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Civil Appeal No. 2906 of 1981. Appeal by Special leave from Judgment and order dated the 6th July, 1981 of the Bombay High Court in Writ Petition No. 227 of 1981. Raju Ramachandran and Mrs Sadhana Ramachandran for the Appellant. S.B. Bhasme, K. Rajendra Choudhary and K. Sivraj Choudhary for Respondent. M N Shroff for Respondent No. 2 (NOT PRESENT) The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The appellant in this appeal by special leave under article 136 of the Constitution was a member of the Armed Forces of the Union from August, 1942 until August 17, 1970 when he retired from the Army, In 1964, he became the owner of a flat in a co operative society in Tardeo Bombay having inherited the same from his brother. The respondent was already the tenant of the premises when the appellant inherited it as the owner. Soon after his retirement, the appellant filed a suit for ejectment against the respondent on the grounds of default in payment of rent, bona fide personal requirement and unlawful submitting. This was in 1971. While the suit was still pending, the Bombay Rents, Hotel and Lodging House Rates Central Act, 1947 was amended in 1975 by the introduction of sec. 13 A 1. This was a special provision aimed at enabling a member of the Armed Forces of the Union or a retired members of the said Armed Forces to recover possession of premises bona fide required by him for his occupation or the occupation of members of his family on the production of a certificate from the Head of the Service or the Commanding Officer. The certificate was to specify that the indivi 753 dual concerned was presently a member of the armed forces of the Union or that he was such a member and was now a retired ex serviceman and that he did not possess any other suitable residence in the local area wherever he or any member of his family could reside. It was further provided that the certificate was to be conclusive evidence of the facts stated therein An important distinction between the general provision contained in Section 13 (1) (g) and the special provision Section 13 A 1 is that under the special provision a tenant is disabled from taking advantage of Section 13 (2) which provides that no decree for eviction shall be passed on the ground specified in Section 13 (I) (g) if the court is satisfied that having regard to all the circumstances of the case, greater hardship would be caused by passing the decree than by refusing to pass it. The appellant, therefore, preferred to file a fresh suit for eviction of the respondent under Section 13 A 1 of the Bombay Rent Act rather than pursue the suit filed in 1971. He filed a fresh suit under the new provision. He produced the certificate required to be produced under Section 13 A 1. The Rent Controller and the Appellate Authority concurrently found that the Appellant bona fide required the flat for his own occupation and decreed the suit. The tenant moved the High Court of Bombay under article 227 of the Constitution A learned single Judge of the High Court, while not interfering with the concurrent finding of the subordinate tribunals that the landlord bona fide require the premises for his own occupation, nevertheless set aside the decree for eviction on the ground that Section 13 A 1 did not enable a member or a retired member of the armed forces to seek the remedy provided by Section 13 A 1 of the Bombay Rent Act if the premises were already in the occupation of the tenant when he became the landlord has appealed under article 136 of the Constitution. Section 13 A 1 of the Bombay Rent Act is as follows: "13 A 1 Notwithstanding anything contained in this Act (a) a landlord, who is a member of the armed forces of the Union, or who was such member and is duly retired (which term shall include premature retirement) shall be entitled to recover possession of any premises, on the ground that the premises are bona fide required by him for occupation by himself or any member of his family (which term shall include a parents or other relation ordinarily residing with him and dependent on him); and the Court shall pass a decree for eviction on such ground 754 if the landlord, at the hearing of the suit, produces a certificate signed by the Head of his Service or his Commanding officer to the effect that (i) he is presently a member of the armed forces of the Union or he was such member and is now a retired ex serviceman; (ii) he does not possess any other suitable residence in the local area where he or the member of his family can reside; (b) where a member of the armed forces of the Union dies while in service or such member is duly retired as stated above and dies within five years of his retirement, his widow, who is or becomes a landlord of any premises, shall be entitled to recover possession of such premises, on the ground that the premises are bona fide required by her for occupation by herself of any member of her family (which term shall include her or her husband 's parent or other relation ordinarily residing with her): and the Court shall pass a decree for eviction on such ground, if such widow, at the suit, produces a certificate signed by the Area or Sub area Commander within whose jurisdiction the premises are situated to the effect that (i) she is a widow of a deceased member of the armed forces as aforesaid; (ii) she does not possess any other suitable residence in the local area where she or the members of her family can reside. Explanation 1 For the purpose of clause (a) of this section, the expression "the Head of this Service", in the case of officers retired from the Indian Army includes the Area Commander, in the case of officers retired from the Indian Navy includes the Flag officer Commanding in Chief, Western Naval Command, and in the case of officers retired from the Indian Air Force includes the Station Commander. 755 Explanation 2 For the purposes of this section, any certificate granted thereunder shall be conclusive evidence of the facts stated therein". It is true, as pointed out by the learned Single Judge, the Bombay Rent Act is a welfare legislation designed among other matters, to protect tenants from harassment and unreasonable eviction by Landlords and it should, therefore he interpreted in a broad and liberal spirit so as to further and not to constrain the object of the Act. We also agree that the exclusionary provisions in the Act should be construed strictly so as to give a wide amplitude to the principal object of the legislation and to prevent its evasion on deceptive grounds. But this does not mean that the intention of the legislature, expressed with sufficient vocabular clarity or gathered by reference to permissible sources, may be by passed to accommodate individual versions of what may appear reasonable. The task of an interpreter is to ascertain intention. It is often said, where the words of a statute are clear and unambiguous, there can arise no question of construction. Such words ordinarily speak for themselves. Since the words must have spoken as clearly to legislators as to judges, it may be safely presumed that the legislature intended what the words plainly say. This is the true basis of the so called golden rule of Construction that "Where the language of an Act is clear and explicit, we must give effect to it, for in that case the words of the Statute speak the intention of the legislature". A court should give effect to plain words not because there is any charm or magic in the plainness of such, words but because plain words may be expected to convey plainly the intention of the legislature. Bearing these general principles in mind, if we look at Section 13 A 1 against the background and in the light of the object and the remaining provisions of the Act, what do we find? As we said earlier one of the principal objects of the Act is to protect the tenant against unreasonable eviction by a landlord. So, the Act stipulates the grounds on which a Landlord may seek eviction of a tenant. Section 13 (I) (g) in particular enables a landlord to recover possession of any premises if the Court is satisfied 'that the premises are reasonably and bona fide required by the landlord for occupation by himself or by any person for whose benefit the premises are held. So solicitous indeed is the legislature about protecting the tenant that Section 13 (2) contains a further stipulation that. "No decree for eviction shall be passed on the ground specified in clause (g) of sub section (I) if the Court is satis 756 fied that, having regard to all the circumstances of the case including the question whether other reasonable accommodation is available for the landlord or the tenant greater hardship would be caused by passing the decree than by refusing to pass it", and "Where the Court is satisfied that no hardship would be caused either to the tenant or to the landlord by passing the decree in respect of a part of the premises, the Court shall pass the decree in respect of such part only". Notwithstanding the expressed legislative bias in favour of the tenant, the legislature itself made a serious departure from the general rule so as to lean in favour of landlords who are or were members of the armed services, and who because of the exigencies of their service were not able to occupy their own premises during the course of their service. Section 13 A 1 was enacted, relaxing the rigour of Section 13 in favour of a landlord who is or was a member of the armed forces. It is now provided that if he produces a certificate in the manner prescribed it shall be taken as established, without further proof that he is presently a member of the armed forces of the Union or that he was such member and is now a retired ex serviceman and that he does not possess any other suitable residence in the local area where he or any member of his family can reside. All that he had to further prove is that he bona fide required the premises for occupation by himself or any member of his family. The certificate is conclusive proof that he did not possess any suitable residence in the local area but not that he bona fide requires the same for occupation by himself or any member of his family. There may be cases where he does not possess any other suitable residence in the local area and yet he does not bona fide require the premises for occupation by himself or any member of his family, being comfortably settled elsewhere with a no need or pressure to move. But so soon as he establishes that he bona fide requires the premises for occupation for his family, he is entitled to recover possession and does not have to further prove that greater hardship would be caused to him than to the tenant if a decree for possession is not granted. It is of course, implicit that the person producing the certificate is the landlord. It is further implicit that the person mentioned in the certificate as presently or previously a member of the armed forces was at a simultaneous point of time both landlord and member of the armed forces. This has been laid down recently by this Court in Mrs. Wintfred Ross & Anr. vs Mrs. Ivy Fonseca 757 and others (1) where it was observed: "Having regard to the object and purposes of the Act and in particular Section 13 A 1 it is difficult to hold that Section 13 A 1 can be availed of by an ex member of the armed forces to recover from a tenant possession of a building which he acquires after his retirement. Since a liberal interpretation of Section 13 A 1 of the Act is likely to expose it to a successful challenge on the basis of article 14 of the Constitution, it has to be read down as conferring benefit only on those members of the armed forces who were landlords of the premises in question while they were in service even though they may avail of it after their retirement. Such a construction would save it from the criticism that it is discriminatory and also would advance the object of enacting it, namely, that members of the armed forces should not while they are in service feel worried about the difficulties of a long drawn out litigation when they wish to get back the premises which they have leased out during their service". But we find it impossible on the plain language of Section 13 A 1 to further read down the provision as enabling a member or a retired member of the armed forces to recover possession of the premises only if he had himself originally let out the premises when he was a member of the armed forces and not if the tenancy had commenced before he became the landlord of the premises either by inheritance, partition, or any other made of transfer of property. To place such an interpretation would be to virtually rewrite the provision. The language of Section 13 A 1 which is sufficiently plain does not warrant or invite such an interpretation. Nor is there anything elsewhere in the Act which compels such a construction. The statement of object and reasons was read to us. It says, "Defence Services Personnel are liable to transfers and to be stationed in different parts of the country. They are often posted at non family stations. Some of these personnel, who possess their own premises either in their home towns or elsewhere have necessarily to hire them out to other persons temporarily while they are away on duty. It has been represented to the State Government by the military 758 authorities that on their retirement or transfer to non family stations the serving and ex service personnel find it extremely difficult to regain possession of their premises which they badly require for personal occupation permanently or for housing their families for the duration of their posting at non family stations. In case of death of a service personnel while in service or death of ex service personnel shortly after the retirement, the widow also finds it extremely difficult to regain possession of their premises for her personal occupation or occupation of her family. The case of Defence Services Personnel due to their special obligations and disabilities do need different treatment from that accorded to other landlords and in fact special provisions have been made for them in some of the States, whereby processes for each personnel to regain possession of their premises have been simplified and made more effective. It is considered necessary to make a special provision in the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 to enable a member or retired member of the armed forces of the Union or a widow of such a member who dies while in service, or who dies within five years of his retirement, to regain possession of their premises, when bona fide required for occupation by them or members of their families and to provide that the Court shall be bound to pass a decree for eviction on such ground if such member or widow, as landlord, produces, at the hearing of the suit, the necessary certificate signed by the Head of his Service or His Commanding officer or the Area or Sub Area Commander within whose Jurisdiction the premises are situated. The Bill intended to achieve these objects" It was said that the use of the words 'regain possession ' in the statement of objects and Reasons indicated that the member of the armed forces must have himself given possession, that is, he must have himself let the tenant into possession. We cannot read so much into the Statement of object and Reasons and into the Statute, via the Statement of objects and Reasons. The words 'regain possession ' in the context, are merely meant to convey 'obtain possession '. To our mind, the intention of the legislature is 759 expressed with sufficient clarity by the language of Section 13 A 1 and there is nothing either in the Statute or in the Statute or in the Statement of objects and Reasons to suggest that the intention of the legislature was other than what we have said. We therefore, allow the appeal, set aside the judgment of the High Court and restore those of the Rent Controller and the appellate authority. The parties will bear their respective costs. The respondents are given time till 30th September, 1984 to vacate the premises subject to their filing within four weeks from today an undertaking which shall be in the form usually adopted in the Court. N.V.K. Appeal allowed.

The appellant in his writ petition to the High Court challenged the continuance in office of Shri Charan Singh as the Prime Minister contending that Shri Charan Singh failed to seek the mandate of the Lok Sabha".a within three weeks after assuming the office of the Prime Minister as directed by the President of India, that instead of "facing the House" he submitted the resignation of his Government on August 20, 1979, and that his continuation in office thereafter as a caretaker Prime Minister without taking a fresh oath of office was unconstitutional. The High Court dismissed the writ petition, but granted a certificate of fitness to appeal to this Court Dismissing the Appeal, ^ HELD: 1. The continuation in office of Shri Charan Singh and his ministers was not unconstitutional. [71 G] 2. It is not the practice of this Court to decide questions of mere academic importance The issues raised by the appellant are no longer live. 171 E] 3. Our Constitution knows no such hybrid thing as a "Prime Minister subject to a condition of defeasance". Conditions imposed by the President may create considerations of political morality or conventional propriety but not of constitutional validity. [71 F]

Appeal No. 339/60. Appeal from the judgment and decree dated November 17, 1955, of the Andhra Pradesh High Court in A. section No. 51/1951. A. Banganadham Chetty, A. V. Rangam, A. Vedavalli and K. R. Chaudhri. for the appellants. B. Ganapathy Iyer, R. Thiagarajan and G. Gopalakrishnan, for the respondent No. I. 1962. December 12. The judgment of ' the Court was delivered by 997 MUDHOLKAR, J. This is an appeal by a certificate granted by the High Court of Andhra Pradesh under article 133 (1) (a) of the Constitution. The relevant facts arc these The plaintiff respondent Ramaswamy & Co who carry on business in tobacco at Guntur instituted a suit against the appellant firm which also carries on similar business at that place and its alleged partners Kurapati Venkata Mallayya and Mittapalli Abbayya, for the recovery of the price of 112 bales of DB tobacco strips (hereafter referred to as DB strips) sold to them on June 5, 1946, amounting to Rs. 14,099/ and interest thereon from the date of purchase to the date of suit. In addition, the respondent firm claimed interest from the date of suit to the date of realization. It is the respondent firm 's case that the tobacco weighed 28,196 pounds and that the appellant firm purchased it by agreeing to pay its price at 8 annas per pound. Further according to the respondent firm the appellant firm agreed to pay interest on the amount at 9% per annum. The appellant firm denied having purchased 112 bales of tobacco from the respondent firm and denied also having agreed to pay its price at annas per pound or at any other rate. They also denied the existence of any agreement to pay any interest. According to the appellant firm in May, 1946 it secured a contract to supply to the Russian Government 3,000 bales of inferior tobacco at the rate of 8 annas per pound. One Kottamasu Venkateswarlu (who was distantly 'related to the partners of the appellant firm) was managing partner of the respondent firm. This firm had some inferior tobacco and Venketashswarlu pressed the appellant firm to take over 112 bales of the tobacco from it and tender them towar ds the contract with the Russian Government saying that the appellent firm may deduct one 998 anna per pound from the price received from the Russian Government towards their expenses and commission. The appellant firm had reluctantly agreed to this request and despatched 97 out of the 112 bales to Kakinada after getting Agmark certificate with respect to them, with the assistance of Venkateswarlu The representative of the Russian Government, however, rejected the goods on the ground that they were of inferior quality. Five bales out of these 97 bales were rejected by the Agmark authorities after re inspection of the goods at Kakinada. Those bales were returned to Guntur along with other rejected bales which belonged to the appellant firm but they were consumed in an accidental fire in the godown of the a pellant firm. The remaining 92 bales are said to be apeal lying with the shipping agent at Kakinada and that as the tobacco is of very poor quality no purchaser had yet been found for it. Fifteen bales out of the 112 bales which had not been sent to Kakinada got damaged and had to be rebaled. As a result of the rebaling they were reduced to ten bales and these are still lying with the appellant firm, which the appellantfirm was willing to return to the respondent firm on its paying the godown charges. Thus, the main defence of the appellant firm is that it never purchased 112 bales of tobacco from the respondent firm and, therefore, the respondent firm could not sue it for the price of those bales. It may be mentioned that before the institution of the suit a Receiver had been appointed in another suit for realization of the debts due to the 'respondent firm The court before which the suit was pending had made an order on June 22, 1949 permitting the ]Receiver to collect the debts due to the respondentfirm. In pursuance of this order the Receiver Suryanarayana instituted the suit out of which this appeal arises, describing himself thus in the plaint: " 'I, Suryanarayana Garu, Receiver appointed 'in O.S. 999 275 of 1948 on the file of the District Munsif 's Court, Guntur". The appellant firm contended that the suit was untenable because a Receiver has no right to institute a suit in his own name and further that the Receiver had not been expressly authorised by the court to institute the suit in question. The appellantfirm also contended that the suit was barred by time. It specifically contended that the respondent firm was not entitled either to the alleged price or to any interest. The appellant firm further contended that Mittapalli Abbayya ceased to be a Partner of the firm since the vear 1942 because as a result of a partition between Abbayya and his son ., Abbayya 's interest in the appellant firm fell to the share of one of his sons, Kotilingam. In consequence of the plea taken by the appellant firm that the suit was not tenable the respondentfirm amended the plaint with the leave of the court on December 27, 1949 by describing the plaintiff as ""Messrs. Thondepu Ramaswami & Co., represented by Suryanarayana Garu receiver appointed in O.S. 275 of 1948 on the file of the District Munsif 's Court, Guntur" in place of the original "I. Suryanarayana Garu, Receiver appointed in O.S. 275 of 1948 on the file of the District Munsif 's Court, Guntur". Thereupon the appellant firm filed an amended written statement in which it contended that the amendment was made long after the period of limitation and that it does not cure the initial defect in the suit of having been filed by a person other than the one who was entitled to institute a suit and that consequently the suit was barred by limita. The trial court held that the respondent firm had established the contract alleged by it but that it had not established that the appellant firm had agreed to pay the price at the rate of 8 annas per pound. It, however, held that the price of tobacco 1000 was Rs. 5,639 3 0, but it, dismissed the suit on the ground that I, Suryanarayana was not entitled to institute a suit in his capacity as Receiver in 0. section 275 of 1948, that the amendment of the plaint was made beyond the period of limitation and that, therefore, the suit was barred by time. In appeal the High Court held that the Receiver was entitled to institute the suit having been authorised by the court to collect the debts of T. Ramaswami & Co., that at the most 'there was a misdescription of the plaintiff firm in the cause title of the suit which could be corrected any time and that consequently the suit was within time. It further held that the price of tobacco agreed to between the parties was 8 annas per pound and that the plaintiff was entitled to a decree for Rs. 14,098/ and interest at 6% p.a. from the date of delivery of the goods till realisation. The first point urged before us by Mr. Ranganadham Chetty on behalf of the appellant firm is that the High ' Court, as well as the Subordinate judge were in error in holding that the bales in question had been purchased by the appellant firm from the respondent firm. This, however, is a question of fact and since the two courts below have found against the appellant firm on this point this court would not ordinarily interfere with such a finding. Mr. Ranganadham Chetty, however, contended on the authority of the decision in Srimati Bibhabati Devi vs Kumur Ramendra Narayan Roy( ') that the practice of the court in appeals by special leave is not a castiron one and that it, would, therefore, be open to this Court to depart from it in, an appropriate case. The aforesaid decision was referred to by this Court in Srinivas Ram Kumar vs Mahabir Prasad (2 ) and it was pointed out that when the courts below have given concurrent findings on pure questions of fact, this court would not ordinarily interfere with them (1) (1946) L.R. 73 I.A. 246, 259. (2) (1951] S.C.R 277,281. 1001 and review the evidence for the third time unless there are exceptional circumstances justifying a departure from the normal practice. Learned counsel contended that this is an unusual case because the reasons given by the High Court for holding that the transaction was a sale are quite different from those given by the trial court and in fact one of the reasons given by the High Court proceeds on a view of an important piece of evidence which is diametrically opposite to that expressed by the trial court. Mr. Ringanadham 'Chetty pointed out that in support of its claim the respondent firm relied upon two entries in its account books Exs. A 13 and A 14, that these entries were not relied tin by the trial court, but the High Court has without giving any reason for regarding them as genuine acted upon them. What the trial court has said in para 14 of its judgment is as follows : " 'In order to establish the sale of 122 bales of flue cured virginia tobacco strips,, Ramaswami relies on certain entries in the account books of his firm. Exhibit A 13 is the katha on page 27 of the day book of Thondepu Ramaswami & Co., containing an entry in respect of 112 bales weighing 28, 196 pounds at Re 0 8 0 per pound and debiting a sum of Rs. 14,098/ . The words " 'Re. 0 8 0 per pound" are contai ned in the third line of the entry. The words "112 bales weighing 28.,196 pounds at Re. 0 8 0 per pound" appear to be written closely. The sum of Re. 14,098 appears in different ink. Exhibit A 14 is the katha of the 1st defendant firm found on page 111 of the corresponding, ledger of Thondepu Ramaswami & Co. On 5 6 1964 a sum of Rs. 14,098 was debited in respect of 112 bales of barn tobacco weighing 28 196 pounds at Re. 0 8 0 per pound. ' In the second line of the entry the price therefore (in Telugue) and the debit 1002 of the sum of Rs. 14,098are found. On 21st August, 1946 interest of Rs. 267 1 9 was added. Exhibit A 17 is the interest Katha of Messrs. Thoadepu Ramaswami & Co, Exhibit A 16 is the katha at page 41 of the day book of Thondepu Ramaswami & Co. The katha shows that on 21 8 1946 to balancing entries 21 8 1946 two balancing entries for interest of Rs. 267 13 6 were made in the day book. The entry on the right hand side has been scored out and Ramaswamy has not been able to explain why and under what circumstances the entry happens to be scored out. The entry on the left hand side however, was not scored out. The totals do not tally unless the sum of Rs. 267 13 6 is included in the aggegate sum mentioned on the right hand side on page 41. It has been commented on behalf of the defendants that Ramaswamy himself has no personal knowledge of the entries, that the clerks who made the entries in the account books have not been examined and that Exhibits A 13, A 14 and A 1 6 cannot be relied on in order to come to the conclusion that the transaction relating to 112 bales was a sale and only a sale. Though Ramaswamy was not present when the entries were made in the several registers of his firm, it is not disputed that the accounts have been maintained in the usual course of business. " ling with the question of price the trial court has ob served: " 'Much reliance cannot be placed on the rate mentioned in Exhibits A 13 and A 14 and the price has to be determined independently having regard to the fact that the price of tobacco depreciates gradually with its age. " If will thus be seen that the trial court has not rejected these entries outright but only rejected them in so far as they were intended to establish the price agreed to be paid to the respondent firm. 1003 Dealing with this matter the High Court has observed thus : " 'Exhibit A 13 is the entry in the day book of Thondepu Ramaswami & Co. under date 5 6 1946 wherein a sum of Rs. 14,098 is debited to the defendant firm in respect of 112 bales of tobacco weighing 286196 pounds at 8 annas per pound. Though the figures "Rs. 14,098" were written in a different ink from the rest of the entry this is not a suspicious circumstance because the rest of the entry which is in the same ink and which is written in a normal manner contains reference to the sale of 28,196 pounds at 8 annas per pound. The resultant total is entered in the column on the right hand side as Rs. 14,098. It may be that the figure of Rs. 14 098 was entered a: little later before the accounts for the day were closed. Exhibit A 14 is the corresponding ledger of Thondepu Ramaswami & Co. and the entries in the day book are duly incorporated in the ledger. " Then later on the High Court has observed "At the same time the entries in the regularly kept books of the plaintiff firm cannot be thrown overboard particularly when no challenge was made of their genuineness. " The High Court has also stated : ""It is apparent from Exhibit A 23 that the defendant firm was shown to be a debtor not merely with respect to Rs. 14,098 the price of 28,196 pounds but also in respect of the interest due upon the sum, and the plaintiff firm has paid income tax thereon." toto the High Court has given certain reasons and even though we may not agree with them it cannot be said that there is any unusual circumstance which would warrant our reviewing afresh the evidence on 1004 the point as to whether the transaction in question was a sale or not. Mr. Ranganadham Chetty next contended that the courts below have not borne in mind the true significance of the words ""no price" occurring in the entry relating to the 112 bales in question in the verification register exhibit A 28. The Entry reads thus "5 6 46 For 112 bales of Baru tobacco no price at Re. 0 8 0 per pound The entries were in Telugu and the actual words used are and according to Mr. Ranganadham Chetty they mean that there was no sale. The Courts below, however, which were conversant with the language, have understood the entry to mean "no price" and that is how the ' expression has been translated in the paper book and it is not open to Mr. Ranganadham Chetty to say that the meaning is otherwise than this. Mr. Chetty then contended that even accepting that the meaning is only " 'no price" the proper inference to be drawn is that there was no transaction of sale and that the rate of 8 annas per pound stated in the entry is given merely for valuing the 112 bales. That may be so but it does not negative the effect of the other entries which clearly point to the transaction being a sale. Some point was also sought to be made by Mr. Ranganadham Chetty from the fact that no copy of the transport permit required to be taken for the transfer of excisable articles from one bonded warehouse to another was placed on record. We fail to see the significance of this because the appellant firm admits that 112 bales of tobacco were actually received by it from the respondent firm. It will thus be seen that there are no exceptional circumstances or unusual reasons which would induce us to re examine the entire evidence on the point ourselves. We, therefore, decline to do so. 1005 The next question is whether the suit was in proper form and was within time. Though the case of section for the suit arose on June 5, 1945, it is admitted before us that the courts were closed on June 5, 1949 and the suit was filed on the day on which they reopened. It would, therefore, be within time if it was properly constituted on the date on which it was filed. In Jagat Parini Dasi vs Naba Gopal Chaki (1) which is the leading case on the point it was held by the Calcutta High Court that a court must authorise a Receiver to sue in his own name and a Receiver who is authorised to sue though not expressly in his own name, may do so by virtue of his appointment with full powers under section 503 of the Code of Civil Procedure (Act XIV of 1882). In coming to this conclusion the learned judges pointed out that though, the object and purpose of the appointment of a Receiver may be generally stated to be the Preservation of the subject matter of the litigation pending judicial determination of the rights of the parties it does not necessarily follow that if he is authorised to sue, he cannot sue in his own name. Then the learned judges pointed out : ,,Though he is in one sense a custodian of the property of the person, whom in certain respects he is made to supplant, there seems to be no reason why his power should not be held to be co extensive with his functions. It is clear that he cannot conveniently perform those functions, unless upon the theory that he has sufficient interest in the subject matter committed to him, to enable him to sue in respect thereof by virtue of his office, in his own name. On the whole, we are disposed to take the view that, although a receiver is not the assignee or beneficial owner of the property entrusted to his care, it is an incomplete and inaccurate statement of his relations to the property to say that (1) Cal. 305. 1006 he is merely its custodian, When a Court has taken property into its own charge and custody for the purpose of administration in accordance with the ultimate rights of the Parties to the litigation, it is in custodia legis. The title of the property for the time being, and for the purposes of the administration, may, in a sense, be said to be in the Court. The receiver is appointed for the benefit of all concerned; he is the representative of the Court, and of all Parties interested in the litigation, wherein he is appointed. He is the rightarm of the Court in exercising the jurisdiction invoked in such cases for administering the property; the Court can only administer through a receiver. For this reason; all suits to collect obtain possession of the property must be prosecuted by the receiver, and the proceeds received and controlled by him alone. If the suit has to be nominally prosecuted in the name of the true owners of the property, it is an inconvenient as well as useless form inconvenient, because in many cases, the title of the owners may be the subject matter of the litigation in which the receiver has been appointed useless, because the true owners have no discretion as to the institution of the suit, no control over its management, and no right to the possesion of the proceeds." (pp. 316 317) Later the learned judges pointed out, that for the time being and for the purpose of administration of the assets the real party interested in the litigation is the Receiver and, therefore, there is no reason why the suit could not be instituted in his own name. The learned Judges then referred to a number of cases in support of their conclusion. It seems to us that the view of the Calcutta High Court that a Receiver who is appointed with full powers to administer the property which is Custodia legis or 1007 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. If any property is in custodia legis the contesting parties cannot deal with it in an manner, and, therefore, there must be some authority competent to deal with it, in the interest of the parties themselves. A Receiver who is placed in charge of the property on behalf of a court can be the only appropriate person who could do so. 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. Here apparently the Receiver was not a person with full powers but by its order dated June 26, 1949 the, court authorised him to collect debts, particularly as some debts were liable to get barred by time. The Receiver, therefore, had the right to institute the suit in question. It is, however, contended that the order does not say specifically that he should institute a suit. In our opinion, the authority given to the Receiver ",to collect the debts" is wide enough to empower the Receiver to take such legal steps as he thought necessary for collecting the debtsincluding instituting a suit. The suit as originally instituted, was thus perfectly competent. The High Court has observed that even assuming that it would have been more appropriate for the Receiver to show in the cause title that it was the firm which was the real plaintiff and that the firm was suing through him it was merely a case of misdescription and that the plaint could be amended at any time for the purpose of showing the correct description of the plaintiffs We agree with the High Court 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. 1008 [His Lordship then dealt with the point regarding the rate of interest.] x x x x x x x x x Accordingly we set aside the decree of the High Court, allow the appeal in part and pass a decree in favour of the respondent firm for Rs. 5,639/3/ with interest at 6 per cent per annum from the date of the transaction till realization. The respondent firm will proportionate costs throughout from the appellant firm, which would bear its own costs. Appeal allowed in part.

The appellant was convicted under section 379 of the Indian Penal Code. He was a Superintendent in the Chief Engineer 's office and got a file removed from the Secretariat through a clerk, took it home and made it available to his friend, the co accused, who removed certain documents by substituting others. The appellant returned the file to the office that next day. He made a confession when the Chief Engineer threatened that if he did not disclose the truth the matter would be placed in the hands of the Police. That confession was later retracted. The three courts below were of the opinion that the statement of the Chief Engineer did not amount to a threat in the circumstances of the case. Held, that section 24 of the evidence Act waives the stringent rule of proof as laid down by section 3 of the Act and requires the court to form a prima facie opinion on the evidence and circumstances of the particular case whether a confession should or should not be excluded as being involuntary. It is not possible to lay down any inflexible standard and the Supreme Court acting under article 136 of the Constitution would not ordinarily differ from the concurrent findings arrived at by the courts below. A retracted confession may form the legal basis of a con viction if the court is satisfied that it was true and voluntarily made. As a general rule of practice, however, it is unsafe to rely upon a confession, much less a retracted confession, unless the court is satisfied that the retracted confession was true, voluntarily made and corroborated in material particulars. In the present case there could be no doubt that the necessary ingredients constituting the offence of theft were mad 690 To constitute theft the loss caused need not be permanent Even temporary dispossession, though the person taking the property intended to restore it, may constitute theft. Illustrations (b) and (1) of section 378 of the Indian Penal Code clearly show that a temporary deprivation of another person of his property may cause wrongful loss to him.

ION: Civil Appeal No. 495 of 1984. From the Judgment and order dated 1.11.1983 of the Delhi High Court in L.P.A. No. 160 of 1983. P. P. Rao and A. Mariaputham for the Appellant. Dr. Anand Prakash, D.N. Dwivedi, Mrs. Anil Katiyar, C.V. Subba Rao, Vineet Kumar and Deepak K. Thakur for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. This appeal by special leave calls in question the judgment of a Division Bench of the Delhi High Court in a Letters Patent Appeal upholding the decision of a learned Single Judge rejecting the writ petition of the appellant. The appellant was an employee of the Institute of Constitutional and Parliamentary Studies (hereafter referred to as ICPS for short) and in a disciplinary action he was dismissed from service by order dated 17th November, 1982. When he assailed the order in a writ petition before the High Court, the question whether lCPS was 'State ' within the meaning of Article 12 of the Constitution came for consideration as the major issue arising in the matter. The learned Single Judge dismissed the writ petition by holding that the employer was neither an agency nor an instrumentality of the Government and did not constitute 'State ' within the meaning of Article 12 and, therefore, was not subject to the writ jurisdiction of the High Court. The appeal against the judgment of the learned Single Judge was dismissed on 1st November, 1983. In course of hearing of the appeal Dr. Anand Prakash appearing for ICPS fairly stated that whether the Institute be 'State ' or not within the meaning of Article 12 of the Constitution, the employer 264 was prepared to give a fresh opportunity to the appellant to meet the charges so as to dispel from his mind the feeling that he has not been given reasonable opportunity to defend himself. Ordinarily, with that concession the impugned order entailing the dismissal of the employee and the judicial determination against the appellant should have been set aside and the matter should have gone before the enquiry officer for affording reasonable opportunity to the appellant of being heard against the charges. Dr. Anand Prakash, however, invited us to enter into the merits of the issue as to whether ICPS constitutes 'State ' within the constitutional meaning of the term The Union of India which appears before us through counsel also wanted that the question should be decided. Thereupon we suggested to the appellant who was till then appearing in person to get represented through counsel so that the matter could be appropriately argued on his behalf also. He has been rendered suitable assistance by the Supreme Court Legal Aid Committee and Mr. P.P.Rao, Senior Counsel, has appeared on his behalf. The main question for consideration now, therefore, is whether ICPS is 'State '. For appropriate consideration of this question it is necessary to look into the constitution of the body, the purpose for which it has been created, the manner of its functioning including the mode of its funding and the broad features which have been found by this Court in several decisions to be relevant in the matter of determining a dispute of this type. Article 12 of the Constitution provides an inclusive definition of the term 'State ' by saying: "In this part, unless the context otherwise requires, 'the State ' includes the Government and Parliament of India and the Government and the State 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. " obviously ICPS can become 'State ' only if it is found to be an authority within the territory of India or under the control of the Government of India. ICPS, respondent No.2, is a society registered under the Societies Registration Act, 21 of 1860, and was registered on 9th March, 1965. As would appear from its Memorandum of Association, the foundation members were 19 in number 13 being members besides a President and five Vice Presidents. The first President of the Soci 265 ety was the then Speaker of the Lok Sabha. The five Vice Presidents were the then Minister of Railways, Minister of Law and Social Security Minister of Communication and Parliamentary Affairs, a former (Chief Justice of India and a former Attorney General of India. Dr. L.N. Singhvi, then a member of the Lok Sabha, was its Executive Chairman. The Public Trustee in the Department of Company Affairs and Insurance in the Ministry of Finance was the Director and a member of the Lok Sabha was the Society 's Treasurer. The then Minister of Cultural Affairs in the Ministry of Education along with three members of the Lok Sabha, a Senior Advocate of the Supreme Court, a member of the Rajya Sabha, the then Vice Chancellor of Rajasthan University. the respective Secretaries of the Lok Sabha and the Rajya Sabha Secretariat and the Secretary in the Ministry of Law were its Members. The registered office of the Society was initially located within the Parliament House but was later on shifted to the Vithalbhai Patel House, Rafi Marg, New Delhi . The objects of the Society inter alia were: ( I) to promote and provide for constitutional and Parliamentary studies with special reference to comparative studies in constitutional systems of various countries and working of the Indian Constitution and parliamentary and governmental institutions in their various aspects; (2) to undertake study of courses and fundamental research relating to developments in constitutional law, conventions and practices, parliamentary procedure, legislative drafting, trends in judicial interpretation and allied matters; (3) to organise inter alia training programmes in constitutional problems and matters of current parliamentary importance; (4) to set up a legislative research and reference service for the benefit of all interested members of the Union Parliament and State Legislature irrespective of their party affiliations; (5) to undertake and provide for the publication of a journal and of research papers and of books and brochures with a view to disseminate democratic values and to foster broad based civic education and awareness, and in particular, to pro. mote study of constitutional and parliamentary affairs; 266 (6) to establish and maintain libraries and information services to facilitate the study of constitutional and parliamentary subjects and spread information in regard thereto; (7) to invite as and when feasible, scholars who may or may not be members of the Society, to take advantage of the facilities offered by the Society and to benefit the Society by their knowledge and experience; and (8) to institute appropriate fellowships, offer prizes and arrange scholarships and stipends in furtherance of the objects of the society. The Memorandum permitted the Society to accept gifts, donations and subscriptions of cash and securities and of any property either movable or immovable. The rule classifies the members under heads like Founder Members, Life Members, Honorary Members, ordinary Members, Corporate Members and Associate Members. ordinary membership, according to the Rules, would extend to Members of Parliament or of any State Legislature or those who have been or are members of the Judiciary or advocates of the Supreme Court or the High Courts or persons employed in public service or persons engaged in teaching of study of social sciences particularly of Political Science, Law or subjects related thereto. In the category of Honorary Members were the President, the Vice President and the Prime Minister of India. Though the Memorandum permitted receipt of gifts and donations from outside, it is not disputed that the main source of income of the society has been the annual Central Government grant. We think it appropriate at this stage to turn attention to judicial precedents to find out as to what should be the test to be applied for determining when on institution like respondent No.2 would be treated as 'other authorities ' under Article 12 of the Constitution. The first in point of time is the Constitution Bench judgment in the case of Rajasthan State Electricity Board, Jaipur vs Mohan Lal & Ors., ; Bhargava, J. who delivered the main judgment observed: "the meaning of the word 'authority ' given in Webster 's Third New International Dictionary, which can be applicable, is a "public administrative agency or corporation having quasi governmental powers and authorised to 267 administer a revenue producing public enterprise." This dictionary meaning of the word 'authority ' is clearly wide enough to include all bodies created by a statute on which powers are conferred to carry out governmental or quasi governmental functions. The expression "other authorities" is wide enough to include within it every authority created by a statute and functioning within the territory of India, or under the control of the Government of India; and we do not see any reason to narrow down this meaning in the context in which the words 'other authorities ' are used in Article l 7 of the Constitution In Smt. Ujjam Bai vs State of Uttar Pradesh, Ayyangar, J. had observed: "Again Article 12 winds up the list of authorities falling within the definition by referring to 'other authorities ' within the territory of India which cannot obviously be read as ejusoem generis with either the Government and the Legislatures or local authorities. The words are of wide amplitude and capable of comprehending every authority created under a statute and functioning within the territory of India or under the control of the Government of India. Shah, J., as he then was, added a note to the leading Judgment of Bhargava and observed: "I am unable, however, to agree that every constitutional or statutory authority on whom powers are conferred by law is 'other authority ' within the meaning of Article 12. The expression 'authority ' in its etymological sense means a body invested with power to command or give an ultimate decision, or enforce obedience, or having a legal right to command and be obeyed. In determining what the expression 'other authority ' in Article 12 connotes, regard must be had not only to the sweep of fundamental rights over the power of the authority, but also to the restrictions which may be imposed upon the exercise of certain fundamental rights (e.g., those declared by Article 19) by the authority. Fundamental rights within their allotted fields trans 268 cend the legislative and executive power of the sovereign authority. But some of the important fundamental rights are liable to be circumscribed by the imposition of reason able restrictions by the State. The true content of the expression 'other authority ' in Article 12 must be deter mined in the light of this dual phase of fundamental rights. In considering whether a statutory or constitutional body is an authority within the meaning of Article 12, it would he necessary to bear in mind not only whether against the authority fundamental rights in terms absolute are intended to be anforced, but also whether it was intended by the Constitution makers that the authority was invested with the sovereign power to impose restrictions on very important and basic fundamental freedoms. In my judgment, authorities, constitutional or statutory invested with power by law but not sharing the sovereign power do not fall within the expression 'State ' as defined in Article 12. Those authorities which are invested with sovereign power, i.e., power to make rules or regulations and to administer or enforce them to the detriment of citizens and others fall within the definition of 'State ' in Article 12, and constitutional or statutory bodies which do not share that sovereign power of the State are not, in my judgment, 'State ' within the meaning of Article 12 of the Constitution. Two cases, the First of Sabhajit Tewary vs Union of India & Ors., and the other of Sukhdev Singh & Ors vs Bhagatram Sardar Singh Raghuvanshi & Anr., l 19 were disposed of by the same Constitution Bench on February 21, 1975. In both these cases, the true meaning of Article 12 of the Constitution fell for consideration. Sabhajit Tewary 's case was one where the status of the Council of Scientific and Industrial Research was examined. This Court took note of the fact that the Council was a society registered under the Societies Registration Act. Under Rule 3, the Prime Minister of India was the ex officio President of the Society and under Rule 30 the governing body consisted of persons appointed by the Government of India representing the administrative ministry under which the Council of Scientific and Industrial Research is included and the Ministry of Finance. The Court also took note of the manner in which the affairs of the Society including funding were conducted. Ray, CJ.,in the brief judgment that the 269 Court delivered in the case observed: A "Extracting the features as aforesaid, it was contented that these would indicate that the Council of Scientific and industrial Research was really an agency of the Government. This contention is unsound. The society does not have a statutory character like the oil and Natural Gas Commission, or the Life Insurance Corporation or Industrial Finance Corporation. It is a society incorporated in accordance with the provisions of the Societies Registration Act. The fact that the Prime Minister is the President or that the Government appoints nominees to the governing body or that the Government may terminate the membership will not establish anything more than the fact that the Government takes special care that the promotion, guidance and cooperation of scientific and industrial research, the institution and functioning of specific researches, establishment or development and assistance to special institutions or departments of the existing institutions for scientific study of problems affecting particular industry in a trade, the utilisation of the result of the researches conducted under the auspices of the Council towards the development of industries in the country are carried out in a responsible manner. This Court has held in Praga Tools Corporation vs C.A. Imanual & Ors., ; ; Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., and in S.L. Aggarwal vs General Manager, Hindustan Steel Ltd., ; that the Praga Tools Corporation, Heavy Engineering Mazdoor Union and Hindustan Steel Ltd. are all companies incorporated under the Companies Act and the employees of these companies Act and the employees of these companies do not enjoy the protection available to Government servants as contemplated in Article 311. The companies were held in these cases lo have independent existence of the Government and by the law related to corporations. These could not be hold to be departments of the Government. " The ratio of this decision has been fully relied upon by the High Court in dismissing the claim of the appellant. 270 In Sukhdev Singh 's case (supra) the leading judgment was delivered also by Ray, CJ. Two questions fell for consideration ( l) whether an order of. removal from service contrary to Regulations would enable the employee to a declaration against the statutory corporation of continuance in service or would it end up in claim for damages only and (2) whether the employee of a statutory corporation is entitled to claim protection of Articles 14 and 16 against the Corporation. The Court, therefore, straight went into the question as to whether statutory corporations were authorities within the meaning of Article 12. As a fact, three corporations being the oil and Natural Gas Commission, the Life Insurance Corporation and the Industrial Finance Corporation were before the Court and each one of them had been set up under a special statute. At page 641 of the Reports, the learned Chief Justice pointed out: "In the background of the provisions of the three Acts under consideration, the question arises as to whether these Corporations can be described to be authorities within the meaning of Article 12 of the Constitution . " At page 642 of the Reports the conclusion was reached to the effect that "these statutory bodies are 'authorities ' within the meaning of Article 12 of the Constitution. " We are really concerned with what Mathew J., added to the judgment He observed: "The test propounded by the majority is satisfied so far as the oil and Natural Gas Commission is concerned as section 25 of the oil and Natural Gas Commission Act provides for issuing, binding direction to third parties not to prevent the employees of the Commission from entering upon their property if the Commission so directs. In other words, as section 25 authorises the Commission to issue binding directions to third parties not to prevent the employees of the Commission from entering into their land and as disobedience of such directions is punishable under the relevant provision of the Indian penal Code since those employees are deemed to be pubic servants under section 21 of the Indian Penal Code by virtue of section 27 of the Act, the Commission is an 'authority ' within the meaning of the expression 'other authorities ' in Article 12 271 Though this would be sufficient to make the commission a 'State ' according to the decision of this Court in the Rajasthan Electricity Board case (supra), there is a larger question which has a direct bearing so far as the other two corporations are concerned, viz., whether, despite the fact that there are no provisions for issuing binding directions to third parties the disobedience of which would entail penal consequences, the corporations set up under statutes to carry on business of public importance of which is fundamental to the life of the people can be considered as 'State ' within the meaning of Article 12. " Mathew, J. referred to the precedents and other authorities from England, France and United States and at page 654 of the Reports stated: "The ultimate question which is relevant for our purpose is whether such a corporation is an agency or instrumentality of the government for carrying on a business for the benefit of the public. In other words, the question is, for whose benefit was the corporation carrying on the business? When it is seen from the provisions of that Act that on liquidation of the corporation, its assets should be divided among the shareholders, namely, the Central and State governments and others, if any, the implication is clear that the benefit of the accumulated income would go to the Central and State Governments. Nobody will deny that an agent has a legal personality different from that of the principal. The fact that the agent is subject to the direction of the principal does not mean that he has no legal personality of his own . . . The crux of the matter is that public corporation is a new type of institution which has sprung from the new social and economic functions of government and that it therefore does not neatly fit into old legal categories. Instead of forcing it into them, the later should be adapted to the needs of changing times and conditions. I do not think there is any basis for the apprehension expressed that by holding that these public corporations are 'State ' within the meaning of Article 12, the employees of these corporations would become government servants. I also wish to make it clear that I express no opinion on 272 the question whether private corporations or other like organisations, though they exercise power over their employees which might violate their fundamental rights, would be 'State ' within the meaning of Article 12. " Then comes the case of Ramana Dayaram Shetty vs The International Airport Authority of India & Ors., ; The question before the Court was whether the International Airport Authority of India was 'State ' within the meaning of Article 12 so as to be subjected to enforcement of fundamental rights against it. Examining this aspect, Bhagwati, J., as he then was spoke for the three Judge Bench thus: "Now it is obvious that the government which represents the executive authority of the State , may act through the instrumentality or agency of natural persons or it may employ the instrumentality or agency of judicial persons to carry out its functions. In the early days, when the Government had limited functions it could operate effectively through natural persons constituting its civil service and they were found adequate to discharge governmental functions, which were of traditional vintage. But as the tasks of the government multiplied with the advent of the welfare State, it began lo be increasingly felt that the frame work of civil service was not sufficient to handle the new tasks which were often of specialised and highly technical character. The inadequacy of the civil service to deal with these new problems came to be realised and it became necessary to force a new instrumentality or administrative device for handling these new problems. It was in these circumstances and with a view to supplying this administrative need that the public corporation came into being as the third arm of the Government. As early as 1819 the Supreme Court of the United States in Mac Cullough v . Maryland, (4 Wheat 315) held that the Congress has power to charter corporations as incidental to or in aid of governmental functions and , as pointed out by Mathew J., in Sukhdev vs Bhagat Ram, (supra) such federal corporations would ex hypothesi be agencies of the Government. In Great Britain too, the policy of public administration through separate corporations was gradually evovled and the conduct of basic industries through giant corporations has now become a permanent feature 273 of public life. So far as India is concerned, the genesis of the emergence of corporations as instrumentalities or agencies of Government is to be found in the Government of India Resolution on Industrial Policy dated with April, 1948 where it was stated inter alia that 'management of state enterprises will as a rule be through the medium of public corporation under the statutory control of the Central Government who will assume such powers as may be necessary to ensure this. ' It was in pursuance of the policy envisaged in this and subsequent resolutions on Industrial policy that corporations were created by Government for setting up and management of public enterprises and carrying out other public functions. Ordinarily, these functions could have been carried out by Government departmentally through service personnel, but the instrumentality or agency of the corporations was resorted to in these cases having regard to the nature of the task to be performed. The corporations acting as instrumentality or agency of Government would obviously be subject to the same limitations in the field of constitutional and administrative law as Government itself, though in the eye of the law, they would be distinct and independent legal entities. If the Government acting through its officers is subject to certain constitutional and public law limitations, it must follow a fortiori that Government acting through the instrumentality or agency of corporations should equally be subject to the same limitations. But the question is how to determine whether a corporation is acting as instrumentality or agency of Government. It is a question not entirely free from difficulty. " It was again pointed out in the same case that: "A corporation may be created in one of two ways. It may be either established by statute or incorporated under a Law such as the or the . Where a corporation is wholly controlled by Government not only in its policy making but also in carrying out the functions entrusted to it by the law establishing it or by the Charter of its incorporation, there can be no doubt that it would be an instrumentality or agency of Government . " 274 The Court further stated: "But the public nature of the function, if impregnated with governmental character or 'tied or ent wined with government ' or fortified by some other additional factor may render the corporation an instrumentality or agency of Government. Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference. It will thus be seen that there are several factors which may have to be considered in determining whether a corporation is an agency or instrumentality of Government. We have referred to some of these factors and they may be summarised as under: whether there is any financial assistance given by the State, and if so, what is the magnitude of such assistance whether there is any other form of assistance, given by the State, and if so whether it is of the usual kind or it is extraordinary, whether there is any control of the management and policies of the corporation by the State and what is the nature and extent of such control, whether the corporation enjoys State confer red or State protected monopoly status and whether the functions carried out by the corporation are public functions closely related to governmental functions This particularisation of relevant factors is however not exhaustive and by its very nature it cannot be, because with increasing assumption of new tasks growing complexities of management and administration and the necessity of continuing adjustment in relations between the corporations and Government calling for flexibility, adapt ability and innovative skills, it is not possible to make an exhaustive enumeration of the tests which would invariably and in all cases provide an unfailing answer to the question whether a corporation is governmental instrumentality or agency. At page 1052 of the Reports the Court proceeded to consider whether International Airport Authority of India could be said to be an 'authority ' falling within the meaning of 'State ' in Article 12. The constitution of the body, the manner of filling it up? Government 's power of control in the matter of appointment of members and termination of membership were utilised as tests for examining whether 275 the Airport authority was 'State '. After referring to the special A aspects, the Court observed: "It will be seen from these provisions that there are certain features of the respondent which are eloquent and throw considerable light on the true nature of the first respondent. In the first place, the Chairman and Members of the first respondent are all persons nominated by the Central Government and the Central Government has also the power to terminate their appointment as also to review them in certain specified circumstances. The Central Government is also vested with the power to take away the management of any airport from the first respondent and to entrust it to any other person or authority and for certain specified reasons, the Central Government can also supersede the first respondent. The Central Government has also power to give directions in writing from time to time on questions of policy and these directions are declared binding on the first respondent. " Reference was made to the case of Sabhajit Tewary (supra). Bhagwati, J. referring thereto stated : "This decision does not lay down any principle or test for the purpose of determining when a corporation can be said to be an authority. If at all, any test can be gleaned from the decision, it is whether the corporation is really an agency of the Government." and ultimately it was held that the Authority was 'State ' under Article 12. This case clearly approves the treatment of the matter by Mathew, J. in Sukhdev Singh 's case (supra). The two Judge Bench in the case of Managing Director, Uttar Pradesh Warehousing Corporation & Anr. vs Vinay Narayan Vajpayee, ; was cited but we do not consider it necessary to refer to the same. On the other hand reference to the two later decisions of this Court may be more useful. Those are Ajay Hasia etc. vs Khalid Mujib Sehravardi & Ors. etc. ; , of a Constitution Beocll and the other is Som Prakash Rekhi vs Union of India & Anr., ; being a three Judge Bench decision. It is pertinent to indicate that both the judgments were delivered on November 13, 1980. 276 In Ajay Hasia 's case an Engineering College was also a Society registered under the Jammu & Kashmir Registration of Societies Act, l898, and the question that fell for consideration was whether it was an authority within the meaning of Article 12. The Court found that the Memorandum of Association of the Society in clause (3) set out the objects for which the Society was incorporated and they included among other things establishment of the college with a view to providing instructions and research in such branches of engineering and technology as the college may think fit and for the advancement of learning and knowledge in such branches. Reference was made to the Memorandum of Association, the objects and the powers of the State Government to make appointments and to the fact that the State government with the approval of the Central Government had the power to take such action and to issue such directions as are necessary in respect of all matters relating to the functioning of the college as noticed in the review of the activities. the Court also took note of the fact that the founding members of the society were enumerated in clause (9) of the memorandum and they were the Chairmen to be appointed by the State Government with the approval of the Central Government, two representatives of the State Government, one representative of the Central Government, two representatives of the All India Council for Technical Education to be nominated by the Northern Regional Committee, one representative of the University of Jammu & Kashmir, one nonofficial representative of each of the Punjab, Rajasthan, UttarPradesh and Jammu & Kashmir States and to be appointed by the respective Governments in consultation with the Central Government and the principal who shall also be the ex officio Secretary. The rules of the Society were referred to with a view to finding out the details of functioning. Sabhajit Tewary 's case was referred to and distinguished and the tests laid down in the International Airport Authority 's case (supra) were approved. Ultimately the Court summarised the position as under: " The tests for determining as to when a corporation can be said to be an instrumentality or agency of Government may now be culled out from the judgment in the International Airport Authority 's case. These tests ate not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution because while stressing the necessity of a wide meaning to be placed on the expression 'other authorities '. it must be realised that it should not stretched so far as to bring in 277 every autonomous body which has some nexus with the Government within the sweep of the expression. A wide enlargment of the meaning must be tempered by a wise limitation. We may summarise the relevant tests gathered from the decision in the International Airport Authority 's case as follows: (1) "one thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the corporation is an instrumentality or agency of (Government (2) "Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being inpregnated with governmental character. " (3) "It may also be a relevant factor whether the corporation enjoys monopoly status which is State conferred or State protected." (4) "Existence of deep and pervasive State control may afford an indication that the corporation is a State agency or instrumentality." (5) "If the functions of the corporation are of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation as an instrumentality or agency of Government. (6) "Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference of the corporation being an instrumentality or agency of Government. " The Court thereafter proceeded to say: "We may point out that it is immaterial for this purpose whether the corporation is created by a statute or under a statute. The test is whether it is an instrumentality 278 or agency of the Government and not as to how it is created. The inquiry has to be not as to how the juristic person is born but why it has been brought into existence. The corporation may be a statutory corporation created by a statute or it may be a Government Company or a company formed under the or it may be a society registered under the or any other similar statute. Whatever be its genetical origin, it would be an 'authority ' within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors. The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression 'authority ' in Article 12. " At pages 99 and 100 of the Reports, the Constitution Bench referred to the facts of the particular case and came to hold that the society was an instrumentality or agency of the State. In Som Prakash Rekhi 's case (supra) at page 137 of the Reports, Krishna Iyer, J. referred to the five tests and concluded by saying that: "The finale is reached when the cumulative effect of all the relevant factors above set out is assessed and once the body is found to be an instrument or agency of Government, the further conclusion emerges that it is 'State ' and is subject to the same constitutional limitations as Government At page 138 the criticism against the conclusions reached in the c, Airport Authority 's case was taken note of and the learned Judge observed: "There is no doubt that Bhagwati, J. broadened the scope of State under Article 12 and according to Shri G.B. Pai the observations spill over beyond the requirements of the case and must be dismissed as obiter. " 279 Pathak, J., as he then was, added a brief note to the judgment by A saying: "I must confess to some hesitation in accepting the proposition that the Bharat Petroleum Corporation Limited is a 'State ' within the meaning of Article 12 of the Constitution. But in view of the direction taken by the law in this Court since Ramana Dayarama Shetty vs International Airport Authority I find I must lean in favour of that conclusion. I would have welcomed a wider range of debate before us on the fundamental principles involved in the issue and on the implications flowing from the definition in the of a 'Government Company '? but perhaps a future case may provide that. " We have thus the tests available in the two decisions to be applied to the facts of the case in hand for determination as to whether ICPS is 'State ' within the meaning of Article 12. There are two more cases to which brief reference may now be made B.S. Minhas vs Indian Statistical Institute & Ors., ; and P.K. Ramachandra Iyer & Ors. vs Union of India & Ors. , ; The case of the Indian Statistical Institute is also of a society registered under the . The Court found that the entire money required for funding the Institute was provided by the Central Government and even if any other money was to be received by the Institute it could be done only with the approval of the Central Government and the accounts of the Institute were to be submitted to the Central Government for its scrutiny and satisfaction. The Society had to comlpy with all directions as may be issued by the Central Government. 'The control of the Central Government was deep and pervasive and, therefore, it was an instrumentality of the Central Government and as such was an authority within the meaning of Article 12 of the Constitution. ln coming to this conclusion, the Court relied upon the tests indicated in the International Airport Authority 's case as also in the case of Ajay Hasia. In Ramchandra Iyer 's case, the question for consideration was whether the Indian Council of Agricultural Research (ICAR) was a set up within the meaning of Article 12 of the Constitution. ICAR is also a Society registered under the . The Court found that when it was set up, it was an attached office of the 280 Government of Tndia and had not undergone any change when it got transferred into a Society. Applying the tests indicated in International Airport Authority case as also the case of Ajay Hasia, the Court came to the conclusion that there was little doubt that it was an instrumentality or agency of the State. It further stated: "ICAR came into existence as an integral department of the Government of India and later on became an attached office of the Central Government. The composition of the ICAR as evidenced by Rule 3 could not have been more governmental in character than any department of the Government. " It is time to turn to the facts of the present case to find out as to what the conclusion should be when the tests formulated by the several cases of this Court referred to above are applied. There cannot indeed be a strait jacket formula. It is not necessary that all the tests should he satisfied for reaching the conclusion either for or against r holding an institution to be 'State '. In a given case some of the features may emerge so boldly and prominently that a second view may not be possible. There may yet be other cases where the matter would be on the border line and it would be difficult to take one view or the other outright. Our struggle for independence which spread over a century bore fruit in 1947. During the long period of struggle, the British Government following the pattern of the democratic system prevailing in their own country had patronised the evolution of a process of self government. The Government of India Act of 1935 which was a positive improvement on the previous Acts had introduced provincial autonomy and the Indian Independence Act, 1947, adopted that pat tern of Government. Even the Constitution which the people of India gave unto themselves in 1949 and which came into force from the 26th of January, 1950, followed that pattern, of course, with considerable modifications. Thus when we became independent a democratic pattern had evolved in this country through more or less an historical process. Soon the princely States disappeared by a process of merger and the Constitution ultimately came to have a federal base the federating States as the units and the federation at the Centre. Democracy pre supposes certain conditions for its successful working. It is necessary that there must be a deep sense of understanding, mutual confidence and tolerance and regard and acceptance 281 Of the views of others. In the early years of freedom, the spirit of sacrifice and a sense of obligation to the leadership that had helped the dream of freedom to materialise had been accepted. The emergence of a new generation within less than two decades of independence gave rise to a feeling that the people 's representatives in the Legislatures required the acquisition of the appropriate democratic bias and spirit. ICPS was born as a voluntary organisation to fulfil this requirement. At the inception it was certainly not a governmental organisation and it has not been the case of the parties in their pleadings nor have we been told at the bar during the long arguments that had been advanced that the objects of ICPS are those which are a State obligation to fulfil. The Society was thus born out of a feeling that there should be a voluntary association mostly consisting of Members of the two Houses of Parliament with some external support to fulfil the objects which were adopted by the Society. To Start with, the Society was accommodated in the Parliament House but in due course it shifted out. The President of India inaugurated the Society. Very appropriately the Speaker of the Lok Sabha became its first President and three Ministers, a former Chief Justice of India and a former Attorney General joined as its Vice Presidents. Some of the public officers were also associated in the administrative set up of the Society. Individual Members of Parliament and the corporate body known as Parliament are certainly two different concepts. Services of some of the employees of Parliament were lent to the Society. While Article 12 refers to Parliament as such, a few Members of Parliament cannot be considered as Parliament so as to constitute that body as referred to in Article 12. The Speaker and the Ministers who joined as Vice Presidents of the Society were there in their individual capacities and not as Ministers, though designations were indicated. In the category of Vice Presidents, Executive Chairman, Treasurer and members, there were many people who were really not a part of Government as such and some of them did not belong to Parliament. The objects of the Society were not governmental business but were certainly the aspects which were expected to equip Members of Parliament and the State Legislatures with the requisite knowledge and experience for better functioning. Many of the objects adopted by the Society were not confined to the two Houses of Parliament and were intended to have an impact on society at large. The Memorandum of the Society permitted acceptance of gifts, 282 donations and subscriptions. There is material to show that the Ford Foundation, a US based Trust had extended support for some time. Undoubtedly, the annual contribution from the Government has been substantial and it would not be wrong to say that they perhaps constitute the main source of funding, Yet some money has been coming from other sources. In later years, foreign funding came to be regulated and, therefore, it became necessary to provide that without Government clearance like any other institution, ICPS was not to receive foreign donations. No material has been placed before us f the stand that the Society was not entitled to receive Contributions from any indigenous source without Government sanction. Since Government money has been coming, the usual conditions attached to Government grants have been applied and enforced. If the society 's affairs were really intended to be carrier on as a part of the Lok Sabha or Parliament as such, the manner of functioning would have been different. The accounts of the Society are separately maintained and subject to audit in the same way as the affairs of societies receiving Government grants are to be audited. Government usually impose certain conditions and restrictions when grants are made. No exception has been made in respect of the Society and the mere fact that such restrictions are made is not a determinative aspect. Considerable attempt has been made by Mr. Rao, learned counsel for the appellant, to show that in the functioning of the Society there is deep and pervasive control of government. We have examined meticulously the correspondence and the instances where control was attempted to be exercised or has, as a fact, been exercised but these again are features which appear to have been explained away We were taken through the report submitted by the Tripathi Committee which had been set up to suggest changes in the set up and affairs of the Society. The report and the steps taken on the basis of the report are also not material which can be taken to be indisputable features for reaching the conclusion one way or the other. We were shown the correspondence by the Minister of Law with the Executive Chairman of the Society. Undoubtedly the Minister has tried to exercise his authority as the controlling department of Government in the matter of making the grant. As we have already pointed that itself may not be a conclusive feature. We have several cases of societies registered under which have been treated as 'State ' but in each of 283 those cases it would appear on analysis that either governmental business had been undertaken by the Society or what was expected to be the public obligation of the 'State ' had been undertaken to be performed as a part of the Society 's function. In a Welfare State, as has been pointed out on more than one occasion by this Court, Governmental control is very pervasive and in fact touches all aspects of social existence. ln the absence of a fair application of the tests to be made, there is possibility of turning every non governmental society into an agency or instrumentality of the State. That obviously would not serve the purpose and may be far from reality. A broad picture of the matter has to be taken and a discerning mind has to be applied keeping the realities and human experiences in view so as to reach a reasonable conclusion. Having given our anxious consideration to the facts of this case, we are not in a position to hold that ICPS is either an agency or instrumentality of the State so as to come within the purview of 'other authorities ' in Article 12 of the Constitution. We must say that ICPS is a case of its type typical in many ways and the normal tests may perhaps not properly apply to test its character. While we were referring to the cases in an earlier part of our judgment, we have noticed the caution indicated by this Court that even if some institution becomes 'State ' within the meaning of Article 12, its employees do not become holders of civil posts so as to become entitled to the cover of Article 311. They would, however, be entitled to the benefits of Part III of the Constitution. It is unnecessary to examine the appellant 's case keeping Articles 14 and 16 of the Constitution in view as on the concession of Dr. Anand Prakash the proceedings will have to reopen. Before we part with this case, we must indicate what reliefs the appellant would be entitled to. Now that the order of the dismissal is set aside and the proceedings have been restored to the stage of enquiry, the appellant shall be deemed to have been restored to service. The appellant would have become entitled to the normal relief available in such a situation. He should be deemed to be in service and we do not agree with Dr. Anand Prakash that his suspension should continue. His suspension which had merged into dismissal has been vacated. It shall, however, be open for the employer to make any direction as is deemed appropriate in that behalf in future. The appellant, therefore, becomes entitled to the salary for the past period subject to his satisfying the authorities that he has not earned any other income during that period. The appellant shall be given reasonable opportunity by the enquiring officer to meet the charges 284 and the enquiry shall be completed with in four months. The appellant has personally assured us in Court that he will fully cooperate in the enquiry. The enquiry officer shall allow inspection to the appellant of all records relevant to the enquiry. We make no order as to costs. S.L. Appeal disposed of.

% The respondent was a Sarpanch of a Gram Panchayat. Consequent upon a report made by the Sub Divisional officer, against the respondent stating the facts and circumstances which satisfied the conditions mentioned in section 115 of the orissa Gram Panchayat Act, 1964 for his suspension and removal, the second appellant, by his order dated 22.4.85, suspended the respondent. A notice, as required by sub section (2) of section 151, was served on the Sarpanch who filed his detailed reply and was also personally heard. As the explanation was not considered satisfactory, an order dated 24.10.86 removing him from the office of the Sarpanch was passed, in which it was mentioned that the appellant 's further continuance in office would be detrimental to the interest of the Gram Panchayat as also of the inhabitants of the Grama. A second notification dated 24.10.86 under sub section (4) was also passed. The Sarpanch challenged the above notifications before the High Court. The High Court quashed the notifications on the sole and simple ground that the order did not satisfy one of the mandatory requirements, i.e. the appellant 's further continuance in the office would be detrimental to the interest of the Gram Panchayat or inhabitants of the Grama. Allowing the appeal, ^ HELD: The language of sub section (2) does not require a repetition of the necessary satisfaction in the same language as referable to sub section (1). Besides, the section cannot be interpreted to mandatorily lay down a rule for the authority concerned to express his conclusion in relation to the fulfilment of the conditions mentioned therein in a particular form using a particular set of words. [181B] 178 What is contemplated by the section is the formation of an opinion in this regard after giving a reasonable opportunity to the Sarpanch in question to meet the allegations suggested and to announce the conclusion in unambiguous and express terms. All that has been done in the instant case. 1 [181B C] The second appellant, while passing the order of suspension under sub section (l) of section 115, expressly stated that further continuance of the appellant in the office would be detrimental to the interest of the Gram Panchayat and the inhabitants of the Grama. The State Government was of the opinion that the circumstances specified in sub section (1) existed. In the order of removal, the State Government after mentioning the allegations, stated that the explanation of the Sarpanch was not acceptable and he was, therefore, being removed from the office. The allegations made against him thus were accepted as correct. The High Court was, therefore, not justified in quashing the impugned orders.[180 H; 181A,C]

titions Nos. 7897 7901, 8077 86, 8115 34, 7969 78, 4591 4598 of 1983, 788 92, 1360, 2225, 2365 67 of 1982, 7924 52, 8049 50, 7963 68, 8087 92, 8093 97, 8137 69 5824, 5818, 5233, 4578, 4577, 4574, 4576, 8047 48 of 1983, 7490 92/82, 3560, 5625, 5830, 6071 75, 6083 90, 6098 6101, 6102 29, 6180 88, 7046 47, 7495, 7613 14 7622 26, 7656 60, 7663 68, 7670 82, 8003, 8005, 8006, 4583, 8434 40, 8427 33, 5356 64, 7618 21, 7655, 8391 93, 3326, 3939, 6133 79 of 1983, 9347, 7800 and 9803 of 1982. (Under article 32 of the Constitution of India). WITH Civil Appeal No. 31 34 of 1981. Appeals from the judgment and order dated the 18th December, 1980 of the Karnataka High Court in Writ Petitions Nos. 21090 and 21339 of 1980. 743 AND Civil Appeals Nos. 1735 06 of 1981 Appeal by Special leave from the judgment and order dated the 19th May, 1981 of the Karnataka State Transport Appellate Tribunal, Bangalore in Appeal Nos. 643 and 644 of 1980. AND Special Leave Petition No. 2275 of 1982. From the Proceedings dated 6th October, 1981 of the Secretary, Karnataka State Transport Authority Bangalore, in Subject No. 165 of 1981. For the Appearing Parties: K. K. Venugopal, R. B. Datar & Ms. Madhu Mool Chandani, K. N. Bhatt, A. T. M. Sampath, P. N. Ramalingam, B.P. Singh, section section Javali, N. K Sharma, Harbans Lal, R. N. Poddar, N. section Das Bahl, V. G. Mehta, V. K. Verma, P. R. Mridul, Vineet Kumar, C. section Vaidyanathan, N. Nettar, B. R. L. Iyengar, P.R. Ramasesh, P. K. Pillai, R. P. Bhatt, Swaraj Kaushal, M. Veerappa and A. K. Sharma. The Judgment of the Court was delivered by DESAI, J. Appellants and petitioners in this group of appeals and special leave petition and writ petitions are persons who have obtained or were desirous of obtaining temporary tourist permits valid for the whole of India styled as 'All India Tourist Permit '. The chronology of events leading to the appeals and writ petitions may be briefly stated. Sub sec. (7) was inserted in Sec. 63 of the (Act for short) with effect from October 1, 1970 empowering State Transport Authority in each State, for the purpose of promoting tourism, to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that State, specify in this behalf. The Central Government specified that the State Transport Authority in each State may grant permit as 744 contemplated by Sec. 63 (7) not exceeding 50 in number. Armed with this power, the State Transport Authority of Karnataka State in all granted 36 such permits. There were thus 14 vacancies. It appears that several persons applied for temporary all India tourist permits to the State Transport Authority of Karnataka State. These applications for the permits were rejected and some of the applicants who were respondent Nos. 3 to 11 in the writ petition in the High Court and who are appellants in this Court preferred appeals to State Transport Appellate Tribunal. The appellate tribunal purporting to exercise power under Sec. 62 of the Act granted temporary all India tourist permits to them. Some of the holders of regular permits granted under sec. 63 (7) of the Act filed writ petitions in the High Court of Karnataka. By a common Judgment the Division Bench of the High Court allowed the writ petitions, inter alia, on the ground that the grant of a permit under Sec. 63 (7) must be in accordance with the provisions of the various sections set out therein which does not include Sec. 62 under which alone temporary permit can be granted and therefore, grant of temporary permits for tourist vehicles of all India operation is not permissible. Accordingly, a writ of certiorary was issued guashing and setting aside the decision of the State Transport Appellate Authority. On the request of the present appellants, the High Court granted a certificate under article 134 A of the Constitution as in its view a substantial question of law of general importance, namely, whether a temporary permit can be granted in respect of a tourist vehicle for all India operation, does arise and further in its opinion the question needs to be decided by the Supreme Court. Hence some appeals by certificate. Following the decision of the High Court, large number of appeals pending before the State Transport Appellate Authority were dismissed and the appellants whose appeals were dismissed have approached this Court under article 136 of the Constitution. Further a large number of writ petitions have been filed under article 32 of the Constitution questioning the correctness of the decision of various transport authorities refusing to grant temporary all India tourist permits and praying for a writ of mandamus directing the State Transport Authority of various States to grant such permits. A further prayer in some of the writ petitions is to the effect that that part of sub sec. (7) of Sec. 63 which enables the Central Government to prescribe a quota for each State in resp ct of all India tourist permits, is violative of the Constitution and must be declared unconstitutional. 745 As common questions have been raised in the appeals, special leave petitions and the writ petitions, they were heard together and are being disposed of by this common judgment. The narrow and the only question that was canvassed before us is: whether there is power in any of the Transport Authorities as enumerated in Sec. 44 of the Act to grant temporary all India tourist permits ? In other words, whether the power conferred by Sec. 62 of the Act enabling the Regional Transport Authority without following the procedure laid down in Sec. 57, to grant temporary permit as therein envisaged would comprehend the power to grant temporary all India tourist permits ? We must frankly confess that this neat question of law is none too easy of answer and much can be said in support of rival contentions. At the outset, let it be made distinctly clear that there is no nomenclature as regular or permanent all India tourist permit. 63 (7) has specified a permit that can be granted by the State Transport Authority of any State, subject to the quota fixed by the Central Government valid for the whole or any part of India. In other words, such a permit would enable the permit holder to undertake an all India operation which for brevity 's sake may be described as all India tourist permit. 63 (7) speaks of such permit which may be granted after complying with the various sections of the Act therein set out. Such permits when granted may be styled as regular all India tourist permit in contradistinction to what the appellants and the petitioners seek as temporary all India tourist permit. A brief resume of the relevant provisions of the Act may shed light on the controversy raised before us. Expression 'contract carriage ' is defined in Sec. 2 (3) to mean a motor vehicle which carries a passenger or passengers for hire or reward under a contract express or implied for the use of the vehicle as a whole at or for a fixed or agreed rate or sum etc. 'Stage carriage ' is defined in Sec. 2 (29) to mean a motor vehicle carrying or adapted to carry more than six persons excluding the driver which carries passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey. Expression 'tourist vehicle ' is defined in Sec. 2(29 A) to Mean a contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as the State Government may, by notification in the official Gazette, specify in this behalf. The defini 746 tion of 'tourist vehicle ' was introduced by Amending Act 56 of 1969 by which Sec. 63 (7) was also introduced. Chapter IV bears the heading 'Control of Transport Vehicles '. 42 prohibits owner of a transport vehicle to use the same in the public place save in accordance with the conditions of a permit granted under the relevant provisions of the Act. It may be recalled that transport vehicle includes goods vehicle as well as passenger vehicle. Thus no passenger vehicles can be used in any public place without a permit. 44 requires the State Government to constitute various transport authorities in each State such as State Transport Authority, to exercise and discharge the powers and functions specified in sub sec. (3) as also Regional Transport Authority to exercise and discharge throughout such areas referred to as regions, as may be specified in the notification, powers and functions conferred on such authority. It would appear that a State Transport Authority is to be constituted for the whole State. The State is to be divided into various regions and a Regional Transport Authority has to be constituted for one or more of such regions. The powers and functions of the State Transport Authority are generally stated in sub sec. (3) which include; (a) the duty to co ordinate and regulate the activities and policies of the Regional Transport Authority, if any, of the State, (b) to perform the duties of a Regional Transport Authority where there is no such authority and, if it thinks fit or if so required by a Regional Transport Authority, to perform those duties in respect of any route common to two or more regions, (c) to settle the disputes and decide all matters on which differences of opinion arise between Regional Transport Authorities, and (d) to discharge such other functions as may be prescribed. 45 makes general provisions as to applications for permits. Sub sec. (2) of Sec. 45 provides that notwithstanding anything contained in sub sec. (1), the State Government may, by notification in the official Gazette, direct that in the case of any vehicle or vehicles proposed to be used in two or more regions Lying in DIFFERENT States, the application under Sec. 45 (1) shall be made to the State Transport Authority of the region in which the applicant resides or has his principal place of business. 46 specifies the contents of an application for a stage carriage permit. 49 prescribes the requirements of an application for a contract carriage permit. One of the requirements is to specify the area for which the permit is required. Primarily an application for a contract carriage has to be made to Regional Transport Authority as transpires from Secs. 50 and 51. It is necessary to notice this fact because an all India tourist permit is none the less a contract carriage permit with 747 this difference that its area of operation is the whole of India. It would further transpire from a combined reading of Secs. 49, 50 and 51 that an application for a contract carriage permit with its operational jurisdiction intra State has to be made to the Regional Transport Authority and if inter State operation is contemplated, the application has to be made to the State Transport Authority of the region in which the applicant resides or has his principal place of business as contemplated by Sec. 45 (2). This becomes further manifest from the provisions of Sec. 63. (1) which provides that except as otherwise provided, a permit granted by the Regional Transport Authority of any one region shall not be valid in any region, unless the permit has been counter signed by the Regional Transport Authority of that other region and a permit granted in any one State shall not be valid in any other State unless counter signed by the State Transport Authority of that other State or by the Regional Transport Authority concerned. Sub sec. (6) of Sec. 63 starts with a non obstante clause and it provides that notwithstanding anything contained in sub sec. but subject to any rules that may be made under this Act, the Regional Transport Authority of any one region may, for the convenience of the public, grant a special permit in relation to a public service vehicle for carrying a passenger or passengers for hire or reward under a contract, express of implied for the use of the vehicle as a whole without stopping to pick up or set down along the line of route passengers not included in the contract. 11 Then comes sub sec. (7) of Sec. 63 which enables the State Transport Authority to grant regular all India tourist permit. It may be extracted: "Notwithstanding anything contained in sub section (1), but subject to any rules that may be made under this Act, any State Transport Authority may, for the purpose or promoting tourism, grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that State, specify in this behalf, and the provisions of Sections 49, 50, 51, 57, 58, 59, 59 A, 60, 61 and 64 shall, as far as may be, apply in relation to such permits. " There is a proviso to the section which is immaterial for the present purpose. Sub sec. (7) of Sec. 63 which confers power on a State transport Authority to grant regular all India tourist permit makes 748 it obligatory that while granting such permits or in order to grant such permit or with a view to obtain such permit the applicant as well as the concerned authority shall have to act in accordance with Secs. 49, 50, 51, 57, 58, 59, 59 A, 60, 61 and 64 as far as may, apply in relation to such permits. A reference to Sec. 62 at this stage is necessary because the State Transport Appellate Authority reversed the decision of the Regional Transport Authority and directed grant of temporary all India tourist permit under the erroneous understanding that such temporary permits can be granted under Sec. reads as under: "62. Temporary permits (1) A Regional Transport Authority may without following the procedure laid down in Section 57, grant permits, to be effective for a limited period not in any case to exceed four months, to authorise the use of a transport vehicle temporarily (a) for the conveyance of passengers on special occasions such as to and from fairs and religious gatherings, or (b) for the purposes of a seasonal business, or (c) to meet a particular temporary need, or (d) pending decision on an application for the renewal of a permit, any may attach to any such permit any condition it thinks fit: Provided that a temporary permit under this section shall, in no case, be granted in respect of any route or area specified in an application for the grant of a new permit under Section 46 or Section 54 during the pendency of the application: Provided further that a temporary permit under this section shall, in no case, be granted more than once in respect of any route or area specified in an application for the renewal of a permit during the pendency of such application for renewal. 749 (2) Notwithstanding anything contained in subsection (1), a temporary permit may be granted there under in respect of any route or area where (i) no permit could be issued under Section 48 or Section 51 or Section 54 in respect of that route or area by reason of an order of a court or, other competent authority restraining the issue of the same, for a period not exceeding the period for which the issue of the permit has been so restrained; or (ii) as a result of the suspension by a court or other competent authority of the permit of any vehicle in respect of that route or area, there is no trans port vehicle of the same class with a valid permit, in respect of that route or area, or there is no adequate number of such vehicles in respect of that route or area, for a period not exceeding the period of such suspension.: Provided that the number of transport vehicles in respect of which the temporary permit is so granted shall not exceed the number of vehicles in respect of which the issue of a permit has been restrained or as the case may be, the permit has been suspended. " Translating these various provisions into functional implementation, an applicant who desires to obtain a permit for a tourist vehicle has to make an application under Sec. 63 (7). Such an application has to be processed as required by Sec. 49 which would immediately imprint the application as an application for a contract carriage permit with this difference that it shall have an all India operation. If it is an application simpliciter for a contract carriage permit, Sec. 50 would necessitate the application being made to Regional Transport Authority, but if the contract carriage permit is to be valid for an inter State operation, obviously, the application will have to be made to State Transport Authority Sec. 63 (7) also requires that an application for all India tourist permit has to be made to State Transport Authority. Therefore, even though an application for contract carriage permit has ordinarily to be made to Regional Transport Authority, if all India operation is desired in respect 750 of a tourist vehicle, the same has to be made to the State Transport Authority. This application has to be processed according to the procedure prescribed in Sec. A contract carriage permit other than the one having an all India operation must specify the area or the route or routes on which the permit holder can ply the vehicle under the authority of contract carriage permit as required by Sec. Permit contemplated by Sec. 63 (7) can be granted and shall be effective without renewal for such period, not less than 3 years and not more than 5 years, as the authority granting the permit may specify. (See Sec. 58). In view of the power conferred by Sec. 60, the transport authority which granted the permit will have the power to cancel or suspend the same, if one or more of the conditions prescribed in Sec. 60 are satisfied. Sec. 63 (7) for the first time conferred power on the State Transport Authority in a State to grant a permit which will enable the permit holder to use the tourist vehicle for all India operation without complying with sub sec. (1) of Sec. 63 which required countersignature of tho State Transport Authority or the Regional Transport Authority as the case may be of State or region other than the one by which the permit is granted, to undertake an operation in the area within the jurisdiction of the counter signing State Transport Authority or Regional Transport Authority as the case may be. Therefore, unquestionably even though the permit contemplated by Sec. 63 (7) has a larger operational area, it is none the less a contract carriage permit, and Sec. 63 (7) mandated that the authority granting such permit will have to comply with all the sections except Sec. 62 which have to be complied with for obtaining a contract carriage permit contemplated by Sec. Why was Sec. 62 omitted from Sec. 63 (7) is the root question ? The High Court in this connection observed that "since subsection (6) of Sec. 63 has provided for grant of special permits for all India operation of contract carriages, it is reasonable to infer that the omission to mention Sec. 62 in the latter part of sub sec. (7) of Sec. 63 was deliberate and that the legislature did not intend grant of temporary permits for tourist vehicles for all India operation. " This view is assailed on behalf of the appellants and the writ petitioners. It was contended that as an elaborate procedure is prescribed for grant of stage carriage permit or contract carriage permit and that it being a prolix and time consuming process, Sec. 62 keeping in 751 view the urgent or emergent need to provide transport facilities to travelling public, conferred power on Regional Transport Authority to grant temporary permit to meet a particular temporary need or for purposes of seasonal business or pending decision of an application for the renewal of a permit. It was urged that if either a stage carriage or contract carriage permit can be granted by a Regional Transport Authority to meet a particular temporary need or pending decision of an application for the renewal of a permit, the Regional Transport Authority can as well grant temporary all India tourist permit for the self same reasons. There are two fallacies in the submissions on behalf of the appellants and the writ petitioners. 62 confers power on the Regional Transport Authority to grant temporary permit. A Regional Transport Authority is set up for a region. The jurisdiction of the Regional Transport Authority extends over a region which is usually a small part of the State because for the purposes of the Act State has to be divided into regions. Power to grant temporary permit is conferred on Regional Transport Authority, amongst others, meet a particular temporary need. Regional Transport Authority having jurisdiction over a comparatively small area may be able to gauge, notice or appreciate a particular temporary need for which a temporary permit can be granted for a period not exceeding 4 months without following the procedure prescribed. in Sec. The same power can be enjoyed pending the renewal of an already granted permit. By its very nature. 62 caters to a situation where permits to operate vehicles may be granted for a short period to meet some temporary or emergency requirement or where time is likely to be spent in processing an application for renewal of a permit and in the interregnum the travelling public may not be put to inconvenience on account of non availability of vehicles with permits. The Madhya Pradesh State Road Transport Corporation vs The Regional Transport Authority, Raipur).(1) An authority having jurisdiction over a comparatively small area is favourably placed to notice a situation as contemplated by Sec. Therefore, the power is conferred on Regional Transport Authority and not the State Transport Authority to grant temporary permit in the circumstances set out in Sec. 62, because State Transport Authority has jurisdiction over the whole State, and the State Transport Authority exercising the power under Sec. 63 (7) will have to have an all India perspective. 752 Therefore, the statute did not confer such power on State. Transport Authority because by its very nature the Regional Transport Authority having jurisdiction over a comparatively smaller area would be better equipped to appreciate and deal with the needs of the travelling public of a temporary character or pending the renewal of a permit. There is intrinsic evidence in the language of Sec. 62 that it was meant to be used by Regional Transport Authority for dealing with a situation within its small area. If Regional Transport Authority is not competent to grant regular all India tourist permit, no canon of construction would permit the Court to clothe him with power to grant temporary all India tourist permit. Even if the dictum that the power to grant final relief inheres the power to grant interim relief can be extended to executive authority, yet when the Regional Transport Authority has no power to grant regular all India tourist permit, it would be impossible to hold that such authority has none the less the power to grant temporary all India tourist permit. Therefore, the very language of Sec. 62 on which the High Court substantially relied in support of its conclusion would be sufficient to negative the contention canvased on behalf of the appellants and the petitioners. It was, however, urged that Sec. 44 (3) contemplates a situation where a State Transport Authority has to perform the duties of Regional Transport Authority and, therefore, the expression 'Regional Transport Authority ' in Sec. 62 would either comprehend State Transport Authority or would not atleast exclude the power conferred on the lower authority to be enjoyed by the higher authority. 44 (3) would not render any help in this behalf because it merely provides that a State Transport Authority can perform the duties of a Regional Transport Authority where there is no such Authority or where, if it thinks fit or if so required by a Regional Transport Authority, to perform those duties in respect of any route common to two or more regions. None of these conditions under which a State Transport Authority can perform the functions and discharge the duties of a Regional Transport Authority are satisfied, and there fore, it is difficult to accept the submission that the expression 'Regional Transport Authority ' used in Sec. 62 will comprehend State Trans port Authority. It is equally not possible to accept the submission that when a power is conferred on a lower authority that power can always be enjoyed by the authority higher in the hierarchy in relation to the lower authority. There is no express provision in the statute which provides that the Stats Transport Authority can always and 753 without any fetter enjoy the power of the Regional Transport Authority and in the absence of such provision it is difficult to read merely on the basis of vertical hierarchy wherever the lower authority is mentioned in the statute, the higher authority be included therein. Viewed from this angle, we do not propose to undertake the exercise of ascertaining whether State Transport Authority can be said to be the higher authority in relation to Regional Transport Authority. It was urged that temporary permit can be granted pending decision of an application for a renewal of a permit; and that as in the State of Karnataka out of a quota of 50 permits granted by the Central Government under Sec. 63 (7), only 36 have been issued, the State Transport Authority can grant temporary permit for the vacancies till regular all India tourist permits are granted. Support was sought to be drawn for the submission from cl. (d) of sub sec. (1) of Sec. 62 which provides that temporary permit can be granted pending decision on an application for the renewal of a permit. The section does not provide for grant of temporary permits pending grant of a regular permit. On the contrary the first proviso to Sec. 62 (1) makes what is implicit in the cl. (d) explicit by providing that a temporary permit under Sec. 62 shall, in no case, be granted in respect of any route or area specified in an application for the grant of a new permit under Section 46 or Sec. 54 during the pendency of the application. It may be recalled that Sec. 46 provides for an application for a stage carriage permit and Sec. 54 provides for an application for public carriers permit. Therefore, in no case a temporary permit can be granted under the section pending grant of or renewal or a contract carriage permit. Sub sec (2) of Sec. 62, however, carves out an exception where a temporary contract carriage permit can be granted in respect of any route or area where no permit could be issued by reason of an order of the court or, other competent authority restraining the issue of the same. That is not the case here. Therefore, there is no power to grant a temporary contract carriage permit and ipso facto the temporary all India tourist permit under Sec. 62 and the contention stands negatived by the very language of Sec. 62 Accordingly there is no merit in the submission. A few days after the arguments were concluded and the matter stood over for Judgment, Mr. K. N. Bhatt, learned counsel for some of the petitioners submitted a written brief in which it was stated that the in its application to the State of 754 Karnataka was amended by the Motor Vehicles (Mysore Amendment Act, 1973 (Karnataka Act No. 25 of 1975) which, after receiving the assent of the President came into force on January 12, 1974, has introduced the following sentence at the end of sub sec. (2) of Sec. 45. The sentence reads as under: "When such a notification is issued, reference to the Regional Transport Authority in Sections 47, 48, 50, 51, 53, 54, 55, 56, 57, 58, 62, 63 and 68 shall, in respect of the application for permit for using a vehicle in two or more regions Lying in different States, be construed as reference also to the State Transport Authority. " By the same Amending Act sub sec. (2A) has been added in Sec. 45 which reads as under: "Notwithstanding anything contained in sub section (1), the State Government may, by notification in the official Gazette, direct that in the case of any vehicle or vehicles proposed to be used in two or more regions lying in the State, the application under that sub section shall be made to the State Transport Authority. When such a notication is issued, reference to the Regional Transport Authority in sections 47, 48, 50, 51, 53, 54, 55, 56, 57, 58. 62, 63 and 68F shall in respect of applications for permit for using a vehicle in two or more regions lying in the State, be construed as reference also to the State Trans port Authority. " Relying on these amendments it was urged that as far as the State of Karnataka is concerned on the issue of a notification under sub sec (2A) of Sec 45 the expression 'Regional Transport Authority ' in Sec. 62 will also comprehend State Transport Authority and therefore, the submission of the appellants and the petitioners cannot be negatived on the ground that only Regional Transport Authority is empowered to issue temporary permits. Though no notification as required under sub sec. (2A) of Sec. 45 was brought to our notice we are prepared to proceed on the assumption that such a notification has been issued. But even if in the application of the to the State of Karnataka, Sec. 62 would also enable State Transport Authority to issue temporary permit, it can only be done in the circumstances and eventualities mentioned in that. 755 section. It will be presently pointed out that power to grant temporary permit under Sec. 62 in the circumstances and eventualities therein mentioned would not comprehend the power to grant temporary all India tourist permit because none of the conditions under which the same can be granted would be attracted and State Transport Authority of a State will have no material for satisfaction of one or the other condition set out in Sec. 62 which would enable it to grant such a permit. Therefore, this amendment would hardly make any difference in the outcome of the matter. It was urged that the High Court was in error in attaching importance to the omission of Sec. 62 from array of sections subject to which an application for an all India tourist permit has to be processed which according to the High Court clearly manifests the legislative intention that there was no question of granting under any circumstances temporary all India tourist permit. It was contended that omission of Sec. 62 is quite logical because if it was placed amongst the array of sections subject to which applications for all India tourist permit have to be processed, it would have become incongruous. Proceeding along this line it was submitted that Sec. 63 (7) provides that 'such permit ' as contemplated by Sec. 63 (7) will be granted in accordance with the various provisions set out therein, the expression 'such permit ' can only mean regular or all India tourist permit and the temporary all India tourist permit was not to be catered to by Sec. 63 (7) but by Sec. 62 and therefore it was rightly omitted from the array of sections set out in sec. 63 (7). If one were to conclude from the mere omission of Sec. 62 from amongst the array of sections subject to which an application for permit under sec. 63 (7) will have to be processed that no temporary all India tourist permit can be granted, there would have been some force in the submission on behalf of the appellants and the writ petitioners. But we would presently point that the whole concept of granting temporary all India tourist permit is foreign to the concept of all India tourist permit and that this conclusion gets reinforced by the omission of Sec. 62 from the array of various sections subject to to which a permit under Sec. 63 (7) can be granted. Sub section (7) was introduced in Sec. 63 in 1970. The object underlying the introduction of sub sec. (7) becomes manifest from the language used therein. Till the introduction of sub sec. (7), the situation was that the Regional Transport Authority can grant contract carriage permit valid for the area under its jurisdiction or when counter signed by the State Transport Authority of the other State 756 then the vehicle can be operated in that other State. Now with a view to promoting tourism, it was decided to clothe State Transport Authority with power to issue a permit which without the necessity of obtaining counter signature of other Transport Authority of other State valid for operating the vehicle throughout the length and breadth of the country. With a view to providing uninterrupted flow of tourist traffic, thereby expanding tourist facilities which would promote tourism in the country, a contract carriage permit with all India operation was conceived and power was conferred on the State Transport Authority subject to the quota prescribed by the Central Government for each State to grant such permit. Every State had the prescribed quota and we were informed that at present each State has a quota of 50 permits. Within the quota, State Transport Authority in each State can grant a contract carriage permit in respect of a tourist vehicle for all India operation. A contract carriage permit can as well be granted under Sec. 51 in respect of a vehicle which carries a passenger or passengers for hire or reward under a contract express or implied for the use of the vehicle as a whole at or for a fixed or agreed rate or sum etc. Any ordinary vehicle meeting the requirements of law can be operated under a contract carriage permit granted under Sec. But when it comes to granting of a contract carriage permit available for all India operation, it has to be in respect of a tourist vehicle. Tourist vehicle has been defined to mean a contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as the State Government, may, by notification in the official Gazette, specify in this behalf. We were told that some special arrangements for comfortable journey over long distances has to be provided in a tourist vehicle. What is the distinction ? An all India tourist permit is none the less a contract carriage permit but while contract carriage permit can be granted for any vehicle not required to be specially adapted for the purpose, a contract carriage permit for all India operation as envisaged by Sec. 63 (7) can only be granted in respect of tourist vehicle, and it appears that it requires a substantial financial investment for adapting a vehicle as a tourist vehicle. This intrinsic evidence shows that such huge or heavy outlay cannot be imposed on an applicant by giving him temporary all India tourist permit which cannot be granted for a period extending 4 months. If Sec. 62 were to be a proviso to Sec. 63 (7) and therefore, one can conceive of granting a temporary all India tourist permit for meeting a particular temporary need, it is difficult to envisage a particular temporary need of an all India variant which can be 757 noticed by State Transport Authority of one State and such authority can proceed side tracking all relevant provisions to grant temporary all India tourist permit. Can there conceivably be a particular temporary need felt throughout India at the same time ? If the answer is in the affirmative, all the States can grant temporary permits. There will be more vehicles and less travellers. Further a State Transport Authority of one State may believe that there exists a particular temporary need but the view of the other State Transport Authority can be exactly to the contrary, and State Transport Authority. Of one State can open the flood gates of temporary permits permitting tourist vehicles to invade other States. It may be that a particular temporary need may arise in one State but that can be catered to by the Regional Transport Authority of the region or the State Transport Authority of the State giving direction to Regional Transport Authority to grant contract carriage permit under Sec. 51. It is not necessary to have recourse to Sec. 63 (7) in such a situation, and if one State cannot cater to the particular all India need, other States having their own quota can fill in the bill. Having thus examined the whole concept of all India tourist permit, the question of granting of a tourist permit to cater to a particular temporary need appears to be foreign to the very concept of all India tourist permit. For this additional reason, we are of the opinion that the High Court was perfectly justified in reaching the E conclusion that there is no power to grant temporary all India tourist permit and the High Court rightly set aside the decision of the State Transport Appellate Authority. No case is therefore, made out for interfering with the same. Accordingly all these appeals, special leave petitions and writ petitions fail and each of which is dismissed with costs where appearance has been entered into on the other side. All interim orders are vacated. H.L.C. Appeals and petitions dismissed.

For the offence of murder of Smt. Gyani, her husband Virbhan Singh his mother Smt. Gyani Devi (both appellants before the Supreme Court) alongwith his father Sileti Singh were arraigned before life Sessions Judge, Etawah, section 302 read with Section 34 Indian Penal Code. According to the prosecution the motive was the selfish animal nature in the husband and his parents which has come out in the form of their determination that the husband should remarry after doing away with the obstacle in the shape of his existing wife on the sole ground that she was inauspicious due to the fact that she did not bear children for four or five years after the marriage and that even though thereafter she conceived twice and successfully gave birth to two male babies, both those babies did not survive beyond a few weeks or days. The further evidence of the prosecution were that the accused assaulted the deceased and then hung her with a rope to give the impression of suicide, did not inform anyone and kept the body in the room, that an attempt made by Sileti Singh to remove the body in a lorry failed, that when P.W.1, the sister of the deceased went along with P.W.4 her brother in law to see the deceased on the 14th of August, 1968, the husband and the mother told a lie that the deceased had gone out to get medicine, that again on the 15th August, 1968 after P.W,l 's repeated insistence, the dead body was shown to her in a decomposed condition, that Sileti Singh only thereafter lodged a report at the police station Jawaharnagar to the effect that the deceased committed suicide which version was accepted by the Police and the Panchas; that on the insistance of P.W.1, the dead body was sent for postmortem, that the postmortem revealed (a) five antemortem injuries including the breakage of the right side hyoid bone under the ligature mark, (b) death should have taken place between 5.30 P.M. On August 13th, 1968 and 5.30 A.M: on August 14th, 1968, (c) death was due to shock and haemorrhage as a result of injury to liver aud stomach as well as asphyxia due to hanging and (d) inview of the antemortem injuries found, there was little possibility of the deceased hanging herself. The Sessions Judge found, on a careful and analytical consideration of the evidence, all the accused guilty, convicted them under Section 302 I.P.C. and sentenced the three of them to life imprisonment. In the appeal filed the 601 High Court confirmed the conviction and sentence of the present appellants and acquitted Sileti Singh, the father. There was no appeal by the State against the acquittal. Dismissing the appeal, the Court ^ HELD: 1: 1. The conviction and senctence of the appellants are perfectly correct and sound, as they are guilt of the murder of the deceased in a brutal and heinous fashion. The case no doubt turns purely on circumstantial evidence. But the circumstances are so telling that the only conclusion reasonably possible is the one arrived at by the courts below that the deceased did not commit suicide by hanging hereself but was done to death by being brutally assaulted and thereafter hung by the neck with a rope. The medical evidence clearly goes to prove that it would not have been possible for the deceased, who had sustained severe injuries of the type and nature described in the post mortem report in the stomach and liver, to hang herself. The husband, Virbhan Singh and his mother, Smt. Gyani Devi, were throughout present in the house and no outsider had come to the house at the relevant time. According to the opinion of the doctor, the latest point of time at which the death of the deceased could have taken place was 5,30 a.m. On 14.8.1968 but even on the evening of that day when P.W.1, Shrimati Ram Kumari, sister of the deceased went to their house and enquired for the deceased, she was told by Virbhan Singh and his mother that the deceased had gone out with the father in law for getting some medicine. On the next day (15th August, 1968) rumours spread in the village that the deceased had been done to death and it was only when P.W. l accompanied by her brother in law, P.W. 4 went to the house of the accused and insisted on being shown the body that she was finally allowed to see the dead body of her sister which, by then, was already in a state of decomposition. Significantly, it is only subsequent thereto that Sileti Singh went to the police Station and lodged the report stating that the deceased had committed suicide by hanging. The conduct of the appellants is consistent only with their active involvement in the commission of the crime. It has come out in the evidence that on the evening of the 14th August 1968 at about 7.30 or 8.00 p.m. Sileti Singh had made attempts to remove clandestinely the dead body from the locality for which purpose he had met Brahma Nand (P.W. 3), a truck owner, and unsuccessfully tried to hire his truck to transport the dead body. [605 G H, 606 A E] Observations (i) If society should be ridden of this growing evil, it is imperative that whenever dastardly crimes of this nature are detected and the offence brought home to the accused, the courts must deal with the offender most ruthlessly and impose deterrent punishment. [602 E] (ii) Most strangely, in spite of the body being in a fairly advanced state of decomposition, thereby clearly indicating that the death had taken place a long time prior to the report given by Sileti Singh, which should have normally aroused serious suspicion in the mind of any reasonable person about the 602 version of suicide given by him, the Sub Inspector and the panchas were inclined to record the cause of death as suicide by hanging and close the case without any further investigation. [603 H 604 A] (iii) Though the reasons stated by the High Court in acquitting Sileti Singh by giving the benefit of doubt are not sound and convincing since the State has not preferred an appeal, his acquittal will stand. [606 F G]

Appeal No.110 of 1957. Appeal by special leave from the judgment and order dated February 25, 1955, of the former Bombay High Court in I.T.R. No. 57/X of 1954. N. A. Palkhivala and I. N. Shroff, for the Appellant. A. N. Kripal and D. Gupta, for the Respondent. November 24. The Judgment of the Court was delivered by KAPUR, J. This is an appeal by special leave against the judgment and order of the High Court of Bombay answering the question submitted to it. against the assessee firm who is the appellant before 653 us, the respondent being the Commissioner of Income tax. The appeal relates to the assessment year 1949 50, the accounting year ended on July 25, 1948. The appellant is a firm doing the business of importing dates from abroad and selling them in India. During the accounting year the appellant imported dates from Iraq. At the relevant time the import of dates by steamers was prohibited by two notifications dated December 12, 1946, and June 4, 1947, but they were permitted to be brought by country craft. Goods which had been ordered by the appellant were received partly by steamer and partly by country craft. Consignments, which were imported by steamer and were valued at Rs. 5 lacs were confiscated by the Customs Authorities under section 167, item 8 of the Sea Customs Act but under section 183 of that Act the, appellant was given an option to pay fines aggregating Rs. 1,63,950 which sum on appeal was reduced to Rs. 82,250. This sum was paid and the dates were released. On the sale of the goods certain profits accrued out of which it sought to deduct Rs. 82,250 paid as penalty on ordinary principles of commercial accounting. The Income tax Officer disallowed this claim which was also disallowed by the Appellate Assistant Commissioner. On appeal to the Income tax Appellate Tribunal this sum was held to be allowable by a majority of two to one. At the instance of the respondent the Tribunal referred the following question to the High Court for its opinion: "Whether on the facts and in the circumstances of the case, the payment of Rs. 82,250 is an allowable expenditure under Section 10(2) (xv) of the Indian Income tax Act?" The High Court held that the above amount of Rs. 82,250 could not be said to have been paid for salvaging the goods but was paid as a penalty incurred in consequence of an illegal, act on the part of the appellant and was therefore not an allowable item under section 10(2)(xv) of the Income tax Act. Against this judgment the appellant firm has come in appeal to this Court by special leave. 83 654 any contract of hire purchase was contemplated, cannot be applied simpliciter, because such a contract has in it not only the element of bailment but also the element of sale. At common law the term 'hire purchase ' properly applies only to contracts of hire conferring an option to purchase, but it is often used to describe contracts which are in reality agreements to purchase chattels by instalments, subject to a condition that the property in them is not to pass until all instalments have been paid. The distinction between these two types of hire purchase contracts is, however, a most important one, because under the latter type of contract there is a binding obligation on the hirer to buy and the hirer can therefore pass a good title to a purchaser or pledgee dealing with him in good faith and without notice of the rights of the true owner, whereas in the case of a contract which merely confers an option to purchase there is no binding obligation on the hirer to buy, and a purchaser or pledgee can obtain no better title than the hirer had, except in the case of a sale in market overt, the contract not being an agreement to buy within the Factors Act, 1889, or the Sale of Goods Act, 1893." The observations quoted above are based mostly on two leading cases which have come to be regarded as the locus classicus upon the subject, namely Lee vs Butler (1) in which the transaction was described by Lord Esher, M.R., as "Hire and Purchase Agreements" and Helby vs Matthews (2) in which the House of Lords distinguished the former case on the ground that in that case there was a binding contract to buy and not merely an option to buy, without any obligation to buy. Both these cases were decided in terms of Factors Act of 1889 (52 & 53 Viet. c. 45, section 9). Both the kinds of agreements exemplified by the two leading cases aforesaid would now be included in the definition of 'hire purchase ' as contained in section 21 of the Hire Purchase Act, 1938 (1 & 2 Geo., 6, c. 53): " 'Hire purchase agreement ' means an agreement for the bailment of goods under which the bailee (1) (2) (1895] A.C. 471. 655 may buy the goods or under which the property in the goods will or may pass to the bailee, and where, by virtue of two or more agreements, none of which by itself constitutes a hire purchase agreement, there is a bailment of goods and either the bailee may buy the goods, or the property therein will or may pass to the bailee, the agreements shall be treated for the purposes of this Act as a single agreement made at the time when the last of the agreements was made. " It is clear that under the Law, as it now stands, which has now been crystallised into the section of the Hire Purchase Act, quoted above, the transaction partakes of the nature of a contract or bailment with an element of sale, as aforesaid, added to it. 'in such an agreement, the hirer may not be bound to purchase the thing hired;. he may or may not be. But in either case, if there is an obligation to buy, or an option to buy, the goods delivered to the hirer by the owner on the terms that the hirer, on payment of a premium as also of a number of instalments, shall enjoy the use of the goods, which ultimately may become his property, the transaction amounts to one of hire purchase, even though the title to the goods has remained with the owner and shall not pass to the hirer until a certain event has happened, namely, that all the stipulated instalments have been paid, or that the hirer has exercised his option to finalise the purchase on payment of a sum, nominal or otherwise. But it has been contended on behalf of the petitioners that there is no binding agreement to purchase the goods and that title is retained by the owner not as a security for payment of the price but absolutely. According to third term of the agreement, on the hirer duly performing and observing the terms of the agreement, with particular reference to the payment of the monthly instalments, "the hiring shall come to an end and the vehicle shall, at the option of the hirer, become his absolute property; but until such payments as aforesaid have been made, the vehicle shall remain the property of the owners. The hirer shall also have the option of purchasing the vehicle at any 656 belonging to him may be, the name and residence of the said person and the amount of penalty or increased rate of duty unrecovered; and such Magistrate shall thereupon proceed to enforce payment of the said amount in like manner as if such penalty or increased rate had been a fine inflicted by himself. " These sections show the punishments provided for the breach of the prohibitions in regard to importation or exportation of goods under sections 18 and 19; the power of the Customs Authorities to give an option to pay in lieu of confiscation and how the penalties are to be imposed. Therefore when the appellants incurred the liability they did so as a penalty for an infraction of the law; but it cannot be said that the money which they had to pay was not paid as a penalty and in fact under section 167(8) it was a penalty. In support of his argument counsel for the appellant firm referred to Maqbool Hussain etc. vs The State of Bombay etc. (1) and to the following passage at p. 742 where Bhagwati, J., said: "Confiscation is no doubt one of the penalties which the Customs Authorities can impose but that is more in the nature of proceedings in rem than proceedings in personam, the object being to confiscate the offending goods which have been dealt with contrary to the provisions of the law and in respect of the confiscation also an option is given to the owner of the goods to pay in lieu of confiscation such fine as the officer thinks fit. All this is for the enforcement of the levy of and safeguarding the recovery of the sea customs duties. " Similar observations were made by section K. Das, J., in Shewpujanrai Indrasanrai Ltd. vs The Collector of Customs & Ors. (2) where it was said that a distinction must be drawn between an action in rem and proceeding in personam and that confiscation of the goods is a proceeding in rem and the penalties are enforced against the goods whether the offender is known or not. The view taken by this Court in the other two cases cited by counsel for the appellants, i.e., Leo Roy (1) ; (2) ; , 836. 657 Frey vs The Superintendent, District Jail, Amritsar (1) and Thomas Dana vs The State of Punjab (2) is the same. In Dana case (2) Subba Rao, J., said at p. 298: "If the authority concerned makes an order of confiscation it is only a proceeding in rem and the penalty is enforced against the goods. On the other hand, if it imposes a penalty against the person concerned, it is a proceeding against the person and he is punished for committing the offence. It follows that in the case of confiscation there is no prosecution against the person or imposition of a penalty on him." In Maqbool Hussain 's case (3) the question for decision was whether after proceedings had been taken under the Sea Customs Act an accused person could be prosecuted and could or could not rely upon the plea of double jeopardy, it was held that he could not. In Shewpujanrai 's case (4) the contention raised was that after proceedings had been taken under the Foreign Exchange Regulation Act it was not open to the Customs Authorities to take any action under the Sea Customs Act. The other two cases were similar to Maqbool Hussain 's case (3). The contention now raised before us is quite different. What is to be decided in the present case is whether the penalty which was paid by the appellant firm was an allowable deduction within section 10(2)(xv) of the Income tax Act which provides: section 10(2)(xv) "any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation. " The words "for the purpose of such business" have been construed in Inland Revenue vs Anglo Brewing Co. Ltd. (5) to mean "for the purpose of keeping the trade going and of making it pay". The essential condition of allowance is that the expenditure should have been laid out or expended wholly and exclusively for the purpose of such business. (1) ; (2) [1959] Supp. I S.C.R. 274, 298. (3) ; (4) ; , 836. (5) , 813. 658 In deciding this case, reference to decisions in some English cases will be fruitful. In Commissioners of Inland Revenue vs Warnes & Co. (1), the assessee who carried on the business of oil exporters were sued for a penalty on an information exhibited by the Attorney General under the Sea Customs Consolidation Act for breach of orders and proclamations. The matter was settled by consent on the assessee agreeing to pay a mitigated penalty of pound 2,000. All imputations on the moral culpability of the assessees were withdrawn. The provisions of the Act under which this information was lodged and penalty paid was similar to the provisions of the Indian Sea Customs Act. This amount was held not to be a proper deduction because in order to be within the provision similar to section 10(2) (xv) of the Indian Act the loss had to be something within commercial contemplation and in the nature of a commercial loss. Rowlatt, J., relying on the observation of Lord Loreburn, L. C., in Strong & Co. vs Woodifield (2) said at p. 452: "but it seems to me that a penal liability of this kind cannot be regarded as a loss connected with or arising out of a trade. I think that a loss connected with or arising out of a trade must, at any rate, amount to something in the nature of a loss which is contemplable and in the nature of a commercial loss. I do not intend that to be an exhaustive definition, but I do not think it is possible to say that when a fine which is what the penalty in the present case amounted to has been inflicted upon a trading body, it can be said that that is a "loss connected, with or arising out of" the trade within the meaning of this rule. " This statement of the law was approved in the Commissioners of Inland Revenue vs Alexander Von Glehn & Co. Ltd. (3) where also in similar circumstances by consent of the assessee penalty of pound 3,000 was paid and the penalty plus the costs were claimed as deduction in arriving at the profits. The Special Commissioners had found that the penalty and costs were incurred by the assessee in the course of carrying on (1) (2) ; (3) [1920] .2 K.B. 553. 659 their trade and so incidental thereto and were admissible deductions. Rowlatt, J., on a reference held it to be a non deductible item. This judgment was affirmed on appeal by the Court of Appeal. Lord Sterndale, M. R., was of the opinion that it was immaterial whether technically the proceedings were criminal or not. The money that was paid was paid as a penalty and it did not matter if in the information it was called a forfeiture. It was argued by the assessee in that case that no moral obliquity was attributed to them and that it did not matter whether the expense was incurred in consequence of an infraction of the law or whether it was a penalty for doing an illegal act. At p. 565 Lord Sterndale said: "Now what is the position here? This business could perfectly well be carried on without any infraction of the law. This penalty was imposed because of an infraction of the law, and that does not seem to me to be, any more than the expense which had to be paid in Strong & Co. vs Woodifield (1) appeared to Lord Davey to be, a disbursement or expense which was laid out or expended for the purpose of such trade. ." Warrington L.J. said at p.569: "It is a sum which the persons conducting the trade have had to pay because in conducting it they have so acted as to render themselves liable to this penalty. It is not a commercial loss, and I think when the Act speaks of a loss connected with or arising out of such trade it means a commercial loss, connected with or arising out of the trade. " In Strong & Co. vs Woodifield (1) a brewing company owned a licensed house in which they carried on the business of inn keepers. They incurred a liability to pay damages on account of injuries caused to a visitor, by the falling in of a chimney. This sum was held not to be allowable as a deduction in computing the profits ' Lord Loreburn, L. C., in his speech said no sum could be deducted unless it be money wholly and exclusively laid out or expended for the purpose of such (1) ; 660 trade and that only such losses could be deducted as were connected with it in the sense that they were really incidental to the trade itself and they could not be deducted if they were mainly incidental to some other vocation or fell on the trader in some character other than that of a trader. Lord Davey observed:"I think the disbursements permitted are such as are made for that purpose. It is not enough that the disbursement is made in the course of, or arise out of, or is connected with the trade or is made out of the profits of the trade. It must be made for the purpose of earning profits. " The following passage from Lord Sterndale 's judgment at p. 566 in Von Glehn 's case (1) from which we have already quoted shows the effect of incurring a penalty as a result of a breach of the law: "During the course of the trading this company committed a breach of the law. As I say, it has been agreed that they did not intend to do anything wrong in the sense that they were willingly and knowingly sending these goods to an enemy destination; but they committed a breach of the law, and for that breach of the law, they were fined. That, as it seems to me, was not a loss connected with the business, but was a fine imposed upon the company personally, so far as a company can be considered to be a person, for a breach of the law which it had committed. It is perhaps a little difficult to put the distinction into very exact language, but there seems to me to be a difference between a commercial loss in trading and a penalty imposed upon a person or a company for a breach of the law which they have committed in that trading. For that reason I think that both the decision of Rowlatt, J., in this case, and his former decision in Inland Revenue Commissioners vs Warnes & Co. (2) which he followed were right, and that this appeal should be dismissed with costs." In Spofforth and Prince vs Glider (3) the assessee was a firm of chartered accountants, who claimed a deduction for certain legal costs paid in connection with a (1) [1920) 2 K.B. 55.3. (2) (3) 661 successful defence of one of the partners in a Police Court. The assessee firm also sought legal advice in regard to matters connected with some proceedings. Summons were issued against the assessee firm but were eventually dismissed. The assessee contended that the whole of the costs incurred in connection with the proceedings were "wholly and exclusively" laid out or expended for the appellant 's profession and were therefore allowable deductions. The Special Commissioner had held against the assessee which was upheld by the Court. The test laid down by Lord Davey in Strong & Co. vs Woodifield (1) was applied and applying that test it was held that except the expenses for obtaining legal advice the other expenses were not admissible. In Farrie vs Hall (2) F, a sugar broker was sued in the High Court for libel and the Court held that F had acted maliciously and that the defence of privilege could not prevail and awarded damages against him. F sought to claim the amount of damages as an allowable deduction contending that it was an expenditure laid out wholly and exclusively for the purposes of his trade or was a loss connected with or arising out of the trade. Relying on the cases above mentioned this amount was disallowed because it fell on the assessee in his character of a calumniator of a rival sugar broker and it was only remotely connected with his trade as a sugar broker. Therefore it was not laid out exclusively and wholly for the purpose of his business. We were also referred to the observations of Danckwerts, J. in Newson vs Robertson (3) where it was said that if the expenditure is incurred by the tax payer for more than one purpose including the commercial purposes in the sense that it is incurred for the purposes of earning profits of the trade and also some outside purpose then the expenses cannot be claimed at all as not being wholly and exclusively laid out or expended for the purpose of the trade. In that case expenses claimed by a Barrister for (1) ; (2) (3) , 459. 84 662 travelling between his house and his chambers were disallowed because his object and purpose in travelling was mixed and not wholly and exclusively for the purpose of the profession. Coming now to Indian cases; In Mask & Co. vs Commissioner of Income tax, Madras (1) the assessee in breach of his contract sold crackers at a lower rate and a decree was passed against him for damages for breach of contract which he claimed as an allowable deduction. It was held that as the assessee had disregarded the undertaking given and his conduct was palpably dishonest it did not constitute an allowable expenditure. Sir Lionel Leach, C. J., after referring to Warne 's case (2) and Von Glehn 's case (3) held that the amount did not constitute an expenditure falling within section 10(2)(xii). The Madras High Court in Senthikumara Nadar & Sons vs Commissioner of Income tax, Madras (4) held that payments of penalty for an in. fraction of the law fell outside the scope of permissible deductions under section 10(2)(xv). In that case the assessee had to pay liquidated damages which was akin to penalty incurred for an act opposed to public policy a policy underlying the Coffee Market Expansion Act, 1942, and which was left to the Coffee Board to enforce. Reference was also made during the course of arguments to Commissioner of Income tax vs Hirjee (1). In that case the assessee was prosecuted under the Hoarding and Profiteering Ordinance but was finally acquitted and claimed the amount spent in defending himself under section 10(2)(xv) in his assessment. It was held that the distinction between the legal expenses on a successful and unsuccessful defence was not sound and that the deductibility of such expenses under section 10(2)(xv) must depend on the nature and purpose of the legal proceedings in relation to the business whose profits are in computation and are unaffected by the final outcome of the proceedings. A review of these cases shows that expenses which (1) (3) (2) (4) (5) ; 663 are permitted as deductions are such as are made for the purpose of carrying on the business, i.e., to enable a person to carry on and earn profit in that business. It is not enough that the disbursements are made in the course of or arise out of or are concerned with or made out of the profits of the business but they must also be for the purpose of earning the profits of the business. As was pointed out in Von Glehn 's case (1) an expenditure is not deductible unless it is a commercial loss in trade and a penalty imposed for breach of the law during the course of trade cannot be described as such. If a sum is paid by an assessee conducting his business, because in conducting it he has acted in a manner, which has rendered him liable to penalty it cannot be claimed as a deductible expense. It must be a commercial loss and in its nature must be con templable as such. Such penalties which are incurred by an assessee in proceedings launched against him for an infraction of the law cannot be called commercial losses incurred by an assessee in carrying on his business. Infraction of the law is not a normal incident of business and therefore only such disbursements can be deducted as are really incidental to the business itself. They cannot be deducted if they fall on the assessee in some character other than that of a trader. Therefore where a penalty is incurred for the contravention of any specific statutory provision, it cannot be said to be a commercial loss falling on the assessee as a trader the test being that the expenses which are for the purpose of enabling a person to carry on trade for making profits in the business are permitted but not if they are merely connected with the business. It was argued that unless the penalty is of a nature which is personal to the assessee and if it is merely ordered against the goods imported it is an allowable deduction. That, in our opinion, is an erroneous distinction because disbursement is deductible only if it falls within section 10(2)(xv) of the Income tax Act and no such deduction can be made unless it falls within the test laid down in the cases discussed above and it can be said to be expenditure wholly and exclusively laid for the purpose of the business. Can it be said (1) 664 that a penalty paid for an infraction of the law, even though it may involve no personal liability in the sense of a fine imposed for an offence committed, is wholly and exclusively laid for the business in the sense as those words are used in the cases that have been discussed above. In our opinion, no expense which is paid by way of penalty for a breach of the law can be said to be an amount wholly and exclusively laid for the purpose of the business. The distinction sought to be drawn between a personal liability and a liability of the kind now before us is not sustainable because anything done which is an infraction of the law and is visited with a penalty cannot on grounds of public policy be said to be a commercial expense for the purpose of a business or a disbursement made for the purposes of earning the profits of such business. In our opinion the High Court rightly held that the amount claimed was not deductible and we therefore dismiss this appeal with costs. Appeal dismissed.

A Subordinate Judge dismissed an application by a decree holder for adjournment of an execution case and by the same order dismissed the execution case itself without informing the decree. holder 's pleader that the application for adjournment had been dismissed and asking him whether be had to make any submission in 137 the matter of the execution case, and an application for restoration of the execution case setting aside the order of dismissal, the Subordinate Judge, finding that he had committed an error which had resulted in denial of justice restored the execution case in the exercise of the inherent powers of the court under section 151, Civil Procedure Code. The judgment debtor preferred an appeal and an application, for revision to the High Court against this order. The High Court held that the appeal was not maintainable but set aside the order of the Subordinate Judge in the exercise of its revisional powers and remanded the case to the Subordinate Judge for fresh disposal after considering whether it would have been possible for the decree holder to take any further steps in connection with the execution application after the dismissal of the application for adjournment: Held, (i) that the order of the Subordinate Judge dismissing the execution case without giving an opportunity to the decree holder 's pleader to state what he had to say the case itself was bad and was rightly set aside by the court its own initiative in exercise of its inherent powers. (ii)The High Court had no jurisdiction in the exercise of its appellate powers to reverse the order of restoration as that order by itself did not amount to a final determination of any question relating to execution, discharge or satisfaction of a decree within the meaning of section 47, Criminal Procedure Code, and an order made under section 151, Criminal Procedure Code, simpliciter is not an appealable order. Akshia Pillai vs Govindarajulu Chetty (A.I.R. 1924 Mad. 778), Govinda Padayachi vs Velu Murugiah Chettiar (A.I.R. and Noor Mohammad vs Sulaiman Khan (A.I.R. 1943 Oudh 35) distinguished. (iii)As the order of the Subordinate Judge was one that he had jurisdiction to make, and as he had, in making that order, neither acted in excess of his jurisdiction or with material irregularity nor committed any breach of procedure, the High Court acted in excess of its revisional jurisdiction under section 115, Civil Procedure Code, and the order of remand and all proceedings taken subsequent to that order were illegal. Section 115, Civil Procedure Code, applies to matters of jurisdiction alone, the irregular exercise or non exercise of it or the illegal assumption of it, and if a subordinate court had jurisdiction to make the order it has made and has not acted in breach of any provision of law or committed any error of procedure which is material and may have affected the ultimate decision, the High Court has no power to interfere, however profoundly it may differ from the conclusions of that court questions of fact or law. Rajah Amir Hassan Khan vs Sheo Baksh Singh (1883 83) 11 I.A. 237, Bala Krishna Udayar vs Vasudeva Aiyar (1917) 44 IA. 261, Venkatagiri Ayyangar vs Hindu Religious Endowments Board 138 1949) 76 I.A. 67, Joy Chand Lal Babu vs Kamalaksha Chowdhury 1949)76 I.A.131 and Narayan Sonaji vs Sheshrao Vithoba (I.L.R. referred to. Mohunt Bhagwan Ramanuj Das vs Khettar Moni Dassi and Gulab Chand Bargur vs Kabiruddin Ahmed , dissented from.

Appeal Nos. 185 187 of 1993. From the Judgment and Order dated 5.8.1991 of the Orissa Ad ministrative Tribunal, Bhubaneshwar in O.A. No. 679 of 1988. 246 B.A. Mohanty, A Mariarputham, Mrs. Aruna Mathur, Raju Rama chandran and A.K. Panda for the Appellants. Shanti Bhushan, Prashant Bhushan, P.N. Misra, P. Gour, R.P. Wadhwani and C.N. Sreekumar for the Respondents. The Judgment of the Court was delivered by MOHAN, J. Leave granted in all the matters. All these appeals can be dealt with under a common judgment since they are directed against the judgment and order dated August 5, 1991 passed by the Orissa Administrative Tribunal Bhubaneshwar in Original Application No. 679 of 1988. Prakash Chandra Misra (Respondent 1 in all these appeals) was directly recruited to the Orissa State Forest Service Class 11 by the Orissa Public Service Commission in the year 1979. After completion of training for two years at Forest Service College, Burnihat, Assam he was appointed as an Assistant Conservator of Forests. He moved the Administrative Tribunal challenging the seniority of the Forest Rangers who were members of Orissa Subordinate Forest Service and were promoted as Assistant Conservator of Forests, between his recruitment and the joining of service after training. According to first respondent, the promotees who were promoted in the years 1981 and 1982 ought to have been assigned a place below him as per recruitment rules. The seniority of direct recruits vis a vis the promotees required to be decided on the basis of the Orissa Forest Service Class II Recruitment Rules, 1959. It was further urged that he was recruited in the year 1979 through Public Service Commission. He had to undergo training for two years and thereafter he was appointed in the year 1981. Therefore, the short question was whether the respondent was to be assigned seniority from the year 1979 (the year of recruitment) or from the year 1981 (the year of appointment). The Tribunal observed that Rule 9(a) of 1959 Rules read with Rule 6 would point out that the promotee officers were to be on probation for a period of two years like the direct recruits. Such direct recruits were also sent for training to the Forest Training College. The 1959 Rules used the word 'recruited ', the 1984 Rules used the word "appointed". These words must be assigned proper meaning. 247 Inasmuch as the direct recruits were to be treated as seniors to promotees 'en bloc ' the first respondent must be treated as a recruit of 1979 and ought to be treated as senior to promotees. The next question that came up for consideration was as to the application of quota rule. On this, the Tribunal held that both in the 1959 Rules as well as in the 1984 Rules, the promotees and direct recruits will be in the proportion of 1/3rd and 2/3rd. In the present case, 1959 Rules being applicable there was no doubt that promotees have substantially encroached upon the quota for direct recruits. In view of that, promotions which have been made more than the quota prescribed in the rules have to be either adjusted against future vacancies in the promotion quota or reverted. Such promotions beyond the prescribed quota are illegal. In view of these findings, the Tribunal held that the first respondent was entitled to be treated (i) as a direct recruit of 1979 and (ii) he shall be confirmed and promoted on the basis of being direct recruit of 1979. His seniority was to be fixed on the basis of being a direct recruit of 1979 within the 2/3rd quota for direct recruits. These directions were to be implemented within six months from the date of the order. On these terms, the petition of the first respondent came to be allowed. Aggrieved by this judgment, SLP (C) No. 615 of 1992 has come to be preferred by Prafulla Kumar Swain, a promotee (Respondent No. 91 before the Orissa Administrative Tribunal). SLP (Civil) No. 1604 of 1992 has come to be preferred by Bijay Kishore Mohanty and 10 others (respondents before the Orissa Administrative Tribunal). The State has preferred SLP (C) No. 4186 of 1992. Mr. Raiu Ramachandran, learned counsel for the appellant in SLP (C) No. 1604 of 1992 would submit that the first respondent was selected for undergoing superiod Forest Service Course at the Forest Service College, Burnihat, Assam in the year 1979. Having regard to the terminology of the order wh ich says 'he was selected", it cannot be held that he could lay a claim to the post. The Orissa Forest Service Class II Recruitment Rules, 1959 govern the case in question. The Tribunal had gone wrong in its interpretation of the various 248 rules. First of all, it is incorrect to hold that they are merely administrative instructions. On the contrary, they are rules framed under proviso to Article 309 of the Constitution of India, as a result of which, they have statutory force. Having held that both the direct recruits as well as the promotees undergo probation for a period of two years, properly speaking, the period of training for the direct recruits could not count as service. That is precisely what is stated in clause (c) of Regulation 12. If under the said Regulation the appointment to service is to commence only after the successful completion of training there is no justification whatever to conclude that the date of recruitment could be the relevant date for the purposes of reckoning the seniority. Recruitment in the submission of the learned counsel would merely mean enlistment or selection. That is why Regulation 13 says the "selected candidates". Even Rules 9 has not been appreciated in its proper perspective. As regards the ratio of 2/3rd and 1/3rd between direct recruits and promotees the relevant rule that is applicable is Rule 5(3). That sub rule contains a provision: "Save as otherwise decided by Government". If, therefore, it has been otherwise provided by the Government, this ratio of 2/3rd and 1/3rd does not apply. In other words, there is overriding power vested in the Government. Hence, the ratio is flexible and contemplates a departure whenever the Government otherwise decides. Here again, the Tribunal has gone wrong. In Direct Recruit Class II Engineering Officers ' Association and Ors. vs State of Maharashtra and Ors. , ; at page 938 this Court has taken the view that where the rules permit the authorities to relax the provisions relating to the quota, ordinarily a presumption should be raised that there was such relaxation when there is a deviation from the quota rule. In any event, the placement of Respondents 42 to 94 as per Civil List corrected upto 1982 was published in the year 1985 by the State Government. They are the promotees from amongst the various Rangers in Subordinate Service Class 11 as Assistant Conservator of Forests in 1980. This was at a time when the first respondent was undergoing training at Burnihat, Assam. If really, therefore, the gradation list was published as early as 1985, there is absolutely no justification for the first respondent to approach in the year 1988. The judgment of the Tribunal has resulted in unsettling the settled matters. For these reasons, it is prayed that the order of the Tribunal may be reversed. Mr. A.K. Panda, learned counsel for the State adopts the arguments 249 of Mr. Raju Ramchandran, learned counsel for the appellant. Mr. Shanti Bhushan, learned counsel appearing for the first respondent would submit that recruitment is different from appointment. The definition of the service is contained under Rule 3(e) which states "service" means Orissa Forest Service Class 11. The service consists of Officers of Class 11 who are designated as Assistant Conservator of Forests. Rule 5(c) talks of recruitment to Class II. In sub rule (a) a reference is made to Regulation. What is contemplated hereunder is nothing more than the competitive examination prescribed under Regulation. Therefore, Regulation 12 cannot be pressed into service. When an officer is recruited to Class 11 Service it does not mean that only from the date of appointment his seniority is to be reckoned. The very fact that his recruitment to the service is enough. The argument of the other side that the period of training will have to be excluded merely because both the direct recruits as well as the promotees undergo probation is untenable. The question is, whether the direct recruits who are definitely superior could be pushed lower down to the promotees. In Service Law the direct recruits are always treated on a better footing than the promotees. Even though the relevant years of recruitment and promotion of persons involved are essentially of the years 1979 to 1984, yet it is 1984 Rules which will govern. Rule 24 of the 1984 Rules contains the repeal and saving clauses. That says that all the officers who were appointed prior to the repeal shall be deemed to have been appointed under the provisions of 1984 Rules. If that be so, the aforesaid Explanation to Rule 16 must apply. Thus it is clear as on today the seniority by the 1984 Rules. The same has clearly provided that the date of appointment of direct recruits for the purposes of seniority will be deemed to be 2 years prior to the date of appointment to a working post. Since the normal period of training is 2 years this cannot but mean that the date of appointment of direct recruits for the purposes of seniority will be the date of selection. If the seniority is not a vested right it is well open to the Government to alter the same by making a departure from 1959 and providing for the same in the amended 1984 Rules. Learned counsel draws our attention to Indian Forest Service (Appointment by Promotion) Regulations of 1966. In the said Regulations, Regulation 5 in its Explanation 11 states that in computing the period of 250 continuous service the period of training which an officer had undergone is to be included. If that is the intention for Grade I Service, certainly a different intention cannot be spelt out under the 1959 Rules for Grade 11 Service. This is also evident when the 1984 Rules are looked at. There the rules clearly lay down in Rules 16 in its Explanation that the training period is not to be excluded. When rules specifically prescribe the quota as 1/3rd the Government cannot wriggle out of the situation that a saving provision had been made which is factually not so in this case. For this purpose, the Government has relied upon the proceedings held on 5.1.80 and 7.1.80. The proceedings of Departmental Promotion Committee will not constitute the Government order. All Government orders must be issued under the signature of the Minister according to the Rules of Business. In the present case, no such order of the Minister regarding the alteration of quota is produced. The statutory rules lay down a clear legislative policy with regard to fixation of quota so that the brightest talent be made available for the service. As to what would be the consequence of violating a statutory rule has come to be laid down in Keshav Chandra Joshi and Ors. vs Union of India, [1990] Supp. 2 SCR 573 at page 586. That ratio squarely applies to the facts of the case. The point relating to laches was never argued before the Tribunal. Therefore, the appellant cannot be allowed to argue at this stage. We will now proceed to set out the necessary factual background. The Orissa Public Service Commission through an advertisement dated 8.10.64 invited applications from open market for admission of candidates to a competitive examination for selection to the posts of Orissa Forest Service Class II service. 18 candidates were selected. They were sent for training at Indian Forest College, Dehradun during the year 1965 67. Only on successful completion of the training they could be appointed to Class 11 Service. One of the candidates who was successful in completion of training and who received the posting order 233/67 came forward with a writ petition before the Orissa High Court that he had been assigned in the list of gradation a rank junior to the promotees who were confirmed by Service Commission after the recruitment of the petitioner. The scope of 1959 Rules came up for consideration and the High Court concluded that the recruitment to Class II Service was complete only after successful 251 completion of two years ' training in the Forest College. Relief was granted on that basis. That came up in appeal to this Court in Civil Appeal Nos. 2051 52 of 1974 State of Orissa vs Manoranjan Rath & Ors. By an order dated 7th of January, 1988, finding that there was no ground to interfere with the judgment of the High Court, the appeals came to be dismissed. While the matter stood thus one of the directly recruited officers (Prakash Chandra Misra, respondent No.1) filed a petition before the Tribunal challenging the seniority. He contended that the promotees who were promoted in the year 1981 82 ought to have been assigned a place lower than him as per recruitment rules. Two main contentions were: 1. His services should be reckoned from the date of recruitment itself and not from the date of actual appointment. Therefore, the exclusion of the period of two years ' training for the purposes of reckoning the seniority was illegal. The promotees had been appointed in excess of the quota which the rules had prescribed. There is no specific order of Government providing otherwise. The Tribunal accepted these contentions and held that the petitioner before it being a direct recruit of the year 1979 must be treated as such and had to be confirmed and promoted on the basis of being a direct recruit of the year 1979. This should be done within the 2/3rd quota for direct recruits. Accordingly the petition was allowed. It is under these circumstances, special leave petitions have come to be preferred. Having regard to the arguments two points arise for our determination: (1) Whether the direct recruits are to be considered as recruited in the year in which they were selected by the Service Commission and sent for training into the Forest College or in the year in which they were actually appointed to a working post on completion of training? (2) Whether there was a quota fixed for promotees in the Orissa Forest Service during the relevant years. Even at the outset, we may point out that the Tribunal has grossly erred in holding that the Orissa Service Class 11 Recruitment Rules of 1959 are mere administrative instructions. On the contrary, these rules were framed under the proviso to Article 309 of the Constitution and they are 252 statutory in character. Section 3(e) of 1959 Rules says 'Service" means the Orissa Forest Service Class II. Rule 5 reads as under: "5. (1) Recruitment to Class II service shall be made (a)by direct recruitment on the result of competitive examination as per Regulation I appended to this rule; (b)by promotion as per the Regulation 11 appended to this rule governing promotions to the Orissa Forest Service, Class II; (2)Government shall decide from time to time the number of vacancies in class II Service to be filled by direct recruitment and by promotion. (3)Save as otherwise decided by Government, number of posts of the service filled up by promotion shall not exceed one third of the total number of such posts in the cadre. " Rule 9 is as follows: "9(a) When officers are recruited by promotion and by direct recruitment during the same year the directly recruited members shall be considered senior to the promoted members irrespective of their dates of appointment. (b)In case of promotion, seniority may be determined in accordance with the positions the promoted officers held in the recommendation of Public Service Commission made according to merit. (c)In case of direct recruitment, seniority may be determined according to the achievements in the examination in the Forest College. " Besides these rules there are also Regulations dealing with direct recruitment. It may be stated that the Regulations prescribe the condition of eligibility (Regulation 1(2)), educational qualification (Regulation I(6)), written test by means of a competitive examination (Regulation 18(a)) and 253 a viva voice test. The candidates are to be summoned for viva voice test on securing the minimum qualifying marks prescribed by the Commission. Thereafter the Commission prepares a list of successful candidates provided they are found fit in the physical test as prescribed under Regula tion 1(5). The fist of successful candidates is to be forwarded to the Government for approval. Regulation 12 is important for our purposes. Under that Regulation the finally selected candidates are required to undergo two years training. During the period of pendency a consolidated monthly allowance of Rs. 150 as stipend is paid. Under clause (b) of that Regulation he is required to execute a bond provided for in Appendix A. Regulation 12(c) in unmistakable terms says the period of training will not count as service under Government. Such service will count only from the date of appointment to the service after successful completion of the course of training. (Emphasis supplied). We must give full meaning and effect to this Regulation. At this stage, we will proceed to decide as to the meaning and effect of the words "recruitment" and "appointment". The term "recruitment" connotes and clearly signifies enlistment, acceptance, selection or approval for appointment. Certainly, this is not actual appointment or posting in service. In contradistinction the word "appointment" means an actual act of posting a person to a particular office. Recruitment is just an initial process. That may lead to eventual appointment in the service. But, that cannot tantamount to an appointment. No doubt, Rule 5 talks of recruitment to Class II Service. We consider these are two sources of recruitment. Nowhere in the Recruitment Rules of 1959 it is specified that the services of a direct recruit under the Government shall be reckoned from the date of selection in the competitive examination. On the contrary, Regulation 12(c) is very clear that the period of training is not to be reckoned as Government service. It is admitted before us that after the successful completion of training when the appointment order is issued the direct recruits are put on probation. Similar is in the case of the promotees. Both of them undergo probation. Therefore, in the light of these provisions it is not possible for us to accept the contention advanced on behalf of the direct recruits that their seniority must be reckoned from the date of their recruitment. This is why Mr. Shanti Bhushan, learned counsel for the direct 254 recruits, respondents, would urge that 1984 Rules would govern. Rule 16 in Explanation provides thus: "Explanation For the purpose of clause (a), the year of appointment of direct recruits shall be deemed to be the year arrived at after deducting two years from the date of successful completion of the training in the Forest College." He would urge that in view of Rule 24 all the appointments must be deemed to have been made under these Rules. Rule 24 reads thus: "24. All rules and orders corresponding to these rules and in force immediately before the commencement of these rules are hereby repealed: Provided that nothing in these rules shall be construed as affecting or invalidating the appointments already made or orders issued in accordance with the provisions of any rules or orders in force immediately before the commencement of these rules and that all such appointments and orders shall continue in force and shall, as far as may be, be deemed to have been made and issued under the appropriate provisions of these rules: Provided further that Government may, by order, direct that any of the provisions of these rules shall not apply to the Officers already appointed under the rules and orders in force immediately before the commencement of these rules or shall apply to them with such modifications as the Government may specify in that order. ' Therefore, according to him, the benefit of Explanation to Rule 16 quoted above must apply. We find it impossible to accept this contention for the following reasons: 1.Since the appointments in question have been made under 1959 Rules, 1984 Rules will be inapplicable. 2.The 1984 Rules came into force only when they were published in the Official Gazette on December 21, 1984. 255 3. Explanation under Rule 16 is a substantive provision. Therefore, it cannot be retrospective. As regards Rule 24, the proviso clearly states that the Rules cannot be construed as affecting or invalidating the appointments already made. Therefore, if any right has been acquired or any privilege had accrued that would remain unaltered. Therefore, these appointments which are governed by the 1959 Rules will continue notwithstanding the repeal. Clauses (a) and (e) of Section 6 of the also point this position: 6. Effect, of repeal: Where this Act, or any (Central Act) or Regulation made after the commencement of this Act, repeals any enactment hitherto made, or hereafter to be made, then, unless a different intention appears, the repeal shall not (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) (c) (d) (e) effect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid. " Coming to the deeming clause, that creates a legal fiction; the Court is to ascertain for what purpose the fiction is created. In Justice G.P. Singh Principles of Statutory Interpretation (Fourth Edition 1988) at page 208 it is stated thus: "As was observed by James, LJ. : 'When a statute enacts that something shall be deemed to have been done, which in fact and in truth was not done, the court is entitled and bound to ascertain for what purposes and between what person the statutory fiction is to be resorted to '. 'When a legal fiction is created ', stated S.R. Das, J. "for what purposes, one is led to 256 ask at once, is it so created?" Therefore, by the operation of deeming clause it only enables appointments made under 1959 Rules to be continued under 1984 Rules. Certainly, by the repeal of 1959 Rules it cannot mean all those appointments cease. Nor again, the substantive provision of Rule 16, as stated above. Would govern. Therefore, Rule 24 has no application. Thus, we conclude that the seniority of direct recruits will have to be reckoned only from the date of appointment and not from the date of recruitment. The gradation list which was impugned by the first respondent before the Tribunal was prepared in pursuance of the order of this Court read with the aforementioned judgment of the Orissa High Court and this is so stated in a letter dated 4th January, 1989 written by the Deputy Secretary to the Government of Orissa, Forest, Fisheries and Animal Husbandry Department, Bhubaneshwar to the Principal Chief Conservator of Forest, Orissa, Bhubaneshwar (Annexure II to the Special Leave Petition in S.L.P. (C) No. 1604 of 1992). That this gradation list had been framed upon the aforesaid basis also does not appear to have been brought to the attention of the tribunal. The gradation list has been in operation over several years. We see no reason to unsettle the settled position. In this behalf we draw support from the judgment of this Court in Direct Recruit Class II Engineering Officers ' Association vs State of Maharashtra and others. ; , We may also note that though the same question was before this Court a little before the petition was made by the first respondent before the Tribunal, no effort was made by the first respondent to intervene and place before this Court his point of view. It is inconceivable that he would not have known that the same question was before this Court. Turning to the quota rule the records reveal that the Government had clearly taken a decision to increase the number of posts to be filled up by promotion in excess of the 1/3rd of total posts in the cadre on administrative grounds connected with nationalisation of Kendu Leaf Trade in 1972 73 in the interest of public due to non availability of direct candidates trained in the Indian Forest College, Dehradun. It is not correct to say that Government have decided that the quota of direct recruitment which will be encroached upon by the promotees will be released as and when direct recruits are available. In fact, it was decided that the 4 direct 257 candidates who were by then under diploma course Training in forestry at Dehradun in the event of their coming out successful during 1974 from the training College may be appointed and in consequence, the junior most promotee officers whom were appointed on ad hoc basis as aforesaid pending concurrence of Orissa Public Service Commission will have to be reverted to make room for them. No promotion to Orissa Forest Service Class 11 could be made on regular basis without obtaining concurrence of the Orissa Public Service Commission as per Clause 2(h) of Regulation 11 appended to the Orissa Forest Class II Recruitment Rules, 1959. In view of the urgency to implement the Kendu Leaf Scheme in 1973, 39 Forest Rangers were appointed to Class 11 Forest Service on an 'ad hoc ' basis for a period of six months or till concurrence of the Commission is received for their final appointment. The 39 Forest Ranger had already been promoted to Orissa Forest Service Class 11 on regular basis on the recommendation of the Orissa Public Service Commission. In view of this, it is not correct to say in that the decision taken by Government for promoting excess promotees in the year 1972 was only to promote them on an ad hoc basis within that quota. Hence, to contend that the promotees would obviously have to yield to direct recruits who came in subsequently within their quota and would consequently also not be eligible for seniority above direct recruits, is untenable. We may also add that there were earlier proceedings in Transfer Application No.147 of 1986 before the Orissa Administrative Tribunal. The decision was rendered on 3.7.87. SLP (C) No. 1624 of 1.988 filed against the said decision was dismissed by this Court on 18.1.89. There was also an application, OJ.C. No. 588 of 1972 before the Orissa High Court in Manoranjan Rath vs State of Orissa and others. The decision was rendered on 10.6.74. Against the said decision Civil Appeal Nos. 2051 52 of 1974 were preferred to this Court which were dismissed on 7.1.88. The Tribunal in the above judgment had held on perusal of the departmental file that the Government had taken decision to increase the number of posts to be filled up by promotion on administrative grounds. This was necessitated because of the nationalisation of Kendu Leaf Trade. Action to fill up the posts by promotion of Forest Rangers in excess of 1/3rd of the total posts in the cadre was taken in pursuance of the decision of the Government. Though the actual decision of the Government is not produced before us yet the proceedings of the meetings of the Departmental Committee held on 5.1.80 and 7.1.80 to select Forest Rangers suitable for promotion took note of 258 Rule 5(3) which contains the saving clause. "Save as otherwise decided by Government, number of posts of the service filled up by promotion shall not exceed one third of the total number of such posts in the cadre. " These proceedings speak volumes. The proceedings were given effect to by promotions. Such promotions in excess of the prescribed quota had to be made since no more directly recruited candidates were available during that year. The Government did not want its work to be hampered by allowing the posts were to remain vacant. While seeking the concurrence of Orissa Public Service Commission to the decision taken by the Departmental Committee held on 5.1.80 and 7.1.80, the proceedings of the Committee explain the circumstances under which the Government decision was taken. From this point of view, we find the decision in Keshav Chandra Joshi 's case (supra) has no application here. Therefore, the promotions given in excess of 1/3rd quota are valid. There is no justification to push down the promotees in seniority. The promotion in excess of the prescribed quota was necessitated by the exigencies and in the interest of the public. It is supported by a conscious decision of the Government which is permissible under Rule 5(3). Therefore, we reject the arguments advanced on behalf of the direct recruits in this regard. A reference was made to the Indian Forest Service (Appointment by Promotion) Regulations, 1966, particularly Regulation 5. It is also urged that from the post of Class 11, promotion is to be made to Class 1. We are of the view that since the appointments in question are regulated under Orissa Forest Service Class II Recruitment Rules, the said Regulations of 1966 have no application. Further, as pointed out above, the Orissa Rules were framed under proviso to Article 309 of the Constitution of India and have statutory and binding force. Now comes the proverbial last straw on the camel 's back. There have been laches on the part of the direct recruits in seeking the remedy. When the list was published in 1985 nothing prevented them to approach earlier. This is the point to be put against them. That this position was known to the direct recruit (Prakash Chandra Mishra) is clear from paragraph 18 of his petition before the Tribunal. It 259 reads thus. Therefore, placement of Respondent Nos. 42 to 94 as per Civil List corrected upto 1982 published in the year 1985 by the State Government who are promotees from amongst the Forest Rangers in Subordinate Service to Class II Service as Assistant Conservator of Forests in the year 1980 when this applicant was undergoing training at Burnihat, Assam, is patently illegal and an act without jurisdiction by the State Government of Orissa. ' (Emphasis supplied) We do not want to unsettle settled matters which will lead to several complications. In view of the foregoing discussion, we set aside the judgment of the Tribunal. The appeals will stand allowed. However, there shall be no order as to costs. V.P.R. Appeals allowed.

The Orissa Public Service Commission through an advertisement dated 8.10.64 Invited applications for admission of candidates to a competitive examination for selection to the posts of Orissa Forest Service Class II Service. The 18 selected candidates were sent for training at the Indian Forest College during the year 1965 67. One of the candidates, who successfully completed the training was appointed to Class 11 Service. He filed a writ petition in the High Court, as he was assigned in the list of gradation a rank junior to the promotees, who were confirmed by Service Commission after his recruitment The High Court held that the recruitment to class II Service was complete only after successful completion of two years ' training in the Forest College. The appeals by special leave flied against the High Courts 242 Judgment were dismissed by this Court. In 1979, the respondent No. 1 (in all the present appeals) was directly recruited to the Orissa State Forest Service Class II by the State Commission. He was appointed as an Assistant Conservator of Forests, after his completion of training for two years at the Forest Service College. Respondent No. 1 moved the Administrative Tribunal challenging the seniority of the Forest Rangers, who were members of the Orissa Subordinate Forest Service and were promoted as Assistant Conservators of Forests, when the respondent was undergoing his training. Respondent contended before the Tribunal that the seniority of direct recruits vis a vis the promotees required to be decided on the basis of the Orissa Forest Service Class II Recruitment Rules, 1959; that his services should be reckoned from the date of recruitment Itself and not from the date of actual appointment; that the exclusion of the period of two years ' training from the purposes of reckoning the seniority was illegal; and that the appointment of the promotees in excess of the quota prescribed by the Rules and in the absence of any specific order of Government providing otherwise was illegal. Allowing the petition, the Tribunal held that the respondent No.1 (in the present appeals) was entitled to be treated as a direct recruit of 1979 and he be confirmed and promoted on being direct recruit of 1979 and his seniority to be fixed on the basis of being a direct recruit of 1979 within the 2/3rd quota for direct recruits. The present appeals by special leave were preferred by the aggrieved parties against the judgment of the Tribunal. The appellant in SLP (C) No. 1604 of 1992 submitted that the respondent No.1 was selected for undergoing superior Forest Service Course at the Forest Service College in 1979; that having regard to the terminology of the order which stated, "he was selected", it could not be held that he could lay a claim to the post; that the Tribunal had gone wrong in its interpretation of the rules that having held that both the direct recruits as well as the promotees were to undergo probation for a period of two years, the period of training for the direct recruit could not count as service; that the ratio of 2/3rd and 1/3rd between direct recruits 243 and promotees did not apply, if the Government provided otherwise; that the Civil List corrected upto 1982 was published in 1985; and that the judgment of the Tribunal resulted in unsettling the settled matters, hence same to be reversed. The State adopted the arguments of the appellant in SLP (C) No. 1604/92. The respondent No.1 submitted that recruitment was different from appointment; that when an officer was recruited to Class 11 Service if did not mean that only from the date of appointment his seniority was to be reckoned, that the argument that the period of training to be excluded merely because both the direct recruits as well as the promotees undergo probation was untenable; that when rules specifically prescribed the quota as 2/3rd and 1/3rd, the Government could not wriggle out of the situation that a saving provision was made which was factually not so in this case; that the point relating to laches which was never argued before the Tribunal, could not be raised before the Court. Allowing the appeals, this court, HELD, 1.01. The term 'recruitment "connotes and clearly signifies enlistment, acceptance, selection or approval for appointment Certainly, this Is not actual appointment or posting in service. In contradistinction, the word 'appointment ' means an actual act of posting a person to a particular office. [253E] 1.02. Recruitment is just an initial process. 'Mat may lead to eventual appointment in service. But, that cannot tantamount to an appointment. No doubt, Rule 5 talks of recruitment to Class 11 Service. [253E] 1.03. Nowhere in the Recruitment Rules of 1959 it is specified that the services of a direct recruit under the Government shall be reckoned from the date of selection in the competitive examination. On the contrary, Regulation 12(c) is very clear that the period of training is not to be reckoned as Government service. [253F] 1.04. Under Regulation 12 the finally selected candidates are required to undergo two years training. During the period of pendency & consolidated monthly allowance of Rs. 150 as stipend is paid. Under clause (b) of that Regulation he is required to execute a bond provided for 244 in Appendix A. Regulation 12 (c) in unmistakable terms says the period of training will not count as service under Government. Such service will count only from the date of appointment to the service after successful completion of the course of training. [253B C] 1.05. After the successful completion of training when the appointment order Is issued the direct recruits are put on probation. Similar Is in the case of the promotees. Both of them undergo probation. [253G] 1.06. The seniority of direct recruits will have to be reckoned only from the date of appointment and not from the date of recruitment. [253G] 2.01. The Government had clearly taken a decision to increase the number of posts to be filled up by promotion in excess of the 1/3rd of total posts in the cadre on administrative grounds connected with nationalisation of Kendu Leaf Trade in 1972 73 in the interest of public due to non availability of direct candidates trained In the Indian Forest College, Dehradun. [256G] 2.02. It is not correct to say that Government have decided that the quota of direct recruitment which will be encroached upon by the promotees will be released as and when direct recruits are available. [256H] 2.03. Hence, to contend that the promotees would obviously have to yield to direct recruits who came in subsequently within their quota and would consequently also not be eligible for seniority above direct recruits, is untenable. [257D] 2.04. ]Me promotions given in excess of 1/3rd quota are valid. There is no justification to push down the promotees in seniority. The promotion in excess of the prescribed quota was necessitated by the exigencies and in the intersest of the public. It is supported by a conscious decision of the Government which is permissible under Rule 5(3). [258D] Keshav Chandra Joshi and Ors. vs Union of India, [1990] Supp. 2 SCR 573 at page 586, distinguished. Direct Recruit Class II Engineering Officers Association and Ors. vs State of Maharashtra and Ors. , ; at page 938; SLP (C) No. 1624 of 1988 Disposed of on 18.01.89; CA. 2051 52 of 1974 Disposed of on 7.1.88, referred to. 245 3.01. By the operation of deeming clause it only enables appointments made under 1959 Rules to be continued under 1984 Rules. Certainly, by the repeal of 1959 Rules It cannot mean all those appointments cease. Nor again, the substantive provision of Rule 16 would govern. Therefore, Rule 24 has no application. [256A B] 3.02. Since the appointments in question have been made under 1959 Rules, 1984 Rules will be inapplicable. The 1984 Rules, came into force only when they were published in the Official Gazette on December 21, 1984. Explanation under Rule 16 is a substantive provision. Therefore, it cannot be retrospective. As regards Rule 24, the proviso clearly states that the Rules cannot be construed as affecting on invalidating the appointments already made. Therefore, if any right has been acquired or any privilege had accrued that would remain unaltered. Therefore, these appointments which are governed by the 1959 Rules will continue not withstanding the repeal. [254H, 255A B] 3.03. Since the appointments in question are regulated under Orissa Forest Service Class 11 Recruitment Rules, the Indian Forest Service (Appointment by Promotion) Regulations of 1966 have no application. The Orissa Rules were framed under proviso to Article 309 of the Constitution of India and have statutory and binding force. [258F] G.P. Singh: Principles of Statutory Interpretation Fourth Edition 1988, at page 208, referred to. There have been laches on the part of the direct recruits in seeking the remedy. When the list was published in 1985 nothing prevented them to approach earlier. This is the point to be put against them. [258G] 4.02. The gradation list has been in operation over several years. There is no reason to unsettle the settled position. [256E] Direct Recruit Class II Engineering Officers ' Association vs State of Maharashtra and others; , , referred to.

s Nos. 84, 174, 188, 241 and 242 of 1966. Petitions under article 32 of the Constitution of India for the enforcement of fundamental rights. M.R. M. Abdul Kari, K. Rajendra Chaudhuri, and K. R. Chaudhuri, for the petitioners (in W. P. No. 84 of 1966). 837 B. K. Bhattacharya and M. L Khowaja, for the petitioners (in W. P. No. 174 of 1966). Daniel A. Latifi and M. I. Khowaja,. for the petitioners (in W. P. No. 188 of 1966). K. L. Gauba and section Saukat Hussain, for the petitioners (in W.P. No. 241 of 1966). section Shaukat Hussain, for the petitioners (in W.P. No. 242 of 1966). C. K. Daphtary, Attorney General, N. section Bindra, R. H. Dhe bar, section P. Nayar for R. N. Sachthey, foe the respondent (in W.P. Nos. 84, 174 and 242 of 1966) and the respondents Nos. 1 and 3 (in W.P. No. 188 of 1966). C. K. Daphtary, Attorney General, Lily Thomas, P.C. Kapur, R. H. Dhebar for R. N. Sachthey for the respondent On W.P. No. 242 of 1966). The Judgment of the Court was delivered by Wanchoo, C. J. These five writ petitions raise common ques tions and will be dealt with together. They attack the constitutionality of the Aligarh Muslim University (Amendment) Act, No. 62 of 1951 (hereinafter referred to as the 1951 Act) and the Aligarh Muslim University (Amendment) Act, No. 19 of 1965, (hereinafter referred to as the 1965 Act). The principal attack is based on the provisions of article 30(1) which lays down that "all minorities whether based on religion or language, shall have the right to establish and administer educational institutions of their choice". The case of all the petitioners is that the Aligarh Muslim University (hereinafter referred to as the Aligarh University) was established by the Muslim minority and therefore the Muslims had the right to administer it and in so far as the Acts of 1951 and 1965 take away or abridge any part of that right they are ultra vires article 30(1). Besides this principal attack, the two Acts are also subsidiarily attacked for violating the fundamental rights guanteed under Articles 14, 19, 25, 26, 29 and 31 of the Constitution. It is unnecessary to set out the nature of the attack under these Articles for that will appear when we deal with the matter in detail later. suffice it to say that all the petitions do not make the attack, under ill these Articles, but the sum total of the subsidiary attack in all these petitions takes in its sweep all these six Articles. The petitions have been opposed on behalf of the Union of India and its main contention is that the Aligarh University was established in 1920 by the , No. XL of 1920, (hereinafter referred to as the 1920 Act) and that this Establishment was not by the Muslim minority but by the Government of India by virtue of a statute namely the 1920 Act and, therefore the Muslim minority could not claim any fundamental right to administer the Aligarh University under article 30(1). It /P(N)78CI 14(a) 838 was further contended that as the Aligarh University was established by the 1920 Act by the Government of India, Parliament had the right to amend that statute as it thought fit in the interest of education and the amendments made by the Acts of 1951 and 1965 were perfectly valid as there was no question of their taking away the right of the Muslim minority to administer the Aligarh University, for the minority not having established the University could not claim the right to administer it. It was further contended that the fact that under the provisions of the 1920 Act the Court of the Aligarh University was, to be composed entirely of Muslims did not give any right to, the Muslim. community as such to administer the. University which had been administered by the authorities established by the 1920 Act. It was further contended that the attack based on the six Articles of the Constitution to which we have referred already had no substance and did not in any manner make the Acts of 1951 and 1965 unconstitutional. We do not think it necessary at this stage to give in detail the reply of the Government of India on these points and shall refer to it as and when the occasion arises. It is necessary to refer to the history previous to the establishment of the Aligarh University in 1920 in order to understand the contentions raised on either side. It appears that as far back as 1870 Sir Syed Ahmad Khan thought, that the backwardness of the Muslim community was due to their neglect of modern education. He therefore conceived the idea of imparting liberal education to Muslims in literature and science while at the same time instruction was to be given in Muslim religion and traditions also. With this object in mind, he organised a Committee to devise ways and means for educational regeneration of Muslims and in May 1872 a society called the Muhammadan Anglo Oriental College Fund Committee was started for collecting subscriptions to realise the goal that Sir Syed Ahmad Khan had conceived. In consequence of the activities of the committee a school was opened in May 1873. In 1876, the school became a High School and in 1877 Lord Litton, then Viceroy of India, laid the foundation stone for the establishment of a college. The Muhammadan Anglo Oriental College, Aligarh hereinafter referred to as the M.A.0. College) was established thereafter and was, it is said, a flourishing institution by the time Sir Syed Ahmad Khan died in 1898. It is said that thereafter the idea of establishing a Muslim University gathered strength from year to year at the turn of the century and by 1911 some funds Were collected and a Muslim University Association was established for the purpose of establishing a teaching University at Algarh. Long negotiations took place between the Associationland the Government of India, which eventually resulted in the establishment of the Aligarh University in 1920 by the 1920 Act. It may be mentioned that before that a 839 largo sum of money was collected by the Association for the University as the Government of India had made it a condition that rupees thirty lakhs must be collected for the University before it could be established. Further it seems, that the existing M.A.0. College was made the basis of the University and was made over to the authorities established by the 920 Act for the administration of the University along with the properties and funds attached to the college, the major part of which had been contributed by Muslims though some contributions were made by other communities as well. It is necessary now.to refer in some detail to the provisions of the 1920 Act to see how the Aligarh University came to be established. The long title of the 1920 Act is in these words: "An Act to establish and incorporate a teaching and residential Muslim University at Aligarh". The preamble says that "it is expedient to establish and incorporate a teaching and residential Muslim University at Aligarh, and to dissolve the Societies registered under the , which are respectively known as the Muhammadan Anglo Oriental College, Aligarh and the Muslim University Association, and to transfer and vest in the said University all properties and rights of the said Societies and of the Muslim University Foundation Committee". It will be seen from this that the two earlier societies, one of which was connected with the M.A.0. College and the other had been formed for collecting funds for the establishment of the University at Aligarh, were dissolved and all their properties and rights and also of the Muslim University Foundation Committee, which presumably collected funs for the proposed University were transferred and vested in the University established by the 1920 Act. Section 3 of the 1920 Act laid down that "the First Chancel lor, Pro Chancellor and Vice Chancellor shall be the persons appointed in this behalf by a notification of the Governor General in Council in the Gazette of India and the persons specified in the schedule [shall be] the first members of the Court" and they happened to be all Muslims. Further section 3 constituted a body corporate by the name of the Aligarh Muslim University and this body corporate was to have perpetual succession and a Common Seal and could sue and be sued by that name. Section 4 dissolved the M.A.0. College and the Muslim University Association and all property, movable and immovable, and all rights, powers and privileges of the two said societies, and all property, movable and immovable, and all rights, powers and privileges of the Muslim University Foundation Committee were transferred and 'vested in the Aligarh University and were to be applied to the objects and purposes for which the Aligarh University was incorporated. 840 All debts, liabilities and obligations, of the said societies and Committee were transferred to the University, which was made responsible for discharging and satisfying them. All references in any enactment to either of the societies or to the said Committee were to be construed ' as references to the University. It was further provided that any will, deed or other documents, whether made or executed before or after the commencement of the 1920Act, which contained any bequest, gift or trust in favour of any of the said societies or of the said Committee would, on the com mencement of the 1920 Act be construed as if the University had been named therein instead of such society or Committee. The effect of this provision was that the Properties endowed for the purpose of the M.A.0. College were to be used for the Aligarh University after it came into existence. These provisions will show that the three previous bodies legally came to an end and everything that they were possessed of was vested in the University as established by the 1920 Act. Section 5 provides for the powers of the University including the power to hold examinations and to grant and confer degrees and other academic distinctions. Section 6 is important. It laid down that "the degrees, diplomas and other academic distinctions granted or conferred to or on persons by the University shall be recognised by the Government as are the corresponding degrees, diplomas and other academic distinctions granted by any other University incorporated under any enactment". Section 7 provided for reserve funds including the sum of rupees thirty lakhs. Section 's provided that "the Uni versity shall, subject to the provisions of this Act and the Ordinances, be open to all persons of either sex and of whatever race, creed or class", which shows that the University was not established for Muslims alone. Under section 9 the Court was given the power to make Statutes providing that instruction in the Muslim religion would be compulsory in the case of Muslim students. Sections 10, 11 and 12 made other provisions necessary for the functioning of a University but they are not material for our purpose. Section 13 is another important section. It provided that "the Governor General shall be the Lord Rector of the University". Further sub section (2) of section 13 provided that "the Lord Rector shall have the right to cause an inspection to be made by such person or persons as he may direct, of the University, its buildings, laboratories, and equipment, and of any institution maintained by the University, and also of the examinations, teaching and other work conducted or done by the University, and to cause an inquiry to be made in like manner in respect of any matter connected with the University. The Lord Rector shall in every case give notice to the University of his intention to cause an ins pection or inquiry." After the enquiry, the Lord Rector had the 841 power to address the Vice Chancellor with reference to the result of such inspection and inquiry and the Vice Chancellor was bound to communicate to the Court the views of the Lord Rector with such advice as the Lord Rector might offer upon the action to be taken thereon. The Court was then required to communicate through the Vice Chancellor to the Lord Rector such action if any as was proposed to be taken or was taken upon the result of such inspection or inquiry. Finally the Lord Rector was given the power where the Court did not, within reasonable time, take action to the satisfaction of the Lord Rector to issue such directions as he thought fit after considering any explanation furnished or representation made by the Court and the Court was bound to comply with such directions. These provisions clearly bring out that the final control in the matter was with the Lord Rector who was the Governor General of India. Then comes section 14 which is again an important provision, which provided for the Visiting Board of the University, which consisted of the Governor, the members of the Executive Council, the Ministers, one member nominated by the Governor and one member nominated by the Minister in charge of Education. The Visiting Board had the power to inspect ' the University and to satisfy itself that the proceedings of the University were in conformity with the Act, Statutes and Ordinances, after giving notice to the University of its intention to do so. The Visiting Board was also given the power, by order in writing, to annul any proceedings not in conformity with the Act, Statutes and Ordinances, provided that before making such an order, the Board had to call upon the University to show cause why such an order should not be made, and to consider such cause if shown within reasonable time. This provision, though not so all pervasive as the provision in section 13 of the 1920 Act, shows that the Visiting Board had also certain over riding powers in case the University authorizes acted against the Act, Statutes and Ordinances. There is no condition that the Lord Rector and the members of the Visiting Board must belong to the Muslim community. Sections 15 to 21 are not material$ for our purposes. They made provisions for officers of the University and Rectors and laid down that "the powers of officers of the University other than the Chancellor, the Pro Chancellor, the Vice Chancellor and, the Pro Vice Chancellor shall be prescribed by the Statutes and the Ordinances". Section 22 provided for the, authorities of the University, namely, the Court, the Executive Council and the Academic Council and such other authorities as might be declared by the Statutes to be authorities of the University. Section 23 provided for the constitution of the Court, and the proviso to sub section (1) has been greatly stressed on behalf of the petitioners which laid down that "no person other than a Muslim shall be a member 842 thereof". It may be added here that the Select Committee which went into the Bill before the 1920 Act was passed was not very happy about this proviso and observed that: " in reference to the constitution of the Court we have retained the provision that no person other than Muslim shall be a member thereof. We have done this as we understand that such a provision is in accordance with the preponderance of Muslim feeling though some of us are by no means satisfied that such a provision is necessary." By section 23(2), the Court was to be the supreme governing body of the University and would exercise all the powers of the University, not otherwise provided for by the 1920 Act, the Statutes, the Ordinances and the Regulations. It was given the power to review the acts of the Executive and the Academic Councils, save where such Councils had acted in accordance with powers conferred on them under the Act, the Statutes or the Ordinances and to direct that necessary action be taken by the Executive or the Academic Council, as the case might.be, on any recommendation of the Lord Rector. The power of Making Statutes was also conferred on the Court along with other powers necessary for the functioning of the University. Section 24 dealt with the Executive Council, section 25 with the Academic Council and section 26 with other authorities of the University. Section 27 laid down what the Statutes might provide. Section 28 dealt with the question of the first Statutes and how they were to be amended, repealed and addled to. There is an important provision in section 28 which laid down that "no new Statute or amendment or repeal of an existing Statute shall have any validity, until it his been submitted through the Visiting Board (which may record its opinion thereon) to the Governor General in Council, and has been approved by the latter, who may sanction, disallow or remit it for further consideration. " This provision clearly shows that the final power over the administration of the University rested with the Governor General in Council. Section 29 dealt with Ordinances and what they could provide and section 30 provided which authorities of the University could, make Ordinances. Section 30(2) provided that "the first Ordinances shall be framed as directed by the Governor General in Council." and sub section (3) thereof lald down that "no new Ordinance, or amendment or repeal of an existing Ordinance shall have any validity until it has been submitted though the Court and the Visiting Board (which may record its opinion thereon) to the Governor General in Council, and has obtained the approval of the latter, who may sanction, disallow or remit it for further consideration". This again shows that even Ordinances could not be made by the University withOut the approval of the Governor General In Council. If any dispute arose between the, Executive and the Academic Council as 843 to which had the power to make an Ordinance, either Council could represent the matter to the Visiting Board and the Visiting Board had to refer the same to a tribunal consisting of three members, one of whom was to be nominated by the Executive Council, one by the Academic Council, and one was to be a Judge of the High Court nominated by the Lord Rector. This again shows that in the matter of such disputes, the Court which is called the supreme governing body of the University, did not have the power to resolve it. Section 31 provides for the making of Regulations, which had to be consistent with the Statutes and Ordinances. It is only the Regulations which did not require the approval of the Governor General before they came into force. Section 32 provided for admission of students to the University and sub section (4) thereof provided that "the University shall not save with the previous sanction of the Governor General in Council recognise (for the purpose of admission to a course of study for a degree) as equivalent to its own degrees, any degree conferred by any other University or as equivalent to the Intermediate Examination of an Indian University, any examination conducted by any other authority". This shows that in the matter of admission the University could not admit students of other institutions unless the Governor General in Council 'approved the degree or any other examination of the institutions other than Indian Universities established by law. Section 33 provided for examinations, section 34 for annual report and section 35 for annual accounts. Sections 36 to 38 provided for supplementary matters like conditions of service of officers and teachers, provident and pension funds, filling of casual vacancies and are not material for our purposes. Section 39 laid down that "no act or proceeding of any authority of the University shall be invalidated merely, by reason of the existence of vacancy or vacancies among its members". Section 40 is important and laid down that "if any difficulty arises with respect to the establishment of the University or any authority of the Uni versity or in connection with the first meeting of any authority of the University, the Governor General in Council may by order make any appointment or do anything which appears to him necessary or expedient for the proper establishment of the University or any authority thereof or for the firs meeting of any authority of the University. " This again shows the power of the Governor General in Council in the matter of establishment of the University. This brings us to the end of the sections of the 1920 Act. There is nothing anywhere in any section of the Act which vests the administration of the University in the Muslim community. The fact that in the proviso to section 23(1) it is provided that the Court of the University shall consist only of Muslims does not necessarily mean that the administration of the University was vested or was intended, to be vested in the Muslim minority. If anything, some of the important provisions to which we have already referred show that the final power in almost every matter of importance 844 was in the Lord Rector, who was the Governor General or in the Governor General in Council. Then follows the schedule which provides for the first Sta tutes of the Aligarh University. These Statutes provided for the Rectors of the University, the Vice Chancellor, Pro Vice Chancellor, Treasurer, Registrar, Proctor and Librarian, the Court, constitution of the Court, the first Court, meetings of the Court and the powers of the Court, the Executive Council, the powers of the Executive Council, the Academic Council and its powers, departments of studies, appointments, register of graduates, convocations, Committees and so on. The annexure to the 1920 Act gave the names of the Foundation Members of the Court numbering 124 who were all Muslims and who were to hold office for five years from the commencement of the Court. Such were the provisions of the 1920 Act. They continued in force till 1951 without any substantial amendment. In 1951, the 1951 Act was passed. It made certain changes in the 1920Act mainly on account of the coming into force of the Constitution. We shall refer only to such changes as are material for our purposes. The first material change was the deletion of section 9 of the 1920 Act which gave power to the Court to make Statutes providing for compulsory religious instruction in the case of Muslim students. This amendment was presume ably made in the interest of the University in view of article 28(3) of the Constitution which lays down that "no person attending any educational institution recognised by the State or receiving aid out of State funds shall be required to take part in any religious instruction that may be imparted in such institution or to attend any religious worship that may be conducted in such institution or in any premises attached thereto unless such person or, if such person is a minor, his guardian has given his consent thereto. " It was necessary to delete section 9 as otherwise the University might have lost the grant which was given to it by the Government of India. Further section 8 of the 1920 Act was amended and the new section provided that "the University shall be open to persons of either sex and of whatever race, creed, caste, or class, and it shall not be lawful for the University to adopt or impose on any person, any test whatsoever of religious belief or profession in order to entitle him to be admitted therein, as a teacher or student, or to hold any office therein, or to graduate thereat, or to enjoy or exercise any privilege thereof, except in respect of any particular benefaction accepted by the University, where such test is made a condition thereof by my testamentary or other instrument creating such benefaction". The new section 8 had also a proviso laying down that "nothing in this section shall be deemed to prevent religious instruction being given in the manner prescribed by the Ordinances to those who have consented to receive it". Clearly section 9 was deleted and section 8 was amended in this manner to bring the law into conformity with 845 the provisions of the Constitution and for the benefit of the University so that it could continue to receive aid from the Government. Some amendment was also made in section 13 in view of the changed constitutional set up and in place of the Lord Rector, the University was to have a Visitor. Section 14 was also amended and the power of the Visiting Board was conferred on the Visitor by addition of a new sub section (6). The next substantial change was that the proviso to section 23(1) which required that all members of the Court would only be Muslims was deleted,. Other amendments are not material for our purpose as they merely relate to administrative details concerning the University. It will thus be seen that by virtue of the 1951 Act non Mus lims could also be members of the Court. But the Court still remained the supreme governing body of the University as provided by section 23 (1) of the 1920 Act. It is remarkable that though the proviso to section 23(1) was deleted, as far back as 1951, there was no challenge to the 1951 Act till after Ordinance No. 11 of 1965 was passed. The reason for this might be that there was practically no substantial change in the administrative set up of the 1920 Act and it was only when a drastic change was made by the Ordinance of 1965, followed by the 1965 Act, that challenge was made not only to the 1965 Act but also to the 1951 Act in so far as it did away with the proviso to section 23(1). It is not our function in the present petitions to consider the policy underlying the amendments made by the 1965 Act nor do we propose to go into the merits of the amendments made by the 1965 Act. We are in the present petitions concerned only with the constitutionality of the provisions of the 1965 Act. If the provisions are constitutional, they were within the legislative competence of Parliament. This brings us to the changes made in the 1965 Act which have occasioned the present challenge. The main amendment in the 1965 Act was in section 23 of the 1920 Act with respect to the composition and the powers of the Court of the University. Sub sections (2) and (3) of the 1920 Act were deleted, with the result that the Court no longer remained, the supreme governing body and could no longer exercise the powers conferred on it by sub sections (2) and (3) of section 23. In place of these two sub sections, a new subsection (2) was put in, which reduced the functions of the Court to three only, namely, "(a) to advise the Visitor in respect of any matter which may be referred to the Court for advice; (b) to advise any other authority of the University in respect of any matter which may be referred to the Court for advice; and (c) to perform such other duties and exercise such other powers as may be assigned to it by the Visitor or under this Act". It further appears from the amendments of sections 28, 29, 34 and 38 that the powers of 846 the Executive Council were correspondingly increased. The Statutes were also amended and many of the powers of the Court were transferred by the amendment to the Executive Council. Further the constitution of the Court was drastically changed by the amendment of the 8th Statute and it practically became a body nominated by the Visitor except for the Chancellor, the ProChancellor, the members of the Executive Council who were ex officio members and three members of Parliament, two to be nominated by the Speaker of the House of the People and one by the Chairman of the Council of States. Changes were also made in the constitution of the Executive Council. Finally the 1965 Act provided that "every person holding office as a member of the Court or the Executive Council, as the case may be, immediately before the 20th day of May, 1965 (on which date Ordinance No. 11 of 1965 wais promulgated) shall on and from the said date cease to hold office as such". It was also provided that until the Court or the Executive Council was reconstituted, the Visitor might by general or special order direct any officer of the University to exercise the powers and perform the duties conferred or imposed by or under the 1920 Act as amended by the 1965 Act on the Court or the Executive Council as the case may be. The contention of the petitioners is that by these drastic amendments in 1965 the Muslim minority was deprived of the right to administer the Aligarh University and that this deprivation was in violation of article 30(1) of the Constitution; and it is to this question we turn now. Under Article 30(1), "all minorities whether based on religion or language shall have the right to establish and administer educational institutions of their choice". We shall proceed on the assumption in the present petitions that Muslims are a minority based on religion. What then is the scope of article 30(1) and what exactly is the right conferred therein on the religious minorities. It is to our mind quite clear that article 310(1) postulates that the religious community will have the rig establish and administer educational institutions of their choice mentoing thereby that where a religious minority establishes an educational institution, it will have the right to administer that. An argument has been raised to the effect that even though the religions minority may not have established the educational institution, it will have the right to administer it, if by some process it been administering the same before the Constitution came into force. We are not prepared to accept this argument. The, Artice in our opinion clearly shows that the minority will have the right to administer educational institutions of their choice provided they have established them, but not otherwise. The Article cannot be read, to mean that even if the educational institution has been established by somebody else, any religious minority would have the right to administer it because, for some reason or other, it might have been 847 administering it before the Constitution came into force. The words "establish and administer" in the Article must be read conjunctively and so read it gives the Tight to the minority to administer an educational institution provided it has been established by it. In this connection our attention was drawn to In re, The Kerala Education Bill, 1957(1) where, it is argued, this Court had held that the minority can administer an educational institution even though it might not have established it. In that case an argument was raised that under article 30(1) protection was given only to educational institutions established after the Constitution came into force. That argument wag turned down by this Court for the obvious reason that if that interpretation was given to article 30(1) it would be robbed of much of its content. But that case in our opinion did not lay down that the words "establish, and administer" in Art 30(1) should be read disjunctively, so that, though a minority might not have established an educational institution it had the right to administer it. It is true that at p. 1062 the Court spoke of article 30(1) giving two rights to a minority i.e. (i) to establish and (ii) to administer. But that was said only in the context of meeting he argument that educational institutions established by minorities before the Constitution came into force did not have the protection of article 30(1). We are or opinion that nothing in that case justifies the contention raised of behalf of the petitioners that the minorities would have the right to administer an educational institution even though the institution may not have been established, by them. The two words in Art 30(1) must be read together and No read the Article gives this right to the minority to administer institutions established by it, If the educational institution has not been established by a minority it cannot claim the right to administer it under article 30(1) We have therefore to consider whether the Aligarh University was established by the Muslim minority; and if it was so established the minority would certainly have the right to administer it. We should also like to refer to the observations in The purgah Committee, Ajmer vs Syed Hussain Ali(1). In that case the Court observed while dealing with article 26(a) and (d) of the Constitution that even if it be assumed that a certain religious institution was established by a minority community it may lose the right to administer it in certain circumstances. We may in this connection refer to the following observations at p. 414 for they appequally to article 30(1): "If the right to administer properties never vested in the denomination or had been validly surrendered by it or had otherwise been effectively and irretrievably lost to it, article 26 cannot be successfully invoked." [1959] S.C.R. 995. (2) [1962] 1 S.C.P. 383. 848 We shall have to examine closely what happened in 1920 when the 1920 Act was passed to decide (firstly) whether in the face of that Act it could be said that the Aligarh University was established by the Muslim minority, (secondly) whether the right to administer it ever vested in the minority, and (thirdly) even if the right to administer some properties that came to the University vested in the minority before the establishment of the Aligarh University, whether it had been surrendered when the Aligarh University came to be established. Before we do so we should like to say that the words "edu cational institutions" are of very wide import and would include a university also. This was not disputed on behalf of the Union of India and therefore it may be accepted that a religious minority had the right to establish a university under article 30(1). The position with respect to the establishment of Universities before the Constitution came into force in 1950 was this. There was no law in India which prohibited any private individual or body from Establishing a university and it was therefore, open to a private individual or body to establish a university. There is a good, deal on common between educational institutions which are not universities and those which are universities. Both teach students and both have teachers for the purpose. But what distinguishes a University from any other educational institution is that a university grants degrees of its own while other educational institutions cannot. It is this granting of degrees by a university which dis tinguishes it from the ordinary run of educational institutions. See St. David 's College, Lampeter vs Ministry of Education(1). Thus in law in India there was no prohibition against establishment of universities by private individuals or bodies and if any university was so established it must of necessity be granting deges before it could be called a university. But though such a university might be granting degrees it did not follow that the Government of the country was bound to recognise those degrees. is a matter of fact as the law stood up to the time the Constitution time into force, the Government was not bound to recognise agrees of universities established by private individuals or bodies and gene rally speaking the Government only recognised degrees universities established by it by law. of private individual or body could before 1950 insist that the degrees of any university established by him or it must be recognised by government. Such recognition depended upon the will of government generally expressed through statute. The importance of the recognition of Government in matters of this kind cannot be minimized. This position continued even after the Constitution came into force. It is only in 1956 that by sub section (1) of section 22 of the University Grants commission Act, (No. 3 of 1956) it was laid down that "the right to conferring or granting degrees shall be exercised only by a (1) 849 University established or incorporated by or under a Central Act, a Provincial Act or a State Act: or an institution deemed to be a University under section 3 or an institution specially empowered by an Act of Parliament to confer or grant degrees". Sub section (2) thereof further provided that "save as provided in sub section (1), no person or authority shall confer, or grant, or hold himself or itself as entitled to confer or grant any degree". Section 23 further prohibited the use of the word "university" by an educational institution unless it is established by law. It was only thereafter that no private individual or body could grant a degree in India. Therefore it was possible for the Muslim minority to establish a university before the Constitution came into force, though the degrees conferred by such a university were not bound to be recognised by Government. There was nothing in 1920 to prevent the Muslim minority, if it so chose, to establish a university; but if it did so the degrees of such a university were not bound to be recognised by Government. It may be that in the absence of recognition of the degrees granted by a university, it may not have attracted many students, and that is why we find that before the Constitution came into force, most of the universities in India were established by legislation. The Aligarh University was also in the same way established by legislation and it provided under section 6 of the 1920 Act that "the degrees , diplomas and other academic distinctions granted or conferred to or on persons by the University shall be recognised by the Government as are the corresponding degrees, diplomas and other academic distinctions granted by any other university incorporated under any enactment. " It is clear therefore that even though the Muslim minority could have established at Aligarh in 1920 a university, it could not insist that degrees granted by such a university should be recognised by Government. Therefore when the Aligarh university was established in 1920 and by section 6 its degrees were recognised by Government, an institution was brought into existence which could not be brought into existence by any private individual or body for such individual or body could not insist upon the recognition of the degrees conferred by any university established, by it. The enactment of s.6 in the 1920 Act is a very important circumstance which shows that the Aligarh University when it came to be established in 1920 was not established by the Muslim minority, for the minority could not insist on the recognition by Government of the degrees conferred by any university established by it. It is true, as is clear from the 1920 Act, that the nucleus of the Aligarh University was the M.A.O College, which was till then a teaching institution under the Allahabad University. The conversion of that college (if we may use that expression) into a university was however not by the Muslim minority; it took place 850 by virtue of the 1920 Act which was passed by the Central legislature. There was no Aligarh University existing till the 1920Act was passed. It was brought into being by the 1920 Act and must therefore be held to have been established by the Central Legislature which by passing the 1920 Act incorporated it. The fact that it was based on the M.A.0. College, would make no difference to the question as to who established the Aligarh University. The answer to our mind as to who established the Aligarh University is clear and that is that it was the Central Legislature by enacting the 1920 Act that established the said University. As we have said already, the Muslim minority could not establish a university whose degrees were bound to be recognised by Gov ernment as provided by section 6 of 1920 Act. that one circumstance along with the fact that without the 1920 Act the University in the form that it had, could not come into existence shows clearly that the Aligarh University when it came into existence in 1920 was established by, the Central Legislature by the 1920 Act. It may be that the 1920 Act was passed as a result of the efforts of the Muslim minority. But that does not mean that the Aligarh University when it came into being under the 1920 Act was established by the Muslim minority. A good deal of argument was addressed, to us on the nature of eleemosynary corporations and the difference between fundatio incipiens and fundatio perficiens and certain English cases were cited in support thereof. It was urged that the word "establish" in the 1920 Act amounted only to, a case of fundatio incipiens and that so far as fundatio perficiens was concerned,, that was the Muslim minority. We do not think it necessary to go into these distinctions of the English law; nor.do we think it necessary to consider the nature of eleemosynary corporations. Suffice it to say that even if we assume that those who contributed money and property which was vested in the Aligarh University (and some of them were non Muslims) were in the post of fundatio perficiens, they could only have visitorial rights under the English common law. But Muslim minority as such could not claim to be fundatio perficiens for that right would only be in the donors and no others. Further even these visitorial rights must be held to have been negatived by the 1920 Act for it specifically conferred such rights on, the Lord Rector and the Visiting Board and no others. Some argument was also based on some cases of the Supreme Court of the United States of America which depended upon the provisions of the Constitution of that country which Prohibits im pairment of contracts. It is profitless to refer to the cases cited in that behalf for our Constitution has no such fundamental right. Further we cannot under any circumstance read the 1920 Act as a kind of contrast. What does the word "establish" used in article 30(1) mean? In Bouvier 's Law Dictionary, Third Edition, Vol. I, it has been 851 said that the word "establish" occurs frequently in the, Constitution of the United States and it is there used in different meanings; and five such meanings have been given, namely (1) to settle firm , to fix unalterably, as to establish justice; (2) to make or form: as, to establish a uniform rule of naturalization; (3) to found, to create, to regulate , as, Congress shall have power to establish post offices; (4) to found, recognize, confirm or admit: as, Congress shall make no law respecting an establishment of religion; (5) to create, to ratify, or confirm, as We, the people, etc., do ordain and establish this constitution. Thus it cannot be said that the only meaning of the word "establish" is to found in the sense in which an eleemosy nary institution is founded and we shall have to see in what sense the word has been used in our Constitution in this Article. In Shorter Oxford English Dictionary, Third Edition, the word "establish" has at number of meanings, i.e. to ratify, confirm, settle, to found, to create. Here again founding is not the only meaning of the word "establish" and it includes creation also. In Webster 's Third New International Dictionary, the word "establish" has been given a number of meanings, namely, to found or base squarely, to make firm or stable, to bring into existence, create, make, start, originate. It will be seen that here also founding is not the only meaning; and the word also means "to bring into existence". We are of opinion that for the purpose of article 30(1) the word means "to bring into existence", and so the right given by article 30(1) to the minority is to bring into existence an educational institution, and if they do so, to administer it. We have therefore to see what happened in 1920 and who brought the Aligarh University into existence. From the history we have set out above, it will be clear that those who were in charge of the M.A.O. College, the Muslim University Association and the Muslim University Foundation Committee were keen to bring into existence a university at Aligarh. There was nothing in law then to prevent them from doing so, if they so desired without asking Government to help them in the matter. But if they had brought into existence a university on their own, the degrees of that university were not bound to be recognised by Government. It seems to us that it must have been felt by the persons concerned that it would be no use bringing into existence a, university, if the degrees conferred by the said university were not to be recognised by Government. That appears to be the reason why they approached the Government for bringing into existence a university at Aligarh, whose degrees would be recognised by Government and that is why we find section 6 of the 1920 Act laying down that "the degrees, diplomas, and other academic distinctions granted or conferred, to or on persons by the university shall be recognised, by the Government. . It may be accepted for present purposes that the M.A.O. College and the Muslim University Association and the Muslim University Foundation Committee were institutions established by the Muslim minority 852 and two of them were administered. by Societies registered under the Societies Registration Act, (No. 21 of 1860). But if the M.A.0. College was to be converted into a university of the kind whose degrees were bound to be recognised by Government, it would not be possible for those who were in charge of the M.A.0. College to do so. That is why the three institutions to which we have already referred approached the Government to bring into existence a uni versity whose degrees would be recognised by Government. The 1920 Act was then passed by the Central Legislature and the university of the type that was established thereunder, namely, one whose degrees would be recognised by Government, came to be established. It was clearly brought into existence by the 1920 Act for it could not have been brought into existence otherwise. It was thus the Central Legislature which brought into existence the Aligarh University and must be held to have established it. It would not be possible for the Muslim minority to establish a university of the kind whose degrees were bound to be recognised by Government and therefore it must be held that the Aligarh University was brought into existence by the Central Legislature and the Government of India. If that is so, the Muslim minority cannot claim to administer it, for it was not brought into existence by it. article 30(1), which protects educational institutions brought into existence and administered by a minority, cannot help the petitioners and any amendment of the 1920 Act would not be ultra vires article 30(1) of the Constitution. The Aligarh University not having been established by the Muslim minority, any amendment of the 1920 Act by which it was established, would be within the legislative power of Parliament subject of course to the provisions of the Constitution. The Aligarh University not having been established by the Muslim minority, no amendment of the Act can be struck down as unconstitutional under article 30(1). Nor do we think that the provisions of the Act can bear out the contention that it was the Muslim minority which was administering the Aligarh University, after it was brought into existence. It is true that the proviso to section 23(1) of the 1920 Act said that "no person other than a Muslim shall be a member of the Court", which was declared to be the supreme governing body of the Aligarh University and was to exercise all the powers of the University, not otherwise provided for by that Act. We have already referred to the fact that the Select Committee was not happy about this provision and only permitted it in the Act out of deference to the wishes of preponderating Muslim opinion '. It appears from paragraph 8 of the Schedule that even though the members of the Court had to be Muslims, the electorates were not exclusively Muslims. For example, sixty members of the Court had to be elected by persons who had made or would make donations of five hundred rupees and upwards to or for the purposes of the University. Some of these persons were and could 853 be non Muslims. Forty persons were to be elected by the Registered Graduates of the University, and some of the Registered Graduates were and could be non Muslims, for the University was open to all persons of either sex and of whatever race, creed or class. Further fifteen members of the Court were to be elected by the Academic Council, the membership of which was not confined only to Muslims. Besides there were other bodies like the Executive Council and the Academic Council which were concerned with the admi nistration of the Aligarh University and there was no provision in the constitution of these bodies which confined their members only to Muslims. It will thus be seen that besides the fact that the members of the Court had to be all Muslims, there was nothing in the Act to suggest that the administration of the Aligarh University was in the Muslim minority as such. Besides the above, we have already referred to section 13 which showed how the Lord Rector, namely, the Governor General had overriding powers over all matters relating to the administration of the University. Then there was section 14 which gave certain over riding powers to the Visiting Board. The Lord Rector was then the Viceroy and the Visiting Board consisted of the Governor of the United Provinces, the members of his Executive Council, the Ministers, one member nominated by the Governor and one member nominated by the Minister in charge of Education. These people were not necessarily Muslims and they had over riding powers over the administration of the University. Then reference may be made to section 28(2) (c) which laid down that no new Statute or amendment or repeal of an existing Statute, made by the University, would have any validity until it had been approved by the Governor General in Council who had power to sanction, disallow or remit it for further ' consideration. Same powers existed in the Governor General in Council with respect to Ordinances. Lastly reference may be made to section 40, which gave power to the Governor General in Council to remove any difficulty which might arise in the establishment of the University. These provisions in our opinion clearly show that the administration was also not vested in the Muslim minority; on the other hand it was vested.in the statutory bodies created by the 1920 Act, and only in one of them, namely, the Court, there was a bar to the appointment of any one else except a Muslim, though even there some of the electors for some of the members included non Muslims. We are therefore of opinion that the Aligarh University was neither established nor administered by the Muslim minority and therefore there is no question of any amendment to the 1920 Act being unconstitutional under article 30(1) for that Article does not apply at all to the Aligarh University. The next argument is based on article 26 of the Constitution. that Article Provides that every religious denomination or any 854 section thereof shall have the right (a) to establish and maintain institutions for religious and charitable purposes. (c) to own and acquire movable and immovable property; and (d) to administer such property in accordance with law. A question was raised Whether article 26 would take in its sweep educational institutions on the ground that such institutions are institutions for charitable purposes. It was urged that article 26 will not apply to educational institutions for there is specific provision in article 30(1) with respect to educational institutions and therefore institutions for charitable purposes in cl. (a) of article 26 refer to institutions other than educational ones. There is much to be said in favour of this contention. But we do not propose to decide this question for present purposes. We shall assume that educational institutions would also come within article 26(a) as institutions for charitable purposes. Even so we fail to see how article 26 helps the petitioners. Clause (a) of that Article gives the right to every religious denomination and the Muslim minority may for present purposes be assumed to be a religious denomination within the 'meaning of article 26 to establish and maintain institutions for religious and, charitable purposes. What we have said with respect to article 30(1) which gives right to minorities to establish and administer educational institu tions of their choice applies equally to cl. (a) of article 26 and therefore we are of opinion that the words, "establish and maintain" must be read conjunctively and it is only institutions which a religious denomination establishes which 'it can claim to maintain. ' It is not necessary to go into all the ' implications of the word "maintain"; it is enough for present purposes to say that the right to maintain institutions for religious 1 and charitable purposes would include the right to administer them. But the right under el. (a) of article 26 will only arise where the institution is established by a religious denomination and it is in that event only that it can claim to maintain it. As we have already held, the Aligarh University was not established by the Muslim minority and therefore no question arises of its right to maintain it within the meaning of cl. (a) of article 26. Reference is also, made to article 26 clauses (c) and (d) which give the right to a religious denomination "(c) to own and acquire movable and immovable property, and (d) to administer such property in accordance with law". So far as that is concerned it is enough to say that Muslim minority does not own the movable and immovable property which was vested in the Aligarh University by virtue of the 1920 Act and therefore cannot claim to administer any such,property. Clauses (c) and (d) give power to the religious denomination to own and acquire movable and immovable property and if it owns or acquires such movable or immovable property it can administer such property in accordance with law. But the Muslim minority did not own the property which was vested in, the Aligarh University on the date the Constitution came 855 into force, and it could not lay claim to administer that property by virtue of article 26(d). For the rest, there is nothing in the impugned amendment Acts which in any way bars the Muslim minority from owning or acquiring and administering movable or immovable property if it so desires for purposes of article 26. But it cannot lay claim under article 26(d) to administer the property which was vested in the Aligarh University by the 1920 Act, for it did not own that property when the Constitution came into force. The next attack on the constitutionality of the 1965 Act is under article 25 of the Constitution. That Article provides that "subject to public order, morality and health and to the other provisions of this Part all persons are equally entitled to freedom of conscience and the right freely to profess, practice and propagate religion. " We have not been able to understand how the amendment made by the 1965 Act in the 1920 Act in any way affects the tight freely to profess, practice and propagate religion. It may be added that 'learned counsel for the petitioners did not seriously press the contention that the 1965 Act was ultra vires as it violated article 25 of the Constitution. The next Article of the Constitution on which reliance is placed is article 29. That Article provides that "any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same". We have not been able to understand how the amendments made by the 1965 Act in the 1920 Act in any way interfere with the right of the Muslim minority to conserve any distinct language, script or culture which they might have. Here again we may add that no serious argument was raised before us on the basis of article 29. The next Article of the Constitution on which reliance is ,placed is article 14. Here again we are not able to appreciate what the discrimination is which has been brought about by the amendments of the 1965 Act. It seems that the charge of discrimination is based on the provisions of the Benaras Hindu University Act, which University is established ' by an Act of its own. We do not think that article 14 requires that the provisions in every, University Act must always be the same. Each University has problems of its own and it seems to us that it is for the legislature to decide ,what kind of constitution should be conferred on a particular university established by it. There can be no question of discrimination on the ground that some other University Acts provide for some different set up. Each university must be taken to be a class by itself and the legislature has a right to make such provision for its constitution as it thinks fit subject always to the provisions of the Constitution. The mere fact that certain provisions in a statute creating one university are different from provisions in another 856 statute creating another university cannot mean that there is discrimination. It has been urged in this connection that other universities, such as, Delhi, Agra, Allahabad, Patna and Benaras, have certain elective element while the amendment of 1965. has done away with the elective element so far as the Aligarh University is concerned. We have already said that we are not, concerned with the policy of the legislature in enacting the 1965, ' Act; nor are we concerned with the merits of the provisions of the '1965 Atc All that we need say is that simply because there is no elective element in one university while there is such element in" another university it cannot be said that there is discrimination, for, as we have said already, each university is a class by itself and may require a different set up according to the requirements and needs of a particular situation. We therefore. see no, force in the attack on the constitutionality of the 1965 Act on the ground that it is hit by article 14 of the Constitution. The next attack oh the constitutionality of the 1965 Act is based on article 19, and the argument seems to be that the statute deprives Muslims of their right to acquire, hold and,dispose of property and to form associations or unions. The argument has merely to be stated to deserve rejection. We cannot understand how the 1965 Act deprives the Muslim citizens of this country,, of the right to form associations or unions. There is nothing in the 1965 Act which takes away that right, nor is there anything in ' the 1 to 1965 Act which takes away the right of the Muslim citizens acquire, hold and dispose of property But it is said that the Muslim minority has been deprived of the right to manage the Aligarh University and the right to hold the property which was vested in the Aligarh University by the 1920 Act. There is no force in this contention either, for article 19(1)(c) does not give any right to any citizen to manage any particular educational institution. It only gives the right to a citizen to form associations or unions. That right has not been touched by the 1965 Act Similarly, article 19 (1)(f) does not give right to any citizen to hold property vested in a corporate body like the university. All that it provides is that all citizens have the right to acquire, hold and dispose of property of their own. There is nothing in the 1965Act which in any way takes away the right of the Muslims of this country to acquire, hold and dispose of property of their own Lastly reliance is placed on Art.31(1) which provides that "no person shall be deprived of his property save by authority, of law. " We may assume that the "Muslim: minority" is a person for purposes of article 31(1) and the petitioners have a right to file these writs on its behalf. It is urged Oat the Muslim minority has been deprived, of their property, namely. the property vested in the Aligarh University, by the 1965 Act inasmuch as the Court now is a very different body from the Court as it was, under, the 1920 Act. It is difficult to understand this argument. It is clear 857 from the history which we have set out above and from the provisions of the 1920 Act that the two societies which were registered under the , namely, the M.A.O. College and the Muslim University Association, voluntary surrendered whatever property they had including the college buildings etc. to the corporate body created by the 1920 Act, namely, the Aligarh University. The third body, namely, Muslim University Foundation Committee also surrendered the money it had collected in pursuance of the Government direction that it will only establish a university if rupees thirty lakhs were collected for the purpose. The same was apparently collected, the major part from Muslims but some contribution was made by non Muslims also. That fund was also made over to the corporate body, namely, the Aligarh University which was brought into existence by the 1920 Act. This is clear from the preamble of the.1920 Act and also from the provisions contained in section 4 and section 7 thereof. Therefore, when the Constitution came into force on January 26, 1950, there was no property which was held by the Muslim mino rity as such, for the property had already vested in the corporate body, namely, the Aligarh University brought into existence by the 1920 Act. Even assuming that before 1920, the property which was surrendered to the Aligarh University was the property of the Muslim minority, what happened in 1920 put an end to the rights of the Muslim minority to hold the property and all that was done with the consent of those who can be said to have held the proPerty on behalf of the Muslim minority before 1920. There is no attack on the 1920 Act and it is not urged that any part of that Act was in any way ultra vires the Constitution Act which was then in force. Therefore, when the present Constitution came into force on January 26, 1950 the Muslim minority did not have any right in the property which was vested in the Aligarh University by the 1920 Act. The 1965 Act has made no change in the ownership of the property which was vested, in the Aligarh University. Even after the 1965 Act came into force, the property still continues to be vested in the same corporate body, (namely the Aligarh University). In the circumstances, it cannot be said that the 1965 Act deprived the Aligarh University of the property vested in it. As for the Muslim minority they had already given up the property when the Aligarh University was brought into existence by the 1920 Act and that property was vested by the Act in the Aligarh University. The Muslim minority cannot now after the Constitution came into force on January 26, 1950 lay claim to that property which was vested in the Aligarh University by the 1920 Act and say that the 1965 Act merely because it made some change in the constitution of the Court of the Aligarh University deprived the Muslim minority of the property, for the simple reason that the property was not vested in the Muslim minority at any time after the 1920 Act came into force. The argument that there has been breach of article 31(1) has therefore no force. 858 We are therefore of opinion that there is no force in any of these petitions. It is not disputed that the 1951 and 1965 Acts are within the competence of Parliament unless they are hit, by any of the constitutional provisions to which we have referred above. As, they are not hit by any of these provisions, these Acts are good and are not liable to be struck down as ultra vires the Constitution. The petitions therefore fail and are hereby dismissed. In the circumstances we make no order as to costs. V.P.S. Petitions dismissed.

The respondent was employed as a Tracer in the Engineering Department in the erstwhile Hyderabad State where the cadre of Tracers consisted of both matriculates as well as non matriculates and no distinction was made between them. As a result of the reorganisation of States in 1956 he was allotted to the appellant Mysore State where the cadre of Tracers was reorganised into two, ,one consisting of matriculate Tracers in a higher scale of pay and the other of non matriculates in a lower scale. The respondent was given the option either to remain in his old Hyderabad scale of pay or to accept the new scale applicable to non matriculates. He refused to exercise the option and claimed that the cadre of Tracers should not have been divided into two grades and that no distinction should have been made between matriculates and non matriculates. His claim was rejected by the Superintending Engineer on March 19, 1958 and he filed a writ petition in the High Court praying that the order of the Superintending Engineer be quashed and for the issue of writ in the nature, of mandamus to fix his pay in the scale prescribed for matriculate Tracers. The High Court allowed the petition, holding that there was no valid reason for making a distinction as both matriculate and non matriculate Tracers were doing the same kind of work and the distinction made was in violation of articles 14 and 16 of the Constitution. On appeal to this Court, Held: Allowing the appeal. Higher educational qualifications are relevant considerations for fixing a higher pay scale and the classification of two grades of Tracers in the new Mysore State was not violative of articles 14 or 16 of the Constitution. Articles 14 and 16 form part of the same constitutional code Of guarantees and supplement each other. In other words article 16 is only an instance of the application of the general rule of equality laid down in article 14 and it should be construed as such. Hence there is no denial of equality of opportunity unless the person who complains of discrimination is equally situated with the person or persons who are alleged to have been favoured. [411E F] 408 The provisions of article 14 or article 16 do not exclude the laying down of selective tests, nor do they preclude the Government from laying down qualifications for the post in question. Such qualifications need not be only technical and it is open to the Government to consider the general educational attainments of the candidates and to give preference to candidates who have better educational qualifications besides the technical proficiency of a Tracer. [411G412B] General Manager, Southern Railway vs Rangachari, ; , 596, referred to. There was no force in the respondent 's contention that because of his having been in one grade with matriculate Tracers in the old State and, on his being made to work in a separate non matriculate grade in the new State his conditions of service were adversely affected in violation of section 116(7) of the . Furthermore the basis of promotion was merit and seniority based on the interstate seniority list prepared under the provisions of the Act; thus the respondent 's seniority had not been affected and he was not deprived of any accrued benefits. [412F G; 414C D]

minal Appeal No. 158 of 1956. Appeal by special leave from the judgment and order dated February 9, 1955, of the Calcutta High Court in Criminal Revision No. 282 of 1954, arising out of the judgment and order dated December 15, 1953, of the Second Municipal Magistrate, Calcutta, in Case No. 2629C of 1952. Feb. 8, 9, 10. section M. Bose, Advocate General for the State of West Bengal, A. C. Mitra, B. Sen, P. K. Bose and D. Gupta, for the appellant. Three questions arise for determination in this appeal: (1) whether State is a " person " within the meaning of section 386 of the Calcutta Municipal Act, 1923, (2) does the Constitution make any change in the principal of prerogative as part of the common law and (3) does article 372 of the Constitution keep the existing law intact, i. e., the law as declared in L. R. 73 1. A. 271 to the effect that the Crown is not bound by any statute unless it is expressly named or unless it can be held to be included by necessary implication. The word " person " has been held not to include the State. [A.I.R. 1954 Punj. 49 ; A.I.R. 57 Punj. 150; A.I.R. 53 Nag. 35 ; A.I.R. 1955 Nag. 177 ; I.L.R. 1953 1 Cal. 355; 62 C.W.N. 561. 33 Pat. 603 takes the contrary view.] If the word " person " included the State, article 300 of the Constitution would not be 161 necessary. How far the Crown is bound by a Statute not specifically naming it is laid down by the Privy Council in L.R. 73 I.A. 271. The decision of the Madras High Court taking a contrary view in I.L.R. was not cited before the Privy Council and is based upon the wrong assumption that common law changed with the change of legislation. The coming into force of the Constitution does not alter the law as laid down in L.R. 73 I.A. 271, I.L.R. and I.L.R. Article 372 of the Constitution includes the common law of the land and continues the same after the coming into force of the Constitution. [I.L.R. , I.L.R. This common law doctrine of the immunity of the Crown from Statutes not specifically naming it or referring to it by necessary implication is applicable in United States also. ; [52 L. Ed. 82; ; M. C. Setalvad, Attorney General for India, R. Ganapathy Iyer, R. H. Dhebar and T. M. Sen, for intervener No. 1 The question is whether the ancient rule of English common law declared to be applicable to India by the Privy Council is applicable to the construction of section 386 and it has to be examined as to what was the position before and after the Constitution. The High Court has decided that even before the Constitution the principle did not apply in spite of the Privy Council decision. The statute of 1923 must be con strued in accordance with the rule of interpretation prevailing in 1923. The makers of statute in 1923 did not intend to include State in the word " person ". The decision of the Privy Council was the binding law of the land unless there was legislation abrogating it or taking away its effect. Article 372 of the Constitution actually continues the law as laid down in L.R. 73 I.A. 271. This Article uses the expression " of the law in force in India " and not the words " existing law ". The same expression is used in section 292 of the Government of India Act and was interpreted in There is nothing in the Constitution which takes away the applicability of the rule. There is nothing in 21 162 that rule or in its nature repugnant to any provision of our Constitution. The rule is illustrated in ; and I C.L.R. 406. The rule is applicable to all forms of Governments and is based on the ground of public policy and not merely on the ground of prerogative. ; ; V. K. T. Chari, Advocate General for Madras and T. M. Sen, for intervener No. 4. Supported the Advocate General of Bengal. H. M. Seervai, Advocate General for Maharashtra and R. H. Dhebar, for intervener No. 5. The word " person " should be given its normal meaning. It does not include the Crown or the State. It would not include the State unless the statute would be meaningless without such inclusion. [L.R. 73 I.A. 271 ; I C.L.R. 406]. By " necessary implication " is meant that without the inclusion of the crown or the State the beneficent purpose of the statute would be wholly frustrated. The consensus of judicial opinion in Bombay has been the same as expressed in L.R. 73 I.A. 271. The rule has nothing to do with forms of Government.[93 L. Ed. 1406]. Indian decisions have uniformly taken this view. [5 Bom. H.C.R. 23 ; I.L.R. I Bom. 213; 36 Bom. L.R. 820; ; I.L.R. 2 All. 196]. I.L.R. accepts the rule but says that it does not apply to taxation. This was a wrongful curtailment of the prerogative. [Halsbury, Vol. 7, p. 469, para 98]. The judgments of the Privy Council delivered before January 26, 1950, are binding on all courts in India except the Supreme Court and they are binding till the Supreme Court takes a different view. [A.I.R. 1953 Cal. 524; A.I.R. 1955 Nag. 293; Government of India Act, section 212 provided that the judgments of the Federal Court and of the Privy Council shall be binding and shall be followed. section M. Sikri, Advocate General of Punjab and D. Gupta, for intervener No. 2. In pre Constitution statutes the word " person " could include " the Crown " but normally or ordinarily it would not so include. In I.L.R. 1958 Punj. 201 it was held that person " included the State of Punjab and the Union 163 of India. The rule laid down by the Privy Council is equally applicable to a Republic. ; ; 65 L. Ed. 315; ; and ; In A.I.R. 1956 Pat. 91 the State has been held to be a person. G. C. Mathur and C. P. Lal, for intervener No. 3. Adopted the arguments of the Advocate General of West Bengal and of the Attorney General of India. T. M. Sen, for intervener No. 6. Adopted the arguments of the Advocate General, Bengal and the Attorney General of India. N. C. Chatterjee, Sunil K. Basu and Sukumar Ghose, for respondents. Section 386 is directed towards maintenance of healthy condition etc. and is a wholesome provision for safeguarding the health of the people by providing for the control of storing houses and for the equality of the stores. The financial aspect, i. e., the recovery of license fees or fine is inconsequential. The prerogative of immunity from the statutes is only available when the State acts as State and not when it descends to trade and business. State is a person. Salmond, 11th Edition, p. 35, defines person as an entity capable of rights and duties. It has the power to hold and acquire property ; it can sue and be sued [Article 300 of the Constitution ; 60.Punj. L. R. 546.]. The correct rule of interpretation is that to exempt the State from the operation of a statute there must be express exclusion in favour of the State. [Friedman in The mere fact that the State cannot be sent to jail, does not indicate that it is not a person. A Corporation is a person. It is the stigma of the conviction that matters and it is not a question of hurting the State financially. ; [1950] S.C.R. 720. A Corporation can be prosecuted even where mens rea or state of mind is concerned. [Paton on Jurisprudence, 2nd Edition, p. 279]. Sanctions of criminal law should be available against the State for enforcing the law. [72 C. L. R. 409; Willis ' Constitution Law, p. 37]. State is a person. ; ; I. L. R. [1951] 1 All. 269]. When State engages in trade or commerce, it must be treated in the same 164 way as ordinary citizens. [A. 1. R. ; A. 1. R. 1956 Pat. 91.] State is not a person only for the purposes of article 14. The doctrine of immunity of States from the operation of its laws cannot be invoked in the present constitutional set up. The rule is based on royal prerogative. ; ; Willis p. 54]. The rule springs from the prerogative that the King can do no wrong. There is no one equivalent to the King now in India and therefore the prerogative does not survive. Law is a scheme of social control and the command of a superior. If the State claims immunity, it must be exempted by express legislation. Immunity cannot be implied. There has been progressive restriction on the immunity of the State. ; ; ; I.L. R. lays down the correct law. After the coming into force of the Constitution, the High Courts are not bound by the judgment of the Privy Council. All powers are derived from the Constitution and no immunities can be implied. Even if any immunity can be implied, then it cannot be invoked in respect of any trading or commercial activity. [5 Bom. H. C. R. Appendix 1 at p. 13; ; ; 90 L. Ed. 326]. The activity carried on by the State in storing food grains etc., and distributing them was trading activity and not exercise of Governmental function. The State is bound by necessary implication by the provisions of the Calcutta Municipal Act, 1.923. There are provisions in the Act which expressly exempt the State from their operation. See section 126. section M. Bose in reply. Common law can be amended by legislation. See section 4, Hindu Succession Act (30 of 1956) and Hindu Adoptions and Maintenance Act (78 of 1956). There is difference between Civil and Criminal liability. [72 C. L. R. 406, at 409, 424, 425]. The State is not carrying on any trading activity but is acting in the exercise of essential Governmental functions. ; Common law of England was introduced in the Presidency towns by statutes. See Ormond 's Rules of Court; 1. L. R. 61 Cal. 165 H. M. Seervai, (with the permission of the Court). It is a settled rule that if a word is not a term of art, you must take the ordinary meaning and not go to technical books. ; ; 90 L. Ed. 396; Halsbury Vol. 7, p. 221]. section M. Sikri, (with the permission of the Court) referred to Holdsworth History of the English Law, ' Vol. 10, p. 354. August 16. The Judgment of Sinha, C.J., Imam and Shah, JJ., was delivered by Sinha, C. J. Sarkar and Wanchoo, JJ., delivered separate judgments. SINHA C. J. This appeal by special leave is directed against the judgment and order of the High Court at Calcutta dated February 9, 1955, whereby that Court, in its revisional jurisdiction, set aside an order of acquittal dated December 15, 1953, passed by the Municipal Magistrate, Calcutta, in respect of the prosecution launched by the Corporation of Calcutta, respondent in this Court, against the appellant. The relevant facts are these. On July 1, 1952, the Corporation of Calcutta made an application for summons under section 488 of Bengal Act III of 1923, which was substituted by West Bengal Act XXXIII of 1951, against " the Director of Rationing and Distribution representing the Food Department of the Government of West Bengal ". The offence complained of was " for using or permitting to be used premises No. 259, Chitpur Road, Upper, for the purpose of storing rice etc., under the provisions of the Bengal Rationing Order, 1943, without a licence under section 386 for the year, 1951 52, corresponding section 437 of the C.M.C. Act, 1951 ". Section 386(1)(a) of the Calcutta Municipal Act is in these terms: ,, No person shall use or permit to be used any premises for any of the following purposes without or otherwise than in conformity with the terms of a licence granted by the Corporation in this behalf, namely, any of the purposes specified in Schedule XIX 166 Item 8 of the said Schedule is " storing, packing, pressing, cleansing, preparing or manufacturing, by any process whatever, any of the following articles and the articles mentioned include rice, flour, etc. The facts alleged by the prosecution were not denied in behalf of the Department, which was in the position of the accused, but it was contended by way of a preliminary objection that the prosecution was not maintainable in law. After hearing arguments for the parties the learned trial Magistrate passed an order acquitting the accused relying upon a decision of the Calcutta High Court in the case of The Corporation of Calcutta vs Sub Postmaster, Dharamtala Post Office(1), holding that the provisions of section 386 of the Act, neither in terms nor by necessary implication, bound the Government. The respondent moved the Calcutta High Court in its revisional jurisdiction in Criminal Revision No. 282 of 1954, which was heard by a Division Bench consisting of J. P. Mitter and section N. Guha Ray, JJ. Cxuha Ray, J., who delivered the judgment of the Court, Mitter, J., concurring, held that the previous decision of the same High Court in The Corporation of Calcutta vs Sub Postmaster, Dharamtala Post Office (1) was clearly distinguishable. The distinction pointed out was that the previous decision of the Court had relied upon the decision of the Judicial Committee of the Privy Council in Province of Bombay vs Municipal Corporation of the Citu of Bombay (2), in a case arising before the coming into force of the Constitution. As the present case arose after the advent of the Constitu tion, the High Court did not feel bound by the aforesaid decision of the Privy Council and therefore examined the legal position afresh. On such an examination, the High Court came to the conclusion that the Indian Legislature in enacting laws acted on the assumption that the Government would be bound unless excluded either expressly or by necessary implication oftener than on the assumption that it would not be bound, unless the Legislature so provided expressly or by necessary implication. The High Court took the view that the decision of the Division (1) (2) (1946) L.R. 73 I.A. 271. 167 Bench of the Madras High Court in Bell vs The Municipal Commissioners for the City of Madras (1) was more in consonance with the law in India than the opposite view expressed in the Privy Council judgment aforesaid. They definitely decided that the law of India, even before the coming into effect of the Constitution, 7 and even at the time of the passing of the Government of India Act, 1935, was that the Government was bound by a Statute unless it was exempted either expressly or by necessary implication. In that view of the matter, the High Court further observed that the question whether the decision aforesaid of the Privy Council was still good law under article 372 of the Constitution did not arise and that, if it did, it was inclined to the view that the law declared by the Privy Council was not continued by any provision of law. In effect, the High Court took the view that the State was bound by the Statute unless it was excluded from its operation either expressly or by necessary implication. In that view of the matter, it held that section 386 of the Act bound the appellant, set aside the order of acquittal and sent the case back to the learned Magistrate for disposal according to law. The appellant made an application for special leave to appeal from the aforesaid judgment and order of the High Court, and obtained special leave in September 1955. It is thus clear that this case had remained pending in this Court for about five years. If this Court agreed with the view expressed by the High Court, the case would have to be tried on merits and the trial would begin more than eight years after the institution of the petition of complaint, but, as will presently appear, this prosecution was misconceived and therefore, in effect, no one has been the worse for the long pendency of the prosecution, which now must come to an end. The short question for determination in this appeal is whether any offence had been committed by the appellant, as alleged against him. If he was bound by the provisions of the Act to take out a licence on payment of the necessary fees, he must be held to have contravened the provisions of that Statute. It has (1) Mad. 457. 168 been contended by the learned Advocate General of Bengal, representing the appellant, that the decision of the Privy Council referred to above is still good law and that the contrary decision of the Division Bench of the Madras High Court (1) did not take the correct view of the legal position. The argument further is that the Privy Council decision was certainly binding on the Courts in India at the time it was rendered. That was the law of the land as declared by the highest judicial authority. Has that judicial determination been altered by the Constitution ? It has been argued that the law in India, even after the coming into effect of the Constitution, continues to be the same as the law in England in respect of the prerogatives of the Crown. The Act in question does not make any express provision binding the Government and there was nothing in the Act to show to the contrary by necessary implication. The Act could operate with reasonable efficacy without being held to be binding on the Government. It was further pointed out that the High Court had failed to take into con sideration the fact that that High Court itself had construed the Calcutta Municipal Act of 1923, which was replaced by the present Act of 1951, on the basis of the Privy Council decision not to have bound the Government. The Act of 1951 did not make any provision expressly abrogating that view. Hence, it is argued the High Court should have felt bound by the previous decision of that very Court given on the basis of the Privy Council decision; and had erred in taking the opposite view. The argument further was that the State is not a person within the meaning of the penal section with reference to which the prosecution had been launched. The common law could not have been overridden impliedly by a course of legislation. The common law applies to India even after the Constitution, not because there is the King or the Queen, but because it is the law in force. In other words, what was the prerogrative of the sovereign has now become the law of the land in respect of the sovereignty of the State. Thus the law of England, which (1) Mad, 457. 169 in its source was the prerogative of the Crown, was the common law of the land and was adopted by the Constitution by article 372, subject to the reservations contained therein. The Attorney General for India as also the Advocates General of Madras and Bombay supported the contention raised on behalf of the appellant. Mr. N. C. Chatterjee, who appeared on behalf of the respondent, contended that the State is a legal person as recognised in article 300 of the Constitution and was, therefore, capable of rights and obligations; that unless there is an express exclusion of the State by the Legislature, the Act would apply to all, including the State. He further contended that under the Constitution there is no King and, therefore, there cannot be any question of prerogative. Any exemption from the operation of the statute must be found in express immunity under the law and cannot be implied. He went to the length of contending that a State 's prerogative is inconsistent with the whole Constitution. Whatever may have been the legal position before the coming into effect of the Constitution, it has not countenanced the continuance of any such prerogative as is contended for on behalf of the appellant. Another line taken by Mr. Chatterjee is that when the State embarks upon a business, it does so not in its sovereign capacity, but as a legal person, subject to the same rights and liabilities as any other person. In effect, therefore, he contended that the State is a person within the meaning of section 386 of the Act; that the doctrine of immunity of States from the operation of its laws cannot be invoked after the advent of the Constitution, and, alternatively, that even if the immunity is available to the State as a sovereign power, it is not available to the State when it embarked upon a commercial undertaking and that. in any case, the State was bound by the law by applying the rule of necessary implication from the provisions of the Act. In this case it is manifest that it is the Government of West Bengal which is sought to be prosecuted 22 170 through one of its officers. The prosecution is not against a named person, but against the Director of a named Department of the Government. The person who was the Director of the Department at the relevant date, that is to say, in the year 1951 52 may not be the same person who answered that description on the date the prosecution was launched. In essence, therefore, it is the Government of West Bengal which has to answer the charge levelled by the respondent, the Corporation of Calcutta. Whether a prosecution against such an indeterminate person would or would not lie is a matter which has not been raised and, therefore, need not be discussed. The question most canvassed before us in whether the penal section invoked in this case applies to Government. It has been contended, and in our opinion rightly, that the provisions of the penal section neither by express terms nor by necessary implication are meant to be applied to Government. The decision of the Judicial Committee 'of the Privy Council(1), if it is good law even now, completely covers this case, but the decision of the High Court, now under examination, has taken the view that the earlier decision of the Division Bench of the Madras High Court (2 ) has laid down the correct law, and not the Privy Council decision. We have, therefore, to decide which of the two decisions has taken the correct view of the legal position as it obtained on the day the prosecution was launched. 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. Blackstone (Commentaries, Vol. I, 261 262) accurately summed up the legal position as follows: "The king is not bound by any act of Parliament, unless he be named therein by special and (1) (1946) L.R. 73 I.A. 271. (2) Mad. 457. 171 particular words. The most general words that can be devised. affect not him in the least, if they may tend to restrain or diminish any of his rights or interests. For it would be of most mischievous consequence to the public, if the strength of the executive power were liable to be curtailed without its own express consent by constructions and implications of the subject. Yet, when an act of Parliament is expressly made for the preservation of public rights and the suppression of public wrongs, and does not interfere with the established rights of the crown, it is said to be binding as well upon the king as upon the subject; and, likewise, the king may take the benefit of any particular act, though he be not specialty named." (Quoted at p. 355 of Holdsworth, A History of English Law, Vol. The King 's prerogative is thus created and limited by common law and the sovereign can claim no prerogative, except such as the law allows. (See Halsbury 's Laws of England, Vol. 7, Third Edition, para. 464, at p. 22 1). The prerogative of the Crown in respect of property is thus stated in the same volume of Halsbury 's Laws of England, para. 980, at p. 465: "The Crown not being bound by any statute whereby any prerogative right, title, or interest belonging to it may be divested or abridged, unless expressly named or bound by clear implication, property owned, and occupied by the Crown is exempt from taxation unless rendered liable either by express words or necessary implication. Moreover, an express exemption of particular classes of Crown property in a statute is not in itself sufficient to raise the implication that such property only is exempt, and that other property not falling within the exception is bound, such clauses being inserted merely ex majore cautela. " That was the law applicable to India also, as authoritatively laid down by the Privy Council in the case referred to above. That decision was rightly followed by the Calcutta High Court as stated above. That would be the legal position until the advent of the Constitution. 172 The question naturally arises: whether the Constitution has made any change in that position ? There are no words in the Constitution which can be cited in support of the proposition that the position has changed after the republican form of Government has been adumbrated by our Constitution. It was argued on behalf of the respondent that the existence of such a prerogative is negatived by the very form of our new set up, that is to say, it was contended that the republican form of Government is wholly inconsistent with the existence of such a prerogative. In our opinion, there is no warrant for such a contention. The immunity of Government from the operation of certain statutes, and particularly statutes creating offences, is based upon the fundamental concept that the Government or its officers cannot be a party to committing a crime analogous to the I prerogative of perfection ' that the King can do no wrong. Whatever may have been the historical reason of the rule, it has been adopted in our country on grounds of public policy as a rule of interpretation of statutes. That this rule is not peculiar or confined to a monarchical form of Government is illustrated by the decision of the Supreme Court of U. section A. in the case of United States of America vs United Mine Workers of America (1), where it is laid down that restrictions on the issue of injunctions in labour disputes contained in certain statutes do not apply to the United States Government as an employer or to relations between the Government and its employees and that statutes in general terms imposing certain restrictions or divesting certain privileges will not be applied to the sovereign without express words to that effect. Similarly, in the case of United States of America vs Reginald P. Wittek (2), the question arose whether the District of Columbia Emergency Rent Act applied to government owned defence housing or to government owned low rent housing in the District, and it was ruled by the Supreme Court, reversing the decision of the Municipal Court of Appeals, that the statute in question did not apply to the United States Government (1) ; (2) ; 173 which was not a " landlord " within the meaning of the Act. The decision was based on the rule that a general statute imposing restrictions does not impose them upon the Government itself without a clear expression or implication to that effect. Another illustration of the rule is to be found in the case of Jess Larson vs Domestic and Foreign Commerce Corporation (1). In that case a suit by a citizen, in effect, against the Government (War Assets Administration) for an injunction was dismissed by the District Court on the ground that the Court did not have jurisdiction, because the suit was one against the United States. The Supreme Court, by majority, held that the suit as against the United States must fail on the ground that according to the laws of the country the sovereign enjoyed an immunity which was not enjoyed by the citizens. The case of Roberts vs Ahern (2) is another illustration of the same rule. It was held by the High Court of Australia in that case that the Executive Government of the Commonwealth or of a State is not bound by a statute unless the intention that it shall be so bound is apparent. On the other hand, article 372 of the Constitution has specifically provided that subject to the other provisions of the Constitution all the laws in force in this country immediately before the commencement of the Constitution shall continue in force until altered or repealed or amended by a competent Legislature or by other competent authority. The expression " law in force " has been used in a very comprehensive sense as would appear from the provisions of sub cls. (a) and (b) of cl. (3)of article 13 of the Constitution. If we compare the provisions of article 366(10) which defines " existing law " which has reference to law made by a legislative agency in contradistinction to " laws in force " which includes not only statutory law, but also custom or usage having the force of law, it 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. It is thus clear that far from (1) ; : ; (2) (1904) I. C.L.R. 406. 174 the Constitution making any change in the legal position, it has clearly indicated that the laws in force continue to have validity, even in the new set up, except in so far as they come in conflict with the express provisions of the Constitution. No such provision has been brought to our notice. That being so, we are definitely of the opinion that the rule of interpretation of statutes that the State is not bound by a statute, unless it is so provided in express terms or by necessary implication, is still good law. But Mr. Chatterjee further contended, alternatively, that even if it were held that the Government as a sovereign power may have the benefit of the immunity claimed, it is not entitled to that immunity when it embarks upon a business and, in that capacity, becomes subject to the penal provisions of the statute equally with other citizens. This question was not raised below and has not been gone into by the High Court, nor is it clear on the record, as it stands, that the Food Department of the Government of West Bengal, which undertook rationing and distribution of food on a rational basis had embarked upon any trade or business. In the absence of any indication to the contrary, apparently this Department of the Government was discharging the elementary duty of a sovereign to ensure proper and equitable distribution of available food stuffs with a view to maintaining peace and good Government. Therefore, the alternative argument suggested by Mr. Chatterjee has no foundation in fact. It only remains to consider the other alternative argument that even if the State has not been bound by the penal section in the statute in question in express terms, it must be deemed to be bound by it by necessary implication. But no specific provisions of the statute in question have been brought to our notice which could lend any support to this alternative argument. It has not been shown to us that if the section which was sought to be applied against the Government were held not expressly to apply to Government, the law will lose any of its efficacy, or that its working will be hampered in any way. It must, therefore, be 175 held that there is no substance in this contention either. The appeal is accordingly allowed, the judgment under appeal set aside and the acquittal of the appellant confirmed. SARKAR J. The appellant is an officer of the Government of West Bengal. He was prosecuted before a Municipal Magistrate of Calcutta for storing rice in certain premises without obtaining a licence for that purpose from the respondent, the Corporation of Calcutta, as required by section 386 of the Calcutta Municipal Act, 1923. That was an Act passed by the legislature of the former Province of Bengal and may, for the present purpose, be taken to have been passed by the legislature of the State of West Bengal. In storing the rice the appellant had acted in his official capacity and for carrying out the West Bengal Government 's rationing scheme. The Magistrate acquitted the appellant holding that the Act did not bind the Government as it was neither expressly nor by necessary implication made bound, and so, the appellant who had been prosecuted as representing the Government would not be liable for non compliance with its provisions. On revision the High Court at Calcutta held that the English rule that a statute did not bind the Crown unless expressly or by necessary implication made bound, did not apply to Indian statutes and so the Government would be liable for breach of the provisions of the Calcutta Municipal Act. In this view of the matter, the High Court set aside the order of acquittal and sent the case back to the Magistrate for disposal on the merits. This appeal has been taken from the order of the High Court with special leave granted by this Court. The main question is whether the English rule that The Crown is not bound by the provisions of any statute unless it is directly or by necessary implication referred to " applies to India. It is said that the rule is based on the English law of Crown prerogatives and has no application to India since the promulgation of our Constitution as we have now a republican 176 form of government where no question of royal prerogatives can arise. It is pointed out that the prosecution was in this case started since the Constitution came into force and whatever may have been the position earlier, the Government can no longer take shelter under the English rule. I think the rule applies to India even after the Constitution. It seems to me that the rule as applied in modern times, is really a rule of construction of statutes and is not dependent on royal prerogatives. This is the view that appears to have been taken in all recent authorities, to some of which I wish now to refer. In Craies on Statutes (5th Ed.) it is stated at p. 392 that " The rule is analogous, if not equivalent, to the rule already stated that the common law is not presumed to be altered by statute ". The rule, therefore, is based on the presumed intention of the legislature and is, hence, a rule of construction of statutes. Then I find it stated in Attorney General vs Donaldson (1) that " It is a well established rule, generally speaking, in the construction of Acts of Parliament, that the King is not included unless there are words to that effect; for it is inferred prima facie that the law made by the Crown with the assent of the Lords and Commons, is made for subjects and not for the Crown". Again in Comber V. Justices of Berks (2) it was said in reference to this rule, " In Rex vs Cook, 3 T.R. 519, the general principle as to the construction of statutes imposing charges as containing an exemption of the Crown was laid down ". In the Australian case of Roberts vs Ahern (3), it was said, "This rule has commonly been based on the Royal prerogative. Perhaps, however, having regard to modern developments of constitutional law, a more satisfactory basis is to be found in the words of Alderson, B." The words referred to are what I have already set out from Attorney General vs Donaldson (1). In America too this rule has been applied as a rule (1) ; , 123; ; (2) ; , 65. (3) (1904) 1.C.L.R. 406, 417. 177 of construction though there is no King there but the government is of the republican form. So in United States vs United Mine Workers of America (1) it was observed, " There is an old and well known rule that statutes which in general terms divest pre existing rights or privileges will not be applied to the sovereign without express words to that effect. It has been stated, in cases in which there were extraneous and affirmative reasons for believing that the sovereign should also be deemed subject to a restrictive statute, that this rule was a rule of construction only ". Again in reference to the same rule it was said in United States V. State of California (2). " The presumption is an aid to consistent construction of statutes of the enacting sovereign when their purpose is in doubt ". In our country also in Bell vs The Municipal Commissioners for the City of Madras(3), a case on which much reliance has been placed by the respondent, it was said after referring to various English cases dealing with the rule, " This emphatic statement of the rule being founded upon general principles of construction is undoubtedly applicable as much to Indian enactments as to Colonial or Imperial Statutes ". It was also said at the same page, " The rule of construc tion above adverted to cannot itself be regarded as a prerogative of the Crown ". Then I find that in England the rule protects from the operation of a statute not only what may strictly be called Crown prerogatives, or whatever is nowadays left of them, but all the Crown 's rights, title and interest: see Halsbury 's Laws of England (3rd Ed.) Vol. VII, p. 465. In volume XXXI of the Second Edition of the same treatise it is stated with reference to the rule that, " The Crown for this purpose means not only the King personally, but also the officers of State and servants of the Crown when acting within the scope of their authority on behalf of the Crown in the discharge of executive duties ". In Mersey Docka (1) ; , 272 ; ; , 902. (2) ; , 186; ; , 574. (3) Mad. 457, 485. 23 178 vs Cameron(1), Lord Cranworth after referring to the various instances where the rule had been applied to exempt buildings occupied for purposes of the government from rates and other impositions, said, " These decisions however have all gone on the ground more or less sound, that these might all be treated as buildings occupied by the servants of the Crown, and for the Crown, extending in some instances the shield of the Crown to what might more fitly be described as the public government of the country ". Again in Coomber vs Justices of Berks (2), Lord Blackburn after referring to certain observations of Lord Westbury in the Mersey Docks case(1) said, "He there says that the public purposes to make an exemption " must be such as are required and created by the government of the country, and are, therefore, to be deemed part of the use and service of the Crown;" and in Greig vs University of Edinburgh (3) be more clearly shews what was his view by using this language, "property occupied by the servants of the Crown, and (according to the theory of the Constitution) property occupied for the purposes of the administration of the government of the country, become exempt from liability to the poor rate ". " In this case it was held that lands with buildings constructed thereon and used by county justices, and for police purposes were not liable to income tax. In Cooper vs Hawkins (4) it was held that an engine driver employed by the Crown who drove a steam locomotive on Crown service at a speed exceeding the limit specified by regulations made under a statute, was not liable as in the absence of express words, the statute did not bind the Crown. Lastly, I refer to Roberts vs Ahern (5) where a person acting under the orders of the Government of the Commonwealth of Australia had been prosecuted for having carted away nightsoil from a Post Office without a licence from, and without having given any security to, the local authority as was required by an enactment of the State of Victoria. It was held that he was not liable to prosecution because, (1) ; , 508; ; (2) ; , 65. (3) (1868) L.R.I H.L, (SC.)348. (4) (5) ; , 417. 179 " The modern sense of the rule, at any rate, is that the Executive Government of the State is not bound by Statutes unless that intention is apparent: " p. 418. It was also said that " The doctrine is well settled in this sense in the United States of America: " (p. 418). It is unnecessary to multiply instances where acts of the executive government have received the protection of the rule. All this would seem to put it beyond doubt, that whatever its origin, the rule has long been regarded only as a rule of construction. It has been widely used to exempt executive governments from the operation of statutes quite apart from protecting prerogative rights of the British Crown strictly so called. It has been held reasonable to presume that the legislature intended that executive governments are not to be bound by statutes unless made bound expressly or by necessary implication. It would be equally reason. able to do so in our country even under the present set up for the presumption has all along been raised in the past and especially as the applicability of the rule can no longer be made to depend on the prevailing form of government. In countries with a republican form of government, the Sovereign would be the State, and its acts, which can only be the acts of its executive limb would be, under the rule exempt from the operation of its statutes. Whether the royal prerogative as understood in England, exists in the present day India is not a question that can arise in applying what is a pure rule of construction of statutes. Further it is quite clear that the rule has been applied by courts in India in the construction of Indian statutes all along at any rate upto the promulgation of our Constitution, except in the solitary instance of Bell 's case (1) earlier referred to. It would therefore be right to hold that the legislatures in our country have proceeded on the basis that the rule would govern the enactments passed by them. That being so and remembering that the rule is one of construction, there would be no reason to deny its application to Indian statutes after the Constitution. The Dew republican (1) Mad. 180 form of government adopted by us would not warrant a departure from the long established rule of construction. It was then said that the course of legislation in India would indicate that it was not intended even before the Constitution that the rule would apply to Indian statutes. This contention was based on Bell 's case(1). That case seems to me to have proceeded on a basis not very sound. On an examination of certain Indian statutes it was said, " It is noteworthy that as a general rule government is specially excluded whenever the Legislature considered that certain provisions of an enactment should not bind the Government ". From this the conclusion was drawn that "According to the uniform course of Indian legislation, statutes imposing duties or taxes bind Government as much as its subjects, unless the very nature of the duty or tax is such as to be inapplicable to the Government ". It seems to me that this decision overlooks the uniform course of decisions of Indian Courts applying the rule in the construction of Indian statutes. The legislature must be deemed to have known of these decisions and if they wanted to depart from their effect they would have passed a statute bringing about the desired result. No such statute was ever passed. It is wellknown that in these circumstances the legislatures must be taken to have proceeded on the basis that the decisions were correct and the rule was to be applied to the statutes passed by them. That being so, an examination of the course of Indian legislation would be irrelevant. The cases where the Government was expressly excluded must be taken to be instances of exemptions ex majori cautila: see Hornsey Urban Council vs Hennel(2). Furthermore, it seems to me that a comparison of the number of statutes where the Government had been specially excluded from their operation with the number where the statutes are silent on the subject, is, at best, a very unsafe guide for deciding whether the rule should be applied to Indian enactments. I therefore dissent from the view expressed in Bell 's case(1), that the rule does not apply in India. (1) Mad. (2) 181 Now it seems to me that in storing the rice in the present case, the Government of West Bengal was performing one of its governmental functions. It was storing rice for purposes of rationing, that is, making food stuff available to citizens in time of scarcity. That such activity is a part of the government 's duty is unquestionable. The act for which the appellant was prosecuted was, therefore, an act of the West Bengal Government done in discharge of its ordinary duties as the government and the rule would prevent the Act from applying to make the Government liable for a breach of it. Then it is said that the Act binds the Government by necessary implication. In support of this argument we were referred to certain provisions of the Act which expressly exempted the Government from their operation. I am unable to agree that this raises the necessary implication. It has been said in Halsbury 's Laws of England (2nd Ed.) Vol. XXXI at p. 523 that " A general prerogative of the Crown is not deemed to have been abandoned by implication by reason of the specific exemption in a statute of any class of the servants of the Crown from acting in compliance with the prerogative, nor by reason of the :fact that the Crown has foregone or curtailed its rights in some other direction in another part of the statute " ; see also Hornsey Urban Council case (1) earlier referred to. These observations would show the unsoundness of the contention raised by the respondent. Lastly, it is said that the purpose of the Act was to prevent adulteration of food stuffs and this object would be wholly defeated unless the Government was bound by it. It is not in dispute that if this were so, that might be a ground for holding that the Act bound the Government. On this aspect of the case reference may be made to Province of Bombay vs Municipal Corporation of Bombay (2). I am however unable to hold that the purpose of the Act would be wholly or at all defeated if the Government were not bound by it. It seems to me that section 386 of the Act, the breach of which is complained in this case, is concerned with (1) (2) (1946) L.R. 73 I.A. 271. 182 the use of premises and not with the prevention of adulteration of food stuffs as was contended for the respondent. The provisions with regard to adulteration of food stuffs are contained in a, different part of the statute. There is nothing to show that the purpose of the Act would wholly be defeated if some premises were used contrary to the terms of the Act. I would for these reasons hold that the Act did not bind the Government and the prosecution of the appellant for an act done in the discharge of his duties as an officer of the Government cannot be maintained. This appeal should therefore be allowed and the order of the High Court set aside and that of the Magistrate restored. WANCHOO J. I have had the advantage of reading the judgments prepared by my Lord the Chief Justice and my brother Sarkar J. I agree with their conclusion but my reasons are different. I therefore proceed to state my reasons for coming to the same conclusion. The facts have already been stated in the judgment of my Lord the Chief Justice and I will not therefore repeat them. Suffice it to say that the Corporation of Calcutta initiated this prosecution, in substance, of the State of West Bengal through its Director of Rationing and Distribution under section 488 of the Calcutta Municipal Act, No. 111 of 1923, (now equivalent to section 537 of the Calcutta Municipal Act, No. XXXIII of 1951), for using or permitting to be used certain premises for the purpose of storing rice, etc. under the provisions of the Bengal Rationing Order, 1943, without a licence under section 386 of Act III of 1923, (now equivalent to section 437 of Act XXXIII of 1951). The State did not deny the facts; but it was contended on its behalf that the prosecution was not maintainable in law. The Magistrate held that the provisions of section 386 of the 1923 Act did not apply to the State either expressly or by necessary implication and therefore passed an order of acquittal. The Corporation took the matter in revision to the High Court, which distinguished an earlier decision of the High Court relied upon by the Magistrate and held that after India became a 183 democratic republic from January 26, 1950, the High Court was not bound by the decision of the Privy Council in a similar matter reported in Province of Bombay vs Municipal Corporation of the City of Bombay (1) and that the rule of construction based on the royal prerogative that the Crown was not bound by a statute unless it was expressly named therein or at any rate could be held to be bound by necessary implication, did not apply in India after January 26, 1950, and that the true rule of construction on which the Indian legislatures acted was that the State would be bound unless excluded either expressly or by necessary implication. The High Court therefore held that section 488 of the Act of 1923 read with section 386 bound the State and set aside the order of acquittal and sent the case back to the Magistrate for disposal according to law. The most important question thus is, whether the rule of construction derived from the royal prerogative in England can still be said to apply in India after January 26, 1950. If this rule of construction based on the royal prerogative does not apply, it would necessarily follow that the ordinary rule of construction, namely, that the State would also be bound by the law like anybody else unless it is expressly excluded or excluded by necessary implication, would apply. Now the rule of construction based on the royal prerogative is a survival from the medieval theory of divine right of Kings and the conception that the sovereign was absolutely perfect, with the result that the common law of England evolved the maxim that " the King can do no wrong ". In course of time however the royal prerogative in England was held to have been created and limited by the common law and the sovereign could claim no prerogatives, except such as the law allowed nor such as were contrary to Magna Carta or any other statute or to the liberties of the subject. The courts also had jurisdiction to inquire into the existence or extent of any alleged prerogative. If any prerogative was disputed, they had to decide the question whether or not it existed in the same way as they decided any other question of law. If a, (1) (1946) L.R. 73 I.A. 271. 184 prerogative was clearly established, they could take the same judicial notice of it as they took of any other rule of law: (see Halsbury 's Laws of England, 3rd Edition, Vol. 7, p. 221, para. 464). The question of royal prerogative was also considered in Attorney General vs De Keyser 's Royal Hotel Limited(1). It was held there in that even where there was prerogative it could be curtailed by a statute, if the statute dealt with something which before it could be affected by the prerogative, inasmuch as the Crown was a party to every Act of Parliament. Thus in modern times, the royal prerogative is the residue of discretionary or arbitrary authority which at any time is legally left in the hands of the Crown and is recognised under the common law of England. 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 Province of Bombay vs Municipal Corporation of the City of Bombay (2) was given in October 1946; the King was still there and the Privy Council held that the English common law rule of construction applied to Indian legislation as much as to English statutes. I may mention however that in England also the rule has come in for criticism by writers of books on law. Glanville L. Williams in his treatise on " Crown Proceedings " says 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." Again at 54, the author says " 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." (1) ; (2) (1946) L.R. 73 I.A. 271. 185 After January 26, 1950, when our country became a democratic republic and the King ceased to exist, it is rather otiose to talk of the royal prerogative. It is also well to remember that the English common law as such never applied to India, except in the territories covered by the original side of the three Chartered High Courts, namely, Calcutta, Bombay and Madras, (see Kahirodebihari Datta vs Mangobinda Panda(1) ) though sometimes rules of English common law were applied by Indian courts on grounds of justice, equity and good conscience. It seems to me therefore that to apply to Indian statutes a construction based on the royal prerogative as known to the common law of England now when there is no Crown in this country and when the common law of England was generally not even applicable, (except in a very small part), would be doing violence to the ordinary principle of construction of statutes, namely, that only those are not bound by a statute who are either expressly exempted or must be held to be exempt by necessary implication. In our country the Rule of Law prevails and our Constitution has guaranteed it by the provisions contained in Pt. III thereof as well as by other provisions in other Parts: (see Virendra Singh and others vs The State of Uttar Pradesh (2) ). 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. It is said that though the King has gone, sovereignty still exists and therefore what was the prerogative of the King has become the prerogative of the sovereign. There is to my mind a misconception here. It is true that sovereignty must exist under our Constitution (1) Cal. 841, 857. (2) (1955) 1.S.C.R. 415. 186 but there is no sovereign as such now. In England, however, the King is synonymous with the sovereign and so arose the royal prerogative. But in our country it would be impossible now to point to one person or institution and to say that he or it is the sovereign under the Constitution. A further question may arise, if one is in search of a sovereign now, whether the State Government with which one is concerned here is sovereign in the same sense as the English King (though it may have plenary powers under the limits .set under our Constitution). This to my mind is another reason why there being no King or sovereign as such now in our country, the rule of construction based on the royal prerogative can no longer be invoked. Reliance was placed in this connection on certain cases from Australia and Canada and also from the United States of America. So far as Australia and Canada are concerned, the cases are not of much help for the Crown exists there still. Besides in Canada and in most of the provinces of Canada and in New Zealand provisions have been specifically introduced in the Interpretation Acts laying down that no provision or enactment in any Act shall affect, in any manner whatsoever, the rights of His Majesty, his heirs or successors, unless it is expressly stated 'therein that His Majesty shall be bound thereby: (see Street on Governmental Liability ", at p. 152). In the United States also, it is doubtful if the royal prerogative as such is relied on as the basis of certain principles which are in force there. In United States of America vs United Mine Workers of America, Etc. (1), the Supreme Court did say that there was an old and well known rule 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 there was no discussion of the royal prerogative as such in the judgment and the rule was called a well established rule of construction only. Besides the Court went on to consider the words of the statutes under consideration and held that on a proper construction of them the United States was not bound. (1) ; 187 In United States of America vs Reginald P. Wittek (1), the Supreme Court did say that a general statute imposing restrictions does not impose them upon the government itself without a clear expression or implication to that effect; but this decision was based mainly on the terms of the State statute there under consideration and the surrounding circumstances and legislative history of the statute concerned. Another case in the same volume is Jess Larson vs Domestic and Foreign Commerce Corporation (2) at p. 1628, where a suit was brought against an officer of the United States and it was held that it was in substance a suit against the sovereign government over which the court in the absence of consent had no jurisdiction. There is no discussion in this case of the royal prerogative having continued in the United States and the decision seems to have turned on some law of that country which provides that a suit against the Government could not be tried in a court in the absence of consent. As against these decisions I may refer to H. Snowden Marshall vs People of the State of New York (3) to show that royal prerogative as such is losing ground in the United States, if nothing more. When dealing with the priority of a State over the unsecured creditors in payment of debts out of the assets of the debtor, the Supreme Court held that whether the priority was a prerogative right or merely a right of administration was a matter of local law and the decision of the highest court of the State as to the existence of the right and its incidents would be accepted by the Federal Supreme Court as conclusive. Again in Guaranty Trust Company of New York vs United States of America (4), the Supreme Court held that the immunity of the sovereign from the operation of statutes of limitation, although originally a matter of royal prerogative, was now based upon the public policy of protecting the citizens of the State from the loss of their public rights and revenues through the (1) L. Ed. 1406. (2) L. Ed. 1628. (3) ; L. Ed. 315. (4) ; 188 negligence of the officers of the State, showing that some of those immunities which in England were claimed as royal prerogatives, though preserved in the United States, were so preserved for other reasons. Besides it must not be forgotten that though the Crown no longer remained in the United, States after the attainment of independence the American colonies out of which the United States arose were colonised by English settlers who carried the common law of England with them to America with the result that the first Constitution of some of the States (like New York) after independence provided that the common law of England which together with the statutes constituted the law of the colony before independence should be and continue to be the law of the State subject to such alterations as its legislature might thereafter make: (see H. Snowden Marshall vs People, of the State of New York( '), at p. 317). That may account for the United States recognising some of those prerogative rights which were in force in England; though even so, the basis for such recognition is now more the law or public policy than any royal prerogative as such. The position in our country was somewhat different. We had the King but the common law of England did not, as already indicated, apply as a rule in this country. Now that the King has also gone, there seems to be no reason for continuing the royal prerogatives after January 26, 1950. Further it appears to me that the royal prerogative where it deals with substantive rights of the Crown as against its subjects, as, for example, the priority of Crown debts over debts of the same nature owing to the subject, stands on a different footing from the royal prerogative put forward in the present case, which is really no more than a rule of construction of statutes passed by Parliament. Where, for example, a royal prerogative dealing with a substantive right has been accepted by the, Courts in India as applicable here also, it becomes a law in force which will continue in force under article 372(1) of the Constitution. But (1) ; ; 189 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 is exempt from the operation of a statute unless the statute expressly grants the exemption or the exemption arises by necessary implication. On the whole therefore I am of opinion that the proper rule of construction which should now be applied, at any rate after January 26, 1950, is that the State in India whether in the Centre or in the States is bound by the law unless there is an express exemption in favour of the State or an exemption can be inferred by necessary implication. The view taken by the Calcutta High Court in this connection should be accepted and the view expressed by the Privy Council in Province of Bombay vs Municipal Corporation of the City of Bombay (1) should no longer be accepted as the rule for construction of statutes passed by Indian legislatures. Let me then come to the question whether on the view I have taken of the rule of construction, the prosecution in this case can be allowed to continue. There is nothing in the Act of 1923 or in the Act of 1951 exempting the State specifically from any of the provisions of the Calcutta Municipal Act. In this case the State is being prosecuted under section 488 (or section 537 now) and that section provides for fine for breach of section 386 (or section 437 now). The provision is a penal provision ' and immediately a question arises whether the State as such, apart from its individual officers as natural persons, is liable to prosecution under the criminal law or has to be exempted from the operation of the provisions of criminal statutes by necessary implication. A criminal proceeding generally ends with punishment which may be imprisonment, or fine, or both. Now it does not require any elaborate reason to realise that the State as such cannot be sentenced to imprisonment because there is no way of (1) (1946) L.R. 73 I.A. 271. 190 keeping it in prison; therefore, by necessary implication, the State is exempt from all penal statutes and provisions providing for sentences of imprisonment or death. Then come those penal provisions which impose fines, like the present case, and the question is whether in such a case also the State must be deemed by necessary implication to be exempt from the penal provision. Generally speaking fines when inflicted by courts are realised by the State and go to the coffers of the State. In effect, therefore if the State as such is to be prosecuted under a penal statute imposing fine the result is that the Court will sentence the State to fine which will go to the State itself. It is obvious that if such is the result of a prosecution, namely that the accused gets the fine, the intention could never be that such a prosecution should be launched. Therefore where the penalty is fine and the fine goes to the State, it must be held that by necessary implication the law does not intend the State to be prosecuted for such an offence. In the present case I find that under section 81 of the Act of 1923 (or the corres ponding section 115 of the Act of 1951) the fines imposed by the Magistrate will not go to the Corporation but in the usual way to the State. Under the circumstances whatever other methods may be possible for enforcing the provisions of section 386 (or section 437 now) against the State it cannot be intended to be enforced by prosecution resulting in fine which would go to the State itself. In these circumstances it must be held that by necessary implication the State is exempt from the penal provisions contained in section 488 (now section 537). I would therefore allow the appeal, set aside the judgment of the High Court and restore the order of acquittal by the Magistrate. Appeal allowed.

The property of the respondent was acquired under the U. P. Land Acquisition (Rehabilitation of Refugees) Act, 1948. The respondent challenged the constitutionality of the Act by way of a writ petition and though the High Court dismissed the petition it held that the two provisos to s.11 of the Act were invalid as they offended section 299(2) of the Government of India Act. Subsequently the Constitution (Fourth Amendment) Act, 1955, included the U. P. Act in the Ninth Schedule as item NO. 15. The appellant contended that the inclusion of the Act in the Ninth Schedule protected it under article 31 B of the Constitution from any challenge under section 299(2) of the Government of India Act. Held, that the U. P. Act could not be assailed on the ground of unconstitutionality based on a contravention of section 299 of the Government of India Act. The provisions of the Act having been specifically saved by article 31 B read with the Ninth Schedule, the Act could not be deemed to be void or to ever have become void on the ground of its having contravened the provisions of the Government of India Act. Dhirubha Devisingh Gohil vs The State of Bombay, ; , relied on. Saghir Ahmad vs The State of U. P., ; , not applicable.

Appeal No. 215 of 1954. Appeal by Special Leave from the Judgment and Order dated the 23rd day of August 1954 of the High Court of Judicature at Bombay in Special Civil Application No. 1665 of 1954 under Article 226 of the Constitution of India. R. B. Kotwal, J. B. Dadachanji and Rajinder Narain, for the appellant. Naunit Lal, for respondents Nos. 1 to 3. 1955. February 22. The Judgment of the Court was delivered by SINHA J. This is an appeal by special leave against the judgment and order dated the 23rd August 1954 of the High Court of Judicature at Bombay, dismissing the appellant 's petition for a writ of quo warranto or any other appropriate writ directed against the election of the 2nd and 3rd respondents as President and Vice President respectively of the Gadag Betgeri 1271 The facts of this case are not in dispute and may shortly be stated as follows: The 1st respondent is a municipality governed by the provisions of the Municipal Boroughs Act (Bombay Act XVIII of 1925) which 7 hereinafter shall be referred to as the Act for the sake of brevity. The appellant is one of the 32 councillors constituting the municipality. The last general election to the municipality took place on the 7th May 1951. The term of the councillors was three years computed from the date of the first general meetinog held after the general election aforesaid in this case the 10th July 1951. In that meeting the 4th and 5th respondents were elected President and Vice President respectively of the municipality for a term of three years. The Act was amended by Bombay Act XXXV of 1954, under which the term of office of the councillors was extended from 3 to 4 years ending on the 9th July 1955. As the term of respondents 4 and 5 aforesaid was to expire at the end of three years from the 10th July 1951 and as the term of the municipality was extended by one year under the amending Act aforesaid, the vacancies thus occurring bad to be filled up by a fresh election of President and Vice President. The Collector therefore called a special general meeting of the municipality to be held on the 30th July 1954 to elect a President and Vice President for the remaining period of the quadrennium. The Collector had nominated the Prant Officer (the District Deputy Collector) to preside over that special general meeting. On the 30th July 1954 the Prant Officer under instructions from the Collector adjourned the meeting to the 3rd August 1954 without transacting any business, the only item on the agenda being the election of the President and Vice President. The 3rd respondent raised a point of order against the adjournment but the presiding officer aforesaid overruled that objection. Hence the special general meeting was held on the 3rd August 1954. At that meeting the appellant raised a point of order that under the provisions of the " Act a President could not be elected for 163 1272 a term less than a year and that therefore the proposed election would be in the teeth of those provisions. The presiding officer who was the same person who had adjourned the meeting on the 30th July 1954 overruled that objection too. Thereupon 13 out of the 32 councillors who were present walked out on the ground that they did not propose to participate in a meeting in which the proposal was to elect a President for less than a year contrary to the provisions of the Act. The appellant was one of those 13 councillors who walked out. It may be added that the full strength of the municipality is 32 councillors all of whom were present both on the 30th July 1954 and the 3rd August 1954. The remaining 19 councillors proceeded to transact business and elected the 2nd respondent as the President, the proposal being that he "should be President of the municipality for the remaining period of the quadrennium" and that was the proposal which was carried. Immediately after the election of the President another meeting was held for the election of the Vice President under the presidency of the newly elected President (the 2nd respondent). The appellant raised the same point of order as he had done in the case of the election of the President and that was also overruled. Thereupon six of the councillors present including the appellant walked out and the remaining councillors elected the 3rd respondent as the Vice President. The appellant moved the High Court of Bombay under article 226 of the Constitution for a writ of quo warranto or any other appropriate writ or order or direction against the 2nd and 3rd respondents "restraining them from usurping the office of the President and Vice President respectively of the opponent No. I Municipality and restraining them from performing any duties and from exercising any powers as President and Vice President respectively". The High Court held that the election of the 2nd and 3rd respondents was not illegal and dismissed the application. It held that on a proper construction of the relevant provisions of the Act it was not correct to say that the term of office of the councillors or of the newly 1273 elected President and Vice President shall end with the 9th July 1955; that the intention was to elect the President and the Vice President for the remaining term of the municipality which was not only a period of four years certain but an additional period up to 7 the date when new President and Vice President A would be elected and take over after a fresh general election; that the adjournment of the meeting of the 30th July was not beyond the powers of the presiding officer; and that consequently the meeting of the 3rd August was not vitiated by any illegality. It was also pointed out by the High Court that all the councillors constituting the municipality had notice of the adjourned meeting and did as a matter of fact attend that meeting and that even if there was any irregularity in the adjournment on the 30th July 1954 that did not affect the illegality of the adjourned meeting and the business transacted therein. The appellant moved the High Court for leave to appeal to this court but that application was rejected. The appellant then applied to this court for special leave to appeal which was granted on the 3rd September 1954. It has been argued on behalf of the appellant that the meeting held on 3rd August 1954 as aforesaid was invalid for the reasons: 1. that it was not an adjourned meeting inasmuch as the meeting of the 30th July 1954 had not been validly adjourned, 2. that it had not been called by the Collector, and 3. that the written notice required by section 35(3) had not been given and in any event, had not been served and published as required by law. Secondly it was urged that the meeting of the 3rd August being thus invalid. , the business transacted at that meeting, namely, the election of the President was equally invalid. Thirdly it was urged that the election of the President being invalid, the meeting held that very day under the presidency of the President thus elected was also invalid and the election of the Vice President consequently was illegal. It was 1274 further argued that the election of the President and the Vice President being in violation of section 19 of the Act was invalid on that ground also; and finally, that the amendment of section 19 by the amending Act LIV of 1954 after leave to appeal had been granted by this court could not affect the present proceedings which were then pending even though the amending Act purported to make it retrospective. On behalf of respondents 1, 2 and 3 who only have appeared in this court, it has been urged that a President and Vice President could be elected for a term of less than one year as section 19 of the Act was subject to section 23 (1) (A); that in any view of the matter, section 19 as amended by the amending Act LIV of 1954 rendered the election beyond question as the Act in terms was meant to validate all elections held between the passing of the amending Act XXXV of 1954 and the amending Act LIV of 1954; that the presiding officer had inherent, if not statutory power to adjourn the meeting of the 30th July 1954 and that in any event the meeting held on the 3rd August 1954 could be treated as a fresh meeting called by the Collector and that any irregularity in serving the notice or in the appointment of the presiding officer was cured by the provisions of section 57 of the Act. It was also argued that the appellant was not the councillor who had objected to the adjournment of the meeting of the 30th July and could not therefore object to it at a later stage. Finally it was argued that the appellant had no right to a writ or order prayed for as he had not been injured in any sense. It would thus appear that there are two main questions in controversy between the parties, namely, (1) whether the meeting of the 3rd August, 1954 had been validly held; and (2) whether the president and the vice president having been elected "for the remaining period of the quadrennium" had been validly elected. There are a number of subsidiary questions bearing upon these two main questions which have been canvassed before us, 1275 A good deal of argument was addressed to us contending that the presiding officer had no power to adjourn the meeting of the 30th July 1954 in view of the provisions of section 35(11) of the Act. In this connection reference was also made to the proviso to section 19 A(2). Those provisions, it was argued,, point to the conclusion that the powers of the presiding officer are the same as those of the president of a municipality when presiding over an ordinary meeting of the municipality except that section 35(11) relating to adjournments had been qualified only to this extent by the proviso aforesaid, that the Collector or the officer presiding over the meeting for the purpose of holding an election of the president or vice president may refuse to adjourn such a meeting in spite of the wishes of the majority of the members present to the contrary. It was also argued that the High Court had wrongly taken the view that the presiding officer had the inherent right to adjourn the meeting. Reference was made to certain passages in "The Law of Meetings" by Head, "The Law on the Practice of Meetings" by Shackleton, and "Company Meetings" by Talbot. In our opinion, it is unnecessary for the purpose of this case to pronounce upon the merits of that controversy in the view we take of the meeting of the 3rd August, 1954, assuming that the meeting of the 30th July, 1954 had been adjourned without authority. It is common ground that it was the Collector who called the meeting of the 30th July 1954 and that it was under instructions from the Collector that meeting was adjourned. Under the provisions of section 23(1) (A), on the expiry of the term of office of the president or vice president as determined by the municipality under section 19(1) of the Act, a new president or vice president shall be elected within 25 days from the date of such expiry. The provisions of section 19 A which relate to the procedure for calling a meeting of a newly constituted municipality for the election of a president and vice president have been made applicable to the calling of a meeting and the procedure to be followed at such meeting for the 1276 election of a president. Section 19 A requires the Collector to call a meeting for holding such an election. Such a meeting shall be presided over by the Collector or such officer as the Collector may by order in writing appoint in this behalf. The Collector or his nominee, when presiding over such a meeting, shall have the same powers as the president of a municipalit by when presiding over a meeting of the municipality has, but shall not have the right to vote. On the 30th July, 1954 a special general meeting had been called by the Collector for the election of the President. In the proceedings of that meeting it has been recorded that "Under instructions from the Collector of Dharwar the presiding authority adjourns the meeting to 3rd August 1954 at 3 P.m.". At that meeting all the 32 councillors were present and admittedly in their presence the presiding officer declared openly that the meeting will be held on the 3rd August 1954 under instructions from the Collector concerned. When the meeting was held on the 3rd August 1954 at 3 P.m. as previously notified, again the 32 councillors were present. The proceedings show that the same Prant Officer "occupied the chair as authorised by the Collector". The presiding authority read out and explained to the members present the following telegraphic message from the Collector: "Government have directed to bold election of President of Gadag Municipality on 3rd August as already arranged. Hold election accordingly today without fail". At this meeting the appellant raised two points of order, (1) that the election of the president for the remaining period of the quadrennium as mentioned in the agenda was illegal, and (2) that the meeting was not an adjourned meeting of the municipality and was also illegal because it was under the instructions of the Collector that the adjourned meeting was being held and that the Collector had no such power. The minutes of the proceedings further show that "the presiding authority ruled out the points of order on the ground that this was a special meeting called by the Collector for the election of the President and 1277 the election has to be held as already fixed". After the ruling given by the presiding authority, 13 members including the appellant expressed a desire to walk out and walked out with the permission of the presiding authority. The remaining members, as already indicated, continued the business of the meeting and the proposal that the 2nd respondent should be elected president of the municipality for the remaining period of the quadrennium after having been duly made and seconded was carried unanimously and the meeting terminated. It would thus appear that the meeting of the 3rd August 1954 for the election of the president had been called by the Collector who had authorized the Prant Officer to preside over that meeting and that the 2nd respondent was duly elected president. Under section 35(3) of the Act, for such a special general meeting three clear days ' notice has to be given "specifying the time and place at which such meeting is to be held and the business to be transacted thereat shall be served upon the councillors, and posted up at the municipal office or the kacheri or some other public building in the municipal borough and also published in a local vernacular newspaper having a large circulation if such exists". It has been contended on behalf of the appellant that the notice required by section 35 (3) contemplates a written notice to be served and published in the manner specified, and that the meeting of the 3rd August 1954 could not be said to have been held after complying with the terms of sub section (3) of section 35. It was also contended that the requirements of section 19 A(1) and (2) have also not been complied with because there is no evidence that the Collector had called that meeting or that he had made an order in writing that the presiding authority had been authorized to preside over that meeting. In our opinion, there is no substance in any one of these contentions. From the record of the proceedings of the proposed meeting of the 30th July 1954 and the actual meeting on the 3rd August 1954 it is clear that whatever had been done had been done under the orders of 1278 the Collector. He had called the meeting of the 30th July as also of the 3rd August 1954. It was he who had appointed the Prant Officer as the presiding officer for both those meetings. It is true that the notice of the meeting of the 3rd August 1954 had not been given in writing but had only been intimated to all the councillors who were present at the meeting of the 30th July 1954. The notice amply satisfies the requirement of three days ' clear notice, though it was not in writing. It had indicated the time of the meeting and the business to be transacted. Under section 35(4) the ordinary venue of a meeting is the municipal office unless otherwise indicated in the notice. It is also true that the notice was not served in the manner indicated in sub section (3) of section 35 of the Act. There is no evidence that there existed a local vernacular newspaper with large circulation, in which the notice of the meeting could be published. The question is, do those omissions render the notice ineffective in law. That could only be so if those provisions were held to be mandatory. The following provisions (omitting the words not material to this case) would show that those provisions of section 35(3) are directory and not mandatory and that any omissions in the manner of service of the notice are mere irregularities which would not vitiate the proceedings unless it was shown that those irregularities bad prejudicially affected the proceedings: "No resolution of a municipality deemed invalid on account of any irregularity in the service of notice upon any councillor or member provided that the proceedings of the municipality . . . were not prejudicially affected by such irregularity". Fortunately for the respondents, all the councillors constituting the municipality were present on both the occasions, namely, 30th July and 3rd August, 1954. Hence they had ample notice of the meeting to be held on the 3rd August, 1954, the time and place of the meeting and the business to be transacted. It has not been either alleged or proved that the irregularities in the service of the notice or the omissions com 1279 plained of had prejudicially affected the proceedings. But it was contended that as the notice had not been posted up at the municipal office or the local kacheri or some other public building and had also not been published in a local vernacular newspaper, if there were one, though all the councillors were present on 3rd August, 1954, the members of the public had no such notice and naturally therefore could not be present at that meeting. In this connection it was pointed out that sub section (6) of section 35 provides that every such meeting shall be open to the public, unless the presiding authority directs to the contrary. It is evident from the provisions of that sub section that though the presence of the public at such meetings may be desirable, it is not obligatory. The presence at or the absence from such a meeting of the members of the public has no legal consequence so far as the validity of the election is concerned. It must therefore be held that the meeting of the 3rd August, 1954 in substance, though not in form, complied with the requirements of the law for holding a valid special general meeting and that therefore that meeting was not invalid, assuming, as already said, that the order of the presiding authority adjourning the meeting of the 30th July, 1954 was not authorized. It has to be remembered in this connection that such a special general meeting can be presided over only by the Collector or the person authorized by him and if either the Collector or his nominee does not hold the meeting, it is not competent for councillors present to elect their own chairman for presiding over such a meeting. Therefore if the presiding authority admittedly under instructions from the Collector refused to proceed with the elections on the 30th July 1954, the councillors present could not hold a meeting of their own with a president of their own choice and transact the only business on the agenda, namely, the election of president. Hence, rightly or wrongly, if the meeting called for the 30th July was not held, another meeting had to be held for the purpose within 25 days of the occurrence of the vacancy. In this case, as a 164 1280 result of the expiry of the original term of office of the president and vice president, another meeting giving the required three days statutory notice had to be held. The meeting held on the 3rd August 1954 was such a meeting. Indeed, there were some omissions in the manner of publication or service of the notice but those in law were mere irregularities which do not have the effect of vitiating the election held at that meeting. The election of the president therefore, if not otherwise invalid, could not be assailed on the ground of the irregularity in the service or publication of the notice, in the special circum stances of this case. If all the councillors had not been present on the 30th July or had not been informed of the proposed meeting of the 3rd August 1954, other considerations may have arisen but in this case it is clear that there was absolutely no prejudice to any party or individual or the municipality as a whole. But it was further contended that the walking out of the 13 councillors rendered the meeting infructuous. In our opinion, such a result does not follow from the voluntary act of the 13 councillors who chose to walk out. It was not even suggested that there was no quorum for the special general meeting after the 13 councillors walked out. The next question is whether the provisions of section 19 (1) as they stood on the 3rd August 1954 render the election of the president and the vice president on the 3rd August 1954 invalid as it was "for the remaining period of the quadrennium". The High Court has taken the view that the remaining period of the quadrennium would not necessarily end on the 9th July 1955, in view of the proviso to section 19(1) "that the term of office of such president or vice president shall be deemed to extend to and expire with the date on which his successor is elected". In view of the events that have happened it is not necessary for us to pronounce on the correctness or otherwise of that decision. After the judgment of the High Court and after the grant of special leave by this court, the Bombay Legislature enacted Act LIV of 1954 which was published in the Bombay Gazette on the 14th 1281 October 1954. Sections 2 and 3 of the amending Act are in these terms: "2. In section 19 of the Bombay Municipal Boroughs Act, 1925, in sub section (I), (1)after the words 'not less than one year ' the words 'or not less than the residue of the term of office of the municipality, whichever is less ' shall be inserted; (2)for the words 'three years ' the words 'four years ' shall be substituted. 3.(1) The amendments made by this Act shall be deemed to have come into force on the date on which the Bombay District Muncipal and Municipal Boroughs (Amendment) Act, 1954, came into force (hereinafter in this section referred to as 'the said date ') and all elections to the office of the president or vice president, held on or after the said date and before the coming into force of this Act, shall be deemed to be valid as if this Act bad been in force on the said date; and any person elected to the office of the president or vice president at any of such elections shall not be deemed to have been illegally elected merely on the ground that the residue of the term of office of the municipality being less than one year at the time of such election, he would hold his office for a term less than one year in contravention of section 19 of the Bombay Municipal Boroughs Act, 1925, as it was in operation before the coming into force of this Act. (2)Nothing contained in this section shall affect the judgment, decree or order of any competent court, passed before the coming into force of this Act, holding any of such elections invalid on the ground specified in sub section (1)". It has not been contended that section 19 as amended by Act LIV of 1954 does not in terms cover the elections now impugned, nor that section 3 of the amending Act quoted above is not retrospective; but it has been urged on behalf of the appellant that it is not retrospective to the extent of affecting pending proceedings. In terms the amendment in question is deemed to have come into force on the II the May 1954 1282 on which date the amending Act XXXV of 1954 had come into force. Section 3 in terms also declares that all elections to the office of president and vice president held on or after the 11th May 1954 and before the coming into force of the amending Act shall be deemed to have been valid. The section also declares in unequivocal terms that such an election shall not be questioned simply on the ground of contravention of section 19 on which the election of the 2nd and 3rd respondents bad been questioned before the High Court. The legislature apparently thought fit to declare beyond all controversy that an election of president or vice president for the unexpired portion of the term of a municipality could not be questioned on the ground that the provisions of section 19 as it stood before the amendment had been contravened. But it was argued on behalf of the appellant that in terms the amendment had not been made applicable to pending litigation and that therefore this court should hold that the amendment did not have the effect of validating the elections which were already under challenge in a court. No authority has been cited before us in support of the contention that unless there are express words in the amending statute to the effect that the amendment shall apply to pending proceedings also, it cannot affect such proceedings. There is clear authority to the contrary in the following dictum of Lord Reading, C.J. in the case of The King vs The General Commissioners of Income tax for Southampton; Ex parte W. M. Singer (1), "I cannot accept the contention of the applicant that an enactment can only take away vested rights of action for which legal proceedings have been commenced if there are in the enactment express words to that effect. There is no authority for this proposition, and I do not see why in principle it should be the law. But it is necessary that clear language should be used to make the retrospective effect applicable to proceedings commenced before the passing of the statute". That was a case in which the Act in question had (1) , 259, 1283 validated assessments made by commissioners for wrong parishes. It was held by the court that the retrospective effect of the relevant section extended to proceedings for a prohibition commenced before the Act came into force and the rule nisi for a prohibition was therefore discharged. In every case the language of the amending statute has to be examined to find out whether the legislature clearly intended even pending proceedings to be affected by such statute. A number of authorities were cited before us but it is only necessary to refer to the decision of their Lord ships of the Judicial Committee in Mukerjee, Official Receiver vs Ramratan Kuer(1), which is clearly in point. In that case while an appeal had been pending before the Judicial Committee the amending Act had been passed clearly showing that the Act was retrospective in the sense that it applied to all cases of a particular description, without reference to pending litigation. In those circumstances their Lordships pointed out that if any saving were to be implied in favour of pending proceedings, then the provisions of the statute would largely be rendered nugatory. Those observations apply with full force to the present case, inasmuch as if any saving were to be implied in favour of cases pending on the date of the amendment, the words "all elections to the office of the president or vice president, held on or after the said date and before the coming into force of this Act, shall be deemed to be valid" could not be given their full effect. As there are no such saving clauses in express or implied terms, it must be held that the amendment was clearly intended by the legislature to apply to all cases of election of president or vice president, whether or not the matter had been taken to court. it is the duty of courts to give full effect to the intentions of the legislature as expressed in a statute. That being so, it must be held that the amending Act had the effect of curing any illegality or irregularity in the elections in question with reference to the provisions of section 19 of the Act. For the reasons aforesaid it must be held that the (1) [1935] L.R. 63 I.A. 47. 1284 meeting of the 3rd August 1954 had been validly held and that there is no illegality in the election of the 2nd and 3rd respondents as president and vice president respectively. We accordingly affirm the orders of the High Court, though not for the same reasons. The appeal fails and is dismissed with costs. Appeal dismissed.

The first respondent Municipality governed by the Municipal Boroughs Act, 1925 (Bombay Act XVIII of 1925) consists of 32 councillors, S, (the appellant) being one of them. The last general election to the Municipality took place on the 7th May 1951. The term of the councillors was three years computed from the first meeting held on 10th July 1951 after the general election. In that meeting the 4th and 5th respondents were elected President and Vice President respectively for a term of three years. Act XVIII of 1925 was amended by Bombay Act XXXV of 1954 under which the term of office of the councillors was extended from 3 to 4 years ending on 9th July 1955. As the term of respondents 4 and 5 was to expire at the end of three years from the 10th July 1951 and as the term of the Municipality was extended by one year under the Amending Act XXXV of 1954 a fresh election of President and VicePresident was necessary to fill up the vacancies thus occurring. The Collector called a special general meeting for the 30th July 1954 to elect a President and Vice President for the remaining period of the quadrennium and nominated the Prant Official (the District Deputy Collector) to preside over that meeting. On the 30th July 1954 the Prant Officer adjourned the meeting to the 3rd August 1954 under instructions from the Collector without transacting any business. The objection raised by respondent No. 3 against the adjournment was overruled by the presiding Officer. The special general meeting was held on the 3rd August 1954. An objection raised by S (the appellant) that under the provisions of the Act a President could not be elected for a term less than a year was overruled by the presiding Officer. On this 13 councillors (including S) out of the 32 who were present walked out on the ground that the President was to be elected for a term less than a year contrary to the provisions of the Act. The remaining 19 councillors elected the 2nd respondent as the President for the remaining period of the quadrennium. Immediately after that another meeting presided over by the newly elected President elected respondent No. 3 as Vice President. The same point of order raised by S as in the case of the President was overruled, on which 6 councillors walked out and the meeting was held by the remaining councillors. All the 32 councillors were present both on the 30th July 1954 and the 3rd August 1954. An application under article 226 of the Constitution presented by S questioning the validity of the meeting of the 3rd August, 1954, and consequently the validity of the election of respondents Nos. 2 and 3 as President and Vice President for the remaining period of the quadrennium was dismissed by the High Court. Held, (1) that the meeting of the 3rd August 1954, in substance though not in form, complied with the requirements of the law for holding a valid special meeting and therefore the meeting was not invalid because the record of proceedings would show that whatever had been done on the 30th July 1954 and the 3rd August 1954 had been done under the orders of the Collector. The notice to the councillors required under section 35(3) of the Act satisfied the requirements of three clear days, that the provisions of section 35(3) regarding the ser 1270 vice of notice are directory and not mandatory; and that any omissions in the manner of service of the notice are more irregularities which would not vitiate the proceedings unless it is shown that those irregularities had prejudicially affected the proceedings which had not been alleged or proved in the present case. All the councillors constituting the Municipality were present on both the occasions namely the 30th July 1954 and the 3rd August 1954 and thus had ample notice of the meeting to be held on the 3rd August 1954, the time and place of the meeting and the business to be transacted. That under the provisions of section 35(3) of the Act the presence at or the absence from the meeting of the members of the public has no legal consequence so far as the validity of the election is concerned; (2) that as section 19 of the Bombay Boroughs Act, (Bombay Act XVIII of 1925) had been amended by the Bombay Municipal Boroughs Act, 1954 (Bombay Act LIV of 1954) and was retrospective in its operation, it had the effect of curing any illegality or irregularity in the election with reference to the provisions of section 19 of the Act and therefore respondents Nos. 2 and 3 had been validly elected as President and, Vice President respectively. King vs The General Commissioners of Income tax for South ampton, Ex parte W.M. Singer ([1916] 2 K.B. 249) and Mukerjee, Offcial Receiver vs Ramratan Kuer ([1935] L. R. 63 I. A. 47), referred to.

Appeal No. 1675 of 1970. Appeal by special leave from the Award dated February 18, 1970 of the Industrial Tribunal, Rajasthan, Jaipur in Case No. 1.T. 12 of 1967. G. B. Pai, P. N. Tiwari and O. C. Mathur, for the appellant. M. K. Ramamurthi and Vineet Kumar, for the respondent, 653 The Judgment of the Court was delivered by P. Jagamohan Reddy, J. This Appeal is by Special '. Leave against the Award of the Industrial Tribunal, Rajasthan directing the payment of a bonus of Rs. 1,21,000/ apart from an amount of Rs. 90,000/ already disbursed to the workmen of the Appellant for the year 1962 63. The dispute for the bonus year beginning 1st July '62 and ending 30th June '63 was raised by the workmen because the Company which had admittedly made profits, did not pay them a bonus though a gratuity of one month was given to them. The following dispute was therefore referred to the Tribunal: "Whether workmen of M/s. J.K. Synthetic Ltd., Kota are entitled to any bonus for the year 1962 63 and whether payment of one month 's wages as gratuity by the management can be regarded as payment towards bonus for the, year in question?". The Mazdoor Union (hereinafter called 'the Union ') on behalf of the Workmen contended that on the basis of the calculation,; of available surplus they were entitled to a bonus of 60% in accordance with the bonus formula which will entitle them to a five months wages apart from the one month 's wages already paid to them. The first statement of computation filed on behalf of the workers was obviously incorrect because it did not take into account the various prior charges such as Income Tax, return on reserves, rehabilitation reserve etc. which are deductible under Full Bench formula as approved and accepted by this Court from% time to time. It therefore filed another revised return showing an available surplus of Rs. 5.34 lakhs. The management on the other hand challenged the validity of the claim as according to it there was no available surplus for distribution even though they had already paid one month 's bonus wrongly styled as gratuity. The calculations given by it were also found to be equally wanting. As such it filed a revised calculation showing a net deficit of Rs. 72.35 lakhs. It may however, be mentioned that as pointed ' out by the Tribunal, there was no dispute with regard to any of the eight items which comprised the computation of gross profits amounting to Rs. 62.16 lakhs. The Union also did not dispute the deduction of interest on debentures of Rs. 0.06 lakhs; share transfer fee of Rs. 0.05 lakhs; the notional normal depreciation of Rs. 30.57 lakhs; and the return on share capital of Rs. 7.50 lakhs. It had however challenged the deduction of Rs. 4.1 lakhs received as dividend on shares as extraneous income which was being claimed as a deduction by the management. It also disputed an amount of Rs. 1, 11,000/ shown as return on reserves employed in the business and Rs. 75.89 lakhs shown as the annual share required for rehabilitation. The method of calculation of income tax amounting to Rs. 15.23 lakhs was also objected to. The four" 654 items upon which the Tribunal was called on to adjudicate therefore were: ( 1 ) Deduction of Rs. 4. 10 lakhs received as dividend on shares from the gross profits as extraneous income; (2) Rs. 1, 11,000/ as return on reserves employed in business; (3) Rs. 75.89 lakhs as annual share required for rehabilitation, and (4) Rs. 15.23 lakhs towards Income tax. With respect to the first issue the Tribunal felt that even though there was share capital available to the Appellant, instead of utilising it as working capital it had borrowed amounts to work the Nylon factory for which they had to pay an interest of over Rs. 5 lakhs. In these circumstances it disallowed the claim for deduction on the ground that it would be unfair to allow the management to treat the income from Investments as extraneous income and still reduce the profits by raising loans and pay interests resulting in demunition of the surplus. On the second issue the objection of the Union for a deduction of Rs. 1,11 lakhs as return on reserves employed as working capital was disallowed on the ground that the statement M.W. 2/1 produced by Talwar, established that the excess of liability over the assets was utilised as working capital during the course of the bonus. The claim of the management for deduction of Rs. 75.89 lakhs as share required for rehabilitation was however disallowed, as the oral and documentary evidence produced on behalf of the Management did not according to the Tribunal either establish that the life of the Plant and machinery was only 10 years for 1961 62 Block (hereinafter called 'the first Block ') and 11 years for 1962 63 Block (hereinafter called 'the second Block ') nor was the deviser of six years for both the first and the second Block reasonable. It found that the more reasonable multiplier was 13 years for machinery purchased in respect of the first Block and 14 years for machinery purchased in respect of, the second Block and likewise a reasonable deviser for these two Blocks would be four years and two years respectively. In so far as rehabilitation requirements for buildings was concerned the Union did not raise any dispute to the claim of the management amounting to Rs. 0.90 lakhs. As there was also no dispute about the original cost of plant & machinery, the Tribunal by applying the multiplier and deviser as aforesaid computed the annual rehabilitation replacement for plant, machinery and buildings as follows : Rupees in lakhs Block Origi Mul Repla Break Balan Funds Net Life Annu of nal tip cement down ce avail Repla al re plant lier cost value able cement quire & Mach cost cost ment 61 62 133 004 522 .006 65 525 35113 28412 07 1331 70 62 63 15 00 2 0 30 00 0 . '75 29 25 29 25 14 2 10 33.80 655 Rehabilitation replacement for machinery. .33.80 Rehabilitation replacement for building (as per Company calculation). . . . . . 0.90 Total 34.70 Accordingly the additional rehabilitation to be providedfor was calculated as under Funds available : Depreciation upto 31 3 62. . Rs. 15 .68 lakhs General reserves . . 12.00 Investments . . . . 85.60 113 28 Annual rehabilitation replacement. . 34.70 Less : Depreciation provided during the year30 57 _________________ Additional rehabilitation to be provided . 4.23 In so far as Income tax calculation of Rs. 15.18 lakhs was accepted being in accordance with the calculations under the Income Tax Act with respect to which it was said the Union did not find itself in a position to contest. The Tribunal after giving its finding on the matters in issue computed the available surplus as follows: 1. Gross profit. . 62 11 lakhs 2, Deduct prior charges: Rs. 1. Notional normal depreciation. . 30.57 lakhs 2. Direct tax. . . . . 15.18 3. Return on share capital. . . 7.50 4. Return on reserves. . . .1.11 5. Additional requirement for rehabilitation4 23 58.59 Available suprlus . . Rs. 3 .25 lakhs of the 60% payable as bonus would come to Rs. 2,1 1,000/ . As the Company had already disbursed Rs. 90,000/ , the Tribunal directed payment of the balance of Rs. 1,21,000/ . Before us only two items of controversy have been urged namely:(1) relating to extraneous income of Rs. 4.10 lakhs and(2) relating to rehabilitation requirement amounting to Rs. 75.89 lakhs, the first of which the Tribunal disallowed while in respect of the second it only admitted Rs. 4.23 lakhs. With respect to the first item, the disallowance of Rs. 4.10 lakhs, the management not only claimed this amount but also Rs. 7.5 lakhs as return on paid up capital of Rs. 125 lakhs @ 6% per annum. Obviously even on a cursory glance it would appear that the management was seeking to obtain double benefit in respect of investments 656 made out of the paid up capital. The reasons which impelled the Tribunal to reject the claim of the management have, already been noticed and it would therefore be unnecessary to reiterate them. It however, appeared to the Tribunal that if the Company wanted to exclude income from investments it cannot also be allowed 6% return on that part of the share capital which is invested elsewhere and at the same time be allowed to treat the income of Rs. 4.10 lakhs earned therefrom as extraneous income, because apart from deducting income tax on this amount the Company also meets the expenses of administration and management in respect of the said investments. In this view it sustained the objection of the Union. The return on paid up capital is one of the prior charges admissible under the Full Bench formula as approved by this Court. It is based on the principle that while the claim of labour to a share in the profits by way of bonus is in furtherence of social justice, the claim of the capital for a fair return to the investor and also to keep the industry running efficiently which will in the long run enure for the benefit of labour is equally based upon that principle. If therefore any amount is earned from the employment of capital unconnected with the business of the Company, the labour cannot claim the right to participate in its returns. Apart from this if any reserves are utilised for working capital whether these reserves are depreciation reserves or any other, a return in respect of these also is allowed as a prior charge at a reduced rate because utilisation of such reserves would obviate the borrowing from outside sources for which a higher interest has to be paid and which in the long run will not be for the benefit of the workers. These principles have been laid down by this Court as well accepted in Industrial adjudication. While it is true that the Company has the discretion to invest its capital in various activities it cannot on that account deprive the workmen of the benefits of the returns derived therefrom unless of course the investments in such activity is extraneous to the activities of the Company, in the earning of which they had not made any contribution. Whether in any particular case the return on investments amounts to an extraneous income will depend on the facts and circumstances of each case. So far as the case before us is concerned there can be no doubt that the return from the investments is a return on a part of the paid up capital of the Company which is invested for the purpose of earning an income. It cannot therefore be construed as extraneous income. In Workmen of M/s. Hindustan Motors Ltd. vs M/s. Hindustan Motorv Ltd. & Anr.,(1) to which one of us was a party (Vaidialingam, J.) no doubt where the income of the Company was from interest on (1) 1. 657 fixed deposits, it was treated as extraneous income because it was held that it accrued to the Company without any contribution by the workmen. At the same time the Company was not permitted on equitable ground to claim the interest paid by it on its borrowings as business expenditure. Further in that case even the income received by the Company from its foreign collaborators as commission on sales effected by the said collaborators of their own cars in India was treated as extraneous income to which the Company 's workmen made no contribution and was therefore not to be taken into account in calculating the available surplus. In the recent case of MI? Gannon Dunkarley & Co. Ltd. vs Their Workmen(1), by a reference to the decision in the Hindustan Motor 's this principle was again reiterated. In that case one of the question which this Court considered was whether dividends received from trade investments should be deducted from the gross profits for calculating the surplus available for bonus. It was held that "these trade investments have to be treated as capital assets of the Company forming part of their trading activities. The income accruing from these dividends must therefore be re lated to the business of the Company as a whole and hence the income from these dividends has to be included in the income for purposes of calculation of surplus available for bonus". In this view we think the Tribunal was justified in disallowing the deduction of Rs. 4.10 lakhs and in fact on behalf of the Appellant it was frankly conceded before us that the claim in respect of the said item cannot be pressed on any tenable or valid grounds. This brings us to the only remaining controversy, the provi sion for rehabilitation requirement. The claim for a prior charge on this account like any other prior charge has to be established by evidence but As this item results in a substantial deduction from the gross profits and reduces available surplus, materially, effecting the claim of the employees for bonus, each constituent element which is necessary for computing the amount to be provided for must be proved by satisfactory evidence and cannot be left to surmises and conjectures. It is idle to suggest that as the employees have not in any particular case given any evidence or have not produced any material to controvert the claim of the management that claim must be admitted, because it is the management that is in possession of all the relevant material and is accordingly required to satisfactorily substantiate that claim. The elements which are important for the computation of annual rehabilitation requirement, is, the price of the assets at the original cost, the period for which these assets can be used before requiring rehabilitation and the probable increase in the cost of rehabilitation, due to rise in prices, devaluation etc. The probable increase in the price of assets at the time of the rehabilitation over the original (1) L3SupCI/72 658 cost is the multiplier, as it is measured in terms of multiples of the original cost. The number of years after which the asset requires replacement, rehabilitation or modernisation is termed the deviser because the probable cost on a future date has to be provided annually and therefore has to be divided by the number of years at the end of which the amount would be required. There is in this case no dispute between the parties as to the original cost of the plant and machinery which is for the first block Rs. 133.00 lakhs and for the second block Rs. 15.00 lakhs. The only controversy is about the multiplier and the deviser which has been adopted by the Tribunal. The Appellant had in its written statement claimed the multiplier for each of the two blocks as six and the deviser for the first block as 10 and for the second block as 11 but as we have already noticed earlier the Tribunal has accepted the multiplier as 4 for the first block and 2 for the second block and the deviser as 13 and 14 respectively. Even in respect of these the learned Advocate for the Appellant admitted that he is not in a position to contest the reasonableness of what has been adopted by the Tribunal but the Respondent has challenged the very basis adopted by the Tribunal as being more dependent on guess work than on any evidence or material before it. On behalf of the management the right of the Union to chal lenge the multiplier and deviser, in the absence of an Appeal by it is strenuously contested but in our view there is little force in this objection. The appeal by the employer is against the grant of bonus to the employees which implies that the method of computation of the gross profits, as well as of the available surplus and the rate at which the bonus is granted can be subjected to scrutiny. It is needless to recount the several priorities that have to be deducted and the items in respect of which amounts have to be added, before arriving at the available surplus. In an Appeal, the several steps which have to be taken for computation of the available surplus either in respect of the actual amounts or the method adopted, can be challenged. If so the Union, even where it has not appealed against the Award, can support it on a method of computation, which may not have been adopted by the Tribunal but nonetheless is recognised by the Full Bench formula of this Court so long as in the final result the amount awarded is not exceeded. We are supported in this view by a decision of this Court in Management of Northern Railway Cooperative Society Ltd. vs Industrial Tribunal, Rajasthan, Jaipur & Anr.(1) where it was held that the Respondents were entitled to support the decision of the Tribunal even on grounds which were not accepted by the Tribunal or on other grounds which (1)[1967] 2 S.C.R. 476. 659 may not have been taken notice of by the Tribunal while they were patent on the face of the record. A passage from the case of Ramanbhai Ashabhai Patel vs Dabhi Ajithkumr Fulsinji & Ors. (1), will give the reasons adopted by this Court for the aforesaid view. That no doubt was an election appeal but it was said that though the rules framed by this Court in exercise of its rule making powers do not contain any provisions analogous to Order XLI Rule 22 of the Civil Procedure Code, which permits a party to support the Judgment appealed against upon a ground which has been found against him in the Judgment, it was held that this Court has the jurisdiction to sustain the Judgment on grounds which have been found against the Respondent. Mudholkar, J. speaking for himself, Gajendragadkar, C.J., Wanchoo, Hidayatullah, and Raghubar Dayal, JJ. after considering whether the provisions of Order XVIII, Rule 3 of the Rules of this Court which requires parties to file statement of the case could limit it only to those contentions which deal with the points found in favour of that party in the Judgment appealed from, observed at page 724: "Apart from that we think that while dealing with the appeal before it this Court has the power to decide all the points arising from the Judgment appealed against and even in the absence of an express provision like O.XLI, R. 22 of the Code of Civil Procedure it can devise the appropriate procedure to be adopted at the hearing. There could be no better way of supplying the deficiency than by drawing upon the provisions of a general law like the Code of Civil Procedure and adopting such of those provisions as are suitable. We cannot lose sight of the fact that normally a party in whose favour the Judgment appealed from has been given will not be granted special leave to appeal from it. Considerations of justice, therefore, require that this Court should in appropriate cases permit a party placed in such a position to support the judgment in his favour even upon grounds which were negatived in that Judgment". In the view we have taken, we will have to consider the plea on behalf of the Respondents that the rehabilitation requirement has not been properly established, but this need only be entertained if we come to the conclusion that the main contention that the rehabilitation requirement has not been properly computed and if so computed there will be no available surplus for awarding bonus to the employees. (1) ; 660 The learned Advocate for the Appellant as we said earlier has not seriously insisted on the adoption of the multiplier and the deviser claimed by the Appellant but on the other hand contends that even if the multiplier and the deviser as adopted by the Tribunal is followed the trade investments amounting to Rs. 85.6 lakhs cannot be said to be available for computation of rehabilitation requirement. On this assumption while not disputing the computation of the Tribunal in respect of the original cost which as we have earlier mentioned has not been disputed, even by accepting the multiplier, the break down value and the deviser as adopted by the Tribunal the annual amount required would be Rs. 10.71 lakhs and not Rs. 4.23 lakhs as computed by the Tribunal. The only variation between the computation of the appellant and that of the Tribunal is in respect of the funds available which according to the Tribunal is Rs. 113.28 lakhs including the trade investment of Rs. 85.6 lakhs and according to the Appellant it is Rs. 27.8 lakhs comprising of only two items namely depreciation of Rs. 15.68 lakhs and general reserve of Rs. 12 lakhs. If this computation isaccepted then there will be a negative balance of Rs. 2.9 lakhs. This result is arrived at as follows : Gross profits . . . . . .Rs. 62.11 lakhs 1. Notional normal depreciation. 30.57 lakhs 2. Direct tax . . . . Rs. 15 .18 3. Return on share capital. . 7 .50 4. Return on reserves. . . 1 .11 5. Additional requirement for rehabilitationRs. 10 .71 Rs.65. 07" Negative balance. ( ) Rs. 2 .96 lakhs It will be observed that the prior charges comprised in items 1 to 4 are not really in dispute. It is only the additional requirement for rehabilitation that is the bone of contention between the parties and this is challenged on two grounds; firstly that the trade investment of Rs. 85.6 lakhs are available funds for rehabilitation requirement as admitted by the Appellant to be so available in the statement which it furnished to the Tribunal; secondly that no claim for rehabilitation requirement has been substantiated. On the first ground it is contended that the question, what was the: available amount for the annual requirement was specifically before the Tribunal, and that it was the case of the management and not of the workmen that an amount of Rs. 1,23,90,000/ was available consisting of Rs. 26.30 lakhs towards depreciation, Rs. 12 lakhs towards general reserves and Rs. 85 6 lakhs towards investments. In these circumstances the Tribunal was not called upon to investigate the question as to what exactly was the nature of the investments or whether any of 661 them were realisable or were not available for meeting the rehabilitation requirements. Further there was no grievance made in this behalf in the Special Leave Petition and therefore the management is, it is submitted stopped from challenging before his Court the validity of inclusion of this amount in the amount available for rehabilitation. It is further submitted that assuming that this question can be agitated, in the absence of any specific investigation as to the nature of the investments and more particularly when the management itself had shown this amount as being available, the Appellant cannot be permitted to say that it is not available. The contention of the respondents proceeds on a basic error namely that the Appellant had held out that the trade investments were available for rehabilitation requirement. This is not so. In the amended written statement filed on 4 7 69 after obtaining the permission of the Tribunal on 3 7 69, the Appellant claimed the annual share required for rehabilitation as Rs. 93,56,207/ . Even in the statement filed earlier on 10 4 69 it showed two amounts as being available namely depreciation of Rs. 26.31 lakhs and general reserves of Rs. 12 lakhs. It is submitted by the Appellant that only when the arguments were completed on behalf of the Company on 9 12 69, having regard to the claim made by it for deduction of Rs. 4.1 lakhs as extraneous income derived from the trade investments, the corpus of Rs. 85.6 lakhs which earned that income was also shown as available and a statement to 'hat effect was filed on the same day to facilitate the Tribunal in arriving at an Award. In as much as we are not allowing the deduction of Rs. 4.1 lakhs as extraneous income, the question whether the corpus should be treated as being available also has to be considered in the light of the decisions of this Court. The Appellant in our view is fully justified in urging this contention before us, as it cannot be said that this was not raised before the Tribunal. The Tribunal had ample opportunity of considering this aspect since it did specifically consider the nature of the income therefrom. Assuming for the present that the adoption by the Tribunal of the multiplier and deviser can be justified, though the validity of the Tribunal 's award in this behalf has been seriously challenged 'before us, the question to be determined is whether the investments of the Appellant amount to Rs. 85.6 lakhs is available for rehabilitation which in turn will depend upon whether these investments are made in the course of the business of the Company or are unconnected with its business and only invested with a view to earning extraneous income. The principles upon which rehabilitation grant is to be calculated as laid down by this Court is that the depreciation reserves, or in the case of other reserves only if they are available as liquid assets and cash and not earmarked for any specific purposes, are deemed to be available and can be taken into account in computing the annual requirement. The 662 depreciation reserve, the object of which is to meet the requirement of replacement, rehabilitation and modernisation at a future date is considered to be always available whether it is in the form of a liquid asset or not. It is obvious that even this amount will not achieve the purpose of recouping the cost of replacement of the wasted assets and it is for that reason the claim of the industry for rehabilitation in addition to the admissible depreciation has been recognised. Then there are the general reserves, capital reserves and development reserves all of which will be considered to be available if they are in the form of liquid assets or cash. The question in some of these cases will be whether they are considered to be the capital assets of the Company kept in that form in the course of its business or kept as investments outside the business of the Company for the purposes of earning an extraneous income. If it is the former then they are available but if it is the latter they cannot be brought into account for calculating the rehabilitation requirement. As it happens in most cases the claim by the employer is that the reserves are either wholly or partly not available because they have been used as working capital and consequently the, amount to be utilised should not be excluded from the amount claimed towards rehabilitation. The principles governing what deductions should be made from out of reserves before calculating the amount in respect of rehabilitation for the bonus year were set out in the Full Bench formula and have been restated in the Associated Cement Co. Ltd. vs Its Workmen(1). The two items according to that decision that are to be taken into consideration are the general reserves available to the employer and the reserves which have been reasonably earmarked for specific purposes of the industry. In explaining what was meant by availability of the reserves or the earmarking for specific purposes Subba Rao, J. as he then was in Khandesh Spinning & Wvg. Mills Co. Ltd. vs Th.? Rashtriya Girni Kamgar Sang Jalgaon(2), observed at page 845 846 : "We do not think that by using the said words this Court meant to depart from the well recognized principle that if the general reserves have not been used as working capital, they cannot be deducted from the rehabilitation amount. The reserves may be of two kinds. Moneys may be set apart by a company to meet future. payments which the Company is under a contractual or statutory obligation to meet, such as gratuity etc. These amounts are set apart and tied down for a specific purpose and, therefore, they are not available to the employer for rehabilitation purposes. But the same thing cannot be said of the general reserves : they would be available to (1) @ 970. (2) ; 663 The use of the words "reasonably earmarked" is also deliberate and significant. The mere nominal allocation for binding purposes, such as gratuity etc. in the Company 's books is not enough. It must be ascertained by the Industrial Court on the material placed before it whether the said amount is far in excess of the requirements of the particular purpose for which it is so earmarked and whether it is only a device to reduce the claim of the labour for bonus". What is meant by the above observations in the Khandesh Spinning & Wvg. Mills case was later explained by Wanchoo J, as he then was in Bengal Kagazkal Mazdoor Union & Anr. vs The Titaghur Paper Mills Co. Lid.(1). This was what was said at page 54 "All that that decision lays down is that that part of the reserves which go to make up the working capital which is in the shape of raw materials etc. or earmarked reserve will not be deducted from the I gross rehabilitation amount; it does not lay down that all cash reserves in the shape of depreciation reserve, general reserve, renewal reserve and so on and also in the shape of investments and advances cannot be deducted from the gross rehabilitation amount as they may be used as working capital next year". Now the question of trade investments unconnected with the purposes of the industry fell for consideration in the National Engineering Industries Ltd. vs Its Workmen (2). In this case the Company had an investment of Rs. 18.22 in shares, which were treated by this Tribunal as liquid assets available for rehabilitation. But the Company contended that this investment can either be treated as a trading transaction carried out in the ordinary course of business or as a capital asset. If it was the former then it should have been allowed the loss of Rs. 1.72 lakhs as trading expenditure but instead the tribunal had added the profits therefrom to the gross profits, thereby treating the investment as capital asset. It could not therefore deduct Rs. 18.22 lakhs as a fund available for rehabilitation cost. Negativing this contention of the Company, Shelat J, observed at page 796 797 : "We fail to see any contradiction on the part of the Tribunal. The balance sheet for the year 1957 58 contains two schedules; Schedule A shows fixed assets and schedule B shows trade investments of the value of (1) (2) ; 664 Rs. 18,21,571/ . The Company not being an investment Company the investment of Rs. 18.22 acs in shares of other joint stock Companies prima facie represents extra capital not required as working capital for otherwise the Company could not have spared this amount for investment in the stocks of other Companies. The Tribunal was right in treating this investment as a capital asset and in refusing to treat the loss therefrom as trading expenditure. 'the Tribunal at the same time could deduct this amount from the rehabilitation cost because that amount was available to meet the rehabilitation cost. The investment in shares could easily, if the Company was so minded, be converted into cash and utilised for replacement of its worn out machinery". In Gannon Dunkerley 's case also these principles were reiterated. It was held in that case that in calculating rehabilitation grant one of the principles which this Court has laid down is that the depreciation reserve must always be deducted irrespective of the fact whether it is available or not as a liquid asset. In addition other reserves like general reserve are also to be deducted if they are available as liquid reserves and are not ear marked for any specific purpose. The capital reserve and the development reserve can also be deducted if there is material to show that they existed in the form of liquid assets or cash. The question would be whether they are capital assets of the Company kept in that form in the course of its business or whether they have been treated as investments outside the business for the purposes of earning extraneous income. If they are investments made in the course of its business they are to be treated as part of the capital but otherwise if they are extraneous to the business they do not form part of the reserves available for rehabilitaion. It may be observed that in the National Engineering Industries Ltd. vs lts Workmen(1), an exception had been made in the case of an investment Company the investment of which is to be treated as working capital employed in the business of the Company. The Companies Act placed restrictions on the purchase of shares by one Company, of shares of any other body corporate except to the extent and except in accordance with the restrictions and conditions specified in Sec. 372 of that Act as amended by Act 65 of 1960. 373 it is enjoined on Companies investing after 1st April 1952 in shares of any other body corporate in exercise of the limit specified in sub section (2) and the second proviso to the said sub section of Sec. 372 to obtain the authority of 'he Central Government within six months from the commencement of the Act and if such authority and approval is not so obtained 665 the Board of Directors must dispose of the investments in excess of the limits specified in the aforesaid provision within two years from the commencement of the Act. It is also provided by Sec. 372(10) that after the commencement of the Companies Amendment Act a statement should be annexed to the balance sheet giving the details of, the investments acquired; the bodies corporate in the same group, of which the shares have been acquired, whether the investments are existing or not, and the nature of the said investments. An exception however has been made by the proviso to the said sub section in the case of investment Companies (which are those whose principal business is the acquisition of shares etc.) that it shall be sufficient if the investments, existing on the date as at which the balance sheet to which the statement is annexed has been made out From these provisions it is contended that the balance sheet in this case shows only those details which are required to be given by an investment Company which is also consistent with the plea,, ,that the investments of the Appellant were made prior to 1952 when it was an investment Trust Company and these investments, which are the same exceeded the limits prescribed by the Companies Amendment Act without having to conform to the conditions of having either to obtain approval of the Central Government or to dispose of the excess within two years i.e. by 31st March 1962. On behalf of the Respondents however it is submitted that there has been no finding by the Tribunal that the Company is an Investment Company or that the investments were made prior to, 1952 as an Investment Company which would entitle it to treat those investments as not available for the purposes of rehabilitation within the exception indicated in the National Engineering Industries case. In our view this submission has no force. There is ample justification in the contention of the Appellant 's Advocate that the Tribunal did advert to the fact that the Company invested initially a capital of Rs. 75 lakhs as an investment Trust Company and from its inception these investments have been made and that it is only after the amendment in 1960 when it was not possible for it to invest further amounts that it changed its name, increased its capital and started the present industry. On this, aspect of the matter the Tribunal stated thus : "Originally the Company was floated as J. K. Investments Trust Ltd. It had a share capital of Rs. 75 lakhs. They invested this amount and some loans in debentures and loans. Due to amendments in Company law they had to stop further investment from 1960 onwards and changed the name of the Company to J. K. Synthetics Limited, raised additional Rs. 50.00 lacs 666 share capital and started this Nylon factory. Thus to date the share capital of the Company is Rs. 125.00 lacs including the old share capital of Rs. 75.00 lacs of J. K. investments Trust Ltd. Now instead of utilising the old share capital and loans invested in debentures the Company took separate loans to work the Nylon factory for which according to the balance sheet they had to pay over Rs. 5 lacs as interest on loans". It is also apparent from Schedule 'E ' statement forming part of the balance sheet as at 30th June, 1963 that a list of trade investments held by the Appellant have been given. There are two notes attached thereto. Note (1) states Investments in the Companies marked with asterisks exceed ten per cent of their respective subscribed capital. These investments were acquired before the commencement of the Companies (Amendment) Act, 1960, while Note (2) states The Total investments of the Company exceed thirty per cent of its subscribed capital. These investments were acquired before the commencement of the Companies (Amendment) Act, 1960. Having regard to these undisputed facts it appears to us clear that the trading investments were made prior to 1960 when the Company Was an Investment Company, as such these investments are not connected with the activities of the Company, are extraneous to its business and do not form part of the reserves available ,for rehabilitation. In the circumstances the Tribunal is not justified in including this amount in the amounts available for rehabilitation purposes. While this is so and the result of the non exclusion of Rs. 85.60 lakhs would result in a negative balance, the respondents as we have already held are entitled to challenge the claim for rehabilitation on the ground that the essential requisites have not been established by any cogent or sufficient evidence. In computing the requirements for rehabilitation as has been stated often, regard must be had, to two imponderables out of the three main elements because one of them namely the original cost of the asset is specifically ascertainable while the other two have to be established as near as possible which might to some extent involve an estimate based on evidence deducible therefrom. These two imponderables are the multiplier and the deviser. Unless all these elements are determined the amount required for rehabilitation cannot be ascertained. of course the scrap value of the old assets has also to be ascertained but this does not involve any difficulty because normally it is taken as 5% of the value of the assets at cost. Even so the determination of the amount for rehabilitation no doubt poses problems but it is suggested that a reasonable method would be to divide them into blocks, accord 667 ing to the nature of the asset and the year in which the assets have been acquired. The cost of the separate blocks has then to be ascertained and their probable future life has to be estimated. Once this estimate is made it becomes possible to anticipate approximately the year when the plant and machinery would need replacement and the probable price of such requirement at a future date when the asset requires replacement. In determining this difficult question the Tribunal as already observed must have before it all available evidence from which a reasonable and probable adjudication can be made in respect of these essential requisites. The Respondent 's Advocate submits that the Tribunal while quite properly rejecting the evidence produced on behalf of the Appellants indulged in guess work when it adopted arbitrarily the multiplier and the deviser. It is his case that the determination of the life of machinery depends on various factors such as for instance nature of the machinery, its quality, the nature of the industry, the efficiency of workmen etc. In the Hindustan Motor 's case, Bhargava, J, after examining the several cases relating to this aspect of the matter observed at page 319 : "The life of machinery of one particular factory need not necessarily be the same as that of another factory. Various factors come in that affect the useful life of a machinery. There is, first the consideration of the quality of machinery installed. If the machinery is purchased from a country producing higher quality of machines, it will naturally have longer life than the machinery purchased from another country where the quality of production is lower. Again, the articles on which the machinery operates may very markedly vary the life of a machine. If, for example, a machine is utilised for grinding of cement the strain on machine will necessarily not be the same as on a machine which operates on steel or iron". In the Honorary Secretary South India Millowners ' Association & Ors. vs The Secretary, Coimbatore District Textile Workers ' Union(1), to which a reference had been made in the above case, after accepting, on the facts of that case, that the life of the textile machinery was adopted as 25 years, this Court laid down the following principle at p. 933. "We are not prepared to accept either argument because, in our opinion, the life of the machinery in every case has to be determined in the light of evidence adduced by the parties". (1) [1962] 2 Supp. S.C.R. 926. 668 The Advocate on behalf of the Appellant on the other hand says that the Full Bench Formula for determining rehabilitation as accepted in Associated Cement Companies(1) case laid down an elastic measure for determining the probable cost which was to be estimated "as near actualities or realities as possible". At pages 967 968 Gajendragadkar J, as he then was observed : "The estimate about the probable life of the plant and machinery 'is itself to some extent a matter of guess work and any anticipation, however, intelligently made, about the probable trend of prices during the interven ing period would be nothing but a guess. That is how, in determination of this problem, several imponderables face the tribunals. One of the points which raises a controversy in this connection is : What level of prices should the tribunal consider in making its calculations about the probable cost of replacement. . It seems to us that in order to enable the Tribunal to make an estimate in this matter as near actual ties of realises as possible it is necessary that the Tritunal should be given full discretion to admit all relevant evidence about the trend in price levels . The problem of determining the probable cost of replacement itself is very difficult; but the difficulty is immediately increaser when it is remembered that the claim for rehabilitation covers not only cases of replacement pure and simple but of rehabilitation and modernisation. In the context rehabilitation is distinguished from ordinary repairs which go into the working expenses of the industry. It is also dis tinguished from replacement . That is why we think it is necessary that the tribunals should exercise their discretion in admitting all relevant evidence which would enable them to determine this vexed question satisfactorily". Keeping these observations in view what we must see is whether the Tribunal was justified on the evidence in adopting the particular multiplier and the deviser. The stand taken by the management is that it had produced sufficient evidence in support of its own multiplier and deviser and in any case the learned Advocate says the Tribunal is right in arriving at its own conclusion. In fact it is submitted, the management had made an application for appointment of an assessor to assist the Tribunal as an expert for determining the several questions appertaining to the computation of rehabilitation requirements, but that was rejected as the Tribunal did not feel any necessity for it and there is nothing more which the management could do in the circumstances. (1)[1959] S.C.R. 925 @970. 669 It is pointed out that the Nylon industry was a new industry at the time when it was started and the evidence of the General Manager, who had been with the Company from the initial stages and throughout the negotiation for purchase of the machinery, says that according to the manufacturers the life of the machinery could only be six years. That apart the management also produced sample invoices for each year and adduced the evidence of the Manager to prove what would be the cost of rehabilitation. In fact it is said that the Appellant was fortunate in having actual invoices of machinery purchased because the Company had only then expanded its undertaking. The Tribunal rejected the oral evidence on the ground that the witnesses produced by the management were no experts and they did not throw any material light on the matters to be adjudicated by it. It also rejected the documentary evidence on the ground that the machinery which was said to have been purchased was not the same as was sought to be replaced and in any case there was not sufficient evidence for it to accept the multiplier and deviser as claimed by the management. Whether this criticism is valid or not will depend largely on what in fact weighed with the Tribunal in arriving at the multiplier and the deviser. No doubt the employer did make an appli cation to the Tribunal as noticed earlier and the same was rejected on 5 8 69 as it did not find it necessary to appoint an assessor. The application itself was for requesting the Tribunal to appoint an assessor if it thinks necessary. The management cannot without discharging its duty of placing all the necessary material before the Tribunal ask it to appoint an assessor who would be useless without that material. We do not think in the circumstances the Tribunal was wrong in rejecting the application. The Tribunal considered the evidence of S/Shri Jain, Aggarwal and that there had been hundred per cent increase in prices also machinery worth about Rs. 10 lakhs had already been replaced and that there had been hundred percent increase in prices also due to devaluation. The witness was however, not able to give any details as to when the replacement of the parts and machinery took place even though the management kept the record of the replacement of the machinery. He could not also explain what exactly was the impact of the devaluation of Rupee on prices. He did not see the quotations of the machinery. It was therefore concluded that his statement both with regard to the life of the machinery and the replacement cost was quite us less and was based on hearsay. Shri Aggarwal 's evidence was also considered unsatisfactory, both with respect to the estimate of the replacement cost and the life of the machinery. His calculations were based on a comparison of the original cost of machinery in invoices exhibit M. 1, M. 2 and M. 3 and their cost in 1967, as given in the corresponding invoices exhibit M. 4, M. 5 and M. 6 and the devalua 670 tion of the Rupee. The Tribunal then considered the discrepancy between the machines mentioned in various exhibits. No doubt there is some justification in the comment of the learned Advocate by the Tribunal merely because the machines mentioned therein for the Appellant that some of these invoices were not relied upon were different in size and weight to those which were installed in the factory. Undoubtedly there would be a variation because the ingenuity of the inventor and technician is not static and as time goes on there are improvements, renovations and changes that make the machine more sophisticated and efficient. While this is so the question is whether satisfactory evidence has been produced to prove the total cost of rehabilitation and also the life of the machinery. The evidence of Talwar was equally found to be defective. He was greatly relying on the Handbook of Chemical Engineers by John Parry, for establishing the life of the machinery. He said that in that Book the life of a Chemical plant working in three shifts is shown to be 11 years. He also admitted that the Author gives only the guideline for Income tax purposes only. An extract of the Parry 's Handbook was also given by the Tribunal, which stated its conclusions as under : "In view of the above said infirmities it is evident that the management 's claim for rehabilitation is very much inflated. The selection of the average multiplier is rather arbitrary or at least quite generous to the management and their estimate about the life of the machinery is slightly conservative. From the available evidence on record he then proceeds to make his own estimates which as far as the life of the machinery is concerned was placed between that adopted for textile machinery of 25 years and the life given in he Chemical Engineers Handbook of 11 years. It said after referring to the statement in the Chemical Engineer 's Handbook that the life of a Chemical machinery must be more than II years in America where they work efficiently to the maximum capacity of the machinery. It was observed here the working conditions being different the machinery is likely to last longer and certainly due to poor economic conditions in the country the management also cannot afford to discard such valuable machines in eleven years only. The life of the plant therefore must be more than 11 years. On the other hand the ordinary life of textile machinery is taken to be 25 years or more. In this view of the matter if we take the life of the machinery as 14 years it would still be on the side of the conservative estimate". 671 Regarding the multiplier the Tribunal said that : "The 1961 62 Block of the machinery would require replacement according to our estimate in 1975 76. The Company 's claim of six times the original cost based on a comparative study of invoices exhibit M. 1 to M. 3 on the one hand and exhibit M. 4 to M. 6 on the other is very much inflated . The Company has not produced the current price list also of the machinery or any price indices indicating the trend of prices of machines. The prices of machines are more stabilised than prices of consumer goods. The production of the machines has also gone up in the country and it is not impossible that by 1975 we might manufacture our own machines for Nylon factory also. Even otherwise the prices of imported machines are not likely to be more than four times. Therefore, in our opinion the multiplier should only be four for the block of 1961 62. In awards also relied upon by Shri Talwar even though they considered only prewar block of machines, in no case they allowed a multiplier of six. For the block of machines installed in the accounting year, ordinarily the unit is taken as the multiplier but as there has been in the meantime deva luation of the rupee we think it would on the whole be fair to adopt two as a suitable multiplier for the block installed in the accounting year". It appears to us that this is an unsatisfactory way of determining the two most important factors required for computing the rehabilitation requirement. The evidence produced before the Tribunal consisted only of a few invoices which were to serve as samples of the price of machines to show that they have gone up. We are not impressed with the submission of the learned Advocate for the Appellant that a complete set of invoices in respect of all the Departments of the industry which required rehabilitation had been placed before the Tribunal. Indeed the very application for appointment of Assessor demonstrably contradicts this assumption. In this application the management stated that it did , 'examine S/Shri section section Aggarwal, A. C. Talwar as its expert witnesses and have filed some invoices by way of example to show the trend in rising cost in plant and machinery. With regard to useful life of the plant the Respondent places reliance on Chemical Engineer 's Handbook IVth Edition by John Parry" (emphasis ours). It is apparent from this application that the management was relying only on a few sample invoices which they said they had produced while depending heavily only on Parrv 's Handbook for ascertaining the life of the machinery and the probable cost. 672 We have also gone through the evidence of the three witnesses and the invoices referred to and we think that the Tribunal rightly rejected this evidence as not being of much assistance. It is quite probable that the price of the indigenous industry as appearing from the bulletin of the Reserve Bank of India has gone up but that does not furnish a basis for arriving at any specific multiplier or deviser for the Appellant 's plant. All that the invoices produced before the Tribunal establish is only the probable cost of machinery of 2 1/2 lakhs, in an attempt to prove the cost of replacement of plant and machinery worth Rs. 825 lakhs. The Tribunal was therefore, amply justified in saying that the only evidence given is of the few invoices the value of which is only 2 1/2 % of the requirement of the replacement cost which in our view is not sufficient to establish, how many machines in each Department of the industry are required, what is the nature of those machines and what is the probable cost of each of those machines. We are far from satisfied that the management has placed before the Tribunal any satisfactory evidence much less sufficient evidence to arrive at a multiplier and deviser nor has the Tribunal any bases for arriving at its own multiplier and deviser except it be on a pure conjecture and guess work. The result is that though the appellant is able to succeed in one of the main points of his Appeal, the Appeal will have to be dismissed as the Respondents are able to sustain the Award on other grounds. The circumstances of the case justify a direction for each party to bear its own costs. S.C. Appeal dismissed.

Section 3 of the Andhra Pradesh Motor Vehicles Taxation Act (5 of 1963) authorised levy of tax on motor vehicles "used or kept in use in a public place in the State". Item 4 in the table of the notification issued under section 9 of the Act exempted from the tax "any chassis of motor vehicle when driven to any Place in order that a body may be attached it. " The Automotive Manufacturers (P) Ltd. in the State of Andhra Pradesh, were dealers, among other things, in chassis received by it from manufacturers outside the State. The chassis were driven by transport contractors of the manufacturers themselves under temporary certificate of registration under the Motor Vehicles Act and delivered to the appellant in the State of Andhra Pradesh. The Ashok Leyland Ltd. transported motor chassis by road from their factory in Madras to dealers in various parts of India. These chassis were driven through the State of Andhra Pradesh either for delivery there or in other States of India. The Automotive Manufacturers and the Ashok Leyland challenged the imposition of tax under the Act. The High Court dismissed the petitions. In appeals to this Court it was contended that (i) section 3 of the Act was not appli cable, because, there could be no user or keeping for use of the chassis of a motor vehicle as a motor vehicle unless a body was attached to it; (ii) as the chassis were invariably driven to their respective destination, in order that bodies may be attached to them, they came directly under the notification of exemption issued by the State Government; and (iii) the impugned levy operated as an impediment to free trade and commerce in violation of article 301 of the Constitution. Dismissing the appeals. HELD : (i) It is not necessary for a chassis to have a body attached to it before it ran be used within the meaning of the Act, inasmuch as, it can be used by the man who drives it and such use of it on public roads would be enough to attract the levy. [596 D] (ii) Item 4 in the table of the notification limits the exemption from the tax to the journey of the chassis for the express purpose of body being attached to it. The Automotive Manufacturers, being dealers, could and probably did deal with or dispose of the chassis as such. Further, it was not the case of the appellant that the chassis were coming from outside the State for the purpose of having bodies attached to them at the workshop of the appellant. So far as Ashok Leyland was concerned the chassis were being driven along the roads of Andhra Pradesh for disposal at the journey 's end and it would be for the purchaser at the destination to have a body fixed to 594 the chassis according to his own need and on the specification given by him. , Merely because bodies were going to be attached by the ultimate purchasers it could not be said that the running of the chassis on the roads of Andhra Pradesh would attract exemption under item (4) of the notification. [597 C E] [The contention that there was no previous sanction of the President in respect of the bill as envisaged by article 304 (b) was not allowed to be raised inasmuch as it was not urged in writ petitions. Therefore, the Court did not examine the merits of the contentions urged in this regard.

Petitions Nos. 1854 60/81,2125, 2224, 2829, 3321, 3341, 3360, 3604, 4486, 3737, 3774, 4128, 4404, 4415, 4428, 4429, 4430, 4431, 4432, 4436, 4437, 6310, 7090 92, 7138, 7687, 9927, 8481 82, 6790 91182, 5356 64/83, 1868, 3929/81, 531 32, 533 534, 3957, 3975, 4574 4583, 8004, 8007 8008 and 8047/83, 5327, 5622 24, 7510 11, 8075/83, 7490 92/82, 2008, 2328/81, 2858, 2859, 4920 4923, 5616, 6065 73, 5818, 5193 5201/82, 8341 8343, 3149 50, 8381 8382, 9927/82, 377 378, 535/83, 8347 8348, 3560/83, 8003, 8005, 8006/83, 8787 8788/83 and 9011 13 of 1983. Under Article 32 of the Constitution of India WITH Special Leave Petition Nos. 11243 46 of 1983. From the Judgment and order dated the 8th July, 1983 of the Karanataka High Court in Writ Petition Nos. 11268 to 11271 of li: 1981, For The Appearing Petitioners Shanti Bhushan, Y.S. Chitale, K.K Venugopal KN. Bhat, V.K Verma, section Ravindra Bhat, N. Ganpathy, C.S. Vaidayanathan, N. Nattar, R.B. Datar, A.V. Rangam, V.G. Gupta, T.V.S.N. Chari A.T.M. Sampath, Vineet Knmar, D.P. Singh, Miss H. Wahi, B.N. Tawakley, section Srivinasan, P.R. Ramashesh, P.N. Ramlingam, S.R. Srivastava and Rathin Das For The Appearing Respondents R.P. Bhatt, V.S. Desai, Harbans Lal, Swaraj Kaushal, M.N., Shroff, G.V. Subba Rao, N.S. Das Bahl and R.N. Poddar The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Prior to 1969 there was no concept of what may be termed as 'An All India ' permit which would be valid 627 for the whole of India and which would enable the holder of the permit to ply his contract carriage throughout India. Section 63 (1) of the , provides that, except as may be otherwise prescribed, a permit granted by the regional transport authority of any one region shall not be valid in any other region, unless the permit has been counter signed by the regional transport authority of that other region, and a permit granted in any one state shall not be valid in any other state unless counter signed by the State Transport Authority of that other state or by the regional transport authority concerned. The procedure prescribed for obtaining the counter signature of the transport authorities of other regions and states was cumbersome and was not conducive to the development of all India or inter state tourist traffic. In order to remedy the situation and promote all India and inter state tourist traffic, the Parliament amended the and introduced sec. 63 (7) by amending Act 56 of 1969. This new provision enables the State Transport Authority of every state to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that state specify in that behalf. Preference is to be given, to applications for permits from the India Tourism Development Corporation, a State Tourism Development Corporation, a State Tourist Department and such operators and tourist cars or such travel agents as may be approved in that behalf by the Central Government. This was but . the first basic step towards encouraging all India or inter state tourist traffic. There were other hurdles to be cleared before any scheme for grant of all India permits could be effectively implemented. One of the hurdles was this: Under Entry 57 of List II of the Seventh Schedule to the Constitution, the State Legislature is empowered to levy "Taxes on vehicles, whether mechanically propelled or not, suitable for use on roads, including tramcars subject to the provisions of entry 35 of list III". Entry 35 of list III reads: "Mechanically propelled vehicles including the principles on which taxes on such vehicles are to be levied". A coherent reading of Entry 57 of list II and Entry 35 of list III makes it abundantly clear that the power to levy taxes on vehicles suitable for use on roads vests solely in the State Legislature though it may be open to the Parliament to lay down the principles on which taxes may be levied on mechanically propelled vehicles. In other words the Parliament may lay down the guide lines for the levy of taxes on mechanically propelled vehicles but the right to levy such taxes vests solely in the 628 State Legislature. Now there are twenty two States and nine Union Territories in India, specified in the first schedule to the Constitution. Each of the States has the right, within its territory. to levy a tax on motor vehicles. If a tourist vehicle holding an 'All India Permit ' under sec. 63 (7) of the chooses to visit half a dozen states in the course of a round trip from, say, Delhi to . Kanyakumari or Srinagar to Hyderabad tax will ordinarily have to be paid in all the half a dozen or so States. The burden will surely be intolerable and the whole object of sec. 63 (7), namely promotion of all India or inter state tourist traffic will be frustrated. The Central Government was alive to the problem and referred the matter to the Transport Development Council for its advice. The Transport Development Council is a non statutory body constituted by the Central Government and consists of the representatives of the Governments of all the States. The Transport Advisory Council advised the Central Government that there should be a single state taxation on tourist vehicles holding permits under sec. 63 (7), that is, tax should be paid in the 'home state ' and the vehicle should be exempted from payment of tax in states other than the home state. This could be done by the respective State Governments issuing notifications under their taxation legislation exempting tourist vehicles registered in other states from payment of tax, if tax has already been paid in the home state. The Government of India accepted the E suggestion and requested the State Governments and Union Administrations to issue necessary notifications. The suggestion ran into trouble right from the start. While the Governments of Andhra Pradesh, Bihar, Goa, Daman and Diu, Maharashtra, Nagaland and Uttar Pradesh readily agreed to issue such notifications on the basis of reciprocity, there was no such ready response from some other states. The Government of Karnataka was in particular opposed to the grant of any such exemption. Finally, the Government of Karnataka and the Governments of other states too were persuaded to agree to issue such notifications. In the meanwhile the Government of India, in exercise of its power under sec. 63 (7) of the , issued notifications specifying the number and class of tourist vehicles in respect of which each of the State Transport authorities of the States could grant All India permits. The last of the notifications specified that each State Transport authority could issue 50 permits for tourist omnibuses. Pursuant to the request of the Central Government to which all the State Governments finally agreed, notifications were issued 629 exempting tourist vehicles holding permits under sec. 63 (7) from payment of tax, if tax had been paid in the home state. We are particularly concerned in these cases with the notifications issued from time to time by the Government of Karnataka, since that is where the trouble started. The first of the notifications issued by the Government of Karnataka was on September 18, 1972 and it exempted, from payment of taxes payable under the Karnataka Motor Vehicles Taxation Act 1957, tourist motor Cabs and tourist omnibuses registered in the States other than the State of Karnataka and plying in the State of Karnataka under permits which were valid without counter signature in the state of Karnataka, provided that the tax payable in respect of such vehicles had been paid to the State in which the vehicles were registered and provided further that the said State granted similar exemption to tourist motor cabs and tourist omnibuses whose permits were endorsed in the State of Karnataka under Rule 123 A of the Karnataka Motor Vehicles Rules. On July IS, 1976, the Government of Karnataka issued a notification reducing the tax payable under the Motor Vehicles Taxation Act, 1957, in respect of tourist vehicles for which permits had been issued under sec. 63 (7) or endorsement granted under Rule 123 A of the Karnataka Motor Vehicles Rules. On December 20, 1976, a further notification was issued in partial modification of the earlier notification dated September 18, 1972. Exemption from payment of tax was given to tourist motor cabs and tourist omnibuses registered in States other than the State of Karnataka and plying in the State of Karnataka under the authority of a permit granted under sec. 63 (7), provided that the tax payable in respect of the vehicle to the State in which it was registered had already been paid and provided further that similar exemption from payment of tax was granted in respect of similar vehicles of the State of Karnataka. This scheme for the grant of 'All India Permits ', designed as it was to promote all India and inter state tourist traffic. soon fell into abuse at the hands of scheming transport operators. Within the scheme itself lay the seeds for abuse. The scheme enabled the State Transport Authority of each State, to issue fifty all India permits, uniformly, irrespective of the size of the State, its resources, its accessibility, its communications, its facilities, the availability of transport services and operators in the State with the necessary expertise, experience and finance to operate all India tourist services and a host of such other factors. Apparently it was thought undesirable to make a distinction between State and State on what were perhaps thought to be elusive criteria and possibly the scheme 630 was expected to give a boost to the transport business in the smaller and less advanced States. And, of course, it was necessary to obtain the agreement and cooperation of all the States. But, the result was that transport operators from, big and comparatively prosperous and advanced States, well versed in the intricacies of the transport business very soon flocked to small and comparatively poor and less advanced States like Manipur and Nagaland to apply for and obtain all India permits from the State Transport Authorities of these States. It is conceded before us that a large number of persons holding all India permits from some of these small States do not belong to these States at all, but are transport operators coming from far off States. Another factor which appears to have influenced the flocking of transport operators from other States to States like Nagaland and Manipur is the nationalization of contract carriage service in States like Karnataka. Once the permits were obtained and the vehicles were registered, these small States saw the last of the operators. Having obtained the permits, the operators with their vehicles flocked back to the parent State of the operators (not of the vehicles) or to a State like Karnataka where all contract carriages having been nationalized no private contract carriage was available and there was therefore a great opportunity to ply the vehicles as contract carriages within the State. States like Karnataka were swamped by tourist vehicles from all over the country, registered in other States. These tourist vehicles practically 'colonised ' Karnataka and like States and started operating more or less as stage carriages within the particular State, never and rarely if ever, moving out of the State. There was no thought or Question of undertaking all India or interstate tours, and out went the worthy object of sec. 63(7). Quick and easy money with the least trouble and in the shortest time, by whatever method, was the only object. In the counter affidavit filed on behalf of the State of Karnataka in some of the Writ Petitions, it is stated. "Though the vehicles were registered outside the State of Karnataka, they have been permanently stationed in the State of Karnataka and particularly at Bangalore, and the vehicles were all being plied as Stage Carriages. Though All India Tourist Permits were obtained by the residents of other states, the permits were used by taking the vehicles and keeping them in the State of Karnataka. The operators run their tourist buses at fixed timings 631 from particular place like the Stage carriages operated by the Karnataka State Road Transport Corporation (hereinafter called the K.S.R.T.C.) and other private state carriage/ operators. On checking of the vehicles and verification of the passengers, it was found that the passengers found in the vehicle were not genuine tourists and the drivers or the persons incharge of the vehicles were not in a position to produce the trip sheet, name list with whom they entered into contract. It was also found that the passengers found in the vehicles had boarded the buses from one point without any contract or otherwise and without they being tourists. The passengers found in the tourist buses are regular passengers going from one place to another for purposes other than tourism. These vehicles were found catering to the needs of general travellers who can make use of the Stage Carriages operated by the K.S.R.T.C., or other private stage carriage operators. The respondent produces herewith statements as ANNEXURF.S 1 to 9 showing the clandestine operation of the vehicles covered by All India Tourist Permits, the remarks and irregularities noticed by the Motor Vehicles Inspectors while checking the vehicles covered by All India Tourist permit, the frequent detection of these vehicles running as Stage Carriages by collecting individual fares and picking passengers from one point and setting down them at another point and bringing different passengers in the return journey. From the statements enclosed, it is clear that the operators of the tourist buses covered by All India Tourist permits have misused the Tourist Buses by running them as regular stage carriages, competing with the KSRTC buses and other private stage carriages within the State. As a result of indiscriminate misue of the Vehicles as Stage Carriages even though the permits were obtained under Section 63 (7) of the Central Act for Tourism, the State Government has suffered considerable loss in Revenue. These buses actually made use of the passengers which would have normally gone to the KSRTC buses and other private carriages. The very object of obtaining permits under section 63(7) of the Central Act, which intended to promote tourism has been misued by these operators of the Tourists buses by plying their vehicles regularly as stage carriages. Most of the 632 permits obtained under Section 63 (7) of the Central Act in the States other than the State of Karnataka are made use of for the purported use of running the tourist buses but actually the permits were misused to run the tourist vehicle either as stage carriages or as contract carriages". A survey made by the Transport Commissioner of Maharashtra revealed a similar state of affairs. The Transport Commissioner submitted a report to the Government of Maharashtra, a copy of which has been made available to us. It is stated in the report, "Our estimate is that out of these 1300 permits anything between 300 to 400 buses are operating in Maharashtra with Bombay as the main centre. Most of these buses for all practical purposes operate as stage carriage services masquerading as contract carriages. In Maharashtra the ordinary passenger transport by stage carriages and contract carriages has been completely nationalised. The All India Tourist Buses on the other hand are exploiting the loopholes available in the law and operate point to point passenger services on routes where the volume of traffic is heavy viz. routes like Bombay Kolhapur, Bombay Mangalore (Mangalore), Bombay Panaji, Bombay Belgaum, Bombay Ahmedabad and Bombay Indore . . . . . . . . . . . . . . . ". "On 9/10th April 1983, the Transport Commissioner had personally visited the Charoti Check Naka which is our border check post bordering Gujarat on the Bombay Ahmedabad road. From the records of the check post he found that as many as 115 All India Tourist Buses are regularly playing on this route. After making an analysis of these 115 All India Tourist Buses, ' he found that 41 permits had been issued by the State Transport Authority of Manipur. 17 had been issued by State Transport Authority Nagar Haveli, 8 by the State Transport Authority, Meghalaya and 5 by the State Transport Authority Nagaland. A large number of All India Tourist Buses operating with their base in Bombay appear to have been issued by Manipur Nagaland and the Union Territory of Dadra Nagar Haveli". 633 The petitioners, who are transport operators holding all India permits, deny that any of them was guilty of any malpractice or misuse of the permits held by them. But, notwithstanding the petitioners ' denial we do not have the slightest doubt that the allegations of misuse and malpractice made in the counter affidavit, filed on behalf of the Karnataka Government, are generally and substantially correct. Complaints about the abuse of the scheme appear to have been made to the Central Government and the Transport Advisory Council also. We are also told that the question of meeting the challenge posed by these abuses is receiving the attention of the Central Government. The Government of Karnataka, apparently the worst sufferer, reacted sharply. The concession given to the holders of all India permits by way of exempting the all India tourist Vehicles, registered in other States, from payment of the Karnataka Tax, if tax had already been paid in the home State was withdrawn by a notification dated 31st March, 81. It is this notification and the consequences of the notification that are in question in these several Writ Petitions. We are informed that the State of Andhra Pradesh has also issued a notification similar to that of the State of Karnataka withdrawing the exemption which it had granted earlier to vehicles operating on permits issued under sec. 63 (7) and registered in other States. Other states have not withdrawn the exemption previously granted by them to vehicles registered in other states and operating on permits issued under sec. 63(7). But as the exemption granted by most of them is on a reciprocal basis, the withdrawal of exemption by the States of Karnataka and Andhra Pradesh has the effect of making vehicles registered in Karnataka and Andhra Pradesh, immediately subject to payment of tax in every one of those States through which they pass. The collection of tax by the other States is also resisted in these writ petitions. The power of the State Legislature to levy the particular tax, the power of the State Government to grant exemption from payment of tax under the authority delegated to it by the Legislature and the implied power of the State Government to withdraw an exemption granted by it are conceded. Yet a number of ingenious and platitudinous submissions have been though we must confess that many of them have only to be stated to be rejected. Some of them served no better purpose than occupy the time of the Court, time which has become dear and precious because of the mountainous arrears of cases awaiting the decision of this Court. We do wish it is remembered that the Supreme Court is the highest Court in the land and its time is not to be frittered away in 634 listening to hopeless arguments advanced just for the sake of argument. The time has come for judges and lawyers to make a determined effort to chop certain arguments and prone certain others judgments following suit. In fairness to the counsel who appeared in the cases before us, we must say that everyone was brief and none over stated his case. It was submitted that see. 63 (7) of the was designed to promote All India and inter state tourist traffic and thus to advance trade, Commerce and inter course throughout the territory of India. It was implicit in sec. 63 (7) that the States would exercise their power of taxation in such a way as not to impose an additional burden on tourist Vehicles registered in other states and plying on permits issued under sec. 63(7), over and above the tax paid in the home State. In other words, it was implicit that all the States would exempt from taxation tourist vehicles registered in other States and plying on permits issued under sec. 67 (7) was withdrawing the exemption, the object of sec. 63 (7) was defeated and therefore, freedom of trade, Commerce and inter course throughout the territory of India, guaranteed by article 301 of the Constitution was impaired. The withdrawal of exemption was, therefore, unconstitutional and bad in law. The transport operators of Karnataka who were not directly hit by the withdrawal of the exemption by the Government of Karnataka advanced a subtler argument and suggested that they were in fact the worst hit. The argument was that though despite the withdrawal of the exemption, they were paying no more tax to the State of Karnataka than they were paying hitherto, the withdrawal of the exemption had created a situation which denied them the benefit of exemption granted by the Governments of all others States, since those exemptions were reciprocal in condition. The situation indirectly created by the action of the Government of Karnataka imposed an intolerable burden on them by compelling them to pay taxes in every State other than Karnataka through which their vehicles passed and thus virtually denied to them the freedom of trade, Commerce and inter course throughout the territory of India guaranteed by article 301 of the Constitution. We are wholly unable to see any force in these submissions, The learned counsel for the parties on either side invited our atten 635 tion to the Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors Bolani Ores Ltd. vs State of Orissa(2), G.K. Krishnan vs State of Tamil Nadu(9) International Tourist Corporation vs State of Haryana(4) and Malwa Bus Service Pvt. Ltd. vs State of Punjab(5) to explain the extent and the limits of the freedom of trade, commerce and intercourse throughout the territory of India proclaimed by article 301 of the Constitution. We do not propose to refer to any of these cases since the law appears to us to be well settled: Taxes of a compensatory and regulatory character are outside the expanse of article 301 of the Constitution. Regulatory measures and compensatory taxes far from impeding the free flow of trade and commerce, often promote such free flow of trade and commerce by creating agreeable conditions and providing appropriate services. All that is necessary to uphold a tax which purports to be or is claimed to be a compensatory tax is "the existence of a specific, identifiable object behind the levy and a nexus between subject and the object of a levy". ( ') "If the object behind the levy is identifiable and if there is sufficient nexus between the subject and the object of the levy, it is not necessary that the money realised by the levy should be put into a separate fund or that the levy should be proportionate to the expenditure. There can be no bar to an inter mingling of the revenue realised from regulatory and compensatory taxes and from the taxes of a general nature nor can there be any objection to more or less expenditure being incurred on the object behind the compensatory and regulatory levy than the realisation from the levy".(6) It should be patent that "it would ordinarily be well nigh impossible to identify and measure with any exactitude the benefits received and the expenditure incurred and levy the tax according to the benefits received and the expenditure incurred". Nor is the court to interpose itself by assuming the role of a cost accountant and attempt to balance meticulously the cost of the services, benefits and facilities against the realisation from the levy. And, if the levy as a whole is justified by the need generally, it does not have to be separately justified with reference to every group of persons claiming 636 to require and receive less service than others. Once the nexus between the levy and service is seen, the levy must be upheld unless the compensatory character is shown to be wholly or partly, a mere mockery and in truth a design which is destructive of the freedom of inter state trade, commerce and inter course. By virtue of the power given to them by Entries 56 and 57 of List II every one of the States has the right to make its own legislation to compensate it for the services, benefits and facilities provided by it for motor vehicles operating within the territory of the State. Taxes resulting from such legislative activity are by their very nativity and nature, cast and character, regulatory and compensatory and, are therefore, not within the vista of article 301, unless, as we said, the tax is a mere pretext designed to injure the freedom of interstate trade, commerce and intercourse. The nexus between the levy and the service is so patent in the case of such taxes that we need say no more about it. The Karnataka Motor Vehicles Taxation Act and the Motor Vehicles Taxation Acts of other States are without doubt regulatory and compensatory legislations outside the range of article 301 of the Constitution. It is true that the object of enacting sec. 63 (7) by the Parliament was to promote all India and inter state tourist traffic. But 'taxes on vehicles . suitable for use on roads ' is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy. True again, Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, as explained by us at the outset, it is therefore open to the Parliament to lay down the 17 principles on which taxes may be levied on mechanically propelled vehicles. But the Parliament while enacting section 63 (7) of the refrained from indicating any such principles, either expressly or by necessary implication. The State 's power to tax and to exempt was left uninhibited. It may be that a a State legislation, plenary or subordinate, which exempts "non home state tourist vehicles" from tax would be advancing the object of sec. 63 (7) of the and accelerating inter state trade, commerce and intercourse. But merely by Parliament legislating sec. 63 (7), the State Legislatures are not obliged to fall in line and to so arrange their tax laws as to advance the object of sec. 63 (7), be it ever so desirable. The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted. There is no question of impairing the freedom under article 301 by refusing to 637 exempt or by withdrawing an exemption. Not to pat on the back is not to stab in the back. True, straw by straw, the burden of taxation on tourist vehicles increases as each State adds its bit of straw, but, then, each State is concerned with its coffers and has the right to tax vehicles using its roads; and, the contribution which a tourist carriage is required to make to its treasury is no more than what other contract carriages are required to make. We are firmly of the view that there is no impairment of the freedom under article 301. The special submission on behalf of the 'Karnataka operators ' that the withdrawal by the Karnataka Government of the exemption granted to 'outsiders ' has resulted in the Karnataka operators having to pay tax in every State in the country and, therefore, the withdrawal has impaired the freedom under article 301 is but the same general sub mission, seen through glasses of a different tint. It does not even have the merit that the withdrawal of the Karnataka exemption affects them directly. The submission is rejected. One of the submissions made to us was that if there was a misuse of the all India permits, the remedy was to punish the wrong doers by taking appropriate action against the wrong doers by cancelling the permit, if necessary, but not to withdraw the benefit of the exemption altogether, even in the case of honest operators. That is a matter for the Legislature and its delegate to decide but not for the court. If the situation had become so malignant that drastic action was called for, it is not for the court to substitute its judgment to say that the object could perhaps be well achieved by adopting a less drastic procedure. It was submitted that all India tourist vehicles do not use the roads of the State as much as the contract carriages operating in the State and therefore, the State was wrong in treating them alike. It was said that treatment of unequals as equals had resulted in an infringement of article 14 of the Constitution. It was also submitted that vehicles holding inter State permits under inter state agreements were still exempt from tax and this was also a violation of article 14 of the Constitution. Another contention raised was that there was some sort of promissory estoppel which prevented the State Government from withdrawing the exemption. Yet another argument was that the withdrawal of the exemption was arbitrary and therefore, judicial review was necessary. These and other like submissions which were made to us in our opinion, fall in the category of arguments which. 638 we mentioned earlier, have only to be stated to be rejected. The answers are self evident. , The submissions are totally without merit and we see no justification for increasing the length of our judgment by further futile discussion. All the Writ petitions are dismissed with costs and the interim orders are vacated. H.S.K. Petitions dismissed.

In order to promote all India and inter state tourist traffic, the Parliament amended the by introducing in it sec. 63(7) which enabled the State Transport Authority of every State to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as may be specified by the Central Government. Later the Central Government notified that each State Transport Authority could issue 50 all India permits for tourist omnibuses. As each State had the right, within its territory, to levy a tax on a motor vehicle, it was found that unless tourist vehicles with all India permits were exempted from tax by other States than their home state the object of sec. 63(7) would be frustrated. Therefore, the Central Government made a request in this behalf to all the State Governments. In pursuance of that request the Government of Karnataka exempted tourist vehicles holding permits under sec. 63(7) from payment of tax, provided the tax payable to the State in which the vehicle was registered had already been paid and provided further that similar exemption from payment of tax was granted in respect of similar vehicles to the State of Karnataka. Many transport operators from big and comparatively prosperous States flocked to some small and comparatively poor and less advanced States and after getting all India permits from them started plying their vehicles in other States like Karnataka and Maharashtra more or less as regular stage carriages. Having found that the transport operators were misusing the all India permits and indulging in certain malpractices, the Government of Karnataka withdrew the exemption from payment of tax granted earlier. The petitioners, who were transport operators holding all India permits, challenged the withdrawal cf exemption as unconstitutional and bad in law. The petitioners submitted that sec. 63(7) of the was designed to promote all India and inter state tourist traffic and thus to advance trade, 625 commerce and inter course throughout the territory . Of India. By withdrawing the exemption, the object of sec. 63(7) was defeated and therefore, freedom of trade. Commerce and inter course throughout the territory of India, guaranteed by article 301 of the Constitution was impaired. Dismissing the petitions, ^ HELD: By withdrawing the exemption there is no impairment of the freedom under article 301. [637 B] Taxes of a compensatory and regulatory character are outside the expanse of article 301 of the Constitution. Regulatory measures and compensatory taxes far from impeding the free flow of trade and commerce, often promote such free flow of trade and commerce by creating agreeable conditions and providing appropriate services. All that is necessary to uphold a tax which purports to be or is claimed to be a compensatory tax is, the existence of a specific, identifiable object behind the levy and a nexus between subject and the object of a levy. Once the nexus between the levy and service is seen, the levy must be upheld unless the compensatory character is shown to be wholly or partly a mere mockery and in truth a design which is destructive of the freedom of inter state trade, commerce and inter course. [635 C D, 636 A] International Tourist Corporation vs State of Haryana, ; referred to. By virtue of the power given to them by Entries 56 or 57 of List II every one of the States has the right to make its own legislation to compensate it for the services, benefits and facilities provided by it for motor vehicles operating within the territory of the State. Taxes resulting from such legislative activity are by their very nativity and nature, cast and character, regulatory and compensatory and, are therefore, not within the vista of article 301, unless the tax is a mere pretext designed to injure the freedom of inter state trade, commerce and inter course. The nexus between the levy and the service is so patent in the case of such taxes that one need say no more about it. The Karnataka Motor Vehicles Taxation Act and the Motor Vehicles Taxation Acts of other States are without doubt regulatory and compensatory legislation outside the range of article 301 of the Constitution. [635 B D] `Taxes on vehicles . suitable for use on roads ' is a State legislative subject and it is for the State Legislature to impose a levy and to exempt from the levy. Entry 57 of the State List is subject to Entry 35 of the Concurrent List and, it is therefore open to the Parliament to lay down the principles on which taxes may be levied on mechanically propelled vehicles. But the Parliament while enacting sec. 63(7) of the refrained from indicating any such principles, either expressly or by necessary implication. The State 's power to tax and to exempt was left uninhibited. It may be that a State Legislation, plenary or subordinate, which exempts "non home state tourist vehicles" from tax would be advancing the object of sec. 63(71, but 626 the State Legislature are not obliged to fall in line line and to so arrange their tax laws as to advance the object of sec. 63(7), be it ever so desirable. The State is obliged neither to grant an exemption nor to perpetuate an exemption once granted. There is no question of impairing the freedom under article 301 by refusing to exempt or by withdrawing an exemption. [636 E 637 A]

vil Appeal No. 612 (NT) of 1975. From the Judgment and Order dated 24/25.9. 1974 of the Gujarat High Court in Special Civil Application No. 1797 of 1972. Harish N. Salve, Mrs. A.K. Verma and Joel Pares for the Appellant. V.S. Desai, M.B. Rao and Ms. A. Subhashini for the Respondents. The Judgment of the Court was delivered by KANIA, J. This is an appeal from the judgment of a Division of 5 the High Court of Gujarat in Special Civil Application No. 1797 of 1972 on a certificate granted under Article 133(1) of the Constitution of India. The relevant facts are as follows: The assessee is a Private Limited Company and carries on the business of manufacturing and selling textile at Porbun dar in Saurashtra in the Gujarat State. Before 1948 Porbun dar was a part of the Princely State of that name. No In come Tax was levied by the erstwhile Porbundar State prior to 1948. In 1948 there was a merger of several Princely States and as a result of the merger, the State of Saurash tra was formed. No income tax was levied by the State of Saurashtra till 1949 when it promulgated the Saurashtra Income tax Ordinance. Under that Ordinance provision was made for the grant of depreciation allowance based on the written down value. The said Ordinance defined "written down value" as follows: "Written down value" means: (a) in case of assets acquired in the previous year, the actual cost to the assessee; and (b) in the case of assets acquired before the previous year the actual cost to the assessee less all depreciation actually allowed to him under this Ordinance or allowed under an act repealed thereby or which would have been allowed to him if the Income tax Act, 1922 was in force in past." On 26th January, 1950 State of Saurashtra became a part of Union of India as a Part B State. The Indian Income tax Act, 1922 became applicable to the State of Saurashtra from 1st April, 1950 under the provisions of the Fi nance Act, 1950. By Section 13 of the Finance Act of 1950, which provides for repeals and savings, the Saurashtra Income tax Ordinance was repealed. Section 12 of that Act provided for the removal of difficulties as follows: "If any difficulty arises in giving effect to the provisions of any of the Acts, rules or orders extended by Section 3 or Section 11 to any State or merged territory, the Central Government may, by order, make such provision, or give such direction, as appears to it to be necessary for removing the difficulty. " In exercise of the powers conferred upon it by Section 12 of the 6 Finance Act, 1950, the Central Government issued an order known as "Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950". Clause (2) of the Order of 1950 reads as follows: "Computation of aggregate depreciation allow ance and the written down value: In making any assessment under the Indian Incometax Act, 1922, all depreciation actually allowed under any laws or rules of a Part B State relating to Income tax and Super tax or any law relating to tax on prof its of business shall be taken into account in computing the aggregate depreciation allowance referred to in sub clause (c) of the Proviso to Clause (vi) of sub section (2) and the written down value under clause (b) of sub section (5) of Section 10 of the said Act. Provided that, where in respect of any asset, depreciation has been allowed for any year both in the assessment made in the Part B State and in the taxable territories, the greater of the two sums allowed shall only be taken into account. " This order was made by the Central Govern ment on December 2, 1950. Subsequently, on March 9, 1953, in exercise of the powers conferred upon it by Section 60A of the Indian Income tax Act, 1922, an Explanation was added by the Central Government to the above Clause (2) of the Order of 1950 with effect from that date and that Explanation was in the following terms: "For the purpose of this paragraph, the ex pression 'all depreciation actually allowed under any laws or rules of a Part B State ' means and shall be deemed always to have meant the aggregate allowance for depreciation taken into account in computing the written down value under any laws or rules of a Part B State or carried forward under the said laws or rules." In Commissioner of Income tax, Hyderabad vs D.B.R. Mills Ltd., the Hyderabad High Court held that this Explanation was ultra vires the powers of the Central Government under Section 60A of the Indian Income tax Act, 1922. After the said decision of the High Court the Central Government issued a notifica 7 tion on 8th May, 1956 in exercise of the powers conferred upon it by Section 12 of the Finance Act, 1950 and under this notification an Explanation in identical terms as the earlier Explanation inserted by an order made under Section 60A of the Indian Income tax Act, 1922 was added to Clause (2) of the Removal of Difficulties Order, 1950. As far as the appellant assessee is concerned, it was assessed under the Indian Income tax Act from 1940 41 in respect of the income arising or deemed to arise in British India from 1940 41 onwards. For these years income of the assessee was computed on receipt basis, but in calculating the world income, depreciation was taken into consideration for arriv ing at the income outside British India. The assessee was also assessed for assessment year 1949 50 under the Saurash tra Income tax Ordinance, 1949. From the assessment year 1950 51 onwards the assessee was assessed under the Indian Income tax Act, 1922 (referred to hereinafter as "the Indian Income tax Act"). The assessment years with which we are concerned are the assessment years 1957 58, 1958 59 and 1959 60, the corresponding previous years being the calendar years 1956, 1957 and 1958 respectively. It is the case of the assessee that during the course of the assessment of the assessee 's income under the Act of 1922, depreciation was allowed for the assessment year 1950 51 and thereafter on the original cost of the assets as reduced by the deprecia tion allowance given under the Saurashtra Income tax Ordi nance, 1949. The respective written down values for assess ment years 1951 52 and 1952 53 were fixed on the basis of the written down value for assessment year 1950 51. However, subsequently, the Income tax Officer concerned having juris diction over the case of the petitioner, rectified the calculations of depreciation allowance by further reducing the written down value of the assets of the assessee by adopting the procedure which has been set out in paragraph 7 of the petition filed by the assessee. What was done by the Income tax Officer was that the written down value taken for the assessment year 1940 41 by the Income tax Officer, Bombay was taken as the starting point. From this written down value, the depreciation that was actually allowed to the assessee in respect of the assessment years 1940 41 to 1944 45 was deducted. For the assessment years 194546 to 1948 49 the written down value was calculated after calcu lating the depreciation allowance which would be allowable under the rules. For the assessment year 1949 50, the depre ciation allowance as calculated under the Saurashtra Income tax Ordinance, 1954 was deducted. For the assessment years 1950 51 to 1952 53, the depreciation allowance actual ly deducted under the assessment orders passed under the Indian Income tax Act was calculated and for the assessment year 1953 54 the depreciation allowance was calculated under Rule 8 of the 8 Indian Income tax Rules made under the Indian Income tax Act. For the assessment years 1954 55 to 1956 57 the depre ciation was calculated on the basis of the above rectifica tion order. The contention of the assessee is that the depreciation for the previous years should have been calcu lated only on the basis of Clause (2) of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, which provided for computation of the aggregate depreciation allowance on the basis of the deduction which was actually allowed under the provisions of Saurashtra Income tax Ordi nance, 1949. Regarding the Explanation which was added as set out earlier, the contention of the assessee was that it was ultra vires the powers of the Central Government as it was not necessary for the removal of any difficulty. This contention of the assessee was rejected by the Income tax authorities as well as the Income tax Appellate Tribunal. For the assessment years 1957 58 and 1959 60 the assessee again contended before the Income tax authorities and the Tribunal that Explanation to Clause (2) as notified in 1956 was ultra vires the powers of the Central Government. It was contended by the assessee before the Tribunal that the decision of this Court in The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Raingopal Mills Ltd., ; ; which upheld the validity of the Explanation was no longer good law in view of the decision of this Court in Straw Products Ltd. vs Income tax Officer. "A" Ward, Bhopal, and Ors., The contention of the assessee was rejected by the Tribunal by its order dated April 16, 1969. From this decision of the Tribunal at the instance of the assessee a reference was made to the Gujarat High Court in which the following ques tion was raised: "Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the depreciation allowable and not 'actually allowed ' under the Saurashtra Income tax Ordinance, 1949 should be taken into account in computing the aggregate depre ciation allowance and written down value under Section 10(2)(vi) of the Income tax Act, 1922?" This reference was numbered as Reference No. 45 of 1970. On August 17, 1972 the High Court held that in its advisory jurisdiction under the Income tax Act it could not go into the question of the vires of the said Explanation and an swered the question against the assesee. Thereafter the assessee filed Special Civil Application No. 1797 of 1972 from the decision wherein this appeal arises. In this Spe cial Civil Application the vires of the Explanation added by the Central Government by its 9 notification dated May 8, 1956 in exercise of the powers under Section 12 of the Finance Act of 1950 as well as the assessments made on the assessee for the assessment years 1957 58 to 1959 60 were challenged. The Division Bench of the Gujarat High Court in its impugned judgment pointed out that the decision of this Court in The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., had upheld the validity of the said Explanation. The Gujarat High Court noted that the decision of this Court in Straw Products Ltd. vs Income tax Officer, arose from the merged State of Bhopal. Some of the arguments which did not find favour with this Court in the case of The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., were accepted by a Bench of seven learned Judges of this Court in the case of Straw Products. The Gujarat High Court pointed out that in its decision in the case of Straw Products, this Court had considered the decision in the case of Dewan Bahadur Ramgopal Mills Ltd., and explained that decision by stating that the Supreme Court was satisfied that on the facts of that case a difficulty had arisen and it was for removing that difficulty that the Order of 1956 was issued. The Division Bench of the Gujarat High Court considered the decision of this Court in Dewan Bahadur Raingopal Mills Ltd., as binding and following the same dismissed the Special Civil Application filed by the asses see. Mr. Salve made two submissions before us. The first submission made by him was the same as made on behalf of the assessee before the High Court, namely, that there was no difficulty which had arisen in giving effect to the provi sions of the Indian Income tax Act in the State of Saurash tra and hence the pre condition on which the Central Govern ment was authorised to make an order under the Removal of Difficulties Order and add the Explanation had never come into existence and hence adding of the Explanation was without any authority of law and invalid and no legal ef fect. The next submission urged by Mr. Salve was that it is the fundamental scheme of the Indian Incometax Act that, generally speaking, almost the entire cost of a capital asset used for purposes of business or profession should be allowed to be written off by way of depreciation. This could be done in more than one ways. It could be done by allowing a fixed percentage of the actual cost to be deducted as depreciation allowance every year till the entire cost is written off. This is known as the Straight Line Method. The other is the method of calculating the depreciation on the basis of written down value. Written down value would be determined by deducting a fixed percentage of the original cost of the asset in assessment year relevant to the previ ous year in which the asset was 10 acquired and thereafter giving the same percentage of the written down value determined on the footing of the original cost less the depreciation already allowed. Taking into account the definition of the term "written down value" contained in Section 10 of sub section (5) of Indian Income tax Act, 1922, the basic scheme under the said Act appears to be that in determining the written down value for depreciation allowance, the taxing authority can deduct only such amounts as have been allowed earlier by way :of deduc tion. It was submitted by him that this position was accept ed in the decision of this Court in Straw Products Ltd. vs Income tax Officer. In the present case, if the impugned Explanation was applied, the result would be that the writ ten down value of the capital asset of the assessee acquired prior to 1949 would be determined by making deductions for depreciation allowance which was not actually allowed to the assessee between the assessment years 1945 46 to 1948 49. This result would follow from the manner in which the writ ten down value was calculated under the Saurashtra Income tax Ordinance of 1949. It was urged by him that in exercise of its delegated powers it was not open to the Central Government to enact such an Explanation. In order to examine this contention it would be useful to bear in mind some of the provisions of the Indian Income tax Act. In that Act the charge of Income tax is in respect of "total income" of the previous year. The expression "total income", very briefly stated, is defined in sub section (15) of Section 2 as meaning the total amount of income, profits and gains com puted in the manner laid down in the Act. Chapter 3 of the Act deals with the various Heads of Income chargeable to Income tax and Section 10 deals with the Head of Income in respect of profits or gains of business, profession or vocation carried on by the assessee. Sub section (2) of Section 10 deals with the allowances which have to be made in the computation of the profits and gains from business, profession or vocation and Clause (vi) of the said sub section provides for depreciation. The relevant portion of Clause (vi) ran as follows: "In respect of depreciation of such buildings, machinery, plant or furniture being the property of the assessee, a sum equivalent where the assets are ships other than ships ordinarily plying on inland waters to such percentage on the original cost thereof to the assessee as may in any case or class of cases be prescribed and in any other case, to such percentage on the written down value thereof as may in any case or class or cases be pre scribed. " The expression "written down value" as used in sub section (2) 11 of Section 10 of the Act has been defined in sub section (5) of Section 10. The relevant part of Clause (b) of the said sub section runs as follows: "In the case of assets acquired before the previous year the actual cost to the assessee less all depreciation actually allowed to him under this Act, or any Act repealed thereby, or under executive orders issued when the Indian Income tax Act, 1886 (II of 1886), was in force. X X X X Provided that in the case of a building previously the property of the asses see and brought into use for the purposes of the business, profession or vocation after the 28th day of February, 1946, 'written down value ' means the actual cost to the assessee reduced by an amount equal to the depreciation calculated at the rate in force on that date that would have been allowable had the build ing been used for the aforesaid purposes since the date of its acquisition by the assessee and had the provisions of this Act relating to the allowance for depreciation been in force on and from the date of acquisition. " In The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Ramgopal Mill Ltd., the very Explanation added by the notification dated 8.5.1956, which is challenged before us, came up for consideration before a Constitution Bench of this Court. The facts in that case were that prior to January 26, 1950, when the erstwhile State of Hyderabad merged in the Union of India and became a Part B State, the respondent company was assessed to Income tax under the Hyderabad Income tax Act, under which depreciation allowance was given to it on the basis of the written down value of its assets, such as buildings, machinery plants, etc., in accordance with clause (c) of section 12(5) of that Act, which provided that in the case of assets acquired before the previous year and before the commencement of the Act, the written down value would be the actual cost to the assessee less (i) depreciation at the rates applicable to the assets calculat ed on the actual costs for the first year since acquisition and for the next year on the actual cost diminished by the depreciation allowance for one year and so on, for each year upto the commencement of that Act and (ii) depreciation actually allowed to the assessee 12 on such assets for each financial year after the commence ment of the Act. After the merger of Hyderabad with the Union of India, by sections 3 and 13 of the Finance Act, 1950, the taxation laws in force in that State were repealed and the Indian Income tax Act, 1922, was extended to that area; and, in exercise of the powers conferred by section 12 of the Finance Act, 1950, the Central Government issued a notification dated December 2, 1950, called the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950. Paragraph 2 of the Order provided that "in making any as sessment under the Indian Income tax Act, 1922, all depreci ation actually allowed under any laws or rules of a Part B State . . shall be taken into account in computing the aggregate depreciation allowance referred to in proviso (c) to section 10(2)(vi) and the written down value under section 10(5)(b) of the said Act". For the assessment year 195 1 52 the respondent was assessed for the first time under the Indian Income tax Act, and basing its claim on paragraph 2 of the aforesaid Order it asked for depreciation allowance in respect of its assets by working out the value thereof at their inception and deducting therefrom such depreciation as was allowed for the three assessment years in which it was assessed under the Hyderabad Income tax Act. By an order dated November 30, 195 1, the Incometax Officer disallowed the respondent 's claim on the ground that it was against the principle inherent in granting depreciation allowance which must decrease from year to year. The matter was taken up to this Court and while it was pending there, on May 8, 1956, the Central Government issued a notification in exercise of its powers conferred on it by section 12 of the Finance Act, 1950, whereby an Explanation was added to the aforesaid paragraph 2 as follows: "For the purpose of this paragraph, the ex pression 'all depreciation actually allowed under any law or rules of a Part B State ' means and shall be deemed to have always meant the aggregate allowance for depreciation taken into account in computing the written down value under any laws or rules of a Part B State or carried forward under the said laws or rules. " The respondent challenged the validity of the notification of 1956 and also its applicability to the present case on grounds (1) that it was ultra vires the powers conferred on the Central Government by section 12 of the Finance Act, 1950, (2) that it contravened Article 14 of the Constitu tion, and (3) that, in any case, it could have no retrospec tive effect. 13 It was held by this Court that the true scope and effect of Section 12 of the Finance Act, 1950 was that it was for the Central Government to determine if any difficulty of the nature indicated in the section arises and then to make such order or give such direction, as appeared to it to be neces sary to remove the difficulty, the legislature having left the matter to the executive. In the present case, a difficulty had arisen because if depreciation actually allowed under the Hyderabad Income tax Act was taken into account in computing the aggregate depre ciation allowance and the written down value, an anomalous result would follow, namely, depreciation allowance to be allowed to the assessee in the accounting year under the Indian Income tax Act would be more than what was allowed in previous years under the Hyderabad Income tax Act. Conse quently, the Central Government was within its power under section 12 in making the notification dated May 8, 1956. It was also held that the notification of 1956 applied to all those to whom paragraph 2 of the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950, was ap plicable and created no unequal treatment of persons in the like situation. Accordingly, the notification did not con travene Article 14 of the Constitution. In the course of the leading judgment, S.K. Das, J., set out the chain of events which led to the notification dated May 8, 1956 under sec tion 12 of the Finance Act, 1950 being issued which we have already set out earlier and went on to state as follows: "The basic and normal scheme of depreciation under the Indian Income tax Act is that it decreases every year, being a percentage of the written down value which in the first year is the actual cost and in succeeding years actual cost less all depreciation actually allowed under the Income tax Act or any Act repealed thereby etc. The Hyderabad Income tax Act not having been repealed by the Incometax Act but by the Finance Act, 1950, there was a difficulty in allowing depreciation to an assessee in a Part B State in the first year of assessment under the Indian Income tax Act. This difficulty was sought to be removed by paragraph 2 of the Removal of Difficulties Order, 1950. If however, depreciation actually allowed under the Hyderabad Income tax Act was taken into account in computing the aggregate depreciation allowance and the written down value, an anomalous result would follow as in the present 14 case, namely, depreciation allowance to be allowed to the assessee in the accounting year under the Indian Incometax Act would be more than what was allowed in previous years under the Hyderabad Income tax Act. This would create a disparity and be against the scheme of the Indian Income tax Act. It was therefore necessary to explain paragraph 2 of the Remov al of Difficulties Order, 1950, to assimilate or harmonise the position regarding deprecia tion allowance, and the Explanation added in 1953 or 1956 was obviously intended to remove the difficulty arising out of that disparity or disharmony. " It is not disputed that, if this decision is to fol lowed, both the contentions urged by the learned Counsel, Mr. Salve before us must be negatived. The decision clearly lays down that a difficulty had come into existence and the Central Government had, in exercise of the power delegated to it, issued the said notification in 1956 adding the said Explanation to resolve the difficulty. The Court took the view that, under the scheme of the Indian Income tax Act, in respect of assets acquired before the relevant previous year, depreciation is to be allowed on the basis of the original cost less depreciation in respect of earlier years. viz., the years intervening between the relevant previous year and the year of acquisition. Where any tax on income was levied during any of these intervening years, the actual cost would have to be reduced by the depreciation actually allowed but in respect of such intervening years when there was no tax levied on income, depreciation on a notional basis would have to be deducted from the actual cost of the asset. In deducting an amount on account of such notional depreciation there seems to be nothing against the basic scheme of the Income tax Act. These are the conclusions which flow from the said decision of Court in the case of Dewan Bahadur Ramgopal Mills Ltd. The said decision has been rendered by a Bench comprising five learned Judges of this Court and must normally be regarded as binding. upon us. The question, however, is whether the said decision needs to be reconsidered in view of two later decisions of this Court which we shall presently discuss. The first of the said two decisions cited by Mr. Salve is that in the case of Madeva Upendra Sinai vs Union of India & Ors., The said decision has been rendered by majority comprising four learned Judges out of five compris ing the Bench which decided the case. In that case, the challenge was to the validity of the second Proviso to Clause (2) of the Taxation Laws (Extension to Union Territo ries) (Removal of Difficulties) Order No. 2 of 1970 which was deemed to have come into force on 1st April, 15 1963. In brief, this clause provided that in making any assessment under the Indian Income tax Act, 1961 all depre ciation actually allowed under the local laws shall be taken into account in computing the written down value. The second Proviso to that Clause was as follows: "Provided further that where in respect of any period, no depreciation was actually allowed under the local law or the depreciation actu ally allowed cannot be ascertained, deprecia tion in respect of that period shall be calcu lated at the rate for the time being in force under the Income tax Act, 1961 or under the Indian Income tax Act, 1922 . . and the depreciation so calculated shall be deemed to be the depreciation actually allowed under the local law". The majority judgment took the view that the existence or arising of a difficulty was the sine qua non for the exercise of the power under Clause (7) of the Taxation Laws (Extension to Union Territories) Regulation, 1963. The "difficulty" contemplated by that clause had to be a diffi culty arising "in giving effect to" the provisions of the Act, etc., and not a difficulty arising aliunde or an extra neous difficulty. Further, the Central Government could exercise the power under the clause only to the extent it was necessary for applying or giving effect to the Act, etc., and no further. The second Proviso to Clause (2) of the said Order of 1970 sought to raise the taxable income of the assessee inconsistently with the scheme of the Income tax Act, and was ultra vires the Central Government under Clause 7 of the 1963 Regulation and the Revenue was not entitled to lay tax on the basis of the depreciation allow ance computed in accordance with that proviso. It was fur ther held that the said second proviso to Clause (2) of the 1970 order would, in the implementation of the Act, create difficulties rather than remove them. It was further held that the key word in Clause (b) of Section 43(6) of the Income tax Act, 1961 is "actually". 11 is the antithesis of that which is merely speculative, theoretical or imaginary. "Actually" contra indicates a deeming construction of the word "allowed" which it qualifies. It cannot be stretched to mean "notionally allowed" or merely allowable on a notional basis. In Straw Products Ltd. a challenge was made to the validity of sub clause (b) of paragraph 2 of the Taxation Laws (Merged States) (Removal of Difficulties) Order, 1949 inserted therein by the Taxation Laws (Merged States) (Removal of Difficulties) Amendment Order, 1962.1t was held that the said sub clause of the said Explanation was ultra vires 16 the Central Government under Section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 under which it was purported to be made, since no "difficulty" was proved to have arisen justifying the invocation of the power under Section 6; and the revenue authorities were not enti tled to levy tax on the basis of depreciation allowance computed in accordance with sub clause (b) of the said Explanation to paragraph 2 of the Order. It was held that the expression "depreciation actually allowed" connotes under Section 10(2)(vi) of the Indian Income tax Act, 1922 under Clause (2) of the Taxation Laws (Merged States) (Removal of Difficulties) Order, 1949 and the notification under Section 60A of the Income tax Act, depreciation taken into account in assessing the income of an assessee arising from carrying on business, and does not mean depreciation merely allowable or applicable under the taxing provision at p. 236). The Court took the view that the exercise of the power under Section 6 of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 to make provisions or to issue directions as may appear necessary to the Central Government is conditioned by the existence of a difficulty arising in giving effect to the provisions of any Act, rule or order extended by Section 3 to the Merged States. The Section does not make the arising of a difficul ty a matter of subjective satisfaction of the Government: it is a condition precedent to the exercise of power, and existence of the condition, if challenged, must be estab lished as an objective fact. It may be mentioned that the decision in the case of The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd., was noticed and discussed in this judgment but it was pointed out that in that case the difficulty had arisen because, as pointed out by the Court in that case but for the Explanation a difficulty would have arisen insofar as the depreciation allowance allowed to assessee under the Indian Income tax Act would have been more than the depreciation allowance under the Hyderabad Income tax Act. After giving our anxious consideration to the matter, we find ourselves unable to accept the submissions of Mr. Salve, learned Counsel for the assessee. As pointed out by us earlier, it was frankly conceded by the learned Counsel that unless we took the view that the decision of this Court in The Commissioner of Income Tax, Hyderabad vs Dewan Baha dur Ramgopal Mills Lid, was not good law or, at least, that it needed reconsideration by a larger Bench, we must follow that decision and the appeal of the assessee must be dis missed. It is the undisputed position that the very provi sion which is challenged before us was earlier challenged before a Constitution Bench of this Court in 17 the aforementioned case and that challenge was negatived. The mainplank of learned Counsel 's argument is that in the case of Straw Products Ltd. vs Income tax Officer, a view has been taken which is inconsistent with the view taken in The Commissioner of Income tax, Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd. Now, in fact, we find that a Bench comprising seven learned Judges of this Court in this case of Straw Products Ltd. has considered the decision of this Court in Dewan Bahadur Ramgopal Mills Ltd. and has observed that the case could be distinguished because in that case there was a difficulty which had, in fact, arisen and hence, it was necessary to issue the Removal of Difficulties Order, 1956. The observations of this Court in that case (at page 237 to 238 of the aforesaid Report) only show that this Court disapproved the interpretation given to the decision in the case of Dewan Bahadur Ramgopal Mills Ltd. by the Madhya Pradesh High Court, namely, that it was a matter for subjective satisfaction of the Government to decide whether a difficulty has arisen and it was not open to the Court to investigate that question. It was pointed out that in Dewan Bahadur Ramgopal Mills Ltd. this Court was satisfied that, in fact a difficulty had arisen and that difficulty had to be removed and for removing the difficulty, the Order of 1956 was issued. On a fair reading of the decision in the case of Straw Products along with the decision in the case of Dewan Bahadur Ramgopal Mills Ltd., it appears to us that the view taken in Straw Products Ltd., is that although it is for the Government to subjectively satisfy itself that a difficulty has arisen of the kind set out in those decisions before an order can be issued under the power to issue orders for removal of difficulties but that satisfaction is not conclusive as suggested by the High Court of Madhya Pradesh and it is the duty of the Court concerned to examine for itself whether there was a reasonable basis for the Government to have come to such a conclusion. Anyway, al though it is not for the Court to determine for itself in the first instance whether such a difficulty, as contemplat ed, had arisen, it is open to the Court to see whether the Government had a sound basis to come to the conclusion that such a difficulty had arisen. The decision in the case of Straw Products, therefore, in no way casts doubt the deci sion of this Court in Dewan Bahadur Ramgopal Mills Ltd. The other case relied upon by Mr. Salve. namely, Madeva Sinai v, Union Of India has cast no doubt whatever on the decision of this Court in Dewan Bahadur Ramgopal Mills Ltd. but the Court there took the view that the existence of a difficulty was sine qua non for the exercise of the power in Clause 7 of the Taxation Laws (Extension to Union Territories) (Removal of Difficulties) Regulation, 1963. 18 It is not disputed that the decision of the Constitution Bench of this Court in the case of Dewan Bahadur Ramgopal Mills Ltd. is binding on us. In the light of what we have discussed earlier, we do not feel that it is necessary to direct this matter to be placed before a larger Bench so that the decision in Dewan Bahadur Ramgopal Mills Ltd., could be reconsidered. In fact, in the case of Straw Products a larger Bench of this Court did consider that decision and came to the conclusion that on the facts of that case the decision was correct. In view of this, we fail to see how any useful purpose would be served by referring this appeal to a larger Bench. Moreover, problems of the type which have arisen in these cases are not likely to recur hereafter except very rarely. In view of this, we would prefer to follow the decision in The Commissioner of Income tax Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd. and the appeal of the assessee must stand dismissed. Even apart from what we have stated in the foregoing paragraph, we may point out that in the present case, the Saurashtra Income tax Ordinance was repealed by Section 13 of the Finance Act, 1950 and not by any provision of the Indian Income tax Act. As observed in the case of The Com missioner of Income Tax, Hyderabad vs Dewan Bahadur Ramgopal Mills Ltd. (at page 326) the basic and normal scheme of depreciation under the Indian Income tax Act is that it decreases every year, being a percentage of the written down value which in the first year is the actual cost and in succeeding years actual cost less all depreciation actually allowed under the Indian Income tax Act or any Act repealed thereby, etc. In that case, an anomalous situation arose because the Hyderabad Income tax Act was not repealed by the Indian Income tax Act but by the Finance Act, 1950 and hence, a difficulty arose in allowing depreciation to an assessee in Part B State. In the present case also, the Saurashtra Income tax Ordinance having been repealed not by the Indian Income tax Act but by Section 13 of the Finance Act, 1950, a similar difficulty had come into existence, and hence we fail to see how it can be said that the Government had no good basis to come to the conclusion that a difficul ty had. in fact, arisen as contemplated in the case of Dewan Bahadur Ramgopal Mills Ltd. In the result, the appeal fails and is dismissed. Howev er, considering the facts and circumstances of the case, there will be no order as to costs. Y.L. Appeal dis missed.

The contesting respondents have been in occupation of the demised property under a registered lease for 20 years, which was to expire on 31.7.1971. They served a notice on the appellants on 16.7.1971 claiming the right to continue in possession after 31.7.1971 as tenants from month to month. The appellants did not accept the respondents ' claim and filed before the Munsif a case purporting to be an application under section 12 of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947. The respondents con tested the application on the ground that as heirs of the original lessee, they had formed a partnership as a result of which a new month to month tenancy had been created. They further contended that the appellants ' application before the Munsif under section 12 was not maintainable. The Munsif accepted the appellants ' case that the legal representatives of the original lessee continued as tenants under the lease after the attornment and were liable to eviction after the expiry of the lease period. The Judicial Commissioner dis missed the respondents ' appeal holding that the deed of lease was subsisting, the parties were having the relation ship of lessors and lessees, and no month to month tenancy had been created. The Judicial Commissioner further held that the appellants would have to make another application under section 12(3) of the Act for evicting the respondents if they did not vacate within the time allowed by court. The High Court, in its revisional jurisdiction, set aside the decisions of the courts below and held that in the absence of a month 's notice under section 12(1) from the tenants, the application of the appellants under section 12 was not maintain able before the Munsif and the entire proceedings was mis conceived. The High Court pointed out that in the circum stances the appropriate remedy of the appellants was to file a suit under section 11 of the Act. 971 Before this Court it was contended on behalf of the appellants that an application under section 12 of the Act before the Civil Court was maintainable, and that both the reme dies. i.e., by an application under section 12 of the Act as also by way of a suit were open to a landlord after the expiry of the period of a fixed term tenancy, and it was for him to choose which course to follow. On behalf of the respondents it was contended that on the expiry of such a tenancy the only remedy was to file a suit, and in any event section 12 was wholly inapplicable as, according to their case in the notice, a fresh tenancy had come into existence, and as such their notice was not one under section 12 of the Act at all. Allowing the appeal, this Court HELD: (1) The Act refers to several authorities for decision of different issues. As regards the question of dealing. with the eviction of tenants under section 11 and exten sion of period of lease under section 12, the civil court is the proper forum. It is the same court before which both a suit under section 11 and an application under section 12 are to be filed. [976C, D] (2) The instant case was tried by the learned Munsif in the same manner as the trial of an eviction suit. The re spondents filed a regular appeal before the District Judge, designated as Judicial Commissioner, and he also went through the entire controversy thoroughly. The judgment of the High Court indicates that the scope in which the argu ments by the parties were addressed was the same as in a second appeal, and the decision also was accordingly given. In these circumstances, it is wholly immaterial as to wheth er the application originally filed by the appellants before the Munsif was not in the form of a plaint, specially when the necessary verification was also there at the foot of the petition. The only difference may be as to the amount of court fee payable by the parties, but that should not come in the way of construing the correct nature of the proceed ings. [976G H; 977C D] Madho Bibi vs Hazari Mal Marwari, AIR 1929 Patna 141 and Hazari Lal vs Ramjiwan Ramchandra, AIR 1929 Patna 472, referred tO. (3) The court must examine the substance of the applica tion to find out its true nature and should not be guided solely by the heading given to it by a party. [977G H] 972 Lachhoo vs Munnilal Babu Lal, AIR 1935 All. 183, referred to. (4) The principle is well established that the exercise of a power will be referable to a jurisdiction which confers validity upon it and not to a jurisdiction under which it will be nugatory, and there is no reason to exclude the application of this rule to judical proceedings. [977H; 978A] R.P. Singh vs The Chief Commissioner (Admn.) Manipur, ; referred to. (5) If it is assumed that an application under section 12 of the Act is not maintainable in the facts and circumstances of the present case, the proceeding has to be treated as a suit and the judgment of the learned Munsifas a decree therein. [978C] (6) The occasion for filing an application under section 12(3) can arise only where the matter is covered by section 12, and as an assumption has to be made in favour of the re spondents that section 12 has no application, there is no point in asking the appellants to file such an application. [978E] (7) This Court can and should restore the decree of the trial court even in the absence of an appeal by the appel lants before the High Court against the order of the Judi cial Commissoner declining to pass a formal decree of evic tion and directing the appellants to make an application under section 12(3) of the Act for that purpose. As mentioned in Article 142 of the Constitution, this Court may pass such decree or make such order as is necessary for doing complete justice in any case or matter pending before it, and the instant case is a most appropriate one for exercise of such power. [978D F]

iminal Appeal No '400 of 1993. From the Judgment land order dated 3.6. 1992 of the Punjab and Haryana High Court in Criminal Revision No. 443 of 1990. P. Chadambaram, Mukul Rohtagi, Ms. Bina Gupta and Ms. Monika Mohil for the Appellants. N.N. Goswamy, Y.D. Mahajan and N.D. Garg for the Respondent. The Judgments of the Court were delivered by K. RAMASWAMYJ: Special leave granted. The appellant, accused No. 2 in p. (CBI) No. 40/2, dated February 18, 1985, F.I.R. No. RC No. 2 to 4/1983 dated March 4,1983 and P.S. SPE/CBI/CTU (E) I/New Delhi, Dist. Delhi and four other namely, V.P. Anand, Baldev Raj Sharma, Bansi La] and Ranjit KumarMarwah are accused in the said case. It is the prosecution case that the accused hatched a conspiracy at Chandigarh to cheat Punjab National Bank for short 'PNB '. In furtherance thereof V.P. Anand floated three New Link Enterprises and M/s. Moonlight Industries in the name of Baldev Raj Sharms, his employee and M/s. Guru Nanak Industries in the name of Bansi Lal, yet another employee. He opened current accounts in their respective names in the P.N.B. at Chandigarh. In furtherance of the conspiracy and in confabulation with V.P. Anand, the appellant, Ajay Aggarwal, a non resident Indian at Dubai who is running M/s. Sales International, Dubai, agreed to and got credit facility by way of Foreign Letters of Credit Nos. 4069 p, 4070 p and 4084 p, issued proforma invoices of the said concern and addresses to PNB through Guru Nanak Industries and New Link Enterprises. Ranjit Marwah, the 5th accused, Manager of P.N.B., In charge, of foreign exchange department confabulated with the accused, issued Foreign Letter of Credit in violation of import policy. The Bills of Lading were addressed to PNB at Chandigarh. The cable confirmation of P.N.B. was sent to M/ s Sales International by P.N.B., Chandigarh for confirmation of discrepancy. The appellant had confirmed correctness thereof in the name of V.P. Anand. Placing reliance thereon authority letter was issued by P.N.B., Chandigarh and cables were sent subsequent thereto to remit the amounts to Emirates National Bank Ltd. through Irving Trust Company. V.P. Anand was present on September 16, 1981 at Dubai and at his instance the Emirats National Bank, Dubai informed the 551 P.N.B., Chandigarh that the discrepancy in the document adeptable to V.P. Anand and claimed to have inspected the goods on board in vessel, M.V. Atefeh. On receipt of the information from the Sales International, Dubai, full amount in US Dollars 4, 39,200 was credited against all the three Letters of Credit on discount basis. During investigation it was found that Vessel M.V. Atefeh was a nonexistent one and three Foreicn Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant, Ajay Aggarwal to the Emirates National Bank, Dubai. Thus the P.N. B. was cheated of an amount of Rs. 40,30,329. Accordingly charge sheet was laid against the appellant. and others for offences punishable under sections 120B read with Sections 420 (Cheating), 468 (Forgery) and 471 using as genuine (Forged documents), I.P.C. The Chief Judicial Magistrate, Chandigarh by his order dated January 11, 1990 discharged all, the accused of the offences on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and, therefore the sanction under section 188 Criminal Procedure Code, 1973 for short the 'Code ' is mandatory. Since no such sanction was produced the prosecution is not maintainable. On revision, the High Court of Punjab and Haryana in Criminal Revision No. 443 of 1990 by order dated June 3, 1992 held, that the conspiracy had taken place at Chandigarh. The overt acts committed in pursuance of that conspiracy at Dubai constituted offences under sections 420, 467 and 471, I.P.C., are all triable at Chandigarh without previous sanction of the central Govt. The order of discharge, therefore, was set aside and the appellant and other accused were directed to be present through their counsel in person in the Trial Court on July 17,1992 to enable the court to take further proceedings in accordance with law. This appeal has been filed by the appellant alone under article 136 of the constitution. Sri Chidambaram, learned Senior counsel contended that the appellant was not a privy to the conspiracy. He was an N.I.R. businessman at Dubai. He never visited Chandigarh. Even assuming for the sake of argument that conspiracy had taken place and all act committed in furtherance thereof were also at Dubai. The transaction through, bank is only bank to bank transaction. Even assuming that some of the offences were committed in India since as per the prosecution case itself that part of the conspiracy and related offences were committed at Dubai, by operation of Section 188 read with the proviso thereto with a non obstanti clause, absence of sanction by the Central Govt. knocks of the bottom of the jurisdiction of the courts in India to take cognisance of or to enquire into of try the accused. He placed strong reliance on 1. Fakhrulla khan and Ors. vs Emperor AIR 1935 Mad. 326, In re M.L. Verghese AIR 1947 MAD. 352, kailash Sharma vs State [1973] Crl. Law Journal 1021 and K. Satwant Singh vs State of Punjab ; Sri Goswami, the learned senior counsel for the respondents contended that the conspiracy to cheat. PNB was hatched at Chandigarh. All the accused committed 552 overt acts in furtherance. All the accused committed overt acts in furtherance on the conspiracy at Chandigarh and, therefore, the sanction of the Central Govt. is not necessary. The High Court had rightly recorded those findings. There is no need to obtain sanction under section 188 of the Code. The diverse contentions give rise to the primary question whether the sanction of the Central Govt. as required under proviso to section 188 of the Code is necessary. Section 188 of the Code reads thus "Offence committed outside India when an offence is committed outside India (a) by a citizen of India, whether on the high seas or elsewhere; or (b) by a person, not being such citizen, on any ship or aircraft registered in India, he may be dealt with in respect of such offence asif it had been committed at any place within India at which he may be found: Provided that, notwithstanding anything in any of the preceding sections of this Chapter, no such offence shall be inquired into or tried in India except. with the previous sanction of the Central Government". Section 3, IPC prescribes punishment of offences committed beyond, but which by law may be tried with, India, It provided that any person liable, by any Indian law, to be tried for an offence committed beyond India shall be dealt with according to the provisions of this Code for any act committed beyond India in the same manner as if such act had been committed within India. Section 4 extends its territorial operation postulating that IPC shall apply to any offence committed by (1) any citizen of India in any place without any beyond India; (2) any person on any ship or aircraft registered in India wherever it may be. Explanation in this section the word offence ' includes every act committed outside India which, if committed in India, would be punishable under this Code. 553 Illustration A, who is a citizen of India, commits a Murder in Uganda. He can be tried and convicted of murder in any place in India in which he may be found. The Code of Criminal Procedure extends to whole of India except the State of Jammu & Kashmir and except chapters 8, 10 and 11, the other provisions of the Code shall not apply to the State of Nagaland and to the tribal area. However, the State Govt. has been empowered, by a notification, to apply all other provisions of the Code or any of them to the whole or part of the State of Nagaland and such other tribal areas, with supplemental, incidental or consequential modifications, as may be specified in the notification. Therefore, the Code also has territorial operation. The Code is to consolidate and amend the law relating to criminal procedure. Section 188 was suitably amended pursuant to the recommendation made by the Law Commission. Chapter VIII deals with jurisdiction of the courts in inquiries and trials. Section 177 postulates that every offence shall ordinarily be inquired into and tried by a Court within whose local jurisdiction it was committed but exceptions have been engrafted in subsequent sections in the Chapter. Section 179 provides venue for trial or enquiry at the place where the act is done or consequences ensued. So inquiry or trial may be had by a Court within whose local jurisdiction such thing has been done or such consequence has ensued. Section 188 by fiction dealt offences conumitted by a citizen of India or a foreigner outside India or on high seas or elsewhere or on any ship or aircraft registered in India. Such person was directed to be dealt with, in respect of such offences, as if be had committed at any place within India at which he may be found. But the proviso thereto puts and embargo that notwithstanding anything in any of the preceding sections of this Chapter have been done such offences shall not be inquired into or tried in India except with the previous sanction of the Central Govt. Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory. It also has the power to punish all such offences wherever committed by its citizen. The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to, and is punishable by, its law. Otherwise the criminal law could not be administered according to any civilised system of jurisprudence. Sections 177 to 186 deal with the venue or the place of the enquiry or trial of crimes. Section 177 reiterates the well established common law rule that the proper and ordinary situs for the trial of a crime is the area of jurisdiction in which the acts occurred and are alleged to constitute the crime. But this rule is subject to several well recognised exceptions and some of those exceptions have been engrafted in subsequent sections in the chapter of the Code. 554 Therefore, the provisions in Chapter VIII are elastic and not peremptory. In consequence there with Sections 218 to 223 of the code would also deal with exceptions engrafted in the Code. Therefore, they do permit enquiry or trial of a particular offence along with other offences at a common trial in one court so that the court having jurisdiction to try an offence gets jurisdiction to try other offence committed or consequences thereof has ensued. The procedure is hand maid to substantive justice, namely, to bring the offenders to justice to meet out punishment under IPC or special law as the case may be, in accordance with the procedure prescribed under the Code or special procedure under that Act constituting the offence. The question is whether prior sanction of the Central Govt. Is necessary for the offence of 'conspiracy under proviso to section 188 of the Code to take cognizance of an offence punishable under section 120 B etc. I.P.C. or to proceed with trial. In Chapter VA, conspiracy was brought on statute by the Amendment Act, 1913 (8 of 1913). Section 120 A of the I.P.C. defines 'conspiracy ' to mean that when two or more persons agree to do, or cause to be done an ilegal act, or an act which is not illegal by illegal means such an agreement is designated as "criminal conspiracy". No agreement except an agreement to commit an offence shall amount to a criminal conspiracy, unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof. Section 120 B of the I.P.C. prescribes punishment for criminal conspiracy. It is not necessary that each conspirator must know all the details or the scheme nor be a participant at every stage. It is necessary that they should agree for design or object of the conspiracy. Conspiracy is conceived as having three elements: (1) agreement (2) between two or more persons by whom the agreement is effected , and (3) a criminal object, which may be either the ultimate aim of the agreement, or may constitute the means, or one of the means by which that aim is to be accomplished. It is immaterial whether this is found in the ultimate objects. The common law definition of criminal conspiracy was stated first by Lord Denman in jones case that an indictment for conspiracy must "charge a conspiracy to do an unlawful act by unlawful means" and was elaborated by Willies, J. on behalf of the judges while referring the question to the House of Lords in Mulcahy vs Reg and the House of Lords in unanimous decision reiterated in Quinn vs Leathem ; at 528) as under: A conspiracy consists not merely in the intention of two or more, but in the agreement. of two or more to do ,in unlawful act, or to do a lawful act by unlawful means. So long as such a design rests in intention only it is not indictable, When two agree to carry it into 555 effect, the very plot is an act in itself, and the act of each of the parties, promise against promise, actus contra actum, capable of being enforced, if lawful, punishable of for a criminal object or for the use of criminal means". This Court in B. G. Barsay vs The State of Bombay [1962] 2 SCR at 229, held "The (list of the offence is an agreement to break the law. The parties to such an agreement will be guilty of criminal conspiracy, though the illegal act agreed to be done has not been done. So too, it is 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 fit is an offence or if it is prohibited by law". In Yashpal vs State of Punjab the rule was laid as follows "The very agreement, concert or league is the ingredient of the offence. It is not necessary that all the conspirators must know each and every detail of the conspiracy as long as they are co participators in the main object of the conspiracy. There may be so many devices and techniques adopted to achieve the common goal of the conspiracy and there may be division of performances in the chain of actions with one object to achieve the real end of which every collaborator must be aware and in which each one of them must be interested. There must be unity of object or purpose but there may be plurality of means sometimes even unknown to one another, amongst the conspirators. In achieving the goal several offences may be committed by some of the conspirators even unknown to the others. The only relevant factor is that all means adopted and illegal acts done must be and purported to be in furtherance of the object of the conspiracy even though there may be sometimes misfire or over shooting by some of the conspirators". In Mohammed Usman. Mohammad Hussain Manivar & Anr. vs State of Maharashtra ; , it was held that for an offence under section 120B IPC, the prosecution need not necessarily prove that the conspirators expressly 556 agreed to do or cause to be done the illegal act. the agreement may be proved by necessary implication. In Noor Mohammed Yusuf Momin vs State of Maharashtra ; , it was held that section 120 B IPC makes the criminal conspiracy as a substantive offence which offence postulates an agreement between two or more persons to do or cause to be done an act by illegal means. If the offence itself is to commit an offence, no further steps are needed to be proved to carry the agreement into effect. In R. K. Dalmia & Anr. vs The Delhi Administration It 963] 1 SCR 253, it was further held that it is not necessary that each member of a conspiracy must know all the details of the conspiracy. In Shivanarayan Laxminarayan & Ors. State of Mahrashtra & Ors. , this court emphasized that a conspiracy is always hatched in secrecy and it is impossible to adduce direct evidence of the same. The offence can be only proved largely from the inferences drawn from acts or illegal omission committed by the conspirators in pursuance of a common design. The question then is whether conspiracy is continuing offence. Conspiracy to commit crime it self is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment, independent of the conspiracy. Yet, in our considered view, the agreement does not come to an end with its making, but would endure till it is accomplished or abandoned or proved abortive. Being a continuing offence, if any acts or omissions which constitutes an offence, are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India, they would obviate the need to obtain sanction of the Central Govt. all of them need not be present in India nor continue to remain in India. In lennart Schussler & Anr. vs Director of Enforcement & Anr. ; , a Constitution Bench of this Court was to consider the question of conspiracy in the setting of the facts, stated thus "A. 2 was the Managing Director of the Rayala Corporation Ltd. Which manufactures Halda Typewriters. A. 1 was an Export Manager of ASSAB. A. 1 and A.2 conspired that A.2 would purchase material on behalf of his Company from ASSAB instead of M/s Atvidaberos, which provided raw material. A.2 was to over invoice the value of the goods by 40 per cent of true value and that he should be paid the difference of 40 per cent on account of the aforesaid over invoicing by crediting it to A.2 's personal account at Stockholm in a Swedish Bank and requested A. 1 to help him in opening the account in Swenska Handles Banken, Sweden and to have further 557 deposits to his personal account from ASSAB. A. 1 agreed to act as requested by A.2 and A.2 made arrangements with ASSAB to intimate to A. 1 the various amounts credited to A.2 's account and asked A. 1 to keep a watch over the correctness of the account and ' to further intimate to him the account position from time to time through unofficial channels and whenever A. 1 come to India. A. 1 agreed to comply with this request. This agreement was entered into between the parties in the year 1963 at Stockholm and again in Madras in the year 1965. The question was whether Sec. 120 B of the Indian Penal Code was attracted to these facts". Per majority, Jaganmohan Reddy, J. held that the gist of the offence defined in section 120 A IPC, which is itself punishable as a substantive offence is the very agreement between two or more persons to do or cause to be done an illegal act or legal act by illegal means, subject, however, to the proviso that where the agreement is not an agreement to commit an offence, the agreement does not amount to a conspiracy unless it is followed up by an overt act done by one or more persons in pursuance of such an agreement. There must be a meeting of minds in the doing of the illegal act or the doing of a legal act by illegal means. in furtherance of the conspiracy, certain persons are induced to do an unlawful act without the knowledge of the conspiracy or the plot they cannot be held to be conspirators, though they may be guilty of an offence pertaining to the specific unlawful act. The offence of conspiracy is complete when two or more conspirators have agreed to do or cause to be done an act which is itself an offence, in which case no overt act need be established. It was contended in that regard that several acts which constitute to make an offence under section 120 B may be split up in parts and the criminal liability of A. 1 must only be judged with regard to the part played by him. He merely agreed to help A.2 to open an account in the Swedish Bank, having the amounts lying to the credit of A.2 with Atvidaberg to that account and to help A.2 by keeping a watch over the account. Therefore, it does not amount to a criminal conspiracy. While negating the argument, this court held thus: "It appears to us that this is not a justifiable contention, because what has to be seen is whether the agreement between A. 1 and A.2 is a conspiracy to do or continue to do something which is illegal and, if it is, it is immaterial whether the agreement to do any of the acts in furtherance of the commission of the offence do not strictly amount to an offence. the entire agreement must be viewed as a whole and it has to be ascertained as to what in fact the conspirators intended to do or the object they wanted to achieve". 558 Thus, this court, though not in the context of jurisdictional issue, held that the agreement not illegal at its inception would become illegal by subsequent conduct and an agreement to do an illegal act or to do a legal act by illegal means, must be viewed as a whole and not in isolation. It was also implied that the agreement shall continuing till the object is achieved. The agreement does not get terminated by merely entering into an agreement but it continues to subsist till the object is either achieved or terminated or abandoned. In Abdul Kader vs State AIR 1964 Bombay 133, a conspiracy was formed in South Africa by appellants to cheat persons by dishonestly inducing them to deliver money in the Indian currency by using forced documents and the acts of cheating were committed in India. When the accused were charged with the offence of conspiracy, it was contended that the conspiracy was entered into and was completed in South Africa and, therefore, the Indian Courts had no jurisdiction to try the accused for the offence of conspiracy. The Division Bench held that though the conspiracy was entered in a foreign country and was completed as soon as the agreement was made, yet it was treated to be a continuous offence and the persons continued to be parties to the conspiracy when they committed acts in India. Accordingly, it was held that the Indian Courts had jurisdiction to try the offence of conspiracy. In U.S. vs Kissal ; , Holmes, J. held that conspiracy is a continuous offence and stated "is a perversion of natural thought and of natural language to call such continuous co operation of a cinema to graphic series of distinct conspiracies rather than to call it a single one. a conspiracy is a partnership in criminal purposes. That as such it may have continuation in time. is shown by the rule that overt act by one partner may be the act of all without any new agreement specifically directed to that act". In Ford vs U. section ; at 620 to 622, Tuft, C.J. held that conspiracy is a continuing offence. In Director of public Prosecutions vs Door and Ors. 1973 Appeal Cases 807 (H.L.), the five respondents hatched a plan abroad, i.e. Belgium and Morocco and worked out the details to import cannabis into the United States via England, In pursuance thereof two vans with cannabis concealed in them were shipped from Morocco to Southampton; the other van was traced at Liverspool, from where the vans were to have been shipped to America and the cannabis in it was found. They were charged among other offences with conspiracy to import dangerous drugs. At the trial, the respondents contended that the Courts in England had no jurisdiction to try them on the count of conspiracy since the conspiracy had been entered into abroad. While rejecting the contention, Lord Wilberforce held (at page 817) "The present case involves international elements the accused are 559 aliens and the conspiracy was initiated abroad but there can be no question here of any breach of any rules of international law if the) are prosecuted in this country. Under the objective territorial principle ( use the terminology of the Harward Research in Inter national Law) or the principle of University (For the prevention of the trade in narcotics falls within this description)or both, the courts of this country have a clear right, if not a duty, to prosecute in accordance with our municipal law. The position as it is under the international law it not, however, determinative of the question whether, unde r our municipal law, the acts committed amount to a crime. That has to be decided on different principles. If conspiracy to import drugs were a statutory offence, the question whether foreign conspiracies were included would be decided upon the terms of the statute. Since it is (if at all) a common law offence, this question must be decided upon principle and authority In my opinion, the key to a decision for or against the offence charged can be found in an answer to the question why the common law treats certain actions as crimes. And one answer must certainly be because the actions in question are a threat to the Queen 's peace or as we would now perhaps say, to society. Judged by this test, there is every reason for, and none that I can see against, the prosecution. Con spiracies are intended to be carried into effect, and one reason why, in addition to individual prosecution of each participant, conspiracy charges are brought is because criminal action organised and executed, in concert is more dangerous than an individual breach of law. Why, then, restrain from prosecution where the relevant concert was, initially, formed outside the United Kingoom?. The truth is that, in the normal case of a conspiracy carried out, or partly carried out, in this country, the location of the formation of the agreement is irrelevant; the attack upon the laws of this country is identical wherever the conspirators happened to commit; the "conspiracy" is a complex formed indeed, but not separately completed, at the first meeting of the plotters". Viscount Dilhorne at page 823 laid the rule that: "a conspiracy does not end with the making of the agreement. It will continue so long as there are two or more parties to it intending to carry out the design. It would be highly unreal to say that the conspiracy to carry out the Gunpower plot was completed when the conspirators met and agreed to the plot at Catesby". 561 in my view, be considered contrary to the rules of international comity for the forces of law and order in England to protect the Queen 's peace by arresting them and putting them in trial for conspiracy whether they are British subjects or foreigners and whether or not conspiracy is a crime under the law of the country in which the conspiracy was born". At page 835 it was held that the respondents conspired together in England notwithstanding the fact that they were abroad when they entered into the agreement which was the essence of the conspiracy. That agreement was and remained a continuing agreement and they continued to conspire until the offence they were conspiring to commit was in fact committed. Accordingly, it was held that the conspiracy, though entered into abroad, was committed in England and the courts in England and jurisdiction. The ratio emphasizes that acts done in furtherance of continuing conspiracy constitute part of the cause of action and performance of it gives jurisdiction for English Courts to try the accused. In Trecy vs Director of Public Prosecutions 1971 Appeal Cases 537 at 563 to ,(H. L.). the facts of the case were that the appellant therein posted in the Isle of Wright a letter written by him and addressed to Mrs. X in West Germany demanding money with menaces. The letter was received by Mrs. X in West Germany. The appellant was charged with black mail indictable section 21 of the Theft Act, 1968. While denying the offence, it was contended that the courts in England were devoted of jurisdiction. Over ruling the said objection, Lord Diplock at page 562 observed: "The State is under a correlative duty to those who owe obedience to its laws to protect their interests and one of the purposes of criminal law is to afford such protection by determining by threat of punishment conducted by other persons which is calculated to hand to those interests. Comity gives no right to a State to insist that any person may with immunity do physical acts in its own territory which have harmful consequences to persons within the territory of another state. It may be under no obligation in comity to punish those acts itself, but it has no ground from complaint in international law if the State in which the harmful consequences had their effect punishes, when they do enter its territories, persons who did such acts". Prof. Williams, Glanville in his article "Venue and the Ambit of Criminal Law at 528 stated thus: 562 "Sometimes the problem of determining the place of the crime is assisted by the doctrine of the continuing crime. Some crimes are regarded as being of a continuing nature, and they may accordingly be prosecuted in any jurisdiction in which they are partly committed the partial commission being, in the eye of the law, a total commission '. In the context of conspiracy under the caption inchoate crimes" It was stated: "The general principle seems to be that jurisdiction over an inchoate crime appertains to the State that would have had jurisdiction had the crime been consummated". Commenting upon the ratio laid down in Board of Trade vs Owen [1957] Appeal Cases 602, he stated at page 534 thus "The seems to follow owen as logical corollary that our courts will assume jurisdiction to punish a conspiracy entered into abroad to commit a crime here. Although the general principle is that crime committed abroad do not become punishable here merely because their evil effects occur here, there may be an exception for inchoate crimes aimed against persons in this country. Since conspiracy is the widest and vaguest of the inchoate crimes, it seems clearly that the rule for conspiracy must apply to more limited crimes of incitement and attempt also". At page 535 he further stated that "the rule of inchoate crimes is therefore an exception from the general principle of territorial jurisdiction. The crime is wholly committed in the State A, yet is justiciable also in State B". At page 535 he elucidated that "certain exceptions are recognised or suggested". Lord Tucker in own 's case (supra) illustrated that a conspiracy D 2 England to violate the laws of a foreign country might be justiciable here if the preferments the conspiracy charged would produce a public mischief within the State or injure a person here by causing him damage, abroad". At page 536 be stated that "as another exception from the rule in Board of, Trade vs Owen (supra it seems from the earlier decision that a conspiracy entered into here will be punishable if the conspirators contem plates that the illegality may be performed either within British jurisdiction or abroad even though, in the event, the illegality is performed abroad". His statement of law now receives acceptance by House of Lords in Doot 's case. 563 In Halsbury 's Law of England, third edition, vol. 10, page 327, para 602, while dealing with continuing offence it was stated as under: "A criminal enterprise may consist of continuing act which is done in more places than one or of a series of acts which are done in several places. In such cases, though there is one criminal enterprise, there may be several crimes, and a crime is committed in each place where a complete criminal act is performed although the act may be only a part of the enterprise". It was further elucidated in para 603 that: "What constitutes a complete criminal act is determined by the nature of the crime. Thus, as regards continuing acts, in the case of sending by post or otherwise a libellous or threatening letter, or a letter to provoke a breach of the peace, a crime is committed, both where the letter is posted or otherwise sent, and also where it is received, and the venue may be laid in either place. Archbold in Criminal Pleadings, Evidence and Practice, 42nd edition (1985) Chapter 23, in para 28 32 at p. 2281, Wright on Conspiracies and Agreements at pages 73 74, Smith on Crimes at page 239 and Russel on Crime, 12th edition, page 613 stated that conspiracy is a continuing offence and liable to prosecution at the place of making the agreement and also in the country where the acts are committed. Thus, an agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy. If the agreement is not an agreement to commit an offence, it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement. The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to do that illegal act or legal act by illegal means. Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into. It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy. Each act constitutes separate offence punishable, independent of the conspiracy. The law had developed several or different models or technics to broach the scope of conspiracy. One such model is that of a chain, where each party performs even without knowledge of other a role that aids succeeding parties in accomplishing the criminal objectives of the conspiracy. An illustration, of a single conspiracy, its parts bound together as links in a chain, is 564 the process of procuring and distributing narcotics or an illegal foreign drug for sale in different parts of the (,lobe. In such a case, smugglers, middlemen and retailers are privies to a single conspiracy to smuggle and distribute narcotics. The smugglers knew that the middlemen must sell to retailers , and the retailers knew that the middlemen must buy of importers of someone or another. Thus the conspirators at one end of the chain knew that the unlawful business would not, and could not, stop with their buyers, and those at the other end knew that it had not begun with their settlers. The accused embarked upon a venture in all parts of which each was a participant and an abettor in the sense that, the success of the part with which he was immediately concerned, was dependent upon the success of the whole. It should also be considered as a spoke in the hub. There is a rim to bind all the spokes to gather in a single conspiracy. It is not material that a rim is found only when there is proof that each spoke was aware of one another 's existence but that all promoted in furtherance of some single illegal objective. The traditional concept of single agreement can also accommodate the situation where a well defined group conspires to commit multiple crimes so long as all these crimes are the objects of the same agreement or continuous conspiratorial relationship, and the conspiracy continues to subsist though it was entered in the first instance. Take for instance that three persons hatched a conspiracy in country 'A ' to kill 'D ' in country 'B ' with explosive substance. As far as conspiracy is concerned, it is complete in country 'A ' one of them pursuant thereto carried the explosive substance and hands it over to third one in the country 'B ' who implants at a place where 'D ' frequents and got exploded with remote control. 'D ' may be killed or escape or may be diffused. The conspiracy continues till it is executed in country 'B ' or frustrated. Therefore, it is a continuing act and all are liable for conspiracy in country 'B ' though first two are liable to murder with aid of section 120 B and the last one is liable under section 302 or 307 IPC, as the case may be. Conspiracy may be considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner. In the comity of International Law, in these days, committing offences on international scale is a common feature. The offence of conspiracy would be a useful weapon and there would exist no conflict in municipal laws and the doctrine of autrefoes convict or acquit would extend to such offences. The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud. A conspiracy thus, is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of acts. So long aits performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity. A crime is complete as soon as the agreement is made, but it is not a thing of the moment. It does not end with the making of the 565 agreement. It will continue so long as there are two or more parties to it intending to carry into effect the design. Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so. The conspiracy designed or agreed abroad will have the same effect as in India, when part of the acts, pursuant to the agreement are agreed to be finalised or done, attempted or even frustrated and vice versa. In K. Satwant Singh vs The State of Punjab ; , a Constitution Bench of this Court was to consider as to when section 188 of the Code would be applicable to a case. The facts therein was that the appellant had cheated the Govt. of Burma whose office was at Shimla punishable under section 420 IPC. The accused contended that the part of the act was done at Kohlapur where payment was to be made and on that basis the court at Shimla had no jurisdiction to try the offence without prior sanction of the political agent. Considering that question this court held that if the offence of cheating was committed outside British India, the sanction would be necessary but on facts it was held that: "It seems to us, on the facts established in this case, that no part of the offence of cheating was committed by the appellant outside British India. His false representation to the Govt. of Burma that money was due to him was at a place in British India which induced that govt. to order payment of his claims. In fact, he was paid at Lahore at his own request by means of cheques on the Branch of the Imperial Bank of India at Lahore. The delivery of the property of the Govt. of Burma, namely, the money, was made at Lahore, a place in Brithsh India, an d we cannot regard, in the circumstances of the present case, the posting of the cheques at Kohlapur either as delivery of property to the appellant at Kohlapur or payment of his claims at Kohlapur. The entire argument founded on the provisions of section 188 of the Code, therefore, fails. Far from helping the appellant the ratio establishes that if an offence was committed in India the need to obtain sanction under section 188 is obviated. In Purshottamdas Dalmia vs Stale of West Bengal ; , this court, when the appellant was charged with offences punishable under sections 120B, 466 and 477, the appellant contended that offence of conspiracy was entered into at Calcutta the offences of using the forged documents was committed at Madras. Therefore, the court at Calcutta had no jurisdiction to try the offence under section 471 read with section 466, EPC, even though committed in pursuance of the conspiracy and in course of the same transaction. This court held that the desirability of trying the offences of alit 566 he overt acts committed in pursuance of a conspiracy together is obvious and sections 177 and 239 of the Code leave no manner of doubt that the court which has the jurisdiction to try the offence of criminal conspiracy has also the jurisdiction to try all the overt acts committed in pursuance of it even though outside its territorial jurisdiction. In LN. Mukherjee vs The State of Madras ; , it was further held that the court having jurisdiction to try the offences committed in pursuance of the conspiracy, has also the jurisdiction to try the offence of criminal conspiracy, even though it was committed outside its territorial jurisdiction. This view was further reiterated in R.K. Dalmia vs Delhi Administration ; at 273 and Banwari Lal Jhunjhunwala and Ors. vs Union of India and Anr. 1963] supp. 2 SCR 338. Therein it was held that the court trying an accused for offence of conspiracy is competent to try him for offences committed in pursuance of that conspiracy irrespective of the fact whether or not overt acts have been committed within its territorial jurisdiction. The charges framed therein under section 409 read with sections 120B, 420, IPC and section 5(1) (D) read with section 5(2) of the Prevention of Corruption Act were upheld. Thus we hold that sanction under section 188 is not a condition precedent to take cognizance of the offence. If need be it could be obtained before trial begins. Conspiracy was initially hatched at Chandigarh and though itself is a completed offence, being continuing offence, even accepting appellant 's case that he was at Dubai and part of conspiracy and overt acts in furtherance thereof had taken place at Dubai and partly at Chandigarh; and in consequence thereof other offences had been ensued. Since the. offences have been committed during the continuing course of transaction culminated in cheating P.N.B. at Chandigarh, the need to obtain sanction for various offences under proviso to section 188 is obviated. Therefore, there is no need to obtain sanction from Central Govt. The case may be different if the offences were committed out side India and are completed in themselves without conspiracy. Perhaps that question may be different for which we express no opinion on the facts of this case. The ratio in Fakhruila Khan has no application to the facts in this case. Therein the accused were charged for offences under section 420, 419, 467 and 468 and the offences were committed in native State, Mysore. As a result the courts in British India i.e. Madras province had no jurisdiction to try the offence without prior sanction. Equally in Verghese 's case the offences charged under section 409, IPC had also, been taken place outside British India. Therefore, it was held that the sanction under s, 188 was necessary. The ratio in Kailash Sharma 's case is not good at law. The appeal is accordingly dismissed. R.M. SAHAI J. While agreeing with Brother Ramaswamy, J., I propose to add a few words. Prosecution of the appellant under Section 120B read with Section 420 and 471 of the Indian Penal Code (in brief 'IPC ') was assailed for 567 absence of sanction under Section 188 of the Criminal Procedure Code (in brief 'Cr. P. C. '). Two submissions were advanced, one that even though criminal conspiracy was itself an offence but if another offence was committed in pursuance of it outside India then sanction was necessary; second an offence is constituted of a number of ingredients and even if one of them was committed outside the country Section 188 of the Cr. P.C. was attracted. Language of the section is plain and simple. It operates where an offence is committed by a citizen of India outside the country. Requirements are, therefore, one commission of an offence; second by an Indian citizen; and third that it should have been committed outside the country. Out of the three there is no dispute that the appellant is an Indian citizen. But so far the other two are concerned the allegations in the complaint are that the conspiracy to forge and cheat the bank was hatched by the appellant and others in India. Whether it was so or not, cannot be gone into at this stage. What is the claim then? Two fold one the appellant was in Dubai at the relevant time when the offence is alleged to have been committed. Second, since the bills of lading and exchange were prepared and were submitted to the Emirates National Bank at Dubai and the Payment too was received at Emirates National Bank in Dubai, the alleged offence of forgery and cheating were committed outside India. Is that so? Can the offence of conspiracy or cheating or forgery on these allegations be said to have been committed outside the country? Substantive law of extra territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained the Section 188 Cr. P.C. Effect of these sections is that an offence committed by an Indian citizen, outside the country is deemed to have been committed in India. Proviso to Section 188 Cr. P.C. however provides the safeguard for the NRI to guard against any unwarranted harassment by directing, "that, notwithstanding anything in any of the preceding sections of this Chapter, no such offence shall be inquired into or tried in India except with the previous sanction of the Central Government. " Since the proviso begins with a non obstinate clause its observance is mandatory. But is would come into play only if the principal clause is applicable, namely, it is established that an offence as defined in clause 'n ' of Section 2 of the Cr. P.C. has been committed and it has been committed outside the country. What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country. An offence is defined in the Cr. P.C. to mean an 568 act or omission made punishable by any law for the time being in force. None of the offences for which the appellant has been charged has residence as one of its ingredients. The jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed. It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction. When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC. The ingredients of the offence is agreement and not the residence. meeting of minds of more than two persons is the primary requirement. Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sitting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two. The two minds met when talks oral or in writing took place in India. Therefore, the offence of conspiracy cannot be said to have been committed outside the country. In Mobarik Ali Ahmed vs The State of Bombay. ; this court while dealing with the question of jurisdiction of the Courts to try an offence of cheating committed by a foreign national held that the offence of cheating took place only when representation was made by the accused sitting in Karachi to the complaints sitting in Bombay. The argument founded on corporeal presence was rejected and it was observed: "What is, therefore, to be seen is whether there is any reason to think that a foreigner not corporeally present at the time of the commission of the commission of the offence does not fall within the range of persons punishable therefor under the Code. It appears to us that the answer must be in the negative unless there is any recognised legal principle on which such exclusion can be founded or the language of the Code compels such a construction". If a foreign national is amenable to jurisdiction under Section 179 of the Cr. P.C. a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present. Preparation of bill of lading at Dubai or payment at Dubai were not isolated acts. They were part of chain activities between the appellant and his associates with whom he entered into agreement to cheat the bank at Chandigarh. Any isolated act or omission committed at Dubai was insufficient to constitute an offence. The illegal act of dishonestly inducing the bank at Chandigarh was committed not by preparation of bill at Dubai but its presentation in pursuance of agreement to cheat. The submission thus founded was on residence or on preparation of bills of lading or encashment at Dubai are of no consequence. 569 Nor is there any merit in the submission that even part of the offence would attract Section 189 as the section operates when offence is committed outside India. An offence is committed when all the ingredients are satisfied. The section having used the word offence it cannot be understood as part of the offence. Section 179 Cr. P.C. empowers a court to try an offence either at a place where the offence is committed or the consequences ensue. On the allegations in the complaint the act or omissions were committed in India. In any case the consequence of conspiracy, cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec. 188 Cr. P.C. were not attracted. ORDER For reasons given by us in our concurring but separate orders the appeal fails and is dismissed. Parties shall bear their own costs. Appeal dismissed.

The prosecution case was that the appellant, a non resident Indian at Dubai, hatched a conspiracy along with four others to cheat the Bank at Chandigarh. in furtherance of the conspiracy, the appellant got credit facility by way of Foreign Letters of Credit and issued proforma invoices of his concern and addressed to the Bank through the establishments of other accused. The Manager of the Bank, another accused, in confabulation with 544 the appellant and other accused, being in charge of foreign exchange department, issued Foreign letter of Credit in violation of import policy. The Bills of Lading were addressed to the Bank. The cable confirmation of the Bank was sent to appellant 's concern at Dubai for confirmation of discrepancy. The appellant confirmed correctness thereof. Placing reliance thereon, authority letter was issued by the Bank and cables were sent subsequent thereto to remit the amount . to the Dubai Bank through one Irving Trust Company, At the instance of accused Anand, The Dubai Bank informed the Bankat Chandigarh that the discrepancy in the document adaptable to accused Anand and claimed to have inspected the goods on board in the vessel. On receipt of the information from the appellant 's concern at Dubai, full amount is US Dollars 4,39,200 was credited against all the three Letters of Credit on discount basis. The investigation established that the vessel was a non existent one and three Foreign Letters of Credit were fabricated on the basis of false and forged shipping documents submitted by the appellant to the Dubai Bank. Thus the Bank at Chandigarh was cheated of an amount of Rs. 40,30,329. The accused were charge sheeted under section read with sections 420, 468, and 471, IPC. The Trial Court discharged all the accused of the offenses on the ground that conspiracy and the acts done in furtherance thereof had taken place outside India and as no sanction under section 188, Code of Criminal Procedure 1973 was produced, the prosecution was not maintainable. The High Court in revision held that the conspiracy took place at Chandigarh and the overt acts committed In pursuance of that conspiracy at Dubai constituted offences under sections 420,467 and 471 IPC., and they were triable at Chandigarh without previous sanction of the Central Govt. The High Court setting aside the order of discharge of the trial Court, directed to continue further proceedings in accordance with law. That order of the High Court was challenged under this appeal under Article 136 of the Constitution. The appellant contended that he was not a privy to the conspiracy and the conspiracy did not take place at Chandigarh; and that even assuming that some of the offences were committed in India, by operation of section 188 read with the proviso thereto with a non obstanti clause, absence of sanction by the 545 Central Govt. barred the jurisdiction of the Courts in India to take cognisance of or to enquire into or try the accused. The respondents submitted that the conspiracy to cheat the Bank was hatched at Chandigarh; that all the accused committed over acts in furtherance of the conspiracy at Chandigarh and therefore, the sanction of the Central Govt. was not necessary. Dismissing the appeal, this Court, HELD: Per K. Ramaswarmy, J. 1.01. Judicial power of a State extends to the punishment of all offences against the municipal laws of the State by whomsoever committed within the territory. It also has the power to punish all such offences wherever committed by its citizen. The general principle of international law is that every person be it a citizen or foreigner who is found within a foreign State is subjected to, and is punishable by, its law. Otherwise the criminal law could not be administered according to any civilised system of jurisprudence. (553F) 1.02. Conspiracy may he considered to be a march under a banner and a person may join or drop out in the march without the necessity of the change in the text on the banner. In the comity of International Law, in these days, commiting offences on international scale is a common feature. The offence of conspiracy would be a useful weapon and there would exist no contact in municipal laws and the doctrine of autrefois convict or acquit would extend to such offences. The comity of nations are duty bound to apprehend the conspirators as soon as they set their feet on the country territorial limits and nip the offence in the bud. (564 F G) 2.01. Section 120 A of the I.P.C. defines 'conspiracy ' to mean that 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 as criminal conspiracy". No agreement except an agreement to commit an offence shall amount to a criminal conspiracy, unless some act besides the agreement is done by one or more parties to such agreement in furtherance thereof. (557 C) 546 2.02. Section 120 B of the I.P.C. prescribes punishment for criminal conspiracy. It is not necessary that each conspirator must know all the details of the scheme nor be a participant at every state. It is necessary that they should agree for design or object of the conspiracy. Conspiracy is conceived as having three elements: (1) agreement (2) between two or more persons by whom the agreement is effected; and (3) a criminal object, which may be either the ultimate aim of the agreement, or may constitute the means, or one of the means by which that aim is to be accomplished. It is immaterial whether this is found in the ultimate objects. (554 E) 2.03. Conspiracy to commit a crime itself is punishable as a substantive offence and every individual offence committed pursuant to the conspiracy is separate and distinct offence to which individual offenders are liable to punishment, independent of the conspiracy. (556 D) 2.04. The agreement does not come to an end with it . making, but would endure till it is accomplished or abandoned or proved abortive. Being a continuing offence, if any acts or omissions which constitute an offence are done in India or outside its territory the conspirators continuing to be parties to the conspiracy and since part of the acts were done in India, they would obviate the need to obtain sanction of the Central Govt. All of them need not he present in India nor continue to remain in India. (556 E) 2.05. An agreement between two or more persons to do an illegal act or legal acts by illegal means is criminal conspiracy. If the agreement is not an agreement to commit an offence, it does not amount to conspiracy unless it is followed up by an overt act done by one or more persons in furtherance of the agreement. The offence is complete as soon as there is meeting of minds and unity of purpose between the conspirators to de that illegal act or legal act by illegal means. Conspiracy itself is a substantive offence and is distinct from the offence to commit which the conspiracy is entered into. It is undoubted that the general conspiracy is distinct from number of separate offences committed while executing the offence of conspiracy. Each act constitutes separate offence punishable, independent of the conspiracy. (563 F G) "Jones 'Case, 1832 B & A D 345; Mulcahy vs Reg., (1868) L.R. ; Quinn vs Leathem, ; at 528; B.G. Barsay. vs The State of Bombay, ; Yashpal vs The State of Punjab, ; Mohammed Usman, Mohamned Hussain Manivar & Anr.v. State of Maharashtra, [1981] 3SCR 68;Noor 547 Mohammad Yasuf Monin vs State of Maharashtra, ; ; R.K. Dalmia & Anr. vs The Delhi Administration, ; ; Shivanarayan Laxminarayan & Ors. vs State of Maharashtra & Ors. and Lennari Schussler & Anr. vs Director of Enforcement & Anr., 1197012SCR 760, referred to. 2.06. A conspiracy is a continuing offence and continues to subsist and committed wherever one of the conspirators does an act or series of facts. So long as it ; performance continues, it is a continuing offence till it is executed or rescinded or frustrated by choice or necessity A crime is complete as soon as the agreement is made, but it is not a thing of the moment It does not end with the making of the agreement. It will continue so long as there are two or more parties to it intending to carry into effect the design. Its continuance is a threat to the society against which it was aimed at and would be dealt with as soon as that jurisdiction can properly claim the power to do so. The conspiracy designed or agreed abroad will have the same effect as in India,. when part of the acts, pursuant to the agreement are agreed to be finalised or done, attempted or even frustrated and vice versa. (564 H, 565 A) Abdul Kader vs State. AIR 1964 Bombay 133; U.S. vs Kissal, ; ; Ford vs U.S., ; at 620 to 622; Director of Public Prosecutions vs Doot and Ors., (1973) Appeal Cases 807 (H.L); Treacy vs Director of Public Prosecutions, (1971) Appeal Cases 537 at 563 (H.L.) and Board of Trade vs Owen. (1957) Appeal Cases 602, referred to. Prof. Williams, Glanville: "Vanue and the Ambit of Criminal Law", at 528; Halsbury 's Law of England, third edition Vol. page 327, Para 6O2; Archobold:Criminal pleadings. Evidence and Practice 42nd edition, [1985] Chapter 23, In para 28 32 at page 2281; Writ: Conspiracies and Agreements, at pages 73 74; Smith: Crimes, at page 239 and Russel; Crime, 12th edition, page 613, referred to. 2.07. Sanction under section 188 is not a condition precedent to take cognizance of the offence. If need be it could he obtained before trial begins. Conspiracy was initially hatcher at Chandigarh and though its elf is a completed offence, being continuing offence, even accepting appellant 's case that he was at Dubai and part of conspiracy and overt acts in furtherance 548 thereof had taken place at Dubai and partly at Chandigar and in consequence thereof other offences had been ensued. Since the offences have been committed during the continuing course of transaction culminates in cheating P.N.B. at Chandigarh, the need to obtain sanction for various officer under proviso to section 188 is obviated. Therefore, there is no need to obtain sanction from Central Govt. The case may he different if the offences were committed out side India and are completed in themselves without conspiracy. (566 D E) K. Satwant Singh vs The State of Punjab, ; ; In Re M. L Verghese, AIR 1947 Mad. 352; T. Fakhulla Khan and Ors. vs Emperor, AIR 1935 Mad. 326; Kailash Sharma vs State, 1973 Crl. law journal 1021, distinguished. Purshottamdas Dalmia vs State of Bengal, ; ; L.N. Mukherjee vs The State of Madras, ; ; R.K. Dalmia vs Delhi Administration ; at 273; Banwari Lal Jhunjhunwala and Ors vs Union of India and Anr., [1963] Supp. 2 SCR 338, referred to. Per R.M. Sahai, J. (Concurring) 1.1. Language of the section 188, Code of Criminal Procedure is plain and simple. It operates where an offence is committed by a citizen of India outside the country. Requirements are, therefore, one commission of an offence; second by an Indian citizen; and third that it should have been committed outside the country. (567 D) 1.2. Substantive law of extra territory in respect of criminal offences is provided for by Section 4 of the IPC and the procedure to inquire and try it is contained in Section 1 88 Cr. P.C. Effect of these sections is that an offence committed by an Indian citizen outside the country is deemed to have been committed in India. (567 E) 1.3. Since the proviso to Section 188, Cr. P.C. begin . with a non obstinate clause its observance is mandatory. But it would come into play only if the principal clause is applicable, namely, it is established that an offence as defined in dause 'n 'of Section 2 of the Cr. P.C. has been committed and it has been committed outside the country. (567 G) 549 1.4. What has to be examined at this stage is if the claim of the appellant that the offence under Section 120B read with Section 420 and Section 471 of the IPC were committed outside the country. An offence is deemed in the Cr. P.C. to mean an Act or omission made punishable by any law for the time being in force. None of the offences for which the appellant has been charged has residence as one of its ingredients. (567 H, 568 A) 1.5. The jurisdiction to inquire or try vests under Section 177 in the Court in whose local jurisdiction the offence is committed. It is thus the commission of offence and not the residence of the accused which is decisive of jurisdiction. When two or more persons agree to do or cause to be done an illegal act or an act which is illegal by illegal means such agreement is designated a criminal conspiracy under Section 120A of the IPC. The ingredients of the offence is agreement and not the residence. Meeting of minds of more than two persons is the primary requirement Even if it is assumed that the appellant was at Dubai and he entered into an agreement with his counterpart sifting in India to do an illegal act in India the offence of conspiracy came into being when agreement was reached between the two. The two minds met when talks oral or in writing took place in India. Therefore, the offence of conspiracy cannot be said to have been committed outside the country. (568 B C) 1.6. If a foreign national is amenable to jurisdiction under Section 179 of the Cr. P.C. a NRI cannot claim that the offence shall be deemed to have been committed outside the country merely because he was not physically present (568 F) Mobarik Ali Ahmed vs The State of Bombay, ; , referred to. An offence is committed when all the ingredients are satisfied. The section having used the word 'offence ' it cannot be understood as part of the offence. Section 179 Cr. P.C. empowers a court to try an offence either at a place where the offence is committed or the consequences ensue. On the allegations in the complaint the act or omissions were committed in India. In any case the consequence of conspiracy, cheating and forging having taken place at Chandigarh the offence was not committed outside the country therefore the provisions of Sec. 188 Cr. P.C. were not attracted. (569 B)

tition No. 443 of 1988. (Under Article 32 of the Constitution of India). Rajiv K. Garg and N.D. Garg for the Petitioner. Soli J. Sorabjee, Attorney General, M. Chandrasekharan and P. Parmeswaran for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ. This is an application under Article 32 of the Constitution. Northern Corporation is the petitioner in the instant application and the Union of India, the Collector of Customs and the Assistant Collector of Customs (Bond Department) are the respondents. On 11th May, 1983, the licensing authority issued import licence No. 2959845 for Rs.20, 12,729 in favour of M/s Industrial Cable India Ltd., Rajpura. The licence holder transferred the same in favour of M/s Metalic metal Indus tries. The transferee licence holder issued a letter of authority in favour of the petitioner for the import of MSCR defective sheets or coils. The letter of authority was issued on 21st May, 1984. The petitioner herein placed order on M/s Sayani Enter prises Pvt. Ltd., Singapore for the supply of MSCR defective sheets or coils on 30th May, 1984. The foreign supplier shipped the material in three consignments and the goods arrived at the Bombay Port on 12th June, 1984. The clearing agent of the petitioner filed bills of entry on 30th July, 1984 for warehousing under section 59 of the . 1962 (hereinafter referred to as 'the Act '), and the same was allowed. The goods were bounded on 7th August, 1984. It may be mentioned that the rate of duty on the day was 60% + 40% + Rs.650 per M.T. and 10% C.V.D. The total duty on the consignment was assessed as Rs.26,20,109.55. 624 On 21th August, 1984, the petitioner 's clearing agent filed six bills of entry for ex bond clearance. However, the bills of entry were returned with the remark that "please obtain no objection from the income tax". This was endorsed on 24th August, 1984. The petitioner states that thereafter he came to know that the income tax authorities had imposed ban under section 132(1) of the Income Tax Act, 1961. The petitioner asserted that he was ever ready and willing, rather was anxious, to get the material on payment of the then prevailing customs duty. However, due to circumstances beyond the control of the petitioner, that it to say, by the order of the Income Tax Authorities the goods could not be released. This factor was not of the petitioner 's making, according to the petitioner. ' On 30th March, 1988, the Income Tax Department issued the necessary no objection certificate, thus lifting the ban. On 4th April, 1988, the petitioner 's agent contacted the customs authority for clearance of the goods. The duty as is prevalent now is Rs.5,000 per M.T. + addl. duty 45% and C.V.D. at Rs.325 per M.T. The total duty came to a very large sum of money. The demand, according to the petitioner, was arbitrary, illegal and unconstitutional. The instant writ was filed under Article 32 of the Constitution on 16th April, 1988 and on 22nd April, 1988, this Court passed the following order: "Pending notice, there will be limited stay to the extent that the goods name, "MSCR defective sheets/coils" which have arrived at Bombay Port per S.S. "SEA PRIMROSE" will be released forthwith on petitioner 's paying customs and other duties as leviable on 21.8.84. In addition to the above payment the petitioner will deposit Rs.5 lakhs and for the balance amount petitioner will furnish surety (which may consist of ITC bond but excluding cash/bank guarantee/NSC/FDR) to the satisfaction of the Collector of Customs. " We directed that the notice should be given to the revenue authority to appear before us. Learned Attorney General had appeared pursuant to the notice on behalf of the respond ents. It is contended on behalf of the respondents that for the payment of duty, the liability of the petitioner to pay the duty is the duty at the time of clearance of the goods. Our attention was drawn to section 15(1)(b) of the Act which postulates that the rate of duty and tariff valuation, if any, applicable 625 to any imported goods, shall be the rate and valuation in force, in case the goods are cleared from a warehouse under section 68, on the date on which the goods are actually removed from the warehouse. Section 15 of the Act reads as under: "section 15. Date for determination of rate of duty and tariff valuation of imported goods. (1) The rate of duty and tariff valuation, if any, applica ble to any imported goods, shall be the rate and valuation in force (a) in the case of goods entered for home con sumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section; (b) in the case of goods cleared from a warehouse under section 68, on the date on which the goods are actual ly removed from the warehouse; (c) in the case of any other goods, on the date of payment of duty: Provided that if a bill of entry has been present ed before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards. (2) The provisions of this section shall not apply to bag gage and goods imported by post." Learned Attorney General laid emphasis on the expression "actually removed" in clause (b) of section 15(1) of the Act. Our attention was also drawn to section 16 of the Act which reads as under: "section 16. Date for determination of rate of duty and tariff valuation of export goods. (1) The rate of duty and tariff valuation, if any, applica ble to any export goods, shall be the rate and valuation in force (a) in the case of goods entered for export under 626 section 50, on the date"on which the proper officer makes an order permitting clearance and loading of the goods for exportation under section 51; (b) in the case of any other goods, on the date of payment of duty. (2) The provisions of this section shall not apply, to baggage and goods exported by post. " It was contended on behalf of the revenue that in view of the aforesaid, it would not be possible for the petition er to clear the goods on payment of duty on the date when the petitioner was actualling expressed willingness to remove the goods. Our attention was drawn to the decision of this Court in Prakash Cotton Mills (P) Ltd. vs B. Sen & Ors., [1979] 2 SCR 1142. In that case,the appellant stored on December 22, 1965 in the Customs warehouse, goods import ed by him under a licence, and cleared them on various dates between September 1, 1966 and February 20, 1967. Under protest, they paid customs duty at the enhanced rates in accordance with the amended provisions. Later, they claimed rebate alleging that since the consignments had been re ceived, stored and assessed to duty much before the promul gation of the Ordinance, they were liable to pay duty at the rate prevailing on the date of warehousing. Their appeals and revision were unsuccessful. In appeal to this Court it was contended that the material change in section 15 being only the substitution of the words "the rate of duty" the customs authorities were not entitled to take into account the new rate of exchange at the appreciated value of currency in respect of the consignments stored in the warehouse prior to the coming into force of the Ordinance. Dismissing the appeal, this Court held that the customs authorities were right intaking the view that the rate of duty applicable to the imported goods should be determined according to the law prevalent on the date they were actually removed from the warehouse. Section 15(1)(b) clearly requires that the rate of duty, rate of exchange and tariff applicable to any imported goods shall be the rate and valuation in force on the date on which goods are actually removed from the ware house. Under section 49 and importer may apply to the Assistant Collector of Customs for permission to store the imported goods in a warehouse pending their clearance and he may be permitted to do so; and section 68 provides that an importer of any warehoused goods may clear them if the import duty leviable on them has been paid. In that case, it was found that as the goods were removed from the warehouse after the amending Ordinance had come 627 into force, the customs authorities and the Central Govern ment were right in taking the view that the rate of duty applicable to the imported goods should be determined ac cording the law prevalent on the date these were actually removed from the warehouse. Mr. Garg, appearing for the petitioner, on the other hand contended before us that his client was willing indeed to pay the duty when the goods crossed the customs barrier and were in the process of being cleared, but could not be cleared because of the prohibitory orders of the Income Tax Department under section 102 of the . In that light, it was not possible, Mr. Garg contended, for the Income Tax Department to claim enhanced duty due to facts which were not for the fault of the petitioner. In view of the language used in section 15(1)(b) of the Act, it is difficult to accept this contention specially in the light of the expression used 'actually removed '. It must be ac cepted that the prohibitory orders, arbitrary or not, would postpone the date of clearance and as such would postpone the determination of the duty. Therefore, it is difficult to accept Mr. Garg 's contention. However, there is a far more serious objection in enter taining this application under Article 32 of the Constitu tion. Article 32 of the Constitution guarantees the right to move the Supreme Court for enforcement of fundamental rights. If there is breach of the fundamental rights, the petitioner can certainly have recourse to Article 32 of the Constitution provided other conditions are satisfied. But we must, in all such cases, be circumventive of what is the right claimed. In this case, the petitioner as such has no fundamental fight to clear the goods imported except in due process of law. Now in the facts of this case, such clear ance can only be made on payment of duty as enjoined by the . In a particular situation whether customs duty is payable at the rate prevalent on a particular date or not has to be determined under the four corners of the . The petitioner has no fundamental right as such to clear any goods imported without payment of duties in accordance with the law. There is procedure provided by law for determination of the payment of customs duty. The reve nue has proceeded on that basis. The petitioner contends that duty at a particular rate prevalent at a particular date was not payable. The petitioner cannot seek to remove the goods without payment at that rate or without having the matter determined by the procedure envisaged and enjoined by the law for that determination. The petitioner without seeking to take any relief within the procedure envisaged under the Act had moved this Court for breach of fundamental right. This is not permissible and should never be 628 entertained. In a matter of this nature where liability of a citizen to pay a particular duty depends on interpretation of law and determination of facts and the provision of a particular statute for which elaborate procedure is pre scribed, it cannot conceivably be contended that enforcing of those provisions of the Act would breach fundamental right which entitle a citizen to seek recourse to Article 32 of the Constitution. We are, therefore, clearly of the opinion that relief under Article 32 of the Constitution is wholly inappropriate in the facts and the circumstances of this case. It has further to be reiterated that for enforce ment of fundamental right which is dependent upon adjudica tion or determination of questions of law as well as ques tion of fact without taking any resort to the provisions of the Act, it is not permissible to move this Court on the theoretical basis that there is breach of the fundamental right. Whenever a person complains and claims that there is a violation of law, it does not automatically involve breach of fundamental right for the enforcement of which alone Article 32 of the Constitution is attracted. It appears that the facts of this nature require elaborate procedural inves tigation and this Court should not be moved and should not entertain on these averments of the Article 32 of the Con stitution. This position is clearly well settled, but some times we are persuaded to accept that an allegation of breach of law is an action in breach of fundamental right. In this connection, reference may be made to the decision of this Court in Smt. Ujjam Bai vs State of Uttar Pradesh, [1963] 1 SCR 778, where this Court observed at p. 842 of the report as under: "In my opinion, the correct answer to the two questions which have been referred to this larger Bench must be in the negative. An order of assessment made by an authority under a taxing statute which is intra vires and in the undoubted exercise of its jurisdiction cannot be challenged on the sole ground that it is ,passed ,on a misconstruction of a provision of the Act or of a notification issued thereunder. Nor can the validity of such an order be questioned in a petition under article 32 of the Constitution. The proper remedy for correcting an error in such an order is to pro ceed by way of appeal, or if the error is an error apparent on the face of the record, they by an application under article 226 of the Constitution. It is necessary to observe here that article 32 of the Constitution does not give this Court an appellate jurisdiction Such. as is given by articles 132 to 136. Article 32 guarantees the right to a constitutional remedy and relates only to the enforcement of the rights conferred 629 by Part 111 of the Constitution. Unless a question of the enforcement of a fundamental right arises, article 32 does not apply. There can be no question of the enforcement of a fundamental fight if the order challenged is a valid and legal order, in spite of the allegation that it is errone ous. I have, therefore, come to the conclusion that no question of the enforcement of a fundamental fight arises in this case and the writ petition is not maintainable. " In the aforesaid view of the matter, we are clearly of the opinion that Article 32 of the Constitution should not have been resorted to and this application does not lie under Article 32 of the Constitution. However, it appears that this Court has passed an order on 22nd April, as indicated hereinbefore. It is stated that the goods have been cleared pursuant to that order. The revenue would be at liberty to take appropriate action in accordance with law for the recovery of the dues. This writ petition is accordingly disposed of. N.P.V. Petition disposed of.

The appellant, a registered dealer under the Punjab General Sales Tax Act, 1948 despatched some part of the manufactured goods outside the state, without paying the tax on the taxable raw material consumed in the manufacture of such goods. The assessing authority issued a show cause notice for the assessee 's failure to pay the said tax. Interest was also demanded on the tax amount. The assesses disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful default on its part, as it was under a bona fide belief that no tax was to be paid on the raw material used in the manufactured goods sent outside State. The assesses further stated that it had acted on legal advice that it was not liable to pay any Purchase Tax and, therefore, in the absence of a clear intention to avoid the payment of tax, there could be no question of imposition of penalty and demand for interest. The assessee 's submissions did not find favour with the Revenue, as also the Tribunal, and the assesses sought a reference to the High Court under section 22(1) of the Act. But the Tribunal rejected application for reference. Thereafter the assesses preferred appeals to this Court, against the Tribunal 's rejection of reference as also the Tribunal 's order in appeal. On behalf of the appellants, it was contended that the main question involved in this case is concluded by several decisions of this Court, and it was not liable to pay the tax, as demanded by the Revenue. On behalf of the Revenue it was contended that the assesses was liable to pay the tax on the raw materials used in the manufactured goods sent outside the State. Allowing the appeals, this Court, 348 HELD: 1.1 Under Section 4B of the Punjab General Sales Tax Act, 1948 the tax becomes exigible not on the purchase of the raw material or on the use thereof in the manufacture of a new and distinct commodity but only after the goods so manufactured are despatched to a place outside the State. Once the goods are sent outside the State the purchaser is made liable to pay the tax at the rate prescribed on the purchase of such goods provided no tax is payable on the purchase thereof under any other provision of the Act. It is obvious that the tax though described as purchase tax is in effect a tax on consignment since it becomes effective on the happening of an event which has nothing to do with the actual purchase. Even if the raw material is used in the manufacture of any taxable goods, the purchaser does not become liable to pay tax on the raw material until the manufactured item is sent out of the State. And between the manufacture of the goods out of the purchased raw material and their actual despatch outside the State there may be a long time gap. The liability of tax only after despatch of the manufactured goods outside the State and that event may have no relation to the actual purchase or manufacture. That being so, the tax though described as a purchase tax is actually a tax on the consigmment of the manufactured goods, the levy of which is beyond the competence of the State as the power to impose such tax is vested in Parliament by virtue of clause (h) of Article 269(1) of the Constitution read with Entry 92B in Schedule 7, List 1. [352H; 353A E; 354B] 1.2. Even though the language of section 4B of the Act is not identical to section 9(1) of the Haryana Sales Tax Act, it is in substance similar in certain respects, particularly in respect of the point of time when the liability to pay tax arises. Under that provision also the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch of the goods outside the State. [353D E] M/s. Goodyear India Ltd. vs State of Haryana, ; ; applied. State of Tamil Nadu vs M. K. Kandaswami etc., [ 19761 1 SCR 38; referred to. Since the Revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax. Therefore, the action taken in exercise of power under section 10(6) and section 11D of the Act cannot be allowed to stand. [354G H] 349

Civil Appeals Nos. 2567, 2818 20, 2648, 3277, 2817, 2918, 3079 83, 3001 04, 3543 48, 2810 16, 3375, 2864 2917, 2989 3000, 3084 3088, 3268 71, 3253 54, 3399 3400 of 1982. Appeals by special leave from the Judgments and orders dated the 30th April, 1982, 5th, 6th, 7th, 10th, 11th, 12th, 13th, 15th, May, 1982, 3rd, 17th, 23rd, August, 1982 of the Patna High Court in C.W.J.C Nos. 1788, 3726, 3727, 4529 of 1981, 253, 688, 1473 of 1982, 2771/81, 96/82, 1233, 1498, 1907, 1986 of 81, 1042, 1043, 1121, 1044 of 1982, 3198, 3197, 3195, 3147, 3146, 3148, 1573, 1377, 1802, 1852, 1800, 1950, 1776 of 1981, 1038 of 1982, 1300, 1301, 1303, 1329, 1334, 1383, 1648 of 1981, 255 of 1982, 1193, 1198, 1204, 1206, 1209, 1211, 1213, 1214, 1262 64, 1273, 1282, 1283, 1287, 1331, 1355 1382, 1384, 1386, 1431, 1432, 1484, 1488, 1489, 1548, 1645, 1734, 1833 of 1981, 78 of 1982, 1154, 1160, 1168, 1169. 1186, 1187, 1191, 1549, 1556, 1557 58, 1415, 1461, 1465, 1487 of 1981, 251 of 1982, 228, 1321 of 1981, 394, 1478 of 1982, 1320/81, 902, 565/82, 1775, 1177, 1801 of 1981, 503/82, 1804/81, 1, 3, 4, 6 & 7 of 1982, 3079, 3528 of 1981, 1947/82, 1254/82, 2922/81, 1372/82, 1408 & 1482 of 1981. AND Special Leave Petitions Nos. 10744 53, 9554 58, 9788, 9821 22, 10907, 9095, 1202 05, 9886 88, 9500 02, 9753, 9523, 10912, 11069, 10754 56, 10797 10812, 10891, 9702, 9782, 9561, 14001, 14364 66 of 1982, 1393 96, 1422 23, 1472 73 of 1983. From the Judgments and orders dated the 30th April, 1982, 3rd May, 5th, 6th, 7th, 10th, 11th, 12th, 13th May, 19th August 9th & 15th September, 8th & 18th October 1982, 20th & 21st January, 1983 of the Patna High Court in C.W.J.C. Nos. 1176, 1516 139 1435, 1177, 1618, 1469 & 1252 of 1982, 3398/81, 1355/82, 525182, 3640, 3641, 3642, 3743 & 3745 of 1982, 1326, 1784, 1405, 1854, 3337, A 1656 of 1981, 349, 1108, 1148, 4073, 4074, 4075 of 1982, 3118, 3080, 1161, 1374, 2804, 3035 of 1981, 4213/82, 1517/82, 1278, 1414, 1290, 1291, 1292, 1297, 1306, 1200, 1212, 1256, 1276, 1277, 1485 of 1981, 484, 509/82, 1517, 1578, 1450, 4037, 2944, 1788, 2889 of 1981, 1547, 506, 507, 508, 4931, 1253, 1431, 1432, 207 & 214 of 1982 & 182 & 203 of 1983. WITH Writ Petitions Nos. 9266, 10055 56, 7002 09, 7019 23, 7024, 7921 22, 7996.97, 8508 10, 9680 92, 9322, 7647 53, 8005, 8067, 7160 of 1982, 415 76 78, 640 41, 652 of 1983 (Under article 32 of the Constitution of India) A.B. Divan, A.K. Sen, Shankar Ghose, P.R. Mridul, Hardev Singh & S.T. Deasi, Talat Ansari, Ashok Sagar, Sandeep Thakore, Ms. Rainu Walia, D.N. Misra, D.P. Mukherjee, B.R. Agarwala, Miss Vijayalakshmi Menon, U.P. Singh, B.B. Singh. B.S. Chauhan, Anil Kumar Sharma, Praveen Kumar, A.T. Patra, Vineet Kumar, A.K. Jha, M.P. Jha, R.S. Sodhi, A. Minocha, Mrs. Indu Goswamy, S.K. Sinha, Vinoo Bhagat, P.N. Misra, KK. Jain and Pramod Dayal for the Appellants. K Parasaran, Solicitor General, R.B. Mahto, Addl. Advocate General. Bihar. Pramod Swarup and U.S. Prasad for the Respondents. The Judgment of the Court was delivered by SEN, J. These are appeals by special leave from a judgment and order of the High Court of Patna dated April 30, 1982 by which the High Court upheld the constitutional validity of sub section (I) of s.5 of the Bihar Finance Act, 1981 ("Act ' for short) which provides for the levy of a surcharge on every dealer whose gross turnover during a year exceeds Rs. 5 lakhs, in addition to the tax payable by him, at such rate not exceeding 10 per centum of the total amount of tax, and of sub section (3) of section 5 of the Act which prohibits such dealer from collecting the amount of surcharge payable by him from the purchasers. 140 The Bihar Finance Act 1981, is not only an Act for the levy A of a tax on the sale or purchase of goods but also is an Act to consolidate and amend various other laws. We are here concerned with section S of the Act which finds place in Part I of the Act which bears the heading "Levy of tax on the sale and, purchase of goods in Bihar and is relatable to Entry 54 of List II of the Seventh Schedule. By two separate notifications dated January 15, 1981 the State Government of Bihar in exercise of the powers conferred by sub section (I) section S of the Act appointed January, IS; 1981 to be the date from which surcharge under section 5 shall be leviable and fixed the rate of surcharge at 10 per centum of the total amount of the tax payable by a dealer whose gross turnover during a year exceeds Rs. 5 lakhs, in addition to the tax payable by him. The Act was reserved for the previous assent of the President and received his assent on April 20, 1981. There is no point raised as regards the validity of the notifications in question and therefore there is no need for us to deal with it. The principal contention advanced by the appellants in these appeals is that the field of price fixation of essential commodities in general, and drugs and formulations in particular, is an occupied field by virtue of various control orders issued by the Central Government from time to time under sub section (I) of section 3 of the which allows the manufacturer of producer of goods to pass on the tax liability to the consumer and therefore the State Legislature of Bihar had no legislative competence to enact sub section (3) of section S of the Act which interdicts that no dealer liable to pay a surcharge, in addition to the tax payable by him, shall be entitled to collect the amount of surcharge, and thereby trenches upon a field occupied by a law made by Parliament. Alternatively, the submission is that if sub s (3) of section 5 of the Act were to cover all sales including sales of essential commodities whose prices are fixed by the Central Government by various control orders issued under the Essential commodities Act, then there will be repugnancy between the State law and the various control orders which according to section 6 of the must prevail. There is also a subsidiary contention put forward on behalf of the appellants that sub section (I) of section S of the Act is ultra vires the State Legislature in as much as the liability to pay surcharge is on a dealer whose gross turnover during a year exceeds Rs. 5 lakhes or more i.e. inclusive of transactions relating to Sale or purchase of goods which have taken place in the course of inter state trade or commerce or outside the State or in the course of import into, or 141 export of goods outside the territory of India. The submission is that such transactions are covered by article 286 of the Constitution and A therefore are outside the purview of the Act and thus they cannot be taken into consideration for computation of the gross turnover as defined in section 2 (j) of the Act for the purpose of bearing the incidence of surcharge under sub section (1) of section 5 of the Act. It will be convenient, having regard to the course taken in the arguments, to briefly refer to the facts as are discernible from the records in Civil Appeal No. 2567 of 1982 Messrs Hoechst Pharmaceuticals Limited & Another vs The State of Bihar & others, and Civil Appeal No. 3277 of 1982 Messrs Glaxo laboratories (India) Limited vs The State of Bihar & others. Messrs Hoechst Pharmaceuticals Limited and Messrs Glaxo Laboratories (India) Limited are companies incorporated under the engaged in the manufacture and sale of various medicines and life saving drugs throughout India including the State of Bihar. They have their branch or sales depot at Patna registered as a dealer under section 14 of the Act and effect sales of their manufactured products through wholesale distributors or stockists appointed in almost all the districts of Bihar who, in their turn, sell them to retailers through whom the medicines and drugs reach the consumers. Almost 94% of the medicines and drugs sold by them are at the controlled price exclusive of local taxes under the Drugs (Price Control) order, 1979 issued by the Central Government under sub section (1) of section 3 of the and they are expressly prohibited from selling these medicines and drugs in excess of the controlled price so fixed by the Central Government from time to time which allows the manufacturer or producer to pass on the tax liability to the consumer. The appellants have placed on record their printed price lists of their well known medicines and drugs manufactured by them showing the price at which they sell to the retailers as also the retail price, both inclusive of excise duty. It appears therefrom that one of the terms of their contract is that sales tax and local taxes will be charged wherever applicable. These appellants have also placed on record their orders of assessment together with notices of demand, for the assessment years 1980 81 and 1981 82. For the assessment year 1980 81, the Commercial Taxes officer, Patna Circle, Patna determined the gross turnover of sales in the State of Bihar through their branch office at Patna of Messrs Hoechst Pharmaceuticals Limited on the basis of the return 142 filed by them at Rs. 3,13,69,598,12p. and the tax payable thereon at Rs. 19,65,137.52.p. The tax liability for the period from January 15, 1981 to March 31, 1981 comes to Rs. 3,85,023.33.p. and the surcharge thereon at 10% amounts to Rs. 38,503.33p. Thus the total tax assessed of Messrs Hoechst Pharmaceuticals Limited including surcharge for the assessment year 1980 81 amounts to Rs. 20,03,640.85p. The figures for the assessment year 1981 82 are not available. Foe the assessment years 1980 81 and 1981 82 the annual returns filed by Messrs Glaxo Laboratories (India) Limited show the gross turnover of their sales in the State of Bihar through their branch at Patna at Rs. 5,17,83,985.76p. and Rs. 5,89,22,346.64p. respectively. They have paid tax along with the return amounting to Rs. 34,06,809.80p. and Rs. 40,13,057.28p. inclusive of surcharge at 10% of the tax for the period from January 15, 1981 to March 31, 1981 and April 1981 to January 19, 1982 amounting to Rs. 34,877.62p. and Rs. 3,09,955.86p. respectively. There is excess payment of Rs. 55,383.98p. in the assessment year 1980 81 and Rs. 13,112.35p. in the year 1981 82. These figures show the magnitude of the business carried on by these appellants in the State of Bihar alone and their capacity to bear the additional burden of surcharge levied under sub section (I) of section 5 of the Act. The High Court referred to the decision in section Kodar vs State of Kerala(1) where this Court upheld the constitutional validity of sub section (2) of section 2 of the Tamil Nadu Additional Sales Tax Act, 1970 which is in pari materia with sub section 3 of section S of the Act and which interdicts that no dealer referred to in sub section (l) shall be entitled to collect the additional tax payable by him. It held that the surcharge levied under sub section (1) of section 5 is in reality an additional tax on the aggregate of sales effected by a dealer during a year and that it was not necessary that the dealer should be enabled to pass on the incidence of tax on sale to the purchaser in order that it night be a tax on the sale of goods. Merely because the dealer is prevented by sub section (3) of section 5 of the Act from collecting the surcharge, it does not cease to be a surcharge on sales tax. It held relying on Kodar 's case, supra, that the charge under sub section (I) of section 5 of the Act falls at a uniform rate of 10 per centum of the tax on all dealers falling within the class specified therein i. e. whose gross turnover during a year exceeds Rs. 5 lakhs, and is therefore not discriminatory and violative of article 14 of the Constitution, nor is it possible to say that 143 because a dealer is disabled from passing on the incidence of surcharge to the purchaser, sub section (3) of section 5 imposes an unreasonable A restriction on the fundamental right guaranteed under article 19 (1) (g). As regards the manufacturers and producers of medicines and drugs, the High Court held that there was no irreconcilable conflict between sub section (3) of section 5 of the Act and paragraph 21 of the Drugs (Price Control) order 1979 and both the laws are capable of being obeyed. Undeterred by the decision of this Court in Kodar 's case, supra, the appellants have challenged the constitutional validity of sub section (3) of section 5 of the Act in these appeals on the ground that the Court in that case did not consider the effect of price fixation of essential commodities by the Central Government under sub s (I) of section 3 of the which, by reason of section 6 of that Act, has an overriding effect notwithstanding any other law inconsistent therewith. These appeals were argued with much learning and resource particularly with respect to federal supremacy and conflict of powers between the Union and State Legislatures and as to how if there is such conflict, their respective powers can be fairly reconciled. In support of these appeals, learned counsel for the appellants have advanced the following contentions viz: (1) The opening words of article 246 (3) of the Constitution "Subject to clauses (1) and (2)" make the power of the Legislature of any State to make laws for such State or any part thereof with respect to any of the matters enumerated in List II of the Seventh Schedule subject to the Union power to legislate with respect to any of the matters enumerated in List I or List III. That is to say, sub section (3) of section 5 of the Act which provides that no dealer shall be entitled to collect the surcharge levied on him must therefore yield to section 6 of the which provides that any order made under section 3 of the Act shall have effect notwithstanding anything inconsistent therewith contained in any enactment other then the Act or any instrument having effect by virtue of any enactment other than the Act. The entire submission proceeds on the doctrine of occupied field and the concept of federal supremacy. In short, the contention is that the Union power shall prevail in a case of conflict between List II and List III. (2) sub section (3) of section 5 of the Act which provides that no dealer shall be entitled to collect the amount of surcharge levied on him, clearly falls within Entry 54 of List II of the Seventh Schedule and it collides with, and or is inconsistent with, or repugnant to, the scheme of Drugs (Price Control) order? 1979 generally so far as 144 price fixation of drugs is concerned and particularly with paragraph 21 which enables the manufacturer or producer of drugs to pass on the liability to pay sales tax to the consumer. If that be so, then there will be repugnancy between the State law and the Control order which according to section 6 of the , must prevail. It is the duty of the Court to adopt the rule of harmonious construction to prevent a conflict between both the laws and care should be taken to see that both can operate in different fields without encroachment. It is therefore submitted that there is no question of repugnancy and it can be avoided by the principle of reconciliation. That is only possible by giving full effect to the non obstante clause in section 6 of the . (3) The provisions contained in sub section (3) of section 5 of the Act is ex facie and patently discriminatory. The treats certain controlled commodities and their sellers in a special manner by fixing controlled prices. The sellers so treated by this Central law are so circumstanced that they cannot be equated with other sellers not effected by any control orders. The class of dealers who can raise their sale prices and absorb the surcharge levied under sub section (1) of section 5 and a class of dealers like the manufacturers andproducers of medicines and drugs who cannot raise their sale prices beyond the controlled price are treated similarly. Once the fact of different classes being separate is taken, than a State law which treats both classes equally and visits them with different burdens, would be violative of article 14. The State cannot by treating unequals as equals impose different burden on different classes. (4) The restriction imposed by sub section (3) of section 5 of the Act which prevents the manufacturers of producers of medicines and drugs from passing on the liability to pay surcharge is confiscatory and casts a disproportionate burden on such manufacturers and producers and constitutes an unreasonable restriction on the freedom to carry on their business guaranteed under article 19 (1) (g). (5) Sub s (1) section 5 of the Act is ultra vires the State Legislature of Bihar insofar as for the purpose of the levy of surcharge on a certain class of dealers, it takes into account his gross turnover as defined in section 2 (j) of the Act. It is urged that the State Legislature was not competent under Entry 54 of List II of the Seventh Schedule to enact a provision like sub section (1) of section S of the Act which makes the grass turnover of a dealer as defined in section 2 (j) to be the basis for the levy of a surcharge i. e. inclusive of transactions relating to sale or purchase of goods which have taken place in the course of inter state trade or commerce or outside the territory of India. Such transactions are outside the purview of the Act and therefore they cannot be taken 145 into consideration for computation of the gross turnover as defined in section 2 (j) of the Act for the purpose of bearing the incidence of surcharge. The contention to the contrary advanced by the learned Solicitor General appearing on behalf of the State of Bihar is that there is no inconsistency between sub section (3) of section 5 of the Act and paragraph 21 of the Control order and both the laws are capable of being obeyed. According to him, the question of repugnancy under article 254(1) between a law made by Parliament and a IdW made by the State Legislature arises only in case both the legislations occupy the same field with respect to one of the matters enumerated in the Concurrent list, and there is direct conflict between the two laws. It is only when both these requirements are fulfilled that the State law will to the extent of repugnancy, become void. The learned Solicitor General contends that the question has to be determined not by the application of the doctrine of occupied field but by the rule of 'pith and substance '. He further contends that the appellants being manufacturers or producers of drugs are not governed by paragraph 21 of the Control order which relates to retail sale but by paragraph 24 thereof which deals with sale by a manufacturer or producer to wholesale distributor. Under paragraph 24 of the Control order, the manufacturer or producer is not entitled to pass on the liability to pay sales tax and the price that he charges to the wholesaler or distributor is inclusive of sales tax. He also contends that the controlled price of an essential commodity particularly of medicines and drugs fixed by a control order issued by the Central Government under sub section (1) of s: 3 of the is only the maximum price thereof and there is nothing to prevent a manufacturer or producer of medicines and drugs to sell it at a price lower than the controlled price. All that will happen, the learned Solicitor General reasons, is that the levy of surcharge under sub section (1) of section 5 of the Act will cut into the profits of the manufacturer or producer but that will not make the State law inconsistent with the Central law. As regards medicines and drugs, the surcharge being borne by the manufacturers or producers under sub section (3) of section 5 of the Act, the controlled price of such medicines and drug to the consumer will remain the same. Lastly, the Solicitor General submits that there is no material placed by the, appellants to show that the levy of surcharge under sub section (I) of section 5 of the act would impose a burden disproportionate to the profits 146 earned by them or that it is confiscatory in nature. There is, our opinion, considerable force in these submissions. Before proceeding further it is necessary to mention that the contentions raised on behalf of manufacturers and producers of medicines and drugs can govern only those appellants who are dealers in essential commodities, the controlled price of which is exclusive of sales tax as filed by control orders issued by the Central Government under sub section (1) of section 3 of the , but cannot be availed of by the other appellants who are dealers in other commodities. The case of such appellants would be squarely governed by the decision of this Court in Kodar 's case, supra, and their liability to pay surcharge under sub section (1) of section 5 of the Act must be upheld, irrespective of the contentions raised in these appeals, on based on the opening words "Subject to clauses (1) and (2)" in article 246(3) of the Constitution and on section 6 of the . It is therefore necessary to first deal with the principle laid down in Kodar 's case, supra. In Kodar 's case, supra, this Court upheld tho Constitution validity of the Tamil Nadu Additional Sales Tax Act, 1970 which imposes additional sales tax at 5% on a dealer whose annual gross turnover exceeds Rs. 10 lakhs. The charging provision in sub section (1) of section 2 of that Act is in terms similar to sub section (1) of section 5 of the Act, and provides that the tax payable by a dealer whose turnover for a year exceeds Rs. 10 lakhs shall be increased by an additional tax 5% of the tax payable by him. Sub section (2) of that Act is in pari materia with sub section (3) of section 5 of the Act and provides that no dealer referred to in sub section (I) shall be entitled to collect the additional tax payable by him. The Court laid down that: (l) The additional tax levied under sub section (I) of section 2 of that Act was in reality a tax on the aggregate of sales effected by a dealer during a year and therefore the additional tax was really a tax on the sale of goods and not a tax on the income of a dealer and therefore falls within the scope of Entry 54 of List II of the Seventh Schedule. (2) Generally Speaking, the amount or rate of tax is a matter exclusively within the legislative judgment and so long as a tax retains its avowed character and does not confiscate property to the State under the guise of a tax, its reasonableness cannot be questioned by the Court The imposition of additional tax on a dealer whose annual turnover exceeds Rs. 10 lakhs is not an unreasonable restriction on the fundamental rights guaranteed under article 19(1)(g) or (f) as the tax 147 is upon the sale of goods and was not shown to be confiscatory. (3) It is not an essential chracteristic of a sales tax that the seller must have the right to pass it on to the consumer, nor is the power of the Legislature to impose a tax on sales conditional on its making a provision for seller to collect the tax from the purchasers. Merely because sub section (2) of section 2 of that Act prevented a dealer from passing on the incidence of additional tax to the purchaser, it cannot be said that the Act imposes an unreasonable restriction upon the fundamental rights under article 19(1)(g) or (f). The Act was not violative of article 14 of the Constitution as classification of dealers on the basis of their turnover for the purpose of levy of additional tax was passed on the capacity of dealers who occupy position of economic superiority by reason of their greater volume of businesses i.e. On capacity to pay and such classification for purposes of the levy was not unreasonable. In order to appreciate the implications of the wide ranging contentions advanced before us, it is necessary to set out the relevant statutory provisions. Sub section (1) of section 5 of the Act provides for the levy of surcharge on every dealer whose gross turnover during a year exceeds Rs. 5 lakhs and, the material provisions of which are in the following terms: "5. Surcharge (I) Every dealer whose gross turnover during a year exceeds rupees five lakhs shall, in addition to the tax payable by him under this Part, also pay a surcharge at such rate not exceeding ten per centum of the total amount of the tax payable by him, as may be fixed by the State Government by a notification published in the official Gazette: Provided that the aggregate of the tax and surcharge payable under this Part shall not exceed, in respect of goods declared to be of special importance in inter State trade or commerce by section 14 of the central Sales Tax Act, 1256 (Act 74 of 1956), the rate fixed by section 15 of the said Act: The expression "gross turnover" as defined in section 2(j) Of the Act insofar as material reads: 148 "2(j) "gross turnover" means (i) for the purposes of levy of sales tax, aggregate of sale prices received and receivable by a dealer, during any given period, in respect of sale of goods (including the sale of goods made outside the State or in the course of inter State trade or commerce or export) but does not include sale prices of goods or class or classes or description of goods which have borne the incidence of purchase tax under section 4. " Sub section (3) of section 5 of the Act, the constitutional validity of which is challenged, provides: "5(3) Notwithstanding anything to the contrary contained in this Part, no dealer mentioned in sub section (1), who is liable to pay surcharge shall be entitled to collect the amount of this surcharge. " It is fairly conceded that not only sub section (1) of section 5 of the Act which provides for the levy of surcharge on dealers whose gross turnover during a year exceeds Rs. 5 lakhs, but also sub section (3) of section 5 of the Act which enjoins that no dealer who is liable to pay a surcharge under sub section (I) shall be entitled to collect the amount of surcharge payable by him, are both relatable to Entry 54 of List II of the Seventh Schedule which reads: "54. Taxes on the sale or purchase of goods other than newspapers, subject to the provisions of Entry 92A of List I." There can be no doubt that the Central and the State legislations operate in two different and distinct fields. The provides for the regulation, production, a supply distribution and pricing of essential commodities and is relatable to Entry 33 of List III of the Seventh Schedule which reads: "33. Trade and commerce in, and the production, supply and distribution of, . (a) the products of any industry where the control of such industry by the Union is declared by Parliament 149 by law to be expedient in the public interest, and imported goods of the same kind as such products. " The definition of "essential commodities" in section 2(a) of the now includes 'drugs ' by the insertion of cl. (iva) therein by Act 30 of 1974. Sub section (I) of section 3 of the provides: B "3. Powers to control production, supply, distribution, etc., of essential commodities (1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof. and trade and commerce therein. " Sub section (2) lays down without prejudice to the generality of the powers conferred by sub section (1), an order made therein may provide for the matters enumerated in cls. (a) to (f). (c) of sub section (2) provides: "For controlling the price at which an essential com modify may be bought or sold. " section 6 of the which has an important bearing on these appeals is in these terms: "6. Effect of orders inconsistent with other enactments Any order made under section 3 shall have effect not withstanding anything inconsistent therewith contained in any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. " The Drugs (Price Control) order, 1979 issued by the Central Government in exercise of the powers conferred under section 3 of the provides for a comprehensive scheme of price fixation both as regards bulk drugs as well as 150 formulations. The expressions "bulk drug" and "formulation" are A defined in paragraph 2(a) and 2(f ) as: "2. In the order, unless the context otherwise requires, (a) "bulk drug" means any substance including pharmaceutical, chemical, biological or plant product or medicinal gas conforming to pharmacopoeal or other standards accepted under the , which is used as such or as an ingredient in any formulations; (f) "formulations" means a medicine processed out of, or containing one or more bulk drug or drugs, with or without the use of any pharmaceutical aids for internal or external use for, or in the . diagnosis, treatment, mitigation or prevention of disease in human beings or animals, but shall not include We are here concerned with the impact of sub section (3) of section 5 of the Act on the price structure of formulation, but non the less much stress was laid on fixation of price of bulk drugs under paragraph 3(2) which allows a reasonable return to the manufacture under sub paragraph (3) thereof. A manufacturer or producer of such bulk drugs is entitled to sell it at a price exceeding the price notified under sub paragraph (1), plus local taxes, if any, payable. What is of essence is the price fixation of formulations and the relevant provisions are contained in paragraph, 10 to 15, 17, 20, 21 and 24. Paragraph 10 provides for a formula according to which the retail price of formulation shall be calculated and it reads: "10. Calculation of retail price of formulations The retail price of a formulation shall be calculated in accordance with the following formula, namely: R.P.=(M.C+C.C+P.M.+P.C) X 1 + MU / 100 + ED Where "R.P." means retail price. 151 "M C." means material cost and includes the cost of drugs and other pharmaceutical aids used including h overages, if any, and process loss thereon in accordance with such norms as may be specified by the Government from time to time by notification in official Gazette in this behalf. "C.C." means conversion cost worked out in accordance with such norms as may be specified by the Government from time to time by notification in the official Gazette in this behalf. "P.M." means the cost of packing material including process loss thereon worked out in accordance with such norms as may be specified by the Government from time to time by notification in the official Gazette in this behalf. "P.C." means packing charges worked out in accordance with such norms as may be specified by the Government from time to time by notification in the official Gazette in this behalf. "M.U." means mark up referred to in paragraph 11. "E.D." means excise duty: Provided that in the case of an imported formulation the landed cost shall from the basis for fixing its price along with such margin as the Government may allow from time to time. Provided further that where an imported formulation is re packed, its landed cost plus the cost of packing materials and packing charges as worked out in accordance with such norms as may be specified by the Government from time to time, by notification in the official Gazette, shall form the basis for fixing its price. Explanation For the purposes of this paragraph, "landed cost" shall mean the cost of import of drug inclusive of customs duty and clearing charges". 152 The expression "mark up" referred to above is dealt within A paragraph 11 and it provides: "11. Mark up referred to in paragraph 10 includes the distribution cost, outward freight, promotional expenses, manufacturers margin and the trade commission and shall not exceed (i) forty percent in the case of formulations specified in Category I of the Third Schedule; (ii) fifty five percent in the case of formulations specified in Category II of the said Schedule: (iii) one hundred per cent in the case of formulations specified in Category III of the said Schedule. " It is unnecessary for our purposes to reproduce the provisions of paragraphs 12 to 14 which formulate a detailed scheme of price fixation. Paragraph 15 confers power of revision of prices and it reads: "15. Power to revise prices of formulations Not withstanding anything contained in this order . (a) The Government may, after obtaining such information as it may consider necessary from a manufacturer or an importer, fix or revise the retail price of one or more formulations marketed by such manufacturer or importer, including a formulation not specified in any of the categories of the Third Schedule in such manner as the pre tax return on the sales turnover of such manufacturer or importer does not exceed the maximum pre tax return specified in the Fifth Schedule; (b) the Government may, if it considers necessary so to do in public interest, by order, revise the retail price of any formulation specified in any of the categories of the Third Schedule. " 153 Paragraph 17 Casts a mandatory duty on the Central Government to maintain 'Drugs Prices Equalisation Account ' to which shall be credited (a) by the manufacturer, importer or distributor, as the case may be (i) the amount determined under sub paragraph (2) of paragraph 7; (ii) the excess of the common selling price or, as the case may be, pooled price over his retention price; (b) such other amount of money as the Central Government may, after due appropriation made by Parliament by law in this behalf, grant from time to time. The amount credited to the Drugs Prices Equalisation Account is meant to compensate a manufacturer, importer or distributor the short fall between his retention price and the common selling price or, as the case may be, the pooled price for the purpose of increasing the production, or securing the equitable distribution and availability at fair prices, of drugs after meeting the expenses incurred by the Government in connection therewith. Every manufacturer, importer or distributor is entitled to make a claim for being compensated for the short fall. Paragraph 19 interdicts that every manufacturer or importer of a formulation intended for sale shall furnish to the dealers, State Drug Controllers and the Government, a price list showing the price at which the formulation is sold t.) a retailer inclusive of excise duty. Every such manufacturer or retailer has to give effect to the change in prices as approved by the Government. Every dealer is required to display the price list at a conspicuous part of the premises. It is, however, necessary to reproduce paragraphs 20, 21 and 24 as they are of considerable importance for our purposes and they read: "20. Retail price to be displayed on label of container Every manufacturer, importer or distributor of a formulation intended for sale shall display in indelible 154 print mark on the label of the container of the formulation or the minimum pack thereof offered for retail sale, the maximum retail price of that formulation with the words "retail price not to exceed" preceding it, and "local taxes extra" succeeding it." "21. Control of sale prices of formulations specified in Third Schedule No retailer shall sell any formulation specified in any of the categories in the Third Schedule to any person at a price exceeding the price specified in the current price list or the price indicated on the label of the container or pack thereof, whichever is less, plus the local taxes, if any, payable. Explanation For the purpose of this paragraph, "local taxes" includes sales tax and octroi actually paid by the retailer under any law in force in a particular area." "24. Price to the wholesaler and retailer (a) No manufacturer, importer or distributor shall sell a formulation to a wholesaler unless otherwise permitted under the provisions of this order or any other order made thereunder at a price higher than: (a) the retail price minus 14 per cent thereof, in the case of ethical drugs, and (b) the retail price minus 12 percent thereof, in the case of non ethical drugs. (2) No manufacturer, importer, distributor or wholesaler shall sell a formulation to a retailer unless otherwise permitted under the provisions of this order or any order made thereunder, at a price higher than: (a) the retail price minus 12 percent thereof, in the case of ethical drugs, and (b) the retail price minus 10 percent thereof, in the case of non ethical drugs. 155 Explanation For the purposes of this paragraph (i) "ethical drugs" shall include all drugs specified in Schedule C, entries Nos. 1, 2, 3, 7, 8 and 9 of Schedule C(l), Schedule E, Schedule G, Schedule and Schedule L, appended to the Drugs and Cosmetics Rules, 1945 made under the , (23 of 1940); and (ii) "non ethical drugs" shall mean all drugs other than ethical drugs. (3) Notwithstanding anything contained in sub para graphs (1) and (2), the Government may, by a general or special order, fix, in public interest, the price to the wholesaler or retailer in respect of any formulation the price which has been fixed or revised under this order. " Much emphasis was laid on fixation of price of bulk drugs under paragraph 3 which provides by sub paragraph (1) that the Government may, with a view to regulating the equitable distribution of an indigenously manufactured bulk drug specified in the First Schedule or the Second Schedule and making it available at a fair price and subject to the provisions of sub paragraph (2) and after making such inquiry as it deems fit, fix from time to time, by notification in the official Gazette, the maximum price at which such bulk drug shall be sold. Sub paragraph (2) enjoins that while filing the price of a bulk drug under sub paragraph (1), the Government may take into account the average cost of production of each bulk drug manufactured by efficient manufacturer and allow a reasonable return on net worth. Explanation thereto defines the expression "efficient manufacturer" to mean a manufacturer (i) whose production of such bulkdrug in relation to the total production of such bulk drug in the country is large, or (ii) who employs efficient technology in the production of such bulk drug. Sub paragraph (3) provides that no person shall sell a bulk drug at a price exceeding the price notified under sub paragraph (1), plus local taxes, if any, payable. It is urged that while fixing the price of bulk drug, the Government has to take into account the average cost of production 156 of that bulk drug by a particular manufacturer, by taking into A consideration the cost to a manufacturer who employs efficient methods and allowing a reasonable return on the net worth of the drug manufactured. Otherwise, every manufacturer will show a figure as cost of production, which may not be acceptable. The average cost of production of an efficient manufacturer is made the standard for fixing the price but such fixation of the price of bulk drug allows a reasonable return to the manufacturer. Under sub paragraph (3) the manufacturer or producer of such bulk drug is entitled to sell it at a price not exceeding the price so fixed plus local tax if any, payable. Much stress is laid that the average cost of an efficient manufacturer allows a reasonable return on net worth of the drug manufactured and the price so fixed is exclusive of local taxes i.e. sales tax. It is further urged that the term "local taxes" in sub paragraph (3) means and includes sales tax leviable in a State and attention is drawn to Explanation to paragraph 21 for that purpose. We fail to appreciate the relevance of sub paragraph (3) of paragraph 3 which relates to a manufacturer or producer of bulk drugs or of paragraph 21 of the Control order which fixes the controlled price of formulations specified in the Third Schedule exclusive of local taxes i.e. sales tax. The appellants are manufacturers or producers of medicines and drugs and are governed by paragraph 24. Under paragraph 24, a manufacturer or producer is not entitled to sell a formulation to a wholesaler at a price higher than the retail price minus 14% thereof in case of ethical drugs and minus 12% in case of non ethical drugs. It is quite clear upon the terms of paragraph 24 that the price chargeable by the appellants as manufacturers or producers is a price inclusive of sales tax. The entire argument built upon sub paragraph (3) of paragraph 3 and paragraph 21 of the Control order showing that the controlled price is exclusive of sales tax and thereof is in conflict with sub s (3) of section S of the Act appears to be wholly misconceived. It is urged that the appellants in their price lists have a term embodied that sales tax would be chargeable from a wholesaler or distributor and therefore they are entitled to recover sales tax on the sale of their medicines and drugs cannot possibly prevail. Such a term would be in clear violation of para graph 24 of the Control order which is an offence punishable under section 7 of the . It cannot be doubted that a surcharge partakes of the nature of sales tax and therefore it was within the competence of the State 157 Legislature to enact sub section (I) of section S of the Act for the purpose of levying surcharge on certain class of dealers in addition to the tax payable by them. When the State Legislature had competence to levy tax on sale or purchase of goods under Entry 54, it was equally competent to select the class of dealers on whom the charge will fall. If that be so, the State Legislature could undoubtedly have enacted sub section (3) of section S of the Act prohibiting the dealers liable to pay a surcharge under sub section (I) thereof from recovering the same from the purchaser. It is fairly conceded that sub section (3) of section S of the Act is also relatable to Entry 54. The contention however is that there is conflict between paragraph 21 of the Control order which allows a manufacturer or producer of drugs to pass on the liability to pay sales tax and sub section (3) of section S of the Act which prohibits such manufacturers or producers from recovering the surcharge and therefore it is constitutionally void. It is said that the Courts should try to adopt the rule of harmonious construction and give effect to paragraph 21 of the Control order as the impact of sub section (3) of section S of the Act is on fixation of price of drugs under the Drugs (Price Control) order and therefore by reason of section 6 of the , paragraph 21 of the Control order which provides for the passing on of tax liability must prevail. The submission rests on a construction of article 246 (3) of the Constitution and it is said that the power of the State Legislature to enact a law with respect to any subject in List II is subject to the power of Parliament to legislate with respect to matters enumerated in Lists I and III. It is convenient at this stage to deal with the contention of the appellants that if sub section (3) of section 5 of the Act were to cover all sales including sales of essential commodities whose prices are controlled by the Central Government under the various control orders issued under sub section (I) of section 3 of the , then there will be repugnancy between the State law and such contral orders which according to section 6 of the must prevail. In such a case, the State law must yield to the extent of the repugnancy. In Hari Shankar Bagla & Anr. vs State of Madhya Pradesh(1) the Court had occasion to deal with the non obstante clause in section 6 of the Essential Supplies (Temporary Powers) Act, 1946 which was in pari materia with section 6 of the and it was observed: 158 "The effect of section 6 certainly is not to repeal any one of these laws or abrogate them. Its object is simply to by pass them where they are inconsistent with the provisions of the Essential Supplies (Temporary Powers) Act, 1946, or the orders made thereunder. In other words, the orders made under section 3 would he operative in regard to the essential commodity covered by the Textile Control order wherever there is repugnancy in this order with the existing laws and to that extent the existing laws with regard to those commodities will not operate. By passing a certain law does not necessarily amount to repeal or abrogation of that law. That law remains unrepealed but during the continuance of the order made under section 3 it does not operate in that field for the time being. " The Court added that after in order is made under section 3 of that Act, section 6 then steps in wherein Parliament has declared that as soon as such an order comes into being that will have effect notwithstanding any inconsistency therewith contained in any enactment other than that Act. Placing reliance on the observations in Hari Shankar Bagla 's case, supra, it is urged that the effect of the non obstante clause in section 6 of the is to give an overriding effect to the provisions of paragraph 21. It is further urged that paragraph 21 of the Control order having been issued by the Central Government under sub section (1) of s 3 of the which permits the manufacturer or producer to pass on the liability to pay sales tax must prevail and sub section (3) of section S of the Act which is inconsistent therewith is by passed. The contention appears to be misconceived. The appellants being manufacturers or producers of formulations are not governed by paragraph 21 of the Control order but by paragraph 24 thereof and therefore the price chargeable by them to a wholesaler or distributor is inclusive of sales tax. There being no conflict between sub section (3) of section S of the Act and paragraph 24 of the Control order, the question of non obstante clause to section 6 of the coming into play does not arise. Even otherwise i. e. if some of the appellants were governed by paragraph 21 of the Control order, that would hardly make any difference. Under the scheme of the Act, a dealer is free to pass 159 on the liability to pay sales tax payable under section 3 and additional sales tax payable under section 6 to the purchasers. Sub section (3) of section S of A the Act however imposes a limitation on dealers liable to pay surcharge under sub section (1) thereof from collecting the amount of surcharge payable by them from the purchasers which only means that surcharge payable by such dealers under sub section (I) of section S of the Act will cut into the profits earned by such dealers. The controlled price or retail price of medicines and drugs under paragraph 21 remains the same, and the consumer interest is taken care of in as much as the liability to pay surcharge sub section (3) of section 5 cannot be passed on. That being so, there is no conflict between sub section (3) of section S of the Act and paragraph 21 of the Control order. The entire sub mission advanced by learned counsel for the appellants proceeds on the hypothesis that the various control orders issued under sub section (1) of section 3 of the are for the protection of the manufacturer or producer. There is an obvious fallacy in the argument which fails to take into account the purpose of the legislation. Where the fixation of price of an essential commodity is necessary to protect the interests of consumers in view of the scarcity of supply, such restriction cannot be challenged as unreasonable on the ground that it would result in the elimination of middleman for whom it would be unprofitable to carry on business at fixed rate or that it does not ensure a reasonable return to the manufacturer or producer on the capital employed in the business of manufacturing or producing such an essential commodity. The contention that in the field of fixation of price by a control order issued under sub section (1) of section 3 of the , the Central Government must have due regard to the securing of a reasonable return on the capital employed in the business of manufacturing or producing an essential commodity is entirely misconceived. The predominant object of issuing a control order under sub section (1) of section 3 of the Act is to secure the equitable distribution and availability of essential commodities at fair prices to the consumers, and the mere circumstance that some of those engaged in the field of industry, trade and commerce may suffer a loss is no ground for treating such a regulatory law to be unreasonable, unless the basis adopted for price fixation is so unreasonable as to be in excess of the power to fix the price, or there is a statutory obligation to ensure a fair return to the industry. In Shree Meenakshi Mills 160 Ltd. vs Union of India(l) Ray, J speaking for the Court rejected the A contention that the controlled price must ensure a reasonable return on the capital employed in the business of manufacturing or producing essential commodities in these words : "In fixing the prices, a price line has to be held in order to give preference or predominant consideration to the interests of the consumers or the general public over that of the producers in respect of essential commodities. The aspect of ensuring availability of the essential commodities to the consumer equitably and at fair price is the most important consideration." In Prag Ice & Oil Mills & Anr. etc. vs Union of India(a) Chandrachud, J. (as he then was) negatived a similar contention that fixation of a price without ensuring a reasonable return to the producers or dealers was unconstitutional. In repelling the contention, Chandrachud J. speaking for the Court referred to the two earlier b decisions in Panipat Cooperative Sugar Mills vs Union of India(3) and Anakapalle Cooperative Agricultural & Industrial Society Ltd. vs Union of India(4) and observed: "The infirmity of this argument, as pointed out in Meenakshi Mills 's case, is that these two decisions turned on the language of s 3 (3C) of the under which it is statutorily obligatory to the industry a reasonable return on the capital employed in the business of manufacturing sugar. These decisions can therefore have no application to cases of price fixation under section 3 (1) read with section 3 (2) (c) of the Act. Cases falling under sub sections (3A), (3B) and (3C) of section 3 of the Act belong to a different category altogether. " The learned Chief Justice then observed: "The dominant purpose of these provisions is to ensure the availability of essential commodities to the consumers at a fair price. And though patent injustice to 161 the producer is not to be encouraged, a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 3 (1) and section 3 (2) (c) of the . The interest of the consumer has to be kept ill the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration. " The contention advanced does not take note of the distinction between the controlled price fixed under cl. (c) of sub section (2) of section 3 of the Act read with sub section (I) thereof and the procurement price fixed under sub sections (3A), (3B) and (3C). In fixing a procurement price under sub sections (3A), (3B) and (3C), there is a statutory obligation cast on the Central Government to ensure a fair return to the producers or dealers of essential commodities. while in fixing the controlled price under c]. (c) of sub section (2) of section 3 read with sub section (1) thereof, the predominant factor is the basis to secure the equitable distribution and availability of essential commodities at fair prices to the consumers and a reasonable return on investment or a reasonable rate of profit to the manufacturer or producer i. not a relevant criterion although it should not ordinarily work patent injustice to a manufacturer or producer. Just as the industry cannot complain of rise and fall of prices due to economic factors in open market, it cannot similarly complain of some increase in, or reduction of, prices as a result of an order issued under sub section (I) of section 3 of the essential commodities Act, or a cut in the margin of profits brought about by a provision like sub section (3) of section 5 of the Act which provides that a manufacture or producer shall not be entitled to recover the surcharge levied on him under sub section (I) of section S of the Act because such increase or reduction is also based on economic factors. The principal point in controversy is: Whether there is repugnancy between sub section (3) of section 5 of the Act and paragraph 21 of the Control order and therefore sub section (3) of section 5 must yield to that extent. The submission is that if Parliament chooses to occupy the field and there is price fixation of an essential commodity with liberty to pass on the burden of tax to the consumer by a law made by Parliament under Entry 33 of List III of the Seventh Schedule, then it is not competent for the State Legislature to enact a provision 162 like sub section (3) of section S of the Act while enacting a law under Entry 54 of List II prohibiting the passing on of liability of tax to the purchaser. The true principle applicable in judging the constitutional validity of sub section (3) of section S of the Act is to determine whether in its pith and substance it is a law relatable to Entry 54 of List II of the Seventh Schedule and not whether there is repugnancy between sub section (3) of section S of the Act and paragraph 21 of the Drugs {Price Control) order made under sub section (1) of section 3 of the , is therefore void. In dealing with the question, we must set out article 246 of the Constitution which is based on section 100 of the Government of India Act, 1935 and it reads: "246(1) Notwithstanding anything in clauses (2) and t (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the "Union List"). (2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the "Concurrent List"). (3) Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the "State List"). (4) Parliament has power to make laws with respect to any matter for any part of the territory of India not 9 included in a State notwithstanding that such matter is a matter enumerated in the State List. " It is obvious that article 246 imposes limitations on the legislative powers of the Union and State Legislatures and its ultimate analysis would reveal the following essentials: 1. Parliament has exclusive power to legislate with respect to any of the matters enumerated in List I 163 notwithstanding anything contained in cls. (2) and (3). The non obstante clause in article 246(1 ) provides for predominance or supremacy of Union Legislature. This power is not encumbered by anything contained in cls. (2) and (3) for these causes them selves are expressly limited and made subject to the non obstante clause in article 246(1). The combined effect of the different clauses contained in article 246 is no more and no less than this: that in respect of any matter falling within List I, Parliament has exclusive power of legislation. The State Legislature has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II of the Seventh Schedule and it also has the power to make laws with respect to any matters enumerated in List III. The exclusive power of the State Legislature to . legislate with respect to any of the matters enumerated in List II has to be exercised subject to cl. (l) i.e. the exclusive power of Parliament to legislate with respect to matters enumerated in List I. As a con sequence, if there is a conflict between an entry in List I and an entry in List II which is not capable of reconciliation, the power of Parliament to legislate with respect to a matter enumerated in List TI must supersede pro tanto the exercise of power of the State Legislature. Both Parliament and the State Legislature have con current powers of legislation with respect to any of the matters enumerated in List III. article 254 provides for the method of resolving conflicts between a law made by Parliament and a law made by the Legislature of a State with respect to a matter falling in the Concurrent List and it reads: "254(1) If any provision of a law made by the Legislature of a State is repugnant to any provision of a law made by Parliament which Parliament is competent enact, or to any provision of an existing law with respect to one of the matters enumerated in the Concurrent List, then, 164 subject to the provisions of clause (2), the law made by Parliament, whether passed before or after the law made by the Legislature of such State, or, as the case may be, the existing law shall prevail and the law made by the Legislature of the State shall, to the extent of the repugnancy, be void. (2) Where a law made by the Legislature of a State with respect to one of the matters enumerated in the Concurrent List contains any provision repugnant to the provisions of an earlier law made by Parliament or an existing law with respect to that matter, then, the law so made by the Legislature of such State shall if it has been reserved for the consideration of the President and has received his assent, prevail in that State. Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, varying or repealing the law so made by the Legislature of the State. " We find it difficult to subscribe to the proposition advanced on behalf of the appellants that merely because of the opening words of article 246(3) of the Constitution "Subject to clauses (I) and (2)" and the non obstante clause in article . 246(1) ' 'Notwithstanding . anything in clauses (2) and (3)", sub section (3) of section 5 of the Act which provides that no dealer shall be entitled to collect the amount of surcharge must be struck down as ultra vires the State Legislature inasmuch as it is in consistent with paragraph 21 of the drugs (Price Control) order issued by the Central Government under sub section (I) of section 3 of the which enables the manufacturer or producer of drugs to pass on the liability to pay sales tax to the consumer. The submission is that sub section (3) of section 5 of the Act enacted by the State Legislature while making a law under Entry 54 of List II of the Seventh Schedule which interdicts that a dealer liable to pay surcharge under sub section (1) of section 5 of the Act shall not be entitled to collect it from the purchaser, directly trenches upon Union power to legislate with respect to fixation of price of essential commodities under Entry 33 of List Ill. It is said that if both are valid, then ex hypothesi the law made by Parliament must prevail and the State law pro tanto must yield. We are afraid, the contention cannot prevail in view of the well accepted principles, 165 The words "Notwithstanding anything contained in clauses (2) and (3) ' in article 246 (l) and the words "Subject to clauses A (I.) and (2)" in article 246(3) lay down the principle of Federal supremacy viz. that in case of inevitable conflict between Union and State powers, the Union power as enumerated in List T shall prevail over the State power as enumerated in List II and III. and in case of overlapping between List 11 and III, the 13 former shall prevail. But the principle of Federal supremacy laid down in article 246 of the Constitution cannot be resorted to unless there is an "irreconcilable" conflict between the Entries in the Union and State Lists. In the case of a seeming conflict between the Entries in the two lists, the Entries should be read together without giving a narrow and restricted sense to either of them. Secondly, an attempt should be made to see whether the two Entries cannot be reconciled so as to avoid a conflict of jurisdiction. lt should be considered whether a fair reconciliation can be achieved by giving to the language or the Union Legislative List a meaning which, if less wide than it night in another context bear, is yet one that can properly be given to it and equally giving to the language of the State Legislative List a meaning which it can properly bear. The non obstante clause in article 246(l) must operate only if such reconciliation should prove impossible. Thirdly, no question of conflict between the two lists will arise if the impugned legislation, by the application of the doctrine of "pith and substance" appears to fall exclusively under one list, and the encroachment upon another list is only incidental. Union and State Legislatures have concurrent power with respect to subjects enumerated in List III, subject only to the pro vision contained in cl. (2) of article 254 i.e. provided the provisions of the State Act do not conflict with those of any (Central Act on the subject. However, in case of repugnancy between a State Act and a Union Law on a subject enumerated in List III, the State law must yield to the Central law unless it has been reserved for the assent of the President and has received his assent under article 254(2). The question of repugnancy arises only when both the Legislatures are competent to legislate in the same field i.e. when both the Union and the State laws relate to a subject specified in List III and occupy the same field. As regards the distribution of legislative powers between the Union and the States, article 246 adopts with immaterial alterations the 166 scheme for the distribution of legislative powers contained in section 100 A of the Government of India Act, 1935. Our Constitution was not written on a clean slate because a Federal Constitution had been established by the Government of India Act, 1935 and it still remains the framework on which the present Constitution is built. The provisions of the Constitution must accordingly be read in the light of the provisions of the Government of India Act, 1935 and the principles laid down in connection with the nature and interpretation of legislative power contained in the Government of India Act, 1935 are applicable, and have in fact been applied, to the interpretation of the Constitution. In the matter of the Central Provinces & Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938(1) Gwyer, C.J. referred to the two decision of the Privy Council in Citizen Insurance Company vs Wiliam Parsons(2) and Attorney General for the Province of Ontario vs Attorney General for the Dominion of Canada(3) which in his opinion had laid down 'most clearly the principles which should be applied by Courts in the matter of deciding upon the competence of the two rival Legislatures that have been set up under the Indian Federal system. With regard to the interpretation of the non obstante clause in section 100(l) of the Government of India Act, 1935 Gwyer, C.J. observed: "It is a fundamental assumption that the legislative powers of the Centre and Provinces could not have been intended to be in conflict with one another and, therefore, we must read them together, and interpret or modify the language in which one is expressed by the language of the other." "In all cases of this kind the question before the Court", according to the learned Chief Justice is not "how the two legislative powers are theoretically capable of being construed, but how they are to be construed here and now." The general scheme of the British North America Act, 1867 with regard to the distribution of legislative powers, and the general 167 scope and effect of sections 91 and 92, and their relations to each other were fully considered and commented upon in the case of Citizen Insurance Company 's case, supra. Sir Montague Smith delivering the judgment for the Board evolved the rule of reconciliation observing: "In these cases it is the duty of the Courts, however difficult it may be, to ascertain in what degree and to what extent, authority to deal with matters Falling within these classes of subjects exists in each legislature, and to define in the particular case before them the limits of their respective power. It could not have been the intention that a conflict should exist; and, in order to prevent such a result, the two sections must be read together and the language of one interpreted and, where necessary, modified by that of the other. In this way it may, in most cases, be found possible to arrive at a reasonable and practical construction of the language of the Section, so as to reconcile the respective powers they contain and give effect to all of them. Earl Loreburn, L.C. delivering the judgment of the Judicial Committee in Attorney General for the Province of Ontario 's case, (supra) observed that in the interpretation of sections 91 and 92 of the E: British North America Act: "If the text is explicit, the text is conclusive alike for what it directs and what it forbids. " When the text is ambiguous, as for example when the words establishing two mutually exclusive jurisdictions are wide enough to bring a particular power within either, recourse must be had to the context and scheme of the Act. In A.L.S.P.P. Subrahmanyan Chettiar vs Muttuswami Goundan(l) Gwyer, C.J. reiterated that the principles laid down by the Privy Council in a long line of decisions in the interpretation of sections 91 and 92 of the British North America Act, 1867 must be accepted as a guide for the interpretation of section 100 of the Government of India Act, 1935: 168 "It must inevitably happen from time to time that legislation, though purporting to deal with a subject in one list, touches also on a subject in another list, and the different provisions of the enactment may be so closely intertwined that build adherence to a strictly verbal interpretation would result in a large number of statutes being declared invalid because the Legislature enacting them may appear to have legislated in a forbidden sphere. Hence the rule which has been evolved by the Judicial Committee whereby the impugned statute is examined to ascertain its 'pith and substance ' or its true nature and character for the purpose of determining whether it is legislation in respect of matters in this list or in that. " It has already been stated that where the two lists appear to conflict with each other, an endeavour should be made to reconcile them by reading them together and applying the doctrine of pith and substance. It is only when such attempt to reconcile fails that the non obstante clause in article 246(1) should be applied as a matter of last resort. For, in the words of Gwyer, C.J. in C.P. & Berar Taxation Act 's case, supra: "For the clause ought to be regarded as a last re source, a witness to the imperfections of human expression and the fallibility of legal draftsmanship. " The observations made by the Privy Council in the Citizen 's Insurance Company 's case, supra, were quoted with approval by Gwyer, C.J. in C.P. & Berar Taxation Act 's case, supra, and he observed that an endeavour should be made to reconcile apparently conflicting provisions and that the general power ought not to be construed as to make a nullity of a particular power operating in the same field. The same duty of reconciling apparently conflicting provisions was reiterated by Lord Simonds in delivering the judgment of the Privy Council in Governor General in Council vs Province of Madras(1): "For in a Federal constitution in which there is a division of legislative powers between Central and Provincial Legislatures, it appears to be inevitable that controversy should arise whether one or other legislature 169 is not exceeding its own, and encroaching on the other 's constitutional legislative power, and in such a controversy it is a principle, which their Lordships do not hesitate to apply in the present case, that it is not the name of the tax but its real nature, its "pith and substance" as it has sometimes been said, which must determine into what category it falls. " B Their Lordships approved of the decision of the Federal Court in The Province of Madras vs Messrs Boddu Paidanna & Sons(l) where it was held that when there were apparently conflicting entries the correct approach to the question was to see whether it was possible to effect a reconciliation between the two entries so as to avoid a conflict and overlapping. In Prafulla Kumar Mukherjee & Ors. vs Bank of Commerce Ltd., Khulna(1) Lord Porter delivering the judgment of the Board laid down that in distinguishing between the powers of the divided jurisdictions under list I, II and III of the Seventh Schedule to the Government of India Act, 1935 it is not possible to make a clean cut between the powers of the various Legislatures. They are bound to overlap from time to time, and the rule which has. been evolved by the Judicial Committee whereby an impugned statute is examined to ascertain its pith and substance or its true character for the purpose of determining in which particular list the legislation falls, applies to Indian as well as to Dominion legislation. In laying down that principle, the Privy Council observed: "Moreover, the British Parliament when enacting the Indian Constitution had a long experience of the working of the British North America Act and the Australian Commonwealth Act and must have known that it is not in practice possible to ensure that the powers entrusted to the several legislatures will never overlap." The Privy Council quoted with approval the observations of Gwyer, C.J in Subramanyan Chettiar 's case, supra, quoted above, and observed: 170 "No doubt experience of past difficulties has made A the provisions of the Indian Act more exact in some particulars, and the existence of the Concurrent List has made it easier to distinguish between. those matters which are essential in determining to which list particular provision should be attributed and those which are merely incidental. But the overlapping of subject matter is not avoided by substituting three lists for two, or even by arranging for a hierarchy of jurisdictions. Subjects must still overlap, and where they do, the question must be asked what in pith and substance is the effect of the enactment of which complaint is made, and in what list is its true nature and character to be found. If these questions could not be asked, much beneficent legislation would be stifled at birth. and many of the subjects entrusted to provincial legislation could never effectively be dealt with. " It would therefore appear that apparent conflict with the Federal power had to be resolved by application of the doctrine of pith and substance and incidental encroachment. Once it is found that a law made by the Provincial Legislature was with respect to one of the matters enumerated in the Provincial List, the degree or extent of the invasion into the forbidden field was immaterial. "The invasion of the provinces into subjects in the Federal List", in the words of Lord Porter, "was important": " . not . because the validity of an Act can be determined by discriminating between degrees of invasion, but for the purpose of determining as to what is the pith and substance of the impugned Act. Its pro visions may advance so far into federal territory as to show that its true nature is not covered with Provincial matters, but the question is not, has it trespassed more or less, but is the trespass, whatever it be, such as to show that the pith and substance of the impugned Act is not money lending but promissory notes or banking ? once that question is determined the Act falls on one or the other side of the line and can be seen as valid or invalid according to its true content. " The passage quoted above places the precedence according to the three lists in its proper perspective. In answering the objection that 171 view does not give sufficient effect to the non obstante clause in section 100(1) of the Government of India Act, 1935, as between the three lists, the Privy Council observed: "Where they come in conflict, List I has priority over Lists III and II and List III has priority over List II." But added: "The priority of the Federal Legislature would not prevent the Provincial Legislature from dealing with any matter within List II though it may incidentally affect any item in List I." It would therefore appear that the constitutionality of the law is to be judged by its real subject matter and not by its incidental effect on any topic of legislation in another field. The decision of the Privy Council in Prafulla Kumar Mukherjee 's case, supra, has been repeatedly approved by the Federal Court and this Court as laying down the correct rule to be applied in resolving conflicts which arise from overlapping powers in mutually exclusive lists. It may be added as a corollary of the pith and substance rule that once it is found that in pith and substance an impugned Act is a law on a permitted field any incidental encroachment on a forbidden field does not affect the competence of the legislature to enact that Act; Ralla Ram vs Province of East Punjab(2), State of Bombay vs Nerothamdas Jethabai & Anr(2), State of Bombay vs F. N. Balsara(3), A. section Krishna vs State of Madras(4), M. Karunanidhi vs Union of India(5), Union of India vs H.S. Dhillon(6) and Southern Pharmaceuticals & Chemicals Trichur & Ors. etc. vs State of Kerala & Ors. etc.(7) In Laskin 's Canadian Constitutional Law, 4th edn. , it is observed at p. 24 that the doctrine of paramountcy Is tied up with 172 the "trenching" doctrine in the first of the four propositions formulated by Lord Tomlin in Attorney General for Canada vs Attorney General for Britain Columbia & Ors.(1) case, and then he goes into the question,: "What is the basis of the paramountcy doctrine ?" Laskin quotes from Lefroy 's Canada 's Federal System at p. 126: "But the rule as to predominance of Dominion legislation it may be confidently said, can only be invoked in cases of absolutely conflicting legislations in pari materia, when it would be an impossibility to give effect to both the Dominion and the provincial enactments. " The learned author refers two the two decisions of the Privy Council in Attorney General of Ontario vs Attorney General of Canada(2) and City of Montreal vs Montreal Street Railway(3) laying down that: "There must be a real conflict between the two Acts, that is, the two enactments 'must come into collision '. . or 'comes into conflict . over a field of jurisdiction common to both '. " Laskin observes that the "conflict" test espoused by these authorities seems clear enough in principle even if it raises problems in application. He then at p. 26 notices that there is a recent trend in the decisions of the Supreme Court of Canada to the strict view of paramountcy reflected in the conflict or collision test, which he describes as the test of operating incompatibility and observes at p. 27 : . "It is necessary to be reminded at all times that no issue of paramountcy can arise unless there is in existence federal and provincial legislation which, independently considered, is in each case valid. If either piece of legislation, standing alone, is invalid there is no occasion to consider whether the field has been occupied. The issue that will have been resolved in such case would be the anterior one of the "matter embraced by the legislation, whether of Parliament or of the provincial legislature, as the case may be. " 173 At p. 28, he states: "The doctrine of occupied field applies only where there is a clash between Dominion legislation and provincial legislation within an area common to both. " Here there is no such conflict. The Union and the State laws operate on two different and distinct fields and both the laws are capable of being obeyed. Questions of conflict between the jurisdiction of Parliament of the Dominion and of the Provincial Legislature have frequently come up before the Privy Council and we may briefly refer to the decisions relied upon though they are of little assistance to the appellants. In Grand Trunk Railway Company of Canada vs Attorney General of Canada(1), Lord Dunedin observed: The construction of the provisions of the British North America Act has been frequently before their Lordships. It does not seem necessary to recapitulate the decisions. But a comparison of two cases decided in the year 1894 viz. , Attorney General of Ontario vs Attorney General of Canada(2) and Tennant vs Union Bank of Canada(3) seem to establish these two propositions First, that there can be a domain in which provincial and Dominion legislation may overlap, in which case neither legislation will be ultra vires, if the field is clear; and secondly, that if the field it not clear, and in such a domain the two legislations meet, then the Dominion legislation must prevail. " In a later decision of the Privy Council in Attorney General for Canada vs Attorney General for British Columbia & Ors. case, supra, Lord Tomlin summarized in four propositions the result of the earlier decisions of the Board on the question of conflict between the Dominion and Provincial Legislatures. The third proposition is to the effect that it is within the competence of the Dominion Parliament to provide for matters which, though otherwise within the 174 legislative competence of the Provincial Legislature, are necessarily incidental to effective legislation by Parliament of the Dominion upon a subject of legislation expressly enumerated in section 91. The fourth proposition on which the entire argument of learned counsel for the appellants proceeds is based upon the dictum of Lord Dunedin in Grand Trunk Railway Company 's case, supra, set out above. It is well settled that the validity of an Act is not affected if lt incidentally trenches upon matters outside the authorized field and therefore it is necessary to inquire in each case what is the pith and substance of the Act impugned. If the Act, when so viewed, substantially falls within the powers expressly conferred upon the legislature which enacted it, then it cannot be held to be invalid merely because it incidentally encroaches on matters which have been assigned to another Legislature. In Board of Trustees of the Lethbrige Northern Irrigation District & Anr. vs Independent order of Foresters(1), Viscount, Caldecote, L.C. Observed: "These sections have been the subject of repeated examination in the Judicial Committee, and there can no longer be any doubt as to the proper principles to their interpretation, difficult though they may be in application. Lord Haldane, in delivering the judgment of the Judicial Committee in, Great West Saddlary Co. vs The King(2) said "The rule of constraction is that general language in the heads of section 92 yields to particular expressions in section 91, where the latter are unambiguous. " In a later decision of the Judicial Committee, Attorney General for Canada vs Attorney General for British Columbia, supra, Lord Tomlin summarized in four propositions the result of the earlier decisions of the Board on questions of conflict between the Dominion and the Provincial Legislatures. The first proposition is to the effect that the legislation of the Provincial Parliament of the Dominion, so long as it strictly relates to subjects of legislation expressly enumerated in section 91, is of paramount authority, even though it trenches upon matters assigned to the Provincial 175 Legislatures by section 92, Lord Tomlin referred to Tennant vs Union Bank of Canada, supra, as the authority for this statement." Viscount Caldecote then observed: "In applying these principles, as their Lordships propose to do, an inquiry must first be made as to the "true nature and character of the enactment in question" Citizen Insurance Co. Of Canada vs Wiliam Parsons) (supra) or, to use Lord Watson 's words in delivering the judgment of the Judicial Committee in Union Colliery Company of British Columbia vs Bryden(1) as to their "pith and substance". Their Lordships now address themselves to that inquiry." "Legislation", said Lord Maugham in delivering the judgment of the Privy Council in Attorney General for Alberta vs Attorney General for Canada,(2) "given in pith and substance within one of the classes specially enumerated in section 91 is beyond the legislative competence of the Provincial Legislature under section 91". At p. 370 of the Report, Lord Maugham laid down on behalf of the Privy Council: "Since 1894 it has been a settled principle that if a subject of legislation by the Province is only incidental or ancillary to one of the classes of subjects enumerated in section 91 and is properly within one of the subjects enumerated in section 92, then legislation by the Province is competent unless and until the Dominion Parliament chooses to occupy the field by legislation." (Emphasis supplied.) Lord Maugham 's reference to the year 1894 points to the decision of the Privy Council in Attorney General for Ontario vs Attorney General for Canada, supra. In Attorney General for Canada vs Attorney General for the Province of Quebed,(3) Lord Porter in delivering the judgment of the Board drew attention to these principles and then observed: 176 "In calling attention to these principles their Lordships are but repeating what has many times been set forth in the judgments of the Board, and it only remains to apply them to the individual case under consideration. ' The rule of pith and substance laid down by the Privy Council was reaffirmed by Viscount Simon in Attorney General of Sasketchewan vs Attorney General of Canada & Ors (1) This was emphasized very clearly by Lord Atkin while dealing with the validity of the Milk and Milk Products Act (Northern Ireland) which was impugned as violating section 4 of the Government of Ireland Act, 1920 in Gallahagher vs Lynn(2) in his own terse language: "It is well established that you are to look at the "true nature and character" of the legislation; Russell vs The Queen(3) "the pith and substance of the legislation". If on the view of the statute a, whole, you find that the substance of the legislation is within the express powers, then it is now invalidated if incidentally it affects matters which are outside the authorized field. " Much stress is laid on the fourth propositions formulated by Lord Tomlin in Attorney General for Canada vs Attorney General for British Columbia & Ors., (supra) based on the dictum of Lord Dunedin in Grand Trunk Railway Company of Canada 's case, supra, which, even at the cost of repetition, we may set out below: "4. There can be a domain in which provincial and Dominion legislation may overlap, in which case neither legislation will be ultra vires if the field is clear, but if the field is not clear and the two legislations meet, the Dominion legislation must prevail: see Grand Trunk R. of Canada vs Attorney General of Canada, (supra). " The question is whether the field is not clear and the two legislations meet and therefore on the doctrine of Federal supremacy sub s (3) 177 of section S of the Act must be struck down as ultra vires The principle deducible from the dictum of Lord Dunedin as applied to the distribution of legislative powers under Art 246 of the Constitution, is that when the validity of an Act is challenged as ultra vires, the answer lies to the question, what is the pith and substance of the impugned Act ? No doubt, in many cases it can be said that the enactment which is under consideration may be regarded from more than one angle and as operating in more than one field. If however, the matter dealt with comes within any of the classes of subjects enumerated in List II, then it is under the terms of article 246 (3) not to be deemed to come within the classes of subjects assigned exclusively to Parliament under article 246 (1) even though the classes of subjects looked at signly overlap in many respects. The whole distri bution of powers must be looked at as Gwyer, C. J. Observed in C.P. & Berar Taxation Act 's case, supra, in determining the question of validity of the Act in question. Moreover, as Gwyer, C.J. Laid down in Subrahmaniyan Chettiar 's case, (supra), and affirmed by their Lordships of the Privy Council in Prafulla Kumar Mukherjee 's case, (supra) it is within the competence of the State Legislature under article 246 (3) to provide for matters which, though within the competence of Parliament, are necessarily incidental to effective legislation by the State Legislature on the subject of legislation expressly enumerated in List II. We must then pass on to the contention advanced by learned counsel for the appellants that there is repugnancy between sub s (3) of section S of the Act and paragraph 21 of the Drugs (Price Control) order and therefore sub section (3) of section 5 of the Act is void to that extent. Ordinarily, the laws could be said to be repugnant when they involve impossibility of obedience to them simultaneously but there may be cases in which enactments may be inconsistent although obedience to each of them may be possible without disobeying the other. The question of "repugnancy" arises only with reference to a legislation falling in the Concurrent List but it can be cured by resort to article 254 (2). As we have endeavoured so far, the question raised as to the constitutional validity of sub section (3) of section S of the Act has to be determined by application of the rule of the pith and substance whether or not the subject matter of the impugned legislation was competently enacted under article 246, and therefore tho question of repugnancy under article 254 was not a matter in issue. The submission 178 put forward on behalf of the appellants however is that there is direct collision and/or irreconciliable conflict between sub section (3) of section 5 of the Act which is relatable to Entry 54 of List II of the Seventh Schedule and paragraph 21 of the Control order issued by the Central Government under sub section (1) of section 3 of the which is relatable to Entry 33 of List III. It is sought to be argued that the words "a law made by Parliament which Parliament is competent to enact" must be construed to mean not only a law made by Parliament with respect to one of the matters enumerated in the Concurrent List but they are wide enough to include a law made by Parliament with respect to any of the matters enumerated in the Union List. The argument was put in this form. In considering whether a State law is repugnant to a law made by Parliament, two questions arise: First, is the law made by Parliament viz. the , a valid law ? For, if it is not, no question of repugnancy to a State law can arise. If however it is a valid law, the question as to what constitutes repugnancy directly arises. The Second question turns on a construction of the words "a law made by Parliament which Parliament is competent to enact" in article 254 (1). Strong reliance is placed on the judgment of the High Court of Australia in Clyde Engineering Company Limited vs Cowburn(1) and to a passage in Australian Federal Constitutional Law by Colin Howard, 2nd edn. at pp. 34 35. Our attention is also drawn to two other decisions of the High Court of Australia: Ex parte Mc Lean(2) and Stock Motor Ploughs Limited vs Forsyth.(3) The decision in Clyde Engineering Company 's cases, supra, is an authority for the proposition that two enactments may be inconsistent where one statute takes away the rights conferred by the other although obedience to each one of them may be possible without disobeying the other. The contention is that paragraph 21 of the Control order confers a right on the manufacturers and producers of medicines and drugs to pass on the liability for sales tax while sub section (3) of section 5 of the Act prohibits such manufacturers or producers from passing on such liability. The argument cannot prevail for two obvious reasons viz (1) Entry 54 of List II is a tax entry and therefore there is no question of repugnancy between sub section (3) of section 5 of the Act which is a 179 law made by the State Legislature for the imposition of tax on sale or purchase of goods relatable to Entry 54 and paragraph 21 of the Control order issued by the Central Government under sub section (1) of section 3 of the which is a law made by Parliament relatable to Entry 33 of List III. And (2). The question of 'repugnancy ' can only arise in connection with the subjects enumerated in the Concurrent List as regards which both the Union and the State Legislatures have concurrent powers so that the question af conflict between laws made by both Legislatures relating to the same subject may arise. This Court has considered the question of repugnancy in several cases and in Deep Chand vs The State of Uttar Pradesh & Ors.(1) the result of the authorities was thus stated by Subba Rao, J.: "Nicholas in his Australian Constitution, 2nd edn., p. 303, refers to three tests of inconsistency or repugnancy: 1. There may be inconsistency in the actual terms of the competing statutes; 2. Though there may be no direct conflict, a State law may be inoperative because the Commonwealth law, or the award of the Commonwealth Court, is intended to be a complete exhaustive Code; and 3. Even in the absence of intention, a conflict may arise when both State and Commonwealth seek to exercise their powers over the same subject matter." In Ch. Tika Ramji & Ors. vs The State of Uttar Pradesh & Ors.(2) the Court accepted the above three rules evolved by Nicholas, among others, as useful guides to test the question of repugnancy. article 254 of the Constitution makes provision first, as to what would happen in the case of conflict between a Central and State 180 law with regard to the subjects enumerated in the Concurrent List, and secondly, for resolving such conflict. article 254(1) enunciates the normal rule that in the event of a conflict between a Union and a State law in the concurrent field, the former prevails over the latter. (1) lays down that if a State law relating to a concurrent subject is 'repugnant ' to a Union law relating to that subject, then, whether the Union law is prior or later in time, the Union law will prevail and the State law shall, to the extent of such repugnancy, be void. To the general rule laid down in cl. (1), cl. (2) engrafts an exception, viz., that if the President assents to a State law which has been reserved for his consideration, it will prevail notwithstanding its repugnancy to an earlier law of the Union, both laws dealing with a concurrent subject. In such a case, the Central Act will give way to the State Act only to the extent of inconsistency between the two, and no more. In short, the result of obtaining the assent of the President to a State Act which is inconsistent with a previous Union law relating to a concurrent subject would be that the State Act will prevail in that State and override the provisions of the Central Act in their applicability to that State only. The predominance of the State law may however be taken away if Parliament legislates under the proviso to cl. The proviso to article 254(2) empowers the Union Parliament to repeal or amend a repugnant State law, either directly, or by itself enacting a law repugnant to the State law with respect to the 'same matter '. Even though the subsequent law made by Parliament does not expressly repeal a State law, even then, the State law will become void as soon as the subsequent law of Parliament creating repugnancy is made. A State law would be repugnant to the Union law when there is direct conflict between the two laws. Such repugnancy may also arise where both laws operate in the same field and the two cannot possibly stand together. : See: Zaverbhai Amaidas vs State of Bombay(1), M. Karunanidhi vs Union of India(2) and T. Barai vs Henry Ah Hoe d: Anr.(2) We may briefly refer to the three Australian decisions relied upon. As stated above, the decision in Clyde Engineering Company 's case (supra), lays down that inconsistency is also created when one statute takes away rights conferred by the other. In Ex Parte McLean 's case, supra, Dixon J. laid down another test viz., two 181 statutes could be said to be inconsistent if they, in respect of an identical subject matter, imposed identical duty upon the subject, but provided for different sanctions for enforcing those duties. In Stock Motor Ploughs Limited 's case, supra, Evatt, J. held that even in respect of cases where two laws impose one and the same duty of obedience there may be inconsistency. As already stated the controversy in these appeals falls to be determined by the true nature and character of the impugned enactment, its pith and substance, as to whether it falls within the legislative competence of the State Legislature under article 246(3) and does not involve any question of repugnancy under article 254(1). We fail to comprehend the basis for the submission put forward on behalf of the appellants that there is repugnancy between sub section (3) of section 5 of the Act which is relatable to Entry 54 of List II of the Seventh Schedule and paragraph 21 of the Control order issued by the Central Government under sub section (1) of section 3 of the relatable to Entry 33 of List III and therefore sub section (3) of section 5 of the Act which is a law made by the State Legislature is void under article 254(1). The question of repugnancy under article 254(1) between a law made by Parliament and a law made by the State Legislature arises only in case both the legislations occupy the same field with respect to one of the matters enumerated in the Concurrent List, and there is direct conflict between the two laws. It is only when both these requirements are fulfilled that the State law will, to the extent of repugnancy become void. article 254(1) has no application to cases of repugnancy due to overlapping found between List II on the one hand and List I and List III on the other. If such overlapping exists in any particular case, the State law will be ultra vires because of the non obstante clause in article 246(1) read with the opening words "Subject to" in article 246(3). In such a case, the State law will fail not because of repugnance to the Union law but due to want of legislative competence. It is no doubt true that the expression "a law made by Parliament which Parliament is competent to enact" in article 254(1) is susceptible of a construction that repugnance between a State law and a law made by Parliament may take place outside the concurrent sphere because Parliament is competent to enact law with respect to subjects included in List III as well as 'List I" But if article 254(1) is read as a whole, it will be seen that it is expressly made subject to cl. (2) which makes reference to repugnancy in the field of Concurrent List in other words, if cl. (2) is to be the guide in the determination of scope of cl. (1), the 182 repugnancy between Union and State law must be taken to refer only to the Concurrent field. article 254(1) speaks of a State law being repugnant to (a) a law made by Parliament or (b) an existing law. There was a controversy at one time as to whether the succeeding words "with respect to one of the matters enumerated in the Concurrent List" govern both (a) and (b) or (b) alone. It is now settled that the words "with respect to" qualify both the clauses in article 254(1) viz. a law made by Parliament which Parliament is competent to enact as well as any provision of an existing law. The under lying principle is that the question of repugnancy arises only when both the Legislatures are competent to legislate in the same field i.e. with respect to one of the matters enumerated in the Con current List. Hence, article 254(1) can not apply unless both the Union and the State laws relate to a subject specified in the Con current List, and they occupy the same field. This construction of ours is supported by the observations of Venkatarama Ayyar, J. speaking for the Court in A. section Krishna 's case, supra, while dealing with section 107(1) of the Government of India Act, 1935 to the effect: "For this section to apply, two conditions must be fulfilled: (1) The provisions of the Provincial law and those of the Central legislation must both be in respect of a matter which is enumerated in the Concurrent List, and (2) they must be repugnant to each other, It is only when both these requirements are satisfied that the Provincial law will, to the extent of the repugnancy, become void." In Ch. Tika Ramji 's case, supra, the Court observed that no question of repugnancy under article 254 of the Constitution could arise where parliamentary legislation and State legislation occupy different fields and deal with separate and distinct matters even though of a cognate and allied character and that where, as in that case, there was no inconsistency in the actual terms of the Acts enacted by Parliament and the State Legislature relatable to Entry 33 of List III, the test of repugnancy would be whether Parliament and State Legislature, in legislating on an entry in the Concurrent List, exercised their powers over the same subject matter or whether the laws enacted by Parliament were intended to be exhausted as to cover the entire field, and added: 183 "The pith and substance argument cannot be imported here for the simple reason that, when both the Centre as well as the State Legislatures were operating in the con current field, there was no question of any trespass upon the exclusive jurisdiction of the Centre under Entry 52 of List I, the only question which survived being whether put in both the pieces of legislation enacted by the Centre and the State Legislature, there was any such repugnancy. " This observation lends support to the view that in cases of overlapping between List II on the one hand and Lists I and III on the other, there is no question of repugnancy under article 254(1). Subba Rao. J. speaking for the Court in Deep Chand 's case, supra, interpreted article 254(1) in these terms: "article 254(1) lays down a general rule. Clause (2) is an exception to that Article and the proviso qualified the said exception. If there is repugnancy between the law made by the State and that made by the Parliament with respect to one of the matters enumerated in the Con current List, the law made by Parliament shall prevail to the extent of the repugnancy and law made by the State shall, to the extent of such repugnancy, be void. " In all fairness to learned counsel for the appellants, it must be stated that they did not pursue the point any further in view of these pronouncements. We are unable to appreciate the contention that sub section (3) of section 5 of the Act being a State law must be struck down as ultra vires as the field of fixation of price of essential commodities is an occupied field covered by a central legislation. It is axiomatic that the power of the State Legislature to make a law with respect to the levy and imposition of a tax on sale or purchase of goods relatable to Entry 54 of List 11 of the Seventh Schedule and to make ancillary provisions in that behalf, is plenary and is not subject to the power of Parliament to make a law under Entry 33 of List III. There is no warrant for projecting the power of Parliament to make a law under. Entry 33 of List III into the State 's power of taxation under Entry 54 of List II. Otherwise, Entry 54 will have to be read as: 'Taxes on the sale or purchase of goods other than essential commodities etc 184 cetra '. When one entry is made 'subject to ' another entry, all that it means is that out of the scope of the former entry, a field of legislation covered by the latter entry has been reserved to be specially dealt with by the appropriate Legislature. Entry 54 of List II of the Seventh Schedule is only subject to Entry 92A of List I and there can be no further curtailment of the State 's power of taxation. It is a well established rule of construction that the entries in the three lists must be read in a broad and liberal sense and must be given the widest scope which their meaning is fairly capable of because they set up a machinery of Government. The controversy which is now raised is of serious moment to the States, and a matter apparently of deep interest of the Union. But in its legal aspect, the question lies within a very narrow compass. The duty of the Court is simply to determine as a matter of law, according to the true construction of article 246(3) of the Constitution, whether the State 's power of taxation of sale of goods under Entry 54 of List II and to make ancillary provisions in regard thereto, is capable of being encroached upon by a law made by Parliament with respect to one of the matters enumerated in the Concurrent List. The contention fails to take into account that the Constitution effects a complete separation of the taxing power of the Union and of the States under article 246. It is equally well settled that the various entries in the three lists are not 'powers of legislation, but 'fields ' of legislation. The power to legislate is given by article 246 and other Articles of the Constitution. Taxation is considered to be a distinct matter for purposes of legisla tive competence. Hence, the power to tax cannot be deduced from a general legislative entry as an ancillary power. Further, the element of tax does not directly flow from the power to regulate trade or commerce in, and the production, supply and distribution of essential commodities under Entry 33 of List III, although the liability to pay tax may be a matter incidental to the Centre 's power of price control. "Legislative relations between the Union and the States inter se with reference to the three lists in Schedule VII cannot be under stood fully without examining the general features disclosed by the entries contained in those Lists: "Seervai in his Constitutional Law of India, 3rd edn. 1 at pp. 81 82. A scrutiny of Lists I and II of the Seventh Schedule would show that there is no overlapping 185 anywhere in the taxing power and the Constitution gives independent sources of taxation to the Union and the States. Following the scheme of the Government of India Act, 1935, the Constitution has made the taxing power of the Union and of the States mutually exclusive and thus avoided the difficulties which have arisen in some other Federal Constitutions from overlapping powers of taxation. It would therefore appear that there is a distinction made between general subjects of legislation and taxation. The general subjects of legislation are dealt with in one group of entries and power of taxation ill a separate group. In M.P. Sundararamier & Co. vs The State of Andhra Pradesh & Anr.(1) This Court dealt with the scheme of the separation of taxation powers between the Union and the States by mutually exclusive lists. In List I, Entries 1 to 81 deal with general subjects of legislation; Entries 82 to 92A deal with taxes. In List 11, Entries 1 to 44 deal with general subjects of legislation; Entries 45 to 63 deal With taxes. This mutual exclusiveness is also brought out by the fact that in List Ill, the Concurrent Legislative List, there is no entry relating to a tax, but it only contains an entry relating to levy of fees in respect of matters given in that list other then court fees. Thus, in our Constitution, a conflict of the taxing power of the Union and of the States cannot arise. That being so, it is difficult to comprehend the submission that there can be intrusion by a law made by Parliament under Entry 33 of List III into a forbidden field viz. the State s exclusive power to make a law with respect to the levy and imposition of a tax on sale or purchase of goods relatable to Entry 54 of List II of the Seventh Schedule. It follows that the two laws viz. sub section (3) of section 5 of the Act and paragraph 21 of the Control order issued by the Central Government under sub section (1) of section 3 of the , operate on two separate and distinct fields and both are capable of being obeyed. There is no question of any clash between the two laws and the question of repugnancy does not come into play. The remaining part of the case presents little difficulty. It would be convenient to deal with the contention based on articles 14 and 19 (1) (g) of the Constitution together as the submissions more or less proceed on the similar lines. It is urged that the provision contained in sub section (3) of section 5 of the act is violative of article 14 of the Constitution inasmuch as it is wholly arbitrary and irrational and it 186 treats "unequals as equals". It is urged that the treats certain controlled commodities and their sellers in a special manner by fixing controlled prices. The dealers so treated by this Central law are so circumstanced that they cannot be equated with other dealers who can raise their sale prices and absorb the surcharge levied under sub section (1) of section 5 of the act and a class of dealers like manufacturers and producers of medicines and drugs and other dealers of essential commodities who cannot raise their sale prices beyond the controlled price are being treated similarly without any rational basis. Once the fact of different classes being separate is taken, then a State law which treats both classes equally and visits them with different burdens would be violative of article 14. The State cannot by treating 'equals as unequals ' impose different burdens on different classes. It is submitted that the restriction imposed by sub section 3 of section 5 of the act which prevents the manufacturers and producers of medicines and drugs and other essential commodities from passing on the liability to pay surcharge is confiscatory and imposes a disproportionate burden on such manufacturers and producers or other dealers. These two abstract questions have been convassed on the basis that each of the appellants was a dealer having a gross turnover of Rs. 5 lakhs or more in a year and therefore liable to pay surcharge, in addition to the tax payable by him, under sub section (1) of section 5 of the Act. It is lamentable that there is no factual foundation laid to support the contention that the levy of surcharge under sub section (1) of section 5 of the Act imposes a disproportionate burden on a certain class of dealers such as manufacturers or producers of drugs and pharmaceuticals or dealers engaged in the business of distribution and sale of motor trucks etc. to support the assertion that sub section (3) of section 5 of the Act which prohibits such persons from passing on the liability to pay surcharge is arbitrary or irrational, or that it treats 'unequals as equals ' and thus infringes article 14 of the Constitution or is confiscatory in nature. There is no ground whatever for holding that sub section (3) of section 5 of the Act is arbitrary or irrational or that it treats 'unequals as equals ', or that it imposes a disproportionate burden on a certain class of dealers. It must be remembered that sub section (1) of section 5 of the Act provides for the levy of a surcharge having a gross turnover of Rs 5 lakhs or more in a year at a uniform rate of 10 per centum of the tax payable by them, irrespective whether they are dealers in essential 187 commodities or not. A surcharge in its true nature and character is nothing but a higher rate of tax to raise revenue for general purposes. The levy of surcharge under sub section (1) of section 5 of the Act falls uniformly on a certain class of dealers depending upon their capacity to bear the additional burden. From a fiscal point of view, a sales tax on a manufacturer or producer involves the complication of price structure. It is apt to increase the price of the commodity, and tends to be shifted forward to the consumer. The manufacturers or producers often formulate their prices in terms of certain profit targets. Their initial response would be to raise prices by the full amount of the tax. Where the conventional mark up leaves substantial unrealized profits, successful tax shifting is possible regardless of the nature of the tax. If, on the other hand, the tax cannot be passed on to the consumer, it must be shifted backwards to owners inputs. Despite theoretical approach of economists, businessmen always Regard the tax as a cost and make adjustments accordingly, and this is brought out by John C. Winfrey on Public Finance at p. 402 in the following passage: "The businessman . . has been skeptical regarding the entire approach of marginal cost pricing. His position has been that taxes are treated as a cost when determining prices, be it as part of a full cost pricing" rule? by application of a conventional mark up rate defined net of tax, or by pricing to meet a net of tax target rate of return. According to these formulas, a change in tax rate leads to an adjustment in price. The profits tax becomes a quasi sales tax. The fact that such a price policy is not consistent with the usual concepts of profit maximization does not disprove its existence. " Pausing here for a moment, we may observe that a surcharge being borne by the manufacturers and producers of medicines and drugs under sub section (3) of section 5 of the Act, the controlled price of such medicines and drugs to the consumer will remain the same. From the figures set out above, it will be seen that the business carried on by the appellants in the State of Bihar alone is of such magnitude that they have the capacity to bear the additional burden of surcharge levied under sub section (1) of section 5 of the Act. It roughly works out to one paisa per rupee of the sale price of the manufactured commodity. There is no material placed on record that the surcharge levied under sub section (1) of section 5 of the Act imposes a 188 disproportionate burden on the appellants or that it is confiscatory in nature. The argument of arbitrariness is an argument of despair. Sub section (1) of section Of the Act levies surcharge on dealers whose gross turnover in a year exceeds Rs. 5 lakhs irrespective of whether such dealers deal in essential commodities or not. lt is a general tax and all dealers falling within the class defined under sub section (1) of section 5 of the Act have been levied the surcharge at a uniform rate of 10 per centum of the tax. It will be noticed that first proviso to sub section (1) of section 5 enjoins that the aggregate of the tax and surcharge payable under the Act shall not exceed, in respect of goods declared to be of special importance in inter State trade or commerce by section 14 of the , the rate fixed by section 15 thereof. Under section 14 of the Act, almost all commodities which are essential to the life of the community are declared to be goods of special importance in inter State trade or commerce and therefore the maximum sales tax leviable on sale or purchase of such goods cannot exceed 4 per cent. It would therefore appear that generally dealers having a gross turnover of Rs. 5 lakhs in a year dealing in commodities covered by section 14 will not have to bear the burden of surcharge under sub section (1) of section 5 of the Act. It is the misfortune of these appellants that medicines and drugs are not declared to be of special importance in respect of inter State trade or commerce by section 14 of the . That apart, the appellants as manufacturers or producers of drugs under paragraph 24(1) have to bear the burden of sales tax on the controlled price that they cannot charge to a wholesaler a price higher than (a) the retail price minus 14 per cent thereof, in the case of ethical drugs; and (b) the retail price minus 12 per cent thereof, in the case of non ethical drugs. Under paragraph 24(2) they cannot sell to a retailer at a price higher than (a) the retail price minus 12 per cent thereof, in the case of ethical drugs; and (b) the retail price minus 10 per cent thereof, in the case of non ethical drugs. These provisions merely indicate that there is a margin of 14 per cent to the wholesaler in the case of ethical drugs and of 12 per cent in the case of non ethical drugs,. and the wholesaler has a margin of 2 per cent in either case when he sells to the retailer. In contrast, the profit margins of manufacturers and producers of medicines and drugs is considerably higher. Under the scheme of the Drugs (Price Control) order, the calculation of the retail price of formulations under paragraph 10 has to be accordance with the formula set out therein. One of the elements that enters 189 into the price structure is the 'mark up ' which is defined in paragraph 11 to include distribution cost, outward freight, promotional expenses, manufacturers margin and trade commission. Clauses (1) to (3) of the Third Schedule show that the mark up ranges from 40% in the case formulations specified in category (i), 55% in the case of formulations specified in category (ii) and 100% in the case of formulations specified in category (iii). This gives an indication of the extent of profits earned by the manufacturers and producers of formulations. In Market situations where uncertainty about demand prevails and mark up pricing is practised, the usual response is to attempt to shift taxes to the consumer. Musgrave in his Public Finance in Theory and Practice observes that economists like to think of business behaviour as being rational, in the sense of following a maximising rule, but businessmen may not act rationally. They regard the tax as a cost and make adjustments accordingly: "One of these is the practice of markup or margin pricing. Under this rule, costs are "marked up" to allow for a customary ratio of profits to costs, or price is set such as to leave profits (i.e., sales minus cost) a customary fraction of sales. Whether this gives rise to shifting depends on how costs and margins are defined. Shifting occurs if the tax is included as a cost, or if the margin if defined net of tax. " It would therefore appear that businessmen are skeptical regarding the entire approach of marginal cost pricing. their position is that taxes are treated as a cost when determining prices, be it as part of a "full cost pricing" rule, by application of a conventional mark up rate defined net of tax, or by pricing to meet a net of tax target rate of return. According to these formulae, a change in tax rate leads to an adjustment in price. If the appellants find that the levy of surcharge under sub section Of section 5 of the Act cannot be borne within the present price structure of medicines and drugs, they have the right to apply to the Central Government for revision of the retail price of formulations under paragraph 15 of the Control order. It was a startling proposition advanced by learned counsel for the appellants that the Court was wrong in Kodar 's case in 190 justifying on the basis of economic superiority the burden of additional sales tax on a certain class of dealers. It was held by the Court relying upon the dissenting opinion of Cardozo, J. in Stewart Dry Goods Co. vs Lewis ; that a gross sales tax graduated at increasing rates with the volume of sales on a certain class of dealers does not offend against article 14 of the Constitution. The contention that ability to pay is not a relevant criterion for upholding the validity of sub section (3) of section 5. Of the Act cannot be accepted. To say the least, there is no basis for this submission. It is beyond the scope of this judgment to enter into intricacies of public finance viz. Objectives and criteria of a tax, problems of shifting et cetera. Nor is it necessary for us to enter into a discussion of the so called benefit principle, or the alternative approach of ability to pay. There is probably widespread agreement now that taxes that fall on the 'better off ' rather than the worse off ' and are progressive rather tean proportional, are to be preferred. The concept of 'ability to pay ' implies both equal treatment of people with equal ability, however measured, and the progressive rate structure. The 'ability to pay ' doctrine has strong affinities to egalitarian social philosophy, both support measures designed to reduce inequalities of wealth and income. On questions of economic regulations and related matters, the Court must defer to the legislative judgment. When the power to tax exists, the extent of the burden is a matter for discretion of the law makers. It is not the function of the Court to consider the propriety or justness of the tax, or enter upon the realm of legislative policy. If the evident intent and general operation of the tax legislation is to adjust the burden with a fair and reasonable degree of equality, the constitutional requirement is satisfied. The equality clause in article 14 does not take from the State power to classify a class of persons who must bear the heavier burden of tax. The classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it results in some inequalities. In Kodar 's case, supra, the constitutional validity of a similar levy was upheld on the capacity to pay. It was observed: "The large dealer occupies a possition of economic superiority by reason of his greater volume of his business. And to make his tax heavier, both absolutely and relatively, is Dot arbitrary discrimination,, but an attempt 191 to proportion the payment to capacity to pay and thus to arrive in the end at more genuine equality. " The economic wisdom of a tax is within the exclusive province of the Legislature. The only question for the Court to consider is whether there is rationality in the belief of the Legislature that capacity to pay the tax increases by and large with an increase of receipts. The view taken by the Court in Kodar 's case, supra, is in consonance with social justice in an egalitarian State and therefore the contention based on article 14 of the Constitution must fail. The contention that sub section (3) of section 5 of the Act imposes an unreasonable restriction upon the freedom of trade guaranteed under article 19 (1) (g) of the Constitution proceeds on the basis that sales tax being essentially an indirect tax, it was not competent for the Legislature to make a provision prohibiting the dealer from collecting the amount of surcharge cannot prevail. It is urged that the surcharge does not retain its avowed character as sales tax but in its true gature and character is virtually a tax on income, by reason of the limitation contained in sub section (3) of section 5 of the Act. We are not impressed with the argument. Merely because a dealer falling within the class defined under sub section (1) of section 5 of the Act is prevented from collecting the surcharge recovered from him, does not affect the competence of the State Legislature to make a provision like sub section (3) of section 5 of the Act nor does it become a tax on his income. It is not doubt true that a sales tax is, according to the accepted notions, intended to be passed on to the buyer, and the provisions authorising and regulating the collection of sales tax by the seller from the purchaser are a usual feature of sales tax legislation. But it is not an essential characteristic of a sales tax that the seller must have the right to pass it on to the consumer, nor is the power of the Legislature to impose a tax on sales conditional on its making a provision for sellers to collect the tax from the purchasers. Whether a law should be enacted, imposing a sales tax, or validating the imposition of sales tax, when the seller is not in a position to pass it on to the consumer, is a matter of policy and does not effect the competence of the legislature: see: The Tata Iron & Steel Co. Ltd. vs The State of Bihar(1): M/s. J.K. Jute Mills Co. Ltd. vs The State of Uttar Pradesh & Anr.(2) 5. Kodar vs State of Kerala.(3) The contention based on the article 19 (1) (g) cannot therefore be sustained. 192 There was quite some discussion at the Bar as to whether the assent of the President is justiciable. rt was submitted that since not only sub section (1) of section 5 of the Act which provides for the levy of a surcharge on dealers having a gross turnover of Rs. 5 lakhs in a year but also sub section (3) thereof which interdicts that no such dealer shall be entitled to recover the amount of surcharge collected from him, are both relatable to Entry 54 of List II of the Seventh Schedule, there was no occasion for the Governor to have referred the Bill under article 200 to the President for his assent. It is some what strange that this argument should be advanced for the first time after a lapse of 30 years of the inauguration of the Constitution. Immediate provocation for this argument appears to be an obiter dictum of Lord Diplock while delivering the judgment of the Judicial Committee in Teh Cheng Poh @, Char Meh vs Public Prosecutor, Malaysia(1) that "the Courts are not powerless when there is a failure to exercise the power of revocation of a Proclamation of Emergency "issued by the Ruler of Malaysia under section 47 (2) of the Internal Security Act. The ultimate decision of the Privy Council was that since by virtue of s 47 (2) of that Act the security area proclamation remained lawful until revoked by resolutions of both Houses of Parliament or by the Ruler, it could not be deemed to lapse because the conditions upon which the Ruler had exercised his discretion to make the Proclamation were no longer in existence. That being so, the decision in Teh Cheng Poh 's case, supra, is not an authority for the proposition that the assent of the President is justiciable nor can it be spelled out that that Court can enquire into the reasons why the Bill was reserved by the Governor under article 200 for the assent of the President nor whether the President applied his mind to the question whether there was repugnancy between the Bill reserved for his consideration and received his assent under article 254 (2). The constitutional position of a Governor is clearly defined. The Governor is made a component part of the Legislature of a State under article 168 because every Bill passed by the State Legislation has to be reserved for the assent of the Governor under article 200. Under that Article, the Governor can adopt one of the three courses, namely: (1) He may give his assent to it, in which case the Bill becomes a law; or (2) He may except in the case of a 'Money Bill ' withhold his assent therefrom, in which cases the Bill falls through unless the procedure indicated in the first proviso is followed 193 i. e. return the Bill to the Assembly for consideration with a message, or (3) He may "on the advice of the Council of Ministers" reserve the Bill for the consideration of the President, in which case the President will adopt the procedure laid down in article 201. The first proviso to article 200 deals with a situation where the Governor is bound to give his assent and the Bill is reconsidered and passed by the Assembly. The second proviso to that Article makes the reservation for the Consideration of the President obligatory where the Bill would, "if it becomes law, dergoate from the powers of the High Court". Under article 201, when a Bill is reserved by the Governor for the consideration of the President, the President can adopt two courses, namely: (1) He may give his assent to it in which case again the Bill becomes a law; or (2) He may except where the Bill is not a 'Money Bill ', direct the Governor to return the Bill to the House or, as the case may be, the Houses of the Legislature of the State together with such message as is mentioned in the first proviso to article 200. When a Bill is so reserved by the President, the House or Houses shall reconsider it accordingly within a period of six months from the date of receipt of such message and if it is again passed by the House or Houses with or without amendment, it shall be presented again to the President for his consideration. Thus, it is clear that a Bill passed by the State Assembly may become law if the Governor gives his assent to it or if, having been reserved by the Governor for the consideration of the President, it is assented to by the President There is no provision in the Constitution which lays down that a Bill which has been assented to by the President would be ineffective as an Act if there was no compelling necessity for the Governor to reserve it for the assent of the President. A Bill which attracts article 254 (2) or article 304 (b) where it is introduced or moved in the Legislative Assembly of a State without the previous sanction of the President or which attracted article 31 (3) as it was then in force, or falling under the second proviso to article 200 has necessarily to be reserved for the consideration of the President. There may also be a Bill passed by the State legislature where there may be a genuine doubt about the applicability of any of the provisions of the Constitution which require the assent of the President to be given to it in order that it may be effective as an Act. In such a case, it is for the Governor to exercise his discretion and to decide whether he should assent to the Bill or should reserve it for consideration of the President to avoid any furture complication Even if it ultimately turns out that there was no necessity for the Governor to have 194 reserved a Bill for the consideration of the President, still he having done so and obtained the assent of the President, the Act so passed cannot be held to be unconstitutional on the ground of want of proper assent. This aspect of the matter, as the law now stands, is not open to scrutiny by the courts. In the instant case, the Finance Bill which ultimately became the Act in question was a consolidating Act relating to different subjects and perhaps the Governor felt that it was necessary to reserve it for the assent of the President. We have no hesitation in holding that the assent of the President is not justiciable, and we cannot spell out any infirmity arising out of his decision to give such assent. There still remains the contention that for the purpose of levying surcharge it is impermissible to take into account the method of computation of gross turnover, the turnover representing sales in the course of inter State trade and outside the State and sales in the course of export out of India. It is urged that the non obstante clause in section 7 of the Act has the effect of taking these transactions out of the purview of the Act with the result that a dealer is not required nor is he entitled to include them in the calculations of his turnover liable to tax thereunder. The submission is that sub section (1) of section 5 of the Act is ultra vires the State Legislature in so far as for purposes of levying the charge, the incidence of liability of a dealer to pay such surcharge depends on his gross turnover as defined in section 2 (j) of the Act. In support of the contention, reliance was placed on the following passage in the judgment of this Court in A. V. Fernandez vs State of Kerala(1): "There is a broad distinction between the provisions contained in the statute in regard to the exemptions of tax or refund or rebate of tax on the one hand and in regard to the non liability to tax or non imposition of tax on the other. In the former case, but for the provisions as regards the exemptions or refund or rebate of tax, the sales or purchases would have to be included in the gross turnover of the dealer because they are prima facie liable to tax and the only thing which the dealer is entitled to in respect thereof is the deduction from the gross turnover in order to arrive at the net turnover on which the tax can be imposed. In the latter case, the 195 sales or purchases are exempted from taxation altogether. The legislature cannot enact a law imposing or authorising the imposition of a tax thereupon and they are not liable to any such imposition of tax. If they are thus not liable to tax, no tax can be levied or imposed on them and they do not come within the purview of the act at all. The very fact of their non liability to tax is sufficient to exclude them from the calculation of the gross turnover as well as the net turnover on which sales tax can be levied or imposed. The submission appears to proceed on a misapprehension of the principles laid down in Fernandez 's case, supra. To understand the ratio deducible in Fernandez 's case, supra, a few facts have to be stated. The business of the assessee in that case consisted in the purchase of copra, manufacture of coconut oil and cake therefrom and sale of oil and cake to parties inside the State and sale of oil to parties outside the State. In 1951, the Travancore Cochin General Sales Tax Act, 1125 was amended by addition of section 26 which incorporated the ban of article 286 of the Constitution and was in pari materia with section 7 of the Act. For the year 1951 52, the Sales Tax officer assessed the assessee to sales tax on a net assessable turnover by taking the value of the whole of the copra purchased by him, adding thereto the respective values of the oil and cake sold inside the State and. deducting only the value of the copra relatable to the oil sold inside the State. It was contended by the assessee that in the calculation of the net turnover, he was entitled to include the total value of the oil sold by him, both inside and outside the State, and deduct therefrom the total value of the copra purchased by him and further, under the overriding provision of section 26 of the Act, he was entitled to have the value of the oil sold outside the State deducted. The main controversy between the parties centered around the method of computation of the net turnover. The contention advanced by the assessee was rejected by the High Court, which limited the deduction to purchase of copra relatable to the sales inside the State. In affirming that decision, this Court observed that so far as sales of coconut oil outside the State were concerned, they were, as it were, by reason of section 26 of the Act read in conjunction with article 286, taken out of the purview of the Act, and that they had the effect of setting at naught and obliterating in regard thereto the provisions contained in the Act relating to the imposition of tax on the sale or purchase of such goods and in 196 particular the provision contained in the charging section, section 3, and the provisions contained in r. 20(2) and other provisions which were incidental to the process of levying such tax. The aforementioned passage relied upon cannot be read out of context in which it appears and if so read, it is hardly of any assistance to the appellants. In the penultimate paragraph in Fernandez 's case, supra, the Court after laying down that the non obstante clause in section 26 had the effect of taking sales in the course of inter State trade and outside the State out of the purview of the Act with the result that the dealer was not required nor entitled to include them in computation e of the turnover liable to tax thereunder, observed: "This position is not at all affected by the provision with regard to registration and submissions of returns of the sales tax by the dealers under the Act. The legislature, in spite of its disability in the matter of the imposition of sales tax by virtue of the provisions of article 286 of the Constitution, may for the purposes of the registration of a dealer and submission of the returns of sales tax include these transactions in the dealer 's turnover. Such inclusion, however, for the purposes aforesaid would not affect the non liability of these transactions to levy or imposition of sales tax by virtue of the provisions of article 286 of the Constitution and the corresponding pro vision enacted in the Act, as above. " The decision in Fernandez 's case, supra, is therefore clearly an authority for the proposition that the State Legislature notwithstanding article 286 of the Constitution while making a law under Entry 54 of List II of the Seventh Schedule can, for purposes of the registration of a dealer and submission of returns of sales tax, include the transactions covered by article 286 of the Constitution That being so, the constitutional validity of sub section (1) of section 5 of the Act which provides for the classification of dealers whose gross turnover during a year exceeds Rs. 5 lakhs for the purpose of levy of surcharge, in addition to the tax payable by him, is not assailable. So long as sales in the course of inter State trade and commerce or sales outside the State and sales in the course of import into, or export out of the territory of India are not taxed, there is nothing to prevent the State Legislature while making a law for the levy of a surcharge under Entry 54 of List II of the Seventh 197 Schedule to take into account the total turnover of the dealer within the State and provide, as has been done by sub section (1) of section 5 of the Act, that if the gross turnover of such dealer exceeds Rs. 5 lakhs in a year, he shall, in addition to the tax, also pay a surcharge at such rate not exceeding 10 per centum of the tax as may be provided. The liability to pay a surcharge is not on the gross turnover including the transactions covered by article 286 but is only on inside sales and the surcharge is sought to be levied on dealers who have a position of economic superiority. The definition of gross turnover in section 2(j) of the Act is adopted not for the purpose of bringing to surcharge inter State sales or outside sales or sales in the course of import into, or export of goods out of the territory of India, but is only for the purpose of classifying dealers within the State and to identify the class of dealers liable to pay such surcharge. The underlying object is to classify dealers into those who are economically superior and those who are not. That is to say, the imposition of surcharge is on those who have the capacity to bear the burden of additional tax. There is sufficient territorial nexus between the persons sought to be charged and the State seeking to tax them. Sufficiency of territorial nexus involves a consideration of two elements viz.: (a) the connection must be real and not illusory, and (b) the liability sought to be imposed must be pertinent to that territorial connection: State of Bombay vs R.M.D. Chamarbaugwala(1), The Tata Iron & Steel Co. Ltd. vs State of Bihar(2), and International Tourist Corporation etc. vs State of Haryana & Ors.(3) The gross turnover of a dealer is taken into account in sub section (1) of section 5 of the Act for the purpose of identifying the class of dealers liable to pay a surcharge not on the gross turnover but on the tax payable by them. For these reasons, these appeals and the connected writ petitions and special leave petitions are dismissed with no order as to costs. H.L.C. Appeals dismissed.

Respondent Dorothea and one Prafulla Kumar Mitra were married under the Special Marriage Act, 1872, in January 1952. Respondent asked for a divorce in 1961 and obtained a decree on May 2, 1962 and as per the decree she was to be paid Rs. 300.0 per month as alimony until she remarries. Respondent levied execution of the decree and the same was compromised and payment of arrears was undertaken to be made in instalments. On March 31, 1965, Mitra executed a will but made no provision therein for the satisfaction of the maintenance decree. He died on April 3, 1965 and the appellant who was the executrix under the will got it duty probated. Since no payment was made by the executrix after December 1975, rcspmldent filed execution in Matrimoniai Case 1 of 1977 claiming recovery of Rs. 19,500.00. Appellant objected to the claim under Section 47 of the Code of Civil Procedure by pleading that the order of alimony not being charged the claim under decree for alimony abated with the death of Mitra. The executing court overruled the objection and the Division Bench of the Calcutta High Court, while dismissing the revision petition, however, granted certificate of appeal to this Court. Dismissing the appeal, the Court ^ HELD :1:1. The language of Section 37 does not warrant the conclusion that there is extinguishment of the decree for alimony upon the death of the judgment debtor husband. [519 G] 1:2. The Special Marriage Act is a statute of 1954 made by the Indian Parliament after independence. There is no ambiguity in Section 37 for the interpretation of which it is necessary to go beyond the provision itself. It is one of the settled principles of interpretation that the Court should lean in favour of sustaining a decree and should not permit the benefits under a decree 517 to be lost unless there be Act, any special reason for it. In incorporating a provision like Section 37 in the Act, Parliament intended to protect the wife at the time of divorce by providing for payment of maintenance. If the husband has left behind an estate at the time of his death there can be no justification for the view that the decree is wiped out and the heirs would succeed to the property without the liability of satisfying ' the decree. [523 A C] 1:3. There is no doubt that matrimonial Proceedings abate on the death of either spouse and legal representatives cannot be brought on record and the proceedings cannot be continued any further and where maintenance has been made a charge on the husband 's estate, the death of the husband would not at all effect the decree and notwithstanding such death, the estate can be proceeded against for realisation of the maintenance dues for post death period. But, there is no rationality in the contention that where the matrimonial proceedings have terminated during the lifetime of the husband and a decree has emerged such a decree for maintence or alimony gets extinguished with the death of the husband when any other decree even though not charged on the husband 's property would not get so extinguished. A decrees against the husband is executable against the estate of the husband in the hands of the heirs and ' there is no personal liability. In law a maintenance decree would not make any difference. The decree indicates that maintenance was payable during the life time of the widow. To make such a decree contingent upon the life of the husband is contrary to the terms and the spirit of the decree. Therefore, the assets left behind by Mitra are liable to be proceeded against in the hands of his legal heirs for satisfaction of the decree for maintenance. [522 C H] 2. The phrase "at the instance of either party" occurring in sub section (2) of Section 37 of the Act are not confined to the spouses only. Sub section 3 clearly provides that on remarriage or on a finding that the wife is not leading a chaste life, the order of maintenance can be rescinded. Upon the husband 's death his estate passes on to his legal heirs and intention of the Legislature being clear that upon remarriage or non leading of a chaste life the benefit conferred by the statute should expire and the estate should become free from the liability of satisfying the decree for maintenance, the application for varying. modifying or rescinding the order for maintenance can be made even by those who have succeeded to the husband 's estate and the estate can be freed from the liability. Examining the scheme of the statute and the purpose for which such a provision has been made, it is clear; that the words `either party ' would also cover the legal heirs who have stepped into the shoes of the spouses under the law and such persons would also be competent to ask for variation, modification or rescission of the order for maintenance. That term would also include the holders of the estate with lawful title for the time being. [523 E H, 524 A B]

on No. 492 of 1954. Petition under article 32 of the Constitution for the enforcement of Fundamental Rights. B. Sen, I. N. Shroff and B. P. Singh for the petitioner. M. C. Setalvad, Attorney General for India, and C. K. Daphtary, Solicitor General for India (G. N. Joshi 770 P.A. Mehta and P. G. Gokhale, with them) for the respondents. October 21. The Judgment of the Court was delivered by MEHR CHAND MAHAJAN C.J. This is a petition under article 32 of the Constitution of India for the enforcement of fundamental rights under articles 31(1) and 19(1)(f) of the Constitution and for the issue of writs in the nature of mandamus and/or certiorari and for suitable directions restraining the respondents from interfering with the petitioner 's properties in violation of his fundamental rights. The petition arises in these circumstances. The petitioner, along with his brothers, used to carry on the business of toddy and liquor vendors. In addition to this, one of the brothers used to run a bus service and dealt in cotton and money lending also. All the brothers owned extensive properties, both agricultural and non agricultural. Though prior to the assessment year 1926 27 all the brothers were assessed to income tax as a Hindu undivided family, since then up to the year 1946 they were assessed separately on account of a partition alleged to have been made between them. In December, 1946, the Income tax Officer commenced proceedings against them under section 34 on the ground that the case of partition set up by them was not correct and as a matter of fact there had been no partition between them and they were carrying on business jointly. As a result of these proceedings an assessment under section 34 was made on the four brothers jointly, treating them as an association of persons, for the year 1942 43. Similar assessment proceedings were taken against them in respect of the years 1940 41, 1941 42 and 1943 44. In December, 1947, the Central Government, under the bona fide belief that the petitioner 's brothers had made huge profits during the war and had evaded tax, made five references to the Income tax Investigation Commission under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947. Reference No. 175 concerned all the brothers as an association of persons while the other four references related 771 to the brothers individually. As a result of the pro ceedings before the Investigation Commission, the Commission made a report to the Central Government on the 26th of September, 1952, estimating the amount of escaped income at Rs. 16,79,203 between the year,% 1940 41 and 1948 49. In pursuance of this report the Central Government passed an order under section 8(2) of the Taxation on Income (Investigation Commission) Act directing that the assessment proceedings be taken under the Indian Income tax Act and Excess Profits Tax Act, 1940, as well as under the Business Profits Tax Act, 1947, against Messrs Jamkhandi Bros. as an association of persons with a view to assess or reassess the income that had escaped assessment according to the report of the Investigation Commission. In accordance with these orders the Income tax Officer commenced proceedings against Messrs Jamkhandi Bros. as an association of persons. On the 30th November, 1953, various assessment orders were passed by the Income tax Officer assessing the petitioner under the Income tax Act and the Excess Profits Tax Act. Proceedings were then taken against the petitioner for recovery of the tax assessed by the Income tax Officer and in those proceedings the properties of the petitioner in the District of Belgaum were attached for payment of the dues and one of his properties comprising of about 12 plots of land was sold by public auction under the provisions of the Bombay Land Revenue Code. On the 20th September, 1954, the present application was preferred under the provisions of article 32 of the Constitution. It has perhaps been made under the impression that the decision of this Court in Suraj Mal Mohta vs A. V. Visvanatha Sastri and Another (1) has application to the facts and circumstances of this case as well and that relief can be obtained against the assessment orders which have become final, by taking proceedings under article 32 of the Constitution. In the petition it was alleged that the attachment and sale of the petitioner 's properties was illegal and violates the petitioner 's fundamental rights under articles 31(1) and 19(1)(f) of the Constitution. It was also alleged (1) ; 772 that the proceedings before the Income tax Investigation Commission after the coming into force of the Constitution were illegal as being in contravention of articles 14 and 20(3) of the Constitution and that in view of the decision of this Court in Suraj Mal Mohta vs A. V. Visvanatha Sastri and Another (supra) proceedings under the Taxation on Income (Investigation Commission) Act, 1947 were discriminatory and that the references made by the Central Government under section 5(1) are not based on a proper classification. It was prayed that this Court may be pleased to issue a writ in the nature of mandamus and/or certiorari or such other directions as may be appropriate to quash the assessment orders made in pursuance of the order of the Central Govern ment under section 8(2) of the Taxation on Income (Investigation Commission) Act, 1947, and to restrain the respondents from attaching and selling or interfering in any manner with the properties of the petitioner. From the facts stated above it is plain that the proceedings taken under the impugned Act XXX of 1947 concluded so far as the Investigation Commission is concerned in September, 1952, more than two years before this petition was presented in this Court. The assessment orders under the Income tax Act itself were made a against the petitioner in November, 1953. In these circumstances we are of the opinion that he is entitled to no relief under the provisions of article 32 of the Constitution. It was held by this Court in Ramjilal vs Income tax Officer, Mohindergarh (1) that as there is a special provision in article 265 of the Constitution that no tax shall be levied or collected except by authority of law, clause (1) of article 31 must therefore be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax, and inasmuch as the right conferred by article 265 is not a right conferred by Part III of the Constitution, it could not be enforced under article 32. In view of this decision it has to be held that the petition under article 32 is not maintainable in the situation that has arisen and that even otherwise in the peculiar circum stances that have arisen it would not be just and proper (1) 773 to direct the issue of any of the writs the issue of which is discretionary with this Court. When this position was put to Mr. Sen, the learned counsel for the petitioner, he very fairly, and, in our opinion, rightly conceded that it was not possible for him to combat this position. For the reasons given above this petition is bound to fail and it is accordingly dismissed with costs.

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

Appeal No. 272 of 1956. Appeal from the judgment and decree dated June 28, 1954, of the former Nagpur High Court, in First Appeal No. 107 of 1946. M. C. Setalvad, Attorney General for India, Purshottam Trikamdas, section T. Khirwadkar and I. N. Shroff for the appellant. Achhru Ram, A. R. Chaubey and Naunit Lal for the respondents. February 22. The Judgment of the Court was delivered by WANCHOO, J. This is an appeal on a certificate granted by the Nagpur High Court. The brief facts necessary for present purposes are these. One Ramchandar Jat originally owned Annas 10/8 share in Mauza Tamalawadi while the rest belonged to others. Ramchandar executed a simple mortgage deed on July 27, 1920, in favour of Seth Ram Jiwan and two. minors Ram Narain and Radhey Sham. The plaintiffs. respondents are the representatives of the mortgagees. On August 27, 1926, the defendant appellant purchased Annas /5/4 share belonging to the other share holders in the village. Thereafter, the appellant brought a 915 suit against Ramchandar who was lambardar of the village for profits, in which 9, decree was passed against Ramchandar. In execution of that decree the appellant purchased the entire Annas /10/8 share of Ramchandar in the village about the year 1932. In consequence, the appellant became the owner of the entire village subject to the mortgage of the respondents on Annas /5/4 share therein. On July 27, 1932, the respondents sued Ramchandar on the basis of their mortgage deed and a preliminary decree for sale was passed in March, 1937. To this suit the appellant was also a party. The preliminary decree was followed by a final decree and thereafter the property was put to sale and was purchased by the respondents on March 1, 1940. This sale was confirmed on April 12, 1940, and a sale certificate was granted to the respondents. So by the year 1940 the respondents were the owners of Annas /5/4 share in the village while the appellant was the owner of Annas /10/8 share. The appellant was also a lambardar. Ramchandar Jat held sir land in certain khasras with a total area of 252 49 acres. On the sale of Ramchandar 's share to the appellant, Ramchandar became an ex proprietary tenant of his sir land. Thereafter Ramchandar was ejected from his exproprietary tenancy sometime in 1936 and the lands came into possession of the appellant. There were certain other lands which were nominally recorded as Muafi Khairati in the name of Ramchandar 's mother but were actually in the possession of Ramchandar. It appears that Ramchandar was ejected from these lands also and they came into, the possession of the appellant. Further the appellant as a lambardar came into possession of certain other lands by surrender or otherwise. The respondents filed a suit for partition before the Sub Divisional Officer, Hard&, in 1942. In that suit they claimed half share in the lands of Ramchandar and his mother which came into. the possession of the appellant. They also claimed a share in other lands which came into the possession of the appellant as lambardar. Their case was that these lands were 916 accession to the mortgage in their favour and they were therefore entitled to a proper share in them '. This claim was resisted by the appellant before the Sub Divisional Officer. On October 20, 1943, the Sub Divisional Officer passed an order which in effect rejected the contention of the respondents and accepted the plea of the appellant. Thereupon the respondents filed the present suit for a declaration in the civil court in 1944 claiming that they were entitled to a proportionate share in the lands specified in the plaint. The suit was resisted by the appellant and his contention was that the respondents had purchased specific khudkashat and chhotaghas plots and that they therefore could not be allowed anything more than what was mentioned in the decree and the sale certificate which were the basis of their title. As the specific lands with respect to which the respondents claimed a declaration in this suit were not mentioned in the sale certificate, they were not entitled to any share in them. A large number of issues were framed by the trial court, which decreed a part of the claim put forward by the respondents but dismissed the rest. Consequently, the respondents went up in appeal to the High Court. The appeal was allowed so far as the respondents ' claim to one half share in the sir plots held by Ramchandar was concerned. Further, they were allowed one third share in the lands held by the mother of Ramchandar and also in certain other lands which came into the possession of the appellant as lambardar subject to payment of certain amounts. This was followed by an application by the appellant for leave to appeal to this Court and a certificate was granted by the High Court. That is how the matter has come up before us. The main contention of the appellant before us is that the mortgage deed of 1920 which is the basis of the title of the respondents did not include the sir plots in the possession of, Ramchandar nor the plots of Ramchandar 's mother. Nor were these plots included in the suit which was brought by the respondents on the basis of the mortgage deed. Further, the sale certificate also did not include these plots, though 917 some other plots were mentioned therein. Therefore, the respondents were not entitled to these plots as accession to the mortgage. This brings us to a consideration of the mortgage in favour of the respondents. The mortgage was without possession and the property mortgaged was mentioned in these terms: " I do hereby mortgage without possession half share /5/4, five annas and four pies, area 678.31 acres, jama sarkar Rs. 326/10/8 together with khudkashat, chhotaghas, big shrubs, abadi, gair abadi, cultivated and that lying vacant, and the rights and privileges appertaining to water, forests, chahat, gardens, and right of cultivation, malguzari and trees of every kind whether giving fruits or no fruits and prohibited and unprohibited wood with entire rights and prvileges appertaining to the village. " It will be seen that what was mortgaged was the entire half share of Ramchandar in /10/8 share which he owned in the village. It is true that the mortgage goes on to describe certain other things but that in our opinion is merely by way of precaution, for even if the part underlined* was not there in the mortgage, the respondents being the mortgagees of /5/4 share would be entitled to everything contained in that share. The underlined* part of the mortgage therefore does not cut down the amplitude of the mortgage with respect to the entire /5/4 share out of /10/8 share of Ramchandar. It is true that sir is not specifically mentioned in the mortgage but as the mortgage was of the entire /5/4 share out of /10/8 share it will include (unless there is a specific exclusion of sir) the area of sir also pertaining to the share mortgaged. In this connection our attention was drawn to as. 68 and 69 of the Central Provinces Land Revenue Act, No. 11 of 1917, which was in force at the relevant time. Section 68 deals with sir land and section 69 wit khudkashat. Sir is defined in section 2 (17) and khudkashat is defined in section 2 (5) as " that part of the home farm of a mahal which is cultivated by the proprietor as such and which is not sir land. " Thus though sir land may be a part of the home farm it is a different entity Here printed in italics. 918 from khudkashat land. Reference was also made to sections 49 and 50 of the Central Provinces Tenancy Act, No. 1 of 1920 (hereinafter called the Tenancy Act) which deal with transfer of sir land. Under section 49 (1) a proprietor who temporarily or permanently loses whether under a decree or order of a civil court or by transfer or otherwise his right to occupy any portion of his sir land as a proprietor shall at the date of such loss, become an occupancy. tenant except where he has obtained a sanction under section 50 of the Tenancy Act. Further under section 49 (2) there is a prohibition on the registration of documents which purport to transfer all the rights of a proprietor in big sir land without reservation of the right of tenancy specified in sub section It is urged for the appellant that the reason why sir land was not mentioned in the mortgage deed of 1920 was that otherwise sanction of the Revenue Officer would have been required under section 50 of the Tenancy Act. Now section 50 provides that if a proprietor desires to transfer the proprietary rights in any part of his sir without reservation of a right of occupancy specified in section 49(1) he may apply to the Revenue Officer and if such Revenue Officer is satisfied that the transferor is not wholly or mainly an agriculturist or that the property is self acquired or has been acquired within the twenty years last preceding, he shall sanction the transfer. Sections 49 and 50 in our opinion only come into play when the proprietor making a transfer loses his right to occupy any portion of his sir land temporarily or permanently and sanction has to be obtained under section 50 only where the transfer is to be made without reservation of the right of occupancy. But the mortgage in this case is a simple mortgage and there was no transfer of possession under it. Therefore the proprietor Ramchandar never lost his right to occupy his sir land by this mortgage and there was therefore no necessity for him to make any reservation in that respect or to apply for sanction under section 50, for he was not losing the right to occupy his sir at all. But that does not mean that when he mortgaged his entire share of /5/4 out of /10/8 share,, he was excluding from the mortgage the area of sir 919 corresponding to the share mortgaged. As the mortgage deed of 1920 stands, it is a mortgage of all the proprietary rights in /5/4 share including the proprietary right in the sir pertaining to that share ; but as the proprietor was not losing his right to occupy the sir land, the mortgage being without possession, it was not necessary for him to make any application under section 50 of the Tenancy Act. We are therefore of opinion that the appellant cannot take advantage in the circumstances of the fact that no application was made under section 50 of the Tenancy Act and therefore there was no effect of this mortgage on the sir rights. As we read the mortagage it clearly affected the sir Tight also pertaining to /5/4 share and it was not necessary to make an application under section 50 of the Tenancy Act, for the mortgagor was not losing possession of his sir and there would be no question of any ex proprietary tenancy arising in his favour, to relinquish which he would have to apply under section 50. Turning now to the plaint in the mortgage suit we find that the property subject to the mortgage is mentioned in para. 2 thereof inexactly the same terms as in the mortgage deed. In para. 13 it is again recited that the mortgagor mortgaged /5/4 share out of his /10/8 share. Paragraph 13 then goes on to say that on the date of the mortgage, the mortgagor had certain khudkashat and chhotaghas lands and both cultivating and proprietary rights in them pertaining to half share only were liable to be sold. No mention was made of sir in this paragraph. But that in our opinion was not necessary, for the mortgage included the mortgage of sir land also pertaining to /5/4 share though without possession. The prayer in the suit was for sale of the mortgaged property together with khudkashat, etc. ; but this again was a mere matter of precaution, for in any case the entire proprietary right in sir, khudkashat, etc., relating to /5/4 share would be sold on a decree following on the mortgage. Then coming to the sale certificate we find that it certifies that the respondents had purchased /5/4 share in the village with abadi, khudkashat, chhotaghas and all rights pertaining to the 'share. It is true that 920 khudkashat and chhotaghas are specifically mentioned in the sale certificate but the words " all rights pertaining to the share " appearing in the sale certificate would include such proprietary rights in the sir land as belonged to the share mentioned in the sale certificate. We are, therefore, of opinion. that so far as sir land is concerned, the proprietary right in it pertaining to /5/4 share was mortgaged and the respondents by their sale certificate got a right in the sir land also. Now what happened after the mortgage deed in favour of the respondents was that the appellant purchased the entire /10/8 share of Ramchandar subject to the mortgage of the respondents in 1932. At that time Ramchandar became an ex proprietary tenant of his entire sir relating to this share under section 49 of the Tenancy Act. In 1936 Ramchandar was ejected from the ex proprietary tenancy which came in the possession of the appellant as lambardar and has apparently since then remained in his possession. The case of the respondents is that in 1936 their mortgage was subsisting and the sir land which thus came into the possession of the appellant on the extinction of the ex proprietary tenancy became an accession to the mortgage and, therefore, they as mortgagees were entitled to half share in the lands which thus came into the possession of the appellant. We have already pointed out that the mortgage covered the sir plots also so for as the proprietary rights in them were concerned. Therefore, when Ramchandar 's ex proprietary rights came to an end and the land came into the possession of the appellant and became khudkashat, the mortgage would cover this khudkashat land to the extent of the mortgagees ' share therein. It is, true that if Ramchandar 's ex proprietary tenancy had continued, the mortgagee would have no right to ask for half share in it; but when the ex proprietary tenancy was extinguished and this land came in the possession of the lambardar mortgagor it, was an accession to the mortgage under section 70 of the Transfer,of Property Act and the mortgagees could claim a share in it. , It was however urged that accession to be available to 921 the mortgage must be a legal accession. We however see no illegality in the accession which took place. There is also no doubt that the accession took place when the mortgage was still subsisting. Therefore, we agree with the High Court that on the ex proprietary tenancy being extinguished, the sir land which Would otherwise have remained in the exclusive possession of Ramchandar as an ex proprietary tenant became an accession to the mortgaged property and the respondents would be entitled to half of it on their purchasing the /5/4 share in execution of the decree on the mortgage. The fact that the rent of an ex proprietary tenant is due to the person whose ex proprietary tenant he becomes by virtue of the sale or mortgage with possession would make no difference after ex proprietary tenancy is extinguished, for on such extinction the land would go to the entire proprietary body and would thus in this case be an accession to the mortgage to the extent of the share mortgaged. This brings us to the lands in the name of Ramchandar 's mother. It appears that these lands came into the possession of Ramchandar after the mortgage but before the institution of the mortgage suit. They were nominally recorded in the name of his mother and in 1932 after his entire share was purchased by the appellant lie was recorded as an occupancy tenant of these lands. Later the appellant came into possession of them apparently as a lambardar. It is not clear when and how the appellant got possession of them. There can be no doubt however that his possession was for the entire body of proprietors and the respondents would be entitled to a share in them. But it was urged that the claim of the respondents to these lands was barred by 0. 11, r. 2 of the Code of Civil Procedure, because they were not specified in the plaint based on the mortgage deed of 1920. Reliance in this connection is placed on Hazarilal vs Hazarimal (1) and Seth Manakchand vs Chaube Manoharlal (2). These cases in our opinion do not apply, because they are cases of foreclosure while in (1) A. I. R. , (2) A.I.R. 1944 P.C 46, 922 the present case the respondents ' suit was for sale of the share mortgaged with them. Further in the plaint, when specifying the khudkashat plots it wag made clear that they were khudkashat on the date of the mortgage; the respondents thus did not specify the khudkashat plots on the date of the plaint. Though they had specified some plots in the plaint which were mentioned in the sale certificate also, the suit " as for the sale of the entire /5/4 share and that would include khudkashat lands pertaining to the share existing at the time when the suit was filed. It is not necessary in a suit for sale to specify the lands in the possession of the mortgagor specifically and they would pass on sale along with the share sold. The claim, therefore, would not be barred under 0. 11, r. 2, on the ground that these plots entered in the name of the mother of Ramchandar were not specifically mentioned in the plaint. This leaves certain lands which came into the possession of the appellant as a lambardar in the ordinary course of management. The respondents would clearly be entitled to a share in these lands also on payment of proportionate expenses incurred by the appellant in the course of suits in which he came into possession. This is what the High Court has ordered and we see no reason to disagree with that view. The appeal, therefore, fails and is hereby dismissed with costs. Appeal dismissed.

The manager of an undivided Hindu family consisting of himself, his brother and their step mother, instituted a suit for recovery of the amount due under a mortgage belonging to the family. The step mother who was interested in the mortgagee right was not made a party to the suit. Though the manager (the first plaintiff) did not describe himself as the manager in the plaint, the allegations in the plaint showed that the suit was filed on behalf of the joint family. No objection as to non joinder was raised in the trial court, but when the appeal was pending in the High Court the step mother was added as a party on her applica tion. The contesting defendants pleaded that as all persons having an interest in the mortgage security were not joined as parties within the period of limitation prescribed for a suit to enforce the mortgage, and the first plaintiff did not, in any case, purport to institute the suit in his capacity as the manager, the suit must fail. Held: (1) that the failure to join a person who is a proper but not a necessary party does not affect the maintainability of the suit nor does it invite the application of section 22 Of the Indian Limitation Act, 1908 ; (2) that the question whether a suit as instituted by the manager of an undivided Hindu family in his personal capacity or as representing the family depends upon the circumstances of each case and that the failure of the plaintiff to describe himself as the manager in the plaint is not decisive of the question. (1) (2) 897 In the resent case, the step mother was not a necessary party, and the facts showed that the suit was instituted by the first plaintiff in his capacity as manager. Accordingly, the suit was maintainable. Guruvayya Gowda and Others vs Dattatraya Anant and Others Bom. 11, referred to.

Civil Appeal Nos. 1546 1551 of 1971. (From 1he Judgment and Order dated 20 12 1968 of the Calcutta High Court in Appeals from Original Orders Nos. 556 559, 571 and 572 of 1967) 150 Lal Narain Sinha, Sol. General and G.S. Chatterice, for the appellants. Purushottam Chatterjee and Ratbin Des, for the respondents. The Judgment of the Court was delivered by BHAGWATI, J. The short question which arises for deter mination in these appeals is whether green ginger falls within the category of goods described as "vegetables, green or dried, commonly known as "sabji, tarkeri or ask" in Item (6) of Schedule I to the Bengal Finance (Sales Tax) Act, 1941. If it is covered by this description, it would be exempt from sales tax imposed under the provisions of that Act. The Sales Tax authorities held that green ginger is used to. add Havour and. taste to food and it is, therefore, not vegetable commonly known as sabji, tarkeri or ask". The orders of the Sales Tax authorities were challenged in a writ petition filed under article 226 of the Constitution and a Single Judge of the High Court who. heard the writ petition disagreed with the view taken by the Sales Tax authorities and held that green ginger is vegetable within the meaning of that expression as used in Item (6) of the First Schedule to the Act. This view of the learned Single ' Judge was affirmed by a Division Bench of the High Court on appeal under clause (15) of the Letters Patent. Hence the present appeal by the State with special leave obtained from this Court. The Bengal Finance (Sales Tax) Act, 1941 levies sales tax on the taxable turnover of a dealer computed in accord ance with the provisions of that Act. Section 6, sub sec tion (1) provides that no tax shall be payable under the Act on the sale of goods specified in the first column of Sched ule I, subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof and Item (6) of Schedule I specifies in the first column "vegetable, green or dried, commonly known as "Sabji, tar kari or ask" so that No. tax is payable on the sale of goods falling within this category, subject to the exception set out in the second column, namely, that they would be liable to bear tax "when sold in sealed containers. " It was common ground in the present case that green ginger was not sold by the assessee in sealed containers and the only question which, therefore, requires to be considered is whether green ginger can be regarded as vegetable commonly known as 'sabji, tarkari or sak '. Now, the word 'vegetable ' is not defined in the Act but it is well settled as a result of several decisions of this Court of which we may mention only two, namely, Ram avatar Budhaiprasad vs Assistant Sales Tax Officer, kola(1) and M/s Motipur Jamindary Co. Ltd. vs State of Bihar(2)) that this word, being a word of every day use, must be construed not in any technical sense, nor from any botanical point of view, but as understood in common par lance. The question which arose in Ramavatar 's case (supra) was whether betel leaves are "vegetables" (1) ; (2) ; 151 and this court held that they are not included within that term. This Court quoted with approval the following passage from the judgment of the High Court of Madhya Pradesh in Madhya Pradesh Pan Merchants ' Association, Santra Market, Nagput vs State of Madhya Pradesh(1): "In our opinion, the word "vegetables" cannot be given the comprehensive meaning the term bears in natural history and has not been given that meaning in taxing statutes before. The term "vegetables" is to be understood as commonly understood denoting those classes of vegetable matter which are grown in kitchen gardens and are used for the table.", and observed that "the word 'vegetable ' in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table". This meaning of the word 'vegetable ' was reiterated by this Court in Motipur zamindary case (supra) where this Court was called upon to consider whether sugarcane can be regarded as vegetable and it was held by this Court that sugarcane cannot be said to fail within the definition of the word 'vegetable '. It is interesting to note that the same principle of construction in relation to words used in a taxing statute has also been adopted in English, Canadian and American courts. Pollock B. pointed out in Grenfell vs I.R.C.(2) that "if a statute contains language which is capable of being construed in a popular sense, such a statute is not to be construed according to the strict or technical meaning of the language contained in it, but is to be construed in its popular sense, meaning, of course, by the words "popular sense" that sense which people conversant with the subject matter with which the statute is dealing would attribute to it. '" So also the Supreme Court of Canada said in Planters Nut and Chocolate Co. Ltd. vs The King,(3) while interpret ing the words 'fruit ' and 'vegetable ' in the Excise Act: "They are ordinary words in every day use and are, there fore, to be construed according to their popular sense". The same rule was expressed in slightly different language by Story, J., in 200 Chests of Tea(4) where the learned Judge said that "the particular words used by the Legisla ture in the denomination of articles are to be understood according to the common commercial understanding of the terms used, and not in their scientific or technical sense, for the Legislature does "not suppose our merchants to be naturalists, or geologists, or botanists" ". It will, therefore, be seen that the word 'vegetable ' in Item (6) of Schedule I to the Act must be construed as understood in common parlance and it must be given its popular sense meaning "that sense which people conversant with the subject matter with which the statute is dealing would attribute to it" and so construed, it denotes those classes of vegetables which are grown in a kitchen garden or in a farm and are used for the table. Now, obviously green ginger is a vegetable (1) 7 S.T.C. 99 at 102. (2) at 248. (3) (4) (1824), 9 Wheaton (U.S.) 430 at 438. 11 240SCI/77 152 grown in a kitchen garden or in a farm and is used for the table. It may not be used as a principal item of the meal but it certainly forms part of the meal as a subsidiary item. It is an item which is ordinarily sold by a vegetable vendor and both the vegetable vendor who every day deals in vegetables and the housewife who. daily goes to the market to purchase vegetables would unhesitatingly re and green ginger as vegetable. The assessee in fact placed evidence before the Sales Tax authorities showing that the Railway authorities also treated green ginger as vegetable for the purpose of railway tariff and charged for the carriage of green ginger at the reduced rate applicable to vegetables and even the Corporation of Calcutta included green ginger in the category of vegetables in the market bulletin pub lished by it fortnightly showing the rates in the municipal market. There can, therefore, be little doubt that green ginger is generally regarded as included within the meaning of the word 'vegetable ' as understood in common parlance. That a part, we find that Item (6) speaks not simply of vegetables but "vegetables commonly known as sabji, tar kari or sak" and the Division Bench of the High Court held green ginger to fall within the meaning of the words "sabji, tarkari or sak". We should certainly be very slow to disturb a meaning placed on these words in Bengali language by two judges of the High Court who may reasonably be expected to be quite conversant with that language. We are accordingly of the view that green ginger is included within the meaning of the words "vegetables commonly known as sabji, tarkari or sak" in Item (6) of Schedule I and its sales must be held to be, exempt from tax under section 6 of the Act. The result is that the appeals fail and are dismissed with costs. Costs will be only m one set. S.R. Appeals dismissed.

The Conservation of Foreign Exchange and Prevention of Smuggling Activities (Maharashtra Conditions of Detention) Order, 1974 provides that security prisoners shall not be allowed to supplement their diet even at their own expense, restricts the security prisoner from receiving funds from relatives and friends; restricts the number of meetings with relatives and friends and medical attention is allowed only through the Medical Officer of the prison in the same way as a convicted criminal and so on. Writ Petitions field by the detenus under articles 226, and 227 of the Constitution, two High Courts .have struck down the Order as ultra vires. On appeal it was contended by the State that the right of a person to move. any Court for the enforcement of the rights conferred by articles 14, 19, 21 and 22 of the Constitu tion having been suspended by the Presidential Orders of June 27, 1975 and January 8, 1976 issued under article 359(1) for the period during which the Proclamation of Emergency was inforce, no person had locus Mandi to move an appli cation under article 226 for the 'issue of a writ to enforce any right to personal liberty. Allowing the appeals, (per Ray, C.J. and Jaswant Singh, J.) HELD: The Writ Petitions were not maintainable and the High Courts were clearly in error in passing the impugned directions which were not warranted by any relevant law including the law relating to preventive detention. [732 D] 1. It is well settled by the decisions of this Court that if a person was deprived of his personal liberty not under the 'Defence of India Act, 1962 or any rule or order made thereunder but in contravention thereof, his locus standi to move any court for the enforcement of the rights conferred by articles 21 and 22 was not barred. On the other hand since the Presidential Orders dated June 27, 1975 and January 8, 1976 were not circumscribed by any limitation, their applicability was not made dependent upon the fulfil ment of any conditions precedent. They imposed a total or blanket ban on the enforcement of the fundamental rights conferred by articles 19, 21 and 22. There is,therefore, no room for doubt that these Presidential Orders unconditional ly suspended the enforceability of the right conferred upon any person, including a foreigner, to move any Court for the enforcement of the rights conferred by articles 14, 19, 21 and 22 of the Constitution. [742 E, G H] Additional District Magistrate, Jabalpur vs Shiva Kant Shukla , Makhan Singh vs State of Punjab , State of Maharashtra vs Prabhakar Pandurang Sanz giri [1966] 1 S.C.R. 702 A.I.R. 1966 S.C. 424, Dr. Ram Manohar Lohia vs State of Bihar 1966 S.C. 740, A.K. Gopalan vs The State of Madras and Kharak Singh vs State of U.P. [1964] 1 S.C.R. 332 A.I.R. 1963 S.C. 1295, followed, 720 2. When a person has no locus standi to move any Court to challenge his order of detention, the High Court could not issue directions disregarding the provisions of the Act, which is a self contained code, and particularly sections 5 and 12(6) which are mandatory. [745 F H] Maqbool Hussain vs The State of Bombay ; , followed. As Articles 19, 21 and 22 of the Constitution have been suspended during the operation of the Proclamation of Emergency, the Conservation of Foreign Exchange and Preven tion of Smuggling Activities Act and the orders made or passed thereunder were not open to challenge on the ground of their being inconsistent with or repugnant to articles 14, 19, 21 and 22 of the Constitution in view of the Presiden tial Orders, dated June 27, 1975 and January 8, 1976. [742 G H] In the instant case the detenus covertly sought to enforce the vary rights which were suspended. It was not open to the High Courts to strike down the impugned clauses of the Maharashtra Conditions of Detention Order 1974. The avowed object of the Act, as mainrest from its preamble, being the conservation and augmentation of foreign exchange and the prevention of smuggling activities secretly organised and carried on, it is essential that contact 0f the detenus with the outside world should be reduced to the minimum. It is for the State Governments who are in full possession of all material facts and not for the Courts who have neither the necessary knowledge of the facts nor the. legal competence, to regulate conditions of detention Of persons, including their maintenance, interviews or communi cations with others. [746 A C] 5. When a person is detailed, he can exercise only such privileges as are conferred on him by the order of detention or by the rules governing his detention. State of Maharashtra vs Prabhakar Pandurang Sanzgiri [1966] I SCR 702AIR 1966 S.C. 424 referred to. The mere fact that a detenu is confined in a prison for the sake of administrative convenience does not entitle him to be treated as a civil prisoner or to be governed by the provisions of the Prisons Act. The view of the High Courts to the contrary cannot be sustained. [746 D E] Maqbool Hussatn vs The State of Bombay ; , followed. The contention that the Presidential Orders did not bar the Court from examining the vires of the detention orders because what was sought to be enforced was not a right of personal liberty but a redress against unreasona bleness of the order was misconceived. The Presidential Orders imposed a blanket ban on every judicial enquiry into the validity of an order depriving a person of his personal liberty irrespective of whether it stems from the initial order directing his detention or from an order laying down the conditions in his detention. [743 A E] Additional District Magistrate, .Jabalpur vs Shiva Kant Shukla followed. (Per Beg. J.) Concurring. 721 The High Courts, acting under article 226 have not been given the power to interfere in any matter involving the assertion or enforcement of a right to personal freedom by the detenus during an Emergency, when exercise of such power by the High Courts is suspended. In times of Emergency the remedy for all the grievances of the detenus lies with the executive and administrative authorities of the State. [754 B C] 1. Shukla 's case held that 'it was not the fundamental rights which were suspended by the Presidential Order under article 359 but the right to move any Court for the enforcement of such right conferred by Part III as may be mentioned in the Order which is suspended for the duration of_the Emer gency. This mean that it is the 'jurisdiction of Courts, to the extent to which a petitioner seeks to enforce the funda mental rights mentioned in the Presidential Order, which is suspended. [749 G H] Additional District Magistrate, Jabalpur vs Shivakant Shukla AIR 1976 SC 1283, applied. A.K. Gopalan vs State of Madras, ; , Kharak Singh vs State of U.P., [1964] 1 SCR 332, 1. C. Golakanath vs State of Punjab ; His Holiness Kesavananda Bharati Sripadagalavaru vs State of Kerala, [1973] Supp. SCR 1 and Haradhan Saha vs The State of West Bengal & Ors., [1975] (1) SCR 778 AIR 1974 SCR 154 referred to. The term "any other purpose" in article 226 means pur poses similar to those for which one of the specified writs would issue subject to certain exceptions The writ of habeas corpus is wider in scope than the enfrocement of fundamen tal rights which are available against the State only and its officers and agents. But so far as mere directions or orders for any other purpose are concerned, the jurisdiction of High Courts does not extend to making orders against private individuals. On the other hand, if an officer is duly empowered and has passed a detention order, that order is not capable of being questioned under article 226. All enquiry into the conditions of exercise of such. power is barred under the constitutional provisions during the emer gency. [750 D E, H, 751 A, C D] 3. In the instant case the remedy sought was clearly covered by the Presidential inhibition which operates against the High Courts. The claims made by the detenus were not matters which the High Court could consider in petition under article 226 of the Constitution. [751 E F] 4. If the object of a proceeding is to enforce the fundamental right, to personal freedom, a High Court 's jurisdiction under article 226 is barred during an Emergency even if it involved adjudication on the question of vires of a rule made under enactments authorising preventive deten tion. It is impossible to invalidate a rule either intended for or used for regulating the conditions of detention of a person detained under one of the Acts authorising preven tive detention on the ground that the rule could only be used for persons in punitive detention. The attack on the validity of such a rule cannot succeed on the ground that the object of the rule should be shown to be preventive and not punitive. [754 E F] 5. Shukla 's case indicates that articles 19 and 21 embrace every aspect of an alleged infringement of the right of personal freedom by a State authority or officer purporting to act under a law. Even if the action violates, a protec tion conferred by article 21 upon citizens as well as non citizens in ordinary times, the result of the suspension, of the protection given by article 21 must necessarily be that the protection cannot be enforced during an Emergency. If that be the effect of the Presidential declaration under article 359, the Court cannot go behind this declaration of law and the express letter of the law as embodied in the Constitu tion and enforce what may be covered by the right to person al freedom in ordinary times whether it parades under the guise of natural law or statutory law or constitutional law. [755 F H] 722

Civil Appeal No. 1148 1979. From the Judgment and Order dated 4.4.1979 of the Delhi High Court in S.A.O. No. 103 of 1979. P.H. Parekh and A.K. Gupta for the Appellant. 940 Dr. U.R. Lalit, C.M. Oberai and D.N. Misra for the Respondent. The Judgment of the Court was delivered by NATARAJAN, J. This appeal by special leave is directed against a judgment of the Delhi High Court dismissing the second appeal preferred by the appellant herein to impugn the order passed against him in execution proceedings taken under Section 21 of the Delhi Rent Control Act 1958 by the Rent Controller and confirmed by the Rent Control Tribunal. The respondent, a Government official who has since retired from service is the owner of a house bearing number A/15, Naraina Vihar, New Delhi. During the year 1976, the respondent was residing in Government Quarters situated in Kidwai Nagar, New Delhi. On June 1, 1976 the respondent and the appellant appeared before the Rent Controller and sought for permission of the Rent Controller for the rear portion of the ground floor being leased out for a period of 18 months to the appellant under Section 21 of the Delhi Rent Control Act (hereinafter referred to as the Act). Besides filing the application, the parties gave their declarations before the Rent Controller. The respondent declared that he was the owner of the premises No. A 15, Naraina Residential Scheme, Delhi, that he did not require the rear portion of the ground floor as shown in the plan Exhibit A 1 for his own use. that as such he wanted to let out the same to the appellant for residential purpose at a monthly rent of Rs.500 exclusive of water and electricity charges for a period of 18 months with effect from June 1, 1976 as per proposed lease deed Exhibit A 2. The appellant for his part declared that he had heard the statement of the respondent and he accepted the same as correct, that he wanted to take on lease the rear portion of the ground floor of the re spondent 's house as marked in plan Exhibit A I for his residence on a monthly rent of Rs.500 exclusive of water and electricity charges for a period of 18 months with effect from June 1, 1976 as per the terms contained in the draft lease deed Exhibit A 2 and further declared that he "shall vacate the premises on the expiry of the aforesaid period of 18 months. " Thereupon the Rent Controller passed an order as under: "Having regard to the averments made in the petition and the statements of the parties recorded above, permission under Section 21 of the Delhi Rent Control Act, 1958 is granted to the petitioner for letting out the aforesaid por 941 tion of the aforesaid house as detailed in the statement of the petitioner to the respondent for residential purpose for a period of 18 months with effect from today, the 1st of June, 1976. File be consigned to the record room. " It was the case of the respondent in the execution application filed by him that pursuant to the above said permission granted by the Rent Controller, the appellant was inducted into possession of the leased portion on June 2, 1976, that the period of lease came to an end on November 30, 1976 and that as the appellant failed to deliver posses sion on December 1, 1977 as undertaken by him, he had to file the application under Section 21 for recovering posses sion of the leased portion. The said execution application was filed on December 12, 1977. The appellant contested the application and raised a three fold defence as under: (1) He had been inducted into possession as a tenant on May 28, 1976 itself, i.e. before the Rent Controller gave permission to the lease transaction by his order dated June 1. 1976 and that as such the tenancy was not governed by the order passed under section 21 of the Act by the Rent Con troller. (2) Though the leased portion was taken on rent for being used as a residence, the parties by mutual arrangement had agreed soon after the lease to make the proprietary concern of the appellant viz. M/s. Refaire Projects Corpora tion the tenant of the premises and as such the firm was the tenant and not the appellant and hence the execution appli cation against the appellant was not maintainable. After the period of tenancy was over, a fresh tenancy was entered into governing not only the leased portion of the ground floor on a higher rent of Rs.550 P.M. but also covering a garage and servants quarters on a monthly rent of Rs. 150 and by reason of the new tenancy the respondent was disentitled to file an execution application. The Rent Controller and the Rent Control Tribunal, after a due consideration of the materials placed before the court by the parties, rendered concurrent findings to the effect that the tenancy came into effect only by reason of the permission granted by the Rent Controller under Section 21, that the several pleas of the tenant viz. a tenancy 942 coming into existence even prior to the order of the Rent Controller, a subsequent modification of the tenancy so as to make the firm the tenant and a fresh tenancy being creat ed so as to cover an additional area and on revised rental terms were all untenable and baseless contentions. Both the authorities therefore allowed the execution application and directed the appellant to deliver possession of the leased premises. Before the High Court, in the second appeal preferred by the appellant, the question of a fresh tenancy on revised terms of lease was again sought to be canvassed but the High Court very rightly declined to examine the matter as the exercise would call for appraisal of evidence on factual matters which is in the domain of the Trial Court and the first Appellate Court and would also necessitate sitting in judgment over concurrent findings of facts rendered by the courts below. It was then urged before the High Court that there was no agreement in writing as required under Section 21 of the Act and hence the permission granted by the Rent Controller was not a valid one on the strength of which an execution application can be filed. The High Court rejected this contention stating that inasmuch as the parties had made statements before the Rent Controller and duly signed them, there was sufficient compliance with the terms of Section 21 and it was not necessary that there should be a separate agreement in writing over and above the draft agreement and the statements rendered before the Rent Con troller. The High Court also briefly went into the question whether the proprietary concern of the appellant had become the tenant and whether thereby the use of the premises had been changed from residential to non residential purpose and found the contentions of the appellant to be wholly devoid of merit. The High Court therefore dismissed the second appeal and hence the present appeal by special leave by the tenant. Mr. Parekh, learned counsel for the appellant, realising the futility of canvassing once over again the unsuccessful defences raised before the courts below and the High Court, sought to assail the judgment of the High Court and the order in the Execution Application on two grounds alone viz. (1) the permission obtained by the respondent from the Rent Controller under Section 21 was in fraud of the statute and (2) an important condition prescribed by Section 21 was not fulfilled. It has to be mentioned even here that these contentions had not been raised before the Rent Controller and the Appellate Tribunal or even before the High Court. 943 In so far as the first contention is concerned, the appellant has alleged in the special leave petition that the respondent had been obtaining permission from the Rent Controller under Section 21 on several occasions for leasing out different portions in the ground floor as well as the first floor of the house to different tenants for short periods in order to deprive the tenants of their rights conferred by the Act and also to get higher rent from each successive tenant. The respondent has controverted these averments in his counter affidavit. Mr. Parekh submitted that the appellant was not setting up a new case because he had given the details of the names of the previous tenants and the portions occupied by them and the periods for which short term leases were granted to them after obtaining permission from the Rent Controller under Section 21 of the Act and as such there were enough materials before the Court to show that the respondent had been abusing the provisions of Section 21 and playing a fraud upon the statute and obtaining permission for leasing out portions of the house to several tenants for limited durations and as such the permission granted by the Rent Controller in this case is vitiated by the fraud committed by the respondent and hence the execution application filed by the respondent was not at all maintainable. It is true we find that in the objections filed by the appellant to the execution application, he has given some particulars regarding the names of some tenants to whom the other portions of the building had been let out by the respondent after obtaining permission from the Rent Controller under Section 21. But significantly enough, the appellant had not pursued the matter and substantiated the charge of fraud levelled by him. He has not cross examined the respondent with reference to the leases granted earlier by him to other tenants nor has he adduced independent evidence to prove the factum of those leases and such leases being granted by abuse of the provisions of Section 21. In the absence of factual materials to show the abuse or misuse of the provisions of Section 21, it is not possible for us to sustain the contention of the appellant 's counsel that the respondent had practised fraud on the Rent Controller and obtained permission under Section 21 to lease out a portion of the house to the appellant because a plea per taining to fraudulent practice is a mixed question of fact and law. Without the requisite foundation on facts to prove a wilful contravention or abuse of a provision of law a finding cannot be rendered as to whether a party has commit ted a fraud by abusing any legal provision. Besides, it has to be borne in mind that even if the respondent had let out the ground floor portions and the first floor of the build ing to other tenants on earlier occasions by having recourse to Section 21 of the Act, the respondent may have done so on the basis of bona .fide grounds and 944 genuine calculations and his calculations may have gone wrong due to factors or events beyond his control. Learned counsel invited our attention to the decisions rendered in S.P. Noronah vs Prem Kumari Khanna, 1 and V.S. Rahi vs Ram Chambeli, ; and argued that the respondent had suppressed material facts from the Rent Controller when he asked for permission under Section 21 of the Act to lease out the premises in question to the appellant for eighteen months, and furthermore the Rent Controller had passed his order granting permission under Section 21 without the application of mind. Similar contentions were raised before us in the case of Inder Mohan Lal vs Ramesh Khanna (C.A. No. 468 of 1977) in which judg ment has been rendered by us on 4.8. 1987. The whole gamut of Section 21, the object underlying the provision, the field of its operation and the correct ratio to be applied in dealing with cases pertaining to Section 21 have been elaborately considered by us in the light of the earlier decisions of this Court and some of the decisions rendered by the Delhi High Court. We have pointed out therein that in order to attract Section 21 four conditions have to be satisfied viz. (1) the landlord does not require the whole or part of any premises for a particular period, (2) the landlord must obtain the permission of the Controller in the prescribed manner, (3) the letting of the whole or part of the premises must be for residential purposes only; and (4) such letting out must be for such period as may be agreed to in writing. After analysing the decision in Noronah 's case the resultant position emerging under law has been summa rised as follows: "An analysis of this judgment which has been applied in the various cases would indicate that Section 21 only gives sanction if the landlord makes a statement to the satisfaction of the court and the tenant accepts that the landlord does not require the premises for a limited period, this statement of a landlord must be bona fide. The purpose must be for residence. There must not be any fraud or collusion. There is a presumption of regulari ty. But it is open in particular facts and circumstances of the case to prove to the satisfaction of the executing court that there was collusion or conspiracy between the land lord and the tenant and the landlord did not mean what he said or that it was a fraud or that the tenant agreed because the tenant was wholly unequal to the landlord. " 945 Viewed in this light it may be seen that the respondent herein has satisfied all the tests prescribed in Noronah 's case. The respondent was a Government servant and was living in Government quarters allotted to him. He had an apprehen sion that the allotment of the Government quarters may be cancelled because of his owning a house and so he had to provide for any contingency resulting from the cancellation of the allotment of Government quarters to him, and hence he felt he would be able to spare the leased premises only for a limited period. There was no material before the Rent Controller to establish or even to arouse suspicion that the respondent was playing a fraud on the statute. In such circumstances the order passed by the Rent Controller cannot be said to be vitiated in any manner. It would also be pertinent to point out in this context that if the Rent Controller had reason to suspect the bona fides of the respondent 's application under Section 21, the Rent Control ler could only have declined to grant his permission for the lease transaction and, if he had done so, the lease transac tion would not at all have come to pass through. The Rent Controller could not have compelled or directed the respond ent to give the premises on lease to the appellant for an indefinite period of time so as to enable the appellant to have the benefit of the statutory protection afforded by the Act against eviction except on one or more of the grounds set out in Section 14. In so far as Rahi 's case (supra) is concerned, the facts therein were totally different and they were instrumental for the court declining to sustain the landlady 's application under Section 21 for eviction of the tenant. The evidence in the case established that the land lady had previously let out the identical portion of the house to other tenants but still she had made a false decla ration before the Rent Controller that she had never let out the portion to any one earlier. Furthermore her statement that after the lease period was over her mother would be joining her and the leased portion would be required for her was found to be false because the lady in question was not her mother but an aunt whom the landlady claimed to be her foster mother. It was therefore a case where the permission under Section 21 had been obtained on the basis of false declarations and statements. In the present case no such false declaration had been made by the respondent when he sought the permission of the Rent Controller under Section 21. On the other hand we are inclined to agree with the argument of the respondent 's counsel that the facts of the case call for the court taking the view which it had taken in the case of Dhanwanti vs D.D. Gupta, (AIR In that case it was observed that there may be certain cases where the owner, after obtaining permission under Section 21 of the Act had let out the premises for a limited period and after the expiry of the said 946 period he may have again found it necessary to obtain per mission to let out the premises for another limited period due to genuine causes and therefore, the mere fact of let ting out of the premises once again by having resort to Section 21 of the Act for a limited period should not neces sarily lead to the inference that from the very beginning the premises were available for letting out indefinitely. In the instant case there is no evidence except the averment of the appellant that the respondent had let out the leased portion on earlier occasions also for limited periods by having resort to Section 21. However even if that statement is true there cannot be an automatic inference that the permission granted by the Rent Controller pertaining to the lease of the premises to the appellant had been obtained by fraudulent means by the respondent. Apart from these things there is also another factor which weakens the objections raised by the appellant and denudes them of force and content. He has waited for the full term of the lease to raise objections about the re spondent playing a fraud on the statute. He has failed to put forth these objections within a reasonable time after the permission was granted by the Rent Controller to impugn the order on the ground of the alleged fraud perpetrated by the respondent. It was observed by this Court in J.R. Vohra vs India Export House, ; at 911 912 that the remedy available to a tenant in a case where there was only a ritualistic observance of the procedure while granting permission for the creation of a limited tenancy or where such permission was procured by fraud practised by the landlord or was a result of collusion between the strong and the weak, would be for the tenant approaching the Rent Controller during the currency of the limited tenancy itself for adjudication of his pleas as soon as he discovers facts and circumstances that tend to vitiate ab initio the initial grant of permission and not to wait till the landlord makes his application for recovery of the premises after the expiry of the period fixed under Section 21. We are, therefore, unable to sustain the first ground of attack of the appellant 's counsel to assail the judgment of the High Court. In so far as the second ground is concerned, this aspect of the matter also has been considered by us and dealt with in a detailed manner in Inder Mohan Lal 's case. After notic ing the decisions of the Delhi High Court which have held the field all along declaring that Section 21 is a complete Code by itself and that a permission granted under Section 21 would not become invalid either on account of the 947 landlord failing to disclose the reasons for non requirement of the leased premises for a particular period or because of the landlord and the tenant not entering into an agreement in writing subsequent to the grant of permission under Section 21 or on account of the agreement of tenancy in writing not being subsequently registered, this Court af firmed the decisions of the Delhi High Court laying down the above ratio in observance of the settled judicial policy that in the matter of interpretation of a local statute the law settled by the High Court over a continuous period of time should be normally adhered to and should not be dis turbed. The relevant passage in the judgment reads as fol lows: "Learned counsel for the appellant also stressed before us that Section 21 of the Rent Act was a complete Code by itself. The order was under section 21 of the Rent Act. No further question of lease or registered lease arose thereafter. This question has been settled by series of decisions of the Delhi High Court upon which people have acted for long. See the decision in Kasturi Lal vs Shiv Charan Das Mathur, [1976] Rent Control Reporter Vol. 8 703 where at pages 708 709 Misra J. of the Delhi High Court had clearly indicated numer ous cases where it was held that Section 21 was a Code by itself. The order of the permis sion is itself an authority; no lease was necessary and if that is the state of law in Delhi, it is too late in the day to hold otherwise. See the observations of this Court in Raj Narain Pandey and others vs Sant Prasad Tewari & others; , where this Court observed that in the matter of the interpretation of a local statute, the view taken by the High Court over a number of years should normally be adhered to and not to be disturbed. A different view would not only introduce an element of uncertainty and confu sion but it would also have the effect of unsettling transactions which might have been entered into on the faith of those decisions. In Delhi, transactions have been completed on the basis of permission and it was never doubted that there was any requirement of any lease or any agreement subsequent to the order and the same required registration. There is therefore, no merit in the second contention of the appellant 's counsel that since the lease transaction was not reduced to 948 writing in terms of Exhibit A 2 subsequent to the grant of permission by the Rent Controller, the terms of Section 21 are not fulfilled and hence the execution application under Section 21 would not lie. In the light of our conclusions the appeal has to fail and it will accordingly stand dismissed with costs to the respondent. P.S.S Appeal dis missed.

The respondent, a government official, while residing in Government quarters sought permission of the Rent Controller under section 21 of the Delhi Rent Control Act, 1958 for leasing out a portion of his house to the appellant for residential purposes for 18 months as he did not require it for his own use for that period. The appellant declared before the Rent Controller that he accepted the statement of the respondent and that he shall vacate the premises on the expiry of the period of 18 months. The Rent Controller, thereupon, passed an order granting permission in terms of the declaration. When after expiry of the stipulated period the appellant failed to vacate the leased portion, the respondent filed an execution application for recovering possession. The Rent Controller as well as the Appellate Authority rendered concurrent finding to the effect that the tenancy came into effect only by reason of the permission granted by the Rent Controller under section 21 and directed the appellant to deliver possession to the respondent. In second appeal before the High Court it was contended by the appellant that since the lease agreement was not reduced to writing, as required under section 21 of the Act, the permission granted by the Rent Controller was not valid. Dismissing the appeal the High Court held that in as much as the parties had made statements before the Rent Controller and duly signed them, there was sufficient compliance with the terms of section 21 and it was not necessary that there should be a separate agreement in writing over and above the draft agreement and the statements rendered before the Rent Controller. 938 In the appeal by special leave, the contention taken before the High Court was reiterated, and in addition it was contended for the first time that the permission obtained by the respondent from the Rent Controller under section 21 was in fraud of the statute inasmuch as he had been obtaining such permission on several occasions for short periods in order to deprive the tenants of their rights under the Act. Dismissing the appeal, HELD: 1.1 A plea pertaining to fraudulent practice is a mixed question of fact and law. Without the requisite foun dation on facts to prove a wilful contravention or abuse of a provision of law a finding cannot be rendered as to wheth er a party has committed a fraud by abusing any legal provi sion. [943FG] 1.2 In the instant case, the appellant had not cross examined the respondent with reference to the lease granted earlier by the respondent to other tenants nor had he ad duced independent evidence to prove the factum of those leases and such leases being granted by abuse of the provi sions of section 21 of the Delhi Rent Control Act, 1958. In the absence of factual material to show the abuse or misuse of the provisions of section 21, it cannot be said that the respond ent had practised fraud on the Rent Controller in obtaining permission. Besides, even if the respondent had let out different portions of the building to other tenants on earlier occasions by having recourse to section 21 he may have done so on the basis of bona fide grounds and genuine calcu lations and his calculations may have gone wrong due to factors or events beyond his control. The mere fact of letting out of the premises once again by resort to section 21 for a limited period should not necessarily lead to the inference that from the very beginning the premises were available for letting out indefinitely. [943EF, G 944A, 946A] Dhanwanti vs D.D. Gupta, (AIR referred to. 1.3 The respondent was a government servant and was living in Government quarters. He had an apprehension that the said allotment may be cancelled because of his owning a house and so he had to provide for any contingency resulting from such cancellation and hence he felt he would be able to spare the leased premises only for a limited period. There was no material before the Rent Controller to establish or even to arouse suspicion that the respondent was playing a fraud on the statute. In such circumstances the order passed by the Rent Controller cannot be said to be vitiated in any manner. [945AB] 939 S.B. Noronah vs Prem Kumari Khanna, ; , applied. V.S. Rahi vs Ram Chambeli, ; , distinguished. The appellant has waited for the full term of the lease to raise objections about the respondent playing a fraud on the statute. He has failed to put forth these objections within a reasonable time, after the permission was granted by the Rent Controller, to impugn the order on the ground of the alleged fraud perpetrated by the respond ent,. This factor weakens the objections raised by the appellant and denudes them of force and content. [946CD] J.R. Vohra vs India Export House, ; at 911 912, referred to. In the matter of interpretation of a local statute the law settled by the High Court over a continuous period of time should normally be adhered to and should not be disturbed. The Delhi High Court has consistently held that section 21 of the Delhi Rent Control Act, 1958 is a complete Code by itself, and a permission granted thereunder would not become invalid either on account of the landlord failing to disclose the reasons for non requirement of the leased premises for a particular period or because of the landlord and the tenant not entering into an agreement in writing subsequent to the grant of permission under section 21 or on account of the agreement of tenancy in writing not being subsequently registered. A different view would not only introduce an element of uncertainty and confusion but it would also have the effect of unsettling transactions which might have been entered into on the faith of those deci sions. [947B, 946H 947A, FG] Inder Mohan Lal vs Ramesh Khanna (C.A. No. 468 of 1977) decided on 4.8.1987; Raj Narain Pandey & Ors. vs Sant Prasad Tewari & Ors., ; and Kasturi Lal vs Shiv Charan Das Mathur, [1976] Rent Control Reporter, Vol. 8 p. 703, referred to.

Appeal No. 1057 of 1965. Appeal by special leave from the judgment and order dated November 21, 1963 of the Gujarat High Court in Special Civil Application No. 560 of 1961. N.S. Bindra, S.K. Dholakia and S.P. Nayar, for the appellant. Somnath R. Upadhya and Bhuvanesh Kumari, for the respondent No. 1. 616 The Judgment of the Court was 'delivered by Hegde, J. This is an appeal by special leave. Herein we have to determine the true scope of section 14(1) of the Bombay Merged Territories and Areas (Jagir Abolition) (Bombay Act No. XXXIX of 1954). That question arises thus: Respondent No. 1 was the Bhayyat of the Jagir of Ghantoil. That Jagir was situated in the Idar State, a former Indian State. The area comprised in that State is a part of the State of Gujarat at present. The said Jagir was a proprietary Jagir and for the purpose of succession and inheritance, it was governed by the rule of primogeniture. The eldest son succeeded to the Gaddi: the other junior members of the family were granted maintenance known as Jiwarak, out of the Jagir estate. The former Thakore of Ghantoil, Shri Dalpatsinhji Kumansingh granted as Jiwarak to the father of the present respondent, a half share in a village by means of a deed dated Feb. 18, 1916. In 1928 dispute arose between the Thakore and the Bhayyats in the matter of aforesaid Jiwarak. Hence the first respondent and his brother filed a suit in the Sadar Court of the then Idar State claiming Jiwarak. The Court of first ' instance decreed the suit in favour of the first respondent and his brothers. The Thakore went in appeal against the said judgment. When the appeal was pending, the dispute was compromised and a consent decree was passed on September 23, 1940. Under the consent decree the following rights were given to the first respondent and his brothers as Jiwarak. (1) Rights to recover assessment (Vighoti) of Survey Nos. 382 387, 396, 398, 399, 542, 543, 544, 545 and 546 assessed at Rs. 175/ . (2) Right to own and possess Gharkhed Lands consisting of Survey Nos. 219, 220, 225, 227, 228 and 229 assessed at Rs. 74/8/ free from payment of assessment; and ( 3 ) Right to receive a cash allowance of Rs. 234/12/annually from the Jagir. The Act came into force on August 1, 1954 as a result of which all Jagirs in the merged territories of Bombay including the Jagir of Ghantoil were abolished. Thereafter respondent No. 1 claimed compensation under section 14(1) of the Act. He applied to the Jagir Abolition Officer for fixing the compensation due to him in respect of his aforementioned rights. That officer rejected his claim but when the matter was taken up in appeal to the Gujarat Revenue Tribunal, 'the Tribunal granted him compensation in respect of his rights to recover assessment of Rs. 175/annually but it rejected his claim for compensation under the remaining two heads. The first respondent then took up the matter to the Gujarat High Court under article 227 of the Constitu 617 tion in Special Civil Application No. 560 of 1961. The High Court allowed that application. It held that the first respondent is entitled to compensation in accordance with the provisions of the Act both in respect of Gharkhed lands as well as in respect of his right to receive cash allowance of Rs. 234/12/ annually. The Jagir Abolition Officer was directed to hold further inquiry for determining a compensation payable to the first respondent in respect of those rights. This appeal is directed against the said order of the High Court. The long title of the Act shows that it is an Act to abolish Jagirs in the merged territories and merged areas in the State of Bombay. Its preamble reads: "Whereas it is expedient in the public interest to abolish jagirs of various kinds in the merged ' territories and merged areas in the State of Bombay and to provide for matters consequential and incidental thereto; It is hereby enacted as follows . . " Section 2 defines the various expressions including Gharkhed land, Jagir, Jiwai Jagir, used in the Act. Jagirs are abolished under section 3. That Section reads: "Notwithstanding anything contained in any usage, grant, sanad, order, agreement or any law for the time being in force, on and from the appointed date, (i) all jagirs shall be deemed to have been abolished; (ii) save as expressly provided by or under the provisions of this Act, the right of a jagirdar to recover rent or assessment of land or to levy or recover any kind of tax, cess, fee, charge of any hak and the right of reversion or lapse, if any, vested in a jagirdar, and all other rights of a jagirdar or of any person legally subsisting on the said date, in ' respect of a jagir village as incidents of jagir shall be deemed 'to have been extinguished." Section 4 provides that all Jagir villages shall be liable to pay land revenue in accordance with the provisions of the Code and the rules relating to unalienated lands shall apply to these villages. In this case we are not concerned with the compensation payable to the Jagirdar. We are dealing with the case of a person coming under section 14(1) of the Act. That section prescribes the method of awarding compensation to persons other than Jagirdars who are aggrieved by the provisions of the Act as abolishing, extinguishing or modifying any of their rights to, or interest in property. The section reads thus: 618 "Section 14 ( 1 ). If any person other than a jagirdar is aggrieved by the provisions of this Act as abolishing, extinguishing or modifying any of his rights to, or interest in property and if compensation for such abolition, extinguishment or modification has not been provided for in the provisions of this Act, such person may apply to the Collector for compensation. " The real question for decision is whether the right to own and possess Gharkhed land and the right to receive cash allowance annually from the Jagir are rights to property or at any rate interest in property. Before a person can claim compensation under section 14(1) he has to establish (1) that he is not the Jagirdar of the concerned Jagir (2) he is aggrieved by the provisions of the Act as abolishing, extinguishing or modifying any of his rights to, or interest in property as a result of the abolition of the Jagir and (3 ) compensation for such abolishing, extinguishment, modification has not been provided in the provisions of this Act. It is admitted that the petitioner was not a Jagirdar. It is also admitted that he is aggrieved by the provisions of this Act. It was not said that for abolition of any of the privileges enjoyed by him any compensation had been provided ' under the provisions of the Act. The only point in controversy is whether the claim put forward by him can be considered as right to, or interest in property. We shall first take up the Gharkhed lands. Admittedly the first respondent was enjoying those lands without any liability to pay assessment. That was a right conferred on him under the compromise decree. No material was placed before us to show that the Jagirdar was competent in spite of the compromise decree to collect assessment from him in respect of those lands. This was not a case of suspension of land revenue. The first respondent 's right was to enjoy the land free of the liability to pay the land revenue. That was the position on 'the date the Act came into force. So far as the Thakore was concerned the right to collect the assessment of those lands had been given as Jagir to the Jagirdar. We see no merit in the contention of Mr. N.S. Bindra, the learned Counsel for the appellant that the Sovereign had an inherent right to levy assessment and any agreement not to collect assessment has necessarily to be considered as a concession and not a right. That question is wholly irrelevant for our present purpose. In this case we are not called upon to consider the nature of the power of the Sovereign to levy assessment. The only question for our decision is that whether by abolishing the Jagir and by levying assessment on the Gharkhed lands any of the respondent 's right to or interest in property were abolished, extinguished or modified. We are considering the plaintiff respondent 's 919 right to or interest in property as it stood before the Act and not after section 5 of the Act came into force. There is no denying the fact that right to enjoy a property without the liability to assessment is a more valuable right than the right to enjoy the same property with the liability to pay assessment. Before the Act, the first respondent was enjoying Gharkhed land without the liability to pay assessment but after the Act came into force he enjoying those very. lands with the liability to pay assessment. Therefore there is hardly any doubt that his interest in that property stands modified. In this case it is not necessary to consider whether that interest can be considered as a right in the property. We are also in agreement with the High Court that the right to receive cash allowance of Rs. 234/12/ annually from the Jagir is one of those rights that have got to be compensated under section 14(1). That liability was not the personal liability of the Jagirdar. The first respondent was entitled to get that amount from the Jagir. In other words it was a charge on the Jagir. Therefore it is an interest in property. We are unable to agree with Mr. Bindra that the decision of this Court in Civil Appeals Nos. 517 534 of 1965 (The State of Gujarat etc. V. Vakhatsinghji Sursinghji Vaghela)(1) to which two of the members of this Bench were parties is of any assistance to the appellant. Therein this Court was called upon to consider the scope of section 14(1) of the Bombay Taluqdari Abolition Act, 1949. The language of that provision is substantially different from the language of section 14( 1 ) of the Act. Further therein this Court held that the concerned Taluqdar was not entitled to enjoy the lands with the liability of paying only 60% of the assessed assessment though for some years only 60% of the assessed assessment was collected as a matter of concession. That was only a concession and not a right. Mr. Bindra tried to extract one or two sentences from the decision of the Bombay High Court in Shapurji Jivanji V. The Collector of Bombay(2) and found an argument on the basis of those sentences to the effect that the right to collect assessment can never be given up. Far from supporting that contention the decision actually proceeded on the basis that the said right can be given up either by contract or on the basis of legislation. For the reasons mentioned above we see no merit in this appeal. It is accordingly dismissed with costs. V.P.S. Appeal dismissed.

The appellant made a gift in 1951 of certain ordinary and preference shares in a company to. his wife and on the date of transfer the value of the shares was Rs. 69,730. After the company had converted the preference shares into ordinary shares the appellant 's wife sold most of the shares held by her for Pa. 1,54,800, resulting in a capital gain of Rs. 70,860 as computed under section 12B of the Income Tax Act. She deposited the entire amount realised from the sale of shares with a firm and thereby earned an interest of Rs. 9,288 per year. In the appellant 's assessment for 1957 58, the Income Tax Officer included the amount of Rs. 70,860 on the view that the gain resulting from the sale of the shares was the income of the appellant 's wife which arose directly or indirectly from assets transferred by him within the meaning of section 16 (3)(a)(iii) of the Income Tax Act, 1922. Similarly, in the appellant 's assessment for the year 1958 59 ' and 19591 60, the interest amount of Rs. 9,288 was also included as income within the meaning of section 16 (3) (a) (iii). In appeals made against the three assessment orders, while the Appellate Assistant Commissioner dismissed the appeal in respect of the assessment year 1957 58 be partly allowed the other two appeals taking the view that only that part of the interest which was attributable to the monetary value of the shares at the time of the gift was liable to be included in the appellant 's total income under section 16 (3)(a)(iii); since the monetary value of the shares gifted to the wife at the time when the gift was made was. only Rs. 69,730. the interest attributable to it worked, out at Rs. 4,138 and only this amount could be included in the appellant 's income. The Appellate. Tribunal dismissed the appellant 's further appeal and also allowed cross appeals filed by the Department. The High Court. upon a reference. held that the sum of Rs. 70,860 was properly included in the appellant 's income, in 1957 58 but that the interest amount in excess of Rs. 4.138 was not liable to be included in his income for 1958 59 and 1959 60. In the appeal to this Court the only question for consideration was whether the amount of Rs. 70.860 was the appellant 's income under section 16 (3)(a)(iii). It was contended on his behalf (i) that what comes within the ambit of section 16(3.)(a)(iii) is the income from the transferred assets.which is different from the profits or gains arising from the sale of the transferred assets. or in other words "the capital gains" from the transferred assets; and (ii) that section 16(3)(a)(iii) was enacted in 1937 when the word 'income ' did not include 'capital gains ' and income from the property was understood to be income falling under that head in section 6 of Act. HELD: The High Court had rightly decided that the amount. of Rs. 70,860 was properly included in the assessees income under section 16 (3) (a) (iii). 361 (i) There is no logical distinction between income arising from the asset transferred to the wife and arising from the sale of the assets so transferred. The profits or gains which arise from the sale of the asset would arise or spring from the asset, although the operation by which the profits or gain is made to arise out of the asset is the operation of sale. [364 G H] (ii) Although at the time when section 16(3)(a)(iii) was enacted the definition of 'income ' did not include 'capital gains ', capital gains having been brought within the meaning of 'income ' in section 2(6C), the expression 'income ' as used in section 16(3)(a)(iii) must be construed according to the amended definition of the word and would, therefore, include capital gains. There is nothing in the context or language of section 16(3)(a)(iii) of the Act to suggest that capital gains are excluded from its scope and there is no reason why a restricted interpretation should be given to the provisions of section 16(3) (a) (iii). [365 C E]

Civil Appeal No. 548 of 1958. Appeal by Special Leave from the judgment and order dated March 27, 1957, of the Patna High Court in Misc. Judicial Case No. 315 of 1956. B. Sen, P. W. Sahasrabudhe and A. C. Ratnaparkhi. for the Appellant K. L. Hathi and R. H. Dhebar, for Respondent No. 1. N. C. Chatterjee and section N. Mukerji, for Respondent No. 2. 1961. October 9. The Judgment of the Court was delivered by SARKAR, J. on September 25, 1947, the appellant was appointed by respondent No. 2, the Tata Iron and Steel Co., Ltd. (hereafter called the Company) as the Chief Labour officer of its collieries of which it appears to have a few, and he worked 33 under the Company till the latter terminated his services by a notice dated December 5,1955. On such discharge, the appellant , claiming to be a Welfare Officer of a mine within r.74(2) of the Mines Rules 1955, which rule we shall later ser out, filed an appeal before respondent No.1, the Chief Inspector of Mines in India, under that rule questioning the validity of his discharged by the Company. The Chief Inspector held that the appellant was not a Welfare Officer within that rule and refused to entertain his appeal. The appellant then moved the High Court at Patna under article 226 of the Constitution for an appropriate writ directing the chief inspector to decide the appeal. The High Court dismissed the appellant 's petition agreeing substantially with the view taken by the Chief Inspector. The appellant has now appealed to this Court against the judgment of the High Court. The Mines Rules; 1955 were framed under the , and came into force on July 2, 1956. We are principally concerned with the proviso for. 74(2) but this has to be read with r.72. The relevant portions of these rules are set out below. Rule 72. (1) In every mine wherein 500 or more persons are ordinarily employed there shall be appointed at least one Welfare Officer: Provided that if the number of persons ordinarily employed exceeds 2000, there shall be appointed additional Welfare Officer on a scale of one for every 2000 persons or fraction thereof (2) No person shall as a Welfare Officer of a mine unless he possesses (Here certain qualifications are specified) Provided that in case of a person already in service as a Welfare Officer in a mine the 34 above qualifications may, with the approval of the Chief Inspector be relaxed. (3). . . . . (4) A written notice of ever y such appointment. . and of the date thereof shall be sent by the owner, agent or manager t o the Chief Inspector within 7 days from the date of such appointment. . . Rule 73. Duties of Welfare officers: . . . . . . . . . . (Here certain duties are prescribed) Rule 74. (1). . . . . . . (2) The condition of service of a Welfare Officer shall be the same as of other members of the staff of corresponding status in the mine; Provided that in the case of discharge or dismissal, the Welfare Officer, shall have a right of appeal to the Chief Inspector whose decision thereon shall be final and binding upon the owner, agent or manager of the mine as the case may be. The Chief Inspector mentioned in these Rules is the Chief Inspector of Mines in India. If the appellant was not a Welfare officer within the proviso to r. 74(2) as the company contends, then, of course, no appeal by him lay under it. He would then clearly not be entitled to the writ he asked. The question therefore is whether the appellant was a Welfare Officer within the rule and is really one of construction of it. We desire now to point out certain facts as to which there is no controversy. First, both the Act and the Rules came into force long after the appellant had been appointed by the Company. Secondly no relaxation of qualifications had been sought from or granted by the Chief Inspector with respect to 35 The appellant under the proviso to sub r. (2) of r. 72 after the Rules came in to force. Thirdly, no notice as contemplated in r. 72(4) had been given concerning the appellant. It appears that the Chief Inspector found that the appellant "was performing duties akin to those of Welfare officers contemplated by rule 73 and he was qualified to work as a Welfare officer. " We propose to deal with this appeal on the basis of these findings. Dealing with the contention noticed by the Chief Inspector and the High Court that a Welfare Officer under r. 74(2) is one who is appointed after the Rules came into force, Mr. Sen for the appellant said that a person like the appellant who had the requisite qualifications and was discharging the duties prescribed for a Welfare officer from before the Rules came into force, would be a Welfare officer within them. He pointed out that the proviso to sub r. (2) of r. 72 clearly contemplated the continuance of the service of such a person as a Welfare officer with relaxation where such was necessary and was granted. He also said that sub r. (4) of r. 72 was inapplicable to Such a person because he had been appointed long ago and because the proviso to r. 72(2) indicated that its application was not intended. We do not think it necessary to pronounce on this question in the present case. In our view, the appeal must fail even if Mr. Sen 's contention is right and that for another reason . We observe that the Rules do not define the term "Welfare officer". But we think it is beyond doubt and indeed the contrary has not been contended that the Welfare officer mentioned in the proviso to r. 74(2) is the same officer as is mentioned in sub r (1) of r. 72. Now it is, in our view, perfectly plain that the Welfare officer contemplated by r. 72(1) is such an officer of one mine. The rule says that there shall be at least one Welfare officer for every mine employing between 500 and 2000 persons and this makes any other view impossible 36 As we understood Mr. Sen, he also accepted that the Welfare officer contemplated is one appointed in respect of one mine. Now, the appellant was on his own case, the Welfare Officer of several mines of the Company and not of one of such mines only. Therefore, we think that he was not a Welfare officer within r. 72(1) and hence not within the proviso to r. 74(2). But Mr. Sen contends that the appellant might be considered as having been severally and independently appointed the Welfare officer of each of the Company 's several collieries in his charge. We think that would be an impossible view to take. One appointment cannot be treated as several appointments and it is not in dispute that the appellant had only one appointment for all the Company 's collieries. We think that this appeal fails and we dismiss it with costs. Appeal dismissed.

The , and the Minimum Wages Rules, framed thereunder, laid down the principle that the Government should provide for a day of 1 est to the workers for every period of 7 days and also to make provisions for making some payment in connection therewith. The dispute between the workers and employers of the present case related to (a) arrears of wages for Sunday, the "weekly off" day on which no work was done and (b) arrears of wages for work 37 done on Sundays which should have been given as a weekly off day but was not so given and no compensatory day was given in lieu thereof as contemplated under the Minimum Wages Rules. As regards arrears of wages for Sundays on which no work was done the workmen 's case was that they were entitled to payment for each such Sunday amounts equal to their average daily wages during the preceding week, that for the work done on Sundays without the compensatory "off day" they were entitled to three times the ordinary rate. The respondent 's case was that on a proper interpretation of r. 23 of the Minimum (Wages Central) Rules, 1960, the Workmen were not entitled to payment for Sundays on which no work was done and that in any case they had been constructively paid for Sundays inasmuch as the daily wages were fixed at I/26th of the monthly wages. The Industrial Tribunal rejected all the claims of the workmen. On appeal by special leave. ^ Held, that contravention of r. 23 of the Minimum Wages Rules was punishable under the but the Industrial Tribunal had no authority to impose penalty in the shape of making the employer pay in respect of work done on Sundays something more than what he would have otherwise to pay. Neither the nor the Rules contain any provision for such additional payment over and above what would be payable for over time work as such. The workmen therefore cannot get three times the ordinary rate. The phrase "for which" in r. 23 referred to the weekly holiday whether it was on a Sunday or on any other day of the week as permitted under the Rules. No distinction was made between the holiday on the first day of the week and holiday on one of the five days immediately before or after the said day. The scheme was for one holiday in the week and it was for that holiday that payment was provided. Trustees of the Port of Bombay vs Authority under the Payment of Wages Act, (1957) I L.L.J. 627, A. C. C. vs Labour Inspector, (1960) 1 L. L. J. 192 and Jaswani Sugar Mills vs Sub divisional Magistrate, , approved. The Central Government clearly intended under the Minimum Wages Rules that for work on a holiday something more than what was actually paid for six days of the week should be paid. This could not be defeated by a statement that in form six days wages were paid, but in fact and in substance seven days wages were paid. The plea of constructive payment must fail. The argument that r. 23 did not apply to the workmen of the present case after the introduction of the piece rate scheme introduced in this case must be rejected 38

ivil Appeal No. 584 of 1982. From the Judgment and Order dated 21.9.1979 of the Punjab and Haryana High Court in Civil Writ Petition No. 2247 of 1979. A.B. Rohtagi and M.S. Mann for the Appellant. Harbans Lal and Ashok K. Mahajan for the Respondents. The following Judgment of the Court were delivered by K. RAMASWAMY, J. I wholly agree with my learned brother Saikia, J. with regard to the reasoning and the conclusions. He has succinctly stated the facts of the case and the relevant provisions of law and they need no reiteration. I would add only few points which I deem relevant to be dealt with. As regards the applicability of the limitation of six months period prescribed under Rule 18 for the exercise of the revisional power by the State Govt. under Section 42 of the Act, assailing legality or propriety of the scheme prepared or confirmation thereof or repartition made in pursuance thereof, it could be angulated from yet another perspective. Indisputably Section 42 was amended by the Amendment Act of 1960 incorporating after the words any order passed "(Scheme prepared or confirmed or repartition made)". Rule 18 was made in exercise of the rule making power by the subordinate legislation. After the amendment of Section 42 was made to exercise the revisional power by the State Govt. against the schemes prepared or confirmed or repartition made, correspondingly, no amendment to Rule 18 was made bringing within its ambit scheme prepared or con firmed or repartition made in pursuance thereof. It is unnecessary to go into the question whether Rule 18 was declared to be intra vires or not. We proceed on the footing that Rule 18 is ultra vires and applies to the exercise of the revisional power by the State Govt. under Section 42. The omission to amend the Rule is an indication of the legislative animation that the limitation of six months prescribed under the Rule 18 would be confined to be ap plicable only to "any order passed by any officer under the Act. Thereby, by necessary implication the prescription of the limitation of six months for filing revision petition against the scheme prepared or confirmed or repartition made in pursuance thereof would stand excluded. It is no 580 doubt true as contended for respondents that the Consolida tion Officer who has prepared the scheme or confirmed it or modified or repartition made when it is objected to by the affected party, has to consider the objections and, as a part thereof by necessary implication, has to assign reasons and the record must contain reasons. But the legislature made a dichotomy between the orders passed and scheme pre pared or confirmation thereof or repartition affected in pursuance thereof. He is not free to take arbitrary deci sion. Assigning reasons are sine quo non for application of the mind though he does not appear to communicate the rea sons therefore. But to an order passed assigning reasons in its support and communication thereof are necessary concomi tants and this was made manifest when Section 19, 20 and 21 are looked into. As regards the exercise of the power under Section 19 and 20 the statute does not envisage passing any orders. But when exercise of the power in Sub sec. 20 of 21, the officer is enjoined to pass orders and appeals are provided within the prescribed limitation against those orders to the appellate forums. This, also, is an indication of the fact that the limitation of six months is confined to the orders to be revised under section 42. It is undoubted that the scheme prepared or confirmed or modified or repartition made in pursuance thereof are amena ble to the revisional jurisdiction under section 42. The State Govt. would consider the legality or propriety of the reasons or the grounds on which the scheme was initially prepared or confirmed or modified or repartition made in pursuance thereof. But that does not mean that it is an order made and the limitation of six months prescribed under Rule 18 would get attracted to the revision filed against the scheme prepared or modified or repartition made in pursuance thereof. Thus I have. little hesitation to hold that the prescription of limitation of six months under Rule 18 would be confined only to order passed by any officer under the Act; it would not apply to the revision filed against the scheme prepared or confirmed or reparti tion made in pursuance thereof. It is undoubted that when there is no limitation pre scribed for exercise of the revisional power under Section 42 against the schemes prepared or confirmed or repartition made, it would be exercised within a reasonable time. What is a reasonable time is always a question of fact depending upon the facts and circumstances in each case. When legisla ture chose not to fix a particular period of limitation by judicial dicta it is not permissible to limit to a particu lar period. The long lapse of time may be a fact for the revisional authority to take into 581 account in the light of the facts and circumstances obtain able in an appropriate case. No absolute or precise period of limitation could be predicated or laid. Take for instance the facts of this case. the previous Sarpanch is a benefici ary from the impugned order and has chosen not to take steps to have the scheme impugned by filing a revision under Section 42 of the Act. The Gram Panchayat, being a juristic person, could not by itself except through the executive authority take. any action against the scheme prepared by the Consolidation Officer to assail its legality or proprie ty by filing the revision. The revision petition was filed soon after the new Sarpanch came into office. Take another instance of a case where the officer concerned and the person benefitted, in confabulation, have made a scheme and repartition affected in pursuance thereto and kept it in dark to the knowledge of the person affected by the scheme prepared or the partition made. Until the person affected had actual knowledge, it is not possible to become award of it. The limitation begins to run from the date of the knowl edge of the fraud so played. It is always open to the af fected person to come forward and say that for the first time he became aware of the scheme prepared or partition made in pursuance thereof only when his rights are sought to be interfered with or exercise of the enjoyment of the property is interdicted. Therefore immediately within a reasonable time thereafter he is to file a revision before the State Govt. Having had the knowledge of the impugned action if he stood by without taking any further action, it is always open to the other party to bring it to the notice of the State Govt. of the ground or the circumstances under which the revision petitioner when he became aware of the scheme prepared or the repartition made and he deliberately chose to acquiesce to it and if the State Govt. is satisfied of the same, unless satisfactory explanation for the delay is given, the State Govt. may decline to interfere with the impugned action or may decline to entertain the revision petition itself. Thus it could be seen that each case has to be angulated on its own given facts and circumstances as to the reasonable period of limitation within which the revi sional power is to be filed. Even though more than 5 years time had elapsed from the date of the preparation of the scheme till date of the filing of the revision under Section 42, there is sufficient ground in this case for the new Sarpanch in not filing a revision within six months from the date of the original scheme and the State Govt. is well justified in exercising the power under Section 42. The High Court is unjustified in interfering with the order passed by the Consolidation Officer. Accordingly, the appeal is al lowed. No costs. 582 K.N. SAIKIA, J. This appeal by special leave is from the Judgment of the High Court of Punjab and Haryana at Chandi garh dated 21.9.1979 in Civil Writ Petition No. 2247 of 1979 allowing the petition and setting aside the order of the Director, Consolidation of Holdings dated 8.2.1979. The appellant Gram Panchayat, hereinafter referred to as the 'Panchayat ', was the owner of 1200 Bighas of land in village Kanonda, Tehsil Bahadurgarh, District Rohtak. A Scheme of consolidation of holdings, hereinafter referred to as 'the Scheme ', of the village was confirmed on 15.1.1974 under section 20 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (50 of 1948), hereinafter referred to as 'the Act '. The Panchayat, there fore, moved an application under section 42 of the Act on 20.9.1977 for setting aside the Scheme, objecting to the utilisation of the land of value of /2/ (two annas) and allotments made to the other rightholders for their benefit. On 24.1. 1979 a Mushtehri Mundadi was made for information of all the villagers concerned, but the rightholders were absent and ex party proceedings were taken against them. The Panchayat 's case was that under the said Scheme the Panchay at land was consolidated, repartitioned and allotted to persons who did not have any right to hold the land. Be sides, the land of Dharat containing two wells and a big house being religious place of worship was also partitioned under the Scheme and consequently the Panchayat has been reduced to a landless person, financially weakened and rendered incapable of rendering service in the village. After hearing the parties the Director in his order dated 8.2. 1979 observed that it was evident from the perus al of the record that the Scheme of Consolidation of the village was confirmed on 15.1. 1974 whereas the application had been filed on 20.9. 1977 and as such the application had been filed too late. After the expiry of six months period the application was time barred. However, he said in his order: "In this case only to benefit some land own ers, the land of the value of two annas has been allotted due to which the deserving persons have been left over and they have not been given even Abadi plots. Apart from this the Panchayat had no other land to cultivate, due to which the Panchayat is unable to devel op the agricultural schemes and in these circumstances of the matter I condone the delay in filing the present application. " 583 He accordingly set aside the Scheme and remanded the case to the Consolidation Officer under section 21(2) of the Act with some directions. Against that order the respondents moved the High Court of Punjab and Haryana in Civil Writ Petition No. 2247 of 1979 urging, inter alia, that the Director of Consolidation of Holdings had condoned the delay without there being any ground for the same and that, in doing so, he had acted illegally and with material irregu larity. The High Court held that from the observations of the Director it was evident that the delay was condoned on extraneous considerations as no reason whatsoever was given by the applicant in the application filed before him under section 42 of the Act as to why it was filed after the period of limitation. In that view of the matter, holding that the Director of Consolidation of Holdings had acted illegally and with material irregularity in condoning the delay, the High Court by the impugned order dated 21.9.79 allowed the writ petition and quashed the order of the Director of Consolidation of Holdings dated 8.2.1979. Mr. A.B. Rohtagi, the learned counsel for the appel lant, submits that the High Court erred in setting aside the Director of Consolidation 's order applying to the confirma tion of the Scheme the period of limitation of six months as prescribed in Rule 18 of the East Punjab Holdings (Consoli dation and Prevention of Fragmentation) Rules 1949, herein after referred to as 'the Rules ', inasmuch as that rule speaks only of orders and not of confirmation of the Scheme; and that a Full Bench of the Punjab and Haryana High Court in Jagtar Singh vs Additional Director, Consolidation of Holdings, Jullundar, , taking the view that the bar of limitation under Rule 18 does not apply to those petitions under section 42 in which the legality or validity of a scheme prepared or confirmed or repartition made is challenged has overruled AIR 1982 Punjab and Har yana 148 and that Full Bench decision has since been followed in Mr. Rohtagi further submits that on merits also there was ample justification for the Director to have taken the view it did inasmuch as Panchayat lands were taken into consolidation and repartitioned and allotted to persons who had no right to obtain the land thereby impoverishing the Panchayat and rendering it incapa ble of giving any help to the villagers. Mr. Harbans Lal, learned counsel for the respondents submits that the Full Bench decision that the limitation under rule 18 does not cover an order confirming a scheme is not tenable inasmuch as confirmation of a scheme is only by an order as contemplated under rule 18, and an applica tion challenging that order of confirmation has, there 584 fore, to be made within six months thereof; and that even assuming that there was no bar of limitation, an application had to be made within a reasonable time which, according to learned counsel, would be 'about two years '; and that by any standard the appellant 's application under section 42 was belated and could not have been allowed. Lastly, counsel submits that there were three earlier applications dismissed by the Director under section 42 of the Act, including one by the Panchayat itself, and the Director had no power to review his own order. The questions to be decided therefore are, whether for the purpose of limitation under rule 18 of the Rules confir mation of a scheme would be an order as envisaged in the rule; if it was not an order, whether the Director was justified in setting aside the scheme and remanding the matter to the Consolidation Officer; and whether the Direc tor 's order was one of review of his earlier order and as such beyond his jurisdiction. To decide the first question we may conveniently refer to the provisions of the Act and rule 18 of the Rules. Section 42 of the Act empowers the State Government to call for proceedings under the Act. It says: "42. Power of State Government to call for proceedings:The State Government may at any time for the purpose of satisfying itself as to the legality or propriety of any order passed, scheme prepared or confirmed or repar tition made by any officer under this Act, call for and examine the record of any case pending before or disposed of by such officer and may pass such order in reference thereto as it thinks fit: Provided that no order or scheme or repartition shall be varied or reversed with out giving the parties interested notice ' to appear and opportunity to be heard except in cases where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration. " From a perusal of this section there arises no doubt that under it the State Government may for the stated purpose call for proceedings wherein any order is passed, scheme prepared or confirmed or repartition made by any officer under this Act. Under the proviso the State 585 Government shall not vary or reverse any order or scheme or repartition without giving the interested parties opportuni ty of being heard except in cases where the State Government is satisfied that the proceedings have been vitiated by unlawful consideration. There is therefore no doubt that this section envisages proceedings wherein order is passed, scheme prepared or confirmed or repartition made. These are the distinct proceedings for the purpose of exercising jurisdiction under this section. Rule 18 deals with limitation for application under section 42, and it reads: "18. Limitation for application under section 42: An application under section 42 shall be made within six months of the date of the order against which it is filed: Provided that in computing the period of limitation, the time spent in ob taining certified copies of the orders and the grounds of appeal, if any, filed under sub section (3) or sub section(4) of section 21, required to accompany the application shall be excluded: Provided further, that an applica tion may be admitted after the period of limitation prescribed therefore if the appli cant satisfies the authority competent to take action under section 42 that he had sufficient cause for not making the application within such period. " From a perusal of this rule there arises no doubt that for applying this rule the application has to be one under section 42 of the Act and it has to be against an order and under the first proviso a certified copy of the order is required to accompany the application and in computing the period of limitation of six months, the time spent in ob taining the certified copy is to be excluded. While the Division Bench comprising P.C. Jain and Tewa tia, JJ of the Punjab and Haryana High Court in the instant case applied the period of limitation to the confirmation of the scheme and in that view of the matter set aside the Director 's order, the Full Bench comprising P.C. Jain, Acting C.J., Tewatia and Tiwana, JJ. held: "A bare perusal of rule 18 of the Rules would show that .it provides limitation only for petitions filed against orders 586 passed. There is no reference in the Rules to a scheme prepared or confirmed or repartition made. The fact that in section 42 of the Act the words 'scheme prepared or confirmed or repartition made ' have been added as a result of amendment, cannot justify the conclusion that in Rule 18 of the Rules these words have also to be read. " We respectfully agree with this view. Rule 18 has to be interpreted as we find it and the words of the rule are simple, precise and unambiguous and no more is necessary than to understand these words in their natural and ordinary sense. Two different meanings cannot be given to the same word 'order ' namely, that in section 42 it does not include scheme prepared or confirmed or repartition made; while in rule 18 it would include them. The Full Bench therefore rightly held that rule 18 of the Rules does not apply to those proceedings in which the legality or validity of the scheme prepared or confirmed or repartition made is chal lenged. The Full Bench rightly approved the decision in Haqiqat Singh vs Addl. Director, Consolidation of Holdings, AIR 1981 Punjab & Haryana 204, wherein it was held that a reading of section 42 as well as the scheme of the Act unmistakably pointed out that the statute made a clear distinction between order passed by an officer under the Act and the performance of duties by the authorities under the Act in the matter of preparation and confirmation of scheme of consolidation and re partition made in pursuance thereof. So it could not possibly be held that preparation or confir mation of a scheme and the repartition carried would fail within the scope of 'order ' as used in rule 18 of the rules. The rule did not come into play when a petitioner challenged either the scheme of consolidation including its preparation or confirmation of the repartition made in pursuance there of. The amendment made this position clear. In a subsequent decision reported in Joginder Singh and Ors. vs The Director, Consolidation of Holdings, decided on August 8, 1988, where the direct hold ers had not challenged any order of the consolidation au thorities but had attacked the validity of the scheme and the repartition, it was rightly held that the bar of limita tion of six months in rule 18 of the Rules was not attracted to the facts of that case. Mr. Harbans Lal submits that the above decisions require reconsideration. We do not agreed. We have perused the provisions of the Act and rule 18. The Act provides for the compulsory consolidation of, and for prevention of fragmen tation of, agricultural holdings in the 587 State of Punjab and for the assignment or reservation of land for common purposes of the village. It appears that prior to the Act there were two methods of consolidation in vogue in the Province, one through the Revenue Department and the other through the Cooperative Department but the progress of consolidation was very slow and lengthy and the Act sought to remedy those defects. Section 19 of the Act provides for publication of draft scheme and on such publi cation any person likely to be affected by such scheme, shall, within 30 days of such publication, communicate in writing to the Consolidation Officer any objections relating to the scheme. The Consolidation Officer, shall, after considering the objections, if any received, submit the scheme with such amendment as he considers necessary togeth er with his remarks on the objections to the Settlement Officer (Consolidation). Thus, in this section we do not find any provisions for any order being passed. Section 20 deals with confirmation of the scheme. Under sub section(2) thereof if any objections are received to the draft scheme published under sub section (1) of section 19 and also if no written or oral objections to the draft scheme are received under subsection (3) of that section by the Settlement Officer (Consolidation) he shall confirm that scheme. Under sub section (3) if any objections are received to the draft scheme published under sub section (1) of section 19 or if any written or oral objections are received by the Settle ment Officer (Consolidation) before the confirmation of the draft scheme by him the Settlement Officer(Consolidation) may after taking the objections into consideration together with the remarks thereon of the Consolidation Officer and also after considering the written or oral objections either confirm the scheme with or without modifications, or refuse to confirm it. In case of such refusal the Settlement Offi cer (Consolidation) shall return the draft scheme, with such directions as may be necessary to the Consolidation Officer, for reconsideration and resubmission . Under sub section (4) upon the consideration of the scheme under sub section (2) or (3) the scheme as confirmed shall be published in the prescribed manner in the estate or estates concerned. Thus, this section also does not envisage passing of any order with reference to any person affected by the scheme. It may be true, as Mr. Harbans Lal submits, that the confirmation may be done in the form of an order. However, the word 'order ' has not been used by the legislature in this sec tion. Section 21 deals with repartition. Under sub section (1) of this section, the Consolidation Officer shall, after obtaining the advice of the land owners of the estate or estates concerned, carry out repartition in accordance with the scheme of consolidation of holdings 588 confirmed under section 20 and the boundaries of the hold ings as demarcated shall be shown on the Shajra which shall be published in the prescribed manner in the estate or estates concerned. There is no provision of passing of any 'order ' under this sub section. Under subsection (2) any person aggrieved by the repartition may file written objec tion within 15 days of the publication before the Consolida tion Officer who shall after hearing the objectors pass such orders as he considers proper confirming or modifying the repartition. Thus this sub section envisages passing of orders on the objections after hearing the objectors. Sub section (3) provides that any person aggrieved by the order of the Consolidation Officer under sub section (2) may within one month of that order file an appeal before the Settlement Officer (Consolidation) who shall after hearing the appellant pass such order as he considers proper. This sub section also clearly envisages passing of an order on appeal by an aggrieved person as above. Subsection (4) provides that any person aggrieved by the order of Settle ment Officer (Consolidation) under sub section (3) whether made before or after the commencement of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Second Amendment and Validation Act, 1962 may within 60 days of that order appeal to the Assistant Director of Consolida tion and under sub section (5) any appeal against an order of the Settlement Officer (Consolidation) pending under sub section (4) immediately before the commencement of the East Punjab Holdings (Consolidation and Prevention of Frag mentation) Second Amendment and Validation Act, 1962, either before the State or any officer to whom the powers of the State Government in this behalf have been delegated, shall be decided by the Assistant Director of Consolidation. Thus, the above sub sections clearly envisage passing of orders by the respective authorities. We have already extracted section 42 of the Act and Rule 18 of the Rules. It would be clear that though section 42 envisaged orders, preparation or confirmation of scheme and repartition separately, Rule 18 provides for limitation only in respect of an application under that section in a pro ceeding where an order was passed. There is the maxim ex pressio unius est exclusio alterius expression of one thing is the exclusion of another. Mention of one thing implies the exclusion of another. When certain persons or things are specified in a law an intention to exclude all others from its operation may be inferred. When mention has been made only of 'Orders ', the inference would be that preparation or confirmation of scheme and repartition are 589 excluded. Again, Ex praecedentibus et consequentibus optima fit interpretation. The best interpretation is made from the context. As we have seen, while section 19 and 20 did not envisage passing of any order section 21 envisaged passing of orders. Section 42 deals with applications against or ders, preparation or confirmation of scheme and repartition. Rule 18 mentions only orders and hence by inference excludes 'preparation and confirmation of scheme and repartition '. We have accordingly no doubt in approving the Full Bench deci sion in Jagtar Singh vs Additional Director, Consolidation of Holdings (supra). Mr. Harbans Lal 's submission that even if no limitation was prescribed the application of the Panchayat before the Director was inordinately delayed is not tenable. According to the learned counsel the period of two years would be reasonable period. We are unable to agree. In matters like Consolidation of Holdings by a scheme and the preparation and confirmation of the scheme and repartition thereafter the objections may arise at various stages for various reasons and it will not be possible to prescribe any hard and fast rule as to reasonable period after which an appli cation could be made under section 42 of the Act. The legis lature itself did not do so. In the instant case the Pan chayat filed the application on 20th September, 1977 before the Director of Consolidation under section 42 of the Act praying for the revocation of the Scheme and for directions for fresh valuation to be ordered and repartition effected through appropriate authorities stating that the Sarpanch was not given any Nishan Dehi or demarcation on the spot nor was issued any passbook, and the petition was not filed earlier because the new Sarpanch came to know all these only a month ago and so the petition was claimed to be in time. The original Sarpanch was a beneficiary out of the Panchayat land and he took no steps and the present Sarpanch took charge only a few months ago. There were lot of complaints about valuation and allotments to rightholders. Under the above circumstances when the Director himself considered it fit for granting the prayer, it cannot be said that the application was unreasonably delayed. The next submission of Mr. Harbans Lal is equally un tenable. It is true that in Harbhajan Singh vs Karam Singh and Anr., ; , it has been held that there is no provision in the Act granting express power of Review to the State Government with regard to an order made under section 42 of the Act and in the absence of any such power the Director, Consolidation of Holdings could not have reviewed his previous order dismissing an application of the Panchay at 590 under section 42 of the Act, and if so done, the review order of the Director would be ultra vires and without jurisdiction. In the instant case it has not been shown to us that the Panchayat earlier moved any application under section 42 on the same subject matter and the instant order of the Director amounted to a review of his own order. There is no material to hold that the instant order of the Direc tor is an order of review of his earlier order; and Mr. Rohtagi clearly denied that it was so. In the result we allow this appeal, set aside the im pugned order of the High Court and restore that of the Director, Consolidation. We, however, leave the parties to bear their own costs. Y. Lal Appeal allowed.

The appellant Panchayat owned 1200 Bighas of land in Village Kanonda Distt. Rohtak in Haryana. A Scheme of con solidation of Holdings under Section 20 of the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act 1948 was confirmed on 15.1.1974, as a result whereof the Panchayat 's land was consolidated, repartitioned and allot ted to persons, allegedly having no right to hold the same with the result, the Panchayat was reduced as a landless person, and financially weak. The Panchayat, therefore, on 20.9.1977 moved an application under section 42 of the Act objecting to the utilization of the Land of the value of /2/ (Two annas) and the allotments made to other right holders. After hearing the parties, the Director of Consolidation of Holdings by his order dated 8.2.79 set aside the scheme and remanded the case to the consolidation officer with some directions. The Director took the view that even though the application had been made much beyond the period of limita tion of six months contemplated under Rule 18, yet in view of the fact that the Panchayat had no other land to culti vate due to which the Panchayat was unable to develop the agricultural Schemes, condoned the delay and allowed the application as aforesaid. Against the said orders the Re spondents moved the High Court by means of a Writ Petition urging inter alia that the Director had condoned the delay without there being any ground for the same and thus had acted illegally. The High Court held that the Director condoned the delay on extraneous considerations and accord ingly quashed the impugned 577 order of 8.2.79 passed by the Director. Hence the Panchayat has filed this appeal after obtaining Special Leave. Allowing the appeal, this Court, HELD: (Per K.N. Saikia & M. Fathima Beevi, JJ.) Section 42 of the Act envisages proceedings wherein order is passed, scheme prepared or confirmed or repartition made. These are the distinct proceedings for the purpose of exercising jurisdiction under this section. [585B] Applying Rule 18, the application has to be one under section 42 of the Act, and it has to be against an order and under the first proviso, a certified copy of the order is required to accompany the application and in computing the period of limitation of six months, the time spent in ob taining the certified copy is to be excluded. [585F]. Rule 18 has to be interpreted as it is found, and the words of the rule are simple, precise and unambiguous and no more is necessary than to understand these words in their natural and ordinary sense. Two different meanings cannot be given to the same word "order" namely, that, in section 42 it does not include scheme prepared or confirmed or reparti tion made, while in Rule 18, it would include them. [586B C] The Rule did not come into play when a petitioner chal lenged either the scheme of consolidation including its preparation or confirmation or the repartition made in pursuance thereof. The amendment made this position clear. [586E] Though section 42 envisaged orders, preparation or confirmation of scheme and repartition separately, Rule 18 provides for limitation only in respect of an application under that section in a proceeding where an order was passed. There is the maxim expressio unius est exclusio alterius expression of one thing implies the exclusion of another. When mention has been made only of "orders", the inference would be that preparation or confirmation of scheme and repartition are excluded. [588F G] In matters like consolidation of Holdings by a scheme and the preparation and confirmation of the scheme and repartition thereafter, the objections may arise at various stages for various reasons and it will 578 not be possible to prescribe any hard and fast rule as to the reasonable period after which an application could be made under section 42 of the Act. The Legislature itself did not do so. [589C D] In the instant case, it has not been shown that the Panchayat earlier moved an application under section 42 on the same subject matter. There is no material to hold that the instant order of the Director is an order of review of his earlier order. [590A] (Per K. Ramaswamy, J.) As regards the exercise of the power under sections 19 & 20, the statute does not envisage passing any orders. But when exercising the power, the officer is enjoined to pass orders and appeals are provided within the prescribed limi tation against those orders to the appellate forums. This also, is an indication of the fact that the limitation of six months is confined to the orders to be revised under section 42. [580C D] The prescription of limitation of six months under Rule 18 would be confined only to order passed by an officer under the Act, it would not apply to the revision filed against the scheme prepared on confirmed or repartition made in pursuance thereof. [580F] It is undoubted that when there is no limitation pre scribed for exercise of the revisional power under section 42 against the schemes prepared or confirmed or repartition made, it would be exercised within a reasonable time. [580G] What is reasonable time is always a question of fact depending upon the facts and circumstances of each case. [580G] When legislature chose not to fix a particular period of limitation, by judicial dicta it is not permissible to limit to a particular period. :While exercising power under Sec tion 42, the revisional authority may take into account the long lapse of time as a factor in the light of the facts and circumstances obtainable in an appropriate, case. No abso lute or precise period of limitation could be predicted or laid. [580H] Jagtar Singh vs Additional Director, Consolidation of Holdings, Jullundar, AIR 1984 Punjab & Haryana 216, ap proved. Haqiqat Singh vs Addl. Director, Consolidation of Hold ings, AIR 1981 Punjab & Haryana 204; Joginder Singh & Ors. vs The Director, 579 Consolidation of Holdings, and Harbha jan Singh vs Karam Singh & Anr., ; , referred to.

Appeal No. 490 of 1957. Appeal from the judgment and decree dated March 22,1954, of the Allahabad High Court in Civil Misc. Writ No. 7854 of 1951. G. section Pathak, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant. C. B. Agarwala, G. C Mathur and C. P. Lal, for respondents Nos. 1 and 3. March 6. The Judgment of section K. Das, M. Hidayatullah, J. C. Shah and N. Rajagopala Ayyangar, JJ. was delivered by J. C. Shah, J. K. C. Das Gupta, J. delivered a separate, Judgment. SHAH, J. In 1981, the appellant was admitted to the police force of the United Provinces and was appointed a Sub Inspector of Police. He was later promoted to the rank of Inspector, and in 1946 was transferred to the Anti corruption department. In 1947, he was appointed, while retaining his substantive rank of Inspector, to the officiating rank of Deputy Superintendent of Police. Shortly thereafter, complaints were received by the Chief Minister and Inspector General of Police ' U. P. charging the appellant with immorality, corruption and gross dereliction of duty. In a preliminary confidential enquiry, the Inspector General of Police came to the conclusion that "a prima facie case" was made out against the 20 154 appellant. He then directed that a formal enquiry be held against the appellant and passed orders reverting the appellant to his substantive rank of Inspector and placing him under suspension. An enquiry was held into the conduct of the appellant by the Superintendent of Police, Anti corruption department. The report of the Superintendent of Police was forwarded to the Government of U. P., and the Governor acting under r. 4 of the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 herein after called the Tribunal Rules referred the case for enquiry to a Tribunal appointed under r. 3 of the Tribunal Rules on charges of corruption, personal immorality and failure to discharge duties properly. The Tribunal framed three charges against the appellant, and after a detailed survey of the evidence recommended on February 4, 1950, that the appellant be dismissed from service. The Governor then served a notice requiring the appellant to show cause why he should not be dismissed from service and after considering the explanation submitted by the appellant, the Governor ordered that the appellant be dismissed with effect from December 5, 1950. The appellant challenged this order by a petition instituted in the High Court of Judicature at Allahabad under article 226 of the Constitution for a writ of certiorari quashing the proceedings of the Tribunal and for a writ of mandamus directing the State of Uttar Pradesh to hold an enquiry under section 55 of the Civil Services (Classification, Control and Appeal) Rules. In support the order dismissing the appellant from High Court dismissing his petition, the appellant has raised three contentions: 1. that the order dismissing the appellant from the police force was unauthorised, because the Governor had no power under section 7 of the Police Act and the regulations framed thereunder to pass that order; 2. that even if the Governor was invested with power to dismiss a police officer, out of two alternative modes of enquiry, a mode prejudicial to the appellant having been adopted the proceedings of the Tribunal which enquired into the charges against him 155 were void, as the equal protection clause of the Con stitution was violated; and 3. that the proceedings of the Tribunal were vitiated because of patent irregularities which resulted in an erroneous decision as to the guilt of the appellant. To appreciate the first two contentions, it is necessary briefly to set out the relevant provisions of the laws procedural and substantive in force, having a bearing on the tenure of service of members of the police force in the State of Uttar Pradesh. The appellant was admitted to the police force constituted under Act V of 1861. By section 3 of that Act, superintendence throughout a general police district vests in and is exercised by the State Government to which such district is subordinate and except as authorised by the Act, no person, officer or court may be empowered by the State Government to supersede or control any police functionary. By section 4, the administration of the police throughout a general police district is vested in the Inspector General of Police. By section 7, it is provided that subject to the provisions of article 311 of the Constitution and to such rules as the State Government may from time to time make under the Act, the Inspector General, Deputy Inspectors General, Assistant Inspectors General and District Superintendents of Police may at any time dismiss, suspend or reduce any police officer of the subordinate rank whom they shall think remiss or negligent in the discharge of his duty, or unfit for the same, or may award any one or more of the punishments (set out therein) to any police officer of the subordinate rank who discharges his duty in a careless or negligent manner or who by any act of his own renders himself unfit for the discharge thereof. Section 46 sub section(2) authorises the State Government to make rules for giving effect to the provisions of the Act, and also to amend, add to or cancel the rules framed. The Government of Uttar Pradesh has framed rules called the Police Regulations under the Indian Police Act. Chapter 32 containing Regulations 477 to 507 deals with departmental punishment and 156 criminal prosecution of police officers and Ch.33 containing Regulations 508 to 516 deals with appeals, revisions, petitions etc. By Regulation 477, it is provided that no officer appointed under section 2 of the Police Act shall be punished by executive order otherwise than in the manner provided in the chapter. Regulation 478A provides that the punishment of dismissal or removal from the force or reduction as defined in Regulation 482 may be awarded only after departmental proceedings. By Regulation 479 cl.(a), "full power" is reserved to the Governor to punish all police officers, and by cl.(b), the Inspector General is authorised to punish Inspectors and ill police officers of "lower ranks". Regulation 489 provides for the departmental trials of police officers and Regulation 490 provides that the departmental trials of police officers must be conducted in accordance with the rules set out therein. Regulation 490 in its various clauses makes provisions about oral and documentary evidence, framing of charges, explanation of the delinquent police officer, recording of statement of defence witnesses, recording of findings by the Superintendent of Police and the making of a report by the enquiry officer if he is of the view that the delinquent Police officer should be dismissed or removed from the force. Clause (9) provides that the police officer may not be represented by counsel in any proceeding instituted against him under the rules. By Regulation 508, every police officer against whom an order of dismissal or removal is passed is entitled to prefer one appeal against an order of dismissal from the police force to the authorities prescribed in that behalf, but against the order of the Governor in exercise of authority reserved under Regulation 479 cl.(a), no appeal is provided. By section 96B of the Government of India Act,, 1915, the tenure of all civil officers including police officers was at the pleasure of the Sovereign. In exercise of the powers conferred by sub.s.(2) of section 96B, classification rules were framed by the local Governments. In the Government of India Act, 1935, ch. 2 of Part X dealt with civil services, their tenure, recruitment and 157 conditions of service. The section corresponding to section 96B of the Government of India Act, 1915, in the later Act was section 240(1) and thereunder all members of the civil service held office during the pleasure of the Sovereign. By the Government of India Act, 1935, to every civil servant a two fold protection was guaranteed by cls.(2) and (3) of section 240(1) that he shall not be dismissed from service by any authority sub.ordinate to that by which he was appointed and that he shall not be dismissed or reduced in rank until be has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. But these provisions did not apply to police officers for whom a special provision was enacted in section 243. That section provided: "Notwithstanding anything in the foregoing provisions of this chapter, the conditions of service of the subordinate ranks of the various police forces in India shall be such as may be determined by or under the Act relating to those forces respectively. " The conditions of service of the police force of the subordinate ranks were under the Government of India Act, 1935 therefore only such as were prescribed by rules framed under section 7 and section 46(2) of the Police Act. By the Constitution of India, the distinction between police officers and other civil servants in the matter of protection by constitutional guarantees is abolished and as from January 26, 1950, the recruitment and conditions of service of all persons serving the Union or the State are now governed by article 309 and their tenure by article 310 of the Constitution. By Article 311, the protection granted under section 240 cls.(2) and (3) of the Government of India Act is extended to members of the police force as well. By Article 309, the conditions of service of public servants are made subject to the provisions of the Constitution and the Acts of the appropriate Legislature. By Article 310, except as expressly provided by the Constitution, (i.e., except in cases where there is an express provision for dismissal of certain public servants e.g., Judges of the Supreme Court and of the High Courts, Comptroller and Auditor General of India, Chief Election Commissioner) 158 all civil servants who hold office under the Union of India hold office during the pleasure of the 'President and all civil servants who hold office under the State hold it during the pleasure of the Governor. By virtue of article 313 of the Constitution, until other provision is made, all laws in force immediately before the Constitution and applicable to any public service which continues to exist under the Union or a State shall continue in force so far as consistent with the Constitution: the power of the police functionaries to dismiss police officers is therefore preserved. On November 4, 1947, the Governor of U. P. in exercise of, the powers conferred inter alia by section 7 of the Police Act, published the Tribunal Rules. By r. 1 el.(3), these rules apply "to all Government servants under the rule making control of the Governor" and are applicable to any acts, omissions or conduct arising before the date of commencement of the rules as they are applicable to those arising after that date. Clause (e) of r. 2 defines "corruption", el.(d) defines "failure to discharge duties properly" and el.(e) defines " personal immorality". Rule 4 authorises the Governor to refer to a Tribunal constituted under r. 3, cases relating to an individual Government servant or class of Government servant or servants in a particular area only in respect of matters involving (a) corruption, (b) failure to discharge duties properly.(e) irremediable general inefficiency in a public servant of more than ten years ' standing, and (d) personal im. morality. By cl. 2, the Governor is also authorised in respect of a gazetted Government servant on his own request to refer his case to the Tribunal in respect of matters referred to in sub.r. By r. 7, the proceedings of the Tribunal are to be conducted in camera and neither the prosecution nor the defense has the right to be represented by counsel. Rule 8 prescribes the procedure to be followed by the Tribunal and r. 9 deals with the record to be maintained by the Tribunal. Rule 10 states that the Governor shall not be bound to consult the Public Service Commission on the Tribunal 's recommendations and shall paw an order of punishment in the terms recommended by the Tribunal, provided "the Governor may for 159 sufficient reasons, award a lesser punishment". Rule 1 2 provides that nothing in the rules shall be deemed to affect the conduct of disciplinary proceedings 'in ' oases other than those specifically covered by the provisions of the Tribunal Rules. Rule 13 authorises the Governor to delegate the power to refer cases to gazetted officers,in charge of districts and to pass an order of punishment under r. 10 to heads of departments. Enquiry against the appellant, though commenced before the Constitution was concluded after the Constitution, and the order dismissing him from the police force was passed in December, 1950. Under Police Regulation 479(a), the Governor had the power to dismiss a police officer. The Tribunal Rules were framed in exercise of various powers vested in the Governor including the power under section 7 of the Police Act, and by those rules, the Governor was authorised to pass appropriate orders concerning police officers. By virtue of Article 313, the Police Regulations as well as the Tribunal Rules in so far as they were not inconsistent with the provisions of the Constitution remained in operation after the Constitution. The authority vested in the Inspector General of Police and his subordinates by section 7 of the Police Act was not exclusive. It was controlled by the Government of India Act, 1935, and the Constitution which made the tenure of all civil servants of a Province during the pleasure of the Governor of that Province. The plea that the Governor had no power to dismiss the appellant from service and such power could only be exercised by the Inspector General of Police and the officers named in s.7 of the police Act is therefore without substance. But it is urged that the enquiry held by the Tribunal against the appellant and the order consequent upon that enquiry deprived the appellant of the equal protection of the laws and were therefore void as infringing article 14 of the Constitution. It is true that when proceedings were started against the appellant for an enquiry for his alleged misdemeanors, one of two distinct procedures for holding an enquiry, was open for selection by the authorities. The police 160 authorities could direct an enquiry under the Police Regulations under the procedure prescribed by Regulation 490; it was also open to the Governor to direct an enquiry against the appellant, and as the charges against him fell within r. 4 of the Tribunal Rules, the procedure for enquiry was the one prescribed by r. 8 of the Tribunal Rules. Relying upon the existence of these two sets of rules simultaneously governing enquiries against police officers either ' of which could be resorted to at the option of the authorities in respect of charges set out in r. 4 of the Tribunal Rules, it was urged that in directing an enquiry against the appellant under the Tribunal Rules, discrimination was practiced against him, and he was deprived of the guarantee of equal protection of the laws. That an enquiry against the appellant could have been made under the procedure prescribed by Regulation 490 of the Police Regulations appears to be supported by rr.1(3), 4 and 12 of the Tribunal Rules. Rule 1 subr.(3) provides that the Tribunal Rules shall apply to all Government servants under the rule making control of the Governor, and by r. 4, the Governor is authorised to refer cases to the Tribunal, but he if; not obliged to do so. By r. 12, nothing in the Tribunal Rules is to affect the conduct of disciplinary proceedings in oases other than those specifically dealt with under the rules. But the order of the Governor directing an enquiry against the appellant was passed before the Constitution, and article 14 has no retrospective operation: it does not vitiate transactions even if patently discriminatory which were completed before the commencement of the Constitution. In Syed Qasim Razvi vs The State of Hyderabad (1), this court was called upon to decide whether a trial of an offender commenced before the Constitution under the Special Tribunal Regulation promulgated by the Military Governor of the Hyderabad State was, since the Constitution, invalid in view of article 14. Mukherjea J. speaking for the majority of the court observed: (1) 161 is not to obliterate the entire operation of the inconsistent laws or to wipe them out altogether from the statute book; for to do so will be to give them retrospective effect which they do not possess. Such laws must be hold to be valid for all past transactions and for enforcing rights and liabilities accrued before the advent of the Constitution. On this principle, the order made by the Mlitary Governor referring this case to the Special Tribunal cannot be impeached and consequently the Special Tribunal must be deemed to have taken cognizance of the case quite properly, and its proceedings up to the date of the coming in of the Constitution would also have to be regarded as valid." Similarly, Das, J. in Lachhmandas Kewalram Ahuja vs The State of Bombay (1) in dealing with the validity of proceeding before a Special Judge holding a trial before the Constitution observed: "As the Act was valid in its entirety before the date of the Constitution, that part of the proceeding before the Special Judge, which, up to that date, had been regulated by this special procedure cannot be questioned, however discriminatory it may have been. . ". Selection by the authorities of one of two alternative procedures at a time when article 14 was not in operation, does not therefore enable the appellant to contest the validity of the enquiry on the plea of denial of equal protection of the laws. It was also observed in Syed Qasim Razvi 's case(2) by Mukherjea J. at p. 606: "In cases of the type (where the trial commenced before the Constitution) Which we have before us where part of the trial could not be challenged as bad and the validity of the other 'part depends on the question as to whether the accused has been deprived of equal protection in matters of procedure, it is incumbent upon the court to consider, firstly, whether the discriminatory or unequal provisions of law could be separated from the rest and even without them a fair measure of equality in the matter (2) ; (2) 162 of procedure could be secured to the accused. In the second place, it has got to consider whether the procedure actually followed did or did not proceed upon the basis of the discriminatory provisions. In our opinion, a mere threat or possibility of unequal treatment is not sufficient. If actually the accused has been discriminated against, then and then only he can complain, not otherwise. We may mention here that the impossibility of giving the accused the substance of a trial according to normal procedure at the subsequent stage may arise not only from the fact that the discriminatory provisions were not severable from the rest of the Act and the court consequently had no option to continue any other than the discriminatory procedure; or it may arise from something done at the previous stage which though not invalid at that time precludes the adoption of a different procedure subsequently." The proceedings of the Tribunal prior to the commencement of the Constitution are therefore not open to challenge except to the limited extent indicated by Mukherjea J. The question which falls to be considered is whether the procedure followed by the Tribunal after the Constitution was discriminatory and operated to the prejudice of the appellant. Regulation 490 of the Police Regulations sets out the procedure to be followed in an enquiry by the police functionaries, and rr. 8 and 9 of the Tribunal Rules set out the procedure to be followed by the Tribunal. There is no substantial difference between the procedure prescribed for the two forms of enquiry. The enquiry in its true nature is quasi judicial. It is manifest from the very nature of the enquiry that the approach to the materials placed before the enquiring body should be judicial. It is true that by Regulation 490, the oral evidence is to be direct, but even under r. 8 of the Tribunal Rules, the Tribunal is to be guided by rules of equity and natural justice and is not bound by formal rules of procedure relating to evidence. It was urged that whereas the Tribunal may admit on record evidence which is hearsay, the oral 163 evidence under the Police Regulations must be direct evidence and hearsay is excluded. We do not think that any such distinction was intended. Even though the Tribunal is not bound by formal rules relating to procedure and evidence, it cannot rely on evidence which is purely hearsay, because to do so in ' and enquiry of this nature would be contrary to rules of equity and natural justice. The provisions for maintaining the record and calling upon the delinquent public servant to submit his explanation are substantially the same under Regulation 490 of the Police Regulations and r. 8 of the Tribunal Rules. It is urged that under the Tribunal Rules, there is a departure in respect of important matters from the Police Regulations which render the Tribunal Rules prejudicial to the person against whom enquiry is held under those rules. Firstly it is submitted that there is no right of appeal under the Tribunal Rules as is given under the Police Regulations; secondly that the Governor is bound to act according to the recommendations of the Tribunal and thirdly, that under the Tribunal Rules, even if the complexity of a case under enquiry justifies engagement of counsel to assist the person charged, assistance by counsel may not be permitted at the enquiry. These three variations, it is urged, make the Tribunal Rules not only discriminatory but prejudicial as well to the person against whom enquiry is held under these Rules. In our vie," , this plea cannot be sustained. The Tribunal Rules and the Police Regulations in so far as they deal with enquiries against police officers are promulgated under section 7 of the Police Act, and neither the Tribunal Rules nor the Police Regulations provide an appeal against an order of dismissal or reduction in rank which the Governor may pass. The fact that an order made by a police authority is made appealable whereas the order passed by the Governor is not made appealable is not a ground on which the validity of the Tribunal Rules can be challenged. In either case, the final order rests with the Governor who has to decide the matter himself. Equal protection of the laws does not postulate equal treatment of all persons without 164 distinction:it merely guarantees the application of the same laws alike and without discrimination to all persons similarly situated. The power of the Legislature to make a distinction between persons or transactions based on a real differentia is not taken away by the equal protection clause. Therefore by providing a right of appeal against the order of police authorities acting under the Police Regulations imposing penalties upon a member of the police force, and by providing no such right of appeal when the order passed is by the Governor, no discrimination inviting the application of article 14 is practiced. under r. 10 of the Tribunal Rules, the Governor is enjoined to pass an order of punishment in terms recommended by the Tribunal, whereas no such obligation is cast upon the police authority who is competent to dismiss a police officer when an enquiry is held under Regulation 490 of the Police Regulations. To the extent that r. 10 requires the Governor to accept the recommendation of the Tribunal, the rule may be regarded as inconsistent with the Constitution, because every police officer holds office during the pleasure of the Governor, and is entitled under article 311(2) to a reasonable opportunity to show cause to the satisfaction of the Governor against the action proposed to be taken in regard to him. The partial invalidity of r. 10 however does not affect the remaining rules: that part of the rule which requires the Governor to accept the recommendation of the Tribunal as to the guilt of the public servant concerned is clearly severable. We may observe that in considering the case of the appellant, the Governor exercised his independent judgment and passed an order of dismissal and did not act merely on the recommendation of the Tribunal. The difference between the two sets of rules on the matter under consideration does not relate to the procedure of the enquiring bodies, but to the content of reasonable opportunity guaranteed by article 311 of the Constitution. The rules relating to appearance of lawyers at enquiries under the Police Regulations and under the Tribunal Rules are also not different. Under cl.(9) 165 of Regulation 490 of the Police Regulations, an accused police officer may not be represented by counsel in any proceeding instituted under those Regulations, ' and by r. 7 of the Tribunal Rules, neither the prosecution nor the defence have the right to be represented by counsel. Both the rules deny to the police officer the right to be represented by counsel. The procedure provided in the Police Regulations is substantially the same as the procedure prescribed by the Tribunal Rules, and by continuing the enquiry after the Constitution under the Tribunal Rules and not under the Police Regulations, a more onerous procedure prejudicial to the appellant was not adopted. The Governor appointed the Tribunal for enquiry against the appellant before the Constitution, but the order of dismissal was passed after the Constitution came into force. The appellant was entitled to the protection of article 311(2) of the Constitution. Since the Constitution was enacted, the distinction which was made between members of the police force and other civil servants under sections 240, 241 and 243 of the Government of India Act has disappeared and all civil servants including the police officers are entitled to the protection of article 311(2). The content of the guarantee was explained by this court in Khem Chand vs The Union of India (1). It was observed by "To summarise: the reasonable opportunity envisaged by the provisions under consideration includes (a)an opportunity to deny his guilt and establish his innocence which he can only do if he is told what the charges leveled against him are and the allegations on which such charges are based; (b)an opportunity to defend himself by cross examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence; and finally (c)an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority, after the enquiry is over and after (1) ; , 1096.166 applying his mind to the gravity or otherwise of the charges proved against the government servant tentatively proposes to inflict one of the three punishments and communicates the same to the government servant". To a police officer charged with misdemeanor, opportunity in all the three branches set out in Khemchand 's case (1)is provided under the Tribunal Rules. There is opportunity to the police officer against whom an enquiry is made to deny his guilt and to establish his innocence; there is opportunity to defend himself by cross examination of witnesses produced against him and by examining himself and other witnesses in support of his defence, and there is also opportunity to make his representation as to why the proposed punishment should not be inflicted. The discrimination which is prohibited by article 4 is treatment in a manner prejudicial as compared with another person similarly circumstanced by the adoption of a law, sub stantive or procedural, different from the one applicable to that other person. In Sardar Kapur Singh vs The Union of India (1), this court held that by directing an enquiry against a member of the Indian Civil Service who was charged with misdemeanor under, the and not under r. 55 of the Civil Services (Classification, Control and Appeal) Rules when there was no substantial difference between the material provisions, discrimination was not practiced. It was observed (at p. 581): "Does the holding of an enquiry against a public servant under the , 18,50 violate the equal protection clause of the Constitution? The appellant submits that the Government is invested with authority to direct an enquiry in one of two alternative modes and by directing an enquiry under the which Act it is submitted contains more stringent provisions when against another public servant similarly circumstances an enquiry under r. 55 may be directed, article 14 of the Constitution is infringed. " After considering the ,,special protection given to (1) ; 1096 (2) ; 167 members of the Indian Civil Service and the essential characterised of the procedure for making enquiries under the public Servants (Inquiries) Act,1850, it was observed at p.584. "The primary constitutional guarantee, a member of the Indian Civil Service is entitled to is one of being afforded a reasonable opportunity of the content set out earlier, in an enquiry in exercise of powers conferred by either the or r. 55 of the Civil Services (Classifi. cation, Control and Appeal) Rules, and disorimination is not practised merely because resort is had to one of two alternative sources of authority, unless it is shown that the procedure adopted operated to the prejudice of the public servant concerned. In the case before us, the enquiry held against the appellant is not in manner different from the manner in which an enquiry may be held consistently with the procedure prescribed by r. 55, and therefore on a plea of inequality before the law, the enquiry held by the Enquiry Commissioner is not liable to be declared void because it was held in a manner though permissible in law, not in the manner, the appellant says, it might have been held. " In Syed Qasim Razvi 's case (1), it was held that if the substance of the special procedure followed after the Constitution in an enquiry or trial commenced before the Constitution is the same as in the case of a trial by the normal procedure, the plea of discrimination invalidating a trial must fail, Counsel for the appellant in support of his plea that the enquiry by the Tribunal was vitiated because it was held under a discriminatory procedure relied judgment of this Bench in the State of Orissa Dhirendranath Das (2). In that case, a lower Division Assistant in the Secretariat of the Orissa Government was found guilty of certain misdemeanor by a Tribunal appointed under rules framed by the Orissa Government after an enquiry held in that behalf and was ordered to be dismissed from service. In a petition by the public servant under article 226 of the Constitution praying for a writ declaring illegal the order (1) (2) A.LR.168 of dismissal it was held by the Orissa High Court that ad on the date on which enquiry was directed against the petitioner there were two sets of rules in operation, the Tribunal Rules and the Bihar and Orissa Subordinate Services Discipline and Appeal Rules and it was open to the Government of Orissa to select either set of rules for enquiry against any public servant against whom a charge of misdemeanor was made and that selection of one in, preference to the other set of rules was violative of the guarantee of article 14 of the Constitution. The High Court accordingly declared the order of dismissal inoperative and further declared that the disciplinary proceedings be restored to the stage which they had reached when the case was referred to the Tribunal. Against that order, the State of Orissa preferred an appeal to this court. The relevant rules were not in that case incorporated in the paper book prepared for the hearing nor did counsel for the@ State produce for our consideration those rules. Counsel also conceded that by the adoption of the procedure prescribed by the Tribunal Rules in preference to the procedure in an enquiry under the Service Rules, discrimination would be practiced because there were substantial differences in the protection to which the public servants were entitled under the Service Rules and the Tribunal Rules. The only ground pressed in support of the appeal was that the Service Rules were not in operation at the time when the enquiry in question was directed and by directing an enquiry under the Tribunal Rules, discrimination was not practiced. But this argument raised for the first time questions which were never investigated and this court declined to allow counsel to raise them. It was observed in that case: "If the two sets of rules were in operation at the material time when the enquiry was directed against the respondent and by order of the Governor, the enquiry was directed under the Tribunal Rules which are "more drastic" and prejudicial to the interest of the respondent, a clear case of discrimination arises and the order directing enquiry 169 against the respondent and the subsequent proceedings are liable to be struck down as infringing article 14 of the Constitution." Before us, counsel for the appellants has produced a printed copy of the Disciplinary Proceedings (Administrative Tribunal) Rules, 1951 published by the Government of Orissa. A perusal of these rules may apparently suggest that subject to certain minor differences, these rules are substantially the same as the Tribunal Rules framed by, the State of U. P. We have however not been supplied with a copy of the Bihar and Orissa Subordinate Services Discipline and Appeal Rules, 1935. The judgment of this court in The State of Orissa vs Dhirendranath Das can have no application to this case, because in that case, the order of the High Court was. assailed on the limited ground that the High Court erred in assuming that there were two sets of rules simultaneously in operation, and it was open to the Executive Government to select one or the other for holding an enquiry against a delinquent public servant. That contention was negatived and the judgment of the High Court was confirmed. We do not think that there is any substance in the plea that discrimination was practiced by continuing the enquiry under the Tribunal Rules after the Constitution was brought into force. This appeal is filed with a certificate under article 132 of the Constitution. By ' el.(3) of article 132 the appellant is entitled to appeal to this court only on the ground that the High Court has wrongly decided a substantial question as to the interpretation of the Constitution and unless this court grants leave to him, on no other. Counsel for the appellant has challenged the regularity of the proceedings of the Tribunal and we have heard him to assure ourselves that the proceeding of the Tribunal has not been vitiated by any serious irregularity, or that the appellant was net deprived of the protection under article 311 of the Constitution. We proceed to consider briefly the arguments advanced in support of that plea. It was urged 170 in the first instance that the appellant was not permitted to appear at the enquiry before the Tribunal by a lawyer whereas the State Government was represented by a lawyer. It was averred in paragraph 14 of the affidavit of the appellant that the case for the prosecution was conducted by Jwala Prasad, Deputy Superintendent of Police and Legal Advisor to the Anti corruption Department, and that the Tribunal was told that such a course would be contrary to the Tribunal Rules and in any case contrary to rules of equity and natural justice, because he the appellant was not permitted to appear by counsel. In reply, Hari Shankar Sharma, Deputy Superintendent of Police stated in his affidavit that it was not true that before the Tribunal prosecution was conducted by Jwala Prasad. Ho also, stated that the Tribunal had required the presence of Sri Krishna who had made enquiries, but as Sri Krishna could not remain present, Jwala Prasad attended the sitting of the .Tribunal only on one day as Deputy Superintendent of Police, C.I.D., but he did not take any part in the proceedings, and "examination of witnesses and the cross examination was all done by the members of the Tribunal" and the appellant. It does not appear that Jwala Prasad was a practicing lawyer: he was not in any case permitted to appear as a lawyer and on the affidavit of Hari Shankar Sharma, it is clear that he did not take any part in the examination of witnesses or cross examination. It was then urged that the explanation submitted by the appellant was not considered because the Governor felt bound by the recommendations of the Tribunal. But in para 25 of the affidavit, Hari Shankar Sharma stated that the explanation of the appellant was submitted to the Government by the Inspector General of Police and the Governor duly considered the explanation and was of opinion that the appellant was unable to clear his conduct and therefore under r. 10(1) of the Tribunal Rules the Governor ordered dismissal of the appellant from service after considering the merits of his defence. It was then urged that the application submitted by the appellant for summoning witnesses and 171 calling for certain records was not considered and the appellant had on that account been prejudiced. In para 15 of his affidavit, the appellant stated that the Tribunal refused to call for certain records and though he wanted to summon certain defence witnesses, his application in that behalf was also refused. In answer P to this averment, Hari Shankar Sharma stated that the appellant had given a long list of defence witnesses and the Tribunal asked him to select those witnesses whose evidence in the opinion of the appellant would be relevant and thereupon the appellant " reduced his list to a much smaller number" and all those witnesses were summoned. Then it was urged that the assessor who is required under the rules to assist the Tribunal not having remained present at the hearing, the enquiry was vitiated. In paragraph 16 of the affidavit, the appellant has stated that during the enquiry section N. Agha the assessor was absent on many days on which the case was heard and the evidence was recorded. In reply, Hari Shankar Sharma stated that the contents of paragraph 16 of the affidavit were not correct, that it was true that Agha could not attend on certain dates "due to unavoidable circumstances", but the appellant was specifically asked if he had any objection to the recording of evidence in Agha 's absence and the appellant having stated that he has no objection, the proceedings were continued with his written consent. He further stated that the assessor was explained of the proceedings held on the days on which he had remained absent. The averments made in the affidavit of Hari ShankarSharma were not controverted by the appellant. On the materials placed on record, there is no substance in any of the pleas raised by the appellant relating to the regularity of the proceedings of the Tribunal. It may be pertinent to note that even though the appellant challenged before the High Court the regularity of the proceedings of the Tribunal, no argument was, it appears, advanced before the High Court in support thereof. The judgment of the High Court which is fairly detailed does not refer to any 172 ground on which the contention was sought to be sustained. The appeal fails and is dismissed with costs. DAS GUPTA, J. I have had the advantage or reading the judgment prepared by Shah J.; but while I respectfully agree with the conclusions on all other points, I regret my inability to agree with the conclusion reached there on the main question in controversy, viz. whether the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 are void as being in contravention of article 14 of the Constitution, in so far as they do not provide for any appeal against a decision by the Governor under Rule 10. The facts have been fully stated by my learned Brother and need not be repeated, especially as the facts in this particular case do not arise for consideration in the decision of the question of law, whether article 14 is contravened by the above provisions of the Tribunal Rules. Under these rules the Governor may refer to the Tribunal constituted in accordance with rule 3 "cases relating to an individual government servant or class of government servants or government servants in a particular area only in respect of matters involving (a) corruption; (b) failure to discharge duties properly; (c) irremediable general ineffi ciency in a public servant of more than ten year 's standing; and (d) personal immorality." Under cl. 3 of rule 1 these rules apply to all government servants under the rule making control of the Governor. It is not disputed that these rules apply to every member of the police service in Uttar Pradesh and that the Governor may refer to the Tribunal the cases relating to any individual government servant belonging to the police department in respect of any of the matters mentioned 'in cl. (1) of Rule 4. It is also not disputed that if the Governor "does not make any such refe rence, the case of any such member of the police service in respect of any of these matters may be inquired into under the Uttar Pradesh Police Regulations. The co existence of the provisions of Police Regulations on 173 the question of departmental punishment of police officers with the Tribunal Rules, thus results in the position that of two members of the police service holding the same post and rank, one may be proceeded against in respect of any of the matters mentioned in Rule 4(1) of the Tribunal Rules, under the Tribunal Rules and another may be proceeded against for the self same matter under the Police Regulations. Where the inquiry is held under the Tribunal Rules, the Tribunal has to make a record of the charges, the explanation, its own findings and the views of the assessor and where satisfied that punishment be imposed, also formulate its recommendations about punishment. Under Rule 10 the Governor will then decide the case and no appeal shall lie against the order so passed by the Governor. Where the action is taken under the Police Regulations procedure, a police officer against whom an order of dismissal, removal, suspension or reduction is passed has a right of appeal to the authority prescribed in Regulation 508. The question is whether the existence of the right of appeal under the Police Regulation Procedure and the absence of the right, appeal against the decision by the Governor in the Tribunal Rules ' procedure amounts to unequal treatment. On behalf of the respondent it has been urged that there is no unequal treatment as in one case it is the order of the Governor which is made not appealable and in the other case it is the order of a police functionary which is made appealable. The argument seems to be that only if in the Police Regulations an order made by the Governor had been made appealable while under the Tribunal Rules the order made by the Governor was not appealable there could be any scope for a complaint of unequal treatment. With great respect to my learned brethren who have taken the contrary view, I am of the opinion that this argument misses the realities of the position and is really an attempt to slur over the difficulty. The real Position that requires examination appears to me to be this: Suppose A and B are two police officers holding the same rank and post and A is proceeded against under the 174 Tribunal Rules on a charge of corruption while B is proceeded against on a similar charge of corruption under the Police Regulations procedure. In the first case if the Tribunal finds A guilty and recommends, say, dismissal; and the Governor makes an order of dismissal, against this order there is no appeal. Suppose in B 's case also the punishing authority makes an order of dismissal but against this B has a right of appeal. It is obvious that while in the latter case B has some chance of the appellate authority taking a different view either about his guilt or about the quantum of punishment and setting aside or modifying the order, A has no such chance at all. It will be little consolation to A that the order in his case has been passed by such an high authority as the Governor. He can, it seems to me, legitimately complain that there is a real difference between the way he is treated and B is treated because of this existence of B 's right of appeal against the punishing authority 's order while he has no such right. Unless one assumes that the right of appeal is only in name, I do not see how one can deny that there is a legitimate basis for this complaint. I cannot agree that the right of ap. peal is a right without substance. Whenever one authority sits in appeal over another authority there is always a chance that the appellate authority may take a different view of facts or of law and as regards the quantum of punishment requisite, from the authority whose decision is under appeal. It is this chance which is denied, if a right of appeal is taken away. I am therefore of opinion that the absence of the right of appeal under Rule 10 of the Tribunal Rules while a right of appeal is given to a police officer under the Police Regulations, results in unequal treatment in a substantial matter, as between a police officer proceeded against under the Tribunal Rules and an officer who is proceeded against under the Police Regulations procedure. Nor is it possible to discover any principle to guide the discretion of the Government to select some police officers to be proceeded against under the Tribunal Rules while leaving out other police officers to be proceeded against, in respect 175 of similar matters, under the Police Regulations procedure. I have therefore come to the conclusion that the Tribunal Rules in so far as they provide that no appeal shall lie against the decision of the Governor is ultra vires the Constitution, being in contravention of article 14 of the Constitution. As has been noticed by Shah J. a somewhat similar question fell to be considered by us in Civil Appeal No. 103 of 1959 (State of Orissa vs Dhirendranath Das). Comparing the Disciplinary Proceedings (Administrative Tribunal) Rules., 1951 of the Orissa Government under which Dhirendranath Das had been proceeded against and dismissed from service with the Bihar and Orissa Subordinate Service Discipline and Appeal Rules, 1935 this Court held that inasmuch as there was a right of appeal to the authority immediately superior to the punishing authority under the Service Rules. while there is no such appeal against the findings and recommendations of the Tribunal, the pre proeedings were substantially different. The court further pointed out that as inquiries could be directed according to procedures substantially different at the, discretion of the executive authority "exercise whereof is not governed by any principle,% having any rational relation to the purpose to be achieved by the inquiry, the order selecting a prejudicial procedure, out of the two open for selection, is hit by article 14 of the Constitution. " I cannot find anything here that would justify a revision of the view taken by us in that case. As in my judgment the U. P. Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 are hit by article 14 of the Constitution I would allow the appeal and set aside the order of dismissal passed against the appellant By Court. In view of the majority Judgment of the Court, the appeal fails and is dismissed with costs. Appeal dismissed.

The Essential Supplies (Temporary Powers) Act, 1946, a temporary Act which was being extended from time to time after the date of its first expiry, for a year at a time, was extended up to the 31st March, 1951, from the 31st March, 1950, by a resolution passed by the Constituent Assembly (Legislative) at a meeting held on the 20th December, 1949. The appellant who was convicted for an offence committed under the Act on the 24th October, 1950, contended that the Constituent Assembly had no power to extend the Act in view of, the provisions of article 379 (1) of the Constitution, and that at any rate it had no power to extend the duration of the Act beyond the 26th January, 1950 645 Held, that, even assuming that under article 379 (1) the Provi sional Parliament was intended to function from the 26th November, 1949, and not from the 26th. January, 1950, as the Constituent Assembly was to continue in existence till the 26th January 1950, the power conferred on it as a designated body by the India (Central Government and Legislature) Act, 1946, of the British Parliament as adapted by the India (Provisional Constitution) Order, 1947, could be validly exercised on the 20th December, 1949, and was so exercised when it passed the resolution on that date. The Provisional Parliament was not a body authorised to exercise the special power of approving the extension of the period mentioned in section 4 of the India Act of 1946 as that was not one of the powers conferred by the Constitution on the Provisional Parliament, nor can bringing the Provisional Parliament into existence on the 26th November, 1949, assuming that to be the case, be regarded as " other provision " made by the Constituent Assembly within the meaning of section 4 of the India Act of 1946. Held further, that the resolution extending the life of the Act beyond the 26th of January, 1950, was not invalid, as it came into immediate effect and not on the 1st of April, 1950, when the previous extension expired. Accordingly the Act with its duration extended by virtue of the resolution was an Act immediately in force before the commencement of the Constitution anti so was saved by article 372 (1) and Explanation III.

iminal Appeal No. 76 of 1958. Appeal by special leave from the judgment and order dated March 4, 1958, of the Patna High Court in Criminal Appeal No. 50 of 1958 and Death Reference No. 3 of 1958 arising out of the judgment and order dated January 18, 1958, of the Court of the 1st Additional Judicial Commissioner of Chotanagpur at Ranchi in Sessions Trial No. XC of 1957. B. R. L. Iyengar, for the appellant. 1338 R. H. Dhebar for the respondent. September 19. The Judgment of the Court was delivered by section K. DAS J. This is an appeal by special leave. The appellant is Ratan Gond, aged about 28 years. Tried on a charge under section 302, Indian Penal Code, he was convicted and sentenced to death by the learned Additional Judicial Commissioner of Ranchi in the State of Bihar. The learned Additional Judicial Commissioner submitted the record to the High Court of Patna for confirmation of the sentence, as he was required to do under the provisions of section 374 of the Code of Criminal Procedure. Ratan Gond also preferred an appeal to the High Court. The appeal and the reference under section 374, Criminal Procedure Code, were heard together by a Division Bench of the said High Court and it accepted the reference and dismissed the appeal thereby confirming the sentence of death passed upon the appellant. On May 19, 1958, the appellant prayed for and obtained special leave and then filed the present appeal in pursuance of the leave granted to him. The facts lie within a, narrow compass. The appellant was a resident of village Urte, Tola Banmunda, police station Kolebera in the district of Ranchi. One Mst. Jatri (P. W. 2), who was a widow, also lived in the same village and same Tola. She had two young daughters, one named Baisakhi and the other named Aghani. Baisakhi was about nine years old and Aghain about five years old. The subject of the present appeal is the murder of the girl Baisakhi. On a Tuesday, May 7, 1957, the two sisters, Baisakhi and Aghani, had gone out to Pluck wild berries in a hilly jungle situated at a short distance from their village, the distance being estimated variously by various witnesses from 300 yards to a little more than a mile. We may give here some idea of the location of the village and the hilly area near it. According to the evidence of Rup Ram (P. W. 1), uncle of the two girls, Tola Banmunda consists of about 40 houses. At a short distance to the north, there is a hilly tract known 1339 as Amtis Chua hill. Close to the hill, there are jungles on two sides and there is also a spring or well in between the two strips of jungles. On Tuesday, Mst. Jatri (P. W. 2) had herself gone to pluck berries known as Keond berries at another place. When she left the house in the morning, her two daughters were in the house. Jatri came back at about noon and found Aghani alone in the house. She enquired from Aghani about the elder sister Baisakhi and Aghani made certain statements to her mother as well as to other persons later that day and the next day. Aghani, however, died within a few months of the occurrence, before her statements could be recorded in a judicial proceeding. The courts below have referred to, and the High Court has relied on, the statements of Aghani. One of the points urged on behalf of the appellant is that the statements of Aghani were not admissible in evidence either under section 32 or section 33 of the Evidence Act (I of 1872). As we are of the view that this contention is correct, we are omitting all reference to the statements of Aghani in stating the facts of the case. When Baisakhi did not return to the house even in the evening Mst. Jatri went in the direction of Amtis Chua hill, but could not find Baisakhi. Next morning, information was sent to Rup Ram (P. W. 1) about the fact that Baisakhi was missing, Rup Ram having gone to village Targa for making tiles on the preceding Monday. Rup Ram came back to Banmunda on Wednesday, May 8, 1957. In the meantime certain other villagers including Dalpat Sai (P. W. 4), mukhia of the village, and Sohar (P. W. 5), chaukidar of the village, had been informed that Baisakhi was missing. Aghani took Rup Ram and these villagers to the foot of Amtis Chua hill and showed them the spring or well. This village party found the headless body of Baisakhi at a short distance from the aforesaid spring. The body was identified by Mst. Jatri and others as the dead body of Baisakhi by reason of the white saree of yellow border which Baisakhi was wearing, five red " churis " round the right hand, two red " churis " round the 170 1340 left hand, one " bera " round the left hand, one brass ring on the left finger and certain beads of a " mala " which Baisakhi had put on. When the headless dead body was discovered and identified, Dalpat Sai left some of his companions to guard the dead body and went to the house of the appellant, but did not find him there. He then sent Rup Ram and the chaukidar to the police station which was at a distance of 43 miles. He also sent some volunteers of the Gram Panchayat to look for the appellant. On Thursday, May 9, 1957, at about 10 a.m., Rup Ram and the chaukidar appear ed at the police station of Kolebera and Rup Ram gave an information, which was recorded by the Assistant Sub Inspector of Police. This information referred to the statements of Aghani and to the other facts which had been discovered by that time. On the same Thursday, the appellant was found in the house of his sister 's husband in another village called Karmapani. The appellant was caught hold of by the village volunteers and brought back to village Banmunda on Thursday. At about 1 or 2 p. m. on that day, he was questioned by Dalpat Sai (P.W.4) mukhia of the Gram Panchayat, Krishna Chandra Singh (P. W. 7), Sarpanch of the Gram Panchayat, and Praduman Singh (P. W. 13), one of the panches of the Panchayat, and it is stated that the appellant made an extra judicial confession to these persons to the effect that he had killed the child Baisakhi for greed of money, as a contractor who was building a, bridge on the Lurki river had offered Rs. 80 for a human head. The appellant was detained by the aforesaid village authorities till the Assistant Sub Inspector of Police arrived at the village on Friday, May 10, 1957. The Assistant Sub Inspector arrived at about 3 a.m. He was taken to the place where the headless dead body of Baisakhi lay. The Assistant Sub Inspector made an inquest on the dead body and seized the articles found there including 29 beads of the " mala " ' which Baisakhi was wearing and which lay scattered near the place. The Assistant Sub Inspector of Police arrested the appellant, who was already in custody of the mukhia. The house of the 1341 Weapon called " balua " was found in the north facing room of the house, between a wall and the roof. This " balua " had certain blood stains on it, but the stains having disintegrated, the origin of the blood could not be determined. It is stated that on being questioned where the head of the girl Baisakhi was, the appellant took the Assistant Sub Inspector of Police and some of the villagers to a place at a short distance of 100 yards or so from where the dead body was. At that place were discovered some strands of bloodstained hair which were seized by the Assistant SubInspector of Police. The strands of hair looked like the hair on the bead of a female person and the Chemical Examiner later reported that the strands of hair were stained with human blood and "appeared to be scalp hair of human (female) origin morphologically ". After further investigation by two different Sub Inspectors of Police, the appellant was sent up for trial. There was an enquiry by a Magistrate of the first class, who, at the conclusion of the enquiry, committed the appellant for trial by the Court of Session. The defence of the appellant was that he had been falsely implicated. He denied that he killed Baisakhi near the jungle at Amtis Chua hill. He further denied that he had made any extra judicial confession to Dalpat Sai, Krishna Chandra Singh and Praduman Singh. He denied that any blood stained weapon was found in his house by the Assistant Sub Inspector of Police and he also denied that he was absent from his village or was found in the house of his sister 's husband in village Karmapani. The learned Additional Judicial Commissioner, as also the High Court, rightly stated that the case against the appellant rested on (a) circumstantial evidence and (b) the extra judicial confession stated to have been made by the appellant. The courts below concurrently held that the extra judicial confession was voluntary and it did not appear to them to have been caused by any inducement, threat or promise having reference to the charge made against 1342 he appellant so as to attract the provisions of section 24 of the Evidence Act. They further held that the confession, though later denied by the appellant, was sufficiently corroborated by the circumstantial evidence and the confession and the circumstantial evidence read together led to only one reasonable inference ', namely, that the appellant had killed the child Baisakhi in the hope of getting some money. It is not disputed that in an appeal filed by special leave under article 136 of the Constitution it is not normally open to the appellant to raise questions of fact or to ask for interference by us with concurrent findings of fact, unless the findings are vitiated by errors of law or the conclusions reached by the courts below are so patently opposed to well established principles as to amount to a miscarriage of justice. Mr. Iyengar for the appellant has urged before us three main points. Firstly, he has submitted that the extra judicial confession said to have been made by the appellant is not admissible in evidence. Secondly, he has contended that even if admissible, there is no guarantee of its truth. Thirdly, he has submitted that even with regard to circumstantial evidence, the courts below have relied on inadmissible evidence, with particular reference to the statements of Aghani, to establish one of the circumstances, namely, that the appellant was last seen with Baisakhi before her murder. His argument is that the other circumstances established against the appellant, namely, the recovery of the blood stained " balua ", of the blood stained hair and the absence of the appellant from the village on Wednesday, do not carry the case against the appellant far enough so as to complete the chain and make them inconsistent with any hypothesis other than the guilt of the appellant. He has submitted that in considering the circumstantial evidence in this case the courts below have departed from the well established principle that the circumstances affirmatively proved against an accused person must be of such a character as to be consistent only with his guilt and inconsistent with any reasonable hypothesis of his innocence. 1343 Before we examine the aforesaid submissions, it is necessary to state that the finding of the courts below that Baisakhi was murdered some time between May 7 and May 8, 1957, and that the headless dead body which was discovered on May 8, 1957, was correctly identified as the dead body of the girl Baisakhi has not been challenged before us. The postmortem examination on the dead body was held on May 11, 1957, and the ante mortem injuries which the doctor found were (1) complete severance of the head from the neck,(2)one incised wound on the left shoulder and (3) anincised wound on the left upper arm. The doctor 's evidence makes it quite clear that the unfortunate girl was brutally done to death. The identification of the headless dead body also rests on a very sure foundation. We have already referred to the clothing, ring, beads, etc., from which the identity of the dead body was established. The murder of the girl Baisakhi having been clearly established, the courts below rightly applied their mind to a consideration of the principal question in the case, namely, if the appellant was responsible for that murder. This brings us to a consideration of the submissions made on behalf of the appellant. We may say at the very outset that we agree with learned counsel for the appellant that the statements of Aghani, who unfortunately died within a few months of the occurrence before her statements could be recorded in a judicial proceeding, were not admissible in evidence either under section 32 or section 33 of the Evidence Act. Section 33 is clearly out of the way because Aghani made no statements in a judicial proceeding or before any person authorised by law to take her evidence. The only relevant clause of section 32 which may be said to have any bearing is cl. (1) which relates to statements made by a person as to the cause of his death or as to any of the circumstances of the transaction which resulted in his death. In the case before us, the statements made by Aghani do not relate to the cause of her death or to any of the circumstances relating to her death ; on the contrary, the statements relate to the death of her sister. We are, therefore, of the opinion 1344 that the statements do not come within section 32(1) of the Evidence Act and, indeed, Mr. Dhebar appearing on behalf of the State, has conceded that section 32(1) does not apply to the statements of Aghani. Excluding the statements of Aghani, what then is the evidence against the appellant ? Firstly, we have the extra judicial confession. Then, we have the following circumstances which the courts below have held to have been clearly established against the appellant, namely, (a) recovery of the blood stained " balua " from a room of the appellant, (b) recovery of the blood stained strands of hair from a place pointed out by the appellant and (c) disappearance of the appellant from the village immediately after the murder and his arrest in village Karmapani in circumstances mentioned by Maheshwar Sai (P. W. 6). Lastly, there is another adverse circumstance which arises out of the total denial by the appellant of the recovery of the blood stained " balua " and of his arrest in village Karmapani. As to the extra judicial confession, two questions arise: is it voluntary, and, if so, is it true ? The appellant denied at a later stage that he had made a confession, but it is not necessary to consider in this case the abstract question as to whether, as against its maker, a conviction can be based on a confession which is found to be voluntary and true. It is enough to state that usually and as a matter of caution, courts require some material corroboration to such a confessional statement, corroboration which connects the accused person with the crime in question, and the real question which falls for decision in the present case is if the circumstances proved against the appellant afford sufficient corroboration to the confessional statement of the appellant, in case we hold that the confessional statement is voluntary and true. Let us first see if the confession was voluntary. Section 24 of the Evidence Act states: "A confession made by an accused person is irrelevant in a criminal proceeding, if the making of the confession appears to the Court to have been caused by any inducement, threat or promise having reference to the charge against the accused person, 1345 proceeding from a person in authority and sufficient, in the opinion of the Court, to give the accused person grounds which would appear to him reasonable for supposing that by making it he would gain any advantage or avoid any evil of a temporal nature in reference to the proceedings against him ". Mr. Iyengar has referred us to the evidence of the three witnesses, Dalpat Sai (P.W. 4), Krishna Chandra Singh (P. W. 7), and Praduman Singh (P. W. 13), Mukhia, Sarpanch and Panch respectively of the Gram Panchayat. We agree with Mr. Iyengar that having regard to the provisions of the Bihar Panchayat Raj Act (Bihar VIII of 1948) the aforesaid three persons can be said to be persons in authority within the meaning of section 24. The question, however, is are there any circumstances which tend to show that the making of the confession appears to have been caused by any inducement, threat or promise, having reference to the charge against the appellant and proceeding from any one of the aforesaid three persons and sufficient in the opinion of the court to give the appellant grounds which would appear to him to be reasonable for supposing that by making it he would gain any advantage or avoid any evil of a temporal nature in reference to the proceedings against him. The courts below have categorically answered this question in the negative. We have examined the evidence of the three witnesses mentioned above. That evidence shows that the appellant was brought to the house of Dalpat Sai (P. W. 4) at about 10 a.m. on Thursday (May 9, 1957). He was questioned for some time; Dalpat Sai (P.W. 4) said that he was questioned for about two hours. The evidence of Dalpat Sai makes it clear, however, that it was not a process of continuous questioning for two hours. Ratan was given some food and then, when he was questioned, he kept quiet for some time and then said that he had killed the girl because the contractor who was building the bridge on river Lurki had offered to pay a sum of Rs. 80 for a human head. Having examined the evidence of the three witnesses who prove the extra judicial confession, we do not come to 1346 a conclusion different from the one arrived at by the courts below. Mr. Iyengar referred us to the observations made by Cave J. (as he then was) in The Queen vs Thompson(1). That was a case in which a prisoner was tried for embezzling the money of a company. It was proved at the trial that, being taxed with the crime by the Chairman of the company, the prisoner said that he had taken the money. The Chairman stated that at the time of the confession, no threat or promise was made, but he said to the prisoner 's brother, " It will be the right thing for your brother to make a statement " and the court drew the inference that the prisoner, when he made the confession, knew that the Chairman had spoken these words to his brother. In these circumstances, the learned Judge said: " I prefer to put my judgment on the ground that it is the duty of the prosecution to prove, in case of doubt, that the prisoner 's statement was free and voluntary, and that they did not discharge themselves of this obligation ". He further added that there were always reasons to suspect those confessions which were supposed to be the offspring of penitence and remorse, and which nevertheless were repudiated by the prisoner at the trial. It is true that in the case under our consideration the appellant denied to have made the confession which he had made earlier; but we find no such circumstances as were present in Thompson 's case (1), such as the statement of the Chairman of the company to the brother of the prisoner. It is true that the appellant was brought back from village Karmapani by members of the village volunteer force. He was taken to the village authorities to whom he made a confession. The evidence does not even remotely suggest that any threat, promise or inducement was made. The only circumstance relied on by Mr. Iyengar is that it took about two to three hours from the time when the appellant was brought to the house of the mukhia up to the time when he made his confessional statement. Mr. Iyengar has relied on In re Kataru Chinna Papiah (2), where a Superintendent of Police questioned the accused person for four hours at night (1) , 18. (2) A.I.R. 1940 Mad. 136. 1347 and again for two hours in the morning. It was pointed out that this was a flagrant violation of the relevant rule in the instructions issued to police officers. All that we need say is that there was no such questioning in the present case. Another decision to which Mr. Iyengar has invited our attention is Hashmat Khan vs The Crown (1). We do not think that that decision is of any assistance to Mr. Iyengar. It was held therein that a mere possibility of there having been some inducement is not sufficient to attract section 24 of the Evidence Act; but only when it appears to the court that the confession has been made as a result of some inducement held out by a person in authority that it becomes irrelevant. That was a case in which the accused person, when questioned, was told that it would be better for him if he told the truth; it was held that this amounted to an inducement within the meaning of section 24 of the Indian Evidence Act. As to the truth of the confession, nothing has been brought to our notice which would show that the confessional statement contained any untrue or inaccurate statement. It is true that the prosecution has given no evidence to show that the contractor who was building the bridge over river Lurki, or for that matter, any contractor, had offered a sum of Rs. 80 for a human head. In the very nature of things, it is not expected that any contractor, even if he had made such an offer, will admit having done so, and we do not think that the prosecution can be asked to give evidence in support of any such offer. We recognise that in ordinary and normal circumstances nobody asks for a human head for building abridge; nor is it usual normally for a person to accept such an offer, even if it is made. We must not forget, however, that we are dealing in this case with aboriginal people who are ,still steeped in superstition. It is worthy of note that Maheshwar Sai (P. W. 6) said that when the appellant was taken in custody in village Karmapani, he did not even enquire why he was arrested; on the contrary, he offered Rs. 20 and a he goat to the witness and (1) Lah. 171 1348 implored the latter to save him. Such a statement was again of an incriminatory nature, and if the evidence of Maheshwar Sai is correct, the statement was absolutely voluntary and was not the result of any questioning at all. For these reasons, we do not think that the reference to an offer of Rs. 80 for a human head in the confessional statement of the appellant necessarily destroys its veracity. There can be no doubt that the recovery of the blood stained " balua " (even though the origin of the blood could not be determined owing to disintegration) and of the blood stained strands of female hair at the place pointed out by the appellant, are circumstances clearly proved against the appellant. These circumstances may not be sufficient by themselves to prove that the appellant was the murderer, but there is no doubt that they lend assurance to the confes sional statement of the appellant, assurance of a kind which connects the appellant with the crime in question. This is a case in which the confession and the circumstances have to be read together. There is the additional circumstance that soon after the murder the appellant disappeared from his village and when arrested in another village, his conduct was such as to show that he was suffering from a guilty mind. On the top of all this, there is the total denial by the appellant that any blood stained " balua " was recovered from his house or that he disappeared from the village after the murder. It is unfortunate that the learned Additional Judicial Commissioner did not ask the appellant to explain the recovery of the blood stained strands of female hair. That was an important circumstance against the appellant and when the learned Additional Judicial Commissioner examined the appellant under the provisions of section 342 of the Code of Criminal Procedure he should have asked the appellant to explain this circumstance. We take this opportunity of inviting the attention of the learned Additional Judicial Commissioner to this very serious omission. Another omission on the part of the learned Additional Judicial Commissioner is his failure to comply with the provisions of section 287 of the Code of 1349 Criminal Procedure. The examination of the accused recorded by or before the Committing Magistrate does not appear to have been tendered by the prosecutor in the present case; at least we do not find any such statement in the printed paper book. We are satisfied, however, that no prejudice has been caused. The Assistant Sub Inspector of Police who gave evidence of the recovery of blood stained hair from a place pointed out by the appellant was not even cross exa mined on the point. The defence of the appellant was a total denial and even if the recovery of the blood stained strands of female hair was put to the appellant, he would undoubtedly have denied such recovery as having been made at his pointing out the place. To sum up: we see no reasons to differ from the conclusion arrived at by the courts below that the confessional statement made by the appellant was voluntary and admissible; there are no reasons for thinking that it was not true. The circumstances clearly proved against the appellant, even excluding the circumstance which rested on the statements of Aghani, afford sufficient corroboration to the confession of the appellant, though denied at a later stage, and the corroboration is of such a nature as to connect the appellant with the murder of the child Baisakhi. The only reasonable inference which can be drawn from the confession read with the circumstantial evidence is that the appellant killed the child Baisakhi between May 7 and 8, 1957, in the hope of getting some money. Whether that hope was realised or not is more than we can tell. The head was never recovered, but there can be no doubt that the dead body was correctly identified to be the dead body of the child Baisakhi. As to the sentence, in view of the circumstances in which the child Baisakhi was killed, we do not think ,that we shall be justified in interfering with it in the present case. For these reasons, we hold that the appeal is without merit and must be dismissed. Appeal dismissed.

The assessee, manufacturer of strawboard, claimed con cessional rates of income tax, development rebate at higher rate under section 33 and deduction under section 80 E of the Income Tax Act, 1961, for the assessment years 1965 66, 1966 67 and 1967 68, on the ground that the manufacture of strawboard was a priority industry. The claim was rejected by the Income Tax Officer on the ground that the assessee could not be described as a priority industry and that the manufacture of strawboard was not covered by the words 'paper and pulp ' in the relevant Schedules pertaining to the assessment years 1966 67 and 1967 68. The assessee 's appeals were dismissed by the Appellate Assistant Commissioner. In second appeals, the Appellate Tribunal accepted the assessee 's plea that the manufacture of strawboard was a priority industry and held that the assessee was entitled to the statutory rebates claimed by it. On a reference made at the instance of the Revenue, the High Court held that the strawboard industry was covered within the expression 'paper and pulp ' appearing in the relevant Schedules of the income Tax Act. Dismissing the appeals by the Revenue, this Court, HELD: When provision is made in the context of a law providing for concessional rates of tax for the purpose of encouraging an industrial activity, a liberal construction should be put upon the language of the statute. [775E F] 773 The provision for rebate has been made for the purpose of encouraging the setting up of new industries, and the industries are those described in the Schedules relevant to the respective assessment years. When the Schedules refer to 'paper and pulp ', they, in fact, intend to refer to the paper and pulp industry. The expression has been used com prehensively. [775D E] The expression 'paper and pulp ' in the Industries (Development and Regulation) Act, 1951 includes paperboard and strawboard. Newsprint, paperboard and strawboard have been specifically mentioned in the relevant entry in order to make it clear that they are included within the meaning of the word 'paper '. The process or ' manufacturing straw board is identical with the process of manufacturing paper. [775G H; 776A] In the circumstances, there is no doubt that the straw board industry is part of the paper and pulp industry and the assessee, whose undertaking was registered in terms of section 10 of the Industries (Development and Regulation), 1951 is entitled to the rebates claimed by it. [775E]

ivil Appeal No. 526 (NT) of 1979. From the Judgment dated 16.12.1976 of the Kerala High Court in I.T.R. No. 101 of 1974. Dr. V. Gauri Shankar, section Rajappa and Ms. A. Subhashini for the Appellant. Santosh N. Hegde, E.M.S. Anam and K.L. Mehta for the Respondents. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. This appeal by special leave is against the decision of the High Court of Kerala in Income Tax Reference No. 101/1974 and it raises an important issue concerning the requirements of a gift made "in contemplation of death" within the meaning of Section 5(1)(xi) of Gift Tax Act, 1958 (`The Act '). That reference was made under Section 26(1) of the Gift Tax Act, 1958 by the Income Tax Appellate Tribunal Cochin Bench. The Tribunal referred to the High Court two questions for its opinion, out of which we are concerned only with the first question which reads: "Whether on the facts and circumstances of the case the 850 Tribunal was right in holding that the gift of movables valued at Rs.67,578 is not a gift made in contemplation of death within the meaning of section 5(1)(xi) of ?" The facts of the case as found by the Tribunal are simple and not unusual. Abdul Karim Mohammed a businessman in Cochin executed a document styled as "settlement will" gifting certain movables to the assessee respondent inthe shape of business assets valued by the Gift Tax Officer at Rs.67,578. The document was executed on 4 April 1964 and at the time of execution, the donor was seriously ill. He died of the illness after about six weeks. In gift tax assessment proceedings the assessee claimed exemption for this gift under section 5(1)(xi) of the Act which provides that a gift shall not be charged under the in respect of a gift made by any person in contemplation of death. The Gift Tax Officer rejected the claim of the assessee and brought the said amount to tax. But on appeal the Appellate Assistant Commissioner held to the contrary. He allowed the exemption sought for on the ground that the gift was in contemplation of death. He has relied upon the circumstances under which the gift was made and the events followed thereafter to reach his conclusion. He has described the facts and circumstances as follows: "Now I agree with Sri Karunakaran, that the absence of any reference in the deed of settlement to the illness from which the donor was suffering does not lead to the conclusion that there was no illness, or that the donor was nor apprehensive of death resulting from the same. There is ample evidence to show that he was seriously ill at the time when he made the gift. He was aged about 72 at the time and he was also suffering from paralysis, diabetes, hernia etc. In fact, in view of the seriousness of the condition he could not proceed to the Sub Registrar 's office for registration of the document; on the other hand the sub registrar ws brought to his residence for the purpose of effecting the registration. In an affidavit filed by him before the Gift Tax Officer on the 3rd August, 1969, the sub registrar has affirmed that at the time of execution of the document the settler was in sick bed and was unable to move out of the same. He has also stated that the settler as well as his children showed anxiety and haste in the matter of registration on account of the serious nature of the illness. At that time, according to the sub registrar the settler was in his proper sense, but soon after the execution of the deed, further complications set in and his power of speech and movements became impaired. Dr. V.B. Mohammed who was treating him has certified that 851 on 4th June 1964 patient was unable to recognise the surroundings properly, and that his mental condition was impaired to a great degree. On 9th June, 1964 i.e. within about six weeks from the date of the settlement he died. In these circumstances, I am satisfied that the donor, an aged gentleman who seriously ill at the time of the settlement entertained no hope of recovery, and that it was in such a state of mind, that he made the settlement. Hence the gifts must be taken to have been made in contemplation of death. " The Gift Tax Officer appealed to the Tribunal against the decision of the Appellate Assistant Commissioner. The Tribunal has affirmed the finding of the Appellate Assistant Commissioner that the donor at the time of gift was ill and expected to die shortly of his illness. The Tribunal observed "But we are satisfied that the Appellate Assistant Commissioner was on the facts and circumstances of the case right in his conclusion that the donor, an aged gentleman, who was seriously ill at the time of the settlement entertained no hope of recovery and that it was in such a state of mind that he made the settlement. The materials referred, relied on and discussed by the Appellate Assistant Commissioner in the appellate order are sufficient enough to lead to a reasonable conclusion that the donor was, at the time of execution of the document, ill and that he expected to die shortly of his illness." The Tribunal however, did not agree with the exemption allowed to the assessee. It has stated that the finding recorded by the Assistant Commissioner that the donor was ill at the time of gift and he died thereafter out of the illness alone is not sufficient to hold that the gift was made in contemplation of gift death. In order to satisfy the requirements of gift in contemplation of death there must be two other conditions to be satisfied; (i) There must be delivery of possession of the gifted movables to the donee; (ii) that a gift is entitled to take effect only in the event of the donor 's death and that if the donor recovers from the illness the property should revert back. On the first condition the Tribunal found on facts that there was delivery of possession of the gifted movables. On the second condition, the Tribunal observed that the gift was unconditional and it was in nature of settlement deed, pure and simple. It was executed to settle absolutely forever the property of the donor without any condition. It is just like any other settlement executed by a person without the contemplation of death. It has not been expressly specified or impliedly present in the deed that the gift must revert back in the event of the donor recovering from illness. The gifted property has to be kept as a gift in case the donor shall die of his illness has also not been satisfied in the case. With these findings, the Tribunal allowed the appeal of the Gift Tax Officer. 852 Thereafter, at the instance of the assessee the question set out earlier was referred to the High Court for its opinion. The High Court has answered the question in the negative and in favour of the assessee. The High Court expressed the view that it is not necessary that there must be recital in the deed stating that the property would revert to the donor in the event of his recovery from the illness, or the donor surviving the donee. Such a condition could be inferred from the attending circumstances of the gift. The High Court has referred to the affidavits filed by the sub registrar who registered the document and the Doctor who treated the donor to come to the conclusion that the donor was seriously ill at the time of execution of the deed and expected to die shortly of that illness. The factum of delivery of the gifted assets to the donee at a time when the donor was seriously sick and the donor 's death shortly thereafter were also relied upon. It was then stated that in as much as the donor was actually sick at the time of execution of the deed and died of the same illness without recovery, after a short period, the gift in question was made in contemplation of death and therefore, entitled to exemption from tax under Section 5(1)(xi) of the Act. The legality of the view expressed by the High Court is under challenge in this appeal. First, we may refer to the relevant statutory provisions bearing on the question. Section 3 of the Act is the charging section and it provides that in respect of gifts there shall be charged tax referred to as the gift tax at the rate specified in the schedule. Section 5 provides exemption in respect of certain gifts. Section 5 sub section (1)(xi) provides that gift tax shall not be charged under the Act in respect of gifts made by any person in contemplation of death. Explanation (d) to sub section (2) of Section 5 states "that gifts made in contemplation of death" has the same meaning as in Section 191 of the . Section 191 of the deals with the requirements of gifts made in contemplation of death. It reads as follows: "191. Property transferable by gift made in contemplation of death. (1) A man may dispose, by gift made in contemplation of death, of any movable property which he could dispose of by will. (2) A gift said to be made in contemplation of death where a man, who is ill and expects to die shortly his illness, 853 delivers to another the possession of any movable property to keep as a gift in case the donor shall die of that illness. (3) Such a gift may be resumed by the giver; and shall not take effect if he recovers from the illness during which it was made; nor if e survives the person to whom it was made. The requirements of a gift in contemplation of death as laid down by Section 191 of the are: (i) the gift must be of movable property; (ii) it must be made in contemplation of death; (iii) the donor must be ill and he expects to die shortly of the illness; (iv) possession of the property should be delivered to the donee; and (v) the gift does not take effect if the donor recovers from the illness or the donee predeceases the donor. There is nothing new in the requirements provided under Section 191 of the Succession Act. They are similar to the constituent elements of a valid donatio mortis causa. The essential conditions of a donatio mortis causa may be summarised thus: "For an effectual donatio mortis causa three things must combine: firs, the gift or donation must have been made in contemplation, though not necessarily in expectation of death; secondly, there must have been delivery to the donee of the subject matter of the gift; and thirdly. the gift must be made under such circumstances as shew that the thing is to revert to the donor in case he should recover. This last requirement is sometimes put some what differently, and it is said that the gift must be made under circumstances shewing that it is to take effect only if the death of donor follows; it is not necessary to say which way of putting it is the better." (See Cain vs Moon, at 286). Now, all the conditions of a valid gift in contemplation of death except perhaps the last condition prescribed under section 191 of the are found present in this case by the fact finding authorities. The gift was made when the donor was seriously ill and apprehending his death. The donor died within six weeks after the execution of the deed. The possession of the property gifted has been delivered to the donee before the death. But it is said that there is nothing to show in the document expressly or impliedly that the gift was made under such circumstances that the thing was to revert to the donor in case he should recover. Dr. Gauri Shankar learned counsel for the Revenue contends that the gift in contemplation of death should be conditional that is, on the term that if the donor would not 854 die he should be entitled to remain complete dominion of the property, the subject matter of the gift. There should be indications in the document to that effect without which, counsel states that the gift becomes inter vivos and absolute. It seems to us that the recitals in the deed of gift are not conclusive to determine the nature and validity of the gift. The party may produce evidence aliunde to prove that the donor gifted the property when he was seriously ill and contemplating his death with no hope of recovery. These factors in conjunction with the factum of death of the donor may be sufficient to infer that the gift was made in contemplation of death. It is implicit in such circumstances that the donee becomes the owner of the gifted property only if the donor dies of the illness and if the donor recovers from the illness, the recovery itself operates as a revocation of the gift. It is not necessary to state that in the gift deed that the donee becomes the owner of the property only upon the death of the donor. Nor it is necessary to specify that the gift is liable to be revoked upon the donor 's recovery from the illness. The law acknowledges these conditions from the circumstances under which the gift is made. Reference may be made to the following passage from Halsbury 's Laws of England (4th ed. 20 p. 41 para 67): "There is an implied condition that the gift is to be retained only in the event of death, even though the donor does not expressly say so. The death may take place some time afterwards, or the donor may actually die from some other illness, but if the donor recovers from illness, during which the gift is made the donee has no title, and can only hold what was delivered to him in trust for the donor." Jerman on Wills (8th ed. 1 p. 46 47) also lends light on this aspect: "The conditional nature of the gift need not be expressed: It is implied in the absence of evidence to the contrary. And even if the transaction is such as would in the case of a gift inter vivos confers a complete legal title, if the circumstances authorise the supposition that the gift was made in contemplation of death, mortis causa is presumed. It is immaterial that the donor in that dies from some disorder not contemplated by him at the time he made the gift. " Similar is the statement of law in Williams on "Executors and 855 Administrators" (14 ed. p. 315): "542. Conditional on death: "The gift must be conditioned to take effect only on the death of the donor. But it is not essential that the donor should expressly attach this condition to the gift; for if a gift is made during the donor 's last illness and in contemplation of death, the law infers the condition that the donee is to hold the donation only in case the donor dies. " The principles in the Corpus Juris Secundum (vol. 38 p. 782) are not quite different: ". A gift causa mortis differs from a gift inter vivos in that it is made in view of expected or impending death, as appears infra $$ 75,78. The vital distinction between a gift inter vivos and a gift causa mortis is that the former is irrevocable, while the latter may be revoked at any time before the donor 's death, and may be defeated by the recovery or survival of the donor. More fully, a gift causa mortis is liable to revocation by the donor and does not pass an irrevocable title until the death of the donor, while a gift inter vivos vests an irrevocable title on delivery; in the case of a gift inter vivos the title is not only transferred and vested in the donee at once, but the gift is immediately completed and is absolute and irrevocable, while in the case of a gift causa mortis the transfer is subject to be defeated by the happening of any one of the conditions implied by the law. " It is further stated (at p. 917 para 110): "A gift causa mortis is revoked by the recovery of the donor, from the particular illness, or his survival of the peril, which existed at the time of the gift and in contemplation of which the gift was made. The recovery of the donor from the particular illness, or his survival of the peril, which existed at the time of the gift and in contemplation of which the gift was made will of itself operate as a revocation of the gift. " 856 In the light of these principles and in view of the findings recorded by the Tribunal about the serious sickness of the donor and his state of mind at the time of making the gift in question, it can be reasonably concluded that the gift was not absolute and irrevocable. On the contrary, it will be legitimate to infer that the gift was in contemplation of death. Any other view in this case would be inappropriate. No account in this regard would be complete unless it is held that marz ul maut gift with which we are concerned is also entitled to exemption from gift tax under Section 5(1)(xi) of the Act. Counsel for the Revenue argues that the exemption provided under Section 5(1)(xi) of the Act is not available to the assessee since Section 191 of the is not applicable to marz ul maut gift. We do not find much substance in this submission. The exemption to gift in contemplation of death is provided under Section 5(1)(xi) of the Act and not under Section 191 of the . Section 191 furnishes only the meaning or requirements of gift in contemplation of death. If a gift in contemplation of death is recognised by the personal law of parties satisfying the conditions contemplated under Section 191 of the , it cannot be denied exemption under Section 5(1)(xi) of the act even assuming that Section 191 as such will not be applicable to the parties. Under Mohammedan Law gift made during marz ul maut (death bed illness) is subject to very strict scrutiny for its validity. Marz ul maut is a malady which induces an apprehension of death in the person suffering from it and which eventually results in his death. There are three tests laid down to determine whether illness is to be regarded as marz ul maut. They are: (1) Proximate danger of death so that there is a preponderance of Khauf or apprehension that at the given time death must be more probable than life. (2) There must be some degree of subjective apprehension of death in the mind of the sick person. (3) There must be external indicia chief among which would be the inability to attend to ordinary avocations. (See: Rashid Karmalli and Anr. vs sherbanoo, The gift made during marz ul maut is subject to all other conditions necessary for the validity of a hiba or gift, including delivery of possession by the donor to the donee. (See: Mulla 's Mohammedan Law pp. 109, 111 Section 135 & 136). Syed Ameer Ali in his book on "Mohammedan Law" throws some more light on the principles of `gift of the sick '. It is stated: "In the chapter in the "Fatawai Alamgiri" dealing with "the gift of the sick" the principles are set forth at some length. In the first place it is stated from the Asal that neither a gift nor a sadakah by a mariz a person suffering from 857 marz ul maut of which the definition is given later on is effective without possession: and if possession is taken, it is valid inrespect of a third. If the donor were to die before delivery (taslim) the whole disposition would be invalid. It is, therefore, necessary to understand that a gift by a mariz is a contract and not a wasiat, and the right of disposition is restricted to a third on account of the right of the heirs which attaches to the property of the mariz. And as it is an act of bounty it is effective so far only as the law allows and that is a third. And being a contractual disposition it is subject to the conditions relating to gifts, among them the taking of possession by the donee before the death f the donor." (Vol. 14th ed. 1985 p. 59 60). From these principles of Mohammedan Law it will be clear that the gift made in marz ul maut could be regarded as gift made in contemplation of death since it has all the requisites prescribed under Section 191 of the . The only limitation under Mohammedan Law is that the disposition is restricted to a third on account of the right of the heirs. Marz ul maut gift cannot therefore take effect beyond a third of the estate of the donor after payment of funeral expenses and debt unless heirs give their consent after the death of the donor, to the excess taking effect. Whether there is any such consent given in this case by his heirs is the subject matter of enquiry to be made by the Tribunal. It may be stated that the second question refered to the High Court relates to the validity of the gift beyond a third of the estates of the donor. On that question the High Court has not expressed any view and it has directed the Tribunal to consider that issue afresh. We, therefore, refrain from expressing any views on that matter. From the foregoing discussion, the view taken by the High Court is correct and it does not call for interference. We accordingly dismiss the appeal with costs. N.P.V. Appeal dismissed.

Gift to certain movable assets was made to the respondent assessee by a Muslim businessman, when he was seriously ill, and died of the illness after six weeks of the execution of the document. In gift tax assessment proceedings, the assessee claimed exemption for this gift under Section 5(1)(xi) of the Gift Tax Act, 1958, on the ground that the gift was made in contemplation of death. The Gift Tax Officer rejected the claim. But, on appeal, the Appellate Assistant Commissioner allowed the exemption relying on the circumstances under which the gift was made and the events followed thereafter and the evidence of the Sub Registrar, who was brought to residence for effecting registration, and the doctor, who was treating the donor. On appeal by the Gift Tax Officer, the Tribunal affirmed the finding of the Appellate Assistant Commissioner regarding the donor 's illness but did not allow the exemption on the ground that, though there was delivery of possession of the gifted movables, the gift was unconditional and absolute, since it had not been specifically expressed or impliedly present in the deed that the gift must revert back in the event of the donor recovering from illness and that the gifted property had to be kept as a gift in case the donor died of his illness. However, on a reference made at the instance of the assessee for opinion, the High Court held that such a condition need not be mentioned in the deed and 847 it could be inferred from the attending circumstances of the gift, and since the donor was actually sick at the time of execution of the deed and died of the same illness without recovery, after a short period, the gift in question was made in contemplation of death and therefore, entitled to exemption from tax under Section 5(1)(xi) of the Act. In the appeal before this Court, on behalf of the Department it was contended that the gift in contemplation of death should be conditional, and in the absence of indications in the document to the effect that if the donor did not die, he should be entitled to remain in complete domination of the gifted property, the gift would become inter vivos and absolute, and that the exemption under Section 5(1)(xi) of the Gift Tax Act was not available to the assessee, since Section 191 of the Indian Succession Act was not applicable to marz ul maut gift. Dismissing the appeal by the Department, this Court HELD: 1.1 Explanation (d) to sub section (2) of Section 5 of the Gift Tax Act, 1958 states that a gift made in contemplation of death has the same meaning as in Section 191 of the . The requirements of a gift in contemplation of death as laid down by Section 191 are: (i) the gift must be of movable property; (ii) it must be made in contemplation of death; (iii) the donor must be ill and he expects to die shortly of the illness; (iv) possession of the property should be delivered to the done; and (v) the gift does not effect if the donor recovers from the illness or the donee predeceases the donor. These requirements are similar to the constituent elements of a valid donatio martis causa. [853C E] Cain vs Moon, @ 286, referred to. 1.2. In the instant case, all the conditions prescribed, except perhaps the last one are found present by the fact finding authorities. [853G] 1.3. The recitals in the deed of gift are not conclusive to determine the nature and validity of the gift. The party may produce evidence aliunde to prove that the donor gifted the property when he was seriously ill and contemplating his death with no hope of recovery. These factors in conjunction with the factum of death of the donor may be sufficient to infer that the gift was made in contemplation of death. It is implicit in such circumstances that the donee becomes the owner of the gifted property only if the donor dies of the illness and if the donor recovers from the illness, the recovery itself operates as a revocation of the gift. [854B C] 848 1.4 It is not necessary to state in the gift deed that donee becomes owner of the property only upon the death of the donor. Nor it is necessary to specify that the gift is liable to be revoked upon the donor 's recovery from the illness. The law acknowledges these conditions from the circumstances under which the gift is made. [854C D] Halsbury 's Laws of England, 4th Edn. 20 p. 41 para 67; Jerman on Wills, 8th Edn. Vol, 1 p. 46 47; Williams on "Executors and Administrators", 14th Edn. p. 315, and Corpus Juris Secundum, vol. 38 p. 782 and p. 917 para 110, referred to. 1.5 In the light of this and in view of the findings recorded by the Tribunal about the serious sickness of the donor and his state of mind at the time of making the gift in question, it can be reasonably concluded that the gift was not absolute and irrevocable. On the contrary, it would be legitimate to infer that the gift was in contemplation of death. any other view would be inappropriate. [856A B] 2.1 Marz ul maut is also entitled to exemption from gift tax under Section 5(1)(xi) of the Gift Tax Act, 1958. [856B] 2.2 The exemption to gift in contemplation of death is provided under Section 5(1)(xi) of the Gift Tax Act, and not under Section 191 of the , Section 191 furnishes only the meaning or requirements of gift in contemplation of death. It a gift in contemplation of death is recognised by the personal law of parties satisfying the conditions contemplated under Section 191 of the , cannot be denied exemption under Section 5(1)(xi) of the Act, Even assuming that Section 191 as such will not be applicable to the parties. [856C D] 2.3 Under Mohammedan Law gift made during marz ul maut (death bed illness) is subject to very strict scrutiny and subject to all other conditions necessary for the validity of a hiba or gift, including delivery of possession of the donor to the donee. [856D] Mulla 's Mohammedan Law, pp. 111 Sections 135 & 136, referred to. 2.4 Marz ul maut is a malady which induces an apprehension of death inthe person suffering from it and which eventually results in his death. There are three tests laid down to determine whether illness is to be regarded as marz ul maut. They are; (i) Proximate danger of death 849 so that there is preponderance of khauf or apprehension that at the given time death must be more probable than life. (2) There must be some degree of subjective apprehension of death in the mind of the sick person. (3) There must be external indicia chief among which would be the inability to attend to ordinary avocations. [856E F] Rashid Karmalli and anr. vs Sherbanoo, [1907] 31 ILR Bombay 2641, referred to. 2.5 Therefore, under the Principles of Mohammedan Law, the gift made in marz ul maut could be regarded as gift made in contemplation of death, since it has all the requisites prescribed under Section 191 of the . The only limitation is that the disposition is restricted to a third on account of the right of the heirs. [857C D] Syed Ameer Ali: Mohammedan Law, Vol. 1, 4th Edn. 1985 p. 59 60, referred to.

Civil Appeal No. 1823 of 1969. Apeal by Special Leave from the Judgment and Order dated the 27th/28th/30th January, 1967 of the Gujarat High Court in Special Civil Application No. 163 of 1962. B. R. Agarwala for the Appellant. I. N. Shroff for the Respondents. Dr. L. M. Singhvi, Advocate General, Rajasthan, V. section Dave and section M. Jain for Intervener, Municipal Council, Jodhpur. The Judgment of the Court was delivered by SHINGHAL, J. This appeal by special leave arises from the judgment of the Gujarat High Court dated January 27, 28 and 30, 83 1967. The two petitioners before the High Court were firms trading in certain commodities within the limits of the Municipal Borough of Broach. The grievance in one of the petitions was that the Municipality had collected certain amounts wrongfully, and the grievance in the other petition was that the Municipality had refused some amounts even though they were refundable under its byelaws. Both the petitions concerned goods which were "imported" within the octroi limits of the Municipality but came to be "exported" therefrom. The first petition was in respect of a consignment which was designated as a through consignment, and the second petition concerned goods in transit and goods for export other than those which could be called goods in transit. The amounts in dispute related to the levy of octroi under section 73(i) of the Bombay Municipal Boroughs Act, 1923, hereinafter called the Act, which provides as follows: "73 (i) Subject to any general or special orders which the State Government may make in this behalf and to the provisions of sections 75 and 76, a Municipality may impose for the purposes of this Act any of the following taxes, namely: * * * * * (iv) an octroi on animals or goods or both, brought, within the octroi limits for consumption, use or sale therein;. " The word "sale" was included within the ambit of octroi when the Act was amended in 1954. The High Court took note of the rules and the bye laws and held that it was not possible to take the view that the rules contemplated that no refund was payable in case the goods had undergone a sale during the course of their stay in octroi limits. It accordingly came to the conclusion that in regard to goods meant for export in the sense defined in the rules, refund was claimable even if a sale transaction in the larger sense (i.e. in a sense other than a sale to a consumer or with the intention that the goods must pass into hands of the ultimate consumer) took place in regard thereto, provided that the other conditions were satisfied. The High Court then examined the correct interpretation of the word "sale" in clause (iv) of section 73(i) of the Act and after considering this Court 's judgment in Burmah Shell Oil Storage and Distributing Co. India Ld. vs The Belgaum Borough Municipality,(1) it held that the word "sale" could not be given the narrow meaning of a sale for consumption to the ultimate consumer because, in that sense, the Legislature would be guilty of having introduced a word which it was not necessary for it to introduce. The High Court made a reference to the definition of "sale" in section 4 of the Sale of 84 Goods Act and held that the expression "sale" as used in the definition of 'through consignments" in the rules had the same connotation as in the Sale of Goods Act and therefore "if a consignment is brought within the octroi limits and if the municipal authorities are satisfied that the consignment has been brought in for the purpose of effecting a sale in the aforesaid sense, then the consignment does not become a through consignment." According to the High Court, it was not enough merely to prove that the consignment left the octroi limits within six hours after the goods were imported and that it was necessary to show that the goods were intended only to pass through in the sense that they were not meant for consumption, use or sale, and that in regard to such goods there was no intention of changing hands by way of sale or that there was no intention of breaking their bulk or detaining them beyond six hours or unloading them. In the view it took, the High Court issued some directions for compliance by the authorities concerned. The writ petitioners felt dissatisfied with the view taken by the High Court and applied for a certificate under articles 132(1) and 133(1) (c) of the Constitution. The High Court held that no question arose under article 132, and no certificate could be granted under article 133 as there was no final order. The petitioners however applied to this Court for special leave on the ground, inter alia, that the High Court put a wrong interpretation on the expression "sale" in section 73(i)(iv) of the Act inspite of the decision of this Court in Burmah Shell 's case (supra). As has been stated, they succeeded in obtaining special leave from this Court. When the case came up for hearing before a Division Bench, it noticed the decision in Burmah Shell 's case (supra) and felt that there were "burred areas" of sale within the territory which may attract a tax under entry 52 (List II of Seventh Schedule) left uncertain by the aforesaid decision of this Court so that the matter deserved consideration by a larger Bench. This is how the case has come up before us for hearing. We have allowed Municipal Council, Jodhpur, to intervene in the hearing at its request. The short question before us is whether this Court 's decision in the Burmah Shell 's case (supra) squarely covers the present controversy or whether that decision requires reconsideration. The learned counsel have in fact confined their arguments to this narrow field. In order to appreciate the controversy, it will be desirable to refer to the basic facts of the Burmah Shell 's case (supra). The Burmah Shell Oil Storage and Distribution Co. India Ltd., hereinafter referred to as the Company, was a dealer in petrol and other petroleum products which it manufactured in its refineries situated out side the octroi limits of Belgaum Municipality. It brought these products inside that area either for use or consumption by itself or for sale generally to its dealers and licensees who in their turn sold them to others. According to the Company the goods brought by 85 it within the octroi limits could be divided into four categories as follows: 1. Goods consumed by the Company; 2. Goods sold by the Company through its dealers or by itself and consumed within the octroi limits by persons other than the Company; 3. Goods sold by the Company through its dealers or by itself inside the octroi limits to other persons but consumed by them outside the octroi limits; and 4. Goods sent by the Company from its Depot inside the octroi limits to extra municipal points where they are bought and consumed by persons other than the company. This Court examined the scheme of taxation under the Act and the rules and the bye laws made by the Municipality for the levy of octroi. It also took note of the fact that the words "use or sale" were substituted for the words "or use" by Bombay Act 35 of 1954, which are the subject matter of a fresh controversy before us, and made a reference to the Legislative Lists in the Government of India Act, 1935 and the Constitution. After examining the history of octrois and terminal taxes, this Court held that "octrois were taxes on goods brought into the local area for consumption, use or sale", and that "they were leviable in respect of goods put to some use or other in the area but only if they were meant for such user. " It was specifically clarified that the word "sale" was included only in 1954 in order to bring the description of octroi in the Act in line with the Constitution, and that the expression "consumption" and "use" together "connote the bringing in of goods and animals not with a view to taking them out again but with a view to their retention either for use without using them up or for consumption in a manner which destroys, wastes or uses them up. " Looking to the trade of the Company, this Court held that sale by it directly to consumers or to dealers was "merely the means for putting the goods in the way of use or consumption" and that the word "therein" does not mean that all the act of consumption must take place in the area of the municipality. The Court therefore went to hold as follows. "In other words, a sale of the goods brought inside, even though not expressly mentioned in the description of octroi as it stood formerly, was implicit, provided the goods were not re exported out of the area but were brought inside for use or consumption by buyers inside the area. In this sense the amplification of the description both in the Government of India Act, 1935 and the Constitution did not make any addition to the true concept of 'octroi ' as explained above. That concept included the bringing in of goods in a local area so that the goods come to a repose there. When the Government of India Act, 1935 was enacted, the word 86 'octroi ' was deliberately avoided and a description added to forestall any dispute of the nature which has been raised in this case. In other words, even without the description the tax was on goods brought for 'consumption, use or sale '. The word 'octroi ' was also avoided because terminal taxes are also a kind of octroi and the two were to be allocated to different legislatures. In our opinion, even without the word 'sale ' in the Boroughs Act the position was the same provided the goods were sold in the local area to a consumer who bought them for the purpose of use or consumption or even for resale to others for the purpose of use or consumption by them in the area. It was only when the goods were re exported out of the area that the tax could not legitimately be levied. " This Court categorically held that the Company was liable to pay octroi on goods brought into the local area (a) to be consumed by itself or sold by it to consumers direct, and (b) for sale to dealers who in their turn sold the goods to consumers within the municipal area irrespective of whether such consumers bought them for use in the area or outside it, but it was "not liable to octroi in respect of goods which it brought into the local area and which were re exported. " The law on the subject matter of the present controversy has thus been laid down quite clearly in the Burmah Shell 's case (supra) and the present case squarely falls to be governed by it. We are also in agreement with that interpretation of the law. It may be mentioned that the learned counsel have not been able to advance any new argument justifying a reconsideration of the decision. The appeal is allowed, the impugned judgment of the High Court is set aside and the respondents are directed to examine and determine the claims of the appellant in accordance with the above decision. The appellant will be entitled to costs from the respondents. P.B.R. Appeal allowed.

Section 47(2) of the Jammu & Kashmir Representation of the People Act enacts that the Returning Officer shall examine the nomination papers and shall decide all objections which may be made to any nomination and may, either on such objection or in his own motion, after such summary enquiry, if any, reject any nomination on the ground, among others, that the signature of the candidate or the proposer on the nomination paper is not genuine. For the general election to the State Assembly the appellant and the respondent (petitioner) filed nomination papers. The nomination paper of the respondent was rejected by the Returning Officer on the ground that when his nomination was called neither he nor anyone on his behalf was present. After the words 'Hence rejected ' recorded on the nomination paper the Returning Officer had also added that the signature of the proposer was not genuine. In the election that ensued the appellant was declared elected. The respondent in his election petition alleged (i) that though at the time of scrutiny the Returning Officer was informed by his proposer that the respondent had gone out to ease and requested him to wait for a while, the Returning Officer rejected the nomination paper and refused to reopen the matter even on the respondent 's request immediately thereafter and (ii) that the Returning Officer committed forgery by subsequently adding certain words in the order of rejection and by over writing the signature of the proposer on the nomination paper. The High Court held (i) that the Returning Officer was not justified in law in rejecting the nomination paper of the respondent on the ground that he was not present at the time of scrutiny, and (ii) that the Returning Officer having become functus officio any subsequent observations which he might have made was irrelevant and since the nomination paper was illegally rejected the election was void and was liable to be set aside under section 108(1)(c) of the Act. Allowing the appeal to this Court, ^ HELD: The judgment of the High Court is erroneous both on fact and in law and is against the weight of evidence on record and preponderance of probabilities. [27 D] (1) Although the appellate Court should be slow to disturb a pure finding of fact based on appreciation of evidence by the Trial Court, it is well settled that the sanctity and purity of electoral processes must be maintained. The election of a duly elected candidate cannot be set at naught on the basis of interested on partisan evidence not backed by cogent circumstances or unimpeachable documents. [6 H] Rahim Khan vs Khurshid Ahmed & Ors. [1975] 1 S.C.R. 643, 656 and D. Venkata Reddy vs R. Sultan & Ors. ; , referred to. In the instant case the approach of the High Court was not correct. It had overlooked many essential features. Secondly the High Court had observed that issue No. 1 was wide enough to include the appellant 's plea that even if the order of the Returning Officer in rejecting the nomination paper on the ground of absence of the candidate or his proposer was wrong, it could 2 still be supported on the ground that the signature of the proposer was not genuine. Yet it had not determined this aspect of the matter. [27 C] (2) The order of the Returning Officer read as a whole clearly shows that the nomination paper was rejected not only on the ground that the candidate or his proposer was not present but also on the ground that the signature of the proposer on the nomination paper was not genuine. It is true that the Returning Officer had not given any clear finding on this point but section 47 of the Act did not require a well reasoned decision. All that was necessary was that the Returning Officer should apply his mind and determine the question in a summary manner. Even if the ground on which the nomination paper had been actually rejected was not a permissible ground, if the successful candidate could make out a case that the nomination paper could have been properly rejected on one of the grounds mentioned in section 47 the rejection would not be improper and the election would be upheld. [22 D H] N. T. Veluswami Thevar vs G. Raja Nainar & Ors. [1959] Supp. 1 S.C.R. 623 followed. (i) In the instant case the fact that P.W. 4 had stated in his evidence that when the Returning Officer called the name of the petitioner no one on his behalf responded knocks the bottom out of the respondent 's story that the proposer had been instructed to request the Returning Officer to wait or that the Returning Officer had not acceded to his request. [8 D] (ii) On a perusal of the Returning Officer 's original order it was clear that the entire order had been written in the same ink, with the same pen and appears to have been written in one sitting. There is nothing to show that the second part of the order was added subsequently because the strokes of the letters, the ink used and the general tenor of the writing are the same throughout. [20 B] (iii) As regards that portion of the Returning Officer 's order written by him after writing "Hence rejected" his explanation was that while he was writing his order and had not completed the same, objection was taken by the appellant regarding the genuineness of the proposer 's signature and since the clerk had by then put the seal, he had recorded the appellant 's objection in this space left and completed his order and signed above the seal. This was corroborated by independent witnesses and there is no reason why the Returning Officer should have added a part of the order subsequently. [20E, 21 A] (iv) The Returning Officer, while indicating the appellant 's objection regarding the genuineness of the signature of the proposer also observed that it was not possible to verify the signature of the proposer in the absence of the candidate as well as the proposer. Thus the absence of the candidate and the proposer had been used, not for the purpose of rejecting the nomination paper, but for the purpose of supporting the conclusion of the Returning Officer that the signature was not genuine. [22 F] (v) It has been satisfactorily proved that the signature of the proposer which contained overwriting was not his genuine signature and, therefore, the nomination paper had been properly rejected and the election could not be assailed under section 108(1)(c) of the Act. From the facts found it was clear that the over writing present in the signature at the time of scrutiny threw considerable doubt on the genuineness of the proposer 's signature. The fact that the proposer and the respondent were absent at the time of scrutiny lends sufficient support to the inference that the signature of the proposer was not genuine. [26 C D]

Appeal No. 432 of 1963. Appeal from the Judgment and Decree dated the August 27, 1958 of Andhra Pradesh High Court in Appeal Suit No. 113 of 1954. C. Narasimhacharyya and K. R. Chaudhury, for the appel lant. P. Ram Reddy, for respondents Nos. 4 to 7. P. Ram Reddy and A. V. V. Nair, for respondents Nos. 15, 16, 18 to 20, 22, 23 to 25. The Judgment of the Court was delivered by Shah J. Khader Miran, Muhammad Abdul Kassim and Muhammad Labhai mortgaged on August 21, 1933, certain immovable property in favour of Narsimha Reddy to secure repayment of Rs. 20,000/ . Khader Miran died on November 19, 1937. On July 12, 1940 Narsimha Reddy commenced an action for enforcement of the mortgage against Muhammad Abdul Kasim, Muhammad Labhai, and three widows of Khader Miran Fathima Bi, Amina Bi and Mahaboob Bi, and a daughter Muhammad Mariyam Bi. A preliminary mortgage decree passed in the action on November 25, 1940 was made absolute on October 11, 1941, and in execution of the decree the properties mort 939 gaged were sold at a court auction and were purchased by the mortgagee Narsimha Reddy on October 16, 1942, with leave of the Court. Narsimha Reddy thereafter transferred the properties to P. Chinnamma Reddi and the latter in his turn alienated portions thereof. N. K. Mohammad Sulaiman hereinafter referred to as 'the plaintiff ' claiming that he was the son of Khader Miran instituted suit No. 125 of 1950 in the Court of the Subordinate Judge, Chittoor for a decree for partition of the mortaged properties by metes and bounds" and in the alternative for a declaration that he was entitled "to redeem the mortgage or portion thereof equal to his share in the mortgaged properties" and for an order against Narsimha Reddy and the alienees from him to render a true and correct account of the income of the properties, and for a further declaration that the decree and judgment in suit No. 87 of 1940 and the execution proceedings thereon were null and void, and "if necessary to set aside the same. " To this suit were impleaded Mahammad Ismail who, it was claimed, was also the ;on of Khader Miran, and was not impleaded in the earlier suit, Mahaboob Bi the mother of the plaintiff, Mariyam Bi his step sister, narsimha Reddy and twenty two alienees of the property. The suit was resisted by Narsimha Reddy and the alienees on two principal grounds that the plaintiff was not the son of Khader Miran, and that the decree in suit No. 87 of 1940 was in any event binding upon the plaintiff for the estate of Khadar Miran was fully represented in the suit by those who were in possession of the estate of Khader Miran. On the second plea, it was sub mitted that Narsimha Reddy had made "full and bona fide in quiry" and had come to learn that only the three widows and daughter of Khader Miran were the surviving members of the family of Khader Miran and that they were in possession of his estate, and that it was not brought to the notice of Narsimha Reddy at any time that there were, beside those impleaded, other heirs to the estate of Khader Miran. The Trial Court held that the plaintiff who was the son of Khader Miran was "sufficiently represented" by the three widows and the daughter of Khader Miran in suit No. 87 of 1940, and that the plaintiff and his brother Mohammed Ismail were bound by the decree and the sale in execution thereof, even though they were not impleaded as parties eo nomine. In appeal to the High court of Andhra Pradesh, the decree passed by the Trial Court, dismissing the plaintiff 's suit was confirmed. With certificate 940 granted by the High Court, this appeal is preferred in forma pauperis by the plaintiff. The Trial Court and the High Court have held that Narsimha Reddy had instituted the mortgage suit after making bona fide enquiry and being satisfied that the only heirs of Khader Miran were his three widows and his daughter, and that the entire estate was in their possession, and that there were no other heirs. This finding is not challenged before us, but counsel for the plaintiff argues that when in a suit to enforce a mortgage instituted after the death of a Muslim debtor one or more out of the heirs of the deceased debtor is or are not impleaded in the suit and a decree is obtained, what passes to the auction purchaser at the court sale is only the right, title and interest in the properties of the heirs of the deceased debtor who were impleaded in the suit. On this question, there has been a sharp conflict of opinion amongst the High Courts in India. It is necessary in the first instance to set out certain principles which are accepted as well settled. The estate of a muslim dying intestate devolves under the Islamic law upon his heirs at the moment of his death i.e. the estate vests immediately in each heir in proportion to the shares ordained by the personal law and the interest of each heir is separate and distirct. Each heir is under the personal law liable to satisfy the debts of the deceased only to the extent of the share of the debt proportionate to his share in the estate . A creditor of a muslim dying intestate may sue all the heirs of the deceased, and where the estate of the deceased has not been distributed between the heirs, he may execute the decree against the property as a whole without regard to the extent of the liability of the heirs inter se. The creditor is however not bound to sue all the heirs: the creditor may sue some only of the heirs and obtain a decree against those heirs, and liability for satisfaction of the decree may be enforced against individual heirs in the property held by them proportionate to their share in the estate. It is also settled that where the defendant in an action dies after institution of the suit, he creditor after diligent nd bona fide enquiry impleads some but not all the heirs as legal representatives, the heirs so impleaded represent the estate of the deceased and a decree obtained against them binds not only those heirs who are impleaded in the action but the entire estate including the interest of those not brought on the record: Dava Ram and others vs Shyam Sundari & others(1) : This Court at p. 240 observed (1)[1965] 1 S.C.R. 231 941 .lm15 "The almost universal consensus of opinion of all the High Courts is that where a plaintiff or an appellant after diligent and bona fide enquiry ascertains who the legal representatives of a deceased defendant or respondent are and brings them on record within the time limited by law, there is no abatement of the suit or appeal, that the impleaded legal representatives sufficiently represent the estate of the deceased and that a decision obtained with them on record will bind not merely those impleaded but the entire estate including those not brought on record." This Court has therefore recognised the principle of representation of the estate by some heirs where the defendant dies during the pendency of a suit to enforce a claim against him, and not all the heirs are brought on the record. If after bona fide enquiry, some but not all the heirs of a deceased defendant are 'brought oil the record, the heirs so brought on the record represent the entire state of the deceased, and the decision of the Court in the absence of fraud or collusion binds those who are not brought on the record as well as those who are impleaded eo nomine. Daya Ram 's case, it is true, did not relate to the estate of a deceased Muslim, but the rule enunciated is of the domain of procedural law and applies to all communities irrespective of the religious pursuasion or personal law. Counsel for the plaintiff says that this rule applies only to cases where the defendant dies after institution of the suit, and does not apply where a suit is instituted against the heirs of a deceased debtor. The reason suggested is that by the combined operation of 0. 22 rr. 4 & 5 Code of Civil Procedure there is a decision of the Court that persons impleaded are the heirs of the deceased and are allowed to be brought on the record as his heirs and legal representatives. Reliance is also placed upon the definition of "legal representative" in section 2 (11 ) of the Code of Civil Procedure. It is submitted that where persons are either expressly or by implication directed or permitted by an order of the Court to represent the estate, in the absence oil fraud or collusion the heirs brought on the record will represent the entire estate, and the decree passed against them and proceedINGS taken pursuant thereto will be binding upon the heirs not so impleaded. But where the plaintiff institutes a suit against certain person as legal representatives of the deceased debtor there is no representation to the estate by some only of the heirs of the deceased where the deceased was a muslim. On this point there has been, as already stated, conflict of opinion and in some High Courts from time to time different views have been expressed To seek elucidation of principle from an analysis 942 of the numerous decisions of the cases may turn out a futile pursuit. That is not because we do not hold the opinions expressed by eminent Judges on this question in great respect, but because in our view it would conduce to greater clarity if the grounds on which the decisions have proceeded are examined in the light of the true principles applicable. In seeking its solution the problem whether a decree obtain ed by a creditor in a suit instituted against some of the heirs of a deceased Muslim for payment of debts due by him is binding on the other heirs has been approached from different angles : (i) by the analogy of Hindu law where on devolution of property on death of a Hindu upon members of a joint Hindu family or a widow the estate of the deceased is represented by the manager or the widow, and the creditor in a suit properly instituted against the manager or the widow may obtain a decree which binds all the persons having interest in the estate; (ii) the rule of Mahomedan law as set out in Hamilton 's Hedaya, 2nd Edn., p. 349, Bk. XX, Ch. 4 (relating to the duties of the Kazee): "for any one of the, heirs of a deceased person stands as litigant on behalf of all the others, with respect to anything due to or by the deceased, whether it be debt or substance, since the decree of the Kazi in such case is in reality either in favour of or against the deceased; and any of the heirs may stand as his representative with respect to such decree. . To this it is objected, "If one heir be litigant on behalf of the others, it would follow that each creditor is entitled to have recourse to him for payment of his demand, whereas, according to law, each is only obliged to pay his own share. " Reply : "The creditors are entitled to have recourse to one of several heirs only in a case where all the effects are in the hands of that heir. This is what is stated in the Jama Kabeer; and the reason of it is that although any one of the heirs may act as plaintiff in a cause on behalf of the others, yet he cannot act as defendant on their behalf, unless the whole of the effects be in his possession"; (iii) that a creditor of the deceased may sue one of the heirs who is in possession of the whole or any part of the estate, without joining other heirs as defendants, for administration of the estate and for recovery of the entire debt, and Pet a decree against the entire estate; and (iv) on the strict rules of Islamic law that devolution of inheritance takes place immediately upon the death of the ancestor, and jus representations being foreign to the Islamic law of inheritance, and only those heirs who are sued by the creditor of the deceased ancestor are liable to satisfy the debt proportionate to their interest in the estate. The first view was enunciated by the Calcutta High Court in Mussemut Nuzeerun vs Moulvie Amerooddin(1) and was adopted by the Bombay High Court in Khurshetbibi vs Kesho Vinayak(2; Davalava vs Bhimaji ( 3 ) and Virchand vs Kondu (4 ) . The second view though pressed for acceptance before the Courts has not met with approval. The rules of procedure enunciated by the Muhammadan lawyers have no application under the Indian system of jurisprudence to the trial of actions in our courts and as observed by Mahmood, J., in Jafri Begam vs Amir Muhammad Khan(") at p. 842: " . and if there are any claims against the estate, and they are litigated, the matter passes into the region of procedure, and must be regulated according to the law which governs the action of the Court, The plaintiff must go to the Court having jurisdiction, and institute his suit within limitation, impleading all the heirs against whose shares he seeks to enforce his claim; " The Calcutta High Court in Muttyjan vs Ahmed Ally(") accepted the third view and regarded a suit filed by a creditor to recover a debt due from the estate of a deceased muslim debtor as an administration action. It was further confirmed in Amir Dulhin vs Baijnath Singh(7). On this rule an exception was engrafted in a later judgment in Abbas Naskar vs Chairman, District Board, 24 Parganas(8). It was observed in Abbas Naskar 's case(") that in the case of an estate of a muslim dying intestate if there has been no distribution of the estate, and the suit is instituted for recovery of a debt the creditor may sue any heir in possession of the whole or part of the estate without joining the other heirs as defendants, for realisation of the entire debt passed in such a suit may be enforceable against all the assets that are in his possession. But a decree for administration may only be passed where the heirs who are sued are in possession of the whole or any part of the estate so as to be liable to account for the same to the rest, or in other words, the suits were against some of the heirs, who are in possession of property exceeding their share of the inheritance: where the heirs are in possession of the respective shares of inheritance, the principle can have no (1) (3) I.L.R. (5) I.L.R. 7 All. 822. (7) I.L.R. 1. (2) I.L.R. (4) I.L.R. (6) I.L.R. (8) I.L.R. 944 application. The modified rule accepted by the Calcutta High Court is that where a heir is in possession of the estate of a deceased muslim on behalf of the other heirs, in a suit to recover a debt due from the estate a decree for administration may be passed. The last view has been uniformly expressed by the Allahabad High Court since it was first enunciated by Mahmood J., in Jafri Begam 's case(1). It may be observed that the Bombay High Court in later decisions has accepted this view : Bhagirthibai vs Roshanbi (2 ) : Shahasaheb vs Sadashiv(3): Lala Miya vs Manubibi (4 ) and Veerbhadrappa Shilwant vs Shekabai(5). We may now examine whether the grounds on which the different views were expressed are sustainable in principle. It must be recalled that whether a decree obtained by a creditor against the heirs of a deceased muslim is binding upon the entire estate or only of those who were impleaded eo nomine is not a question to be determined on the personal law either of the deceased or of the defendant in the suit. It is a part of the law of procedure which regulates all matters going to the remedy, and when the matter passes into the domain of procedure, it must be regulated by the law governing the action of the Court. An administration action may undoubtedly lie at the instance of a creditor for and on behalf of all the creditors for an order that the Court do enter upon administration of the estate and do pay to the creditors claiming the amount either the whole or such amount as may be rateably payable to each creditor out of the estate after satisfying the primary liabilities of the estate. A suit by a creditor may in appropriate cases, where the procedure Prescribed in that behalf is followed, be treated as an administration action, but Very action instituted by a creditor of a deceased debtor to recover a debt due out of his estate in the hands of some or all the heirs is not an administration action. A person in possession of the whole or a part of the estate which originally belonged to a debtor dying intestate does not clothe himself with a right to represent other persons who are interested in the estate. Such a person may by intermeddling with the estate be regarded is executor de sontort and may render himself liable accordingly, but thereby he cannot represent those whose estate he has intermeddled with. An administrator appointed by the Court would (1) I.L.R. 7 All.822 (2) I.L.R. (3) I.L.R. (4) I.L.R. (5) I.L.R. 945 resent the estate, and a creditor may sue him for recovery of the debts due out of the estate. In an administration action properly instituted, the Court may take upon itself the duty to administer the estate out of which the debts may be satisfied. But a simple action for recovery of a debt from the estate of a deceased debtor will not be regarded as an action for administration. Ordinarily the Court does not regard a decree binding upon a person who was not impleaded eo nomine in the action. But to that rule there are certain recognised exceptions. Where by the personal law governing the absent heir the heir impleaded represents his interest in the estate of the deceased. There is yet another exception which is evolved in the larger interest of administration of justice. If there be a debt justly due and no prejudice is shown to the absent heir, the decree in an action where the plaintiff has after bona fide enquiry impleaded all the heirs known to him will ordinarily be held binding upon all persons interested in the estate. The Court will undoubtedly investigate, if invited, whether the decree was obtained by fraud, collusion or other means intended to overreach the Court. The Court will also enquire whether there was a real contest in the suit, and may for that purpose ascertain whether there was any special defence which the absent defendant could put forward, but which was not put forward. Where however on account of a bona fide error, the plaintiff seeking relief institutes his suit against a person who is not representing the estate of a deceased person against whom the plaintiff has a claim either at all or even partially, in the absence of fraud or collusion or other ground which taint the decree, a decree passed against the persons impleaded as heirs binds the estate, even though other persons interested in the estate are not brought on the record. This principle applies to all parties irrespective of their religious persuation. A few illustrative cases which support this principle may be noticed. In Chaturbujadoss Kushaldoss and Sons vs Rajamanicka Mudali(1) a debtor died leaving a will bequeathing his estate to his nephew subject to certain dispositions. In ignorance of the will, and bona fide believing that the widow was the proper legal representative, a creditor of the deceased brought a suit against her alone and obtained a decree ex parts for satisfaction of the debt out of the husband 's estate and satisfied his claim by sale of certain items of the estate in her hands. A nephew of the deceased who was a devisee under the will sued to set aside the decree and sale in execution thereof. It was held by the High Court of (1) I.L.R. Sup. CI/65 17 946 Madras that as the creditor bona fide believed the widow was the proper legal representative and as she was then interested in defending the estate and sufficiently represented the estate and as the creditor got his decree without any fraud or collusion with her, it was binding on the nephew who was the residuary legatee under the will. In dealing with this question, Madhavan Nair, J., observed at p. 218 : "Prima facie, a decree will bind only the parties to it or those claiming through them; but there are exceptions to this rule. The Courts have held that in certain circumstances when one who is not the true legal repre sentative of a deceased person is impleaded as his legal representative, then a decree passed against him in his character as the legal representative of the deceased would be binding on the true representative though he is not a party to it. The suit may have been instituted against the wrong legal representative at the very commencement or the wrong legal representative may have been brought on record during the pendency of the suit or after the decree and for purposes of execution. " The principle so stated derives support from the judgment of the Judicial Committee in Khairajmal vs Daim(1). In that case, the material facts out of the many complicated facts which have a bearing on the point under review are these : a suit was instituted for redemption of two mortgages of 1874 in respect of certain immoveable properties. The plea of the mortagee in substance, was that the equity of redemption had been sold in execution of money decrees against the mortgagors in earlier proceedings and was vested in other persons, and therefore the mortgagors had no right to sue. One of such mortgagors was Nabibaksh. It appeared that in suit No. 372 of 1879 instituted for recovery of a debt there was reference to arbitration, and Nabibaksh signed the reference. Nabibaksh died shortly thereafter and his two widows and his son Muhammad Hassan named as legal re presentivs were served with the summons and were willing to accept the award. They were also served with the notice of sale of the property of Nabibaksh. An infant daughter of Nabibaksh was omitted from the list of heirs impleaded, but the entire interest of Nabibaksh was sold in execution of the decree obtained in that suit. The Judicial Committee held that the estate of Nabibaksh as sufficiently represented for the purpose of the suit, although the name of the infant daughter was omitted and (1) L.R. 32 T.A. 23. 947 that the share of Nabibaksh in the equity of redemption in the property sold in execution of the decree in suit No. 372 of 1879 being bound by the sale, was irredeemable. It is true that Nabibaksh died after the suit for recovery of the debt was instituted and his heirs were brought on the record under a procedure similar to O. 22 r. 4 of the Code of the Civil Procedure. But the Judicial Committee did not express the view that the estate was represented because the heirs were brought on record after the death of Nabibaksh in a pending suit, but apparently on the principle on which the Madras High Court in Chaturbujadoss Kushaldoss & Sons ' case(1) proceeded. This view was also expressed by the High Court of Orissa in Sarat Chandra Deb and others vs Bichitrananda Sahu and others(2), where Jagannadhadas, J., observed that where proceedings taken bona fide by the creditor against the person actually in possession by virtue of the assertions of a claim to succeed to or represent the estate of the deceased '; debtor are binding against the real legal heir, whether such proceedings were commenced or continued against the wrong person, and irrespective of any express or implied decision by the Court that the ,person so impleaded was the proper legal representative. The Court in that case recognised that though the title of a persons to property cannot normally be affected by any proceeding to which he is not a party, his interest in the property may still be bound if he may having regard to the circumstances, be said to, have been sufficiently represented in the proceeding. The learned judge observed at p. 445: "I have, therefore, no hesitation in coming to the conclusion that where a mortgagee institutes a suit bona fide against the person in possession of the estate of the deceased mortgagor, who is in such possession in assertion of a claim to succeed to that estate, and where a person purchases the mortgaged property bona fide in execution of that decree, such purchaser gets the full title to the mortgaged property by virtue of such sale and the real heir is bound thereby and that his only remedy, if at all, in a proper case is to get the sale set aside by appropriate proceedings in time." In a recent judgment of the Madras High Court in Shunmughom Chettiar vs K. A. Govindasami Chettiar and others(3) it was held that where after the death of the mortgagor, in a suit on the mortgage, the mortgagee bona fide and "after due care and ' (1) I.L.R. (2) I.L.R. [1950] Cutt. (3) A.I.R. 1961 Mad. 948 caution" impleads a person who is believed by him to be the legal representative of the mortgagor and who is in possession of the mortgaged property and a decree is obtained on that footing without the legal representative so impleaded disclaiming any liability, the decree thus obtained by the mortgagee will bind other legal representatives who may be in existence. It is true that the cases of the Madras & Orissa High Courts did not relate to the estate of a muslim debtor. But the rule, as already stated, is one of procedure and not of personal law, and applies to a muslim debtor 's estate as well as to a Hindu debtor 's estate. It is true that in the case of a debtor who is sued for recovery of the debt, and if he died after the institution of the suit, there is some order of the Court express or implied recognising that the person sought to be brought on record are the heirs and legal representatives of the deceased debtor. The Court records a conclusion, if not expressly, by implication, that they :represent the estate. It was held by this Court, as already stated ,earlier, in a recent judgment in Daya Ram 's case(1) that failure ;to bring the other heirs on record, if there is a bona fide enquiry :as to the existence of the heirs, does not affect the validity of the decree and the proceedings taken thereunder. In a suit instituted against the heirs of a deceased debtor, it is the creditor who takes upon himself the responsibility to bring certain persons as heirs and legal representatives of the deceased on the record. If he has proceeded bona fide and after due enquiry and under a belief that the persons who are brought on the record are the only legal representatives, it would make no difference in principle that in the former case the heirs have been brought on the record during the pendency of the suit, the creditor having died since the institution of the suit, and in the other case at the instance of the plaintiff certain persons are impleaded as legal representatives of the deceased person. In either case, where after due enquiry certain persons are impleaded after diligent and bona fide enquiry in the genuine belief that they are the only persons interested in the estate, the whole estate of the deceased will be duly represented by the persons who are brought on the record or impleaded, and the decree will be binding upon the entire estate. This rule will of course not apply to cases where there has been fraud or collusion between the creditor and the heir impleaded, ,or where there are other circumstances which indicate that there has not been a fair or real trial, or that the absent heir had a special defence which was not and could not be tried in the earlier proceeding. (1) ; 949 The appellant and his brother Mohammad Ismail were both minors when the action for enforcement of the mortgage in favour of Narsimha Reddy was instituted. The mortgaged pro perty was in the possession of the three widows and daughter of Khader Miran, and the other mortgagors. It is also found that Narsimha Reddy had made bona fide enquiry and had not come to learn about the existence of any other heirs. It is also not the case of the appellant that he had any special defence to the suit which if he was impleaded as a party to the suit he could have set up, nor is there any ground for holding that there was no fair or real trial of the action. This appeal therefore fails and is dismissed with costs. The appellant was permitted to appeal in forma pauperism He will pay the court fee payable on the memo of appeal as if he had not been permitted to appeal in forma pauperis Appeal dismissed.

In 1949, the Banking Companies Act was passed with a view to protect and secure the interests of depositors. In 1953 section 45 O was enacted by the Banking Companies (Amendment) Act, in pursuance of the recommendations of the Banking Companies Liquidation Proceedings Committee. Section 45 O (1) provided that in computing the period of limitation prescribed for an application by a banking company which is being wound up, the period commencing from the date of the presentation of the winding up petition shall be excluded; and section 45 O (3) provided that sub section (1) shall also apply to a banking company in respect of which the winding up petition was presented before the commencement of the Amendment Act, that is, 30th December 1953. On 1st May 1947, a decree for a sum of money had been passed in favour of the appellant Bank, against the respondents. The decree provided that the amount which was due on 30th May should be paid in 6 annual instalments each payable on 30th December from 1947 to 1952. The decree also provided that if the respondents failed to pay any instalment within 4 months of its becoming due, the appellant shall be entitled to realise all the amounts then due, by execution. None of the instalments was paid. On May 11, 1948 a petition for winding up of the appellant was presented and it was ordered to be wound up on August 3, 1948. In August 1956 the liquidator filed an execution application on the original side of the High Court, for realising the amounts. The application was allowed, but the High Court, in Letters Patent Appeal, held that the application was barred by time. In appeal to this Court, the appellant contended that in view of section 45 O the application was within time: while the respondents contended that: (1) all the instalments fell due by 1st May 1948 by operation of the default clause, and therefore, the application was barred by article 182 (7) of the Limitation Act, 1908, by the time section 45 0 was brought on the statute book; (ii) the section has no retrospective operation so as to revive a debt which had become barred at the date of its enactment; and (iii) if the default clause gave only an option to the appellant so that it could apply for execution as and when an instalment fell due, then, the instalments which fell due in 1947, 1948 and 1949 had become barred before the enactment of the section; and the instalments which fell due during the years 1948 to 1952 were also not saved from the bar of limitation, as the section applied only to those cases where the right to execute had arisen before the presentation of the winding up petition. 709 HELD: (By full Court): Section 45 0 saved the execution application from the bar of limitation imposed by article 182(7) of the Limitation Act. [712H; 719A; 727D; 742A] (i) Per Sarkar, J: The right to apply for execution in respect of the instalments under the decree arose on the dates on which they respectively fell due. [713H] The default clause was only intended for the benefit of the appellant and gave an option to the appellant to sue for the entire amount or waive the benefit of the option, and the appellant had not taken advantage of it. [713D, E, H] Ram Culpo Bhattacharji vs Ram Chunder Shome, Cal. 352, referred to. (ii) Per Sarkar, J: There is no reason why a distinction should have been intended between debtors, the claims against whom might have become barred before the section was enacted and those, the claims against whom, became barred thereafter. In fact, the object of the section would be better achieved by applying it to both classes. [715 F G] One of the methods by which, the object of the Act which was to protect depositors, could be achieved is by extending the period of limitation for enforcement of the claims of a bank in liquidation, so that more money may be collected for payment to the depositors. That being so, the largest extension of the period, which the language used is capable of, must have been intended. [715E F] Besides, section 45 O(3) expressly makes sub section (1), applicable to a banking company being would up on a petition presented before 30th December 1953 Under section 45 0(1) and (3) a period which had started to run before that date could be excluded, and, there is no hint that such exclusion is confined to cases where the right had not become barred by that date. (3) must have been intended to give full retrospective effect to subs. (1), as otherwise, it need not have been enacted, because, sub section (1) would, by its own terms, apply to cases of winding up on a petition presented before the Amending Act, and, considering the intention of the Act, sub section (3) could not have been enacted as a surplusage or ex abundanti cautela. Therefore, section 45 0(1) applies to applications by the banking company, even when they had become barred before the Amending Act. [716 B E H; 717 C] Per Wanchoo, J: The appellant would be entitled to exclude the entire period from 11th May 1948 the date of presentation of the winding up application upto the date of the execution application and would thus be entitled to execute the decree for the total of the 6 instalments due. [726 E] The language of section 45 0(1) implies that it was meant to be retrospective and that conclusion becomes inevitable when it is read with sub section (3), in the background of the remedy that the legislature intended to provide for the benefit of depositors. Section 45 0(1) imperatively lava down that where an application is filed by a banking company which was being would up on or after 30th December 1953 the Court must exclude the period commencing from the date of presentation of the winding up petition to the date of the application in computing the period of limitation. Further by virtue of subs (3), subs. (1) applies not only to those banking companies which were being wound up on petitions presented on or after the section came into force, but also to those banking companies where the winding up petition was made before 30th December 1953 and whether the winding up order was made before or after that date provided the banking company was in the process of being wound up when the application was filed; and, there is no scope for the court to consider 710 whether the application, if filed before 30th December 1953, would barred by limitation or not. [722H; 723 A B, D E; 724 E] Per Raghubar Dayal J: The appellant 's application for execution is maintainable and not barred by time, because, the effect of section 45 0(1) is that, in applications made by a banking company which is being would up, or for whose winding up a petition has been presented before 30th December 1953, the period of limitation is arrested on the date of the presentation of the winding up petition, and it is not material whether such date is earlier than 30th December 1953 or net. Therefore, the sub section is retrospective, and an application can be made even in regard to matters with respect to which such action could be taken on the date of the presentation of the windup petition, but could not be taken, because of efflux of time, on 30th December 1953. [731C; 736G. 737E] One of the conditions for the application of the sub section is that a "banking company is being wound up", and this condition would be satisfied by all companies with respect to which winding up orders had been made either before 30th December 1953 or thereafter. There is nothing in the language of the sub section to limit the expression to those companies which respect to which winding up orders are made subsequent to that date. The provision is not for the benefit of such companies only, but, is for the benefit of all companies which would be in the process of winding up during the enforcement of the Act. This is also apparent when sub sections (1) and (3) are read together. So read, the period of exclusion would be available in connection with applications by a banking company which is being wound up or with respect to which a petition for winding up has keen made prior to 30th December 1953. If the provisions of sub section (1) can apply to the banking companies with respect to which proceedings on a winding petition were pending on 30th December 1953, there is no reason why they should not apply to banking companies with respect to which winding up orders had been made prior 'to that date. Further, if a restricted interpretation is given to sub section (1), by confining it to cases where the cause of action was not barred on 30th December 1953, then sub section (3) will have no utility, because, that sub section only provides that whatever advantage a banking company can derive from the provisions of sub section (1) when it is being wound up, would be available to it even if it is not being wound up, if a petition for its winding up had been presented prior to 30th December 1953. The only case in which the banking company can take advantage of sub section (3), then, would be vhen the cause of action for the application has not lapsed by that date and the proceedings on a winding up application were pending on that date. But, such cases would be covered by the language of sub section (1)itself, for, the cause of action would be alive on 30th December 1953 and the winding up order would be made subsequent to that date. [734 B E; 736B, E H] Case law referred to. (iii) Per Sarkar and Raghubar Dayal, JJ.: Section 45 0(1) should be read as permitting the exclusion of the entire period commencing from the date of the presentation of the winding up petition where the debts became due before that date, and, in cases There the debt became due subsequently such part of that period as commences from the date of the accrual of the debt. [718E; 741F] Per Sarkar, J.: There is no reason why it should have been intended that debts which fell due before the presentation of the winding up petition but were not barred by that date could be 711 recovered, and not those which became due thereafter. No doubt, if the sub section is applied to the case of a debt accruing due to a banking company after the presentation of a winding up petition, such a debt would be completely free from the bar of limitation, but since it has that effect in the case of debts which accrued due prior to the presentation of the petit,ion and had not become barred on that date, the section must be construed as permitting the whole of the period commencing from the presentation of the petition to be excluded where in fact it could be done, and a part of that period only where the whole of it could not be excluded. [717F, H; 718C, H] Cortis vs The Kent Water Works Company, ; , referred to. Per Raghubar Dayal, J: The appellant waived its right under the default clause of the decree and sought execution for the realisation of the various instalments. Even so the execution application was within time, because, a banking company is entitled to exclude, the period from the date on which the winding up petition was presented upto the date of the institution of the application, from the period of limitation prescribed, and it would be illogical to hold that it is not entitled to ask that a shorter period, as the case would be, when the cause of action arose subsequent to the presentation of the winding up petition, should be excluded. It may be that this means, the entire period of limitation is abrogated with respect to causes of action arising subsequent to the date of the winding up petition, but it would be anomalous to hold that action can be taken with the help of the sub section with respect to causes of action ' which had arisen much earlier than the date of the presentation of the winding up petition, but action cannot be taken with respect to causes of action arising subsequent to such a date if it had not been taken within the prescribed period of limitation. [740G, 741C, G H] Per Wanchoo J.: The present case is governed by section 45 0(3) ' because, the winding up petition was presented before section 45 0(1) came into force, but by virtue of sub section (3), sub section '(1) would apply. As there was default in the payment of the instalment due on 30th December 1947, the right to execute all the remaining instalments arose on ist May 1948 and since that right was not waived, limitation for all the instalments began even on ist May 1948, while the winding up application was filed on 11th May 1948, and so, the appellant could take advantage of the section and execute the decree for the entire amount. [726A E; 727C D] Exclusion of time cannot take place where time has not begun to run before the date from which the exclusion begins. Therefore, in order that section 45 0(1) should apply, it is necessary that the period of limitation for the application should have begun to run before the date of winding up petition, but should not have run out. [724 C] On this interpretation, in the case of instalment decrees without a default clause, the instalments which became due and were not paid before the winding up petition may be recoverable by execution, while in the case of instalments which became due after the presentation of the petition, the exclusion provided by the section would not come into play. But if the sub section is interpreted as stopping limitation in all cases, after the presentation of the winding up petition, it will result in another anomaly, that there would be no limitation at all in a case where the liquidator files a suit and gets a decree. [7241; 725A] 712

minal Appeal Nos. 101 to 103 of 1970. Appeals by special leave from the judgment and order dated October 10, 1969 of the Calcutta High Court in Criminal Revision Nos. 238, 289 and 290 of 1969. D. Mukherjee and section Ghosh for the appellants (in all the appeals). A. N. Mulla, J. M. Khanna, Vishnu Bahadur Saharaya and Yogindra Khushalani for the respondents, (in Cr. A. Nos. 101 & 103/70). R. A. Gupta for respondent (in Cr. A. No. 102/70). section C. Mazumdar for the State (in all the appeals). The Judgment of the Court was delivered by VAIDIYALIGAM, J. These three appeals by the complaint, by special leave, are against the common judgment and order dated August 10, 1969, of the Calcutta High Court in Criminal Revisions Nos. 238, 289 and 290 of 1969, setting aside the charge under section 120B read with section 409 I.P.C. framed against all the four accused and the charge under section 409 IPC framed against accused Nos 1 to 3. The High Court by the same judgment, quashed the proceedings based upon the said charges, which were pending before the Presidency Magistrate, 7th Court, Calcutta in case No. C/3443 of 1967. The appellant in all these three appeals, Amar Chand Agar walla, filed a complaint before the Chief Presidency Magistrate, Calcutta, on November 21, 1967, on the basis of which the four 181 accused persons, namely, Paramanada Agarwalla, Madan Mohan Gour, Jhumermal Agarwala and Shanti Bose, were required to answer charges under section 120B/409 and 409 IPC. These persons will be referred to as accused Nos. 1, 2, 3 and 4 respectively. The case was later on transferred to the Presidency Magistrate, 7th Court, Calcuttta, for disposal. The 7th Presidency Magistrate, after recording the evidence of ten prosecution witnesses, framed a charge on September 7, 1968, under section 120B/409 against all the four accused and a charge under section 409 IPC against accused Nos. 1 to 3. The allegations in the complaint were briefly as follows The complainant was a partner of M/s. Kalinga Bakery Bis cuit Confectionery and Mineral Water Company of Rourkela in Orissa and was granted actual users ' import licence on November 18, 1966, by the Joint 'Chief Controller of imports and Exports, Calcutta, for import of skimmed milk powder and other commodities upto the value of Rs. 60,000/ . This commodity was for the purpose of being used in the licensee 's factory. The complainant appointed M/s. Arun Importer (P) Ltd., owned, managed and controlled by accused Nos. 1 to 3, as his agents to import 52.5 bags of milk powder from New Zealand. The first accused wrote a letter dated July 25, 1967, informing the complainant that the goods had already been shipped and that they would be arriving very shortly. Accused Nos. 1 to 3 also offered to assist the complainant with a loan of Rs. 25,000/ to enable him to clear the shipping documents from the Bank. The 4th accused was introduced by the other accused as a Customs Clearing Agent and on their suggestion, the, complainant appointed him as his clearing agent. After clearing the shipping documents with the assistance of the loan provided by the accused, the complainant, however, was not informed about the actual arrival of the ship. The complainant addressed a letter dated August 19, 1967, to accused No. 4 asking for information about the arrival of the goods. None of the accused gave any intimation about the arrival of the goods. However, to his surprise, the complainant read in the newspaper a report on August 22, 1967, about the police having recovered from the various parts of Calcutta several bags of milk powder stated to have been imported on his account. The complainant rushed to Calcutta and contacted the accused but was not able to get any information. Accused No. 4 flatly declined to even recognise the complainant or talk to him; accused Nos. 1 to 3, however, professed ignorance about the whole thing and hinted that accused No. 4 might have diverted the goods to other persons. On August 26, 1967, an application was filed before the Chief Presidency Magistrate to direct the police to make an investigation under section 156(3) of the Criminal Procedure Code re 182 garding the missing quantity of milk powder. In the said application, however, only Shanti Bose (the present accused No. 4) was cited as an accused, as the complainant did not have any reason to suspect the other accused. The milk powder seized by the police was later on directed to be returned to the complainant by the High Court on his furnishing security. Accused Nos. 1 to 3, coming to know about this proceeding, instituted on September 25, 1967, a suit against the complainant in the High Court (Suit No. 2283 of 1967) praying for a declaration that the plaintiff was the pledge of 316 bags of milk powder of the defendant and prayed for a decree in the sum of Rs. 26,744.87. They also asked for various interim reliefs. The complainant, during the pendency of the proceedings before the Chief Presidency Magistrate, came to know that all the accused persons had taken away on August 19, 1967, the entire quantity of 525 bags of milk powder, which had been imported on his account without his knowledge, consent or instructions and that they had also mis appropriated about 200 bags before the police could raid their premises. On an ascertainment of these facts, the complainant withdrew his original complaint with the permission of the court and instituted the present complaint against all the accused. On receipt of the complaints the Chief Presidency Magistrate ordered a judicial enquiry to be held by the 9th Presidency Magistrate. In the judicial enquiry held by the latter, the complainant had brought on record various documents to substantiate his allegations. As a result of the enquiry, the Chief Presidency Magistrate on December 26, 1967, summoned all the four accused persons under sections 120B/409 and 409 an transferred the case for disposal to the 7th Presidency Magistrate, The learned Magistrate, after a consideration of the materials placed before him by the complainant, framed on September 7, 1968 charges against all the accused under sections 120B/409 IPC and a charge under section 409 IPC against accused Nos. 1 to 3. None of the accused persons moved the High Court against the order of the Magistrate issuing process or against the order dated 7 9 1968 framing charges against them. It is seen from the records that a large volume of oral and documentary evidence had already been lot in and the trial itself had almost come to the closing stage. What remained was only to examine two more witnesses on the side of the prosecution, as per order dated 24 21969, and also to examine one Durga Dutt Chowdhury as a court witness under section 540, Criminal Procedure Code, as per order dated 7 3 1969. The witnesses examined so far by the prosecution had also been cross examined, by the defence. 183 While matters stood thus, the 4th accused moved the High Court in Criminal Revision No. 238 of 1969 for quashing the charges and the entire proceedings that had taken place before the Magistrate. There was also a prayer in the alternative for stay of the criminal proceedings till the disposal of Civil Suit No. 2283 of 1967 Accused No. 2 filed a similar Revision No. 289 of 1969, followed by accused Nos. 1 and 3, who were the, petitioners in Criminal Revision No. 290 of 1969. All the three Criminal Revisions were, heard together by the High Court and have been dealt with in its common judgment. On behalf of the accused, five contentions were urged before the High Court for quashing the charges as well as the entire proceedings pending before the Presidency Magistrate. The first contention related to the maintainability of the present proceedings by the complainant, when he himself was an accused in a case under section 5 of the Imports and Exports (Control) Act 1947, stated by the Central Bureau of Investigation, Economic Offences wing, Calcutta, in B. C. case No. 23/W/67. it was urged before the High Court that though he had been discharged, he is, nevertheless, an interested complainant. The High Court rejected this contention and held that, on that account, the present proceedings cannot be quashed. The second contention of the accused related to the effect of ,the order of withdrawal of the earlier complaint on the present proceedings. It was pleaded that the dismissal of the, first complaint operates as a bar to these proceedings. However, this contention also was rejected by the High Court on the ground that an order of dismissal under section 203, Criminal Procedure Code, is no bar to the entertainment of a second complainant on the similar facts, though such a complaint can be entertained, only under exceptional circumstances. The High Court ultimately held that the present proceedings are not unwarranted of unable in view of the first order of discharge in the circumstances of the present case. The third contention that was taken before the High Court by the accused was that the factum of entrustment has not been established by clear and cogent evidence and as such, there cannot be any breach of trust, for less any dishonest conversion leading to a conspiracy. The learned Judge held that it is difficult, at that stage, on the evidence adduced, to hold that there has not been any entrustment, especially as the whole case depends upon on appreciation of the entire evidence for coming to a conclusion one way or the other. On this reasoning, this contention also was rejected. 184 It must be noted that the third contention was an invitation to the High Court to consider the evidence already adduced before the Magistrate and to come to a conclusion that no entrustment had been established. The High Court, in our opinion, ,quite rightly, declined at that stage, to go into that question of tact and left it to the Magistrate to assess and appreciate the evidence and come to a conclusion one way or the other. We are particularly referring to this aspect because, as will be seen later, ,the High Court adopted a different criteria when it dealt with the fifth contention of the accused. The fourth contention of the accused was that both the first and the second complaints suppressed material facts, vitiating the present proceedings. The fifth contention, as the High Court itself observes, related to the merits, namely, that the evidence on record does not establish the offences with which the accused are charged. These two contentions have found favour with the High Court. It is on the basis of the acceptance of these contentions that the entire proceedings have been quashed. The fourth contention of the accused was that the complainant had suppressed material facts, which were within his knowledge, in the first complaint filed on August 26, 1967. Particularly, it was stressed that the complainant had not even referred to the Civil Suit No. 2283 of 1967 instituted against him. The said complaint also does not refer to the complainant having taken a loan of Rs. 25,000/ from the accused. The learned Judge has accepted this criticism as justified. It is not necessary for us to refer to, what according to the learned Judge were, certain omis sions made by the complainant in his original complaint filed on August 26, 1967. But it is enough to state that the view of the learned Judge that even the suit instituted against the complainant had not been referred to, is not justified. The complaint was filed on August 26, 1967, whereas the suit against the complainant was filed on September 26, 1967. It is also the view of the learned Judge that the present complaint also. does not refer to certain matters, which were within the knowledge of the com plainant. We do not propose even to advert to these matters. According to the High Court, there has been a suppression of some material facts in the two petitions of complaint and, therefore, the present proceedings must be held to be bad and repugnant effecting their maintainability. The High Court has referred in this case to a decision of the Calcutta High Court which, in our opinion, has no bearing. The decision is in Sunder Das Loghani vs Farun Rustom Iran(1). That was a case of (1) A.I.R. 1939 Calcutta 320. 185 discharge of the accused under section 253 (2) of the Criminal Procedure Code, as the Magistrate was of the opinion that the complainant had deliberately suppressed several facts and that the complaint was a thoroughly dishonest one. in the end the High Court has held that the Present Proceedings are bad and improper and, therefore, they have to be quashed. The fifth and the last contention taken on behalf of the accused relates, as the High Court itself states, to the merits of the case and is based Upon the evidence on record, both oral and documentary. After a consideration of certain items of evidence, the learned Judge has held that the evidence on record rules out any offence of breach of trust. or a conspiracy to commit the same, by the accused persons and, therefore, the present croceedings are not maintainable and have to be quashed. A representation appears to have been made on behalf of the complainant that a large volume of evidence, oral and documentary, has already been adduced and the trial has gone on for a long time and that only two more prosecution witnesses and a court witness remain to be examined. On this basis it was pressed before the High Court by the complainant that the High Court should allow the proceedings to go on and to come to its logical conclusion and that the. High Court should not interfere at that stage. The learned Judge, however, considered this representation and held that the two remaining prosecution witnesses should not be allowed to be examined 'in the facts and circumstances of the case, as they cannot possibly have any material effect on the merits of the case. The High Court further held that even the proposed examination of the court witness is not necessary, as it will only prejudice the accused and undo the effect of their cross examination. On this basis, the representation made on behalf of the complainant was rejected. On behalf of the appellant, Mr. D. Mookerjee very strenuously attacked the reasoning of the High Court for quashing the charges framed against the accused and the entire proceedings that head taken place before the Presidency Magistrate. On the other hand, Mr. A. N. Mulla, learned counsel on behalf of the accused, urged that the High Court was justified, in the circumstances, in quashing the charges well as the entire proceedings so far taken place before the Presidency Magistrate. The learned counsel appearing for the State supported the appellant and urged that the High Court was not justified in interfering with the proceedings when the trial had gone on for a considerably long time and was due to close, We have already referred to the 4th and the 5th contentions urged on behalf of the accused which have found favour with 186 the High Court. We have already pointed out that the learned Judge quite rightly declined, when dealing with the third contention, to consider, on an appreciation of evidence, whether an entrustment has been proved. This, the High Court has properly left to be decided by the Magistrate after the entire evidence is closed. But when dealing with the fifth contention, which the High Court itself says, relative to the merits of the case, and has to be decided on the basis of the evidence on record, both oral and documentary, the High Court instead of adopting the same test, as it did when dealing with the third contention, embarked upon a fairly elaborate appreciation of the evidence on record and ultimately came to the conclusion that the evidence on record does not establish any breach of trust, or a conspiracy to commit the same, by the accused persons. Regarding the fourth contention, which also has found acceptance at the hands of the High Court, it relates to what according to the accused was, suppression of certain material facts by the complainant in his two complaints. In our opinion, the High Court was not justified, in the particular circumstances of this case, in quashing the charge, as well as the entire proceedings that had taken place before the Magistrate. it is not as if the accused had moved the High Court at the earliest stage when the Presidency Magistrate issued sommons to them. Nor had they approached the High Court when charges were framed against them. The accused had 'been summoned, after a judicial enquiry by the Chief Presidency Magistrate on December 26, 1967, under sections 120B/409 and 409 IPC. Before the Magistrate, the evidence. oral and documentary, was adduced by the complainant in the presence of the accused. On a consideration of such materials, the Presidency Magistrate framed charges against all the four accused as early as September 7, 1968. If the case of the accused was that the allegations in the complaint do not constitute the offence complained of or that the complaint has to be quashed for any ground available in law. they should have approached the High Court, at any rate. immediately after the charges were framed. The records disclose that it was the fourth accused, who moved the High Court to quash the proceeding on March 17, 1969, earlier than the other accused. Even by that date, several prosecution witnesses, had been examined and they had also been cross examined by the accused. Several items of documentary evidence had already been let in during the trial. Only two prosecution witnesses and a court witness remained to be examined. The proper course at that stage to be adopted by the High Court was to allow the proceedings to go on and to come to its logical conclusion, one way or the other,. and decline to interfere with those proceedings. The fourth contention related to the suppressions of certain 187 material in the complaint. We do not propose to express any opinion on that aspect because, even assuming that there has been suppression, that is a matter to be considered by the Trial Magistrate. Similarly, as to whether the evidence on record establishes that an offence of breach of trust has been committed, or not, is again a matter for the Trial Court to come to a conclusion, one way or the other, after an appraisal of the entire evidence that is let in by the prosecution and by the defence, if any. The High Court was not justified at that stage to have embarked upon an appreciation of the evidence. Here again, we do not express any opinion, on merits, as the matter is to be, considered by the Trial Magistrate. The High Court was also equally not justified in holding that the two prosecution witnesses should, not be examined on the ground that their evidence will not have any material effect on the merits. The further view of the High Court that the examination of the court witness will prejudice the accused, is also without any basis. In fact, the High Courts decision on. the question of these witnesses is really on a representation made on behalf of the complainant that the trial is almost coming to a close and that only two more prosecution witnesses and one court witness remain to be examined. So far as we could see, the ' accused have not challenged the order of the Magistrate dated February 24, 1969, allowing the prosecution to examine Satanarayan Agarwalla and an officer of the Directorate of Industries, Government of Orissa; nor have they challenged the order dated March 7, 1969, of the Magistrate allowing the prayer of the prosecution for examining Durga Dutt Chowdhury as a court witness under section 540. In holding that the proposed examination of Durga Dutt Chowdhury, as a court witness, will pre judice the accused, the High Court has not given due consideration to the decision of ;this Court in Jamatraj Kewalji Govani vs The State of Maharastra(1). It is not clear whether the High Court passed the order, in question, under section 561A or under section 439 of the Code. of Criminal Procedure. This Court has laid down the principles in R.,P. Kapur vs The State of Punjab(2), which have to beborne in mind by the High Court when its inherent jurisdiction under section 561A is invoked for quashing the proce edings pending before a subordinate court. It has been 'emphasised that the inherent jurisdiction could be exercised to quash proceedings in a proper case, either to prevent the abuse of the.process of any court or otherwise to secure the ends of justice. This Court has also indicated some of the categories of case where (1) ; (2) 188 the inherent jurisdiction could and should be exercised to quash proceedings. However, the exercise of the power by the High Court, in the case before us, does not come within the ambit of the principles laid down by this Court in the above decision. For instance, the second contention taken before the High Court by the accused related to the maintainability of the second complaint, when the first complaint had been withdrawn and the accused had been discharged. If the High Court had accepted the contention of the accused in that regard, it may be that the High Court was justified in quashing ;the proceedings, though at a very late stage. But on that point, the High Court 's decision is in favour of the complainant. The other points taken into account by the High Court do not justify the exercise of its power under section 561A and that too at a very late stage of the proceedings. Even assuming that the High Court was exercising jurisdiction under section 439, in our opinion, the present was not a case for interference by the High Court. The jurisdiction of the High Court is to be exercised normally under section 439, Criminal Procedure Code, only in exceptional cases, when there is a glaring defect in the procedure or there is a manifest error of point of law and consequently there has been a flagrant miscarriage of justice. The High Court has not found any of these circums tances to exist in the case before us for quashing the charge and the further proceedings. The judgment and order of the High Court quashing the ,charges framed against the accused as well as the other proceedings based thereon, pending in case No. C/344 3 of 1967, are set aside. The learned Presidency Magistrate will proceed with the further trial and give it a very expeditious disposal. We make it clear that the directions given by the Chief Presidency Magistrate regarding the examination of two more prosecution witnesses and the court witness will stand, subject to any modifications that may be made by that Court in regard to the directions I already given by it. In the result, the appeals are allowed. V.P.S. Appeals allowed.

Before September 1966 the marketing Organisation of the employercompany was in three divisions. Thereafter it was organised into two divisions. There were extensive and prolonged consultations between the employer and the employees but the reorganisation was not approved by the employees. The new scheme was introduced on the 5th or 6th September and the industrial dispute arising therefrom was referred to the Tribunal on 30th September. The workers presented themselves for work every day and offered to work according to the old scheme but they were not given any work. They were told that as long as they refused to work under the new scheme they would not be paid any wages. Some workers had voluntarily retired and the vacancies were not filled. Therefore, pending the adjudication on the reference already made, seven workers filed applications under section 33A of the , alleging that during the pendency of the adjucation, their service conditions had been changed adversely and that their salary for the month of October had not been paid. The Industrial Tribunal was different in the two cases as also the evidence let in in the two cases. In the main reference, the Tribunal held in favour of the employer. With reference to the applications of the employees, the other Tribunal held in favour of the employees on the grounds that the conditions of work had been changed to the workers ' prejudice, that the reorganisation was likely to lead to re trenchment, that the matter thus fell under item 10 of Schedule 4 to the Act and that therefore, the employees were justified in refusing to work. Both parties appealed to this Court, HELD : On a consideration of the material in each of the awards 'both the awards should be upheld. [628 A B] (1) The evidence given in the main reference not being a part of the evidence in the applications filed by the employees it is not open tothis Court to take it into consideration in deciding the appeals filed by the employer as against the award in favour of the employees. [628A] (2) This Court, in considering a matter under article 136, does not ordinarily reassess the evidence on the basis of which the Tribunalcame to its conclusion. It will interfere with findings of facts only if they are unsupported by any evidence or are wholly perverse. [628 D E] (3) The reorganisation is neither a change in usage falling under item 8 of the 4th Schedule to the Act, nor rationalisation falling under item 10, nor an increase or reduction in the number of persons employed in any department falling under item 11; and hence, it was not necessary to give any notice under section 9A of the Act. [633 D E] 625 (a) The employer has a right to organise his work in the manner he pleases. [631C] (b) The various decisions show that whether any particular practice or allowance or concession had become a condition of service would always depend upon the facts and circumstances of each case. , On the evidence and findings given by the Tribunal it cannot be held that there has been any change in the terms and conditions of service of the workers in this case to their detriment. [633 C E] Parry & Company 's ; Dharangadhara Chemical ,Works Ltd., vs Kanju Kalu & Ors. [1955] 1 L.L.J. 316; Chandramalai Estate vs Its Workmen ; The Graham Trading Co. (India) Ltd. vs Its Workmen ; ; Workmen of Hindustan Shipyard Ltd. vs I.T. ; McLeod & Co. vs Its Workmen ; Indian Overseas Bank vs Their Workmen [1967 68] ; Indian Oxygen Limited vs Udaynath Singh , Oil & Natural Gas Commission vs Their Workmen and Tata Iron & Steel Co. vs Workmen ; , referred to. (c) The Tribunal held on the basis of oral as well as documentary evidence that the contention of the workers that it was a condition of service of every employee to work for only one division at a time was not established. The arrangement of the words and phrases in item 10 shows that only rationalisation or standardisation or improvement of plant or technique, which is likely to lead to retrenchment of workmen that would fall under that item and not mere rationalisation or standardisation. The retrenchment contemplated is retrenchment as defined in section 2(00), which does not include voluntary retirement of the workmen. Therefore, the workers cannot make a grievance of the voluntary retirement and non filling of vacancies and try to bring the matter under item 10. The employer had the right to decide the staff complement and to fill only such jobs as continued to exist and not automatically replace every individual. [630 A H] Alembic Chemical Works Co. Ltd. vs The Workmen, ; , referred to. Therefore, there is no reason for differing from the findings of the. Tribunal that there has been no change in usage adversely affecting the workers coming under item 8, and that there has been no retrenchment under item 10. [632D] (4) The 4th schedule relates to conditions of service for change of which the 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. [631 A C] [The question whether the prolonged and detailed discussion between the parties was a substantial compliance with the provisions of section 9A not decided].[633E] (5) But the non payment of wages in the circumstances of this case amounts to an alteration in the conditions of service and the fact that the scheme was introduced before the reference under section 10 was made does not bar an application under section 33A. The tribunal was justified in coming to the conclusion that this alteration in the conditions of service could not have been made without the notice under section 9A. [634 C D; 635 B C] 626 (a) The applications in this case were not for wages due for the month of September but for October. [634E] (b) The refusal to pay wages was not a solitary instance in respect of which an application could have been made under section 33C. it was a continued refusal and the cause of action arises de die in diem. If the refusal of the workers to work under reorganisation scheme is justified then the refusal by management to pay unless they work under the reorganisation scheme would amount to alteration of the conditions of service of Workers. [634 G H] (c) Even if an application had been made under section 33C the whole scheme would have been considered and it is not fair at this distance of time to drive the workers to file application under that section, the procedure for which would be the same as under section 33A, merely on the ground that the introduction of the scheme had taken place before the reference to the adjudication was made. [636 B C] (d) The Tribunal had found that the reorganisation scheme had rendered some workers surplus, that the scheme had seriously prejudiced. the workers, and that the apprehension of the workers that the reorganisation would result in some members of the staff becoming surplus had come true. [635 A B] North Brooke Jute Co. Ltd. , National Coal Co. vs L. P. Dave, , Shama Biscuit Co. vs Their Workmen , referred to : Ram Nath Koeri vs Lakshmi Devi Sugar Mills & Ors. , approved. (e) If all the evidence which was let in in the main reference were available to the Tribunal which decided the applications of the workers, the result might have been different. But it could not be said that the Tribunal is wrong in having proceeded to dispose of the matter in the way it did. [636 A D]

62 to 465 of 1960. Appeals from the judgment and order dated September 26,1955, of the Bombay High Court I. T. R. No. 22 of 1955. K. N. Rajagopal Sastri, J. K. Hiranandi and N.H. Hingorani for the appellants. N. D. Karkhanis and D. Gupta for the respondents. April 19. The Judgment of the Court was delivered by 270 SHAH, J. This is a group of appeals against orders passed by the High Court of Bombay in Income Tax Reference under section 66(1) of the Indian Income Tax Act. Chellsons Ltd. a Private Company was incorporated in April 1941. The shareholders of the company at the material time were Kishinchand Chellaram holding 6 shares and Shewakram Kishinchand, Lokumal Kishinchand and Murli Tabilram each holding three shares. Kishinchand, Shewakram and Lokumal were directors of the company. At a General meeting of the shareholders of the company held on July 10, 1943, it was resolved to declare dividend at "60 per cent on the shares" of the company and for the purpose of that of declaration the profits of the year 1941 43 were included in the profit of the year 1942 43. Pursuant to this resolution, Rs. 46,000/ were credited in the books of the company to the account of Kishinchand Chellaram on March 31, 1944 and Rs. 23,000/ were credited to each of the other three shareholders. Another meeting of the shareholders was held on July 15, 1944, and it was resolved to declare dividend at "60 per cent on the shares" out of the profit of the company for 1943 44. Pursuant to this resolution, on September 29, 1944, Rs. 30,000/ were credited in the company 's books of account to Kishinchand and Rs. 15 000/ were credited to the accounts of each of the other there shareholders. In their respective returns for the assessment year 1945 46, Kishinchand, Showakram, Lokumal and Murli who will hereinafter be collectively called the assessees included the amounts credited to them in the company 's books of account as dividends for the three years 1941 42 to 1943 44. On December 4,1947, at an Extraordinary General Meeting another resolution purporting to ' reverse the earlier resolutions dated July 10, 1943 and July 271 15, 1944, was passed by the company. The resolution read as follows: "The notice dated 25th November, 1947 calling the Extraordinary General Body Meeting for today, was placed on the table. " Whereas the sum of Rs. 1,90,000 paid to the shareholders during the year 1944 45 as per details given below viz 1941 42 1942 43 1943 44 Total Mr. inch and Chellaram 10,000 36,000 30,000 76,000 Mr. Shewakram Kishinchand 5,000 18,000 15,000 38,000 Mr. Lokumal Kishinchand 5,000 18,000 15,000 38,000 Mr. Murli Tahilram 5,000 18,000 15,000 38,000 Total 25,000 90,000 75,000 190,000 was sanctioned by the General Body inadver tently without taking into consideration the Company 's liability for taxation, including E. P. T. and all the shareholders having been fully apprised of the bona fide mistake it is hereby unanimously resolved that such dividend inadvertently paid be considered as loan to such individual shareholders ' and be paid back to the Company forthwith, and the con sideration of any dividend to the shareholder be deferred to the next Annual General Meet ing. The adjustment in this regard will not 272 be made in the books of the Company as on 6th April, 1947. " Even though this resolution was passed, and the proceedings for assessment before the Income Tax Officer were not disposed of the assessees did not file revised returns excluding the amounts credited as dividend, nor did they claim before the Income Tax Officer that those amounts not being income were not liable to tax. By his order dated January 1, 1950, the Income Tax Officer brought the income returned by the assessees including the amounts credited to them as dividends, for the three years to tax. In appeals to the Appellate. Assistant Commissioner, the assessees contended that the amounts credited by the Company to their accounts in respect of the years 1941 42, 1942 43 and 1943 44 were not, in view of the subsequent resolution, liable to be taxed as dividend income. 'The Appellate Assistant Commissioner rejected this plea. The assessees then appealed to the Appellate Tribunal and contended that the dividends for the three years in question were declared out of capital and such declaration of dividend being under the Indian,Companies Act invalid, in the assessment the amounts, credited to their accounts as dividend should be excluded. The Income Tax Appellate Tribunal held that the dividends in respect of the years 1941 42 and 1942 43, having been received before the year of account relevant to the year of assessment 1945 46, were not liable to be taxed in that year. But the Tribunal confirmed the orders of assessment as to the dividend for the year 1943 44, because, in their view, the resolution declaring dividend could not be reversed by a resolution at a subsequent General Meeting after the dividends had been paid. At the instance of 273 the assessees the Appellate Tribunal referred in each of the four cases the following two questions: (1) Whether the shareholders of the company at the meeting held on December 4, 1947 could reverse the resolutions passed on July 10, 1943 and July 15, 1944 ? (2) Whether the sum of Rs. . . received by the assessee. . . as dividend in the account year 1944 45 relevant for the assessment year 1945 46 has been lawfully taxed in the assessment year 1945 46? If not, could only the dividends that could have been paid out of the profits or a part thereof be taxed in the assessment year 1945 46 ? (In each set of questions the appropriate amount received and the name of the assessee was incorporated in the second question). The Tribunal observed in the order of reference that the Income Tax Department challenged the correctness of the claim made by the shareholders that dividend was paid without making provision for payment of tax, but they did not desire to go into accounts to ascertain whether provision for tax was made, as "the parties at the time of the hearing of the appeals proceeded on the footing that no such provision was made. Even if provision was made, it makes no difference in so far as the Department is concerned. The question is whether any divident has been declared out of capital and that question will have to be examined at the time of passing the order under Section 66 (5) of the Act, in view of question No. 2." The High Court declined to answer the first question because in their view it was unnecessary, and 'answered the first part of the second 274 question in the affirmative, and hold that the second part did not on that view arise for decision. Against the order of the High Court these four appeals have been preferred by the assessees. The only question material to these appeals which was argued by the assessees before the Tribunal was whether it was competent to the company by a subsequent resolution to reverse an earlier resolution declaring the dividend. The Tribunal held that the earlier resolution could not be reversed by a subsequent resolution, and therefore what was paid and received as dividend could not by a subsequent resolution of the company be treated as paid otherwise than as dividend. The High Court held that the assessments were properly made by the Income Tax Officer. They observed that the assessment of an assessee for each year is self contained and subsequent events cannot justify modification of the assessment. Section 16(2) provided (in so far as it is material) that "for the purposes of inclusion in the total income of an assessee any dividend shall be deemed to be income of the previous year in which it is paid, credited or distributed or deemed to have been paid, credited or distributed to him. x x x". It is common ground that on July 15, 1944 dividend was declared by a resolution of the company and the amounts payable to the assessees were, in fact, credited on September 29, 1944, in the accounts maintained by the company, to each of the shareholders as dividend. The amounts were therefore declared as dividend, treated as dividend and received by the assessees as dividend. The assessees included the dividends so credited to their accounts in the returns. It may be assumed that the company failed to provide for payment of tax before declaring dividend and that after providing for payment of tax the net profits of company may not have 275 been sufficient to justify declaration of dividend at 60% of the value of the shares. On that assumption it may be inferred that the dividend or a part thereof was in truth paid out of the capital of the company. Payment of dividend otherwise than out of profits of the year, or other undistributed profits was at the material time prohibited by article 97 of Table A of the Indian Companies Act, 1913 as amended by Act. XXXII of 1936 read with section 17(2) of the Act; and therefore such payment may be regarded as unlawful. If the Directors of a company have deliberately paid or negligently been instrumental in paying dividend out of capital they may have, in an action by the company or if the company is being wound up at the instance of the Liquidator to compensate the company for loss occasioned by their wrongful or negligent conduct. (In ' the matter of The Union Bank Allahabad Ltd. (1). In this case we are not concerned with the validity of the distribution of dividend, 'or the liability of the directors arising out of improper distribution of dividend. We are concerned with the true character of the payment made on September 29, 1944, to the assessees. If dividend is declared and the amount is credited or paid to the share holders as dividend can the character of the credit or payment be altered by a subsequent resolution so as to alter the incidence of tax which attaches to that amount? By virtue of section 16(2) the liability to pay tax attaches as soon as dividend is paid, credited or distributed or deemed to have been paid, credited or distributed to the shareholders and the Income Tax Act contains no provision for altering the incidence of liability to pay tax on the dividend, merely because it is found that in declaring dividend and paying it the company violated a prohibition (1) All. 276 relating to payment of dividend in the Indian Companies Act. It is not necessary to consider in this case whether the shareholders may be compelled by the company to refund the amount improperly paid as dividend out of capital. Even if the shareholders agree to refund the amounts received by them as dividend the original character of the receipt as dividend is not thereby altered. In ascertaining ' whether liability to pay Income tax on dividend arose, a resolution of the company whereby payments made to the shareholders as dividend are to be treated as loans cannot retrospectively alter the character of the payment and thereby exempt it from liability which has already attached thereto. Before this Court two contentions were raised by counsel for the assesses : (1) that on the amount received by each of the asseseees tax was not eligible because it was not dividend at all, and (2) that what was declared and paid as dividend ceased to be such by virtue of the subsequent resolution. The first plea was not raised before the Tribunal, and on the question as framed it did not arise for decision on a reference under section 66 of the Indian Income Tax Act. The jurisdiction of the High Court under section 66 being advisory, they were concerned to give their opinion on questions which fairly arose out of the order of the Tribunal, and were in fact raised and referred. The question whether the payment made by the Company was not in the nature of dividend not having fairly arisen out of the order of the Tribunal, it cannot be raised in this Court as it could not in the High Court. In any event, we are of the opinion that payment made as dividend by a company to its shareholders does not lose that character merely because it is paid out of capital. Under the Income Tax Act, liability to pay tax attaches as soon as dividend is paid, credited or distributed or is so 277 declared. The Act does not contemplate an enquiry whether the dividend is properly paid credited or distributed before liability to pay Tax attaches thereto. The answer to the second contention for reasons already set out by us must be in the negative. The appeals therefore fail and are dismissed. In the circumstances of the case there will be no order as to costs. Appeals dissmissed.

For the year of account ending March 31, 1955, the appellant, a private limited company, earned a total income of Rs. 49,843. The company declared a ' dividend of Rs. 11,712 on July 13, 1955, and before the close of the year of assessment 1955 55 declared an additional dividend of Rs. 5,612, thereby distributing in the aggregate dividend which was not less than 767 60% of the total income, reduced by the income tax and supertax payable by it. The company then claimed rebate at the rate of one anna in the rupee on the amount computed according to Sch. 1, Part 1, Item B, read with section 2 of the Finance Act, 1955. The Income tax authorities rejected the claim on the ground that the expression "company to which the provisions of section 23A of the Income tax Act cannot be made applicable" in the provision of law aforesaid in the Finance Act, 1955, on which the appellant company relied, referred to a company against which in no circumstances could an order under section 23A be made, and private limited companies being companies in respect of which an 'order under section 23A could be made if the conditions prescribed relating to distribution of dividend were fulfilled, the benefit of rebate was not admissible in favour of the appellant company. The Appellate Tribunal and the High Court took the view that the benefit of a rebate provided by the Finance Act could not be denied to a private company if the conditions prescribed in section 23.A(1) of the Income tax Act were fulfilled, because, according to their view, the expression "can not be made applicable" only refers to a state of affairs in which having regard to the circumstances an order tinder section 23A could not be made. Held, that the appellant company was entitled to the rebate claimed by it. The expression "to which the provisions of section 23A of the Income tax Act can not be made applicable" in Sch. 1, Part 1, Item B, of the Finance Act, 1955, meant that the appli cability of section 23A of the Income tax Act depended upon an order to be made by the Income tax Officer, and not upon any exclusion by the provisions of the Act. It was only when an order under section 23A would not, having regard to the circumstances, be.justified that the right to obtain rebate under the Finance Act was claimable.

iminal Appeals Nos. 41 and 77 of 1973. Appeals under Section 19 of the from the, Judgment and Order dated the 5th February, 1973 of the Orissa High Court at Cuttack in Criminal Miscellaneous Case No. 8 of 1972. A.K. Ser, G. L. Mukhoty and C. section section Rao, for the appellant (in Cr.A. 41./73). G. Rath, and B. Parthasarathy, for the appellant (In Cr. A. 77/73). F. section Nariman, Additional Solicitor General, B. M. Patnaik and Vinoo Bhagat, for respondent No. 1 (in Cr. A. 41/73) and respondent NO. 2 (in Or. A. 77/73). G. Rath and U. P. Singh,for respondent No. 2 (in Cr. A. 41/73), A. K. Sen and C. section section Rao, for respondent No. 1 (in Cr. A. 77/73). The judgment of the Court were delivered by PALEKAR J. This is (Criminal Appeal No. 41 of 1973) an appeal by one Baradakanta Mishra from his conviction and sentence under the by a Full Bench of fiVe of the. Orissa High Court. The Judgment is reported in I.L.R. [1913] Cuttack, 134 (Registrar of the Orissa High Court vs Baradakanta Mishra and Ors.). The appellant started his career as a Munsif in 1947. His career as a Judicial Officer was far from satisfactory. In 1956 he was promoted on trial basis to the rank of a sub Judge with the observation 28 7 that if he was found incompetent, suitable action would be, taken. In due course, he, was confirmed as a Subordinate Judge. On April, 2, 1962 he was promoted, again on trial basis, to the rank of Additional District Magistrate (Judicial) which is a post in the cadre of the orissa Superior Judicial Service (Junior Branch). As his work was for unsatisfactory, he wag reverted to his substantive post of a Subordinate Judge on January 4, 1963. The order of reversion was challenged by him in a Writ Petition which was dismissible by a Bench of C.J. and , J. The case is reported in [I.L.R.] 1966, Cutback, 503. An appeal to the Supreme Court was dismissed on February 6,he 1967. While working as a Subordinate Judge, after reversion, ' was suspended from service from 15th May, 1964 to 9th April, 1967 during the pendency of a disciplinary proceeding against him. that proceeding ended in a light punishment of two of his increments being stopped. From the. above order of punishment, the appellant filed on 10 10 1967 an appeal to the State Government. The State Government by its order dated 15 7 1970 allowed tie appeal on the ground that the Public Service Commission had not heed consulted by the High Court before imposing the punishment, and that the Charge Sheet served on the appellant having indicated the proposed punishment vitiated the disciplinary proceedings. After the case, Was sent back to the High Court the charges which had been earlier established, were framed again and served on him on 13 2 1971 and we are informed that the proceeding is still pending. In the meantime, it appears, he was promoted to the post of the Additional District Maggistrate in February, 1968 though the High Court was of opinion that he was unbalanced, quarrelsome, reflect and undisciplined. The High Court specifically observed that though the appellant suffered from these defects, It was sincere and working and the other officers who had superseded him as Additional Districting Magistratres were not much better. The promotion was made on trial basis for a period of one year with the. observation that if during that period his work was found to be unsatisfactory, he 'would be reverted to the rank of Sub Judge. In that year the High Court had to face an abnormal situation by the retirement of many District Judges on account of the decision of the Government reducing the age of retirement from 58 to '55 years Many, vacancies occurred and the appellant was then promoted as an Additional District and Sessions Judge on trial basis for six months in July, 1968. In January, 1969 he was allowed to continue on a temporary basis till further orders subject to further review of his work at the time of confirmation. It is worthy of note that this decision to continue was taken on the report of the present Chief. Justice O. K. Mishra who was at that time the Administrative Judge. On May 12, 1969 his services were placed at the disposal of the Government in the Law Department, who appointed him as Joint Secretary. Law, till October 12, 1969. From October 13, 1960 to December 4, 1970 he was appointed by the Government as the Commissioner of Endowments. The Government was thoroughly dissatisfied with his work and on December 5, 1970 his services were replaced at the disposal of the High Court. The appellant went on leave. 288 On his return to the Judicial cadre, he functioned as Addison District and Sessions Judge, Cuttack till July 14, 1971 when he was ,posted to act as District and Sessions Judge for 12 days in the temporary leave vacancy of the permanent District Judge Mr. P. K Mohanty. When he was thus acting as District and Sessions Judge for a short period by way of stop gap arrangement, the High Court placed several restrictions on his administrative powers,. In the brief period that he was working as Additional District and Sessions Judge, Cuttack, the appellant showed gross indiscretion by defying a request made by the Distr ict, Judge in due course of administration. He also committed a avejuiudicial misdemeanors. He heard an appeal and posted it for judgment on June 22, 1971. The judgment was delivered on that date and the, appeal was dismissed. The Order Sheets of the judgment were signed by the appellant and the judgment was duly sealed. Later in the day, however, the appellant scored through his signatures both in the Order Sheet and in the judgment and returned the record of the appeal to the District Judge for disposal by making a false statement that the judgment had not been delivered and that the parties being known to him it was not desirable that he should further hear the appeal, after taking additional evidence for which a petition had been filed. This was something quite extraordinary from a Judge of the appellant 's standing. When these matters were brought to the notice of the High Court the Registrar by Order of the High Court recommended to the Government that the appellant be reverted to the post of the Additional District Magistrate (Judicial). There were already three departmental proceedings pending against the appellant and he had also been convicted in a contempt case. The High Court expressly informed the Government that these four matters had not been taken into consideration in recommending his reversion and that his reversion was solely due to the fact that his work was found unsatisfactory. The recommendation was accepted by the Government who on September 1, 1971 reverted the appellant to the post of the Additional District Magistrate. On September 10, 1971 the appellant made a representation to the Chief Minister praying for the withdrawal of the order of reversion and, if necessary, to suspend him after drawing up a regular depart7 mental proceeding. The representation was forwarded to the Government with the comments of the High Court. Something unusual happened. Without any further consultation with the High Court, the Governor cancelled the reversion order by notification dated March 21, 1972 And on the same day the Chief Minister wrote a confidential D.O. to the Chief Justice by name explaining the circumstances under which the reversion. order was cancelled. The Chief Minister appeared. to rely upon a decision of the Orissa High Court which had no application to the facts of this particular case. But any way. it would appear that by reason of the Order dated March 21, 1972: the reversion of the appellant to the post of the Additional District Magistrate stood cancelled and he continued to act in the post of the Additional District & Sessions Judge, Cuttack. 289 The D.O. letter of the Chief Minister remained unopened till the return of the Chief Justice from New Delhi where he had gone to attend the Chief Justices Conference. It was opened by the Chief Justice on return on March 26, 1972. But in the meantime, the appellant, who had gone on leave, having known about the order passed on March 21, 1972 asked for his posting. The rules required that on return from leave he should produce, a medical certificate and he was, accordingly directed to produce one. On March 28, 1972 the Chief Justice placed the letter of the Chief Minister for consideration before the Full Court. The Full Court took the decision to start a disciplinary proceeding against the appellant and, pending the same, to place him under suspension in exercise of their powers under Article 235 of the Constitution. Accordingly on March 30 1972 the appellant was placed under suspension and his headquarters were fixed at Cuttack. The present contempt proceedings arise out of events which took place after the suspension order. On receiving the suspension order the appellant addressed by letter an appeal to the Governor of Orissal for cancelling the order of suspension and for posting him directly under the Government. That is Annexure 8. As the High Court was of the view that no appeal lay from an order of suspension pending disciplinary charges, it did not forward the appeal to the. Governor. In fact on April 28, 1972 the Registrar of the High Court intimated the State Government that the appeal filed by the appellant to the Governor had been withheld by the High Court as no such appeal lies against the order of suspension pending disciplinary proceedings. The appellant was also intimated accordingly. On April 29, 1972 charges in 'the disciplinary proceeding were, framed by the High Court and communicated to the appellant and the appellant was directed to file his reply to the charges by a certain date. On May 14, 1972 the appellant wrote three letters. One was to the Registrar and is Annexure 13. By this letter the appellant intimated that he had moved the Governor to transfer the disciplinary proceedings to the Administrative Tribunal and that he would take all other alternative steps administrative and judicial to avoid the proceeding being dealt with by the High Court. The second letter was addressed to the Governor and is Annexure 15. It purports to be a representation with a prayer to direct the High Court to forward the appeal withheld by it. There was a third letter of the same date addressed directly to the Governor purporting to be a representation. That is Annexure 16. The prayer was that the departmental pro . seedings be reference to the Administrative Tribunal. A copy of this letter was sent to the Registrar of the High Court with the following . remark "As the Honourable Court are likely to withhold such petitions, this is submitted direct with copy to the Honourable Court for information. Honourable Court may be,, pleased to send their comments on this petition to the Governor." 29 0 On May 22, 1972 the appellant addressed a letter (Annexure 14) to the Registrar intimating him that he would not submit any explanation to the charges framed against him until his representation to the Governor was disposed of. He also stated therein that he may file a writ application for the purpose and would take the matter to the Supreme Court, if necessary. He also stated that he cannot wait for the permission of the High Court for leaving the Headquarters. It is the contents of these letters on which a show cause notice for contempt was issued to the appellant under the orders of the Full Court on July 3, 1972. On 27 7 1972 the appellant filed his preliminary objection to the show cause notice challenging its maintainability on the ground that whatever he had said had no reference to the judicial functions of any Judge of the High Court and, therefore, no contempt proceedings would lie. He pressed for a decision on the point. When the matter came before a Division Bench on 3 8 1972 the appellant was directed to file his full reply to the show cause notice. Accordingly, it was filed on 7 8 1972 and the appellant again pressed for a decision on his preliminary objection. The Division Bench refused to deal with the preliminary objection and so on 30 8 1972 the appellant filed Criminal Appeal NO. 174 of 1972 in this Court praying for cancellation of the contempt proceedings challenging therein the maintainability of the proceeding and complaining of bias and prejudice of the High Court particularly the Honourable the Chief Justice and Mr. Justice R.N. Mishra. He said apprehended that he would not get a fair deal if the matter is disposed of by the High court On 21 11 1972 the Supreme Court appeal was withdrawn. At the instance of the Division Bench, a PM Bench of five Judges was constituted by the Chief Justice, and the case came on for hearing before the Full Bench on 4 12 1972. In the meantime the appeal memo filed by the appellant in the Supreme Court was available and since it contained matter which amounted to contempt, additional, charges were framed and a show cause notice was issued to the aPPellant in respect of these additional charges. A copy of, the appeal memo containing the statements amounting to contempt is Annexure 20. The Annexures were examined by the court with a view to consider whether the statements therein amount to a criminal contempt. On a full and prolonged consideration the Fall Bench came to, the unanimous conclusion that Annexures 8,13,14,16, and 20 contain matters which accounted to gross contempt of court and since the appellant had not even offered an apology, this was a matter in Which serious notice ought to be taken, especially, in view of previous convictions for contempt, and, accordingly sentenced the appellant to two months simple imprisonment though in their opinion he deserved the maximum sentence of six months. The several Annexures referred to above have been extracted by the Fall Bench in its judgment and it as not necessary to reproduce them here. It will be sufficient to reproduce only those portions 29 1 which were regarded as grossly contemptuous and had been under lined in the judgment. Annexure 8. As already stated this is a letter in the, form of an appeal addressed to the Governor of Orissa complaining against the suspension and praying for stay of operation of the suspension order on the basis. of the advance copy sent to the Governor for its cancellation and for posting the appellant directly under the Government. it is dated 10 4 1972. The appeal had been routed through the High Court but the High Court did not forward the same. In this annexure reference is made to the previous appeal filed by him against the order of the High Court stopping his two increments after a departmental proceeding and how the Governor in appeal had cancelled even the very departmental proceeding in the appeal. An interpretation was, put on that order which it did not bear and it was made out, though falsely, that the punishment had been set aside on the basis of the allegations made by the appellant that some Honourable Judges of the High Court had been biased and prejudiced against him. The appellant also asked the Governor to appreciate that by the said departmental proceedings the High Court had put the Exchequer to a very heavy loss "all on accounts of the palpable incorrect views of the High Court. " Then the appellant says that the present action,. namely , the order of suspension clearly disclosed mala fides. He suggested that there were several "embarrassing events" which he could offer for consideration of the Governor but he was content at this stage to refer to only one of them. In this connection he referred to the fact that when he intimated to the High Court that he desired to join duties after his leave on March 20, 1972 he was informed by the High Court on March 23, 1972 that his re posting after leave would be decided after the medical board reported as to his fitness. to join after leave. This, according to the appellant, showed that the High Court had already taken a decision in the absence of the Chief Justice that the appellant should be re posted. But on the return of the Chief Justice from New; Delhi there was a sudden change. , He clearly suggested that after the Chief Justice 's return, the court took the decision to suspend him and in this connection he made the following observations : "This decision of the High Court, reached at before the Honourable the Chief Justice attended the High Court on the 27th March after his 10 days of absence, clearly indi cates that no proceeding, much less suspension, against the appellant was under contemplation till that day, but on the other hand, the appellant 's place of posting was under consideration of the High Court. Circumstances clearly disclose that after the return of the Honourable Chief Justice, the Government 's order, disapproving the High Court 's views about the appellants demotion, was not accepted gracefully by the High Court, and so subterfuge was adopted to counteract the said decision of. the Government by a novel step, thus to deprive the appellant of the result of the said decision. In view of this patent mala fide alone, such an action 292 is liable to be quashed, by any competent Court of law. " Then at a later stage the appellant says "The appellant happens to be the senior most judicial officer in the State as regards length of service, and he has already 20 more months before attaining the age of superan nuation. Hence, he may not deserve the present unwarranted, sudden and mysterious suspension. giving rise to speculations, touching his integrity. " Then again he says ". . the treatment of the High Court may require that after cancellation of this order of suspension, he be brought under the direct control of the Government in a special post for the rest of his service career of hardly 20 months more. " The High Court at para 61 of the judgment has observed as follows : "In the appeal memo (Annexure 8) the condemner attributed mala fides, bias and prejudice to the High Court. He made false insinuations that the Governor cancelled the previous disciplinary proceeding against the condemner on the ground that the same was vitiated as the High Court had prejudged the matter and the Government set aside the punishment on the ground that three of the Honourable Judges were biased and prejudiced against him. He alleged that the disciplinary proceeding involved the Government in heavy expenses on account of the palpably incorrect views of the High Court. He asserted that the order of suspension as per Annexure 6 was mala fide. He stated that he would produce more facts relating to the mala fides of the High Court before the Governor. He alleged that the High Court did not gracefully accept the Government 's order cancelling his demotion, and the High Court resorted to a subterfuge to counter act the said decision of the Government by taking a novel step, and that the High Court 's action suffered from patent mala fide. He stated that there was a turn of event after return of the Chief Justice from the Chief Justices ' Conference and that the High Court did not accept Government 's decision. gracefully and that the other Judges had no independent judgment of their own, and were influenced by the Chief Justice to take a view, different from what they had already taken, to give a posting order to the contemner, and that the High Court resorted to a subterfuge. He wanted protection of the Govern against the High Court which he insinuates as an engine of oppression. He characterised the High Court 's order of suspension as mysterious and prayed that the Government should post him directly under it. " We have no doubt that the Full Bench has correctly summarized the effect of Annexure 8, and we have nothing more, to add. 29 3 Annexures 13 and 14 should go together. Annexure 13 is a letter by the appellant to the Registrar dated May 14, 1972 in which he told him that he had moved the Governor, Orissa with a prayer to refer his matter to the Tribunal under the provisions of the Disciplinary Proceedings Rules, 1951 and also that he would take all other alternative steps "administrative and judicial" to avoid this proceeding being dealt with by the High Court and for this purpose would have to consult some prominent Advocates of Calcutta and Delhi. Annexure 14 is a further letter dated May 22, 1972 to the Registrar intimating him that he would not submit any explanation to the charges framed until his representation to the Governor was disposed of. In this letter he further pointed out that it would not be possible for him to wait for the permission of the High Court to leave headquarters, because he may be called by his legal advisers at any moment and in those circumstances he said "I hereby inform the Honourable Court that I may be absent during the entire period mentioned in my letter dated the 14th May, 1972 and the Honourable Court may kindly approve of the same. " The effect of Annexares 13 and 14 has been summarised by the Full Bench in these words : "Thus, in Annexures 13 and 14, the contemner exhibited a contemptuous defiance of the Court 's order, by declaring that he would not obey the order. and would leave the station without waiting for permission from the High Court, as his first consideration was to "go out in connection with legal advice and filing applications and appeals in the Supreme Court" in matters connocted with his suspension, and to take all steps to avoid the proceeding being dealt with by the High Court. These passages depict, in unequivocal terms, that the dispensation of justice by the Judges of the High Court on its administrative side, is most atrocious and vindictive and it is on that ground. the contemner would not obey the Court 's order, could not submit any explana tions, and would take all possible measures before the Supreme Court, the Governor and the Chief Minister not to surrender to the jurisdiction of the High Court. His entire attempt has been to present a lurid picture of the administration of justice, by the High Court. " In the context, we are not prepared to say that this summary of the effect of Annexures 13 and 14 is far wrong. Annexure 16. That brings us to Annexure 16. It Is dated May 14, 1972 and purports to be a representation made by the appellant direct to the Governor without routing it through the High Court. The following passages have been underlined by the Full Bench as being grossly contemptuous. ". the High Court have already contemplated in this departmental proceedings, a very heavy punishment for the petitioner. " 294 "If on two such allegations, bias and prejudice of the High Court was disclosed by strongly pleading for demotion of the petitioner, the multiple number of such charges may naturally make the petitioner, apprehensive of the result of the proceedings, if conducted by the High Court." ". . the High Court even without any authority or jurisdiction in this regard and on the face of the directions of the Government in Political and Servoes Department communicated in the Government 's Memo No. 3559 Gen., dated the 15th March 1958, have placed the petitioner under suspension " "The High Court have also taken unusual move in placing the petitioner under suspension in a 'contemplated proceeding ' " ". the High Court on the administrative side, is seriously prejudiced and biased against him, and they act, as if the charges stand established, requiring extreme punish ment and as such, justice, may not be meted out to the petitioner by the High Court, if they conduct this departmental inquiry." ". . the petitioner considers it risky to submit his explanation to the High Court." ". . the High Court in the best interest of justice,should not enquire into these charges. " A copy of the above representation was sent to the Registrar and the following endorsement appears thereon. As the Honourable Court are likely to withhold petitions this is submitted direct with copy to the Honourable Court for information. The Honourable Court may be pleased to send their comments on this petition to the Governor. " The summary of the effect of Annexure 16 is given by the Full Bench in para 70 of the judgment which is as follows : "In Annexure 16 the contemner has suggested that the Court has already prejudged the matter and has taken a previous decision to impose a heavy punishment. Bias and prejudice on the part of the Court were also alleged by the contemner. He suggested that the Court is not in a position to weigh the evidence. and consider the materials on record and to impose a sentence commensurate with his delinquency. The action taken by the High Court has been branded as unusual. . ." "A copy of this Annexure 16 was sent to the High Court with a contemptuous remark that since the High Court was likely to withhold the representation it was submitted direct to the Governor. Not being satisfied with that, he issued a further directive to the court to send their comments on his representation to the Governor. 295 The above summary of the effect of Annexure 16 is, in our view, correct. Annexure 20. This annexure is the memo of appeal filed by the appellant in the Supreme Court in Criminal Appeal No. 174 of 1972. The appeal had been filed because the Division Bench had refused to consider his preliminary objection with regard to the maintainability of the present contempt proceedings. The grievance before the Supreme Court was that the, Orissa High Court had taken. six contempt proceedings against him and in view. of what happened in some of those proceedings, the appellant entertained apprehension that the court may impose substantive punishment and may refuse bail or time to the appellant for getting redress from the Supreme Court if the present contempt proceedings were also to go on before the same High Court. In the first contempt proceeding though the proceedings were dropped, Adverse comments were made against his conduct thus depriving him of an opportunity to go in appeal and have the adverse comments exnged. in one of the other cases he says. . the appellant was brought down to the Court hall, and the Honourable Judges convicted and sentenced the appellant and without affording him an opportunity to obtain stay of the sentence from this Honourable Court, executed the sentence by administering admonition in the, open court and sounding warning that, if at any time such contumacious conduct of his was noticed, a very serious view would be taken about punishment. " In the other contempt matter, he alleged, a Judge wanted to add a new charge. The appellant objected to the same and went in appeal to the Suprerac, Court. The appellant says that when the appellant filed his appeal in this Court and brought this fact to the notice of the Honourable Judges,, they dropped the additional charge. In another proceeding, he says, the Honourable Judges while dropping the proceeding found out a very innocent and inconsequential mistake in the sworn counter affidavit of the appellant and on that account ordered the filing of a criminal complaint for an offence under section 199 of the I.P.C. In ground (1) the appellant alleged that the appellant fears bias of the Honourable High Court against him in view of the facts and circumstances stated above. The Full Bench in its judgment has considered each one of them allegations in the appeal memo and shows how the insinuations were false and how plain facts were distorted, They are entirely right in ,ummarising these facts of Annexure 20 in these words: "Thus in Annexure 20 the contemner has, in clearest terms, alleged bias and prejudice against the High Court and its Chief Justice. He has taken the plea that the court itself has become disqualified to deal with the case In his view the Judges of this Court have fallen from the path of rectitude, and are vindictive, and have already decided to impose substantive sentence and refuse bail, and they are not in a position to mete out even handed justice. , 522SCI/74 296 disrespectful fulminations of an angry insubordinate officer, there is hardly any doubt that Annexures 8, 16 and 20 contain statements which are deliberately made to grossly scandalize the High Court. The Judges of the High Court and especially the Chief Justice are charged with mala fides, improper motives, bias and prejudice. It is insinuated that they are oppressing the appellant, have become vindictive and are incapable of doing him justice. It is also suggested that they do not administer justice fearlessly because in one matter affecting the appellant, they dropped a charge against him for fear of the Supreme Court. All this, prima facie, amounts to gross scandalization of the High Court. The law applicable to this case is the law as contained in the No. 17 of 1971. Section 2 defines "Contempt of Court", as either "civil contempt" or "criminal contempt". Clause (c) defines "criminal contempt" as follows : (c) "criminal contempt" means the publication (whether by words, spoken or written, or by signs, or by visible repre sentations, or otherwise) of any matter or the doing of any other act whatsoever which (i) scandalises or tends to scandalise, or lowers or tends to lower the authority of, any court; or (ii) prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or (iii) interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner;" It will be seen that the terminology used in the definition is borrowed from the English law of Contempt and embodies concepts which are familiar to that law which, by and large, was applied in India. The expressions "scandalize", "lowering the authority of the court", "interference", "obstruction" and "administration of justice" have all gone into the legal currency of our sub continent and have to be understood in the sense in which they have been so far understood by our courts with the aid of the English law, where necessary. The first sub clause generally deals with what is known as the scandalization of the court discussed by Halsbury 3rd Edition in Volume 8, page 7 at para 9 : "Scandalous attacks upon Judges are punished by attachment or committal upon the principle that they are, as against the public, not the judge, an obstruction to public justice; and a libel on a judge, in order to constitute a contempt of court, must have been calculated to cause such an obstruction. The punishment is inflicted, not for the purpose of protecting either the court as a whole, or the individual judges of the court from a repetition of the attack, but of protecting the public, and especially those who either voluntarily or by compulsion are subject to the jurisdiction of the court, from the mischief they will incur if the authority of the tribunal is undermined or impaired. " Sub clause (1) embodies the above concept and takes in cases when by the publication or the fact the 29 7 administration. of justice is held to ridicule and contempt. This is regarded as an "obstruction" of public justice whereby the authority of the court is undermined. Sub clause (1) refers to one species of contempt of which "obstruction" is an important element. Sub clause (ii) speaks of, interference with due course of judicial proceedings and is directly connected with administration of justice in its common acceptance. While clauses (i) and (ii) deal with obstruction and interference respectively in the particular way described therein, clause (iii) is a residuary Provision by which any other type of obstruction or interference with the administration of justice is regarded as a criminal contempt. In other words, all the three sub clauses referred to above define contempt in terms of obstruction of or interference with administration of justice. Broadly speaking our statute, accepts what was laid down by the Privy Council and other English authorities that proceedings in contempt are always with reference to the administration of justice. It is enough for our purpose to refer to Debi Prasad Sharma vs The Kin.g Emperor(1) in which Lord Atkin delivering the judgment of the Judicial Committee observed at page 223 as follows : "In 1899 this Board pronounced proceedings for this species of contempt (scandalization) to be obsolete in this country ' though surviving in other parts of the Empire, but they added that it is a weapon to be used sparingly and always with reference to the administration of Justice : McLeod vs St. Aubyn (1) In In,re a Special Referewe from the Bahama Islands [1893] A.C. 1 38) the test applied by the, ve strong Board which heard the reference was whether the words complain of were in the circumstances calculated to obstruct or interfere with the course of justice and the due administration of. the law. In Oueen vs GraY [1900](2) Q. B. 36 it was show that the offence of scandalizing the, court itself was not obsolete in this country. A very scandal us attack had been made on a fudge for his judicial utterances while sitting in a criminalase on circuit and it was with the foregoing opinions on record that lord Russell of Killowen, C.J., adopting the expression of Wilmot, C.J. in his opinion in Rex. vs Almon (1765 Wilmot 's Notes of Opinions, 243 ; ,which is the source of much of the present law on the subject, spoke of the article complained of as calculated to lower the authority of the judge. It is, therefore, clear that scandalization within the meaning of subclause (1) must be in respect of the court or the Judge with reference to admims tration of justice. The contention of Mr. Sen on behalf of the appellant is that, in the first place ', it must be remembered that the publication or acts complained of are in the course of the appellant challenging his suspension and holding of disciplinary proceedings in an appeal or representation to the Governor from the orders passed by the High Court. In Anexure 20 he was challenging the order of the High Court before (1) 70 Indian Appeals, 216. 298 the Supreme Court. The appellant in his submission, bona fide believed that he had a right to appeal and, in pursuance of the right he thus claimed he had given expression to his grievance or had otherwise acted, not with a view to malign the court or in defiance of it, but with the sole object of obtaining the reversal of the orders passed by the High Court against him. In the second place, Mr. Sen contended, the passages about which the complaint was made did not amount to contempt of court since they did not purport to criticize any judicial ' acts of the judges sitting in the seat of justice. It may be that in some places disrespectful references have been made to the Judges which Mr. Sen assures us, he should have, never done. At the same time, in his submission, criticism of administrative acts of the High Court even in vilification terms did not amount to contempt of court. So far as the first part of the argument is concerned, the same must be dismissed as unsubstantial because if, in fact the language used amounts to contempt. of court it will become punishable as criminal contempt. The right of appeal does not give the right to commit contempt of court, nor can it be used as a cover to bring the authority of the High Court into disrespect and disregard. It has been held by this Court in Jugal Kishore vs Sitamarhi Central Co op. Bank() that allegations of mala fides in the grounds of appeal to the Joint Registrar of Cooperative Societies from the Order of the Assistant Registrar would constitute gross contempt. A point of some substance is in the second part of Mr. Sen 's argument and it will be necessary to decide in the present case whether contemptuous imputations made with reference to "the administrative acts" of the High Court do not amount to contempt of Court. The answer to the point raised by Mr. Sen will depend upon whether the amputations referred to above do or do not affect administration of Justice. That is the basis on which contempt is punished and must afford the necessary test. We have not been referred to any comprehensive definition of the expression "administration of justice". But historically, and in the minds of the people, administration of justice is exclusively associated with the Courts of justice constitutionally established. Such courts have been established throughout the land by several statutes. The Presiding Judge of a court embodies in himself the court, and when engaged in the task of administering justice is assisted by a complement of clerks and ministerial officers( Whose duty it is to protect and maintain the records, prepare the writs, serve the processes etc. The acts in which they are engaged are acts in aid of administration of justice by the Presiding Judge. The power of appointment of clerks and ministerial officers involves administrative control by the Presiding Judge over them and though such control is described as administrative to distinguish it from the duties of a Judge sitting in the seat of justice such control is exercised by the Judge as a Judge, in the course of judicial administration. Judicial administration is an integrated function of the judge and cannot suffer any dissection so far as maintenance of high standards of rectitude in judicial administration is con (1) A.I.R. 1967 S.C. 14 94 299 cerned. The whole set up of a court is for the purpose of administration of justice, and the control which the Judge, exercises over his assistants has also the object of maintaining the purity of administration of justice. These observations apply to all courts of justice in the land whether they are regarded as superior or inferior courts of justice. Courts of justice have, in accordance with their constitutions. to perform multifarious functions for due administration of 'justice. Any lapse from the strict standards of rectitude in performing these functions is bound to affect administration of justice which is a term of wider import than mere adjudication of causes from the seat of justice. In a country which has a hierarchy of courts one above the other, it is usual to find that the one which is above is entrusted with disciplinary control over the one below it. Such control is devised with a view to ensure that the lower court functions properly in its judicial administration. A Judge can foul judicial administration by misdemeanors while engaged in the exercise of the functions of a Judge. It is therefore as important for the superior court to be vigilant about the conduct and behavior of the Subordinate Judge as a Judge, as it is to administer the law, because both functions are essential for administration of justice. The Judge of the superior court in whom this disciplinary control is vested functions as much as a Judge in such matters as when he hears and disposes of cases before him. The procedures may be different. The place where he sits may be different. But the powers are exercised in both instances in due course of judicial administration. If superior courts neglect to discipline subordinate courts, they will fail in an essential function of judicial administration and bring the whole administration of justice into contempt and disrepute. The mere function of adjudication between parties is not the whole of administration of justice for any court. It is important to remember that disciplinary control is vested in the court and not in a Judge as a private individual. Control, therefore, is a function as conducive to proper administration of justice as laying down the law or doing justice between the parties. What is commonly described as an administrative function has been, when vested in the High Court, consistently regarded by the statutes as a function in the administration ' of justice. Take for example the Letters Patent for the High Court of Calcutta. Bombay and Madras. Clause 8 thereof authorises and empowers the Chief Justice from time to time as occasion may require "to appoint so many and such clerks and other ministerial officers it shall be found necessary for the administration of justice End the due execution of all the powers and authorities granted and committed to the said High Court by these Letters Patent. " It is obvious that this authority of the Chief Justice to appoint clerks and ministerial officers for the administration of justice implies an authority to control them in the interest of administration of justice. This Controlling function which is commonly described as an administrative function is designed with the primary object of securing administration of justice. Therefore, 300 when the Chief Justice appoints ministerial officers and assumes disciplinary control over them, that is a function which though described a administrative is really in the course of administration of justice. , Similarly section 9 of the High Courts Act, 1861 while conferring on the High Courts several types of jurisdictions and powers says that all such jurisdiction and powers are "for and in relation to the administration of justice in the Presidency for which it is established. " Section 106 of the Government of India Act, 1915 similarly shows that the, several jurisdictions of the High Court and all their powers and authority are "in relation to the administration of justice including power to appoint clerks and other ministerial officers of the court. " Section 223 of the Government of India Act, 1935 preserves the jurisdictions of the. existing High Courts and, the respective powers of the Judges thereof in relation to the administration of justice in the court. Section 224 of that Act declares that the High Court shall have superintendence over all courts in India for the time being subject to its appellate jurisdiction and this superintendence, it is now settled, extends both to administrative and judicial functions of the subordinate courts. When we come to our constitution we find that whereas Articles 225 and 227 preserve and to some extent extend these powers in relation to administration of justice, Article 235 vests in the High Court the control over District Courts and Courts Subordinate thereto. In the State of west Bengal vs Nripendra Nath Bagchi(1) this Court has pointed out that control under Article 235 is control over the conduct and discipline of the Judges. That is a function which, as we have already seen, is undoubtedly connected with administration of justice. The disciplinary control over the misdemeanours of the subordinate judiciary in their judicial administration is a function which the High Court must exercise in the interest of administration of justice. It is a function which is essential for the administration of justice in the wide connotation it has received and, therefore, when the High Court functions in a disciplinary capacity, it only does so in furtherance of administration of justice. We thus reach the conclusion that the courts of justice in a State from the highest to the lowest are by their constitution entrusted with functions directly connected with the administration of justice, and it is the expectation and confidence of all those who have or likely to have business therein that the courts perform all their functions on a high level. of rectitude without fear or favour, affection or ill will. And it is this traditional confidence in the courts that justice will be administered in them which is sought to be, protected by proceedings in contempt. The object, as already stated, is not to vindicate the Judge personally but to protect the public against any undermining of their accustomed confidence in the Judges ' authority. Wilmot C.J. in his opinoin in the case of Rex vs Almon alreadly referred to says : "The arraignment of the justice of the Judges, is arraigning the King 's justice, it is an impeachment of his wisdom and goodness in the choice of his Judges, and excites in the minds of the people a general dissatisfaction with all judicial determination, and indisposes their minds to obey them; and whenever men 's allegiance to the laws is so fundamen (1) ; 301 tally shaken, it is the most fatal and most dangerous obstruction of justice, and in my opinion, calls out for a more rapid and immediate redress than any other obstructing whatsover; not for the sake of. the Judges, as private individuals, but because they are the channels by which the King 's justice is conveyed to the people. To be, impartial, and to be universally thought so, are both absolutely necessary for the giving justice that free, open, and uninterrupted current, which it has, for many ages, ' found all over this kingdom. . Further explaining what be meant by the words "authority of the court", he observed "the word "authority" is frequently used to express both the right of declaring the law, which is properly called jurisdiction, and of enforcing obedience to it, in which sense it is equivalent to the word power : but by the word "authority", I do not mean that coercive power of the Judges, but the deference and respect which is paid to them. and their Acts, from an opinion of their justice and integrity. " Scandalization of the court is a species of contempt and may take several forms. A common form is the vilification of the Judge. When proceedings in contempt are taken for such vilification the question which the court has to ask is whether the vilification is of the Judge, as a Judge. See Queen vs Gray(1) or it is the vilification of the Judge as an individual. If the latter, the Judge, is left to his private remedies and the court has no power to commit for contempt. If the former, the court will proceed to exercise the jurisdiction with scrupulous care and in cases which are clear and beyond reasonable doubt. Secondly, the court will have also to consider the degree of harm caused as affecting administration of justice and, if it is slight and beneath notice, courts will not punish for contempt. This salutary practice, is adopted by section 13 of the . The jurisdiction is not intended to uphold the personal dignity of the Judges. That must rest on surer foundations. Judges rely on their conduct itself to be its own vindication. But if the attack on the Judge functioning as a Judge substantially affects administration of justice it becomes a public mischief punishable for contempt, and it matters not whether such an attack is based on what a judge is alleged to have, done in the exercise of his administrative responsibilities. A Judge 's functions may be divisible, but his integrity and authority are not divisible in the context of administration of justice. An unwarranted attack on him for corrupt administration is as potent in doing public harm as an attack on his adjudicatory function. The Full Bench has considered a very large number of cases and come to the conclusion that there is no foundation. for the view that an attack on the court in its exercise of administrative functions does not amount to contempt. In Brahma prakash Sharma and others vs The State of Uttar pradesh(2) it is pointed out that the object of contempt proceedings is not to afford protection to judges personally from nations to which they may be exposed as individuals but intended,as protection to the public those interest would be very much affected, (1) [1900] (2) Queen 's 13 36 at page 40. (2 ) 302 if by the act or by the conduct of any party the authority of the court is lowered and thee sense of confidence which the people have in the administration of justice by it is weakened. The case is no authority to the proposition put forward by Mr. Sen. In Gobind Ram vs 'State of Maharashtra(1) some observations of Jagannadhadas, C.J. (as he then was) in the State vs The Editors and Publishers of Eastern Times and Prajatantra(2) were quoted by this Court with approval. These observations are : " 'A review of the cases in which a contempt committed by way of scandalization of the court has been taken notice of for punishment shows clearly that the exercise of the punitive jurisdiction is confined to cases of very grave and scurrilous attack on the court or on the Judges in their judicial capacity. the ignoring of which could only result encouraging a repetition of the same with the sense of in unity which would thereby result in lowering the prestige and authority of the court." Mr. Sen has particularly emphasised the words "judicial capacity" and argued that this only refers to the Judge functioning in the seat of justice. It does not appear from the report of the Orissa case that the High Court was in any way, concerned with the alleged dichotomy between the Judge 's administration functions and his ad judicatory functions. "Judicial capacity" is an ambivalent term which means " capacity of or proper to a Judge" and is capable of taking in all functional capacities of a Judge whether administrative, adjudicatory or any other, necessary for the administration of justice. There is no sufficient warrant to hold that the Orissa High Court used the words "judicial capacity" with a view to exclude all other capacities of the Judges except the capacity to adjudicate, nor for holding that this Court approved the use of the expression as limited to the. Judges ' adjudicatory function. On the other hand, there is high. authority for the proposition that vilificatory criticism of a Judge functioning as a Judge even in purely administrative or non adjudicatory matters amounts to criminal contempt. The case of Rex vs Almon already referred to is a case of this kind. Almon published a pamphlet in which the Chief Justice and, impliedly, all the Judges of the court of King 's Bench Were accused of deliberately delaying or defeating the issue of the process of Habeas corpus by introducing a new rule that a petition praying for the issue of that process should be accompanied by an affidavit. It was held that this constituted contempt of court. The Chief Justice and the Judges were not criticized for what they were doing in a judicial proceeding from the "seat of justice" but for making a rule which, 'in the opinion of the writer was deliberately designed to delay or defeat the process of habeas corpus. Apparently. the rule had been made by the court under its power to regulate proceedings in court and not in any judicial proceeding between parties to a cause. The rule Was Made Under the rule making function of the court and not in exercise of any adjudicatory function as narrowly interpreted now, and still it was held that the court was scandalized and its authority lowered. In Mott Lal Ghose and others(3) a strong special bench of five Judges held that an imputation made against the Chief Justice of the Calcutta High Court suggesting that he was improperly motivated in constituting a packed bench (1) [1971] 1.S.C.C. 740. (2) A I.R. 1952 orissa, 318. (3) XLV Calcutta 169. 303 to hear a particular class of appeals was held to amount to contempt. Sanderson, C. J. observed at page 180 : "I have no doubt that this article, read by itself, constitutes a very serious reflection upon the administration of the court, which everyone knows is in the hands of the Chief Justice. " Woodroffe, J. at page 199 observed : "The Court, however, in such cases does not seek to vindicate any, personal interests of the Judges, but the general administration of justice, which is a public concern. " Mookerjee, J at page, 231 observed : "it seems to me indisputably plain that the implication of the second article, whether taken along with or independently of the first, is that, at the instance of person$ interested in the Calcutta Improvement Trust, the Chief Justice has constituted a Special Bench to ensure a decision favorable to the Trust in the appeals against the judgment of Mr. Justice Greece." Proceeding further he held "an imputation of this character constitutes a contempt of court. " It was the function of the Chief Justice as Chief Justice of the Court to administratively form, front time to time, benches for the disposal of the business of the court. To attribute improper motives to him in the exercise of this function was held to be a contempt because that was bound to undermine the confidence of the people in the High Court and its Judges in relation to administration of justice. Similarly, in The state of Bombay vs Mr. P.(1)" "a scurrilous attack on. the court receiver for alleged misbehavior in his official duties and a charge against the Chief Justice and the administrative judges for deliberately conniving at it were held to constitute contempt. The same argument as is now put forward was made in that case. (See para 14 of the report), but was rejected in these words : "By making these foul attacks upon the Judges, the respondent has tried to create an apprehension in the mind of the public regarding the integrity of these Judges and has done a wrong to the public. He has attempted to shake the confidence of the public in the Judges of this Court and in the justice that is being administered by these judges of this Court. " There is no such thing as a denigration of a Judge function wise. This is brought out clearly in the judgment of the Judicial Committee in Debi Prasad Sharma vs The King Emperor(2) referred to earlier. In that case the appellant had suggested falsely that the Chief Justice of the Allahabad High Court had in his administrative capacity, issued a circular to the Judicial Officers under his jurisdiction enjoining on them to raise contributions to the warfares which, it was said, would lower the prestige of the court in the eyes of the people. In holding that the imputation did not constitute contempt of court but at the most, a personal defamation of the Chief Justice in his individual capacity, Lord Atkins said at page 224, "When the comment in question in the present case is examined it is found that there is no criticism of any judiciaries of the Chief Justice, or any imputation on him for anything done or omitted to be done by him in the administration of justice. it can hardly be said that there is any criticism of him in his administrative capacity, for, as far as their Lordships have been informed, the administrative control of the subordinate courts of the. Province, whatever it is, is exercised, not by the Chief Justice, but by the. court over, which he presides. " (1) A.I.R. 1959 Bombay 182. (2) 70 Indian Appeals 216. 304 The words underlined above are important. In holding that only ordinary remedies for defamation were open to the Chief Justice, their Lordships had to ask the substantial question, as suggested by Lord Watson during the course of the arguments in Re : Special Reference from the Bahama Islands(1) "whether the letter complained of referred to him in his official capacity. " With that case obviously in mind and the case was referred to earlier in the judgment lord Atkin showed in the words quoted above that the criticism did not refer (i) to any judicial act, meaning thereby any adjudicatory act and (ii) to any administrative act, because the Chief Justice alone had no administrative control over the subordinate courts but only the High Court as a whole. The plain implication is that if the circular had been alleged to have been issued by the Chief Justice under the authority of the High Court, then the imputation having the effect of lowering the prestige and authority of the High Court could conceivably have been regarded as contempt. Their Lordships of the Privy Council are not known to waste their words over matters not relevant to the issue. It was absolutely necessary for their Lordships to eliminate the possibility of the alleged action of the Chief Justice being connected in any manner with any adjudicatory or administrative function of the High Court by pointing out that it did not refer to any official act in the administration of justice or, as stated in Queen vs Gray already refer , red to, "the act of a Judge as a Judge", in which case alone the imputation would have amounted to scandalization of the court. The above authorities are sufficient to show that there is no warrant for the narrow view that the offence of scandalization of the court takes place only when the imputation has reference to the adjudicatory functions, of a Judge in the seat of justice. We are unable, therefore, to accept the submission of Mr. Sen on this aspect of the case. We have already shown that the, imputations in Annexures 8, 16 and 20 have grossly, vilified the Hugh Court tending to affect substantially administration of justice and, therefore, the appellant was rightly convicted of the offence of criminal contempt. As regards the sentence, it is enough to say that the Full Bench has considered the question at great length. There were six contempt proceedings against the appellant and the court had treated him generously. In two proceedings he was let off with a fine. Even in the present case the Full Bench was of the opinion that the maximum sentence under the law was deserved by the appellant but imposed on him only a sentence of simple imprisonment for two months. The appellant, throughout, took a defiant attitude and did not even think it necessary to offer an apology. Ordinarily we would be most reluctant to interfere with the sentence imposed by the High Court, but for the fact that we notice that he has almost come to the end of his judicial career and during the last few years has been gripped by a sort of mania against the High Court which clouded his reason. We think the object of punishment will be served by directing him to pay (1) at 14. 30 5 a fine of Rs. 1,000/ or in default to suffer simple imprisonment for 3. months in substitution of the sentence inflicted by the High Court. It remains now to point out that when dealing principally with the contempt of the appellant, the court also thought it fit to hear the: parties including the Advocate General on some subsidiary but important questions on the relative position of the Government of Orissa and the High Court in the matter of disciplinary control over Subordinate Judges. It appears that the State Government. framed what are known as the Orissa Civil Services (Classification and Control) Rules, 1962 and they appear to apply to all Government servants under the State. The Full Bench held that some of the rules, in their application to the Subordinate judiciary of the State, contravened Articles 235 which vested control over, the Subordinate Judiciary in, the High Court. From these findings the State of Orissa has come in appeal and that appeal is numbered Criminal Appeal No. 77/1973 In our opinion, the principal matter before the Full Bench was in, relation to the contempt committed by the appellant. The constitutional issue between the State Government and the High Court came in only by way of a side wind. In fact it would appear from the judgment that the learned Advocate General had requested the court not to. express any opinion on these constitutional matters, and the court also seems to have thought that the constitutionality of the rules had ' no relation to the commission of the contempt. However, the court thought that the issue became relevant, especially, on the question of sentence and hence applied its mind to the Constitutionality of some of the rules. It has struck down those rules which, in the opinion of the court, contravened Article 235 in their application to the Subordinate Judiciary. We have considered whether it is necessary for us to dear with those questions here, but are inclined to think that we should express no opinion on the constitutionality of the impugned rules. Accordingly, appeal No. 41 is dismissed with the modification in, the sentence as suggested above and criminal appeal No. 77 of 1973 is permitted to be withdrawn without prejudice to the contentions raised by the State in regard to the constitutionality of the rules struck down by the High Court. KRISHNA IYER, J. We have had the advantage of reading the leading opinion of our learned brother, Palekar, J., and, concurring as we do in the ultimate conclusion, to depart from the ' option of silenceneeds a word of explanation. Graver issues bearing on free speech raised in these proceedings and the correct approach to be made to what in substance is a criminal charge, bring to the fore our diver gence in legal reasoning and constitutional perspective which we proceed to set out in a separate opinion. The facts of the present case, fully laid bare in the judgment of Palekar, J., are in a sense peculiar. The contest is himself a senior district judge. The alleged multiple contempt relates partly to (i) an administrative act of the High Court preliminary to disciplinary proceedings and is stated to be contained in a representation filed 306 by him before the Governor, under a rule which apparently authorizes such appeals, against the suspension order of the High Court, and (ii) averments in a special leave petition filed by him in this Court, aggrieved by the refusal of the High Court to decide a preliminary objection in these very contempt proceedings on the judicial side. A: full Bench of the High Court convicted the appellant for contempt, the action itself having been initiated by an administrative full court. The questions we are called upon to decide are (a) whether criticism of an administrative act of the High Court or of any court could at all amount to contempt of court; (b) whether pejorative imputations about a court or judge, however offensive, true or honestly held even if contained in. an appeal to a higher court or in a remedial representation to a correctional authority, constitute contempt. The legal touchstone adopted by the High Court is that any statement which in some manner may shake the confidence of the community in a judge or in the judicial system, is straightaway contempt, regardless of context or purpose or degree of publication or absence of any clear land present danger of disaffection or its being a bona fide plea for orderly change in the judicature and its, process. On the facts, we agree that the spirit of defiance, extenuated partly by a sense of despair, is writ large in the writings of the appellant but wish to warn ourselves that his reported past violations should not prejudice a judicial appraisal of his alleged present criminal contempt. And the benefit of doubt, if any, belongs to the condemner in this jurisdiction. The dilemma of the law of contempt arises because of the constitutional need to balance two great but occasionally conflicting principles freedom of expression and fair and fearless justice remembering the brooding presence of articles 19(1) (a), 19(2), 129 and 215 of the Constitution. In a sense, the Indian approach is a little different from the English and its orientating on is more akin to American jurisprudence, although there is much,that is common to all the three. The pronouncement of Wilmot, C.J., posthumously published, has influenced the law of contempt in the Unite d States and the Commonwealth countries, but it is a moot point whether we should still be bound to the regal moorings of th e law in Rex vs Almon(1) ". by our constitution the King is the fountain of justice and . he delegates the power to the judges . arraignment of the justice of the judges is arraigning the King 's justice. It is an impeachment of his wisdom in the choice of his judges. it excites dissatisfaction with judicial determination and indisposes the minds of people to obey them". Maybe we are nearer the republican justification suggested in the American system(2) (1) Wilmot 's notes 243 (Wilmot ed. 1802 =97 ER 94. as cited in Fox,Contempt of Court (1927). (2) 18 U.S.C.A. 3691 (formerly , 389. 30 7 "In this country, all courts derive their authority from the people, and hold it in trust for their security and benefit. In this state, all judges are elected by the people, and hold their authority, in a double, sense, directly from them; the power they exercise is but the authority of the people themselves, exercised through courts as their agents. It is the authority and laws emanating from the people, which the judges sit to exercise and enforce. Contempt against these courts, the administration of their laws, are insults offered to the authority of the people themselves, and not to the humble agents of the law, whom they employ in the conduct of their government. " This shift in legal philosophy will broaden the base of the citizen 's right to criticize and render the judicial power more socially valid. We are not subjects of a king but citizens of a republic and a blanket ban through the contempt power, stifling namely, Administration of justice, thus criticism of a strategic institution, forbidding the right to argue for reform of the judicial process and to comment on the performance of the judicial personnel through outspoken or marginally excessive criticism of the instrumentalities of law. and justice, may be a tall order. For, change through free speech is basic to our democracy, and to prevent change through criticism is to petrify the organs of democratic government. The judicial instrument is no exception. To cite vintage rulings of English courts and to bow to decisions of British Indian days as absolutes is to ignore the law of all laws that the rule of law must keep pace with the rule of life. To make our point, we cannot resist quoting McWhinney(1),who wrote "The dominant theme in American philosophy of law today must be the concept of change or revolution in law. In Mr. Justice Oliver Wendell Hoimes ' own aphorism, it is revolting to have no better reason for a rule of law than that it was laid down in the time of Henry IV. The prestige argument, from age alone, that because a claimed legal rule has lasted a certain length of time it must automatically be valid and binding at the present day, regardless of changes in basic societal conditions and expectations, is no longer very persuasive. According to the basic teachings of the Legal Realist and policy schools of law, society itself is in continuing state of flux at the present day '; and the positive law, therefore, if it is to continue to be useful in the resolution of contemporary major social conflicts and social problems, must change in measure with the society. What we have, therefore, concomitantly with our conception of society in revolution is a conception of law itself, as being in a condition of flux, of movement. On this view, law is not a frozen, static body of rules but rules in a continuous process of change and adaptation and the judge, at the final appellate level anyway, is a part determinant part of this dynamic process of legal evolution." Canadian Bar Review (Vol. 45) 1967, 582 583. 308 This approach must inform Indian law, including contempt law. It is very necessary to remember the legal transformation in our Devalue system on the inauguration of the Constitution, and the dogmas of the quiet past must change with the challenges of the stormy present. The great words of Justice Homles uttered in a different context bear repetition in this context : "But when men have realized that time has upset many fighting faiths, they may come to believe even more than they believe the, very foundations of their own conduct that the ultimate good desired is better reached by free trade in ideas that the best test of truth is the power of the thought to get itself accepted in the competition of the market, and that truth is the only ground upon which their wishes safely can be carried out. That, at any rate, is the theory of our Constitution. It is an experiment, as all life is an experiment. Every year, if not every day, we have to wager our salvation upon some prophecy based upon imperfect knowledge. While that experiment is part of our system I think that we should be eternally vigilant it against attempts to check the expression of opinions that we loathe and believe to be fraught with death, unless they so imminently threaten immediate interference with the lawful and pressing purposes of the law that an immediate check is required to save the country. "(1) Before, stating the principles of law bearing on the facets of contempt of court raised in this case we would like to underscore the need to ,draw the lines clear enough to create confidence in the people that this ancient and inherent power, intended to preserve the faith of the public in public justice, will not be so used as to provoke public hostility as overtook the Star Chamber. A vague and wandering jurisdiction with uncertain frontiers, a sensitive and suspect power to punish vested in the prosecutor, a law which makes it a crime to publish regardless of truth and public good and permits a process of brevity conviction, may unwittingly trendiness upon civil liberties and so the special jurisdiction and jurisprudence bearing on contempt power must be delineated with deliberation and operated with serious circus section by the higher judicial echelons. So it is that as the palladium ,of our freedoms, the Supreme Court and the High Courts, must vigilantly protect free speech even against judicial umbrage a delicate but sacred duty whose discharge demands tolerance and detachment of a high order. The present proceedings challenge, the projection of the power to punish for contempt into administrative domains of the Court and its extension to statements in remedial proceedings. One recalls the observations of the American Supreme Court:(2) "Contempt of Court is the Proteus of the Legal World,. assuming an almost infinite diversity of forms. (1) The Suprem Court and Civil Liberties by 03m 3nd K. Fracknel Published for the American Civil Liberties Union in its 40th anniversaries year Pornea Publications, Inc. New York (1960)page 40, (2) Moskovitz, Contempt of Injunctions, Criminal and Civil, (1943). 309 Considerations such as we have silhouetted led to the enactment of the Contempt of Court Act, 1971, which makes some restrictive departures from the traditional law and implies some wholesome principles which serve as unspoken guidelines in this branch of law. Section 5 protects fair comment on the merits of, cases finally decided, and section 13 absolves from sentence all contempt which do not substan tially interfere or tend substantially to interfere with the due course of justice. Statements which disparage a subordinate judicial officer presiding over a court are not contempt if made in good faith to the High Court or any other lower Court to which the offended judge is subordinate. The emphasis in section 2(o), section 3 and section 13 to the interference with the course of justice or obstruction of the administration of justice or scandalising or lowering the authority of the Court not the judge highlights the judicial area as entitled to inviolability. and suggests a functional rather than a personal or 'institutional ' 'immunity. The unique power to punish for contempt of itself inheres in a Court qua Court in its essential role of dispenser of public justice. The phraseological image projected by the catenate of expressions like court, course of justice administration of justice, civil and criminal proceedings, judicial proceedings, merits of any case, presiding officer of the Court, judicial proceeding before a court sitting in chamber or in camera undertaking given to a court, substantial interference with the due course of justice, etc., occurring in the various sections of the Act, the very conspirator of the statutory provisions and the ethos and raison d 'etre of the jurisdiction persuade us to the conclusion that the text of the Act must take its colour from the general context and confine the, contempt power to the judicial cum para judicial areas including those administrative functions as are intimately associated with the exercise of judicial power. What then is a Court ? It is "an agency of the sovereign created by it directly or indirectly under its authority, consisting of. one or more officers, established and maintained for the purposes of hearing and determining issues of law and fact regarding legal rights and alleged violations thereof, and of applying the sanctions of the law, authorised to exercise its powers in due course of law at times and places previously determined by lawful authority. Isbill vs Stovall, Rex. App. , 1070." ". An organised body with defined powers, meeting at certain times and places for the, hearing and decision of causes and other matters brought before it, and aided in this, its proper business, by its proper officers, viz., attorneys and counsel to present and manage the business, clerks to record and attest its acts and decisions, and ministerial officers to execute its commands, and secure due order in its proceedings. Ex parte Gardner,, , 39 p. 570: Hertman vs Hertman , , 582."(1). In short the accent is on the functional personality which is pivotal to securing justice to the people. Purely administrative acts, Black 's Law Dictionary, Fourth Edu. 310 like recruitments, transfers and postings, routine disciplinary action against subordinate staff, executive acts in running the establishment and ministerial business ancillary to office keeping these are common to all departments in the public sector and merely because they relate to the judicial wing of government cannot enjoy a higher immunity from criticism. The quintessence of the contempt power is protection of the public, not judicial personnel. Excerpts from a few Anglo American authorities will attest our standpoint "The object of the discipline enforced by the Court in, case of contempt of Court is not to vindicate the dignity of the Court or the person of the Judge, but to prevent undue interference with the administration of justice." [Bowen, L.J.Helmore vs Smith , 455] "The law of contempt is not made for the protection of judges who may be sensitive to the winds of public opinion. Judges are supposed to be men of fortitude, able to thrive in a hardy climate. "[Douglas, J. Craig vs Harney ; , 376 (1947)]. Judges as persons, or courts as institutions, are entitled to no greater immunity from criticism than other persons or institutions. Just because the holders of judicial office are identified with the interests of justice they may forget their common human frailties and fallibilities. There have sometimes been martinets upon the bench as there have also been pompous wielders of authority who have used the paraphernalia of power in support of what they called their dignity. Therefore, judges must I be kept mindful of their limitations and their ultimate public responsibility by a vigorous stream of criticism expressed_with candor however blunt., [Frankfurter, J., Bridges vs California ; , 289 (1941)] If we accept this slant on judicialisation as a functional limitation on the contempt jurisdiction we mutt exclude from its ambit interference with purely administrative acts of courts and non judicial functions of judges. This dichotomy is implicit in the decided cases although the twilight of the law blurs the dividing lines now and then. To cast the net wider is unreasonable and unwarranted by precedent. To treat, as the High Court has done, "the image and personality of the High Court as an integrated one and to hold that every shadow that darkness it is contempt is to forget life, reason and political progress. For, if a judge has an integrated personality and his *He openly accuses him of neglect or worse, she would certainly reduce the confidence of the public in him as judge Will her accusation be personalised contempt? If a judge expresses on a platform crude views on moral lapses and is severely criticized in public for it, it will undoubtedly debunk him as a judge. Will such censure be branded contempt? 311 As early as 1892, the Privy Council in The matter of a Special Reference from the Bahama Islands() bad to upset a sentence of indefinite imprisonment imposed by the Chief Justice of Bahmas on one Mr. Moseley for two 'letters to the editor ' fun of snub and sarcasm about Yelverton, Esq., Chief Justice. In these there was cynical reference to the Chief Justice 's incompetence and imprudence, couched in stinging satire. The Judicial Committee held : "(a) That the letter signed "Colonist" in The Nassau Guardian though it might have been made the subject of proceedings for libel was not, in the circumstances, calculated to obstruct or interfere with the course of justice or the due administration of the law, and therefore did not constitute a contempt of Court." The Attorney General struck a sound note when in the course of the arguments he summed up the law thus "A libel upon a judge, holding him up to contempt and ridicule in his character as a judge, so as to lower him in the estimation of the public amongst whom be exercises office is a contempt of court." (emphasis supplied) Lord Atkin, in the celebrated case of Debi Prasad Sharma vs The King Emperor(2) where the printer, publisher and editor of the: Hindustan Times were found guilty of contempt by the Allahabad High Court for criticising the Chief Justice by falsely imputing to him a circular communication to the subordinate judiciary to raise collections for the war fund, set asida the conviction holding that the proceedings in contempt were misconceived, The learned Law Lord observed "When the comment in question in the present case is examined it is found that there is no criticism of any judicial act of the Chief Justice, or any imptitation on him for any thing done or omitted to be done by him in the administration of justice. It can hardly be said that there is any criticism of him in his administrative capacity, for, as far as their Lordships have been informed, the administrative control of the subordinate courts of ' the Province, whatever is, is exercised, not by the Chief Justice, but by the court over which he presides. The appellants are not charged with saying anything in contempt of the subordinate courts or the administration of justice by them. In truth, the, Chief Justice is alleged, unruly, as Is now admitted, to have committed an ill advised act in writing to his subordinate, judges asking (as the news item says), enjoining (as the comment says) them to collect fog the War Fund. If the facts were as alleged they admitted, of criticism. No doubt it is galling for any judicial personato be criticised publicly as having done something outsidethis judicial proceedings which was ill advised or indiscreet. But judicial personages can afford not to be too sensitive.simple denial in public (1) ,.149. (2) (1942) 70 I.A. 216. 8 522SCI)74 31 2 of the alleged request would at once have allayed the trouble. If a judge is defamed in such a way as not to affect the administration of justice he has the ordinary remedies for defamation if he should feel impelled to use them. " The whole emphasis and ratio of the decision consists in the impugned editorial not being an attack on the administration of justice and, therefore, not amounting to contempt of court. The learned Additional Solicitor General, however, stressed the significance of the passing observation made in the judgment that the administrative control of the subordinate judiciary vested in the whole court and not only in the Chief Justice, and argued that by implication their Lordships must be deemed to have regarded animadversion on even acts of administrative control as potential prey to the contempt law. An obscure reference to the Chief Justice not being even the exclusive administrative authority over the lower judiciary, meant perhaps to bring into bold relief the irrelevance of the criticism as reflecting even on the executive functions of the Chief Justice, cannot be considered to reach a reverse result, ignoring the setting and the thrust of the whole dictum. A Division Bench of the Kerala High Court, in Kaviath Damodaran vs Induchoodan(1), has relied on this Privy Council ruling for the proposition that administrative acts of the court in that case the transfer of a Magistrate criticised as promoted by extraneous pressure was not a fit subject for punitive action. (In that case, of course, the contemnor was convicted for another publication). The deep concern of the law of contempt is to inhibit sullying essays on the administration of justice in which the public have a vital interest and not to warn off or victimise criticisms, just or unjust, of judges as citizens, administrators, non judicial authorities, etc. K.L. Gauba 'S(2) case was naturally pressed into service at the Bar against the contemnor but such an extreme case of wild and vicious attacks on the Chief Justice rarely serves in the search for any abiding principle in an excited setting. That ruling reminds us that, whatever the provocation, a Judge by reason of his office, has to halt at the gates of controversy but as enlightenment spreads and public opinion ripens this judicial self abbegation will ' be appreciated better. and not "embolden the licentious to trample upon everything sacred in society and to overthrow those institutions which 'have hitherto been deemed the best guardians of civil liberty. " Again, while Young, C.J., in that case rules out the tenability of truth as a valid defence against contempt, action, we observe, not without pertinence in the constitutional context of restrictions on free expression having to be reasonable, that in most of the reported cases courts have hastened to hold the imputations false before proceeding to punish. Contempt is no cover for a guilty judge to get away with it but a shield against attacks on public. justice. Gauba 's case, on the facts, was a mud slinging episode on the judicial target as such and the conviction accords with the policy of the law we have set out. (1) A.I.R. 1961 Kerala 321. (2) I.L.R. , 419. 313 A Division Bench of the Allahabad High Court, in Rex. vs D. section Nayyar,(1) had to deal with a representation by a litigant against a magistrate with reference to a case adversely decided, and Kidwai, J. cleared the confused ground right in the beginning by observing : "The first thing to be remembered is that Courts are not concerned with contempt of any authority except Courts of law in the exercise of their judicial functions. Thus, any speech, writing or act which does not have the, effect of interfering with the exercise of their judicial functions by the Courts cannot be the subject of proceedings in contempt. In India very often the same officers exercise executive. as well as judicial functions. Sometimes it becomes difficult to draw a distinction between their two capacities but nevertheless a distinction must be drawn and it is only if the criticism is of judicial acts that action by way of proceedings in contempt may be taken. " A letter to the President of the Congress party complaining about the appointment of. a judicial officer who was the brothirin law of the, Private Secretary of a 'Minister (belonging to that party) and of the transfer of cases to his Court where in Congressmen were involved, was sought to be punished as contempt of court. Kidwai, J, made the following useful remarks exonerating the contemnor : "In this passage also the attack is on the appointment of the judicial officer and the transfer of, cases to him but there is no attack upon the officer himself. Both these attacks are upon the system and not upon any Magistrate in respect of the performance by him of his judicial functions. They wish to see, laid down a salutary principle by which Justice should not only be done but should also appear to be done. There is no contempt of Court in this rather it is an endeavor to free Courts from all extraneous shackles and proceedings to contempt are wholly unc alled for ' The Judicial Committee in In re. section B. Sarbadhicary (2) considered the misconduct of a barrister for publishing an article where he cast reflections upon judges of the Allahabad, High Court. The merits of the case apart, the Judicial Committee emphasized the judicial capacity of the judges which attracted the contempt jurisdiction. Sir Andrew Seoble observed : "There is no doubt that the article in question was a libel reflecting not only upon Richards J. but other judges of the High Court in their judicial capacity and in reference to their conduct in the discharge of their public duties." (emphasis added) "The public duty" in their "judicial capacity" was obviously in contradistinction to merely personal activities or administrative function It is not as if a judge doing some non judicial public duty is protected from criticism in which case, any action by him as of Law or Vice chancellor in a University or as Acting Governor or President (1)A.I.R.1950 All. 549 ,551,555. (2) (1906) 34 XX I A. 14. 314 or Member of the Law or Finance Commission would also be punishable, as contempt. The basic public duty of a judge in his judicial capacity is to dispense public justice in court and anyone who obstructs or interferes in this area does so at his peril. Likewise, personal behaviour of judicial personnel, if criticized severely or even sinisterly, cannot be countered by the weapon of contempt of court, for to use the language of Mukherjee, J. in Brahma Prakash Sharma vs State of Uttar Pradesh,(1) "the object of contempt proceedings is not to afford protection to Judges personally from imputations to which they may be exposed as individuals" (emphasis added). Otherwise, a grocer who sues a judge for price of goods with an imputation that the defendant has falsely and maliciously refused to honour the claim, or a servant of a judge who makes personal allegations of misconduct against his master may be hauled up for contempt. This is no amulet worn by judges for all purposes. "The punishment is inflicted not for the, purpose of protecting either the Court as a whole or the individual judges of the Court from a repetition of the attack, but of protecting the public, and especially those who either voluntarily or by compulsion are subject to the jurisdiction of the Court, from the mischief they will incur if the authority of the Tribunal is undermined or impaired." (Vide para 9, Halsbury 's Laws of England, 3rd Edn. Vol. VIII). Indeed, if we peer through the mists of English Judicial history, Courts of record were not qua such courts, acting in any administrative capacities. How then could contempt action, going by genesis, be warranted purely administrative matters of courts. Of course, there have 'been cases sounding a different note. In State vs H. Nagamani, (2) one Mr. Nagamani, an impetuous I.A.S. officer, wrote a letter making critical I remarks couched in disrespectful and improper language about the inspection report of his court by a Judge of the High Court of Patna. However, Mr. Nagamani tendered an unqualified apology and the court discharged the rule for contempt since in their view the contempt was purged by the apology. Of course, there was no need to consider in detail whether the letter reflecting upon the Judge who held the inspection was contempt; it Was treated as such and the apology accepted. And the High Court 's inspection of the judicial work of the sub ordinate judiciary is a judicial function or is at least para judicial. The Allahabad High Court punished the late Shri C. Y. Chintamani and, Shri K D. Malaviya for publishing a criticism to the effect that comparatively undeserving lawyers were being frequently raised to the Bench. The Court held them guilty of contempt holding the criticism of the judges as a vicious reflection and a case of Contempt. [sea In the matter of an Advocate of Allahabad(3), Borderline cases draw up to the pneumbra of law and cannot light up dark comers. The learned Additional Solicitor General, in an endeavour to expand the meaning of "administration of justice" so to rope in criticisms of executive acts of judges, drew out attention to articles '225, 227 and 235, and the provisions of earlier Government of India Acts (c.f. sec. 224(1) 1935 Act) which vest the Power to appoint the staff and do (1) (2) A.I.R. 1959 Pat. 373 (3) A.I.R. 1935 AU. 1. 315 other incidental management functions, in the High Court as part of the administration of justice. Several High Court Acts clothe Chief Justices with administrative powers and Civil Courts Acts and Letters Patents charge judges with administrative duties the,, goal being effective administration of justice. If the appointment of clerks is part of the administration of justice, denunciation of the judges in these acts interferes with the administration of justice, liable to be visited with punishment. This means that if a judge in charge of appointments chooses relations or unqualified men or takes other consideration, the public must hold its tongue on pain of contempt. The paramount but restrictive jurisdiction to protect the public against substantial interference with the stream of justice cannot be polluted or diffused into an intimidator power for the judges to strike at adverse comments on administrative, legislative (as under articles 225, 226 and 227) and extra judicial acts. Commonsense and principle can certainly accept a valid administrative area so closely integrated with court work as to be stamped with judicial character such as constitution of benches, transfer of cases, issue of administrative directions regarding submission of findings or disposal of cases by subordinate courts, supervision of judicial work of subordinate courts and the like. Not everything covered by article 225, 227 and 235 will be of this texture. To overkill is to undermine in the long run. We may now sum up. Judges and Courts have diverse duties. But functionally, historically and jurisprudentially, the value which is dear to the community and the function which deserves to be cordoned off from public molestation, is judicial. Vicious criticism of 'personal and administrative acts of judges may indirectly mar their image and weaken the confidence of the public in the judiciary but the countervailing good, not merely of free speech but also of greater faith generated by exposure to the acting light of bona fide, even if marginally overzealous, criticism cannot be overlooked. Justice is no cloistered virtue. The first part of the present case directly raises the question whether statements made in an appeal to the Governor against an order of the High Court on the administrative side attracts the contempt law. To our mind the answer arises from another question. Is the suspension of the District Judge so woven into and integrally connected with the administration of justice that it can be regarded as not purely an administrative act but a para judicial function ? The answer must, on the facts here, be in the affirmative. "he appeal was against the suspension which was a preliminary to contemplated disciplinary action. What was that action about ? Against the appellant in his judicial capacity, for acts of judicial misconduct. The control was. therefore, judicial and. hence the unbridled attack on the High Court for the step was punishable as contempt. A large margin must be allowed for allegations in remedial representations but extravagance forfeits ' the protection of good faith. In this case reckless excess has vitiated what otherwise could have been legitimate grievance at least in one flagrant instance, the others being less clear. One of the 316 grounds for taking disciplinary action ' was based on the disposal of a civil appeal by the contemnor as Additional District Judge. lie heard it, delivered judgment dismissing the appeal signed the order sheet and judgment and sealed the judgment. Later in the day, the contemnor scored off his signatures in the order sheet and judgment, and returned the record to the principal District Judge for disposal falsely stating that the judgment had not been delivered. The High took the view that this action was without jurisdiction and revealed utter disregard of truth and procedure deserving disciplinary action. Obviously, the impugned conduct of the contemnor was qua judge and the evil criticism was of a supervisory act of the High Court and the critic would and should necessarily 'court contempt action. And in his memorandum of appeal the contemnor used expressions like 'mala fides ' and 'subterfuge ' without good faith, and in such a case no shelter can be sought in the alibi of 'administrative act. ' The second part of the charge relates to objectionable statements in the special leave petition to this Court. Ordinarily they must be out of bounds for, the contempt power; for, fearless seeking of justice will otherwise be stifled. In State ' of Uttar Pradesh vs Shyam Sunder Lal (1) a complaint about the conduct of a judicial officer in a petition to the Prime Minister was held not to constitute contempt. The representation was forwarded by the Prime Minister 's office to the Chief Secretary from whom it reached the District Magistrate. Certainly there was there fore sufficient, publication in the law of libel but the Court held "A letter sent to the Prime Minister and not intended to be broadcast to the public or any section of the public cannot create an apprehension in the mind of public . regarding the integrity, ability or fairness of the judge " Similarly, in Rex. vs R. section Nayyar, "(2) the court considered a representation made to the Premier of the State about a judicial officer and also to the President of the All India Congress Committee. The Court took the view that such complaints may be addressed to the Premier about judicial officers since Government had to consider under the then rules the conduct of judicial personnel. "If these complaints are genuine and are made in a proper manner with the object of obtaining redress, and are not made mala fide with a view either to exert pressure upon the Court in the exercise of its judicial functions or to diminish the authority of the Court by lvilifying it, it would not be in furtherance of justice to stifle them by means of summary action for contempt, but rather the reverse" _(emphasis added). A pregnant observation made by the Court deserves mention "It would indeed be extraordinary if the law should provide a remedy the conduct of eve ' a member of the highest Judicial Tribunal in the exercise of his judicial office may be the subject of enquiry with a view to see whether he is fit to continue to hold that office and yet no one should be able to initiate proceedings for an enquiry by a complaint (1) A.I.R. 1954 All 308. (2) A.I.R. 1950 All. 549: 554. 317 to the appropriate authority by reason of a fear of being punished for contempt, and I can find no justification for this view. " At this stage it must be noticed that in the State of Madhya Pradesh vs Ravi Shanker(1) this Court ruled that aspersions of a serious nature made against a Magistrate in a transfer petition could be punishable as a contempt if made without good faith. However, in Govind Ram vs State of Maharashtra,(2) this Court reviewed the decisions on the point and ruled that if in the garb of a transfer application scurrilous attacks were made on a court imputing improper motives to the Judge there may still be contempt of court, although the court referred with approval to the ruling in Swarnamayi Panigrahi vs B. Nayak(3) that a latitudinarian approach was permissible in transfer applications. The core of the pronouncement is that permission remedial process like a transfer application cannot be a mask to malign a judge, a certain generosity or indulgence is justified in evaluating the allegations against the judge. Eventually, Grover J., held that the allegations made in the proceeding in question were not sufficiently serious to constitute contempt. A liberal margin is permissible in such cases but batting within the crease and observing the rules of the game are still necessary. Irrelevant or unvarnished imputations under the pretext of grounds of appeal amount to foul play and perversion of legal process. Here, the author, a senior judicial officer who professionally weighs his thoughts and words, has no justification for the immoderate abuse he has resorted to. In this sector even truth is no defence, as in the case of criminal insult in the latter because it May Produce violent breaches and is forbidden in the name of public peace, and in the former because it may demoralise, the community about courts and is forbidden in the interests of public justice as contempt of court. Even so, if judges have frailities after all they are human they need to be corrected by independent criticism. If the judicature has serious shortcomings which demand systemic correction through socially oriented reforms initiated through constructive criticism, the contempt power should not be an interdict. AR this, far from undermining the confidence of the public in courts, enhances it and, in the last analysis, cannot be recessed by indiscriminate resort to contempt power. Even bodies like the Law Commission or the ' Law Institute and researchers, legal and sociological may run risks because their professional work sometimes involves unpastoral criticism of judges, judicial processes and the system itself and thus hover perilously around the periphery of the law it widely construed. Creative legal journalism and activist statesmanship for judicial reform cannot be jeopardised by an undefined apprehension of contempt action. Even in England a refreshingly pro free speech approach has been latterly adopted. Any episode in the administration of justice may be publicly or privately criti cised, provided that the criticism is fair and (1) (2) ; , (3) A.I.R. 1959 Orissa 89. 318 temperate and made in good faith. Lord Denning, in the famous Quintin Hogg case() laid down remarkable guidelines in the matter of, actions for contempt. The learned Law Lord said : "It is a jurisdiction which undoubtedly belongs to us but which we will most sparingly exercise; more particularly as we ourselves have an interest in the matter. Let me say at once that we will never use this jurisdiction as a means to uphold our own dignity. That must rest on surer foundations. Nor will we use it to suppress those who speak against us. We do not fear criticism, nor do we resent it. For there is something far more important at stake. It is no less than freedom of speech itself. It is the right of every man, in Parliament or out of it, in the Press or over the broadcast, to make fair comment, even outspoken comment, on matters of public interest. Those who comment can deal faithfully with all that is, done in a court of justice. They can say that we are mistaken, and our decisions erroneous, whether they are subject to appeal or not. All we would ask is that those who criticise us will remember that, from the nature of our office, we cannot reply to their criticisms We cannot enter into public controversy. Still less into political controversy. We must rely on our conduct itself to be its own vindication. Exposed as we are to the winds of criticism, nothing which is said by this person or that, nothing which is written by this person or that, nothing which is written by this pen or that will deter us from doing what we believe is right; nor, I would add, from saying what the occasion requires, provided that it is pertinent to the matter in hand. Silence is not an option when things are ill done." This Court has held that the law of contempt is valid notwithstanding article 19(1). The Contention was persisted in C. K. Daphtay vs O. P. Gupta. (2) This Court came to the conclusion that the existing law of contempt imposes reasonable restrictions within the meaning or article 19(2). "Apart from this, the 'Constitution makes this Court a gudian of fundamental rights conferred by the Constitution and it would not desire to enforce any law which imposes unreasonable restrictions on the precious right of freedom of speech and expression guaranteed by the Constitution." (Sikri C.J.) The Court being the guardian of people 's rights, it has been held repeatedly that the contempt jurisdiction should be exercised "with, scrupulous care and only when the cage is clear and beyond reasonable doubt. (vide R. vs Gray) (s) (1) :1206 07. (2) All. R. , Para 52. (3) [1900] 2 O.B. 36. 319 The policy directive can be gleaned from the ruling in Special Reference No. 1 of 1964(1) where Gajendragadkar, C.J., speaking for the Court, observed : "We ought never to forget that the power to punish for contempt large as it is, must always be exercised cautiously wisely, and with circumspection. Frequent or indiscriminate use of this power in anger or irritation would not help to sustain the dignity or status of the court, but may sometimes affect it adversely. Wise Judges never forget that the best way to sustain the dignity and status of their office is to deserve respect from the public at large by the quality of their judgments, the fearlessness, fairness and objectivity of their approach, and by the restraint, dignity and decorum which they observe in their judicial conduct. " If judges decay the contempt power will not save them and so the other side of the coin is that judges, like Caesar 's wife, must be above suspicion. To wind up, the key word is "justice", not "judge"; the key note thought is unobstructed public justice, not the self defence of a judge; the corner stone of the contempt law is the accommodation of two constitutional values the right of free speech and the right to independent justice. The ignition of contempt action should be substantial land mala fide interference with fearless judicial action, not fair comment or trivial reflections on the judicial process and personnel. We have sought to set our legal sights in line with the now constitutional order and endeavoured so to draw the grey contours of the contempt law that it fulfils its high purpose but the more. We have tried to avoid subjectivism in the law, recognising by a re statement, the truth that "the great tides and currents which engulf the rest of men do not turn aside in their course and pass the judges by. (2) " The facts of the present case disclose that an incorrigible contemnor, who had made it almost his latter ,day professional occupation to cross the High Courts path, has come to this Court in appeal. He has been reckless, persistent and guilty of undermining the High Court 's authority in his intemperate averments in both petitions. But having regard to the fact that he is a senior judicial officer who has at some stage in his career displayed zeal and industry and is now in the (1) ; ; 501. (2) Benjamin N. Cardozo The Nature of the Judicial Process New Haven : Yale University Press Page 163. 320 sombre evening of an official career, a punishment short of imprisonment would have met the ends of justice and inspired in the public mind confidence in the justice administration by showing that even delinquent judges will be punished if they play with or pervert the due course of justice, as the contemnor here has done. A heavy hand is wasted severity where a lighter sentence may serve as well. A fine of Rs. 1000/ with three months ' imprisonment in default of payment will meet the ends of justice and we impose this sentence in substitution of the infliction of imprisonment by the High Court. this modification Civil Appeal No. 41 of 1973 is dismissed. On the appeal by the State the course adopted in the leading judgment of Palekar J. has our concurrence. Appeal No. 41 dismissed. P.B.R. Appeal No. 77 allowed to be withdrawn.

The appellant and his companions were charged with an offence under section 302 I.P.C. for causing the death of the deceased by pouring acid on him when he was sleeping on his cot on the night of the occurrence. After recording the first information report the police sub inspector recorded the statement of the deceased and at the dispensary the doctor recorded the statement of the deceased, in both of which he stated that the appellant poured acid over his body and caused injuries to him. The deceased succumbed to his injuries. Disbelieving the prosecution evidence the trial court acquitted him. The High Court on the other hand accepted the evidence of all the prosecution witnesses and convicted and sentenced the appellant to life imprisonment but acquitted the remaining two accused. In appeal to this Court it was contended that the High Court should not have reversed the judgment of the trial court and the evidence relied upon by the High Court was not satisfactory. Dismissing the appeal. HELD : that the approach of the trial court was clearly unreasonable and the High Court was fully justified in setting.aside the acquittal of the. appellant. It is well settled that in an appeal under section 417 of the Code of Criminal Procedure the Court has full power to review at large the evidence on which the order of acquittal was founded and to reach the conclusion that upon the evidence the order of acquittal should be reversed. No limitation should be placed upon that power unless it be found expressly stated in the Code, but in exercising the power conflict by the Code before reaching its conclusion upon facts the High Court should give proper weight and consideration to such matters as (1) the views of the trial judge as to the credibility of the witnesses; (2) the presumption of innocence in favour of the accused, a presumption certainly not weakened by the fact that he has been acquitted at his trial; (3) the right of the accused to the benefit of any real and reasonable doubt and (4) the slowness of an appellate court in disturbing the finding of fact arrived at by a judge who had the advantage of seeing the witnesses. [576 D F] In the instant case there was no doubt that the deceased died as a result of acid bums. There was no cogent reason to disbelieve the evidence of the prosecution witnesses. The trial court was wrong in rejecting evidence of these witnesses on the ground that they were related to the deceased.! Close relatives of the deceased would normally be most reluctant to spare the real assailant and falsely mention the name of another person as the one responsible for causing injuries to the deceased. The deceased would not spare his real assailant ' and falsely mention the name of the appellant as one who poured acid over his body. There was no reason to discard the dying declaration made by the appellant to the police sub inspector, The trial Court was wrong in rejecting the dying declaration to the police (F.I.R.) on the ground that the deceased had stated to the doctor that he had become unconscious after the occurrence. There was nothing in the statement recorded by the doctor to indicate that the deceased remained unconscious for. a long time and as such was not in position to lodge the F.I.R. The fact that the language used in the dying declaration made to the doctor was rather chaste would not go to show that the said statement could not have been made by the deceased. As to the language used in the dying declaration there is nothing abnormal or unusual in the same person using colloquial language while talking to one person and using refined language while talking to another person. [574 E F ; 575D; 576A] 571

Civil Appeal No. 2607 of 1987. From the Judgment and order dated 6.1.1986 of the Patna High Court in Appeal Decree No. 75 of 1978. 416 Avadh Behari and Y.K. Jain for the Appellant. Shanker Ghosh and M. P. Jha for the Respondent. The Judgment of the Court was delivered by VENKATARAMIAH, J. The appellant is a firm carrying on business at Jharia. It took on lease a room bearing No. 1 in a building belonging to the respondent on a monthly rent of Rs.70 on 7.11.1960 and paid in advance two months ' rent, i.e., Rs.140. The appellant paid rents regularly but did not pay the rent for the months of September and October, 1972. Taking advantage of the non payment of the rent in respect of the said two months the respondent filed a petition for eviction against the appellant contending that the appellant had become liable to be evicted from the premises in question under clause (d) of sub section (1) of section 11 of the Bihar Building (Lease, Rent and Eviction) Control Act, 1947 (hereinafter referred to as 'the Act ') which provided that on failure to pay two months ' rent a tenant was liable to be evicted from the premises taken on lease. The appellant pleaded inter alia in his written statement that at the time of the inception of the tenancy it had paid the respondent a sum of Rs.140 as advance rent with an understanding that the amount of advance could be set off against the rent whenever necessary or required and that since under section 3 of the Act it was not lawful for a landlord to claim or receive, in consideration of the grant, renewal or continuance of a tenancy of any building, the payment of any premium, salami, fine or any other like sum in addition to the rent or payment of any sum exceeding one month 's rent of such building as rent, in advance, the appellant could not be considered as a defaulter in payment of rent for purposes of clause (d) of section 11(1) of the Act as atleast one month 's rent which had been paid in excess of what was permitted under section 3 of the Act was liable to be adjusted towards the arrears. The appellant, therefore, contended that in any view of the matter it could not be treated as a defaulter liable to be ejected from the premises. Agreeing with the pleas of the appellant the trial court dismissed the suit and the appeal filed by the respondent before the {[; Additional Subordinate Judge, Dhanbad against the judgment of the trial court was also dismissed. The respondent filed a second appeal before the High Court against the judgment of the Additional Subordinate Judge. The High Court found that the appellant had failed to pay the rent for the months of September and October, 1972 although it accepted the plea of the appellant that he had paid the sum of Rs.140 as rent in advance on the ground that the appellant had not requested 417 the respondent to adjust the rent which he had paid in advance A towards the rent due for the months of September and October, 1972. The relevant part of the judgment of the High Court reads thus: "6. In paragraph 9 of the written statement, the respondent stated that Rs.140 was advanced to the appellant, with an understanding that it could be set off against the rent whenever necessary or required. It will, therefore, appear that the respondent was entitled to claim adjustment if it was necessary or required. The respondent neither orally nor in writing informed that it was exercising its option under the agreement for adjusting the amount paid in advance towards the rent of September and October, 197,. Accordingly to the respondent 's own showing, it remitted the rent for these two months also alongwith rent of November and December, 1972 in January, 1973. If it had exercised its option under the agreement, there was no necessity for it to remit the rent for the months of September and October because that amount was not due as it had been paid by adjustment. Mr. Sinha submitted that the pleading should not be construed in a pedantic manner. There is no question of construing the pleadings in this case in a pedantic manner because according to its own case, the respondent was entitled to adjust the amount if necessary or required and for that it was necessary for it to intimate the appellant that it was exercising his option. Further, in the written statement no where it is asserted that it may be allowed to adjust the amount against the rent of September and October, 1972. Since the option was not exercised at any stage, the respondent cannot get the benefit of the amount paid by it in advance to the appellant. Mr. Merathia tried to make out that section 3 of the Act prohibits the landlord to accept the rent for more than one month and as the advance was for two months, no benefit can be given to the respondent as the contract was against the statute. It is true that if the parties are in pari delicto court will not come in rescue of either. However. that does not help the appellant. " Accordingly the High Court set aside the concurrent judgments of the two courts below and directed the eviction. This appeal by special leave is filed by the appellant against the judgment of the High Court. H 418 It is unfortunate that the High Court has approached the entire case in a technical fashion. It is not disputed that the respondent was not entitled to receive more than one month 's rent by way of advance. Yet, the respondent had received in advance the rent for two months. The receipt under which the said advance was received does not state that the amount received was liable to be adjusted towards the arrears of rent only on the appellant informing the respondent orally or in writing that such adjustment is to be made. In the written statement, however, the appellant pleaded that the amount paid by way of advance could be set off by way of rent whenever necessary or required. This is not a case where there was any agreement to the effect that such adjustment could be made only on the tenant asking the landlord to make such adjustment. Nor is this a case where the tenant was liable to the landlord on any other account. The only transaction between them was the lease in question and the amount in question had been paid as rent in advance. There was also no agreement that the amount was liable to be adjusted at the termination of the lease. It was, therefore, open to the respondent to appropriate the said sum towards the arrears even without any option being exercised as regards such adjustment by the appellant. The High Court erred in observing that the appellant had not asserted in its written. statement that it may be allowed to adjust the advance amount towards the rent due for the months of September and October, 1972. In substance the plea set out in para 9 of the written statement, amounts to such an assertion. In any case the appellant could not be treated as a defaulter who had failed to pay rent for two months. The High Court was also wrong in coming to the conclusion that the appellant could not rely on the provisions of section 3 of the Act on the ground that if the parties were in pari delicto the court would not come to the rescue of either. In Mohd. Salimuddin vs Misri Lal and another, [19861 1 S.C.R. 622 this Court has held that where in a suit by landlord for eviction of tenant it was found that the tenant, in order to secure the tenancy advanced certain amount to the landlord (although in violation of prohibition to do so as embodied in section 3 of the Act) under an agreement containing a stipulation that the loan amount was to be adjusted against the rent which accrued, and the amount so advanced was sufficient to cover the landlord 's claim of arrears of rent for the relevant period, it could not be said that the tenant was not entitled to claim adjustment of the loan amount so advanced against the rent which accrued subsequently, simply because the loan advanced was in violation of the prohibition contained in the Act. Accordingly, this Court held that as the tenant was not in arrears of rent after the 419 adjustment of loan amount towards the rent, he was not liable to be evicted from the premises in question. This Court further observed that the doctrine of in pari delicto was not attracted to such a situation. The principle enunciated in the above case is equally applicable to the case before us. The learned counsel for the respondent, however, relied upon a Full Bench decision of the High Court of Patna in Galab Chand Prasad vs Budhwanti and another, A.I.R. 1985 Pat. 327 in which it had been held that any excess rent paid by a tenant to his landlord in pursuance of a mutually agreed enhancement of rent which was illegal did not get automatically adjusted against all the subsequent defaults in the payment of the monthly rent under the Act. The decree for eviction passed by the High Court of Patna in the above case has no doubt been affirmed by this Court in Budhwanti & Anr. vs Gulab Chand Prasad., ; But, this Court affirmed the judgment of the High Court not on the ground that the tenant in that case was a defaulter in payment of rent but on the ground that the landlord required the premises for his bona fide use and occupation. This Court in its judgment observed that "in the view we propose to take . . . we do not think it necessary to go into the question whether the appellants had committed default in payment of rent and secondly even if they had committed default, they are entitled to adjust the excess rent paid by them over a span of 30 years without reference to the rule of in pari delicto. The reason for our refraining to go into these questions is because we find the decree for eviction passed against the appellants can be sustained on the second ground, viz., bona fide requirement of the shop for the business requirements of the members of the joint family. " It is not now necessary for us to consider the correctness of the observation made by the Full Bench of Patna High Court on the question of default and the right of the tenant to claim adjustment because what was claimed by way of adjustment in the said case was a certain excess amount paid over a long period of 30 years as enhanced rent under a mutual agreement though such payment was contrary to law. But in the case before us the amount of Rs.140 had not been paid as enhanced rent under any such agreement. It was, in fact, an amount which had been paid in advance which was liable to be adjusted whenever it was necessary or required. On the facts and in the circumstances of the case we are satisfied that the appellant was not in arrears of two months ' rent. We are of opinion that the High Court was in error in holding that the appellant was a defaulter who was liable to be evicted under clause (d) of sub 420 section (1) of section 11 of the Act. The judgment of the High Court is,therefore, liable to be set aside and we accordingly set it aside. The judgment of the trial court which has been affirmed by the first appellate court is restored. The appeal is accordingly allowed with costs. H.L.C. Appeal allowed.

In May, 1974 the Higher Judicial Service for the State of UP was constituted, and the post of Civil and Sessions Judge was abolished. The U.P. State Higher Judicial Service Rules, 1975 came into force with effect from May 10, 1975. The petitioners State Judicial Service Officers who were promoted on various dates to the Higher Judicial Service and posted as Additional District Judges/Civil and Sessions Judges before 1974, filed writ petitions in this Court challenging their inter se seniority, vis a vis, direct recruits contending that, on their confirmation, they were given seniority from a date chosen by the High Court arbitrarily, instead of from the date of their continuous officiation, which had resulted in their being placed much below the officers appointed much later by direct recruitment, that there was no provision for direct recruitment to the Higher Judicial Service before the 1975 rules were brought into force and all the existing vacancies on that date were to be filled by only promotion, and therefore, the High Court, while confirming and giving the dates for the purpose of seniority, ought to have prepared a list of a vacancies existing on the date the rules came into force and confirmed all those who were officiating as Additional and District Judges or Civil and Sessions Judges on that day in all those vacancies. They also contended that while computing the seniority only three years were counted whereas they should have been given advantage of continuous officiation as they were officiating in the posts before the 1975 rules came into existence. 399 The aforesaid petitions were contested by the High Court contending that as it became necessary to fill in the temporary posts the formality of examining record and consideration by a Committee or the Full Court was not done, and all the petitioners were appointed only on the basis of seniority and not in accordance with the rules and, therefore, they could not be treated as appointed on probation from the date of their officiation and that even if an officer had been continuously working for more than three years, still for the purpose of computing seniority only three years will be counted as per proviso to Rule 26. Allowing the writ petitions partly, ^ HELD: 1.1 The period of officiation has to be considered as period of probation and the confirmation has to be from the date on which earliest a vacancy was available and the seniority has to be counted on that basis. [406A] 1.2 Before the U.P. Higher Judicial Service Rules, 1975 were brought into force, there was no rule requiring direct recruitment and hence all the posts available were to be filled by promotion. In view of this, and in view of proviso to Rule 8, all the posts (permanent) available in the Higher Judicial Service plus thirty one temporary posts existing on that date, which may become permanent later, should be filled by promotion from amongst the members of the Nyayika Sewa. Some of the posts may be occupied by promotees officers who were given promotions on ad hoc basis and working on these posts or that the posts may be Lying vacant. Whatever may be the situation the matter will have to be gone into afresh by the High Court and all the posts in the Higher Judicial Service available as on May 10, 1974 plus thirty one posts have to be filled from the officers of the Nyayika Sewa. [403C, 406E G] 1.3 In view of Para 3 of the Rules and the Notification abolishing the posts of Civil and Sessions Judges, all those officers who were officiating as Civil and Sessions Judges on 8th May, 1974 automatically became Additional District and Sessions Judges. What has been contemplated in Rule 20 could not be applied retrospectively for promotions before 1975. What was left was only a consideration of their cases of confirmation. In doing so, the only thing that could be kept in view is the date on which a vacancy (permanent) was available for their confirmation and the seniority of those officers will have to be reckoned in accordance with the date of confirmation which will be not the actual date of confirmation but a date when a post was available, and in so doing, it will not also be reasonable to fix any date, as has been done by 400 the High Court arbitrarily on the assumption that actually when they were promoted they were not promoted after following the procedure. The only thing that can be considered will be that if at the time of confirmation an officer was not found fit naturally he must have been reverted, and the question of ms seniority in the Higher Judicial Service, therefore, will not arise. [407G H, 408B E] So far as the posts available on 10th May, 1974 is concerned, the High Court will have to look into the matter afresh and decide the seniority. But after the rules came into force, the Rules will have to be given effect to. [408H, 409A] 2.1 In Rule 22 the phrase used is "to make appointment to the service on the occurrence of substantive vacancies". The substantive vacancy has not been defined in the Rules. But the scheme of the rules clearly indicates that there are permanent posts and temporary posts also which are created to meet contingency and it may in due course be made permanent. Therefore, when appointment under Rule 22 is contemplated in the service of substantive vacancies, it may be both temporary or permanent. But the vacancy must be in the cadre. A person could only be confirmed when the permanent post is available for him. It is clear from cl. (3) of Rule 22 that appointment to temporary vacancies shall be made from the Nyayika Sewa and as and when a substantive vacancies arises the procedure for selection should be followed and the officers who were appointed to fill in the temporary post should be considered first and appointed on probation if found fit. [410D F, 410H 411A] 2.2 Normally the period of probation shall be two years. In computing this period of probation, an officer who has been continuously officiating immediately prior to his appointment on probation will also be taken into account and the period of probation in any event shall not exceed three years. Proviso 2 to Rule 26 provides that in the case of promotee officers a maximum period of continuous officiation in the service shall not, for the purpose of determining seniority, exceed three years immediately preceding the date of confirmation. This is consistent with the Rule 23 which provides that total period of probation shall not ordinarily exceed three years. [412A B, C D] These principles of seniority will apply only to the promotions made after the rules came into force. The scheme of the rules is that if a person is appointed to officiate in the Higher Judicial Service his case for confirmation will normally be considered within three years and either he will be confirmed or reverted and the High Court is expected 401 to examine the case of the promotee officer within three years and decide whether the officer deserves to be confirmed or reverted. [412E F] By laying down that the period of probation shall not ordinarily exceed three years and that only three years of continuous officiation will be counted for purposes of seniority in the case of promotee officers, the rules contemplate that there will not be an occassion when there may be a person officiating for more than three years and his case has not yet been considered for confirmation. [412G H] Ordinarily, if the Rules were brought into force the appointments to the Higher Judicial Service, either on the basis of direct recruitment or on the basis of promotion, must have been in accordance with the Rules and it is expected that the probation, confirmation and the seniority must have been looked into by the High Court strictly in accordance with the Rules. [413A B] 3. About the appointments on the posts available before these Rules were brought into force and to fill in temporary posts, the matter will have to be examined afresh by the High Court and the posts available on 10th May, 1974 plus thirty one posts will have to be filled in only by promotees. Thereafter the High Court should examine the cases of promotion and direct recruitment, after coming into force of these Rules, and the vacancies available. After considering the cases in accordance with these Rules, the High Court will prepare afresh the seniority list which may be notified so that if any objections are raised they may be placed for determination in accordance with the Rules. [413D F] O.P. Singla & Anr. etc. vs Union of India & Ors., l, referred to.

ivil Appeal No. 2071 of 1968. (From the Judgment and Order dated 20 4 1967 of the Madhya Pradesh High Court in Misc. First Appeal No. 104/66). Rameshwar Nath, for the appellants U.R. Lalit and A.G. Ratnaparkhi, for respondent No. 1. Naunit Lal and Miss Lalita Kohli, for respondent No. 2. The Judgment of the Court was delivered by KAILASAM, J. This is an appeal by certificate under Article 133 (1)(a) of the Constitution granted by the High Court of Madhya Pradesh. The appellants filed a claim for compensation of a sum of rupees one lakh under section 110 of the before the Claims Tribunal, Jabalpur. The first claimant is the wife and the claimants 2 to 8 are the children of one Purshottam Tulsidas Udeshi who met with his death in a motor car accident on 18th December, 1960 when he was travelling in the car which was driven by Madhavjibhai Mathuradas Ved, the Manager of the first opponent company, M/s. Ranjit Ginning and Pressing Co. Private Ltd., in a rash and negligent manner near a village called Chincholivad which was 16 miles from Saoner. The car which was .a Hindustan Ambassador Saloon was insured with second opponent, Union 375 Fire Accident and General Insurance Co. Ltd. The deceased was aged 58 years at the time of ' his death and according to the petitioners was earning annually about Rs. 9,000. They claimed a compensation of rupees one lakh. The opposite parties, the owner and the insurance company, opposed. the claim. While admitting that the vehicle was proceeding from Nagpur on its way to Pandhurna for the purpose men tioned by the applicants they denied that the vehicle was driven in a rash and negligent manner and pleaded that the vehicle was at the time of accident in perfectly sound condition. It Was submitted that the husband of the appli cant No. 1 was travelling in the said vehicle on his own responsibility and for his own purpose and absolutely gratis and not on behalf of or at the instance of the opposite party No. 1, or the driver of the vehicle and therefore the claimants are not entitled to any compensa tion. The opposite parties pleaded that the incident was as a result of inevitable accident and not due to any act of rashness or negligence on the part Of the driver. They opposed the claim of the compensation as highly exaggerated. The Motor Accidents Claims Tribunal, Jabalpur, found that the accident of the motor vehicle was as a result of negligent driving of the vehicle by the Manager, Madhavjib hai Mathuradas Ved, the driver of the vehicle. It also found that the first respondent, the owner of the company, is liable to pay compensation to the claimants on account of the negligence of their employee Madhavjibhai which caused the death of Purshottam Tulsidas Udeshi. Regarding the compensation payable the Tribunal fixed Rs. 31,209.15 as general damages in addition to Rs. 2,000 as special damages for funeral and post funeral expenses. The owner, first opponent, preferred an appeal to the High Court impleading the claimants and the insurance company as respondents against the award passed by the. Claims Tribunal. The High Court did not decide the question as to whether the accident was due to the rash and negligent driving or the quantum of compensation to which the claimants were entitled to as it allowed the appeal by the owner on the ground that the owner cannot be held vicariously liable for the act of Madhavjib hai in taking Purshottam as a passenger as the said act was neither in the course of his employment nor under any au thority whatsoever and that there was no evidence that the owners of the vehicle were aware that Purshottam was being taken in the car as a passenger by their Manager, Madhavjib hai. Holding that so far as the owners are concerned Pur shottam was no better than a trespasser the High Court held that the owners were not vicariously liable. On an applica tion by the claimants the High Court granted a certificate and thus this appeal has come before this Court. The questions that arise for consideration are whether on the facts of the case the claimants have established (1) that the accident was due to the rash and negligent driving of Madhaviibhai Mathuradas Ved, the Manager of the company, and (2) whether the incident took place during the course of the employment of the driver. In the event the claimants succeed on these two points the amount of compensation to which they are entitled would have to be determined. 376 The High Court relying on three decisions in Sitgram Motilal Kalal vs Santanuprasad Jaishankar Bhatt(1), Canadian Pacific Railway Company vs Leonard Lockhall(2), and Conway vs George Wimpey & Co. Ltd.(3), came to the conclusion that the rash and negligent driving by the Manager was not in the course of his employment. The learned counsel for the respondent relied on some other decisions which will be referred to in due course. The High Court has not gone into the question as to whether the car was. being driven rashly and negligently by the owner 's employee as it held that the act was not in the course of his employment. We feel that the question as to whether the car was being driven rashly and negligently would have to be decided on the facts of the case first for, if the claimants fail to establish rash ' and negligent act no other question would arise. We would therefore proceed to deal with this question first. The claimants did not lead any direct evidence as to how the accident occurred. No eye witness was examined. But P.W. 1, the younger brother of the deceased Purshottam Udeshi, who went to the spot soon after the accident was examined. He stated that he went with one of his relatives and an employee of his brother 's employer and saw that the car had dashed against a tree while proceeding from Nagpur to Pandurna. The tree was on the right hand side of the road, four feet away from the right hand side of the main metalled road. The vehicle will have to proceed on the left hand side of the road. The road was 15 feet wide and was a straight metalled road. On either side of the road there were fields. The fields were of lower level. The tree against which the car dashed was uprooted about 9 to 10 inches from the ground. The car dashed so heavily that it was broken in the front side. A photograph taken at that time was also filed. According to the witness the vehicle struck so heavily that the machine of the car from its original posi tion went back about a foot. The steering wheel and the engine of the car receded back on driver 's side and by the said impact the occupants died and front seat also moved back. The witness was not cross examined on what he saw about the state of the car and the tree. It was not sug gested to him that the car was not driven in a rash and negligent manner. In fact there is no cross examination on the aspect of rash and negligent driving. The Claims Tribu nal on this evidence found that "it was admittedly a mishap on the right side of the road wherein the vehicle had dashed against a tree beyond the pavement so violently as not only to damage the vehicle badly but also entailing death of its three occupants, maxim 'res ipsa loquitur ' applies (See Ellor vs Selfridge The Tribunal proceeded to discuss the evidence of P.W. 1 and found on the evidence that it cannot.help concluding that the dashing of the car against the tree was most violent and that it was for the respondents to establish that it was a case of inevitable accident. They have led no evidence. It may at once be stated that though the opposite parties had pleaded that this is a case of inevitable accident they have (1) (2) A.I.R. 1943 P.C. 63. (3) 377 not led any evidence to establish their plea. The burden rests on the opposite party to prove the inevitable acci dent. To succeed in such a defence the opposite party will have to establish that the cause of the accident could not have been avoided by exercise of ordinary care and caution. "To establish a defence of inevitable accident the defendant must either show what caused the accident and that the result was inevitable, or he must show all possible causes, one or more of which produced the effect, and with regard to each of such possible causes he must show that the result could not have been avoided." (Halsbury 's Laws of England, Third Ed., Vol. 28, p. 81). No such attempt was made and before us the plea of inevitable accident was not raised. We have therefore to consider whether the claimants have made out a case of rash and negligent driving. As found by the Tribunal there is no eye witness and therefore the question is whether from the facts established the case of rash and negligent act could be inferred. The Tribunal has applied the doctrine of "resipsa loquitur". It has to be considered whether under the circumstances the Tribunal was justified in applying the doctrine. The normal rule is that it is for the plaintiff to prove negligence but as in some cases considerable hardship is caused to the plaintiff as the true cause of the accident is not known to him but is solely within the knowledge of the defendant who. caused it, the plaintiff can prove the acci dent but cannot prove how it happened to establish negli gence on the part of the defendant, This hardship is sought to be avoided by applying the principle of res ipsa loqui tur. The general purport of the words res ipsa loquitur is that the accident "speaks for itself" or tell 's its own story. There are cases in which the accident speaks for itself so that it is sufficient for the plaintiff to prove the accident and nothing more. It will then be for the defendant to establish that the accident happened due to some other cause that his own negligence. Salmond on the Law of Torts (15th Ed.) at p. 306 states: "The maxim res ipsa loquitur applies whenever it is so improbable that such an accident would have happened without the negligence of the defendant that a reasonable jury could find without further evidence that it was so caused. " In Halsbury 's Laws of England, 3rd Ed., Vol. 28, at p. 77, the position is stated thus: "An exception to the general rule that the burden of proof of the alleged negligence is in the first instance on the plaintiff occurs wherever the facts already established are such that .the proper and natural inference arising from them is ,that the injury complained of was caused by the defendant 's negligence, or where the event charged as negligence "tells its own story ' of negligence on the part of the defendant, the story so told being clear and unambiguous. " Where the maxim is applied the burden is on the defendant to show either that in fact he was not negligent or that the accident might more probably have happened in a manner which did not connote negligence on his part. For the application of the principle it must be shown that the car was under the management of the defendant and that the accident is such as in ordinary course of things does not happen if those who had the management used proper care. Applying the principles stated above we have to see whether the requirements of the principle 378 have been satisfied. There can be no dispute that the car was under the management of the company 's manager and that from the facts disclosed by P.W. 1 if the driver had used proper care in the ordinary course of things the car could not have gone to the right extreme of the road, dashed against a tree and moved it a few inches away. The learned counsel for the respondents submitted that the road is a very narrow road of the width of about 15 feet on either side of which were fields and that it is quite probable that cattle might have strayed. into the road suddenly causing the accident. We are unable to accept the plea for in a country road with a width of about 15 feet with fields on either side ordinary care requires that the car should be driven at a speed in which it could be controlled 'if some stray cattle happened to come into the road. From the description of the accident given by P.W. 1 which stands unchallenged the car had proceeded to the right extremity of the road which is the wrong side and dashed against a tree uprooting it about 9 inches from the ground. The car was broken on the front side and the vehicle struck the tree so heavily that the engine of the car was displaced from its original position one foot on the back and the steering wheel and the engine of the car had receded back on the driver 's side. The car could not have gone to the right extremity and dashed with such violence on the tree if the driver had exercised reasonable care and caution. On the facts made out the doctrine is applicable and it is for the opponents to prove that the incident did not take ' place due to their negligence. This they have not even attempted to do. In the circumstances we find that the Tribunal was justified in applying the doctrine. It was submitted by the Learned counsel for the respondents that as the High Court did not consider the question this point may be remitted to the High Court. We do not think it necessary to do so for the evidence on record is convicing to prove the case of rash and negligent driving set up by the claimants. The second contention that was raised by the counsel for the appellants is that the High Court was in error in hold ing that the incident did not take place in the course of the employment or under the authority of the company. The High Court found that there is no evidence that the owner of the vehicle was aware that Purshottam was being taken in the car as a passenger by Madhavjibhai and in the circumstances the owner cannot be held liable for the tortious act of the servant. The High Court found that the car was going from Nagpur to Pandhurna on the business of the company and it may also be that Madhavjibhai, the Manager of the owner 's car, was also going on the business of the owner and it may also be that he had implied authority to drive the vehicle. Having agreed with the contentions of the claim ants so far the High Court came to the conclusion that there were no pleadings or material on record to establish that Purshottam was travelling in the vehicle either on some business of the owner of the vehicle or under any ostensible authority from them to their manager Madhavjibhai to take Purshottam as a passenger in the vehicle. Before dealing with the right of Purshottam as a passenger, we will consid er the question whether the 379 accident took place during the course of the employment of Madhavjibhai by the company. It is admitted in the written statement by the owner, that Madhavjibhai was the Manager of opposite party No. 1 and that the vehicle was proceeding from Nagpur on its way to Pandhurna for purpose of deliver ing an amount of Rs. 20,000 to the Ginning. and Pressing factory at Pandhurna. The Tribunal found on the plead ings that Madhavjibhai was the employee of the company and during the course of employment by driving the motor car he negligently caused the death of Purshottam. The High Court also confirmed the findings and found that Madhavjibhai, the Manager .of the owner of the car, was going on the business Of the said owner and that it may be that the Manager had the implied authority to drive the vehicle. On such a finding which is not disputed before us, it is difficult to resist the conclusion that the accident was due to the negligence of the servant in the course of his employment and that the master is liable. On the facts found the law is very clear but as the question of the company 's liability was argued at some length we will proceed to refer to the law on the subject. It is now firmly established that the master 's liability is based on the ground that the act is done in the scope or course of his employment or authority. The position was stated by Lord Justice Denning in Young vs Edward Box and Co. Ltd.(1). The plaintiff and fellow workmen were given a lift on one of the defendants ' lorries with the consent of his foreman and of the driver of the lorry. On a Sunday evening the plaintiff, in the course of that journey, was injured by the negligence of the driver of the lorry and the plaintiff brought an action against the defendants claiming damages for his injuries. The defence was that the plain tiff, when on the lorry, was a trespasser. The traffic manager of the defendants pleaded that he had never given instructions to the foreman that he should arrange for lifts being given to the plaintiff and his fellow workmen on Sundays and that the foreman had no authority to consent to the plaintiff 's riding on the lorry. While two learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible authority of the foreman, and that the plaintiff was entitled to rely on that authority and in that respect was a licensee, Lord Denning held that although the plaintiff, when on the lorry, was a trespasser, so far as the defendants were concerned, the driver was acting in the course of his employment in giving the plaintiff a lift and that was sufficient to make the defendants liable and that he did not base his judgment on the consent of 'the foreman. Lord Justice Denning stated the position thus: " . the first question is to see whether ' the servant was liable. If the answer is Yes, the second question is to see whether the employer must shoulder the serv ant 's liability. So far as the driver is concerned, his liability depends on whether the plaintiff was on the lorry with his con sent or not. X X X X X. (1) at 793. 380 The next question is how far the employers are liable for their servant 's conduct. In order to make the employers liable to the passenger it is not sufficient that they should be liable for theft servant 's negli gence in driving. They must also be responsi ble for his conduct in giving the man a lift. If the servant has been forbidden, or is unau thorised, to give anyone a lift, then No. doubt the passenger is a trespasser on ' the lorry so far as the owners are concerned; but that is not of itself an answer to the claim. X X X X X In my opinion, when the owner of a lorry sends his servant on a journey with it, thereby putting the servant in a position, not only to drive it, but also be give people a lift in it, then he is answerable/or the manner in which the servant conducts himself on the journey, not only in the driving of it, but also in giving lifts in it, provided, of course, that in so doing the servant is acting in the course of his employment." Lord Justice Denning concluded by observing that the passen ger was therefore a trespasser, so far as the employers were concerned; but nevertheless the driver was acting in the course of his employment, and that is sufficient to make the employers liable. It will thus be seen that while two of the learned Judges held that the right to give the plaintiff leave to ride on the lorry was within the ostensible author ity of the foreman and the plaintiff was entitled to rely on that authority as a licensee, Lord Denning based it on the ground that even though the plaintiff was a trespasser so far as the defendants were concerned, as the driver was acting in the course of his employment in giving the plain tiff a lift, it was sufficient to make the defendants li able. Applying the test laid down there can be no difficul ty in concluding that the right to give leave to Purshottam to ride in the car was within the ostensible authority of the Manager of the company who was driving the car and that the Manager was acting in the course of his employment in giving lift to Purshottam. Under both the tests the respond ents would be liable. We will now refer to the three cases relied on by the High Court for coming to the conclusion that the accident did not take place during the course of employment. The first case referred to is Sitaram Motilal Kalal vs Santanu prasad Jaishankar Bhatt(1). The owner of a vehicle entrust ed it to A for plying it as a taxi. B who used to clean the taxi was either employed by the owner or on his behalf by A. A trained B to assist him in driving the taxi and took B for obtaining a licence for driving. While taking the test B caused bodily injury to the respondent. A was not present in the vehicle at the time of the accident. On the question whether the owner was liable the majority held the view that the owner was not liable. On the facts the court found that the person who had borrowed the taxi for taking out a licence and the driver who lent the same was not acting in the course of his business. The court on an application of the test laid down in various decisions held that there is no proof that the second defendant, the driver, was author ized to coach the cleaner so that the cleaner ' (1) [19661 3 S.C.R. 527.] 381 might become a driver and drive the taxi and that it ap peared more probable that the second defendant wanted some one to assist him in driving the taxi for part of the time and was training the third defendant to share the task of driving. The owner 's plea that it had not given any such authority was accepted by the court. Holding that it had not been proved that the act was impliedly authorized by the owner or to come within any of the extensions of the doc trine of scope of employment the court held that the owner is not liable. This Court has held that the test is whether the act was done on the owner 's business or that it was proved to have been impliedly authorized by the owner. At page 537 it is stated that the law is settled that master is vicariously liable for the acts of his servants acting in the course of his employment. Unless the act is done in the course of employment, the servant 's act does not make the employer liable. In other words, for the master 's liability to arise, the act must be a wrongful act authorised by the master or a wrongful and unauthorized mode of doing some act authorised by the master. The extension of the doctrine of the scope of employment noticed in the judgment refers to the decision of Ormrod and Another vs Crosville Motor Serv ices Ltd., and Another (1), where Lord Denning stated: "It has often been supposed that the owner of a vehicle is only liable for the negligence of the driver if that driver is his servant acting in the course of his employment. This is not correct. The owner is also liable if the driver is, with the owner 's consent, driving the car on the owner 's business or for the owner 's purposes." The Supreme Court accepted the test and to that extent this may be taken as an extension of the doctrine of scope of employment. Thus, on the facts as we have found that the accident took place during the course of employment the decision in Sitaram Motilal Kalal is of no help to the respondents. The next ease which is referred to by the High Court is Canadian Pacific Railway Company vs Lockhart(2). In that case one S was employed as a carpenter by the railway compa ny. In the course of his employment he was required to make repairs of various kinds to employer 's property. He made a key for use in a lock in the station at N far away from his headquarters at W. He was paid per hour and the railway company kept vehicles to be used by S available for him. S, however, had a car of his own and without communicating his intention to anyone he used it on his way to N. An accident happened on the way owing to S 's negligence. It was also in evidence that the railway company had issued notice to its servants particularly to S warning him against using their private cars unless they had got their cars insured against third party risk. On the facts, the Privy Council held that the means of transport used by the carpenter was clearly incidental to ' execution of that for which he was employed. As what was prohibited was not acting as a driver but using a non insured car, the prohibition merely limited the way in which the servant was to execute the work which he was employed to do and that breach of the prohibition did not exclude the liability of the master to third party. We do not see how this case would help the respondents. On (1) (2) 382 the other hand it supports the contention of the counsel for the appellants that when the Manager was driving the car for the purposes of the company it was in the course of his employment. The third case that is referred to by the High Court is Conway vs George Wimpey & Co. Ltd. (1). The defendants, a firm of contractors, were engaged in building work at an aerodrome, and they provided lorries to convey their employ ees to the various places of their work on the site. In the cab of each lorry was a notice indicating that the driver was under strict orders not to carry passengers other than the employees of the defendants during the course of, and in connection with, their employment, and that any other person travelling on the vehicle did so at his own risk. Further the driver of the lorry had received clear oral instructions prohibiting him fro.m taking other persons. The plaintiff who was employed as a labourer by another firm Of contrac tors at the aerodrome, while on his way to work, was permit ted by the driver to ride on one of the defendants ' lorries for some distance across the aerodrome and while dismounting the plaintiff was injured owing to driver 's negligence. The court held that on the facts of the case the taking of the defendants ' employees on the vehicle was not merely a wrong ful, mode of performing an act of the class which the driver in the present case was employed to perform but was the performance of an act of a class which he was not employed to perform at all. The facts stated above are entirely different from those which arise in the present case before us as in the case before the Court of Appeal(2) there was a notice indicating that the driver was under strict orders not to carry passengers and the driver was instructed not to carry others while in the present case a responsible officer of the company, the Manager, had permitted Purshottam to have a ride in the car. Taking into account the high posi tion of the driver who was the Manager of the company, it is reasonable to presume, in the absence of any evidence to the contrary, that the Manager had authority to carry Purshottam and was acting in the course of his employment. We do not see any support for the conclusion arrived at by the High Court that the driver was not acting in the course of his employment. We will now proceed to refer to some cases which were cited by the learned counsel for the respondents. The learned counsel placed reliance on the decision in Houghton vs Pilkington.(1) In that case the plaintiff at the request of a servant of the defendant got into the defendant 's cart which was then in the chrage of the servant, in order to render assistance to another servant of the defendant who had been rendered unconscious by an accident. The plaintiff fell out of the cart and was injured through the negligence of the servant in charge of the cart in causing the horse to start. In an action against the defendent for damages for the injuries sustained by the plaintiff it was held that the existence of an emergency gave no implied authority to the servant to invite the plaintiff into. the cart and that the defendant was not liable (1) (2) (3) 383 to the plaintiff. Justice Bankes while agreeing with Justice Bray who delivered the leading judgment expressed his view that the lower court had taken the view that an emergency had arisen which gave the defendant 's servant implied au thority to invite the plaintiff into the cart for the pur pose of rendering assistance to. the injured boy. The learned Judge was first inclined to agree with that view but because of the case being governed by Cox vs Midland Coun ties Ry. Co. ; he felt he could not consistent ly with that decision hold that in the circumstances the driver of the cart had any implied authority to invite the plaintiff to get into the car. The facts in Houghton vs Pilkington are entirely different and the decision was based on the ground that existence of the emergency did not confer on the driver of the cart authority to invite the plain tiff into the cart. The next case that was cited by the learned counsel for the respondents was Twine vs Bean 's Express, Limited(1). The defendants provided for the use of a bank a commercial van and a driver on the terms that the driver remained the servant of the defendants and that the defendants accepted no responsibility for injury suffered by persons riding in the van who were not employed by them. There were two notices on the van, one stating that no unauthorized person was allowed on the vehicle, and the other that driver had instructions not to allow unauthorized travellers in the van, and that in no event would the defendants be responsi ble for damage happening to them. One T who was not author ized to ride in the van got a rift in the van with the consent of the driver. Owing to the negligence of the driver the accident occurred and T was killed. The conten tion that the accident arose while the driver was engaged on a duly authorized journey was negatived and it was held that defendants owed no duty to T to take care. This case was taken up on appeal which confirmed the view of the trial court holding that the driver in giving the lift to T was clearly not acting within the Scope of his employment and his employers were consequently not liable. The facts are totally different. The learned counsel for the respondents was not able to produce any authority which would support his contention that on the facts of the case found, the company should not be held liable. Before we conclude, we would like to point out that the recent trend in law is to make the master liable for acts which do not strictly fall within the term "in the course of the employment" as ordinarily understood. We have referred to Sitaram Motilal Kalal vs Santanuprasad Jaishankar Bhat (supra) where this Court accepted the law laid down by Lord Denning in Ormrod and Another rs. Crosville Motor Services Ltd. and Another (supra) that the owner is not only liable for the negligence of the driver if that driver is his servant acting in the course of his employment but also when the driver is, with the owner 's consent, driving the car on the owner 's business or for the owner 's purposes. This extension has been accepted by this Court. The law as laid down by Lord Denning in Young vs Edward Box and Co. Ltd. already referred to i.e. the first question is to see wheth er the servant is liable (1) 155, year 1945 56. 10 36SCI/77 384 and if the answer is yes, the second question is to see whether the em1oyer must shoulder the servant 's liability, has been uniformally accepted as stated in Salmond Law of Torts, 15th Ed., p. 60 '6, in Crown Proceedings Act, 1947 and approved by the House of Lords in Staveley Iron & Chemical Co. Ltd. vs Jones(1) and I.C.I. Ltd. vs Shatwell(2). The scope of the course of employment has been extended in Navarro vs Moregrand Ltd. & Anr(3) where the plaintiff who wanted to acquire the tenancy of a certain flat, applied to the second defendant, a person with ostensible authority to conduct the business of letting the particular fiat for the first defendant, the landlord. The second defendant demand ed from the plaintiff a payment of Pound 225 if he wanted the flat and 'the plaintiff paid the amount. The plaintiff sought to recover the sum from the landlord under the Land lord and Tenant (Rent Control) Act, 1949. The Court of Appeal held that the mere fact that the second defendent was making an illegal request did not constitute notice to the plaintiff that he was exceeding his authority and that, though the second defendant was not acting within his actual or ostensible authority in asking for the premium, a.s the landlord had entrusted him with the letting of the flat, and as it was in the very course of conducting that business that he committed the wrong complained of he was acting in the course of his employment. Lord Denning took the view that though the second defendant was acting illegally in asking for and receiving a premium and had no actual or ostensible authority to do an illegal act, nevertheless, he was plainly acting in the course of his employment, because his employers, the landlords, had entrusted him with the full business of letting the property, and it was in the very course of conducting that business 'that he did the wrong of which complaint is made. This decision has extended the scope of acting in the course of employment to include an illegal act of asking for and receiving a premium though the receiving of the premium was not authorized. We do. not feel called upon to consider whether this extended meaning should be accepted by this Court. It appears Lord Goddard, Chief Justice, had gone further in Barker vs Levinson(4) and stated that "the master is responsible for a criminal act of the servant if the act is done within the general scope of the servant 's employment." Lord Justice Denning would not go to this extent and felt relieved to find that in the authorized Law Reports , the passage quoted above was struck out. We respectfully agree with the view of Lord Denning that the passage attributed to Lord Chief Justice Goddard went a bit too far. On a consideration of the cases, we confirm the law as laid down by this Court in Sitararn Motilal Kalal vs Santa nuprasad Jaishankar Bhatt (suvra) and find that in this case the driver was acting in the course of his employment. and as such the owner is liable. We therefore set aside the finding of the High Court that the act was not committed in the course of employment or under the authority of the master, and allow the appeal. 2) (1965) A.C. 656. (3) (4) 66 The Times L.R. (Pt. 2) 717. 385 The only point that remains is the determination of the quantum of compensation to which the appellants are entitled to. The High Court did not go into this question but the Tribunal after taking into consideration the various facts fixed the compensation at Rs. 33,209.15 with costs and directed that the insurance company shall indemnify the owner to the extent of Rs. 15,000. The Tribunal fixed special damages for funeral and post funeral expenses in cluding transport charges at Rs. 2,000. This item is not disputed. The second item is a sum of Rs. 31,209.15 which according to the Tribunal would have been the amount which the deceased would have earned by continuing to work for a period of 5 years. The Tribunal accepted the documents produced by the claimants regarding the income of the de ceased and fixed it at Rs. 9,316.83 per annum. Out of this amount the Tribunal rightly excluded a sum of Rs. 1,875 which is the bonus the deceased would have got as it cannot be taken into account and fixed the net amount of earning at Rs. 7,441.83 per year and Rs. 37,209.15 for 5 years. After deducting Rs. 6,000 which the deceased might have spent on himself the Tribunal arrived at a figure of Rs. 31,209.15 under this head. The learned counsel for the respondents referring to item No. 27 pointed out that the pay of the deceased was only Rs. 425 per month and that the Tribunal was in error in including the dearness allowance, conveyance allowance and other expenses and that the income of the deceased should have been taken as only Rs. 425 per month. The learned counsel for the appellants accepts this figure. Taking Rs. 425/ being the monthly income the annual income totals up to Rs. 5,100/ and for 5 years to Rs. 25,500/ . Adding to this Rs. 2,000/ which was given as special dam ages the total amount will come to Rs. 27,500/ . We accept ' this calculation as correct and restore the award passed by the Claims Tribunal but restrict it to an amount of Rs. 27,500/ . As the Union Fire Accident & General Insurance Co. Ltd., Paris, carrying on business at Nagpur has been nationalised, though the second respondent before the Tribunal was repre sented by a counsel, we directed notice to the nationalised insurance company so. that they would also be heard. The nationalised insurance company has taken notice and appeared through Mr. Naunit Lal, advocate. The insurance company had nothing further to add except as to the quantum of liability of the insurance company so far as injuries to the passengers are concerned. Mr. Naunit Lal submitted that the scope of the statutory insurance does not cover the injury suffered by the passengers and as the owner has specifically insured under the insurance policy the risk to passengers to the extent of Rs. 15,000 only the liability of the insurance company should be limited to Rs. 15,000. On behalf of the owner it was submitted that the insurance cover under the Act extended to the injury to the passengers also and sought to support his contention by referring to section 95(1)(b)(i) which provides against any liability to the owner which may be incurred by him in respect of death of or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. 386 As section 95 of the Motor Vehicles Act, 1935 as amended by Act 56 of 1969 is based on the English Act it is useful to refer to that. Neither the Road Traffic Act, 1960, or the earlier 1930 Act required users of. motor vehicles to be insured in respect of liability for death or bodily injury to passengers in the vehicle being .used except a vehicle in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment. In fact, sub section 203(4) of the 1960 Act provided that the policy shall not be required to cover liability in respect of death of or bodily injury to persons being carried in or upon, or entering or getting on to or alighting from, the vehicle at the time of the occurrence of the event out of which the claims arise. The provisions of the English Act being explicit the risk to passengers is not covered by the insurance policy. The provisions under the English Road Traffic Act, 1960, were introduced by the amendment of section 95 of the Indian Motor Vehicles Act. The law as regards general exclusion of passengers is stated in Hals bury 's Laws of England, Third Edition, Vol. 22, at p. 368, para 755 as follows : "Subject to certain exceptions a policy is not required to cover liability in respect of the death of, or bodily injury to, a person being carried in or upon, or entering or getting into or alighting from, the vehicle at the time of the occurrence of the event out of which the claim arises," It is unnecessary to refer to the subsequent development of the English law and as the subsequent changes have not been adopted in the Indian statute. Suffice it to say that the Motor Vehicle (Passenger Insurance) Act, 1971, made insur ance cover for passenger liability compulsory by repealing paragraph (a) and the proviso of sub section 203(4). But this Act was repealed by Road Traffic Act, 1972 though under section 145 of 1972. Act the coming into force of the provi sions of Act 1971 covering passenger liability was delayed under December 1, 1972. (vide Bingham 's Motor Claims Cases, 7th Ed., p. 704). Section 95(a) and 95(b)(i) of the Motor Vehicles Act adopted the provisions of the English Road Traffic Act, 1960, and excluded the liability of the insurance company regarding the risk to the passengers. Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death or bodily injury to any person or damage to any property of a third party caused by or arising out of the use of the vehicle in a public place. The plea that the words "third party" are wide enough to cover all persons except the person and the insurer is negatived as the insurance cover is not available to the passengers made clear by the proviso to sub section which provides that a policy shall not be required "(ii) except where the vehicle is a vehi cle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment, to cover liability in respect of the death of or bodily injury to persons being 387 carried in or upon or entering or mounting or alighting from the vehicle at the time of the occurrence of the event out of which a claim arises. " Therefore it is not required that a policy of ' insurance should cover risk to the passengers who are not carried for hire or reward. As under section 95 the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured the plea of the counsel for the insurance company will have to be accepted and the insurance company held not liable under the requirements of the Motor Vehicles Act. The insurer can always take policies covering risks which are not covered by the requirements of section 95. In this case the insurer had insured with the insurance company the risk to. the passengers. By an endorsement to. the policy the insurance company had insured the liability regarding the accidents to passengers in the following terms: "In consideration of the payment of an additional premium it is hereby understood and agreed that the Company undertakes to pay compensation on the scale provided below for bodily injury as hereinafter defined sustained by any passenger . . ." The scale of compensation is fixed at Rs. 15,000. The insurance company is ready and willing to pay compensation to the extent of Rs. 15,000 according to this endorsement but the learned counsel for the insured submitted that the liability of the insurance ' company is unlimited with regard to risk to the passengers. The counsel relied on Section II of the Policy which relates to liability to third parties. The clause relied on is extracted in full: "Section II Liability to Third Parties. The Company will indemnify the in sured in the event of accident caused by or arising out of the use of the Motor Car against all sums including claimant 's costs and expenses which the insured shall become ' legally liable to pay in respect of (a) death of or bodily injury to any person but except so far as is necessary to meet the requirements of Section 95 of the Motor Vehi cles Act, 1939, the Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured. " It was submitted that the wording of clause 1 is wide enough to cover all risks including injuries to passengers. The clause provides that the Company will indemnify the insured against all sums including claimant 's costs and expenses which the insured shall become legally liable. This accord ing to the learned counsel would 'include legal liability to pay for risk to passengers. The legal liability is re stricted to 388 clause 1 (a) which states that the indemnity is in relation to the legal liability to pay in respect of death of or bodily injury to any person bur except so far as is neces sary to meet the requirements of section 95 of the Motor Vehicles Act. The Company shall not be liable where such death or injury arises out of and in the course of the employment of such person by the insured. Clause 1 and 1 (a) is not very clearly worded but the words "except so far as is necessary to meet the requirements of Section 95 of the ," would indicate that the liability is restricted to the liability arising out of the statutory requirements under section 95. The second part of clause 1(a) refers to the non liability for injuries arising in the course of employment of such person. The meaning of this sub clause becomes clear when we look to the other clauses of the insurance policy. The policy also provides for insurance of risks which are not covered under section 95 of the Act by stipulating payment of extra premium. These clauses would themselves indicate that what was in tended to be covered under clause 1 and 1 (a) is the risk required to be covered under section 95 of the Motor Vehi cles Act. On a construction of the insurance policy we accept the plea of the insurance company that the policy had insured the owner only to the extent of Rs. 15,000 regarding the injury to the passenger. In the result we hold that the liability of the insurance company is restricted to Rs. 15,000. There shah be a decree in favour of the claimants appellants to the extent of Rs. 27,500 against ' the respond ents out of which the liability of the insurance company will be restricted to Rs. 15,000. The appeal is allowed with the costs of the appellant which will be paid by the respondents in equal share. P.H.P. Appeal allowed.

Purshottam Udeshi was travelling in a car which was driven by Manager of the first respondent company. The car was insured with the second respondent. The car dashed against a tree while proceeding from Nagpur to Pandurna. Purshottam, who was aged 58 years at that time, died in the. accident. His annual income was about Rs. 9000/ . The widow and children of Purshottam filed a claim for compensation for a sum of Rs. 1 lac under section 110 of the , before the Claims Tribunal. The respondents denied that the vehicle was driven in a rash or negligent manner and contended tbat the vehicle at the time of accident was perfectly in sound condition. It was also contended that Purshottam was travelling in the said vehicle on his own responsibility and for his own purpose absolutely gratis and not on behalf of or at the instance of respondent No. 1 or the driver of the vehicle and, therefore, the claimants were not entitled to any compensation. The respondent pleaded inevitable accident. The Tribunal found that the accident was as a result of negligent driving of the vehicle by the Manager. It also found that the first respondent the owner of the company was liable, to pay compensation to the claimants on account of negligence of their employee. Tribunal awarded Rs. 31,209/ as general damages on the basis of 5 years ' earning less the, amount which the deceased might have spent on himself and Rs. 2,000/. as special damages for funeral and post funeral expenses. The Tribunal took into account the pay, D.A., conveyance allowance etc. for the purpose of determining income of the deceased. Both the respond ents. filed appeals in the. High Court. The High Court did not decide the question as to whether the accident was due to rash and negligent driving or the quantum of compensation allowed by the Tribunal was proper or not on the ground that the respondent No. 1 cannot be held vicariously liable for the act of their Manager in taking Purshottam as a passen ger as the said act was neither in the course of his employ ment nor under any authority whatsoever; that no evidence was led to show that the respondent No. 1 was aware that Purshottam was being taken in the car as a passenger by their Manager. The High Court held that Purshottam was no better than a trespasser as far as respondent No. 1 is concerned and that, therefore., respondent No. 1 cannot be made vicariously liable. In an appeal by certificate, the appellants claimants con tended: (1) That the accident was due to the, rash and negligent driving of the Manager of re spondent No. 1. (2) The accident took place during the course of the employment of the driver. Allowing the appeal, HELD: (1) The car was being driven rashly and negligent ly. Although no eye witness was examined P.W.I. the brother of the deceased who went to the spot soon after the accident was examined. He deposed that the car dashed 373 against a tree. The tree was on the right hand side of the road, 4 ft. away from the right hand side of the main met alled road. The road was 15 ft. wide and was a metalled road. On other side of the road there were fields at lower level. The tree against which the car dashed was uprooted about 9 to 10" from the ground. The car dashed so vio lently that it was broken in the front side. The vehicle struck so violently that the machine of the car went back about a foot from its original position. The steering wheel of the engine of the car receded back on the driver 's side and the said impact on the driver 's side and by the said impact the occupants died and front seat also moved back. The witness was not cross examined on these facts. The maxim of "Res ipsa 1oquitur" clearly applies in the present case. In view of the proved facts the burden was on the respondents to prove the inevitable accident. [376 B H] Eller vs Selfridge , referred to. The normal rule is that it is for the plaintiff to prove negligence but in some cases considerable hardship is caused to ' the plaintiff as the true, cause! of the accident is not known to him but is solely within the knowledge of the, defendant who caused it. The plaintiff can prove the acci dent but cannot prove how it happened to establish negli gence on the part of the defendant. This hardship is sought to be avoided by applying the principle of res ipsa 1oqui tur. It means the accident "speaks for itself" or "tells its own story". The car could not have gone to the right extremity and dashed with such violence with the tree if the driver had exercised reasonable care and caution. The Court did not think it necessary to remand the matter to the High Court to consider the question of rash and negligent driving since the evidence was convincing. [377 D E, 378, A. E] (2) It is an admitted fact that the driver of the car, the Manager of respondent No. 1, was proceeding from Nagpur to Pandhurna for purpose of delivering an amount of Rs. 20,000/ . He was driving the car in the course of the employment of respondent No. 1. It is now firmly estab lished that the master 's liability is based on the ground that the. act is done in the scope or sourse of his employ ment or authority. [379 A G] Young vs Edward Box and Co. Ltd. at 793, approved. Sitaram Motilal Kalal vs Santanuprasad Jaishankar Bhatt (1966)3 SCR 527; Conway vs George Wimpey & Co. Ltd. and , distinguished. Ormrod and Another vs Crosville Motor Services Ltd. (1953)2 All E.R. 753 and Canadian Pacific Railway Co. vs Lockhart , referred to. (3) The Manager permitted Purshottam to have a ride in the car. Taking into account the high position of the driver who was the Manager of the company it is reasonable, to presume in the absence of any evidence to the contrary the Manager had authority to carry Purshottam or acting in the course of his employment. There is nothing to support the conclusion of the High Court that the driver was not acting in the course of his employment. [382 D F] Cox vs Midland Counties Ry. Co. ; and Honghton vs Pilkington, distinguished. Twine vs Bean 's Express, Ltd. 62 T.L.R.p. 155, year 1945 46 distinguished. Recent trend in law is to make the master liable for acts which do not strictly fall within the term "in the course of employment" as ordinarily understood. [383 F] 5. The High Court did not go into the question of quantum of compensation. The Tribunal, however, ought not to have taken D.A., Conveyance Allowance etc. , into account for the purposes of determining the income of the deceased. Thus, the income of 5 years would stand reduced from Rs. 31,000/to Rs. 25,500/ over and above special damage of Rs. 2,000/ [385 A, C D] 374 6. As far as respondent No. 2 Insurance Co. is con cerned it contended that since the Company had specifically limited its liability in respect of injury to passengers to Rs. 15,000/ it cannot be made liable for anything in excess of Rs. 15,000/ . The respondent No. 1 contended that the insurance cover under the Act extended to the injury to the passengers also and relied on Section 95(1) (b)(i) which provides against any libility to the owner which may be incurred by him in respect of death or bodily injury to any person or damage to any person of a third party caused by or arising out of the use of the vehicle in a public place. Section 95 of the as amended by Act 56 of 1969, is based on the Road Traffic Act of 1960 or the earlier Act of 1930 in England. Section 95(a) and 95(b)(i) of the Act adopts the provisions of the English Road Traffic Act, 1960, and excludes the liability of the Insurance Co. regarding the. risk to the passengers. Section 95 provides that a policy of insurance must be a policy which insures the persons against any liability which may be incurred by him in respect of death or bodily injury to any person or damage. to any property of a third party caused by or arising out of use of the vehicle in a public place. Proviso 2 to Section 95(b) makes it clear that it is not required that a policy of insurance should cover risk of the passengers who are not carried for hire or reward. Under section 95, the risk to a passenger in a vehicle who is not carried for hire or reward is not required to be insured. The Insurer can however always take policies for a risk which is not covered by section 95. In the present case, the insurer had insured with the Insurance Co. the risk to the passenger to the extent of Rs. 15,000/ . Clause 1 of the section 2 to the Insurance Policy which requires the Insurance Co. to indemnify the insured in respect of claimants ' claim which becomes legally payable: in respect of death of or bodily injury to any person is not happily worded. However, since the said clause .talks of "except so far as necessary to meet the requirements of section 95 of the " would indicate that the liability is restricted ,to the liability aris ing out of the statutory requirements under section 95. The policy read with the other clauses makes it clear that the respondent No. 2 would be liable to the extent of Rs. 15,000/ . [385 G H, 386 A, F, A D]

Appeal No. 1258 of 1967. Appeal by Special Leave from the Judgment and Order dated the 10th July 1963 of the Mysore High Court at Bangalore in Second Appeal No. 345 of 1961. 710 section section Javali, B. P. Singh and B. R. Agrawala for the appellants. K. N. Bhatt and Saroja Gopalakrishnan, for respondents Nos. 1 3. The Judgment of the Court was delivered by JAGANMOHAN REDDY, J. The appellants who were the plaintiffs filed a suit against the respondents the defendants for partition, separate possession of their 7/20th share of suit properties and for mesne profits. The Trial Court decreed the suit, but the High Court dismissed it. This appeal is by special leave against that judgment. Prior to the Hindu Succession Act, XXX of 1956 (hereinafter referred to as 'the Succession Act) the parties were governed by the Aliyasantana Law and the question before us is whether their rights are to be determined in accordance with that Law or under the Succession Act. It is not disputed that Chandayya Shetty, who died on February 13, 1957 after coming into force of the Succession Act, and the first respondent are brother and sister respectively. The first appellant is the widow and appellants 2 to 6 are the sons of Chandayya Shetty, while respondents 2 to 4 are the sons of the first respondent. In order to appreciate the contentions, urged before us, it would be necessary to first set out certain underlying concepts of the Aliyasantana customary law, the changes made by the Aliyasantana Act (Madras Act IX of 1949) hereinafter referred to as "the Madras Act" and the relevant provisions of the Succession Act. The Aliyasantana Law is a part of the customary law which governed certain communities on the West Coast of South India. The basic principle underlying the joint family composition, otherwise known as kutmba or tarwad, under the customary law known by two different names, namely, marumakkattayvam and aliyasantana, is the matriarchal system, in which the devolution is through females. The meaning of the two words by which the systems are known literally connotes 'inheritance in the line of nephews ' or sisters ', sons. Apart from a few differences in these two systems. it may be noticed that while the marumakkattayam system was applicable to all castes, the aliyasantana system is ' not followed by the Brahmins (See P. R. Sundra Iyer 's Malabar and Aliyasantana Law, 1922 Edn. 247). It is chiefly followed by the Bunts, the Bilwa caste and the non priestly class among the Jains (See Myne 's Hindu Law, 1950), 11th Edn. 971). A kutumba under the Aliyasantana customary law was a family corporation: every member born in it has equal rights in the property owned by it. On the death of any member of the kutumba his or her interest in the kutumba property devolved on the other members of the kutumba by survivorship. The limited estate of Hindu female familiar to the Mitakshara Law was unknown to this ,system, for under it every male and female member had equal rights in the kutumba property. Under this law, though partition could not be enforced at the instance of on( , or more members and the members of the kutumba would be entitled to maintenance. it could be effected at the instance of all the adult members thereof. It may, however, be noticed that 'since the basis of the system was matriarchal, the children 711 of the female members alone were the coparceners in the kutumba, but not the wife and the children of the mate members. This customary law as applicable in certain areas of the Madras Province and in the erstwhile princely State of Travancore and Cochin was modified by the laws enacted by the respective legislatures. In this case we are concerned with the Madras Ast which defined and amended in certain respects the laws relating. to marriage, guardianship, maintenance, intestate succession and partition applicable to persons governed by that customary law. In respect of matters which this Act did not affect, the prevailing customary law was saved by section 39 of the Madras Act which provided : "Nothing contained in this Act shall be deemed to affect any rule of Aliyasantana Law, custom or usage, except to the extent expressly laid down in this Act. " The Madras Act conferred a right to partition properties and the mode of ascertainment of shares on partition. These provisions are dealt with in Ch. VI of that Act. Before examining the provisions of the Madras Act and the Succession Act it may be mentioned that Chandayya Shetty had executed a Will on January 15, 1958 bequeathing his interest in favour of the appellants ie. his wife and children. A week thereafter on January 22, 1957, the first respondent and her children issued a notice to Chandayya Shetty stating that he Chandayya Shetty) was the manager of the undivided family, that he was a nissanthathi kavaru (branch) while the respondents were santhathi kavarus, as such there were only two kavarus and that they had decided to divide the properties between Chandayya Shetty and themselves. They, therefore, demanded under the Madras Act a share belonging to their kavaru from out of the entire movable and immovable properties of the family. Chandiyya Shetty replied on January 24, 1957, denying that the respondents ' family was a santhathi kavaru, but was a nissanthethi kavaru as the first respondent was more than 50 years old on the date of the said notice and had no female issue. He, however, admitted that there are only two kavarus in the family, and as both the kavarus were nissanthathi kavarus, each kavaru was therefore entitled to an absolute share in the kutumba pro perties. He also stated that he had no objection to the claim for partition made by the respondents and was prepared to effect it provided the respondents cooperated. After this reply notice, Chandayya Shetty died, as already stated, on February 13, 1957. On March 23, 1957, the appellants i.e. Chadayya Shetty 's widow and her children gave a notice to the respondents claiming a separate share under the Will of Chandayya Shetty. A reply was given on the same day by the respondents denying that the appellants had any share because according to them Chandayya Shetty was entitled only to a life interest under the Aliyasantana Law. On these facts it may be necessary to ascertain under the provisions of the Madras Act the interest which Chandayya Shetty had in the joint family properties on the date of his death, whether a partition had 712 been effected,. whether his will is effective in respect of his share, whether he had a life interest in the properties, and whether under the provisions of the Succession Act that interest had been enlarged into an absolute interest which could be bequeathed by a Will. Before examining the provisions of Ch. VI of the Madras Act which deal with partition, it will be useful to ascertain, what under that Act is a 'kutumba ' and a 'kavaru ', and what is meant by a 'santliathi kavaru ' and a 'nissanthathi kavaru '? A 'kavaru ' has been defined in section 3 (b) (i) in relation to a female as meaning "the group of persons consisting of that female, her children and all her descendants in the female line", and under section 3 (b) (ii) when used in relation to a male as meaning "the kavaru of the mother of that male". Under section 3(c) 'kutuniba ' means "the group of persons forming a joint family with community of property governed by the Aliyasantana Law of inheritance". Under section 3 (f) 'nissanthathi kavaru ' has been defined as meaning "a kavaru which is not a santhathi kavaru", and 'santhathi kavaru ' under section 3 (h) means "a kavaru of which at least one member is a female who has not completed the age of fifty years". It is apparent from these definitions that the basic concept of inheritance through a female has been maintained under this Act in that the presence of even one female in the kavaru will have the effect of continuing the kavaru, and the absence of a female would amount to the absence of progeny a nissanthathi liable to the extinction of the branch. Keeping in view these definitions, section 35, which provides for partition may now be read "35. (1) Any, kavaru represented by the majority of its major members may claim to take its share of all the properties of the kutumba over which the kutumba has power of disposal and separate from the kutumba: "Provided that . (i) where a kavaru consists of only two persons, such a claim may be made by either of them; (ii) no kavaru shall make such a claim during the lifetime of any ancestress common to such kavaru and to any other kavaru or kavarus of the kutumba, who has not completed fifty years of age, unless (a) she has signified her consent in writing, or (b) two thirds of the major members of the kavaru join in making the claim for partition; (iii) the common ancestress may on her own volition claim a partition. (2) The share obtained by the kavaru shall be taken by it with all the incidents of kutumba property. Explanation. For the purposes of this Chapter (a) a male member of a kutumba, or a female member thereof who has no living descendant in the female line, shall be deemed to be a kavaru if he or she has no living female ascendant who is a member of the kutumba; 713 (b) such male member, or such female member if she has completed the age of fifty Years, shall be deemed to be a nissanthathi kavaru." Under section 36(1) any kavaru entitled to partition under section 35 shall be allotted a share of, the kutumba properties in accordance with the provisions of sub section (2), and the share of a kavaru at a partition under sub section (2) (h) shall be ascertained as on the date on which it make a claim for partition. Explanation to that sub section provides that : "For the purposes of this sub section, the date on which a partition is claimed shall be (a) where the claim is made by a suit for partition, the date of the institution of the suit (whether the suit is prosecuted or not); and (b) where the claim is made otherwise than by a suit the date on which such claim is made. " The following sub sections (3) to (5) on which reliance has been placed are also given below : "(3) If, at the time of the partition, any kavaru taking a share is a nissanthathi kavaru, it shall have only a life interest in the properties allotted to it, if the kutumba from which it separates has at least one female member who has not completed the, age of fifty years, or where the kutumba breaks up into a number of kavarus at the partition, if at least one of such kavarus is a santhathi kavaru and if there is no such female member or santhathi kavaru, the kavaru shall have an absolute interest in the properties allotted to it. (4) In the case referred to in sub section (3), the life interest of the nissanthathi kavaru in the properties allotted to it at the partition shall become absolute, if the kutumba concerned ceases to have among its members a female who has not completed the age of fifty years or if all the kavarus into which the kutumba broke up, whether at the same or at a subsequent partition, become nissanthathi kavarus. (5) The properties allotted to a nissanthathi kavaru at a partition and in which it had only a life interest at the time of the death of the last of its members, shall devolve upon the kutumba, or where the kutumba has broken up, at the same or at a subsequent partition, into a number of kavarus, upon the nearest santhathi kavaru or kavarus. " The position that emerges on a consideration of these provisions is that, any kavaru represented by the majority of its major members can claim its share of all the properties of the kutumba over which the kutumba has power of disposal. It may thereafter take its share and separate from the kutumba, provided that where a kavaru consists of only two persons, such a claim can be. made by either of them 714 but no kavaru can make such a claim during the life time of any common ancestress who is common to such kavaru and to any other kavaru or kavarus of the kutumba, who has not completed fifty years unless she has signified her consent in writing or two thirds of the major members of the kavaru have joined in making the claim for partition. The common ancestress can however on her own volition claim a partition. The share obtained by the kavaru on partition is taken with all the incidents of a kutumba property. Under section 36 of that Act the property of a kutumba is on partition divisible in a certain proportion for a period of fifteen years from the commencement of that Act and thereafter all the property, is to be divided per stripes and each kavaru gets a share on that basis. The provision is also applicable to every kavaru possessing separate property as if it were a kutumba. However, under sub section (3) of section 36 of that Act if at the time of the partition any kavaru taking a share is a nissanthathi kavaru it would have only a life interest in the property allotted to it if the; kutumba from which it separated has at least one female member who has not completed the age of fifty years or where the kutumba broke up into a number of kavarus at partition if at least one such kavaru is a santhathi kavaru. But if there is no such female member or santhathi kavaru the nissanthathi kavaru would have an absolute interest in the properties allotted to it. Sub section (4) of that section provides for circumstances under which the life estate in a ,divided share above referred to becomes absolute property ' and sub section (5) of that section provides that the properties allotted to a nissanthathi kavaru at a partition and in which it had only a life interest at the time of the death of the last of its members devolves upon the kutumba or where the kutumba is broken up at the same or at a subsequent partition into a number of kavarus, upon the nearest santhathi kavaru or kavarus. See Gupte 's Hindu Law of Succession, 2nd Edn., (p. 484). It is apparent from a reading of these provisions that in this case there were only two kavarus and that one of them was santliathi kavaru and the other a nissanthathi kavaru. The kavaru of Chandayya Shetty was a branch which was liable to extinction as he had no female progeny. The appellants however sought to characterise the kavaru of the respondents as a nissanthathi kavaru because though there was a female, namely, the first respondent, she was said to be not under fifty years, for if this was so, then since both the kavarus would be nissanthathi kavarus, at a partition each of the two kavarus would take an absolute interest. But when there are two kavarus if one is sintbathi kavaru and the other a nissanthathi kavaru, at a partition the nissantbathi kavaru would take only a life interest. The attempt to establish that the respondents ' kavaru was a nissanthathi kavaru having failed, as, both the Courts held that the first respondent was below 50 years. the learned Advocate for the appellants made strenuous attempts to persuade us, that in fact the giving of a notice by the first respondent does not effect a partition of the kutumba or between the two kavarug, and that even if this be not established, section 7(2) of the Succession Act read with its Explanation has the effect of enlarging a 715 life interest into an absolute interest. If so, the learned Advocate submits that Chandayya Shetty had an interest in the properties which he could bequeath by Will. It appears to us that the provisions of the Madras Act particularly section 36(2)(h) with its Explanation without doubt indicates the time when a share of kavaru is ascertained or a partition in the family and "whether property,is divided by metes and, bounds or not the share in property has to be determined as on the date when the claim is made. In this case, the claim was made on January 22, 1957 and, therefore, the share of the parties has to be determined as on that date even though the physical partition of the properties by metes and bounds may take place some time later. The argument that though a claim may be made, no partition may. ever take place, and consequently there is no partition of the kavarus, is a speculation which cannot affect the principle applicable for determining, whether or not a partition takes place and if so when. it may be that even though a notice bad been given for partition of the properties, the parties may later choose to live together and the notice withdrawn. But that is neither her nor there. What we have to ascertain is whether there, has been a partition in the family or whether the family is still undivided for the purposes of section 7(2) of the Succession Act. The learned Advocate for the appellants has made a great play on the words "undivided interest in the property" in section 7(2) of the Succession Act, as in his submission when Chandayya Shetty died, he had undivided interest in the kutumba properties and hence the provisions of the Succession Act applied and the appellants were entitled to their shares. This contention of the appellants no doubt finds support from the District Judge who observed that section 7 (2) does not speak about a division in status, but only speaks about a division in property and that it would be wrong to import the provisions of the Aliyasantana Act in interpreting the Hindu Succession Act which prevails in spite of any provisions under the Aliyasantana Law. There was, according to the District Judge, nothing in section 7(2) of the Act which states that the person who dies after the commencement of the Act should not only have an undivided interest but he should also have been an undivided member of the kutumba, and it would be wrong to introduce words which are not in the Act. According to him under section 7(2) of the Act if the kutumba properties had not been divided and the deceased had not been allotted any portion of the kutumba properties, then he continued to have an undivided interest in the properties at the time of his death,_ and on his death his share is inherited by his legal heirs under the Act. The, learned Advocate again drew support from the ,observations made by the District Judge that even if the provisions of the Madras Act could be taken into consideration in interpreting the provisions of the Succession Act, then sub section (3) of section 36 could not be invoked to say that even where an allotment could have been made, but was not made, there would have been an allottee who was only entitled to life estate. According to the District Judge, section 36(3) of the Madras Act comes into operation only when there has been a partition and allotment of a definite share, the share to be ascertained 716 as at the time the partition was claimed. But, when there has been no partition and no allotment of a share, then section 36(3) has no operation and the person who formed a nissanthathi kavaru, if he dies without getting allotted his share in the kutumba properties, dies with an undivided interest in the kutumba properties, and, therefore, section 7(2) of the Succession Act comes into play. This view of the District Judge has been held to be erroneous by the High Court. To ascertain which view is correct, we will have to examine, the relevant provisions of the Succession Act and ascertain whether on Chandayya Shetty 's death, he had an undivided interest which he could dispose of by will and if he had a life interest whether. it had been enlarged into an absolute interest. The Succession Act defines "aliyansantana law" by section 3 (a) as meaning "the system of law applicable to persons who, if this Act had not been passed, would have been governed by the Madras Aliyasantana Act, 1949, or by, the customary aliyasantana law with respect to the matters for which provision is made in this Act. " Section 4(1) on which reliance has been placed for contending that the Aliyasantana Law as in force prior to the Succession Act has no application provides thus : "4. (1) Save as otherwise expressly provided in this Act. (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; (b) any other law in force immediately before the commencement of this Act shall cease to apply to Hindus in so far as it is inconsistent with any of the provisions of this Act. " Sections 8and 10 of the Succession Act make provisions for the devolution and succession of the property of a male , Hindu dying intestate,S. 15 deals with the general rules of succession in the case of female Hindus dying intestate, and section 23 makes special provision in respect of dwelling houses where a Hindu dies intestate leaving him or her both male and female heirs specified in class I of the Schedule. Sections 7, 17 and 30 of the Act on which reliance has been placed will now be read insofar as they are relevant: "7. (2) When a Hindu to whom the aliyasantana law would have applied if this Act had not been passed dies after the commencement of this Act, having at the time of his or her death an undivided interest in the property of a kutumba or kavaru, as the case may be, his or her interest in the property shall devolve by testamentary or intestate succession, as the case may be, under this Act and not according to the aliyasantana law. Explanation. For the purposes of this sub section, the interest of a Hindu in the property of a kutumba or 717 kavaru shall be deemed to be the share in the property of the kutumba or kavaru, as the case may be, that would have fallen to him or her in a partition of that property per capita had been made immediately before his or her death among all the members of the kutumba or kavaru, as the case may be, then living, whether he or she was entitled to claim such partition or not under the aliyasantana law, and such share shall be deemed to have been allotted to him or her absolutely. ' "17. The provisions of sections 8, 10, 15 and 23 shall have effect in relation to persons who would have been governed by the marumakkattayam law or aliyasantana law if this Act had not been passed as if , (i) for sub cluses (c) and (d) of section 8, the following had been substituted, namely : " (c) x x x (ii) for clauses (a) to (e) of sub section (1) of section 15, the following had been substituted, namely (a) x x x x (b) x x x x (c) x x x x (d) x x x x (e) x x x x (iii) clause (a) to subsection (2) of section 15 had been omitted; (iv) section 23 had been omitted." "30. Any Hindu may dispose of by Will or other testamentary disposition any property, which is capable of being so disposed of by him, in accordance with the provisions of the , or any other law for the time being in force and applicable to Hindus. Explanation. The interest of a male Hindu in a Mitakshara coparcenary property or the interest of a member of a forward, tavazhi, illom, kutumba or kavaru in the property of the tarwad, tavazhifi illom, kutumba or ' kavaru shall, notwithstanding anything contained in this Act or in any other law for the time being in force, be deemed to be pro perty capable of being disposed of by him or by her within the meaning of this sub section. " The first thing to be noticed is that on the demand for partition there is a division in status, and though partition by metes and bounds may not have taken place, that family can thereafter never be considered as an undivided family, nor can the interest of a copareener be considered to be an undivided interest. It is a well established principle in, the Hindu Law that a member of a joint Hindu family has a right to, intimate his definite and unambiguous intention to the other members of the joint family that he will separate himself from 718 family and enjoy his share in severalty. Such an unequivocal intention communicated to the, others will amount to a division in status and on ,such division he will have a right to get a de facto division of his specific share of the joint family property, in which till then all of them had an undivided coparcenary interest, and in which none of them could claim that he had any right to any specific part thereof. Once the decision to divide has been unequivocally expressed and clearly intimated to his co sharers, whether or not the other co sharers agree, an immediate severance of the joint status is effected arid his right to obtain and possess the share to which be is admittedly entitled be Comes specified: Girja Bai vs Sadayhiv Dhundiraj & Others.(1) Lord Westbury in Appovier vs Ramasubbier,(2) had earlier observed "If there be a conversion of the joint tenancy of an undivided family into a tenancy in common of the members of that undivided family, the undivided family becomes a divided family with reference to, the property that is the subject of that agreement, and that is a separation in interest and in right, although not immediately followed by a de facto actual division of the subject matter. This may, at any time, be claimed by virtue of the separate right. " This principle has been incorporated in section 36(2) (h) of the Madras .Act which, as already stated, specifies the point of time for ascertaining the share when a division in status is effected. The term 'partition ' in sub section (3) of section 36 therefore must be given the same meaning ,as in section 36 (2) (h) of the Madras Act. In Mahalinga Shetty vs Jalaia Shedthi and others(3) Govinda Menon, J., as he then was, speaking for the Bench of the Madras High Court came to a similar conclusion on a consideration of sections 36(2) (h) and 36(3) of the Madras Act. It was held in that case +.hat the phrase 'at the time of partition should be understood as 'at the time when the parties effect a severance in status ' the partition being only a disruption of status. It does not mean the point of time when the actual division by metes and bounds takes place, which might take a long time after the division in status takes place, either by the institution of a suit or by a notice of ($aim for 'partition '. It was pointed ,out in that case that clause (h) in sub section (2) of section 36 was obviously inserted as a result of the decision in Karthiyayini Kunchi vs Minakshi Ammal(4) in which a Bench of that Court held that the theory of division in status by a unilateral declaration of intention is applicable to persons following the Marumakkattayam Law just as it applies to Mitakshara joint family. Burn, J., who delivered the judgment stated that the principle is not restricted to the case of joint Hindu families following the Mtakshara or any other system of law but is one of universal application. It is to remove any doubts about this that clause (h) has been inserted in section 36(2). In our view also, the word partition ' in sub section (3) of section 36 should be given the same meaning, as.in section 36(2) (h) of the Madras Act, if so on a demand for partition (1) L. R. 43 I. A. 151. (2) (1866) It M. T. A. 75. (3) (4) 719 a severance of status takes place and the share to which each is entitled in the, undivided properties is ascertained. Even in the case of an aliyasantana kutumba this Court had held per Hegde and Grover, JJ. in Padmaraja and others vs Dhanavanthi and others(1) that if the jointness of the kutumba had been disrupted, there is no question of planning any partition as there is no kutumba in existence as in the instant case before us. Similarly, on the same parity of reasoning, when there are two kavarus, a demand for parti tion would disrupt them and Chandayya Shetty could no longer claim that he had an undivided interest within the meaning of section 7(2) of the Succession Act, and if he has no undivided interest in the property, his interest cannot be enlarged into an absolute estate, nor can his interest in the property devolve, upon his heirs by intestate succession. What section 7 is dealing with is a situation similar to that dealt with in section 6, namely, that when a member of joint Hindu family dies undivided, instead of his undivided interest devolving upon the other members of the family by survivorship, it is provided that on the death of an undivided member of the joint Hindu family his share in the joint family properties shall devolve on his heirs as if there had been partition in the family. The Explanation to section 7(2) makes this position clear. Prior to the Succession Act neither under the customary law, nor under the Madras Act, nor under the the interest of a coparcener in an aliyasantana kutumba could have been disposed of by testamentary disposition. But section 30 of the Succession Act made a definite change in the law, by enabling a member of an undivided aliyasantana kutumba or of a kavaru to dispose of his interest in the kutumba or kavaru properties by a will. The learned Advocate for the appellants submits. that merely because a person has asked for a partition and that also not by Chandayya Shetty but by the first respondent, it should not deprive him of his right to dispose of that property by a will, or deprive his legal heirs of inheriting his property by intestate succession. This argument ignores the basic concepts of the aliyasantano law. As pointed out earlier there is neither a kutumba, nor can Chandayya Shetty be a kavaru. The two kavarus after the division in status, become only one kavaru, namely that of respondent 1. Chandayya Shetty will not be 'a kavaru within the meaning of section 3(b) of the Madras Act, because under section 3(b) (ii) there being no female line, it is only the mother of Chandayya Shetty who can be a kavaru but not Chandayya Shetty. In fact a male can never be a kavaru either under the customary law or under the Madras Act. When the Succession Act refers to kavaru in relation to its undivided interest, it is the kavaru under the custom or the Madras Act and not a deemed kavaru for the purposes of partition. If Chandayya Shetty is not a kavaru, there is no property of a kavaru which can be disposed of under section 30 of the Succession Act. Even under the Explanation to that section, the life interest which Chandayya Shetty had no severance of status is not property capable of being disposed of by a will. As we said he is no longer a kavaru and had, therefore, no interest in the property of the, kavaru. (1) ; , 104. 92SupC/74 720 A Full Bench of the Mysore High Court in Sundara Adapa and others vs Girija and Others(1) has given a similar answer on facts analogous to the one raised before us. In that case the first defendant who was a nissanthathi kavaru had claimed in his written statement a partition of his own share and was granted 751360th share in the preliminary decree. By a will he left to his wife and children all his rights in the properties due to him on account of his share. There was also likewise a santhathi kavaru, Under the Aliyasantana Act on the cessation of the first defendant 's life interest the property would devolve upon the nearest santhathi kavaru according to sub section (5) of section 36. But it was contended as is contended in this case. that by virtue of Explanation to sub section (1) of section 30 of the Succession Act, the rights of the first defendant in his 75/360th share of his properties became capable of being disposed of by wi ll and, therefore, the children of the first defendant could be entitled to the share in accordance with the terms thereof. Hegde, J., as he then was, delivering the judgment of that Court observed at pp. 238 239 ; "The object of section 30 is clear. That section neither directly nor by necessary implication deals with the devolution of divided interest. As mentioned earlier, its purpose is limited. The language employed is plain and therefore no question of interpretation arises. It is not correct to contend, as done by Sri Bhat, that if the Explanation to section 30(1) is understood in the manner the respondents want us to understand, a coparcener who dies undivided would leave a more valuable estate to his heirs than one who dies divided. In most cases, the share taken by a nissanthathi kavaru though limited to the duration of the life of the kavaru would be larger in extent than one as provided under sec. 7 (2) of the "Act". In the case of a share under the Aliyasanthana Act the kavaru takes his share on the basis of half per capita, half per stirpes. Under sec. 7(2) the share is determined on per capita basis. Quite clearly the object of bounty under section 7 (2) read with sec. 30 is the donee under the will of a deceased coparcener. The fact that divided members also do not get corresponding benefits under the "Act" is no relevant test. If Parliament wanted to enlarge the interest of divided male members nothing would have been easier than to enact a provision on the lines of sec. 14(1) of the "Act", provided Parliament had competence to do so. Further, the Explanation to section 30(1) speaks of "The interest of a Male Hindu" in his "kutumba" or "kavaru" propert y. The definite article 'the ' evidently refers to the interest specified or quantified in some other provision of the "Act"; it could not refer to the unascertained interest of a coparcener in a kutumba. Obviously "the interest" referred to is the interest quantified under section 7 of the "Act" to which reference will be made in greater detail at a later stage. (1) T. L. R. 721 Quite clearly, on the date of his death the first defendant was not a member of his kutumba or kavaru. As noticed earlier, he was already divided from the family. Further, his will did not relate to his interest in the kutumba or kavaru property. The will purported to bequeath the property obtained by him as his share as per the preliminary decree. Therefore, the contention that interest obtained by the first defendant under the preliminary, decree stood enlarged as a result of section 30(1) of the "Act" must fail. " The above statement of the law which meets the several contentions raised before us is in consonance with our own reading of the provision of the Madras Act and the Succession Act. The learned Advocate for the appellants, however, has tried to distinguish this case on the ground that the effect of section 17 of the Succession Act was not considered in that case. In our view, that question was not relevant either in that case or in this case, because section 17 of the Succession Act applies the provisions of sections 8, 10, 15 and 23 which deal with intestacy, to Persons who would have been governed by the Marumakkattayam Law or Aliyasantana Law if the Succession Act had not been passed with the modifications provided therein. in this case also, as already stated, there is no kavaru of Chandayya Shetty and on separation he Succession Act while enlarging the right of an absolute interest did not specifically the right of the former. In the absence had only a life interest which is not a heritable property and cannot be disposed of by a will, nor could it devolve as on intestacy. Even the argument that under section 7(2) Chandayya Shett 's life interest has been enlarged into an absolute interest is equally untenable, because a male with a life interest under the Aliyasantana Law being in the same position as a female limited owner under the Hindu Law, the latter under section 14 into provide for the enlarging of any such specific provision we can only hold that Chandayya Shetty 's interest enured till his life time only. In the result the judgment of the High Court is sustained, and the appeal dismissed but without,costs. 3.B.W. Appeal dismissed.

One of the cardinal principles which has always to be kept in view in our system of administration of justice for criminal cases is that a person arraigned as an accused is presumed to be innocent unless that presumption is rebutted by the prosecution by production of evidence as may show him to be guilty of the offence with which he is charged. The burden of proving the guilt of the accused is upon the prosecution and unless it relieves itself of that burden, the courts cannot record a finding of the guilt of the accused. There are certain cases in which statutory presumptions arise regarding the guilt of the accused but the burden even in those cases is upon the, prosecution to prove the existence of facts which have to be present before the presumption can be drawn. Once those facts are shown by the prosecution to exist the court can raise the statutory presumption and it would, in such an event, be for the accused to rebut the presumption. The onus even in such cases upon the accused is not as heavy as is normally upon the prosecution to prove the guilt of the accused. If some material is brought on the record consistent with the innocence of the accused which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal. [733 H; 734 C] Another golden thread which runs through the web of the administration of justice in criminal cases is that if two views are possible on the evidence adduced in the case, one pointing to the guilt of the accused and the other to his innocence, the view which is favorable to the accused should be adopted. This principle has a special relevance in cases where the guilt of the accused is sought to be established by circumstantial evidence. Rule ha, . accordingly been laid down that unless the evidence adduced in the case is consistent only with, the hypothesis of the guilt of the accused and is inconsistent with that of his innocence, the court should refrain from recording a finding of guilt of the accused. It is also an accepted rule that in case the court entertains reasonable doubt regarding the guilt of the accused, the accused must have the benefit of doubt. Of course, the doubt regarding.the guilt of the accused should be reasonable, it is not the doubt of a mind which is either so vacillating that it is incapable of reaching a firm conclusion or so timid that it is hesitant and afraid to take things to their natural consequences. The rule regarding the benefit of doubt also does not warrant acquittal of the accused by resort to surmises, conjectures or fanciful considerations. As mentioned by this Court in the case or Slate of Punjab vs Jagir Singh, (Crl. A. No. 7 of 1972 d/ August 6, 1973) a criminal trial is not liked a fairy tale wherein one is free to give flight to one ' In arriving at the conclusion about the guilt of the imagination and phantasy. accused charged with the evidence by the yardstick of witnesses. Every case own facts. Although the. to the accused the courts commission of a crime, the court has to judge the of probabilities, its intrinsic worth and the animu, in the final analysis would have to depend upon it benefit of every reasonable doubt sh uld be given should not at the same time reject evidence which is ex facie trustworthy or grounds which are fanciful or in the nature of conjec [734 G H; 735A D] It needs all the sameto be re emphasised that if a reasonable doubt arise regarding the guilt of theaccused, the benefit of that cannot be withheld from the accused. The courts would not be Justified in withholding the benefit be cause the acquittal might have an impact upon the law and order situation or create adverse reaction in society or amongst those members of the society who believe the accused to be guilty. The guilt of the accused has to be 723 adjudged not by the fact that a vast number of people believe, him to be guilty but whether his guilt has been established by the evidence brought on record. Indeed, the courts have hardly any other yardstick or material to adjudge the guilt of the person arranged as accused. It is no doubt true that wrongful acquittals are undesirable and shake the confidence of the people in the judicial system, much worse, however, is the wrongful conviction of an innocent person. The consequence of the conviction of an innocent person are far more serious and its reverberations cannot but be felt in a civilised society. [735D F; H] Shivaji Sahabrao Bobade & anr. vs State of Maharashtra, Cr. A. No. 26 of 1970 dated 27 8 73, referred to. The appellant was convicted under section 302 Indian Penal Code and sentenced to death. The High Court maintained the conviction and sentence. The High Court relied on three pieces of evidence viz.; (i) evidence of a witness which was recorded by the police over two months after the occurrence; (ii) the letter written by the accused to the Deputy Commissioner making a confession and (iii) the confession made to S.R. who incorporated this in a letter to the Station House Officer. Allowing the appeal to this Court, HELD : that the judgment of the trial court and the High Court had to be .set aside and the accused acquitted. [736F] ( 1) If a witness professed to know about a gravely incriminating circumstance against a person accused of the offence of murder and the witness kept silent for over two months regarding the said incriminating circumstance against the accused, his statement relating to the incriminating circumstances, in the absence of any cogent reason, was bound to lose most of its value. [73OB C] (2) The fact that no action was taken on the letter till it was taken into possession by the police, the incongruity of the portion of the letter relating to confession and the circumstances in which the accused is stated to have got the letter written all these make it unsafe to act upon the confession incorporated in the letter. [730H] (3) The letter which was addressed by SR to the Station House Officer was in the nature of narration of what, according to SR, he had been told by the accused. Such a letter would constitute a statement for the purpose of section 162, Cr. P.C. The prohibition contained in section 162, Cr. P.C. relates to all statements made, during the course of an investigation. The prohibition relating to the use of a statement made to a police officer during the course of an investigation could not be set at naught by the police officer not himself recording the statement of a person but having it in the form of a communication addressed by a person concerned to the police officer. If a statement made by a person to a police officer in the course of an investigation is inadmissible except for the purpose mentioned in section 162, the same would be true of a letter containing narration of facts addressed by a person to a police officer during the course of an investigation. It is not permissible to circumvent the prohibition contained in section 1162 by the investigating officer obtaining a written statement of a person instead of the investigating officer himself recording that statement. The restriction placed by section 162 on the use of statement made during the course of investigation is in general terms. There is nothing in the section to show that the investigation must relate to any particular accused before a statement to the police pertaining to that accused can be held to be inadmissible. The letter is, therefore, inadmissible in evidence. [732C E; G] Sita Ram vs State of Uttar Pradesh, [1966] Supp. S.C.R. 165 held inapplicable.

Appeal No. 38 of 1953. Appeal under article 132(1) of the Constitution of India from the Judgment and Order dated the 13th December, 1951, of the High Court of Judicature, Madras, in Civil Miscellaneous Petition No. 2591 of 1951. 1007 V.K.T. Chari, Advocate General of Madras (B. Ganapathy Iyer, with him) for the appellant. B. Somayya and C.R. Pattabhi Raman (T. Krishna Rao and M.S. K. Sastri, with them) for the respondent. T. N. Subramania Iyer, Advocate General of Travancore Cochin (T. R. Balakrishna Iyer and Sardar Bahadur with him) for the Intervener (State of Travancor,Cochin). March 16. The Judgment of the Court was delivered by MUKHERJIA J. This appeal is directed against a judgment of a Division Bench of the Madras High Court, dated the 13th of December, 1951, by which the learned Judges allowed & petition, presented by the respondent under article 226 of the Constitution, and directed a writ of prohibition to issue in his favour prohibiting the appellant from proceeding with the settlement of a scheme in connection with a Math, known as the Shirur Math, of which the petitioner happens to be the head or superior. It may be stated at the outset that the petition was filed at a time when the Madras Hindu Religion Endowments Act (Act II of 1927), was in force and the writ was prayed for against the Hindu Religious Endowments Board constituted under that Act, which was the predecessor in authority of the present appellant and had initiated proceedings for settlement of a scheme against the petitioner under section 61 of the said Act. The petition was directed to be heard along with two other petitions of a similar nature relating to the temple at Chidambaram in the district of South Arcot and questions were raised in all of them regarding the validity of Madras Act 11 of 1927, hereinafter referred to as the Earlier Act. While the petitions were still pending, the Madras Hindu Religious and Charitable Endowments Act,, 1951 (hereinafter called the New Act), was passed by the Madras Legislature and came into force on the 27th of August, 1951. In view of the Earlier Act being replaced by the new one,, leave was given to all the petitioners to amend their petitions and challenge the validity of the. New Act as well. 1008 Under section 103 of the New Act, notifications, orders and acts under the Earlier Act are to be treated as notifications, orders and acts issued, made or done by the appropriate, authority under the corresponding provisions of the New Act, and in accordance with this provision, the Commissioner, Hindu Religious Endowments, Madras, who takes the place of the President, "Hindu Religious Endowments Board under the Earlier Act, was added as a party to the proceedings. So far as the present appeal is concerned, the material facts may be shortly narrated as follows: The Math, known as Shirur Math, of which the petitioner is the superior or Mathadhipati, is one of the eight Maths situated at Udipi in the district of South Kanara and they are reputed to have been founded by Shri Madhwacharya, the well known exponent of dualistic theism in the Hindu Religion. Besides these eight Maths, each one of which is presided over by a Sanvasi or Swami, there exists another ancient religious institution at Udipi, known as Shri Krishna Devara Math, also established by Madhwacharya which is supposed to contain an image of God Krishna originally made by Arjun and miraculously obtained from a vessel wrecked at the coast of Tulava. There is no Mathadhipati in the Shri Krishna Math and its. affairs are managed by the superiors of the other eight Maths by turns and the custom is that the Swami of each of these eight Maths presides over the Shri Krishna Math in turn for a period of two years in every sixteen years. The appointed time of change in the headship of the Shri Krishna Math is the occasion of a great festival, known as Pariyayam, when a vast concourse of devotees gather at Udipi from all parts of Southern India, and an ancient usage imposes a duty upon the Mathadhipati to feed every Brahmin that comes to the place at that time. The petitioner was installed as Mathadhipati in the year 1919, when he was still a minor, and he assumed management after coming of age some time in 1926. At that time the Math was heavily in debt. Between 1926 and 1930 the Swami succeeded in clearing off a large portion of the debt. In 1931, however, came the 1009 turn of his taking over management of the Shri Krishna Math and he had had to incur debts to meet the heavy expenditure attendant on the Pariyayam ceremonies, The financial position improved to some extent during the years that followed, but troubles again arose in 1946, which was the year of the second Pariyayam of the Swami. Owing to scarcity and the high prices of commodities at that time, the Swami had to borrow money to meet the expenditure and the debts mounted up to nearly a lakh of rupees. The Hindu Religious Endowments Board, functioning under the Earlier Act of 1927, intervened at this stage and in exercise of its powers under section 61 A of the Act called upon the Swami to appoint a competent manager to manage the affairs of the institution. The petitioners case is that the action of the Board was in stigated by one Lakshminarayana Rao, a lawyer of Udipi, who wanted to have control over the affairs of the Math. It appears that in pursuance of the direction of the Board, one Sripath Achar was appointed an agent and a Power of Attorney was executed in his favour on the 24th of December, 1948. The agent, it is alleged by the petitioner, wanted to have his own way in all the affairs of the Math and paid no regard whatsoever to the wishes of the Mahant. He did not even submit accounts to the Mahant and deliberately flouted his authority. In this state of affairs the Swami,, on the 26th of September, 1950, served a notice upon the agent terminating his agency and calling upon him to hand over to the Mathadhipati all account papers and vouchers relating to the institution together with the cash in hand. Far from complying with this demand, the agent, who was supported by the aforesaid Lakshminarayans Rao, questioned the authority of the Swami to cancel his agency and threatened that he would refer the matter for action to the Board. On the 4th of October, 1950, the petitioner filed a suit against the agent in the Sub,Court of South Kanara for recovery of the account books and other articles belonging to the Math, for rendering an account of the management and also for an injunction restraining the said agent from interfering with the affairs of the Math under colour of the 1010 authority conferred by the Power of Attorney which the plaintiff had cancelled. The said Sripath Achar anticipating this suit filed an application to the Board on the 3rd of October, 1950, complaining against the cancellation of the Power of Attorney and his management of the Math. The Board on the 4th October, 1950, issued a notice to the Swami proposing to inquire into the matter on the 24th of October following at 2 p.m. at Madras and requesting the Swami either to apppear in person or by a pleader. To this the Swami sent a reply on 21st October, 1950, stating that the subject matter of the very enquiry was before the court in the original suit filed by him and as the matter was sub judice the enquiry should be put off. A copy of the plaint filed in that suit was also sent along with the reply. The Board, it appears, dropped that enquiry, but without waiting for the result of the suit, initiated proceedings suo moto under section 62 of the Earlier Act and issued a notice upon the Swami on the 6th of November, 1950, stating that it had reason to believe that the endowments of the said Math were being mismanaged and that a scheme should be framed for the administration of its affairs. The notice was served by affixture on the Swami and the 8th of December, 1950, was fixed as the date of enquiry. On that date at the request of the counsel for the Swami, it was adjourned to the 21st of December, following. On the 8th of December, 1950, an application was filed on behalf of the Swami praying to the Board to issue a direction to the agent to hand over the account papers and other documents, without which it was not possible for him to file his objections As the lawyer appearing for the Swami was unwell, the matter was again adjourned till the 10th of January, 1951. The Swami was not ready with his objections even on that date as his lawyer had no t recovered from his illness and a telegram was sent to the Board on the previous day requesting the latter to grant a further adjournment. The Board did not accede to this request and as no explanation was filed by the Swami, the enquiry was closed and orders reserved upon it. On the 13th of January, 1951, the Swami, it appears sent a written 1011 explanation to the Board, which the latter admittedly received on the 15th On the 24th of January, 1951, the Swami received a notice from the Board stating inter alia that the Board was satisfied that in the,, interests of proper administration of the Math and its endowments, the settlement of a scheme was necessary. A draft scheme was sent along with the notice and if the petitioner had any objections to the same, he was required to send in his objections on or before the 11th of February, 1951, as the. final order regarding the scheme would be made on the 15th of February, 1951. On the 12th of February, 1951, the peti tioner filed the petition, out of which this appeal arises, in the High Court of Madras, praying for a writ of prohibition to prohibit the Board from taking further steps in the matter of settling a scheme for the administration of the Math. It was alleged inter alia that the Board was actuated by bias against the petitioner and the action taken by it with regard to the settling of a scheme was not a bona fide act at all. The main contention, however, was that having regard to the fundamental rights guaranteed under the Constitution in matters of religion and religious institutions belonging to particular religious denominations, the law regulating the framing of a scheme interfering with the management of the Math and its affairs by the Mathadhipati conflicted with the provisions of art icles 19(1) (f) and 26 of the Constitution and was hence void under article 13. It was alleged further that the provisions of the Act were discriminatory in their character and offended against article 15 of the Constitution. As has been stated already, after the New Act came into force, the petitioner was allowed to end his petition and the attack was now directed against the constitutional validity of the New Act which replaced the earlier legislation. The learned Judges, who heard the petition, went into the matter with elaborate fullness, both on the constitutional questions involved in it as well as on its merits. On the merits, it was held that in the circumstances of the case the action of the Board was a perverse exercise of its jurisdiction and that it should 1012 not be allowed to proceed in regard to the settlement of the scheme. On the constitutional issues raised in the case, the learned Judges pronounced quite a number of sections of the New Act to be ultra vires the Constitution by reason of their being in conflict with the fundamental rights of the petitioner guaranteed under articles 19(1)(f), 25, 26 and 27 of the Constitution. In the result, the rule nisi issued on the petition was made absolute and the Commissioner, Hindu Religious Endowments, Madras, was prohibited from proceeding further with the framing of a scheme inregard to the petitioner 's Math. The Commisioner has now come up on appeal before us on the strength of a certificate granted by the High Court under article 132(1) of the Constitution. The learned Advocate General for Madras, who appeared in support of the appeal, confined his arguments exclusively to the constitutional points involved in this case. Although he had put in an application to. urge grounds other than the constitutional grounds, that application was not pressed and he did not challen the findings of fact upon which the High Court based its decision on the merits of the petition. The position, therefore, is that the order of the High Court issuing the writ of prohibition against the appellant must stand irrespective of the decision which we light arrive at on the constitutional points raised before us. It is not disputed that a State Legislature is competent to enact laws on the subject of religious and charitable endowments, which is covered by entry 28 of List III in Schedule VII of the Constitution. No question of legislative incompetency on the part of the Madras Legislature to enact the legislation in question has been raised before us with the exception of the provision, relating to payment of annual contribution contained in section 76 of the impugned Act. The argument that has been advanced is, that the contribution is in reality a tax and not a fee and consequently the State Legislature had no authority to enact a provision of this character. We will deal with this point separately later on. All the other points canvassed 1013 before us relate to the constitutional validity or otherwise of the several provisions of the Act which have been held to be invalid by the High Court of Madras on grounds of their being in conflict with the fundamental rights guaranteed under articles 19(1) (f), 25, 26 and 27 of the Constitution. In order to appreciate the contentions that have been advanced on these heads by the learned counsel on both sides, it may be convenient to refer briefly to the scheme and the salient provisions of the Act. The object of the legislation, as indicated in the preamble, is to amend and consolidate the law relating to the administration and governance of Hindu religious and charitable institutions and endowments in the State of Madras. As compared with the Earlier Act, its scope is wider and it can be made applicable to purely charitable endowments by proper notification under section 3 of the Act. The Earlier Act provided for supervision of Hindu religious endowments through a statutory body known as the Madras Hindu religious Endowments Board. The New Act has abolished this Board and the administration of religious and charitable institutions has been vested practically in a department of the Government, at the head of which is the Commissioner. The powers of the Commissioner and of the other authorities under him have been enumerated in Chapter II of the Act. Under the Commissioner are the Deputy Commissioners, Assistant Commissioners and Area Committees. The Commissioner, with the approval of the Government, has to divide the State into certain areas and each area is placed in charge of a Deputy Commissioner, to whom the powers of the Commissioner can be delegated. The State has also to be divided into a number of divisions and an Assistant Commissioner is to be placed in charge of each division. Below the Assistant Commissioner, there will be an Area Committee in charge of all the temples situated within a division or part of a division. Under section 18, the Commissioner is empowered to examine the records of any Deputy Commissioner, Assistant Commissioner, or Area Committee, or of any trustee not being the trustee 131 1014 of a, Math, in respect of any proceeding under the Act, to satisfy himself as to the regularity, correctness, or propriety of any decision or order. Chapter III contains the general provisions relating to all religious institutions. Under section 20, the administration of religious endowments is placed under the general superintendence and control of the Commissioner and he is empowered to pass any orders which may be deemed necessary to ensure that such endowments are properly administered and their income is duly appropriated for the purposes for which they were founded or exist. Section 21 gives the Commissioner, the Deputy and Assistant Commissioners and such other officers asmay be authorised in th is behalf, the power to enter the premises of any religious institution or any place of worship for the purpose of exercising any power conferred, or discharging any duty imposed, by or under the Act. The only restriction is that the officer exercising the power must be a Hindu. Section 23 makes it obligatory on the trustee of a religious institution to obey all lawful orders issued under the provisions of this Act by the Government, the Commissioner, the Deputy Commissioner, the Area Committee or the Assistant Commissioner. Section 24 lays down that in the administration of the affairs of the institution, a trustee should use as much care as a man of ordinary prudence would use in the management of his own affairs. Section 25 deals with the preparation of registers of all religious institutions and section 26 provides for the annual verification of such registers. Section 27 imposes a duty on the trustee to furnish to the Commissioner such accounts, returns, reports and other information as the Commissioner may require. Under section 28, power is given to the Commissioner or any other officer authorised by him to inspect all movable and immovable properties appertaining to a religious institution. Section 29 forbids alienation of all immovable properties belonging to the trust, except leases for a term not exceeding five ,,ears, without the Sanction of the Commissioner. Section 30 lays down that although a trustee may incur expenditure for making arrangements for securing the health and 1015 comfort of pilgrims, worshippers and other people, when there is a surplus left after making adequate provision for purposes specified in section 79(2), he shall be guided in such matters by all genera or special instructions which he may receive from the Commissioner or the Area Committee. Section 31 deals with surplus funds which the trustee may apply wholly or in part with the permission in writing, of the Deputy Commissioner for any of the purposes specified in section 59(1). Chapter IV deals specifically with Maths. Seetion 52 enumerates the grounds on which a suit would lie to remove a trustee. Section 54 relates to what is called " dittam " or scale of expenditure. The trustee has got to submit to the Commissioner proposals for fixing the "dittam" and the amounts to be allotted to the various objects connected with the institution. The proposals are to be published and after receiving suggestions, if any, from persons interested in the instution, they would be scrutinised by the Commissioner. If the Commissioner thinks that a modification is necessary, he shall submit the case to the Government and the orders of the Government would be final. Section 55 empowers the trustee to spend at his discretion and for purposes connected with the Math the "Pathakanikas " or gifts made to him personally, but he is required to keep regular accounts of the receipts and expenditure of such personal gifts. Under section 56, the Commissioner is empowered to call upon the trustee to appoint a manager for the administration of the secular affairs of the institution and in default of such appointment, the Commissioner may make the appointment himself. Under section 58, a Deputy Commissioner is competent to frame a scheme for any religious institutions if he has reason to believe that in the interests of the proper administration of the trust any such scheme is necessary. Sub section (3) of this section provides that a scheme settled for a Math may contain inter alia a provision for appointment of a paid executive officer professing the Hindu religion, whose salary shall be paid out of the funds of the institution. Section 59 makes provision for application of the "cy pres" doctrine when the specific 1016 objects of the trust fail. Chapter VI of the Act, which comprises sections 63 to 69, deals with the notification of religious institutions. A religious institution may be notified in accordance with the provisions laid down in this chapter. Such notification remains in force for five years and the effect of it is to take over the administration and vest it in an executive officer appointed by the Commissioner. Chapter VII deals with budgets, accounts and audit and Chapter VIII relates to finance. Section 76 of Chapter VIII makes it compulsory for all religious institutions to pay annually to the Government a contribution not exceeding 5 per cent. of their income on account of the services rendered to them by the Government and their officers functioning under this Act. Chapter IX is not material for our purpose, and Chapter X deals with provisions of a miscellaneous nature. Section 89 in Chapter X prescribes the penalty for refusal by a trustee to comply with the provisions of the Act. Section 92 lays down that nothing contained in the Act shall be deemed to confer any power or. impose any duty in contravention of the rights conferred on any religious denomination under clauses (a), (b) and (c) of article 26 of the Constitution. Section 99 vests a revisional jurisdiction in the Government to call for and examine the records of the Commissioner and other subordinate authorities to satisfy themselves as to the regularity and propriety of any proceeding taken or any order or decision made by them These, in brief, are the provisions of the Act material for our present purpose. The learned Judges of the High Court have taken the view that the respondent as Mathadhipati has certain well defined rights in the institution and its endowments which could be regarded as rights to property within the meaning of article 19(1)(f) of the Constitution. The provisions of the Act to the extent that they take away or unduly restrict the power to exercise these rights are not reasonable restrictions within the meaning of article 19(5) and must consequently be held invalid. The High Court has held in the second place that the respondent, as the head and 1917 representative of a religious institution, has a right guaranteed to him under article 25 of the Constitution to practise and propagate freely the religion of which he and his followers profess to be adherents. This right, in the opinion of the High Court, has been affected by some of the provisions of the Act. The High Court has held further that the Math in question is really an institution belonging to Sivalli Brahmins, who are a section of the followers of Madhwacharya and hence constitutes a religious denomination within the meaning of article 26 of the Constitution. This religious denomination has a fundamental right under article 26 to manage its own affairs in matters of religion through the Mathadhipati who is their spiritual head and superior, and those provisions of the Act, which substantially take away the rights of the Mathadhipati in this respect, amount to violation of the fundamental right guaranteed under article 26. Lastly, the High Court has. held that the provision for compulsory contribution made in section 76 of the Act comes within the mischief of article 27 of the Constitution. This last point raises a wide issue and We propose to discuss it separately later on. So far as the other three points are concerned, we will have to examine first of all the general contentions that have been raised by the learned Attorney General, who appeared for the Union of India as an intervener in this and other connected cases, and the questions raised are, whether these articles of the Constitution are at all available to the respondent in the present case and whether they give him any protection regarding the rights and privileges, of the infraction of which he complains. As regards article 19(1)(f) of the Constitution, the question that requires consideration is, whether the respondent as Mathadhipati has a right to property in the legal sense,, in the religious institution and its endowments which would enable him to claim the protection of this article ? A question is also formulated as to whether this article deals with concrete rights of property at all ? So far as article 25 of the Constitution is concerned, the point raised is, whether this 1018 article which, it is said, is intended to protect religious freedom only so far as individuals are concerned, can be invoked in favour of an institution or Organisation ? With regard to article 26, the contention is that a Math does not come within the description of a religious denomination as provided for in the article and even if it does, what cannot be interfered with is its right to manage its own affairs in matters of religion only and nothing else. It is said, that the word it religion ", as used in this article, should be taken in its strict etymological sense as distinguished from any kind of secular activity which may be connected in some way with religion on but does not form an essential part of it. Reference is made in this connection to clause (2)(a) of article 25 and clause (d) of article 26. We will take up these points for consideration one after another. As regards the property rights of a Mathadhipati, it may not be possible to say in view of the pronouncements of the Judicial Committee, which have been accepted as good law in this country ever since 1921, that a Mathadhipati holds the Math property as a lifetenant or that his position is similar to that of a Hindu widow in respect to her husband 's estate or of an English BishoP holding a benefice. He is certainly not a trustee in the strict sense. He may be, as the Privy Council(1), says, a manager or custodian, of the institution who has to discharge the duties of a trustee and is answerable as such; but he is not a mere manager and it would not be right to describe Mahantship as a mere office. " A superior of a Math has not only duties to discharge in connection with the endowment but he has a personal interest of a beneficial character which is sanctioned by custom and is much larger than that of a Shebait in the debutter property. It was held by a Full Bench of the Calcutta High Court(2), that Shebaitship. itself is property, and this decision was approved of by the Judicial Committee in Ganesh v Lal Behary(3), and again in Bhabatarini vs Ashalata(4). (1) Vide Vidya Varuthi vs Balusami, 48 I. A. 302 (2) Vide Monahai vs Bhupendra, (3) 63 I.A. 448. (4) 70 I.A. 57. 1019 The effect of the first two decisions, as the Privy Council pointed out in the last case, was to emphasise the propriet ary element in the Shebaiti right and to show that though in some respects an anomaly, it was an anomaly to be accepted as having been admitted into Hindu ,law from an early date. This view was adopted in its entirety by this court in Angurbala vs Debabrata (1), and what was said in that case in respect to Shebaiti right could, with equal propriety, be applied to the office of a Mahant. Thus in the conception of Mahantship, as in Shebaitship, both the elements of office and property, of duties and personal interest are blended together and neither can be detached from the other. The personal or beneficial interest of the Mahant in the endowments attached to an institution is manifested in his large powers of disposal and administration and his right to create derivative tenures in respect to endowed properties; and these and other rights of a similar character invest the office of the Mahant with .the character of proprietary right which, though anomalous to some extent, is still a genuine legal right. It is true that the Mahantship is not heritable like ordinary property, but that is because of its peculiar nature and the fact that the office is generally held by an ascetic, whose connection with his natural family being completely cut of, the ordinary rules of succession do not apply. There is no reason why the word "property", as used in article 19(1) (f) of the Constitution, should not be given a liberal and wide connotation and should not be extended to those well recognised types of interest which have the insignia or characteristics of proprietary right. As said above, the ingredients of both office and property, of duties and personal interest are blended together in the rights of a Mahant and the Mahant has the right to enjoy this property or beneficial interest so long as he is entitled to hold his office. To take away this beneficial interest and leave him merely to the discharge of his duties would be to destroy his character as a Mahant altogether. It is true that the beneficial interest which he enjoys is appurtenant to his duties (1) 1020 and as he is in charge of a public institution, reasonable restrictions can always be placed upon his rights in the interest of the public. But the restrictions would cease to be reasonable if they are calculated to make him unfit to discharge the duties which he is called upon to discharge. A Mahant 's duty is not simply to manage the temporalities of a Math. He is the head and superior of spiritual fraternity and the purpose of Math is to encourage and foster spiritual training by maintenance of a competent line of teachers who could impart religious instructions to the disciples and followers of the Math and try to strengthen the doctrines of the particular school or order, of which they profess to be adherents. This purpose cannot be served if the restrictions are such as would bring the Mathadhipati down to the level of a servant under a State department. It is from this standpoint that the reasonableness of the restrictions should be judged. A point was suggested by the learned AttorneyGeneral that as article 19(1) (f) deals only with the natural rights inherent in a citizen to acquire, hold and dispose of property in the abstract without reference to rights to any particular property, it can be of no real assistance to the respondent in the present case and article 3l of the Constitution, which deals with deprivation of property, has no application here. In the case of The State of West Bengal vs Subodh Gopal Bose(II) (Civil Appeal No. 107 of 1952, decided by this court on the 17th December, 1953), an opinion was expressed by Patanjali Sastri C. J. that article 19(1) (f) of the Constitution is concerned only with the abstract right and capacity to acquire, hold and dispose of property and that it has no relation to concrete property rights. This, it may be noted, was an expression of opinion by the learned Chief Justice alone and it was not the decision of the court ; for out of the other four learned Judges who together with the Chief Justice constituted the Bench, two did not definitely agree with this view, while the remaining two did not express any opinion one way or the other. This point was not raised before us by the Advocate General for Madras, who appeared in support of the appeal, nor by any of the other (1) (1954] S.C.R. 587 1021 counsel appearing in this case. The learned Attorney. General himself stated candidly that he was not prepared to support the view taken by the late Chief Justice as mentioned above, and he only raised the. point to get an authoritative pronouncement upon it by the court. In our opinion, it would not be proper to express any final opinion upon the point in the present case when we had not the advantage of any arguments addressed to us upon it. We would prefer to proceed, as this court has proceeded all along, in dealing with similar cases in the past, on the footing that article 19(1) (f) applies equally to concrete as well as abstract rights of property. We now come to article 25 which, as its language indicates, secures to every person, subject to public order, health and morality, a freedom not only to entertain such religious belief, as may be approved of by his judgment and conscience, but also to exhibit his belief in such outward acts as he thinks proper and to propagate or disseminate his ideas for the edification of others. A question is raised as to whether the word "persons" here means individuals only or includes corporate bodies as well. The question, in our opinion, is not at all relevant for our present purpose. A Mathadhipati is certainly not a corporate body; he is the head of a spiritual fraternity and by virtue of his office has to perform the duties of a religious teacher. it is his duty to practise and propagate the religious tenets, of which he is an adherent and if any provision of law prevents him from propagating his doctrines, that would certainly affect the religious freedom which is guaranteed to every person under article 25. Institutions as such cannot practise or propagate religion; it can be done only by individual persons and whether these person propagate their personal views or the tenets for which the institution stands is really immaterial for purposes. of article 25. It is the propagation of belief that is protected, no matter whether the propagation takes place in a church or monastery, or in a temple or parlour meeting. As regards article 26, the first question is, what is the precise meaning or connotation of the expression 132 1022 "religious denomination" and whether a Math could come within this expression. The word "denomination" has been defined in the Oxford Dictionary to mean 'Ca collection of individuals classed together under the same name: a religious sect or body having a common faith and Organisation and designated by a distinctive name. It is well known that the practice of setting up Maths as centres of the logical teaching was started by Shri Sankaracharya and was followed by various teachers since then. After Sankara, came a galaxy of religious teachers and philosophers who founded the different sects and sub sects of the Hindu religion that we find in India at the present day. Each one of such sects or sub sects can certainly be balled a religious denomination, as it is designated by a distinctive name, in many cases it is the name of the founder, and has a common faith and common spiritual organization. The followers of Ramanuja, who are known by the name of Shri Vaishnabas, undoubtedly constitute a religious denomination; and so do the followers of Madhwacharya and other religious teachers. It is a fact well established by tradition that the eight Udipi Maths were founded by Madhwacharya himself and the trustees and the beneficiaries of these Maths profess to be followers of that teacher. The High Court has found that the Math in question is in charge of the Sivalli Brahmins who constitute a section of the followers of Madhwacharya. As article 26 contemplates not merely a religious denomination but also a section thereof, the Math or the spiritual fraternity represented by it can legitimately come within the purview of this article. The other thing that remains to be considered in regard to article 26 is, what is the scope of clause (b) of the article which speaks of management " of its own affairs in matters of religion ?" The language undoubtedly suggests that there could be other affairs of a religious denomination or a section thereof which are not matters of religion and to which the guarantee given by this clause would not apply. The question is, whereas the line to be drawn between what are matters of religion and what are not 1023 It will be seen that besides the right to manage its own affairs in matters of religion, which is given by clause (b), the next two clauses of article 26 guarantee to a religious denomination the right to acquire and own property and to administer such property in accordance with law. The administration of its property by a religious denomination has thus been placed on a different footing from the right to manage its own affairs in matters of religion. The latter is a fundamental right which no legislature can take away, whereas the former can be regulated by laws which the legislature can validly impose. It is clear, therefore, that questions merely relating to administration of properties belonging to a religious group or institution are not matters of religion to which clause (b) of the article applies. What then are matters of religion ? The word "religion " has not been defined in the Constitution and it is a term which is hardly susceptible of any rigid definition. In an American case(1), it has been said " that the term religion has reference to one 's views of his relation to his Creator and to the obligations they impose of reverence for His Being and character and of obedience to His will. It is often confounded with cultus of form or worship of a particular sect, but is distinguishable from the latter. " We do not think that the above definition can be regarded as either precise or adequate. Articles 25 and 26 of our Constitution are based for the most part upon article 44(2) of the Constitution of Eire and we have great doubt whether a definition of "religion" as given above could have been in the minds of our Constitution makers when they framed the Constitution. Religion is certainly a matter of faith with individuals or communities and it is not necessarily theistic. There are well known religions in India like Buddhism and Jainism which do not believe in God or in any Intelligent First Cause. A religion undoubtedly has its basis in a system of beliefs or doctrines which are regarded by those who profess that religion as conducive to their spiritual well being, but it would not be correct to say that religion is nothing else, but a (1) Vide Davie vs Benson ; at 342. 1024 doctrine or belief. A religion may not only lay down a code of ethical rules for its followers to accept, it might prescribe rituals and observances, ceremonies and modes of worship which are regarded as integral parts of religion, and these forms and observances might extend even to matters of food and dress. The guarantee under our Constitution not only protects the freedom of religious opinion but it protects also acts done in pursuance of a religion and this is made clear by the use of the expression " practice of religion " in article 25. Latham C. J. of the High Court of Australia while dealing with the provision of section 116 of the Australian Constitution which inter alia forbids the Commonwealth to prohibit the "free exercise of any religion" made the following weighty observations(1) : " It is sometimes suggested in discussions on the subject of freedom of religion that, though the civil Government should not interfere with religious opinion&, it nevertheless may deal as it pleases with any acts which are done in pursuance of religious belief without infringing the principle of freedom of religion. It appears to me to be difficult to maintain this distinction as relevant to the interpretation of section 116. The section refers in express terms to the exercise of religion, and therefore it is intended to protect from the operation of any Commonwealth laws acts which are done in the exercise of religion. Thus the section goes far beyond protecting liberty of opinion. It protects also acts. done in pursuance of religious belief as part of religion. " These observations apply fully to the protection of religion as guaranteed by the Indian Constitution. Restrictions by the State upon free exercise of religion are permitted both under articles 25 and 26 on grounds of public order,. morality and health. Clause (2)(a) of article 25 reserves the right of the State to regulate or restrict any economic, financial, political and other secular activities which may be associated with religious practice and there is a further right given to the State by sub clause (b) under which the State can (1) Vide Adelaide Company V. The Commonwealth 67 C.L.R. 116, 127 1025 legislate for social welfare and reform even though by so doing it might interfere with religious practices. The learned Attorney General lays stress upon clause (2)(a) of the article and his contention is that all secular activities, which may be associated with religion but do not really constitute an essential part of it, are amenable to State regulation. The contention formulated in such broad terms cannot, we think, be supported. In the first place, what constitutes the essential part of a religion is primarily to be ascertained with reference to the doctrines of that religion itself. If the tenets of any religious sect of the Hindus prescribe that offerings of food should be given to the idol at particular hours of the day, that periodical ceremonies should be performed in a certain way at certain periods of the year or that there should be daily recital of sacred texts or ablations to the sacred fire, all these would be regarded as parts of religion and the mere fact that they involve expenditure of money or employment of priests and servants or the use of marketable commodities would not make them secular activities partaking of a commercial or economic character; all of them are religious. practices and should be regarded as matters of religion within the meaning of article 26(b). What article 25(2)(a) contemplates is not regulation by the State of religious practices as such, the freedom of which is guaranteed by the Constitution except when they run counter to public order, health and morality, but regulation of activities which are economic, commercial or political in their character though they are associated with religious practices. We may refer in this connection to a few American and Australian cases, all of which arose out of the activities of persons connected with the religious association known as "Jehova 's Witnesses." This association of persons loosely organised throughout Australia, U.S.A. and other countries regard the literal interpretation of the Bible as fundamental to proper religious beliefs. This belief in the supreme Authority of the Bible colours many of their political ideas. They refuse to take oath of allegiance to the king or other Constituted 1026 human authority and even to show respect to the national flag, and they decry all wars between nations and all kinds of war activities. In 1941 a company of " Jehova 's Witnesses " incorporated in Australia commenced proclaiming and teaching matters which were prejudicial to war activities and the defence of the Commonwealth and steps were taken against them under the National Security Regulations of the State. The legality of the action of the Government was questioned by means of a writ petition before the High Court and the High Court held that the action of the Government was justified and that section 116, which guaranteed freedom of religion under the Australian Constitution, was not in any way infringed by the National Security Regulations(1). These were undoubtedly political activities though arising out of religious belief entertained by a particular community. In such cases, as Chief Justice Latham pointed out, the provision for protection of religion was not an absolute protection to be interpreted and applied independently of other provisions of the Constitution. These privileges must be reconciled with the right of the State to employ the sovereign power to ensure peace, security and orderly living without which constitutional guarantee of civil liberty would be a mockery. The courts of America were at one time greatly agitated over the question of legality of a State regulation which required the pupils in public schools on pain of compulsion to participate in a daily ceremony of saluting the national flag, while reciting in unison, a pledge of allegiance to it in a certain set formula. The question arose in Minersville School District, Board of Education, etc. vs Gobitis(2). In that case two small children, Lillian and William Gobitis, were expelled from the public school of Minersville, Pennsylvania, for refusing to salute the national flag as part of the daily exercise. The Gobitis family were affiliated with "Jehova 's Witnesses" and had been (1) Vide Adelaide Company vs The Commonwealth, ; , 127. (2) ; 1027 brought up conscientiously to believe that such a gesture of respect for the flag was forbidden by the scripture. The point for decision by the Supreme Court was whether the requirement of participation in such a ceremony exacted from a child, who refused upon sincere religious ground, infringed the liberty of religion guaranteed by the First and the Fourteenth Amendments ? The court held by a majority that it did not and that it was within the province of the legislature and the school authorities to adopt appropriate means to evoke and foster a sentiment of. national unity amongst the children in public schools. The Supreme Court, however, changed their views on this identical point in the later case of West Virginia State Board of Education vs Barnette(1). There it was held overruling the earlier decision referred to above that the action of a State in making it compulsory for children in public schools to salute the flag and pledge allegiance constituted a violation of the First and the Fourteenth Amendments. This difference in judicial opinion brings out forcibly the difficult task which a court has to perform in cases of this type where the freedom or religious convictions genuinely entertained by men come into conflict with the proper political attitude which is expected from citizens in matters of unity and solidarity of the State organization. As regards commercial activities, which are prompted by religious beliefs, we can cite the case of Murdock vs Pennsylvania(2). Here also the petitioners were "Jehova 's Witnesses" and they went about from door to door in the city of Jeannette distributing literature and soliciting people to purchase certain religious books and pamphlets, all published by the Watch Tower Bible and Tract Society. A municipal ordinance required religious colporteurs to pay a licence tax as a condition to the pursuit of their activities. The petitioners were convicted and fined for violation of the ordinance. It was held that the ordinance in question was invalid under the Federal Constitution as constituting a denial of freedom of speech, press and religion; (1) ; (2) ; 1028 and it was held further that upon the facts of the case it could not be said that "Jehova 's Witnesses" were engaged in a commercial rather than in a religious venture. Here again, it may be pointed out that a contrary view was taken only a few years before in the case of Jones vs Opelika(1), and it was held that a city ordinance, which required that licence be procured and taxes paid for the business of selling books and pamphlets on the streets from house to house, was applicable to a member of a religious Organisation who was engaged in selling the printed propaganda, pamphlets without having complied with the provisions of the ordinance. It is to be noted that both in the American as well as in the Australian Constitutions the. right to freedom of religion has been declared in unrestricted terms with. out any limitation whatsoever. Limitations, therefore, have been introduced by courts of law in these countries on grounds of morality, order and social protection. An adjustment of the competing demands of the interests of Government and constitutional liberties is always a delicate and a difficult task and that is why we find difference of judicial opinion to such an extent in cases decided by the American courts where questions of religious freedom were involved. Our Constitution makers, however, have embodied the limitations which have been evolved by judicial pronouncements in America or Australia in the Constitution itself and the language of articles 25 and 26 is sufficiently clear to enable us to determine without the aid of foreign authorities as to what matters come within the purview of religion and what do not. As we have already indicated, freedom of religion in our Constitution is not confined to religious beliefs only; it extends to religious practices as well subject to the restrictions which the Constitution itself has laid down. Under article 26(b), therefore, a religious denomination .or organization enjoys complete autonomy in the matter of deciding as to what rites and ceremonies are essential according to the tenets of the religion they hold and no outside authority has any jurisdiction to (1) ; 1029 interfere with their decision in such matters. Of course, the scale of expenses to be incurred in connection with these religious observances would be a matter of administration of property belonging to the religious denomination and can be controlled by secular authorities in accordance with any law laid down by a competent legislature; for it could not be the injunction, of any religion to destroy the institution and its endowments by incurring wasteful expenditure on rites and ceremonies. It should be noticed, however, that under article 26(d), it is the fundamental right of a religious denomination or its representative to administer its properties in accordance with law; and the law, therefore, must leave the right of administration to the religious denomination itself subject to such restrictions and regulations as it might choose to impose. A law which takes away the right of administration from the hands of a religious denomination altogether and vests it in any other authority would amount to a violation of the right guaranteed under clause (d) of article 26. Having thus disposed of the general contentions that were raised in this appeal, we will proceed now to examine the specific grounds that have been urged by the parties before us in regard to the decision of the High Court so far as it declared several sections of the new Act to be ultra vires the Constitution by reason of their conflicting with the fundamental rights of the respondent. The concluding portion of the judgment of the High Court where the learned Judges summed up their decision on this point stands as follows: " To sum up, we hold that the following sections are ultra vires the State Legislature in so far as they relate to this Math: and what we say will also equally apply to other Maths of a similar nature. The sections of the new Act are: sections 18, 209 21, 25(4), section 26 (to the extent section 25(4) is made applicable), section 28 (though it sounds innocuous, it is liable to abuse as we have already pointed out earlier in the judgment), section 29, clause (2) of section 30, section 31, section 39(2), section 42, section 53 (because courts have ample powers to meet these contingencies), ,section 54, clause (2) of section 55, section 56, clause (3) 133 1030 of section 58, sections to 69 in Chapter VI, clauses (2), (3) and (4) of section 70, section 76, section 89 and section 99 (to the extent it gives the Government virtually complete control over the Matadhipati and Maths). It may be pointed out at the outset that the learned Judges were not, right in including sections 18, 39(2) and 42 in this list, as these sections are not applicable to Maths under the Act itself This position has not been disputed by Mr. Somayya, who appears for the respondent. Section 20 of the Act describes the powers of the Commissioner in respect to religious endowments and they include power to pass any orders that may be deemed necessary to ensure that such endowments are properly administered and that their income is duly appropriated for the purposes for which they were founded. Having regard to the fact that the Mathadhipati occupies the position of a trustee with regard to the Math, which is a public institution, some amount of control or supervision over the due administration of the endowments and due appropriation of their funds is certainly necessary in the interest of the public and we do not think that the provision of this section by itself offends any fundamental right of the Mahant. We do not agree with the High Court that the result of this provision would be to reduce the Mahant to the position of a servant. No doubt the Commissioner is invested, with powers to pass orders, but orders can be passed only for the purposes specified in the section and not for interference with the rights of the Mahant as are sanctioned by usage or for lowering his position as the spiritual head of the institution. The saving provision contained in section 91 of the Act makes the position quite clear. An apprehension that the powers conferred by this section may be abused in individual cases does not make the provision itself bad or invalid in law. We agree, however, with the High Court in the view taken by it about section 21. This section empowers the Commissioner and his subordinate officers and also persons authorised by them to enter the premises of 1031 any religious institution or place of worship for the purpose of exercising any power conferred, or any duty imposed by or under the Act. It is well known that there could be no such thing as an unregulated and unrestricted right of entry in a public temple or other religious institution, for persons who are not connected with the spiritual functions thereof. It is a traditional custom universally observed not to allow access to any outsider to the particularly sacred parts of a temple as for example, the place where the deity is located. There are also fixed hours of worship and rest for the idol when no disturbance by any member of the public is allowed. Section 21, it is to be noted, does not confine the right of entry to the outer portion of the premises; it does not even exclude the inner sanctuary the Holy of Holies" as it is said, the sanctity of which is zealously preserved. It does not say that the entry may be made after due notice to the head. the institution and at such hours which would not interfere with the due observance of the rites and ceremonies in the institution. We think that as the section stands, it interferes with the fundamental rights of the Mathadhipati and the denomination of which he is head guaranteed under articles 25 and 26 of the Constitution. Our attention has been drawn in. this connection to section 91. of the Act which, it is said, provides a sufficient safeguard against any abuse of power under section 2 1. We cannot agree with this contention. Clause (a ) of section 91 excepts from the saving clause all express provisions of the Act within which the provision of section 21 would have to be included. Clause (b) again does not say anything about custom or usage obtaining in an institution and it does not indicate by whom and in what manner the question of interference with the, religious and spiritual functions of the Math would be decided in case of any dispute arising regarding it. In our opinion, section 21 has been rightly held to be invalid. Section 23 imposes a duty upon the trustees to obey all lawful orders issued be the Commissioner or any subordinate authority under the, provisions of the Act. No exception can be taken to the section if those 1032 provisions of the Act, which offend against the fund&mental rights of the respondent, are left out of account as being invalid. No body can make a grievance if he .is directed to obey orders issued in pursuance of valid legal authority. The same reason would, in our opinion, apply to section 24. It may be mentioned here that sections 23 and 24 have not been specifically mentioned in the concluding portion of the judgment of the High Court set out above, though they have been attacked by the learned Judges in course of their discussion. As regards section 25, the High Court has taken exception only to clause (4) of the section. If the preparation of registers for religious institutions is not wrong and does not affect the fundamental rights of the Mahant,one fails to see how the direction for addition to or alteration of entries in such registers, which clause (4) contemplates and which will be necessary as a result of enquiries made under clause (3), can, in any sense, be held to be invalid as infringing the fundamental rights of the Mahant. The enquiry that is contemplated by clauses (3) and (4) is an enquiry into the actual state of affairs, and the whole object of the section is to keep an accurate record of the particulars specified in it. We are unable, therefore, to agree with the view expressed by the learned Judges. For the same reasons, section 26, which provides for annual verification of the registers, cannot be held to be bad. According to the High Court section 28 is itself innocuous. The mere possibility of its being abused is no ground for holding it to be invalid. As all endowed properties are. ordinarily inalienable, we fail to see why the restrictions placed by Section 29 upon alienation of endowed properties should be considered bad. In our opinion, the provision of clause (2) of section 29, which enables the Commissioner to impose conditions when he grants sanction to alienation of endowed property, is perfectly reasonable and to that no exception can be taken. The provision of section 30(2) appears to us to be somewhat obscure. Clause (1) of the section enables 1033 a trustee to incur expenditure out of the funds in his charge after making adequate provision . for the purposes referred to in section 70(2), for making arrangements for the health, safety and convenience of disciples, pilgrims, etc. Clause (2), however, says that in incurring expenditure under clause (1), the trustee shall be guided by such general or special instruction as the Commissioner or the Area Committee might give in that connection. If the trustee is to be guided but not fettered by such directions, possibly no objection can be taken to this clause; but if he is bound to carry out such instructions, we do think that it constitutes an encroachment on his right. Under the law, as it stands, the Mahant has large powers of disposal over the surplus income and the only restriction is that he cannot spend anything out of it for his personal use unconnected with the dignity of his ,office. But as the purposes specified in sub clauses (a) and (b) of section 30(1) are beneficial to the institution there seems to be no reason why the authority vested in the Mahant to spend the surplus income for such purposes should be taken away from him and he should be compelled to act in such matters under the instructions of the Government officers. We think that this is an unreasonable restriction on the Mahant 's right of property which is blended with his office. The same reason applies in our opnion to section 31 of the Act, the meaning of which also is far from clear. If after making adequate provision for the purposes referred, to in section 70(2) and for, the arrangements mentioned in section 30(2) there is still a surplus left with the trustee, section 31 enables him to spend it for the purposes specified in section 59(1) with the previous sanction of the Deputy Commissioner. One of the purposes mentioned in section 59(1) is the propagation of the religious tenents of the institution, and it, is not understood why sanction of the Deputy Commissioner should be necessary for spending the surplus, income for the propagation of the religious tenets of the order which is one of the primary duties of a Mahant to discharge. The next thing that strikes one is, whether sanction is necessary if the trustee 1034 wants to spend the money for purposes other than those specified in section 59(1) ? If the answer is in the nega tive, the whole object of the section becomes meaningless. If, on the other hand, the implication of the section is that the surplus can be spent only for the purposes specified in section 59(1) and that too with the permission of the Deputy Commissioner, it undoubtedly places a burdensome restriction upon the property rights of the Mahant which are sanctioned by usage and which would have the effect of impairing his dignity and efficiency as the head of the institution. We think that sections 30(2) and 31 have been rightly held to be invalid by the High Court. Sections 39 and 42, as said already, are not applicable to Maths and hence can be left out of consideration,. , Section 53 has . been condemned by the High Court merely on the ground that the court has ample jurisdiction to provide for the contingencies that this section is intended to meet. But that surely cannot prevent a competent legislature from legislating on the topic, provided it can do so without violating" any of the fundamental rights guaranteed by the Constitution. We are unable to agree with the High Court on this point. There seems to be nothing wrong or unreasonable in section 54 of the Act which provides for fixing the standard, scale of expenditure. The proposals for this purpose would have to be submitted by the trustee ; they are then to be published and suggestions invited from persons having interest in the amendment. The Commissioner is to scrutinise the original proposals and the . suggestions received and if in his opinion a modification of the scale is necessary, he has to submit a report to the Government, whose decision will be final. This we consider to be quite a reasonable and salutary provision. Section 55 deals with a Mahant 's power over Pathakanikas or personal gifts. Ordinarily a Mahant has absolute power of disposal over such gifts, though if he dies without making any disposition, it is reckoned as the property of the Math and goes to the succeeding Mahant. The first clause of section 55 lays down that such Pathakanikas shall be spent only for the 1035 purposes of the Math. This is an unwarranted restriction on the property right of the Mahant. It may be that according to customs prevailing in a particular institution, such personal gifts are regarded as gifts to the institution itself and the Mahant receives them only as the representative of the institution; but the general rule is otherwise. As section 55(1) does not say that this rule will apply only when there is a custom of that nature in a particular institution, we must say that the provision in this unrestricted form is an unreasonable encroachment upon the, fundamental right of the Mahant. The same objection can be raised against clause (2) of the section; for if the Pathakanikas constitute the property of a Mahant, there is no justification for compelling him to keep accounts of the receipts and expenditure of such personal gifts. As said already, if the Mahant dies without disposing of these personal gifts, they may form part of the assets of the Math, but that is no reason for restricting the powers of the Mahant over these gifts so long as he is alive. Section 56 has been rightly invalidated by the High Court. , It makes provision of an extremely drastic ,character. Power has been given to the Commissioner to require the trustee to appoint a manager for administration of the secular affairs of the institution and in case of default, the Commissioner can make the appointment. himself. The manager thus appointed though nominally a servant of the trustee, has practically to do everything according to the directions of .the Commissioner and his subordinates. It is to be noted that this power can be exercised at the mere option of the Commissioner without, any justifying necessity whatsoever and no pre requisites like mis management of property or maladministration of trust funds are necessary to enable the trustee to exercise such drastic power. It is true that the section contemplates the appointment of a manager for administration of the secular affairs of this institution. But no rigid demarcation could be made as we have already said between the spiritual duties of the Mahant 1036 and his personal interest in the trust property. The effect of the section really is that the Commissioner is at liberty at any moment he chooses to deprive the Mahant of his right to administer the trust property even if there is no negligence or maladministration on his part. Such restriction would be opposed to the provision of article 26(d) of the Constitution. It would cripple his authority as Mahant altogether and reduce his position to that of an ordinary priest or paid servant. We find nothing wrong in section 58 of the Act which relates to the framing of the scheme by the Deputy Commissioner. It is true that it is a Government officer and not the court who is given the power to settle the scheme, but we think that sample safeguards have been provided in the Act to rectify any error or unjust decision made by the Deputy Commissioner. Section 61 provides for an appeal to the Commissioner, against the order of the Deputy Commissioner and there is a right of suit given to a party who is aggrieved by the order of the Commissioner ,with a further right of appeal to the High Court. The objection urged against the provision of clause (3)(b) of section 58 does not appear to us to be of The executive officer mentioned in much substance that clause could be nothing else but a manager of the properties of the Math, ad the cannot possibly be empowered to exercise the functions of the Mathadhipati himself. In any event, the trustee would have his remedy against such order of the Deputy Commissioner by way of appeal to the Commissioner and also by way of suit as laid down in sections 61 and 62. Section 59 simply provides a scheme for the application of the cy pres doctrine in case the object of the trust fails either from the inception or by reason of subsequent eve*. Here again the only complaint that is raised is, that such order could be made by the Deputy Commissioner. We think that this objection has not much substance. In the first place, the various objects on, which the trust funds could be spent are laid down in the section itself and the jurisdiction of the Deputy Commissioner is only to make a choice out of the several heads . 1037 Further an appeal has been provided from an order of the Deputy Commissioner under this section to the Commissioner. We, therefore, cannot agree with the High Court that sections 58 and 59 of the Act are invalid. Chapter VI of the Act, which contains sections 63 to 69, relates to notification of religious institutions The provisions are extremely drastic in, their character and the worst feature of it is that no access is allowed to the court to set aside an order of notification. The Advocate General for Madras frankly stated that he could not support the legality of these provisions. We hold therefore, in agreement with High Court that these sections should. be hold to be void. Section 70 relates to the, budget of religious institu tions. Objection has been taken only to clause (3.) which empowers the Commissioner and the Area Committee to make any additions to or alterations in the budget as they deem fit. A budget is indispensable in all public institutions and we do not think that it is per be unreasonable to provide for the budget of a religious institution being prepared under the supervision of the Commissioner or the Area Committee. It is to be noted that if the order is made by an Area Committee under clause (3), clause (4) provides an appeal against it to the Deputy Commissioner. Section 89 provides for penalties for refusal by the trustee to comply with the provisions of the Act. If the objectionable portions of the Act are eliminated, the portion that remains will be perfectly valid and for violation of these valid provisions, penalties can legiti mately be provided. Section 99 vests an overall revisional power in the Government. This, in our opinion, is beneficial to the trustee, for he will have an opportunity to approach, the Government in case of an irregularity, error or omission made by the Commissioner or any other subordinate officer. The only other point that requires consideration is the constitutional validity of section 76 of the Act which runs as follows: "76. (1) In respect of the services rendered by the Government and their officers, every religious institution shall, from the income derived by it, pay to the 134 1038 Government annually such contribution not exceeding five per centum of its income as may be prescribed. (2)Every religious institution, the annual income of which for the fasli year immediately preceding as calculated for the purposes of the levy of contribution under sub section (1), is hot less than one thousand rupees, shall pay to the Government annually, for meeting the cost of auditing its accounts, such further sum not exceeding one and a half per centum of its income as the Commissioner may determine. (3)The annual payments referred to in sub sections (1) and (2) shall be made, notwithstanding anything to the contrary contained in any scheme settled or deemed to be settled under this Act for the religious institution concerned. (4)The Government shall pay the salaries, allowances, pensions and other beneficial remuneration of the Commissioner, Deputy Commissioners, Assistant Commissioners and other officers and servants (other than executive officers of religious institutions) employed for the purposes of this Act and the other expenses incurred for such purposes, including the expenses of Area Committees and the cost of auditing the accounts of religious institutions. " Thus the section authorises the levy of an annual contribution on all religious institutions, the maximum of which is fixed at 5 per cent. of the income derived by them. The Government is to frame rules for the purposes of fixing rates within the permissible maximums and the section expressly states that the levy is in respect of the I services rendered by the Government and its officers. The validity of the provision has been attacked on a two fold ground: the first is, that the contribution is really a tax and as such it was beyond the legislative competence of the State Legislature to enact such provision. The other is, that the contribution being a tax or imposition, the proceeds of which are specifically appropriated for the maintenance of a particular religion or religious denomination, it comes within the mischief of article 27 of the Constitution and is hence void. 1039 So far as the first ground is concerned, it is not disputed that the legislation in the present case is covered by entries 10 and 28 of List III in Schedule VII of the Constitution. If the contribution payable under section 76 of the Act is a "fee", it may come under entry 47 of the Concurrent List which deals with " fees" in respect of any of the matters included in that list. On the other hand, if it is a tax, as this particular tax has not been provided for in any specific entry in any of the three lists, it could come only under entry 97 of List I or article 248(1) of the Constitution and in either view the Union Legislature alone would be competent to legislate upon it. On behalf of the appellant, the contention raised is that the contribution levied is a fee and not a tax and the learned Attorney General, who appeared for the Union of India as intervener in this as well as in the other connected appeals made a strenuous attempt to support this, position. The point is certainly not free from doubt and requires careful consideration. The learned Attorney General has argued in the first place that our Constitution makes a clear distinction ,between taxes and fees. It is true, as be t has pointed out, that there are a number of entries in List I of the Seventh Schedule which relate to taxes and duties of various sorts; whereas the last entry, namely entry 96, speaks of "fees" in respect of any of the matters dealt with in the list. Extractly the same is with regard to entries 46 to 62 in List II all of which relate to taxes and here again the last entry deals only with "fees" leviable in respect of the different matters specified in the list. It appears that: articles II 0 and 1 19 of the Constitution which deal with "Money Bills" lay down expressly that a bill will not be deemed to be a "Money Bill" by reason only that it provides for the imposition of fines. . or for the demand or payment of fees for licences or fees for services rendered, whereas a bill dealing with imposition or regulation. of a tax will always be a Money Bill. Article 277 also mentions taxes, cesses and fees separately. It is not clear, how ever, whether the word "tax" as used in article 265 has not been used in the wider sense as including all other 1040 impositions like ceases and fees; and that at least seems to be the implication of clause (28) of article 366 which defines taxation as including the imposition of any tax or impost, whether general, local or special. It seems to us that though levying of fees is only a particular form of the exercise of the taxing power of the State, our Constitution has placed fees uder a separate category for purposes of legislation and at the end of each one of the three legislative lists, it has given a power to the particular legislature to legislate on the imposition of fees in respect to every one of the items dealt with in the list itself. Some idea as to what fees are may be gathered from clause (2) of articles 110 and 119 referred to above which speak of fees for licences and for services rendered. The question for our consideration really is, what are the indicia or special characteristics that distinguish a fee from a tax proper ? On this point we have been referred to several authorities by the learned counsel appearing for the different parties including opinions expressed by writers of recognised treatises on public finance. A neat definition of what "tax" means has been given by Latham C. J. of the High Court of Australia,in Matthews vs Chicory Marketing Board(1). A tax", according to the learned Chief Justice, "is a compulsory exaction of money by public authority for public purposes enforceable by law and is not payment for services rendered". This definition brings out, in our opinion, the esential characteristics of a tax as distinguished from other forms of imposition which, in a general sense, are included within it. It is said that the essence of taxation is compulsion, that is to say, it is imposed under statutory power without the taxpayer 's consent and the payment is enforced by law(2). The second characteristic of tax is that it is an imposition made for public purpose without reference to any special benefit to be conferred on the payer of the tax. This is expressed by saying that the levy of tax is for the purposes of general revenue, which when collected revenues of the State. As the (1) ; , 276. (2) Vide Lower Mainland Dairy vs Crystal Dairy Ltd. 1041 object of a tax is not to confer any special benefit upon any particular individual, there is, as it is said, no element of quid pro quo between the taxpayer and the public authority(1). Another feature of taxation it; that as it is a part of the common burden, the quantum of imposition upon the taxpayer depends generally upon his capacity to pay. Coming now to fees, a 'fee ' is generally defined to be a charge for a special service rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the Government in rendering the service, though in many cases the costs are arbitrarily assessed. Ordinarily, the fees are uniform and no account is taken of the vary abilities of different recipients to pay(2). These are undoubtedly some of the general characteristics, but as there may be various kinds of fees, it is not possible to formulate a definition that would be applicable to all cases. As regards the distinction between a tax and a fee, it, is argued in the first place on behalf of the respondent that a fee is something voluntary which a person has got to pay if he wants certain ' services from the Government; but there is no obligation on his part to seek such services and if he does not want the services, I he can avoid the obligation. The example given is of a licence fee. If a man wants a licence that is entirely his own choice and then only he has to pay the fees, but not otherwise. We think that a careful examination will reveal that the element of compulsion or coerciveness is present in all kinds of imposition. though in different degrees and that it is not totally absent in fees. This, therefore, cannot be made the sole or even a material criterion for distinguishing a tax from fees. It is difficult, we think, to conceive of a tax except it be something like a poll tax, the incidence of which falls on all persons within a State. The house tax has to be paid only by those who own houses, the land tax by those who possess lands, municipal taxes or rates will fall on those who have properties within a (1) see Findlay Shirras on "Science of Public Finance", Vol. (2) Vide Lutz on "Public Finance" p. 215. 1042 municipality. Persons who do not have houses,land or Properties within municipalities, would not have to pay these taxes, but nevertheless these impositions come within the category of taxes and nobody can say that it is a choice of these people to own lands or houses or specified kinds of properties so that there is no compulsion on them to pay taxes at all. Compulsion lies in the fact that payment is enforceable by law against a man in spite of his unwillingness or want of consent ; and this element is present in taxes as well as in fees. Of course, in some cases whether a man would come. within the category Of a service receiver may be a matter of his choice, but that by itself would not constitute a major test which can be taken as the criterion of this species of imposition. The distinction between a tax and a fee lies primarily in the fact that a tax is levied he a part of a common burden, while a fee is a payment for a special benefit or privilege. Fees confer a special capacity, although the special advan tage, as for example in the case of registration fees for documents or marriage licences, is secondary to the primary motive of regulation in the public interest(1). Public interest seems to be at the basis of all impositions but in a fee it is some special benefit which the individual receives. As seligman says it is the, special benefit accruing to the indivitual which is the reason for payment in the case of fees; in the case of a tax, the particular advantage if it; exists at all is an incidental result of State action(2). If, as we hold, a fee is regarded as a sort of return or consideration for services rendered, it is absolutely necessary that the levy of fees should, on the face of the legislative provision, be co related to the expenses incurred by Government in rendering the services. As indicated in article 1 10 of the Constitution ordinarily there are two classes of cases where Government imposes fees upon persons. In the first class of cases, Government simply grants a permission or privilege to a person to do something, which otherwise that person would not be competent to do and extracts fees either (1) Vide Findlay Shirras on "Science of Public Finance" Vol. (2) Vide Seligman 's Essays on Taxation, P. 408. 1043 heavy or moderate from that person in return for the privilege that is conferred. ; A most common illustration of this type of cases is furnished. by the licence fees for motor vehicles. Here the costs incurred by the Government in maintaining an office or bureau for the granting of licences may be very small and the amount of imposition that is levied is based really not upon the costs incur. red by the Government but upon the benefit that the individual receives. In such cases, according to all the writers on public finance, the tax element is predominant(1), and if the money paid by licence holders goes for the upkeep of roads and other matters of general public utility, the licence fee cannot but be regarded as a tax. In the other class of cases, the Government does some positive work for the benefit of persons and the money is taken as the return for the work done or services rendered. If the money thus paid is set apart and appropriated specifically for the performance of such work and is not merged in the public revenues for the benefit of the general public,, it could be counted as fees and not a tax. There is really no generic difference between the tax and fees and as said by Seligman, the taxing power of a State may manifest itself in three different forms known respectively as special assessments,fees and taxes(2). Our Constitution has, for legislative purposes, made a distinction between a tax and a fee and while there are various entries in the legislative lists with regard to various forms of taxes there is an entry at the end of each one of the three lists as regards fees which could be levied in respect of any of the matters that is included in it. The implication seems to be that fees have special reference to governmental action undertaken in respect to any of these matters. Section 76 of the Madras Act speaks definitely of the contribution being levied in respect rendered by the Government; so far it has the appearance of fees. It is true that religious institutions do not want these services to be rendered to them and it (1) Vide Spligman 's Essays on Taxation, p. 409 (2) lbid, P. 406, 1044 may be that they do not consider the State interference to be a benefit at all. We agree, however, with the learned Attorney General that, in the present day concept of a State, it cannot be said that services could be rendered by the State only at the request of those who require these services. lf in the larger,interest of the public, a State considers it desirable that some special service should be done for certain people, the people must accept these services, whether willing or not(1) It may be noticed, however, that the contribution that has been levied under section 76 of the Act has been made to depend upon the capacity of the payer and not upon the quantum of benefit that is supposed to be conferred on any particular religious institution. Further the institutions,, which come under the lower income group and have income less than Rs. 1,000 annually, are excluded from the liability to pay the additional charges under clause (2) of the section. These are undoubtedly some of the characteristics of a 'tax ' and the imposition bears a close analogy to income tax. But the material fact which negatives the theory of fees in the present case is that the money raised by levy of the contribution is not ear marked or specified for defraying the expenses that the Government has to incur in performing the services. All the collections go to the consolidated fund of the State and all the expenses have to be met not out of these collections but out of the general revenues by a proper method of appropriation as is done in case of other Government expenses. That in itself might not be conclusive, but in this case there is total absences of any co relation between the expenses incurred by the Government and the amount raised by contribution under the provision of section 76 and in these circumstances the theory of a return or counter payment or quid pro quo cannot have any possible application to this case. In our opinion, therefore, the High Court was right in holding that the contribution levied under section 76 is a tax and not a fee and consequently it was beyond the power of the State Legislature to enact this provision. (1) Vide Findlay Shirras on "Science of Public Finance" Vol. 1045 In view of our decision on this point, the other ground hardly requires consideration. We will indicate, however, very briefly our opinion on the second point raised. The first contention, which has been raised by Mr. Nambiar in reference to article 27 of the Constitution is that the word "taxes", as used therein, is not confined to taxes proper but is inclusive of all other impositions like cesses, fees, etc. We do not think it necessary to decide this point in the present case, for in our opinion on the facts of the present case, the imposition, although it is a tax, does not come within the purview of the latter part of the article at all. What is forbidden by the article is the specific appropriation of the proceeds of any tax in payment of expenses for the promotion or maintenance of any particular religion or religious denomination. The reason underlying this provision is obvious. Ours being a secular State and there being freedom of religion guaranteed by the Constitution, both to individuals and to groups, it is against the policy of the ,Constitution to pay out of public funds any money for the promotion or maintenance of any particular religion or religious denomination. But the object of the contribution under section 76 of the Madras Act is not the fostering or preservation of the Hindu religion or any denomination within it. The purpose is to see that religious trusts and institutions,, wherever they exist, are properly administered. It is a secular administration of the religious legislature seeks to control and the in the Act, is to ensure that the institutions that the object, as enunciated endowments attached to the religious institutions are properly administered and their income is duly appropriated for the purposes for which they were founded or exist. There is no qustion of favouring any particular religion or religious denomination in such cases . In our opinion, article 27 of the Constitution is not attracted to the facts of the present case. The result, therefore, is that in our opinion sections 21, 30(2), 31,55,56 and 63 to 69 are the only sections which should be declared invalid as conflicting with the fundamental rights of the respondent as Mathadhipati of the Math in question and 135 1046 section 76(1) is void as beyond the legislative competence of the Madras State Legislature. The rest of the Act is to be regarded as valid. The decision of the High Court will be modified to this extent, but as the judgment of the High Court is affirmed on its merits, the appeal will stand dismissed with costs to the respondent. Appeal dismissed.

S who was Sub Agent of a Phospate company was convicted for a contravention of the Fertiliser Control Order read with section 7(1) of the Essential Commodities Act. The fertiliser seized during investigation was sold by the order of the Court and the sale proceeds held in deposit. The trial Magistrate ordered the fertiliser to be returned to the company but S filed an appeal under section 520 of the Code of Criminal Procedure and on December 23, 1963 the Sessions Judge directed the Magistrate to deliver the amount to S upon his furnishing security and executing a bond to the satisfaction of the District Magistrate. On January 3, 1964 S produced a certified copy of this order and asked to be allowed to take out the amount and furnished a bond. The Magistrate recommended its acceptance and it was then accepted by the Additional District Magistrate. On January 11, 1964 the Magistrate directed the issuance of a pay order. S received it on the same day and deposited it with his bankers on January 13. The Company meanwhile had filed a revision petition before the High Court and asked the Sessions Judge to stay his order of December 3, 1963. The Sessions Judge passed an order of stay on January 14. 1964 which was received in the District Magistrate 's office on January 16, 1964. Even after the receipt of that order in the District Magistrate 's office a communication was sent to the trial magistrate on 20th January,1964 directing him to carry out the Sessions Judge 's order dated December 23, 1963. The High Court charged the District Magistrate and other appellants for contempt and held that contempt of the Court of the Sessions Judge had been committed because : (a) The Magistrate accepted S 's bond which was not in proper form and thus failed to carry out the Sessions Judge 's order of December 23, 1963; (b) The bond was accepted by the Additional District Magistrate whereas the Sessions Judge had ordered that the bond should be to the satisfaction of the District Magistrate; (c) The District Magistrate directed that the Sessions Judge 's order of December 23, 1963 be carried out although the Sessions Judge 's stay order had been received in his office before that. The High Court held that there had been gross delay in the communication and execution of the orders of the superior courts by the District Magistrate and the subordinates and that there was a well knit conspiracy to pay the amount in deposit to S in defiance of the orders of the superior courts. Against their conviction by the High Court the appellants came to this Court. HELD : (i) There is nothing in section 517 Criminal Procedure Code which excluded the use of an indemnity bond such as was executed in the case. The Sessions Judge did not order that the bond should be taken in 305 the name of any particular court. A bond in the name of the Government of West Bengal substantially complied with the order of the Sessions Judge as it could be enforced against S without any trouble [308 F G] (ii) In holding that the District Magistrate alone could accept the bond the High Court ignored the powers of the Additional District Magistrate under the Code of Criminal Procedure. The practice of courts in Bengal is also against the proposition because such bonds are usually considered for acceptance by the Additional District Magistrate [308 G H] (iii) The High Court went wrong in holding that there was a conspiracy by the officials concerned. For a conspiracy to be hatched there must be some foundation of gain or purpose. The conspirators would at least know that there was nothing to be gained by delaying the orders since the money was already paid out. The stay orders were ineffective since there was nothing to stay. There was no doubt some delay but it could be dealt with in other ways than punishment for an imaginary contempt of court. L309 G H,[310 A] In the circumstances of the case the High Court was also wrong in taking into account against the appellants their failure to make an apology.[1310 B] A question whether there is contempt of court or not is a serious one. The court is both the accuser as well as the judge of the accusation. It behaves the court to act with as great circumspection as possible making all allowances for errors of judgment and difficulties arising from inveterate practices in courts and tribunals. It is only when a clear case of contumacious conduct not explainable otherwise, arises, that the condemner must be punished [310 F] [The Court, however, cautioned all concerned that orders of stay, bail, injunctions received from superior courts must receive close and prompt attention and unnecessary delay in dispatching or dealing with them may well furnish grounds for an inference that it was due to a natural disinclination to deal with the matter born of indifference and sometimes even of contumaciousness. [311 A B]

Appeals Nos. 187 and 190 of 1960. Appeals from the judgment dated 22nd January, 1957, of the Punjab High Court (Circuit Bench), Delhi, in Civil Reference No. 6 of 1953. Veda Vyasa, section K. Kapur and K. K. Jain, for the appellant. B. Ganapathi Iyer and D. Gupta, for the respondent. November 30. The Judgment of the Court was delivered by KAPUR, J. These appeals are brought by the assessee company against a common judgment and order of the Punjab High Court by which four appeals were decided in Civil Reference No. 6 of 1953. The appeals relate to four assessment years, 1947 48, 1948 49, 1949 50 and 1950 51. Two of these assessments, i.e., for the years 1947 48 and 1948 49 were made on the 800 appellant as successor to the two limited companies hereinafter mentioned. Briefly stated the facts of the case are that the appellant company was incorporated in the year 1947. Its objects inter alia were to acquire as a going concern activities, functions and business of the Delhi Stock & Share Exchange Limited and the Delhi Stock and Share Brokers Association Limited and to promote and regulate the business of exchange of stocks and shares, debentures and debenture stocks, Government securities, bonds and equities of any description and with a view thereto, to establish and conduct Stock Exchange in Delhi and/or elsewhere. Its capital is Rs. 5,00,000 divided into 250 shares of Rs. 2,000 each on which dividend could be earned. The appellant company provided a building and a hall wherein the business was to be transacted under the supervision and control of the appellant. The appellant company also made rules for the conduct of business of sale and purchase of shares in the Exchange premises. The total income for the year 1947 48 was Rs. 29,363 out of which a sum of Rs. 15,975 shown as admission fees was deducted and the income returned was Rs. 13,388. In the profit and loss account of that year Members ' admission fees were shown as Rs. 9,000 and on account of Authorised Assistants admission fees Rs. 6,875. The Income tax Officer who made the assessment for the year 1947 48 disallowed this deduction. The return for the following year also was made on a similar basis but the return for the years 1949 50 and 1950 51 did not take into account the admission fees received but in the Director 's report the amounts so received were shown as having been taken directly into the balance sheet. The Income tax Officer, however, disallowed and added back the amount so received to the income returned by the appellant. Against these orders appeals were taken to the Appellate Assistant Commissioner who set aside the additional assessments made under section 34 in regard to the assessment years 1947 48, 1948 49 and 1949 50 and the 4th appeal in regard to the year 1950 51 was decided against the appellant. Both sides appealed 801 to the Income tax Appellate Tribunal against the respective orders of the Appellate Assistant Commissioner and the Tribunal decided all the appeals in favour of the appellant. It was held by one of the members of the Tribunal that the amounts received as entrance fees were intended to be and were in fact treated as capital receipts and were therefore excluded from assessment and by the other that as there was no requisite periodicity, those amounts were not taxable. At the instance of the respondent a case was stated to the High Court on the following question: "Whether the admission fees of Members or Authorised Assistants received by the assessee is taxable income in its hands?" The High Court answered the question in favour of the respondent. The High Court held that the appellant was not a mutual society and therefore was not exempt from the payment of income tax; that it had a share capital on which dividend could be earned and any person could become a shareholder of the company by purchasing a share but every shareholder could not become a member unless he was enrolled, admitted or elected as a member and paid a sum of Rs. 250 as admission fee. On becoming a member he was entitled to exercise all rights and privileges of membership. It also found that the real object of the company was to carry on business as a Stock Exchange and the earning of profits. It was held therefore that the admission fees fell within the ambit of the expression "profits and gains of business, profession or vocation". The further alternative argument which was raised, i.e., that the income fell under section 10(6) of the Act, was therefore not decided. Mr. Veda Vyasa contended on behalf of the appellant that there were only 250 members of the appellant company; that the amount received as membership fees was shown as capital in the books of the company and there was no periodicity and therefore the amounts which had been treated as income should have been treated as capital receipts and therefore exempt from assessment. It was firstly contended that the question did not arise out of the order of the 802 Tribunal and that a new question had been raised but the objection is futile not only because of the absence of any such objection at the stage of the drawing up the statement of the case but also because of failure to object in the High Court; nor do we see any validity in the objection raised. That was the only matter in controversy requiring the decision of the court and was properly referred by the Tribunal. It was then contended that the question had to be answered in the light of facts admitted or found by the Tribunal and that the nature of the appellant 's business or the rules in regard to membership could not be taken into consideration in answering the question. That again is an unsustainable argument. The statement of the case itself shows that all these matters were taken into consideration by one of the members of the Tribunal and the learned judges of the High Court also decided the matter on that material which had been placed before the Income tax authorities and which was expressly referred to in their orders and which again was placed before the High Court in the argument presented there on behalf of the appellant company. It is wholly immaterial in the circumstances of the present case to take into consideration as to how the appellant treated the amounts in question. It is not how an assessee treats any monies received but what is the nature of the receipts which is decisive of its being taxable. These amounts were received by the appellant as membership admission fees and as admission fees paid by the members on account of Authorised Assistants. As far as the latter payment is concerned that would fall within the decision of this Court in Commissioner of Income tax. vs Calcutta Stock Exchange Association Ltd. (1) and therefore is taxable income. The former, i.e., members admission fees has to be decided in accordance with the nature of the business of the appellant company, its Memorandum and Articles of Association and the Rules made for the conduct of business. The appellant company was an association which carried on a trade and its profits were divisible as dividend amongst the shareholders. (1) 803 The object with which the company was formed was to promote and regulate the business in shares, stocks and securities etc., and to establish and conduct the business of a Stock Exchange in Delhi and to facilitate the transaction of such business. The business was more like that in Liverpool Corn Trade Association vs Monks (1). In that case an association was formed with the object of promoting the interest of corn trade with a share capital upon which the association was empowered to declare a dividend. The Association provided a Corn Exchange market, newsroom and facilities for carrying on business and membership was confined to persons engaged in the corn trade and every member was required to be a shareholder and had to pay an entrance fee. The Association also charged the members and every person making use of facilities a subscription which varied according to the use made by them. The bulk of the receipts of the Association was derived from entrance fees and subscriptions. It was therefore contended that the Association did not carry on a trade and that it was a mutual association and entrance fees and subscriptions should be disregarded in computing assessment of the assessable profits. It was held that it was not a mutual association whose transactions were inca pable of producing a profit; that it carried on a trade and the entrance fee paid by members ought to be included in the associations receipts for purposes of computing the profit. Rowlatt, J. said at p. 121: "I do not see why that amount is not a profit. The company has a capital upon which dividends may be earned, and the company has assets which can be used for the purpose of obtaining payments from its 'members for the advantages of such use, and one is tempted to ask why a profit is not so made exactly on the same footing as a profit is made by a railway company who issues a traveling ticket at a price to one of its own shareholders, or at any rate as much a profit as a profit made by a company from a dealing with its own shareholders in a line of business which is restricted to the shareholders." (1) 804 In Commissioner of Income tax, Bombay City vs Royal Western India Turf Club Ltd. (1) this Court rejected the applicability of the principle of mutuality because there was no mutual dealing between members inter se. There was no putting up a common fund for discharging a common obligation undertaken by the contributors for their mutual benefit and for this reason the case decided by the House of Lords in Styles V. New York Life Insurance Company (2) was held not applicable. In the present case the Memorandum of Association shows that the object with which the company was formed was to promote and regulate the business of exchange of stocks, shares, debentures, debenture stocks etc. The income, if any, which accrued from the business of the appellant company was distributable amongst the shareholders like in every joint stock company. According to the Articles of Association the members included shareholders and members of the Exchange and according to the rules and bye laws of the appellant company 'member ' means an individual, body of individuals, firms, companies, corporations or any corporate body as may be on the list of working members of the Stock Exchange for the time being. In the Articles of Association cls. 7 & 8, provision was made for the election of members by the Board of Directors and Rules 9 & 10 laid down the procedure for the election of these members. The entrance fees were payable by the trading members elected under the Rules and Bylaws of the Association, who alone with their Associates, could transact business in stocks and shares in the Association. Therefore, the body of trading members who paid the entrance fees, and the shareholders among whom the profits were distributed were not identical and thus the element of mutuality was lacking. It is the nature of the business of the company and the profits and the distribution thereof which are the determining factors and in this case it has not been shown that the appellants business was in any way different from that which was carried on in the (1) ; , 308. (2) ; 805 case reported as Liverpool Corn Trade Association vs Monks (1). In our opinion the judgment of the High Court is right and the appeals are therefore dismissed with costs. One hearing fee. Appeals dismissed.

The appellant carried on various businesses and one such was the running of a Theatre and Restaurant. In October, 1943, a subsidiary company was formed which was using the premises of the Theatre under a lease granted to it from April, 1944. In working out the capital of the two companies for excess profits tax, a claim of rupees five lakhs for goodwill as part of the capital of the subsidiary company was not taken into account. On reference to the High Court it held that the Tribunal should have allowed the value of the goodwill whatever it thought was reasonable at the date of transfer. Thereafter the Tribunal took into account only the value lease hold of the site to the subsidiary company and came to the conclusion that no goodwill had been acquired by the business of the Theatre as such and whatever goodwill there was related to the site of building itself, and estimated the value of goodwill at rupees two lakhs. Petition under sections 66(1) and 66(2) read with section 21 of the Excess Profits Tax Act being rejected by the Tribunal and the High Court, the appellants came appeal by special leave. Held, that the goodwill of a business needed to be considered in a broader way. It depended upon a variety of circumstances or a combination of them. The nature, the location, the (1) 102 806 service, the standing of the business, the honesty of those who run it, and the lack of competition and many other factors went individually or together to make up the goodwill, though the locality always played a considerable part. Shift the locality, and the goodwill may be lost but it was not everything. The power to attract custom depended on one or more of the other factors as well. In the instant case a question of law did arise, whether the goodwill of the Eros Theatre and Restaurant Ltd. was calculated in accordance with law. Cruttwell vs Lye, (1810) 17 ves. 335, Trego vs Hunt, L.), Inland Revenue Commissioners vs Muller & Co. 's Margarin, Ltd., 9101 A. C. 217 (H. L.), Daniell vs Federal Commissioner of Taxation; , and Federal Commissioner of Taxation vs Williamson, ; , discussed.

Civil Appeal No. 3947 (NT) of 1987. From the Judgment and order dated 27.8.1986 of the Bombay High Court in Appeal No. 676 of 1986. B.B. Ahuja, C.V. Subba Rao and Ms. A Subhashini, for the Appellants . N.A. Palkhiwala, S.P. Mehta, Ms. A. Vasantji and Praveen Kumar for the Respondent. The Judgment of the Court was delivered by 117 SABYASACHI MUKHARJI, J. Special leave granted. This is an appeal from the judgment and order of the Division Bench of the High Court of Bombay whereby the Division Bench concurred with the judgment and order of the learned Single Judge of the Court. The respondent herein had entered into an agreement on or about 5th May, 1978 with Thai Rayon Company Limited at Thailand (hereinafter called the foreign company). It was engaged in the business of manufacturing and selling Stapple Fibres at Bangkok in Thailand. The agreement recited that the respondent as he was described was a technician holding a Bachelor 's degree from the Massachusetts Institute of Technology, U.S.A. and has had several years of experience in the business of manufacturing and selling Stapple Fibres through his association with companies engaged in similar business and the foreign Company as referred to in the agreement aforesaid as the 'employer ' had approached him, i.e. the technician to make available to the 'employer ' his services in Bangkok on certain terms and conditions, inter alia, that the Thai Company would pay to the respondent remuneration of $12,000 per annum in quarterly instalments and it would be receivable at Bangkok. The agreement was for a period of three years with liberty to either party to terminate it after six months ' notice. It was subject to the approval of the Governments of Thailand and India and other authorities, if any. The respondent applied to the Central Government in India for its approval of his employment with the Thai Company under the agreement for the purpose of securing the benefit conferred by section 80 RRA of the Income Tax Act, 1961 (hereinafter called 'the Act '). On June 8, 1979 the Government informed the respondent that it was unable to approve the employment with the Thai Rayon Company Limited, Bangkok, as per the terms and conditions contained in the agreement dated 5th May, 1978 for the purpose of section 80 RRA of the Act as the section, according to Government contemplated rendering of service outside India in the status of an 'employee '. It was further stated that it was seen that the status of the respondent under the foreign employer was that of a 'consultant ' and not of an 'employee '. Therefore, the remuneration contemplated under section 80 RRA was from an employer and would not be applicable to the instant case of the respondent, according to the Government. Thereafter it appears, after hearing the respondent, the 118 Government by its letter dated 17th February. 1981 observed that the benefit of section 80 RRA of the Act could not be given to the respondent for the reason stated in that letter. Was the Government right in the view it took, is the question here? The learned Single Judge of the High Court quashed the communication refusing to accord approval and directed the Government to reconsider the application of the respondent. There was a Letters Patent Appeal before the Division Bench of the High Court. The Division Bench found no reason to interfere with ,the view expressed by the learned Single Judge and accordingly the appeal was dismissed. Aggrieved thereby the appellant who was the respondent before the trial court has come up to this Court. We are concerned in this appeal with the construction of section b 80 RRA of the Act. The said section is as follows: "80 RRA. (1) Where the gross total income of an individual who is a citizen of India includes any remuneration received by him in foreign currency from any employer (being a foreign employer or an Indian concern) for any service rendered by him outside India, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the individual, a deduction from such remuneration of an amount equal to fifty per cent thereof: Provided that where the individual renders continuous service outside India under or for such employer for a period exceeding thirty six months, no deduction under this section shall be allowed in respect of the remuneration for such service relating to any period after the expiry of the thirty six months aforesaid. (2) The deduction under this section shall be allowed (i) in the case of an individual who is or was, immediately before under taking such service, in the employment of the Central Government or any State 119 Government, only if such service is sponsored by the Central Government; (ii) in the case of any other individual, only if he is a technician and the terms and conditions of his service outside India are approved in this behalf by the Central Government or the prescribed authority. Explanation: For the purposes of this section (a) "foreign currency" shall have the meaning assigned to it in the Foreign Exchange Regulation Act, 1973 (46 of 1973): (b) "foreign employer" means, (i) the Government of a foreign State; or (ii) a foreign enterprise ' or (iii) any association or body established outside India; (c) "technician" means a person having specialised knowledge and experience in (i) constructional or manufacturing operations or mining or the generation or distribution of electricity or any other form of power; or (ii) agriculture, animal husbandry, dairy farming, deep sea fishing or ship building; or (iii) public administration or industrial or business management; or (iv) accountancy; or (v) any field of natural or applied science including medical science or social science; or (vi) any other field which the Board may prescribe in this behalf, who is employed in a capacity in which such specialised knowledge and experience are actually utilised. " 120 The only question involved in this appeal is whether any remuneration was received by the respondent in foreign currency from his employer, being a foreign employer for service rendered by him outside India. Mr. Ahuja counsel for the revenue contended that the remuneration received by a part time consultant from a foreign employer or an Indian concern abroad cannot include remuneration paid to a person. Mr. Ahuja further submitted that this section was really a counter part of section 10(6)(vii) of the Act. He further submitted that it should be construed to be confined to deduction to be given only in the case of remuneration given to an employee and not the fees paid to a consultant or a technician. We are unable to accept this contention. It has been specifically made clear that remuneration due should be chargeable under the head "Salaries" for the services rendered as a technician in section 10(6)(via). Section 80 RRA does not use these phrases. Apparently, advisedly therefore, it must follow that it did not cover fees received by the consultant for the services rendered outside India. An analysis of section 80 RRA reveals that in order to be entitled to deductions at the rate enumerated in the section by the respondent, the sum must be (i) remuneration (ii) received by him in foreign currency (iii) from any employer (being a foreign employer or an Indian concern) for any service rendered by him outside India. Furthermore, the terms and conditions of his service outside India must be approved by the Central Government. Further in the case of the respondent the deduction of the section would not be allowed in respect of the remuneration if such services related to any period after the expiry of the 36 months. The respondent was not employed beyond a period of 36 months. Indisputably, the sum concerned in this appeal, being fee, was remuneration in the sense being 'amount paid in lieu of services rendered '. The sum in question was received in foreign currency. There is no dispute as to that. The only question is whether the sum was received from 'any employer '. The other requirement is that the sum should be received for the services rendered outside India. There is no dispute as to that. The only question that requires consideration in the background of indisputable facts in this case is whether the sum received by the respondent was from 'an employer '. In other words, whether Thai Company was the employer of the respondent. On behalf of the revenue it was submitted by Mr. Ahuja that it was only as a counter part of section 10(6)(via) and that the section should be so considered properly. Mr. Palkhiwala appearing for the respondent pointed out the object of section 80 RRA of the Act was manifest to encourage, firstly earning 121 of foreign exchange by India, secondly, bringing that currency by Indian nationals from abroad to India and thirdly, to improve the status of the Indians abroad and increasing the market of Indian technician. It appears to us to be plausible object in the present socio economic context. We find that the amplitude of the expressions "employee" and "employer" covers the cases of consultant or technician. We find in the scheme of the section nothing to warrant any exception as contended for by the revenue. If we read the section with the object of the section in view as suggested by Mr. Palkhiwala then there is no warrant to restrict the meaning in the manner canvassed by the revenue before us. Mr. Ahuja, however, drew our attention to the objects appearing in clause 31 of the Finance Bill 1975 which later on became the Act. We find nothing in clause 31 to suggest a restricted meaning as canvassed by Shri Ahuja. The relevant portion of clause 31 reads as follows: "31. Tax relief in respect of remuneration received from foreign employees by Indian technicians, etc. At present, Indian technicians, etc., who work for a short period during a financial year with a foreign Government or a foreign enterprise are liable to Indian tax if they remain "resident in India" for tax purposes in that year, on the whole of the remuneration received by them from the foreign employer, without any allowance in respect of expenditure incurred by them out of such remuneration for meeting higher living costs and other essential expenditure in foreign countries. To relieve this hardship, the Bill seeks to make a provision in the Income tax Act for allowing a deduction in the computation of the taxable income, of 50 per cent of the remuneration received by them from a foreign Government or a foreign enterprise or any association or body established outside India". We find nothing to warrant a restricted construction as canvassed by Mr. Ahuja. We were also referred to the speech of the Hon 'ble Minister introducing the Bill before the Parliament, where the Hon 'ble Minister, inter alia stated as follows: "There are at present certain income tax exemption limits applying to salaried assessees relating to house rent allowance and leave travel concessions. These are being liberalised. Indian technicians employed abroad are also proposed to be given some tax relief. " 122 Shri Ahuja contended that it was only to encourage salaried employees who were going abroad and the cost of living was so high abroad to encourage them to get an exemption from tax on the salary earned abroad working as a technician that this provision was introduced. But this does not indicate that any limitation was intended to be confined only to the salaried employee and not extended to any technician or consultant employed abroad for the period stipulated in the section. We find that there is no warrant in the section to restrain the expression "remuneration" received from a foreign employee only to the salary received by an employee. In our opinion, employment as a technician for the purpose indicated by Shri Palkhiwala could also be an object of the Act and in such a case the fee received by consultant or technician would also come within the purview of the section concerned. In Aiyar 'The Lexicon. 1940 Ed. at page 387 it has been stated that an employer is one who employs, one who engages or keeps men in service, one who uses or enjoys the service of other persons for pay or salary. The words 'employer ' or 'employee ' are used not in any technical sense. In Shri Chintaman Rao & Another vs The State of Madhya Pradesh, ; at page 1346 of the report, it was observed that the concept of employment involved three ingredients: (1) employer (2) employee and (3) the contract of employment. The employee is one who works for other for hire. The employer is one who employs the services of other persons. In the context of this act, therefore, the expression 'employee ' will include a consultant or a technician employed by the foreign Company because he would be working for other for hire. It is true that the respondent may serve more than one master. A man may in certain circumstances serve two masters; very often he does serve many. The expression "to employ" has been considered in Ellis vs Ellis & Co., and does not mean generally to find actual employment; it rather means to retain and pay a person whether employed or not but if employed then to be employed in the work only in respect of which contract is made. "Medical advisers may be employed at a salary to be ready in case of illness; members of theatrical establishments. in case their labour should be needed; household servants in performance of their duty when their masters wish; in these and other similar cases the requirement of actual service is distinct from the employment by the party employing". In an agreement to "retain and employ", "employ" means only to 'retain ' in the service 'and is mere tautology '. See in this connection, Stroud 's Judicial Dictionary, 4th Edition, Vol. 2 at page 893. The expression, however, must 123 depend upon the context of the particular provision in which the expression appears. lt was held in England that an engineer appointed by a local authority to supervise the execution of works, but not subject to the local authority 's supervision, is nevertheless an 'employee ' within the meaning of section 40(1) of the Local Government Superannuation Act 1937, in Morren vs Swinton and Pendlebury B.C., [1965] I W.L.R. 576. In Chambers 20th Century Dictionary "employ" has been indicated to mean to occupy the time or attention of. "employment" means an act of employing. In the Concise oxford Dictionary "employee" means a person employed for wages. "Employ" means use of services of person. It follows, therefore, that it comprehends whole time servant or part time engagee. It is significant that section 80 RRA of the Act uses the expression "remuneration" and not salary to be entitled to deduction. In the aforesaid view of the matter we see no warrant to restrict the meaning of the expression "remuneration" to only salary received by an employee abroad. The literal meaning is clear, we need not bother any more for the intention or the purpose. The intention, in our opinion, is writ large. In principle also we are unable to find any rationale or the reason for the distinction sought to be made on behalf of the revenue. In the aforesaid view of the matter, we are of the opinion that the High Court was right in dismissing the appeal and we find no reason to interfere with the order of the High Court. The appeal, therefore, fails and is accordingly, dismissed without any order as to costs. S.L. Appeal dismissed.

% The respondent, Aditya V. Birla, described to be a technician with experience in the business of manufacturing and selling Stapple Fibres, and the Thai Rayon Company, Thailand, engaged in the business of manufacturing and selling Stapple Fibres, entered into an agreement wherein the respondent was stated to be approached by the Thai Company to make his services available to the Company as his 'employer ', in Bangkok, on certain terms and conditions, for which the Company would pay him remuneration receivable at Bangkok. The agreement was for a period of three years and was subject to the approval of the Governments of India and Thailand, etc. The respondent applied to the Government of India for its approval of his employment with the Thai Company under the agreement; for the purpose of securing the benefits conferred by section 80 RRA of the Income Tax Act, 1961. The Government declined to accord its approval to the respondent 's employment with the Thai Company on the terms and conditions contained in the agreement, for the purpose of section 80 RRA, on the ground that the section, according to its view, contemplates rendering service outside India in the status of an 'employee ', whereas the status of the respondent under the foreign employer was that of a 'consultant ' and not an 'employee ', and that, therefore, the remuneration contemplated under section 80 RRA would be applicable to the case of the respondent and the benefit of the section could not be given to him. The respondent moved the High Court for relief against the decision of the Government. A learned Single Judge of the High Court quashed the order of the Government and directed it to reconsider the case of the respondent. The Letters Patent Appeal against the order of the Single Judge was dismissed by the Division Bench of the High Court. The appellant then moved this Court against the order of the High Court by Special Leave. Dismissing the appeal, the Court, 116 ^ HELD: An analysis of section 80 RRA reveals that, in the case of the respondent, in order to be entitled to the deductions at the rate enumerated in the section, the sum must be (i) remuneration, (ii) received by him in the foreign currency, (iii) from any employer (being a foreign employer or an Indian Concern) for any service rendered by him outside India. Further the terms and conditions of his service outside India must be approved by the Government of India. Furthermore, in his case the deduction of the section would not be allowed In respect of the remuneration if the service related to any period after the expiry of 36 months. He was not employed beyond the period of 36 months. Indisputably, the sum concerned in the case, fee, was remuneration, being the amount paid in lieu of 'services ' rendered. The sum in question was received in foreign currency for services rendered outside India. [120D F] In the context of the Income Tax Act, the expression 'employee ' will include a consultant or a technician employed by a foreign company. The amplitude of the expressions 'employee ' and 'employer ' I) covers the case of the consultant or the technician. There is nothing in the scheme of the section to warrant any exception, as contended for by the revenue. [122E; 121B] The High Court was right in dismissing the appeal.[123E] Aiyar `The Lexicon, 1941) Ed. at page 387, .Shri Chintaman Rao and Anr. vs The State of Madhya Pradesh. [19581 S.C.R. 1340 at 1346; Ellis vs Ellis and Co., [19051 1 K.B. 324; Stroud 's Judicial Dictionary, 4th Edition, Vol. 2 at page 893 and Morren vs Swinton and Pendlebury B.C.,[1965] 1 W.L.R, 576, referred to.

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

For the two accounting periods the assessee, a resident company, incorporated outside India paid estate duty payable on the death of its certain share holders not domiciled in India and debited the said amounts to revenue in its accounts in ascertaining the profits and gains of its business for the said years. The Income tax Officer included the said amounts so paid towards estate duty in the profits and gains of the company for the said two accounting periods and assessed the company to income tax for 1955 56 and 1956 57 on that basis. The appeals by the assessee to the Appellate Assistant Commissioner were dismissed but on further appeal, the Appellate Tribunal set aside the said orders and held that the assessee was entitled to deduct the said amount in computing its profits. On an application by the Commissioner of Income tax, the Tribunal stated a case under section 66(1) of the Act to the High Court and referred the following question of law for its opinion: "Whether on the facts and in the circumstances ,of the case, the estate duty paid by the company under s, 84 ,of the , is a revenue expenditure deductible in computing the assessee 's business income for the ,assessment years in question." The High Court agreed with the view of the Tribunal and answered the question in the affirmative. On appeal by special leave it was urged on behalf of the appellants, (1) that the sum paid by the assessee under section 84 of the were not expenditure of the assessee company and therefore, they could not be deducted from its profits in computing its assessable income under section 10(2)(xv) of the Act; and (2) that even if it was revenue expenditure, it was not laid out or expended wholly or exclusively for the purpose of the assessee 's business within the meaning of the said sub clause. Held: (i) There was nothing on the record to show whether in England, where the concerned share holders died, the resident company could recover the amount representing the estate duty paid by it in India from the legal representative of the deceased share holders. Therefore, the assessee who, as a statutory agent paid to the State the estate duty, could not recover the same from the legal representative of the deceased non resident share holders. In that situation the company would be out of pocket to the extent it paid the estate duty of the said persons. Therefore, it cannot be held that the amounts paid by the assessee towards estate duty were not expenditure incurred by it, but only amounts paid by it on account with a right to recover the same from the persons on whose behalf it paid. (ii)The expression" for the purpose of the business"in s.10(2) (xv) of the Act is wider in scope than the expression "for the purpose of earning profits". Its range is wide: it may 694 take in not only the day to day running of a business but also the rationalization of its administration and modernization of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile title; it may also comprehend payment of statutory dues and taxes imposed as a pre condition to commence or for carrying on of a business; it may comprehend many other acts incidental to the carrying on of a business. However wide the meaning of the expression may be, its limits are implicit in it. The purpose shall be for the purpose of the business, that is to say, the expenditure incurred shall be for carrying on the business and the assessee shall incur it in his capacity as a person carrying on the business. It cannot include sums spent by the assessee as agent of a third party, whether the origin of the agency is voluntary or statutory; in that event, he pays the amount on behalf of another and for a purpose unconnected with the business. In the present case, the amounts in question were paid by the assessee as a statutory agent to discharge a statutory duty unconnected with the business, though the occasion for the imposition arose because of the territorial nexus afforded by the accident of its doing business in India. Therefore, it must be held that the estate duty paid by the respondent was not an allowable deduction under section 10(2)(xv) of the Act. Case law reviewed.

er to cancel the nOti ce convening the meeting and to direct the Secretary to issue a notice to that effect, the said power could be exercis ed only bona fide and for a purpose or purposes within t he scope of the said Act. If the power was exercised mala fi de or for a collateral purpose, the exercise of the power wou ld certainly be bad. [125E F] & CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1994 of 1989. From the Judgment and Order dated 28.10.88 of the Guj a rat High Court in L.P.A. 236 of 1988. G. Ramaswamy, Additional Solicitor General, P.H. Pare kh and M .K. Pandit for the Appellants. Respondent Nos. 1 and 3 in person, Mukul Mudgal and G. Venkateshwara Rao for the Respondents. The Judgment of the Court was delivered by KANIA, J. Leave granted. As a substantial point of law is involved in this cas e, we have granted special leave and the Appeal is being tak en up to hearing with the consent of the parties. The Appeal is directed against the judgment of a Division Bench of t he Gujarat High Court, allowing the writ petition filed befor e The facts of the case relevant for the disposal of th is Appeal, briefly stated, are as follows. Appellants Nos. 1 and 2 are persons elected in 1987 as Mayor and Deputy Mayor respectively of the Municipal Corp o ration of Bhavnagar, Respondent No. 5 herein (referred to in the judgment as "the Corporation"). Appellant No. 3 is t he Secretary of the said Corporation. Respondents Nos. 1 and 2 are persons claiming to have 114 been elected as Mayor and Deputy Mayor of the Corporation at a meeting held on June 1, 1988, the validity of which is disputed before The Corporation came into existence in 1982. The ele c tions to the Corporation were duly held in 1985 and 51 members were elected. On June 30, 1987, appellants Nos. 1 and 2 were duly elected as Mayor and Deputy Mayor respe c tively of the Corporation for a period of one year. On M ay 21, 1988, a notice was issued by appellants Nos. 1 and 2 to convene a meeting of the members of the Corporation at 5. 00 p.m. on June 1, 1988 to elect a Mayor and Deputy Mayor of the Corporation for the second term and for certain oth er business mentioned in the Agenda circulated. On May 3 1, 1988, appellant No. 1 gave instructions by a letter to t he Deputy Secretary of the Corporation to postpone the meeti ng of the Corporation as appellant No. 1 had to go to Gandhin a gar for a certain urgent work of the Corporation. It see ms clear from the record that the said instructions were giv en by appellant No. 1 after consulting 32 members of the Corp o ration, presumably those belonging to his own party. Purs u ant to the said letter and the instructions contained ther e in appellant No. 3 issued a letter addressed to the membe rs of the Corporation that the meeting scheduled for June 1, 1988 had been postponed. The said letter was circulated to all the members of the Corporation. In spite of the sa id letter postponing the meeting, 19 members of the Corpor a tion, presumably belonging to the minority party or parti es assembled at the place indicated in the notice dated May 2 1, 1988 and elected respondents Nos. 1 and 2 as Mayor a nd Deputy Mayor of the Corporation respectively. At the sa id meeting neither the Commissioner of the Corporation nor t he Secretary or Deputy Secretary was present and the minutes of the said meeting were not recorded by the Secretary of t he Corporation. As appellants nos. 1 and 2 did not hand ov er the charge to respondents Nos. 1 and 2, the latter filed a writ petition, being Writ Petition No. 2772 of 1988 in t he Gujarat High Court for being declared as legally elect ed Mayor and Deputy Mayor of the Corporation respectively a nd for an order that charge of the said post should be hand ed over to them. On June 9, 1988, the said writ petition w as dismissed by a learned Single Judge of the Gujarat Hi gh Court. The learned Single Judge, who dismissed the said wr it petition, took the view that, as the Mayor in exercise of the powers conferred upon him under sub clause (c) of Clau se 1 of Chapter II of the Schedule (under Section 453) in t he Bombay Provincial Municipal Corporations Act, 1949 (herei n after referred to as "the said Act") can issue a notice f or convening the meeting, he is also entitled to the power to cancel or rescind the notice 115 under the provisions of Section 21 of the Bombay Gener al Clauses Act, 1904. It was held that appellant No. 1, as t he Mayor, was exercising a statutory power vested in him a nd could, therefore, cancel the notice and postpone the meeti ng convened by him before the meeting was held. It was point ed out by him that in the history of the Corporation meetin gs had been postponed by the Mayor in the same manner. T he learned Single Judge further took the view that even assu m ing that appellant No. 1 had no right to postpone the mee t ing, even then the election of respondents Nos. 1 and 2 as Mayor and Deputy Mayor at the meeting held on June 1, 19 88 could not be held legal and valid as the majority of t he members of the Corporation had been deprived of the opport u nity of exercising their right to elect a Mayor and Depu ty Mayor by reason of the notice for postponing the meeting. A Letters Patent Appeal was preferred by respondents Nos. 1 and 2 against the decision of the learned Single Judge to a Division Bench of the Gujarat High Court. The Division Ben ch of the said High Court took the view that it was bound by the view taken by a Division Bench of this Court in Chandr a kant Khaire vs Dr. Shantaram Kale and others; , ; where it was observed as follows: "A properly convened meeting cannot be postponed. The prop er course to adopt is to hold the meeting as originally inten d ed and then and there adjourn it to a more suitable date. If this course be not adopted, members will be entitled to ignore the notice of postponement, and, if sufficient to form a quorum, hold the meeting as originally convened a nd validly transact the business thereat. " The Division Bench pointed out that the number of membe rs present at the said meeting on June 1, 1988 was sufficie nt to constitute the quorum prescribed and hence, the meeti ng must be held to be valid and respondents Nos. 1 and 2 du ly elected as Mayor and Deputy Mayor respectively. The Divisi on Bench took the view that even if the aforesaid observatio ns made by this Court constituted only an obiter dictum of th is Court and not the ratio of the case, they were neverthele ss binding as a precedent on the Division Bench. The learn ed Judges constituting the Bench did note that the result a nd the conclusion arrived at by them would be a little sta r tling inasmuch as the party which is in the majority in t he Corporation would not be having a Mayor or Deputy Mayor fr om its own party but would have to suffer as Mayor and Depu ty Mayor persons belonging to the minority party but observ ed that such a result could not be helped because the majori ty of the councillors who had consented to the postponement of the said 116 meeting to be held on June 1, 1988 had acted illegally a nd had thereby invited the result. It is this decision which is sought to be assailed before us. It was contended by Mr. G. Ramaswamy, learned Addition al Solicitor General who appeared for the appellants, that t he Division Bench had committed an error in following t he observations made in Chandrakant Khaire 's case which we ha ve already set out above as that case could be distinguished on facts. It was submitted by him that, on the other hand, t he question raised in this Appeal was practically covered, on the basis of analogy, by the ratio of the decision of th is Court in Mohd. Yunus Saleem vs Shiv Kumar Shastri and ot h ers; , which dealt with analogous provisio ns of the Representation of the People Act, 1951. It was fu r ther submitted by him that in view of the provisions of Section 21 of the Bombay General Clauses Act, 1904, whi ch were applicable to the case, since appellant No. 1, Mayo r, had the power to convene the meeting of the members of t he Corporation, it must be held that he also had the impli ed power to cancel or postpone the meeting. In order to appreciate these contentions, it is nece s sary to refer to certain provisions of the said Act. The relevant clauses of Section 19 of the said Act runs as follows: "19. Mayor and Deputy Mayor (1) The Corporation shall at its first meeti ng after general elections and at its first meeting in the sa me month in each succeeding year elect from amongst the cou n cillors one of its members to be the Mayor and another to be the Deputy Mayor. (2) The Mayor and the Deputy Mayor shall ho ld office until a new Mayor and a new Deputy Mayor have be en elected under sub section (1) and, in a year in which gene r al elections have been held, shall do so notwithstandi ng that they have not been returned as councillors on t he results of the elections X X X X X" Chapter XXIX of the said Act which deals with the subjec ts of rules, 117 by laws, regulations and standing orders. Section 453 in t he said Chapter provides that the rules as amended from time to time shall be deemed to be part of the said Act. Chapter II of the Schedule (under section 453) of t he said Act deals with the proceedings of the Corporatio n, Transport Committee, Standing Committee, etc. Sub claus es (a) to (c) of Clause 1 of the said Chapter are as follows: "1. Provisions regulating Corporation proceedings. (a) There shall be in each month at least o ne ordinary meeting of the Corporation which shall be held n ot later than the twentieth day of the month; (b) the first meeting of the Corporation aft er general elections shall be held as early as conveniently m ay be on a day and at a time and place to be fixed by t he Commissioner, and if not held on that day shall be held on some subsequent date to be fixed by the Commissioner; (c) the day, time and place of meeting shall in every other case be fixed by the Mayor or in the event of the office of Mayor being vacant, or of the death or resi g nation of the Mayor or of his ceasing to be a councillor, or of his being incapable of acting, by the Deputy Mayor, or failing both the Mayor and the Deputy Mayor, by the Chairm an of the Standing Committee. " Sub clause (f) of Clause 1, briefly put, provides th at one third of the whole number of councillors constitutes t he quorum. Sub clause (h) provides that at least seven cle ar days ' notice shall ordinarily be given of every meetin g, other than an adjourned meeting, but in cases of urgency a ny such meeting may be called on a shorter notice except f or certain other purposes with which we are not concerned her e. Section 21 of the Bombay General Clauses Act, 1904 ru ns as follows: "21. Power to make to include power to add to, amend, va ry or rescind, orders, etc. Where, by any Bombay Act, or Maharashtra Act, a 118 power to issue notifications, orders, rules or by laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and cond i tions, if any, to add to, amend, vary or rescind any notif i cations, orders, rules or by laws, so issued. " It is clear from the judgment of the Division Bench of the Gujarat High Court the correctness of which is cha l lenged before us that the Division Bench considered itse lf bound by the observations in Chandrakant Khaire 's case s et out by us earlier. The facts of that case were that t he first meeting of the Municipal Corporation of Aurangab ad after election was held on May 6, 1988 at 2.00 p.m. as scheduled. The Municipal Commissioner presided over the sa id meeting. At the said meeting, not only the councillors b ut many outsiders were also present in the hall when the mee t ing was being held. There were also a large number of su p porters of the rival parties, spectators and journalist section The Municipal Commissioner was surrounded by some 20 25 persons apart from the councillors belonging to the riv al parties, one group, comprising of the supporters of Sh iv Sena, insisted upon the meeting being adjourned for the d ay while the other group consisting of the supporters of t he Congress (I) party demanded that the meeting should be continued. There was total confusion inside the hall. T he Municipal Commissioner informed the Collector, who w as present in the hall, that he could not hold the meeting in the unruly and disorderly situation prevailing and co m plained that his repeated requests to the councillors to maintain peace, had no effect and they kept on shoutin g, raising slogans and fighting amongst themselves. The Commi s sioner announced that the polling for the offices of Mayo r, Deputy Mayor and Members of the .Standing Committee wou ld commence from 2.30 p.m. onwards. Some members belonging to Shiv Sena Party sat on the ballot boxes and others belongi ng to that party and its supporters surrounded the Municip al Commissioner demanding the meeting be adjourned to a subs e quent date. Thereupon, the councillors belonging to a Party in Power, namely, Congress (I), started shouting at him that the meeting should be held later on that day. Th is was followed by shouting of slogans, hurling of abuses a nd thumping of tables and even throwing of chairs. It appea rs that the Superintendent of Police and the Collector ask ed the outsiders to clear out of the hall and requested t he councillors to take their places to enable the Municip al Commissioner to transact the business for the day a nd brought the situation under control. The affidavit filed by the said officers, namely, the Superintendent of Police a nd the Collector, showed that the atmosphere then calmed do wn and the 119 order was restored and they left the hall. It was thereaft er that the Municipal Commissioner announced on the mike th at the meeting would continue and the elections would be he ld at 4.30 p.m. It was at this election, that respondents no section 1 and 2, namely, Dr. Shantaram Kale and Takiqui Hassan, we re declared elected as Mayor and Deputy Mayor respectivel y. This election which was challenged in Court and it is in t he context of these facts that the observations set out earli er were made. The contention of the appellant was that t he meeting was adjourned for the day or sine die by the Munic i pal Commissioner and hence the holding of the adjourn ed meeting later on the same day without fresh notice was b ad in law. It was submitted by the learned Additional Solicit or General of India, counsel for the appellants, that t he Division Bench which delivered the impugned judgment, err ed in taking the view that it was bound by the observations s et out earlier by us in the judgment in Chandrakant Khaire 's case. It was submitted by him that in that case the meeti ng of the Aurangabad Municipal Corporation had already co m menced and the question was as to whether the Municip al Commissioner could on his own adjourn the meeting for t he day or sine die or whether this could be done only by a resolution passed at the meeting. It was submitted by h im that that was a case which dealt with the question of a d journment of a meeting which had commenced whereas in t he present case, a meeting which had been convened was ca n called and, later on, another meeting was fixed on a diffe r ent date. The question in Chandrakant Khaire 's case w as relating to an adjournment of a meeting whereas in t he present case the question related to the cancellation of a notice convening the meeting. It was urged by him that in view of the provisions of Section 21 of the Bombay Gener al Clauses Act and sub clause (c) of Clause 1 of the sa id Schedule set out earlier, the Mayor who had the power to convene the meeting must be held to have the implied pow er to cancel the meeting which was convened. It was, on t he other hand, submitted by respondent No. 1, who appeared in person, that the decision in Chandrakant Khaire 's case is directly applicable to the case before us and in view of t he same, it must be held that the Mayor, namely, appellant N o. 1, had no power to cancel the notice convening the meeti ng and hence it must be held that the meeting at which t he supporters of respondent No. 1 which met and elected r e spondent No. 1 as aforesaid was validly held and the resol u tion appointing respondent No. 1 was validly passed. As we have pointed out earlier in Chandrakant Khaire 's case, the meeting which was convened had already commenc ed and the conten 120 tion of the appellant was that in view of the riotous beh a viour of the councillors as well as the outsiders who h ad got into the meeting, the Commissioner had adjourned t he meeting sine die. It was common ground that no resoluti on was passed at the meeting regarding its adjournment. It w as in those circumstances that the aforesaid observations ha ve been made by the Division Bench of this Court which decid ed the case. The Bench in that case was not really concern ed with a situation where a meeting had not commenced at a ll and the notice convening the meeting had been cancelled by the person authorised to issue the notice convening t he meeting. In this connection, we may refer to the meaning of the term 'adjournment ' given in certain dictionaries. It h as been observed in Stroud 's Judicial Dictionary, Fifth Ed i tion, Volume I at page 61 that the word 'adjournment ' mu st be construed with reference to the object of the contex t, and with reference to the object of the enquiry. In We b ster 's Comprehensive Dictionary, International Edition, at page 18 the term 'adjournment ' has, inter alia, been defin ed as "(1) To put off to another day or place, as a meeting or session; postpone (2) To put off to the next session, as t he decision of a council (3) To postpone or suspend proceedin gs for a specified time.". In Concise Oxford Dictionary, Six th Edition, the word 'adjournment ' has been defined, int er alia, as "(1) Put off, postpone; break off for later resum p tion". The definitions of the aforesaid term 'adjournmen t ' in Chambers Twentieth Century Dictionary, Revised Editi on (1964) and Collins English Dictionary are more or le ss similar so the aforestated definition of the said term in Webster Comprehensive Dictionary, International Edition. It appears to us that strictly speaking, unless the object of the context or inquiry otherwise warrants the term 'adjour n ment ' in connection with a meeting should be applied only to the case of a meeting which has already convened and whi ch is thereafter postponed and not to a case where a noti ce convening a meeting is cancelled and subsequently, a noti ce for holding the same meeting on a later date is issued, as in the case before us. It seems that the passage in the judgment in Chandraka nt Khaire 's Case which has been strongly relied upon by t he respondent No. 1 has been taken substantially from t he observations at page 156 in Shackleton on the Law and Pra c tice of Meetings (Seventh Edition). Shackleton has bas ed those observations on the decision of a single case, namel y, Smith vs Paringa Mines Ltd., [1906] 2 Ch. In that cas e, a company had two directors and there was disagreement amo ng them regarding the appointment of an additional directo r. The aggrieved director commenced an action and after this a notice was 121 issued postponing a general meeting already called but, in the belief that the attempted postponement was illegal, t he aggrieved director advertised the meeting in the press f or the same day as previously arranged. On that day, he wi th certain other shareholders attended the meeting and at th at meeting resolutions were approved re electing himself as a director and refusing to re appoint the other director. It was held that the resolutions were valid, for, in the a b sence of express authority in the articles, the directors of a company have no power to postpone a general meeting pro p erly convened. It appears, therefore, that these observ a tions are based on a decision which dealt with the powers of the directors of a company which are derived from the art i cles of association of the company which essentially are in the nature of a compact or an agreement. The only powe rs which the directors of a company have, are such as have be en conferred upon them by articles of association of the comp a ny. The powers of the Mayor of the Corporation, on the oth er hand, are statutory in nature and they are derived from t he Bombay Municipal Corporation Act. As set out by us earlie r, sub section (1) of Section 19 of the said Act provides f or the election of a Mayor of a Municipal Corporation. T he Mayor has various powers conferred under the said Act. Su b clause (c) of Clause 1 in Chapter II of the said Schedule in the Municipal Corporation Act provides that except for t he first meeting for a new Corporation which has been du ly elected, the time, day and place of meeting shall be fix ed by the Mayor. The powers of the Mayor regarding the holdi ng of meetings of the Corporation, therefore, are not deriv ed from any compact as in the case of directors of a compa ny but are essentially statutory in nature. We do not thin k, with respect, that, in these circumstances, it would be proper to apply the aforestated observatioins of Shacklet on to the present case. Moreover, as we have already point ed out, the case before this Court in Chandrakant Khaire vs D r. Shantaram Kale and Ors., was not a case where a noti ce convening a meeting was cancelled and later a notice conve n ing another meeting was issued but it was a case where a meeting duly convened had commenced and it was alleged th at the Municipal Commissioner had adjourned it without the re being any resolution to that effect. We are, therfore, of the view that the aforesaid observations in the decision of Chandrakant Khaire 's case are not applicable to the ca se before us. We can derive some support to our view from a decisi on of this Court in Mohd. Yunus Saleem vs Shiv Kumar Shast ri and Ors. In that case, the facts were that a parliamenta ry constituency from which election to Lok Sabha took place in 1971 consisted of five assembly constituencies. The polli ng at two of these was scheduled to take place 122 on March 1 and at the other three on March 3, 1971. T he polling at the first two constituencies took place as sche d uled but on March 2 there was a communal riot, as a resu lt of which the Election Commissioner postponed the poll at t he other three constituencies from March 3 to March 9. T he polling took place in the said constituencies on the pos t poned date and the first respondent was declared electe d. The appellant challenged the election in an election pet i tion. It was contended by him, inter alia, that the Electi on Commissioner had no power to alter the date of the poll at the remaining constituencies. The election petition w as dismissed by the High Court. On appeal to this Court, th is Court took the view that Section 153 of the Representati on of the People Act, 1951 on which reliance had been placed by the High Court in taking the view that the Election Commi s sioner had power to postpone the poll was not applicab le because it dealt only with the question of extending ti me for completion of the election and not for altering the da te of the poll; Sections 57 and 58 of the Representation of t he People Act, 1951 could not be invoked by the Election Co m missioner for this purpose. It was, however, held th at section 30 of the Representation of the People Act read wi th Section 21 of General Clauses Act gives necessary powers to the Election Commissioner to alter the date of the poll. We may point out that we do not propose to set out the prov i sions of Section 30 of the Representation of the People A ct because it is not necessary to do so. Suffice it to no te that the said section provides that the Election Commissio n er shall by notification in the official gazette appoi nt inter alia the date or dates on which a poll shall, if necessary, be taken and also the date before which t he election shall be completed. Section 153 confers upon t he Election Commissioner the power to extend the time for t he completion of election. Section 21 of the Central Gener al Clauses Act is in pari materia with Section 21 of the Bomb ay General Clauses Act which was applicable in the case befo re us and which we have already set out earlier. It is tr ue that the ratio of this case is not directly applicable to the case before us. However, it does appear to us that, on a parity of reasoning, it must be held that the Mayor had t he implied power to cancel a meeting or 'postpone a meeti ng which was duly convened before the said meeting commenc ed and to convene the same on a subsequent occasion. It is needless to say that this power must be exercised by t he Mayor bona fide and not for a collateral purpose. The pow er must again be exercised for a proper purpose. If the May or is unable to show this, then the postponement of the meeti ng must be held to be bad. But it is not possible to say th at the Mayor had no power to cancel a meeting duly convened a nd to direct that the same should be held on a later day pr o vided that the power was exercised 123 bona fide and for a justified purpose. We may now refer to certain other decisions which a re cited before us. Our attention was drawn by respondent No. 1 to the decision of a learned Single Judge of the Gujar at High Court in Babubhai Girdharbhai Patel vs Manibhai Asha b hai Patel & Others, [1975] 16 Gujarat Law Reporter, 566. In that case, the facts were in pari materia with the fac ts before us. It was held by the learned Single Judge of th at Court that on a plain reading of sub section (11) of Secti on 51 of the Gujarat Municipality Act it is clear that a mee t ing can be adjourned only provided a majority of the cou n cillors accord their consent to such adjournment. It w as also held that it is not open to the President to cancel or adjourn the meeting if he personally considers it necessa ry or desirable to do so before the councillors assemble. It was observed that the President of the Municipality does n ot have unrestricted power to cancel or adjourn a meeting at his humour or pleasure or caprice. No assistance can be arrived at by respondent No. 1 from this judgment becau se that decision has been reversed in respect of the aforesta t ed conclusions by a Division Bench of the Gujarat High Cou rt in Letters Patent Appeal No. 183 of 1974 decided on Novemb er 20, 1974 by B.J. Divan, C.J., and T.U. Mehta, J., the jud g ment having been delivered by Divan, C.J. In that case, it was held that it is obvious that the President of the muni c ipality in whom the power to call a meeting of the munic i pality had been vested by section 51(1) of the Gujar at Municipalities Act, 1963 must also be conferred the power to adjourn the meeting if, because of certain extraordina ry circumstances like civil commotion or act of God or a ny other unusual event, it becomes necessary to adjourn t he holding of the meeting. The learned Judges constituting t he Division Bench held that they were unable to agree with t he view of the learned Single Judge to the effect that t he doctrine that he who has such power to convene a meeting h as also the power to adjourn the meeting, if the circumstanc es so demand, cannot be read into the provisions of the Gujar at Municipalites Act. The learned Judges, however, agreed wi th the learned Single Judge that the President of the Munic i pality had no power to adjourn the meeting at his !will or caprice. They also pointed out that unless unusual circu m stances beyond the control of the President of the Munic i pality prevail, he cannot utilise this power to adjourn a meeting which has once been notified. Taking into accou nt all the facts and circumstances of the case, it was he ld that the adjournment of the meeting of the municipality by the President was not warranted in law and was, therefor e, invalid. We may, however, point out that neither the learn ed Single Judge who delivered the judgment in Babubhai Gir d harbhai Patel vs 124 Manibhai Ashabhai Patel & Ors., nor the Division Benc h, which reversed this decision to the extent set out by us have taken into account the provisions of section 21 of t he Bombay General Clauses Act, which we have already referr ed to. That section fortifies the view taken by the Divisi on Bench. We may now refer to the decision of the Allahabad Hi gh Court in R.K. Jain vs Bar Council of U.P. & Ors., AIR (197 4) 61 Allahabad 211. In that case, the Bar Council ofUPin exercise of its power under section 15(2) of theAdvocates Act, 1961, framed rules which regulate the manner and proc e dure of holding the election of the members to the B ar Council. These rules are known as Bar Council of Utt ar Pradesh Election Rules, 1968. Rule 4 lays down that t he election of members to the Bar Council shall be held at su ch place or places, on such date or dates, and during such ho ur or hours as the Council may appoint. Rule 6 provides th at notice of the time and place of election shall be given by publication in the manner prescribed under the rules. T he learned Single Judge (K.N. Singh, J., as he then was) w ho decided the case held that the principles laid down in section 21 of the General Clauses Act are fully applicab le in construing Rules 4 and 6 of the said Election Rule s, 1968. On the facts of the case it was held that the B ar Council had the full jurisdiction to change the date of an election and to postpone the election or to fix dates f or holding the election afresh till the elections were comple t ed. In our view, the learned Judges of the Gujarat Hi gh Court who delivered the judgment under consideration befo re us need not have considered themselves bound by the afor e said observations in Chandrakant Khaire 's case, as they ha ve done. In the first place, these observations do not const i tute the ratio of the judgment in that case. The question in that case was whether a meeting which was duly convened a nd had commenced could have been adjourned by the Municip al Commissioner and not whether a notice convening a meeti ng issued by the Municipal Corporation could be cancelled by him before the commencement of the meeting with a view to have the meeting held on a subsequent date. We are of t he view that the Division Bench was not really called upon to consider the situation in such a case, as we have point ed out earlier. Moreover, it appears that the Division Ben ch has not taken into account the provisions of section 21 of the Bombay General Clauses Act or the principles underlyi ng that section. No argument was advanced before the Divisi on Bench on the basis of that section at all. The attention of the Division Bench was not drawn to the judgment of th is Court in Mohd. Yunus Saleem 's case. Had that 125 been done, we feel that the Division Bench which decided t he Chandrakant Khaire 's case, might not have made the afor e stated observations at all. In our view, the principl es underlying section 21 of the Bombay General Clauses A ct would be clearly applicable in considering the scope of t he powers of the Mayor of a Municipal Corporation set out in Clause 1 of Chapter II of the said Schedule in the said A ct and in particular, in sub clause (c) of the said clause. We may point out that the rules in the Schedule have be en framed under the statutory provisions of the said Act a nd section 453 of the said Act provides that the rules in t he schedule as amended from time to time shall be deemed to be part of that Act. In our view, the power of the Mayor co n ferred under Clause 1 of Chapter II of the said Schedu le must be regarded as a statutory power as distinguished fr om the powers of directors of a company which are deriv ed strictly from the Articles of Association of the Compa ny which are contractual in nature. There appears to be no reason to take the view that the principles underlyi ng section 21 of the Bombay General Clauses Act would not app ly to the said powers of the Mayor. In our view, appellant N o. 1, the Mayor of respondent No. 5, Corporation, had the pow er to cancel the notice convening the meeting before the co m mencement of the meeting with a view to convene the meeti ng on a later date. The question, however, whether he h as exercised the power within its true ambit is a differe nt question altogether. In this regard, in our opinion, a l though the Mayor had the power to cancel the notice conve n ing the meeting and to direct the secretary to issue a notice to that effect, the said power could be exercis ed only bona fide and for a purpose or purposes within t he scope of the said Act. If the power was exercised mala fi de or for a collateral purpose, the exercise of the power wou ld certainly be bad. In the present case, there is considerab le factual controversy as to whether, even on the footing th at appellant No. 1 had the power to cancel the notice conveni ng the meeting, that power was exercised bona fide for a pu r pose within the scope of the said Act or whether it w as exercised for collateral or impermissible purposes. We remand the matter to the Gujarat High Court for the determ i nation of that question. In view of the urgency of t he matter, we would request the Gujarat High Court to dispo se of the writ petition latest by 30th April, 1989 as far as possible. The interim order granted by this Court on Nove m ber 16, 1988 shall continue upto 5th May, 1989, subject to any orders which may be passed hereafter by the Gujarat Hi gh Court. From that date, it will be for the parties to app ly for appropriate interim orders to the Gujarat High Cou rt till the case is finally disposed of by that Court. 126 The Appeal is allowed to the extent aforesaid. Taki ng into account the facts and circumstances of the case, t he parties shall bear and pay their own costs. R.P.D. Appeal allowed.

Sub section (1) of section 12B of the Indian Income Tax Act, 1922 provides that tax shall be payable by an assessee under the head "Capital gains" in respect of any profits or gains arising from the sale, exchange, relinquishment or transfer of a capital asset. The respondent assessee who owned 90 shares in the Shorrock Co. which stood dissolved under a scheme of amalga mation with another company known as New Shorrock Co., which was sanctioned by the High Court, was aborted 45 shares of the New Shorrock Co. in terms of the provisions of the said scheme. During the assessment proceedings for the assessment year 1961 62, the Income Tax Officer omitted to consider the applicability of section 12B 10 the case of the assessee. Later on, the Commissioner issued a notice under section 33B to the assessee stating that the receipt of 45 shares of the New Shorrock Co. "in exchange" of his original holding of 90 shares in the Shorrock Co. had resulted in an assessable profit, and passed an order directing the Income Tax Officer to revise the assessment and to include an amount of Rs.49,350 representing the capital gain resulting from the transaction. On appeal by the assessee the Appellate Tribu nal held that the transaction represented neither an ex change nor a relinquishment and, therefore, section 12B of the Act was not attracted. However, at the instance of the Revenue the Tribunal referred the question to the High Court which answered it in favour of the assessee. Dismissing the appeals, 180 HELD: The sole question is whether the receipt of the 45 shares of the New Shorrock Co. upon amalgamation by reason of the share holding of 90 shares of the Shorrock Co. can be described as an "exchange" or a "relinquishment" within the meaning of section 12B. It seems plain to us that no exchange is involved in the transaction. An exchange involves the trans fer of property by one person to another and reciprocally the transfer of property by that other to the first person. There must be a mutual transfer of ownership of one thing for the ownership of another. In the present case, the assessee cannot be said to have transferred any property to any one. When he was allotted the shares of the New Shorrock Co. he was entitled to such allotment because of his holding the 90 shares of Shorrock Co. The holding of the 90 shares in the Shorrock Co. was merely a qualifying condition enti tling the assessee to the allotment of the 45 shares of the New Shorrock Co. The dissolution of the Shorrock Co. de prived the holding of the 90 shares of that company of all value. [183B E] On the question whether there was any relinquishment, the decision must again be against the Revenue. A relin quishment takes place when the owner withdraws himself from the property and abandons his rights thereto. It presumes that the property continues to exist after the relinquish ment. Upon amalgamation, the shares of the Shorrock Co. lost all value as that company stood dissolved. [183E F]

Appeal No. 2206 of 1968. From the Judgment and Order dated the 29 3 1968 of the Rajasthan High Court in D.P. Civil W.P. No. 257/68. S.M. Jain, for the appellant B. Dutta, for respondent No. 1 Miss Maya Rao, for respondents Nos. 2 5. The Judgment of the Court was delivered by KHANNA, J. This appeal on certificate is against the order of the Rajasthan High Court dismissing in limine the petition under articles 226 and 227 of the Constitution of India, field by the appellant against the ' Union of India, the State of Rajasthan and two others, praying for quashing the demand made from the appellant in respect of royalty. The appellant took on lease 180 acres of land from the Government"of Rajasthan on June 18, 1962 for the purpose of mining gypsum ore for a period of 20 years. Section 9(2) of the Mines and Minerals (Regulation and Development),Act, 1957 relates to. royaltries in respect of mining leases. According to that provision, the holder of a mining lease granted on or after the commencement 138 of the said Act shall pay royalty in respect of any mineral removed or consumed by him or by his agent, manager, employee, contractor or sub lessee from the leased area at the rate for the time being specified in the Second Sched ule in respect of that mineral. The Second Schedule provides at item No. 13 the rate on which royalty, etc., in re spect of gypsum is to be paid. According to that item at the relevant time, royalty would .be at the rate of Rs. 1.25 per tonne of gypsum containing 85 per cent and above CaSO42H20 and at the rate of 75 paise per tonne of gypsum containing less than 85 per cent of CaSO42H20. Royalty was demanded from the appellant in respect of gypsum won by him at the rate of Rs. 1.25 per tonne. The case of the appellant, however, is that the gypsum which was won by him contained less than 85 per cent of CaSO42H20. As against that, the stand taken by the respondents is that the appellant failed to furnish. the analysis reports from a standard laboratory to show that gypsum won by him contained less than 85 per cent CaSO42H20. Revision filed by the appellant against the decision of the Rajasthan Government to charge royalty at the rate of Rs. 1.25 per tonne was dismissed by the Central Government. The High Court dismissed the writ petition on the ground that it involved determination of disputed questions of fact. It was also observed that the High Court should not in exercise of its extraordinary jurisdiction grant relief to the appellant when he had an alternative remedy. After hearing Mr. Sobhagmal Jain on behalf of the appellant, we see no cogent ground to take a view different from that taken by the High Court. There cannot, in our opinion, be any doubt on the point that the extent of purity of the gypsum won by the appellant is a question of fact. It has also been brought to our notice that after the dismissal of the writ petition by the High Court, the appellant has filed a suit, in which he has agitated the same question which is the subject matter of the writ petition. In our opinion, the appellant cannot pursue two parallel remedies in respect of the same matter at the same time. Mr. Sobhagmal points out that the suit brought by the appellant has been dismissed in default and that an applica tion for the restoration of the suit has been filed in the trial court. Learned counsel for the. respondents state that they would not oppose the application for restoration of the suit. We, therefore, dismiss the appeal but with no order as to costs. M.R. Appeal dismissed.

The appellant had leased some land from the Government of Rajasthan for mining gypsum. A dispute .arose between the parties regarding the rate of royalty payable by the appel lant. The appellant 's revision petition against the les sor 's decision to charge at the higher rate was dismissed by the Central Government and then his writ petition was dis missed by the High Court on the grounds that the matter involved determination of disputed questions of fact, and that an alternative remedy has been availed of by the appel lant. Dismissing the appeal the Court,. HELD: The extent of purity of the gypsum won by the appellant is a question of fact. 'Furthermore, after the dismissal of the writ petition the appellant has filed a suit, in which he has agitated the same question which is the subject matter of the writ petition. The appellant cannot pursue two parallel remedies in respect of the same matter at the same time.

: Criminal. Appeal No. 150 of 1966. Appeal from the judgment and order, dated June 21, 1965 of the Gujarat High Court in Criminal Appeal No. 906 of 1963. H.R. Khanna and R.N. Sachthey, for the appellants. M Nanavati, B. Datta and O.C. Mathur, for the respondent. 457 The Judgment of the Court was delivered by Grover, J. This is an appeal by certificate against the judgment of the High Court of Gujarat setting aside an order of a Magistrate by which the respondent was convicted of an offence under section 67 read with section 37 of the Bombay Public Trusts Act 1950 (as adapted and applied to the State of Gujarat), hereinafter referred to as the Act, and sentenced to pay a fine of Rs. 300, in default of payment of which he was to suffer rigorous imprisonment for two months. The respondent is one of the trustees of a trust known as "Shri Swami Narayan Mandir" at Ahmedabad which is registered as a public trust in the office of the Charity Commissioner. The trust is managed under a scheme prepared by the High Court of Bombay. It appears that the Charity Commissioner learnt about certain constructions having been made by the respondent trustee without permission from him. On March 22, 1962 a letter (Ext. 3) was addressed from his office to the respondent the material part of which may be reproduced: "An information is received of the Charity Commissioner that opposite the temple near the New Narnarayan building the blocks are being constructed in which shops are constructed on the ground floor of that building. For what purpose it is constructed ? 2. From when its construction work is started ? 3. What amount is spent till today in construction of the same ? 4. What amount is to be spent still ? 5. How much income will accrue from it ? 6. By which No. and on what date the permission of the Charity Commissioner is taken for constructing the same. To which contractors are given the contracts for constructing the same ? His name, address, amount of the contract and other details and a copy of the contract. If the committee has passed a resolution for constructing the same, its true copy. If a contract is given to any contractor, then whether that contractor is related or acquainted to any member of the committee. All these necessary information may please be sent before 15th April, 1962. Queries on similar lines were made regarding the constructions near the respondent 's bungalow in Girdharnagar. 458 As no reply was received from the respondent reminders were sent to him on April 20, 1962 and May 10, 1962 followed by a telegram dispatched on May 23, 1962. A reply was sent by the respondent giving the particulars of the buildings which had been constructed. Reference was made to the resolutions of the Committee relating to these constructions together with the ,amount spent on them. The Inspector appointed under the Act made a report dated May 4, 1963 giving the result of the enquiry made by him relating to the aforesaid constructions. According to him 8 shops had been constructed adjoining the Narnarayan building opposite the Swammarayan temple, the estimated cost of which was more than Rs. 2 lacs. On plot No. 98A shops were being built in four blocks. Construction was also being made on another plot No. 98A 2 opposite the railway crossing. On May 30, 1962 the Charity Commissioner instituted a complaint in the court of the City Magistrate at Ahmedabad giving most of these facts and stating inter alia that under the provisions of the Act a trustee who desired to invest trust funds in construction of buildings was bound to obtain permission of the Charity Commissioner which had not been done in the present case. According to him the respondent had deliberately committee a breach of the relevant provisions of the Act and had omitted to comply with the notice dated May 22, 1962. The gravamen of the charge was contained in paragraph 7 according to which the respondent had, without reasonable cause, failed to comply with the order and the directions issued to him under the provisions of section 37 of the Act. The respondent filed an application (Ext. 6) before the Magistrate submitting that the investment of the trust funds made in the construction of the building adjacent to the Narnarayan Bhavan was legal and had been done in good faith. It was for the benefit of the institution. The scheme committee had given its consent by passing resolutions. By an order, dated June 10, 1963, the City Magistrate held that the respondent had not shown the purpose of the new constructions nor had he furnished the date of commencement of the work as also the details amount already spent and to be spent on the said constructions. He was accordingly convicted under section 37 read with section 67 of the Act. The respondent moved the High Court on the revisional .side. It was quite clear that the respondent was not being prosecuted for failure to obtain permission from the Charity Commissioner in the matter of investment of funds but the case for the prosecution, as urged by the Assistant Government Pleader before the High Court, was that in the letter dated March 22, 1962, Charity Commissioner had called for a "statement ' or "report" regarding certain construction work which was being carried on 459 by the respondent in his capacity as a trustee and since the same had not been complied with the respondent had been rightly convicted. The High Court was of the view that the words used in el. (c) of section 37(1) namely, return, statement, account or report have to be interpreted or construed with reference to the other provisions of the Act and the Rules framed thereunder where those words had been employed or used. As regards the word "statement" reference was made to Rules 17, 22 and 23. Similarly the word "report" was mentioned in sections 34, 37 and 38. It was finally held that the Charity Commissioner had not called for any "statement" or "report" but for particulars and detailed information regarding the various items set out in his letter which he was not empowered to do. The Act was enacted to regulate and. to make better provisions for the administration of public, religious and charitable trusts in the State of Bombay. Section 2(13) define.s. public trust. Section 2(18) defines the word "trustee" as a person in whom either alone or in association with other persons, the trust property is vested and includes a manager. Section 2(20) says that words and expressions used but not defined in the shall have the meanings assigned to them in that Act. Chapter ii of the Act provides for the appointment of the Charity Commissioner, Joint Deputy and Assistant Charity Commissioners as also the subordinate officers and assessors. Chapter HI gives charitable purposes and validity of certain trusts. Chapter IV relates to registration of public trusts. Under section 17 a duty has been cast on the Deputy or Assistant Charity Commissioner in charge of the public trust registration office to keep and maintain such books, indices and other registers as may be prescribed which have to contain the prescribed particulars. Under section 22 where any change occurs in any of the entries in the register kept under section 17 the trustee shall, within 90 days from the date of the occurrence of such change, report the same in the prescribed form to the Deputy or Assistant Charity Commissioner in charge of the public trust registration office. Chapter V deals with accounts and audit. Section 32 makes it the duty of every trustee to keep regular accounts in the approved form containing the prescribed particulars. Under section 34 it is the duty of every Auditor to prepare balance sheet and to report irregularities etc. Section 35 relates to investment of public trust money and provides inter alia that the Charity Commissioner may permit a trustee to invest money in any manner other than that provided in that section. Section 3 6 prohibits alienation of immovable property of a public trust without the previous sanction of the Charity Commissioner. Chapter V/which contains sections 37 to 41 is headed "control". Section 37 gives powers of inspection and supervision to the Charity Commissioner etc. These officers have been given, under subs. ( 1 ), the power 460 (a) "to enter on and inspect or cause to be entered on and inspected any property belonging to a public trust; (b) to call for or inspect any extract from any proceedings of the trustees of any public trust and any rocks of account or documents in the possession, or under the control, of the trustees or any person on behalf of the trustees. (c) to call for any return, statement, account or report which he may think fit from the trustees or any person connected with a public trust. " Sub section (2) says that it shall be the duty of every trustee to afford all reasonable facilities to any officer exercising any of the powers under sub section (1 ) and to comply with any order or direction made by him. Sections 38 and 39 provide for calling of an explanation from the trustee or any other person concerned on the report of the Auditor and the making of a report by the Deputy or the Assistant Charity Commissioner to the Charity Commissioner about the gross negligence, breach of trust etc. , of the trustee. Under section 40 the Charity Commissioner after considering the report submitted under section 39 and giving an opportunity to the person concerned and holding such enquiry as he thinks fit can determine the various matters set out in that section and under section 41 if he decides that any person is liable to pay to the public trust any amount for the loss caused to the trust he may direct that amount shah be surcharged on that person. Section 54 provides for what is called Dharmada and an account is to be submitted in the prescribed form. Section 56(N)(2)(h) includes among the general duties of a Committee in which the management of certain endowments vests under section 56(D) to supply such returns, statistics, accounts and other information with respect to such endowments as the State Government may, from time to time, require. It is unnecessary to notice the other.r sections with the exception of sections 67 and 69. Section 67 provides for contravention inter alia of any order or direction made under the Act by the Charity Commissioner. Section 69 relates to the duties, functions and powers of the Charity Commissioner. Under cl. (h) he can enter on and inspect any trust property and call for and inspect any proceedings of a trust. He can further call for any return, statement, books of account, document or report from trustees or any person connected with a public trust under section 37. The relevant rules in the Bombay Public Trust (Gujarat Rules 1961) may next be examined. Rule 17 is to the effect that every trustee shall keep regular accounts of all receipts and of movable and immovable property and of. all encumbrances created on the trust property and of all payments, alienations etc. made on behalf 4 61 of the trust. The accounts have to contain all such particulars as in the opinion of the Charity Commissioner will facilitate preparation of the balance sheet and income and expenditure account in the Form of Schedules VII/and IX and the preparation of a Statement of income chargeable to contributions in the Form of Schedule IXC. According to the proviso to r. 17 where the trustees of a public trust are entitled to file statements in the Form of Schedules IXA and IXB by virtue of any exemption granted under section 33(4)( 'b) the accounts may contain particulars which shall facilitate the preparation of statements in the aforesaid Form of Schedules IXA and IXB. Schedule IXC is headed "statement of income liable to contributions" and has reference to sub r. (3) of r. 32 which provides for contributions to the Public Trust Administration Fund by every public trust other than a trust exclusively for the purpose of advancement and propagation of secular education or exclusively for the purpose of medical relief or veterinary treatment of animals; certain deductions specified therein shall be allowed in calculating the gross annual income of a public trust or where the public trust is a Dharmada, its gross annual collection by receipts for the purpose of assessing the contribution. Schedules/XA and IXB are headed "statements of income and expenditure" respectively and have as stated before reference to section 33(4)(b) which provides that the Government may, by general or special order, exempt any public trust or class of public trusts from the provisions of sub section (2) of section 33 according to which the accounts shall be audited annually in such manner as may be prescribed and by a person who is a Chartered ' Accountant or by such persons as may be authorised by the State Government. Rule 18 which relates to the powers in respect of audit empowers the Deputy or the Assistant Charity Commissioner inter alia to require the production before the auditor of any book, deed, account etc. by the trustee or to give such information as may be necessary regarding the same. Rule 22 and 23 provide for inspection and grant of entries in the public trust register and other documents. Thus inspection and grant of copies can be obtained of any entry or portion thereof in the register of public trust or any statement, notice intimation, account, audit report or any other document filed under the Act. In other similar legislation on public trusts the expressions. which have been used may be noticed. In the (English) Charitable Trusts Act 1853 it was provided by section 10 that the Board (consisting of the Charity Commissioners) may require all trustees or persons acting or having any concern in the management or administration of any charity or the estate, funds or property thereof to render to the said Board accounts and statements in writing in relation to such charity or the funds, estate, property, income or monies thereof or may also require such trustee to return answers in writing to any questions or enquiries sup. C I/68 15 463 or statement" but in addition answers have to be returned to any questions or enquiries and the refusal to do so is punishable with contempt of court. In the Act itself the legislature was fully aware of the true import of the word "information" as is clear from section 56(H)(2)(h) and r. 18. It is difficult, therefore, to equate the word "statement" as used in section 37 (1 ) (c) with the word "information" or answering of enquiries etc. which would have a much wider sweep than the word "statement" when considered from the point of view of statutory provisions and the rules in which it appears. In view of the above discussion it is difficult to hold that any of the items mentioned in the letter, dated March 22, 1962 fall within the meaning of the words "report" or 'statement". The enquiries which have been made can only involve the calling of information on various matters mentioned in the letter which could hardly be said to fall within the aforesaid expressions used in section 37(1)(c). The view of the High Court, therefore, must be upheld, with the result that the appeal fails and is dismissed. Y.P. Appeal dismissed.

Section 67 of the Bombay Public Trusts Act, 1950 provides that the contravention of an order or direction made under the Act by the Charity Commissioner is an offence. Section 69 relates to the duties, functions and powers of the Charity Commissioner. Under section 69(H), the Charity Commissioner can, under section 37, call for a "statement" or "report" from a trustee of a public trust. The respondent was one of the trustees of a public trust. In respect of certain constructions made with the funds of the public trust, without the Charity Commissioner 's permission, the Charity Commissioner wrote to the respondent asking him to furnish information regarding, g the purpose of the constructions and when they were stated, the amount spent and to be spent, the income expected, and details and particulars regarding the contracts. For failure to comply with the notice, the respondent was prosecuted. He was convicted by the Magistrate under sections 37 and 67 of the Act. In revision. he was acquitted by the High Court. In appeal to this Court, HELD: The items mentioned by the Charity Commissioner only involve calling of "information" on various matters and did not fall within the meaning of the words "report" or "statement" used in section 37(1)(c), and the Charity Commissioner is not empowered to call for such "information". [463 C] From the context in which the word "report" has been used in section 37(1)(c) the word can have reference only to a formal report which a trustee may be required to make under the provisions of the Act or the rules if any framed under section 84(1)(b). Similarly, the word "Statement" has been employed in rr. 17, 22 and 23 of the rules, and this word, appearing in section 37(1)(c) has to be construed with reference to them. So construed, it cannot be equated with the word "information" which would have a much wider sweep than the word "statement". The distinction between the words "statement" and "information" is recognised by the Legislature itself by the use of the words "other information" in section 56(N) (2) (h) of the Act and r. 18 of the Rules made thereunder, which take in the answering of all inquiries and giving all kinds of information. [462 E G]

Appeal No. 1059 of 1963. Appeal from the judgment and order dated April 10, 1962 of the Punjab High Court in L.P. Appeal No. 312 of 1959. B. Sen and R. N. Sachthey, for the appellant. C. B. Agarwala, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent. The Judgment of the Court was delivered by Gajendragadkar, CJ. This appeal raises a short question as to the content of the entry "Electrical, Mechanical or general engineering products" used in Schedule 1 to the Employees ' Provident Fund Act, 1952 (No. 19 of 1952) (hereinafter called the Act). The respondent firm, Shibu Metal Works, runs a factory which manufactures brass utensils. Under the Act and the scheme framed thereunder, the employer to whose factory the Act applies is required to deposit with the appellant, the Regional Provident Commissioner, his share of the contribution as well as that of the employees coupled with the administrative charges within 15 days of each succeeding month. It appears that the respondent had been making such deposits in the past. If the employer makes a delayed payment, the Government is entitled to impose damages not exceeding 25 per cent of the amounts payable by the employer. In respect of the period between June, 1955 to October, 1955, and for the months of June, August, September and November, 1956, delayed payments were made by the respondent. Thereupon, the appellant called upon the respondent to pay the damages. The respondent, in turn, made explanations and contended that there was really no delay in the making of payments in regard to some months, and in respect of the others where delay was admitted, it claimed that the same should be condoned. The appellant did not accept either of the pleas raised by the respondent, and demanded the payment of damages. That led to the present writ proceedings, commenced by the respondent in the High Court of Punjab. In its writ petition filed on the 3rd November, 1958, the respondent contended that the appellant was not entitled to recover either the contributions alleged to be due under the Act or Sup./65 6 74 damages alleged to be due on the ground that there was delay in payment, because the manufacture of brass utensils which was the work carried on in the respondents factory did not come within the purview of the Act. On this ground, the respondent urged that the demand made by the appellant was illegal, ultra vires and without jurisdiction. The writ petition asked for the issue of a writ of mandamus restraining the appellant from recovering any amount from the respondent under the Act. The appellant resisted the writ petition and urged that the entry "Electrical, Mechanical or general engineering products" included manufacture of brass utensils, and so, the respondent 's factory fell within the purview of the Act. The appellant also urged that if the respondent entertained any doubt as to the applicability of the Act to its factory, it should have approached the Central Government for removal of the doubt and not rushed to the court for a judgment. The learned Single Judge who heard the writ petition held that the manufacture of brass utensils fell within the provisions of the relevant entry in Sch. 1, because, in his opinion, the said utensils were, in substance, drums and containers. He, therefore, held that the appellant was entitled to demand from the respondent the deposit of the contributions as prescribed by the Act. He, however, took the view that the demand for damages made by the appellant was not justified. On these findings the writ petition was partly allowed in that a writ was issued against the appellant restraining him from making a demand for the payment of damages. In regard to the claim made by the respondent that it was not liable to deposit the contributions under the Act, the learned Judge held that the said claim was not justified. The respondent then preferred an appeal under the Letters Patent before a Division Bench of the Punjab High Court. The Letters Patent Bench has upheld the respondent 's contention that the manufacture of brass utensils does not fell within the entry "Electrical, Mechanical or general engineering products" enumerated in Sch. 1 to the Act. In the result, the respondents appeal was allowed and a writ was issued against the appellant in terms of the prayer made by the respondent in its writ petition. The appellant then moved the said High Court for a certificate and with the certificate granted to him, he has come to this Court in appeal. That is how the only question which arises for our decision is : what is the true content of the entry "Electrical, Mechanical or general engineering products" included in Sch. 1 ,of the Act? 75 Before dealing with this point, it would be relevant to refer briefly to the broad features of the scheme prescribed by the Act, and its purpose. This Act was passed in order to provide for the institution of provident funds for employees in factories and other establishments. Section 1, sub section (3), originally provided that subject to the provisions contained in section 16, the Act would apply (a) to every establishment which is a factory engaged in any industry specified in Sch. 1 and in which 50 or more persons are employed, and (b) to any other establishment employing 50 or more persons or class of such establishments which the Central Government may, by notification in the Official Gazette, specify in that behalf. 'Mere is a proviso to this subsection which it is unnecessary to set out. Later, in 1960, the requirement that 50 workmen should be employed has been modified and now, the employment of 20 workmen is enough to attract the application of the Act. Section 2(g) defines a "factory" a, , any premises, including the precincts thereof, in any part of which a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power. This shows that if the test prescribed by section 1(3) is satisfied and the undertaking is shown to be engaged in a manufacturing process, the Act applies. It makes no difference to the applicability of the Act that in a given factory, the manufacturing process is carried on without the aid of power. It is the manufacturing process which is the decisive factor. Section (1) defines "industry" as meaning any industry specified in Sch. 1, and includes any industry added to the Schedule by notification under section 4. This definition shows how entries in Sch. 1 assume significance. Whenever a question arises as to whether any industry is governed by the Act, the answer is to be found by looking at Sch. It is also clear that additions can be made to Sch. 1 from time to time by notification by the Central Govern ment. Section 4 specifically confers this power on the Central Government. It provides that the Central Government may add any industry to Sch. 1 and it lays down that after the notification is issued by the Central Government in that behalf, the industry so added shall be deemed to be an industry specified in Sch. 1 for the purposes of the Act. Section 4(2) provides a safeguard by requiring that notifications issued under sub section (1) shall be laid before Parliament, as soon as may be, after they are issued. Section 5 is the key section of the Act and it provides for the institution of Employees ' Provident Fund Schemes. It is not necessary for our purpose to refer to the details of these schemes. It would thus be seen that the basic purpose of the Act is to 76 require that appropriate provision should be made by way of provident fund for the benefit of the employees engaged in establishments to which the Act applies. Rules made for the institution of the funds provide for contribution both by the employees and the employers and there can be little doubt that the purpose intended to be achieved by the Act is a very beneficent purpose in that it assures to the employees concerned the payment of specified amounts of provident fund in due time. Schedule 1 which plays a decisive role in the determination of the question as to whether an industry falls under the provisions of the Act, originally contained six entries. It provided that any industry engaged in the manufacture or production of the six items mentioned therein shall be an industry for the purpose of the Act. The words "or production" were deleted in 1953 and now, the entry refers to any industry engaged in the manufacture of the items mentioned in Sch. 1. Amongst the items thus inserted was "Electrical, Mechanical or general engineering products. " Just as the requirement as to the number of workmen whose employment would bring the establishment within the scope of the Act has been liberalised and 50 has been brought down to 20, so the items listed in Sch. 1 have also been expanded and several additions have been made in that behalf. The object of the Act clearly was to proceed to make provision for the provident fund for the benefit of industrial employees in a cautious and pragmatic manner, and that explains how and why the Central Government has slowly and gradually but progressively, been expanding the scope of the applicability of the Act to different branches of industry. The process of making additions to Sch. 1 has been proceeding apace and one has merely to look at the items which have been listed in Sch. 1 by several additions up to the 15th of May, 1964 to realise how the scope of Sch. 1 has been considerably expanded. The question as to what exactly is the content of the entry with which we are concerned has been considered by different High Courts from time to time, and we would very briefly indicate what the effect of these decisions is in order to illustrate how the approach adopted by the Courts in interpreting this entry has not been uniform. In Regional Provident Commissioner, U.P., Kanpur vs M/s. Great Eastern Electroplator Ltd.,(1) a Division Bench of the Allahabad High Court held that an electric torch case is receptacle in which the torch batteries are kept, and it is, therefore, a container within the meaning of item (24) of the (1) A.I.R. 1959 All 133. 77 Explanation to Sch. 1, and is or must be deemed to be an electrical, mechanical or general engineering product. We ought to add that in 1953, an Explanation has been added to Sch. 1 for the purpose of indicating what items would fall under the entry "Electrical, mechanical or general engineering products". Amongst the items listed under the Explanation, item (24) is 'drums and containers '. The Division Bench of the Allahabad High Court reversed the view taken by the learned single Judge of the said High Court, and came to the conclusion that an electric torch case is a container within the meaning of item (24) in the Explanation to which we have just referred. This decision of the Divi sion Bench was brought to this Court in appeal (No. 580 of 1960, decided on 18th December 1962), and this Court took the view that the conclusion reached by the Division Bench that an electric torch case is a container within the meaning of item (24) of the Explanation to Sch. 1 was right. In the Nagpur Glass Works Ltd. vs Regional Provident Fund Commissioner, (1) the Bombay High Court has held that burners or metal lamps were products which fell within the Schedule under the entry 'Electrical, mechanical or general engineering products '. In Haji Nadir Ali Khan and Others vs The Union of India and Others,(2) Falshaw J., as he then was, took the view that musical instruments, whether made of metal or otherwise, though not mentioned specifically in Sch. 1, fell within the scope of the expression "electrical, mechanical or general engineering products". In Hindustan Electric Co., Ltd. vs Regional Provident Fund Commissioner, Punjab, & Anr. ,(3) Grover J. of the Punjab High Court similarly held that stoves would fall within the expression in question. In Madras, in T. R. Raghava Iyengar and Co. vs The Regional Provident Fund Commissioner, Madras, (4) Jagadisan J. has taken the view that the conversion of metal sheets and circles into vessels results in products of metal rolling and re rolling within the meaning of the Schedule to the Act, and so, an industry for the purpose of manufacturing vessels and utensils out of brass and copper sheets and circles is covered by the Act. In The Regional Provident Fund Commissioner, Bombay vs Shree Krishna Metal Manufacturing Co., Bhandara, and Oudh Sugar Mills Ltd. ,(1) one of the points which arose for the decision (1) I.L.R. (2) A.I.R. 1958 Pun. (3) A.I.R. 1959 Pun. (4) A.I.R. 1963 Mad. 238. (5) [1962] Supp. 3 S.C.R. 815. 78 of this Court was whether the manufacture of metal circular sheets fell within Sch. 1, and it appears that it was conceded by both the parties that the said work would fall within Sch. 1 of the Act; and so, the Co., carrying on the said work was a factory engaged in the industry which attracted the provisions of the Act. We have referred to these decisions only to illustrate how in dealing with different products, the Courts have tried to interpret the entry in question; it appears that in dealing with the products with which they were concerned in each case, they did not adopt a uniform approach, and the reasons given and the tests applied by them are not the same or similar. It is hardly necessary to add that we propose to express no opinion on the merits of the decisions to which we have just referred. Reverting then to the question of construing the relevant entry in Sch. 1, it is necessary to bear in mind that this entry occurs in the Act which is intended to serve a beneficent purpose. The object which the Act purports to achieve is to require that appropriate provision should be made for the employees employed in the establishments to which the Act applies; and that means that in construing the material provisions of such an Act, if two views are reasonably possible, the courts should prefer the view which helps the achievement of the object. If the words used in the entry are capable of a narrow or broad construction, each construction being reasonably possible, and it appears that the broad construction would help the furtherance of the object, then it would be necessary to prefer the said construction. This rule postulates that there is a competition between the two constructions, each one of which is reasonably possible. This rule does not justify the straining of the words or putting an unnatural or unreasonable meaning on them just for the purpose of introducing a broader construction. The other circumstance which has to be borne in mind in interpreting the entry is that the interpretation should not concentrate on the word "products" used in it. If this word had been used, say for instance in the material provisions of the Sales tax Act, the decision as to whether a particular product is liable to pay the tax, would depend upon the consideration whether the pro duct in question falls within the scope of the said Act or not, and in that context, interpretation would naturally concentrate on the character and nature of the product in question. In the present case, the entry takes us back to the first clause of Sch. 1 which refers to any industry engaged in the manufacture of any of the products enumerated by the different entries in Sch. T. So, in 79 construing the relevant entry, what we have to ask ourselves is : is the industry of the respondent engaged in the manufacture of any of the products mentioned in the entry ? It is the character of the industrial activity carried on by the respondent 's undertaking that falls to be determined, and the question is not so much as to what is the product produced as what is the nature of the activity of the respondent 's undertaking; is the respondent 's undertaking engaged in the manufacture of the products in question ? This consideration is relevant for the purpose of determining the content of the entry. There is no doubt that the establishment of the respondent is a factory within the meaning of section 2 (g), and it would be an industry within the meaning of Sch. 1 if its manufacturing activity is found to be an activity connected with the products enumerated in the entry. The entry refers to engineering products. It is, therefore, necessary to clear the ground by referring to the word "engineering" which qualifies the word "products". To engineer, according to the dictionary meaning, is to act as an engineer, or to employ the art of the engineer upon; to construct or manage as an engineer. "Engineering", according to the Encyclopedia Britannica, Vol. 8, in its early uses referred specially to the operations of those who constructed engines of war and executed works intended to serve military purposes. Such military engineer, , were long the only ones to whom the title was applied. But about the middle of 18th century a new class of engineers arose who concerned themselves with works which, though they might be in some cases of the same character as those undertaken by military engineers, as in the making of roads, were neither exclu sively military in purpose nor executed by soldiers, and those men by way of distinction came to be known as civil engineers. Thus, civil engineering came to be known as the "art of directing the great sources of power in nature for the use and convenience of man, as the means of production and of traffic in states, both for external and internal trade, as applied in the construction of roads, bridges, aqueducts, canals, river navigation and docks for internal intercourse and exchange, and in the construction of ports, harbours, moles, breakwaters and lighthouses, and in the art of navigation by artificial power for the purposes of commerce, and in the construction and adaptation of machinery, and in the drainage of cities and towns". (p. 444). Gradually, however, Specialisation set in. The first branch of engineering which received recognition as a separate branch, was mechanical engineering. This branch is concerned with 80 steam engines, machine tools, millwork and moving machinery in general, and it was soon followed by mining engineering, which deals with the location and working of coal, ore and other minerals. Subsequently, numerous other more or less strictly defined groups and sub divisions came into existence; they are : civil, mining and metallurgical, mechanical, electrical, chemical aeronautical and industrial. There are other less clearly defined branches of engineering, such as sanitary, structural, drainage, hydraulic, highway, railway, electric power, electrical communications, steam power, internal combustion, marine, welding, production, petroleum production, fire protection, safety, architectural, nuclear, and management or administrative engineering (p. 448). It would thus appear that the area covered by engineering which was originally occupied only by military engineering, is now split up into several sub areas which are covered by special branches of engineering known by special names. The entry in question refers to electrical and mechanical engineering, and it is easy enough to determine what the denotation of these two expressions is. In the context, 'general engineering ' which is also mentioned in the entry must not be construed in a general comprehensive sense which the words may, prima facie, suggest, because if that was the scope of the said words, there was hardly any point in referring to electrical and mechanical engineering separately. Therefore, we are inclined to hold that the expression "general engineering" does not include electrical or mechanical engineering which are specifically mentioned in the entry, and it also does not include other branches of engineering which are known by specific or special titles. These specific branches of engineering have already been indicated by us by reference to the Encyclopaedia Britannica. After the first six entries had been included in Sch. 1 in 1952, an Explanation was added to it in 1953 which purports to indicate what items are intended to be included in the entry "Electrical, mechanical or general engineering products". This Explanation consists of four clauses; cl. (a) enumerates the items falling under the entry with which we are concerned in the present appeal, whereas clauses (b), (c) and (d) afford similar explanation in regard to entries relating to "Iron and Steel", "Paper", and "Textiles" respectively. A glance at the items included in cl. (a) of the Explanation, as well as the items included in clauses (b), (c) & (d) clearly shows that the object of the legislature in enacting the Explanation was to clarify the content of the respective entries 81 in Sch. 1, to illustrate them by adding specific items, and to enlarge their scope in some material particulars. The fact that an Explanation has been added with this purpose in 1953, must also be taken into account in construing the entry in question. Mr. Agarwala for the respondent has contended that the learned single Judge was in error in holding that the respondent 's industry was engaged in the manufacture of drums and containers specified as item (24) introduced in cl. (a) of the Explanation. He argues that the core of the entry is engineering products, and while construing the entry, the significance of this core should not be overlooked. According to him, the entry really takes in engineering products like machinery and equipment for generation of electrical energy. He suggests that in determining the content of this entry, we should ask ourselves what would this entry mean to an ordinary citizen in a commercial sense ? It would mean that the products to which the entry refers are products which are useful in, or meant for, electrical engineering, mechanical engineering or general engineering. This entry may also take in machines or their parts which are similarly useful in or meant for electrical, mechanical, or general engineering. If this narrow construction is accepted, then, of course, production of brass utensils would be plainly outside the entry. There are, however, several considerations which suggest that this narrow construction cannot be accepted. As we have already indicated, a glance at the items mentioned in cl. (a) of the Explanation and the extended meaning attributed to the respective entries covered by clauses (b), (c) and (d) of the Explanation, clearly indicates that none of the said entries can be reasonably mad in that restricted manner. If this restricted interpretation is accepted, then several items included in cl. (a) of the Explanation would be so completely foreign to the original content of the entry that their inclusion would appear to be unjustified. Take for instance, item (15) in cl. (a) of the Explanation which is bicycles; item (17) which is sewing and knitting machines; item (22) which is safes, vaults and furniture made of iron or steel or steel alloys; or item (23) which is cutlery and surgical instruments. Clause (a) of the Explanation provides that these items should be included in the entry in question, "without prejudice to the ordinary meaning of the expressions used therein". If the narrow construction for which Mr. Agarwala contends is accepted, it would look unreasonable that the Legislature should have introduced these items under cl. (a) of the Explanation. Besides, 82 this construction lays undue emphasis on the concept of products and erroneously treats engineering products as the core of the expression. What the entry really means is electrical engineering products, mechanical engineering products or general engineering products and in determining the content of the entry, we have to hark back to the relevant consideration that this entry is intended to describe an industry as falling within the scope of the Act if the said industry is engaged in the manufacture of the products in question. Now, if we take the other entries which were initially included in Sch. 1, the construction for which Mr. Agarwala contends cannot obviously be applied in respect of them; and so, we think it would not be possible to adopt the narrow construction which Mr. Agarwala has suggested for our acceptance. On the other hand, Mr. Sen for the appellant suggested that the proper way to construe this entry would be to hold that this entry would take in every industry which is engaged in the manufacture of products which are manufactured by electrical, mechanical or general engineering process. This construction treats the process of production as the crux of the entry; and if this construction were accepted, the scope of the content of the entry would be very wide indeed. If every product whose production can be referred to one or the other of the processes mentioned in the entry is construed to fall within its content, then several other entries in the Schedule would, prima facie, appear to be redundant, because this entry itself would be comprehensive enough to take them in. In that case, Explanation (a) which has been added in 1953 would itself appear to be without any purpose, because most, if not all, of the items introduced by the said clause would be included within the original entry itself. In our opinion, such a wide construction would not be justified, because we are inclined to hold that it is not the process which is important in construing the entry as the character of the activity with which the industry is concerned. That is why we are not prepared to accent the very broad construction of the entry suggested by Mr. Sen. The proper way to determine the content of this entry appears to us to be to hold that all products which are generally known as electrical engineering products, or mechanical engineering products, or general engineering products, are intended to be covered by the entry, and the object of Sch. 1 is to include within the scope of the Act every industry which is engaged in the manufacture of electrical engineering products, mechanical engineering 83 products, or general engineering products. It is the character of the products that helps to determine the content of the entry; can. the product in question be reasonably described as an electrical engineering product, or a mechanical engineering product, or a general engineering product ? That is the question to ask in every case, and as we have already indicated, in considering the question as to whether the product falls under the category of general engineering product, general engineering should be construed in the limited sense which we have already shown. It may be that in a large majority of cases, the products included within the entry may be produced by electrical or mechanical or general engineering process; but that is not the essence of the matter. The industrial activity which manufactures the three categories of products already enumerated by us, brings the industry within the scope of Sch. 1, and therefore, attracts the application of the Act. If we bear in mind the three broad categories of products, the manufacture of which brings the industry within the scope of Sch. 1, it would be easy to appreciate the items enumerated in cl. (a) of the Explanation. Broadly stated, items 1 to 6 can be, said to be electrical engineering products; 7 to 10 may be said to be mechanical engineering products and the rest general engineering products. We are free to confess that the inclusion of each one of these items in cl. (a) of the Explanation cannot be easily explained; but, on the whole, it appears to us that the object of the Explanation was to clarify, illustrate and expand the content of the entry in question in order that there should be no doubt as to the classes and categories of industry which were intended to be brought within the purview of the Act. Thus considered, we think that the manufacture of brass utensils can easily be regarded as an activity the object of which is the manufacture of general engineering products. This interpretation is not as narrow as that suggested by Mr. Agarwala, nor as broad as that suggested to Mr. Sen, and, on the whole, it seems to fit in with the scheme of Sch. 1 considered in the light of the object intended to be achieved by the insertion of the Explanation in 1953 and the subsequent additions made to Sch. 1 itself. We are, therefore, satisfied that the Letters Patent Bench of the Punjab High Court was in error in holding that the respondent 's factory did not fall within the scope of the material provisions of the Act. Incidentally, we may add that before the present controversy arose between the respondent and the appellant, it appears that the respondent had 84 been making deposits towards the Provident Fund as required by the Act. The result is, the appeal is allowed, the order passed by the :,Letters Patent Bench is set aside and that of the learned single Judge restored with costs throughout. Appeal allowed.

The appellants were convicted by the Sessions Judge under section 302 with section 34 of the Indian Penal Code. Two of them were sentenced to death and two to imprisonment for life. Their appeal before the High Court was heard by a Division Bench of two judges, one of whom was for allowing it, the other for dismissing it. The third Judge to whom it was refer red dismissed the appeal. The appellants applied for a certi ficate of fitness to appeal to the Supreme Court. The certificate was granted mainly on the ground that the third Judge who heard the appeal had omitted to discuss at length the question of the genuineness of the first information report. In the Supreme Court objection was taken on behalf of the State that the certificate of fitness granted by the High Court was incompetent in view of the previous decisions of this Court in Haripada Dey vs State of West Bengal & Anr. ; , Nar Singh & Anr. vs State of Uttar Pradesh, ; , Sunder Singh vs State of Uttar Pradesh, A.I.R. (1956) S.C. 411 and Khushalrai vs State of Bombay, ; The appellants urged that these cases be reconsidered. A plea for the reduction of the death sentences was also made. HELD: (i) Section 429 of the Criminal Procedure Code contemplates that it is for the third Judge to decide on what points he shall hear arguments, if any, and that postulates that he is completely free in resolving the difference as he thinks fit. It was sufficient for the third Judge to have said on the question of the First Information Report that he did not consider it necessary to decide the point but if it was necessary he was in agreement with the Judge on the Division Bench who was for dismissing the appeal. There was therefore a proper decision by the third Judge and the certificate could not be based on the omission to discuss the doubts about the First Information Report. [771 F H] (ii) The Constitution does not contemplate acriminal Jurisdiction for this court except in these case covered by clauses (a) and (b) of article 134 which provide for appeals as of right. The High Court before it certifies the case must be satisfied that it involves some substantial question of law or principle. Only a case involving something more than mere appreciation of evidence is contemplated by the Constitution of the grant of a certificate. What that may be will depend on the circumstances of the case but the High Court should be slow to certify cases. The High Court should not overlook that there is a further remedy by way of special leave which may be invoked in cases where 772 the certificate is refused. The present certificate did not comply with the requirements of article 134(1) (c) :is explained above. [780 C F; 781 A] Case law considered. (iii)That whenever two Judges in appeal differ on the question of sentence, death sentence should not be imposed without compelling reasons cannot be raised to the pedestal of a rule, for that would leave the sentence to the determination of one Judge to the exclusion of the other. Each case must be decided on its own facts and a sentence of imprisonment for life can only be substituted if the facts justify that the extreme penalty of law should not be imposed. [781 E F] Kalawati and Another vs State of Himachal Pradesh, and Pandurang, Tukia and Bhillia vs State of Hyderabad, ; , referred to.

il Appeals Nos. 392 of 1956 & 686 of 1957. Appeals from the judgment and order dated March 31, 1954, of the former Hyderabad High Court in Civil Writ Nos. 43 and 44 of 1951 respectively. section P. Varma, section Mohammed and section R. Borgaouker, for the appellants in both the appeals. A. V. Viswanatha Sastri, P. V. R. Tatachari and T.M. Sen, for the respondents in both the appeals. Civil Appeal No. 392 of 1956. March 16. The Judgment of the Court was delivered by SHAH, J. This is an appeal filed with a certificate granted under article 133(1)(c) of the Constitution by the High Court of Judicature of the State,, of Hyderabad. The appellant was a Jagirdar holding jagirs Ramwarm Chandam Palli and Gulla Palli, Taluq Sirsalla, in the District of Karimnagar in the State of Hyderabad. After the Police Action in August, 1948, Major General Chaudary was appointed the Military Governor for the State of Hyderabad. His Exalted Highness the Nizam of Hyderabad invested the Military Governor with authority to administer the State by a Farman dated September 19, 1948. The Farman was in the following terms: " Whereas the General Officer Commanding in Chief Southern Army has appointed Major General J. N. Chaudary, O.B.E., to be the Military Governor for the Hyderabad State and whereas all authority 313 for the administration of the State now vests in him, I hereby enjoin all the subjects of the State to carry out such orders as he may deem fit to issue from time to time. I appeal to all officers of the State administration and subjects of the State to render faithful and unflinching obedience to the Military Governor and conduct themselves in a manner calculated to bring about the speedy restoration of law and order in the State ". On August 7, 1949, His Exalted Highness the Nizam issued an explanatory Farman in the following terms: " With reference to my Farman dated 19 9 1948, in which I referred to the fact that all authority for the administration of the State now vests in the Military Governor, I hereby declare that the said authority includes and has always included authority to make Regulations ". On August 10, 1949, the Military Governor promulgated The Hyderabad (Abolition of Jagirs) Regulation of 1358 Fasli, which will hereinafter be referred to as the Abolition Regulation. This Regulation was brought into force on August 15, 1949, the date of its publication in the Official Gazette. Section 5 of the Regulation directed that from a date to be notified for the transfer of the administrations of the jagirs in the State to the Government, the jagirdars shall make over the management of the jagirs to the Jagir Administrator and in default of compliance therewith the Officer appointed under the Regulation may take forcible possession. By section 6, it was provided that the jagirs shall be included in the " Diwani " and unless and until included in a district, shall be administered by the Jagir Administrator, and that the powers, rights and liabilities in relation to such jagirs shall cease to be exercisable by the jagirdars and shall be exercisable by the Jagir Administrators, and that no jagirdar shall recover or receive any customary or other dues from any tenant or resident of the jagir. By section 14, it was declared that the jagirdars were to receive certain interim maintenance allowances until such time as the terms of the commutation of the jagirs were determined. Pursuant to the authority reserved by a. 6 of the Abolition Regulation, possession 314 of the jagirs was taken over sometime in September 1949 by the Jagir Administrator acting on behalf of the State of Hyderabad. On December 1, 1949, another Farman was issued by His Exalted Highness the Nizam which provided as follows: " Whereas the General Officer Commanding in Chief Southern Army has as from the 1st December, 1949, terminated the appointment of Major General Chaudary, O.B.E., to be the Military Governor for the Hyderabad State; And whereas it is necessary to make other arrangements for the administration of the State as from the said date; Now, therefore, I hereby appoint as from the said date Mr. M. K. Vellodi, C.I.E., I.C.S., to be my Chief Minister and . I further direct that all the powers of administration, vested in the Military Governor before the said date are exercisable by the Chief Minister ". In exercise of the powers vested in him, the Chief Minister promulgated the Hyderabad Jagirs (Commutation) Regulation No. XXV of 1359 Fasli which will hereinafter be referred to as the Commutation Regulation. This Regulation was brought into operation on January 25, 1950. By section 3 of the Regulation, the method of computing the commutation sum for every jagir was prescribed. After the inauguration of the Constitution of India on January 26, 1950, on which date the ' territory of the State of Hyderabad became part of the Union of India, the President on April 25, 1950, certified the two Regulations under article 31(6) of the Constitution by a notification published in the gazette of the Union of India. The Constitution was amended on June 18, 1951 by the Constitution (First Amendment) Act of 1951 whereby, inter alia, articles 31(A) and 31(B) and Sch. IX were incorporated in the Constitution. The Abolition Regulation and the Commutation Regulation were included in Schedule IX and by virtue of article 31(B), neither the Regulations nor any of the provisions thereof were to be deemed to be void or ever to have become void on the ground that the 315 Regulations were inconsistent with or took away or abridged any of the rights conferred by any of the provisions of Part III of the Constitution. In the meantime, the appellant had, on January 29, 1951, filed a petition in the High Court of Hyderabad for a writ in the nature of mandamus directing the State of Hyderabad and the Jagir Administrator to hand over possession of the appellant 's properties and for an order declaring the Abolition Regulation and the Commutation Regulation ultra vires and unconstitutional and for certain interim orders. After the amendment of the Constitution, the petition was amended on August 14, 1952. By this petition, the appellant claimed that sections 4(1)(c) and 4(2) of the Commutation Regulation and section 6(4) of the Abolition Regulation were invalid because by these provisions, there was " naked confiscation of the property " of the appellant and that they amounted to " colourable and fraudulent exercise of legislative power ". The High Court of Hyderabad rejected the petition filed by the appellant, but certified the case under article 133(1)(c) as a fit one for appeal to this court. In this appeal, two principal contentions fall to be determined, viz., (1) whether legislative authority was conferred upon the Military Governor by the Farman dated September 19, 1948 and (2) If, by the Farman, legislative authority was delegated to the Military Governor, whether it was circumscribed by any limitations or reservations. Was the Military Governor, by the Farman dated September 19, 1948, invested with all the sovereign authority legislative, executive and judicial of H.E.H. the Nizam or was he merely invested with the executive authority ? By the plain words used in the Farman, " all authority for the administration of the State was conferred upon the Military Governor" and there is nothing in the text of the Farman which warrants the view that only executive authority was intended to be delegated thereby. Within the expression, " all administrative authority " is encompassed the entirety of the authority of the sovereign, and by the delegation from His Exalted Highness the Nizam, the Military Governor was invested with that authority 316 in all its amplitude. The injunction to the subjects of the State to carry out all such orders as the Military Governor may deem fit to issue and the appeal to the officers of the State and the subjects to render faithful and unflinching obedience and to conduct themselves in a manner calculated to bring about the speedy restoration of law and order, do not detract from the amplitude of the powers delegated to the Military Governor. The expression, " orders " would include every order made in exercise of authority for the administration of the State; and the object intended to be achieved, viz., the speedy restoration of law and order in the State by His Exalted Highness the Nizam as expressed in the appeal was not restrictive of that authority. That His Exalted Highness the Nizam in and before the month of September, 1948, was an absolute ruler invested with all authority, executive, legislative and judicial is indisputable. He had supreme powers vested in him to modify, restrict take away or extinguish the rights of any of his subjects and the validity of his actions or orders was not liable to be questioned before any tribunal or authority. The Farman promulgated on September 19, 1948, by His Exalted Highness the Nizam delegated his sovereign authority to the Military Governor and to remove all doubts as to the effect of that delegation, an explanatory Farman dated August 7, 1949, was issued. It was declared in express terms by that Farman that the authority of the Military Governor to; included and has always included the authority to make Regulations ". In the clearest terms, the author of the Farman proclaimed the content of the authority delegated by him to the Military Governor. The plea rather faintly urged by Mr. Varma that the Farman merely recited that the Military Governor had been invested with authority for administration and did not by its own force purport to invest the Military Governor with authority to administer the State is plainly inconsistent with the argument which was advanced in the High Court and the statement of the case filed in this court and was therefore rightly abandoned by him. 317 Though by the delegation of authority, the Military Governor was invested with all authority of His Exalted Highness the Nizam in the matter of administration of the State in all its departments, the sovereignty of His Exalted Highness the Nizam was, by this act of delegation, undoubtedly not extinguished. It was open to him, notwithstanding the delegation, to issue orders or Regulations contrary to those which were issued by the Military Governor, and also to withdraw the authority of the Military Governor. There is, however, no evidence on the record to show that after September 19, 1948, and before the Abolition Regulation was promulgated, the authority of the Military Governor was withdrawn or that His Exalted Highness the Nizam had issued any order or Regulation inconsistent with the Abolition Regulation. The authority of the Military Governor was withdrawn in December, 1949, and the Chief Minister was invested with the same authority of administration including expressly the power of legislation, and it was in exercise of that authority that the Chief Minister issued the Commutation Regulation. The authority of His Exalted Highness the Nizam as the sovereign ruler to resume the jagirs and to extinguish the interests of the jagirdars being by delegation vested in the Military Governor, the legality of the action of the latter was not open to challenge on any test of legislative competence. Assuming that no opportunity had arisen for exercise of the sovereign authority in the matter of resumption of jagirs or extinction of the jagirdars ' interests before the promulgation of the Abolition Regulation, an inference cannot therefrom arise that His Exalted Highness the Nizam had irrevocably placed a restriction on his sovereignty, or that the delegation to the Military Governor of the sovereign authority was subject to an implied restriction that the interests of the jagirdars in the jagirs could not in exercise of the authority be extinguished. The authority of the Military Governor, being unrestricted, so long as it enured, his action in issuing the Abolition Regulation could not be challenged on the plea that it was a colourable exercise of legislative 41 318 authority. The doctrine of invalidity of legislative provisions enacted in colourable exercise of authority applies to legislatures whose powers are subject to constitutional restrictions. When such a legislative body seeks, under the guise or pretence of complying with the restrictions, in enacting a statute, to evade or elude them, it is but a fraud on the Constitution, and the statute is liable to be declared invalid on the ground that the enactment is in colourable exercise of authority, the statute being in truth beyond the competence of the body. But a statute enacted by a legislative authority whose powers are not fettered by any constitutional or other limitations, cannot be declared invalid as enacted in colourable exercise of its powers. The authority of the Chief Minister under the Farman dated December 1, 1949, in its amplitude, was as extensive as that of His Exalted Highness the Nizam and the Commutation Regulation was not liable to be challenged on the ground of want of legislative competence or colourable exercise of legislative authority, the power exercised by him being the legislative power as the delegate of the Sovereign. The plea that the fundamental rights of the appellant under the Constitution were infringed by the two Regulations does not require any detailed examination. By virtue of the Abolition Regulation, the rights of the appellant as a jagirdar in his jagir were extinguished and by the Commutation Regulation, the quantum of compensation payable to him was determined by a pre Constitution legislation. The Regulations were competently promulgated in exercise of legislative authority in that behalf ; and the Constitution does not operate retrospectively to revive the rights which had been, before it was enacted, extinguished. The Constitution has except as otherwise expressly provided, no retrospective operation Keshavan Mahava Menon vs State of Bombay (1); and rights which were by legislation extinguished, before it was enacted, are not revived thereby. At the commencement of the Constitution, the appellant had, therefore, no rights in the jagirs and he, obviously, could not claim a writ of mandamus directing (1) ; 319 delivery of possession of the jagir, or a writ directing commutation otherwise than under the provisions of the Commutation Regulation. It may also be observed that the Parliament has, by the Constitution (1st, Amendment) Act, included the Abolition and the Commutation Regulations in the ninth schedule, and by virtue of article 31(B), the two Regulations are exempt from challenge on the ground that they are inconsistent with or take away or abridge any of the fundamental rights conferred by Part III of the Constitution. The appeal therefore fails and is dismissed with costs. Civil Appeal No. 686 of 1957. This appeal raises the same question which has been decided in the companion Appeal No. 392 of 1956 and for reasons set out therein, this appeal must fail and is dismissed with costs. Appeals dismissed.

The Sessions Court has power to examine witnesses who were not examined before the Committing Magistrate because of sec. 540, Criminal Procedure Code, and if the witness is treated as a prosecution witness and examined by the prose cuting counsel instead of by the court, that at best would be an irrigularity curable by sec. 537 of the Code. The proper time to object to such a procedure would be at the trial itself. Sher Bahadur vs The Crown (I.L.R. and Queen Empress vs G.W. Hayfield (I.L.R. 14 All. 212)distin quished S.S. Jhabwala vs Emperor (A.I.R. 1933 All. 690) and Mussamat. Niamat vs The Crown I.L.R. 17 All. 176) approved. Emperor vs Channing Arnold referred to. Resort to sec. 145 of the Evidence Act is necessary only if a witness denies that he made the former statement. In that event it would be necessary to prove that he did and if the former statement was reduced to writing, then sec. 145 requires that his attention must be drawn to those parts which are to be used for contradiction. But that position does not arise when the witness admits the former statement. In such a case all that is necessary is to look to the former statement of which no further proof is necessary because of the admission ' that it was made. The former statement cannot be used as substantive evidence unless sec. 288, Criminal Procedure Code, is called in aid but even without sec. 288 the court would be entitled to say, basing on the evidence in chief which is the substantive evidence, that what the witness said to the police or the Committing Magistrate, is the true version, not because those state ments form substantive evidence, but because they tally with the evidence in chief which is substantive. If a former statement can be brought in under sec. 157 of the Evidence Act, it can be transmuted into substantive evidence by the application of sec. 288 of the Criminal Procedure Code. Tara Singh vs The State ; distinquished. 813 In the certificate of the Committing Magistrate endorsed on the deposition sheet states that the deposition was read out to the witness and the witness admitted it to be correct the court is bound to accept this as correct under sec. 80 of the Evidence Act until it is proved to be untrue. It is not necessary nor desirable to examine the Commit ting Magistrate to prove the truth of his certificate. Kashmera Singh vs The State of Madhya Pradsh [1952] (S.C.R.) 526 followed. Even if it be true that the deposition was not read over, that would only amount to a curable irregularity and in the absence of prejudice which must be disclosed in an affidavit which shows exactly where the record departs from what the witness actually said, the objection cannot be sustained.

Appeal No. 693 of 1957. Appeal from the judgment and Order dated the 25th May, 1956 of the Punjab High Court in F.A.C. No. 89/D of 55. N. C. Chatterjee, section K. Kapur, N. H. Hingorani and Ganpat Rai, for the appellants. H. J. Umrigar and T. M. Sen, for the respondent. January 20. The Judgment of the Court was delivered by SHAH J. On May 3, 1937, M/s. Alopi Parshad and Sons Ltd., who will herinafter be referred to as the Agents, were, under an agreement in writing, appointed by the Governor General for India in Council, as from October 1, 1937, agents for purchasing ghee required for the use of the Army personnel. The Government of India, by cl. 12 of the agreement, undertook to pay to the Agents the actual expenses incurred for purchasing ghee, cost of empty tins, expenses incurred on clearance of Government tins from the railway, export land customs duty levied on ghee purchased and exported from markets situated in Indian States, octroi duty, terminal tax or other local rates on ghee, and certain other charges incurred 796 by the Agents. The Government also agreed to pay to the Agents at rates specified in the agreement: (1) the financing and overhead (mandi) charges incurred in the buying markets. (2) the cost of establishments and contingencies provided by the Agents on the Government 's account for carrying out the purchase and supply of ghee, and (3) the buying remuneration. In consideration of the Government paying to the Agents a sum of rupee one and anna one only per one hundred pounds nett weight of finally accepted ghee, as combined financing and overhead (mandi) charges, the Agents by cl. 13 undertook to provide the working capital and also to bear the costs, charges and expenses, including financing and overhead charges incurred by them in buying ghee in the market. The Agents also undertook, by cl. 14, to bear the establishment and contingency charges for the duo performance by them of the terms of the agreement, and the Government agreed to pay in consideration thereof annas 14 and pies 6 per every hundred pounds of ghee accepted. The Government also agreed to pay to the Agents remuneration for services rendered in purchasing ghee, at the rate of one rupee per one hundred pounds nett weight of accepted ghee. Pursuant to the agreement, the Agents supplied from time to time ghee to the Government of India, as required. In September, 1939, the World War 11 broke out, and there was an enormous increase in the demand by the Government of ghee. On June 20, 1942, the original agreement was, by mutual consent, revised, and in respect of the establishment and contingencies, the uniform rate of annas 14 and 6 pies per hundred pounds of accepted ghee, was substituted by a graded scale: for the first 5 thousand tons, the Agents were to be paid at the rate of Re. 0 14 6 per hundred pounds, for the next five thousand tons, at the rate of annas 8 per hundred pounds, and at the rate of annas 4 per hundred pounds, for supplies exceeding ten thousand tons. Even ill respect of 797 remuneration for services, a graded scale was substituted: for the first five thousand tons, remuneration was to be paid at the rate of Re. 1 per hundred pounds, at the rate of annas 8 per hundred pounds, for the next five thousand, and annas 4 per hundred pounds, for supplies exceeding ten thousand tons. This modification in the rates became effective from September 11, 1940. By their communication dated December 6, 1943, the Agents demanded that the remuneration, establishment and contingencies, and mandi and financing charges, be enhanced. In respect of the buying remuneration, they proposed a 25 per cent increase; in respect of establishment and contingencies, they proposed an increase of 20 per cent., and in respect of mandi and financing charges, an increase of 112 per cent. This revision of the rates was claimed on the plea that the existing rates, fixed in peace time, were "entirely superseded by the totally altered conditions obtaining in war time. " To this letter, no immediate reply was given by the Government of India, and the Agents continued to supply ghee till May, 1945. On May 17, 1945, the Government of India, purporting to exercise their option under cl. 9 of the agreement, served the Agents with a notice of termination of the agreement. On May 22, 1945, the Chief Director of Purchases, on behalf of the Government of India, replied to the letter dated December 6, 1943, and informed the Agents that normally no claim for revision of rates could be entertained during the currency of the agreement and especially with retrospective effect, but a claim for ex gratia compensation to meet any actual loss suffered by an agent, might be entertained, if the Agents established circumstances justifying such a claim. The Chief Director of Purchases called upon the Agents to submit the report of their auditors on the agency accounts, for the ghee supplied, as also a statement in detail, showing the actual expenditure incurred. The notice dated May 17, 1945, was waived by mutual consent, and under an arrangement dated May 16, 1946, the Agents agreed to supply five 798 thousand tons of ghee by October 31, 1946, on which date, the agreement dated May 3, 1937, was to come to an end. By their letter dated July 1, 1946, the Agents claimed that a dispute had arisen under the contract, and appointed one Nigam to be arbitrator on their behalf to adjudicate upon the dispute, pursuant to cl. 20 of the terms of the agreement dated May 3, 1937, and. called upon the Government of India to appoint their arbitrator. The Government of India, by their letter dated July 10, 1946, nominated one Rangi Lal to be arbitrator on their behalf. Before the arbitrators, the Agents made their claim under four heads: (1) The Agents claimed that the agreement dated June 20, 1942, was not binding upon them, and they were entitled to Rs. 23,08,372 8 0 being the difference between the buying remuneration, establishment and contingency charges due under the agreement dated May 3, 1937, and the amount actually received. The details of this claim were set out in Sch. A. (2)In the event of the arbitrators holding the agreement dated June 20, 1942, was binding, a revision of the rates for establishment and contingencies, and an additional amount of Rs. 6,91,600 4 0 at such revised rates as set out in Sch. B. (3)Revision of the rates fixed under the agreement dated June 20, 1942, of the mandi charges, and an additional amount of Rs. 14,47,204 6 3, at the revised rates as set out in Sch. C. (4)Damages for wrongful termination of the agreement in the month of October, 1946, amounting to Rs. 2,41,235, as set out in Sch. The arbitrators did not arrive at any agreed decision, and the dispute was referred to Lala Achru Ram who was nominated an umpire. The umpire was of the view that the agreement dated June 20, 1942, was valid, and the claim as set out in Sch. A was untenable; that the claims set out in Sch. B and Sch. C, did not arise out of the agreement, and he had no jurisdiction to adjudicate upon the same; and that as the claim set out in Sch. D, was outside the scope of 799 the Reference, he was incompetent to give any finding on that claim. This Award was filed in the court of the Sub ordinate Judge, First class, Delhi. The Agents applied to set aside the Award on the grounds that the umpire was guilty of misconduct in that he failed to give an adequate opportunity to the Agents to present and substantiate their case before him, and that in holding that the claims as described in Schedules B, C and D, either did not arise out of the agreement or were outside the scope of the Reference, the umpire erred. The learned Subordinate Judge held that the umpire was in error in leaving undetermined claims described in Sch. B and Sch. D, which were within the scope of the Reference, and that the claim described in Sch. C was properly left undecided as it was outside the scope of the Reference. He also held that the Award was vitiated on account of judicial misconduct, because the Agents were not allowed by the umpire sufficient opportunity to place their case. The learned Subordinate Judge, in that view, proceeded to set aside the Award, but he declined to supersede the Reference, and left it to the parties to "appoint other arbitrators in view of cl. 20 of the agreement, for settling the dispute. " Against the order of the Subordinate Judge, the Union of India appealed to the High Court of East Punjab. Khosla, J., who heard the appeal, confirmed the order passed by the court of first instance. The learned Judge agreed with the view of the Subordinate Judge that the umpire bad been guilty of judicial misconduct. The learned Judge observed in his judgment that the claim of the Agents, as described in Schedules B and C, was not beyond the arbitration agreement. In so observing, presumably, the learned Judge committed some error. The Subordinate Judge had come to the conclusion that the claim described in Sch. C, was beyond the arbitration agreement, and no reasons were given by Khosla, J., for disagreeing with that view. Appeal 31 of 1953 under the Letters Patent, against the judgment of Khosla J., was dismissed by a 102 800 Division Bench of the High Court of East Punjab, observing that the claim detailed in Sch. B arose out of the contract, but that it was unnecessary to decide whether the claim described in Sch. C for an increase in the financing and overhead mandi charges, was properly ruled out by the umpire. In the meantime, by letter dated August 9, 1952, the Agents called upon the Government of India to appoint their arbitrator under cl. 20 of the agreement dated May 3, 1937, for a fresh adjudication of the dispute, and intimated that they had again appointed Nigam to be their arbitrator. The Government of India informed the Agents by their letter dated August 14, 1952, that they had filed an appeal against the judgment of the Subordinate Judge, Delhi, and in the circumstances, the question of appointing an arbitrator, did not arise until the final disposal of the appeal. The Government, however, without prejudice to their rights, including the right to prosecute the appeal, again appointed Rangi Lal to be arbitrator on their behalf. After the Appeal under the Letters Patent, was decided by the East Punjab High Court on Decemher 16, 1953, the arbitrators entered upon the reference. On March 1, 1954, the Agents submitted their claim, contending that the supplementary agreement dated June 20, 1942, was void and not binding upon them, and that, in any event, on the representations made on December 6, 1943, and from time to time thereafter, they were assured by the Chief Director of Purchases that the claim made by them would be favourably considered by the Government of India, and relying on these assurances, they continued to supply ghee in quantities demanded by the Government after incurring " heavy extra expenditure". They also claimed that they were constantly demanding an increase in the mandi and financing charges, but the Chief Director of Purchases, who was duly authorized in that behalf by the Government, gave repeated verbal assurances that their demands would be satisfied, and requested them to continue supplies for the successful prosecution of the war. Contending 801 that the Government of India was estopped from repudiating their claim set out in Schedules B and C, in view of all the facts and circumstances stated in the petition, the Agents prayed for a declaration that the supplementary agreement dated June 20, 1942, was void and not binding upon them, and for a decree for payment of Rs. 27,48,515 with interest at the rate of 6 per cent. per annum from March 1, 1954, and, in the, alternative, for a decree for Rs. 25,63,037 7 3, with interest at the rate of 6 percent. per annual from March 1, 1954, till recovery. This claim of the Agents was resisted by the Government of India. Inter alia, it was denied that any assurances were given by the Director of Purchases, or that the Agents continued to supply thee relying upon such alleged assurances. It was asserted that the Agents continued to supply thee without insisting upon any modification of the agreement, because they found, and it must be presumed that they found, it profitable to do so under the terms fixed under the supplementary contract dated June 20, 1942. The claims made for the additional buying remuneration, for mandi charges and for establishment and contingency charges, were denied. It was urged that, in any event, the claim for additional buying remuneration and for mandi charges and for reimbursement of establishment and contingencies, was not covered by cl. 20 of the agreement, under which the submission to arbitration was made, and the arbitrators had no jurisdiction to adjudicate upon those claims. On the claim made by the Agents, and the denial thereof, the arbitrators incorporated the points of contest in the form of certain issues. On May 2, 1954, the arbitrators made an award rejecting the primary claim on the view that the supplementary agreement dated June 20, 1942, was for consideration and the same was valid and binding upon the Agents. On the alternative claim, they awarded, under the head of establishment and contingencies, Rs. 80,994 12 6, being the actual loss which, in their view, the Agents had suffered, and Rs. 11,27,965 11 3, in addition to the amounts received by the Agents from the Government 802 for mandi and financing charges. The arbitrators accordingly awarded an amount of Rs. 13,03,676 12 6 with future interest from November 15, 1949, till the V. date of realization, and costs. The Union of India The award was filed in the court of the Commercial Subordinate Judge, Delhi, on June 2, 1954. The Government of India applied under sections 30 and 33 of the Indian Arbitration Act, to set aside the award on the grounds that it was invalid, that it had been improperly procured, and that it was vitiated on account of judicial misconduct of the arbitrators. The Commercial Subordinate Judge held that the arbitrators had committed an error apparent on the face of the award in ordering the Union to pay to the Agents additional remuneration and financing and overhead charges, but, in his view, specific questions having been expressly referred for adjudication to the arbitrators, the award was binding upon the parties and could not be set aside on the ground of an error apparent on the face thereof. The learned Judge, accordingly, rejected the application for setting aside the award. Against the order made by the Subordinate Judge, an appeal was preferred by the Union of India to the High Court of East Punjab at Chandigarh. At the hearing of the appeal, counsel for the Agents sought to support the award on the plea that certain questions had been specifically referred to the arbitrators, and it was open to the arbitrators to make the award which they made, on the basis of quantum meruit. The High Court held that there was no specific reference of any questions of law to the arbitrators, and the decision of the arbitrators was not conclusive and was open to challenge, because it was vitiated by errors apparent on the face of the award. The High Court reversed the order passed by the Subordinate Judge, and set aside the award of the arbitrators, holding that there was no "legal basis for awarding any compensation" to the Agents for any loss which they might have sustained. This appeal has been filed with leave of the High Court under el. 133 (1)(a) of the Constitution. 803 The extent of the jurisdiction of the court to set aside an award on the ground of an error in making,,,,,,. the award is well defined. The award of an arbitrator may be set aside on the ground of an error on the face thereof only when in the award or in any document incorporated with it, as for instance, a note appended by the arbitrators, stating the reasons for his decision, there is found some legal proposition which is the basis of the award and which is erroneous Champsey Bhara and Company vs Jivaraj Balloo Spinning and Weaving Company, Limited (1). If, however, a specific question is submitted to the arbitrator and he answers it, the fact that the answer involves an erroneous decision in point of law does not make the award bad on its face so as to permit of its being set aside In the matter of an arbitration between King and Duveen and Others (2 ) and Government of Kelantan vs Duff Development Company Limited (3). Was the reference made by the parties to the arbitrators a specific reference, that is, a reference inviting the arbitrators to decide certain. questions of law submitted to them? If the reference is of a specific question of law, even if the award is erroneous, the decision being of arbitrators selected by the parties to adjudicate upon those questions, the award will bind the parties. In the reference originally made to the arbitrators by the letter of the Agents on July 1, 1946, and the reply of the Government dated July 10, 1946, a general reference of the dispute was made in terms of el. 20 of the agreement. Even though the award made on that reference, was set aside by the Subordinate Judge, the arbitration was not superseded, and the reference was expressly kept alive, reserving an opportunity to the parties to appoint fresh arbitrators pursuant to the agreement, for settling the dispute; and by letters respectively dated August 2, 1952, and August 14, 1952, a general reference was again made to the arbitrators. Paragraph 14 of the letter written by the Agents on August 2, 1952, evidences an intention to serve the notice under cl. 20 (1) L.R. 5o I.A. 324. (2) L.E. (1913) 2 K.B.D. 32. (3) L.R. 1923 A.C. 395. 804 of the agreement. Issues were undoubtedly raised by the arbitrators, but that was presumably to focus the attention of the parties on the points arising for adjudication. The Agents had made their claim before the arbitrators, and the claim and the jurisdiction of the arbitrators to adjudicate upon the claim, were denied. The arbitrators were by the terms of reference only authorized to adjudicate upon the disputes raised. There is no foundation for the view that a specific reference, submitting a question of law for the adjudication of the arbitrators, was made. We agree, therefore, with the view of the High Court that the reference made, was a general reference and not a specific reference on any question of law. The award may, therefore, be set aside if it be demonstrated to be erroneous on the face of it. The original agreement dated May 3,1937, was modified by the supplementary agreement dated June 20, 1942, and the arbitrators have held that the modified agreement was binding upon the Agents. By the agreement as modified, a graded scale was fixed for the establishment and the contingencies to be paid to the Agents, and also for the mandi charges and overhead expenses. The arbitrators still proceeded to award an additional amount for establishment and contingencies and an additional amount for mandi charges. By el. 14(a), read with el. 12(b) (2) of the agreement, the rate at which establishment and contingency charges were to be paid, was expressly stipulated, and there is no dispute that the Government of India have paid to the Agents those charges at the stipulated rate for thee actually purchased. The award of the arbitrators shows that the amount actually received from the Government, totalled Rs. 6,04,700 9 0, whereas, according to the accounts maintained by the Agents, they had spent Rs. 6,77,542 0 3. Granting that the Agents had incurred this additional expenditure under the head ` establishment and contingencies ', when the contract expressly stipulated for payment of charges at rates specified therein, we fail to appreciate on what ground the arbitrators could ignore the express 805 covenants between the parties, and award to the Agents amounts which the Union of India had not agreed to pay to the Agents. The award of the arbitrators, awarding additional expenses under the head of establishment and contingencies, together with interest thereon, is on the face of it erroneous. Before the arbitrators, a number of arhatias who supplied thee to the Agents, appeared and produced extracts from their books, showing the amounts actually due to them from the latter. Detailed charts, showing the total amount due under each head of expenditure to each arhatia, were produced. The arbitrators were satisfied that the statements produced, reflected a general rise in prices and cost of labour. Taking into consideration the fact that the other persons were buying thee at rates considerably in excess of the stipulated rates, the arbitrators held that the Agents were entitled to be reimbursed to the extent of Rs. 11,27,965 11 3. But the terms of the contract, stipulating the rate at which the financing and overhead charges were to be paid under el. 13(a) read with cl. 12(b), remained binding so long as the contract was not abandoned or altered by mutual agreement, and the arbitrators had no authority to award any amount in excess of the amount expressly stipulated to be paid. Mr. Chatterjee, on behalf of the Agents, submitted that the circumstances existing at the time when the terms of the contract were settled, were "entirely displaced" by reason of the commencement of hostilities in the Second World War, and the terms of the contract agreed upon in the light of circumstances existing in May, 1937, could not, in view of the turn of events which were never in the contemplation of the parties, remain binding upon the Agents. This argument is untrue in fact and unsupportable in law. The contract was modified on June 20, 1942, by mutual consent, and the modification was made nearly three years after the commencement of the hostilities. The Agents were fully aware of the altered circumstances at the date when the modified schedule for payment of overhead charges, contingencies and buying remuneration, was agreed 806 upon. Again, a contract is not frustrated merely because the circumstances in which the contract was made, are altered. Section 56 of the Indian Contract Act provides " A contract to do an act which, after the contract is made, becomes impossible, or, by reason of some event which the promiser could not prevent, unlawful, becomes void when the act becomes impossible or unlawful." Performance of the contract had not become impossible or unlawful; the contract was in fact performed by the Agents, and they have received remuneration expressly stipulated to be paid therein. The Indian Contract Act does not enable a party to a contract to ignore the express covenants thereof, and to claim payment of consideration for performance of the contract at rates different from the stipulated rates, on some vague plea of equity. " The parties to an executory contract are often faced, in the course of carrying it out, with a turn of events which they did not at all anticipate a wholly abnormal rise or fall in prices, a sudden depreciation of currency, an unexpected obstacle to execution, or the like. Yet this does not in itself affect the bargain they have made. If, on the other hand, a consideration of the terms of the contract, in the light of the circumstances existing when it was made, shows that they never agreed to be bound in a fundamentally different situa tion which has now unexpectedly emerged, the contract ceases to bind at that point not because the court in its discretion thinks it just and reasonable to qualify the terms of the contract, but because on its true construction it does not apply in that situation. When it is said that in such circumstances the court reaches a conclusion which is 'just and reasonable ' (Lord Wright in Constantine 's case(1) or one 'which justice demands ' (Lord Sumner in Hirji Mulji vs Cheong Yue Steamship Co. Ltd. (2) this result is arrived at by putting a just construction upon the contract in accordance with an 'implication. . from the (1) , 186. (2) , 510 807 presumed common intention of the parties ' speech of Lord Simon in British Movietonews Ltd. vs London and District Cinemas Ltd. (1). There is no general liberty reserved to the courts to absolve a party from liability to perform his part of the contract, merely because on account of an uncontemplated turn of events, the performance of the contract may become onerous. That is the law both in India and in England, and there is, in our opinion, no general rule to which recourse may be had as contended by Mr. Chatterjee, relying upon which a party may ignore the express covenants on account of an uncontemplated turn of events since the date of the contract. Mr. Chatterjee strenuously contended that in England, a rule has in recent years been evolved which did not attach to contracts the same sanctity which the earlier decisions had attached, and in support of his contention, he relied upon the observations made in British Movietonews Ld. vs London and District Cinemas Ld. In that case, Denning, L.J., is reported to have observed : ". . no matter that a contract is framed in words which taken literally or absolutely, cover what has happened, nevertheless, if the ensuing turn of events was so completely outside the contemplation of the parties that the court is satisfied that the parties, as reasonable people, cannot have intended that the contract should apply to the new situation, then the court will read the words of the contract in a qualified sense; it will restrict them to the circumstances contemplated by the parties; it will not apply them to the uncontemplated turn of events, but will do therein what is just and reasonable. " But the observations made by Denning, L.J., upon which reliance has been placed, proceeded substantially upon misapprehension of what was decided in Parkinson & Co. Ld. vs Commissioners of Works (3), on which the learned Lord Justice placed considerable reliance. The view taken by him, was negatived in (1) L.R. 1052 A.C. 166 at pp. 185 & 186. (2) (1951) 1 K.B.D. 19O, 201, (3) (1949) 2 K.B. D. 632. 103 808 appeal to the House of Lords in the British Movietonew 's case (1952) A.C. 166 already referred to. In lndia, in the codified law of contracts, there is nothing which justifies the view that a change of circustamences, " completely outside the contemplation of parties" at the time when the contract was entered into, will justify a court, while holding the parties bound by the contract, in departing from the express terms thereof. Parkinson and Co. Ld. vs Commissioners of Works (1) was a case in which on the true interpretation of a contract, it was held, though it was not so expressly provided, that the profits of a private contractor, who had entered into a contract with the Commissioners of Works to make certain building constructions and such other additional constructions as may be demanded by the latter, were restricted to a fixed amount only if the additional quantity of work did not substantially exceed in value a specified sum. The Court in that case held that a term must be implied in the contract that the Commissioners should not be entitled to require work materially in excess of the specified sum. In that case, the Court did not proceed upon any such general principle as was assumed by Denning, L.J., in the British Movietonews Ld. vs London and District Cinemas Ld. We are, therefore, unable to agree with the contention of Mr. Chatterjee that the arbitrators, were justified in ignoring the express terms of the contract prescribing remuneration payable to the Agents, and in proceeding upon the basis of quantum meruit. Relying upon section 222 of the Indian Contract Act, by which duty to indemnify the agent against the consequences of all lawful acts done in exercise of the authority conferred, is imposed upon the employer, the arbitrators could not award compensation to the agents in excess of the expressly stipulated consideration. The claim made by the Agents was not for indemnity for consequences of acts lawfully done by them on behalf of the Government of India; it was a claim for charges incurred by them in excess of those stipulated. Such a claim was not a claim for (1) (1949) 2 K.P.D. 632. (2) (1951) 1 K.B.D. 190, 201. 809 indemnity, but a claim for enhancement of the rate of the agreed consideration. Assuming that the Agents relied upon assurances alleged to be given by the Director in charge of Purchases, in the absence of an express covenant modifying the contract which governed the relations of the Agents with the Government of India, vague assurances could not modify the contract. Ghee having been supplied by the Agents under the terms of the contract, the right of the Agents was to receive remuneration under the terms of that contract. It is difficult to appreciate the argument advanced by Mr. Chatterjee that the Agents were entitled to claim remuneration at rates substantially different from the terms stipulated, on the basis of quantum meruit. Compensation quantum meruit is awarded for work done or services rendered, when the price thereof is not fixed by a contract. For work done or services rendered pursuant to the terms of a contract, compensation quantum meruit cannot be awarded where the contract provides for the consideration payable in that behalf Quantum meruit is but reasonable compensation awarded on implication of a contract to remunerate, and an express stipulation governing the relations between the parties under a contract, cannot be displaced by assuming that the stipulation is not reasonable. It is, therefore, unnecessary to consider the argument advanced by Mr. Chatterjee that a claim for compensation on the basis of quantum meruit, is one which arises out of the agreement within the meaning of cl. 20. Granting that a claim for compensation on the basis of quantum meruit, may be adjudicated upon by the arbitrators in a reference made under el. 20 of the agreement, in the circumstances of the case before us, compensation on that basis could not be claimed. The plea that there was a bar of res judicata by reason of the decision in the Letters Patent Appeal No. 31 of 1953, has, in our judgment, no force. The Subordinate Judge set aside the award on the ground that there had been judicial misconduct committed by the umpire and also on the view that the claims made, as described in Schedules B and D, were not outside 810 the competence of the arbitrators. The High Court in appeal under the Letters Patent, did confirm the order, setting aside the award; but there was no binding decision between the parties that the claim described in Sch. B, that is, the claim for establishment and contingency charges, was within the competence of the arbitrators in reference under el. 20.It may be observed that according to the High Court of East Punjab in the Appeal No. 31 of 1953, under the Letters Patent, it was not necessary to express any opinion whether the claim in Sch. C was within the competence of the arbitrators, and the claims described in Sch. D does not appear to have been agitated in the second arbitration proceeding. We, accordingly, agree with the view of the High Court that the Award of the arbitrators was liable to be set aside because of an error apparent on the face of the award. In this view, the appeal fails and is dismissed with costs. Appeal dismissed.

The appellant 's workmen were represented by a Union called Kamdar Mandal Cement Works, Porbandar. The registration of the said union was cancelled and that led to the formation of two Unions, the Cement Kamdar Mandal and Cement Employees Union. The Cement Kamdar Mandal gave two notices one after another to the appellant, purporting to terminate two previous awards, wherein the defunct union represented the workmen. Thereafter the Mandal presented fresh demands and the dispute was referred to the Tribunal. The second union, the Cement Employees ' Union which represented the majority of the appellant 's workmen at Porbandar had been impleaded in the proceedings. The appellant raised preliminary objections before the Tribunal against the competency of the reference inter alia on the ground that the award in question by which the parties were bound had not been duly terminated under section 19(6) of the Act in as much as the union which purported to terminate the said award represented only a minority of workmen bound by it. The Tribunal by its interlocutory judgment found against the appellant. The dispute between the parties centres round the question as to who can issue the notice terminating the award on behalf of workmen who are bound by the award as a result of section 18 of the Act. The question therefore for decision is whether a registered trade union representing a minority of workmen governed by an award can give notice to the other party intimating its intention to terminate the award under section 19(6) of the . Held, that the effect of section 18 is that an award properly made by an industrial tribunal governs the employer and all those who represent him under section 18(c) and the employees who are parties to the dispute and all those who are included in section 18(b) and (d). On a fair and reasonable reading of section 19(6), the true position is that, though the expression "any party bound by the award" refers to all workmen bound by the award, notice to terminate the said award can be given not by an individual workman but by a group of workmen acting collectively either through their union or otherwise, and it is not necessary that such a group of workmen acting collectively either through their union or otherwise, should represent the majority of workmen bound by the award. Thus it is open to a minority of workmen or a minority union to terminate 158 the award by which they, along with other employees, are bound just as much as it is open to them to raise an industrial dispute under the Act. The Central Provinces Transport Services Limited vs Raghunath Gopal Patwardhan; , and The Newspapers Limited vs The State Industrial Tribunal, U. P.; , , referred to.

Civil Appeal No. 1188 of 1976. Appeal by special leave from the Award dated 27 2 1976 of the Industrial Tribunal, Maharashtra in Complaints (I.T.) Nos. 48 53 and 55 63 of 1973 in Ref. (I.T.) No. 375 of 1972 published in the Maharashtra Govt. Gazette L dated 3 6 1976. M. K. Ramamurthi and Naunit Lal for the Appellant. Sachin Chaudhuri and B. R. Aggarwala for the Respondent. The Judgment of the Court was delivered by JASWANT SINGH, J. This appeal by special leave is directed against the common award dated February 27, 1976 of the Industrial Tribunal, 615 Maharashtra, Bombay rejecting as not maintainable complaints Nos. 48 of 1973 to 63 of 1973 made by the appellants against the respondent (hereinafter referred to for brevity as 'the Company) under section 33(A) of the (hereinafter called 'the Act ') in reference (IT) No. 336 of 1972. The facts material for the purpose of this appeal are: The appellants (hereinafter described as 'Workmen ') were employees of the Company. During the pendency of the above mentioned reference No. 336 of 1972 before the Second Labour Court, Bombay for adjudication of a dispute, 344 workmen of the Company including the appellants went on an indefinite peaceful strike with effect from August 30, 1972, pursuant to the strike notice given to the Company by their registered union called 'The Association of Chemical Workers ' in support of its demand for re instatement of three of the union leaders who had been dismissed by the Company. On the even date i.e. August 30, 1972, the Company put up a notice stating that the strike embarked upon by the workmen was illegal and those participating in the said strike were liable to disciplinary action for misconduct as per Company 's certified standing orders Nos. 22(b) and 24(a). On September 7, 1972, the Company issued notices to the appellants and 10 others asking them to report for duty on or before September 18, 1972, failing which their absence would be construed as voluntary abandonment of service and their names would be struck off from the muster rolls of the Company. On September 19, 1972, the Company sent separate communications to the appellants and 10 others informing them that since "by not reporting for duty they had confirmed its presumption that they were no longer interested to continue in service of the Company and had totally abandoned the Company 's service" their names had been struck off from the rolls of the Company from that date. Along with its communication, the Company sent a cheque to each one of the appellants for the amount due to him on account of gratuity, leave salary and one month 's salary. On September 26, 1972, the appellants wrote to the Company returning the cheques sent by the Company and stating that its letter dated September 7, 1972 which had reached them only on September 20, 1972 had already been replied by letter dated September 21, 1972, that they were interested in the service of the Company and had neither voluntarily abandoned the service of the Company and did they wish to do so, and that they would, report for work the moment the strike was called off 616 by their union. On October 23, 1972 the Company wrote to the appellants acknowledging their letter dated September 26, 1972 but stating therein that it did not wish to revise its earlier decision under which their names had been struck off the rolls. It is to be noted that in its letter the Company did not refute the averment made by the appellants in their letter dated September 26, 1972 that the Company 's letter dated September 7, 1972 had reached them only on September 20, 1972. On the even date i.e., September 26, 1972, the appellants ' union wrote to the Labour Commissioner complaining about the arbitrary termination of service of 25 workmen (including the appellants) and emphasising that they had not abandoned service. On October 2, 1972, the appellants and other striking workmen addressed letters to the Works Manager of the Company protesting against the action of the Company in removing them from service and asserting that the said action was by way of victimization for their participation in the strike. On March 30, 1973, the union made a formal demand calling upon the Company to re instate the appellants and others who had been removed from service on the ground that they had abandoned their service. On May 19, 1973, certain proposals for settlements were made on behalf of the employees whose services were terminated by the Company and requesting the Company for re instatement of the appellants and 10 other workmen. On July 5, 1973, the union wrote a letter to the Assistant Commissioner of Labour, Naupada, soliciting his intervention in the dispute concerning the re instatement of the 16 employees including the appellants. The Assistant Commissioner thereupon summoned the parties for discussion on July 19, 1973 but his attempts at conciliation did not bear any fruit. Thereafter, the appellants made the aforesaid complaints before the Industrial Tribunal with the result as stated above. Appearing in support of the appeal Mr. Ramamurti has vehemently urged that the action of the Company in removing the names of the appellants from its rolls was illegal and arbitrary, that the appellants had not abandoned the Company 's service, that at any rate the termination of their services could only be in terms of the Company 's standing orders and since the standing orders did not provide for treating the workmen as having abandoned service in case they were absent in connection with the notified strike, the Company 's action was manifestly illegal and invalid. Three questions arise for consideration in this case, namely: (1) what is the true meaning of the expression 'abandonment of service '; 617 (2) whether in the circumstances of the case it could be said that the appellants had voluntarily abandoned the service of the Company; and (3) whether the action of the Company in removing the names of the appellants from its rolls on the presumption that they had abandoned service would constitute a change in the conditions of service of the appellants ? We will deal with these questions seriatim: Re. Question No. 1: In the Act, we do not find any definition of the expression 'abandonment of service '. In the absence of any clue as to the meaning of the said expression, we have to depend on meaning assigned to it in the dictionary of English language. In the unabridged edition of the Random House Dictionary, the word 'abandon ' has been explained as meaning 'to leave completely and finally; for sake utterly; to relinquish, renounce; to give up all concern in something '. According to the Dictionary of English Law by Earl Jowitt (1959 edition) 'abandonment ' means 'relinquishment of an interest or claim '. According to Blacks Law Dictionary 'abandonment ' when used in relation to an office means 'voluntary relinquishment. It must be total and under such circumstances as clearly to indicate an absolute relinquishment. The failure to perform the duties pertaining to the office must be with actual or imputed intention, on the part of the officer to abandon and relinquish the office. The intention may be inferred from the acts and conduct of the party, and is a question of fact. Temporary absence is not ordinarily sufficient to constitute an abandonment of office '. From the connotations reproduced above it clearly follows that to constitute abandonment, there must be total or complete giving up of duties so as to indicate an intention not to resume the same. In Buckingham Co. vs Venkatiah & Ors. it was observed by this Court that under common law an inference that an employee has abandoned or relinquished service is not easily drawn unless from the length of absence and from other surrounding circumstances an inference to that effect can be legitimately drawn and it can be assumed that the employee intended to abandon service. Abandonment or relinquishment of service is always a question of intention, and normally, such an intention cannot be attributed to an employee without adequate evi 618 dence in that behalf. Thus, whether there has been a voluntary abandonment of service or not is a question of fact which has to be determined in the light of the surrounding circumstances of each case. Question No. 2: This takes us to the consideration of the second question, namely, whether in the circumstances of the instant case, it could be said that the appellants had voluntarily abandoned the service of the Company. It may be recalled that the appellants had along with 229 other workmen gone on indefinite and peaceful strike which ended on October 22, 1972) in response to the strike notice given by the union to the Company to press its demand for re instatement of its three dismissed leaders and had not only by their letters dated September 21, 1972 and September 26, 1972 unequivocally intimated to the Company that they did not intend to abandon the service but had also returned the cheques sent to them by the Company on account of their leave salary gratuity etc. The appellants stand that the letter of the Company dated September 7, 1972 was received by them on September 20, 1972 and not earlier was never denied or refuted by the Company in the correspondence that passed between the parties. Thus, there was nothing in the surrounding circumstances or the conduct of the appellants indicating or suggesting an intention on their part to abandon service which in view of the ratio of Gopal Chandra Misra 's case, can be legitimately said to mean to detach, unfasten, undo or untie the binding knot or link which holds one to the office and the obligations and privileges that go with it Their absence from duty was purely temporary and could by no stretch of imagination be construed as voluntary abandonment by them of the Company 's service. In Express Newspaper (P) Limited vs Michael Mark & Anr.,(2) which is on all fours with the present case, it was held that if the employees absent themselves from the work because of strike in enforcement of their demands, there can be no question of abandonment of employment by them. In the present case also the appellant 's absence from duty was because of their peaceful strike to enforce their demand. Accordingly, we are of the view that there was no abandonment of service on the part of the appellants. Re Question No. 3: Let us now advert to the last but the most crucial question, namely, whether the action of the Company in removing the names of the appellants from its rolls during the pendency of the proceedings before the Labour Court in respect of the industrial dispute on the presumption that they had abandoned Company 's service 619 constituted an alteration in the conditions of service applicable to them immediately before the commencement of the said proceedings which prejudiciously affected them. Although the learned counsel appearing on behalf of the respondent has taken us through the certified standing orders as applicable to the appellants, he has not been able to point out anything therein to indicate that the company could terminate the services of the appellants on the ground of abandonment of service because of their going on strike in enforcement of their demands. Thus, their being no provision in the certified standing orders by virtue of which the Company would have terminated the services of the appellants in the aforesaid circumstance, the impugned action on the part of the Company clearly amounted to a change in the condition of service of the appellants during the admitted pendency of the industrial dispute before the Labour Court which adversely affected them and could not be countenanced. We are fortified in this view by the aforesaid decision of this Court in Express Newspapers (P) Limited vs Michael Mark & Anr. (Supra) where repelling an identical contention to the effect that the failure of the workmen to return to work by a notified date clearly implied abandonment of their employment, it was held that the management cannot by imposing a new term of employment unilaterally convert the absence of work into abandonment of employment. It was further held in that decision that if the strike was in fact illegal, the management could take disciplinary action against the employees under the standing orders and dismiss them. If that were done, the strikers would not have been entitled to any compensation under standing orders but that was not what the appellants purported to do and the respondents were, therefore, entitled to relief. For the foregoing reasons, we are unable to uphold the impugned action of the Company and the award under appeal which are manifestly illegal. In the result, we allow the appeal, set aside the aforesaid award of the Industrial Tribunal and direct the Company to reinstate the appellants. The appellants shall also be entitled to the costs of the appeal. A point which requires to be clarified and has been brought to the notice of the Court after the judgment was delivered relates to back wages from 19 9 72 to the date of reinstatement. The rule in such cases is that where reinstatement has been directed by the Court, the entire back wages must follow as a matter of course. Of course there is a discretion in the court having regard to special circumstances if any to modify this normal rule. In the present case the period stretches over six years and Shri Sachine Chaudhary brings to our notice the fact that 620 back wages have to be computed, if ordered in full, on a much higher scale because of two settlements which have raised the scales of wages substantially. While there is no case specifically put forward that the workmen concerned have been employed elsewhere during this period, still we take a total view the whole case and direct that for the entire period from 1972 to the date of reinstatement, 75 per cent of the wages will be paid to all the workmen concerned on the scales and revised scales as the case may be. P.B.R. Appeal allowed.

In support of their demand for reinstatement of certain dismissed union leaders a number of workmen, including the appellants had gone on an indefinite peaceful strike. The Company (respondent) put up a notice that the strike was illegal and that the striking workmen were liable to disciplinary action for misconduct. A week later, the company issued individual notices to the appellants and other workmen calling upon them to report for duty, failing which their absence would be construed as voluntary abandonment of service and that their names would be struck off the muster rolls. A few days later the company informed the workmen concerned that by not reporting for duty they had confirmed its presumption that they were no longer interested to continue in its service that they had totally abandoned its service. The names of the appellants had been struck off the rolls. In final settlement of the workers ' claims for gratuity, leave salary and a month 's salary a cheque was sent to each of the appellants. But the appellants returned the cheques to the company pointing out that they were interested in the service of the company and that they had neither voluntarily abandoned the service nor did they wish to do so and that they would report for work as soon as the strike was called off. Thereafter, although there were prolonged negotiations between the union and the company, the company did not take them into its service. Since a dispute was pending before an Industrial Tribunal application was made under section 33A of the . The Tribunal rejected the workers ' demand for reinstatement. In appeal to this Court it was contended on behalf of the appellants, that (i) removing their names from the rolls was illegal and arbitrary; (ii) the appellants had not voluntarily abandoned the company 's service and (iii) since termination of service could only be in accordance with standing orders, and since the standing orders in this case did not provide for treating the workmen as having abandoned the service in case they were absent in connection with a strike, the company 's action in terminating the appellants ' services was illegal. Allowing the appeal, ^ HELD: The impugned action of the company and the award of the Tribunal were illegal. [619 E] 1. To constitute abandonment there must be total or complete giving up of duties so as to indicate an intention not to resume the same. Failure to perform duties pertaining to an office must be with actual or imputed intention on 614 the part of the officer to abandon and relinquish the office. The intention may be inferred from the acts and conduct of a party and is a question of fact which could be determined in the light of surrounding circumstances in each case. Temporary absence is not ordinarily sufficient to constitute abandonment of office. [617 D F] Buckingham Co. vs Venkatiah & Ors., ; ; referred to. The absence of workmen from duty was purely temporary and cannot be construed as their voluntary abandonment of the company 's service. There was nothing in the surrounding circumstances or the conduct of the workmen indicating or suggesting an intention on their part to abandon service. To abandon service means to detach, unfasten, undo or untie the binding knot or link which holds one to the office and obligations and privileges that go with it. [618 C E] In the instant case the workmen went on a peaceful strike. By their letters they unequivocally intimated to the company that they did not intend to abandon service. They had returned the cheques sent to them by the company. Union of India vs Gopal Chandra Misra ; referred to. Since there was no provision in the certified standing orders, by virtue of which the company could have terminated the services of the workmen, the impugned action amounted to change in the conditions of service of the workmen during the pendency of the industrial dispute which adversely affected them. [619 A] Express Newspapers (P) Ltd. vs Michael Mark & Anr., ; applied. In cases where reinstatement had been directed by the Court it is the rule that the entire back wages must follow as a matter of course. In the special circumstances of this case the workmen are entitled to wages at 75% for the entire period from the date of termination of their services to the date of reinstatement.

Civil Appeal No. 2494 of 1969. From the Judgment and Decree dated 24 1 1969 of the Calcutta High Court in Appeal from Original Order No. 111/66. D. N. Mukherjee and N. R. Chaudhary for the Appellants. P. K. Chatterjee and Sukumar Ghosh for the Respondent. The Judgment of the Court was delivered by UNTWALIA, J. This is an appeal by certificate filed by the judgment debtors from the decision of the Calcutta High Court given in appeal from that of a learned single Judge of that Court. The facts of the case clearly demonstrate the fighting attitude of the judgment debtors to gain time for the satisfaction of the decree. On August 15, 1925 one Indera Chand Kejriwal instituted on the original side of the Calcutta High Court a suit on the basis of a mortgage against Ram Chander Saragogi, Sewbux Saraogi and Tejpal Saraogi for recovery of Rs. 38,000/ as principal and Rs. 6,082.8 annas as interest. By an equitable mortgage the property mortgaged consisted of two houses (1) No. 126, Harrison Road and (2) No. 13/2, Syed Salley Lane in the town of Calcutta. On November 26, 1926 a consent decree was passed for a sum of Rs. 41,000/ together with interest thereon @ 6.3/4% per annum. On failure of the judgment debtors to pay the amount the mortgaged properties were to be sold. On 3rd of January, 1929 it was ordered and 158 decreed that the mortgaged property be sold. On 16th April, 1934 Indera Chand Kejriwal by a deed of assignment assigned his interest in the decree to Mahadeo Prasad Tibrewalla, the respondent in this appeal. On the application of the assignee decree holder an order was made on the 8th May, 1934 substituting his name in place of the original decree holder and recording some terms of settlement between him and the judgment debtors. The amount with interest quantified on that date was Rs. 60,023.12 annas which was to carry an interest of 6.3/4% per annum. Subsequently on an application of the decree holder one Anandilal Poddar was appointed on the 14th June, 1938 a receiver of rents and profits of the mortgaged properties. A sum of Rs. 10,000/ was paid to the decree holder on the 7th September, 1939 towards part satisfaction of the decree. On the death of Ram Chander Saraogi, one of the judgment debtors, by order dated the 7th August, 1945 Smt.Parbati Devi, Ananta Kumar Saraogi and Suraj Kumar Saraogi, his heirs and legal representatives, were substituted. They are appellant Nos. 1 to 3 in this appeal. No further payment was made to the decree holder and eventually a consent order was passed by the Court on the 17th June, 1953 on the basis of the terms of settlement arrived at between the parties which were incorporated in the letter written by the Solicitor of the judgment debtors to the Solicitor of the decree holder. The terms of settlement are quoted in full in the appellate judgment of the High Court. The salient terms of the settlement may be stated as follows: (1) That the total dues on the date came to Rs. 1,10,000/ . (2) That Shri Anandilal Poddar, the receiver was to pay Rs. 35,000/ . (3) That a sum of Rs. 40,000/ was to be paid by conveying premises No. 13/2 Syed Salley Lane to the decree holder, and, (4) That a sum of Rs. 35,000/ was to be paid in cash by raising money by execution of an another mortgage of premises No. 126, Harrison Road. Anandilal Poddar paid the sum of Rs. 35,000/ . But nothing further was done by the judgment debtors pursuant to the settlement arrived at on the 17th June, 1953. Sewbux Saraogi, one of the judgment debtors, died leaving a Will in which the universal legatee was his daughter Smt.Kapurbai and the sole executor appointed therein was Motilal Jhunjhunwalla, husband of Kapurbai. On the 7th 159 June, 1965 the respondent affirmed a tabular statement for execution of the decree. A learned single judge of the Calcutta High Court dismissed that application mainly on the grounds (1) that the terms of bargain between the parties recorded on the 17th June, 1953 were entirely different from the original decree and had the effect of superseding it; the former decree, therefore, was not executable; (2) that the factum of the death of Sewbux Saraogi was not recorded and his heirs were not substituted in the tabular statement. In passing, the learned single Judge also expressed the view that the execution was barred under section 48 of the Code of Civil Procedure. On appeal by the decree holder the Appellate Bench has reversed the decision of the learned single Judge on all the points. Hence this appeal by the judgment debtors. We shall first dispose of the point of limitation. From the facts stated above it is abundantly clear that there was no bar of limitation in the present execution instituted in the year 1965. At no point of time the mortgage decree had been fully satisfied. All through steps were being taken and it was not a case where the execution was barred either under section 48 of the Code of Civil Procedure or Article 183 of the Limitation Act 1908. It was conceded and rightly so by learned counsel for the appellants that the execution was not barred under Article 136 of the . But the submission was that it was already barred when that Act came into force on the 1st of January, 1964 under Article 183 of the old Act. We have no difficulty in rejecting the argument of limitation. All through steps had been taken by the decree holder. The case was not lying dormant at any point of time for a period of more than 12 years. When in the year 1929 there was an order for sale of the mortgaged properties it appears some payments were made and finally accounts were settled in the year 1934. Thereafter the mode of execution proceeded by appointment of a receiver. A sum of Rs. 10,000/ was paid in the year 1939. In the year 1945 steps were taken for substitution of the heirs and legal representatives of Ram Chander Saraogi, one of the deceased judgment debtors. Parbati Devi, appellant No. 1, was allowed to take some steps for the satisfaction of the decree. But nothing was done. Eventually a settlement was again arrived at on the 17th June, 1953 for satisfaction of the decree but on the judgment debtors ' failure to fulfil the settlement the present proceedings were started by filing the tabular statement on the 7th of June, 1965 well within 12 years of the 17th June, 1953. The point of limitation raised on behalf of the appellants, therefore, must be rejected. 160 A statement had been made in the tabular statement that Sewbux Saraogi, one of the judgment debtors, was dead. Kapurbai, his daughter along with others were sought to be substituted in his place. Later on it transpired that she was a universal legatee under a will executed by Sewbux Saraogi. She was, therefore, undoubtedly a legal representative competent to represent the estate of Sewbux Saraogi. Even in absence of the substitution of Motilal Jhunjhunwalla, the sole executor of the will, the execution was not defective. Reference in this connection may be made to the decision of this Court in the case of The Andhra Bank Ltd. vs R. Srinivasan and Others, (1) decision relied upon by the Appellate Bench. Coming to the third and the last point it may be mentioned that the settlement arrived at on the 17th June, 1953 was not an altogether renovation of the old decree. The amount due was quantified and the mode of satisfaction was prescribed giving liberty to the judgment debtors to satisfy the decree by conveying one of the two mortgaged houses and by paying a sum of Rs. 35,000/ in cash by raising the money by mortgage of the other house. The judgment debtors did neither. The terms of settlement were silent as to what was to happen on the failure of the judgment debtors to satisfy the decree in the manner agreed upon. In such a situation it was quite legitimate to assume that the parties intended that the decree holders would be entitled to realise the dues by execution of the original mortgage decree. Reading the terms of settlement in the context of the letter of the Solicitor of the Judgment debtors it is plain to us that the order dated 17th June, 1953 had not the effect of passing a new decree in substitution of the old one. It had merely the effect of giving facility to the judgment debtors for the satisfaction of the decretal dues. On their failure to do so they were liable to be proceeded with in execution of the original mortgage decree. For the reasons stated above, we hold that there is no substance in any of the points arising in this appeal. We accordingly dismiss this appeal with costs. N.V.K. Appeal dismissed.

The act complained of is dishonest misappropriation or conversion of goods by the appellants which they had seized and as such were holding in trust to be dealt with in accordance with law. This gave a bona fide apprehension to the respondent that the goods have been criminally mis appropriated by the appellants. The S.D.M. conducted a preliminary enquiry and found a prima facie case under section 120B/409 IPC against the appellants. The S.D.M. summoned the appellants who appeared before him and prayed for their immediate discharge, which was accepted on the ground that he had no jurisdiction and he discharged the appellants. A revision petition before the Addl. Sessions Judge was dismissed on the ground that since the shortage of the goods was discovered at the time when they were produced before the Customs House, there was absolutely nothing to show that the shortage, if any, was due to the act of the appellants. The respondent went in further revision to the High Court which was allowed on the ground that no sanction was required for the prosecution of the accused appellants because they were certainly not acting in the discharge of their official duties, when they misappropriated these goods. It was argued on behalf of the appellants that (i) It had been falsely alleged in the complaint that when the S.D.M. inspected the goods and noticed the condition thereof, it was found that the seals of the four boxes were broken while the remaining three packages were completely empty but sealed; that the inventory itself, prepared by the S.D.M. falsified the prosecution allegation; (ii) That it was not alleged in the complaint with particularly as to what goods had disappeared or were removed, nor that the disappearance of some of the goods, if any, occurred after their seizure and before their deposit in the Customs House by the appellant; (iii) That even if for the sake of argument it is assumed that some of the goods were removed and set apart by the appellants after seizure, then also sanction for prosecution u/s 197 Cr. P.C. was absolutely necessary because, the seizure and removal being integrally connected with each other, the alleged act constituting the offence of criminal mis appropriation/criminal breach of trust could but reasonably be viewed as an act which includes dereliction of duty done or purporting to be done in the discharge of their official duty by the appellants; (iv) That section 197 Cr. P.C. cannot be construed too narrowly, in the sense that since the commission of offence is never a part of the official duty of a public servant, an act constituting an offence can 112 never be said to have been done or purportedly done in the discharge of official duty, as such a narrow construction, will render the section entirely otiose. Dismissing the appeal, ^ HELD: The question of sanction u/s 197 Criminal Procedure Code can be raised and considered at any stage of the proceedings. [116H, 117A] The words "Any offence alleged to have been committed by him while acting or purporting to act in the discharge of his official duty" in section 197(1) of the Code, are capable of a narrow as well as wide interpretation. If these words are construed too narrowly, the section will be rendered altogether sterile, for it is no part of an official duty to commit an offence, and never can be. In the wider sense, these words will take under their umbrella every act constituting an offence, committed in the course of the same transaction in which the official duty is performed or purports to be performed. The right approach to the import of these words lies between these two extremes. While it is not every offence committed by a public servant while engaged in the performance of his official duty, which is entitled to the protection of sec. 197(1), an act constituting an offence directly and reasonably connected with an official duty will require sanction for prosecution under the said provision. The sine qua non for the applicability of this section is that the offence charged, be it one of commission or omission, must be one which has been committed by the public servant either in his official capacity or under colour of the office held my him. [118D H, 119A] In the instant case, there was some foundation for the allegation that the goods in question had been misappropriated by the appellants sometime after their seizure and before their deposit in the Customs House. There can be no dispute that the seizure of the goods by the appellants and their being thus entrusted with the goods or having dominion over them, was an committed by them while acting in the discharge of their official duty. But the act complained of is subsequent dishonest, misappropriation or conversion of those goods by the appellants, which is the second necessary element of the offence of criminal breach of trust under section 409, Indian Penal Code. It could not be said that the act of dishonest, misappropriation or conversion complained of bore such an integral relation to the duty of the appellants that they could genuinely claim that they committed it in the course of the performance of their official duty.[119E H 120A] There is nothing in the nature or quality of the act complained of which attaches to or partakes of the official character of the appellants who allegedly did it. Nor could the alleged act of misappropriation or conversion be reasonably said to be imbued with the colour of the office held by the appellants. Therefore, on the facts of the present case, the alleged act of criminal misappropriation complained of was not committed by them while they were acting or purporting to act in the discharge of their official duty, the commission of the offence having no direct connection or inseparable link with their duties as public servant. At the most, the official status of the appellants furnished them with an opportunity or occasion to commit the alleged criminal act. Sanction of the appropriate Government was therefore not necessary for the protection of the appellants for an offence under section 409/120B Indian Penal Code. [120A B, 121D F] 113 Om Parkash vs State of Uttar Pradesh, ; , Amrik Singh vs The State of pepsu; , , Shreekantiah Rammayya Munipalli and Ors. vs State of Bombay, A.I.R. ; distinguished. Baijnath vs State of Madhya Pradesh, A.I.R. 1966, S.C. 220 at page 222 and Harihar vs State of Bihar, ; referred to.

No. 60 of 1958. Writ Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights. H. J. Umrigar and A. G. Ratnaparkhi, for the appellant. section K. Kapoor and P. Gupta, for the respondents. April 5. The Judgment of the Court was delivered by SARKAR, J. The petitioners were born in India before the commencement of the Constitution. Sometime in 1947, they went away to the territory since included in Pakistan. They used to come to India from time to time and the last time that they came, was in April, 1956. Each time they came to India, they did so on passports issued by the Government of Pakistan. In December., 1956, they applied to the Collector of Nagaur in Rajasthan where they resided, for registration as citizens of India. On December 19, 1956, the Collector of Nagaur issued certificates of registration to them under section 5(l)(a) of the . Subsequently on February 5, 1957, two of the petitioners made applications for grant of citizenship certificates to their minor children under section 5(l)(d) of that Act. On February 6, 1957, an officer of the Collectorate of Nagaur took back the registration certificates issued to petitioners Nos. 2 and 3 on the 774 representation that they were required for recording in them the names of the minor children for whose registration as citizens of India applications had been made. On February 8, 1957, notices were issued by the Collector of Nagaur canceling the registration certificates issued to the petitioners and directing them to return to Pakistan within three days. The petitioners have presented this petition for a writ quashing the order of the Collector of Nagaur canceling their registration as citizens of, and requiring them to leave, India. The respondents to this petition originally were the State of Rajasthan and the Collector of Nagaur. Subsequently, under our order notice of the petition was given to the Union of India and the Union has appeared. The only question is whether the cancellation of the registration of the petitioners as citizens of India, was valid. It was said on behalf of the respondents that the Collector had power to cancel the registration under section 10(2)(a) of the Act. That provision states, amongst other things, that the Central Government may by order deprive certain citizens of India of their citizenship "if it is satisfied that the registration was obtained by means of fraud, false representation or concealment of any material fact". The petitioners" answer to this contention was that the cancellation of their registration was not by the Central Government but by the Collector. They also contended that their registration as citizens could not be cancelled under sub sec. (2) of section 10. They pointed out that subsection (2) started with the words "Subject to the provisions of this section" and contended that the powers under that subsection could, therefore, be exercised subject to the other provisions of section 10. They then referred to sub sec. (l) of section 1.0 which so far as relevant provided, "A citizen of India who is such by registration otherwise than under cl. (a) of sub section (1) of section 5 of this Act shall cease to be a citizen of India if he is deprived of that citizenship by an order of the Central Government under this section". They contended that they became citizens of India by registration under section 5(l)(a) of the Act and 775 they could not be deprived of their citizenship under sub section (2) of section 10. On the facts of this case it is unnecessary to express any opinion on these contentions. In any event, under cl. (a) of sub section (2) of section 10 a citizen can be deprived of his citizenship only if it is proved that the registration was obtained by means of fraud, false representation or concealment of any material fact. This power cannot, therefore, be exercised unless such fraud, false representation or suppression of a material fact exists. It was contended by the respondents that the petitioners had obtained registration as citizens of India by suppressing the fact that they had earlier applied to the Government of India for long term visas for permanent settlement in India which had been refused by that Government. The making of the previous applications and their rejection are no doubt material facts. The contention however that these facts were concealed is clearly unfounded. It has been proved to our satisfaction by the production of the original applications for registration made. by the petitioners that they had mentioned the fact that their applications for permission to settle permanently in India had been rejected by the Government. As we understood learned counsel for the respondents, he also accepted this position. The only other point that was taken by the respondents was that the Collector having the power to grant the registration certificate under the had by virtue of section 21 of the , and apart from section 10(2) of the , the power to cancel it. We are entirely unable to agree that a. 21 conferred on the Collector any such power. The orders mentioned in that section are not orders of the kind contemplated in section 5 of the . It seems to us therefore that the orders canceling the registration of the petitioners as citizens were wholly illegal and unsupportable and they are accordingly set aside. The petitioners will be entitled to the costs of this application. Petition allowed.

The Custodian of evacuee properties made a declaration that two houses were evacuee properties. Notice under section 7 of the , which initiated the proceedings resulting in the declaration had been served on two persons as owners. These persons did not appear and contest the proceedings. The petitioners claimed to be entitled to certain shares in the houses. No notice under section 7 Of the Act had at any time been served on them and they had never been declared evacuees. One of the petitioners filed an appeal under the Act to the Custodian General which was dismissed as time barred. The petitioners then filed a petition under article 32 Of the Constitution of India on the ground that they were being wrongfully deprived of their shares in the houses. Held, that as no notice under section 7 of the Act had been ser ved on the petitioners, their shares in the houses had never become evacuee property nor vested in the Custodian. The petitioner who had filed the appeal did not thereby lose his rights in the houses either as the appeal did not decide any question as to such rights but was dismissed on the sole ground that it was filed beyond the time prescribed for it. Strictly, no appeal by him lay as he was not a party to the proceeding resulting in the declaration. Section 12 of the , only affects the rights of an evacuee in his property. The notification made under that section did not have the effect of extinguishing the petitioners ' rights in the houses as they had never been declared evacuees. Ebrahim Aboobaker vs Tek Chand Dolwani, ; , referred to.

iminal Appeal No. 76 of 1968. Appeal by special leave from the judgment and order dated February 8, 1968 of the Mysore High Court in Criminal Appeal No. 215 of 1966. V.M. Tarkunde, R. Jethamalani, N. H. Hingorani and K. Hingorani, for the appellant. section P. Nayar, for the respondent. The Judgment of the Court was delivered by Dua, J. This appeal by special leave is directed against the judgment and order of the Mysore High Court on appeal setting aside in part the order of the appellant 's acquittal by a Second Class Magistrate and convicting him under r. 126P(2) of the Defence of India Rules as amended in 1963 hereafter called the Rules and sentencing him to rigorous imprisonment for six months. The order of the trial court acquitting him of the offence under section 135 of the Customs Act was upheld. The appellant alighted from a service plane at H.A.L. Aero drome, Bangalore on November 16, 1963 at about 12.45 in the afternoon. E. R. Fariman, Inspector, C.I.D. had prior incriminating information about the arrival of a person whose description seemed to tally with that of the appellant. The Inspector and has staff who were on the look out waited for the appellant to take his baggage from the baggage counter. As soon as the appellant took delivery of a plastic bag and a hold all the Inspector asked the appellant to accompany him to the Security Room. On being questioned the appellant gave his name as Tara Chand though he admitted that he had travelled under the name of J. D. Shaw. In the Security Room in the presence of Panchwatdars the plastic bag and the hold all were opened and examined. From a pillow taken out of the hold all were found two tape bags containing 16 pieces of gold with foreign markings. These tape bags had been put into the pillow which was then stitched. The appellant was then produced by the Inspector before his D. section P. along with the articles seized from him. After obtaining sanction from the Collector under section 137(1) of the 910 Customs Act and under r. 126Q of the Rules Shri Rasool, Superintendent of Central Excise (P.W. 3) filed the complaint. The learned Magistrate trying the appellant found the. gold pieces to be of foreign origin. He, however, did not find any evidence establishing them to be smuggled with the result that the appellant was acquitted of the offence under section 135 of the Customs Act. The learned Magistrate did not draw any presumption against the appellant because the seizure of the gold pieces was not by the Customs authorities but by the police who thereafter handed over the gold pieces to the office of the Collector of Central Excise and Customs. While considering the case against the appellant under r. 126P(2) of the Rules, the learned Magistrate observed that according to the relevant notification issued by the Government of India on November 5, 1963 in modification of the earlier one issued under r. 126J read with r. 126X of the Rules, it is either the Assistant Collector of Central Excise or the Collector of Central Excise who can institute prosecution. These officers are not authorised to delegate the power to institute prosecution. According to the learned Magistrate the Collector of Excise had, therefore, no power to delegate the right to institute prosecutions with which healone had been clothed. Exhibit P/5 was in the circumstancesconsidered to be ineffective. On this reasoning the complainthaving not been filed by the officer competently authorised the appellant was acquitted. On appeal by the Superintendent of Central Excise and Customs (the complainant in the case) the High Court disagreed with the view taken by the learned Magistrate. It may be pointed out that the appeal by the complainant was confined only to the acquittal under r. 126P(2) of the Rules and the appellant 's acquittal under section 135 of the Customs Act was not questioned, it being conceded that there was no evidence on the record to bring the appellant 's case under section 135 of the Customs Act. The High Court relying on exhibit P/5 and the two notifications issued by the Government of India came to the conclusion that the Collector was lawfully empowered to authorise the Superintendent of Central Excise to prosecute the appellant. That Court also arrived at the conclusion that the,appellant, who was not a dealer or refiner, having a licence, was found in possession of gold, of which no declaration had been made under the law and, therefore, he was guilty of an offence punishable under r. 126P(2) of the Rules. The appeal was accordingly allowed and the appellant convicted and sentenced to rigorous imprisonment for six months. 911 In this Court Shri Tarkunde assailed the legality of the view taken by the High Court. According to him the trial court had rightly held the prosecution not to have been instituted by a duly authorised person. Let us see if the scheme of the relevant statutory provisions supports the learned counsel. Part XII A of the Rules deals with Gold Control and it con tains rules 126A to 126Z. This part was inserted in the Defence of India Rules in January 1963. Rule 126Q provides : "(1) No prosecution for any offence punishable under this Part shall be instituted against any person except by, or with the consent of, the Administrator or any person authorised by the Administrator in this behalf. (2) Nothing in rule 154 shall apply to any contravention of any provision of this Part or any order made thereunder. " The word "Administrator" was substituted for the word "Board" in September 1963. We are informed that no Administrator as defined in r. 126A(a) was appointed by the Central Government under power conferred on it by r. 126J(1). Under r. 126X the Central Government is empowered to perform all or any of the functions of the Administrator and also by notification to exercise all or any of the powers conferred on the Administrator by Part XII A if considered necessary or expedient in the public interest to do so. The Administrator who is to take suitable measures : (a) to discourage the use and consumption of gold, (b) to bring about conditions tending to reduce the demand for gold and, (c) to advise the Central Government on all matters relating to gold, is enjoined by r. 126J(3) to discharge his functions subject to the general control and directions of the Central Government. Sub rules 4 and 5 of r. 126J provide : "(4) The Administrator may by general or special order authorise such person as he thinks fit to exercise all or any of the powers exercisable by him under this Part and different persons may be authorised to exercise different powers Provided that no officer below the rank of Collector of Customs or Central Excise or Collector of a district shall be authorised to hear appeals under sub rule (3) of rule 126 M. (5) Subject to any general or special direction given or condition attached by the Administrator any 912 person authorised by the Administrator to exercise any powers may exercise these powers in the same manner and with the same effect as if they had been coffered on that person directly by this Part and not by way of authorization. " We may bear in mind the effect of sub rule (5) on the scheme. Rule 126H(2) (d) dealing with restrictions on possession and sale of gold by persons other than licensed holders lays down "(2) Save as otherwise provided in this Part, (d) no person other than a dealer licensed under this Part shall buy or otherwise acquire or agree to buy or otherwise acquire, gold, not being ornament, except, (i) by succession, intestate or testamentary, or (ii)in accordance with a permit granted by the Administrator or in accordance with such authorisation as the Administrator may, by general or special order make in this behalf : Provided that a refiner may buy or accept gold from a dealer licensed under this Part;" Turning now to the two notifications on the construction of which the fate of this case depends, we find that on January 10, 1963 the Central Government issued a notification in exercise of the powers coffered on it by r. 126X read with r. 126J(4) authorising certain officers of the Central Excise Department to exercise any or all of the powers of the Gold Board in relation to certain matters specified therein. At sl. No. 10 of the Table contained in the notification officers not inferior in rank to the Assistant Collector were authorised to exercise powers and functions in relation to the matter of "according of sanctions for the prosecution of offences" with reference to r. 126Q. We have reproduced the exact words of the entry in col. (4) of the Table. This notification was amended in certain respects on November 5, 1963. At sl. No. 10 of the amended Table officers not inferior in rank to the Assistant Collector of Central Excise Department were authorised to exercise the powers and functions in relation to the matter of "institution. of prosecution for any offence punishable under Part XII A of the Defence of India 913 Rules" with reference to r. 1260. Here again we have reprocessed the exact words used. According to Shri Tarkunde these notifications did not em power the Assistant Collector to authorise the Superintendent of Central Excise and Customs to institute the present proceedings. The Assistant Collector, said the counsel, was authorised only himself to institute them and he could not lawfully accord consent for the institution of prosecution as he purported to do under ET. We are unable to accept this submission. The actual wording of the relevant entries in all the columns of serial No. 10 in the Table of the later notification may here be reproduced. Assistant Collector of the Central Excise Department. 126Q Institution of prosecution for any offence punishable under Part XIIA of the Defence of India Rules, 1962". This has to be read along with the opening part of the earlier notification dated January 10, 1963 Which remains the principal notification and was amended only in certain particulars on November 5, 1963. According to the opening part of the principal notification the officers not inferior in rank to the officer specified in col. 2 of its Table were authorised to exercise any or all of the powers of the Gold Board in relation to the matters specified in the corresponding entries in cols. 3 and 4. In place of "Gold Board" we have to read the word "Administrator" and since no Administrator was ever appointed, the powers and functions entrusted to him were at the relevant time being exercised by the Central Government. We may point out that it was apparently by oversight that the word "Administrator" was not substituted for the expression "Gold Board" in the noti fication though in September 1963 such substitution had been effected by appropriate amendment in the relevant rules. This was not controverted at the Bar and indeed no point was sought to be made on this ground. It would thus be seen that in determining the scope and extent of the powers of the officers authorised in the Table of the Notification to exercise the powers and functions of the Administrator, actually exercised by the Central Government (there being no Administrator appointed under the rules), we have to see the nature of the power and function mentioned in col. 4 and examine it by ' reference to the rule mentioned in col. 3 in the light of the expression "in relation to the matters specified" in the notification which, in our opinion, to some extent widens the scope of the powers and functions de legated by the notification. 16 L694 SupCI/71 914 Under r. 126Q as read in the light of the entries at serial No. 10 of the notification prosecution for an offence punishable under Part XII A can, in our opinion, be instituted by or with the consent of an officer not inferior in rank to the Assistant Collector of the Central Excise Department. In exhibit P/5 dated September 4, 1964 Shri V. Parthasarathy, Collector of Central Excise accorded his sanction to the prosecution of the appellant as required under r. 1260 of the Defence of India Rules. He did so in exercise of the powers conferred on him by the two notifications mentioned above. The offence for which the consent was given was described in this document as under "WHEREAS Shri Tarachand s/o Deviraj (Devi chand) Room No. 4, Mistry Bungalow, Duncan Road, Bombay 4was found to have acquired gold not being ornamentexcept by succession, intestate, or testamentary or in accordancewith the permit granted, either by the Administrator or by the Deputy Secretary in the office of the Gold Control Administrator, Bombay, duly authorised in this behalf by the Government of India vide their notification No. F. 1/8/63 GC dated 20 10 1963, 16 pieces of gold of 10 tolas each bearing markings as to its origin and purity contrary to the pro visions of rule 126H(d) of the Defence of India Amendment Rules. WHEREAS any person having in his possession or in his control any quantity of gold or buy or otherwise acquires or accepts gold in contravention of any provisions of Part XII A of the Defence of India Rules renders himself liable for punishment under Rule 126P(2). And on careful study of the material placed before me and satisfying myself that the said Shri Tarachand is liable to action under rule 126P(2) of the Defence of India Amendment Rules, 1963 for reasons mentioned above, I. V. Parthasarathy, Collector of Central Excise, Mysore Collectorate, Bangalore, in exercise of the powers conferred on me by the Government of India in their Notification F. No. 25/1/63 GCR dated 5 11 63 issued under Rule 126J read with Rule 126 X of the Defence of India Amendment Rules do hereby accord consent for the institution of prosecution of the said Shri Tarachand as required under Rule 126 Q of the Defence of India Amendment Rules, 1963. " 915 This authority, in our opinion, quite clearly falls within the notification read as a whole and the High Court was right in so construing it. The submission that these notifications must be construed strictly because by these instruments the authority to prosecute is delegated and so construed they should be held to confer power only to prosecute but not to accord consent to the apperant 's prosecution by some other person or authority has not impressed us. The attempt by the appellant 's learned counsel in this connection to equate these notification with powers of attorney does not carry the matter any further. The plain reading of the relevant entries in the notifications leaves no doubt in our mind as to its meaning, scope and effect. It quite clearly authorises the Collector to exercise power and function in relation to the matter of institution of prosecution for any offence punishable under Part XII A of the Rules referred to in r. 126Q. Keeping in view the multifarious activities of the higher officers of the Central Excise Department it seems to us that after the responsible officers of this Department not inferior in rank to the Assistant Collector had applied their mind and come to a decision as to the desirability of starting the prosecution in a given case further steps in the matter of actual prosecution including the drafting and presentation of the complaint can be lawfully carried out by others: That this is the real object and purpose of the notifications Is clearly brought out on plain reading of their language. To hold otherwise, as desired by 5hri Tarkunde, would not only mean unduly straining the unambiguous statutory language but would also tend to thwart, instead of effectuating, their real purpose. We are thus in agreement with the view taken by the High Court. The counsel next submitted that the charge levelled against the appellant was different from the one for which he has been convicted. In any event the charge framed, according to the counsel, was vague and it has caused him prejudice in his defence. Here again, we are unable to agree. In the complaint all the relevant facts were stated quite clearly and it was emphasised that the appellant had been found in possession of 16 pieces of gold with foreign markings ingeniously concealed inside long tabular pouches, in turn hidden inside a pillow case. He was stated to be guilty inter alia of offences punishable under r. 126P(2). The second charge framed by the court was as follows : "That you on or about the 16th November, 1963 at about 12.45 hours at H.A.L. Aerodrome, Bangalore, alighted from the plane No. 105 which arrived from Bomay and when you and your articles were searched, 17 L694 Sup CI/71 916 you were found in possession of 16 pieces of gold each bearing markings, as to its foreign origin and purity weighing 10 tolas each, having illegally imported into India in contravention of prohibition imposed by the Ministry of Finance Notification No. 1211 F1/48 dated 25th August, 1948, and without permit issued by the Gold Control Authorities as required under Rule 126H(d) under the Defence of India Amendment Rules, 1963 and thereby committed an offence under Rule 126P(2) r/w 1261(10) of the Defence of India Amendment Rules, 1963 relating to Gold Control and within my cognizance. " The appellant never complained that this charge was vague or outside the complaint. Indeed in his statement in court the appellant has admitted all the relevant facts alleged by the prosecution. The facts alleged and proved clearly bring the appellant 's case within the mischief of rr. 126H(2) (d) and 126P(2). Rule 126H(2) (d) has already been reproduced earlier. Under r. 126P(2) (ii) whoever has in his possession or under his control any quantity of gold in contravention of any provision of Part XII A is punishable with imprisonment for a term of not less than six months and not more than two years and also with fine. All the relevant salient facts alleged by the prosecution having been admitted by the appellant there can hardly be any ques tion of prejudice having been caused to him by the wide language of the complaint and the charge, assuming the language to be wde. This argument is accordingly repelled. Lastly the counsel contended that the sentence imposed was two severe. The entire gold seized from him having been confiscated the sentence undergone should, according to the submission, be held to serve the cause of justice. We have already noticed that under r. 126P(2) (ii) the minimum period of imprisonment prescribed is six months. According to the appellant the law has since been amended and under the Gold (Control Act 18 of 1965 which has repealed Part XII of the Rules there is no minimum sentence of imprisonments prescribed. In our opinion this case must be governed by the law as in force Prior to the enforcement of the . Our attention has not been drawn to any provision of law nor to any principle or precedent which would attract the provisions of the of 1965 to this case in regard to the question of sentence. This appeal accordingly fails and is dismissed. R.K.P.S. Appeal dismissed.

The appellant set fire to grass lying near a khalyan. He was arrested next day From February 23, 1965 when he was arrested to February 2, 1965, he was in police custody and thereafter sent to jail. The Assistant Surgeon, the Civil Surgeon, and the Psychiatrist of the mental hospital to which he was referred reported that he was depressed and silent. According to the Psychiatrist he was a lunatic in terms of the Indian Lunacy Act, 1912. At is trial under section 435 of the Indian Penal Code two of his relatives appeared as defence witnesses and testified that he was mentally unsound. The trial Magistrate acquitted the accused on the finding that the appellant fell within the general exception in section 84 of the Indian Penal Code. The High Court, in appeal filed by the State, reversed the judgment. In appeal by special leave, HELD : It is now well settled that the crucial point of time at which unsoundness of mind should be established is the time when the crime was committed. The burden of proving this lies on the accused though the burden is no higher than that which rests upon a party to civil preceedings. [252 E] State of Madya Pradesh vs Ahmadulla, ; and D. C. Thakker vs State of Gujarat, ; , referred to. In the present case the appellant had discharged the burden. There was no reason why the defence witnesses should not be believed. They were no doubt relations of the appellant but it is the relations who are likely to remain in intimate contact. The behaviour of the appellant on the day of occurrence, failure of the police to lead evidence as to his condition when the appellant was in custody, and the medical evidence indicated that the appellant was insane within the meaning of section 84 I.P.C.[256 D] The High Court was wrong in drawing an adverse inference against the accused on the ground that he had not produced any expert medical evidence in defence. This could not be expected from a poor villager specially in view of the certificates issued by the medical authorities after he was arrested. [2 55 C] The High Court 's observation that the appellant appeared to be of normal understanding and the fact that he had given intelligent answers. to questions under section 342 Cr. P.C., were irrelevant considerations in view of the time that had elapsed since the alleged commission of the offence. [256 B C] 252

No. 77 of 1972. Under Article 32 of the Constitution of India for a writ in the nature of habeas corpus. section K. Dhingra, for the petitioner. Dilip Sinha and G. section Chatterjee, for the respondent. The Judgment of the Court was delivered by Shelat, J. The District Magistrate, Howrah passed on June 12, 1971 the impugned order of detention under sub section (1) read with sub section (3) of section 3 of the West Bengal (Prevention of Violent Activities) Act, 1970 directing the petitioner 's detention thereunder. The order stated that the District Magistrate was satisfied that it was necessary to do so in order to prevent the petitioner from acting in a manner prejudicial to the maintenance of public order. On June 13, 1971, the petitioner was accordingly arrested and detained in Dum Dum Central Jail. 676 The grounds of detention served on the petitioner at the time of his arrest read as follows : (1) On 17 8 70 at about 02.00 hours, you and your associates Bhaja alias Tarapada Ghosh, Bablu, Kartic and others attacked the members of R.G. Party who were on duty near Jatadhari Park by hurling bombs towards them. When chased by them, you and your associates again hurled bombs towards them and managed to escape and thereby disturbed public order. (2) On 10 4 71 at about 16.00 hours, you and your associates being 'armed with sword assaulted one Basudeb Laha of 56/18, Banarjee Bagan Lane. at Sambhu Halder Lane near Jatadhari Park causing injuries on his person. When objected by the members of the public, you also terrorised them by brandishing the sword. (3) On 1 5 71 at 15.00 hours, you and your associates Tapan, Kartic and others being armed with bombs and other deadly weapons demanded money from one Banshi Show of 28, Haraganj Road, P.S. Malipanchghora. When refused, you and your associates assaulted him. The local people and the neighbouring shop keepers objected. At this you and your associates became more violent and terrorised them by throwing bombs towards them. Con sequently they became panicky and fled away. Sub section (1) read with sub s, (3) of section of the Act authorises inter alia a District Magistate to direct detention of any person in respect of whom be is satisfied that such detention should be ordered with a view to prevent him from acting prejudicially to the security of the State of West Bengal, or the maintenance of public order. Sub section (2) of section 3 contains a special definition of the expression "acting in any manner prejudicial to the security of the State or the maintenance of public order" to mean the acts enumerated in cls. (a) to (e) thereof. (d), which is the only relevant clause for purposes of this petition provides as follows: "(d) committing, or instigating any person to commit, any offence punishable with death or imprisonment for life or imprisonment for a term extending to seven years or more or any offence under the or the , where the commission of such offence disturbed, or is likely to disturb, public order. " 677 It is not disputed that the petitioner 's alleged activities set out in grounds ( 1 ) and (3) of the said grounds of detention fell under cl. (d) being offences under the , and also being such that they did or were likely to disturb public order. The only contention raised for our determination was that activities set out in ground No. (2), namely, causing injuries with a sword. would constitute an offence under section 324 of the Penal Code, an offence neither punishable with death, nor life imprisonment, nor imprisonment for a term of seven years. Therefore, ground No. (2) would be, it was urged, a ground which would not fall under the said definition, and would, therefore, be an extraneous ground rendering the impugned order invalid. The contention in our view has no substance as the offence alleged in ground No. (2) would fall under cl. (d) of section 1 (2) of the Act inasmuch as it will be one, punishable under the , LIV of 1959. Under section 2(1) (c) of the , the word 'arms ' inter alia means articles of any description designed or adapted as weapons for offence or defence, and includes firearms, sharpedged and other deadly weapons. A sword is thus arms I within the meaning of this definition. 3 of the Act then prohibits, among other things, possession of firearms or ammunition except under a licence issued under the Act or the rules made thereunder. So far as arms, other than firearms, are concerned, section 4 empowers the Central Government, if it is of opinion that having regard to the circumstances prevailing in any area it is necessary or expedient in the public interest, that acquisition,. possession or carrying of arms, other than firearms, should also be regulated, it may by notification direct that this section shall apply to the area specified in such notification, and thereupon no person shall acquire, have in his possession or carry in that area arms of such class or description as may be specified in that notification, except under a licence issued under the provisions of the Act or the rules made thereunder. Once, therefore, such a notification is issued under the Act or the rules made thereunder, and that notification specifies any arms, e.g. a sword, possession of or carrying such a sword without licence in the specified area would be an offence under the . 25 (1) (b) provides that whoever acquires, has in his possession or carries in any place specified by notification under section 4 'any arms of such class or description as have been specified in that notification in contravention of that section shall be punishable with imprisonment for a term which may extend to three 1 years, or with fine or with both. It, however, appears that no such notification as contemplated by section 4 of the 1959 Act has been issued. But, in 1923 such a 678 notification bearing reference No. Political (Police) Department Notification No. 787 PL, dated March 9, 1923 was issued under section 15 of the earlier Indian , XI of 1878, which was in terms similar to section 4 of the present Act. The question is, whether Act XI of 1878 having been repealed, the said notification issued under section 15 thereof can still be said to be operative ? Sec. 46(1) of the repealed the preceding Act of 1878. Its sub section (2) provides that notwithstanding such repeal and without prejudice to sections 6 and 24 of the General Clauses Act, X of 1897 a licence granted under the repealed Act and in force immediately before the commencement of the new Act shall continue, unless sooner revoked, for the unexpired period for which it had been granted or renewed. 46(2) thus saves only licences issued under the . Sec. 6(b) of the General Clauses Act, however, provides that where any Central Act or regulation made after the commence ment of the Act repeals any earlier enactment, then, unless a different intention appears, such repeal shall not "affect the previous operation of any enactment so repealed or anything duly done or suffered hereunder". 24 next provides that where any Central Act is repealed and re enacted with or without modification, then, unless it is otherwise expressly provided, any notification issued under such repealed Act shall, so far as it is inconsistent with the provisions re enacted, continue in force and be deemed to have been made under the provisions so re enacted unless it is superseded by any notification or order issued under the provisions so re enacted. The new Act nowhere contains an intention to the contrary signifying that the operation of the repealed Act or of an notification issued thereunder was not to continue. Further, the new Act re enacts the provisions of the earlier Act, and section 4 in particular, as already stated, has provisions practically identical to those of section 15 of the earlier Act. The combined effect of sections 6 and 24 of the General Clauses Act is that the said notification of 1923 issued under section 15 of the Act of 1878 not only continued to operate but has. to be deemed to have been enacted under the new Act. Possession of arms, such as a sword without a licence or contrary to the terms and conditions of such a licence would thus be an offence punishable with imprisonment under the . Though the possession of and carrying a sword were alleged to have been committed in 1970, that is, after the repeal of the Arms Act, 1878, the said notification of 1923 issued under the repealed Act would, despite its repeal, continue to be in force and its provisions would be deemed to have been enacted under the new Act by virtue of section 24 of the General Clauses Act. 679 This was the construction placed upon these two sections by this Court in the Chief Inspector of Mines vs Lala Karam Chand Thapar,(1) where the question as to the meaning of section 24 of the General Clauses Act arose. In that case, the directors of a colliery company and its managing agents were prosecuted under the for violation of Coal Mines Regulations of_ 1926 made under Mines Act, 1923, which was repealed by 1952 Act. Repelling the contention that the prosecution in respect of the violation of those Regulations made under the repealed Act was unauthorised and invalid, the Court construed section 24 of the General ' Clauses Act to mean that when an earlier Act is repealed by a later Act, which re enacted the provisions of the earlier Act, Regulations framed under the repealed Act continue in force and are deemed to have been made under the provisions so re enacted, and must be so construed as to have continuity of force, and are to be regarded as laws in force at the date of the offence within the meaning of article 20(3) of the Constitution. In that case, the breach of those Regulations took place before the commencement of the new Act. Even then the prosecution under the new Act was held to be valid on the ground that the Regulations were deemed to have, been made under the new Act. In the present case, the offence of being in possession of and carrying a sword without licence took place after the commencement of the new Act of 1959. The said notification, by virtue of section 24 of the General Clauses Act having to be deemed to have been made under section 4 of the , the notification was in force on the date of the alleged offence. The offence thus fell under the , and that be ing so, acts set out in ground No. (2) were covered by cl. (d) of section 3(2) of the Act. Consequently, that ground cannot be said to be extraneous to the Act. This being the only contention arising for our consideration and it having failed, the petition fails and is dismissed. K.B.N. Petition dismissed.

Section 3(2) (d) of the West Bengal (Prevention of Violent Activities, ' Act, 1970, amongst other things, provides that the committing of any offence punishable with imprisonment for a term extending to 7 years of more, where the commission of such offence disturbs or is likely to disturb public order would be within the definition of the expression "acting in any manner prejudicial to the maintenance of public order". In pursuance of an order under a. 3(1) and (3) of the Act, the petitioner was arrested on August 6, 1971, with a view to preventing him from acting in any manner prejudicial to the maintenance of public order One of the grounds furnished to him was that he threatened to kill a person on account of his refusal to rub out the anti naxalite slogan, written on the wall of his house, that the threat terrorised the common public and as such they could not pursue their normal avocations, and that he disturbed public order. The State Government confirmed the order on October 28, 1971, after receipt of the opinion of the Advisory Board (Dismissing the petition under article 32 Challenging the order of detention. HELD : (1) Under section 506 I.P.C., a threat to commit an offence punish able with death or imprisonment for life shall be punish able with imprisonment of either description for a term which may extend to 7 years. Hence the ground furnished was not extraneous or irrelevant since the petitioner. had committed an offence enumerated in section 3(2) (d) and there was disturbance of public order. [716A C] (2) There was no delay in passing the order of confirmation, since it was passed before the expiry of three months from the date of detention. [716H] Deb Sadhan Rov vs West Bengal, and Ujjal Manda vs West Bengal, ; followed.

ppeals Nos. 125 and 164 of 1958. Appeals by special leave from the Award dated August 26, 1957, of the Fifth Industrial Tribunal at West Bengal in Case No. VIII 264/56. section C. Issacs and section N. Mukherjee, for the Appellants in C. A. No. 125/58 and Respondents in C. A. No. 164/58. N. C. Chatterjee and Dipak Datta Choudhri, for the. Respondents in C. A. No. 125/58 and Appellants in C. A. No. 164/58. January 28. The Judgment of the Court was delivered by SUBBA RAO, J. These appeals are by Special Leave from the Award by Shri G. Palit, Judge, Fifth Industrial Tribunal, West Bengal, in the matter of a dispute between Messrs. Bengal Chemical & Pharmaceutical Works Limited, Calcutta, and their employees, represented by Bengal Chemical Mazdoor Union, Calcutta. The Government of West Bengal by its order dated September 13, 1956, referred the following dispute between the parties referred to above to the Second Industrial Tribunal under section 10 of the (Act 14 of 1947), hereinafter referred to as the Act. " Is the demand of the employees for increase in Dearness Allowance justified ? If so, at what rate?". The said Act was amended by the 139 Industrial Disputes (Amendment & Miscellaneous Provisions) Act, 1956 (36 of 1956), which came into force on August 28, 1956. On April 9, 1956, the ' Government made ail order transferring the said dispute from the file of the Second Industrial Tribunal to that of the Fifth Industrial Tribunal. The Fifth Industrial Tribunal, after making the necessary inquiry, made the award on August 26,1957, and it was duly notified in the Calcutta Gazette on September 26, 1957. As a mistake had crept in, the award was modified by the Tribunal by its order dated the 29th November, 1957; and the modified award was published in the Calcutta Gazette on the 29th November, 1957. Under the award the Tribunal held that there was a rise in the cost of living index and that to neutralise the said rise the employees should get an increase of Rs. 7 in dearness allowance on the pay scale up to Rs. 50 and Rs. 5 on the pay scale above Rs. 50. On that basis the dearness allowance payable to the employees was worked out and awarded. The correctness of the award is questioned in these appeals. The Company preferred Civil Appeal No. 125 of 1958 against the award in so far it was against it and the Union preferred Civil Appeal No. 164 of 1958 in so far it went against the employees. For convenience of reference, the parties will be referred to in the course of the judgment as the Company and the Union. Learned Counsel for the Company raised before us the following points: (1) The order dated April 9, 1957, made by the Government transferring the dispute from the file of the Second Industrial Tribunal to that of the Fifth Industrial Tribunal was illegal; (2) the previous award made by the Tribunal between the same parties on April 26, 1951, and confirmed by the Labour Appellate Tribunal by its order dated August 30, 1951, had not been terminated in accordance with the provisions of section 19(6) of the Act and therefore the present reference was bad in law and without jurisdiction; (3) there was no change in the circumstances obtaining at the time the previous award was made and those prevailing at the time of the present reference as to justify making out a new award; (4) the Tribunal 140 went wrong in taking the rise in the cost of living index between the years 1954 and 1957 instead of taking the fluctuating rate in the index between the date of the earlier award, i.e., August 30, 1951, and the date of the present reference in the year 1957 ; (5) the Tribunal went wrong in so far as it based its decision on the Second Engineering Award of 1950 which was already considered by the Tribunal in its earlier award of the year 1951; and (6) in any event, in computing the amount, the Tribunal applied wrong criteria. We shall consider the above contentions seriatim. But before doing so, it will be convenient to refer briefly to the scope of jurisdiction of this Court under article 136 of the Constitution vis a vis the awards of Tribunals. Article 136 of the Constitution does not confer a right of appeal to any party from the decision of any tribunal, but it confers a discretionary power on the Supreme Court to grant special leave to appeal from the order of any tribunal in the. territory of India. It is implicit in the discretionary reserve power that it cannot be exhaustively defined. It cannot obviously be so construed as to confer a right to a party where he has none under the law. The is intended to be a self contained one and it seeks to achieve social justice on the basis of collective bargaining, conciliation and arbitration. Awards are given on circumstances peculiar to each dispute and the tribunals are, to a large extent, free from the restrictions of technical considerations imposed on courts. A free and liberal exercise of the power under article 136 may materially affect the fundamental basis of such decisions, namely, quick solution to such disputes to achieve industrial peace. Though article 136 is couched in widest terms, it is necessary for this Court to exercise its discretionary jurisdiction only in cases where awards are made in violation of the principles of natural justice, causing substantial and grave injustice to parties or raises an important principle of industrial law requiring elucidation, and final decision by this Court or discloses such other exceptional or special circumstances which merit the consideration of this Court. The points raised by the 141 learned Counsel, except perhaps the first point , do not stand the test of any one of those principles. Learned Counsel for the Company, however, says that, though the ' said principles might be applied at the time of granting leave, once leave is given no such restrictions could be imposed or applied at the time of the final disposal of the appeal. The limits to the exercise of the power under article 136 cannot be made to depend upon the appellant obtaining the special leave of this Court, for two reasons, viz., (i) at that stage the Court may not be in full possession Of all material circumstances to make up its mind and (ii) the order is only an ex parte one made in the absence of the respondent. The same principle should, therefore, be applied in exercising the power of interference with the awards of tribunals irrespective of the fact that the question arises at the time of granting special leave or at the time the appeal is disposed of. It would be illogical to apply two different standards at two different stages of the same case. The same view was expressed by this Court in Pritam Singh vs The State of Madras (1), Hem Raj vs State of Ajmer(1) and sadhu Singh vs State of Pepsu(3) The first question turns upon the construction of the relevant provisions of the Act as amended by the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956. The relevant provisions inserted by the Amending Act read as follows: "Section 2(r) : I Tribunal ' means an Industrial Tribunal constituted under section 7A." " 7 A. Tribunals. (1) The appropriate Government may, by notification in the official Gazette, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule. (2) A Tribunal shall consist of one person only to be appointed by the appropriate Government. (3) A person shall not be qualified for appointment as the presiding officer of a Tribunal unless (1) ; (2) (3) A.I.R. 1954 S.C. 271. 142 (a) he is, or has been, a Judge of a High Court; or (b) he has held the office of the Chairman or any other member of the Labour Appellate Tribunal constituted under the Industial Disputes (Appellate Tribunal) Act, 1950 (48 of 1950), or of any Tribunal, for a period of not less than two years. (4) The appropriate Government may, if it so thinks fit, appoint two persons as assessors to advise the Tribunal in the proceeding before it." "33B. (1) The appropriate Government may, by order in writing and for reasons to be stated therein, withdraw any proceeding under this Act pending before a Labour Court, Tribunal, or National Tribunal, ' as the case may be, for the disposal of the proceeding and the Labour Court, Tribunal or National Tribunal to which the proceeding is so transferred may, subject to special directions in the order of transfer, proceed either de novo or from the stage at which it was so transferred : Provided that where a proceeding under section 33 or section 33A is pending before a Tribunal or National Tribunal, the proceeding may also be transferred to a Labour Court. " Section 30 of the Amending Act reads: " If immediately before the commencement of this Act, there is pending any proceeding in relation to an industrial dispute before a Tribunal constituted under the (14 of 1947), as in force before such commencement, the dispute may be adjudicated and the proceeding disposed of by the Tribunal after such commencement, as if this Act has not been passed." Section 7, before the Amendment ran thus: " The appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act. (2) A Tribunal shall consist of such number of members as the appropriate Government thinks fit. Where the Tribunal consists of two or more members, one of them shall be appointed as chairman. 143 (3) Every member of the Tribunal shall be an independent person, (a) who is or has been a Judge of a High Court or a District Judge, or (b) is qualified for appointment as a Judge of a High Court: Provided that the appointment to a Tribunal of any person not qualified under part (a) shall be made in consultation with the High Court of the Province in which the Tribunal has or is intended to have, its usual place of sitting. " It will be seen from the aforesaid provisions that the Amending Act, which came into force on August 28, 1956, changed the constitution of a tribunal to some extent and conferred a power for the first time on the Government to transfer a proceeding pending before a tribunal to another tribunal; or in the case of a proceeding under section 33 or 33A pending before a tribunal to another tribunal or to a Labour Court. Section 30 of the Amending Act expressly saves a pending proceeding before a tribunal constituted under the Act before the Amending Act came into force and directs that such dispute shall be adjudicated and the proceeding disposed of by that tribunal after the commencement of the Amending Act as if that Act had not been passed. A combined and fair reading of the aforesaid provisions, it is argued, was that section 33B, inserted in the Act by the Amending Act, was prospective in operations i.e., it would apply only to proceedings initiated in the tribunal constituted Under the amended Act and that proceedings pending before the tribunals constituted under the Act before the commencement of the Amending Act would be disposed of as if the Amending Act had not been passed. The Parliament, presumably to clarify the position, brought out another Amending Act styled the Industrial Disputes (Amendment) Act, 1957 (18 of 1957), whereunder among other things, a new definition of " Tribunal " was given in substitution of that in section 2(r) of the Act. The substituted definition reads: " 'Tribunal ' means an Industrial Tribunal constituted under section 7A and includes an Industrial 144 Tribunal constituted before the 10th day of March, 1957, under this Act. " Sub section (2) of section I of the Amending Act 18 of 1957 says that section 2 shall be deemed to have come into force on the 10th day of March, 1957. The result is that section 33B should be read along with the definition of a " Tribunal " inserted by the Amendment Act 18 of 1957, as if that definition was in the Act from March 10, 1957. If that definition of a " Tribunal " 'be read in place of the word ,Tribunal" in section 33B, the relevant part of that section reads: " (1) The appropriate Government may, by order in writing and for reasons to be stated therein, withdraw any proceeding under this Act pending before a Tribunal constituted before the 10th day of March, 1957, and transfer the same to another Tribunal constituted under section 7A of the Act." So construed it follows that in respect of proceedings pending in a tribunal constituted before the 10th day of March, 1957, the Government has the power to transfer them from that date to any other tribunal. It is said that this construction would make section 30 of the Amending Act 36 of 1956 otiose or nugatory. That section contained only a saving clause and it was not inserted in the Act; it served its purpose, and even if it ceased to have any operative force after the Amendment of 1957, that circumstance cannot have any bearing on the impact of the amendment of the definition of " Tribunal " on the provisions of section 33B of the Act. In the present case, the Government made the order of transfer on April 9, 1957, i.e., after section 2 of Amendment Act 18 of 1957 was deemed to have come into force. It must, therefore, be held that the Government acted well within its powers in transferring the dispute pending before the Second Industrial Tribunal, to the Fifth Industrial Tribunal. The second contention, namely, that the Award of 1951 was not terminated in accordance with law, does not appear to have been pressed before the Tribunal. The governing section is section 19(6) which says: " Notwithstanding the expiry of the period of operation under sub section (3), the award shall 145 continue to be binding on the parties until a period of two months has elapsed from the date on which notice is given by any party bound by the award to the other party or parties intimating its intention to terminate the award '. " In the first written statement filed by the Company before the Tribunal, no plea was taken based upon section 19(6) of the Act. In the second written statement filed by the Company on December 20, 1956, a contention was raised to the effect that the award dated June 21, 1951, was not terminated under section 19(6) of the Act, that the said award was binding between the parties and therefore the reference was bad in law. Notwithstanding the said allegation, the award dis closes that no issue was raised on that count and no argument was advanced in support thereof. This attitude might have been adopted by the Company either because it did not think fit to rely upon a technical point but had chosen to get a decision of the Tribunal on merits, or it might be that there was no basis for the contention, as the company might have received notice under the said section. Though it may not be quite relevant, it may be mentioned that even in 1951 when the dispute between the parties was referred to the Industrial Tribunal, though a similar contention was open to the Company and indeed was suggested by the Tribunal, it moved the Tribunal to give an award on the merits of the matter. If this plea had been seriously pressed, the Tribunal would have raised a separate issue and the Union would have been in a position to establish that notice had been served on the Company as required by section 19(6) of the Act. As the question raised depends upon elucidation of further facts, we do not think that we would be justified in allowing the Company to raise the plea before us, and we, therefore, do not permit them to do so. The fourth point turns on the construction of the terms of the agreement entered into between the parties on September 15, 1954. The dispute between the parties had an earlier origin and apart from the 19 146 present reference, there were as many as four references and four awards, and the last of them was dated April 3, 1951. The Company preferred an appeal against that award to the Labour Appellate Tribunal , Calcutta, which, with some modification, confirmed the award of the Tribunal on August 30, 1957. That award as modified by the Appellate Tribunal fixed the basic wages and the rate of dearness allowance payable to the employees. The employees were not satisfied with the award and they placed before the. Company a new charter of demands claiming higher rates of dearness allowance and wages, but the dispute was compromised and the parties entered into an agreement dated September 15, 1954, by virtue of which, the Company introduced the incremental scale in the wage structure. As regards the dearness allowance, it was stated in cl. 1 1 of the agreement as follows: "The existing rate of D. A. will prevail unless there is a substantial change in the working class cost of living index,in which case the rate will be suitably adjusted." On the construction of this clause depends the question of the Union 's right to claim enhanced dearness allowance. It is common case that if the cost of living index in the year 1951 was taken as the basis, there was a fall in the rate of working class cost, of living index in 1957. On the other hand, if the cost of living index in 1954 was the criterion, there was a substantial increase in the cost of living index in 1957. The question, therefore, is what did the parties intend to agree by the aforesaid clause in the agreement. To ascertain the intention of the parties, we should con sider the circumstances under which the said agreement was entered into between the parties. Exhibit 6 is the said agreement. The preamble to the agreement reads : " The Company and the Union came to a settlement in respect of the Pay Scales and Grades in the Charter of Demands dated 25th June, 1953, at the intervention of Shri A. R. Ghosh, Asstt. Labour Commissioner during the Conciliation proceedings ending on the 30th August, 1954. " 147 The preamble indicates that the entire situation obtaining on the date of the agreement was reviewed and the parties agreed to the terms of the settlement mentioned therein. Under clause (1) of the agreement, pay scale and grade as given in annexure B was agreed upon for the time being for a period of three years as an experimental measure, to be reviewed, modified or suspended or withdrawn after three years, depending upon the Company 's business and financial condition. By el. (2), the employees agreed not to raise any dispute involving any further financial burden on the Company during the next three years in respect of pay scale and grade. Clauses (3) to (5) deal with increments and the age of retirement. Clause (6) provides for the piece rated (contract) workers in respect of their increments. Clause (7) is in respect of increment for the daily rated workers. Clause (8) is in respect of the grade and scale of pay and increments of Chemists, Engineers and Doctors, etc. Clause (9) is to the effect that the employees who would be made permanent thence forward would be grouped under two divisions for the purposes of giving effect to the scale of pay. Clause (11) which we have already extracted above relates to the dearness allowance. Clause (12) says " barring the question of bonus for 1358 and 1359 B. S.the Union withdraws its claim in respect of other items in the Charter of Demands dated 25th June, 1953. " We have given the agreement in extenso only for the purpose of showing that all the disputes between the parties arising out of the charter of demands dated June, 25, 1953, were settled between them and reduced to writing. The agreement was self contained and started a new chapter regulating the relationship of the parties to the dispute in respect of matters covered by it. The award must be deemed to have been superseded by the new agreement. In this context the crucial words " existing rate of D. A. ", on which both the learned Counsel relied, could have only one meaning. Do the words " existing rate " refer to the date of the agreement or to the date of the award ? It is true that the existing rate of D. A. had its origin in the award and was made to prevail 148 under the agreement, that is to say that the rate was accepted by the parties as reasonable on the date of "the agreement, till there was a substantial change in the working class cost of living index. If the contention of the learned Counsel for the Company should prevail, the agreement would not be self contained, but only to be construed as modifying the earlier award to some extent. We are satisfied that in regard to matters covered by it, the agreement replaced the earlier award and therefore the date of the agreement is the crucial one for ascertaining whether there was substantial change in the working class cost of living index in the year 1957. We, therefore, reject this contention. Contentions 3, 5 and 6 raise pure questions of fact. The Tribunal, on the consideration of the entire material placed before it, came to the conclusion that there was change of circumstances which entitled the employees to claim an increase in their dearness allowance. It has also fixed the rate of increase in the dearness allowance on the basis of the rise in the cost of living index. In doing so, it also took into consideration the difficulties facing the industry and the repercussion of the rise in the dearness allowance on the consumers in general. Having regard to the overall picture, it came to the conclusion that full neutralisation of the deficiency as a result of rise in the cost of living index by dearness allowance could not be permitted and therefore allowed them only 75 per cent. of the increase in the dearness allowance to which they would have otherwise been entitled on the basis of the rise in the cost of living index. The finding given by the Tribunal is one on fact and we do not see any permissible ground for interference with it in this appeal by special leave. Before closing, one point strenuously pressed upon us by the learned Counsel for the Company which is really another attempt to attack the finding of fact given by the Tribunal from different angle must be mentioned; it was that the Tribunal wrongly relied upon Exhibit 3, corrected on the basis of the information given by the State Statistical Bureau, West Bengal, for ascertaining the working class cost of living index since August 1954 up to March 1957. On the 149 basis of Exhibit 3, the Tribunal held that the working class cost of living index stood at 344.1 in August 1954 and it rose to 400.6 in May 1957, with the result that there was a rise of 56 points, a substantial rise in the cost of living index. Exhibit 3 certainly supports the finding of the Tribunal. The learned Counsel for the Company points out with reference to the relevant entries in the Monthly Statistical Digest, West Bengal, that the said figures relate only to working class menials and the corresponding entries in regard to the working class cost of living index do not indicate so much increase as in the case of the menial class. Learned Counsel has also taken us through the relevant figures. The relevant entries in the Monthly Statistical Digest were not filed before the Tribunal. Indeed when the Union 's witness, Shri Satyaranjan Sen, was examined before the Tribunal, he was not cross examined with a view to elicit information that Exhibit 3 did not relate to the working class cost of living index. When Shri Chatterjee, the Assistant Manager of the Company, who was examined after Shri Sen, gave evidence, he not only did not object to the entries in Exhibit 3 but stated that he was not aware of any substantial increase in the working class cost of living index and complained that similar entries for all the relevant years had not been produced. Even before the Tribunal it does not appear that any argument was advanced contesting the relevancy of Exhibit 3 on the ground that it did not refer to the working class cost of living index. In the circumstances, we do not think that we are justified to allow the learned Counsel for the Company to make out a new case for the first time before us, upsetting the Tribunal 's basis for calculation and involving further and different calculations. In the result, we confirm the award of the Tribunal and dismiss the appeal with costs. The learned Counsel, appearing for the Union, did not press the appeal No. 164 of 1958, filed by the Union, and therefore it is also dismissed with costs. Appeals dismissed.

Under an Irrigation Scheme, the respondent State proposed to construct a dam on a river in the State and prepared a sketch, indicating the passage of the canal from the Dam and for that purpose, proceeded to acquire land through which the canal was proposed to run. Apprehending that serious damage will be caused to their lands by the passing of the canal through their lands, the appellants farmers filed a suit against the respondent State, seeking to restrain it from implementing the Irrigation Scheme, as proposed. During the pendency of the suit an agreement was arrived at between the parties to the effect that the canal from the Dam would be run as per the line demarcated in red in the map appended to the deed of agreement. As a result, the suit was unconditionally withdrawn by the appellants, but subsequently, on discovering that the State Government was going back from the agreement and the alignment of the canal was being undertaken contrary to the alignment reflected in red in the map appended to the agreement, they filed a fresh suit for declaration to the effect that the agreement entered into between them and the respondents through its Executive Engineer, Irrigation Department, was binding on the 367 parties and that the parties were bound to act according to the terms of the said agreement and for an injunction, restraining the respondent State from going back on the agreement. The trial court decreed the suit and permanently restrained the State from going back from the agreement and acting otherwise than as per the terms of the same. The appeal preferred by the State was also dismissed by the District Judge. The State riled a second appeal before the High Court contending that the alleged compromise/agreement was not binding upon the State, inasmuch as the Executive Engineer had no authority to agree on behalf of the State Government as he was not the representative of the Government. The High Court held that the agreement was a null and void document for non compliance with the mandatory provisions of Article 299(1) of the Constitution. It also rejected the appellants ' plea that under the statutory powers conferred by section 18 of the Bombay Irrigation Act, 1879 the Executive Engineer was competent to enter into a compromise and that the said compromise arrived at during the pendency of the earlier suit was binding on the Government. In the appeal filed before this Court on behalf of the appellants farmers, it was submitted that reliance placed on Article 299 of the Constitution of India was wholly erroneous, that by a Notification, dated 27th of September 1963, published in Part IV B of the Government Gazette, the State Government had appointed all Executive Engineers and Superintending Engineers in charge of canals in the State to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act and, therefore, the agreement/compromise entered into by the Executive Engineer during the pendency of the suit of which he was doing 'pervi ' was a validly executed compromise which was binding on the parties and respondent could not go back on it, and that after having made the appellants to withdraw their earlier suit on the basis of the agreement, it was not permissible for the respondent to dispute the act done by its officers or agents within their powers under the statute. Allowing the appeal, this Court, HELD : 1.1. The agreement/compromise arrived at in the previous 368 suit, could not have been equated with a contract between the State and the citizen. Article 299(1) of the Constitution concerns itself with contracts and assurances of property and lays down how Government contracts, including assurances of property are to be made and executed. The provisions of Article 2" are mandatory in character and their non compliance would render a contract void, but where the agreement is not referable to Article 299 and is not a contract, as contemplated by that Article, the agreement cannot be invalidated for not satisfying the essential requirements of Articles 299 of the Constitution. [375B, D E] 1.3. There is a marked distinction between contracts which are executed in exercise of the executive powers and agreements or orders made, which are statutory in nature. Articles 299(1) applies to a contract made in exercise of the executive power of the Union or the State and it has no application to a case where a particular statutory authority as distinguished from the Union or the State, enters into an agreement within his authorised capacity. [375F] State of Haryana and Ors. vs Lal Chand and Ors., ; , relied on. A compromise of the nature contained in the agreement arrived at during the pendency of a suit, in the instant case is not a contract executed between the parties as envisaged by Article 299. [375E] 2.1 It is clear from the record that it was the Executive Engineer who was doing 'pervi ' of the case in the suit filed earlier. The agreement in question was entered into during the pendency of the said case. The State Government had appointed all Executive Engineers and Superintending Engineers in charge of canals in the State to be Canal Officers in respect of such canals and assigned to them all the powers and duties of the Canal Officers under the Act by virtue of the Notification dated 27th September, 1963. Thus, it is manifest that the Executive Engineer, by virtue of the said Notification, had been lawfully appointed as Canal Officer within the meaning of Section 3(6) of the Bombay Irrigation Act, 1879. [377F H, 378A] 2.2. Section 18 of the Act vests the Canal Officers with the power to 369 hold Inquiry and direct the construction of suitable alignments for a water course and by Section 77 of the Act a Canal Officer Is vested with the authority to survey, demarcate and make a map of the land which, in his opinion, Is suitable for constructing an alignment for the water course. [378A] 23. Thus, under the statute, read with the notification dated 27th September, 1963, the Canal Officer (Executive Engineer) was fully competent to decide about the particular alignment of the water course and it fell within the jurisdiction of the Canal Officer to decide and settle about the suitable demarcation of the alignment of the water course of the canal from the Dam, in question and he exercised that jurisdiction under the statute when he demarcated the water course in red, in the map attached to the agreement. It is the content of the agreement and not its form which is relevant to trace the source of power behind it and in the light of the statutory provisions, it Is manifest that the document has been executed by the Executive Engineer by virtue of the statutory powers vested In him. The circumstance that the agreement came into existence during the pendency of the suit and was executed by way of an agreement does not militate against the order of alignment as reflected therein being any less statutory in character. [378B D] 2.4. The Act itself envisages that the Canal Officer may after and settle the alignment in consultation with the landholders through which the water course is to run. In the agreement in question, the Executive Engineer had agreed to alter the alignment of the water course in consultation with the appellants who thereupon 'unconditionally ' withdrew the suit since no grievance remained to be settled. The altered alignment was, therefore, validly made by following the procedure envisaged by the Act. The High Court fell in error in ignoring the statutory powers of the Executive Engineer, vested in him under Sections 18 and 77 of the Act read with the notification or 27th September, 1963 on the true import of agreement. [378E F] 2.5. Under these circumstances, the agreement was lawfully executed by the Executive Engineer in exercise of his statutory powers under the Act and the State was obliged to act according to the terms of the said agreements and could not give it a go bye without following the procedure under the Act to again alter the alignment [378G] 370

Appeal No. 456 of 1958. Appeal by special leave from the judgment and order dated May 10, 1957, of the Rajasthan High Court (Jaipur Bench) at Jaipur in D. B. Civil Reference No. 17 of 1956. WITH PETITION No. 87 of 1961. Petition under article 32 of the Constitution of India for enforcement of Fundamental rights. Bishan Narain, and Govind Saran Singh, for the appellant/petitioner. N. section Bindra and T. M. Sen, for the respondents. April 25. The Judgment of the Court was delivered by 373 DAS GUPTA, J. On April 1, 1950, the Deputy Custodian, Jaipur, made an order in proceedings instituted under section 19 of the Administration of Evacuee Property Ordinance declaring the appellant Dr. Mohammad Saeed a medical practitioner of Jaipur to be an intending evacuee. By the same order a notice was directed to be issued to the respondent to show cause why he should not be declared to be an evacuee under section 2(d)(i) and section 2(d)(iii) of the Ordinance. When thereafter the (Act XXXI of 1950), came into force ano ther notice was issued on the appellant under section 22(b) of the Act to show cause why his property should not be declared evacuee property on the ground that he had transferred a substantial portion of his assets to Pakistan. On November 16, 1951, the Deputy Custodian, Jaipur held Dr. Mohammad Saeed to be an evacuee under section 2(d)(iii) of the Administration of Evacuee Property Ordinance, 1949. He also held Dr. Mohammad Saeed 's property to be evacuee property under section 7 of the Ordinance and also under section 22(b) of the . On appeal the District Judge, Jaipur, set aside this declaration of the appellant as an evacuee under section 2(d)(iii) of the Ordinance and remanded the case for a fresh decision in the light of the observations made by him. As regards the order under section 22(b) the learned District Judge agreed with the Deputy Custodian that Dr. Mohammed Saeed had transferred a substantial portion of his assets to Pakistan between November 1947 and September 1948. Being of opinion however that not only this act of transfer which took place before the 18th day of October, 1949, but other circumstances including the appellant 's conduct after October 18, 1949, have to be, taken into consideration before action under section 22(b) can be taken, he found that it was difficult to say that the appellant had been making preparations for his migration to Pakistan. Accordingly he set aside the order made by the Deputy Custodian under section 22(b). The 48 374 Custodian of Evacuee Property, Rajasthan, moved the Custodian General of Evacuee Property for revision of this order. The Deputy Custodian General of Evacuee Property who heard this petition in revision was unable to agree with the District Judge 's findings on the question as regards the order under section 22(b) and accordingly made a reference under section 27(2) of the , to the High Court of Rajasthan. The High Court rejected the contention raised on behalf of this appellant that the circumstances as to the transfer of a substantial portion of his assets should relate to an act done by any person, after, he was declared as an intending evacuee. It further held that the fact that Dr. Mohammad Saeed had during the period from August 14, 1947 to October 18, 1949, transferred a substantial portion of his assets in India to Pakistan constituted under the law a preparation for his migration to Pakistan and that this justified a declaration by the Custodian of his property situated in Rajasthan in which Dr. Mohammad Saeed has a right or interest, to be evacuee property. Accordingly, the High Court set aside the decision of the District Judge in respect of Deputy Custodian General 's orders under section 22(b) and directed the Custodian General or the Deputy Custodian General, if authorised to deal with it, to dispose of the proceedings in accordance with the decision of the High Court. In accordance with this direction the Deputy Custodian General on August 10, 1957, held that the property of the petitioner was rightly declared to be evacuee property under section 22(b) by the Deputy Custodian. The appeal has been filed against this decision by special leave granted by this Court. After the appeal was heard in part on January 23, 1961, the hearing was adjourned to enable the appellant to make a writ petition. A petition under article 32 of the Constitution was then filed on February 14, 1961, praying for a writ of certiorari and/or mandamus or direction to quash the order made under section 22(b). The appeal and the petition have come up for hearing together. 375 As the writ petition challenges the validity of the law as enacted in section 22(b) it will be proper and convenient to take up that petition for decision first. Of the several grounds urged in the petition against the validity of section 22(b) only one, viz., that section 22(b) contravenes article 14 of the Constitution has been pressed before us. While however in the grounds as stated in the petition the attack was that discrimination had been made between persons declared as intending evacuee in respect of whose property proceedings had been started before the commencement of the Act and those in respect of whose property no such proceedings had yet been started and further that article 14 was contravened because a person declared to be an intending evacuee who had done one of the acts prescribed as constituting a preparation for migration to Pakistan, was denied the right to show that he had, in fact, no intention so to migrate and had made no preparation for the purpose and by imposing upon him a very grave penalty, neither of those contentions were urged at the hearing. The only argument on the question of contravention of article 14 which Mr. Bishan Narain urged on behalf of the petitioner was that in two matters there was discrimination between an intending evacuee whose property was declared evacuee property under section 22(b) and an evacuee whose property might be declared to be an evacuee property, where the evacuee had done practically the same thing for which another person has been declared as an intending evacuee. Learned Counsel has pointed out that under section 2(d)(iv) of the , as it stood after its amendment by Act 11 of 1953, a person who has after the 18th day of October, 1949, transferred to Pakistan without the previous approval of the Custodian his assets or any part of his assets situated in any part of the territories to which the Act extends is an evacuee; so that any property of such a person is evacuee property within the meaning of the Act. When in respect of property of such a person an order has been made under section 7 of the Act declaring it to be evacuee property the evacuee or his heir will be entitled to make 376 an application for restoration of the property under section 16 of the Act, and after due inquiry the Central Government may, subject to the conditions specified in the section make an order restoring the property to the applicant. Another benefit which a person who is an evacuee within the meaning of section 2(d)(iv) is entitled to, along with other evacuees, is that of section 13 of the Displaced Persons (Compensation and Rehabilitation) Act (XLIV of 1954), under which when any property of an evacuee has been acquired under section 12 there shall be paid to an evacuee compensation in respect of his property. . . . in accordance with such principles and in such manner as may be agreed upon between the Governments of India and Pakistan. Take however the case of a person, like the present petitioner who after the 14th day of August, 1947, and before the 18th day of October, 1949, transferred his assets or any portion thereof to Pakistan. He would be an "intending evacuee" within the meaning of section 2(e)(i) of the Act and once a declaration had been made under section 19 that he was an intending evacuee his property would be liable to be declared evacuee property under section 22(b). Even so however he would not get the benefit of section 16 of Act XXXI of 1950 or of section 13 of the . The result of the several provisions of law of the , after it was amended in 1953 therefore is that if a person transferred his assets or any part of his assets to Pakistan without the previous approval of the Custodian after the 18th day of October, 1949, he would be an evacuee in law and his property will be liable to be declared an evacuee property, but he will still be entitled to restoration of the property under section 16 of the , and also to the benefit of section 13 of the (XLIV of 1954); but if a person transferred his assets or part of his assets to Pakistan between the 14th day of August, 1947, and the 18th day of October, 1949, he was liable 377 to be declared an intending evacuee at any date before the Amended Act of 1953 came into force and if that has happened, any property belonging to him was liable to be declared evacuee property under section 22 of the Act at any time before Chapter IV of that Act was repealed by the 1953 Act and even after that date if any proceeding under section 22 was pending on the ' date of the commencement of the 1953 Act. But such a person would not be entitled to the benefit of either section 16 of the , or compensation under section 13 of the (XLIV of 1954). This denial of benefits under section 16 of the 1950 Act and section 13 of the 1954 Act to one who has been declared an intending evacuee on the ground of transfer of assets to Pakistan amounts, it is urged by the learned counsel, to be a denial of equal protection of laws and it is contended that section 22(b) of the as it stood before the section war, repealed along with other sec tions of Chapter IV should be held to be void. In our judgment, this contention is not well founded. In the first place it is to be pointed out that a person who transferred assets between the 14th August, 1947, and the 18th October, 1949, and a person who transferred such assets after the 18th October, 1949, cannot properly be considered to be similarly circumstanced. It has to be borne in mind that political relations between India and Pakistan were in a fluid and disturbed state immediately after the 14th August, 1947, but the position improved to a considerable extent by the 18th October, 1949, which it may be noticed was the date when the Administration of Evacuee Property Ordinance, 1949, was made. Persons who had transferred assets between the 14th August, 1947, and the 18th October, 1949, may therefore reasonably have been considered by the legislature to form a class distinct in respect of the application of the law to their property from those who transferred assets after the 18th October, 1949. We are not however concerned with the reasons or the wisdom of the policy which underlay the denial of the 378 benefits of section 16 of the and section 13 of the (XLIV of 1954) to those persons who had been declared intending evacuees because of having transferred assets between the 14th August, 1947, and the 18th October, 1949, while granting these benefits to those who were evacuees under the law as amended in 1953, because of transfer of assets to Pakistan after the 18th October, 1949. What is clear is that the two groups of persons are not similarly circumstanced and so the denial of equal benefits to the two groups is not an infringement of the guarantee of equal protection of laws. Next it is important to note that this differenceviz., that one group of persons is entitled to the benefits of the sections mentioned above while another group is not does not flow directly or necessarily from section 22(b). What is characterised as discrimination between an evacuee and an intending evacuee is the consequence of the legislature 's omission to extend to the intending evacuees the benefits of section 16 of the 1950 Act and section 13 of the 1954 Act as mentioned above and not of the provisions under section 22(b) that under certain circumstances as specified therein the Custodian may declare the property of an intending evacuee to be evacuee property. We do not think that it is possible to say therefore that section 22(b) of the contravenes article 14 of the Constitution. The petition under article 32 of the Constitution therefore fails and is dismissed with costs. The appeal raises the question of the effect of the application of section 22(b) of the Act to the facts of the present case. Section 22(b), substituting therein for the words "he had done any of the acts specified in sub clauses (i) and (iii) of clause (e) of section 2" the words of only cluse 2(e)(i), reads thus: "If the Custodian is satisfied, after such enquiry as may be prescribed, that the circumstances relating to any person, in respect of whom a declaration has been so made on the ground that after the 14th 379 day of August, 1947, and before the 18th day of October, 1949, he has transferred to Pakistan his assets or any part thereof situated in any part of the territories to which this Act extends are such as may be prescribed as constituting a preparation for his migration to Pakistan, the Custodian may declare any property situated in the State in which such person has any right or interest to be evacuee property and on the issue of such notification any property specified in the notification shall be deemed to be evacuee property which has vested in the Custodian within the meaning of this Act. " It is important to notice the explanation to the section which runs thus: "Explanation: The following shall be deemed to be some of the circumstances prescribed under clause (b), namely (i) the transfer to Pakistan by any person referred to in that clause of a substantial portion of his assets situated in any part of the territories to which this Act extends, or (ii) the acquisition of, or the declaration of an intention to acquire, Pakistan nationality by any such person. " It need only be mentioned that a declaration has been "so made" means that a declaration has been made under section 19 of the Act that he is an intending evacuee. It is no longer in dispute that Dr. Mohammad Saeed had, before the order appealed from was made, transferred to Pakistan a substantial portion of his assets situated in Jaipur which is part of the territories to which this Act extends. It is further not in dispute that this transfer was made before he was declared an intending evacuee. The first contention raised on behalf of the appellant was that this transfer having been made before the declaration was made is not available for consideration for the purpose of an order under section 22(b). The contention is clearly unwarranted. On a normal grammatical construction of the words used by the legislature it is abundantly clear that the transfer to 380 Pakistan of a substantial portion of the assets shall be deemed to be one of the circumstances prescribed under clause (b) irrespective of whether the transfer took place before the declaration as intending evacuee was made or after such declaration. What is necessary is that the circumstance must relate to any person in respect of whom a declaration that he is an intending evacuee has been made. There is nothing to justify the conclusion that the circumstances in order that they may be taken into consideration must also come into existence after the declaration was made. Indeed the scheme of the legislation appears to be that the fact that any portion of a person 's assets has been transferred to Pakistan is sufficient to make him liable to a declaration that he is an intending evacuee; but he becomes liable to the further declaration that his property is evacuee property, where it appears that what was transferred forms a substantial portion of his assets. In some cases it may happen that what was transferred before his declaration as an intending evacuee formed a small part of his assets. In such a case if later on other portions of his assets were transferred to Pakistan and the two transfers together amount to a transfer of a substantial portion of his assets, his property will be liable to be declared as evacuee property: It will be difficult to find any logic in the argument that when what was transferred before his declaration as intending evacuee was itself a substantial portion of his assets, such liability should not fasten. Quite apart however from the question of logic or reasonableness it is quite clear from the language used in the section that the legislature in. tended such circumstance of transfer of a substantial portion of assets to be available for consideration for the purpose of an order under section 22(b) whether or not the transfer took place before the person was declared as an intending evacuee or afterwards. It was next urged that in any case it would be proper for the Custodian to take other circumstances including the later conduct of the intending evacuee to decide whether or not he should declare his property to be evacuee property. It is unnecessary for 381 us to consider whether it is open to the Custodian to consider such other circumstances. The section however gives a Custodian the authority to declare the property of a person who has been declared an intending evacuee to be evacuee property whenever the existence of any of the circumstances prescribed as constituting a preparation for his migrating to Pakistan is established. Where, as in the present case, a Custodian in exercise of such authority has given such a declaration there is no reason for saying that the declaration has been improperly made. In our opinion, the High Court was right in setting aside the order of the District Judge and in directing the Custodian General or the Deputy Custodian General to dispose of the matter in accordance with the views expressed by the High Court that on the facts proved in the case the order made by the Deputy Custodian declaring Dr. Mohammad Saeed 's property as evacuee property was right. The order made by the Deputy Custodian General in compliance with the directions given by the High Court cannot therefore be assailed. The appeal is accordingly dismissed with costs. Appeal dismissed.

This appeal was directed against an order of the Madras High Court issuing a writ of mandamus at the instance of the respondent restraining the appellants from giving effect to two circulars issued by the Railway Board reserving selection posts in Class III of the Railway service in favour of the members of the Scheduled Castes and Scheduled Tribes with retrospective operation. It was urged on behalf of the respondent that the Constitution made a clear distinction between backward classes on the one hand and Scheduled Castes and Scheduled Tribes on the other, and that article 16(4) applied only to reservation of posts at the stage of appointment and not to posts for promotions after appointment and, therefore, the circulars which fell 587 outside the scope of article i6(4) and contravened article i6(1). This was denied by the appellant who pleaded the contrary. The first circular, inter alia, prescribed a quota of reservation for( selection posts and gave retrospective effect to it and the second ' gave guidance and directions as to how the first should be implemented. A subsequent clarification issued by the Board stated that no reversion of staff already promoted to selection posts was contemplated. The High Court held that the expression "backward classes" in article 16(4) included members of the Scheduled Castes and Scheduled Tribes, but that the word ,appointments ' did not denote promotion and the word 'posts ' meant posts outside the civil services and thus the impugned circulars were not covered by article i6(4) and were ultra vires. Held, (per Gajendragadkar, Sarkar, and Das Gupta, JJ.), that the impugned circulars were well within the ambit of article 16(4) Of the Constitution and the appeal must succeed. Articles 16(i) and 16(2) of the Constitution are intended to give effect to article 14 and article 15(1) Of the Constitution and these Articles form parts of the same constitutional code of guarantees and supplement each other. Article 16(i) should, therefore, be construed in a broad and general, and not pedantic and technical way. So construed, "matters relating to employment" cannot mean merely matters prior to the act of appointment nor can 'appointment to any office ' mean merely the initial appointment but must include all matters relating to employment, whether prior or subsequent to the employment, that are either incidental to such employment or form part of its terms and conditions and also include promotion to a selection post. Although Art.16(4), which in substance is an exception to articles 16(1) and 16(2) and should, therefore, be strictly construed, the court cannot in construing it overlook the extreme solicitude shown by the Constitution for the advancement of socially and educationally backward classes of citizens. The scope of article 16(4), though not as extensive as that of article 16(1) and (2), and some of the matters relating to employment such as salary, increment, gratuity, pension and the age of superannuation, must fall outside its non obstante clause, there can be no doubt that it must include appointments and posts in the services. To put a narrower construction on the word 'posts ' would be to defeat the object and the underlying policy ' Article 16(4), therefore, authorises the state to provide for the reservation of appointments as well as selection posts. It is not correct to say that the legislative history of the word 'posts ' shows that it has invariably been used to mean posts outside the services, Neither the relevant provisions of the Constitution nor those of the Constitution Act of 1935 justify such a conclusion. It is the context in which that word is used that must determine its meaning. 588 But in exercising its powers under the Article it should be the duty of the State to harmonise the claims of the backward classes and those of the other employees consistently with the maintenance of an efficient administration as contemplated by article 335 of the Constitution. Per Wanchoo, J. Article 16(4) which is in the nature of an exception or proviso to article 16(1) cannot be allowed to nullify equality of opportunity guaranteed to all citizens by that Article. Article 16(4) implies, as borne out by article 335, that the reservation of appointments or posts for backward classes cannot cover all or even a majority of appointments and posts and the words "not adequately represented", which provide the key to the interpretation of article 16(4), do not convey any idea of quality but mean sufficiency of numerical representation in a particular service, taken not by its grades, but as a whole. Appointments must, therefore, mean initial appointments, and reservation of appointments, the reservation of a percentage of initial appointments. Posts refer to the total number of posts in the service and reservation of posts means reservation of a certain percentage of posts out of total posts in the service. Per Ayyangar, J. Article 16(4), concerned as it is with the right to State employment, has to be read and construed in the light of other provisions relating to services contained in Part XIV of the Constitution and, particularly, article 335. So construed, the word "post" in that Article must mean posts not in the services but posts outside the services. Assuming that was not so, and the word 'posts ' meant posts in the services, the inadequacy of representation sought to be redressed by article 16(4) means quantitative deficiency of representation in a particular service as a whole and not in its grades taken separately, nor in respect of each single post in the service. Read in the light of article 335, article 16(4) can only refer to appointments to the services at the initial stage and not at different stages after the appointment has taken place. Article 16(4) contemplates prospective reservation of appointments and posts and does not authorise retrospective reservation.

(Civil) No.219 of 1988. WITH C.M.P. No. 8572 of 1989. (Under Article 139(A)(1) of the Constitution). AND TRANSFER PETITION NOS. 376 40 of 1985. Rajinder Sachar and R. Vasudevan for the Petitioners in Transfer Case No. 219/88 and C.M.P. No. 8572 of 1989. ' M.K. Ramamurthy, D.S. Chauhan, Pinaki Misra, M.A. Krish namoorthy, H.S. Parihar, R.P. Kapoor, O.C. Mathur, Ms. Madhu Khatri, Ms. Bina Gupta, D.N. Misra and Harish N. Salve for the Respondents in Transfer Case No. 2 19/88 and C.M.P. 8572 of 1989. G. Ramaswamy, Additional Solicitor General, Anil Dev Singh (NP), R.P. Srivastava, Ms. A. Subhashini and C.V.S. Rao for the Petitioners in Transfer Petition No. 376 40 1 of 1985. S.R. Seita and P.K. Manohar for the Respondent in Trans fer Petition Nos. 386 and 376 of 1985. The Judgment of the Court was delivered by THOMMEN, J. The first petitioner is a registered Central Trade Union claiming to represent about 85 per cent of the officers working in the various nationalised banks. Peti tioners 2 to 4 are principal office bearers of the first petitioner and are officers of different nationalised banks. They are aggrieved by Circular dated 23.8.1982 (Annexure A) issued by the Joint Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs, (Bank ing Division), New Delhi. They contend that the circular is contrary to the mandate of the Banking Companies (Acquisi tion and Transfer of Undertakings) Act, 1970 (Act No. 5 of 1970) (hereinafter referred to as the 'Act ') and the Natio nalised Banks (Management and Miscellaneous Provisions) Scheme, 1980 (hereinafter referred to as the 'Scheme '). They further contend that Clause 3 of the Scheme in terms of which the circular is purported to have been issued is ultra vires Section 9 of the Act unless the said clause is so read as to be in harmony with the Section, and when so read the said clause does not justify or support the impugned circu lar. The petitioners, therefore, 854 seek a writ of mandamus to direct the Central Government to appoint a nominee of the majority association of each of the nationalised banks as a member of its Board of Directors. The circular in question reads: "As you are aware, in terms of sub clause (c) of Clause 3 of Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1970/1980, one Director from among the employ ees of the nationalised banks who are not workmen, is to be appointed by the Central Government in consultation with the Reserve Bank of India on the Board of each of the Nationalised Banks. Unlike in the case of workman, the Scheme does not lay down any procedure for selection of the non workman Director. The intention clearly was that in the case of Officer Director, Government should have ample scope and freedom in select ing any officer of the Bank to be the non workman Director. However, hitherto panel of names sent by the banks for selection of the non workman Director has been confined to office bearers of the Association of Officers. Government has recently reviewed this matter in the light of the relevant provisions of the Scheme and come to a conclusion that there is no justification for restricting the choice to the office bearers of the Associations. " The object of the circular is to clarify that the Cen tral Government no longer regards itself bound by its earli er practice of appointing a person from out of the panel of three names submitted by the respective Association repre senting the majority of the non workmenemployees of each nationalised bank. The circular makes it clear that the Government wishes to appoint any officer of proven ability and character to the Board of Directors of a nationalised bank irrespective of his affiliation with any Association. The petitioners contend that the circular is undemocratic and contrary to the letter and spirit of the Act and the Scheme insofar as it cuts at the root of the representative form of selection for appointment to the Board of Directors as contemplated by the statute. The stand of the Central Government and other respond ents, as stated in their counter affidavits, appears to be that the object of the circular is to neutralise and dis courage trade unionism amongst the officers and to keep the directorship above union affiliation, and thus 855 encourage the growth of a "management culture". Mr. Rajinder Sachar, supported by Mr. Ramamurthi, contends that there is no justification whatsoever to issue any such circular for the very object of the Act is to encourage democratic selec tion of the Directors who will truly represent the interests of the various categories of persons mentioned in the Act. To discourage trade unionism is contrary to the very spirit of the statute and repugnant to constitutional principles enshrined in Article 19(1)(c) and Article 43A of the Consti tution of India. The Additional Solicitor General, representing the Central Government and Mr. Harish N. Salve, counsel for the Reserve Bank of India, contend that the Act postulates both election and nomination of members of the Board of Directors and the choice between the two modes of appointment is left to the Central Government. The election or nomination has to be conducted in a manner as specified in the Scheme. The Scheme in effect postulates all appointments to be by nomi nation. In the case of workmen employees, the Director is appointed by the Central Government from amongst the names of three employees furnished by the representative Union. Such appointment, though made out of, and restricted to, the panel furnished by the Union, is in effect a nomination of the one preferred by the Central Government. In the case of non workmen employees, the choice is not restricted to any panel and the only condition postulated is consultation with the Reserve Bank of India. Unionisation, though desirable among workmen, is not a matter to be encouraged in the case of other employees for selection to the Board of Directors, for the Directors must represent the interest of the bank as a whole and not of any special class of persons. The Addi tional Solicitor General also submits that appointment by election is not the only mode of representative appointment, but nomination is perfectly valid and more effective from the point of view of the true institutional interest, par ticularly with reference to management efficiency. In the light of these rival contentions, we shall exam ine the relevant provisions of the Act and the Scheme. Section 9 of the Act provides: "9. Power of Central Government to make scheme (1) The Central Government may, after consul tation with the Reserve Bank, make a scheme for carrying out the provisions of this Act. 856 (2) In particular,and without preju dice to the generality of the foregoing power, the said scheme may provide for all or any of the following matters, namely: (a) . . . . . (b) the constitution of the Board of Direc tors, by whatever name called, of the corre sponding new bank and all such matters in connection therewith or incidental thereto as the Central Government may consider to be necessary or expedient; (c) . . . . . . (d) such incidental, consequential and supplemental matters as may be necessary to carry out the provisions of this Act. (3) Every Board of Directors of a correspond ing new bank, constituted under any scheme made under subsection (1), shall include (a) representative of the employees, and of depositors, of such bank, and (b) such other persons as may represent the interests of each of the following categories, namely, farmers, workers and artisans, to be elected or nominated in such manner as may be specified in the scheme. " The object of Section 9 of the Act, insofar as it is material, is to empower the Central Government to make a scheme for the constitution of the Board of Directors so as to include representatives of the employees and other speci fied categories. "Employees" include workmen and non work men. The categories specified, apart from the employees, are depositors, farmers, workers and artisans. The representa tives of these classes of people are to be either elected or nominated in the manner specified by the Scheme. The legis lature has left it to the Central Government to make a scheme providing for appointment to the Board from amongst the specified categories either by election or by nomina tion. The discretion as to the mode of 857 appointment is, of course, left to the Central Government, but it is not an unrestrained or unrestricted discretion, but a discretion which must be reasonably exercised so as to give effect to the true intent of the legislature as to the composition of the Board of Directors. The object of the legislature is to give the Board a truly representative character so as to reflect the genuine interests of the various persons manning or dealing with the bank as an industry and a commercial enterprise. The object of the Act is to nationalise the banks in order to, as stated in the preamble to the Act, "control the heights of the economy and to meet progressively, and serve better, the needs of development of the economy in conformi ty with the national policy and objectives". The very pur pose of that legislative exercise is to render the largest good to the largest number of people of this "sovereign, socialist, secular, democratic republic". (See the preamble to the Constitution enshrining the national policy and objectives.) It is with this object in view that the Act has envisaged a truly representative Board of Directors chosen by election where election is feasible or by nomination where that mode is more appropriate. But the legislature has left it to the Central Government to specify by a scheme the manner in which the election or nomination is to be conduct ed, bearing in mind the true character and objective of the banking industry and its distinguishing features as a highly sensitive commercial enterprise. Neither the election nor the nomination should be conducted in a manner unmindful of the distinctiveness of the banking industry. What is postu lated is such election or nomination as would lend to the Board of Directors its truly representative character in consonance and harmony with the extremely delicate, vital and significant role of the banking industry in the context of the national policy and objectives and economic develop ment. The mode of election or nomination must, therefore, be such as would be ideally suitable and appropriate to the banking industry and the choice of the mode is generally a matter for decision by the Central Government. The Central Government must in this regard act in consultation with the Reserve Bank of India, for it is the latter that has the necessary expertise and intimate knowledge in the field of banking, finance and other connected matters. The Act, therefore, requires the Central Government to make the Scheme in consultation with the Reserve Bank of India. Any amendment or variation of the Scheme also requires consulta tion with the Reserve Bank of India. [See Section 9(4)]. The Additional Solicitor General is right when he submits that it 858 is generally within the discretion of the Central Government to choose the special mode of appointment. The Government may choose election or nomination as the appropriate mode of appointment in respect of various categories. But we do not agree with him when he submits that the Central Government has a discretion to avoid election even where election is appropriate and feasible in respect of a particular category of persons. The very object of leaving the choice to the Central Government as to the mode, which is election or nomination, is to enable it to reasonably exercise its discretion in such a way as to give the best form of repre sentation to every category of persons mentioned in the Act. It may be possible to appoint a representative of the depos itors by election instead of nomination. It would be per fectly within the discretion of the Central Government to choose that mode. On the other hand, the depositors being not an organised body of persons, although easily identifia ble, selection of their representative by nomination may be easier, more feasible and perhaps more appropriate for the purpose of appointment to the Board. Farmers, workers other than employees, and artisans mentioned under subsection 3(b) of Section 9 are best represented by nomination, they being difficult of identification and their connection with the bank being more remote than in the case of employees or even depositors. For these classes of people, the discretion is entirely that of the Central Government to choose the mode of representation. In the case of employees, on the other hand, election is indeed the most logical, the most appro priate, the most democratic and certainly the most advanta geous form of representation. They are well identified, well organised, well motivated and interested associates and participants in the banking industry. They are as much a part of the bank as the management is. There can be no legitimate management culture foreign to their vital inter ests. There can be no valid management policy contrary to their genuine needs. The Act does not contemplate a manage ment unmindful of the true and legitimate interest of the employees. In a nationalised bank, everyone is as much an employee as he is an employer. There is no antithesis be tween the management and the employees. The distinction that traditionally existed prior to nationalisation is no longer applicable. The true management culture is indeed the cul ture that represents the various interests of all persons specified under Section 9 as well as the larger and wider interests of national economy as postulated in the preamble to the Act. We will now examine the Scheme. Clause 3 of Chapter II of the Scheme provides: 859 "3. Constitution of the Board. As soon as may be after the commencement of this Scheme, the Central Government shall, by notification in the official Gazette, constitute the Board of a nationalised bank, consisting of ( a ) . . . . . . . . (b)(i) one Director, from among the employees of the nationalised bank, who are workmen, to be appointed by the Central Government from out of a panel of three such employees fur nished to it by the representative Union, within a date to be specified by the Central Government; . . . . . . . . . . ( i i ) . . . . . . . . . . . . . . . . . . . . . . . . . . . . ( i i i ) . . . . . . . . (c) one Director, from among the employees of the nationalised bank, who are not workmen, to be appointed by the Central Government after consultation with the Reserve Bank; ( d ) . . . . . . . . . ( e ) . . . . . . . . . ( f ) . . . . . . . . . ( g ) . . . . . . . . . ( h ) . . . . . . . . . The scheme making authority appears to us to have exercised the legislative power delegated to it in making the Scheme in consonance with the Act, although in a certain respect concerning the non workmen employees the intention of the delegate of the legislature could have been articu lated a little more explicitly. We say so in 560 the light of the contemporaneous construction placed on the statute by the delegate, namely, the Central Government, as evinced by its own practice prior to the circular dated 23.8.1982. Until the date of the circular, the consistent practice of the Central Government was to appoint a non workmen Director from out of a panel of three names fur nished to it by the majority association of non workmen employees. The Central Government understood the Act and the Scheme to warrant such mode of appointment in the case of all employees. In other words, the Central Government under stood sub clause (c) of Clause 3 regarding non workmen employees to warrant the same type of representation as in the case of workmen employees mentioned under sub clause (b) of Clause 3. The field of choice was thus understood by the Government to be limited to the panel of names furnished by the representative Union of workmen or Association of non workmen as the case may be. But, as stated earlier, sub clause (c) of Clause 3 is vaguely drafted and when read without regard to the legislative intent, as disclosed by the Act, is capable of a contrary interpretation, as is now sought to be put upon it by the Central Government, and that interpretation is, in our view, wrong, and, in any case, out of harmony with the principle enshrined in Articles 19(1)(c) and 43(A) of the Constitution The Additional Solicitor General poses the question whether the Scheme would not be even more defective if sub clause (c) were to receive the same construction as sub clause (b) so as to restrict the choice of appointment to the three persons specified on the panel furnished by the representative Association. The Act, he says, speaks of election or nomination, and if election were to be construed to be the appropriate mode of choosing the representatives of the employees, appointment by nomination of one person out of the panel furnished by the representative Union of workmen or Association of non workmen, as the case may be, would not be a perfect representation in keeping with the principle of election. That may or may not be so, and there is always room for improvements; but the petitioners have no complaint on that score. If the Central Government were to provide for election in the manner chosen by it so as to appoint the true representatives of the concerned employees, Mr. Sachat submits, the petitioners would have no complaint, provided the provisions laid down in that behalf are valid and reasonable. While, in our view, it is open to the Central Govern ment to amend the Scheme to improve on the machinery for the conduct of an appropriate election, it is incumbent upon it, until any such amend 561 ment is made, to work the present Scheme in such a way as to give the maximum scope for the concerned employees to exer cise their choice in the selection of their representatives. That means, it would be perfectly in order for the Central Government to continue the: practice followed by it prior to the circular in question or to hold election of the repre sentatives of the concerned employees, and, if necessary, to amend the Scheme suitably for that purpose. In the circumstances, we declare that the circular dated 23.8.1982 (Annexure A) is ultra vires the Act and the Scheme and it is, therefore, null and void and of no effect. The Transfer Case is accordingly disposed of. Civil Miscellane ous Petition No. 8572 of 1988 and Transfer Petitions Nos. 376 401 of 1985 are allowed. Parties shall bear their re spective costs. T.N.A. Petitions allowed.

The Central Govt. in exercise of its power under Section 9 of the enacted the Nationalised Banks (Management and Miscellaneous Provisions) Scheme, 1980. Clause 3(b) of the said scheme deals with the appointment of workmen Directors and it provides that the Central Govt. shall constitute the Board of a Nationalised Bank consisting of one Director from among the employees of the nationalised bank, who are workmen, to be appointed from out of a panel of 3 such employees furnished to it by the Representative Union. Clause 3(c) of the Scheme deals with appointment of non workmen Directors and it provides that the Central Government shall constitute the Board of a nationalised bank consisting of one director, from among the employees of the nationalised bank, who are not workmen, to be appointed after consultation with the Reserve Bank. The consistent practice of the Central Govt. was to appoint a non workman Director from out of a penal of 3 names furnished to it by the majority association of non workmen employees. By a circular dated 23.8.82, it was clarified that as far as appointment of non workmen Director is concerned, there is no justification for restricting the choice to the office bearers of the Association. This was to enable the Central Govt. to appoint any officer of proven 851 ability and character to the Board of Directors of a natio nalised Bank irrespective of his affiliation with any asso ciation. The petitioners in these petitions to this Court, chal lenged this circular as contrary to the mandate of the Act and the Scheme, and also contended that clause 3 of the Scheme was ultra vires Section 9 of the Act. Allowing the petitions, HELD: 1. The Circular is ultra vires the Act and the Scheme and it is, therefore, null and void and of no effect. [861C] 2. The object of the is to render the largest good to the largest number of people. The object of Section 9 of the Act is to empower the Central Govt. to make a Scheme for the constitution of the Board of Directors so as to include representatives of the employees i.e. workmen and non workmen and other specified categories viz. depositors, farmers, workers and artisans. The representatives of these classes of people are to be either elected or nominated in the manner specified by the Scheme. The legislature has left it to the Central Government to make a scheme providing for appointment to the Board from amongst the specified catego ries either by election or by nomination. The discretion as to the mode of appointment is left to the Central Govern ment, but it is not an unrestrained or unrestricted discre tion, but a discretion which must be reasonably exercised so as to give effect to the true intent of the legislature i.e. to give the Board a truly representative character so as to reflect the genuine interests of the various persons manning or dealing with the bank as an industry and a commercial enterprise. What is postulated is such election or nomina tion as would lend to the Board of Directors its truly representative character in consonance and harmony with the extremely delicate, vital and significant role of the bank ing industry in the context of the national policy and objectives and economic development. The mode of election or nomination must, therefore, be such as would be ideally suitable and appropriate to the banking industry. Neither the election nor the nomination should be conducted in a manner unmindful of the distinctiveness of the banking industry. The Central Govt. must in this regard act in consultation with the Reserve Bank of India which has the necessary expertise and intimate knowledge in the field of banking, finance and other connected matters. [856F H; 857A B, C G] 852 2.1 But the Central Government has no discretion to avoid election even where election is appropriate and feasi ble in respect of a particular category of persons. For the appointment of representatives of depositors, farmers, workers other than employees and Artisans, the discretion is entirely that of the Central Govt. to choose the mode of representation. On the other hand, in the case of employees, election is indeed the most logical, the most appropriate, the most democratic and certainly the most advantageous form of representation. They are well identified, well organised, well motivated and interested associates and participants in the banking industry. They are as such a part of the bank as the management is. There can be no legitimate management culture foreign to their vital interests. There can be no valid management policy contrary to their genuine needs. The Act does not contemplate a management unmindful of the true and legitimate interests of the employees. In a nationalised bank, everyone is as much an employee as he is an employer. There is no antithesis between the management and the em ployees. The distinction that traditionally existed prior to nationalisation is no longer applicable. The true management culture is indeed the culture that represents the various interests of all persons specified under Section 9 as well as the larger and wider interests of national economy as postulated in the preamble to the Act. [858B G] 3. The Central Govt. understood sub clause (c) of Clause 3 regarding non workmen employees to warrant the same type of representation as in the case of workmen employees men tioned under subclause (b) of Clause 3. The field of choice was thus understood by the Government to be limited to the panel of names furnished by the representative Union of workmen or Association of non workmen as the case may be. But sub clause (c) of Clause 3 is vaguely drafted and when read without regard to the legislative intent, as disclosed by the Act, is capable of a contrary interpretation viz. there is no justification for restricting the choice of non workmen Directors to the office bearers of the Associa tion. That interpretation is wrong and, in any case, out of harmony with the principle enshrined in Articles 19(1)(c) and 43(A) of the Constitution. [860B D] 4. It is open to the Central Government to amend the Scheme to improve on the machinery for the conduct of an appropriate election, it is incumbent upon it, until any such amendment is made, to work the present Scheme in such a way as to give the maximum scope for the concerned employees to exercise their choice in the selection of their represen tatives. [860H; 861A] 853

Civil Appeal No. 76 of 1952. Appeal from the judgment and order dated September 22, 1959 of the Calcutta High Court in Appeal from original order No. 230/1958. A.N. Sinha and P.K. Mukherjee, for the appellant. D.N. Mukherjee, for the respondent. The following judgments were delivered: Sarkar, J. On May 1, 1947, a decree was passed in favour of the appellant bank against the respondents by consent of parties for payment of Rs. 31,000/ in the manner specified. The decree provided that if the respondents failed to pay any of the instalments mentioned in it within four months of the date of its becoming due, the appellant bank "shall deem all . instalments in default and shall be entitled to realise all the said amounts by execution". The amounts payable under the decree by May 30, 1947 were all duly paid. That left a sum of Rs. 21,000/ payable by six annual instalments, each payable on the 30th December of a year, the first instalment being payable in 1947 and the last in 1952. None of these instalments was paid and an application for realising them by execution was made on August 26, 1957. In the meantime a petition for winding up the appellant bank had been presented on May 11, 1948 and an order for winding up had been made on August 3, 1948. Since then the appellant bank has been in the course of winding up. The application for execution was made by the liquidator in the course of the winding up. Under article 182(7) of the First Schedule to the Limitation Act 1908 an application for execution is barred if not made within three years from the date on which the amount sought to be realised was payable under the decree. On December 30, 1953, section 45 O was introduced in the Banking Companies Act, 1949 by the Banking Companies (Amendment) Act, 1953. Sub section (1) of that section is in these terms: section 45 0. (1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 or in any other law for the time being in force, in computing the period of limitation prescribed for a suit or application by a banking company which is being wound up, the period commencing from the date of the presentation of the petition for the winding up of the banking company shall be excluded. The appellant bank claims that this section saves its application for execution from the bar of limitation imposed by article 182(7). The respondents ' answer to this contention is first that section 45 O has no retrospective operation; it does not revive a debt which was already barred at the date of its enactment. Then they say that 713 all the instalments fell due on April 29, 1948 by the operation of the default clause and therefore, they were all barred under article 182(7) by December 30, 1953 when section 45 O was brought on the statute book. Thirdly they say that if it is held that the default clause gave the appellant bank an option which it had not exercised and the right to apply for execution in respect of the instalments arose on the dates they respectively fell due, the instalments which fell due on December 30 of the years 1947, 1948 and 1949 had become barred before the date of the enactment of section 45 0 and that section could not revive them and the instalments which fell due in the years 1948, 1949, 1950, 1951 and 1952 were not saved from the bar of limitation by section 45 0 as it provided for exclusion of a period commencing from the presentation of the petition for winding and was, therefore, confined to cases where the right had arisen before such presentation, which the right in regard to these instalments had not. First, as to the effect of the default clause, no real difficulty arises. It obviously gave an option to the appellant. As was said in Ram Culpo Bhattacharji vs Ram Chunder Shome(1), "The proviso by which the whole amount of the decree becomes due upon default in payment of any one instalment is a proviso which, look at it how you will, is put in for the benefit of the creditor, the decree holder, and his benefit alone; and when a proviso is put into a contract or security, and in 'security ' I include 'decree, ' for the benefit of one individual party, he can waive it, if he thinks fit. " There is not the least doubt that the default clause in the case in hand was intended for the benefit of the appellant bank; the clause had no operation till the appellant bank wanted to take advantage of it. The High Court took that view and with that I am in full agreement. The High Court further held that the appellant bank had not exercised the option to enforce that clause. Bachawat J. expressly said that the appellant "in fact has waived the benefit of that option." The learned Chief Justice held in view of the option, that "the starting point of limitation will be the dates On which each instalment became due. " He could have held this only in the view that the option had not been exercised. None of the parties appears to have contended to the contrary in the High Court. This being a question of fact it cannot be raised for the first time in this Court. On such a question of fact, the High Court 's finding is binding on us. Furthermore, undoubtedly if the respondents wished to contend that the option had been exercised, it was for them to have given evidence of such exercise but they did not do so. No such evidence has been brought to our notice from the records of the case. It has, therefore, to be held that the right to apply for execution in respect of the instalments under the decree arose on the dates on which they respectively fell due. The next question as to whether section 45 0 (1) has a retrospective operation is of real difficulty. Having. given the matter my (1) C.I 352, 354. 714 most anxious consideration, it seems to me that the better view would be to hold that it has such an operation. The general rule no doubt is, as was stated by Wright J. in In re. Athlumney,(1) "Perhaps no rule of construction is more firmly established than this that a retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. " It can no doubt be argued with force that no violence will be done to the language used in sub section (1) of section 45 O if it is read as applying only to cases where the right to apply has not become barred at the date of its enactments. But there are other considerations. Two reasons have operated on my mind to lead me to the conclusion that the general rule should not be applied in the present case. First, it is recognised that the general rule is not invariable and that it is a sound principle in considering whether the intention was that the general rule should not be applied, to "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 and what it was that the Legislature contemplated.": see Pardo vs Bingharn(2). Again in Cries on Statute Law, 6th ed., it is stated at p. 395, "If a statute is passed for the purpose of protecting the public against some evil or abuse, it may be allowed to operate retrospectively, although by such operation it will deprive some person or persons of a vested right. " To the same effect is the observation in Halsbury 's Laws of England, 3rd ed., vol. 36 p. 425. This seems to me to be plain commonsense. In ascertaining the intention of the legislature it is certainly relevant to enquire what the Act aimed to achieve. In Pardo vs Bingham(2) a statute which took away the benefit of a longer period of limitation for a suit provided by an earlier Act was held to have retrospective operation as otherwise it would not have any operation for fifty years or more in the case of persons who were at the time of its passing residing beyond the seas. It was thought that such an extraordinary result could not have been intended. In R.v. Vine(3) the words "Every person convicted of felony shall for ever be disqualified from selling spirits by retail . and if any person shall, after having been so convicted, take out or have any licence to sell spirits by retail, the same shall be void to all intents and purposes" were applied to a person who had been convicted of felony before the Act was passed though by doing so vested rights were affected. Melior J. observed (pp. 200 201). "It appears to me to be the general object of this statute that there should be restraints as to the persons who should be (1) , 551 552. (2) , 740. (3) 715 qualified to hold licences, not as a punishment, but for the public good, upon the ground of character . A man convicted before the Act passed is quite as much tainted as a man convicted after; and it appears to me not only the possible but the natural interpretation of the section that any one convicted of felony shall be ipso facto disqualified, and the licences, if granted, void. " Now the object of the present Act is beyond doubt. It is well known that prior to 1949 in our country a large number of mushroom banks had come into existence and were in the control of persons not very scrupulous or competent. Many banks came to grief and failed with the result that the depositors largely lost their moneys. It was with the object of giving relief to these innocent depositors that the original Act of 1949 and the Acts amending it were passed. A few of the sections may be referred to by way of illustration. Section 43 of the Act provides that every depositor shall be deemed to have proved his claim for the amount shown in the books of the bank until the liquidator showed reasons for doubting the correctness of the entry. Section 43A gives a right to preferential payment upto a sum of Rs. 250/ to such depositors. Indeed in Joseph Kuruvilla Vellukunnel vs The Reserve Bank of India) it was observed by this Court at p. 656, "the whole intend (sic.) and purpose of that Act is to secure the interests of the depositors. " There need now be no doubt about the object of the Act. One of the methods by which that object can be achieved clearly is by extending the period of limitation for the enforcement of the claims of a bank in liquidation so that more money may be collected for payment to the depositors. That is why section 45 O and its predecessor section 45 F had been enacted. Both extended the existing period of limitation in regard to claims by a bank against its debtors. That being so, it would be natural to think that the largest extension which the language used is capable of giving was intended. Then I find no reason why a distinction should have been intended between debtors the claims against whom might have become barred before the section was enacted and those the claims against whom became barred thereafter. The object would be better achieved by applying the section to both classes. I, therefore, think that the Act was intended to have a retrospective operation. The other reason why I think that sub section (1) of section 45 0 has a retrospective operation is provided by the terms of sub section (3) of that section. Retrospective operation is of course a question of the intention of the legislature and that intention has to be gathered from the whole statute. The two sub sections have, therefore, to be considered together: see Barber vs Pigden(1) and Hutchinson vs Jauncey (3). How sub section (3) is in these terms: The provisions of this section, in, so far as they relate to banking companies being wound up, shall also apply to a banking company in respect of which a petition (1) [1962] Suppl. 3 section C.R. 622. (2) (1937)IK.B. 664. (3) (1950)IK.B. 574. (D)5SCI 7 716 for the winding up has been presented before the commencement of the Banking Companies (Amendment) Act, 1953. It expressly makes sub section (1) applicable to a banking company being wound up on a petition presented before the amending Act. That would indicate that the first sub section was intended to apply to suits and applications by a banking company in liquidation even where the winding up petition had been filed before the amending Act. It should, therefore, apply to all such suits or applications even when they had become barred before the amending Act. Again it is indubitable that as a result of the third subsection a period which had started to run before the amending Act is to be excluded under the first sub section. The third subsection gives no hint that such exclusion is to be confined to cases where the right had not become barred before that Act. 1t expressly gives the first sub section a retrospective operation by permitting exclusion of an antecedent period. All this is strong indication that sub section (1) is to have a retrospective operation. If that is not the intention, then it is clear to me that sub section (3) need not have been enacted at all for clearly the first sub .section would by its own terms have applied to cases of winding up on a petition presented before the amending Act. It applies to all banking companies being wound up and. therefore, also to such companies as are being wound up on a petition presented before that Act. It could be said that even then the first sub section not have a retrospective operation but would only apply prospectively to a banking company being wound up on a petition presented before the Act. This may be illustrated by two cases. In R.v. St. Mary, Whitechapel (Inhabitants)(1) Lord Denman C.J. said that a statute "is not properly called a retrospective statute because a part of the requisites for its action is drawn from time antecedent to its passing." Again in Master Ladies Tailors Organisation vs Minister of Labour and National Service(2) it was observed, "The fact that a prospective benefit is in certain cases to be measured by or depends on antecedent facts does not necessarily . make the provision retrospective. " Why then was sub section (3) enacted? It must have been to give sub section (1) full retrospective operation, to make it affect vested rights. If it were not so, sub section (3) would have been a mere surplusage or enacted ex abundanti cautela. A statute is not to be so read unless that reading is compelled by the words used. There are no such words and I do not think that reading is justified by the rule of presumption that a. statute is not intended to have a retrospective operation. In this case particularly because of the clear intention of the Act to protect a sizable section of the public consisting of the depositors, I feel that a reading of sub section (1) ; at. p. 127. (2) (1950) 2 All. F.R. 525, 527. 717 (3) as a surplusage or ex abundanti cautela would be unwarranted. Furthermore, if that sub Section was enacted merely ex abundanti cautela, then why did it not also say that the provisions of section 45 O would apply to a case where the winding up order had been made before the Act? Why was it not thought that caution was necessary to provide for such a case also? I am not saying that sub section (3) does not make the section apply to a case where the winding up order had been made before the amending Act. All that I am saying is that the omission of a reference to the case of a winding up under such an order shows that sub section (3) was not ex abundanti cautela. It must have been intended to give full retrospective effect to section 45 0 including sub section (1) of that section. It remains now to deal with the last point. It is said that ' since sub section (1) allows the period commencing from the date of the presentation of the petition for winding up to be excluded in the computation of the period of limitation, it can only apply to a case where the period of limitation had commenced to run before that date. The contention is, unless it did so, the whole of the period cannot be excluded and the section permits exclusion of the whole or none. It is, therefore, said that even if the first subsection had a retrospective operation, it could result in saving the bar of limitation only so far as the application concerned the instalment which fell due on December 30, 1947 for the petition for the winding up of the appellant bank had been presented on May 11, 1948 and, hence, before the other instalments became due and the period of limitation in respect of them commenced to run. I am not inclined to accept this contention. I see no reason why it should have been intended that debts which fell due before the winding up petition was presented but were not barred on that date could be recovered and not those which became due thereafter. It has to be remembered that a liquidator is not always appointed on the presentation of the petition for winding up and It does not infrequently happen that a long time elapses between the two. It has also to be remembered that liquidator would require quite some time after his appointment to get acquainted with the state of affairs of the company in liquidation and start taking steps for the recovery of its dues. Therefore, there is no reason to think that it was not intended to give the benefit of the Act to a debt accruing due to a banking company after the presentation of a petition for its winding up. No doubt if sub section (1) is applied to a case of a debt accruing due after the presentation of the petition for winding up, such a debt would be completely free from the bar of limitation. But, is there any reason to think that this was not intended? I find none apart from a rigid and somewhat technical reading of the words used and this I am unable to accept, as it, to my mind, manifestly defeats the object of the Act. I here wish to point out that the bar of limitation is completely lifted in the case of a debt accruing due before the presentation of the petition for winding up which had not become time barred 718 then, and it is natural to think that the intention must also have been to lift the bar completely in the case of debts accruing due subsequently. There is no reason to make a distinction between the two classes of debts. I may add that the complete lifting of the ban of limitation would not produce an astounding result or a great hardship. It has to be remembered that the Act is geared up to seeing that the winding up proceedings are concluded as quickly as possible. To ensure that, large powers have been given to the Reserve Bank of India. Therefore, the removal of the bar of limitation should not keep a debtor in suspense for an inordinately long time. It is true that the sub section does not expressly say that the bar of limitation is totally removed in certain cases. That however is no reason for saying that it has not that effect. It clearly has that effect in the case of debts which accrued due prior to the presentation of the winding up petition and had not become barred on that date, even though the sub section does not expressly say so. The absence of these words, therefore, is not a reason leading to the view that debts which became due after the presentation of the petition for winding up were not intended to be protected. In my view, the first sub section should be read as permitting the exclusion of the entire period commencing from the date of the presentation of the petition for winding up where the debts became due before that date and in cases where the debt became due subsequently, such part of that period as commences from the date of the accrual of the debt. I think such a reading has the support of authority. In Cortis vs The Kent Water works Company(1) it was held that a statute which enabled a rate to be made upon certain persons and permitted a person against whom the rate had been made to file an appeal against the order making it on his entering into a recognizance, allowed a corporation which could not enter into a recognizance, to prefer the appeal without doing so. It was said that any other reading of the Act would defeat the object of the statute which was to subject corporations to rates. Bailey J. observed, "But assuming that they cannot enter into a recognizance, yet if they are persons capable of being aggrieved by and appealing against a rate, I should say that part of the clause which gives the appeal applies to all persons capable of appealing, and that the other part of the clause which requires a recognizance to be entered into applies only to those persons who are capable of entering into a recognizance, but is inapplicable to those who are not." (p. 331). On the same principle I would hold that the section permitted the whole of the period commencing from the presentation of the petition for winding up to be excluded where it could in fact be so done and a part of that period only where the whole of it could not be excluded. Any other reading would, to my mind, defeat the object of the Act and should, therefore, be avoided. (1).7 B.& C. 314. 719 In the result 1 would allow the appeal, set aside the judgment of the appellate bench of the High Court, and hold that the decree was fully executable. The appellant will be entitled to take all steps for such execution as arc permitted to it in law. The appellant will get the costs here and below. Wanchoo, J. This appeal on a certificate granted by the Calcutta High Court raises a question as to the interpretation of section 45 0 of the Banking Companies Act, No. X of 1949, (hereinafter referred to as the Act). The section was enacted in the present form by the Banking Companies (Amendment) Act, No. LII of 1953. It is necessary to state certain facts which are not in dispute now in order to see how the question arises. The appellant bank (in liquidation) through its Midnapore branch got a compromise decree against the respondent on May 1, 1947, for the sum of Rs. 31,000/ of which Rs. 2,155 were paid by the respondent that very day. The decree provided that Rs. 6,885/ were to be paid by May 9, 1947 and the balance of Rs. 22,000/ in seven instalments as under: 1. Rs. 1,000/ on May 30, 1947. Rs. 2,000/ on December 30, 1947. Rs. 4,000/ on December 30, 1948. Rs. 4,000/ on December 30, 1949. Rs. 4,000/ on December 30, 1950. Rs. 4,000/ on December 30, 1951. Rs. 3,000/ on December 30, 1952. The sum of Rs. 6,885/ and the first instalment of Rs. 1,000/were duly paid, but the respondent did not pay the second instalment due on December 30, 1947, nor did he pay the subsequent instalments. On May 11, 1948, a winding up petition was presented in consequence of which the appellant bank was wound up by an order dated August 3, 1948. Paragraph 5 of the compromise, which was part of the decree provided that if the judgment debtor did not pay any instalment and committed default, then four months after such default, all the instalments shall be deemed to be in default and the decree holder would be entitled to recover the entire amount of the decree by execution proceedings. It appears that the appellant attempted by applications presented in 1948 and 1950 to execute decree. It is, however, unnecessary to set out the details of those proceedings at this stage. Suffice it to say that nothing was realised in those proceedings and that the proceedings started on the application presented in 1950 were subsequently transferred to the High Court in view of the relevant provisions of the Act, which had come into force meanwhile. On August 24, 1957, the appellant presented an application in tabular form for execution of the decree on the ordinary original 720 civil side of the Calcutta High Court, and the present appeal has arisen out of the proceedings following thereon. It was stated in the application that the respondent had failed to pay the amount of the decree under execution and that the appellant had been wound up by an order of the court dated August 3, 1948 on a petition for winding up presented to it on May 11, 1948. It was prayed therefore that the High Court liquidator who was the official receiver of the appellant be appointed receiver without security and without remuneration to collect and realise amounts payable to the respondent by the Executive Engineer, Works and Buildings Department, Midnapore Division up to a maximum limit of Rs. 35,000/ . A prayer was also made for the appointment of an interim receiver and an interim order for appointment of such receiver was made on August 26, 1957, which order was confirmed on June 2, 1958. The respondent thereupon appealed and the main question that was raised then on its behalf was that the execution of the decree was barred by limitation. The appellant the other hand contended that in view of the provisions contained in section 45 0 of the Act, the application was within time. The appeal court held on an interpretation of section 45 O that the execution was barred by limitation. It is against this order that the present appeal has been flied on a certificate granted by the High Court. The contention of the respondent was that the execution application flied in 1957 was a fresh application and was clearly barred by time. The appellant met this objection on the basis of the provisions of section 45 O of the Act which reads as under: "(1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 or in any other law for the time being in force, in computing the period of limitation prescribed for a suit or application by a banking company, which is being wound up, the period commencing from the date of presentation of the petition for the winding up of the banking company shall be excluded. (2) . . (3) The provisions of this section, insofar as they relate to banking companies being wound up, shall also apply to a banking company in respect of which a petition for the winding up has been presented before the commencement of the Banking Companies (Amendment) Act, 1953. " I have already mentioned that the application for winding up the appellant was presented on May 11, 1948. The winding up order was made by the High Court on August 3, 1948. The Act came into force on March 16, 1949. On March 18, 1950, the Banking Companies (Amendment) Act, No. XX of 1950 721 came into force. On October 24, 1953 the Banking Companies (Amendment) Ordinance No. IV of 1953 was promulgated and lastly on December 30, 1953, the Banking Companies (Amendment) Act. No. LII of 1953 came into force. The case of the appellant throughout has been that the period from May 11, 1948 (when the winding up petition was made) to August 26, 1957 (when the execution application was made) had to be excluded in computing the period of limitation in view of sub sections (1) and (3) of section 45 O of the Act. This contention was rejected by the High Court. It was held that section 45 O did not have retrospective effect in the sense of reviving rights which had become barred on the date it came into force and in this view an application for execution of the entire amount was barred by time counting from the first default. In the alternative it was held that instalments 2, 3 and 4 had become time barred before the coming into force of section 45 O on December 30, 1953 and as there was nothing in section 45 O which could revive claims which had become time barred no execution could be taken out in respect of them. The High Court further held that section 45 O could not apply to instalments 5, 6 and 7 as the cause of action to execute the decree for realisation of amounts due under those instalments arose subsequent to the date on which the petition for winding up was presented and the language of sub section (1) of section 45 O indicated that its provisions were to apply only to cases where the period for the presentation of an application had commenced to run prior to presentation of the winding up application. The High Court consequently held the application for execution to be barred by time. It is well settled that provisions of an enactment operate prospectively. and that the right to sue or apply, which has become barred by lapse of time under the previous law, does not revive unless the new law, expressly or by necessary implication, so provides. The High Court held that there was nothing in section 45 0 which could lead to the conclusion that its provisions had retrospective effect in the sense that the right to apply which had become time barred on December 30, 1953 when the Amendment Act came into force, could revive, and consequently enable the appellant to apply for execution. The principal question therefore is whether the language of section 45 O (1) read with section 45 O (3) is retrospective in operation and revives claims that might have become barred by Limitation on the date when that section came into force i.e. December 30, 1953. Now so far as sub section (3) is concerned, that provision is certainly retrospective in the sense that it applies the provisions of section 45 O (1) to all banking companies which were being wound up on December 30, 1953, and thereafter, even though the application for winding up might have been made before December 30, 1953. The main purpose of sub section (3) obviously is to make it clear that section 45 O (D applies not only to those cases of banking companies where application for winding up is made on or after December 30, 1953 but also to those where the application for winding up had 722 been made before December 30, 1953 so long as the conditions for the application of section 45 0 (1) are fulfilled. The effect of this on the construction of sub section (1) will be considered presently. Section 45 O (1) begins with a non obstante clause and prescribes a special manner of computing the period of limitation in cases governed thereby notwithstanding anything to the contrary in the Indian Limitation Act, 1908. The first condition that is necessary for the application of section 45 O O) is that the suit or application should be by a banking company which is being wound up. Thus section 45 O (1) will not apply to a banking company which is not being wound up or where the winding up is over. It thus applies to a banking company between the date of the winding up petition and the conclusion of the winding up proceedings after a winding up order has been made. Where a suit or application is made by a banking company which is being wound up, the sub section provides for exclusion of a certain period in computing the period of limitation prescribed in the Indian Limitation Act, 1908. The exclusion is of the time commencing from the date of presentation of the petition for the winding up of a banking company to the date of suit or application. Thus where a banking company which is being wound up files a suit or makes an application on or after December 30, 1953, when section 45 O (1) came into force, the subsection directs that in such circumstances the period of limitation shall be calculated by excluding the period commencing from the date of presentation of the petition for winding up upto the date of the filing of the suit or application. These words in my opinion are categorical and lay down what period shall be excluded when a suit or application is filed by a banking company. which is being wound up. I cannot agree with the High Court that in applying section 45 O (1) the court has to consider whether the relief claimed in the suit or application by a banking company which is being wound up had become barred by limitation before December 30, 1953. when section 45 0 came into force. The condition necessary for the application of section 45 O (1) is that the suit or application should be filed by a banking company which is being wound up. Once it is clear that the suit or application is filed by a banking company which is being wound up, the court must exclude the period of limitation from the date of presentation of the petition for winding upto the date of the filing of the suit or application. In what manner the exclusion can be made will be considered later. But these words leave no scope to the court to consider whether the suit or application, if filed before December 30, 1953, would be barred by limitation or not. They imperatively lay down that where an application or suit is flied by a banking company (which is being wound up) on or after December 30, 1953, when section 45 O (1) came into force, the court must exclude the period commencing from the date of presentation of the petition for winding up to the date of the suit or application in computing the period of limitation. Further by virture of sub section (3), sub section (1) applies not only 723 to those banking companies which were being wound up on applications presented on or after section 45 O (1) came into force, but also to those banking companies where the application for winding up was made before December 30, 1953, provided the banking company was in the process of being wound up when the suit or application was filed. The Act was passed for the benefit of depositors and to give time to liquidators to familiarise themselves with the affairs of banks. That is why sub section (3) applied sub section (1) to all banking companies in liquidation even though the petition for winding up might have been made before the Act came into force. It follows that the legislature intended to help depositors in all banks in which liquidation proceedings were not over. Sub section (3) would lose a large part of its efficacy if sub section (1) and sub section (3) read together are not interpreted to provide for retrospective operation of the provisions of sub section It will be giving full effect to the intention of the legislature and advancing the remedy intended to be given to depositors if sub section (1) and sub section (3) are read together to be retrospective in the manner indicated above. The language of sub section (D on its plain reading necessarily implies that it was meant to be retrospective and that conclusion becomes inevitable when it is read with sub section (3) in the background of the remedy that the legislature intended to provide for the benefit of depositors. It may be mentioned that the Banking Companies (Amendment) Act, No. XX of 1950, had also provided a special period of limitation by section 45 F which was in these terms: "45 F. Special period of limitation Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (IX of 1908) or in any other law for the time being in force, in computing the period of limitation prescribed for any suit or application by a banking company, the period of one year immediately preceding the date of the order for the winding up of the banking company shall be excluded. " That provision however only excluded one year immediately preceding the date of the order for the winding up of the banking company. It seems thereafter the Banking Companies Liquidation Proceedings Committee 1952 was appointed and had recommended that "provisions may be made by the legislature to the effect that limitation will stop running against a banking company from the date of the winding up order." This recommendation appears to be the basis of section 45 0. Even so the words of section 45 O have to be interpreted as they stand whatever may have been the recommendation of the committee and on a plain construction of those words it is quite clear that sub section (1) of section 45 0 provides in the case of a suit or application filed by a banking company which is being wound up that the period commencing from the date of presentation of the petition for winding up of the banking company 724 to the date of suit or application shall be excluded. It will however be seen that though the committee recommended that limitation should stop running against a banking company from the date of the winding up order, the legislature made two changes when it proceeded to enact section 45 O (1) of the Act. In the first place it did not provide for stopping of the running of limitation; it provided for exclusion of a certain period. It further provided for exclusion of the period commencing from the presentation of a winding up petition and not from the winding up order as recommended by the committee. Now exclusion has been provided in sections 12 to 16 of the Limitation Act also. It is well settled that exclusion of time cannot take place where time has not begun to run before the date from which the exclusion begins or the time limited has already expired before such date. There can thus be no question of exclusion where the time has not begun to run and is not continuing to run. Therefore, though the committee might have recommended that limitation should stop running from the date of the winding up order, the legislature adopted the well known device of exclusion in order to help banking companies in realising their dues. I may add that in the earlier provision in Act XX of 1950 also. the legislature had only provided for exclusion and the same device was continued when section 45 O (1) was introduced by the Amendment Act of 1953. It is therefore clear that when the legislature enacted section 45 O (1) it made two changes already indicated in the recommendation of the committee and those changes are clear from the words of section 45 O. Therefore, in order that section 45 O (1) should apply, it is necessary firstly that the banking company should be in the process of being wound up when the suit or application is being filed, and secondly that the period of limitation for the suit or application should have begun to run before the date of the winding up petition but should not have run out before such date. Otherwise there can be no question of excluding the period beginning from the date of presentation of the petition for winding Up of the banking company. Further in view of sub section (3) of section 45 O, sub section (1) thereof will apply to all banking companies which are in the process of being wound up, even if the petition for winding up was made before section 45 0 (1) came into force and even if the winding up order was made in such case whether before or after the date on which section 45 O (1) came into force i.e. December 30, 1953. It is however urged that on this interpretation there may be some anomalies, particularly in the cases of instalment decrees. For example, it is said that where an instalment decree provides for six yearly instalments and does not provide for any default clause it may happen that some instalments may become due and may not be paid before a winding up petition while other instalments may become due after the winding up petition. In such a situation, the instalments which became due and were not paid before the winding up petition may be recoverable by execution 725 under section 45 0 (1) for the period of limitation having begun and not having run out the exclusion provided by section 45 O (1) comes into play, while in the case of instalments, which became due after the presentation of the winding up petition, the period of limitation not having begun exclusion could not come into play. It is said that it would be rather anomalous that earlier instalments should be recoverable but not later ones. It is submitted that if the subsection is interpreted to lay down stoppage of the period of limitation after the presentation of the winding up petition it will equally cover all instalments. It may be accepted that there would be this anomaly on the interpretation which I have accepted. But the language is clear and provides for exclusion which can only take place after the period of limitation has begun and before it has run out. Therefore, whatever the anomaly where the language is clear and unambiguous it has to receive the only construction of which it is capable. As against this I may point out that if the language of section 45 O (1) is interpreted as stopping of limitation in all cases after the presentation of the winding up petition it will result in equal anomalies. Take a case where a liquidator files a suit and gets a decree. Was it the intention of the legislature by this provision to lay down that there would be no limitation in such a case for the execution of the decree? That would be the result if the provision in section 45 0 (1) is interpreted as meaning stoppage of all limitation from the date of the presentation of winding up petition. But it could hardly be the intention of the legislature that the liquidator in such a case should not execute the decree which he gets within the period of limitation provided by the Indian Limitation Act. The reason for exclusion provided in section 45 0 (1) appears to be that after a winding up order the liquidator takes charge and he will naturally take time to familiarise himself with the affairs of the company. So in all cases where time has begun to run before the winding up petition and has not run out, the liquidator should get some breathing space and that is why the period from the date of the winding up petition is excluded. But where the time has not begun to run before the windings petition, the liquidator would have ample time within which to know the true state of affairs and in such a case the legislature did not intend that there should be no limitation as provided in the Indian Limitation Act. That is why one finds the language of exclusion in section 45 O (1). The benefit of that provision is meant for cases where time has begun to run but has not run out before the presentation of the winding up petition; it is not meant to provide that there would be no limitation in all cases where banking companies are in the process of liquidation. In any case if the legislature wanted to make such a sweeping provision I should have found appropriate language for that purpose in section 45 O (1). In the absence of such appropriate language, the provisions of section 45 O (D which appear to be clear and unambiguous, must receive their only proper construction already set out above. 726 Let me now see how this construction applies to the facts of the present case. The present case is governed by section 45 O (3) because the winding up petition was presented before section 45 O (1) came into force, but by virtue of sub section (3) of section 45 O, sub section (1) would apply to the present case. The question then is whether limitation had begun to run before May 11, 1948 on which date the winding up petition was presented and if so for which instalments or for the whole of the amount. If limitation had begun to run before May 11, 1948. the period from May 11, 1948 upto the date of the application for execution on August 26, 1957, would have to be excluded. Now the evidence is that there was default in payment of the instalment due on December 30. So the period of limitation for that instalment certainly began to run from that date. Further paragraph 5 of the compromise to which I have already referred lays down that if payment was not made of any instalment within after four months of the due date, the entire remaining decretal amount would also become due. These four months expired on April 30, 1948 and from May 1, 1948 the appellant bank was entitled to execute the entire decretal amount that remained due. Therefore the right to execute all the remaining instalments arose on May 1, 1948. Thus limitation for all the instalments from second to seventh began on May 1, 1948 while the application for winding up was made on May 11, 1948. In view of the interpretation of section 45 0 (1) which I have accepted, the appellant would be entitled to exclusion of the entire period from May 11, 1948 upto the 6ate of the execution application, and would thus be entitled to execute the decree for Rs. 12,000/which is the total of instalments 2 to 7 with interest. But it is said that the appellant cannot execute the whole decree as it had waived the first default. I have already indicated that the High Court had considered the matter both from the point of view of the whole amount and of each instalment. No question of waiver was raised by the respondent in his objection petition. On the other hand it seems to have been urged before the High Court that limitation started from the first default i.e., May 1, 1948 and so there was no question of considering the matter of later instalments at all. This was negatived by the High Court on the authority of Ranglal Aggarwalla vs Shyrnlal Tamuli(1) and that is how the High Court came to consider the question of instalments in the alternative. Besides it appears that two execution applications were made in this case one in February 1948 and the other in. July 1950. When the first execution application was made the default clause had not come into operation and the appellant only wanted execution of the second instalment of Rs. 2,000/ and prayed for attachment for Rs. 2,030/ , including interest. So there could be no waiver then. The second execution application was made not only after (1) 727 the first default but after two other defaults also of the instalments of Rs. 4,000/ each due on December 30, 1948 and December 30, 1949. The total of instalments then in default was only Rs. 10,000/ . Though a copy of the second execution application is not printed in the record, it is clear from the particulars in the present tabular form filed in 1957 that the relief sought at the second execution was by attachment for Rs. 26,070/ . Clearly therefore the appellant was executing the whole decree after the default and there can be no question of waiver in the circumstances: (see also the appellant 's statement of case paragraph 20). Bachawat J. (as he then was) who delivered a short separate judgment has certainly said that the present appellant could waive and had in fact waived the benefit of the default. But that with respect does not appear to be accurate. I am therefore of opinion that there was no waiver of the first default and so the appellant can take advantage of section 45 0 and execute the decree for the entire amount. I would therefore allow the appeal and set aside the order of the High Court, and order that execution should proceed according to law. The appellant will get its costs incurred before the appeal court and this court from the respondent. The remaining costs will abide the result. Raghubar Dayal, J. This appeal, by certificate under article 133(1)(a) of the Constitution, requires the construction of section 45 0 of the Banking Companies Act, 1949 (Act X of 1949), hereinafter called the Act. This section was enacted in its present form by the Banking Companies (Amendment) Act, 1953 (Act LII of 1953). hereinafter called the Amending Act. The question arises on these facts. The appellant bank, through its Midnapore Branch, obtained a compromise decree against the respondent in O.S. No. 25 of 1947 of the First Court of the Subordinate Judge, Midnapore, on May 1, 1947. The decree was for an amount of Rs. 31,000/ of which Rs. 2,115/were paid by the respondent that very day. The decree provided that Rs. 6,885/ were to be paid by May 9, 1947 and the balance of Rs. 22,000/ in seven instalments as under: 1. Rs. 1,000/ on May 30, 1947. Rs. 2,000/ on December 30, 1947. Rs. 4,000/ on December 30, 1948. Rs. 4,000/ on December 30, 1949 5. Rs. 4,000/ on December 30, 1950. Rs. 4,000/ on December 30, 1951. Rs. 3,000/ on December 30, 1952. The judgment debtor respondent did not pay the second and subsequent instalments. Paragraph 5 of the compromise which formed part of the decree provided that if the plaintiff decree holder 728 did not get the amount due to it on account of the instalments within 4 months from the time of default, it was to deem, on the expiry of the said 4 months, all the other instalments to be in default and would be entitled to realise the entire amount of the decree then due through execution proceedings. The appellant attempted, by applications presented in 1948 and in 1950, to execute the decree. The details relating to these applications and the proceedings thereon need not be set out here as they do not affect the question for consideration. Suffice it to say that nothing was realised in these proceedings and that the proceedings started on the application presented in 1950 were subsequently transferred to the High Court in view of the relevant provisions of the Act. On August 24, 1957, the appellant presented an application in a Tabular form for execution of the decree, on the ordinary original civil side of the Calcutta High Court. It was stated in column 10 meant for noting the mode in which the assistance of the Court was required that the defendant judgment debtor had failed to pay any portion of the decretal amount or interest, that the decree holder Bank was wound up by an order of the Court dated August 3, 1948 on a petition for winding up presented to it on May 11, 1948 and that the Court Liquidator, High Court, and the Official Liquidator of the decree holder Bank, be appointed receiver without security and without remuneration, to collect and realise the amount payable to the defendant firm and/or Sukumar Dutta. one of its partners, by the Executive Engineer, Works & Building Department, Midnapur Division, upto a maximum limit of Rs. 35,000/ . A further prayer was made that an interim receiver be appointed before issue of any notice of the application to the judgment debtor. On this application an interim order for the appointment of a receiver was made on August 26, 1957. This order was confirmed on June 2, 1958. The judgment debtor respondent appealed against this order contending that the execution of the decree was barred by limitation. The High Court agreed with the contention and dismissed the application and also set aside the order for appointment of receiver. It is against this order that this appeal has been presented under a certificate from the High Court. The contention for the judgment debtor is that the execution to realise intsalments number 2 to 7 had expired long before August 24, 1957 when the execution application in tabular form had been presented as the date for the payment of the last instalment was December 30, 1952. The period of 4 months after the expiry of December 30, 1952 within which the decree holder could execute the decree expired on May 1, 1953. The execution application was presented after the expiry of 3 years of this date. This 729 objection on the ground of limitation was met by the decree holder Bank on the basis of the provisions of section 45 O of the Act which reads: "(1) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 or in any other law for the time being in force, in computing the period of limitation prescribed for a suit or application by a banking company which is being wound up, the period commencing from the date of presentation of the petition for the winding up of the banking company shall be excluded. (2) Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 or section 543 of the or in any other law for the time being in force, there shall be no period of limitation for the recovery of arrears of calls from any director of a banking company which is being wound up or for the enforcement by the banking company against any of its directors of any claim based on a contract, express or implied; and in respect of all other claims by the banking company against its directors, the period of limitation shall be twelve years from the date of the accrual of such claims or five years from the date of the first appointment of the liquidator, whichever is longer. (3) The provisions of this section, in so far as they relate to banking companies being wound up, shall also apply to a banking company in respect of which a petition for the winding up has been presented before the commencement of the Banking Companies. (Amendment) Act, 1953. " To appreciate the contention based on this section it is necessary to mention a few more facts. On May 11, 1948, a petition for winding up by the Bank was presented. The winding up order was made by the High Court on August 3, 1948. The Act came into force on March 16, 1949. On March 18, 1950, the Banking Companies (Amendment) Act, 1950 (Act XX of 1950) came into force. On October 24, 1953, the Banking Companies (Amendment) Ordinance IV of 1953 was promulgated and lastly, on December 30. 1953, the Amending Act came into force. The contention for the appellant before the High Court and in this Court is that the period between May 11, 1948 when the windings application was filed and August 1957 when the execution application was presented, is to be excluded from the computation of the period of limitation, in view of sub sections (I) and (3) of section 45 O of the Act. This contention was rejected by the High Court on the ground that instalments Nos. 2, 3 and 4 had become time barred before the coming into force of section 45 O on December 30, 730 1953 and that there was nothing in section 45 0 to revive the claims which could not be enforced due to the lapse of time under the provisions of the Limitation Act. Section 45 0 was not held to apply to the case of instalments 5, 6 and 7 as the cause of action to execute the decree for the realisation of the amounts due under these instalments arose subsequent to the date on which the petition for winding up was presented and the language of sub section (1) of section 45 O indicated that its provisions were to apply only in cases where the period for the presentation of an application had commenced to run prior to the presentation of the winding up application. The High Court, consequently, held the application for execution to be barred by time and dismissed it. The contentions urged before the High Court by the respective parties have been repeated before us. It is thus that the question of the construction of section 45 O of the Act has arisen. It is no doubt true that the provisions of an enactment operate prospectively and that the consensus of opinion is that unless they expressly or by necessary implication provide otherwise. the right to sue or apply which had become barred by lapse of time under a previous enactment is not revived by the succeeding enactment. The High Court was of opinion that there is nothing in section 45 0 which could lead to the conclusion that its provisions had retrospective effect in the sense that the right to apply which had become time barred on December 30, 1953, when the Amending Act came into force, could revive and consequently enable the Banking Company to apply for that relief. Lahiri, C.J. said: "On this point it is significant to note that sub section 3 of section 45 O makes the provisions of the section applicable only to a banking company in respect of which a petition for winding up has been presented before the commencement of the Banking Companies (Amendment) Act of 1953; but does not make the provisions of the section applicable to debts due to the banking company which had become barred by lapse of time before the date of such commencement. Then again sub section 1 of section 45 0 provides that the period commencing from the date of the presentation of the petition for winding up of the banking company shall be excluded and does not say that this period shall always be deemed to have been excluded. The use of the future tense in sub section (1) indicates that the Legislature did not intend its provisions to operate on decrees which had before the date of its commencement become unenforceable by lapse of time. There is therefore neither any express word nor any necessary implication in section 45 0 to indicate that its provisions were intended by the Legislature to have retrospective effect." 731 Bachawat J., practically took the same view and said that sub section (1) of section 45 0 did not provide that the period from the date of presentation of the petition for winding up of the banking company would be always deemed to have been excluded and that though sub section (3) of section 45 O specially provided for the retrospective application of the section to a banking company the Legislature deliberately had not provided that sub section (1) of section 45 O would have a larger retrospective operation. I am of opinion that sub section (1) and specially when read with sub section (3)of section 45 0.) operates retrospectively and that the appellant 's application for execution presented to the High Court in 1957 for executing the decree for the realisation of the instalments in the payment of which the respondent judgment debtor made default was maintainable and not barred by time. It is not necessary for the retrospective operation of the provision of an Act that it must be stated that its provisions would be deemed to have always existed. That is one mode and may be an effective mode of providing that the provisions would have retrospective effect. Retrospective effect of an enactment can also be gathered from its language and the object and intent of the legislature in enacting it. In The Queen vs Vine(1) an enactment which was penal in nature was construed to have retrospective effect despite the rule that when an enactment is penal in nature it is not to be construed retrospectively if the language is capable of having a prospective effect given to it and is not retrospective, as the object of the ' enactment was not to punish offenders but to protect the public against public houses in which spirits were retailed being kept by persons of doubtful character. Government had been making laws for exercising control over the Banks since 1936 upto which time the Indian , 19 13, governed the working of Banking Companies as well. In that year, was added to the Indian . Amendments were made to this Part subsequently and, ultimately, it was repealed by the Banking Companies Act, 1949. In this Act too, Part 3A was added by the Amending Act of 1950. The Amending Act of 1953 substituted the present Part 3A in the Act for the Part originally introduced in 1950. Section 45 F which was inserted in the Act by the Amending Act of 1950 may be quoted, as some reference to it would be made subsequently. It reads: "45F. Special period of limitation Notwithstanding anything to the contrary contained in the Indian Limitation Act, 1908 (IX of 1908), or in any other law for (1) L.R. 10 Q.B. 195. (D)5SCI 8 732 the time being in force, in computing the period of limitation prescribed for any suit or application by a banking company, the period of one year immediately preceding the date of the order for the winding up of the banking company shall be excluded. " A scrutiny of the provisions of the Act and especially of Part 3A clearly indicates that the object of the Legislature in enacting these measures was to protect the interests of the depositors of the banking company and to expedite winding up proceedings. We need not refer to the provisions which would indicate such a purpose of the Legislature. The expeditious disposal of the winding up proceedings is clear by the provisions by section 40 which provides that notwithstanding anything to the contrary contained in section 466 of the , the High Court shall not make any order staying the proceedings in relation to the winding up of a banking company, unless the High Court is satisfied that an arrangement has been made whereby the company can pay its depositors in full as their claims accrue. In Joseph Kuruvila Vellukunnel vs The Reserve Bank India(1), it was observed: "An examination of the Banking reveals two things prominently. The first is that the whole intent and purpose of that Act is to secure the interests of the depositors. " It can be presumed that companies which are wound up had been usually mismanaged. Mismanagement can also account for the failure of the banking company to sue the debtors for the recovery of the amounts due to the banking company within limitation. This injures the interests of the depositors and others concerned in the proper running of the banking company. It is again within the range of possibility, nay probability, that the liquidator appointed for the banking company when it is ordered to be wound up would require some substantial time to acquaint himself with the complete position about the affairs of the company and that during such period limitation for instituting suits or making applications in the interests of the banking company may expire. This aspect is fully explained in paragraph 57 of the Report of the Banking Companies Liquidation Proceedings Committee, 1952, which is set out below: "The Committee has also considered the question as to whether the law of limitation should be further relaxed in favour of the Liquidator. The Liquidator has already been granted a year 's grace by Section 45F of the: (1) [1962] Supp. 3 S.C.R. 632, 656. 733 Banking . Most of the witnesses examined by us were of opinion that the Liquidator 's year was inadequate. They urged that in many cases it takes the Liquidator a long time to ascertain who the debtors are and the amounts due from them, particularly where the records are distributed in different parts of India or are incomplete. Under the procedure envisaged above the debtor is liable to be arraigned in the winding up proceedings, and is entitled to claim relief in such proceedings. As regards creditors, it is settled law that 'the Limitation Act ceases to run as from the winding up order so that a creditor whose claim is not then barred will not be barred by subsequent delay '. We see no reason why limitation should not cease to run against the banking company from the date of the winding up order. If the procedure envisaged above is adopted, the necessity for the Liquidator to file suits against the debtors of the bank will rarely arise. Further, the Liquidator shall have no scope for unconscionable delay in proceeding against the debtor. He is required to bring the debtor before the Court within 6 months from the date of the winding up order unless further time is granted by the Court. We therefore recommend that provision may be made by the Legislature to the effect that limitation will stop running against a banking company from the date of the winding up order. " It appears that the Legislature mostly accepted this view of the Committee and enacted section 45 O providing mainly that there would be no running of limitation against the banking company subsequent to the date of the petition for winding up with the result that limitation would run in the ordinary course upto the winding up petition. There is much logic behind it. Non action upto the date of the petition for winding up was on account of the mismanagement of the banking company. The debtor of the banking company gets advantage of the negligence of the company to sue him or apply against him within the period of limitation. Since the presentation of the petition for winding up of the company, the Court gets control over the affairs of the company and supervises the acts of the liquidator, in accordance with the provisions of the Act which, to secure necessary action in all matters within a reasonable time, provide certain periods for certain actions to be taken by the liquidator of the Court. It is to be presumed therefore that any delay in the taking up of any legal action by the Banking Company would be for good reasons. The Legislature seems to have been of the opinion that the interests of the banking companies, especially of its depositors, should not suffer on account of the delay which could not be avoided even when the Court was in charge of the affairs of the banking company. Viewed in this 734 perspective, it should appear that the relevant date for considering whether action can be taken by the banking company by suit or application is the date of presentation of the winding up petition. If the banking company had a right to sue or to apply on the date the petition for winding up was presented, that right should not be lost to it. I may now consider how far the legislature succeeded in making section 45 0 of the Act, specially its sub sections (1) and (3) carry out this object and intention. For the application of sub section (1), two things are necessary: (i) that a company is being wound up and (ii) that a suit is instituted or an application is made by such a banking company. If these two things exist, the period commencing from the date of presentation of the petition for winding up is to be excluded in computing the limitation prescribed for such a suit or application. The first condition would be satisfied by all companies with respect to which winding up orders had been made either before the commencement of the Amending Act of 1953 or thereafter. There is nothing in the language of the sub section to limit the expression companies being wound up ' to those companies with respect to which winding up orders are made subsequent to December 30, 1953. There seems to be no good reason why such a limitation on this expression be imposed. The provision is not for the benefit of such companies only but is for the benefit of all the companies which would be in the process of winding up during the enforcement of the Act. The process might have commenced before or after the enforcement of the Act. Naturally, petitions for the winding up of companies with respect to which winding up orders had been made prior to December 30, 1953, must have been made before that date. The language of sub section (1) plainly applies to companies which were being wound up when the Act came into force. I may refer to certain cases in which expressions of general import have been so construed. In Weldon vs Winslow(1) the provision of law for construction was: "a married woman shall be capable . of suing and being sued either in contract or in tort, or otherwise, in all respects as if she were a feme sole, and her husband need not be joined with her as plaintiff or defendant, or be made a party to any action or other legal proceeding brought by or taken against her, and any damages or costs recovered by her in any such action or proceeding shall be her separate property . " Brett, M.R. said at p. 787 that the section dealt with an action for tort and that after the Act came into operation a married woman (1) I.R.13 Q.B.D. 784. 735 might bring such an action in her own name and the damages and costs recovered shall be her separate property. He continued: "It is said that this is a retrospective construction, because the cause of action arose before the statute came into operation; but the section does not say anything about cause of action; it deals with bringing the action. and there is nothing in it to limit its provisions to causes of action arising after the statute came into operation. I think, therefore, that an action brought after the statute came into operation is within the plain words of section 1, and it is necessary to distort the grammatical meaning of the words to arrive at the interpretation proposed by the defendant 's counsel. " These remarks can apply aptly to the construction of sub section (1) of section 45 O. That sub section deals with the computation of limitation with respect to suits and applications filed after the coming into force of the Amending Act of 1953 and do not apply to suits and applications which had been filed earlier. The provisions say nothing about the time when the petition for winding up be presented. There is nothing to limit the provisions to petitions for winding up which had been presented after the Amending Act came into force. In Bank of Athens Societe Anonyme vs Royal Exchange Assurance(1) an application under sub section (1) of section 3 of the Law Reform (Miscellaneous Provisions) Act, 1934, empowering the Court to award interest on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment, was construed not to be restricted to proceedings taken after the Act had come into force. It was said by Branson J., at p. 773: "I think that on the true construction of that section the court in any proceeding, whenever commenced, whether before or after the Act, has the discretion which the section gives it. The words as they stand are applicable in that sense. " The construction I put on the provisions of sub section (1) gets support from the provisions of sub section It is to be noticed that sub section (3) does not provide that the provisions of sub section (1) would apply to banking companies with respect to which winding up orders had been made prior to the commencement of the Amending Act of 1953. If it had said so, the question we are considering now would not have arisen as that would expressly apply the provisions of sub section (1) to the companies which were being wound up on December 30, 1953. Sub section (3) provides that the provisions of the section, viz., of sub sections (1) and (2), shall also apply in so far as they relate to banking companies being wound up to a banking (1) 736 company in respect of which a petition for winding up has been presented before the commencement of the Amending Act. Sub section (3) contemplates cases in which the petitions for winding up had been made prior to the enforcement of the Act but no orders for the winding up of the company had been made. If the provisions of sub section (1) can apply to the companies with respect to which proceedings on a winding up petition were pending on December 30, 1953, it would be very anomalous if they would not apply to the companies with respect to which winding up orders had been made prior to December 30, 1953. This leads to the inference that sub,S. (1) by its own language applies to banking companies which were being wound up on December 30, 1953. Further, this would be apparent if we combine the provisions of sub sections (1) and (3) together, which could be read thus: "Notwithstanding. in force, in computing the period of limitation prescribed for a suit or application by a banking company which is being wound up, or in respect of which a petition for the winding up has been presented before the commencement of the Banking " Companies (Amendment) Act, 1953, the period commencing from the date of the presentation of the petition for winding up of the banking company shall be excluded." So read, it becomes clear that the period of exclusion would be available in connection with suits or applications by a banking company which is being wound up or with respect to which a petition for winding up has been made prior to December 30, 1953. I am further of opinion that if a restricted construction be placed on the provisions of sub section (1) of section 45 O, the effect of sub section (3) would be very much reduced. In fact, it will probably have no utility. If the cause of action for a suit or application had lapsed by efflux of time prior to or on December 30, 1953, the advantage of sub section (1) will not be available to the banking company on account of the provisions of sub section Sub section (3) itself does not give any particular right to the banking company. It only provides that whatever advantage a banking company can derive from the provisions of sub section (1) when it is being wound up, would be available to it even if it be not being wound up, if a petition for its winding up had been presented prior to the enforcement of the Amending Act of 1953. The only case in which the banking company can take advantage of sub section (3) then would be when the cause of action for the suit or application has not lapsed by December 30, 1953 and the proceedings on a winding up application were pending on that date. Such cases would be covered by the language of sub section (1) if the cause of action was alive on December 30, 1953. The order for the winding up of the company would be made subsequent to the date and therefore suits or 737 applications covered by sub section (1) would get the advantage of the provisions of that Act. The expression 'the period commencing from the date of the presentation of the petition for the winding up of the banking company shall be excluded ' fixes the point of time from which the excluded period will commence, and cannot be limited to the dates of such petitions which be presented after December 30, 1953. It is true, as stated in Jwala Prasad vs Official Liquidator(1), that the only purpose which sub section (3) of section 45 0 serves is to make it clear that sub section (1) will apply even when the petition for the winding up of a company is presented prior to the commencement of the Amending Act of 1953. I do not think that a separate subsection was enacted merely for the clarification of the point that the provisions of sub section (1) of section 45 O would take in such cases firstly because such cases would be covered by the language of sub section (1) and, if not, it could have been stated in sub section (1) itself that those provisions would apply where the petition for winding up was presented before or after the commencement of the Act by simply adding the expression 'presented before or after the commencement of the Act ' between the words 'banking company ' and 'shall be excluded '. I am therefore of the view that the effect of sub section (1) of section 45 0 is that if suits or applications made by a ,banking company which is being wound up or for whose winding up a petition has been presented prior to December 30, 1953, the period of limitation is arrested on the date of the presentation of the petition for winding up of the company and that it is not material whether such a date is earlier than December 30, 1953, or not and that therefore suits can be instituted and applications made even in regard to matters with respect to which such action could be taken on the date of presentation of the application for winding up of the company but could not be taken on the date the Amending Act of 1953 came into force. I may now refer to the case law on the point which is so far quite meagre. In Punjab Commerce Bank vs Brij Lal(2) the suit was filed on March 31, 1952 under section 45 B of the Banking Companies Act, 1949, as amended by Act XX of 1950. The cause of action arose on October 9, 1946. The application for winding up was made on February 17, 1948 and the winding up order was made on October 11, 1952. The suit was dismissed on December 2, 1952 as barred by time and an appeal against the dismissal was pending in the High Court on December 30, 1953 when the Amending Act of 1953 came into force. The suit was certainly time barred as the law (1) A.I.R. 1962 All. 486. (2) A.I.R, 1955 Punj, 45. 738 stood on the date of its institution. It was urged for the appellant that the Amending Act was retrospective in effect, that it applied to all suits which were pending on the date it came into force and as the appeal was a re hearing of the case the suit would still be within time as the Amending Act would be applicable to the case on the date of its decision. This contention was repelled. Bishan Narain J., said at p. 46: "I have carefully read this section and in my opinion section 45 0 is not retrospective in effect expressly or by necessary implication and further there is nothing in this section so retrospective in effect as to revive a claim which before that date had become unenforceable by lapse of time. " These observations apparently go against the appellant. They were, however, made in connection with the provisions of section 45 O applying to a suit pending on the date the Amending Act came into force and their import is limited by the other observations made when dealing with the provisions of section 45 O. These observations, on pp. 46 and 47, are: "It will be noticed that neither sub section (D nor sub section (3) makes any mention of a pending suit at the time when the Amending Act of 1953 came into force although the legislature does provide under section 45 C provisions for transferring such a suit to the High Court. In the absence of any specific mention of pending suits it not possible to hold that the section would apply to them. Sub section (3) is to a certain extent retrospective in effect because it makes sub section (1) applicable to those cases in which a petition for winding up had been presented before the Amending Act, 1953 came into force, but this retrospective effect cannot be extended to claims or suits pending in the High Court at the time that the Amending Act came into force." "Applying this test I hold that section 45 O does not apply to pending suits. " Sub section (3) of section 45 O has been considered to be retrospective to a certain extent. It was not necessary for the purpose of this case to consider in what cases and in what manner its retrospective provisions could be used. In Suburban Bank Ltd., vs Nistaran(1) the plaintiff had claimed inter alia several sums advanced as loans to the defendant on June 27, 1945. Winding up application was made on May 12, 1948; the winding up order was passed on June 30, 1948 and the suit was instituted on December 3, 1949 when section 45 F of the , (1) A.I.R. 1955 Cal. 172. 739 Banking Companies Act, introduced by the Amending Act 23 of 1949, provided a special period of limitation. The suit was clearly time barred in view of article 59 of the Limitation Act and section 45 F of the Banking Companies Act. Consequently, the question arose as to whether section 45 O, in view of the alteration of the law during the pendency of the suit, could apply to that suit. It was held that the question whether the proceeding is barred by the law of limitation must depend on the law in force when the proceeding was instituted and that sub section (1) of section 45 O does not refer to pending proceedings either in express words or by necessary implication. When considering the effect of section 45 O, it was said at p. 175: "The general words 'a suit or application ' can be given full effect by limiting them to suits and applications commenced after the sub section came into force. " No occasion arose to consider the effect of the provisions of sub section (3) of section 45 O in proceedings instituted after it came into force. In M/s. Kesarichand vs S.B. Corporation(1) the period of limitation was to commence from December 29, 1950. Article 85 of the Limitation Act was held applicable to the case. The application for winding up of the company was made on February 26, 1953 and winding up order was made on May 26, 1953. An application under section 45 D of the Act was presented on June 28, 1954, more than three years from the commencement of the period of limitation but within 6 months from the commencement of the Amending Act of 1953. December 29, 1950, being the starting point for limitation, the period of limitation for the application expired before December 30, 1953, a day before the Amending Act came into force and the question did arise whether the applicant could be allowed to get the advantage of section 45 O. It was contended that even if the benefit of section 45 O was given to the plaintiff bank, the application would be barred by limitation as the period which was to be excluded in view of sub section (1) of section 45 O commenced from the date of the presentation of the petition for winding up and ended on the date on which the winding up order was made. This contention was negatived. It was held that section 45 O was retrospective in operation. In Jwala Prasad 's Case(2) the period of limitation for taking proceedings under section 235 of the Indian Companies Act, 1913, commenced on November 1, 1947. The period prescribed was 3 years from the date of the first appointment of the liquidator or from the arising of the cause of action. The application for winding up was made on February 17, 1950 and the liquidator was appointed the same day. The liquidator applied for action under section 235 on (1) A.I.R. 1959 Assam 162. (2) A.I.R. 1962 All. 740 September 30, 1953, before the enforcement of the Amending Act of 1953. It was not a case therefore where an application was made by the banking company subsequent to the enactment of section 45 O. The question about the application being made within ,time was to be decided on the law of limitation as it stood on September 30, 1953. The law of limitation as laid down in section 235 was to apply taking into consideration the provisions of section 45 F of the Act as it stood on September 30, 1953. The Court held that the application could not be held to be in time even if the advantage of the provisions of section 45 F be given. It however considered the effect of section 45 O and said at p. 494 that there was nothing in the section to show that it was intended to be retrospective in effect in the sense that it revived remedies which had already come to art end and reliance was placed on the earlier Calcutta, Punjab ,and Assam cases referred to above. I therefore hold that the provisions of sub section (1) of section 45 0 are retrospective in effect and are applicable to suits or applications by a banking company in respect of causes of action for the suit or an application about which suits could be instituted or applications made on the date of the presentation of the winding up petitions made before the commencement of the Amending Act of 1953, even though the specified period of limitation for such action had expired before the enforcement of the Amending Act. In the present case, judgment debtor respondent defaulted in payment of the second installment due on December 30, 1947. On May 1, 1948, the appellant 's right to execute the decree for the entire amount due under the decree arose. The petition for the winding up of the company was made on May 11, 1948. The appellant 's application for execution presented in 1957 for the entire decretal amount due to it would not be time barred if it had exercised its option to have realised the entire decretal amount in default of payment of the second instalment. The right to exercise such an option arose on May 1, 1948, earlier than the presentation of the winding up application, but the appellant decree holder, however, appeared to have waived its such right and to have sought execution for the realisation of the various installments. Bachawat J., said in his judgment: "The respondent could waive and in fact has waived the benefit of that option and became entitled to enforce payment of each installment as and when it fell due. " It was therefore that an objection was raised to the execution of the decree for the installments failing due after the presentation of the winding up application on May 11, 1948 on the ground that the provisions of sub section (1) of section 45 0 applied only to such suits or applications the causes of action for which accrued before the relevant date, i.e., the date of the presentation of the application for winding up. The contention is that the provision about the 741 exclusion of time in the period of limitation predicate that the period of limitation had commenced to run prior to the beginning of the period to be excluded and that therefore the provisions of sub section (1 ') of section 45 O would apply only to suits or applications with respect to such causes of action which had accrued prior to the date of the winding up petition. This contention for the respondent has been accepted by the High Court. In this the High Court was in error. It is clear that the object of the Legislature was that the running of time during the period when the winding up proceedings were pending in Court and when the Court supervised those proceedings be not included in the period of limitation prescribed under the ordinary law of limitation. The banking company is entitled for the exclusion of the period from the date on which the application for winding up had been presented up to the date of institution of the suit or filing of an application, from the period of limitation prescribed for any suit or application and it would be illogical to hold that it is not entitled to ask that a shorter period, as the case would be when cause of action arose subsequently to the presentation of the application for winding up, be also excluded from the period of limitation prescribed for any suit or application. It appears to me that the object and intention of the Legislature in enacting sub section (1) of section 45 O was that the period subsequent to the presentation of the petition for winding up be not taken into consideration in computing the period of limitation. The entire period will be excluded from consideration if the limitation had begun to run prior to the presentation of the petition for winding up and the relevant lesser period i.e., the period commencing from the accrual of the cause of action subsequent to the date of presentation of the petition for winding up of the company would be excluded from the period of limitation which also commences from the accrual of the cause of action. It may be said that this means that the entire period of limitation is abrogated with respect to causes of action arising subsequent to the date of presentation of the petition for winding up. Such may be the result, but that does not mean construing the provisions of sub section (1) of section 45 O in the context of the circumstances and reasons for the enactment of those provisions. It would be anomalous to hold that action can be taken with the help of the provisions of sub section (1) of section 45 O with respect to causes of action which had arisen much earlier than the date of the presentation of the petition for winding up but action cannot be taken with respect to causes of action arising subsequent to such a date if it had not been taken within the prescribed period of limitation. There is nothing in the language of the sub section, in my opinion, to accept the contention for the respondent whose acceptance would lead to results which would not have been contemplated by the Legislature. 742 I am therefore of opinion that the appellant 's application for execution presented in August 1957 was presented within limitation. I would accordingly allow the appeal with costs, set aside the order of the Division Bench of the High Court on Letters Patent Appeal and restore that of the Single Judge. ORDER This appeal is allowed. The appellant will get its costs in this Court and in the High Court.

Respondent No. 1 who was the landlord of the accommodation in dispute obtained a decree of ejectment against respondent No. 2, his tenant. The appellants who were sub tenants under respondent No. 2 gave a notice to the landlord under section 15(2) of the Madhya Pradesh Accommodation Control Order, 1961, and thereafter filed a suit against him claiming a declaration that being lawful sub tenants they had become direct tenants of the landlord under s, 16(2) of the Act. The High Court held that the suit was barred by section 45(1) of the Act according to which no civil court could enter Lain any suit or proceeding in so far as it related to any matter which the Rent Controlling Authority under the Act was empowered to decide. In appeal to the Supreme Court. HELD : (1) For section 16(2) to come into operation the sub tenancy has to be lawful. The question of lawfulness of a sub tenancy was one which under section 15(3), the Rent Controlling Authority was empowered to decide. Under section 45(1) of the Act no civil court could entertain a suit or proceeding which the Rent Controlling Authority was empowered to decide. 'Me High Court was therefore right in holding that the suit had been filed in a court incompetent to try it and in dismissing it. [13OH 131B] (ii)There is nothing in section 15(3) of the Act to indicate that it does not apply to a case where a, landlord has already obtained a decree against a tenant. If in spite of the decree the appellants had a right under the Act to a direct tenancy under the landlord, they had a right to move the Rent Controlling Authority within the prescribed period for a decision of the question that the subletting to them was lawful. If the Rent Controlling Authority had the power to decide that question, a civil court would not be competent to decide the dispute in a suit brought within that period. The suit by the appellants had been filed within that period. [131G 132B] (iii)The fact that the landlord had not applied under section 15(3) did not affect the issue as it was for the appellants as sub tenants to prove that the sub letting to them was lawful. , [132C] (iv)Section 45(2) also did not help the appellants. That provision was clearly intended only to protect a right to resort to a civil court for the decision of a question as to an interest in property existing apart from the Act concerning which an adjudication may have been incidentally made by a Rent Controlling Authority in deciding a question which it had been empowered by the Act to decide. It does not authorise a civil court to decide a dispute as to the lawfulness of sub letting for the purpose of section 16(2). [133 C E] 129

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

Appellant plaintfull in the pre emption suit against the respondent (vendee) and Respondent 2 (Vendor) got a decree. As per the Trial Court decree the appellant deposited a sum of Rs. 15,500 as the price of the land and RB. 100 u tho charges on account of registration and other expenses of the dead. Respondent I (vendee) filed an appeal and the Additional District Judge dismissed the appeal with the modification directing the appellant to deposit a sum of Rs. 1836 25 more in the trial Court for payment to the vendee, within 15.4.1967; in case of failure the suit was directed to be dismissed. On 14.4.1967, the appellant deposited Rs. 1836.00 instead of Rs. 1836 25. He, however, made good the short deposit of 25 Paise on 28.10.1968 with the permission of the Court averring that the omission to deposit 25 paise was due to bona fide mistakes. The vendee held a regular second appeal and the High Court while dismissing the appeal directed the appellant to deposit within three Months ' time, a further sum of Rs. 500 for the improvements made to the land. The appellant deposited this sum within the time limit. In the execution case filed before the executing court, the respondent vendee Sled an application under order XX Rule 14(1)(b), raising an objection to the maintainability of the Execution Petition on the plea that short deposit of 25 Paise within 15.4.1967 amounted to deemed dismissal of the suit itself and that the default could not be condoned. The executing court by its order dt. 1.2.1969 overruled the objections. The Judgment debtor 's appeal before the II Additional District Judge was accepted holding that the provisions of order XX Rule 14(1)(b) C.P.C. were mandatory, the short deposit was not due to bona fide mistake and the default could not be condoned. The appellant preferred a second execution appeal before the High Court, without a certified copy of the order of the executing Court, but with an application for exemption from filing the certified copy. The appellant was directed on 25.11.1969 to file the 845 certified copy "as soon as is available". Tho appellant obtained a certified copy A on June 3, 1970 and filed it in the High Court on July 17, 1970. The appellant filed r an application on July 17, 1970 under section 5 of the Limitation Act for condonation of delay. The preliminary objection raised by the Respondent No. 1 that the appeal was barred by limitation, was accepted by the learned single Judge and the Execution second appeal thus stood dismissed. Hence the appeal after obtaining special leave of the Court. Allowing the appeal, the Court ^ HELD: 1. The High Court committed an error in not adverting to and not exercising its powers under Section 148 of the Code of Civil Procedure and in dismissing the appeal without going into the merit of the matter. Under section 148 C.P.C., the Court has enough power to enlarge time from time to time. The power given to the Court under section 148, is discretionary and is given for the purpose of securing the ends of justice in case of necessity. [848 C D, E F, 850 B] 2. Under order XX, rule 14 C.P.C. the plaintiff decree holder, in order to get delivery of possession of the land, has to fulfill two conditions : (i) he has to deposit in the court the purchase money together with the cost, if any decreed against him, and (ii) the deposit must be made on or before the date fixed by the Court. [849 E F] However, in view of the deposit of 25 Paise having been made, under the orders of the court after the acceptance of the bona fide mistake, the finding of the first executing appellate court that the non deposit could not be due to any bona fide mistake is absolutely untenable for the reason that while the appellant has deposited in total Rs. 17,936.00 from time to time as directed by the Courts there was absolutely no reason as to why he would not have deposited 25 paise, unless it was due to a mistake. Indeed, the appellant is the victim of Courts craze for technicalities of law at the cost of justice. [845 H, 849 G.H, 850 A]

Civil Appeal No. 1936 of 1978. Appeal by Special leave from the Judgment and order dated the 2nd August, 1978 of the Punjab & Haryana High Court in Civil Writ Petition No. 3272 of 1978. K.K. Jain, S.K. Gupta, P. Dayal and Arun D. Sauger for the Appellant. Harbans Lal, Ms. Kailash Mehta and R.N. Poddar or the Respondent. Messrs. Depro Foods Limited entered into a contract with the Haryana State Industrial Development Corporation Limited, whereby the said Corporation underwrote preference shares of Messrs. [, Depro Foods Limited of Rs. 100 each for a total value of Rs. 3.6 lacs on which a dividend of 9.5% per annum was payable. The appellant who was apparently, at the relevant time, the Managing Director of Messrs. Depro Foods Limited, executed an agreement under which he guaranteed in his personal capacity the payment of the dividend income due in respect of the aforesaid shares to the said Corporation. It is not disputed that Messrs. Depro Foods Limited did not pay Rs. 1,96,961 representing the dividend payable to the said Corporation, and therefore the appellant became personally liable as Guarantor to pay that amount. lt seems that on the failure of the appellant to make payment, the said Corporation invoked a provision in the Guarantee agreement which declares: 942 "5. That the dues on account of this guarantee will be recoverable in the manner in which land revenue is collected by the Government". Consequently it applied to the Assistant Collector, Sonepat, for instituting recovery proceedings. The Assistant Collector commenced coercive measures, which included the issue of a warrant for the arrest of the appellant. The appellant filed a writ petition in the High Court but a Division Bench of the High Court passed an order on August 2, l 978 summarily dismissing the writ petition At one stage during the hearing of this appeal it appeared possible that the dispute could be resolved if even now after a lapse of six years the appellant was prepared to discharge his liability as Guarantor by making payment to the Corporation of the amount sought to be recovered, if necessary in accordance with a convenient time schedule of instalments, but Shri K.K. Jain, learned counsel for the appellant, stated frankly that in spite of repeated communications to his client he had not received any reply from him. The questions have been raised by learned counsel for the appellant. Both questions arise on the assumption that the appellant is liable to pay the amount due from him. The first question is: Whether the amount can be recovered as an arrear of land revenue, including the mode by detention, where such right is founded in private agreement ? The other questions is: If the recovery is made by reference to clause (bb) of section 98 of the Punjab Land Revenue Act, 1887 which speaks of: "(bb) Dividend payable to the Government on 1. Cumulative Redeemable Preference Shares subscribed by or on behalf of the Government". Can that clause be employed for recovering dividend payable to Haryana State Industrial Development Corporation Limited ? Now there is no dispute that the appellant knowingly and deliberately entered into the Guarantee agreement, and is liable as Guarantor to make payment of the dividend due from Messrs Depro Foods Limited. Nor is it disputed that the amount due, with interest, stands at 2,02,166 in respect of the period ending with the year 1977. It was not contended that the appellant in fact does not possess sufficient funds or cannot avail of sufficient per 943 sonal property for the purpose of discharging the liability. The record also shows that before instituting coercive proceedings, the Assistant Collector provided the appellant an opportunity to pay up the amount due from him, and that the appellant make no attempt to discharge the liability. When that is so, we are of opinion that he is not entitled to relief in these proceedings. The appeal arises out of a writ petition, and it is well settled that when a petitioner invokes the jurisdiction of the High Court under Article 226 of the Constitution, it is open to the High Court to consider whether, in the exercise of its undoubted discretionary jurisdiction, it should decline relief to such petitioner if the grant of relief would defeat the interests of justice. The Court always has power to refuse relief where the petitioner seeks to invoke its writ jurisdiction in order to secure a dishonest advantage or perpetuate an unjust gain. This is a case where the High Court was fully justified in refusing relief. On that ground alone, the appeal must fail. Before parting with this case, we think it appropriate to point out that it would be beneficial to the general administration of justice if in certain cases where the High Court disposes of a writ petition in limine it does so by an order incorporating the reasons for such order. Where a case is admitted to final hearing, the judgment of the High Court disposing of the appeal almost invariably sets forth the reasons for its decision; We think it desirable that even when a writ petition is dismissed in limine the High Court should set out its reasons, however briefly, for doing so, especially in those cases where the matter in controversy is the subject of judicial examination for the first time and has not been processed earlier by an inferior judicial or quasi judicial authority. It is of some importance p that party should know from the court of first instance the reasons for an adverse decision received by it, for that promotes acceptance of the judgment and thereby ensures credibility and public confidence in the judicial institution. It must be remembered that the High Court exercises original jurisdiction under Article 226 of the Constitution, and it is only appropriate that a petitioner whose writ petition is dismissed in limine should know what are the precise reasons for the adverse order, whether the writ petition has been rejected on the ground of laches or other preliminary ground or on the merits of the controversy, and what are the reasons of the High Court therefor. We may add that a brief statement of reasons rendered by the High Court, when dismissing the writ 944 petition in limine, is of great assistance also to this Court when the judgment and order of the High Court are sought to he brought here by a petition for special leave to appeal. To sum up, we think it desirable that the High Court, when dismissing in limine, should set forth a brief statement of the reasons for its order instead of disposing of the proceeding by the single word "dismissed". Upon the considerations set forth earlier, we dismiss the appeal but without any order as to costs. M.L.A. Appeal dismissed.

The Haryana State Industrial Development Corporation Limited (for short, the Corporation) underwrote some preference shares of M/s. Depro Foods Limited. The appellant Managing Director of M/s . Depro Foods Ltd. guaranteed by an agreement in his personal capacity the payment of the dividend income due in respect of the aforesaid shares to the Corporation. One of the provisions in the guarantee agreement declared "that the dues on account of this guarantee will be recoverable in the manner in which land revenue is collected by the Government." The Corporation applied to the Assist and Collector for instituting recover proceedings, against the appellant because M/s. Depro Foods Ltd. failed to pay Rs, 1,96,961 representing the dividend payable by it. The Assistant Collector issued a warrant for the arrest of the appellant since he made no effort to pay up the amount due from him. The appellant filed a writ petition in the High Court against the recovery proceedings which was dismissed in limine. Hence this appeal by special leave. Dismissing the appeal, ^ HELD: (1) This Court always has power to refuse relief where the petitioner seeks to invoke its writ jurisdiction in order to secure a dishonest advantages or perpetuate an unjust gain. Under article 226 of the Constitution, it is open to the High Court to consider whether, in the exercise of its undoubted discretionary jurisdiction, it should decline relief to such petitioner if the grant of relief would defeat the interests of justice, The High Court was fully justified in refusing relief to the petitioner. [943C; B] 941 (2) In the instant case the appellant knowingly and deliberately entered into the Guarantee Agreement, and is liable as Guarantor to make payment of the dividend due from Messrs Depro Foods Limited. It was not contended that the appellant in fact does not possess sufficient funds or cannot avail of sufficient personal property for the purpose of discharging the liability. The record also shows that the appellant made no attempt to discharge the liability. When that is so he is not entitled to relief in these proceedings. [942H; 943A B] (3) It is desirable that the High Court, when dismissing a writ petition in limine should set forth a brief statement of the reasons for its order instead of disposing of the proceedings by the single word 'dismissed ' especially in those cases where the matter in controversy in the subject of judicial examination for the first time and has not been processed earlier by an inferior judicial or quasi judicial authority. [943E F]

tition (CRL.) No. 1218 of 1990. (Under Article 32 of the Constitution of India). John Joseph and T.G.N. Nair for the Petitioner. A.D. Giri, Solicitor General, Ashok Bhan, Ms. A. Subhashini and T.T. Kunhikannan for the Respondents. The Judgment of the Court was delivered by VERMA J. This writ petition under Article 32 of the Constitution of India is by the mother of the detenu Noor alias Babu to quash the detention order F. No. 801/1/90 PITNDPS dated 25.1.1990 passed under Section 3 of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (in short 'PIT 'NDPS Act ') and the order of confirmation F. No. 801/1/90 PITNDPS dated 24.4.1990 'passed under Section 9(f) read with Section 10(2) of the PITNDPS Act, by the Central Government directing detention of the detenu for a period of two yeare w.e.f. 30.1.1990. The only argument advanced in support of this writ petition is infraction of Article 22(5) of the Con 424 stitution of India. The facts material for the point raised are stated hereafter. The detenu was arrested from his family estate at Kochuveetil House, Kuthugal, Udumpanchola Taluk, Idikki District, Kerala on 19.10 1989 on the accusation that he and his brothers were involved in extensive illicit cultivation of ganja plants (Cannabis Sativa) in violation of the provisions of (in short 'NDPS Act '), He was produced before the Judicial Magistrate who rejected his bail application. The Sessions Judge also rejected the bail application once but late, granted conditional bail. Thereafter, the detention order dated 25.1.1990 was served on the detenu on 30.1.1990. It was stated therein that even though prosecution of the detenu was likely to be initiated under the NDPS Act, there was likelihood of the detenu indulging in cultivation and production of narcotic drugs (ganja) on the detenu being released on bail on account of which there was compelling necessity to detain him under the PITNDPS Act. The detenu was informed that he had a right to make representation to the detaining authority, Central Government and the Central Advisory Board against the detention order. The mode of address of the representation to the Central Government and the Central Advisory Board was also indicated in the detention order along with the grounds of detention in accordance with Article 22(5) of the Constitution of India. The detenu 's case was referred by the Central Government to the Central Advisory Board on 2.3.1990. During pendency of the reference before the Advisory Board, the detenu made his representation on 24.3.1990 and addressed it to the Advisory Board. The Advisory Board considered the reference relating to the detenu made by the Central Government and also the detenu 's representation submitted to it. The Advisory Board, gave the opinion that there was sufficient cause to justify his preventive detention. The Central Government then made the order dated 24.4.1990 confirming his detention and directed that the detenu Noor alias Babu be detained for a period of two years w.e.f. 30.1.1990. It is admitted that the Advisory Board considered the detenu 's representation before sending its opinion to the Central Government along with the entire record including the representation submitted by the detenu. It is also admitted that the Central Government made the order of confirmation dated 24.4.1990 on receipt of the opinion of the Advisory Board, but there was no independent consideration of the detenu 's representation by the Central Government at any time. In the counter affidavit filed initially by Shri A.K. Roy, Under Secretary to 425 the Government of India, this fact was not clearly stated and, therefore, we directed an additional affidavit to be filed. In the additional affidavit filed by Shri A.K. Roy, it has not been disputed that the Central Government did not at any time consider independently the detenu 's representation addressed to and given to the Advisory Board. In the additional affidavit, the stand of the Central Government in this behalf has been stated thus: ". Since the detenu in the present case has not made any representation to the Central Government, the assertion in para 2 of the grounds of petition that no opportunity was afforded by the Central Government to the said detenu is vehemently denied. The question of consideration of a representation and providing of an opportunity would only arise when a representation is duly made to the Central Government. " On the above facts, the question is: Whether there has been any infraction of the guarantee under Article 22(5) of the Constitution as a result of Central Government 's omission to consider the detenu 's representation independent of its consideration by the Advisory Board? The Central Government 's stand is that the detenu 's representation being addressed to the Advisory Board to which it was submitted during pendency of the reference before the Advisory Board, there was no obligation on the Central Government also to consider the same independently since the representation was not addressed to the Central Government. The Constitutional mandate in Article 22(5) was considered recently by a Constitution Bench in K.M. Abdulla Kunhi and B.L. Abdul Khader vs Union of India and Ors., State of Karnataka and Ors., JT , in view of some conflict in earlier decisions of this Court regarding the detaining authority 's obligation to consider the detenu 's representation independently of the Advisory Board 's duty in this behalf. The Constitution Bench held as follows: "It is now beyond the pale of controversy that the constitutional right to make representation under clause (5) of Article 22 by necessary implication guarantees the constitutional right to a proper consideration of the representation. Secondly, the obligation of the Government to afford to the detenu an opportunity to make representation is distinct from the Government 's obligation to refer the 426 case of detenu along with the representation to the Advisory Board to enable it to form its opinion and send a report to the Government. It is implicit in clauses (4) and (5) of Article 22 that the Government while discharging its duty to consider the representation, cannot depend upon the views of the Board on such representation. It has to consider the representation on its own without being influenced by any such view of the Board. The obligation of the Government to consider the representation is different from the obligation of the Board to consider the representation at the time of hearing the references. The Government considers the representation to ascertain essentially whether the order is in conformity with the power under the law. The Board, on the other hand, considers the representation and the case of the detenu to examine whether there is sufficient case (sic) for detention. The consideration by the Board is an additional safeguard and not a substitute for consideration of the representation by the Government. The right to have the representation considered by the Government, is safeguarded by cl. (5) of Article 22 and it is independent of the consideration of the detenu 's case and his representation by the Advisory Board under cl. (4) of article 22 read with Section 8(c) of the Act. (See: Sk. Abdul Karim & Ors. vs State of West Bengal, [ ; ; Pankaj Kumar Chakrabarty & Ors. vs State of West Bengal, [1970]1 SCR 543; Shayamal Chakraborty vs The Commissioner of Police Calcutta and Anr., [ ; ; B. Sundar Rao and Ors. vs State of Orissa, [ 1; John Martin vs State of West Bengal, 1 1; section K. Sekawat vs Stale of West Bengal; , and Haradhan Saha & Anr. vs State of IVest Bengal and Ors. , ; (emphasis supplied) It is thus clear that the obligation of the Government to consider the representation is different and in addition to the obligation of the Board to consider it at the time of hearing the reference before giving its opinion to the Government. Consideration of the representation by the Government has to be uninfluenced by the view of the Advisory Board. In short, the detenu 's right to have the representation considered by the Government under Article 22(5) is independent of the consideration of the detenu 's case and his representation by the Advi 427 sory Board. This position in law is also not disputed before us. The learned Solicitor General, however, contended that in the present case there being no representation addressed to the Central Government, the only representation made by the detenu being addressed to the Advisory Board during pendency of the reference, there was in fact no representation of the detenu giving rise to the Central Government 's obligation to consider the same. The question is: Whether this contention can be accepted in the face of the clear mandate in Article 22(5) of the Constitution? It is undisputed that if there be only one representation by the detenu addressed to the detaining authority, the obligation arises under Article 22(5) of its consideration by the detaining authority independent of the opinion of the Advisory Board in addition to its consideration by the Advisory Board while giving its opinion. In other words, one representation of the detenu addressed only to the Central Government and not also to the Advisory Board does not dispense with the requirement of its consideration also by the Advisory Board. The question, therefore, is: Whether one of the requirement of consideration by Government is dispensed with when the detenu 's representation instead of being addressed to the Government or also to the Government is addressed only to the Advisory Board and submitted to the Advisory Board instead of the Government? On principle, we find it difficult to uphold the teamed Solicitor General 's contention which would reduce the duty of the detaining authority from one of substance to mere form. The nature of duty imposed on the detaining authority under Article 22(5) in the context of the extraordinary power of preventive detention is sufficient to indicate that strict compliance is necessary to justify interference with personal liberty. It is more so since the liberty involved is of a person in detention and not of a free agent. Article 22(5) casts an important duty on the detaining authority to communicate the grounds of detention to the detenu at the earliest to afford him the earliest opportunity of making a representation against the detention order which implies the duty to consider and decide the representation when made, as soon as possible. Article 22(5) speaks of the detenu 's 'representation against the order ', and imposes the obligation on the detaining authority. Thus, any representation of the detenu against the order of his detention has to be considered and decided by the detaining authority, the requirement of its separate consideration by the Advisory Board being an additional requirement implied by reading together clauses (4) and (5) of Article 22, even though express mention in Article 22(5) is only of the detain 428 ing authority. Moreover, the order of detention is by the detaining authority and so also the order of its revocation if the representation is accepted, the Advisory Board 's role being merely advisory in nature without the power to make any order itself. It is not as if there are two separate and distinct provisions for representation to two different authorities viz. the detaining authority and the Advisory Board, both having independent power to act on its own. It being settled that the aforesaid dual obligation of consideration of the detenu 's representation by the Advisory Board and independently by the detaining authority flows from Article 22(5) when only one representation is made addressed to the detaining authority, there is no reason to hold that the detaining authority is relieved of this obligation merely because the representation is addressed to the Advisory Board instead of the detaining authority and submitted to the Advisory Board during pendency of the reference before it. It is difficult to spell out such an inference from the contents of Article 22(5) in support of the contention of the learned Solicitor General. The contents of Article 22(5) as well as the nature of duty imposed thereby on the detaining authority support the view that so long as there is a representation made by the detenu against the order of detention, the aforesaid dual obligation under Article 22(5) arises irrespective of the fact whether the representation is addressed to the detaining authority or to the Advisory Board or to both. The mode of address is only a matter of form which cannot whittle down the requirement of the Constitutional mandate in Article 22(5) enacted as one of the safeguards provided to the detenu in case of preventive detention. We are, therefore, unable to accept the only argument advanced by the learned Solicitor General to support the detention. On this conclusion, it is not disputed that there has been a breach by the Central Government of its duty under Article 22(5) of the Constitution of India to consider and decide the representation independently of the Advisory Board 's opinion. The order of detention dated 25.1.1990 as well as the order dated 24.4.1990 of its confirmation passed by the Central Government are, therefore, quashed. This shall not, however, affect the detenu 's prosecution for the alleged offence and it shall also not be construed as a direction to release him in case he is in custody as a result of refusal of bail. The writ petition is allowed, accordingly. G.N. Petition allowed.

The original occupant of the suit godowns had on 1.10.1963 granted to the appellant a licence in respect of the premises and subsequently by a deed of assignment dated 13.8.1966 assigned all its rights, title and interest in the premises in favour of the appellant. The appellant had in the meantime by agreement dated 27.3.1964 permitted the second respondent to store goods in the premises. The appellant thereafter requested the Corporation to recognise it as the principal occupant of the premises by means of a formal agreement. This request was at first rejected by the Corporation on the ground that the second respondent, had been already in occupation of the premises. Subsequently the Corporation examined the terms and conditions of the agreement dated 27.3.1964 and after satisfying itself the Corporation transferred the occupancy right to the appellant on the appellant executing a formal agreement dated 17.6.1967. A notice dated 25.7.1969 terminating tenancy in terms of the agreement dated 17.6.1969 was served on the appellant. This was followed by an enquiry under the Bombay Municipal Corporation Act 1888 which resulted in the order of eviction dated 6.1.1971, the appellant being the principal tenant and the second respondent as a sub tenant. The enquiry officer, acting as a delegate in terms of section 68 and exercising the power of Commissioner of the Municipal Corporation of Greater Bombay, the first respondent under section 195B, ordered eviction of the appellant on the ground of sub letting the premises. The enquiry officer, on inspection, found that the second respondent was in occupation of the premises as a sub lessee that the appellant 830 had sub let the premises contrary to the terms of the conditions of occupation and had thus become an unauthorised occupant liable to be evicted from the premises in terms of section 105B, and passed an order of eviction against the appellant. This order was, on appeal, set aside by the appellate officer, on appreciation of the evidence and the terms of the agreements, the appellate officer held that the agreement dated 27.3.1964, approved and recorded the assignment and transfer of the right, title and interest of the original occupant to the appellant, and recognised the appellant as the principal occupant, and that the Corporation was at all material times aware of the appellant 's relationship with the second respondent and the occupation of the premises by the second respondent under the appellant. The eviction of the appellant solely on the ground of sub letting was therefore unwarranted. The High Court in exercise of its jurisdiction under Article 227 of the Constitution held that the appellate officer was wrong in saying that the circumstances had not altered so as to warrant an order of eviction on the ground of sub lease, and that the lease in favour of the appellant had been duly determined by the Corporation in terms of the contract, and the appellant having thus become an "unauthorised" occupant was as such liable to be evicted under clause (b) of sub section (1) of section 105B. The High Court accordingly set aside the order made by the appellate officer under section 105B and restored the order of eviction made under section 105B by the Enquiry Officer. In the appeal to this Court it was submitted on behalf of the appellant that persons in occupation of premises under authority are not liable to be evicted otherwise than on any one of the statutorily specified grounds, and that the application of clause (b) of sub section (1) of section 105B, is confined to persons in unauthorised occupation, and that the appellate officer having found that the Corporation when it entered into an agreement of occupation with the appellant on 17.6.1967 fully aware of the terms and conditions under which the second respondent was in occupation of the premises under the appellant, the High Court was not justified in upholding the eviction of the appellant on the very same ground. On behalf of the respondent No. 1 Corporation it was submitted that in view of the finding that the sub lease granted or renewed by the appellant was contrary to clauses (6) and (2) of the agreement dated 17.6.1967 the appellant has, after the expiry of the period stipulated in 831 the notice dated 25.7.1969, become an unauthorised occupant, and is liable to be evicted in terms of clause (b) of sub section (1) of section 105B. On the question: whether it is open to the Corporation to have recourse to clause (b) of sub section (1) of section 105B to order eviction of the appellant as an unauthorised occupant, and whether clause (b) is attracted where eviction is sought to be made by determination of authority otherwise than in terms of the statute. Allowing the appeal, the Court, HELD: 1. Section 105A to section 105H of Chapter VA were inserted in the Act in 1961 to provide for speedy eviction of persons in unauthorised occupation of Corporation premises. (839C) Section 105A(d) defines 'unauthorised occupation '. This definition shows that occupation of Corporation premises without authority for such occupation is an unauthorised occupation. Such occupation includes continuance in occupation by a person after the authority under which he occupied the premises has "expired" or it has been "duly determined". the definition thus includes not only a trespasser whose initial and continued occupation has never been under any valid authority, but it also includes in equal measure a person whose occupation at its commencement was under authority, but such authority has since expired, or, has been duly determined Which means validly determined. The expiry of authority to occupy occurs by reason of the terms or conditions of occupation. On the other hand, the determination of authority to occupy to be due or valid must be founded on one of the grounds specified by the statute. Any order of eviction on the ground of either "expiry" or due determination" has to be made in accordance with the procedure prescribed by the statute. [839D H] 3. Clause (a) of sub section (1) of section 105B contains various grounds upon which a person is liable to be evicted. Clause (b) says that unauthorised occupation itself is a ground for eviction. Sub section (2) speaks of show cause notice before an order of eviction by notice is made under sub section (1). Sub section (3) has conferred sufficient power on the Commissioner to enforce an order of eviction made by him under sub section (1). For the purpose of holding an enquiry under the Act, the Commissioner is invested with all the powers of a Civil Court (Section 105E) An appeal lies from every order of the Commissioner 832 under section 105B or section 105C to the appellate officer, namely the Principal Judge of the City Civil Court of Bombay (section 105F), whose orders are final and not liable to be "called in question in any original suit, application or execution proceeding" (Section 105G). [841E G] 4. The satisfaction of the Commissioner, which is the condition precedent to the exercise of power of eviction by the summary procedure prescribed by the Act, may be in respect of any of the circumstances falling under clauses (a), (b) or (c) of sub section (1) of section 105B. Clause (a) contemplates eviction of any person on any one of the grounds mentioned in sub clauses (i) to (iv) thereof. These grounds relate only to a person in authorised occupation of Corporation premises. They have no application to a trespasser. [841H 842B] 5. Likewise, clause (c) presumably applies to authorised occupation of Corporation premises, which the Commissioner is empowered to terminate by ordering eviction of the occupant otherwise than on any of the grounds specified under clause (a), provided the Commissioner is satisfied that the premises in question are required by the Corporation in the public interest. All that the Commissioner has to satisfy himself in a case falling under clause (c) is as regards the public interest requiring eviction. Construction of parks, playgrounds, hospitals, colleges, markets, destitute homes and the like will indeed qualify for invoking the Commissioner 's power under clause (c). [842C] 6. Clause (b) is a powerful weapon for eviction of an unauthorised occupant. This clause is applicable equally to a trespasser as it is to a person whose occupation has ceased to be an authorised occupation by reason of expiry of authority in terms thereof or due determination of authority under clause (a) or clause (c) of sub section (1) of section 105B. [842D] 7. If a person is in occupation without authority, as in the case of a trespasser, or if the authority under which a person has been in occupation has expired in terms thereof and he continues to remain in occupation of the premises, he will be liable to be evicted on the ground mentioned in clause (b) of sub section (1) of section 105B, but in accordance with the procedure laid down in that section and on the satisfaction of the Commissioner, expressed by an order, as to the lack or expiry of authority. [842E F] 8. Sub letting as such, without more, is not a ground for eviction 833 under clause (a) (ii). What attracts eviction in terms of that provision is sub letting which is contrary to the terms or conditions of occupation. [843C] In the instant case, the appellate officer has found that the occupation of the premises by the second respondent under the appellant was well known to the Corporation; the terms and conditions of that occupation were closely scrutinised by the Corporation before recognising the transfer of rights and interest from the previous principal occupant to the appellant; and, it was on that basis and with that knowledge that the Corporation authorised the occupation of the premises by the appellant in terms of the agreement dated 17.6.1967. In such circumstances, whatever right of occupation which the second respondent enjoyed under the appellant must be deemed to have been incorporated as a term of the authority granted by the Corporation in favour of the appellant. The appellate officer has categorically found that there was no evidence whatsoever to indicate that the circumstances in which the premises had been occupied by the second respondent had in any manner, or at any time, altered so as to affect the terms or conditions under which the appellant was recognised as the principal occupant. The Corporation is, accordingly on the facts found, estopped from having recourse to the ground falling under clause (a) (ii) of sub section (1) of section 105B. [843D G] 9. In proceedings under Article 227 of the Constitution, the high Court was not justified in interfering with the findings of fact rendered against the Corporation by the appellate officer. [843H 844A]

Appeals Nos. 182 and 183 of 1954. Appeals under article 132(1) of the Constitution of India from the Judgment and Order, dated the 17th November, 1953, of the High Court of Judicature at Allahabad in Civil Miscellaneous Writ No. 414 of 1953, connected with Civil Miscellaneous Writs Nos. 537, 579 to 582, 587 to 595, 597 to 603, 617 to 620, 622, 623, 626 to 629, 633, 634, 638, 639, 651 to 654, 677 all of 1952 and 339 to 342, 351 to 355, 363, 372 to 374, 397, 416 to 464, 504 and 505 of 1953. G. section Pathak (V. D. Bhargava and Naunit Lal, with him) for the appellants. K. L. Misra, Advocate General for the State of U.P., and Jagdish Swarup (J. K. Srivastva and C. P. Lal, with them) for the respondents. October 13. The Judgment of the Court was delivered by MUKHERJEA J. The appellant in these two analogous appeals, along with many others, have been carrying on the business of plying motor vehicles, as ,stage carriages ' on hire, on the Bulandshabr Delhi route from a number of years past. The running of these vehicles has been regulated so long by the Motor Vehicles Act of 1939 which provides, inter alia, for granting of driving licences, the registration of vehicles and exercising control over transport vehicles through permits granted by Regional Transport Authorities. Section 42(3) of the Act exempts transport vehicles, owned by or on behalf of the Central Government or the Provincial Government from the necessity of obtaining permits unless the vehicles were used in connection Path the business of an Indian State Railway. It appears, that some time after 1947 the Government of U. P. conceived the idea of running their own buses on the public thoroughfares. They first started running buses only as competitors with the private operators but later on they decided to exclude all private bus owners from the field and establish a complete State monopoly in respect to the road transport business. They sought to achieve this object by 711 calling in aid the provisions of the Motor Vehicles Act itself. Under section 42(3) of the Act as mentioned above, the Government had not to obtain permits for their own vehicles and they could run any number of buses as they liked without the necessity of taking out permits for them. The Transport Authorities, in furtherance of this State policy, began cancelling the permits already issued to private operators and refusing permits to people who would otherwise have been entitled to them. Upon this, a number of private bus owners filed petitions in the Allahabad High Court under article 226 of the Constitution praying for appropriate relief, by way of writs, against what was described as the illegal use of the provisions of the Motor Vehicles Act by the Government of U. P. These petitions were heard by a Full Bench of five Judges and four judgments were delivered dealing with various questions that were raised by the parties. A majority of the judges expressed the opinion that the State, purporting to act under section 42(3) of the Motor Vehicles Act, could not 'discriminate against other persons in their own favour and that the sub section, in so far as it purports to exempt State Transport buses from the obligation to obtain permits for their use, conflicts with article 14 of the Constitution. All the judges concurred in holding that nationalisation of an industry was not possible by a mere executive order without appropriate legislation and such legislation would probably have to be justified under article 19(6) of the Constitution. As a result of this decision the Transport Authorities were directed to deal with the applications for permits, made by the various private bus owners, in accordance with the provisions of the Motor Vehicles Act, without in any way being influenced by the consideration that the State Government wanted to run buses of their own on certain routes. In view of this pronouncement of law, the State Government, which wanted to have the exclusive right to operate Road Transport Services within its territory, sought the assistance of the Legislature and the U. P. Road Transport Act (Act II of 1951) was passed and 712 became law on and from the 10th of February, 1951. It is the constitutional validity of this enactment which is the subject matter of contest in these present proceedings. The preamble to the Road Transport Act (hereinafter called "The Act") says: "Whereas it is expedient in the interest of the general public and for the promotion of the suitable and efficient road transport to provide for a State Road Transport Services in Uttar Pradesh, it is enacted as follows. " Section 2 gives definitions of certain terms, while section 3, which is the most material section in the Act, embodies virtually its whole purpose. It provides that where the State Government is satisfied that it is necessary, in the interest of general public and for sub serving the common good, so to direct, it may declare that the Road Transport Services in general, or any particular class of such service on any route or portion thereof, shall be 'run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in accordance with the provisions of this Act. Section 4 provides for publication of a scheme framed in accordance with the above declaration and objections to such scheme can be made by interested persons in the manner laid down in section 5.As soon as the scheme is finalised, certain consequences follow which are detailed in section 7. So long as the scheme continues in force, the State Government shall have the exclusive right to operate Road Transport Services, or if the scheme so provides, a certain fixed number of transport vehicles belonging to others can also be run on those roads. The State Government shall be authorised in all such cases to direct the dispensation of the State Transport vehicles from the necessity of taking out permits, or to cancel, alter or modify any existing permits or to add any fresh condition to any permit in respect of any transport vehicle. The remaining portion of the Act purports to lay down how the provisions of the Act are to be worked out and implemented. Sections 8 and 9 provide respectively for the appointment of a Transport Commission and Advisory Committees. Under section 10 the State Government may delegate its powers under the Act to an officer or authority subordinate to it. Section 12 makes it an offence for any person to drive a public service vehicle or allow such vehicle to be used in contravention of the provisions of section 7. It is not necessary to refer to the provisions of the remaining sections as they are not material for our present purpose. By a notification dated the 25th of March, 1953, the U. P. Government published a declaration in terms of section 3 of the Act, to the effect, that the State carriage services, among others, on the Bulandshar Delhi route, shall be run and operated exclusively by the State Government. A further notification issued on the 7th of April following set out what purported to be a scheme for the operation of the State carriage services on these routes. Thereupon the two appel lants as well as several other private bus owners numbering 106 in all, who plied transport buses on these routes, presented petitions under article 226 of the Constitution before the High Court at Allahabad praying for writs, in the nature of mandamus, directing the U. P. Government and the State Transport Authorities not to interfere with the operation of the stage carriages of the petitioners and to refrain from operating the State Road Transport Service except in accordance with the provisions of the Motor Vehicles Act. The constitutional validity of the Act was challenged on a number of grounds, the principal contentions being: (1)that the Act was discriminatory in its character and contravened the provisions of article 14 of the Constitution; (2)that it conflicted with the fundamental rights of the petitioners guaranteed under article 19(1)(g) of the Constitution; and (3)that it was an invalid piece of legislation as it purported to acquire the interest of the petitioners in a commercial undertaking without making any provision for compensation as is required under article 31(2) 714 of the Constitution. It was further argued that the Act violated the guarantee of freedom of inter State and intra state trade embodied in article 301 of the Constitution. All these writ petitions were heard by a Division Bench of the High Court consisting of Mukherji and Chaturvedi JJ. By two separate but concurring judgments dated the 17th of November, 1953, the learned Judges repelled all the contentions of the petitioners and dismissed the writ petitions. It is against this decision that these two appeals have come up to this Court on the strength of certificates granted by the High Court and Mr. Gopal Swarup Pathak appearing in support of the appeals has reiterated practically all the grounds which were urged on behalf of his clients in the Court below. We will take up these points in proper order and it will be convenient first of all to address ourselves to the two allied questions, viz., whether the appellants could claim any fundamental right under article 19(1)(g) of the Constitution which can be said to have been violated by the impugned legislation, and whether the Act has deprived them of any 'property ' which would attract the operation of article 31 of the Constitution? Mr. Pathak argues that a right to carry on any occupation, trade or business is guaranteed to all citizens by article 19(1)(g) of the Constitution. The appellants in the present cases were carrying on the business of plying buses on hire on a public highway until now and the Act which prevents them from pursuing that trade or business conflicts therefore with the fundamental right guaranteed under article 19(1)(g) of the Constitution. It is said also that this beneficial interest of the appellants in the commercial undertaking is 'property ' within the meaning of article 31(2) of the Constitution and as the Act does not conform to the requirements of that article, it must be held to be void. Mr. Pathak put forward another and a somewhat novel argument that the right of the appellants to use a public highway for purposes of trade is in the nature of an easement and as such can be reckoned as property 715 in law; consequently there has been a deprivation of property by the impugned legislation in this sense also. This contention seems to us to be untenable and it was rightly abandoned by the learned counsel. The Advocate General appearing for the State of 'U. P. did not and could not dispute that a right to pursue any trade, business or occupation of one 's choice is guaranteed by the Constitution. He says however that this does not mean that a citizen can carry on his trade or business anywhere he likes and such right is also guaranteed by the Constitution. He must have a legal right to use a particular place for purposes of his trade or business, before he can resist any encroachment upon it on the strength of the constitutional guarantee. His argument in substance is, that the bus owners, as members of the public, have no legal right to ply buses on hire on any public road. The only right which a member of the public can assert in respect of a highway is the right of passing and repassing over it. The State in which all public ways vest under the law has the sole right to determine whether it would allow any citizen to carry on a trade or business upon a public highway and if so, to what extent. The citizen has no inherent right in this respect apart from any State sanction. The position, therefore is, that the rights of the appellants, as indeed those of the other bus owners, are created entirely by State legislation and by State legislation they could be deprived of the same. There is no question of any conflict with the fundamental right guaranteed under article 19(1)(g) of the Constitution in such cases. The argument requires careful consideration. It is not disputed that the Bulandshahr Delhi route is a part of the Grand Trunk Road which is a public highway. According to English law, which has been applied all along in India, a highway has its origin, apart from statute, in dedication, either express or implied, by the owner of land of a right of passage over it to the public and the acceptance of that right by the public (1). In the large majority of cases this dedication is presumed from long and uninterrupted (1) Vide Pratt & Mackenzie on Law of Highways, 19th edn.p. 13.716 user of a way by the public, and the presumption in such cases is so strong as to dispense with all enquiry into the actual intention of the owner of the soil and it is not even material to enquire who the owner was (). The fact that the members of the public have a right of passing and repassing over a highway does not mean however that all highways could be legitimately used as foot passages only and that any other user is possible only with the permission or sufferance of the State. It is from the nature of the user that the extent of the right of passage has to be inferred and the settled principle is that the right extends to all forms of traffic which have been usual and accustomed and also to all which are reasonably similar and incidental thereto ( 2). The law has thus been stated in Halsbury 's Laws of England(1): "Where a highway originates in an inferred dedication, it is a question of fact what kind of traffic it was so dedicated for, having regard to the character of the way and the nature of the user prior to the date at which they infer dedication; and a right of passage once acquired will extend to more modern forms of traffic reasonably similar to those for which the highway was originally dedicated, so long as they do not impose a substantially greater burden on the owner of the soil. " There can be no dispute that the Grand Trunk Road which, as a public highway, has been in existence since the 15th Century A. D. has been used for all sorts of vehicular traffic that were in vogue at different times. Motor vehicles were certainly not known when the road came into existence but the use of motor vehicles in modern times as means of locomotion and transport could not, on the principle stated above, amount to an unwarrantable extension of the accustomed user to which the highway is subjected. If there is any danger to the road by reason of such user, or if such user by one interferes with the user by others, it is up to the State to regulate the motor traffic or reduce the number or weigh of vehicles on the road in any way it likes, and to that no objection can possibly be taken. But the right of the public to use motor vehicles on the public road cannot, in any sense, be regarded as a right created by the Motor Vehicles Act. The right exists anterior to any legislation on this subject as an incident of public rights over a highway. The State only controls and regulates it for the purpose of ensuring safety, peace, health and good morals of the public. Once the position is accepted that a member of the public is entitled to ply motor vehicles on the public road as an incident of his right of passage over a highway, the question is really immaterial whether he plies a vehicle for pleasure or pastime or for the purpose of trade and business. The nature of the right in respect to the highway is not in any way affected thereby and we cannot agree with the learned AdvocateGeneral that the user of a public road for purposes of trade is an extraordinary or special use of the highway which can be acquired only under special sanction from the State. The learned Advocate General in support of his contention has referred us to a few American cases on the point. In the case of Packard vs Banton(1), Sutherland J. observed as follows: " The streets belong to the public and are primarily for the use of the public in the ordinary way. Their use for purposes of gain is special and extraordinary and generally at least may be prohibited or conditioned as the Legislature deems proper. " This decision was approved in Frost vs Railroad Commission(1), and again in Stephenson vs Binford(3), where Sutherland J. practically reiterated his observations in the previous case as follows: " It is a well established law that the highways of the State are public property; that their primary and preferred use is for private purposes; and that their use for purposes of gain is special and extraordinary which generally at least the Legislature may prohibit or condition as it sees fit. We do not think that this is the law of India under our Constitution. The cases referred to above were noticed by the Allahabad High Court in the Full Bench decision of Motilal vs Uttar Pradesh Government(1), and two of the learned Judges constituting the Full Bench expressed their opinion that this 'doctrine of exceptional user ' might have been evolved by the American Courts in the same way as they evolved the 'doctrine of police powers. ' They both held that this American rule did not embody the English or the Indian law on the subject. This identical point was investigated with considerable thoroughness in a recent decision of the Madras High Court in C. section section Motor Service vs State of Madras(2), and it was pointed out by Venkatarama Ayyar J. who delivered the judgment of the Court, that the rule of special or extraordinary use of highways in America had its roots in the doctrine of 'franchise ', which is still a recognised institution in that country. The doctrine of 'franchise ' or 'privilege ' has its origin in English Common Law and was bound up with the old prerogative of the Crown. This doctrine continued to live in the American legal world as a survival of the pre independence days, though in an altered form. The place of the royal grants under the English Common Law was taken by the legislative grants in America and the grant of special rights by legislation to particular individuals or companies is regarded there as a 'franchise ' or 'Privilege ' differing from the ordinary liberties of a citizen. The carrying on of transport buses by common carriers on the public road in America is a 'franchise ' and not a common law right, which could be claimed by all citizens and a distinction is made, as the cases cited above will show, between contract carriers who carry passengers or goods under particular contracts and common carriers whose business is affected with public interest. Over the latter the State claims and exercises a plenary power of control. Ayyar J. has, in our opinion, rightly pointed out that this doctrine of 'franchise ' has no place in our Constitution. Under the Indian Constitution the contract (i) I.L.R. 1951 All. 257.(2) 719 carries as well as the common carriers would occupy the same position so far as the guaranteed right under article 19(1) (g) is concerned and both are liable to be controlled by appropriate regulations under clause (6) of that article. The law on the point, as it stands at present, has been thus summed up by the learned Judge : "The true position then is, that all public streets and roads vest in the State, but that the State holds them as trustees on behalf of the public. The members of the public are entitled as beneficiaries to use them as a matter of right and this right is limited only by the similar rights possessed by every other citizen to use the pathways. The State as trustees on behalf of the public is entitled to impose all such limitations on the character and extent of the user as may be requisite for protecting the rights of the public generally ;. . but subject to such limitations the right of a citizen to carry on business in transport vehicles on public pathways cannot be denied to him on the ground that the State owns the highways. " We are in entire agreement with the statement of law made in these passages. Within the limits imposed by State regulations any member of the public can ply motor vehicles on a public road. To that extent he can also carry on the business of transporting passengers with the aid of the vehicles. It is to this carrying on of the trade or business that the guarantee in article 19(1) (g) is attracted and a citizen can legitimately complain if any legislation takes away or curtails that right any more than is permissible under clause (6) of that article. The legislation in the present case has excluded all private bus owners from the field of transport business. Prima facie it is an infraction of the provision of article 19(1) (g) of the Constitution and the question for our consideration therefore is whether this invasion by the Legislature of the fundamental right can be justified under the provision of clause (6) of article 19 on the ground that it imposes reasonable restrictions on the exercise of the right in the interests of the general public. 720 Article 19(6) of the Constitution, as it stands after the amendment of 1951, makes a three fold provision by way of exception to or limitation upon clause (1) (g) of the article. In the first place it empowers the State to impose reasonable restrictions upon the freedom of trade, business, occupation or profession in the interests of the general public. In the second place it empowers the State to prescribe the professional and technical qualifications necessary for practicing any profession or carrying on any occupation, trade or business. Thirdly, and this is the result of the Constitution (First) Amendment Act of 1951 it enables the State to carry on any trade or business either by itself or through a corporation owned or controlled by the State to the exclusion of private citizens wholly or in part. It is not disputed that the third provision which was introduced by the amendment of the Constitution in 1951 was not in existence when the impugned Act was passed and the High Court rightly held that the validity of the Act is not to be decided by applying the provision of the new clause. The learned Judges held however that quite apart from the new provision, the creation of a State monopoly in regard to transport service, as has been done under the Act, could be justified as reasonable restrictions upon the fundamental right enunciated in article 19(1) (g) of the Constitution imposed in the interests of the general public. The question is, whether the view taken by the High Court is right? To answer this question three things will have to be considered. The first is, whether the expression "restriction" as used in article 19(6) and for the matter of that in the other sub clauses of the article, means and includes total deprivation as well? If the answer is in the affirmative, then only the other two questions would arise, namely, whether these restrictions are reasonable and have been imposed in the interests of the general public ? According to the meaning given in the Oxford Dictionary, the word "restriction" connotes a 'limitation ' imposed upon a person or a thing, a 'condition or regulation ' of this nature, though the use of the word in the sense of suppression is not 721 altogether unknown. In the case of Municipal Corporation of the City of Toronto vs Virgo(1), Lord Davey while discussing a statutory power conferred on a Municipal Council to make bye laws for regulating and governing a trade made the following observation: " No doubt the regulation and governance of a trade may involve the imposition of restrictions on its exercise. where such restrictions are in the opinion of the public authority necessary to prevent a nuisance or for the maintenance of order. But their Lordships think that there is a marked distinction to be drawn between the prohibition or prevention of a trade and the regulation or governance of it, and indeed a power to regulate and govern seems to imply the continued existence of that which is to be regulated or governed. " This line of reasoning receives support from the observations made by some of the learned Judges of this Court in their respective judgments in the case of A. K. Gopalan vs The State (2). The question for consideration in that case was the constitutional validity of the Preventive Detention Act and one of the contentions raised by the learned counsel for the appellant in attacking the validity of the legislation was, that it invaded the right of free movement guaranteed under article 19(1)(d) of the Constitution ; and as the restrictions imposed by it could not be regarded as reasonable restrictions within the meaning of clause (5) of the article, the enactment should be held to be void. This argument was repelled by the majority of the Judges inter alia on the ground that a law which authorises the deprivation of personal liberty did not fall within the purview of article 19 and its validity was not to be judge d by the criteria indicated in that article but depended on its compliance with the requirements of articles 21 and 22 of the Constitution. The expression Personal liberty" as used in article 21, it was said, was sufficiently comprehensive to include the particular freedoms enumerated in article 19(1) and its deprivation therefore in accordance with the provision of article 21 would result in automatic extinction of the other freedoms also. In this connection reference was made to (1) ,93.(2) ; 722 the several sub clauses of article 19 and Patanjali Sastri J. expressed his views in the following words: "The use of the word 'restrictions ' in the various sub clauses seems to imply, in the context, that the rights guaranteed by the Article are still capable of being exercised, and to exclude the idea of incarceration though the words 'restriction and deprivation ' are sometimes used as inter changeable terms, as restriction may reach a point where it may well amount to deprivation. Read as a whole and viewed in its setting among the group of provisions relating to 'right to freedom ', Article 19 seems to my mind to presuppose that the citizen to whom the possession of these fundamental rights is secured retains the substratum of personal freedom on which alone the enjoyment of these rights necessarily rests. " The point for consideration in that case was undoubtedly different from the one that has arisen in the present case and the question whether the restrictions enumerated in the several sub clauses of article ' 19 could go to the length of total deprivation of these liberties was neither raised nor decided in that case. But a distinction was drawn by the majority of learned Judges between negation or deprivation of a right and a restriction upon it and although it was said. that restriction may reach a point where it might amount to deprivation, yet restrictions would normally pre suppose the continued existence no matter even in a very thin and attenuated form of the thing upon which the restrictions were imposed. Kania C.J. in his judgment (vide page 106) expressly said: Therefore Article 19(5) cannot apply to a substantive law depriving a citizen of personal liberty. I am unable to accept the contention that the word 'deprivation ' includes within its scope 'restriction ' when interpreting Article 21. " Against this view it may be urged that the use of the words 'deprivation" and "restrictions" as interchangeable expressions is not altogether unusual in ordinary language and the nature and extent of restrictions might in some cases amount to a negation of the right. The Orissa, High Court in the care of Lokanath 723 Misra vs The State of Orissa (1) accepted this view and made a distinction between "regulation" and "restriction". In the opinion of the learned Judges the observations of Lord Davey in Municipal Corporation of the City of Toronto vs Virgo (supra) referred to above could be distinguished on the ground that the expression used in that article was not 'restriction ' but regulation ' and 'governing '. It is said that the framers of the Constitution were aware of the distinction between the power to 'regulate ' and the power to 'restrict ' and this would be apparent from a scrutiny of sub clause 'a) of clause (2) of article 25 of the Constitution where the words "regulating" and "restricting" occur in juxtaposition indicating thereby that they were not intended to convey the same meaning. On behalf of the respondents much reliance has also been placed on a decision of this Court in Cooverjee vs The Excise COMMISSIONER, etc. (2) where the point for consideration was the validity of the Excise Regulation I of 1915. It was contended, inter alia, on behalf of the appellant in that case that the Excise Regulation and the auction sales made thereunder were ultra vires, as the law purported to grant monopoly of that trade to a few persons and this was inconsistent with article 19(1)(g) of the Constitution. This contention was negatived and this Court held that for the purpose of determining reasonable restrictions within the meaning of article 19(6) of the Constitution on the right given under article 19(1)(g), regard must be had to the nature of the business and the conditions prevailing in a particular trade. The State has certainly the right to prohibit trades which are illegal or immoral or injurious to the health and welfare of the public. The relevant portion of the judgment runs as follows: " Article 19(1)(g) of the Constitution guarantees that all citizens have the right to practise any profession or to carry on any occupation or trade or business, and clause (6) of the article authorises legislation which imposes reasonable restrictions on this right in the interests of the general public. It was not disputed that in order to determine the reasonableness (1) A.I.R. 1952 Orissa 42, (2) ; 724 of the restriction regard must be had to the nature of the business and the conditions prevailing in that trade. . It can also not be denied that the State has the power to prohibit trades which are illegal or immoral or injurious to the health and welfare of the public. Laws prohibiting trades in noxious or dangerous goods or trafficking in women cannot be held to be illegal as enacting a prohibition and not a mere regulation. " It is contended on behalf of the respondents that these observations clearly indicate that the expression "reasonable restriction" as used in article 19(6) of the Constitution might, in certain circumstances, include total prohibition. It may be mentioned here that the Excise Regulation is not a prohibitory statute which prohibits trading in liquor by private citizens altogether. It purports to regulate the trade in a particular way, namely, by putting up the right of trading in liquor in specified areas to the highest bidder in auction sale. The general observations occurring in the judgment cited above must therefore have to be taken with reference to the facts of that case. ' Be that as it may, although in our opinion the normal use of the word "restriction" seems, to be in the sense of "limitation" and not "extinction", we would on this occasion prefer not to express any final opinion on this matter. If the word, "restriction" does not include total prohibition then the law under review cannot be justified under article 19(6). In that case the law would be void unless it can be supported by article 31. That point will be dealt with under the other point raised in the appeal. If however the word "restriction" in article 19(6) of the Constitution be taken in certain circumstances to include prohibition as well, the point for consideration then would be, whether the prohibition of the right of all private citizens to carry on the business of motor transport on public roads within the State of Uttar Pradesh as laid down by the Act can be justified as reasonable restrictions imposed in the interests of the general public. As has been held by this Court in the case of Gooverjee vs The Excise, Commissioner, etc.(1) whether (I) ; 725 the restrictions are reasonable or not would depend to a large extent on the nature of the trade and the conditions prevalent in it. There in nothing wrong in the nature of the trade before us, which is perfectly innocuous. The learned Judges of the High Court have upheld the validity of the legislation substantially on two grounds. In the first place, they have relied on what may be said to be an abstract proposition of law, that prohibition with a view to State monopoly is not per se unreasonable. "In my opinion", thus observes one of the learned Judges, "even this total stoppage of trade on public places and thoroughfares cannot always be said to be an unreasonable restriction". In the second place, it has been said that the transport services are essential to the life of the community and it is conducive to the interests of the general public to have an efficient system of transport on public roads. It is pointed out that the preamble to the Act indicates that the legislation was ' passed in the interests of the general public who are undoubtedly interested in a suitable and efficient road transport service, and it was not proved by the petitioners that the monopoly, which was contemplated in favour of the State in regard to this particular business, was not conducive to the common welfare. As a proposition of law, the first ground may not admit of any dispute but we think that the observations of Lord Porter in the Privy Council case of Commonwealth of Australia and Others vs Bank of New South Wales and Others (1) upon which considerable reliance has been placed by the High Court would indicate the proper way of approach to this question ' "Their Lordships do not intend to lay it down", thus observed Lord Porter, "that in no circumstances could the exclusion of competition so as to create a monopoly either in a State or Commonwealth agency or in some other body be justified. Every case must be judged,on its own facts and in its own setting of time and circumstance, and it may be that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable (1) , 311.93 726 manner of regulation". In order to judge whether State monopoly is reasonable or not, regard therefore must be had to the facts of each particular case in its own setting of time and circumstances. It is not enough to say that as an efficient transport service is conducive to the interests of the people, a legislation which makes provision for such service must always be held valid irrespective of the fact as to what the effect of such legislation would be and irrespective of the particular conditions and circumstances under which the legislation was passed. It is not enough that the restrictions are for the benefit of the public, they must be reasonable as well and the reasonableness could be decided only on a conspectus of all the relevant facts and circumstances. With regard to the second point also we do not think that the learned Judges have approached the question from the proper stand point. There is undoubtedly a presumption in favour of the constitutionality of a legislation. But when the enactment on the face of it is found to violate a fundamental right guaranteed under article 19(1)(g) of the Constitution, it must be held to be invalid unless those who support the legislation can bring it within the purview of the exception laid down in clause (6) of the article. If the respondents do not place any materials before the Court to establish that the legislation comes within the permis sible limits of clause (6), it is surely not for the appel lants to prove negatively that the legislation was not reasonable and was not conducive to the welfare of the community. In the present case we have absolutely no materials before us to say in which way the establishment of State monopoly in regard to road transport service in the particular areas would be conducive to the general welfare of the public. We do not know the conditions of the bus service at the present moment or the conveniences or inconveniences of the public in regard to the same; nor we are told how the position is likely to improve if the State takes over the road transport service and what additional amenities or advantages the general public would enjoy in that event. We mention these matters only to show 727 that these are relevant facts which might help the Court in coming to a decision as to the reasonableness or otherwise of the prohibition, but unfortunately there are no materials in the record relating to any one of them. One thing, however, in our opinion, has a decided bearing on the question of reasonableness and that is the immediate effect which the legislation is likely to produce. Hundreds of citizens are earning their livelihood by carrying on this business on various routes within the State of Uttar Pradesh. Although they carry on the business only with the aid of permits, which are granted to them by the authorities under the Motor Vehicles Act, no compensation has been allowed to them under the statute. It goes without saying that as a result of the Act they will all be deprived of the means of supporting themselves and their families and they will be left with their buses which will be of no further use to them and which they may not be able to dispose of easily or at a reasonable price. It may be pointed out in this connection that in Part IV of the Constitution which enunciates the directive principles of State policy, article 39(a) expressly lays down that the State shall direct its policy towards securing "that the citizens, men and women equally, have the right to an adequate means of livelihood. " The new clause in article 19(6) has no doubt been introduced with a view to provide that a State can create a monopoly in its own favour in respect of any trade or business; but the amendment does not make the establishment of such monopoly a reasonable restriction within the meaning of the first clause of article 19(6). The result of the amendment is that the State would not have to justify such action as reasonable at all in a Court of law and no objection could be taken to it on the ground that it is an infringement of the right guaranteed under article 19(1)(g) of the Constitution. It is quite true that if the present statute was passed after the coming into force of the new clause in article 19(6) of the Constitution, the question of reasonableness would not have arisen at all and the appellants ' case on this point, at any rate, would have been inarguable. These are however 728 considerations which cannot affect our decision in the present case. The amendment of the Constitution, which came later, cannot be invoked to validate an earlier legislation which must be regarded as unconstitutional when it was passed: As Professor Cooley has stated in his work on Constitutional Limitations(1) "a statute void for u`constitutionality is dead and cannot be vitalised by a subsequent amendment of the Constitution removing the constitutional objection but must be re enacted". We think that this is sound law and our conclusion is that the legislation in question which violates the fundamental right of the appellants under article 19(1)(g) of the Constitution and is not shown to be protected by clause (6) of the article, as it stood at the time of the enactment, must be held to be void under article 13(2) of the Constitution. We now come to the second point which is in a manner connected with the first and the question is: If the effect of prohibition of the trade or business of the appellants by the impugned legislation amounts to deprivation of their property or interest in a commercial undertaking within the meaning of article 31(2) of the Constitution, does not the legislation offend against the provision of that clause inasmuch as no provision for compensation has been made in the Act ? It is not seriously disputed on behalf of the respondents that the appellants ' right to ply motor vehicles for gain is, in any event, an interest in a commercial undertaking. There is no doubt also that the appellants have been deprived of this interest. In the opinion of the High Court, in the circumstances of the present case, there is no scope for operation of article 31(2) of the Con stitution and the reason for taking this view is thus given in the judgment of one of the learned Judges: "The question is whether by depriving the private operators of their right to run buses on certain routes and by deciding to run the routes itself the State acquired the right which was of the petitioners ? To me it appears that it could not be said that there was by the State any acquisition of the right which was formerly of the petitioners, whether such right was (1) VOl.729 property or an interest in a commercial or industrial undertaking. The vehicles which were being operated by the private operators have not been acquired by the State nor has any other tangible property which was used by the petitioners for their business been acquired. What has been done is that the petitioners have been prohibited from operating their buses on certain routes. This right of the petitioners has in no way been vested in the State inasmuch as the State always had an equal right with the petitioners to run their buses on these routes. " According to the High Court, therefore, mere depriv ation of the petitioners ' right to run buses or their interest in a commercial undertaking is not sufficient to attract the operation of article 31(2) of the Constitution as the deprivation has been by the authority of law within the meaning of clause (1) of that article. Clause (2) could be attracted only if the State had acquired or taken possession of this very right or interest of the petitioners or in other words if the right of the petitioners to run buses had been acquired by or had become vested in the Government. The State, it is pointed out, has an undoubted right to run buses of its own on the public thoroughfares, and they do not stand on the rights of the petitioners. This argument, we think, is not tenable having regard to the majority decision of this Court in the case of State of West Bengal vs Subodh Gopal Bose and Others (1) and Dwarkadas Shrinivas vs The Sholapur Spinning and Weaving Co. Ltd. (2). In view of that majority decision it must be taken to be settled now that clauses (1) and (2) of article 31 are not mutually exclusive in scope but should be read together as dealing with the same subject, namely, the protection of the right to property by means of limitations on the State 's powers, the deprivation contemplated in clause (1) being no other than acquisition or taking possession of the property referred to in clause (2). The learned Advocate General co n. needed this to be the true legal position after the pronouncements of this Court referred to above. The fact that the buses belonging to the appellants have (1) ; (2) ; 730 not been acquired by the Government is also not material. The property of a business may be both tangible and intangible. Under the statute the Government may not deprive the appellants of their buses or any other tangible property but they are depriving them of the business of running buses on hire on public roads. We think therefore that in these circumstances the legislation does conflict with the provision of article 31(2) of the Constitution and as the requirements of that clause have not been complied with, it should be held to be invalid on that ground. The next point that requires consideration is, whether the Act or any of its provisions are discriminatory in their character and conflict with the rule of equal protection embodied in article 14 of the Constitution ? Mr. Pathak has raised a two fold contention on this point. He has argued in the first place that no discrimination could be made in favour of the State as against private individuals in the matter of carrying on the business of plying buses for hire on public roads. The State as a person, it is conceded, comes under a different class or category from private citizens; but the contention is that when the State carries on trade as merchants it occupies the same position as private traders and its acts in this respect cannot be regarded as acts of the sovereign. Much reliance has been placed by the learned counsel in sup port of this view on the judgment of Sir Barnes Peacock in P. and O. Steam Navigation Co. vs The Secretary of State(1). The other objection taken by the learned counsel is, that the Act gives an unguided and unfettered discretion to the State to associate such persons as it likes in the transport business and thereby allows it to discriminate between one citizen and another. No rules are laid down to regulate the choice of the State in such cases. So far as the first ground is concerned, it is well settled that mere differentiation does not make a legislation obnoxious to the equal protection clause. The Legislature has always the power to make classification and all that is necessary is that the classification should not be arbitrary but must bear a reasonable (1) (1861) 5 B.H.C.R.Appendix 1. 731 relation to the object which the legislation has in view. There is no doubt that classification is inherent in the concept of a monopoly; and if the object of legislation is to create monopoly in favour of the State with regard to a particular business, obviously the State cannot but be differentiated from ordinary citizens and placed in a separate category so far as the running of the business is concerned and this classification would have a perfectly rational relation to the object of the statute. No doubt if the creation of a monopoly in favour of the State is itself bad on the ground of violating some constitutional provisions, the statute would be invalid for those reasons and the question of discrimination would not be material at all. In our opinion, the argument of Mr. Pathak that the State ceases to function as a State as soon as it engages itself in a trade like ordinary trader cannot be accepted as a sound proposition of law under the Constitution of India at the present day. In the last century, when the laissez faire doctrine held the field, the primary function of a State was considered to be maintenance of law and order and all other activities were left to private competitors. That conception is now changed and in place of the 'police State ' of old, we are now having a 'welfare State. ' Chapter IV of our Constitution which lays down the Directive Principles of State Policy clearly indicates what the functions of a State should be and many things which could not have been considered as State functions when the case of P. and 0. Steam Navigation Co. vs The Secretary of State (Supra), was decided would certainly come within the legitimate scope of State duties Vide in this connection Lokanath Misra vs State of Orissa(supra). The other contention of Mr. Pathak in regard to article 14 though somewhat plausible at first sight does not appear to us to be sound. Section 3 of the Act authorises the State Government to declare that the road transport service in general or on particular routes should be run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in accordance with the provisions of 732 the Act The whole question is how is the last part of the section to be implemented and carried out? If the State can choose any and every person it likes for the purpose of being associated with the transport service and there are no rules to guide its discretion, plainly the provision would offend against article 14 of the Constitution. The learned Advocate General pointed out however that the State is only to choose the routes or portions of routes on which the private citizens would be allowed to operate and the number of persons to whom permits should be given, and that the granting of permits would necessarily be regulated by the provisions of Motor Vehicles Act. This does not appear to us to be an unreasonable construction to be put upon the relevant portion of section 3 of the Act and it receives support from what is laid down in section 7(c) of the Act. On this construction the discretion to be exercised by the State would be a regulated discretion guided by statutory rules. We hold therefore that the appellant cannot make any grievance on this score and that the statute does not offend against article 14 of the Constitution. The last point that remains to be considered is, whether the Act conflicts with the guarantee of freedom of inter State and intrastate trade, commerce and intercourse provided for by article 301 of the Constitution ? Article 301 runs as follows: " Subject to the other provisions of this Part, trade ' commerce and intercourse throughout the territory of India shall be free. " Article 302 authorises the Parliament to impose such restrictions on the freedom of trade, commerce and intercourse between one State and another or within any part of the territory of India as may be required in the public interests. Under article 304(b) it is competent even for the Legislature of a State to impose reasonable restrictions upon the freedom of trade, commerce and intercourse mentioned above in the interests of the public, but it is necessary that any bill or amendment for this purpose should first receive the sanction of the President before it is moved or introduced in the Legislature of a State. Article 301 733 corresponds to section 92 of the Australian Constitution and is even wider than the latter inasmuch as the Australian Constitution provides for the freedom of inter State trade only. The High Court has negatived the contention of the appellants on this point primarily on the ground that article 301 of the Constitution has no application to the present case. What is said is, that article 301 provides safeguards for carrying on trade as a whole as distinguished from the rights of an individual to carry it on. In other words, this article is concerned with the passage of commodities or persons either within or outside the State frontiers but not directly with individuals carrying on the commerce or trade. The right of individuals, it is said, is dealt with under article 19(1) (g) of the Constitution and the two articles have been framed in order to secure two different, objects. The question is not quite free from difficulty and in view of the fact that we have declared the Act to be unconstitutional on the two grounds mentioned above, we do not consider it necessary to record our decision on this point. We would only desire 'to indicate the contentions that have been or could be raised upon this point and the different views that are possible to be taken in respect to them so that the Legislature might take these matters into consideration if and when they think of legislating on this subject. We desire to point out that in regard to section 92 of the Australian Constitution, which so far as inter. State trade is concerned adopts almost the same language as article 301 of our Constitution, it has been definitely held by the Judicial Committee in the case of Commonwealth of Australia vs The Bank of New South Wales (supra), that the rights of individuals do come within the purview of the section. It is true, as Lord Porter observed, that section 92 does not create any new juristic rights but it does give the citizens of the State or the Commonwealth, as the case may be, the right to ignore and, if necessary, to call on the judicial power to help him to resist legislative or executive actions which offend against the section. It follows from this, as his Lordship pointed out, that 94 734 the application of section 92 does not involve calculations as to the actual present or possible future effect upon the total value of inter State trade, the difficulty in applying such a criterion being too obvious. If this view is adopted in regard to article 301 of our Constitution it can plausibly be argued that the legislation in the present case is invalid as contravening the terms of the article. The question of reasonable restrictions could not also arise in this case, as the bill was not introduced with the previous sanction of the President as required by the proviso to section 304(b). It is true that the consent of the President was taken subsequently but the proviso expressly insists on the sanction being taken previous to the introduction of the bill. It may be argued that freedom of trade does not, as Lord Porter observed in the Australian Bank case referred to above, mean unrestricted or unrestrained freedom and that regulation of trade is quite compatible with its freedom. As against this it may be pointed out that the Constitution itself has provided in articles 302 and 304(b) how reasonable restrictions could be imposed upon freedom of trade and commerce and it would not be proper to hold that restrictions can be imposed aliunde these provisions in the Constitution. The question would also arise as to what interpretation should be put upon the expression "reasonable restrictions" and whether or not we would have to apply the same tests as we have applied in regard to article 19(6) of the Constitution. One material thing to consider in this connection would be that although the Constitution was amended in 1951 by insertion of an additional clause in article 19(6) by which State monopoly in regard to trade or business was taken out of the purview of article 19(1) (g) of the Constitution, yet no such addition was made in article 301 or article 304 of the Constitution and article 301, as it stands, guarantees freedom of trade, commerce and intercourse subject only to Part XIII of the Constitution and not the other parts of the Constitution including that dealing with fundamental rights. 735 The Australian Constitution indeed has no provision like article 19(1) (g) of the Indian Constitution and it is certainly an arguable point as to whether the rights of individuals alone are dealt with in article 19(1) (g) of the Constitution leaving the freedom of trade and commerce, meaning by that expression 'only the free passage of persons and goods ' within or without a State to be dealt with under article 301 and the following articles. We have thus indicated only the points that could be raised and the possible views that could be taken but as we have said already, we do not desire to express any final opinion on these points as it is unnecessary for purposes of the present case. The result is that in our opinion the appeals should be allowed and the judgment of the High Court set aside A writ in the nature of mandamus shall issue against the respondents in these appeals restraining them from enforcing the provisions of the U. P. State Road Transport Act, 1951, against the appellants or the men working under them. There will be no order as to costs. Appeals allowed.

The appellant was the tenant since before 1958 of certain premises in Delhi belonging to the respondent. The latter filed a proceeding for electing the appellant under section 14(1) of the Delhi Rent Control Act, 1958, on the plea of non payment of rent for seven months. Persuant to the direction of the Rent Controller the appellant paid the arrears under section 141.2) of the Act and the proceeding was disposed of. The appellant again committed default in payment of rent for three consecutive months and the respondent again filed a fresh proceeding for his ejectment under section 14(1). In his written statement the appellant asked the Rent Controller to fix the standard rent of the premises and further to give him again the benefit of 14(2). The Rent Controller rejected these pleas and passed an order ' in ejectment. Appeals before the Rent Control Tribunal and the High Court failed. In appeal by special leave before this Court the appellant contended that the order of the Rent Controller was illegal because he failed to fix the standard rent as claimed by the appellant. He also contended that the limitation period prescribed in section 12 of the Act for an application for fixation of standard rent did not apply where the claim made as a defence in a suit for ejectment under section 14(/)(c), and that in any event he was entitled to the benefit of section 14(2). HELD: (i) The appellant 's plea that the Rent Controller was to fix the standard rent when the appellant asked for its fixation in his written statement must be rejected. (a) The prohibition in ss 4 and 5 of the Act operates only after the standard rent has been fixed and not before. Until the Rent Controller has fixed the standard rent under section 9. the contract between the landlord and tenant determines the liability. Section 6 cannot be interpreted to mean that standard rent can be regarded as fixed without an order the Controller. [400 F H] (b) When section 15(3) refers to a ease in which there is a "dispute as to amount payable by the tenant" the dispute referred to is about contractual rent payable and not about the standard real. The "having regard to the. provisions of the Act" has reference to sections 9 and 12. The scheme of sub section (3) of s 15 is that the interim rent will be paid at the rate ordered by the Controller and if before the proceeding is disposed of standard rent is fixed by the Controller in an application under s.12 then in order to obtain the benefit of s.6 the tenant must pay the arrears calculated on the basis of the standard rent within one month from the date on which the standard rent is fixed or within such further time as the Controller may allow.[402 B G] 391 If in a proceeding under section 14(1)(a) the tenant raises by way of defence a contention that the standard rent be determined the Controller may treat that as an application under section 12 and deal with it according to law. But the Act confers no power under section 15(3) upon the Controller. The power to determine standard rent is exercisable under section 12 only. [402 H] (e) Acceptance of the appellant 's contention would lead to anomalous results. Under section 12 standard rent may be given retrospective operation for not more than one year. But if a tenant is in arrears for more than one year, on the contention of the appellant, the tenant would be liable to pay arrears at the rate of standard rent determined for a period longer than one year before the date on which he made a claim in his written statement for determination of standard rent and may be entitled to reopen closed transactions. The legislature could not have intended that the tenant in default should be entitled to evade the statutory period of limitation prescribed by the expedient of refusing to make an application so as to obtain an advantage to which he is not entitled if he moves the Controller in a substantive application for &.termination of standard rent. [404 E F] M/s. Suraj Balram Sawhney & Sons vs Dr. D. Kid, , 8. K. Chatterjee & Anr. J.N. Ghoshal, (1966) P.L.R. (Delhi Section) 354 and Chander Bhan vs Nand Lal & Anr. , disapproved. Jiwan Industries Private Ltd. vs Santosh & Company, , Lala Manohar Led Nathan Mal vs Medal Lal Murari Lal, A.I.R. , and Smt. Radhey Piari vs section Kalyan Singh, A.I.R. 1959 Punjab, 508, referred to. (ii) The earlier proceeding against the appellant was disposed of on his payment of arrears of rent for seven months. Thereby the appellant had on the earlier occasion obtained the benefit of section 14(2). Having again made default in payment of rent and not having made any payment under section 15, he was not entitled for a second time to the benefit of section 14 (2). The words "no tenant shall be entitled to the benefit under this sub section in the proviso sub section (2) of section 14 are not directory. Even on the assumption that the proviso is not mandatory there was no justification for interfering with the finding of the High Court that the appellant was not entitled to the benefit of section 14(2). [405 E G]

ivil Appeal No. 2319 of 1986. From the Judgment and Order dated 7.3. 1986 of the Allahabad High Court in Revision Petition No. 454 of 1985. Shanti Bhushan, section Dastur, J.J. Bhatt, A. Dayal and K.J. John for the Appellant. L.M. Singhvi, Depanker Gupta, P.L. ' Dubey, N.R. Khaitan, A.M. Singhvi, U.K. Khaitan, Ajay Jain, Praveen Kumar and C. Mukhopadhya for the Respondent. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The appellant, General Electric Company, a multi national, entered into a contract with the respondent, Renusagar Power Company Limited, an Indian Company, agreeing to sell equipment for a Thermal Electric generating plant to be erected at Renukoot on the terms and conditions set forth in the contract. For the purposes of this case, it is unnecessary to set out the terms of the contract and the details of what was envisaged to be done by the parties. It is also unnecessary to set out the various events that took place subsequently. It is sufficient to state that on March 2, 1982, the GEC submitted certain disputes between the GEC and Renusagar for arbitration to the International Chambers of Commerce. On June 11, 1982, Renusagar filed a suit in the Bombay High Court .for a declaration that the claims purported to be referred to arbitration by GEC to ICC were beyond the scope and purview of the arbitration agreement contained in the contract and sought an injunction to restrain the GEC from taking any further steps pursuant to their request for arbitration addressed to ICC on March 2, 1982. In Renusagar 's suit, GEC, on August 11, 1982 filed a petition under section 3 of the For eign Awards (Recognition and Enforcement) Act, 196 1 seeking a stay of the suit. On August 19, 1982 GEC also filed a suit in the Calcutta High Court against the United Commercial Bank to enforce a bank guarantee given by the bank at the instance of Renusagar. On November 25, 1982, Renusagar filed a suit No. 127 of 1982 in the Court of Civil Judge, Mirzapur praying for a declaration that the guarantee given by the United Commercial Bank for and on behalf of the plaintiff stood 864 discharged and had become ineffective and unforceable and for a mandatory injunction against the GEC directing and ordering them to settle the plaintiff 's claim regarding 75 MVA Transformers and to satisfy validly the settlement arrived at of the plaintiff 's claim as mentioned in para 12 of the plaint. It is useful to refer at this juncture to some of the happenings in the proceedings in the Bombay High Court. On April 20, 1983, a learned single Judge of the Bombay High Court dismissed the notice of motion taken out by Renusagar for stay of the arbitration proceedings and allowed the application of GEC for stay of further proceedings in the Bombay High Court. Appeal filed by Renusagar to the Division Bench of the High Court were dismissed on October 21, 1983. Further appeals filed by Renusagar to the Supreme Court were also dismissed on August 16, 1984. The Supreme Court held that the claims of GEC were arbitrable and that the decision of the court was conclusive on that issue and would not arise before the court of arbitration of ICC. On January 17, 1983, GEC filed an application (7 C) purporting to put on record their complaint that annexures to the plaint had not been received by them. On the same day, the Civil Judge made an order: "Copy of the plaint has been given to the defendant (GEC) so that the defendant may file a written statement. " On the same day, the defendant GEC also filed another application (8 C) purporting to be 'under section 20 and Order VII r. 11 read with section 151 of the Code of Civil Procedure ' praying that the court may be pleased to reject the plaint and the suit. In this applica tion, it was stated that the suit was in abuse of the proc ess of the court and an attempt to harass the defendants. The court was requested to dismiss the plaintiff 's suit on that ground as also on other grounds which were thereafter mentioned. It was stated that the defendant did not reside and no cause of action arose within the local limits of the jurisdiction of the court. There was a violation of the stipulation laid down in section 20 of the Code of Civil Proce dure resulting in an abuse of the process of the court. It should entail a dismissal of the suit. The suit had been fradulently instituted on insufficient court fee and for that reason also the suit deserved to be dismissed. The defendant then proceeded to state that they reserved the right to take further objections as preliminary objections to the maintainability of the suit and craved leave to add to or alter or amend the application whenever necessary. What is important to be noticed here is that there was no prayer at this juncture for a stay of the suit. On January 19, 1983, GEC filed an application (10 C) requesting the Court to call upon Renusagar to furnish a complete record of the suit and annex 865 ures. The Civil Judge passed an order: ' "The case is called out. Shri J.P. Singh, present for the plaintiff, Shri R.S ' Dhawan, Advocate for the defendant. 10 C by the defendant to direct the plaintiff to give copies of complete record so that the defendant may plead preliminary objections. The copies of papers have been given. Now the defendant may file_W.S. by March 4, 1983. Put up on March 7, 1983 for issues. Preliminary objections like 7 C and 8 C can be heard and disposed of after filing of written statement when the issues may be framed. " On March 4, 1983 which was the date fixed by the Civil Judge for the filing of a written state ment by GEC, GEC filed three applications before the Mirza pur Court: 11 C, 12 C and 13 C. 13 C was styled as "objec tions by the defendant to the jurisdiction of the court to entertain this suit for declaration and injunction. " The document began with the statement: "The Hon 'ble court has no jurisdiction to entertain this suit because of the following reasons. " Seven reasons were set forth. The first and the fourth grounds related to the territorial jurisdiction of the court. The second ground stated that the plaint did not disclose any cause of action and, therefore, was liable to be rejected under Order VII CPC. The third ground stated that from the statements in the plaint, the suit was barred by limitation. The plaint was, therefore, liable to be rejected under Order VII r. 11 D. The fifth ground was to the effect that the reliefs claimed were untenable on their face and the suit was liable to be straightaway dismissed on that account. The sixth ground was that the suit was liable to be stayed under section 10 or section 15 1 of the CPC. The seventh ground was: "Similarly the suit is liable to be stayed as regards the second relief claimed by the plaintiff under section 3 of the and Foreign Awards (Recognition & Enforcement) Act, 1961 and/or section 34 of the Indian or under all of them". Thereafter the document proceeded to amplify the seven grounds by detailed reference to the allegations in the plaint and by further traversing those allegations. In regard to the seventh ground that the suit was liable to be stayed under section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961, it was stated: "The present claim arises out of the only contract between the parties entered into in 1964. Disputes arising out of or related to this contract have to be settled, after being unable to resolve such disputes by, sincere negotiation by arbitration under the rules of the International Chamber of Commerce Court of Arbitration because of the provisions of article XVIII of the said contract. The defendant is ready and willing to have the present dispute raised by the 866 plaintiff in this plaint to be settled by arbitration without prejudice to the defence of want of cause of action, the bar of limita tion and all other defenses. This Hon. Court is therefore "bound to stay the present suit under section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961. " The final prayer made in the application (13 C) was: "For the above reasons it is prayed that the plaint be either rejected for failure to disclose the cause of action or as being barrred for limitation on the face of it, or it be returned to be plaintiff for presenta tion to a proper forum. Further, the suit is also liable to be dismissed because reliefs claimed by the plaintiff are untenable on their face. Again, alternatively the suit is liable to be stayed under section 10 and/or section 151 CPC in respect of first relief and under section 3 of the Foreign Awards (Recognition and En forcement) Act, 1961 in respect of the second relief claimed by the plaintiff in the plaint. " 11 C was an application under Order VIII Rule 9 and section 151 CPC seeking postponement of the striking of issues from March 7, 1983 to 4th or 5th of April, 1983. In the course of the application it was recited: "That in keeping with the time schedule fixed by this Hon 'ble Court in effect, that a written statement be filed on March 4, 1983, the defendant is filing objections to the jurisdiction of the court to entertain this suit for declaration and injunction to file a subsequent pleading as written statement on merits in the event of the objections taken in the preliminary written statement dated 21st February, 1983 being rejected". The reference to the objections to the jurisdiction of the court and the preliminary written statement dated 21st February, 1983 was obviously to 13 C which was verified at Singapore on February 21, 1983. 12 C was an application to grant leave to the defendant to file a subsequent pleading as written statement on merits if the court rejected the objections taken in the prelimi nary written statement. This application was filed under Order VIII Rule 9. On March 7, 1983, the court adjourned the case to April 5, 1983 and from time to time thereafter. On May 31, 1983, GEC filed their written statement raising their pleas in defence to Renusagar 's suit. However, in the first paragraph it was stated: 867 "The defendant has filed in this Hon 'ble Court an application under section 20 and Order VIII Rule 9 read with section 15 1 CPC for rejection of the plaint with special costs to the defendant on January 15, 1983. The defend ant has also placed on record on January 17, 3983 that a copy of the plaint was supplied without annexures and documents and without the injunction application said to have been filed. The defendant has filed its preliminary written statement contesting the jurisdiction of this Hon 'ble Court to try and entertain the suit as no cause of action has arisen to the plaintiff to sue this defendant on March 4, 1983. An appropriate application under Order VIII Rule 9 read with section 151 CPC was also filed for leave to file subsequent plead ings as written statement on merits in the event of the preliminary written statement and the pleas being rejected was also filed on the same date. " In the second paragraph, it was added, "This defendant craves leave of this Hon 'ble Court to incorporate the preliminary objec tions taken hithertofore by this defendant in its applications and pleadings and preliminary written statement as if the same are set out herein extenso. " Later in paragraph 6 and 7 of the written statement, it was stated as follows: "6. The plaintiff states and submits that the preliminary objections are sufficient to dispose of the entire claim in suit on issues of law alone which go to the root of the Jurisdiction aspect of the suit and its apparent non maintainability and these sought to be decided as prelimi nary questions of law." "7. Without prejudice of the preliminary objections referred to hereinabove and deemed to be incorporated herein as stated this defendant shall now deal with the plaint para wise and on merits . . . " The plaintiff objected to the presentation of the writ ten statement on the ground that it was filed outside court hours. The plaintiff also filed an application for postpone ment of the date of settlement of 868 issues. On August 4, 1983, the defendant filed an applica tion (19 C), requesting the court to settle the issues on August 18, 1983 itself without further postponement. There after the case was adjourned from time to time. On October 19, 1983, the plaintiff filed an application (2c) requesting the court to set the defendant ex parte as not having filed any written statement and to decree the suit. On August 1, 1984, the Plaintiff, Renusagar filed an application, 25 A, for amendment of the Plaint. The amendment sought included a prayer for a decree in a sum of Rs.62,72,272. After contest, the application for amendment was allowed on October 15, 1984 and GEC was given time to file an additional written statement. A few days earlier, the defendant had filed application (30 C) requesting the court to decide the issues regarding maintainability and jurisdiction and stating that the suit may proceed after decisions on these issues. On this application, the court made an order on October 15, 1984 to the effect that a similar request had earlier been rejected by the Court on January 19, 1983 and it was not therefore, open to the Court to reopen the matter. On November 31, 1984, GEC filed an application (34 D) seeking time to file a written statement "if so advised" and postponement of settlement of issues. Time was granted. On January 5, 1985, GEC filed an application (65 C) stating that they had consistently pleaded that the issues relating to the jurisdiction of the court and maintainability of the suit should be heard first and reiterating that request prayed that two issues may be struck and decided before the case was proceeded upon on merits. The two issues suggested were: "(1) whether the Hon 'ble Court had jurisdiction to try and entertain the suit and (2) Whether the present suit is maintainable against the defendantapplicant who neither resides nor carries on busi ness in India." On February 2, 1985, the Mirzapur Court rejected the appli cation, commenting that such a request was being repeatedly made. Against the order of the Mirzapur Court rejecting the application 65 C, GEC filed a petition under article 227 before the Allahabad High Court for quashing the proceedings in the suit. In ground eight of the petition, it was stated that GEC had already raised the plea that the suit was liable to be stayed under section 3 of the Foreign Awards (Recognition & Enforcement) Act, 1961. It was also stated in ground No. twelve that the question of arbitrarbility of the disputes had already been decided by the Supreme Court. On April 4, 1985, the Allahabad High Court 869 dismissed the petition in limine observing as follows: "We have considered the matter carefully and we are of the view that so far as the court below has not been called upon to apply its mind to the provisions contained in section 3 of the Act. Shri R.S. Dhawan who appears along with Shri V.N. Deshpande has stated at the bar that amongst other contentions advanced before the learned Civil Judge, he had pointedly pressed that in view of the aforesaid provi sions further proceedings in the suit should be stayed. We have no doubt that such an argument must have advanced by him. Nonethe less, the learned Civil Judge had not given any decision on this point. We, therefore, consider it appropriate that the petitioner should make a fresh application setting out the relevant facts in the spirit of section 3 of the Act. This application should be made within a fortnight from today. If such an application is made within the time specified by us, the learned Civil Judge will dispose of the same on merits and in accordance with the law. Till the learned Civil Judge disposes of this application he shall not proceed further with the hearing of the suit. No other order is necessary at this stage. With these obser vations the writ petition is dismissed sum marily. " Consequent on the order of the High Court in the appli cation under article 227, GEC filed another application (83 C) before the Mirzapur Court on April 15, 1985 expressly set ting forth their objection under section 3 of the Foreign Awards (Recognition & Enforcement) Act and praying for a stay of the suit under that provision. Reference was also made to their earlier applications made on March 4, 1983. The con tentions raised in 13 C were reiterated. This application (83C) was rejected by the learned Civil Judge, Mirzapur by an order dated July 9, 1985. The learned Civil Judge took the view that the objection raised on the basis of section 3 of the Foreign Awards Act must, in the circumstances of the case, be considered to have been abandoned and the defendant considered to have elected to proceed with the suit. The revision application referred by GEC to the High Court of Allahabad against the order dated July 9, 1985 was dismissed by the High Court on March 7, 1986. The High Court referred to the contents of 13 C in great detail and concluded, "The plaint as initially presented appears to have been completely answered by the General Electric Company in its applica 870 tion 13 C which it may be remembered was also verified as a pleading, because in the written statement 16 Ka which was undoubtedly filed on May 31, 1983, no further facts are referred to . . 13 C is clearly in nature a written statement in the case, raising such pleas which constitute the defence of the General Electric Company to the case set up in plaint as it stood then". The High Court also observed that it was apparent to them that the emphasis in 13 C was on the other objections and not on the objec tions under sec. 3 of the Foreign Awards Act. The High Court also rejected the further contentions advanced on behalf of the General Electric Company that a fresh right to make an application under sec. 3 of the Foreign Awards (Recognition & Enforcement) Act accrued on the plaint being amended by Renusagar. Stay of the Suit was, therefore, refused. General Electric Company has preferred the present appeal against the judgment of the High Court of Allahabad under article 136 of the Constitution. Shri Shanti Bhushan, on behalf of the appellant General Electric Company and Dr. L.M. Singhvi, on behalf of Renusa gar addressed elaborate arguments covering indeed a wide range of facts and law. They also cited before us a host of cases Indian, English and Canadian. We do not propose to examine the several side issues and non issues which have argued before us. We propose to confine ourselves to the basic questions which were argued before us namely, (a) whether either 8 C or 13 C could be considered to be a step in the suit so as to disentitle the defendant from seeking a stay of the suit under sec. 3 of the Foreign Awards (Recog nition & Enforcement) Act, (b) whether 13 C was in the nature of a written statement, the filing of which precluded the defendant from seeking a stay and (c) whether the de fendant could be said to have abandoned the right to seek a stay in the circumstances of the case. The Foreign Awards (Recognition & Enforcement) Act was enacted 'to enable effect to be given to the Convention on the Recognition & Enforcement of Foreign Arbitral Awards done at New York, on the th day of June, 1958, to which India is a party and for purposes connected therewith '. The Convention is set forth in the Schedule to the Act and section 4(i) of the Act provides that a foreign award shall, subject to the provisions of the Act, be enforceable in India as if it were an award made on a matter referred to arbitration in India. Except section 3, we are not concerned with the remaining provisions of the Act. Section 3 is as follows: "Stay of proceedings in respect of matters to be refer 871 red to arbitration: Notwithstanding anything contained in the , or in the Code of Civil Procedure, 1908, if any party to an agreement to which Article II of the Convention set forth in the Schedule applies, or any person claiming through or under him commences any legal proceedings in any Court against any other party to the agreement or any person claiming through or under him in respect of any matter agreed to be referred to arbitration in such agreement, any party to such legal proceedings may, at any time after appearance and before filing a written statement or taking any other step in the proceedings, apply to the Court to stay the proceedings and the Court, unless satis fied that the agreement is null and void, inoperative or incapable of being performed or that there is not, in fact, any dispute be tween the parties with regard to the matter agreed to be referred, shall make an order staying the proceedings. " Section 3 of the Foreign Awards (Recogni tion & Enforcement) Act is analogous to section 34 of the Indian which is as follows: "Agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceed ings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and will ing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings. " It may be straightaway noticed that while section 34 of the Indian vests in the Court the discretion to stay or not to stay the proceedings, section 3 of the Foreign Awards (Recognition & Enforcement) Act vests no such discre tion in the Court. Under the Foreign Awards (Recognition & Enforcement) Act it is mandatory that the proceedings could be stayed if the conditions prescribed are fulfilled. But, whether it is a defendant who invokes the discretion of the Court 872 under section 34 of the Indian or whether it is a defendant who seeks to enforce the right under section 3 of the Foreign Awards (Recognition & Enforcement) Act, it is neces sary that he should not have disentitled himself, from doing so either by filing a written statement or by taking any other step in the proceedings. His application to the Court, be it under section 34 of the Indian . or section 3 of the Foreign Awards (Recognition & Enforcement) Act may be filed "before filing a written statement or taking any other step in the proceedings. " It is competent then only and not thereafter. The question is when may a written statement said to have been filed or when may any other step said to have been taken in the proceedings? On the question of the meaning of the expression 'step in the proceedings ', on the question of the proper approach to the solution of the problem and on allied questions, we were referred by the learned counsel for GEC and Renusagar to decisions of the *English Courts, decisions of the **Canadian Courts and ***passages from textbooks. We do not propose to refer to them in our judgment not because we do not find them instructive; indeed we read them carefully and found them helpful, but because we think that reference to such persuasive authority is justified only if there is no guidance from binding authority. The time has perhaps ar rived to discourage uninhibited reference to and extravagant use of foreign precedents, though indeed we welcome such precedents when they explore virgin territory and expand the horizons of legal thought. The setting of a foreign judgment is the foreign country 's past and present history, its economic relations, its social relations, its trade and commerce, its traditions, its values, its needs, the stages of the development of its people, its legal * 1. Ford 's Hotel Company Ltd. vs Bartlett (1896(I) AC 1) 2. Ochs vs Ochs Brothers ( 1909 (II) Ch. 121) 3. Parker, Gaines & Co. vs Turpin ( 1918 (I) KB 358) 4. Henry vs Geopresco International Ltd. ( 1975 (2) All Eng. LR 702) 5. Tracomin SA vs Sudan Oil Seeds ( 1983 (I) All Eng. LR 404) 6. In re. The Tuyuti (1984 (2) All Eng. LR 545) **1. Raymond vs Adrema Ltd. 2. Fathers of Confederation Bldgs. Trust vs Pigott Con struction Company Limited * * * 1. Russell on Arbitration (20th Edition) 2. Commercial Arbitration by Mustil & Boyd. 873 ideology, its constitutional direction and strategies and its statutes and precedents. Foreign precedents are to be read and remembered in their setting, out never to be ele vated to the level of binding precedents and, therefore, to be avoided from frequent and needless question. Section 34 of the Indian has received the consideration of the Supreme Court in State of U.P .v. Janki Saran Kailash Chander, [1974 (I) SCR 31] and Food Corporation of India vs Yadav Engineer, [1983 (I) SCR 95]. In State of Uttar Pradesh vs Janki Saran Kailash Chandra (supra), the facts were that the summons in a suit institut ed against the State of Uttar Pradesh were served on the District Government Counsel. On September 2, 1966, the District Government Counsel entered his appearance in the suit and also filed a formal application praying for a month 's time for filing a written statement. Time was grant ed as prayed for. On October 1, 1966, the District Govern ment Counsel filed an application under section 34 of the Arbi tration Act pleading that there was an arbitration clause in the agreement between the parties, that the State was will ing to have the matter referred to arbitration and that the suit should therefore, be stayed. The Trial Court stayed the suit. But, on appeal, the High Court took the view that the application for time for filing the written statement was a step in the proceedings within the meaning of that expres sion in section 34 of the and the defendant was therefore, disentitled to claim that the suit should be stayed. The Supreme Court affirmed the decisions of the High Court observing, "In our view there is no serious infirmity in the impugned judgment of the High Court and we are unable to find any cogent ground for interfering under article 136 of the Constitution. " The Court then proceeded to discuss the scope and meaning of section 34 of the and went on to observe: "To enable a defendant to obtain an order staying the suit, apart from other conditions mentioned in section 34 of the , he is required to present his application praying for stay before filing his written statement or taking any other step in the proceedings. In the present case the written statement was indisputably not filed before the application for stay was presented. The question is wheth er any other step was taken in the proceeding as contemplated by section 34 and it is this point with which we are directly concerned in the present case. Taking other steps in the suit 874 proceedings connotes the idea of doing some thing in aid of the progress of the suit or submitting to the jurisdiction of the Court for the purpose of adjudication of the merits of the controversy in the suit. " Thereafter, the Court also noticed that the State had taken benefit of the appearance of the District Standing Counsel and his successful prayer for adjournment of the case by one month for the purpose of filing the written statement. Dealing with the question whether the High Court had interfered with the discretion of the Trial Court, it was observed, "If the appellants ' application was for ad journment for the purpose of filing a written statement, then there is no question of any exercise of the discretion by the Trial Court. Discretion with regard to stay under section 34 of the is to be exercised only when an application under that Section is otherwise competent. Incidentlly it is worth noting that even the order of the trial Court is not included by the appellant in the paper book and we do not know the reasoning of that Court for granting stay. But on the view that we have taken that omission is of little consequence. " The Court then added, "Keeping in view the long delay after the institution of the suit and the fact that the suit is for a very heavy amount by way of damages for breach of contract, it will, in our opinion, be more satisfactory on the whole to have the suit tried in a competent court of law in the normal course rather than by a lay arbitrator who is not bound either by the law of evidence or by the law of procedure." In Food Corporation of India ,,,. Yadav Engineer (supra) the question arose whether the appearance of the defendant and his prayer for time to reply to the notice of motion taken out by the plaintiff for an interim injunction could be said to amount to a step in the proceeding so as to disentitle the defendant from seeking a stay of the proceed ing under sec. 34 of the . First interpreting sec. 34 without the aid of authority, Desai, J. speaking for the court, observed that if a party to an arbitration agree ment sought to enforce the agreement by seeking a stay of the suit, he was obliged to disclose his unequivocal inten tion to abide by the agreement by asking for stay 875 before taking any step which may unequivocally indicate otherwise, that is, a step which may unequivocally indicate the intention to waive the benefit of the arbitration agree ment. "Abandonment of a right to seek resolution of dispute as provided in the arbitration agreement must be clearly mani fested by the ' step taken by such party. Once such unequivocal intention is declared or abandonment of the fight to claim the benefit of the agreement becomes manifest from the conduct, such party would then not be entitled to enforce the arbitration agreement because there is thus a breach of the agreement by both the parties disentitling both to claim any benefit of the arbitration agreement. Section 34 provides that a party dragged to the court as defendant by another party who is a party to the arbitration agreement must ask for stay of the proceedings before filing the written statement or before taking any other step in the proceedings. That party must simultaneously show its readiness and willing ness to do all things necessary to the proper conduct of the arbitration. The legislature by making it mandatory on the party seeking benefit of the arbitration agreement to apply for stay of the proceedings before filing the written statement or before taking any other steps in the proceedings unmistakably pointed out that filing of the written statement discloses such conduct on the part of the party as would unquestionably show that the party has abandoned its rights under the arbitration agreement and has disclosed an unequivocal intention to accept the forum of the court for resolution of the dispute by waiving its right to get the dispute resolved by a forum contemplated by the arbitration agreement. When the party files written state ment to the suit it discloses its defence, enters into a contest and invites the court to adjudicate upon the dispute. Once the court is invited to adjudicate upon the dispute there is no question of then enforcing an arbitra tion agreement by forcing the parties to resort to the forum of their choice as set out in the arbitration agreement. This flows from the well settled principle that the court would normally hold the parties to the bargain (see Ramaji Dayawala & Sons (P) Ltd. vs Invest Import, [ 1981] (I) SCR 399." Posing next the question what other steps the legislature contemplated as disentitling a party from obtaining stay of the proceedings, the 876 learned Judges applied the principle of ejusdem generis and held: "That some other step must indis putably be such step as would manifestly display an unequivocal intention to proceed with the suit and to give up the right to have the matter disposed of by arbitration. Each and every step taken in the proceedings cannot come in the way of the party seeking to en force the arbitration agreement by obtaining stay of proceedings but the step taken by the party must be such step as would clearly and unmistakably indicate an intention on the part of such party to give up the benefit of arbi tration agreement and to acquiesce in the proceedings commenced against the party and to get the dispute resolved by the court. A step taken in the suit which would disentitle the party from obtaining stay of proceeding must be such step as would display an unequivocal intention to proceed with the suit and to abandon the benefit of the arbitration agree ment or the right to get the dispute resolved by arbitration. " The learned judges then proceeded to consider the question whether an appearance in the suit to contest an interlocuto ry application, such as, an application for appointment of receiver or ex parte ad interim injunction, disclosed an unequivocal intention to proceed with the suit and give up in the benefit of the arbitration agreement. The question was answered as follows: "Incidental proceedings for appoint ment of receiver or for interim injunction are for the protection either of the property or the interests of the parties. Now, when ex parte orders are obtained on ex parte aver ments the other party cannot be precluded from coming and pointing out that no case is made out for granting interim relief. It would be too cumbersome to expect the party first to apply for stay and then invite the court under section 41(2) of the Act to vacate the injunction or to discharge the receiver. Giving the expression 'taking any other steps in the proceedings ' such wide connotation as making an application for any purpose in the suit such as vacating stay, discharge of the re ceiver or even modifying the interim orders would work hardship and would be inequitous to the party who is willing to abide by the arbitration agreement and yet be forced to suffer the inequity of ex parte orders. There fore, the expression tak 877 ing any other steps in the proceedings ' must be given a narrow meaning in that the step must be taken in the main proceeding of the suit and it must be such step as would clearly and unambiguously manifest the intention to waive the benefit of the arbitration agreement and to acquiesce in the proceedings. Interloc utory proceedings are incidental to the main proceedings. They have a life till the dispos al of the main proceeding. As the suit or the proceedings is likely to take some time before the dispute in the suit is finally adjudicat ed, more often interim orders have to be made for the protection of the rights of the par ties. Such interlocutory proceedings stand independent and aloof of the main dispute between the parties involved in the suit. They are steps taken for facilitating the just and fair disposal of the main dispute. When these interlocutory proceedings are contested it cannot be said that the party contesting such proceedings has displayed an unequivocal intention to waive the benefit of the arbitra tion agreement or that it has submitted to the jurisdiction of the court. When ex parte orders are made at the back of the party the other party is forced to come to the court to vindicate its right. Such compulsion cannot disclose an unambiguous intention to give up the benefit of the arbitration agreement. Therefore, taking any other steps in the proceedings must be confined to taking steps in the proceedings for resolution of the substantial dispute in the suit. Appearing and contesting the interlocutory applications by seeking either vacation thereof or modifica tion thereof cannot be said to be displaying an unambiguous intention to acquiesce in the suit and to waive the benefit of the arbitra tion agreement. Any other view would both be harsh and inequitous and contrary to the underlying intendment of the Act. The first party which approaches the court and seeks an ex parte interim order has obviously come to the court in breach of the arbitration agree ment. By obtaining an ex parte order if it forces the other party to the agreement to suffer the order or by merely contesting be imputed the intention of waiving the benefit of arbitration agreement, it would enjoy an undeserved advantage. Such could not be the underlying purpose of section 34. Therefore, in our opinion, to effectuate the purpose underlying section 34 the narrow construction of the expres sion 'taking any other steps in the proceed ings ' as hereinabove set out appears to ad vance the 878 object and purpose underlying section 34 and the purpose for which the Act was enacted. " The court then referred to various decisions on the ques tion. Thereafter the case of State of U. P. vs Jankisaran Kailashchandra, (supra) was discussed in detail. After quoting from the judgment of Justice Dua, the court ob served: "The view herein taken not only does not run counter to the view we have taken but in fact clearly supports the view because the pertinent observation is that taking step in the proceeding which would disentitle a party to obtain a stay of the suit must be doing something in aid of the progress of the suit or submitting to the jurisdiction of the court for the purpose of adjudication of the merits of the controversy in the suit. In other words, the step must necessarily manifest the intention of the party to abandon or waive its right to go to arbitration or acquiesce in the dispute being decided by court. In fact, the view taken in this case should have quelled the controversy but it continued to figure in one form or the other and that is why we have dealt with the matter in detail." The Court finally concluded the discussion as follows: "Having thus critically examined both on principle and precedent the meaning to be given to the expression 'taking steps in the proceedings ', we are clearly of the view that unless the step alleged to have been taken by the party seeking to enforce arbitra tion agreement is such as would display in unequivocal intention to proceed with the suit and acquiesce in the method of resolution of dispute adopted by the other party, namely, filing of the suit and thereby indicate that it has abandoned its right under the arbitra tion agreement to get the dispute resolved by arbitration, any other step would not disenti tle the party from seeking relief under section 34. It may be clearly emphasised that contesting the application for interim injunction or for appointment of a receiver or for interim relief by itself without anything more would not constitute such step as would disentitle the party to an order under section 34 of the Act. ' ' 879 Thus we see that it is the view of this court that a step in the proceeding which would disentitle the defendant from invoking sec. 34 of the should be a step in aid of the progress of the suit or submission to the juris diction of the court for the purpose of adjudication of the merits of the controversy in the suit. The step must be such as to manifest the intention of the party unequivocally to abandon the right under the arbitration agreement and in stead to opt to have the dispute resolved on merits in the suit. The step must be such as to indicate an election or affirmation in favour of the suit in the place of the arbi tration. The election or affirmation may be by express choice or by necessary implication by acquiescence. The broad and general right of a person to seek redressal of his grievances in a court of law is subject to the right of the parties to have the disputes settled by a forum of mutual choice. Neither right is insubstantial and neither right can be allowed to be defeated by any manner of technicality. The right to have the dispute adjudicated by a civil court cannot be allowed to be defeated by vague or amorphous mis called agreements to refer to 'arbitration '. On the other hand, if the agreement to refer to arbitration is estab lished, the right to have the dispute settled by arbitration cannot be allowed to be defeated on technical grounds. What do we have in the present case? We mentioned at the outset that GEC filed two applications on January 17, 1983, 7 C and 8 C. In 7 C, GEC purported to put on record their complaint that they had not received the annexures to the plaint. By no stretch of imagination could it possibly be paid that 7 C indicated either an abandonment of arbitration or an affirmation of the suit. 8 C was an application re questing the court to reject the plaint and the suit for the reasons set forth in the application. One of the grounds urged was that the Mirzapur Court had no territorial juris diction. Another ground was that the plaint was insuffi ciently stamped. Yet another ground was that the plaint disclosed no cause of action. Every one of the objections was in the nature of a preliminary objection to the trial of the suit on the merits of the dispute between the parties. Every one of the objections was what may be called a thresh old objection pleaded as a bar to any further hearing of the suit. None of the objections invited an adjudication on the merits of the controversy. It was said that the return of a plaint under Order VII r. 10 and the rejection of a plaint under Order VII r. 11 put an end to the controversy so far as the court where the proceedings had been instituted and that the rejection of a plaint under Order VII r. 11 was a decree within the definition of that expression in Order II r. 2 of the Civil Procedure Code. It was argued that the rejection of a plaint for non disclosure of a cause of action was also an 880 adjudication of the merits of the controversy in the suit and reliance was placed on decisions under the Representa tion of People Act. We do not think that we can accept the argument nor are we able to derive any assistance from the cases cited. In the first place, the expression 'merits of the controversy in the suit ' does not occur either under sec. 34 of the or sec. 3 of the Foreign Awards (Recognition and Enforcement) Act. The words occur in the decision of this court in State of U.P .v. Janki Saran Kailash Chandra (supra) where the court said, "Taking other steps in the suit proceedings connotes the idea of doing something in aid of the progress of the suit or submitting to the jurisdiction of the Court for the purpose of adjudi cation of the merits of the controversy in the suit. " As often enough pointed out by us, words and expressions used in a judgment are not to be construed in the same manner as statutes or as words and expressions defined in statutes. We do not have any doubt that when the words "adjudication of the merits of the controversy in the suit" were used by this court in State of U.P .v. Janki Saran Kailash Chandra (supra), the words were not used to take in every adjudica tion which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudi cation touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground, are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical inter pretation which tends to defeat the object of the legisla tion must be avoided. We are of the view that an invitation to the court to reject a plaint or dismiss a suit on a ground not touching the merits of the controversy between the parties, but a ground such as insufficiency of the court fee paid, maintainability of suit, territorial jurisdiction etc. is really to enable the proceeding before the arbitra tor to go on and far from an election to abandon arbitration and continue the suit. Every threshold bar to a suit set up by a defendant is a step to allow the arbitration to go on. It is a step in aid of arbitration and not in aid of the progress of the suit. In that view, we think that 8 C can hardly be called an invitation to the court to adjudicate upon the merits of the controversy, when in fact it is designed to prevent the court from touching upon the merits of the controversy. The next set of events relied upon by the plaintiff to deny the defendant 's right to obtain stay in the filing by GEC of the applications 1c, 12 C and 13 C in the Mirzapur Court on March 4, 1983.4th 881 March and 7th March were the dates which had been fixed by the Court for filing the written statement and for the striking of the issues. The defendant, on March 4, instead of filing the written statement, filed 11 C, 12 C and 13 C. 13 C, as already mentioned, was styled "objections by the defendant to the jurisdiction of the Court to entertain a suit for declaration and injunction". It began with the statement, "the Hon 'ble Court has no jurisdiction to enter tain the suit for the following reasons" and ended with the prayer: "for the above reasons it is prayed that the plaint may be either rejected for failure to disclose a cause of action or as being barred by limitation on the face of it, or it be returned to the plaintiff for presentation to a proper forum. Further the suit is also liable to be dismissed because reliefs claimed by the plaintiff are untenable on their face, Again, alternatively the suit is liable to be stayed under section 10 and/ or section 151 CPC in respect of first relief and section 3 of the For eign Awards (Recognition & Enforcement) Act 196 1 in respect of second relief claimed by the plaintiff in the suit. " 11 C was an application seeking postponement of the striking of the issues from March 7 to a later date in the event of the preliminary objections being rejected. 12 C was an application to grant leave to file a subsequent pleading as written statement in the event of the preliminary objec tions being rejected. Obviously ll C, 12 C and 13 C have to be read together and reading them together, it appears to us to be clear that the defendant raised objections to the trial of the suit on merits, which were loosely described as 'objections to the jurisdiction of the Court and objections to the maintainability of the suit ' and which were requested to be disposed of first, with a further request that if the objections were rejected the defendant may then be allowed to file a proper written statement on merits and issues struck thereafter. The invitation to the Court was not to proceed with the suit but to refrain from proceeding with the suit until the preliminary objections were first decid ed. The preliminary objections were set out by the defendant in 8 C and 13 C and we have set them out earlier while narrating the facts. We notice that the preliminary objec tions raised were not of such a nature as to make adjudica tion on merits of any part of the real dispute between the parties necessary for deciding the preliminary objections. While elaborating the preliminary objections, particularly in order to explain the contention that the plaint did not disclose a cause of action, the defendant did choose to controvert several factual averments made in the plaint. We do not think that the 882 circumstances that the defendant chose to deny in his appli cation inviting decision on his preliminary objections, the allegations of material facts made by the plaintiff in the plaint changes the character of the applications into a written statement any more than a reply to a notice of motion seeking an ad interim injunction acquires the charac ter of a written statement merely because factual allega tions made in the plaint are also dealt with in the reply. A defendant may consider it necessary to deny the averments of the fact in the plaint with a view to explain the prelimi nary objections raised by him or he may deny the averments of fact by way of abundant caution so as not to be under stood as having admitted (by not denying) the plaint aver ments. In such a situation, the question to be considered is did the defendant intend it to be a written statement or was the document capable of being construed as setting out unreservedly the case which the defendant wished to put forward? Was it meant to answer the plaint? We do not think either 8 C or 13 C is capable of being so construed. Neither the title of the documents nor the prayer in the documents would justify their being dubbed as written statements. We have referred to their contents and we do not think it possible to view 8 C or 13 C as meant to answer the plaint. They were objections and not answer to the Plaint. We are unable to hold that either of them can be treated as a written statement. It is of interest to note here that the plaintiff himself filed an application 21 C requesting the court to set the defendant ex parte on the ground that he did not file any written statement. Obviously the plaintiff never considered 13 C to be a written statement. We are also unable to hold that either of them can be said to be a step in the proceeding. We have already explained why 8 C cannot be treated as a step in the proceeding. The same reasons apply to 13 C also. 13 C invited the court to consider the preliminary objections amongst which was a prayer to stay the suit under section 3 of the Foreign Awards (Recognition & Enforcement) Act. An invitation to the court to decide the preliminary objections was in fact a request to the court not to proceed with the trial of the suit on merits. We are unable to hold that 13 C was an invitation to the court to adjudicate upon the merits of the controversy, when in fact as we said in the case of 8 C, it was designed to prevent the court from touching upon the merits of the controversy. It was argued that the defendant himself sought permission for filing additional pleadings if preliminary objections were rejected and, therefore, the defendant himself thought that 13 C was a pleading, namely, a written statement. Our attention was also invited to the written statement filed on May 31, 1983 in which the preliminary objections filed earlier were referred to as preliminary 883 written statement. We do not think we will be justified in harping upon a word here or a word there. As we said earli er, we propose to look at the substance of the matter and ignore the chaff. Looking to the subStance of the matter, we find that before May 31, 1983, that is, the date on which the written statement was filed, the defendant did not take any step in the suit. The applications filed by him were not in aid of the progress of the suit, but to request the court to refrain from proceeding with the suit. 13 C contained a prayer for the stay of the suit under section 3 of the Foreign Awards (Recognition & Enforcement) Act and we hold that, in terms of that provision, it was made before the written statement was filed and before any step in the proceeding was taken. An argument which was presssed before us was that the conduct of the defendant was such that he must be considered to have abandoned his right to have the suit stayed under section 3 of the Foreign Awards (Recognition & Enforcement) Act. We do not think there is any substance in the submission. On the one hand, we have the outstanding circumstances that the defendant was proceeding with the arbitration. On the other hand, we have also the circumstance that the defendant filed 13 C one of the prayers of which was a stay of the suit under section 3 of the Act. The argument was that the defendant did not press his application and did not seek the orders of the court on 13 C. This would not be a correct picture of the events since we find that even on January 19, 1983, the court made an order that preliminary objections like 7 C and 8 C could be heard and disposed of after filing of written statement when the issues may be framed. We also find that at every stage the defendant kept referring to his prelimi nary objections and never for a moment abandoned them. 30 C was another application filed by him requesting the court to decide the preliminary objections regarding jurisdiction and maintainability of the suit. On this the order was that it was not competent for the court to reopen the order dated January 19, 1983. It was therefore, not the defendant 's fault that the preliminary objections were not decided. Later again the defendant filed 34 C requesting the court to frame preliminary issues and try them on the question of the jurisdiction of the court and the maintainability of the suit. This application was also rejected by the court with the comment that the request was being repeatedly made. It was against this order that the defendant went to the High Court with the application 65 C. The High Court directed the defendant to file an application for the trial court spe cially requesting that court to apply its mind to the provi sions of section 3 of the Foreign Awards (Recognition & Enforce ment) Act and pointedly pressing the contention relating to that provisions. Pursuant to this direction, the defendant filed 83 C 884 before the trial court and it is on the orders made on this application that the present appeal has come before us. The submission of the learned counsel for the plaintiff was that the appeal before us arose directly from the order made on the application 83 C not on the application 13 C. According to the learned counsel, 13 C must be considered to have been given up and since 83 C was filed long after the filing of the written statement, it was incompetent. We are unable to agree. 13 C was never abandoned by the defendant. On the other hand 83 C also expressly refers to 13 C. 83 C is a reiteration and revival of 13 C with emphasis on the objec tion relating to section 3 of the Foreign Awards (Recognition & Enforcement) Act. Looking to the substance of the matter and ignoring technicalities, we are firmly of the view that the defendant sought a stay of the suit before filing a written statement or taking any other step in the suit and that he never abandoned his right to have the suit stayed. The appeals, therefore allowed with costs and the suit No. 127 of 1982 in the court of Mirzapur stayed under section 3 of the Foreign Awards (Recognition & Enforcement) Act. In the view that we have taken we do not think it necessary to consider the further question raised by the learned counsel for the appellant that the amendment of the plaint introducing a substantially new cause of action gave the defendant a fresh right under section 3 of the Foreign Awards Act. H.L.C. Appeal allowed.

The appellant filed a petition for execution of the money decree obtained by her in High Court against the judgment debtor and attachment was levied in execution on open land and a portion of the premises in question belong ing to the judgment debtor. Subsequently, the judgment debtor sold a portion of the attached property. The purchas er in turn, sold a portion thereof to the respondents. The aforesaid execution petition was dismissed for default but later on an application by the appellant, the said Execution Case was restored, and the said property was again attached, and a proclamation for sale of the said property was issued under Order 21 Rule 66 of the Code of Civil Procedure. The respondents ' petition under Order 21, Rule 58 of C.P.C. for releasing the property purchased by the respondents from attachment was dismissed. The High Court allowed the appeal. In appeal to this Court, it was urged on behalf of the appellant that in view of the provisions of Section 64 of the Code of Civil procedure, the sale of the property by the judgment debtor to the purchaser and the sale thereafter by him to the respondents, which were both effected during the subsistence of the attachment, were void as against the appellant decree holder, and although the attachment ceased on the dismissal of the Title Execution Case, on May 9, 1972, it was revived by restoration of the case. Allowing the appeal, this Court, HELD: An order of restoration of a suit dismissed for default would certainly restore or revive the attachment for the period during which it was in subsistence, namely, prior to the dismissal of the suit or execution application. [ 1043D] 1039 In the present case both transactions, sale by the judgment debtor and subsequent sale by the purchaser to the respondents, were effected during the subsistence of the attachment and before the Title Execution Case was dismissed for default. [1043C] The Division Bench of the High Court was in error in taking the view that by reason of the dismissal of the said Title Execution Case, the attachment came to an end and the order of restoration of the said case would not affect any alienations made before the restoration, although such alienations might have been made during the subsistence of the attachment. [1044C] Sushila Bala Dasi vs Guest Keen Williams Ltd., I.L.R. 1949 Vol. 1 Calcutta, p. 177 Annapuma Patrani & Ors. vs Lakshmana Kara & Anr., A.I.R. 1950, Madras, p. 740; Pradyut Natwarlal Shah vs Suryakant H. Sangani & Ors., A.I.R. 1979 Bombay, p. 166; Tavvala Veeraswami vs Pulim Ramanna & Ors., A.I.R. 1935 Madras, p. 365 and Patringa koer vs Madhavanand Ram & Ors., Calcutta Law Journal, 1911, Vol. 14 p. 476, referred to.

Civil Appeal No. 1802 of 1971. Appeal by Special Leave from the Judgment and Order dated 2 11 1971 of the Allahabad High Court in S.A. No. 768 of 1964. Y. section Chitale, Lalji Sahai Srivastava, B. P. Singh and Mukul Mudgal for the Appellant. R. K. Garg, section P. Singh and Sudama Ojha for Respondent No. 1. section T. Desai and Uma Datta for Respondent No. 3. section C. Patil for Respondent No. 2 M. Veerappa for Respondent No. 4. The Judgment of the Court was delivered by SEN J. This is an appeal by special leave from a judgment and decree of the Allahabad High Court dated November 2, 1971 in a suit for declaration of title to, and possession of house No. C 27/33 situate in Mohalla Jagatganj, Varanasi for arrears of rent and mesne profits in respect thereof. The principal point in controversy between the parties in this appeal is, whether the plaintiff, Mathura Ahir, being a Sudra could not be ordained to a religious Order and become a Sanyasi or Yati and, therefore, installed as a Mahant of the Garwaghat Math according to the tenets of the 'Sant Mat ' Sampradaya. A subsidiary question arises as to whether in the absence of proof of the performance of Atma Sradh and the recitation of Pravesh Mantra neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atmavivekanand could be regarded as Hindu sanyasis. It also raises a further question namely whether the first respondent, Harsewanand, the original plaintiff having died during the pendency of the appeal, the appeal abates in its entirety. The facts of the case are set forth with utmost particularity in the judgment of the High Court. It will, therefore, not be inconvenient to deal with them as briefly as possible. The history of the Garwhaghat Math is as follows: In 1925, Swami Sarupanand Paramhans, disciple of Swami Advaitanand, a Hindu ascetic belonging to the 'Sant Mat ' sect, came from the North Western Provinces, and took his abode at Garwaghat, Mouza Ramna Malhija, in the vicinity of Varanasi City. He was a religious preceptor of great learning and from his hermitage preached the tenets and precepts of the 'Sant Mat ' and soon had a large following. He was treated with great veneration and some of his devotees by a registered gift deed dated March 666 18, 1935 endowed the land and building, which he named as 'Bangla Kuti '. Subsequently the said Bangla Kuti and other lands and buildings appurtenant and adjacent thereto came to be known as the Garwaghat Math of which Swami Sarupanand was initially the mahant. He paid a visit to village Khuruhja for a couple of days and Baikunth Singh, father of defendant No. 5, Sri Krishna Singh, the appellant, was greatly influenced by his preachings and left for Varanasi for good. In due course, Baikunth Singh was initiated as chela by Swami Sarupanand who named him as Atmavivekanand. Swami Atmavivekanand Paramhans was the chief disciple of Swami Sarupanand and was given full rights of initiation and Bhesh by his Guru. Swami Sarupanand took his samadhi at Meerut in 1936 and after his death, according to his wishes, his Bhesh and Sampradya gave Swami Atmavivekanand Chadar Mahanti of Garwaghat Math and made him the mahant. Swami Atmavivekanand also had a large following and his 'Sant Mat ' fraternity which comprised of thousands of Grihastha and Virakta disciples made large offerings and gifted extensive properties to him as their religious or spiritual leader. In 1937, Swami Atmavivekanand initiated the plaintiff Mathura Ahir as his chela and named him as Harsewanand according to the custom and usage of the 'Sant Mat ' sect. During his lifetime, he purchased the two properties viz., house No. C 27/33, situate in Mohalla Jagatganj and house No. C 4/83, situate in Mohalla Sarai Gobardhan in the city of Varanasi by registered sale deeds dated December 3, and December 22, 1942 from out of the income of the math i.e., the offerings (Bhent) made by the devotees and formed the properties of the math. Swami Atmavivekanand died at Varanasi on August, 23, 1949. A Bhandara was held on October 3, 1949 and according to the wishes of Swami Atmavivekanand, the mahantas and sanyasis of the Bhesh and Sampardaya gave the Chadar Mahanti to the plaintiff and installed him as the mahant of the math in place of Swami Atmavivekanand on October 4, 1949 in accordance with the custom and usage of the Sampradaya. The mahants and sanyasis of the 'Sant Mat ' Bhesh who had assembled for the Bhandara also executed a document to that effect acknowledging him to be the mahant. The plaintiff having been installed as the mahant, the entire property of the Garwaghat Math along with the two houses in the city of Varanasi, devolved upon him as successor to Swami Atmavivekanand. On August 21, 1951 the plaintiff respondent No. 1, Harsewanand, brought the suit, out of which this appeal arises, in the court of the City Munsif, Varanasi for ejectment of respondents Nos. 2 to 5 from 667 house No. C 27/33, situate in Mohalla Jagatganj, Varanasi. It was pleaded that respondent No. 2, Avadesh Narain, defendant No. 1, had taken the house on rent from Swami Atmavivekanand, the late mahant. It was alleged that he had unlawfully sub let the premises to the respondents Nos. 3 to 5, who were defendants Nos. 2 to 4. The suit was contested by these respondents who denied the tenancy and inter alia pleaded that they were in occupation of the house as chelas of Swami Atmavivekanand in their own right by virtue of the licence granted to them by him. They denied the plaintiff 's title as well as right to sue alleging that he was neither a chela of Swami Atmavivekanand nor his successor. It was also alleged that the house in suit was the personal property of Swami Atmavivekanand and, therefore, on his death his natural son and disciple, Sri Krishna Singh, the appellant became the owner thereof. The suit which was originally framed by the plaintiff respondent No. 1, Harsewanand, as a suit between a landlord and tenant had, therefore, to be converted into a suit for possession based on title by impleading the appellant, Sri Krishna Singh as defendant No. 5. It is not necessary to mention in detail the other averments in the plaint, nor is it necessary to mention the various pleas raised in the written statement filed by the defendants. It will be sufficient, however, to mention that the appellant Sri Krishna Singh in his written statement denied the existence of the math as pleaded by the plaintiff and asserted that the house in it, in any case, was not math property. He further pleaded that the plaintiff Mathura Ahir being a Sudra, was legally incompetent to become a sanyasi, and that the plaintiff was not the mahant of the Garwaghat Math. He further claimed that after the death of Swami Atmavivekanand, he became the owner of the house in suit by inheritance, as also of the properties alleged by the plaintiff to belong to Garwaghat Math. All these properties, according to the appellant, were secular and personal properties of his father Baikunth Singh, who was also known as Swami Atmavivekanand. In the trial, the issues, as finally framed by the learned Munsif were seventeen in number. Of these, the following are relevant: (1) Whether the plaintiff is the owner of the premises in suit? (8) Whether the plaintiff was nominated as a mahant and given Chadar in accordance with the custom? Is there any custom as alleged by the plaintiff? (12) Was Swami Atmavivekanand a sanyasi and had he ceased to be a Grihasti? (13) Is the plaintiff a Sudra and not entitled to become sanyasi according to Hindu law? (14) Is the 668 plaintiff chela of Swami Atmavivekanand and entitled to succeed to properties left by him in preference to his son Sri Krishna? (15) Is the house in suit a Math property? It appears that the case came up for hearing before the learned Munsif on October 5, 1953 when the plaintiff 's counsel accompanied by his parocar made oral pleadings under O. 10, r. 1 of the Code of Civil Procedure to the effect: "The 'Sant Mat ' Sampradaya is one of the Dasnami sanyasis founded by the great Sankaracharya, and is governed by Naranjini Math Akhara. " The learned Munsif found each and every of these issues in favour of the plaintiff and accordingly decreed the suit. x x x x x x x x x On appeal the III Addl. Civil Judge, Varanasi by his judgment dated January 14, 1964 reversed some of the aforesaid findings while maintaining the rest. From the judgment of the Addl. Civil Judge, the appellant alone preferred an appeal to the High Court which by its judgment dated November 2, 1971 on a careful marshalling of the entire evidence, in the light of well settled principles, agreeing with the learned Munsif, set aside the findings of the learned Civil Judge and decreed the plaintiff 's suit in its entirety. A learned Single Judge, Kirty J., in the course of his judgment observed that the evidence on record sufficiently established that there had come into existence a math at Garwaghat, of which Swami Atmavivekanand was the mahant. He referred to the overwhelming evidence led by the plaintiff showing that the building known as 'Shanti Kuti ' and certain other buildings constituted an endowment to the math itself, which was a monastic institution presided over by the mahant. He further held that the house in dispute was not the personal property of Swami Atmavivekanand but formed an accretion to the math as it had been acquired by him from out of the offerings (Bhent) made by the disciples to him as their religious or spiritual leader for the purposes of the spiritual order of the fraternity and, therefore, the natural heirs of Swami Atmavivekanand could have no claim to the property, which must descend to the plaintiff as a successor to him. x x x x x x x x On the question whether the plaintiff and his two predecessors, Swami Atmavivekanand and Swami Sarupanand were not legally com 669 petent to hold office of the mahant of the math in question, the learned Single Judge observed: "The finding of the court below on this point is in appellant 's favour, the reason given therefor being that the plaintiff failed to prove that he or his predecessors had performed Atma Sradh and uttered Pravesh Mantra as mandatorily prescribed by Hindu law. The factual part of the finding, viz., the performance of the Sradh and the utterance of the Mantra, is binding in second appeal, but the conclusion drawn therefrom is one of law. " After referring to the authorities on the subject, he observes: "A reading of the judgments in the above noted cases will show that the various observations therein in regard to performance of Atma Sradh and other rites (Prajapathiyesthi Viraja Homam etc.) and the utterance of Pravesh Mantra etc. were made with reference to particular sects or categories of sanyasis claiming to belong to a particular religious order or class of such order, or with reference to "Sanatan", i.e., orthodox, Hindu Dharma. It is true that on cursory reading it would appear as if the observations formulate indispensable legal requirements of the Hindu law universally applicable to every (Hindu) ordained sanyasi, but, upon a careful analysis I have found that that is not so. The law as stated therein is generally or usually, but not invariably, applicable. " In conclusion, he observes: "In the absence of any proof that the followers of Sant Math or the tenets of that Math required of its Mahant that he must necessarily belong to the twice born class of Hindus and be a Sanyasi in accordance with all the rites and ceremonies mentioned in the aforesaid cases, I am not prepared to hold that Swami Sarupanand and Swami Atmavivekanand were legally incompetent to be Mahants of the Math or that the plaintiff is a person disqualified from assuming and holding that office." He accordingly held that the plaintiff and his predecessors, Swami Sarupanand and Swami Atmavivekanand were not legally incompetent to be the mahants of the math. They did not inflict themselves on the religious fraternity of Sant Mat Sampradaya nor had they been foisted into the office of mahant against the will or in spite of the disapproval of the religious fraternity. In any event, even if the 670 plaintiff was disqualified being a Sudra, he was entitled to sue as the de facto mahant. During the pendency of the appeal, the respondent plaintiff Mahant Harsewanand having died, respondent No. 1, Mahant Harshankranand was brought on record as an heir and legal representative. It would be convenient, at the outset, to deal with the view expressed by the High Court that the strict rule enjoined by the Smriti writers as a result of which Sudras were considered to be incapable of entering the order of yati or sanyasi, has ceased to be valid because of the fundamental rights guaranteed under Part III of the Constitution. In our opinion, the learned Judge failed to appreciate that Part III of the Constitution does not touch upon the personal laws of the parties. In applying the personal laws of the parties, he could not introduce his own concepts of modern times but should have enforced the law as derived from recognised and authoritative sources of Hindu law, i.e., Smritis and commentaries referred to, as interpreted in the judgments of various High Courts, except where such law is altered by any usage or custom or is modified or abrogated by statute. On the main, in agreement with the High Court, we are inclined to take the view that though according to the orthodox Smriti writers a Sudra cannot legitimately enter into a religious Order and although the strict view does not sanction or tolerate ascetic life of the Sudras, it cannot be denied that the existing practice all over India is quite contrary to such orthodox view. In cases, therefore, where the usage is established, according to which a Sudra can enter into a religious order in the same way as in the case of the twice born classes, such usage should be given effect to. The first question, therefore, to consider here is: Whether there was a math in existence at Garwaghat, and if so, whether the house in suit was an accretion to the math? Math means a place for the residence of ascetics and their pupils, and the like. Since the time of Sankaracharya, who established Hindu maths, these maths developed into institutions devoted to the teaching of different systems of Hindu religious philosophy, presided over by ascetics, who were held in great reverence as religious preceptors, and princes and noblemen endowed these institutions with large grants of property. Dr. Bijan Kumar Mukherjea in his Tagore Law Lectures on the Hindu Law of Religious and Charitable Trusts, 4th ed. , p. 321, succinctly states: " 'Math ' in ordinary language signifies an abode or residence of ascetics. In legal parlance it connotes a monastic institution presided over by a superior and established for the use and benefit of ascetics 671 belonging to a particular order who generally are disciples or co disciples of the superior. " x x x x x The property belonging to a math is in fact attached to the office of the mahant, and passed by inheritance to no one who does not fill the office. The head of a math, as such, is not a trustee in the sense in which that term is generally understood, but in legal contemplation he has an estate for life in its permanent endowments and an absolute property in the income derived from the offerings of his followers, subject only to the burden of maintaining the institution. He is bound to spend a large part of the income derived from the offerings of his followers on charitable or religious objects. The words 'the burden of maintaining the institution ' must be understood to include the maintenance of the math, the support of its head and his disciples and the performance of religious and other charities in connection with it, in accordance with usage. See: Semmantha Pandara vs Sellappa Chetty Mad. 175 Giyana Sambandha Pandara Sannadhi vs Kandasami Tambiran Mad 375; Vidya Purna Tirtha Swami vs Vidyanidhi Tirtha Swamy Mad 435; Ram Prakash Das vs Anand Das (1916) 43 I.A. 73 (PC), Vidya Varuthi Thirtha vs Babuswamy Iyer (1920 21) 48 I.A. 302; Kailasam Pillai vs Nataji Thambiran Mad, 265. From the principles, it will be sufficiently clear that a math is an institutional sanctum presided over by a superior who combines in himself the dual office of being the religious or spiritual head of the particular cult or religious fraternity, and of the manager of the secular properties of the institution of the math. In the instant case, the evidence on record sufficiently establishes that a math came to be established at Garwaghat and the building known as 'Bangla Kuti ' and certain other buildings, including the house in suit constituted the endowment of the math itself. From a review of the general mass of evidence the High Court, agreeing with the learned Munsif, held that the followers of the 'Sant Mat ' fraternity are members of a religious order. The long line of witnesses who were all disciples of Swami Sarupanand and/or Swami Atmavivekanand have clearly established that it is a religious institution of monastic nature. It is established for the service of the 'Sant Mat ' cult, the instruction in its tenets and observance of its rites. The Swamiji who is the Guru is the Mahant, the spiritual and religious leader of the fraternity. According to the custom and usage of the 'Sant Mat ' Sampradaya, as pleaded by the plaintiff, the initiation of a chela by the Guru results in complete renunciation of the world, and he ceases to have all con 672 nection with his previous Ashramas before becoming a sanyasi. For becoming a sanyasi it is not necessary that he should be of a particular Varnashram previously, i.e., even a Sudra can become a sanyasi. The succession to the office of the Mahant is by nomination, i.e., from Guru to chela, the Guru initiates the chela after performing the necessary ceremonies. The person initiated as a chela adopts the life of a sanyasi and is pledged to lead a life of celibacy and religious mendicancy. The sitting mahant hands over the management of the math to one of his virtuous chelas fittest to succeed whom he nominates and whom he wishes to install as mahant after him in his place. He makes clear this desire to the members of his Sampradaya, and also authorises the nominated chela to give Bhesh Dikshawa. After the death of the mahant, the Bhesh and Sampradaya give Chadar Mahanti of the math to the said disciple at the time of the Bhandara. The Courts below have concurrently found that the custom or usage, so pleaded has been established. They further found that the plaintiff Mathura Ahir was initiated as a chela by Swami Atmavivekanand and nominated to be his successor. They have also found that at the Bhandara held after Swami Atmavivekanand 's death, the plaintiff was installed as the Mahant of Garwaghat Math by the Mahants and Sanyasis belonging to the 'Sant Mat ' Sampradaya, according to the wishes of Swami Atmavivekanand Paramhans. From the evidence on record, there can be no doubt that the math at Garwaghat belongs to the 'Sant Mat ' Sampradaya, which is a religious Order. No doubt, the plaintiff Harsewanand, P.W. 15, asserts: "Followers of any religion can become a sanyasi in our cult. The practice of becoming sanyasi has been prevalent since Satyuga. Man 's life is divided into three Ashramas. (Again said): there are four Ashramas viz., Brahmacharya, Grihastha, Vanaprastha and Sanyas. Varnas are three, Dashnami Sanyasis came into existence after Shankaracharya. They are Puri, Giri, Bharti, Vana, Tirtha, Aranya, Parvat, Sagar and Saraswati. I am failing to recollect the name of one of them. The Sanyasis of Sant Mat are not Dashnami Sanyasis. Swarupanandji my Guru or I are not Dashnamis, but all these cults are related with Sant Math. I know Niranjani and Nirvani Akharas. They belong to Dashnami Sanyasis and Sant Mat Sanyasis. We have connections with Nirvani and Niranjani Maths. Some customs of the Maths of those Akharas are observed by us also." (Emphasis supplied) 673 This is, however, contrary to what he had stated in his oral pleadings under O.10, r. 1 of the Code of Civil Procedure. The fact that the 'Sant Mat ' Sampradaya is one of the Dashnami sects cannot be doubted. There is unimpeachable testimony of Swami Viveksukhanand, who along with Swami Atmavivekanand and others was initiated as a chela by Swami Sarupanand on the same day, at the same time. During his cross examination, this witness states: "Sri Swarupanandji was Sadhu of Sant Sanyas Sampradai. Sant Sanyas Sampradai has been obtaining from ancient time. This Sampradai is of those ten Sampradai which were founded by Swami Shankracharji. This (Sampradai) out of the Das nam is Purinama. There is no branch in Purinama (Sampradai). .Niranjani and Nirvani Akharas are the Akharas of Giri Sampradai. If a Sanyasi of Giri, Puri, Bharti, or of any Das Nam Sampradai abandons sanyas and re enters into the Grahast Ashram he is called a Gosain. The rules for making disciples in Giri and Puri Sampradai for making chief disciples, and appointing successor are also one and the same. The rules, rituals and the ceremonies which are performed at the time of installation to gaddi in both these Sampradai are also one and the same. There is no difference in Giri and Puri Sampradai. The rules, practices, rituals and customs followed at the time of installation to gaddi in all the ten sampradaiyas founded by Swami Shankracharyaji are one and the same. ' (Emphasis supplied) Though the math at Garwaghat established by Swami Sarupanand was of recent origin, the High Court observes that the religious order denominated as 'Sant Mat ' has had large following in Punjab and some other parts of India since more than a century. In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order. As regards the origin of the Math, it observed: "I have, therefore, no hesitation in holding, in agreement with the finding of the trial court, that there had come into existence a Math at Garwaghat, Varanasi of which Swami Sarupanand was the Mahant. Here I may also mention that from the evidence on record it appears that 'Sant Mat ' is not of very recent origin. Although the evidence is somewhat scanty on the point, yet it sufficiently indicates that this Math 674 has had numerous followers in Punjab and some other parts of India since more than a century. In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order. Here it may also be mentioned that defendants other than the appellant did not seriously dispute the plaintiff 's allegation in regard to the Math in question and the allegation that Swami Sarupanand and thereafter Swami Atmavivekanand were its Mahants. " Referring to the nature of the property, it said: "Swami Atmavivekanand before becoming a follower of the Sant Mat was a Grihasth with a family. From the evidence on the record it transpires that he became a devotee and a disciple of Swami Sarupanand and severed all connections with his family. In course of time he was held in high esteem by the followers of the Sant Mat at Varanasi and other places and large offerings were made to him by the devotees. Swami Sarupanand had nominated him to be his successor and after his death Swami Atmavivekanand did assume the office of Mahant of the math. There is no evidence from which it can be reasonably inferred that he treated or set apart the offerings either in their entirety or some portion thereof as belonging to him personally. On the contrary the evidence on record and the circumstances show that there was a complete blending of such offerings with the funds of the math and used for its purposes. There is also no reliable evidence to establish that the offerings which were made to him were made not for the purposes of the spiritual order or the fraternity but for his personal aggrandizement. Indeed, when a person renounces his family connections and takes to ascetism it would be difficult to hold that he would thereafter start amassing wealth and property for his personal benefit or for the benefit of his family with which he had severed his connection. Unless specifically proved to the contrary, under such circumstances it must be held that the offerings made to such a person were not offerings made to him personally for his personal benefit but had been made for the benefit of the math or the religious institution itself. In such a case, to my mind, the natural heirs of the person concerned could have no claim to the property which the person came by in his capacity as the religious or spiritual leader. The house in suit must be held to be an accretion to the Math. " 675 All this is borne out by the testimony of plaintiff 's witnesses. The institution was really built up by Swami Atmavivekanand, who was held in great veneration by the followers of the sect. He preached the tenets of 'Sant Mat ' and had a large following. His 'Sant Mat ' fraternity comprised of thousands of Grihastha and Virakta disciples who made large offerings. All the witnesses speak of such offerings in cash or kind or in the shape of immovable property which were endowed to the math. There are a number of documents showing the endowment by the disciples of their properties to the math, wherein they have described themselves as 'disciples of Swami Atmavivekanand ' and he is described therein as 'Mahant of the Garwaghat Math '. Even Avadesh Narain, a Judicial Magistrate, D.W. 1, who practised as a lawyer at Varanasi before he was appointed as a Judicial Officer, admits that Swami Atmavivekanand had a large number of disciples in Uttar Pradesh and Bihar, and that the property of 'Bangla Kuti ' might be worth lakhs of rupees. The two houses at Varanasi, including the suit house, were purchased by Swami Atmavivekanand from out of the offerings (Bhent) made by his disciples. We have, therefore, no hesitation in upholding the finding of the High Court as regards the existence of a math at Garwaghat and the suit property being the math property. We may now deal with the main questions on which the decision of the appeal must turn. It has been argued that according to the Smritis a Sudra cannot be a sanyasi and, therefore, the plaintiff could not enter the Order of a yati or sanyasi. It has further been argued that there is no evidence on record in proof of the fact that the plaintiff and his two predecessors Swami Sarupanand and Swami Atmavivekanand had performed Atma Sradh or recited Pravesh Mantra and, therefore, they cannot be regarded as Hindu sanyasis. It, therefore, becomes necessary to trace the origin of Hindu sanyasis belonging to the Dasnami sects founded by the great Sankaracharya, of which the 'Sant Mat ' Sampradaya appears to be a religious denomination i.e., a sub sect. The first question is, whether a Brahman alone can become a sanyasi among Dasnamis? The second question is, what are the essential ceremonies prerequisite for the initiation of a Dasnami sanyasi? The third question is, what is the mode of succession to the office a mahant of a math or Asthal belonging to any of the Dasnami sects? It will be convenient to take up the last point first. The law is well settled that succession to mahantship of a math or religious institution is regulated by custom or usage of the particular institution, except where a rule of succession is laid down by the founder himself who created the endowment: vide Genda Puri vs Chatar Puri [1886] I.A. 100 @ 105, Sital Das vs Sant Ram A.I.R. 676 ; Mahalingam Thambiren vs La Sri Kasivasi ; x x x x x x x x x x One who enters into a religious order severs his connection with the members of his natural family. He is accordingly excluded from inheritance. Entrance to a religious order, is tantamount to civil death so as to cause a complete severance of his connection with his relations, as well as with his property. Neither he nor his natural relatives can succeed to each other 's properties. Any property which may be subsequently acquired by persons adopting religious orders passes to their religious relations. The persons who are excluded on this ground come under three heads, the Vanaprastha or hermit; the Sanyasi or Yati, or ascetic, and the Brahmachari, or perpetual religious student. In order to bring a person under these heads it is necessary to show an absolute abandonment by him of all secular property, and a complete and final withdrawal from earthly affairs. The mere fact that a persons calls himself a Byragi, or religious mendicant, or indeed that he is such, does not of itself disentitle him to succeed to property. Nor does any Sudra come under this disqualification, unless by usage. This civil death does not prevent the person who enters into an order from acquiring and holding private property which will devolve, not of course upon his natural relations, but according to special rules of inheritance. But it would be otherwise if there is no civil death in the eye of the law, but only the holding by a man of certain religious opinions or professions(1). Special rules are propounded for succession to the property of a hermit, of an ascetic, and of a processed student. Yajnavalkya states a special rule of succession in regard to the wealth of ascetics and the like: "The heirs who take the wealth of a Vanaprastha (a hermit), of a Yati (an ascetic) and a Brahmacharin (a student) are in their order, the preceptor, the virtuous pupil, and one who is supposed brother and belonging to the same order". The Mitakshara explains thus(2): "A spiritual brother belonging to the same hermitage (dharmabhratrekatirthi) takes the goods of the hermit (vanaprastha). A virtuous pupil (sacchishya) takes the property of a yati (as ascetic). The preceptor (acharya) is heir to the Brahmachari (professed student). But on failure of these, any one belonging to the same order or hermitage takes the property; even though sons and other natural heirs exist. " The property that is referred to is explained in Mitakshara and in the Viramitrodaya as consisting of clothes, books and other requisite 677 articles. Practically, however, such cases seldom arise. When a hermit or ascetic holds any appreciable extent of property, he generally holds it as the head of some math or as the manager of some religious or charitable endowment, and succession to such property is regulated by the special custom of the foundation. Succession to the office of the Mahant or Mathadhipathi or Pandara Sannadhi is to be regulated by the custom of the particular institution. Even where the Mahant has the power to appoint his successor, it is the custom in the various Maths that such appointments should be confirmed or recognised by the members of the religious fraternity to which the deceased belonged. According to the text of Yajnavalkya referred to above, the property of a life long student goes to his preceptor, that of a hermit or Vanaprastha goes to his religious brother and that of a sanyasi or Yati goes to his virtuous disciple. The principle, so far as it affects maths, is shortly this, viz., 'a virtuous pupil takes the property '. The particular mode in which the virtuous pupil, that is, not merely a chela, or a shishya, fittest to succeed, is ascertained or selected is a matter either of express direction on the part of the founder or of custom in the case of each foundation. There are instances of maths in which the mahantship descends from Guru to chela i.e., the existing mahant alone appoints his successor, but the general rule is that the maths of the same sect in a district, or maths having a common origin, are associated together the mahants of these acknowledging one of their member as a head who is for some reason pre eminent; and on the occasion of the death of one, the others assemble to elect a successor out of the chelas or disciples of the deceased, if possible or if there be none of them qualified then from the chelas of another mahant.(1) According to the Dharmasastras, in the strict legal sense, a Sudra cannot become a sanyasi or ascetic. Mahamopadhya Dr. P. V. Kane in 'History of Dharmasastra ', Vol. 2, Pt. 1, p. 163, observes: "As the sudra could not be initiated into Vedic study, the only asrama out of the four that he was entitled to was that of the householder. In the Anusasanaparva (165. 10) we read 'I am a sudra and so I have no right to resort to the four asramas '. In the Santiparva (63. 12 14) it is said, 'in the case of a sudra who performs service (of the higher classes), who has done his duty, who has raised offspring, who has only a short span of life left or is reduced to the 10th stage (i.e. is above 90 years of age), the fruits of all 678 asramas are laid down (as obtained by him) except of the fourth '. Medhatithi on Manu, VI. 97 explains these words as meaning that the sudra by serving brahmanas and procreating offspring as a householder acquires the merit of all asramas except moksa which is the reward of the proper observance of the duties of the fourth asrama." Although the orthodox view does not sanction or tolerate ascetic life of the Sudras, the existing practice all over India is quite contrary to such orthodox views. In Mukherjea 's Hindu Law of Religious and Charitable Trusts, 4th ed., p. 328, it is said: ". the practice of establishing Maths which began with Brahmin ascetics gradually spread to the Sudras and in course of time it was adopted by dissenting religious sects like the Jains, Kabir Panthis, Nanak Panthis, Jangamus and others though they do not believe in the authority of the Vedas or in the tenets of orthodox Hindu religion. " At page 338, it is observed: ". . according to orthodox Smriti writers, a Sudra cannot legitimately enter into a religious order. Consequently, the texts of Hindu Law relating to exclusion from inheritance applicable to a yati or a sannyasi do not, in terms, apply to Sudra ascetics. On this view, it has been held in a series of cases that a Sudra ascetic is not incapable of inheriting the property of his natural relations under the ordinary law of inheritance. Although orthodox view does not sanction or tolerate ascetic life of the Sudras, it cannot be denied that the existing practice all over India is quite contrary to such orthodox views. In cases, therefore, where the usage is established, according to which the property of a Sudra ascetic devolves in the same way as the property of the ascetics of the twice born classes, such usages should be given effect to." (Emphasis supplied) In the words of the Privy Council in Collector of Madura vs Moottoo Ramalinga(1), 'under the Hindu system of law, clear proof of usage will outweigh the written text of the law '. Golapchandra Sarkar Sastri in his Hindu Law, 8th ed., at pp. 65356, in a passage based on translation of slokas from Maha Nirvana Tantra, observes that in Kali Yug, with numerous sects having their 679 peculiar rites for being ordained to a religious order, there are five castes (varnas), i.e., a fifth caste comprising of all other beings. He further observes that sanyasam according to Vedic rites does not exit and that all the five castes can become Avadhutha Sanyasis: ". in the advanced state of the Kali age, the Brahmanas and the other (four) castes are all entitled to these two orders of life. The Brahman, the Kshatriya, the Vaisya, the Sudra, and the general body of human beings, these five are entitled to be initiated as Sannyasis or ascetics according to Tantric system. " The orthodox rule laid down in the Mitakshara that only the Brahman can enter the fourth Asram of life and are eligible to become sanyasis, has therefore, been commented upon by Golapchandra Sarkar Sastri at p. 662: "It has been held that a Sudra cannot become a sannyasi or ascetic. This is undoubtedly the doctrine propounded in the Smritis. But the learned Judges have not taken into consideration the modern usages introduced by the Vaishnava and Tantrika and other systems according to which a Sudra and even a non Hindu such as Mohamedan may become a Hindu sannyasi. There are many religious sects of ascetics among whom caste distinction is unknown, who accordingly initiate and admit Sudras into their brotherhood if otherwise qualified. In esoteric Hinduism also, caste is individualistic not hereditary, it being determined by qualification and not by birth. The highest virtue taught by the Hindu religion is that a man should regard other persons and beings as his own self reproduced in them, as the same Supreme Soul pervades them all." (Emphasis supplied) Here the question arises as to what classes of Hindus should be denominated as Sudras. It is undoubted that there were originally four classes: (1) the Brahmanas, (2) the Kshatriyas, (3) the Vaishyas, and (4) the Sudras. The first three were the regenerate, or twice born, classes; the latter, the servile class. The three regenerate classes exist, it is true; but it often becomes difficult to distinguish a Sudra from one of the regenerate classes. It is pointed out by Golapchandra Sarkar Sastri at p. 113: "The Smritis, which have thrust into prominence this system, divide men into two large classes namely, the Sudras 680 and the Twice born. The study of the sacred literature forms the principle of this distinction. They ordain that by birth all men are alike to Sudras, and the second birth depends on the study of the sacred literature. Thus Sankha, one of the compilers of the Dharma Shastras, declares "Brahmanas (by birth) are, however, regarded by the wise to be equal to Sudras until they are born in the Veda (i.e., learn the sacred literature), but after that (i.e., this second birth) they are deemed twice born". Passages to the same effect are found in most of the codes, according to which the recognition of the title of the Twice born to superiority over the Sudras, depends upon acquisition of the knowledge of the Vedas. " The learned author then goes on to say at p. 184: "According to the Smritis, every man is by birth a sudra; it is by learning the sacred literature, that a man becomes twice born. The privilege of studying the sacred literature is, no doubt, denied to the sudras as well as to the females of the so called twice born classes. But the status of being twice born depends on the acquisition of knowledge of the sacred literature. Manu ordains that a twice born man shall abide with the preceptor, and study the Vedas for thirty six years or half or a quarter of that period, or until knowledge of the same is acquired. " The consequence of omitting to do the same, according to Manu, is that a twice born man, who without studying the Vedas, applies diligent attention to anything else, soon falls even when living together with his descendants, to the condition of a Sudra. The learned author has observed that the majority of the so called twice born classes have accordingly become long since reduced to the position of Sudras by reason of neglecting the study of the Vedas from generation to generation. The learned Single Judge accordingly observes: "It will thus be seen that originally every person was deemed to be born a Sudra and that it was by virtue of intensive study of Vedas that a person attained the status of a twice born person. With the passage of time running into thousands of years, it is evident that the original hall marks for classification of Sudras and twice born people gradually disappeared and degenerated into the rigid caste system based on birth. " 681 As Dr. Mukherjea observes, the disciples of Sankara were all Brahmans and originally, according to the rule laid down in Sanyas Grahan Paddhati, the authorship of which is imputed to Sankara himself, only the twice born people can become sanyasis of the Dasnami orders. As the four stages of life have, in the Vedas, been prescribed only for the twice born, no Sudra can, strictly speaking, become an ascetic, and that is the view entertained by the Smriti writers.(1). According to the Mitakshara, only the Brahmans can enter the fourth Asram of life and are eligible to become sanyasis; and this view is supported by certain passages from Manu where 'Pravrajya ', i.e. exit from the house, has been spoken of or prescribed for the Brahmans alone, and a text of the Sruiti which says "the Brahmans should become ascetics". According to Nirnaya Sindhu, which has been quoted in West and Buhler 's Digest of Hindu Law(2), a Kshatriya and a Vaishya can also enter into an order of sanyasis. Upon a view of all these authorities, it was held by the Madras High Court in Dharampuram vs Virapandiyan(3) and the Calcutta High Court in Harish Chandra vs Atir Mahamed(4), that a Sudra can not become a sanyasi under Hindu Law, and consequently the devolution of property of a Sudra who purported to renounce the world and become an ascetic would be governed by the ordinary law of inheritance. Asceticism in India, perhaps more than in any other country, has been under the definite and strong sanction of religion. In the doctrine of the four asramas, asceticism was made an integral part of the orthodox Hindu life, and it became the duty of every Hindu, as advanced age overtook him homeless and a wanderer to chasten himself with austerities. Formally this was to be done for the sake of detaching himself from earthly ties, and of realizing union with Brahman. And a religious motive was thus supplied for that which in itself was a welcome release from responsibility, care, and the minute requirements of an elaborate social code. In due course, with the advancement of knowledge, the shackles of the caste system were broken through and the privileges and powers of the ascetic life were extended to Sudras. 682 Hindu asceticism represented, further, a revolt from, or at least a protest against, the tyranny of caste. In its origin probably remote from Brahmanism, and conveying the ordinary idea that bodily pain was profitable for the advancement and purification of the spirit, the ascetic life became, in association with Hinduism and under the prescriptive sanction of Hindu law itself, a refuge from the burden of caste rules and ostracisms.(1) In Encyclopaedia of Religion and Ethics, Ed. by James Hastings, Vol. II, p. 91, it is observed: ". In the first instance apparently, the right and privilege of asceticism, according to Hindu custom or law, belonged to Brahmans alone; it was then extended to all the twice born, and finally all restrictions were removed, and admission into the ranks of the ascetics was accorded to men of every position and degree. " This is based on the following passage from the Ramayana, Uttara Kanda, 74.9ff., quoted in J. Muir 's Original Sanskrit Text, i.119f: "Formerly in the krta age Brahmans alone practised tapas; none who was not a Brahman did so in that enlightened age. then came the treta age,. in which the Ksatriyas were born, distinguished still by their former tapas . . Those Brahmanas and Ksatriyas who lived in the treta practised tapas, and the rest of mankind obedience. . In the dvapara age tapas entered into the Vaisyas. Thus in the course of three ages it entered into three castes; and in the three ages righteousness (dharma) was established in three castes. But the Sudra does not attain to righteousness through the (three) ages. such observance will belong to the future race of Sudras in the kali age, but is unrighteous in the extreme if practised by that caste in the dvapara." (Manu: i. 86) It is, therefore, evident that with reluctance the right to ascetic life was extended to Sudras and in due recognition of their status, they were treated as Hindu sanyasis. At the present time, there is no distinction or barrier; any one may become an ascetic, and the vows are not necessarily lifelong. Some sects, however, still restrict membership to Brahmanas, or at least to men of the three higher castes. The principle laid down by the Madras High Court in Dharmapuram vs Virapandiyan (supra) and the Calcutta High Court in 683 Harish Chandra vs Atir Mahamed (supra) regulating the mode of devolution of property of a Sudras who becomes an ascetic is, however, not applicable to after acquired property of a Hindu sanyasi. As has been said above, when a layman becomes an ascetic, his connection with his natural family and existing property rights are extinguished. If he acquires any property subsequent to his becoming an ascetic, such property passes on his death not to his natural but to his spiritual heirs. It would be convenient next to deal with the question, firstly, as to whether in the 'Sant Mat ' Sampradaya which being a sect of the Dasnamis, a Sudra cannot enter the order of a yati or a sanyasi; and secondly, whether performance of Atma Sradh and the recitation of Pravesh Mantra are ceremonies essential for the initiation of a chela in the 'Sant Mat ' fraternity. That depends on whether the matter falls to be governed by the Smritis or is regulated by the custom or usage of the 'Sant Mat ' Sampradaya which was one of the Dasnami sects. About the eighth century A.D., Sankaracharya, the greatest Hindu scholar and philosopher of modern India, defeated the Buddhists in argument and re established Hinduism as the dominant religion of India. Sankara was an ascetic and founded schools of ascetics. Hindu scholars and philosophers like Mandana Misra, attempted to prove against him that such ascetism was against the law of the Hindus. But all opposition was overborne by the commanding influence of Sankara, who established four maths or seats of religion at four ends of India the Sringeri Math on the Sringeri Hills in the south, the Sharda Math at Dwarka in the west, the Jyotir Math at Badrikashram in the north, and the Govardhan Math at Puri in the east and Mandana himself became a Sanyasi disciple under the name of Sureswara. The monks ordained by Sankara and his disciples were called Sanyasis. Each of the maths has a sanyasi at its head two bears the title of Sankaracharya in general. Sankara is said to have four principal disciples who were all Brahmans, from whom the ten divisions of the Order hence named the 'ten named ' or 'Dasnami Dandis ' originated. These are: Tirtha, 'shrine '; Ashrama, 'order '; Vana, 'wood '; Aranya, 'forest ', 'desert ', Saraswati and Bharti, 'the goddesses of learning and speech '; Puri, 'city '; Giri and Parvata, 'a hill '; and Sagra, 'the ocean '. The orthodox Hindu recognises no other sanyasis.(1) Kabir and Nanka also established monasteries on the lines of Sankara. Chaitanya, the pure, the subtle mystic of Naidia, the greatest exponent and exam 684 ple of Bhakti, originally belonged to one of Sankara 's orders, namely Bharati, though he violently repudiated Sankara 's pantheism, and his followers founded the class of ascetics known as Byragis, who too have their establishments. But it is the schools of Sanyasis founded by Sankara that are now predominant and are the wealthiest, and it is of them that we should speak first. Sankara founded his monastic system on the lines of the Buddhistic Sangharamas, which were found existing at the time. The rules of the Hindu and the Buddhistic institutions, so far as the internal management was concerned, were very similar. The Sangharama had a superior under whose management the establishment was and so had all the Maths of Sankara, the superiors of which were called Mahants and Acharyas, etc. The superior of a Math had the control of all the property, for he was the Guru whose power no one could question, and the nomination of his successor ordinarily lay with him. As a rule, the best and most erudite among the disciples, upon whom the choice of the congregation would naturally fall, was nominated and there was rarely any contention. In course of time, however, as the wealth of the Maths increased and worldliness and all the vices of an idle luxurious life took the place of stern austerity and scholarship above that of all Buddhists and other schismatics, by which Sankara intended the Sanyasis, specially, the superiors, should be distinguished, worldly ideas became the ruling ideas of the establishments. In imitation of the Maths of Sankara, the followers of Ramanuja also founded Maths reaching the Vishishtadwaita system in various parts of India. The followers of Madhvacharya, the chief exponent of the Dwaita system, also founded Maths, the chief among whom are the well known eight Maths at Udipi. Similarly, there are Maths of the followers of Ramanund and Nimbacharya among the orthodox and of Nanak and Kabir among schismatics. There are also many Maths founded by lesser teachers. All the strictly orthodox Maths are Maths of the three regenerate classes. But the followers of Chaitanya in Bengal and of a teacher named Shankara in Assam have Maths or Akharas in which Sudras are admitted. It is, however, only in Madras that the Shaivas have Sudra Maths. The Tantras allow Sudras to become Sanyasis and probably, these are based on the Tantras. The Sudra Maths of Dharmapuram and Tiruvaduthorai are the chief among the Sudra Maths of the Saiva Siddhantam School: Sammantha Pandara vs Sellappa Chetti,(1) G. section Pandara Sannadhi vs Kandaswami Tam 685 biran(1), Vidyapurna Tirthaswami vs Vidhyanidhi Tirthaswami(2), and Kailasam Pillai vs Nataraja Thambiran(2). The most respectable members of this Order of Hindu ascetics known as Saiva Gosains are the spiritual descendants of Sankaracharya, the very incarnation of the strictest Brahmanism. Saiva Gosains fell into two classes monks known as Mathadhari as contrasted with Gharbari, or laymen. The true Dandi should, in accordance with the precepts of Manu Laws (VI. 41ff) live alone near to, but not within a city. Of Saiva mendicants and ascetic orders, Dandis or staff bearers, occupy a place of pre eminence. They worship Lord Siva in his form of Bhairava, the 'Terrible ' and profess to adore Nirguna and Niranjana, the deity devoid of attribute or passion. A sub section of this Order are the Dandi Dasnamis or Dandi of ten names, so called from their assuming one of the names of Sankara 's four disciples and six of their pupils. (4 & 5) It is customary to consider the two religious orders of Dandis and Dasnamis as forming but one division. The classification is not, in every instance, correct but the practices of the two are, in many instances, blended and both denominations are accurately applicable to the same individual(6). The Dandis, properly so called, are the legitimate representatives of the fourth Asrama, or mendicant life, into which the Hindu, according to the instructions of his inspired legislators, is to enter, after passing through the previous stages of student, householder and hermit. Adopting, as a general guide, the rules laid down in the original works, the Dandi is distinguished (5 & 6) by carrying a small Dand, or wand, with several processes or projections from it, and a piece of cloth dyed with red ochre in which the Brahmanical cord is supposed to be enshrined, attached to it. They develop within themselves a complete detachment from the things of enjoyment either of this world or the next. Many Brahmans, even Pandits, or learned 686 Brahmans, come to them for instruction, which they impart freely, without the smallest recompense. All classes of the community pay them the great honour, even worship them(1). The Dandis keep themselves very distinct from the rest of the community. They are Brahmans, and receive disciples only from the Brahmans. They lead a very austere life. They do not touch fire or metal, or vessels made of any sort of metal. It is equally impossible also for them to handle money. They shave their hair and beard. They wear one long unsewn reddish cloth, thrown about the person. Although they are on principle penniless, yet they do not beg. Their dependence on the kindness and care of others is thus of the most absolute character. Yet they are not reduced to distress or even to want; they are fed by the Brahmans, and the Gosains, another class of devotees. They sleep on the ground, and once or twice in the day go round to collect food and alms, for which they must not ask, but contentedly receive what is given. According to the stated rule, they must not approach a house to beg until the regular meal time is passed; what remains over is the portion of the mendicant. A Dandi should live alone, and near to, but not within a city; but this rule is rarely observed, and in general the Dandis are found in cities collected like other mendicants in maths. The Dandi has no particular time or mode of worship, but spends his time in meditation, or in practices corresponding to those of Yoga, and in the study of the Vedanta works, especially according to the precepts of the great Sankaracharya. As the preceptor was an incarnation of Lord Siva, the Dandis reverence that deity; and his incarnations, in preference to the other members of the Triad, whence they are included amongst his votarics. Prof. Wilson in his 'Hindu Religions ' observes: "Any Hindu of the first three classes may become Sannyasi or Dandi, or in these degenerate days, a Hindu of any caste may adopt the life and emblems of this order." (Emphasis supplied) The Dasnami Dandis, who are regarded as the descendents of the original members of the fraternity, are said to refer their origin to Sankaracharya. There are but three, and part of a fourth ascetic class, or those called Tiratha or Indra, Asrama, Saraswati and Bharati who are still 687 regarded as really Sankara 's Dandis. The rest, i.e. the remaining six and a half of the Dasnamis are considered as having fallen from the purity of practice necessary to the Dandis, are still, in general religious characters, and are usually denominated Atits. These are the Atits or A 'Dandis viz., the Vanas, Aranyas, Puris, Giris, Parvatas, Sagaras and half the Bharatis, reputed to have fallen to some extent from orthodoxy, but are still looked upon as religious avtars. The main distinction between the Dandis and the Atits is that the latter does not carry the staff i.e. a trishul. They differ from the former also in their use of clothing, money, and ornaments, their methods of preparing food, and their admission of members from any order of Hindus. Some of them lead an ascetic life, while others mix freely in the world, carry on trade and acquire property. Most of them are celibate, but some of them marry and are often known as samyogi or gharbari Atits. They are often collected in maths or monasteries. They wear ochre coloured garments and carry a rosary of rudraksa seeds sacred to Lord Siva. Their religious theories when they have any) are based on the advaita Vedants of their founder Sankaracharya(1). There is also a sub division of the Puri division of the Dasnarni sect. They have tenets much in common, based on the central idea that the Supreme Deity is incomprehensible or, as they say, 'unseeable '. They denounce idolatory. This more or less conforms to the tenets of the 'Sant Mat ' sect. It is proved by the evidence on record that followers of this sect treat the Guru as the incarnation of God. They have no faith in inanimate idols installed in temples nor do they worship them in their cult. There are no caste restrictions and anyone can be admitted into the Sant Mat fraternity. That takes us to the next question as to whether in the absence of proof of the performance of Atma Sradh and recitation of Pravesh Mantra neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atmavivekanand could be regarded as a Hindu sanyasi. In order to prove that a person has adopted the life of a sanyasi, it must be shown that he has actually relinquished and abandoned all worldly possessions and relinquished all desire for them or that such ceremonies are performed which indicate the severance of his natural family and his secular life. It must also be proved, in case of orthodox sanyasis, that necessary ceremonies have been performed, such as Pindadana or Birajahoma or Projapathiyesthi without which II the renunciation will not be complete. 688 Among Dasnamis, a ceremony called the Bijja Homa i.e., the Biraja Homa has been considered essential. The recitation of the Presha Mantram or the renunciation formula is of course indispensable and has been considered essential by the different High Courts. According to Manu giving up of all wordly property is essential. In Sherring 's 'Hindu Tribes and Castes ', pp. 256 67, the ceremonies prescribed for the initiation of a Dasnami sanyasi are stated thus : "The ceremony observed at the creation of a Gosain is as follows: The candidate is generally a boy, but may be an adult. At the Shiva ratri festival (in honour of Shiva) water brought from a tank, in which an image of the god has been deposited, is applied to the head of the novitiate, which is thereupon shaved. The guru, or spiritual guide, whispers to the disciple a mantra or sacred text. In honour of the event all the Gosains in the neighborhood assemble together, and give their new member their blessing; and a sweetmeat called laddu, made very large is distributed amongst them. The novitiate is now regarded as a Gosain, but he does not become a perfect one until the Vijaya Hom has been performed, at which a Gosain, famous for religion and learning gives him the original mantra of Shiva. The ceremony generally occupies three days in Banaras. On the first day, the Gosain is again shaved, leaving a tuft on the top of the head call d in Hindi Chundi, but in Sanskrit, Shikha. For that day he is considered to be a Brahman, and is obliged to beg at a few houses. On the second day, he is held to be a Bramhachari, and wears coloured garments, and also the janeo or sacred cord. On the third day, the janeo is taken from him, and the Chundi is cut off. The Mantra of Shiva is made known to him, and also the Rudri Gayatri (not the usual one daily pronounced by Brahmans). He is now a full Gosain or Wan parast, is removed from other persons, and abandons the secular world. Henceforth he is bound to observe all the tenets of the Gosains. " In Gossain Ramdhan Puri & Ors. vs Gossain Dalmir Puri(1) Mookerjee and Carnduff JJ., observed at p. 203: "Every aspirant for entrance into the order of sanyasis has to pass through a period of probation. Upon his first arrival at the monastery his habits and character are closely 689 watched for some days, and enquiries are made into his A caste, for the sanyasis admit into their order ordinarily members of the twice born classes and very rarely take members of the fourth class. If the novice is approved, his head is shaved, his name is changed and upon the performance of this preliminary ceremony he is regarded as a probationer for entrance into the order. The final ceremony, however, which is called the Biraja Homa ceremony, is not performed for many months, and sometimes for many years. During this period of apprenticeship it is open to the chela to return to his natural family, but after the performance of the final ceremony his connection with the world is deemed to have been finally severed." In support of these observations, the learned Judges relied on the note of Warden on the customs of Gossains printed as an appendix to steel`s `Law and Custom of Hindu castes '. As regards Swami Sarupanand, the learned Munsif rightly observes that 'it would be unjust to place an unreasonable burden on the plaintiff for leading direct evidence of his initiation, as Swami Sarupanand came to Varanasi from distant land and long ago. The truth has to be discerned out of circumstantial evidence and other materiaI on record. ' That evidence clearly shows that Swami Sarupanand was acknowledged by his numerous followers to be the head of the 'Sant Mat ' fraternity. That Swami Sarupanand paid the debt of nature in 1936 at Meerut and that his Smadhi is situate there is not disputed. The oral evidence lead by the plaintiff in proof of the fact that after the death of Swami, his Bhandara took place at Meerut as well as at Gar vaghat is irrebuttable. It is common knowledge that sanyasis are not cremated but are buried, or their bodies consigned to some river, and that after their demise a Bhandara takes place. Defendants Nos. 1 to 4 admitted in their written statement that Swami Sarupanand was a 'Paramhans ' and that a Bhandara had taken place after his death. The prefixes 'Swami ' and 'Paramhans ' are used for sanyasis and not for men of the world. In the case of Swami Atmavivekanand there is overwhelming evidence in proof of the fact that the requisite ceremonies of Birajahoma or Prajapathiyesthi were performed. Swami Vivekasukhanand, who was initiated as a chela along with Swami Atmavivekanand and others speaks of the performance of BriJahoma and Prajapathiyesthi at the time of their taking sanyas and states: "I attend satsang. I know Swami Sarupa Nandji. He was a Sanyasi. I am in Sanyas Ashram. I became Sanyasi 690 about 28 29 years ago. Four other persons had also taken Sanyas on one and the same day. I had taken Sanyas. Their names are Swami Atma Vivekanandji, Swami Aju niya Nandaji, Swami Abheda Nandji and Swami Purna Shabda Nandji. Swami Atma Viveka Nandji had also taken Sanyas on that very day. Praja Prashit. and Virja Hom Ceremonies were performed at the time of my taking sanyas. Our heads were shaven from before that. our Gurudeo had taken the choote. The sacred threads were burnt in the fire. Our white clothes were removed, and in its place we were directed to put on the clothes of the ochre colour. Guru Maharaj had whispered the Guru Mantra into our ears. Hom (Samigri) were sent from the Mandleshwar of Benaras, and Birja Hom was got per formed with it. We were at that time relieved off, from all the bondages of Grahast Ashram. These very cere monies were performed at the time, when Swami Atma Viveka Nandji took the Sanyas." (Emphasis supplied) It is necessary to mention that though this witness was examined at length, there is no question put as to the performance of Atma Sradh. This is somewhat significant because this question was put to only one of the plaintiff 's witnesses, Mahesh Dutt Shukla, PW 13 and he replied that according to the tenets of the 'Sant Mat ' it is not necessary to perform Atma Sradh for becoming a sanyasi. The evidence of the plaintiff 's witnesses show that the Biraja Homa ceremony is of great importance, and if the Biraja Homa was performed by Swami Atmavivekanand at the time of his initiation, it is not at all probable that Swami Sarupanand and Swami Atmavivekanand, who were men of great ability and circumspection, should have performed Biraja Homa ceremony and omitted the essential details, especially the performance of the Sradh of one 's self, that is, Atma Sradh by Swami Atmavivekanand. If the Prajapathiyesthi or Biraja Homa ceremonies were performed, then it must necessarily give rise to the irresistible inference that Swami Atmavivekanand must have performed his Atma Sradh before he was initiated as a chela. We are clearly of the opinion that the appellant Sri Krishna Singh, impleaded as defendant No. 5, was precluded from contending that his father Baikunth Singh, who on his initiation by Swami Sarupanand was baptised as Swami Atmavivekanand, was not a Hindu sanyasi. On May 29, 1949 he along with his brother brought a suit for partition, being suit No. 389 of 1949 in the Court of Judicial officer, 691 Chandauli, against the other members of their family. It was alleged in the plaint: "That the father of the plaintiffs has been a plan of religious bent of mind. For that reason he having left the property of his share in the spurdgi and possession of his sons, plaintiffs Nos. 2 and 3, more than twenty years ago, left residing here and went away. Thereafter he became a sanyasi. " Since then, plaintiffs Nos. 1, 2 and 3 have been in possession and occupation of the same as of right and also by way of inheritance. "That on account of the renunciation made by the father of the plaintiffs, the plaintiffs have become the principal tenant according to law and they have been in possession and occupation of their share up to this day." (Emphasis supplied) In the aforesaid suit, the appellant Sri Krishna Singh appeared as D, PW 1 and in his deposition, Ext. 101, he stated on oath . "The land in dispute is under my tenancy. The name of my father stands entered in our share. My father died two months ago. After his becoming a Sadhu he adopted the name of Atmavivekanand. He has taken sanyas. He used to live at Gadwadhar Bangla Kuti." (Emphasis supplied) In para 6 of his written statement, the appellant while denying that Swami Sarupanand founded any math at Garwaghat averred: "Sri Swami Swarupa Nandji was the Guru of Sri Baikunth Singh, alias Sri Swami Atma Viveka Nandji, hence having regard to his old age and also with a view of honouring him, his name has been entered in gift deed, dated 8 3 1935. In fact on the basis of the aforesaid deed of gift, Sri Baikunth Singh alias Sri Swami Atma Viveka Nandji acquired the property and has been in exclusive possession thereof. " In para 7 he states: "Sri Baikunth Singh, alias Sri Swami Atma Viveka Nandji was a Grahast. He was Chhattri Hindu by caste. He never took Sanyas nor did he denounce the world. The real fact is that when Sri Swarupa Nandji, who was the resident of Punjab, arrived at the house of Sri Baikunth Singh, aforesaid, situate in Mauza Khuruhja Pargana Majhuwar, 692 District Banaras, Sri Baikunth Singh was impressed by him, and under his influence became religious minded. He called himself as Swami Atma Viveka Nandji. He believed only in the worship and Bhakte of his Guru. He considered his Guru as God. He used to impart this very teaching to his disciples, and devotees. He never renounced the Grahast Ashram. No body ever gave him Chadar Mahanthi. He never became the Mahanth of any Math. Sri Sarupa Nandji was also not the Dasnami. He never took Sanyas. " That appears to be a case set up to defeat the plaintiff 's claim. When he was confronted with his admission in the plaint filed in the suit for partition, he disavowed knowledge of the fact of his father Baikunth Singh having become a sanyasi. This was nothing but a time serving statement. In Chandra Kunwar vs Chaudhri Narpat Singh,(1) the Judicial Committee of the Privy Council observed: "The proof of this admission shifts the burden, because, as against the party making it, as Baron Parke says in Slatterie vs Pooley: "What a party himself admits to be true may reasonably be presumed to be so." No doubt, in case such as this, where the defendant is not party to the deeds and there is therefore no estoppel, the party making the admission may give evidence to rebut this presumption but unless and until that is satisfactorily done, the fact admitted must be taken to be established." It follows that admission of the fact that his father Baikunth Singh had become a sanyasi, shifted the burden on the appellant to disprove that he was Hindu sanyasi. There is direct oral evidence of the plaintiff Harsewanand and of his witnesses PWs 2 to 5, 7 to 10, 14 and particularly that of Swami Viveksukhanand taken on commission, about the plaintiff 's initiation into the ascetic order. All these witnesses have amply proved that the particular ceremonies including Prajapathiyesthi and Biraja Homa required in the 'Sant Mat ' fraternity were performed when the plain tiff was made a sanyasi. It is amply proved by PWs 1 to 10 and 13 to 15 that Swami Atmavivekanand had not only initiated him as his chela but also nominated him to be the mahant and that after his death and in accordance with his wishes, he was given Chader Mahanti on the occasion of the Bhandara of Swami Atmavivekanand. 693 The document Ext. 100, prepared by the 'Sant Mat ' fraternity on this A occasion and the photograph Ext. 121, taken lends assurance to the testimony of these witnesses that the plaintiff Harsewanand was installed as the mahant of the math in accordance with the express desire of Swami Atmavivekanand. The learned Civil Judge in his judgment observes: 'The fact of Harsewanand being a sanyasi remains undoubted '. His finding that he was not a Hindu sanyasi was based upon the view that under Hindu law mere 'renunciation ' of the world is not sufficient. Hence, he holds that a Sudra who renounced the world and became sanyasi cannot be said to be a Hindu sanyasi, as according to the Hindu Sastras no Sudra can become a sanyasi. The underlying fallacy lies in his over looking that the question had to be determined not according to the orthodox view, but according to the usage or custom of the particular sect or fraternity. It is needless to stress that a religious denomination or institution enjoys complete autonomy in the matter of laying down the rites and ceremonies which are essential. We must accordingly hold that the plaintiff was the validly initiated 1) chela of Swami Atmavivekanand and upon his demise was duly installed as the mahant of Garwaghat Math according to the tenets of his 'Sant Mat ' Sampradaya. There remains the question whether due to the death of the 15 plaintiff Harsewanand during the pendency of the appeal the suit brought by him abates in its entirety. It is argued that the original plaintiff, Mathura Ahir, having filed the suit primarily to establish his personal right to the office of mahant which entitled him to possession of the property in suit, the suit abated on his death. The cause of action on which the suit was instituted, it is urged, was personal to the plaintiff, and in order to establish that he had been duly and properly initiated as a sanyasi and installed as a mahant, he had to plead and establish all the necessary facts regarding his capacity to become a sanyasi, his nomination by his Guru. and his ultimate election or nomination by the 'Sant Mat ' Sampradaya. The submission is that these were facts special to the original plaintiff, and he having died, respondent No. 1, Harshankaranand cannot claim any relie unless and until he also establishes all these facts in regard to his claim to mahantship. The original cause of action, it is said, has vanished with the death of the plaintiff and the respondent No. 1, Harshankaranand had necessarily II to plead and establish a new set of facts. In substance, he could not prosecute the cause of action as originally framed and he could 694 not succeed without materially altering the pleadings and substituting another cause of action, which could very well form the subject matter of a separate suit. It is argued that the nomination of a person as a mahant invests him with a 'status ' and, therefore, capacity to succeed to the office of mahant is an incident of that status. It is said that the claim to mahantship is, therefore, a personal right which does not survive the plaintiff; any suit claiming such a status must abate on the death of the plaintiff. Alternatively, the submission is that if the Court came to the conclusion that the plaintiff had sued in his capacity as a de facto mahant, it is obvious that the cause of action would be personal to him and would certainly not survive the plaintiff. In that event, the , J suit must of necessity abate as a right claimed on the basis of de facto ownership cannot survive the plaintiff. x x x x x The question whether a suit abates in its entirety or not upon the death of the plaintiff must necessarily depend on the nature of the suit. This is not a class of case to which the maxim, actio personalis moritur cum persona applies. The suit that the plaintiff Harsewanand brought was for possession of the suit house which belonged to Garwaghat Math, in his capacity as the mahant. On denial of his title, he pleaded that he was initiated as a chela by his Guru Swami Atmavivekanand, the then mahant, in 1937 and nominated to be his successor and accordingly upon his demise on August 23, 1949, had been duly installed as Mahant of the Math by the 'Sant Mat ' Sampradaya, i.e., by the Mahants and Sanyasis of the Bhesh and given Chader Mahanti according to the tenets of fraternity. It was alleged that according to the tenets of this particular sect, anyone, including a Sudra, could be a sanyasi, and further that succession to the office of mahant was from guru to chela according to the custom or usage prevailing in the sect. One of the issues on which the parties went on trial was whether there was in existence a math at Garwaghat, and if so, whether the house in suit was an accretion thereto. The High Court agreeing with the learned Munsif has upheld the plaintiff 's claim. It was held that the house in suit was acquired by Swami Atmavivekanand from out of the offerings (Bhent) made by his disciples and, therefore, was not his secular property, but was an accretion to the Garwaghat Math. It has further been held that the plaintiff Harsewanand was the validly initiated chela of Swami Atmavivekanand and was duly installed as mahant of the math after his death, by the 'Sant Mat ' fraternity according to his wishes. The defendants have been held to be rank trespassers. The decree under 695 appeal crystallizes the rights of the parties. The cause of action did A not die with the plaintiff. In the circumstances, the respondent No. 1, Harshankaranand, who now claims to be the mahant, has the right to contest the appeal as representing the math, being the de facto mahant, for preservation of its properties. x x x x x x According to the Hindu jurisprudence, a religious institution such as a math is treated as a juristic entity with a legal personality capable of holding and acquiring property. It therefore, follows that the suit instituted by the mahant for the time being, on its behalf, is properly constituted and cannot abate under the provisions of order 22 of the Code of Civil Procedure, on the death of the mahant pending the decision of the suit or appeal, as the real party to the suit is the institution. The ownership is in the institution or the idol. From its very nature a math or an idol can act and assert its rights only through human agency known as a mahant, shebait or dharmakarta or sometimes known as trustee. Jenkins C.J. in Babajirao vs Laxmandas(1) defines the true notion of a 'math ' in the following terms: "A math, like an idol, is in Hindu Law a judicial person capable of acquiring, holding and vindicating legal rights, though of necessity it can only act in relation to those rights through the medium of some human agency. " It follows that merely because the mahant for the time being dies and is succeeded by another mahant, the suit does not abate. The correctness of the decision in Ramswarup Das vs Rameshwal Das(2) is thus open to question. It does not stand to reason that when a suit is brought for possession by a mahant of an asthal or Math. Or by a shebait of a debottar property, and the defendant is adjudged to be a trespasser, such a suit should abate with the death of the mahant or shebait. This would imply that after a long drawn litigation, as he re, the new mahant or shebait has to be relegated to a separate suit. The definition of legal representative as contained in s.2(11) of the Code reads: "(11) . "legal representative" means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased and where a party sues or is sued in a representative character the person on whom the estate devolves on the death of the party so suing or sued. " 696 The general rule is that all rights of action and all demands whatsoever, existing in favour of or against a person at the time of his death survive to or against his legal representative. In Muhammad Hussain vs Khushalo(1) Edge C.J., while delivering the judgment of the Full Bench, observed: "I have always understood the law to be that in those cases. in which an action would abate upon the death of the plaintiff before judgment, the action would not abate if final judgment had been obtained before the death of the plaintiff, in which case the benefit of the judgment would go to his legal representative. " That, in our opinion, lays down the correct test. In the instant case, the appellant himself has, of course, without prejudice to his right to challenge the right of the original plaintiff, Harsewanand, to bring the suit, substituted the respondent No. 1, Harshankaranand, as his heir and legal representative, while disputing his claim that he had been appointed as the mahant, as he felt that the appeal could not proceed without substitution of his name. In his reply, the respondent No. 1, Harshankaranand alleges that after the demise of mahant Harsewanand he was duly installed as the mahant of Garwaghat Math by the 'Sant Mat ' fraternity. He further asserts that he was in possession and enjoyment of the math and its properties. The fact that he is in management and control of the math properties is not in dispute. The issue as to whether he was so installed or not or whether he has any right to the office of a mahant, cannot evidently be decided in the appeal, but nevertheless, he has a right to be substituted in place of the deceased Mahant Harsewanand as he is a legal representative within the meaning of section 2(11), as he indubitably is intermeddling with the estate. He has, therefore, the right to come in and prosecute the appeal on behalf of the math. In the result, the appeal must fail and is dismissed with costs.

Respondent Mathura Ahir alias Swami Harswanand, the Mahant of Garwaghat Math filed a suit for declaration of title to and possession of house No. C/27/33 situate in Mohalla Jagatgunj, Varanasi, for arrears of rent and mesne profits in respect thereof. The said property was purchased by his Guru Atma Vivekanand Paramahans (ne Baikunth Singh) from out of the income of the Math i.e. the offerings (Bhent) made by the devotees. The appellant who was impleaded as defendant 5 to avoid further litigation claimed that this property acquired by his late father Baikunth Singh alias Swami Atma Vivekanand, after he became a Guru and out of Math funds devolved upon him the natural son and disciple. Since the claim went in favour of the respondent Mahant the appellant came in appeal by special leave to this Court. The original plaintiff died during the pendency of the appeal. The contentions of the appellant were: (i) the plaintiff Mathura Ahir being a Sudra could not be ordained to a religious order and become a Sanyast or yati and therefore installed a mahant of the Garwaghat Math, according to the tenets of the Sant Math Sampradaya, (ii) In the absence of proof of the performance of Atma Sradh and the recitation of Pravesh Mantram, neither the plaintiff nor his two predecessors Swami Sarupanand and Swami Atma Vivekanand could be regarded as Hindu Sanyasi; and (iii) the first respondent Harsawanand the original plaintiff having died during the pendency of the appeal, the appeal abated in its entirety. Dismissing the appeal, the Court ^ HELD: 1. A math is an institutional sanctum presided over by a superior who combines in himself the dual office of being the religious or spiritual head of the particular cult or religious fraternity and of the manager of the secular properties of the institution of the Math. [671 D E] The property belonging to a Math is in fact attached to the office of the mahant, and passed by inheritance to no one who does not fill the office. The 661 Head of a Math, as such, is not a trustee in the sense in which that term is generally understood, but in legal contemplation he has an estate for life in its permanent endowments and an absolute property in the income derived from the offerings of his followers, subject only to the burden of maintaining the institution. [671 A B] In the instant case, the evidence on record sufficiently establishes that a Math came to be established at Garwaghat and the building known as "Bangla Kuti" and certain other buildings including the house in suit constituted the endowment of the math itself. [671 E F] Sammantha Pandara vs Sellappa Chetti Mad. 175; Gyanasambhandan Pandara Sannadhi vs Kandaswami Tambiram Mad. 375; Vidya Purna Thirthaswami vs Vidyanidhi Thirtha Swami Mad. 435; Ram Prakash Das vs Anand Das (1915 16) 43 I.A. 73 (PC); Vidya Vanthi Thirtha vs Baluswami Iyer (1920 21) 48 I.A. 302; referred to. The math at Garwaghat belongs to the 'Sant Mat ' Sampradaya, which is a religious order and the suit property is Math property. Though the Math at Garwaghat established by Swami Sarupanand was of recent origin, the religious order denominated as 'Sant Math ' has had large following in Punjab and some other parts of India since more than a century. In a sense, therefore, Swami Sarupanand himself did not for the first time evolve any new religious order. [672 E, 673 F G] The institution was really built up by Swami Atma Vivekanand, who was held in great veneration by the followers of the sect. He preached the tenets of 'Sant Mat ' and had a large following. His 'Sant Mat ' fraternity comprised of thousands of Girhastha and Virakta disciples who made large Offerings. Such offerings in cash or kind or in the shape of immovable property which were endowed to the Math. Swami Atma Vivekanand was the Mahant of the Garwaghat Math. The two houses at Varanasi including the suit house were purchased by Swami Atma Vivekanand from out of the offering (Bhent) made by his disciples. [675A D] 3. Succession to Mahantship of a Math or religious institution is regulated by custom or usage of the particular institution, except where a rule of succession is laid down by the founder himself who created the endowment. [675 G H] Genda Puri vs Chatar Puri, [1886] 13 I.A.100 @ 105; Sital Das vs Sant Ram, A.I.R. 1954 SC 606; Mahalinga Thambiran vs La Sri Kasivasi, ; ; followed. The succession to the office of the Mahant according to Sant Sampradaya is by nomination, i.e. from Guru to Chela, the Guru initiates the chela after performing the necessary ceremonies. The person initiated as a Chela adopts the life of a sanyasi and is pledged to lead a life of celibacy and religious mendicancy. The sitting Mahant hands over the management of the Math to one of his virtuous Chelas fittest to succeed when he nominates and when he wishes to install as Mahant after him in his place. He makes clear this desire to the members of his Sampradaya, and also authorises the nominated chela to give Bhesh Dikshwa. After the death of the Mahant, the Bhesh and Sampradaya give Chadar Mahanti of the math to the said disciple at the time of the Bhandara. [672 A C] 662 5. Asceticism in India has been under the definite and strong sanction of religion. In the doctrine of the four asramas, asceticism was made an integral part of the orthodox Hindu life, and it became the duty of every Hindu, as advanced age overtook him, homeless and a wanderer to chasten himself from earthly ties, and of realizing union with Brahman. And a religious motive was thus supplied for that which in itself was a welcome release from responsibility, care and the minute requirements of an elaborate social code. In due course, with the advancement of knowledge, the shackles of the caste system were broken through and the privileges and powers of the ascetic life were extended to Sudras and in due recognition of their status, they were treated as Hindu Sanyasis. At the present time, there is no distinction or barrier; any one may become an ascetic, and the vows are not necessarily life long. Some sects, however, still restrict membership to Brahmans, or at least to men of the three higher castes. [681 E H, 682 G H] 6. One who enters into a religious order severs his connection with the members of his natural family. He is accordingly excluded from inheritance. Entrance to a religious order is tantamount to civil death so as to cause a complete severance of his connection with his relations, as well as with his property. Neither he nor his natural relatives can succeed to each other 's properties. [676 A B] Any property which may be subsequently acquired by persons adopting religious orders passes to their religious relations. The persons who are excluded on this ground came under three heads; the Vanaprastha or hermit; the Sanyasi or Yati, or ascetic and the Brahmachari or perpetual religious student. In order to bring a person under these heads, it is necessary to show an absolute abandonment by him of all secular property, and a complete and final withdrawal from earthly affairs. The mere fact that a person calls himself a Byragi or religious mendicant, or indeed that he is such, does not of itself disentitle him to succeed to property. Nor does any Sudra come under this disqualification, unless by usage. This civil death does not prevent the person who enters into an order from acquiring and holding private property which will devolve, not of course upon his natural relations, but according to special rules of inheritance. But it would be otherwise if there is no civil death in the eye of the law, but only the holding by a man of certain religious opinions or professions. The after acquired property passes on his death not to his natural but to his spiritual heirs. [676 A E, 683 A B] Dharmapuram vs Vivapandiyan, Mad. 202, Harish Chandra vs Alia Mahamed, Cal. 545, explained. The 'Sant Mat ' sampradaya is a religious denomination i.e. a sub sect of one of the Dasnami sects founded by the Great Sankracharya. Sankara was an ascetic and founded schools of ascetics. Sankara established four Maths or seats of religion at four ends of India the Sringeri Math on the Sringeri Hills in the South, the Sharda Math at Dwarka in the West, the Jyotir Math at Badrikashram in the North, and the Govardhan Math at Puri in the east. The monks ordained by Sankara and his disciples were called Sanyasis. Each Math has a sanyasi at its head who bears the title of Sankaracharya in general. Sankara is said to have four disciples who were all brahmans, from whom the 663 ten divisions of the order hence named as the ten named or 'dasnami Dandis ' originated. They are: Thirtha, shrine; Ashrama, order; Vana, wood; Aranya, Forest or desert; Saraswati and Bharati, the goddesses of learning and speech; Puri, City; Giri and Parvata, a hill; and Sagara, the ocean. [683 C G] Dandis or staff bearers occupy a place of pre eminence. They worship Lord Siva in his form Bhairava; the 'Terrible ' and profess to adhere Nirguna and Niranjana, the deity devoid of attribute or passion. A sub section of this order are the Dandi, Dasnamis or Dandi of ten names, so called from their assuming one of the names of Sankara 's four disciples and six of their pupils. [658 B C] The Dandis keep themselves very distinct from the rest of the community. They are Brahmans, and receive disciples only from the Brahmans. They lead a very austere life. They do not touch fire or metal or vessels made of any sort of metal. It is equally impossible also for them to handle money. They shave their hair and beard. They wear one long unsewn reddish cloth, thrown about the person. [686 A B] There are but three and part of a further ascetic class, or those called Tirtha, Asrama, Saraswati and Bharati who are still really regarded as Sankara 's disciples. The rest i.e. the remaining six and a half of the Dasnamis who are considered as having fallen from the purity of practice necessary to the Dandis, are still, in general religious characters usually denominated and are Atits. These are the Atits or A 'Dandis viz. the Vanas, Aranytas, Puris, Giris, Parvata, Sagaras and half the Bharatia, reputed to have fallen to some extent from orthodoxy, but are still looked upon as religious avatars. Unlike the Dandis, the Atits do not carry the shaft i.e. a Trishul. They differ from the former also in their use of clothing money and ornaments, their methods of preparing food and their admission of members from any order of Hindus. Some of them lead an ascetic life, while others mix freely in the world, carry on trade and acquire property. Most of them are celibate but some of them marry and are often known as Samyogi or Gharbari Atits. They are collected in Maths and monastries. They wear ochre coloured garments, and carry a rosary of rudraksha seeds sacred to Lord Siva. Their religious theories (when they have any) are based on the advaita Vedanta of their founder Sankaracharya. [686 H, 687 A D] There is also a sub division of the Puri division of the Dasanami Sect. They have tenets much in common, based on the central idea that the Supreme diety is incomprehensible or 'unseeable '. They denounce idolatory. This more or less conforms to the tenets of the 'Sant Mat ' Sect. [678 D E] The followers of the 'Sant Mat ' treat the Guru as the incarnation of God. They have no faith in inanimate idols installed in temples nor do they worship them in their cult. There are no caste restrictions and any one can be admitted into the Sant Mat fraternity. According to the custom and usage of the Sant Mat Sampradaya, the initiation of a chela by the Guru results in complete renunciation of the world and he ceases to have all connection with his previous Ashramas before becoming a Sanyasi. For becoming a sanyasi it is not necessary that he should be of a particular Varnashram previously, i.e. even a Sudra can become a Sanyasi. [671 G H, 672 E] 8. Though according to the orthodox Smriti writers a Sudra cannot legitimately enter into a religious order and although the strict view does not 664 sanction or tolerate ascetic life of the Sudras, the existing practice all over India is quite contrary to such orthodox view. In cases, therefore, where a Sudra can enter into a religious order in the same way as in the case of the twice born classes, such usage should be given effect to. [670E F] 9. In order to prove that a person has adopted the life of a Sanyasi, it must be shown that he has actually relinquished and abandoned all worldly possessions and relinquished all desire for them or that such ceremonies are performed which indicate the severance of his natural family and his secular life. It must also be proved in case of orthodox sanyasis, that necessary ceremonies have been performed such as Pindadana or Birajahoma or Prajapathiyesthi without which the renunciation will not be complete. [687 G H] Amongst Dasnamis, a ceremony called the Bijla Homa i.e. the Biraja Homa has been considered essential. The recitation of the Pravesha Mantram or the renunciation formula is of course indispensable. [688 A] In the instant case: (a) there is overwhelming evidence in proof of the fact that the requisite ceremonies of Biraj homa or Prajapathiyesthi were performed in case of Swami Sarupanand and Swami Atma Vivekanand. If the Prajapathiyesthi or Biraj Homa ceremonies were performed then it must necessarily give rise to the irresistable inference that Swami Atma Vivekanand must have performed his Atma Sradh before he was initiated as a chela; (b) The appellant was precluded from contending that his father Baikunth Singh was not a Hindu Sanyasi in view of his express admission in the plaint filed in an earlier suit. The burden of proof shifted upon him to disprove it; (c) Swami Harsewanand (Mathura Ahir) was the validly initiated chela of Swami Atma Vivekanand and upon his demise was duly installed as the Mahant of 'Garwaghat Math ' according to the tenets of 'Sant Mat ' Sampradaya. [689 G, H, 693 C D] 10. The question whether a suit abates in its entirety or not upon the death of the plaintiff must necessarily depend upon the nature of the suit. This is not a class of case to which the maxim, actio personalis moritur cum persona applies. [694 C D] 11. According to Hindu jurisprudence, a religious institution such as a math is created as a jurisdic entity with a legal personality capable of holding and acquiring property. It therefore follows that the suit instituted by the mahant for the time being, on its behalf, is properly constituted and cannot abate under the provisions of Order 22 of the Code of Civil Procedure on the death of the mahant pending the decision of the suit or appeal, as the real party to the institution is the institution. The ownership is in the institution or the idol. From its very nature a math or an idol can act and assert its rights only through human agency known as a mahant or shebait or dharmakarta or sometimes known as trustee. It follows that merely because the mahant for the time being dies and is succeeded by another mahant, the suit does not abate. [695 B C, E] Ram Swarup Das vs Rameshwar Das vs ILR 29 Pat. 989, over ruled. The general rule is that all rights of action and all demands whatsoever existing in favour of or against a person at the time of his death survive to or against his legal representative within the meaning of section 2(11) of C.P.C. [699 A,F] Muhamed Hussain vs Khushalo, ILR 9 All. 131; approved.

riminal Appeals Nos. 65 and 66 of 1952, 5 and 19 of 1953 and Petitions Nos. 170 of 1952, 19 and 57 of 1953. Appeals from Orders, dated the 9th April, 1952, of the High Court of Judicature at Bombay in Criminal Applications Nos. 707 and 708 of 1951, from the Judgment and Order, dated the 15th December, 1952, of the High Court of Judicature at Bombay in Criminal Application No. 1310 of 1952; from the Judgment and Order, dated the 29th November, 1952, of the Judicial Commissioners Court Vindhya Pradesh, Rewa, in Criminal Miscellaneous No. 49 of 1952; and Petitions under article 32 of the Constitution of India. J.B. Dadachanji and Z. F. Bootwala for the appellants in Criminal Appeals Nos. 65 and 66 of 1952 and 5 of 1953. C.K. Daphtary Solicitor General for India(G. N. Joshi, with him) for respondents Nos. I and 2 in 121 934 Criminal Appeals Nos. 65 and 66 of 1952 and respondent No. 1 in Criminal Appeal No. 5 of 1953. K.B.Asthana, for the appellant in Criminal Appeal No. 19 of 1953. C.K. Daphtary, Solicitor General for India, (Porus A. Mehta and G. N. J08hi, with him) for the respondent in Criminal Appeal No. 19 of 1953. section P. Sinha (Sri Narain Andley, with him) for the petitioners in petition No. 170 of 1952. Gopalji Mehrotra for respondent No. I in petition No. 170 of 1952. C. K. Daphtary, Solicitor General for India (Porus A. Mehta, with him) for respondent No. 3 in petition No. 170 of 1952. section P. Sinha (section N. Mukherji, with him) for petitioner in petition No. 19 of 1953. Gopalji Mehrotra for respondent No. I in petition No. 19 of 1953. G. N. Joshi for respondent No. 3 in petition No. 19 of 1953. H.J. Umrigar, amicus curiae, for the petitioner in petition No. 57 of 1953. C. K. Daphtary, Solicitor General for India (G. N. J08hi, with him) for the respondents in petition No. 57 of 1953. February 15. The Judgment of Mahajan C.J., Mukherjea, Vivian Bose and Ghulam Hassan JJ. was delivered by Ghulam Hasan J. Das J delivered a seperate judgment. Criminal Appeals Nos. 65 and 66 of 1952. GHULAM HASAN J. This batch of appeals raises a common question of the constitutional validity of section 7 of the Influx from Pakistan (Control) Act (XXIII of 1949). Section 3 of the same Act is also assailed on behalf of some of the appellants but for the purpose of deciding these appeals it will not be necessary to deal with the latter question. Criminal Appeals Nos. 65 and 66 of 1952, which are directed against the judgment and order of the High Court of Judicature at, Bombay in two petitions under article 226 of the Constitution praying for the issue of 935 a writ of mandamus requiring the respondent not to remove them from India on the ground that the impugned section 7 is void may be treated as the leading case which will govern the other appeals. The facts of each of these appeals are slightly different but they proceed upon the common assertion that the appellants are citizens of the Indian Republic. This fact was assumed in the leading case but it is not, disputed that the status of the appellants as Indian citizens in all the cases has not been investigated and determined by any of the courts below against whose decision the appeals have been brought. Having heard the learned counsel appearing in support of the appeals and the learned Solicitor General we have reached the conclusion that section 7 is void in so far as it infringes the right of a citizen of India under article 19(1) (e) of the Constitution. The Act in question received the assent of the Governor General on April 22, 1949, and was published in the Gazette of India Extraordinary on April 23. It is a short Act containing nine sections. It is intituled an Act to " control the admission into, and regulate the movements in, India of persons from Pakistan ". The preamble opens with the words "Whereas it is expedient to control the admission into, and regulate the movements in, India of persons from Pakistan. " Section 2 (b) defines " officer of Government " as any officer of the Central Government and 2 (c) defines "permit" as a "Permit issued or renewed or the period whereof has been extended in accordance with the rules made under this Act. " Section 3 says II No person shall enter India from any place in Pakistan, whether directly or indirectly, unless (a) he is in possession of a permit or (b) being a person not domiciled in India or Pakistan, he is in possession of a valid passport as required by the Indian Passport Act, 1920 (XXXIV of 1920), or (c) he is exempted from the requirement of bein in possession of a permit by or in accordance with the rules made under this Act. " 936 Section 4 empowers the Central Government, by notification in the Official Gazette, to make rules: (a) prescribing the authorities by which and the conditions subject to which permits may be issued or renewed or the period thereof extended, the condition to be satisfied by the applicants for such permits and the forms and classes of such permits; (b) regulating the movements in India of any person who is in possession of a permit; (c) providing for the exemption, either absolutely or on conditions, of any person or class of persons from the requirement of being in possession of a permit or from the operation of any rule made under the section ; and (d). . . . . . . . . . . section 5 is the penal section which says " (a) Whoever enters India in contravention ' of the provisions of section 3, or having entered India contravenes the provisions of any rule made under section 4, or commits a breach of any of the conditions of his permit, shall be punishable with imprisonment for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both. " Section 6 confers power of arrest upon an,officer of Government. Section 7 is as follows: " Without prejudice to the provisions contained in section 5, the Central Government may, by general or special order, direct the removal from India of any person who has committed, or against whom a reason , able SUSPICION exists that he has committed, an offence under this Act, and thereupon any officer of Government shall have all reasonable powers necessary to enforce such direction. " Section 8 provides for protection to persons acting in good faith and section 9 repeals the Influx from, Pakistan (Control) Ordinance, XXXXIV of 1948. The use of the word 'person ' in section 7, read with the title and preamble of the Act leaves no doubt that. the Act applies to citizens and non citizens alike. So 937 far as a non citizen is concerned, it is not contended before us3 that the executive Government has no authority to direct his removal from India and the only contention raised before us is whether the Central Government has any power to direct the removal of an Indian citizen on either of the grounds mentioned in section 7. Section 7, it is contended, confers upon the Central Government unfettered power to direct the removal from India not only of a person who has committed an offence punishable under section 5 of the Act but also one against whom a reasonable suspicion exists that he has committed such an offence. That an Indian citizen visiting Pakistan for any purpose whatsoever and returning to India may be required to produce D, permit or passport as the case may be before he can be allowed to enter the country, may well be. regarded as a proper restriction upon entry but to say that if he enters the country without a permit or on an invalid permit, or commits a breach of any of the conditions of the permit he may, on conviction for such offence, be ordered to be removed from the country is tantamount to taking away his fundamental right guaranteed under article 19(1) (e), " to reside and settle in any part of the territory of India. " The order is sought to be supported by the learned Solicitor General on the ground that it falls within exception (5) of article 19. The proposition that the order imposes in the interest of the general public a reasonable restriction on the exercise of the. right conferred upon an Indian citizen to reside and settle in any part of the territory of India is hardly statable. It is possible to conceive of an Indian citizen being guilty of serious prejudicial Acts such as espionage and disloyalty to his country in which case he may render himself liable to the gravest penalty which the Government may think fit by law to impose upon him but it would be repugnant to all notions of democracy and opposed to the fundamental rights guaranteed in Part III of the Constitution to order his expulsion from the country, for to hold otherwise would be tantamount to destroying the right of citizenship conferred by Part II of the, Constitution. This 938 result is permissible only by recourse to article 11 of the Constitution. Again it will be noticed that section 7 imposes the penalty of removal not only upon a conviction under section 5 but goes further and brings about the same result even where there is a reasonable suspicion entertained by the Central Government that such an offence has been committed. The question whether an offence has been committed is left entirely to the subjective determination of the Government. The inference of a reasonable suspicion rests upon the arbitrary and unrestrained discretion of the Government, and before a citizen is condemned, all that the Government has to do is to issue an order that a reasonable suspicion exists in their mind that an offence under section 5 has been committed. The section does not provide for the issue of a notice to the person concerned to show cause against the order nor is he afforded any opportunity to clear his conduct of the suspicion entertained against him. This is nothing short of a travesty of the right of citizenship. The learned Solicitor General argued that the provision must be viewed in the back ground of the events which took place at the time of the partition and the unsatisfactory relations existing between India and Pakistan. up to the present day. Even so the penalty imposed upon a citizen by his own Government merely upon a breach of the permit Regulations, however serious it may be and, more, upon a reasonable suspicion only by the executive authority of his having violated the conditions of the permit is utterly disproportionate th the gravity of the offence and is in our opinion indefensible. A law which subjects a citizen to the extreme penalty of a virtual forfeiture of his citizenship upon conviction for a mere breach of the permit Regulations or upon a reasonable suspicion of having committed such a breach can hardly be justified upon the ground that it imposes a reasonable restriction upon the fundamental right to reside and settle in the country in the interest of the public. The Act purports to control admission into and regulate the movements in India of persons entering from Pakistan but section 7 oversteps the limits of control 939 and regulation when it provides for removal of a citizen from his own country. To use the language of this court in Chintaman Rao vs The State of Madhya Pradesh and Ram Krishna vs The State of Madhya Pradesh(1), " The effect of the provisions of the Act, however, has no reasonable relation to the subject in view but is so drastic in scope that it goes much in excess of that object. It may be said that the sentry on guard at any of the check posts on the frontier between the two countries can prevent not only unauthorised entry of a citizen by force but can also throw him out if the person has managed to enter surreptitiously. Exactly what the sentrys ' duties are was not argued before us. They would naturally vary according to the circumstances and the orders which be receives but ordinarily we apprehend that the duty of a sentry at the border would be to prevent as far as lay in his power un authorised entry into India. If any person claims to have the right to enter, the sentry 's duty would be to hand him over to the Commander of the Guard and normally it would be the duty of that Commander to hand him over to the proper authority empowered to determine the right which he claims. In the case of an unauthorised entry, ordinarily the duty of the sentry is to arrest a man and hand him over to the proper authority for punishment and in extreme cases he may have the right to shoot the person who does not halt on his command and explain his presence at the outpost. In normal circumstances we doubt if the sentry would have the right to forcibly expel a man who crosses the border. The learned Chief Justice (Chagla C. J.) took the view that section 7 is consequential to section 3 and held that if section 3 controlling admission by means of a permit is valid, section 7 must be held to be equally valid. This argument is fallacious. In the first place, section 7 is by no means wholly consequential to section 3. The first part no doubt renders the person concerned liable to removal upon conviction under section 5 but further empowers. the Central Government (1) ; 940 to pass the same order independently of these provisions even where there is no conviction and a reasonable suspicion exists that an offence has been committed. Assuming, however, that section 7 is consequential to section 3 it gives no opportunity to the aggrieved person to show cause against his removal. There is no forum provided to which the aggrieved party could have recourse in order to vindi cate his character or meet the grounds upon which it is based. Neither the Act nor the rules framed thereunder. indicate what procedure is to be followed by Government in arriving at the conclusion that a breach of section 3 or of the rules under section 4 has taken place, In Shabbir Hussain vs The State of Uttar Pradesh and Another(1) the Allahabad High Court held that a law allowing the removal from a territory of India of any citizen is in contravention of article 19 (1) (d) and(e) of the Constitution and is void in view of article 13(1). The order which was challenged before them was one passed under section 7 and was set aside. In Criminal Writ No. 147 of 1951 decided on December 11, 1951, a Bench of the Punjab High Court (Weston C. J. and Harnam Singh J.) while setting aside the order under section 7 against a citizen of India who had entered India without a permit and was first convicted and then ordered to be externed observed: "The powers of removal or banishment given by section 7 of the Influx from Pakistan (Control) Act, 1949, connot be invoked against citizens of India. No doubt, she committed an offence under section 3 of that Act which applied to all persons, but that cannot justify her removal even though her entry may have been contrary to the provisions of the Act. " We are not prepared to accede to the contention urged by the Solicitor General that a citizen of India who returns to the country without a permit or without a valid permit commits such a grave offence as to justify his expulsion from the country. The object of the Act is, not to deport Indian nationals (1) A.I.R. 1952 All. 941 committing a breach of the permit or passport Regulations but merely to control admission into and regulate movements in India of persons from Pakistan and therefore there is no substance in the argument that section 7 was intended to achieve the objective of expelling Indian citizens, by and large, if they brought themselves within the mischief of section 3. It was faintly contended that the order of physical, removal from India, in addition to the punishment imposed under section 5 of the Act, amounted to what may be called " double jeopardy " and is in conflict with article 20 (2) of the Constitution. The short answer to this contention is that there is no second prosecution for the same offence and therefore no question of double jeopardy arises. See Maqbool Hussain vs The State of Bombay etc.(1). As a result of the foregoing discussion we declare section 7 to be void under article 13(1) in so far as it conflicts with the fundamental right of a citizen of India under article 19(1) (e) of the Constitution and set it aside. The order will, however, operate only upon proof of the fact that the appellants are citizens of India. The case will, therefore, go back to the High Court for a finding upon this question. It will be open to the High Court to determine this question itself or refer it to the court of District Judge for a finding. Parties will be given full opportunity to file affidavits or give other evidence which they may wish to produce. Criminal Appeal No. 5 of 1953. GHULAM HASAN J. The appellant in this case is a resident of Godhra, District Panchmahals, in the State of Bombay. He went to Pakistan in Marc 1948, and returned to India on May 30, 1949, after obtaining a permit for permanent return to India from the High Commissioner for India. In January, 1950, he was prosecuted under section 5 of Act XXIII of 1949 for having obtained a permit which was not in accordance with the provisions of the Act. The prosecution was withdrawn after 21 years. Subsequently on December 5, 1952, he was served with a notice (1) ; 122 942 ordering him to leave India for Pakistan within 10 days else he would be bodily removed to the Indo Pakistan border. Thereupon the appellant filed a petition under article 226 contending that section 7 was contrary to his fundamental rights under articles 14 and 19 of the Constitution and that the same provided no opportunity to the appellant to put his case before the Government officers, nor was any such opportunity afforded to him. He asserted that he was a citizen of India. The application was summarily dismissed on December 15, 1952, whereupon leave to appeal to this court was granted under article 132(1) of the constitutional. As this appeal also raises the question of the constitutional validity of section 7, it will be governed by the decision which we have arrived at in appeals Nos. 65 and 66 of 1952. Criminal Appeal No. 19 of 1953. GHULAM HASAN J. The appellant, Haji Faqir Ahmad, is a resident of Rewa in Vindhya Pradesh and alleges that he is a citizen of India. He was prosecuted under section 5 of Act XXIII of 1949 on the ground that he entered India from Pakistan without a permit and convicted and sentenced. Thereafter he was by an order passed under section 7 bodily removed out of India. His father applied under article 226 of the Constitution and section 491 of the Code of Criminal Procedure for setting aside the order. The learned Judicial Commissioner dismissed the application summarily holding that section 7 was not ultra Vires the Constitution. Mr. Asthana, who appeared on behalf of the appellant, raised a further question that the order was void under article 14 inasmuch as it discriminated against members of a particular community coming from Pakistan. There is no warrant for this contention. The Act applies to citizens as well as non citizens. It applies to all communities irrespective of caste or creed. It is contended that the Act must be held to be discriminatory not only by virtue of its provisions but because of the discriminatory manner in which those provisions have been applied. This argument is 943 to be mentioned only to be rejected, for there is no material whatsoever placed before us to justify the statement. The case in Yick W o vs Peter Hopkins (1) is wholly inapplicable to the facts of the present case. We accordingly reject the contention. This case will also be governed by the decision in Appeals Nos. 65 and 66 of 1952. Petition No. 170 of 1952. AND Petition No. 19 of 1953. GHULAM HASAN J. These petitions under article 32 of the Constitution raise the constitutional validity of section 7 of the Influx from Pakistan (Control) Act, XXIII of 1949. Mr. section P. Sinha, who appears for the petitioners, withdraws these petitions and undertakes to file two petitions under article 226 of the Constitution within a fortnight from this day before the High Court. When these have been filed, they will automatically be governed by the decision given in Ap peals Nos. 65 and 66 of 1652. No other order is called for. The petitions are allowed to be withdrawn. Petition No. 57 of 1953. GHULAM HASAN J. This a petition under article 32 of the Constitution by Inamullah Khan alias Qamar Jamali for the issue of a writ in the nature of habeas corpus directing that the petitioner, who is illegally arrested and detained be brought before the court and set at liberty and for the issue of a writ of certiorari calling for the said order for arrest and detention and the relevant papers and for setting them aside as being void and in operative. It is further prayed that the State of Bhopal and the Superintendent of Central Jail,, Bhopal, where he was being detained be restrained from putting into effect the said order. The petition was made on March 11, 1953. It is stated that the petitioner is a citizen of India having been born in Bhopal in 1922. He was employed in Bhopal for 5 years immediately preceding (1) ; 944 the commencement of the Constitution of India. He also edited a weekly paper "Tarjuman" from Bhopal. His name appears as. a voter in the voters" list of the Bhopal Legislative Assembly (1951 52), as well as in the electoral roll of the Municipal Board, Bhopal. The was arrested on November 24, 1952 by the Sub Inspector of Police at lbrahimpura, Bhopal, under section 7 of the Influx from Pakistan (Control) Act XXIII of Pakistan. At the time of the arrest the petitioner was being tried under section 448, Indian Penal Code, in the court of 1st Class Magistrate, Bhopal, and was on bail. The petitioner alleges that he never went to Pakistan, nor entered India without a permit and was never tried and convicted under the Influx from Pakistan (Control) Act of 1949. He challenges the order under section 7 as being void under article 19(d) and (e) and articles 21 and 22. The fact that the petitioner is a resident of Bhopal and was employed in the State is not denied on behalf of the State. The affidavit on behalf of the State mentions that the petitioner had gone to Pakistan in may, 1952, and returned in August, 1952, without a permit. He was arrested on November 24, 1952, without any prior notice but was told at the time of the arrest that he was to be removed out of India. The petitioner filed an application through his uncle before the Judicial Commissioner, Bhopal, under article 226 on November 25, 1952, challenging. the order. The Judicial Commissioner granted an interim stay order on the same day. The petition was dismissed on February 23, 1953, and the interim order was vacated on March 10, 1953. It is admitted that an oral request was made to the Judicial Commissioner for leave to appeal to this court and it was prayed that pending the grant of leave the order of stay should continue. Leave was refused on the same day and the stay order was vacated. There is an affidavit by the Chief Secretary of the State admitting that the petitioner on, the same day banded an application to the Superintendent of Jail 945 addressed to this court. The Superintendent of Jail sent it to the Chief Secretary on March 13, 1953. It was put up before him on the 14th when he forwarded it to the Law Department for opinion on March 16. The petition was returned to him on the 19th with the remark that it should be forwarded to the Supreme Court. It was sent to this ' court on ;March 22. On the same day a telephonic communication was sent, by the Registrar of this court through the States Ministry directing that the petitioner should be detained if he was still in India, but it appears that the petitioner had been handed over to the Rajas than Police at Kotah on March 12, 1953, and a reply was received by the Inspector General of Police, Jaipur, that the petitioner had crossed the border on March 18, 1953. The Superintendent of Jail has also filed an affidavit supporting the Chief Secretarpand has admitted that it was wrong on his part not to have sent the, petition submitted by the prisoner immediately to this court and that he in good faith believed that as the order for stay had been vacated by the Judicial Commissioner, he should first send it to the Registrar of that court. It is obvious that the Superintendent was grossly in error and his action in not submitting the petition resulted in the unlawful removal of the petitioner out of the country. He, has made amends by tendering an unqualified apology and nothing further need be said about it. In Ebrahim Wazir Mavat vs The State of Bombay and Others and Noor Mohammad Ali Mohammad vs The State of Bombay and Others (Criminal Appeals Nos. 65 and 66 of 1952) in which we have just delivered judgment we have held that section 7 of the Act is void as against a citizen of India being. , an encroachment on his fundamental right under article 19 (1) (e) of the Constitution. Following that decision we hold that the order of removal of the petitioner is liable to be set aside. Mr. Umrigar, who appeared for the petitioner, pointed out that the Judicial Commissioner has already held that the petitioner is a citizen of India and that it will serve no useful purpose by remanding 946 the case to him for an inquiry into the question. The Solicitor General on behalf of the Union of India has read to us the order of the Judicial Commissioner and admits that this is so. It is, therefore, not necessary to adopt the course that we have taken in the aforesaid a peals involving the validity of section 7. We accordingly hold that the order passed against the petitioner is void and set it aside. Mr. Umrigar requests that the order should be communicated to the petitioner through the High Commissioner for India in Karachi to whom the petitioner sent a representation praying that he should be allowed to return to India. This request is granted. Criminal Appeals Nos. 65 and 66 of 1952, No, 5 of 1953 and No. 19 of 1953 and Petitions No. 170 of 1952, No. 19 of 1953 and No. 57 of 1953. DAs J. I regret I am unable to agree with the judgment just delivered. Four Criminal Appeals namely, Criminal Appeals Nos. 65 and 66 of 1952, No. 5 of 1953 and No. 19 of 1953 and three Criminal Miscellaneous Petitions, namely Petition No. 170 of 1952, No. 19 of 1953 and No. 57 of 1953, were posted for hearing and were heard by us one after another. In each one of those appeals and petitions the appellants or the petitioners, as the case may be, challenged the constitutional validity of the Influx from Pakistan (Control) Act,1949 (Act XXIII of 1949). Learned advocate appearing in support of petitions No. 170 of 1952 and No. 19 of 1953 asked for leave to withdraw them with liberty to file fresh ' petitions in the High Court. Such leave having been given nothing further need be said about those two petitions. The facts of each of the remaining appeals and the remaining petition have been set out in the judgment just delivered,, and need not be repeated. Suffice it to say that the appellants in Appeals Nos. 65 and 66 of 1952 first came to India from Pakistan on temporary permits issued by the High Commissioner for India in Pakistan but stayed on after the expiry of the 947 period and were convicted under section 5 of the Act. Later on they returned ' to Pakistan on a temporary permit issued by the High Commissioner for Pakistan in India and eventually came back to India on a permanent permit issued by the High Commissioner for India in Pakistan. That permanent permit was cancelled on the. allegation that it had been obtained on the strength of a "no objection" certificate which had been obtained by them by the suppression of material facts, namely, that they had previously come. to India on a temporary permit. The appellant in Appeal No. 5 of 1953 came to India from Pakistan on a permanent permit which was subsequently can celled on the allegation that it had been obtained by fraud. The appellant in Appeal No. 19 of 1953 came to India from Pakistan without any permit and was prosecuted and convicted under section 5 of the Act and later on arrested and sent back to Pakistan. The petitioner in Petition No. 57 came to India without any permit at all. On this petitioner as well as on the appellants orders had been made under section 7 of the impugned Act to the effect that unless they left India within the time specified in the respective orders they would be bodily removed from India. These orders were made on the ground that they had entered India in violation of section 3 of the Act and/ or the rules and order made thereunder. Each of these persons claimed that they were citizens of India and complained that the orders made against them violated their fundamental rights under Chapter III of the Constitution of India. It will be recalled that on the 15th August, 1947, there was a partition of India and two Dominions were formed under the Indian, Independence Act, 1947. A grave emergency arose on the partition of India resulting in mass migration of population from one Dominion to the other accompanied by riots, arson, murder, rape and loot. Intense bitterness and hatred were generated in the minds of the people of one Dominion against those of the other Dominion. Even in one Dominion there was suspicion in the 948 minds of the members of one community against those of the other. In those circumstances the uncontrolled and indiscriminate entry of persons, Hindu or Muslim, from Pakistan into India was naturally regarded as fraught with the possibility of espionage and sabotage the prevention of which was essential for the security of the Dominion of India. Further an uncontrolled entry of large numbers of people was calculated to place and in fact placed a tremendous strain on the economy of India and on the law and order situation in the country. It was in order to prevent such result that it was necessary to exercise some control over such influx of persons from Pakistan into India. Accordingly, the Influx from West Pakistan (Control) Ordinance (XVII of 1949) was promulgated on the 19th July 1948, by the Governor General in exercise of the powers conferred on him by section 42 of the Government of India Act, 1935. The preamble to that Ordinance recited that an emergency had arisen which made it necessary to control the admission into and regulate the movements in India of persons from Pakistan. Thereafter the Influx from Pakistan (Control) Ordinance (XXXIV of 1948) was issued on the 10th November, 1948, replacing the earlier Ordinance. This Ordinance applied to persons entering into India from both West Pakistan and East Pakistan. It substantially reproduced all the sections of the previous Ordinance . Finally, on the 22nd April, 1949, the Influx from Pakistan (Control) Act (XXIII of 1949) replaced the second Ordinance. Sections 3 and 7 of this Act substantially reproduced the provisions of sections 3 and 7 of the Ordinance. The Permit System Rules of 1948 were replaced on the 20th May, 1949, by the Permit System Rules of 1949. This Act, however, was repealed on the 15th October, 1952, by Act LXVI of 1952. Section 3 of this repealing Act, however, expressly preserved the application of section 6 of the . Although the Influx from Pakistan (Control) Act, 1949 has been repealed and the number of persons who, like the appellants and the petitioners before us. are affected by that Act is small, nevertheless the matter has to 949 be scrutinised closely, for our decision may conceivably affect the passport regulations which have replaced the permit system. The contention advanced in these appeals and the petition is that sections 3 and 7 of the Act have, since the commencement of the Constitution, become void in that they violate the fundamental rights guaranteed by articles 14 and 19(1) (d) and (e) of the Constitution. The provisions of these two sections, which have been sufficiently set out in the judgment just delivered, will at once show that they applied to all persons coming from Pakistan,, whether they were citizens or noncitizens and irrespective of the community to which they belonged or the religion which they professed. It will also appear that, as regards citizens, they did not touch all citizens but affected only such of them as came from Pakistan, whether they were Hindus, Muslims or Christians. It is, therefore, quite clear that the Act applied to a small well defined class of persons who were grouped together on an obviously reasonable basis of classification as explained in the previous decisions of this court. In this view of the matter no question of unconstitutional discrimination can arise at all and, indeed, the plea based on the equal protection clause of the Constitution has not been seriously pressed. The main contest has centred round the question whether these two sections offend against the provisions of article 19(1)(d) and (e) of the Constitution. The learned Solicitor General appearing for the respondents contends that those sections are protected by article 19(5) as being reasonable restrictions on the exercise of the rights guaranteed by sub clauses (d) and (e) of clause (1) of that article. In State of Madras vs V. G. Row (1) Patanjali Sastri C.J. observed: " It is important in this context to bear in mind that the test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as, applicable to all cases. (1) at p. 607. 123 950 The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the,judicial verdict. In evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision should play an important part, and the limit to their interference with legislative judgment I in such cases can only be dictated by their sense of responsibility and self restraint and the sobering reflection that the Constitution is meant not only for people of their way of thinking but for all, and that the majority of the elected representatives, of the people have, ' in authorising the imposition of the restrictions, considered them to be reasonable." The impugned sections have, therefore, to be examined in the light of the above observations. I find nothing unconstitutional about section 3 of the impugned Act It does not debar the entry of any person absolutely. It only requires that a person entering India from any place in Pakistan must be in possession of a permit or a valid passport or be exempted from such requirements. Passport regulations obtain in every civilized country including even those the constitutions whereof confer similar fundamental rights on their citizens, e.g., Switzerland (articles 43 45), Wiener Germany (article III), Czechoslovakia (article 108), Jugoslavia (article 10), Danzig (article 75) and Albania (section 202). Such regula tions serve to check up the persons who enter the territories of the State and are necessary for the safety of the State. Seeing that such regulations obtain everywhere and have a definite utility for the protection of the general public by securing the safety of the State, I have no manner of doubt in my mind that such restrictions as are. contemplated by section 3 must be regarded as reasonable restrictions permissible under 951 clause (5) of article 19 of the Constitution. Indeed, the objection of section 3 has not been seriously pressed before us. The main objection urged by learned counsel appearing in support of these appeals and petitions was directed to the question of the validity of section 7. In the ' first place, it is clear that no objection can be taken to section 7 in so far as it affected persons who were 'not citizens of India, for article 19 guarantees certain fundamental rights to the citizens of India only. In the next place, this section did not affect all citizens but touched only a well defined small class of citizens, namely, those who went to Pakistan and intended to return to India. The question is whether qua these citizens section 7 can also be regarded as a reasonable restriction within the meaning of clause (5) of article 19. The High Court of Bombay has held, and in my opinion quite correctly, that the provisions of section 7 cannot but be regarded as consequential to the provisions of section 3. Suppose at the check post a person from Pakistan, whether a, citizen or not, tried to cross the border without a permit. Surely, the officer at the check post would have been well within the law to prevent a violation of section 3 of the Act and with that end in view to prevent that person, who had no permit, from crossing the border and entering India. I have no doubt that the officer might also have prevented a person from Pakistan from crossing the border if he suspected that the permit produced by the person was forged or otherwise irregular and left him to take up the matter with the higher authorities from Pakistan. Suppose the man who sought to enter India without a permit or with a permit which was suspected to spurious forcibly crossed the border and took a step or two on our side of the line, the Indian officer would certainty have been entitled to throw him back to the other side of the line. Surely, such a person could not be permitted to take advantage of his own wrong and could not be heard to say that, in such circumstances, he had, by his wrong doing, acquired a better right than the person 952 who had not the temerity to violate the provisions of section 3. If this is so then, logically, I can see no difference if the man ran into the Indian territory for some distance and the Indian officer ran after him, overtook him and took him back to the check post and pushed him out of our side of the line. It is, futile,, in such a situation, to expect or to say that the officer should have held a judicial enquiry and come to a judicial decision after hearing an argument as to the validity of the permit or as to the status of the permit holder or the fundamental rights of a, citizen Of India to move freely in India and to settle anywhere he liked in India. The truth and substance of the matter are that in acting in the way indicated above the officer simply performed an executive act and prevented a person who held no permit or held a permit which appeared to the officer to be spurious from entering India from Pakistan in violation of section 3 of the Act. To throw out such a person was not. to inflict any punishment on him or to do him any greater injury than what was imposed on or done to a person who, not having a permit, was stopped at the check post and not allowed to enter India at all. The man thus thrown out was placed under no greater disability than the man who had initially been prevented from entering India at the check post barrier. In both cases such a person might, while staying in Pakistan, have taken steps to obtain a permanent permit upon proof of his status as an Indian citizen and if such permit was illegally withheld from him he might have through some agent in India taken proceedings in Indian courts ' for appropriate reliefs. To my mind the position of the person who,entered India on a temporary permit but who, in violation of the rules or order made under the Act stayed on after the period of the permit expired, was, as from that date, logically the same as that of the person who entered India without a permit. To arrest such a person, after the expiry of the period of the temporary permit, with a view to sending him back back to where he came from and to actually send him back there did not involve or 953 constitute a judicial act at all but Was a rough and ready executive act for enforcing and giving effect to the provisions of section 3 of the Act. To arrest and send such a person back to Pakistan was not to inflict a punishment but was only to restore the status quo and to put him back to the position he would have been in but for his illegal act. In my opinion the act, authorized by section 7 was in essence.a purely executive act for implementing the provisions of section 3. Without such a provision it would have been impossible for the State to control the admission into India of persons from Pakistan and to prevent the concomitant dangers referred to above. The act authorised by the section being an executive act, discretion had perforce to bib left to the executive Government which, by reason of the information available to it" was in a much better position than the courts to know and judge the antecedents of such a person and his ultimate purpose. ' Suppose an Indian, citizen, no matter whether he was a Hindu or a Muslim, had entered India from Pakistan without a permit and suppose he was, upon confidential reports which: could not be safely disclosed, suspected to be engaged in espionage in the interests of Pakistan, would it have been safe enough in those hectic days to have only prosecuted him under section 5 and inflicted on him a fine of rupees one thousand or a term of imprisonment not exceeding a year and then to have left him free, after the term of imprisonment was over, to surreptitiously carry on his nefarious activities of espionage and sabotage against our State while embarking upon a protracted judicial enquiry to ascertain the truth or* otherwise of his claim to Indian citizenship ? It cannot ,be overlooked that there are. long common borders between Pakistan and India both on the west and on the east. The Kashmir situation had also aggravated the emergency brought about by the partition of India. Having regard to all, the circumstances, the tension, bitterness and hatred between the two countries that were generated at,the time of the partition and all which must enter into the judicial verdict, the provisions of section 7 appear to me to have been eminently reasonable restrictions imposed in the interests of the 954 general public upon the exercise by Indian ' citizen coming from Pakistan without a permit of the rights conferred by article 19(1)(d) and (e) of the Constitution. The Indian citizen who was thrown out for not having the proper permit or who was suspected to have violated the provisions of the Act was placed in no worse position than an Indian citizen who, not having a permit, had not been permitted to enter into India at all. They were by no means without remedy. They could from the other side of the border take steps under the rules to obtain valid permanent permits upon proof of their citizenship of India and if such permits were. illegally withheld from them they could move the appropriate High Court under article 226 or even this court under article 32 while they were outside India and might, on proof of their citizenship, have got appropriate writs or orders directing the State or its officers to issue suitable permits and to desist from otherwise preventing them from entering India or interfering with their movement while in India. It is said that if such a person would have been entitled to a permit on proof of his status as an Indian citizen then why should he have Been thrown out at all unless and until he failed to establish his claim to Indian citizenship ? There occur to my mind several answers to this question. In the first place, it would have been putting a premium on wrong doing. In the second place, the person would have been left free to carry on his secret activities, if any, while judicial proceedings would have been going on for ascertaining his status. In the third place, if the person could not be thrown out before his status had been judicially determined there would have been no incentive on his part to take proceedings in court to establish his status and it would have thrown upon the State the duty of initiating proceedings and of discharging the onus of proving the negative fact, of his not being a citizen of India. In view of all the circumstances prevailing at the time the law was enacted and remained in force and in view of the considerations herein before alluded to I have no ' doubt in ray mind except What 955 arises out of my respect for the opinions of my Lord and other learned brothers that the provisions of section 7 were necessary and reasonable and fell within clause (5) of article 19. In my judgment the four appeals as well as Petition No. 57 of 1952 should be dismissed. Appeals allowed, cases remanded. Agents for the appellants and petitioners: section section Shukla, R. A. Govind, Sardar Bahadur and P. K. Chatterji. Agents for the respondents: G. H. Rajadhyaksha and C. P.Lal.

The Metal Corporation of India (Acquisition of Undertaking) Act, 1965, was enacted for acquiring in the public interest, the undertaking of the Metal Corporation of India. The Act provided that the Corp oration was to vest in the Central Government on the commencement of the Act; and that in the absence of an agreement between the Government and the Corporation, the compensation payable to the Corporation was to be an amount equal to the sum total of the value of the properties and assets of the Corporation on the date of the commencement of the Act calculated in accordance with the provisions of Paragraph 11 of the Schedule to the Act, less the liabilities on the said date, calculated in accordance with the provisions of Paragraph III of the Schedule. One of the clauses laying down principles of compensation, viz., clause (b) of para 11 is in two parts. The first part provides for the valuation of plant, machinery or other equipment which has not been worked or used and is in good condition, and the second part provides for the valuation of any other plant, machinery or equipment. The former have to be valued at the actual curt incurred by the Corporation in acquiring them 'and the latter, at the writtendown value determined in accordance with the provisions of the Income of the constitutional validity of the Act. HELD : The Act contravened article 31(2) of the Constitution and was therefore void. [265 C] Under article 31(2), no property shaft be compulsorily acquired except under a law which provides for compensation and either fixes the amount of compensation or specifies the principles on which and the manner in which the compensation is to be determined and given. If the compensation is illusory or if the principles prescribed are irrelevant to the value of the property at or about the time of its acquisition, the law is bad. The law, to justify itself, has to provide for the payment of a "just equivalent" to the property acquired, or lay down principles which are not arbitrary but which are relevant to the fixation of compensation. It is only when the principles stand this test, that the adequacy of the resultant compensation falls outside judicial scrutiny under the second limb of article 31(2). In the instant case, the two principles laid down in cl. (b) of Para 11 of the Schedule are irrelevant to the fixation of the value of the machinery as on the date of acquisition. In the case of unused machinery, if it was Purchased in 1950 for Rs. 100 and, for some reason, had not been used in the working of the Undertaking but had been maintained in good condition, it may cost Rs. 1000 in 1965. A compensation of Rs. 100 for that machinery could not be said to be a "just equivalent" of it. Similarly, in the case of used machinery, if it was purchased in 1950 for Rs. 1000, 256 the aggregate of all the depreciation allowances made year after year may exhaust the sum of Rs. 1000 in ten years, with the result that, under the Income tax Act, the assessee will not be entitled to any depreciation after the tenth year. It could not, however, be said that after the tenth year, the machinery had no value and that the owner was not to be given any compensation. Indeed, such a machinery, because of subsequent rise in prices, may be sold in 1965 for Rs. 10,000. Further the constitutional invalidity of cl. (b) of Para II of the Schedule affect& the totality of the compensation payable; for, machinery is the major part of the undertaking, the entire Undertaking is acquired as a unit, and, in the context of compensation for the entire Undertaking, the clauses of Para H of the Schedule to the Act are not severable. Therefore, the mere fact that in regard to some parts of the Undertaking, the principles laid down in Para H provide for compensation does no affect the question, especially when it has not been shown that the working out of any one or more of the principles would give a higher compensation to some parts of the Undertaking so that the excess paid under one head would offset the deficiency under another head. [261 F H; 262 B; 264 B C, F H; 265 A El Vajravelu vs Special Deputy Collector, ; and Jeejeebhoy vs Assistant Collector, ; , followed.

Appeals Nos. 2459 and 2460 of 1968 and 1161 and 1162 of 1971. Appeals by certificate/special leave from the judgment and order dated April 1, 1968 of the Calcutta High Court in Income tax Reference No. 163 of 1964. N. A. Palkhivala, T. A. Ramachandran and D. N. Gupta, for the appellant (in all the appeals). Jagadish Swarup, Solicitor General, B. B. Ahuja, R. N. Sach they and B. D. Sharma for the respondent (in all the appeals). The Judgment of the Court was delivered by Hegde, J. The first two appeals have been brought by certi ficate and the other two by special leave. The later two appeals came to be filed because the certificates on the basis of which the earlier appeals were brought, were found to be defective inasmuch as the High Court had not given any reason in support of those certificates. Hence it is sufficient, if we deal with the later two appeals. The appellant is a non resident British Shipping Co. whose ships ply in waters all over the world including the Indian waters. For the assessment years 1960 61, and 1961 62 (the relevant accounting years being calendar years 1959 and 1960), the Income tax Officer computed its total income taxable under the 12 L 256 Sup CI/72 170 Indian Income tax Act, 1922 (which will hereinafter be referred to as the, Act) by taking into account the ratio certificates issued by the Chief Inspector of Taxes, U.K. which were based on the assessments made on the appellant in U.K. During the relevant period, there was in U.K. "investment allowance" corresponding to "development rebate" under the Act. The certificates issued by the Chief Inspector contained the percentage ratio of the total world profits of the appellant to its world earnings and similarly the percentage ratio of the wear and tear allowance and the investment allowance to its total world earnings. In making the assessment the Income tax Officer purported to proceed on the basis of rule 33 of the Indian Income tax Rules 1922. The said rule reads : "In any case in which the Income tax Officer is of opinion that the actual amount of the income, profits or gains accruing or arising to any person residing out of the taxable territories whether directly or indirectly through or from any business connection in the taxable territories, or through or from any property in the taxable territories or through or from any assets or source ,of income in the taxable territories, or through or from any money lent at interest and brought into the taxable territories in cash or in kind cannot be ascertained, the amount of such income, profits or gains for the purposes of assessment to income tax may be calculated on such percentage of the turnover so accruing or arising as the Income tax Officer may consider to be reasonable, or on an amount which bears the same proportion to the total profits of the business of such person (such profits being computed in accordance wi th the provisions of the Indian Income tax. Act), as the receipts so accruing or arising bear to the total receipt of the business, or in such other manner as the Income tax Officer may deem suitable. " The Income tax Officer proceeded to assess the appellant assessee on the second of the three bases mentioned in rule 33; but in computing Indian earnings, he did not include the destination earnings ' received in India ie.freight received in Indian ports in respect of cargo loaded at non Indian ports nor did he take into account the investment allowance granted to the appellant in its U.K. assessments. Aggrieved by the order of the Income tax Officer, the assessee took up the matter in appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner accepted the contention of the assessee as regards the inclusion of the desti 171 nation earnings in the computation of the *Indian earnings of the assessee but rejected its contention as regards the investment allowance. Aggrieved by the order of the Appellate Assistant Commissioner both the assessee as well as the Revenue appealed to the income tax Appellate Tribunal. The Tribunal allowed the appeal of the assessee and dismissed that of the Revenue. Thereafter at the instance of the Revenue, the following two questions of law were referred to the High Court under section 66(1) of the Act. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the destination earnings collected in India should be considered as part of the Indian earnings in determining the assessee 's Indian income under Rule 33 of the Income tax Rules ? Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of the assessee for the investment allowance under the U.K. Act (corresponding to the development rebate under the Indian Income tax Act, 1922) in the compu tation of its total world income for the purpose of determining the assessee 's Indian income under rule 33 of the Income tax Rules, 1922 ?" The High Court answered the first question in favour of the, assessee and the second in favour of the Revenue. Hence these appeals by the assessee. The Revenue has not appealed against the decision of the High Court as regards Question No. 1. Hence we have only to consider whether the decision of the High Court relating to Question No. 2 is in accordance with law. At the commencement of his arguments Mr. Palkhivala, learned Counsel for the assessee indicated that rule 33 may not be applicable to the facts of the case; but he said that for the purpose of this case, he was prepared to proceed on the basis that the said rule is the governing provision. The authorities under the Act as well as the High Court have examined the facts of this case on the basis of rule 33. The second question referred to the High Court requires the High Court to express its opinion whether on the facts and in the circumstances of the case, the Tribunal was right in allowing the claim of the assessee for the investment allowance under the U.K. Act in the computation of the total world income for the purpose of determining the assessee 's Indian income under rule 33. Under these circumstances, it would not be appropriate for, us at this stage to ignore the ,earlier proceedings and examine the case afresh on a wholly diffe 172 rent basis. Hence we have not gone into the question whether rule 33 is applicable to the facts of the case. We are proceeding on the assumption that it applies. An mentioned earlier, the assessee is a non resident. Its liability to pay tax arises under sections 3 and 4 of the Act. The total income that arose or accrued or deemed to have arisen or accrued to it in this country in the relevant previous years is liable to be taxed in this country. Section 10(2) provides for certain allowances to be deducted while computing the taxable income. Section 10 (2) (vib) deals with the development rebate. The material part of that section reads: "In respect of a new ship acquired or new machinery or plant installed after the 3 1st day of March, 1954 which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of acquisition of the ship or of the installation of the machinery or plant, equivalent to, (i) in the case of a ship acquired after the 3 1st day of December, 1957, forty per cent of the actual cost of the ship to assessee, and (ii) in the case of a ship acquired before the 1st day of January, 1958 and in the case of any machinery or plant, twenty five per cent. of the actual cost of the ship or machinery or plant ,to the assessee. " The proviso to that clause says "Provided that no allowance under this clause shall be made unless (a) the particulars prescribed for the purpose of clause (vi) have been furnished by the assessee in respect of the ship or machinery or plant; and (b) except where the assessee is a company being a licensee within the meaning of the (54 of 1948), or where the ship has been acquired or the machinery or plant has been installed before the 1st day of January, 1948 an amount equal to seventy five per cent of the development rebate to be actually allowed is debited to the profit and loss account of the relevant previous year and credited to a reserve, account to be utilised by him 173 during a period of ten years next following : or the purposes of the business of the undertaking except (i) for distribution by way of dividends or profits, or (ii) for remittance outside India as profits or for the creation of any asset outside India, and if any such ship, machinery, or plant is sold or otherwise transferred by the assessee to any person other than the Government at any time before the expiry of ten years from the end of the year in which it was acquired or installed, any allowance made under this clause shall be deemed to have been wrongly allowed for the purposes of this Act. " It may be noted that in the case. of a shipping company like the appellant before us, whose ships ply all over the world, it may not be possible to strictly comply with the provisions contained in section 4 of section 10(2). The provisions dealing with the levy of Income tax are not identical in all countries. It may well nigh be impossible for a shipping company like the appellant to rigidly comply with the requirements of the laws in force in the numerous countries where it can be said to have earned income. Possibly to get over such a difficulty rule 33 was enacted. That is how the Revenue had proceeded in assessing the appellant. Evidently in exercise of its power under section 5(8) of the Act, which says that "all officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Central Board of Revenue. ", the Central Board of Revenue had issued the notification dated February 10, 1942. Under that notification instructions had been issued to the assessing authorities, laying down the principles to be applied in assessing the foreign shipping companies. As regards the British Shipping Companies, they were directed to permit those companies "to elect to be assessed on the basis of a ratio certificate granted by the U. ' K. authorities regarding the income or loss and the wear and tear allowance". At the time that notification was issued the Act did not provide for a development rebate. Therefore that notification does not refer to any development rebate. But it is made clear by that notification that a British Shipping Company can elect to be assessed on the basis of a ratio certificate granted by the U.K. authorities regarding the income or loss which means the net income or net loss. During the relevant previous years, the Act 174 provided for deduction of the development rebate in the computation of the taxable income. During those years the U.K. Income tax Act provided for a similar allowance; but that allowance was known as investment allowance. We were informed at the bar that in those years, the percentage of devlopment rebate allowed under the Act was the same as that allowed under the U.K. law as investment allowance. In about the beginning of 1964 M/s. Turner Morrison & Co.which was the a agent of several British Shipping Companies in India appears to have written to the Board of Revenue seeking its advice as to how the British Shipping Companies could claim development rebate. In reply to that letter, the Board of Revenue wrote to them as follows "Sub: Assessment of British Shipping Companies on the basis of ratio certificates Treatment of investment allowance granted in the U.K. I am directed to reply your letter dated 8th Feb. 1957 on the above subject and to state that as the development rebate which corresponds to the investment allowance granted in the U.K. is allowed under the In dian Income tax Act from the assessment year 1956 57, there is no objection to allow the investment allowances for the purpose of the computation of the Indian Income of British Shipping Companies. This would, however be subject to the condition that the investment allowance would be permitted as a deduction only to the extent to which the rate of the allowance granted in the U.K. is not greater than the rate of development rebate allowed under the Indian Income tax Act. " We were informed that the copies of that letter were sent to the Income tax Commissioners in the various States. From this letter, it is clear that the Board of Revenue had instructed the taxing authorities to take into consideration the investment allowance granted by the U.K. authorities in computing the taxable income of the British Shipping Companies. At this stage, it is necessary to mention that the proviso to cl. (vib) of section 10(2) referred to earlier was incorporated into the Act sometime after the above instructions were issued by the Board of Revenue. The authorities under the Act have proceeded on the basis that the computation of the income of the assessee has to be made on the second of the three bases mentioned in rule 33. This assumption appears to be incorrect. Admittedly the profits of the assessee company were not computed in accordance with the provisions of the Act. That being so, the second basis mentioned 175 in rule 33 cannot be applied. This aspect was brought to the notice of the High Court. But the High Court refused to consider the same on the ground that both the Revenue as well as the assessee had proceeded before the authorities under the Act on the assumption that the second basis mentioned in rule 33 is the relevant basis. In our opinion the High Court erred in adopting that approach. The fact that the authorities under the Act as well as the parties were under a mistaken impression cannot alter the true position in law. It is obvious that that basis could not have been applied. That being so the computation of the appellant 's income had to be made either under the first basis viz. the calculation of the profits and gains on such percentage of the turnover accruing or arising as the Income tax Officer may consider to be reasonable or on the third basis i.e. 'in such other manner as the Income tax Officer may doom suitable '. From the assessment orders made by the Income tax Officer, it does not appear that in computing the taxable income of the assessee, he adopted the first basis. The most appropriate basis under which he could have computed the income was the last basis viz. "in such other manner as the Income tax Officer may deem suitable. " While adopting that basis, the Income tax Officer is not required to rigidly apply the various conditions prescribed in the Act in the matter of granting one or the other of the permissible allowances. He may adopt any equitable basis so long as that basis does not conflict either with rule ' 3 or with the instructions or directions given by the Board of Revenue. The power given to the Income tax Officer under that basis is a very wide power. That power is available not only to the Income tax Officer but also to the Appellate Assistant Commissioner and the Tribunal. As the Tribunal had determined the tax due from the appellant on the basis of the ratio certificate given by the U.K. authorities, it cannot be said that the decision reached by the Tribunal was an unreasonable one. The Tribunal 's decision accords with the instructions given by the Board of Revenue. The fact that the Proviso to section 10 (2) (vib) was incorporated into the Act after the Board issued its instructions cannot affect either the validity of rule 33 or the force of the instructions issued by the Board of Revenue because neither rule 33 nor the instructions issued were strictly in accordance with section 10(2). They merely lay down certain just and fair methods of approach to a difficult problem. The learned Solicitor General appearing for the Revenue at one stage of his arguments contended that the instructions issued 176 by, the, Board of Revenue cannot have any binding effect and those instructions cannot abrogate or modify the provisions of the Act. .But he did not contend that the Rule 33 is ultra vires the Act. The instructions, in question merely lay down the manner of applying rule 33. Now coming to the question as to the effect of instructions issued under section 5 (8) of the Act, this Court observed in Navnit Lal C. Javeri vs K. K. Sen Appellate Asstt. Commissioner Bombay : (1) "It is clear that a circular of the kind which was issued by the Board would be binding on all officers and persons employed in the execution of the Act under section5(8) of the, Act. This circular pointed, out to all the officers that it was likely that some of the companies might have advanced loans to their share holders as a result of genuine transactions of loans, and the idea was, not to affect such transactions and not to bring them within the mischief of the new provison." The directions given in that circular clearly deviated from the Provisions of the Act, yet this Court held that the circular was binding on the Income tax Officer. For the reasons mentioned I above, Civil Appeals Nos. 1161 and 1162 of 1971 are allowed and in substitution of the answer given by the High Court to question No. 2, we answer that question in the affirmative and in favour of the assessee. The assessee is entitled to its costs in those appeals both in this Court as well as in the High Court costs one set. Civil Appeals Nos. 2459 and 2460 of 1968 are dismissed as being not maintainable. In those appeals, there will be no order as to costs. G.C. C.A.s Nos. 1161 and 1162/71 allowed. C.A.s Nos. 2459 and 2460/68 dismissed.

The object of the Banking Companies Act, 1949 is to provide a machinery for expeditious and speedy termination of proceedings in liquidation and in the absence of any specific provisions of the Act to the contrary or any rules framed by the High Court under section 45 G of the Act (inserted by Act XX of 1950) the normal procedure for deciding all claims under section 45 B of the Act (inserted by Act XX of 1950) should be a summary proceeding originating with an applica tion. But the court in its discretion may think fit to direct or the rules of the High Court may provide that a suit is the proper remedy in view of the nature of claim made and the questions involved in such claim. Sree Bank vs Mukherjee ([1950] , referred to.

Civil Appeal No. 1416 of 1981. From the Judgment and Order dated 28.12.1975 of the Central Govt. Labour Court at Calcutta in Application No L.C. 28 of 1976. M.K Ramamurthi and Amlan Ghosh for the Appellants. G.B. Pai, V.S. Desai, D.N. Mukherjee, N.R. Chaudhary and R. Mukherjee for the Respondent. KHALID, J. This appeal, by special leave, by two employees of the United Bank of India at Calcutta, is directed against a decision given by the Central Government Industrial Tribunal 1059 cum Labour Court, Calcutta, on 28th December, 1979, in an application made under Section 31 C (2) of the . The claim made by them related to the bonus paid on the eve of Pooja every year which according to them was customary in nature, irrespective of profit or loss. The Labour Court after considering the evidence placed before it held that the bonus claimed could not be characterised as customary since it did not answer to the requirements of law to be customary bonus and that in the absence of an existing right to customary bonus or bonus founded on an implied agreement as a condition of service, the application made under section 33 C(2) was not maintainable and accordingly dismissed the same 3. The petitioners ' claim was attempted to be Supported by the fact that they were given one month 's pay as bonus for the years 1959 to 1963, one and half months ' for the year 1964 and two months ' pay for the years 1965 to 1974. Their further case was that this bonus was paid every year on the eve of Pooja at the rate of pay as on 1st September of the respective year and was unrelated to any profit made by the company. The payment of such bonus consecutively for 16 years without any break and unrelated to profit or loss, without its sanction either in law or any award or any written settlement, payable on the eve of the Pooja developed into a condition of service giving rise to a right and an expectancy which in law assumed the characteristics of customary bonus. This claim was resisted by the Bank on the ground that the application itself was not maintainable since the alleged right pleaded by the workmen was not a condition of service and that such a right did not exist in fact also. The conditions of service of the employees of the Bank are governed by various awards and settlements. Though there were agreements entered into between the bank and its employees on several matters there was no agreement at any time on the question of payment of bonus. Bonus was paid to its employees every year as a result of demand raised separately by them and in respect of every year there was a separate agreement with regard to bonus. It was further stated that the bonus paid was related to profit and not based on any custom 4. The Labour Court considered the correspondence that passed between the BANK and its employees and came to the con 1060 clusion that a right to customary bonus in favour of the employees of the Bank did not exist. The application was dismissed holding that on the basis of the material on record, there was no existing right to customary bonus and that the Labour Court could not either create or declare a right which was not in existence to stretch its jurisdiction under Section 33 C(2) of the . It is the correctness of this finding that we are called upon to decide in this appeal. The Counsel on both sides took us through the various letters that passed between the employees of the Bank and the Bank and brought to our notice the past history relating to the payment of bonus for a considerably long time. It is seen that the Bank had been paying bonus at the rate of one month 's salary from 1959 to 1963. This is period prior to the Bonus Act which came into force in 1965. The payment continued even after coming into force of the Bonus Act. We find from the materials on record that the above payments were not made by the bank unilaterally without any demand, unrelated to profit or loss as a customary bonus. It is true that payments were made on the eve of the Pooja. The bonus so paid was not called Pooja bonus except in 1972 when the words 'Pooja ' was mentioned at the time when the payment was made. The bonus in question was paid for the years 1958 and 1959 as a result of protracted negotiations. Bonus for the year 1962 was paid at the rate of one month 's pay on the basis of Desai award. This rate continued for the year 1.963 also. In 1964, it was at the rate of 45 days ' pay. This rate was further increased for the year 1965 to two months ' pay and this we find was as a result of the discussions held on the subject between the management and the union from time to time. The two months ' rate continued till the year 1969. In 1969, the Bank was nationalised and till 1971 bonus at the rate of two months ' basic salary was sanctioned by the Ministry of Finance and was accordingly paid to the employees. In 1972, the General Secretary of the Union claimed by a letter that the employees were getting bonus at the rate of two months ' pay at the time of Pooja, irrespective of profits and asked for an enhancement of rate of bonus. Discussions were initiated and ultimately the Bank agreed to pay an additional bonus for the year 1972 of an additional four days pay and for the year 1973 two months and 12 days and for 1974 two months and 271/2 days. We have ourselves gone through the letters which are on 1061 record that passed between the parties. The correspondence shows . that the bonus was paid from year to year pursuant to negotiations that took place between the Union of the employees and the Bank and that the rates of bonus were not uniform, but were fluctuating. The Bank had a definite case that bonus was paid out of the profits made or in anticipation of profits. The claim of the Union that it was customary and unrelated to the profits of the Bank was attempted to be made at a belated stage of the case. Before deciding the case on the above materials, it would be useful to refer to the decision of this Court in Vegetable Products Ltd. vs Their Workmen(l) where this Court has laid down the test to determine what exactly is customary or festival bonus. The tests laid down by this Court are: (I) that the payment has been made over an unbroken series of years; (2) that it has been for a sufficiently long period the period has to be longer than in the case of an implied term of employment; (3) that it has been paid even in years of loss and did not depend on the earning of profits; and (4) that the payment has been made at a uniform rate throughout. From the materials disclosed in the records, reference to which was made by us earlier, it will be evident that the bonus paid in this case does not satisfy the requirements laid down by this Court detailed above. It may be true that the payments were made in the month of September or thereabout every year, but that by itself will not make the bonus paid a customary Pooja bonus. The rate has not been uniform. The management has at all times taken the definite stand that the payment was related to profits and that it was in anticipation of making profit. The payments were made at all times pursuant to demands made by the employees. We would like to refer to only two or three letters to fortify our conclusion that the payment was pursuant to the demands of the employees. In the letter dated 20th September, 1958, addressed to the General Secretary, United Bank of India 's employees Association, the opening sentence reads as follows: "With reference to the several demands as stated in your letter dated we have agreed as follows: (1) 1062 (1) Annual bonus for the year 1958. In the letter dated September 3, 1968, written to the President of the Association and marked as confidential, it is stated that "the Bank tried to impress upon the President through a number of discussions to persuade him to revise the present system of paying bonus in September to a system after the year 's results are available and to pay the minimum as provided for in the Bonus Act then and the balance if any after the year 's profit figures are known and since the Bank did not propose to strain its relationship with the employees and as the request made was not acceptable to the employees, it was decided to pay the bonus at the rate of two months ' basic salary, as existing on 1.9.1968. " In the letter dated December 29, 1972, addressed to the General Secretary of the Association it is stated that in case of this Bank, bonus is paid on the basis of the agreement arrived at between your association and the management equivalent to two months ' basic pay. " Reference may also be made to a letter dated 17th April, 1973, by the Association to the Chairman and Managing Director of the Bank which reads as follows: ". As you know, bonus is being paid at the present rate of two months basic pay as on September 1st each year since 1964, when after a continuous struggle the original pre amalgamation rate. was restored gradually, beginning with 15 days basic pay in 1958. " In the letter addressed to the General Secretary (dated 26th August, 1973) reference is again made to the demands made by the association for additional bonus for 1972 and to the subsequent discussions and agreement for payment of bonus at the rate of two months and 12 days pay as on 1.9.1973. From the above letters it is evident that bonus was paid as a result of long discussion at every stage No bonus was paid for the years 1950 to 1958. From 1959 onwards, the rate has not been uniform. There is no evidence to show that this payment was unrelated to the profits. The letters sent by the management clearly indicated that bonus payment was related to the profits and the Bank always wanted its employees to wait for the financial position for computation of the bonus payable. The 1063 evidence in this case does not also justify inference of an implied agreement on the part of the Bank to pay bonus of a customary nature at the time of Pooja, without any relation to profits as a condition of service. The Labour Court has noted the fact that it was nobody 's case that bonus was ever paid in any year of loss or that there was any year of loss and that the bank had consistently taken the position that bonus was paid out of the year 's profit in anticipation. There is one other aspect of the claim now put forward which cannot be lost sight of, which affords an additional reason to reject the contention of the appellants. The respondent is a nationalised bank. Roughly in all there are 25 nationalised banks. The concept of any customary bonus is unknown to nationalised banks. All the nationalised banks are wholly owned undertakings of the Government of India in the matter of bonus, the employees of the nationalised banks must be dealt with on a common denominator. If therefore the contention of the appellant were to prevai the employees of the respondent, which is only one amongst many nationalised bank, would enjoy an undeserved advantage compared to their counterparts in other nationalised banks and even in the Other branches of the respondent bank and may become a cause of disharmony and inequality. Therefore in larger public interest also, the demand for customary bonus otherwise found to be untenable, must be negatived. On a careful consideration of the facts and circumstances of the case disclosed, we find that the appellants have not succeeded in persuading us to disagree with the findings of the Labour Court or to satisfy us that the bonus that they received had the characteristic of customary bonus as known to law and that therefore they were entitled to the quantification of that amount under Section 33 C (2) of the , on the basis of the existence of a legal right in them. The appeal has, therefore, to fail and is dismissed with out any order as to costs S.R. Appeal dismissed.

"Excise duty" as defined in section 2(10) of the A.P. Excise Act, 1968 is leviable on the manufacture of liquor and the manufacturer cannot remove the same from the distillery unless the duty imposed under the Excise Act has been paid. Buyers of Indian liquor from the appellant 's distillery obtain distillery passes for release of liquor after making payment of excise duty and present the same at the distillery there upon the bill of sale or invoice is prepared by the distillery showing the price of liquor but excluding excise duty. The appellant 's books of account also did not contain any reference to excise duty paid by the purchaser. The appellant, there ore, paid sales tax under the Andhra Pradesh General Sales Tax Act, 1957 on the basis of turnover which excluded excise duty. This position was not accepted by the Sale Tax Authorities and the matter was contested right upto the Supreme Court. The Supreme Court in Mc Dowell & Company Ltd. etc. vs Commercial Tax Officer VIIth Circle, Hyderabad, etc. reported in ; held that the Sales Tax Authorities were not competent to include in the "turnover" of the appellant, the excise duty which was not charged by it, but was paid directly to the Excise 792 Authorities the buyers of the liquor, inasmuch as the excise duty did not go into the common till of the appellant and did not become a part of the circulating capital. After the judgment of the Supreme Court Rules 76 and 79(1) of the A.P. Distillery Rules were suitably amended with effect from August 4, 1981. Amended Rule 76(a) provides that "No spirit of liquor" manufactured or stored shall be removed unless the Excise duty specified in rule 6 has been paid by a holder of D 2 licence before such removal and the amended rule 79(1) provides that on payment of the excise duty by the holder of D 2 licence a distillery pass for the removal of spirit fit for human compensation may be granted in favour of any of the named persons therein. The appellant, being a D 2 licence holder was served with a notice, on the basis of the amended provisions, by the respondent proposing to include a sum of Rs. 4,49,09,532.40 representing the excise duty paid directly by buyers of appellants ' liquor in the appellants, turnover for a part of the year 1982 83, Thereupon, the appellant again moved the High Court for quashing the said notice. The High Court considered the effect of the amended Rules and held that the primary liability to pay excise duty was indisputably of the holder of the D 2 licence. The High Court dismissed the writ petition on the findings (a) that the turnover related to liquor; and (b) that the excise duty which was payable by the appellant but had by amicable arrangement been paid by the buyer was actually a part of the turnover of the appellant and was, therefore, liable to be so included for determining liability for sales tax. When leave was granted by a Division Bench of the Supreme Court to appeal against the judgment of the High Court, the correctness of the decision in appellants ' case reported in ; , was doubted and the matter was referred to a larger Bench. Dismissing the appeal, the Court, ^ HELD: (Per Chinnappa Reddy, J. (concurring) 1.1 Much legal sophistry and Judicial exposition both in England and India have gone into the attempt to differentiate the concepts of tax evasion and tax avoidance and to discover the invisible line supposed to exist which distinguishes one from the other. Tax avoidance, it seems, is legal; tax evasion is illegal. Though initially the law was, and law still is, there is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothings to be implied", during the period between the two world wars the theory came to be propounded and developed that it was perfectly open for persons to evade (avoid) income tax if they could do so legally. In the wake of World War II huge profiteering and racketeering became the order of the day, something which persists till today but on a much larger scale. Therefore, the attitude of the entire English Courts towards avoidance of tax perceptibly changed and hardened, The march of the law against Tax avoidance schemes des 793 cribed as magic performance by lawyer turned magician continued and then came a significant departure from the West mininister and the Fisher Executors principle in 1982 and finally "the ghost of West minister" has been exercised in England. Thus, in the very country of its birth, the principle of West minister has been given a decent burial and in that very country where the phrase "tax avoidance" originated the judicial attitude towards tax avoidance has changed and the smile, cynical or even affectionate though it might have been at one time, has now frozen into a deep frown. The courts are concerning themselves not merely with the genuineness of a transaction, but with the intended effect of it for fiscal purposes. No man now can get away with a tax avoidance project with the mere statement that there is nothing illegal about it. [797 G H, C, 807 A D] Inland Revenue Commissioners vs Fishers Executors, ; ; Inland Revenue Commissioners vs Duke of West minister, [19361 AC 1; Lord Howard De Waldan vs Inland Revenue Commissioners, ; Latilla vs Inland Revenue Commissioners, Griffiths vs J.P. Harrizan Ltd. ; Morgan vs Inland Revenue Commissioners, [1963] Chancery 438; Public Trustee vs Inland Revenue Commissioners, [1965] Chancery 286; Campbell vs Inland Revenue Commissioners, [1967] Chancery 651; Greenberg vs Inland Revenue Commissioners, [1971] 3 All E.R. 136; W.T. Ramsay vs Inland Revenue Commissioners, 11982] AC 300: Inland Revenue Commissioners vs Burmah Oil Company Ltd, 1982 STC 30: Furniss vs Dawson, ; ; Commissioner of Income tax, Gujarat vs A. Raman & Co., [1968]1 SCR 10; Commissioner of Income tax. Gujarat vs Kharwar, referred to. 2. The evil consequence of tax avoidance are manifold: (i) there is substantial loss of much needed public revenue particularly in a welfare State like ours; (ii) there is the serious disturbance caused to the economy of the country by the piling up of mountains of blackmoney directly causing inflation; (iii) there is "the large hidden loss" to the community by some of the best brains in the country being involved in the perpetual war waged between the tax avoider and his expert team of advisers, lawyers and accountants on the side and the tax gathered and his perhaps not so skillful, advisers on the other side; (iv) there is the "sense of injustice and inequality which tax avoidance arouses in the breasts of those who are unwilling or unable to profit by it"; and (v) last but not least is the ethics (to be precise, the lack of it) of transferring the burden of tax liability to the shoulders of the guideless, good citizens from those of the "artful doggers". [808 H, 809 A C] 3. The proper way to construe a taxing statute, while considering a device to avoid tax, is not to ask whether the provisions should be construed literally or liberally, nor whether the transaction is not unreal and not prohibited by the statute, but whether the transaction is a device to avoid tax, and whether the transaction is such that the judicial process may accord its approval to it. [809 E F] Wood Polymer Ltd. vs Bengal Hotels Limited, referred to. 794 4. It is neither fair nor desirable to expect the legislature to intervene and take care of every device and scheme to avoid taxation. It is upto the Court to take stock to determine the nature of the new and sophisticated legal devices to avoid tax and consider whether the situation created by the devices could be related to the existing legislation with the aid of 'emerging ' techniques of inter pretation, to expose the devices for what they really are and to refuse to give Judicial benediction. [809 G H 810 A] W.T. Ramsay vs Inland Revenue Commissioners, ; ; Inland Revenue Commissioners vs Burmah Oil Company Ltd. 1982 STC 30; Furniss vs Dawson, [1984] I All E.R. 530 quoted with approval. HELD: (Per Ranganath Misra, J.) 1. Tax planning may be legitimate provided lt is within the framework of law, Colourable devices cannot be part of tax planning and it is wrong to encourage or entertain the belief that it is honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. [823 H, 824 A] Commissioner of Income tax vs A. Raman & Co. (1968) 67 ITR II SC J Commissioner of Income tax, Gujarat II vs B.M. Kharwar, SC; Bank of Chettinad Ltd. vs Commissioner of Income tax, ; Jiyajeerao Cotton Mills Ltd. vs Commission of Income Tax and Excess Profits Tax, Bombay, Commissioner of Income Tax vs Sakarlal Balabhai referred to. Latilla vs I.R. quoted with approval. 2.1 The incidence of excise duty is directly relatable to manufacture but its collection can be deferred to a later stage as a measure of convenience or expediency. [815 A B] The Province of Madras vs M/s. Boddu Paidanna & Sons R.C. Jall vs Union of India, [1962] Suppl. 3 SCR 436; Re. Sea Custom Act, [1964) 3 SCR 787; M/s Guruswamy & Co. etc. vs State of Mysore & Ors. , ; Jullundur Rubber Goods Manufacturers ' Association vs Union of India & Anr. ; ; A.B. Abdul Kadir & Anr. vs State of Kerala, referred to. 2.2 On an examination of the provisions of the A.P. Excise Act, the Rules were framed thereunder and the pronouncements of the Supreme Court, it is clear, that the conclusion of the Court in Mc Dowells & Company Ltd. etc. vs Commercial Tax Officer, Vllth Circle, Hyderabad etc.; , at page 921 of [1973] 1 SCR, that intending purchasers of the Indian liquors who seek to obtain distillery passes are also legally responsible for payment of the excise duty is too broadly stated. The "duty wag primarily a burden which the 795 manufacturer had to bear and even if the purchasers paid the same under the Distillery Rules, the provisions were merely enabling and did not give rise to any legal responsibility or obligation for meeting the burden. [815 B D] The change in Rule 76 of the AP Distillery Rules has clearly affirmed the position that liability for payment of excise duty is of the manufacturer and the provisions of rules 80 to 84 do not militate against it. These rules do not detract from the position that payment of excise duty is the primary and exclusive obligation of the manufacturer and if payment be made under a contract or arrangement by any other person it would amount to meeting of the obligation of the manufacturer and nothing more. [815 D F] 2.3 The definition of "turnover", in section 2(s) of the A.P. General Sales Tax Act, which is to the effect. namely 'the total amount set out in the bill of sale (or if there is no bill of sale, the total amount charged) as the consideration for the sale or purchase of goods (whether such consideration be cash, deferred payment or any other thing or value) Including any sums charged by the dealer for anything done in respect of goods sold at the time of or before the delivery of the goods and any other sums charged by the dealer, whatever be the description, name or object thereof" clearly indicates that the total amount charged as the consideration for the sale is to be taken into account for determining the turnover. Where a bin of sale is issued (and obviously the bill has to state the total amount charged as consideration), the total amount set out therein is to be taken into account. In every transaction of sale, there is bound to be a seller at one end and a buyer at the other and transfer of title in the goods takes place for a consideration. [815 H,816 A C] 2.4 Excise duty though paid by the purchaser to meet the liability of the appellant, is a part of the consideration for the sale and is includible in the turnover of the appellant. The purchaser has paid the tax because the law asks him to pay it on behalf of the manufacturer. Here, admittedly, the bills issued by the appellant did not include the excise duty; Payment of excise duty is a legal liability of the manufacture, its payment is a condition precedent to the removal of the liquor from the distillery and payment by the purchaser is on account of the manufacturer. According to normal commercial practice, excise duty should have been reflected in the bill either as merged in price or being shown separately. As a fact, in the hands of the buyer the cost of liquor is what is charged by the appellant under its bill together with excise duty which the buyer has directly paid on seller 's account. The consideration for the sale is thus the total amount not what is reflected in the bill. [818 C F] 2.5 True, the excise duty component of the price would not be an addition to the coffers of the dealer, as it would go to reimburse him in respect of the excise duty already paid by him on the manufacture of the goods. But even so, it would be part of the sale price because it forms a component of the consideration for the sale of the goods that the amount representing excise duty would be payable by the purchaser, There is no other manner of liability, statutory or 796 otherwise, under which the purchaser would be liable to pay the amount of excise duty to the dealer. And on this reasoning, it would make no difference whether the amount of excise duty is included in the price changed by the dealer or is shown as a separate item in the bill, The position is not different when under a prior agreement, the legal liability of the manufacturer dealer for payment of excise duty is satisfied by the purchaser by direct payment to the excise authorities or to the State exchequer. [816 G H, 817 A D] 2.6 The conclusion reached in the appellants ' case in ; on the second aspect of the matter namely, when the excise duty does not go into the common till of the assessee and it does not become a part of the circulating capital, it does not constitute turnover, is not the decisive test for deter mining whether such duty would constitute "turnover". The relevant consideration is not whether the law permits the incidence of the duty to be passed on to the purchaser but whether there is a prohibition against passing of it. If there is no bar, the incidence would be passed on to the purchaser in accordance with normal commercial practice. [819 A C 821 B C] The Province of Madras vs M/s. Boddu Paidanna & Sons, ; RC Jall vs Union of India, [1962] Suppl. 3 SCR 436; Re. Sea Customs Act; , ; M/s, Guruswamy & Co. etc. vs State of Mysore & Ors, ; jullundur Rubber Goods Manufacturers ' Association vs Union of India & Anr. ; ; A.B. Abbul Kadir & Ors. vs State of Kerala, referred to. Hindustan Sugar Mills vs Rajasthan State, [1979] I SCR 276 applied. Paprika Ltd. & Anr. vs Board of Trade, []944] All. E.R. 372; Love v, Norman Wright (Builders) Ltd. [1944] I All E.R. 618 quoted with approval. M/s George Oakes(P) Ltd. vs The State of Madras, ; , Anand Swarup Mahesh Kumar vs The Commissioner of Sales Tax, ; discussed and distinguished. 3.A stand which has not been taken in the writ petition before the High Court cannot be allowed to be taken in the Supreme Court. Here the contention based on item 26 of the amended First Schedule to the Sales Tax Act that the appellant had already paid tax on the basis of 50 p. in the rupee on the fooling that the consideration for its liquor did not include duty of excise pay able under the Excise Act and the appellant cannot, therefore, be made liable for sales tax on a different footing cannot be sustained. Such a stand had not been taken in the writ petition before the High Court and there has been no 797 factual examination of the position as to whether the classification indicated is not intended to cover a totally different situation. Further for resolving the dispute as to whether excise duty is a part of the turnover, reference to the Schedule is indeed wholly irrelevant. [820 A D] George Oakes (P) Ltd. & Ors. vs The State Madras, 13 STC 98, distinguished.

ION: Criminal Appeal No. 223 of 1959. Appeal by special leave from the judgment and ordered dated April 14, 1959, of the former Bombay High Court (Rajkot Branch) at Rajkot in Criminal Appeal No. 84 of 1958. Nur ud din Ahmed and K. L. Hathi for appellant. H. R. Khanna and R. H. Dhebar, for respondent. January 24. The Judgment of the Court was delivered by KAPUR, J. The appellant and two others were convicted by the Additional Sessions Judge, Gohilwad, under sections 302 and 201 of the Indian Penal Code for the murder of Kanji and they were sentenced to imprisonment for life under the former section and to seven years ' rigorous imprisonment under the latter. The sentence were concurrent. On appeal the High Court set aside the conviction 728 of Nanji Ravji but upheld the convictions and sentences of the appellant and Karamshi Bhawan. The appellant has Come in appeal to this Court by Special leave. The deceased Kanji was rather an unsavoury character in village Chiroda and it is alleged that he had a illicit connection with Shrimati Shantu the sister of Karamshi and also used to follow about Smt. Baghu the sister of the appellant for a similar object. It is stated that five days before the occurrence the appellant Karsan, Karamshi, Nanji and Gumansinh approver met and decided to murder the appellant. With that object in view Gumansinh approver was to decoy the deceased to the Vadi of the appellant and there the murder was to be committed. At about sunset on March 19, 1958, the deceased was decoyed to the place as previously arranged and there he was murdered by the appellant who gave him a few blows. with a sharp cutting instrument called Dharia. According to the statement of the approver the dead body was wrapped in the scarf of the deceased and was carried by the appellant from the place of the murder to the dry bed of the river and there it was burried in a pit. Nothing was heard of the murder or of the deceased till on March 26, 1958, a brother of the deceased made a report to the police about his disappearance and that he suspected the three uncles of the appellant, subsequently the appellant and the other accused persons were taken into custody by the police. One of them while in the custody of the police, was allowed to go to the village and he asked the help of Shamji and Manilal P.Ws. He also made a confession to them and they reported the matter to the police. On March 31, 1958, Gumansinh and Karamshi made confessions 729 which were recorded by a Magistrate. Between March 26 and March 31, recoveries of various articles were made. At the instance of the appellant, it is stated, the dead body and then the head of the deceased was recovered from a distant well. At the instance of Nanji on March 28, 1958 a scarf was, discovered in the pit in which the dead body was according to the approver, buried. On the scarf, there were some hairs which on analysis by the Chemical Examiner were found to be similar to the hairs of the appellant and of the deceased. A day previous, i. e. March 27, 1958, at the instance of the appellant silver buttons which were stained with human blood were discovered from the field of the appellant at small stick like a button belonging to the deceased was also found at his instance. The High Court rejected the confession of Karamshi on the ground that it was not voluntary. It acquitted Nanji on the ground that there were no corroboration in regard to him of the approver 's statement, the place where the dead body was buried was not discovered at his instance, his production of stick and shirt and trousers from his house was of no consequence, and the oral evidence was contrary to the medical evidence and Karamshi 's confessional statement could not be used against Nanji. In regard to the appellant the High Court accepted the testimony of the approver as being a reliable piece of evidence. It attached no importance to the recovery of the cutting instrument, Dharia, nor to the discovery of the stick (Dhoka) at his instance. But the High Court did rely upon the discovery of the dead body of the deceased, i.e. the trunk and the head, at the instance of the appellant and of the blood stained buttons also at his instance and attached importance to scarf recovered from the pit where the dead body was alleged to have been first buried and which had hairs both of the appellant as well as of the deceased. 730 It was argued for the appellant that the evidence of the approver, even though it had been accepted as true, was not corroborated in material particulars connecting the appellant with the offence. On the other hand it was contradicted. The approver had stated that the dead body was buried in a pit in the dry bed of the river but when that pit was dug up the dead body was not found there and only a piece of ulna bone and a heel of a human foot were found and all there recoveries had been made earlier and so could not be called corroborative in material particulars. It was further submitted that there was no evidence to show as to when and how the body of the deceased was removed from the pit, dismembered and thrown into the well. The recovery of the scarf, it was pointed out, was an innocuous circumstance because on the evidence produced it had not been shown to belong to the appellant but to his father and the evidence of the Chemical Examiner was not sufficient to prove that the hairs on the scarf were of the appellant or of the deceased because the Chemical Examiner was certainly no expert on this matter and his evidence was, not admissible under section 45 of the Evidence Act, and at the most, according to the Chemical Examiner 's report the hairs resembled those of the appellant. And secondly according to the approver the dead body of the deceased was wrapped in his own pania (scarf). It was further submitted that the statement in regard to the recovery of the trunk and the head will only show that the appellant knew where the trunk and the head were, which at the most would lead to an inference of an offence under 8. 201 and not of 8. 302. What the law requires in the case of an accomplice 's evidence is that there should be such corroboration of the material Parts of the story connecting the accused with the crime as will satisfy reasonable minds that the approver can be regarded 731 as a truthful witness. The corroboration need not be direct evidence of the commission of the offence by the accused. If it is merely circumstantial evidence of his connection with the crime it will be sufficient and the nature of the corroboration will depend on and vary with the circumstances of each case. Vemireddy Satyanarayan Reddy vs The State of Hyderabad. The confessional statement made by the approver on March 31, 1958 gave the following facts connecting the appellant with the murder. (1) The appellant gave dharia blow to the deceased. The dharia had already been discovered and it has been disregarded from the evidence by the High Court as being of no importance. The next thing stated by the approver was that the deceased 's body was tied in a pania (scarf). He did not state that the scarf in which it was bound belonged to the appellant. The next fact stated by him was that the appellant carried the body of the deceased and then it was buried in a pit and lastly he stated that the appellant had told him that the head of the deceased had been thrown into a well. None of these recoveries in the circumstances of this case are corroborative of the statement of the approver to the extent of connecting the appellant with the offence committed. On the other hand, they are somewhat contradictory of the statement because the pania (scarf) which was found in the pit has now been stated to belong to the appellant. The dead body was not found in the pit, the head had already been discovered and the trunk had also been taken out of the well. In these circumstances it was submitted that the approver 's statement cannot be said to have been corroborated in material particulars. But there are other circumstances which have to be considered even if the evidence of the approver is held not to be very helpful to the prosecution. Firstly, there is the pointing out of 732 the dead body by the appellant from the well; secondly, the discovery of the blood stained (stained with human blood) buttons at the instance of the appellant i thirdly the scarf which has been held to belong to the appellant and which was found from the pit pointed out by the co accused Nanji and fourthly by the presence of the hairs of the appellant and of the deceased on that scarf. The mere fact that the dead body was pointed out by the appellant or was discovered as a result of a statement made by him would not necessarily lead to the conclusion of the offence of murder. But there are other circumstances which have to be considered. The discovery of the buttons with bloodstains at the instance of the appellant is a circumstance which may raise the presumption of the participation of the appellant in the murder, In Wasin Khan vs The State of Uttar Pradesh (1), it was held that the recent and unexplained possession of stolen property would be presumptive evidence against a prisoner on a charge of robbery as also of a charge of murder. But it must depend upon the circumstance of each case. The third piece of evidence to be considered is the recovery of the pania i.e. scarf. No doubt there is no statement by the approver that the scarf in which the dead body was taken was that of the appellant. But a scarf has been found which the High Court has held as belonging to the appellant and hairs were found on that scarf. It was argued that the finding of the hairs was of no consequence and at least the Chemical Examiner was not he proper expert who could depose as to the similarity or other wise of the hairs. The writers on medical jurisprudence, however, have stated that from the microscopic examination of the hairs it is possible to say whether they are of the same or of different colours or sizes and from the examination it may help in deciding where the hairs come from. In 733 Taylor 's Medical Jurisprudence (1956 Edn.) Vol. 1, at page 122, sine cases are given showing that hairs were identified as belonging to particular persons. Thus, we have besides the evidence of the approver three important facts which connect the appellant with the commission of the offence. His pointing out the dead body, his pointing out the silver buttons of the deceased which were stained with human blood and the presence of his hairs on a pania (scarf) on which there were the hairs of the deceases also. In our opinion this would be sufficient evidence in the circumstances of the present case to connect the appellant with the commission of the offence. We, therefore, dismiss the appeal. Appeal dismissed.

The appellant and two others were convicted for murder under sections 302 and 201 of the Indian Penal Code. The High Court accepted the testimony of the approver as being a reliable piece of evidence. It relied upon the discovery of the dead body of the deceased at the instance of the appellant and of blood stained buttons also at his instance and attached importance to the scarf recovered from the pit where the dead body was alleged to have been first buried and which had hairs both of the appellant as well as the deceased. The appellant contended that the evidence of the approver, even though it had been accepted as true, was not corroborated in material particulars connecting the appellant with the offence. None of the recoveries are corroborative of the statement of the approver to the extent of connecting the appellant with the offence committed; on the other hand they are somewhat contradictory of the statement. The evidence of the Chemical Examiner was not sufficient to prove that hairs on the scraf were of the appellant or of the deceased because the Chemical Examiner was no expert on this matter and his evidence was not admissible under section 45 of the Evidence Act and, at the most, according to the Chemical Examiner the hairs resembled those of the appellant. ^ Held, that where the evidence of the approver is held not to be very helpful to the prosecution other circumstances 727 besides the evidence of the approver has to be considered. The mere fact that the dead body was pointed out by the appellant or was discovered as a result of a statement made by him would not necessarily lead to the conclusion of the offence of murder. In the present case beside the evidence of the approver, the appellant 's pointing out of the dead body, his pointing out the silver buttons of the deceased which were stained with human blood and the presence of his hairs on a pania (scraf) on which there were the hairs of the deceased also, are important facts which are sufficient evidence to connect the appellant with the commission of the offence. Held, further, that writers of medical jurisprudence have stated that from microscopic examination of the hairs it is possible to say whether they are of the same or of different colours or sizes and from the examination it may help in deciding where the hairs come from. Vemireddy Satyanarayan Reddy vs State of Hyderabad, ; and Wasim Khan vs State of Uttar Pradesh, [1956] S.C.R. 191, relied on.

ION: Criminal Appeal No. 15 of 1955. Appeal by special leave from the judgment and order dated the 24th March, 1953 of the Calcutta High Court in Criminal Appeal No. 94 of 1952 arising out of the Judgment and order dated the 22nd April 1952 373 of the Court of Sessions Judge, Murshidabad in Sessions Trial No. 1 of 1952. Jai Gopal Sethi, (C. F. Ali and P. K. Ghosh, with him) for the appellants. B.Sen, (I. N. Shroff, for P. K. Bose, with them) for the respondent. April 18. The Judgment of the Court was delivered by JAGANNADHADAS J. This is an appeal by special leave against the judgment of the High Court of Calcutta confirming the conviction and sentence of each of the two appellants before us, by the Sessions Judge of Murshidabad. The appellants were tried on a charge under section 302/34 of the Indian Penal Code by the Sessions Judge with a jury. The jury returned a unanimous verdict of guilty against each under the first part of section 304 read with section 34 of the Indian Penal Code. The learned Judge accepted the verdict and convicted them accordingly and sentenced each of the appellants to rigorous imprisonment for ten years. In order to appreciate the points raised before us, it is desirable to give a brief account of the prosecution case. The two appellants jointly made a murderous assault on one Saurindra Gopal Roy at about 6 30 p.m. on the 3rd November, 1951. There was, owing to litigation, previous enmity between the deceased and the appellants. All of them belonged to a village called Mirzapur which is within the police station Beldanga, district Murshidabad. The deceased along with two friends of his, of the same village, examined as P.Ws. 1 and 2, attended a foot ball match that evening at Beldanga. The match was over by 5 p.m. and all the three of them were returning together to their village. In the course of the return they were passing at about 6 30 p.m. through a field, nearly half a mile away from the village. The two appellants each having a lathi and a Hashua (sickle) in his hand, emerged from a bush nearby and rushed towards the deceased and his companions. P.W. 1 49 374 was first struck with a lathi and thereupon both P.Ws. 1 and 2 moved away to a distance. The appellants assaulted the deceased and inflicted on him a number of serious injuries. The two companions of the deceased, P.Ws. 1 and 2, ran towards the village and shouted for help whereupon a number of people from the village came and collected at the spot. Information was also carried to the son as well as to the brother of the deceased. They also came on the scene. The brother, by name Radhashyam, proceeded at once to the Beldanga police station and lodged the first information report at about 7 30 p.m. The police officer came to the scene and recorded a statement from the deceased who was then still alive. He was thereafter taken to the hospital at Beldanga. At the hospital the Medical Officer also took a statement from him (exhibit 4). He died some time thereafter. P.Ws. 1 and 2, the companions of the deceased, were the only eye witnesses to the murderous assault. The prosecution relied also on certain statements said to have been made by the deceased after the assault. The deceased is said to have stated to P.W. 7 one of the villagers who first came on the scene, after hearing the shouts of P. Ws. 1 and 2, that the two appellants were his assailants. A little later, when his son and his brother, P.W. 3 came there, he is also said to have stated to P.W. 3 that the two appellants were the assailants. Accordingly the first information report gave the names of the two appellants as the assailants. Similar statements are said to have been made by the deceased to the police officer when he came on the spot and later to the Medical Officer when he was taken to the hospital. The evidence, therefore, in support of the prosecution case was mainly, that of the two eye witnesses, P.Ws. 1 and 2, and of the four dying declarations, two of them oral and two written. There was considerable scope for criticism about the evidence of the two eye witnesses. The evidence relating to the dying declarations was also open to attack in view of the nature of the injuries inflicted on the deceased. These included incised wounds on the occipital region and an incised wound 375 in the brain from out of which a piece of metal was removed on dissection. This, as was urged, indicated the likelihood of the deceased having lost his consciousness almost immediately and hence the improbability of any statements by the deceased. But the medical evidence on this point was indecisive. There can be no doubt however that the reliability of the prosecution evidence was open to serious challenge in many respects. But learned counsel for the appellants has not been able to raise either before the High Court or before us any objection to the verdict, on the ground of misdirection or non direction, of a material nature, in the charge to the jury by the Sessions Judge. 'On the other band, the charge brought out every point in favour of the appellants and against the prosecution evidence. It erred, if at all. in that the learned Judge involved himself in a great deal of elaboration. The only flaw in the charge which, learned counsel for the appellants could attempt to make out, was that the exposition therein of the legal concept underlying section 34 of the Indian Penal Code was obscure and that it would not have been correctly appreciated by the jurors. It may be that this could have been expressed in more lucid terms. But we are unable to find that there was any misdirection or non direction therein. Nor do we see any reason to think that the jury has been misled. Thus there was no real attack either in the High Court or here as against the learned Judge 's charge to the jury. Accordingly, the only points urged before us are the following. 1.The circumstances of the case and the nature of the charge to the jury made it incumbent on the learned Judge to disagree with the jury and to refer the case to the High Court under section 307 of the Code of Criminal Procedure. 2.In the alternative, the learned Sessions Judge having expressed himself in his charge to the jury, definitely for acquittal, he should not have accepted its verdict, though unanimous, without giving satisfactory reasons for such acceptance. The learned Judge having, in his charge speci 376 fically cautioned the jury against communal prejudice in the following terms "your deliberations and verdict should not be influenced by any communal considerations,", should have refused to accept the verdict as having been vitiated by communal bias. It may be stated that all the jurors were Hindus and that the accused were both Muhammadans. The suggestion is that in view of the fact that thescene Of occurrence was near the border between West and East Bengal, it should have been appreciated that communal bias was, at the time, almost inevitable. 4.There has been virtually no examination of the accused by the Sessions Judge under section 342 of the Code of Criminal Procedure and the trial has been vitiated thereby. In advancing the first two of the above contentions learned counsel for the appellants assumes and asserts that the Sessions Judge in his charge to the jury was unequivocally of the opinion that there was no reliable evidence on which the conviction could be based and that the appellants should be acquitted. On this assumption, he urges that, when in the circumstances the jury gave a unanimous verdict of guilty, his obvious duty was either to express his dis agreement with the verdict of the jury and refer the whole case for the consideration of the High Court under section 307 of the Code of Criminal Procedure, or, at the least, to have placed on record his reasons why in spite of his clear opinion against the prosecution case, he did not consider it necessary to disagree from the verdict of the jury. In order to substantiate this point of view, learned counsel took us through various portions of the charge to the jury and we have ourselves perused carefully the entirety of it. As already stated, the learned Judge undoubtedly pointed out in his charge all the weaknesses of the prosecution evidence in great detail. It is also likely that be was inclined for an acquittal. But we are not satisfied that he came to a definite and positive conclusion that there should be acquittal. While pointing out the weakness of the prosecution evidence with a leaning against its reliability he has not specifically 377 rejected every important item of the prosecution evidence. It was only in some places that he stated categorically that he would not accept a particular item of evidence and would advise the jurors to reject it. In other places, while pointing out the infirmities of the evidence, he was not so categorical and positive, as to what his own opinion on that item of evidence was. For instance, out of the two eye witnesses, P.Ws. 1 and 2, the learned Judge said, so far as P.W. 2 is concerned, as follows: "Personally speaking I am not satisfied with the evidence of recognition of the accused persons as the assailants of Sourindra Gopal furnished by P.W. 2, Satyapada. You will be advised, gentlemen, not to rely upon the evidence of P.W. 2". As regards the evidence of the other eye witness, P.W. 1, however he summed it up as follows: "You should take a comprehensive view of all matters and then decide whether you should act upon the evidence of recognition of the accused persons as the assailants of Sourindra furnished by P.W. 1, Bhupati". There was similar difference in the expression of his opinions with reference to the evidence of the dying declarations of the deceased. It may be recalled that the evidence of the oral dying declarations is of statements to P.W. 7, Phani, and P.W. 3, Radhashyam. The evidence of statement to P.W. 7 was given by a number of witnesses, viz. P.Ws. 6, 7, 8, 9, 10, 11) 12 and 13. Out of these so far as the evidence of P. W. 9 is concerned, the learned Judge specifically stated as follows: "I should tell you that you should not believe P.W. 9 when he stated on being questioned by Phani, Sourindra mentioned Moseb and Sattar as his assailants". But he did not rule out the evidence of the others on this item in the same manner. Then again, when he dealt with the question whether the slip of paper, exhibit 4, is genuine the learned Judge noticed that the said paper was shown to have been taken from the medical officer P.W. 17 into the possession of the In 378 vestigating Officer, P.W. 35, about a month later and commented on it as follows: "Personally speaking I see no reasonable explanation as to why the I.O. should not have seized exhibit 4 from P.W. 17 immediately after it was recorded, if it was recorded on 3rd November, 1951, and sent it to the Magistrate forthwith". All the same, the learned Judge also remarked thus: "You will consider very seriously whether you have any reason to disbelieve the evidence of P. Ws. 17, 32 and 33". P.Ws. 32 and 33 are witnesses who spoke to the statement of the deceased said to have been taken by the Doctor, P. W. 17. Taking the charge to the jury, therefore, comprehensively we are unable to find that the learned Judge rejected the prosecution evidence and arrived at a clear and categorical conclusion in his own mind that the appellants were not guilty. We are, therefore, unable to accept the assumption of learned counsel for the appellants that the Judge agreed with the unanimous verdict of the jury against his own personal conviction, as to the guilt of the accused. It appears to us, therefore, that there is no foundation, as a fact, for the argument that the learned Judge should have made a reference to the High Court under section 307 of the Code of Criminal Procedure or that, in any case, he should have placed on record his reasons for agreeing with the verdict of the jury notwithstanding his own personal opinion to the contrary. Assuming however that the charge to the jury in this case can be read as being indicative of a definite opinion reached by the Sessions Judge in favour of the appellants, it does not follow that merely on that account he is obliged to make a reference under section 307 of the Code of Criminal Procedure. What is required under that section is not merely disagreement with the verdict of the jury but the additional factor that the learned Sessions Judge "is clearly of opinion that it is necessary for the ends of justice to submit the case to the High Court". It is now well settled, since the decision of the Privy Council in 379 Ramnugrah Singh vs King Emperor(1) that under section 307 of the Code of Criminal Procedure a Session,, Judge, even if he disagrees with the verdict of the jury must normally give effect to that verdict unless he is prepared to hold the further and clear opinion "that no reasonable body of men could have given the verdict which the jury did". We are certainly not prepared to say that the present case satisfies that test or that the charge to the jury indicated any such clear conclusion. Indeed it is to be noticed that on intimation by the jury of its unanimous verdict, the learned Judge has recorded that he "agreed with and accepted the verdict". We have no doubt that it was perfectly competent for him to do so. Learned counsel urges that this acceptance is a judicial act and that having regard to the whole tenor of the Judge 's charge to the jury, he was at least under a duty to himself and to the appellate court to record his reasons for acceptance of the verdict of the jury. We are unable to agree with this contention. It may be that in a case where a Judge in his charge to the jury has clearly and definitely expressed himself for acquittal, it would be very desirable, though not imperative, that he should give his reasons why be changed his view and accepted the verdict of the jury. But we can find no basis for any such contention in this case. The two further contentions that remain which are enumerated above as 3 and 4, were not raised before the High Court. We are reluctant to allow any such contentions to be raised on special leave. The point relating to the possibility of the verdict having been the result of bias has no serious basis. It appears to us that the learned Sessions Judge had no justification in this case for imagining the possibility of such bias and giving a warning to the jury in this behalf. This is not a case which arose out of any incident involving communal tension. The likelihood of any such bias is not to be assumed merely from the fact of the appellants being Mubammadans and the jurors being Hindus. Nor is it right to take it (1) [1946] L.R. 73 I.A. 174. 380 for granted merely from the fact of proximity of the place of trial to the border between West and East Bengal. On the other hand, it is not without some relevance that when the jury was empanelled at the commencement of the trial, there was absolutely no such objection taken. Nor was the right of challenge to the jurors exercised. Learned counsel for the appellants has very strenuously argued before us, the point relating to the inadequacy of the examination of the appellants under section 342 of the Code of Criminal Procedure. Now, it is true that the examination in this case was absolutely perfunctory. The only questions put to each of the accused in the Sessions Court, and the answers thereto were the following: "Q. You have heard the charges made and the evidence adduced against you. Now say, what is your defence? What have you got to say? A. I am innocent. Will you say anything more? A. No. Q. Will you adduce any evidence in defence? A. No." There can be no doubt that this is very inadequate compliance with the salutary provisions of section 342 of the Code of Criminal Procedure. It is regrettable that there has occurred in this case such a serious lacuna in procedure notwithstanding repeated insistence of this Court , in various decisions commencing Tara Singh 's case(1) on a due and fair compliance with the terms of section 342 of the Code of Criminal Procedure. But it is also well recognised that a judgment is not to be set aside merely by reason of inadequate compliance with section 342 of the Code of Criminal Procedure. It is settled that clear prejudice must be shown. This court has clarified the position, in relation to cases where accused is represented by counsel at the trial and in appeal. It is up to the accused or his counsel in such cases to satisfy the Court that such inadequate examination has resulted in miscarriage of justice. This Court in its judgment (1)[1951] S.C.R. 729. 381 in the latest case on this matter, viz. K. C. Mathew and Others vs The State of Travancore Cochin(1) (delivered on the 15th December, 1955) has laid down that "if the counsel was unable to say that his client had in fact been prejudiced and if all that he could urge was that there was a possibility of prejudice, that was not enough". Learned counsel could not, before us, make out any clear prejudice. All that learned counsel for the appellants urges is, that this might be so in a case where the trial was with the assessors and the Judge 's view on the evidence was the main determining factor. But he contends that the same would not be the case where the trial is with the aid of a jury. Learned counsel urges that a full and clear questioning in a jury trial does not serve the mere purpose of enabling the accused to put forward his defence or offer his explanation, which may be considered along with the entire evidence in the case. The jury would, he suggests also, have the opportunity of being impressed one way or the other by the method and the manner of the accused, when giving the explanation and answering the questions and that the same might turn the scale. Learned counsel urges, therefore, that the non examination or inadequate examination under section 342 of the Code of Criminal Procedure in a jury trial must be presumed to cause prejudice and that a conviction in a jury trial should be set aside and retrial ordered, if there is no adequate examination under section 342 of the Code of Criminal Procedure. We are not prepared to accept this contention as a matter of law. The question of prejudice is ultimately one of inference from all the facts and circumstances of each case. The fact of the trial being with the jury may possibly also be an additional circumstance for consideration in an appropriate case. But we see no reason to think that in the present case this would have made any difference. We are, therefore, not Prepared to accept the argument of the learned counsel for the appellants in this behalf. In any case, an argument of this kind which would, if accepted, (1)[1955] 2 S.C.R. 1057. 50 382 necessitate a retrial, is one that ought to be put forward at the earliest stage and at any rate at the time of the regular appeal in the High Court. This cannot be entertained for the first time in an appeal on special leave. For all the above reasons this appeal is dismissed.

A Sessions Judge, even if he disagrees with the verdict of the Jury, must normally give effect to that verdict unless he is clearly of opinion that no reasonable body of men could have given the verdict which the Jury did. Ramnugrah Singh vs King Emperor, ([1946] L.R. 73 I.A. 174), relied on. A Sessions Judge need not record his reasons for accepting the verdict of the Jury. In a case where a Judge in his charge to the Jury, has clearly and definitely expressed himself for acquittal, it would be desirable though not imperative, that he should give his reasons why he changed his view and accepted the verdict of the Jury finding the accused guilty. Even where the examination of the accused under section 342 Cr. P.C. is perfunctory the judgment cannot be set aside unless clear prejudice is shown. Tara Singh 's case, ([1951] S.C.R. 729), referred to. K.C. Mathew and Others vs The State of Travanore Cochin, ([1955] 2 S.C.R. 1057), relied on. Prejudice cannot be presumed from the fact that the trial is by a jury though that is a circumstance which may be taken into consideration. An argument which would, if accepted, necessitate a retrial, ought to be put forward at the earliest stage and at any rate before the High Court in appeal and cannot be entertained for the first time in an appeal on special leave.

ivil Appeal No. 1408 of 1966. Appeal by special leave from the AWard dated May 19, 1965 February 23, 1966 of the Addl. Industrial Tribunal, Delhi in Industrial Dispute No. 109 of 1965. H.R. Gokhale, G.L. Sanghi and K.P. Gupta for the appellant. Urmila Kapur and Bhajan Ramrakhiani, for the respondents. The Judgment of the Court was delivered by Shah, J. By order February 24, 1965 the Chief Commissioner of Delhi referred for adjudication, industrial disputes between the appellant company and its workmen relating to dearness allowance and introduction of a scheme of gratuity for the benefit of the workmen. The Industrial Tribunal, Delhi framed the following "gratuity scheme": (1) On death or retirement on One months wages for each superannuation or on becoming Year of service of part mentally or physically unfit there of in excess of six for further service. subject to a maximum of 15 months 's wages,In case of death of Employee the gratuity shall be payable to his nominee or if there is no nominee to his legal heirs (2)On termination after five 15 days for each year of se years 'service for any cause rvice or part there of in whatsoever except by way of exces of six months subject retrenchment or resignation to a maximum of 15 months resignation. subject wages (3)On resignation after 10 years of service. 15 days wages for each year of service or part thereof in excess of six months to a maximum of 15 months wages Provided that if termination is for any misconduct causing financial loss to the company, the amount of loss shall be deducted from the gratuity payable. The word 'wages ' in this Scheme shall mean the total pay packet of the workman including dearness which he was last drawing. " The Tribunal also directed that "all workmen who were appointed in 1960 or earlier should get dearness allowance at Rs. 3 for every ten point rise in the cost of Consumer Price Index base 1960 over and above their existing wages with effect from 624 1st January, 1965. In case of workmen appointed after 1960, the consumer price index base 1960 on the date of his appointment shall be found out and he shall be given Rs. 3 as dearness for every ten point rise in cost of Consumer Price index base 1960 above it with effect from 1st January, 1965 or such later date on which the limit of 10 point rise in cost of Consumer Price Index base is crossed. " The Tribunal also directed that dearness allowance will not be enhanced till the limit of ten points be "crossed", and that dearness allowance once granted will not be reduced till the Consumer Price Index falls by more than 10 points. The Company has appealed to this Court with special leave. In the view of the Tribunal, the financial position of the company "is very sound" and that it has "financial capacity and, stability to bear the additional burden of dearness allowance and of the gratuity scheme." In reaching that conclusion the Tribunal relied upon a news item published in the newspapers that 2000 Russian Tractors were being immediately imported by the Company even though the agency of the Company was being terminated. In relying upon newspaper reports the Tribunal may have erred. But the conclusion of the Tribunal is rounded upon a review of several other circumstances. It is true that one of the primary lines of business of the company was of selling tractors as agents of Russian manufacturers. That agency was in danger of being terminated because the State Trading Corporation had arranged to take over the agency. But the balance sheets of the company show that the agency was only one of the many lines of business and the closure of the agency of the tractor manufacturers was not likely to affect the financial structure of the Company seriously. The Tribunal has on appreciation of evidence come to the conclusion that the financial position of the company was sound and assuming that the Tribunal is governed by the strict rules prescribed by the Evidence Act, sitting in appeal with special leave we will not be justified in interfering with the finding of the Tribunal even if it be open to the criticism that a part of the evidence relied upon is not in law relevant. The company had on its roll 244 workmen out of whom 118 entered employment after 1960. The company has been paying to its workmen wages consisting of two components basic wages and 50 per cent of the basic wages as dearness allowance. Payment of wages is made in this form to all workmen whether their employment commenced before the year 1960 or thereafter. It is true that before 1960 the company used to make a consolidated payment without specifying any amount of basic salary or dearness allowance. Since 1960 in every appointment letter it was expressly recited that the employee v,iII get a consolidated salary consisting of 2/3rd of the consolidated salary as basic wages and 625 the balance as dearness allowance. The company has produced before the Tribunal 118 such letters of appointment in respect of all employees employed after the year 1960. In respect of the employees appointed prior to the year 1960 in the salary register basic salary and dearness allowance was separately entered though at the time of appointment of employees there was no allocation as basic wages and dearness allowance. There is no dispute that since the year 1960 there has been a rise in the cost of living. The Consumer Price Index for Industrial Workers which was 100 in 1960, had risen to more than 130 in 1965. The management of the company granted dearness allowance to employees in other concerns under its management even though those other concerns were not financially very sound. No serious argument has been advanced before us that the rise in dearness allowance is not Justified. The only ground of complaint is that by relating the dearness allowance to the total wage packet the workmen are given a: rise both in the dearness allowance and in the basic wage The Tribunal has awarded dearness allowance at the flat rate of Rs. 3 for every 10 point rise in the cost of Consumer Price Index. The rise is not related to the quantum of basic wage or consolidated wage. It is a flat uniform rate applicable to every workman. The Tribunal was of the view that the allocation between the basic wage and the dearness allowance was "not fair", but for the purpose of the present reference, the question is academic because dearness allowance is not related to the quantum of salary that the workmen receive. The argument that the rise will operate to give to the workmen besides the additional dearness allowance, a percentage increase in dearness allowance already paid as part of the consolidated wage cannot be accepted. We do not therefore see any reason to interfere with the order passed by "the Tribunal with regard to the dearness allowance at the rate of Rs. 3 for every 10 point rise in the Consumer Price Index. " Gratuity payable to a workman on termination of employment is to be computed on the total wage packet of the workman including dearness allowance which he has last drawn. This order makes a departure from the normal rule which is adopted in industrial awards. In M/s. British Paints (India) Ltd. vs Its Workmen(1) this Court while introducing a gratuity scheme for the first time in the concern directed that the amount of gratuity shall be related to the basic wage or salary and not to the consolidated wage including dearness allowance. A similar order was made in May and Baker (India) Ltd. vs Their Workmen(2). It is true (1) ; (2) [1961] II L.L 626 that in British India Corporation vs The Workmen(1), an award made by the Tribunal fixing the quantum of gratuity on gross salary i.e., basic wage plus dearness allowance was upheld by this Court. The Court affirmed that the usual pattern in fixing the gratuity is to relate it to the basic wage, but refused to interfere with the order because the. practice in that concern was to fix gratuity on the consolidated wage. similarly in Hindustan Antibiotics Ltd vs their work men(2), the Tribunal directed the employer to pay gratuity at the rate of one half of wages for each month including dearness allowance but excluding house rent and all other allowances for each completed year of service subject to a maximum of wages for ten months. In rejecting the claim of the employers for relating gratuity to the basic wage, this Court observed: "If the industry is a flourishing one, we do no see any reason why the labour shall not have the benefit of both the schemes i.e. the employees provident fund and the gratuity scheme. Gratuity is an additional form of relief for the workmen to fall back upon. If the industry can bear the burden, there is no reason why he shall not be entitled to both the retirement benefits. The Tribunal considered all the relevant circumstances: the stability of the concern, the profits made by it in the past, its future prospects and its capacity and came to the conclusion that, in the concern in question, the labour should be provided with a gratuity scheme in addition to that of a provident fund scheme. There was no justification to disturb this conclusion. " In The Remington Rand of India Ltd. vs The Workmen(8) this Court declined to interfere with the order of the Tribunal awarding gratuity related to the consolidated wage including dearness allowance "in view of the flourishing nature of the concern, the enormous profits it was making, the reserves it had built up as also in view of the fact that it was paying gratuity to. executives on the basis of consolidated wages. " In The Delhi Cloth & General Mills Co., Ltd. vs The Workmen & Ors. (4) this Court had to consider whether gratuity payable to workmen in the textile industry in the Delhi region should be related to. the consolidated wage. After referring to the decisions which were brought to the notice of the Court, it was observed that: "It is not easy to extract any principle from these cases:as precedents they are conflicting . The (1) (1965) Vol. 10 Factory Law Report, 244. (2) [1967] I L.L.J. 114. (3) [1968] 1 S.C.R.164. (4) ; 627 Tribunal has failed to take into account the prevailing pattern in the textile industry all over the country . It is a countrywide industry: and in that industry, except in one case to be presently noticed, gratuity has never been granted on the basis of consolidated wages. " The Court after referring to the schemes framed in respect of the industries in Bombay and Ahmedabad and other industries concluded that "determination of gratuity is not based on any definite rules. In each case it must depend upon the prosperity of the concern, needs of the workmen and the prevailing economic conditions examined in the light of the auxiliary benefits which the workmen may get on determination of employment. " There is no clear evidence on the record, and no precedents have been brought to our notice, to justify a departure from the normal rule that the quantum of gratuity is related not to the consolidated wage packet but to the basic wage. A departure may be made from the normal rule, if there be some strong evidence or precedent in the industry, or conduct of the employer or other exceptional circumstances to justify that course. In the absence of such evidence, we are of the view that gratuity should be related to the basic wage and not to the consolidated wage packet. In the present case it is found that the financial position of the Company is sound but there is no evidence that the company is "making abnormally high profits" 'nor is there any evidence that in its sister concerns or in other engineering concerns in the region there is a practice of awarding gratuity related to consolidated wages. It was urged on behalf of the company that even though the workmen had, in the claim made by them, demanded a scheme of . gratuity benefit at the rate of 15 days wages for each year of service in case of death or retirement on attaining the age of superannuation or on becoming mentally or physically unfit for further service,. the Tribunal had awarded gratuity at the rate of one month 's wages for each year of service subject to a maximum of 15 months ' wages. But the claim was made on the footing that the wages were to include dearness allowance. When the claim is not accepted, we cannot hold the workmen bound by the multiples. We make no modification in clause (1 ) of the scheme. We modify the scheme in so far as it relates to the dearness allowance and direct that for the last sentence of the gratuity scheme the following shall be substituted: "The word 'wages ' in the scheme shall mean basic salary or emoluments excluding dearness 'allowance and 628 other allowances and benefits payable to the workman which he had last drawn. " Subject to the above modification, the appeal fails and is dismissed. There will be no order as to costs in the appeal. Y.P. Scheme modified and appeal dismissed.

The Industrial Tribunal on a reference of the disputes between the appellant company and its workmen framed a gratuity scheme. The gratuity payable to a workman on termination of employment was to be computed on the total wage packet of the workman including dearness allowance which he had last drawn. The tribunal also awarded dearness allowance at a flat uniform rate for every 10 point rise in the cost of Consumer Price Index. The Tribunal found that the financial position of the company was sound and it had the capacity to bear the additional burden. In appeal, this Court HELD: (i) The usual pattern in fixing gratuity is to relate it to the basic wage or salary and not to consolidated wage. A departure may be made from the normal rule, if there by some strong evidence or precedent in the industry, or conduct of the employer or other exceptional circumstances to justify that course. In .the absence of such evidence, gratuity should be related to the basic wage and not to the consolidated wage packet. [627 D] In the present case it was found that the financial position of the company was sound but there was no evidence that the company was "making abnormally high profits", nor was there any evidence that in its sister concern or in other engineering concerns in the region there was a practice of awarding gratuity related to consolidated wages. M/s. British Paints (India) Ltd. vs Its Workmen, ; , May & Baker (India.) Ltd. vs Their Workmen, [1961] II L.L.J. 94, British India Corporation vs The Workmen, (1965) Vol. 10 Factory Law Reports 244, Hindustan Antibiotics Ltd. vs Their Workmen, [1967] I. L.L.J 114, The Remington Rand of India Ltd. vs The Workmen, , and Delhi Cloth & General Mills Co. Ltd. vs The Workmen & Ors. ; , referred to. (ii) The rise in dearness allowance was not related to the quantum of basic wage or consolidated wage; it was a flat uniform rate applicable to every workman. Therefore, the. rise would not operate to give the workman, besides the additional dearness allowance, a percentage increase in dearness allowance already paid as part of the consolidated wage. [625 E F] (iii) The Tribunal, on appreciation of evidence found that the financial position of the company was sound. Assuming that the Tribunal was governed by the strict rules prescribed by the Evidence Act, Sitting in appeal with Special Leave this Court would not be justified in interfering 623 with the finding of the Tribunal even if it be open to the criticism that a part of the evidence relied upon was not in law relevant. [624 F]

Appeal No. 2293 of 1970. 45 Appeal by special leave, from the order dated May 4, 1970 of the Central Registrar of Co operative Societies, New Delhi in Appeal No. CR/1/70. Harbans Singh, for the appellant. Remeshwar Dial and A.D. Mathur, for the respondent. The Judgment of the Court was delivered by Sikri, C. J. This appeal by special leave is against the order of the Central Registrar of Cooperative Societies New Delhi dismissing the appeal filed by Panchshila Industrial Cooperative Society (Multi Unit) appellant before us against the award passed by the Arbitrator (Deputy Registrar of Cooperative Societies Rohtak) dated October 7, 1969, in respect of the dispute between the Gurgaon Central Cooperative Bank Ltd., Gurgaon respondent before us, and the appellant. The Central Registrar held that he was not the appropriate appellate authority against the award in question. The only question which arises before us is whether the Central Registrar was the appropriate authority on the facts of this case. The relevant facts are these. The respondent Bank approached the Registrar of Cooperative Societies Haryana for resolving a dispute between the Bank and one of its members appellant before us. The Registrar by his order dated February 17, 1968, in exercise of the powers vested in him under section 56 of the Punjab Co operative Societies Act, 1961, referred the dispute to the Deputy Registrar Cooperative Societies Rohtak for decision. The arbitrator gave the award on October 7, 1969, directing that the appellant do pay to the respondent in all Rs. 16,05,658 20 together with interest at the rate of six and a half per cent per annum until the realisation of the principal amount viz. Rs. 11,52,535 00. The appellant as mentioned above filed an appeal against this award before the Central Registrar. The respondent Bank is a co operative society governed by the provisions of the Punjab Co operative Societies Act 1961. Section 55(1) of this Act inter alia provides that if any dispute touching the constitution management or the business of a co operative society arises between a member 46 and the society such dispute shall be referred to the Re gistrar for decision and no Court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. Section 55(2) provides that for the purposes of sub section (1) a claim by the society for any debt or de mand due to it from a member or the nominee heirs or legal representatives of a deceased member whether such debt or demand be admitted or not, shall be deemed to be a dispute touching the constitution, management or the business of the co operative society. Sub section (3) of section 55 provides that "if any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution management or the business of a cooperative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court. " There is no doubt that the dispute between the respondent Bank and the appellant fell within section 55 and was properly referred to arbitration under that section. It is however, contended that the appellant was registered in December 1955 under the Punjab Cooperative Societies Act, 1955, and by virtue of the , and section 5A of the Multi Unit Co operative Societies Act, 1942, the appellant has ceased to be governed by the provisions of the Punjab Co operative Societies Act because it has become a multi unit co operative society. There is no doubt that by virtue of the , and section 5A of the Multi Unit Co operative Societies, Act, 1942, the appellant has become a multi unit co operative society and the Multi Unit Co operative Societies Act applies to it. But that Act is for the incorporation, regulation and winding up of co operative societies with objects not confined to one State, and it has no impact on section 55 of the Punjab Co operative Societies Act, 1961, inasmuch as the appellant remains a member of the co operative society, namely, the respondent Bank. There is nothing in the provisions of the Multi Unit Co operative Societies Act to indicate that a multi unit co operative society cannot be a member of a co operative society governed by the Punjab Act of 1961. If the appellant continues to be a member, then the terms of section 55 apply and a dispute can be referred to arbitration under that section. An appeal against the at award lies under section 68 of the Punjab Act of 47 1961 to the Government of the decision or order was made by the Registrar, and to the Registrar if the decision or order was made by any other person. It is quite clear therefore, that the Central Registrar had no jurisdiction to hear the appeal. The learned counsel next contends that the Central Registrar should not have dismissed the appeal but returned the memorandum of appeal for presentation to the proper authority. There is no statutory provision enabling the Central Registrar to do so. At any rate, if an appeal is filed before the appropriate authority under the Punjab Co operative Societies Act, 1961, that authority will no doubt take into consideration the provisions of section 14 of the , read with section 29(2) and decide whether the appeal should be entertained or not. In the result the appeal fails and is dismissed with costs. K.B.N. Appeal dismissed.

The respondent bank is a co operative society governed by the Punjab Co operative Societies Act, 1961. A dispute between the bank and the appellant, one of its members, was referred by the Registrar of Co operative Societies, in exercise of the powers vested in him by section 55 of the Act, to the Deputy Registrar, Co operative Societies for arbitration. The appellant filed an appeal against the award before the Central Registrar of Co operative Societies. The Central Registrar dismissed the appeal holding that he was not the appropriate appellate authority, under the Act. In appeal to this Court the appellant con tended that it was registered in 1955 under the Punjab Co operative Societies Act 1955 and by virtue of the and section 5(A) of the Multi Unit Co operative Societies Act, 1942, it had ceased to be governed by the provisions of the Punjab Co operative Societies Act, because, it had become a multi unit co operative Society. Dismissing the appeal, HELD : There is nothing in the provisions of the Multi unit Cooperative Societies Act to indicate that a multi unit co operative society cannot be a member of a co operative society governed by the Punjab Act of 1961. The multi unit co operative societies Act is for the incorporation, regulation and winding up of co operative societies with objects not confined to one State and it has no impact on section 55 of the Punjab Co operative Societies Act, 1961, in as much as the appellant remains a member of the Co operative Society, namely, the respondent bank. If the appellant continues to be a member then the terms of section 55 apply and a dispute can be referred to arbitration under that section. An appeal against that award lies under section 68 of the Punjab Act of 1961 to the government if the decision or order was made by the Registrar and to the Registrar if the decision or order is made by any other person. Therefore the Central Registrar had no jurisdiction to hear the appeal.

Appeal No.350 of 1957. Appeal by special leave from the judgment and order dated August 6, 1956, of the Calcutta High Court on a notice of motion in Appeal No. 152 of 1955. N. C. Chatterjee and P. K. Mukherjee, for the appellant. B. Sen and P. K. Ghosh (for P. K. Bose), for respondent No. 1. 1958. February 14. The Judgment of the Court was delivered by VENICATARAMA AIYAR J. This is an appeal against an order of the High Court of Calcutta dated August 6, 1956, rejecting the application of the appellant to be brought on record as appellant in appeal No. 152 of 1955 pending before it. The second respondent, Sudhir Kumar Mitter, was the owner of two houses, No. 86/1, Cornwallis Street and No. 7 C, Kirti Mitter Lane, Calcutta. On May 19, 1934, he executed a mortgage for Rs. 3,000 over the said houses in favour of the first respondent, Sm. Nirmala Sundari Dassi. She instituted Suit No. 158 of 1935 on this mortgage, and obtained a pre liminary decree on March 8, 1935. The matter then came before the Registrar for taking of accounts, and by his report dated July 23, 1935 he found that a sum 1289 of Rs. 3,914 6 6 was due to her, and on that, a final decree was passed on April 20, 1936. Under r. 27 of ch. 16 of the Original Side Rules of the Calcutta High Court, a person in whose favour a decree is passed has to apply for drawing up of the decree within four days from the date thereof. The rule then provides that " if such application for drawing up a decree or order is not made within the time aforesaid, the decree or order,shall not be drawn up except under order of Court or a Judge to be obtained, unless otherwise ordered, by a petition ex parte ". The importance of this provision is that until a decree is drawn up as mentioned therein, no certified copy thereof would be issued to the party and without such a certified copy, no execution proceedings could be taken. The first respondent who had acted with such alacrity and speed in putting her mortgage in suit and obtaining a decree, took no steps whatsoever to have the decree drawn up, for nearly 18 years. On May 12, 1952, the second respondent sold both the houses to the appellant herein for a sum of Rs. 60,000 which was, it is stated, utilised largely for discharging prior mortgages on which decrees had been obtained and execution proceedings taken. The deed of sale recites that the properties were sold free of all encumbrances. The first respondent who had so far taken no steps to have the decree drawn up now bestirred herself, and on February 17, 1954 obtained an ex parte order under r. 27 aforesaid, granting her leave to draw up and complete the decree. That having been done pursuant to the order, she filed on April 29, 1954 the final decree, and commenced proceedings for sale of the mortgaged properties. Coming to know of this, the second respondent appeared before the Registrar, and raised the objection that the execution of the decree was barred by limitation. The Registrar felt some doubt in the matter, and made a special report under ch. 26, r. 50 seeking the opinion of the Court on the question of limitation, and the first respondent was also directed to take out a notice of motion for directions. The matter then came before P. B. Mukharji J. and after hearing 1290 counsel for both the respondents, he held that the execution of the decree was not barred. Vide judgment reported in Nirmala Sundari vs Sudhir Kumar (1). Against this judgment, the second respondent preferred Appeal No. 152 of 1955, and that is still pending. We now come to the application, out of which the present appeal arises. On July 25, 1956 the appellant applied to be brought on record as appellant in Appeal No. 152 of 1955. The allegations in support of the petition were that she had purchased the properties from the second respondent on May 12, 1952 free of all encumbrances, that the execution proceedings started by the first respondent were not maintainable as the decree had become time barred, that the second respondent, Sudhir Kumar Mitter, had been conducting proceedings in opposition to the execution sale only at her instance and for her benefit, that he had filed Appeal No. 152 of 1955 also oil her behalf, that latterly he had entered into a collusive arrangement with the first respondent with a view to defeat her rights, and that therefore it was necessary that she should be allowed to come on record as appellant so that she might protect her interests. The prayer in the petition was that she be substituted in the place of the second respondent or in the alternative, be brought on record as additional appellant. The application was strenuously opposed by both the respondents. They stated that they had entered into an arrangement settling the amount due to the first respondent at Rs. 17,670, that that settlement was fair and bona fide and binding on the appellant, and that further her application was not maintainable. This application was heard by Chakravarti C. J. and Lahiri J. and by their order dated August 6, 1956, they dismissed it. The appellant then applied under article 133 for leave to appeal to this Court, and in rejecting that application, the learned Chief Justice observed that the original application was pressed only under 0. 22, r. 10 of the Civil Procedure Code and it was dismissed, as it was conceded that the applicant, (1) A.I.R. 1955 Cal. 484. 1291 not being a person who had obtained a transfer pending appeal, was not entitled to apply on the terms of that rule, that the prayer in the alternative that the applicant might be brought on record without being substituted under 0. 22, r. 10 which merited favourable consideration bad not been mentioned at the previous hearing, and that no certificate could be granted under article 133 with a view to that point being raised in appeal, as the order sought to be appealed against was not a final order. The appellant thereafter obtained special leave to appeal under article 136 of the Constitution, and that is how the appeal comes before us. It is contended OD behalf of the appellant that her application is maintainable under 0. 22, r. 10 of the Civil Procedure Code, because Suit No. 158 of 1935 must be considered to have been pending until the decree therein was drawn up which was in 1954, and the transfer in her favour had been made prior thereto on May 12, 1952. The decision in Lakshan Chunder Dey vs Sm. Nikunjamani Dassi (1) is relied on, in support of this position. But it is contended for the first respondent that even if Suit No. 158 of 1935 is considered as pending when the transfer in favour of the appellant was made, that would not affect the result as no application had been made by her to be brought on record in the original court during the pendency of the suit. Nor could the application made to the appellate Court be sustained under 0. 22, r. 10, as the transfer in favour of the appellant was made prior to the filing of that appeal and not during its pendency. This contention appears to be well founded ; but that, however, does not conclude the matter. In our opinion, the application filed by the appellant falls within section 146 of the Civil Procedure Code, and she is entitled to be brought on record under that section. Section 146 provides that save as otherwise provided by the Code, any proceeding which can be taken by a person may also be taken by any person claiming under him. It has been held in Sitharamaswami vs Lakshmi Narasimha (2) that an appeal is a proceeding for the (1) 164 (2) Mad. 510. 1292 purpose of this section, and that further the expression " claiming under" is wide enough to include cases of devolution and assignment mentioned in 0. 22, r. 10. This decision was quoted with approval by this Court in Jugalkishore Saraf vs Raw Cotton Co., Ltd. (1), wherein it was hold that a transferee of a debt on which a suit was pending was entitled to execute the decree which was subsequently passed therein, under section 146 of the Civil Procedure Code as a person claiming under the decree holder, even though an application for execution by him would not lie under 0. 21, r. 16, and it was further observed that the words "save as otherwise provided " only barred proceedings, which would be obnoxious to some provision of the Code. It would follow from the above authorities that whoever is entitled to be but has not been brought oil record under 0. 22, r. 10 in a pending suit or proceeding would be entitled to prefer an appeal against the decree or order passed therein if his assignor could have filed such an appeal, there being no prohibition against it in the Code, and that accordingly the appellant as an assignee of the second respondent of the mortgaged properties would have been entitled to prefer an appeal against the judgment of P. B. Mukharji J. It is next contended that section 146 authorises only the initiation of any proceeding, and that though it would have been competent to the appellant to have preferred an appeal against the judoment of P. B. Mukharji J. she not having done so was not entitled to be brought on record as an appellant to continue the appeal preferred by the second respondent. We are not disposed to construe section 146 narrowly in the manner contended for by counsel for the first respondent. That section was introduced for the first time in the Civil Procedure Code, 1908 with the object of facilitating the exercise of rights by persons in whom they come to be vested by devolution or assignment, and being a beneficent provision should be construed liberally and so as to advance justice and not in a restricted or technical sense. It has been held by a Full Bench of the Madras High Court in Muthiah Chettiar vs Oovinddoss Krishnadass (2) that the assignee of a part of a (1) [1955] i S.C.R. 1369. (2) Mad. 1293 decree is entitled to continue an execution application filed by the transferor decree holder. Vide also Moidin Kutty vs Doraiswami (1). The right to file an appeal must therefore be held to carry with it the right to continue an appeal which had been filed by the person under whom the applicant claims, and the petition of the appellant to be brought on record as an appellant in Appeal No. 152 of 1955 must be held to be main. tainable under section 146. It remains to consider whether, on the merits, there should be an order in favour of the appellant. Of that, we have no doubt whatsoever. The proceedings in which she seeks to intervene arise in execution of a mortgage decree. She has purchased the properties comprised in the decree for Rs. 60,000 under a covenant that they are free from encumbrances. And after her purchase, the first respondent has started proceedings for sale of the properties, nearly 18 years after the decree had been passed. The appellant maintains that the execution proceedings are barred by limitation, and desires to be heard on that question. It is true that P. B. Mukharji J. has rejected this contention, but a reading of his judgment shows and that is what he himself observes that there are substantial questions of law calling for decision. Even apart from the plea of limitation, there is also a question as to the amount payable in discharge and satisfaction of the decree obtained by the first respondent in Suit No. 158 of 1935. Both the respondents claim that they have settled it at Rs. 17,670. But it is stated for the appellant that under the decree which is sought to be executed the amount recoverable for principal and interest will not exceed Rs. 6,000. In the affidavit of Sanjit Kumar Ghose dated December 20, 1956, filed on behalf of the first respondent, particulars are given as to how the sum of Rs. 17,670 was made up. It will be seen therefrom that a sum of Rs. 7,200 is claimed for interest up to March 8, 1956, calculating it not at the rate provided in the final decree but at the contract rate. Then a sum of Rs. 5,000 is included as for costs incurred by the mortgagee in suits other than (1) I.L.R. 1294 Suit No. 158 of 1935 and in proceedings connected therewith. The appellant contends that the properties in her hands could, under no circumstances, be made liable for this amount. A sum of Rs. 1,750 is agreed to be paid for costs in the sale reference, in the proceedings before P. B. Mukharji J. and in Appeal No. 152 of 1955. Asks the appellant, where is the settlement in this, and how can it bind me ? It is obvious that there are several substantial questions arising for determination in which the appellant as purchaser of the properties is vitally interested, and indeed is the only person interested. As a purchaser pendente lite, she will be bound by the proceedings taken by the first respondent in execution of her decree, and justice requires that she should be given an opportunity to protect her rights. We accordingly set aside the order of the Court below dated August 6, 1956 and direct that the appellant be brought on record as additional appellant in Appeal No. 152 of 1955. As Sudhir Kumar Mitter, the appellant now on record, has dropped the fight with the first respondent, we conceive that no embarrassment will result in there being on record two appellants with Conflicting interest. But, in any event, the Court can, if necessary, take action suo motu either under 0. 1, r. 10 or in its inherent jurisdiction and transpose Sudhir Kumar Mitter as second respondent in the appeal, as was done in In re Mathews. Oates vs Mooney (1), and Vanjiappa Goundan vs Annamalai Chettiar (2 ). As for costs, the appellant should, in terms of the order of this Court granting her leave to appeal, pay the contesting respondent her costs in this appeal. The costs of and incidental to the application in Appeal No. 152 of 1955 in the High Court will abide the result of that appeal. Appeal allowed.

The second respondent sold the properties to the appellant in ,952 and the deed of sale recited that the properties were sold free of all encumbrances. The first respondent who had obtained a mortgage decree in respect of the properties in 1935 did not take any steps to have the decree drawn up as required under the Original Side Rules of the Calcutta High Court until 1954, when she commenced proceedings for sale of the mortgaged properties. The second respondent raised the objection that the execution of the decree was barred by limitation but that was overruled by a single judge of the High Court and an appeal against that order was preferred by the second respondent. Apprehending that the second respondent might enter into a collusive arrangement with the first respondent with a view to defeat her rights, the appellant made an application in the High Court under 0. 22, r. 10 of the Code of Civil Procedure praying that she might be substituted in the place of the second respondent, or in the alternative, be brought on record as additional appellant. The High Court having dismissed the application, the appellant brought the present appeal: Held, that the application could not be sustained under 0. 22, r.10, of the Code of Civil Procedure because (i) assuming that 1288 the suit was considered as having been pending until the decree was drawn up in 954 no application was made to the Court where the suit was pending as provided in 0. 22, r. 10, and (ii) the application made to the appellate Court was also not within 0. 22, r. 10, as the transfer in question was made prior to the filing of the appeal and not during its pendency. The application, however, falls within section I46 of the Code of Civil Procedure and the appellant is entitled to be brought on record since an appeal is a proceeding within the meaning of that section and the right to file an appeal carries with it the right to continue an appeal which had been filed by the person under whom the appellant claims. Jugalkishore Sayaf vs Raw Cotton Ltd., [1955] I S.C.R. 1369, Sitharamaswami vs Lakshmi Narasimha, Mad. 51O and Muthia Chettiar vs Govinddoss Kyishnadoss, Mad. gig, relied on.

Appeal No. 1955 of 1970. Appeal by Special Leave from the judgement & other dated the 5th November, 1969 of the Punjab & Harayana High Court in Civil Write No. 309 of 1969. R. K. Garg, section C. Agarwala and V. J. Francis, for the appellant. 775 V. C. Mahajan and 0. P. Shorma, for the respondents. The Judgment of the Court was delivered by RAY, C.J. This is an appeal by special leave from the judgment dated 5 November, 1969 of the High Court of Punjab and Haryana. The only person is whether the order of termination of the service of the appellant who was a probationer is in violation of Rule 9 of the Punjab Civil Service (Punishment & Appeal) Rules, 1952. The appellant was selected by the Public Service Commission as a direct recruit on 20 May, 1965. He was appointed on 26 May, ' 1965. He joined as a probationer. The period of probation was two years. Rule 8(b) of the Punjab Police Service Rules 1959 states that the services of a member recruited by direct appointment may be dispensed with by the Government on his failing to pass the final examination at the end of his period of training, or on his being reported on during or at the end of his period of probation, as unfit for appointment. The order terminating the services of the appellant was as follows: The President of India is pleased to dispense with the service of Shri Hari Singh Mann, Probationery Deputy Superintendent of Police, Amritsar on the expiry of his extended period of probation with effect from 2 2 1969(A.N.) under rule 8(b) of the Punjab Police Service Rules 1959, having considered him unfit for appointment to the State Police Service. The period from 20 5 68 to 2 8 68 which has been treated as leave of the kind due has been excluded from the period of trial (Probation). " The two contentions which have been advanced before the High Court were repeated here. First, the order of termination was passed on 30 January, 1969 when the petitioner by reason of expiry of three years stood confirmed on 19/20 November, 1968. Second the order of termination was one of punishment and the appellant should,therefore, under Rule 9 of the Punjab Civil Service (Punishment and Appeal) Rules have been given opportunity to show cause against the order of termination. Under the aforesaid (Police Service) Rule 8(b) proviso, the Government could extend the period of probation by not more than one year. The appellant was appointed on 20 May, 1965 on two years probation. On 1 July, 1967, there was an order extending the period of probation by one year. On 20 May, 1968, there was an order terminating the services of the petitioner. on 20 July. 1968 there was an order revoking the order of termination and extending the period of probation for six months from 20 May, 1968. The order of termination was on 30 January, 1969. The appellant was on leave from 20 May, 1968 to 2 August, 1968. The 776 Government excluded the period of leave from the period of probation. The object of extending the period of probation is to find out whether the appellant was a fit person. The appellant could not be confirmed till the period of probation to find out the fitness of the appellant expired. It cannot therefore be held that the appellant stood confirmed on 19/20 November, 1968 before the period of probation expired in January, 1969. The appellant relied on Rule 9 of the Punjab Civil Services (Punishment and Appeal) Rules, 1952. Rule 9 is as follows "Where it is proposed to terminate the employment of a probationer, whether during or at the end of the period of probation, for any specific fault or on account of the un satisfactory record or unfavourable reports implying the unsuitability for the service, the probationer shall be ,apprised of the grounds of such proposal, and given an opportunity to show cause against it, before orders are passed by the authority competent to terminate the appointment". If (Punishment) Rule 9 applies the services of the appellant could not be terminated without complying with the previsions thereof. The appellant contended that the order of termination stated that the appellant was considered unfit for appointment and therefore it amounts to punishment to attract rule 9. The appellant extracted a statement from the affidavit of the Inspector General of Police in answer to the appellant 's petition in the High Court that the appellant 's record during the period of probation was unsatisfactory Reliance is placed on rule 9 where it is said that if the termination of the Services of a probationer be on account of unsatisfactory record he shall be given an opportunity to show cause against it. The respondent relied on rule 11 of the Punjab Police Service Rules where it is stated that in matters relating to discipline, penalties 'and appeals, members of the Service shall be governed by the Punjab Civil Services (Punishment and Appeal) Rules. Therefore, it is said by the respondent that Rules 8 and 11 of the Punjab Police Service Rules show that termination of probation which is dealt with in rule 8 is different from matters relating to penalties which are dealt with in rule II of the Punjab Police Service Rules. Termination on account of unsatisfactory record will attract rule 9 of the Punishment Rules. It is obvious that at the time of confirmation fitness is a matter to be considered. The order terminating the services is unfitness for appointment at the time of confirmation, it is not passed on the ground of any turpitude like misconduct or inefficiency. To hold that the words "unfit to be appointed" are a Stigma would rob the authorities of the power to judge fitness for work or suitability to the post at the time of confirmation. 777 Termination of services on account of inadequacy for the job or for any temperamental or other defect not involving moral turpitude is not a stigma which can be called discharge by punishment. Fitness for the job is one of the most important reasons for confirmation. The facts and circumstances do not show that there is any stigma attached to the order of termination. For these reasons, the appeal fails and is dismissed. Parties will pay and bear their own costs. V.M.K. Appeal Dismissed.

In the island of Bombay certain lands were held on a tenure known as "Foras". Under section 2 of Bombay Act VI of 1851 the occupants were entitled to hold the lands subject only to the payment of revenue then payable. Between 1864 and 1867 the Government of India acquired these lands under the provisions of the Land Acquisition Act (VI of 1857). On 22 11 1938 the Governor General sold them to certain persons under whom the present respondents claimed. In April 1942 the appellant acting under the Bombay City Land Revenue Act (Bombay Act II of 1876) issued notices to the respondents proposing to levy assessment on the lands at the rates mentioned therein. The respondents thereupon instituted two suits disputing the right of the appellant to assess the lands to revenue. They contended that under the Foras Land Act the occupants had acquired the right to hold the lands on payment of revenue not exceeding what was then payable, that the right to levy even that assessment was extinguished when the Government acquired the lands under the Land Acquisition Act, that the Governor General having conveyed the lands absolutely under the sale deed dated 22 11 1938 the respondents were entitled to hold them revenue free and that even if revenue was payable it could not exceed what was payable under the Foras Land Act. Held, (i) that under the Foras Land Act (VI of 1851) the occupants of Foras lands acquired a specific right to hold them on payment of assessment not exceeding what was then payable. (ii) that the right of the Government to levy assessment was not the subject matter of the land acquisition proceedings and that the effect of those proceedings was only to extinguish the rights of the occupants in the lands and to vest them absolutely in the Government. (iii) that where there is an absolute sale by the Crown it does not necessarily import that the land is conveyed revenuefree. The question is one of construction of the grant. The rule is that a grantee from the Crown gets only what is granted by the 168 1312 deed and nothing passes by implication. When the grant is embodied in a deed the question ultimately reduces itself to a determination of what was granted thereunder. Section 3 of the Crown Grants Act (XV of 1895) that "all provisions, restrictions conditions and limitations over shall take effect according to their tenor" does not apply when the question is as to the liability to pay revenue. (iv)that the Foras tenure became extinguished when the lands were acquired under the Land Acquisition proceedings and it was incapable of coming back to life when the lands were sold on 22 11 1938 and the respondents cannot claim a right to pay assessment only at the rate at which it was payable under the Foras Land Act. Goswammi Shri Kamala Vahooji vs Collector of Bombay ([1937] L.R. 64 I.A. 334), Shapurji Jivanji vs The Collector of Bombay ([1885] I.L.E. , 488), Naoroji Beramji vs Rogers , Deputy Collector, Calicut Division vs Aiyavu Pillay ([1911] , Dadoba vs Collector of Bombay ([1901] I.L.R. , Thakur Jagannoth Baksh Singh vs The United Provinces ([1946] F.L.J. 88) and Collector of Bombay vs Municipal Corpration of the City of Bombay and others ([1952] S.C.R. 43), referred to.

Appeal No. 146 of 1954. Appeal by Special Leave from the Judgment and Order dated the 17th day of December, 1952, of the High Court of Judicature at Madras in Referred Case No. 45 of 1952 arising out of the Report dated the 27th day of March, 1951, of the Court of District Judge, Krishna in C.M.P. No. 123 of 1951. section P. Sinha, (K. R. Chaudhary and Sardar Bahadur, with him), for the appellant. R. Ganapathy Iyer and P, G. Gokhale, for respondent No. 1. 1056 T. Satyanarayana and P. G. Gokhale, for respondent No. 3. 1954. December 3. The Judgment of the Court was delivered by DAS J. This is an appeal by special leave from an order made by a Special Bench of the High Court of Judicature at Madras under section 12 of the (Act XXXVIII of 1926) debarring the appellant from practising as an advocate for a period of five years. The material facts are these. The appellant before us is an advocate ordinarily practising at Masaulipatam. In Calendar Case No. I of 1949 on the file of the Additional First Class Magistrate 's Court at Masaulipatam nine persons were charged with the offence of conveying rice from the village to other villages without permits. Accused Nos. 2 and 4 were not represented by any advocate. Accused Nos. 1, 3, 5, 6 and 8, all cart men, were defended by the appellant. Accused No. 7, who initiated the proceedings out of which the present appeal arises and who is hereinafter referred to as "the petitioner", was defended by another advocate. The case was disposed of on the 30th September, 1949. Accused Nos. 1, 3, 5 and 6 were acquitted. Accused No. 2 was convicted and sentenced to a fine of Rs. 20 and in default of payment of fine to undergo simple imprisonment for one month. Accused No. 4 and the petitioner, accused No. 7, were also convicted and sentenced to pay a fine of Rs. 300/ each and in default of payment of fine to undergo simple imprisonment for six months. Accused No. 8 was sentenced to pay a fine of Rs. 100/ and in default of payment of the fine, to simple imprisonment for three months. Accused No. 2 paid the fine but the other three convicted persons did not. The four convicted persons including the petitioner thereafter engaged the appellant to prefer an appeal to the Sessions Court. The appeal was presented before the Sessions Court on the 8th October, 1949 and on the same day a petition was filed on behalf of accused Nos. 4, 7 (petitioner) and 8 for an order staying the 1057 realisation of the fine. That application for stay came up before the learned Sessions Judge on the 10th October, 1949 when notice was directed to issue to the Public Prosecutor. On the 11th October, 1949 the learned Judge passed the following order: "Suspended pending disposal of this petition. Call on 14. 10". On the 14th October, 1949 the following further order was passed: "Execution of sentences suspended till disposal of appeal". The appeal was posted for hearing on the 25th November, 1949 and was adjourned from time to time. Eventually, it was finally heard on the 13th July, 1950 when the appeal was allowed and the conviction and sentences of all the appellants were set aside. On the 25th January, 1951 the petitioner caused a registered notice (exhibit A/2) to be sent to the appellant alleging that on the 11th October, 1949 the appellant had represented to him that the Court had refused to suspend the sentences and that unless the amount of fine was deposited the petitioner would be sent to jail. It was further alleged that on such representation the petitioner had on that day paid to the appellant a sum of Rs. 300 for which the appellant had passed to the petitioner a chit (exhibit A/1) under his own signature acknowledging receipt of the said sum. The chit (exhibit A/1) which is addressed to the petitioner runs as follows: "This day, you have paid to me a sum of Rs. 300 (three hundred rupees only)". It is signed by the appellant and below his signature appears the date 11th October 1949 and the time 5 15 P.m. is also mentioned below the signature. The allegation in the registered notice further was that the appellant had concealed from the petitioner the fact that the order for payment of fine had been suspended until the hearing of the appeal and also that the appeal had eventually been allowed. The notice ended with a threat that if the appellant failed to return the sum of Rs. 300 together with interest at 12 per cent. per annum from the 11th October 1949 up to date of 1058 payment the petitioner would be constrained, in addition to such other proceedings as he may be advised to take for recovery of the said amount, to complain against the appellant and his unprofessional conduct to the High Court and the Bar Council. This notice was received by the appellant on the 12th February 1951 and on the next day, 13th February 1951, the appellant issued three registered notices Exs. A/3, A/4 and A/5 to the petitioner. In exhibit A/5 the appellant complained that the petitioner had been evading payment of the agreed fee of Rs. 150 and on firm demand having been made by the appellant on the 21st January 1951 for payment of such fee before the 25th January 1951 the petitioner had issued the registered notice exhibit A/2. In exhibit A/4 the appellant alleged that the petitioner instructed the appellant to file a stay petition as the petitioner was unable to pay the fine and that the appellant filed the petition accordingly and obtained a stay order about which the petitioner was fully aware. In those circumstances the allegations contained in the petitioner 's notice exhibit A/2 were false and highly defamatory. He further alleged that the petitioner was also present in Court on the 13th July 1950 when the appeal was allowed. In the circumstances, there was no need for the petitioner to pay any money to the appellant for the purpose of paying the fine. The appellant called upon the petitioner to withdraw the allegations and tender an unqualified apology immediately. In exhibit A/3 the appellant stated that the petitioner had come to him on the 6th October 1949 to engage him as his advocate for filing an appeal. Seeing that the appellant was then pressed for money for payment of an installment of a loan No. 616 to the Land Mortgage Bank, Pedana, the petitioner volunteered to arrange for a loan of Rs. 300 for the appellant at Pedana and asked him to give a chit in his favour and to send the appellant 's clerk with the petitioner. The petitioner did not, however, succeed in arranging for any money but the chit exhibit A/I remained with him. There was a denial that there was any consideration for the chit exhibit A/I. On the 7th March 1951 the petitioner sent a reply generally 1059 denying the allegations contained in the three several notices sent by the appellant to the petitioner. That reply was received by the appellant on the 13th March 1951 and on the 14th March 1951 the appellant issued a further rejoinder exhibit A/7 denying the allegations in the petitioner 's reply and stating that the statements in his three notices were true. It was further alleged that when the petitioner failed to sup ply the amount mentioned in the chit exhibit A/I the appellant asked him to return the chit but the petitioner said that the chit was missing and that he would search for it and return it subsequently and so saving the petitioner gave the appellant on the 16th October 1949.a hand letter (exhibit D/8) admitting that the petitioner was unable to supply the amount of Rs. 300 mentioned in the said chit as promised. The petitioner did not send any reply to this letter in spite of the fact that the appellant had therein referred to a hand letter (exhibit D/8) dated the 16th October 1949 which totally nullified the value of the chit exhibit A/I. The petitioner then on the 27th March 1951 sent a petition to the High Court making a complaint against the appellant of professional misconduct and praying that the Hon 'ble High Court might be pleased to order an enquiry into the allegations made in his complaint and to take such action against the appellant as was necessary and expedient in the circumstances of the case. Along with the petition were submitted a photograph of the chit exhibit A/I and copies of the registered correspondence that passed between the petitioner and the appellant. Even in this petition the petitioner did not refer to the band letter (exhibit D/8) of the 16th October 1949 and did not specifically deny having written the same. Upon the presentation of the petition the appellant submitted a written explanation before the High Court. The High Court,, under section 10 of the , referred the matter to the District Judge to enquire into the allegations made in the petition and to submit A report. The District Judge issued a notice to the appellant setting forth the following charges: 136 1060 "1. That you have suppressed fraudulently the order of the Additional Sessions Judge, Krishna at Masaulipatam, suspending payment of fine of Rs. 300 and made in Crl. M. P. No. 180 of 1949 in C. A. No. 82 of 1949 preferred against the conviction and sentence passed by the Additional First Class Magistrate, Bandar, in C.C. No. 1 of 1949, on his file, against the petitioner, who is the seventh accused therein; 2. That you, having fraudulently suppressed the above stated fact, have represented to the petitioner that the amount of fine of Rs. 300 had to be deposited into Court on pain of the petitioner being sent to jail and received the said sum of Rs. 300 from him and passed a receipt in his favour for the same; 3. That you, even though the above said C.A. No. 82 of 1949 on the file of the Additional Sessions Judge, Krishna at Masaulipatam was allowed by the judgment dated 13 7 1950, having all knowledge about it did not inform the petitioner that the said C.A. No. 82 of 1949 was disposed of, and later on informed him that it was dismissed, and the conviction and sentence were confirmed; 4. That you, therefore, wrongfully withheld the amount of Rs. 300 belonging to the petitioner without depositing into Court as represented by you and also without refunding it to the petitioner even after the said appeal was allowed in spite of repeated requests and demands made by him, and 5. That you have falsely set up a plea of not having received the said sum of Rs.300 from the petitioner, for which you have passed a receipt in his favour, and later on set up that you wanted to borrow the said amount from him during the subsistence of the relationship of advocate and client, which (borrowing from a client) itself is prohibited by law". The petitioner examined himself (P.W.1) and his brother Potharaju (P.W.2) as his witnesses in support of the allegations in the petition. The appellant examined himself (R. W. 1) and his clerk D. Venkatarangam (R.W.2), Kameswararao, the secretary of the Vadlamannadu Co operative Land Mortgage Bank at 1061 Pedana (R.W.3) and Venktadri, clerk of an advocate (R.W.4) in support of his defence. On a consideration of the entire evidence the learned District Judge found that the testimony of the petitioner and his brother was not credible and acceptable and that there was no reason to reject the testimony of the appellant and his clerk and other witnesses and he came to the conclusion that it bad not been satisfactorily proved that the appellant was guilty of any of the charges framed against him. The District Judge sent a report accordingly. The matter was placed before a Special Bench of the Madras High Court. The Special Bench had no hesitation in agreeing with the findings of the learned District Judge on charges 1, 2 and 3. In their opinion much reliance could not be placed on the veracity of the complainant himself The High Court, in agreement with the learned District Judge, held that the appellant was not guilty of the first three charges. Coming to the last two charges the learned Judges were struck by several facts, namely, (i) the passing of two receipts for two sums of money each of Rs. 300 which were identical with the amount of fine imposed on each of the accused Nos. 4 and 7 (petitioner) and (ii) the date of payment, namely, the 11th October 1949 on which date the petitioner and the fourth accused had to deposit the fine. The learned Judges were strongly impressed with the fact that the chit exhibit A/I had been allowed to remain with the petitioner. The High Court also noted that if the arrange ment was that the appellants clerk would pass a formal stamped receipt after getting the money there was no necessity to issue an informal receipt in favour of the petitioner in advance. The learned Judges further pointed out that in none of the three notices dated the 13th February 1951 any reference had been made by the appellant to the hand letter (exhibit D/8) 'dated the 16th October 1949. The High Court concluded that the failure to mention this hand letter in the earliest reply by the appellant cast considerable doubt on the genuineness of the document and consequently the Court could not act on the basis that it 1062 contained a true statement of facts admitted by the petitioner. The High Court also referred to several other minor points suggesting the improbability of the appellant 's story. The High Court held that the appellant had received a sum of Rs. 300 from the petitioner on the 11th October 1949 as acknowledged by the appellant in the chit exhibit A/ 1. The High Court accordingly held that charges Nos. 4 and 5 had been proved against the appellant and passed orders against the appellant debarring him from practicing as an advocate for five years. The appellant has now preferred this appeal after having obtained special leave from this Court. We have been taken through the evidence by learned advocates appearing on both sides. It appears to us that while there are some facts which cast some doubt on the version of the appellant there are other material facts completely overlooked by the High Court which nevertheless have a material bearing on the truthfulness or falsity of the complainant 's story. It is true that the appellant did not refer to the hand letter (exhibit D/8) in his replies Exs. A/3, A/4 and A/5 to the petitioner 's letter exhibit A/2, but the appellant did refer to it in his rejoinder exhibit A/7 of the 14th March 1951. It is significant that the petitioner did not send any reply to this last rejoinder and deny the allegations definitely made by the appellant. It is further significant that the petitioner did not deny the genuineness of the band letter exhibit D/8 even in his petition. In his evidence the petitioner admits the signature on the hand letter to be his own but states that it must have been made out by the appellant on a blank paper on which he had induced the petitioner to put his signature on the representation that the same would be used as a Vakalatnama. It is very difficult to accept this story because the petitioner knew from his experience as an accused in the trial Court that no Vakalatnama was required in a criminal case. Nor has any of the other appellants been produced as a witness to say that any such signature was taken from any of them on blank paper. Further, the petitioner was present in Court on the 11th October when 1063 the interim stay order was made. exhibit A/1 bears the hour 5 15 P.m. below the signature of the appellant which shows that chit came into existence after court hours. It is utterly impossible to believe that the petitioner would deposit Rs. 300 with his new advocate in spite of the fact that in the earlier part of the day the interim order for stay had been made. It is also significant that accused No. 4 who is also alleged to have paid Rs. 300 to the appellant for a similar purpose has not been called as a witness to corroborate the evidence of the petitioner and his brother. The question of the ability of the petitioner to advance Rs. 300 is one of great importance in this case. The petitioner is not a man of means. He alleged that he had raised the sum of Rs. 300 by selling some miscellaneous gold. No goldsmith or shrove was called to produce his books and give evidence in corroboration of the petitioner and his brother. Indeed, the petitioner could not even mention the name of any shroff to whom he is supposed to have sold his gold. The High Court completely overlooked this aspect of the matter and in the absence of satisfactory evidence showing that the petitioner was in a position to pay the sum of Rs. 300 it will be extremely risky to hold that the fact of payment of Rs. 300 by the petitioner to the appellant has been proved only because there are some weaknesses in the appellant 's story. The appellant 's story that he required Rs. 600 to be paid to the Land Mortgage Bank is supported by the secretary of the Land Mortgage Bank (R.W. 3) who stated that the appellant bad informed him that he had raised Rs. 300 only and that a person who had promised to arrange for a loan of Rs. 300 had failed to do so and that the appellant had asked his advice as to what he was to do. The secretary then told the appellant that as he had made an excess payment in 1948 towards and on account of the principal it would be enough if he paid the amount of Rs. 377/9/ which the appellant bad. It is significant that the Bank 's records show that the appellant had paid only Rs. 377/9/ into the Bank on the 4th November, 1949. If the petitioner had paid 1064 Rs. 300 to the appellant there would have been no reason why the appellant should not have paid the entire Rs. 600 towards his liability to the Bank. The learned District Judge who had the advantage of seeing the witnesses and hearing the evidence disbelieved the evidence of the petitioner and his brother and we see no compelling reason to take a different view of it. On the facts and circumstances of this case we think that charges 4 and 5 have not been brought home to the appellant or, at any rate, the appellant is entitled to the benefit of the doubt. In the circumstances, we hold that the order passed by the High Court should be reversed and we direct that the complaint against the appellant do stand dismissed as not proved. Before parting with this appeal we desire to say that it appears to us that it was wholly wrong and inappropriate for the appellant to have made the Honourable Judges of the Madras High Court respondents to this appeal. It appears that in some cases involving contempt of Court the Honourable Judges have been made parties. It is not necessary for us to express any opinion on this occasion as to the propriety of that procedure in contempt cases but we are clearly of the opinion that in an appeal arising out of a proceeding under the Bar Councils Act the appropriate parties should be the advocate concerned, the complainant, if any, the Bar Council or the secretary thereof and the Advocate General of the State concerned to whom notices have to be issued under section 12(3) of the . Appeal allowed.

It is wrong and inappropriate to implead the Judges of the High Court as respondents in an appeal preferred to the Supreme Court by an Advocate against whom an order of suspension was passed by the High Court under section 12 of the . In such appeal the proper respondents are the complainant if any, the Bar Council or Secretary thereof and the Advocato General of the State concerned

Appeal No. 51 of 1951. Appeal from the Judgment and Decree dated the 11h September, 1945, of the High Court of Judicature at Allaha bad (Brand and Waliullah JJ.) in First Appeal No. 212 of 1942 arising out of the Judgment and Decree dated the 28th February, 1942, of the Court of the Civil Judge of Azamgarh in Original Suit No. 4 of 1941. S.P. Sinha (Shaukat Hussain, with him) for the appel lants. C.K. Daphtary (Nuruddin Ahmed, with him) for the re spondents. Oct. 22. The judgment of the Court was delivered by BHAGWATI J. This is an appeal from the judgment and decree of the High Court of judicature at Allahabad which set aside a decree passed by the Civil Judge of Azamgarh decreeing the plaintiff 's claim. One Haji Abdur Rahman, hereinafter referred to as Haji" a Sunni Mohammedan, died on the 26th January, 1940, leaving behind him a large estate. He left him surviving the plain tiffs 1 to 3, his sons, plaintiff 4 his daughter and plain tiff 5 his wife, defendant 6 his sister, defendant 7 his daughter, by a predeceased wife Batul Bibi and defendants 1 to 4 his nephews and defendant 5 his grand nephew. Plain tiffs case is that immediately after his death the defendant 1 who was the Chairman, Town Area qasba Mubarakpur and a member of the District Board, Azamgarh and defendant 5 who was an old associate of his started propaganda against them, that they set afloat a rumour to the effect that the plain tiffs 1 to 4 1135 were not the legitimate children of Haji and that the plain tiff 5 was not his lawfully wedded wife, that the defendants 1 to 4 set up an oral gift of one third of the estate in their favour and defendant 5 set up an oral will bequeathing one third share of the estate to him and sought to interfere with the possession of the plaintiffs over the estate and nearly stopped all sources of income. It was alleged that under these circumstances a so called deed of family settle ment was executed by and between the parties on the 5th April, 1940, embodying an agreement in regard to the distri bution of the properties belonging to the estate, that plaintiff 3 was a minor of the age of about 9 years and he was represented by the plaintiff 1 who acted as his guardian and executed the deed of settlement for and on his behalf. On these allegations the plaintiffs filed on the 25th Novem ber, 1940, in the Court of Civil Judge of Azamgarh the suit out of which the present appeal arises against the defend ants 1 to 5 and defendants 6 and 7 for a declaration that the deed of settLement dated 5th April, 1940, be held to be invalid and to establish their claim to their legitimate shares in the estate of Haji under Mohammedan Law. The defendant 8 a daughter of the plaintiff 5 whose paternity was in dispute was added as a party defendant to the suit, the plaintiffs claiming that she was the daughter of the plaintiff 5 by Haji and the defendants 1 to 5 alleging that she was a daughter of the plaintiff 5 by her former husband Alimullah. The only defendants who contested the claim of the plaintiffs were the defendants 1 to 5. They denied that the plaintiff 5 was the lawfully wedded wife and the plaintiffs 1 to 4 were the legitimate children of Hail. They also contended that the deed of settlement embodied the terms of a family settlement which had been bona fide arrived at between the parties in regard to the disputed claims to the estate of Haji and was binding on the plaintiffs. It is significant to observe that the defendants 6 and 7 who were the admitted heirs of Haji did not contest the plaintiffs ' claim at all. 1136 The two issues which were mainly contested before the trial Court were, (I) Whether the plaintiffs 1 to 4 are the legitimate issue of and the plaintiff 5 is the wedded wife of Abdul Rahman deceased; (2) Whether the agreement dated 5th April, 1940, was executed by the plaintiffs after understanding its contents fully or was obtained from them by fraud or undue influence ? Was the said deed insufficiently stamped? Was it benefi cial to the minor plaintiffs ? As regards the first issue there was no document evi dencing the marriage between the plaintiff 5 and Haji. The plaintiff 5 and Haji had however lived together as man and wife for 23 to 24 years and the plaintiffs 1 to 4 were born of that union. There was thus a strong presumption of the marriage of Haji with plaintiff 5 having taken place and of the legitimacy of plaintiffs 1 to 4. The trial Court did not attach any importance to the question of onus or pre sumption, examined the evidence which was led by both the parties with a view to come to a finding in regard to this issue, and found as follows: "So far as Musammat Rahima 's marriage with Alimullah or another Abdul Rahman is concerned the evidence of both the parties stands on the same level and is not worthy of much credit. I have however, not the least hesitation to observe that so far as the oral evidence and the circumstances of the case are concerned, they all favour the plaintiffs. I, however, find it difficult to ignore the testimony of the defendants ' witnesses Shah Allaul Haq and Molvi Iqbal Ahmad . . . . Owing to the voluminous oral evidence adduced by the plaintiffs and the circumstances that apparently favour them, I gave my best attention to this case, but upon a careful consideration of the whole evidence on the record, I am not prepared to hold that the plaintiffs 1 to 4 are the legitimate issues of the plaintiff No. 5, the lawfully wedded wife of the deceased, Haji Abdul Rahman. I frankly admit that the matter iS not free from difficulty and 1137 doubt but to my mind the scale leans away from the plain tiffs and I am not satisfied that their version is correct. " On the second issue the learned trial Judge came to the conclusion that the disputed compromise amounted to a family settlement; that it was beneficial to the interests of the minor plaintiff and that it was made by the parties willing ly and without any fraud or undue influence. On these find ings the suit was dismissed with costs. The plaintiffs filed an appeal to the High Court of Judicature at Allahabad. After considering the several authorities on the binding nature of family settlements cited before it came to the conclusion that it did not bind the plaintiffs. As regards defendants 1 to 5 it was held that there was no consideration whatsoever which could in any way support the arrangement. Plaintiffs 4 and 5 being Purdanashin ladies, it was found that they had no chance at any stage of the transaction of getting independent advice in regard to the contents or the effect of the document which they were executing and that even if the deed were valid otherwise it would not be binding on them. It was further held that the plaintiff 3 who would be about 9 years of age at the time of the execution of the deed was repre sented in the transaction by his brother who could not be the legal guardian of his property and that the deed in so far as it adversely affected the interest of plaintiff 3 would not be binding on him. On the question of marriage and legitimacy the High Court came to the conclusion that ii the trial Court had considered the question of onus in its proper light and given the plaintiffs the benefit of the initial presumption in favour of legitimacy and lawful wedlock under the Mahomedan law, he would have recorded a finding in their favour. The defendants to 5 had alleged that at the time of the commencement of sexual relations between the plaintiff 5 and Haji, plaintiff 5 was the wife of one Alimullah who was alive and that therefore the con nection between the 1138 plaintiff 5 and Haji was in its origin illicit and continued as such, with the result that the presumption in favour of a marriage between the plaintiff 5 and Haji and in favour of the legitimacy of plaintiffs 1 to 4 would not arise. The learned trial Judge disbelieved the evidence led by the defendants 1 to 5 in regard to this marriage between the plaintiff 5 and Alimullah. The High Court upheld the finding and said: "All these circumstances, to my mind, strongly militate against the theory of a first marriage of Musammat Rahima Bibi with the man called Alimullah. In this state of the evidence one cannot but hold that this story of the marriage with Alimullah was purely an after thought on the part of the defendants 1 to 5 and it was invented only to get rid of the strong presumption under the Mahomedan law in favour of the paternity of plaintiffs 1 to 4 and the lawful wedlock of the plaintiff 5. " Having thus discredited the theory of the first mar riage of the plaintiff 5 with Alimullah the High Court came to the conclusion that it was fully established that Musam mat Rahima Bibi was the lawfully wedded wife and that the plaintiffs 1 to 4 are the legitimate children of Haji. The defendants 1 to 5 obtained leave to appeal to His Majesty in Council and the appeal was admitted on the 10th January, 1947 Shri S.P. Sinha who appeared for the defendants 1 to 5 before us has urged the self same two questions, namely, (1) Whether the deed of settlement is binding on the plaintiffs and (2) Whether the plaintiff 5 was the lawfully wedded wife and the plaintiffs 1 to 4 are the legitimate children of Haji. In regard to the first question, it is unnecessary to discuss the evidence in regard to fraud, undue influence, want of independent advice etc., as the question in our opinion is capable of being disposed of on a short point. It is admitted that the plaintiff 3 Ishtiaq Husan was a minor of the age of about 9 years at the date of the deed, and he was not represented as 1139 already stated by any legal guardian in this arrangement. The minor 's brother had no power to transfer any right or interest in the immovable property of the minor and such a transfer if made was void. (See Mulla 's Mahomedan Law, 13th Edition, page 303,section 364). Reference may be made to the decision of their Lord ships of the Privy Council in Imambandi vs Mut saddi(1). In that case the mother who was neither the legal guardian of her minor children nor had been appointed their guardian under the Guardian and Wards Act had purported to transfer the shares of her minor children in the property inherited by them from their deceased father. Mr. Ameer Ali who deliv ered the judgment of the Board observed at page 82 as follows : The question how far, or under what circumstances according to Mahomedan law,a mother 's dealings with her minor child 's property are binding on the infant has been frequently before the courts in India. The decisions, howev er, are by no means uniform, and betray two varying tenden cies: one set of decisions purports to give such dealings a qualified force; the other declares them wholly void and ineffective. In the former class of cases the main test for determining the validity of the particular transaction has been the benefit resulting from it to the minor; in the latter the admitted absence of authority or power on the part of the mother to alienate or incumber the minor 's property. " The test of benefit resulting from the transaction to the minor was negatived by the Privy Council and it was laid down that under the Mahomedan law a person who has charge of the person or property of a minor without being his legal guardian, and who may, there fore, be conveniently called a "defacto guardian," has no power to convey to another any right or interest in immovable property which the transferee can enforce against the infant. (1) (1918) 45 1. A. 73. 1140 Shri S.P. Sinha relied upon a decision of the Calcutta High Court reported in Mahomed Keramutullah Miah vs Keramutulla (1) where it was held that there was nothing in the doctrine of family arrangements opposed to the general principle that when it was sought to bind a minor by an agreement entered into on his behalf, it must be shown that the agreement was for the benefit of the minor;that if improper advantage had been taken of the minor 's position, a family arrangement could be set aside on the ground of undue influence or inequality of position or one or other of the grounds which would vitiate such arrangement in the case of adults; but where there was no defect of this nature, the settlement of a doubtful claim was of as much advantage to a minor as to an adult, and where a genuine dispute had been fairly settled the dispute could not be reopened solely on the ground that one of the parties to the family arrangement was a minor. This decision was reached on the 19th July, 1918, i.e., almost 5 months after the decision of their Lordships of the Privy Council, but it does not appear that the ruling was brought to the notice of the learned Judges of the Calcutta High Court. The test of the benefit resulting from the transaction to the minor which was negatived by their Lord ships of the Privy Council was applied by the learned Judges of the Calcutta High Court in order to determine whether the family arrangement which was the subject matter of the suit before them was binding on the minor. Shri S.P. Sinha next relied upon a decision of the Chief Court of Oudh, Ameer Hasan vs Md. Ejaz Husain(2). In that case an agreement to refer to arbitration was entered into by the mother for her minor children and an award was made by the arbitrators. The scheme of distribu tion of properties promulgated in the award was followed without any objection whatever for a long period extending over 14 years and proceedings were taken at the instance of the minors for recovery of possession by actual partition of their shares in the properties. The Court held (1) A.I.R. 1919 Cal. 218. (2) A.I.R. 1929 Oudh 134. 1141 that the reference to arbitration could not be held binding on the minors and the award could not be held to be an operative document, but if the scheme of distribution pro mulgated in the award was in no way perverse or unfair or influenced by any corruption or misconduct of the arbitra tors and had been followed without any objection whatever for a long period extending over 14 years, it would as well be recognised as a family settlement and the court would be extremely reluctant to disturb the arrangement arrived at so many years ago. This line of reasoning was deprecated by their Lordships of the Privy Council in Indian Law Reports 19 Lahore 313 at page 317 where their Lordships observed "it is, however, argued that the transaction should be upheld, because it was a family settlement. Their Lordships cannot assent to the proposition that a party can, by describing a contract as a family settlement, claim for it an exemption from the law governing the capacity of a person to make a valid contract. " We are therefore unable to accept this case as an authority for the proposition that a deed of settlement which is void by reason of the minor not having been properly represented in the transaction can be rehabil itated by the adoption of any such line of reasoning. If the deed of settlement was thus void it could not be void only qua the minor plaintiff 3 but would be void altogether qua all the parties including those who were sui juris. This position could not be and was not as a matter of fact contested before us. The contention of the defendants 1 to 5 in regard to the lawful wedlock between plaintiff 5 and Haji and the legitimacy of the plaintiffs 1 to 4 is equally untenable. The plaintiffs had no doubt to prove that the plaintiff 5 was the lawfully wedded wife and the plaintiffs 1 to 4 were the legitimate children of Haji. Both the Courts found that the factum of the marriage was not proved and the plaintiffs had therefore of necessity to fall back upon the presump tion of marriage arising in Mahomedan law. If that presump tion of marriage arose, there would be no difficulty in 1142 establishing the status of the plaintiffs 1 to 4 as the legitimate children of Haji because they were admittedly born by the plaintiff 5 to Haji. The presumption of marriage arises in Mahomedan law in the absence of direct proof from a prolonged and continual cohabitation as husband and wife. It will be apposite in this connection to refer to a passage from the judgment of their Lordships of the Privy Council in Khajah Hidayut Oollah vs Rai Jan Khanurn(1). Their Lord ships there quoted a passage from Macnaghten 's Principles of Mahomedan Law: "The Mahomedan lawyers carry this disinclination (that is against bastardizing) much further; they consider it legitimate of reasoning to infer the existence of marriage from the proof of cohabitation . . None but children who are in the strictest sense of the word spurious are considered incapable of inheriting the estate of their putative father. The evidence of persons who would, in other cases, be considered incompetent witnesses is admitted to prove wedlock, and, in short, where by any possibility a marriage may be presumed, the law will rather do so than bastardize the issue, and whether a marriage be simply voidable or void ab initio the offspring of it will be deemed legitimate . . . . . This I apprehend, with all due deference, is carrying the doctrine to an extent unwarranted by law; for where children are not born of women proved to be married to their father, or of female slaves to their fathers, some kind of evidence (however slight) is requisite to form a presumption of matrimony. . . . . . . The mere fact of casual concubinage is not sufficient to establish legiti macy ;and if there be proved to have existed any insurmount able obstacle to the marriage of their putative father with their mother, the children, though not born of common women, will be considered bastards to all intents and purposes. " Their Lordships deduced from this passage the principle that where a child had been both to a father, of a mother where there had been not a mere casual (1) (1844) 3 Moore 's indian Appeals 295 at p. 317. 1143 concubinage, but a more permanent connection, and where there was no insurmountable obstacle to such a marriage, then according to the Mahomedan law, the presumption was in favour of such marriage having taken place. The presumption in favour of a lawful marriage would thus arise where there was prolonged and continued cohabita tion as husband and wife and where there was no insurmount able obstacle to such a marriage, eg., prohibited relation ship between the parties, the woman being an undivorced wife of a husband who was alive and the like. Further illustra tions are to be found in the decisions of their Lordships of the Privy Council in 21 Indian Appeals 56 and 37 Indian Appeals 105 where it was laid down that the presumption does not apply if the conduct of the parties was incompatible with the existence of the relation of husband and wife nor did it apply if the woman was admittedly a prostitute before she was brought to the man 's house (see Mulla 's Mahomedan Law, p. 238, section 268). If therefore there was no insur mountable obstacle to such a marriage and the man and woman had cohabited with each other continuously and for a pro longed period the presumption of lawful marriage would arise and it would be sufficient to establish that there was a lawful marriage between them. The plaintiff 5 and Haji had been living as man and wife for 23 to 24 years openly and to the knowledge of all their relations and friends. The plaintiffs 1 to 4 were the children born to them. The plaintiff 5, Haji, and the children were all staying in the family house and all the relations including the defendant I himself treated the plaintiff 5 as a wife of Haji and the plaintiffs 1 to 4 as his children. There was thus sufficient evidence of habit and repute. Haji moreover purchased a house and got the sale deed executed in the names of the plaintiffs 1 and 2 who were described therein as his sons. The evidence which was led by the defendants 1 to 5 to the contrary was dis carded by the High Court as of a negative character 1144 and of no value. Even when the deed of settlement was exe cuted between the parties the plaintiff 5 was described as the widow and plaintiffs 1 to 4 were described as the chil dren of Haji. All these circumstances raised the presumption that the plaintiff 5 was the lawfully wedded wife and the plaintiffs 1 to 4 were the legitimate children of Haji. The result therefore is that both the contentions urged by the defendants 1 to 5 against the plaintiffs ' claim in suit fail and the decree passed in favour of the plaintiffs by the High Court must be affirmed. It was however pointed out by Shri S.P. Sinha that the High Court erred in awarding to the plaintiffs mesne profits even though there was no demand for the same in the plaint. The learned Solicitor General appearing for the plaintiffs conceded that there was no demand for mesne profits as such but urged that the claim for mesne profits would be included within the expression "awarding possession and occupation of the property aforesaid together with all the rights appertaining thereto. " We are afraid that the claim for mesne profits cannot be included within this expression and the High Court was in error in awarding to the plaintiffs mesne profits though they had not been claimed in the plaint. The provision in regard to the mesne profits will therefore have to be deleted from the decree. We dismiss the appeal of the defendants 1 to 5 and affirm the decree passed by the High Court in favour of the plain tiffs, deleting therefrom ' the provision in regard to mesne profits. The plaintiffs will of course be entitled to their costs throughout from the defendants 1 to 5. Appear dismissed. Agent for the appellants ': V.P.K. Nambiyar.

The Oudh Estates Act (Act I of 1869) does not interdict the creation of future estates and limitations provided they do not transgress the rule of perpetuities and where a disposition by a will made by a taluqdar does not make the legatee an absolute owner but gives him only an interest for life which is followed by subsequent interests created in favour of other persons the rule of succession laid down in section 14 of the Act will not apply on the death of the donee and the property bequeathed to him will pass according to the will to the next person entitled to it under the will, 233 The words malik kamil (absolute owner) and naslan bad naslan (generation after generation) are descriptive of a heritable and alienable estate in the donee and they connote full proprietary rights unless there is something in the context or in the surrounding circumstances which indicate that absolute rights were not intended to be conferred. In all such cases the true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the will as a whole with all its provisions and ignoring none of them as redundant or contradictory. In cases where the intention of the testator is to grant an absolute estate, an attempt to reduce the powers of the owner by imposing restraint on alienation would be repelled on the ground of repugnancy; but where the restrictions are the primary things which the testator desires and they are consistent with the whole tenor of the will, it is a material circumstance to be relied on for displacing the presumption of absolute ownership implied in the use of the word malik. Though under the rule laid down in Tagore vs Tagore no interest could be created in favour of unborn persons, yet when a gift is made to a class or series of persons, some of whom are in existence at the time of the testator 's death and some are not, it does not fail in its entirety ; it will be valid with regard to the persons who are in existence at the time of the testator 's death and invalid as to the rest. A will made by a taluqdar of Oudh recited that with a view that after his death his younger son D and his heirs and successors, generation after generation, may not feel any trouble or create any quarrel, D shall after the testator 's death remain in possession of certain villages as absolute owner, with the reservation that he will have no right to transfer, that if D may not be living at the time of his death D 's son or whoever may be his male heir or widow may remain in possession and that although D and his heirs are not given the power of transfer they will exercise all other rights of absolute ownership: Held, that the will did not confer an absolute estate on D and on D 's death the succession was not governed by section 14 of the Oudh Estates Act and D 's widow was entitled to succeed in preference to D 's elder brother.

Appeals Nos. 1062 and 1063 of 1966. Appeals by special leave from the judgment and order dated February 15, 1965 of the Calcutta High Court in matters Nos. 231 ,in,] 232 of 1964. R. M. Hazarnavis, K. D. Karkhanis, R. H. Dhebar and R. N. Sachthey, for the appellant. A. K. Sen, T. A. Rancachandran, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent. The judgment of the Court was delivered by Wanchoo, J. These two appeals by special leave arise out of two applications by the appellant to the Income tax Appellate 175 Tribunal for reference to the High Court of a question of law, which was formulated as follows: "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the reassessment proceedings under section 17(b) of the Wealth Tax Act were not validly initiated and in setting aside the same. " The facts which led to the applications for reference are briefly these. The respondent submitted wealth tax returns for the years 1957 58 and 1958 59. For the year 1957 58 the respondent claimed that an amount of Rs. 51 lakhs and odd being provision for taxation and another amount of Rs. 37 lakhs and odd being provision for contingencies, being ascertained liability, should be allowed as deduction from the total wealth. For the year 1958 59, the respondent claimed Rs. 31 lakhs and odd being provision for contingencies as ascertained liability as deduction from the total wealth. Assessment for the year 1957 58 was completed on December 30, 1957 and the Wealth tax Officer accepted the contention of the respondent and allowed the claim for deduction. Subsequently the Commissioner of Wealth tax by his order dated December 29, 1958 passed under section 25(2) of the Wealth Tax Act, No. XXXVII of 1957, (hereinafter referred to as the Act) disallowed the deduction of Rs. 51 lakhs and odd being the provision for taxation for the assessment year 1957 58. The order of the Wealth tax Officer allowing deduction for contingencies for the assessment year 1957 58 however stood. The assessment for the year 1958 59 was completed on December 9, 1958 and deduction was allowed for contingencies only. It may be added that we are not concerned in the present appeals so far as deduction for provision for taxa tion is concerned. On March 22, 1960, the Wealth tax Officer completed the assessment of the respondent for the year 1959 60 and disallowed the claim for deduction of the provision for contingencies. On June 2, 1960, the Wealth tax Officer issued two notices under section 17(b) of the Act for reassessment of net wealth for the years 1957 58 and 1958 59. On September 24, 1961 orders of reassessment under section 16(3) read with section 17(b) of the Act were passed in respect of the assessment years 1957 58 and 1958 59 and by these orders the amounts which had been formerly allowed as deduction with respect to contingencies were included in the total wealth of the respondent. The respondent then went in appeal against the two reassessment orders and the Appellate Assistant Commissioner sustained the decision of the Wealth tax Officer with respect to the reassessments in question. The case of the respondent was that the Wealth tax Officer had no information on the basis of which he could proceed to reassess the net wealth of the respondent and in this connection reliance was placed on the words "in consequence of any information in his possession" appearing in section 17(b) of the Act. 176 The respondent then went in appeal to the Appellate Tribunal and his contention there was that the issue of notices under section 17(b) of the Act was invalid as it was based on a mere change of opinion on the part of the Wealth tax Officer, as at that time there was no information in the possession of the Wealth tax Officer which could lead him to believe that the net wealth chargeable to tax had escaped assessment. It was contended that such information must be information which came into possession of the Wealth tax Officer subsequent to the making of the original assessment and that the information must lead him to believe that income chargeable to tax had escaped assessment. The Tribunal accepted this contention of the respondent. It may be pointed out that the assessment made by the Wealth tax Officer for the year 1959 60 was taken in appeal to the Appellate Assistant Commissioner by the respondent and the respondent 's appeal was dismissed in November 1960. The Tribunal pointed out that if the Wealth tax Officer had waited till after the decision of the Appellate Assistant Commissioner about the assessment for the year 1959 60 and then issued notices there would have been sufficient information for the purpose of section 17(b) with the Wealth tax Officer to authorise him to issue notice thereunder , but as the Wealth tax Officer issued the notices in June 1960 before that appeal was decided, it was only a case of change 'of opinion by the Wealth tax Officer which did not justify issue of notices under section 17(b). The Tribunal also pointed out that the departmental representative was specifically asked what the information was upon which the Wealth tax Officer came to the conclusion that taxable wealth had escaped assessment. The departmental representative was unable to point to any specific information which came into the possession of the Wealth tax Officer and which could lead him to issue the notices in question. The Tribunal therefore held that the reassessment proceedings under section 17(b) for the years 1957 58 and 1958 59 were not validly initiated and set them aside. Thereupon the appellant applied to the Tribunal for making references under section 27(1) of the Act. The Tribunal rejected the applications. The appellant then applied to the High Court under section 27(3) of the Act for direction to the Tribunal to state a case. The High Court however rejected the applications summarily. Thereupon the appellant applied to this Court for special leave which was granted; and that is how the matter has come before us. The main contention that has been urged on behalf of the appellant before us is that there is divergence of opinion among the High Courts on the question as to what constitutes "information" for the purpose of section 34(1)(b) of the Indian Income tax Act. No. IT of 1922, (hereinafter referred to as the Income tax Act). That section is in pari materia with section 17(b) of the Act and therefore a question of law did arise which should have been referred to the 177 High Court for its decision on the question raised by the appellant. Reliance in this connection is placed on the decision of this Court in Maharajkumar Kamal Singh vs Commissioner of Income tax Bihar(1) where this Court held that "the word 'information ' in section 34(1)(b) included information as to the true and correct state of the law, and so would cover information as to relevant judicial decisions". A further question was raised in that case, namely, "whether it would be open to the Income tax Officer to take action under section 34(1) on the ground that he thinks that his original decision in making the order of assessment was wrong without any fresh information from an external source or whether the successor of the Income tax Officer can act under section 34 on the ground that the order of assessment passed by his predecessor was erroneous". That question was not decided by this Court in that case, though this Court pointed out that in construing the scope and effect of section 34, the High Courts had expressed divergent views on the point. It is urged on behalf of the appellant that the precise question left undecided by this Court in Maharajkumar Kamalsingh 's case(1) arises in the present case, and as there are divergent views taken by the High Courts on that question, a question of law did arise on the order of the Appellate Tribunal and therefore the Tribunal should have made a reference. In Commissioner of Income tax Bombay vs Sir Mohomed Yusuf Ismail(1) it was held by the Bombay High Court as far back as 1943 that under section 34 a mere change of opinion on the same facts or on a question of law or the mere discovery of a mistake of law is not sufficient information within the meaning of section 34 and that in order to take action under section 34 there must be some information as a fact which leads the Income tax Officer to discover that income has escaped or has been under assessed. The same view was taken in a later case by the Nagpur High Court in Income tax Appellate Tribunal Bombay vs B. P. Byramji & Co.(1) where it was again emphasised that a mere change of opinion by the Income tax Officer is no ground for taking action under section 34, Further in Bhimraj Pannalal vs Commissioner of Income tax Bihar(1) it was held by the Patna High Court that "an order of assessment made after investigation by a particular officer should Jr not at his sweet will and pleasure be allowed to be revised merely because he changed his opinion and that there must exist something either suppressed by the assessee or a fact or a point of law which was inadvertently or otherwise omitted to be considered by the Income tax Officer, before he can proceed to act under section 34; and a mere change of opinion on the same facts and law is not covered by that section." (1) [1959] supp. 1 S.C.R. 10: (2) (1944) 12 T.T.R. section (3) (4) 178 The appellant on the other hand relies on some recent deci sions which show that there is some divergence of opinion in the High Courts on this question. In Salem Provident Fund Society Limited vs Commissioner of Income tax Madras(1) the Madras High Court held that "information for the purpose of section 34 need not be wholly extraneous to the record of the original assessment. A mistake apparent on the face of the order of assessment would itself constitute 'information '; whether someone else gave that information to the Income tax Officer or whether he informed himself was immaterial. " In Commissioner of Income tax vs Rathinasabhapathy Muda liar(1) the Madras High Court again held that "the discovery of the Income tax Officer after he had made the assessments that he had committed an error in not including the minor 's income in the father 's assessment was 'information ' obtained after the assessment, and even though all the facts were in the original records, the case was covered by section 34(1)(b) of the Income tax Act and the reassessment was not invalid, and this was not a case of mere change of opinion on the same facts but a case of getting information that income had escaped assessment. " In Canara Industrial and Banking Syndicate Limited vs Com missioner of Income tax, Mysore,(1) the Mysore High Court held that "if income had escaped assessment owing to the failure of the Income tax Officer to understand the true implication of a notification, and the Income tax Officer later on finds that on a correct interpretation of the notification the income was liable to be assessed, he can take proceedings under section 34 for assessment of such income; the word 'information ' in section 34 is wide enough to apply to such a case." The last case to which reference is made is Asghar Ali Mohammad Ali vs Commissioner of Income tax(1) wherein the Allahabad High Court held that "the word 'information ' used in the provision covers all kinds of information received from any person whatsoever or in any manner whatsoever; all that is required is that the Income tax Officer should learn something i.e. he should know something which he did not know previously. " It was further held that "if there is information leading to the belief that income has escaped assessment, the mere fact that this information has resulted in a change of opinion will not make section 34 inapplicable. A change of opinion is not sufficient for initiating proceedings under section 34, only when such change of opinion is the result of a different method of reasoning, and not based on 'information ' (1) (2) (3) (4) 179 It does appear that some High Courts at any rate are taking the view that a change of opinion by the Income tax Officer in certain circumstances will be sufficient for the purpose of section 34(1) (b) and will justify the issue of a notice thereunder. It may be added that after the decision of this Court in Maharajkumar Kamal Sigh 's case(1) it is now settled that "information in section 34(1)(b) included information as to the true and correct state of law, and so would cover information as to relevant judicial decisions" and that such information for the purpose of section 34(1)(b) of the Income tax Act need not be confined only to cases where the Income tax Officer discovers as a fact that income has escaped assessment. To that extent the decision of the Bombay High Court in Sir Mohanmed Yusuf Ismail(1) has been overruled. That is why the Appellate Tribunal stated in its decision that if the notices in the present case had been issued after the decision of the Appellate Assistant Commissioner in the appeal from the assessment for the year 1959 60, there would have been information in possession of the Wealth tax Officer to justify him in issuing notices under section 17(b) of the Act. But in the present case the Wealth tax Officer issued notices before that decision was known to him and the question is whether in the circumstances, in view of the later decisions of the High Courts to which we have referred, a question of law arose or not. The language of section 17(b) of the Act is in pari materia with the language of section 34(1)(b) of the Income tax Act and therefore the decisions under section 34(1)(b) of the latter Act would be relevant in construing the scope and effect of section 17(b) of the Act. There does appear to be divergence of opinion among the High Courts as to the meaning of the word "information" in section 34(1)(b) of the Income tax Act, and in view of that divergence we are of opinion that a question of law did arise in the present case as to the interpretation of the word "information" in section 17(b) of the Act and should have been referred by the Tribunal. We therefore allow the appeals, set aside the order of the High Court and direct the Tribunal to state a case referring the question of law arising in these cases in the form suggested by the appellant. The Tribunal will be free to decide whether to refer the matter to the High Court under section 27(1) or to this Court under section 27 (3A) of the Act. Costs of this Court will abide the result of the reference. Appeals allowed. (1) [1959] Supp. 1 S.C.R. 10.

In August 1957 the appellant created two Trusts by two sepa rate deeds, one of which was a charitable trust and the other a family trust. He then transferred certain shares to the family trust the scheme of which was that during the minority of each of three children of the appellant the property in Schedules A, B and C to the deed qua each beneficiary was to remain vested in the trustees for the benefit of the charitable trust, and after the expiry of the period specified in each case, the corpus and income was to be herd for the beneficial, ownership of the three children. By Clause 9 of the family trust deed, it was provided that the interests granted or created in the respective beneficiaries shall vest in them immediately upon execution of the deed; Clause 21 conferred upon the trustees power either to use the income accruing under the trust for the benefit of the charitable trust during the period prescribed in each case upto the time that each of the three children attained majority or to accumulate the income and deliver it on the expiry of the periods specified to the trustees of the charitable trust. Clause 26 provided that notwithstanding anything. contained in Clauses 21 to 25 the trustees could expend the income accruing under the settlement to each of the beneficiaries therein for the maintenance, education, health, marriage and. advancement of the beneficiaries. In computing the nett wealth of the assesses under the Wealth Tax Act 1957, as on March 31, 1958 and March 31, 1959, the valuation dates respectively for the assessment years 1958 59 and 1959 60, the Wealth Tax Officer and the Appellate Assistant Commissioner included the value of the shares held by the trustees under the family trust, on the ground that these shares were held by them for the benefit of the minor children within the meaning of Section 4(1)(a) (iii) of the Act. On appeal the Appellate Tribunal reversed this decision but. upon a reference, the High Court decided the issue against the assessee. In the appeal to this court, it was contended on behalf of the Revenue that the word "benefit" in the Section meant immediate or deferred benefit and the amendment of Section 4(1)(a)(iii) by Act 46 of 1964 whereby the words "immediate or deferred" were introduced before the word "benefit" in the Section, was in effect only declaratory; and that in any event it was clear from the recitals in the preamble and the other terms of the family trust deed that the intention of the appellant was to make a settlement for the benefit of his minor children within the meaning of the Section prior to its amendment. 420 HELD: (per Wanchoo and Sikri, JJ.). Considering the terms of the family trust deed as a whole, the shares transferred to the trustees were not held for the benefit of the three minor children as on March 31, 1958 and March 31, 1959 within the meaning of section 4(1)(a) (iii)and could not therefore be included in the nett wealth of the as e. [426E] By the terms of the deed, it, war. the charitable trust which was entitled to the income of the shares in Schedules A, B and C during the years before the minor children attained majority; upto that time the children had no interest whatsoever in that income. It could not therefore be said that the settlement was for the immediate benefit of the minor children. [426B C] Although the non obstante clause 26 purported to override the provisions of Clauses 21 to 25, the inclusion of Clause 21 appeared to be a typographical error. In any event even assuming that there was a conflict between Clauses 21 and 26, the earlier disposition under Clause 21 would Prevail over the later directions contained in Clause 26. Sahabzada Mohammed Kamgar Shah vs Jagdish Chandra Deo Dhabal Deo ; , 611. and Ramkishore Lai vs Kamal Narain (1963) Supp. 2 S.C.R. 417, 425; referred to. [427B C] (per Shah J. dissenting): The primary intention of the appellant as disclosed in the preamble of the family trust deed was to make provision for his children; from the terms of the trust deed and particularly from reading Clauses 9 & 26 together, it was clear that there was a vested interest immediately arising in favour of the children on the execution of the instrument, and that they were the real beneficiaries. The High Court had therefore rightly held that the shares transferred to the family Trust were for the immediate benefit of the settlor 's minor children within the meaning of Section 4(1)(a)(iii) and were liable to be included in the computation of wealth of the appellant. [435C E] (By the Court): The words "immediate or deferred" introduced into Section 4(1) (a)(iii) by Act 1946 of 1964 were not merely declaratory. The amendment made a deliberate change. The word 'benefit ' must therefore be construed apart from the amendments and in the context meant "for the immediate benefit of the individual or his wife or minor child". [422C, D]

Special Leave Petition (Civil) No. 11525 of 1983 From the Judgment and Order dated the 10th March, 1983 of the Madhya Pradesh High Court in Misc. (First) Appeal No. 88 of 1979 M. section Gujral and R. N. Poddar for the Petitioners. The Judgment of the Court was delivered by THAKKAR, J. Two mishaps, one 'to the train ' by which a passenger is travelling, and another, a sympthetic one, having nexus with the former, and going arm in arm with it, 'to the passenger ' himself, must occur in the course of the same transaction in order to attract liability of the Railway Administration under Section 82A of the Indian Railways Act, 1890, rightly contends counsel for the Railway. The High Court, in our opinion, was in error in not upholding this unexceptionable proposition and in awarding compensation to a passenger on the premise that it was not essential to establish that there was an 'accident to the train, by which the passenger was travelling. Counsel for the Railway was fair enough (we very highly appreciate this gesture) to state that it was on account of the erroneous interpretation placed by the High Court which was likely to give rise to untenable claims in future, rather than the relatively small amount awarded to the passenger, that the Railway was obliged to approach this Court by way of the present Special Leave Petition. We declined to interfere with the operative order of the High Court in exercise of jurisdiction under article 136 of the Constitution of India having regard to the size of the award (both sides would have expended more than the amount at stake in litigation expenses if leave was granted) but observed that the view taken by the High Court in regard to the question of law involved in the matter was erroneous. We now 558 proceed to articulate our reasons in support of the view expressed by us. The question of interpretation of Section 82A of the Act has arisen in the following contextual backdrop. The respondent was travelling by train in his capacity as a bonafide passenger. While the bogie in which the respondent was travelling was being shunted at a Railway Station, the respondent accidentally fell down from the train, near the water column at the end of the platform, and his right hand was crushed by that part of the train which was being shunted As to how exactly the respondent sustained the injury, the versions of the parties differ. The District Judge did not accept the version of the respondent that the bogie in which he was travelling received a sudden jerk and he fell down on that account. The Railway Administration on the other hand contended that the respondent sustained the injury in the manner described in the relevant contemporaneous record (Assistant Station Master 's Diary) namely: "the injury was sustained by the appellant in going to the rear end of the train and possibly boarding one of the bogies which was being detached during the shunting operation and in this process he appears to have been hit by the water column when these bogies (a part of the train) were being moved during the shunting operation. " Now Section 82A of the Act in so far as material reads thus: "82A Liability of Railway Administration in respect of accidents to trains carrying passengers (1) When in the course of working a railway accident occurs, being either a collision between trains of which one is a train carrying passengers or the derailment of or other accident to a train or any part of a train carrying passengers then, whether or not there has been any wrongful act, neglect or default on the part of the railway administration 559 such as would entitle a person who has been injured or has suffered loss to maintain an action and recover damages in respect thereof, the railway administration shall, notwithstanding any other provision of law to the contrary, be liable to pay compensation to the extent set out in sub section (2) and to that extent only for loss occasioned by the death of a passenger dying as a result of such accident, and for personal injury and loss, destruction or deterioration of animals or goods by the passenger and accompanying the passenger in his compartment or on the train, sustained as a result of such accident. (2) This liability of a railway administration under this Section shall in no case exceed fifty thousand rupees in respect of any one person." (Emphasis added). In interpreting Section 82A the High Court speaks thus: "The word accident therefore according to its ordinary meaning, which must be given to it and construed in the context in which it is used in Section 82A must mean to include within its ambit all incidents resulting in the death of or bodily injury to any passenger during his rail journey, occurring in the course of working a railway, if it involves a passenger train or a part thereof. Any incident treated as railway accident involving a passenger train by the public at large and the railway staff should be treated to be such an accident, falling within the ambit of Section 82A. Any mishap or misfortune in the working of a railway involving a passenger train or a part thereof resulting in the death of or personal injury to a passenger travelling therein, during his rail journey is an accident within the ambit of Section 82A. This will, of course exclude any incident voluntarily and consciously invited by the passenger, i.e. suicide by jumping in front of the moving train. " In our opinion the High Court has shut its eyes to the 560 significance of the essential precondition engrafted in Section 82A in regard to the 'accident, to the train '. Why we say so will become evident presently. A 'body scan ' of the aforesaid provision (Section 82A) reveals that: (1) The machinery of the Section is set in motion only provided there is an 'accident '. (2) The accident must be 'to ' the train ' or 'part of the train ' carrying passengers. (3) The accident to the train carrying passengers may be due to: (a) Collision of two trains one of which is the train carrying passengers; or (b) derailment of such train; or (c) other accident 'to ' such a train. (4) In case any passenger travelling by such train dies, or sustains any injury to his person or property, as a result of or on account of such accident to the train or a part of the train carrying passengers, compensation to the extent provided in the Section will become payable. (5) Such compensation will be payable regardless of whether or not the accident to the train carrying passengers is due to negligence or fault on the part of the railway administration. That the 'accident ' envisioned by the first part of Section 82A (i) is an accident 'to ' the 'train ' or 'a part of the train ' is self evident. The Section speaks of an accident by reason of either (1) collision or (2) derailment or (3) other accident to a train. There is therefore no room for any ambiguity on that score. 561 So also it cannot be gainsaid that the accident, adverted to therein cannot refer to an accident to a passenger 'whilst ' on a passenger train even if the said train is not at all involved in any accident. Common sense and reason buttress this proposition, for, the philosophy of Section 82A appears to be to turn an existing 'fault ' liability into a 'fault or no fault ' liability. Why? Because a carrier who transports passengers as a part of his business, when he charges fare, impliedly guarantees to carry him with safety in so far as such safety is within his power. It is within his power to transport the passenger without an accident to the train, for such an accident is not something which is ordinarily or in the normal course of events inherent in the running of a train. And presumably in order to be 'fair ' to the passengers who pay the 'fare ' for a safe (safe from accident to the train) journey, the legislature, with an eye on social welfare, has provided for compensation by a summary proceeding and has made the liability fault free. But to ensure safe travel is not to "insure" the passenger against accident to himself 'whilst ' travelling. The distinction deserves to be spot lighted. What 'is ' provided is compensation for death or injury caused or loss sustained on account of accident 'to ' the train. What is 'not ' provided is compensation for death of the passenger 'whilst ' travelling or injury sustained by a passenger 'whilst ' travelling on the train, say, by reason of his own act, default, or misfortune, which has no nexus with the 'accident to the train '. In other words what the Section does is to turn a liability which was 'contingent on fault ' into an 'absolute ' liability. What, however, it does not do, is to provide a free 'insurance cover ' to the person and property of a passenger so that compensation can be claimed for the accidental death of or injury to the passenger and/or loss or damage to his property even when there has been no 'accident ' to the train carrying such a passenger. What is the position when a passenger falls down from the train while the bogie, in which he is travelling, is being shunted? Say, when he is standing in the door frame or his trying 562 to get in or get out of the train, on account of the jolt to the bogie at the time of impact with the rest of the train? Is it an accident 'to the train ' so as to attract the liability under Section 82A? The answer substantially depends on the answer to the question: what is an 'accident '? An accident is an occurrence or an event which is unforeseen and startles one when it takes place but does not startle one when it does not take place. It is the happening of the unexpected, not the happening of the expected, which is called an accident. In other words an event or occurrence the happening of which is ordinarily expected in the normal course by almost every one undertaking a rail journey cannot be called an 'accident '. But the happening of something which is not inherent in the normal course of events, and which is not ordinarily expected to happen or occur, is called a mishap or an accident. Now a collision of two trains or derailment of a train or blowing up of a train is something which no one ordinarily expects in the course of a journey. That is why it falls within the parameters of the definition of accident. But a jolt to the bogie which is detached from one train and attached to another cannot be termed as an accident. No shunting can take place without such a jerk or an impact atleast when it is attached or annexed to a train by a shunting engine. If a passenger tumbles inside the compartment or tumbles out of the compartment when he is getting inside the compartment, or stepping out of the compartment, it cannot be said that an accident has occurred to the train or a part of the train. It is doubtless an accident 'to the passenger '. But not to the train. Otherwise it will have to be held that every time a bogie is detached in the course of shunting operation and attached or annexed to a train in the course of the said operation the train meets with an accident. And if such an event or occurrence is to be ordinarily expected as a part of every day life, it cannot be termed as an accident accident to the train (or a part of it). In the case of a mishap to the passenger in such circumstances it cannot be said that there has been an accident to the train and the mishap has nexus with it. The liability under Section 82A will not therefore be attracted in such cases. Or in the case of a mishap to a passenger in similar circumstances, such as an injury sustained on account of falling down whilst getting on or off a running or stationary train or sustained when he slips in a compartment or when something falls on him whilst travelling. All such 563 mishaps, when not connected with the accident to the train, or a part of it, would be accidents to the passenger only. And until both the mishaps take place, one to the train, and another, a sympathetic, one to the passenger, the liability under Section 82A of the Act will not be attracted. So also, unless the loss or damage to the property of a passenger is attributable to the accident to the train, liability under Section 82A will not be attracted. In our opinion, Section 82A of the Indian Railways Act, 1890 is not capable of the rather strained interpretation placed by the High Court and the true position of law is as unfolded in the discussion made heretobefore.

The respondent was travelling by train as a bona fide passenger. While the bogie in which he was travelling was being shunted at a Railway Station, the respondent fell down from the train near the water column at the end of the platform and his right hand was crushed by that part of the train which was being shunted. The District Judge did not accept the version of the respondent that the bogie in which he was travelling received a sudden jerk and that he fell down on that account, and dismissed the application for compensation, In appeal, the High Court, held that the word 'accident ' in section 82A must mean to include within its ambit all incidents resulting in the death of or bodily injury to any passenger during his rail journey, occuring in the course of working of a railway, if it involves a passenger train or apart thereof, and awarded compensation on the premise that it was not essential to establish that there was an 'accident to the train ' by which the passenger was travelling. In the Appeal to this Court, on the question of liability of the Railway Administration under Section 82A of the Indian Railways Act, 1890. ^ HELD: 1. The liability under Section 82A will not be attracted in the case of a mishap or injury sustained by a passenger on account of falling down whilst getting on or off a running or stationary train or sustained when he slips in a compartment or when something falls on him whilst travelling. All such mishaps, when not connected with the accident 556 to the train, or a part of it, would be accidents to the passenger only. And until both the mishaps take place, one to the train, and another, a sympathetic one to the passenger, the liability under section 82A of the Act will not be attracted. So also, unless the loss or damage to the property of a passenger is attributable to the accident to the train, liability under Section 82A will not be attracted. [562G 563A] In the instant case, liability under Section 82A will not be attracted, as it cannot be said that there has been an accident to the train and the mishap has nexus with it. [562G] 2. The philosophy of Section 82A appears to be to turn an existing 'fault liability into a 'fault ' or no fault ' liability. And presumably in order to be 'fair ' to the passengers who pay the 'fare ' for a safe (safe from accident to the train) journey, the legislature, with an eye on social welfare, has provided for compensation by a summary proceeding and has made the liability fault free. [561B D] 3. That the 'accident ' envisioned by the first part of Section 82A(1) is an accident 'to ' the 'train ' or 'a part of the train ' is self evident. The Section speaks of an accident by reason of either (1) collision or (2) derailment or (3) other accident to a train. [560G H] 4. What is provided is compensation for death or injury caused or loss sustained on account of accident 'to ' the train. What is 'not ' provided is compensation for death of the passenger 'whilst ' travelling or injury sustained by a passenger 'whilst travelling on the train, say by reason of his own act default or misfortune, which has no nexus with the 'accident ' to the train. ' What the section does is to turn a liability which was contingent on fault into an 'absolute ' liability. What however, it does not do, is to provide a free insurance cover to the person and property of a passenger so that compensation can be claimed for the accidental death of or injury to the passenger and or loss or damage to his property even when there has been no 'accident ' to the train carrying such a passenger. [561E G] 5. An accident is an occurrence or an event which is unforeseen and startles one when it takes place but does not startle one when it does not take place. It is the happening of the unexpected, not the happening of the expected, which is called an accident. An event or occurrence the happening of which is ordinarily expected in the normal course by almost every one undertaking a rail journey cannot be called an 'accident '. But the happening of something which is not inherent in the normal course of events and which is not ordinarily expected to happen or occur is called a mishap or an accident. A collision of two trains or derailment of a train or blowing up of a train is something which no one ordinarily expects in the course of a journey. That is why it falls within the parameters of the definition of accident. But a jolt to the bogie which is detached from one train and attached to another cannot be termed as an accident. No shunting can take place without such a jerk or an impact at least when it is attached or annexed to a train by a shunting engine. if a passenger 557 tumbles inside the compartment or tumbles out of the compartment when he is getting inside the compartment or stepping out of the compartment it cannot be said that an accident has occurred to the train or part of the train. It is doubtless an accident 'to the passenger '. But not to the train. [562B F]

ISDICTION: Civil Appeal No. 3092 of 1985 etc. From the Judgment and Order dated 1.2.1985 of the Alla habad High Court in W.P. No. 1535 of 1972. 338 S.N. Kacker, R.B. Mehrotra, Gopal Subramanium, Mrs. section Dixit, section Balakrishnan and Ifran Ahmad for the Appellants. T.S. Krishnamoorthi Iyer, Mukul Mudgal, section Balakrishnan and Rajesh for the Respondents. The Judgment of the Court was delivered by KHALID, J. This appeal by special leave and the connect ed special leave petition and the writ petition directed against the judgment and order of the Allahabad High Court dated February 1, 1985 raise a question of construction of Regulation 7(iv)(b) of the U.P. State Electricity Board Service of Engineers (Integration & Seniority) Regulations, 1976, framed under section 79(c) of the . By the judgment, a Division Bench of the High Court has disallowed a batch of writ petitions seeking to quash an order of the U.P. Public Services Tribunal, Lucknow dated April 3, 1978. Allowing a representation made by respondent No. 1, presently working as Superintending Engineer in the U.P. State Electricity Board, the Tribunal held that in terms of Regulation 7(iv)(b) of the Regulations, respondent No. 1 having been granted seven advance increments was entitled to the benefit of as many years of service as the number of advance increments given to him at the time of his recruitment. The High Court has upheld the order of the Public Services Tribunal. As a result, respondent no.1 who figures at serial No. 12 in the integrated seniority list of Assistant Engineers (Civil) i.e. below other Superintending Engineers including the six petitioners in the connected special leave petition No. 8835/85, would take his place at serial no.1 in the seniority list i.e. above them. The short question involved in this appeal is whether respondent No. 1 on a proper construction was entitled to the benefit of as many years of service as the number of advance increments given to him at the time of his recruit ment, as held by the Public Services Tribunal and the High Court. That turns on a construction of the amended Regula tion 7(iv)(b) of the Regulations. Regulation 7(iv)(b) as originally framed provided: "While determining the seniority under clauses (ii) and (iii) above, Engineers directly recruited by the Board before the commencement of these regulations shall be given advantage of as many years of service as is the number of advance increments which were allowed to them at the time 339 of recruitment by the Board. In doing so, no officer shall however be given advantage beyond the date of his initial regular ap pointment in the Government department or the other organisations. " On June 19, 1976 the Electricity Board in exercise of the powers under section 79(c) of the amended Regulation 7(iv)(b) to remove certain anomalies and to give effect to the intention or ' the Board in framing the rule of seniority. It was felt by the Board that the expres sion 'other organisations ' in the unamended Regulation 7(iv)(b) was susceptible of a construction that in the matter of determination of inter se seniority among directly recruited Engineers vis a vis Engineers on deputation with the Board from the Central Government or the State Govern ment, the seniority of the Engineers had to be reckoned by giving them the benefit of as many years of service as the number of advance increments given to them by reason of their special experience or qualifications. The Board ac cordingly substituted the words 'U.P. or Central Government Department in consideration of the service for which advance increments were so allowed ' for the words 'Government de partment or other organisations ' in Regulation 7(iv)(b). The amended Regulation 7(iv)(b) now provides: "While determining the seniority under clauses (ii) and (iii) above, Engineers directly recruited by the Board before the commencement of these regulations shall be given advantage of as many years of service as is the number of advance increments which were allowed to them at the time of recruitment by the Board. In doing so, no officer shall however be given advantage beyond the date of his initial regular appointment in the U.P. or Central Government Department in consideration of the service for which advance increments were so allowed. " Put very briefly, the essential facts are these. By a Government resolution dated March 30, 1959 all the officers of State Government i.e. Civil Engineers and the Electrical and Mechanical Engineers of the Irrigation & Power Depart ment were transferred to the U.P. State Electricity Board constituted under section 5 of the which came into existence on April 1, 1959. The services of these officers were placed on deputation with the Board. In 1964, the Electricity Board issued an advertisement calling for applications for appointment to 20 posts of Assistant Engineers (Civil). It was indicated that a higher start would be allowed to candidates with special qualifi 340 cations or experience and that the selected candidates were to become permanent on completion of three years ' probation. Among those selected was respondent No. 1 P.L. Kelkar who by reason of his previous experience was given a higher start of Rs. 490 in the scale of Rs. 250 850 which meant that he was given nine advance increments as against two increments given to others. Prior to his joining the Electricity Board, respondent no.1 had varied experience in different govern mental and other organisations. After obtaining his degree in Bachelor of Engineering in the year 1957, he was recruit ed as a Junior Engineer, Public Works Department (Building) of the State of Madhya Pradesh on a scale of Rs. 150 300. In 1959 he was promoted as Assistant Engineer, Department of Housing, Madhya Pradesh on a scale of Rs. 250 600. Thereaf ter on June 9, 1960 he accepted appointment as Engineering Assistant Grade I in the Indian Refinery Limited, Guwahati, a Government of India undertaking, on a scale of Rs.300525 after leaving the services of the State Government of Madhya Pradesh. On May 10, 1961, he left Government service to take up employment in the private sector as Assistant Civil Engineer with the Associated Cement Company Limited, Bombay on an initial salary of Rs. 305 per month with annual incre ments. After the interviews of the candidates held on August 17, 1964, the Board in its letter of appointment dated August 22, 1964 offered respondent No. 1 two advance incre ments and stated that his seniority vis a vis the other candidates selected for appointment would be determined later. It seems that respondent No. 1 declined the offer and accordingly the Board by its letter dated August 29, 1964 decided to grant him a higher initial pay of Rs.490 i.e. nine advance increments because of his previous experience. It may be mentioned here that the Board also granted a higher initial pay of Rs.490 i.e. nine advance increments to Prakash Chandra Jain and Rs.430 i.e. seven advance incre ments to Naresh Chandra Gupta. As against respondent No. 1 who had been directly re cruited by the Board w.e.f. October 7, 1964 and is now working as a Superintending Engineer in the Electricity Board, the six petitioners in the connected special leave petition No. 8835/85 namely, V.N. Mathur, Mohd. Wasi Ahmad, Madan Mohan, Brajesh Sahai, Amba Prasad and O.P. Sharma who are also now working as Superintending Engineers in the Electricity Board were Assistant Engineers in the Irrigation & Power Department, were placed on deputation with the Board by the State Government from the year 1960 onwards. They were in due course confirmed as Assistant Engineers in the Irrigation & Power Department. It seems that respondent No. 1 as well as the petitioners were 341 confirmed as Assistant Engineer w.e.f. April 1, 1975. There was no seniority list of Assistant Engineers in the Board nor any rules of seniority at the time when respondent No. 1 joined service. On April 29, 1976 the Board in exercise of the powers under section 79(c) of the framed the U.P. State Electricity Board Service of Engineers (Integration & Seniority) Regulations, 1976. As already stated, the unamended Regulation 7(iv)(b) provided that while determining seniority, Engineers directly re cruited by the Board before the commencement of the Regula tions shall be given advantage of as many years of service as was the number of advance increments which were allowed to them at the time of their recruitment i.e. although respondent No. 1 was recruited on October 7, 1964, it should be deemed that he joined service of the Board on October 7, 1957. As a result of this representation the Board was constrained to amend Regulation 7(iv)(b) as indicated above. On May 19, 1977 the Board rejected the representation made by respondent No. 1. A few months thereafter i.e. on Septem ber 28, 1977 the Board in acccordance with the amended Regulation 7(iv)(b) published the integrated seniority list in which the name of respondent No. 1 figures at serial No. 12 i.e. below other officers at present working as Superin tending Engineers including the aforesaid petitioners in the connected special leave petition. We however wish to mention that there is a controversy as to whether the petitioners in the connected special leave petition applied for and were not selected by the Board as Assistant Engineers (Civil) in 1968. Respondent No. 1 P.L. Kelkar has averred in paragraphs 7, 8 and 9 of the counter affidavit that the aforesaid petitioners who were working on deputation with the Electricity Board did not consider it beneficial to leave their parent department viz. Irrigation & Power Department and join the services of the Board at the relevant time although the Board had again advertised the posts of Assistant Engineer (Civil) in the year 1965. He then goes on to aver in paragraph 9 that in order to build up the Civil Engineering cadre of the Board the Electricity Board readvertised the posts of Assistant Engineer (Civil) in the year 1968 and asserts that most of the petitioners applied for the post and the selection was made by a Selec tion Board on the basis of interview and record of past service and adds: "However, all the petitioners except petition ers nos. 4 and 5 Panba Prasad and O.P. Sharma were not selected for the post of Assistant Engineer (Civil) as per the selection list published by the Board. The reason for the non selection 342 was obviously that they were not found fit for the post on the basis of their record and interview. " When this averment was brought to our notice by learned counsel for respondent No. 1 we called upon the Electricity Board to place before us the relevant records relating to the interviews held in the year 1968 and also to file a detailed affidavit. Learned counsel for the Electricity Board assured us that the Board will comply with the direc tion and place before the Court the relevant records and also file an affidavit. Learned counsel for the petitioners in the connected special leave petition however was baffled at the suggestion that the petitioners should have at all applied for the post of Assistant Engineer (Civil) adver tised in the year 1968 when they were for a number of years actually functioning as officiating Executive Engineers in the Irrigation and Power Department. To set the matter at rest, we asked the parties to exchange affidavits on the subject although the hearing concluded on March 24, 1987 and the case was reserved for judgment. On April 3, 1987 M.S. Rizvi, Deputy Secretary, U.P. State Electricity Board has sworn an affidavit bringing the relevant facts on record. It is averted in paragraph 2 that the records in possession of the Board revealed that in July 1968 applications for the posts of Assistant Engineer (Civil) in the service of the U.P. State Electricity Board were invited and that inter views of the candidates who had applied in pursuance of the said advertisement were conducted during December 1968 and January 1969. In paragraph 3 the respective dates of promo tion of the petitioners as Executive Engineers are given. In paragraph 4 however it is stated that the records relating to the applications in the interviews are not traceable inspite of the best efforts made by the senior officers of the Electricity Board. In his rejoinder, respondent No. 1 P.L. Kelkar contro verts the facts alleged. He submits that the affidavit filed by the Electricity Board does not state the facts correctly. It is then stated: "In fact in Petition No. 4888 (F) III/77 filed by Shri N.P. Malik & Ors. vs U.P. State Elec tricity Board it was averted in para 11 as follows: "That respondents Nos. 2 to 15 applied against advertisement for selection of direct recruits as Civil Engineers in 1968. After an interview they were found to be unfit and were not selected for the substantive post. The list of 343 persons selected under section 3.0. No. 2208 A/SEB/159 A/1968 dated 1.4.69 shows that they were not selected. "In reply to the above submission in paragraph 11, it was averred by the Board before the Public Services Tribunal that the 'contents of paragraph 11 are admitted. " In view of the above reply, respondent No. 1 submits that it is wholly irrelevant whether the records are now available or not because the above affidavit in the Public Services Tribunal was made after perusing the records. We are rather surprised that the Electricity Board should file an affidavit by the Deputy Secretary stating that the rele vant records of the interviews held in the year 1968 are not available unless they have been done away with. We have given above the necessary back ground facts for appreciating the dispute involved in these cases. A decision in these cases depends upon the correct interpretation of Regulation 7(iv)(b) before and after its amendment. The regulation comprises of two parts. The first part refers to the advantage of advance increments. This advantage is based on special qualification and past experience and its conse quent effect on seniority. The grant of subsequent incre ments by the Board after joining its service is not governed by,this regulation. It is the second part of the regulation that gives a little difficulty and it was on this that considerable arguments were addressed before us. Special reliance was placed upon the expression 'in doing so ' occurring in the regulation. What is contended is that this expression indi cates the manner in which the first part is to be construed. The regulation, before its amendment mentioned Government departments or other organisations but after its amendment it was changed to 'in the U.P. or Central Government Depart ment '. This change shows a deliberate attempt to deny its benefit to employees who came from service not comprised in either U.P. or Central Government departments. We do not think that it would be either just or fair to give a limited meaning to the second part of the amended regulation and thereby to deny its benefit to those Engineers who came from other departments or corporations etc. It is necessary to note that the first part of the regulation does not speak of Engineers in the U.P. or the Central Government Departments. It speaks only of Engineers directly recruited by the Board before the commencement of this regulation, which expression takes in, Engineers who came into the service of the 344 Board from all sources. That being so, it would not be proper to completely eliminate Engineers who came from other sources from the benefit of the regulation giving a re stricted meaning to the expression 'in doing so '. It is useful to note. that the Board 's advertisement inviting applications provided higher start for those having special qualifications and experience irrespective of the source of the service held by them. The second part of the regulation has therefore to be construed only as a proviso to the first part confining its scope to the employees of the U.P. as well as Central Government and not to affect the generality as contemplated in the first part. The injustice that will be meted out to the Engineers who came from outside if the restricted meaning is given to the second part of the regulation, can be best illustrated by referring to the case of Shri P.L. Kelkar. He was ap pointed as a Junior Engineer, P.W.D., M.P. on July 19, 1957 and was promoted as Assistant Engineer and posted in Housing Department on May 20, 1959. On June 9, 1960 he was appointed Engineer Assistant Grade I in Indian Refinery Limited, Guwahati, after leaving the services of the M.P. Government. Thereafter, he was appointed as Assistant Engineer on May 10, 1961, in Associated Cement Company Limited, Bombay. It was while working in that company that he came across the advertisement made by he U.P. State Electricity Board. He applied pursuant to such advertisement. He was selected by the Board and appointed as per order dated August 22, 1964. He joined service on October 7, 1964. He was given nine increments taking into consideration his special qualifica tion and experience. Two increments were common to all. Thus, the extra increments given to him were seven. It is apparent that if this extra increment on the basis of his experience and special qualification did not carry with it, seniority in the Board, he would not have either applied or accepted the job. It cannot be assumed that he would have joined the Board willingly as a new entrant. Under these circumstances, the Tribunal was justified in holding that he should be deemed to have been appointed w.e.f. October 7, 1957, instead of October 7, 1964, when he joined the service of the Board. The Tribunal according to us justifiably repelled the contention that he was not entitled to the above advantage under the second part of the Regulation 7(iv)(b). In our view, the Tribunal was justified also in holding that second part is in the nature of proviso limited to persons who had been in service of either U.P. or the Central Government Departments and who had been given ad vance increments in consideration of such service. The High Court considered the question in detail with refer ence 345 to the regulation under consideration and agreed with the Tribunal in the construction put by it regarding the second part of the regulation. We have also given our anxious consideration to the regulation before and after the amend ment. We also come to the conclusion that the interest of justice will be advanced by agreeing with the High Court and the Tribunal in the construction given by them to this regulation. In our judgment, therefore, seniority will have to be fixed in accordance with the number of increments excluding the original two increments given to the entrants in the Board both from the U.P. and the Central Government Departments and from other sources. We do not think it necessary to answer other aspects of the case for this judgment. We do not think any interference is called for with the judgment of the High Court. We confirm the judg ment, dismiss the appeal, writ petition and the special leave petition, with no order as to costs. N.P.V. Appeal and Petitions dis missed.

Consequent upon the opening of the Ram Janam Bhumi Temple at Ayodhya, there was considerable agitation among the Muslim Community. The Petitioners and appellants were arrested for inciting the members of the community to in dulge in violence and charged for offences under sections 147/148/149/307/332 of the Indian Penal Code. While their bail applications were pending; the District Magistrate, purporting to act under sub.s. (3) of section 3 of the , served detention orders on them. Writ Petitions challenging the detention orders filed by the appellants were rejected by the High Court. The Petitioners and appellants contended that the deten tion orders were bad for the reason that there was no mate rial before the District Magistrate on the basis of which he could form the opinion that they would act in future in a manner prejudicial to maintenance of public order. Allowing the petitions and appeals, this Court, HELD: The power to detain under the Act can be exercised only with a view to preventing a person from acting in a manner which may prejudice any of the considerations set forth in Section 3 thereof. Preventive detention is not intended as a punitive measure, as a curtailment of liberty by way of punishment for an offence already committed. No doubt the satisfaction of the District Magistrate making the detention order is subjective in nature, but, even subjec tive satisfaction, must be based upon some pertinent materi al. [473F G; 474A B] In this case there is no material to show that the detenus would act 472 in the future to the prejudice of the maintenance of public order. Even if it is accepted that the detenus did address the assembly of persons and incited them to lawlessness, there is no material to warrant the inference that they would repeat the misconduct or do anything else which would be prejudicial to the maintenance of public order. [473G H]

Appeal No. 748 of 1966. Appeal by special leave from the judgment and order dated February 16, 1965 of the Allahabad High Court in Civil Revision No. 373 of 1963. B. Sen and O.P. Rana, for the appellant. Yogeshwar Prasad, Paras N. Tiwari,S.S. Khanduja for B. Dutta, for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by special leave from the judgment of the Allahabad High Court dated February 16, 1965 in Civil Revision No. 373 of 1963 which was filed against the judgment of the Additional Civil Judge, Mirzapur dated December 4, ]962 in Revenue Appeal No. 417 of 1961. The respondent made an application before the Rehabilitation Grants officer, Mirzapur under section 79 of the U.P. Zamindari Abolition and Land Reforms Act, 1950 to obtain the determination and payment of rehabilitation grant to him. The case of the respondent was that he was the son of the late Raja Sharda Mahesh Narain Singh Shah of Agori Barhar Raj, tehsil Robertsganj in Mirzapur district. Raja Anand Brahma Shah who was a Malgujar of more than Rs. l0,000 annually executed Gujaranama deeds in favour of his younger brothers and Iris mother separately in the year 1949. By these deeds, certain villages were transferred by the raja to the Raj Kumar and the mother in lieu of their right of maintenance. One of such Gujaranamas was executed by Raja Anand Brahma Shah in favour of respondent, Raj Kumar Rukmini Raman Brahma who is one of his younger brothers. The document was executed on October 5, 1949 and registered on January 357 18, 1950. The application of the respondent before the Rehabilitation Grants Officer was opposed 'by the appellant. The. objection of the appellant was that the transfer in favour of the respondent cannot be legally recognised in view of section 23( 1 )(a) of the U.P. Zamindari Abolition & Land Reforms Act, 1950 (U.P. Act 1 of 1951 ) (hereinafter called the Act) for the purpose of assessing the amount of rehabilitation grant. By his order dated January 28, 1961 the rehabilitation Grants Officer held that the respondent was entitled to rehabilitation grant. The appellant preferred an appeal against the order of the Rehabilitation Grant Officer. The appeal was heard by the Additional Civil Judge, Mirzapur, who rejected the objection of the appellant and dismissed the appeal. The appellant took the matter in revision to the Allahabad High Court, but the Revision Application was dismissed on February 16, 1965. It is necessary at this stage to set out the relevant provisions of the Act: Section 3 (12): "In this Act, unless there is anything repugnant in the subject or context (12) 'Intermediary ' with reference to any estate means a proprietor, under proprietor, sub proprietor, thekedar, permanent lessee in Avadh and permanent tenure holder of such estate or part thereof. " Section 23: "Transfer by way of sale or gift not to be recognised (1 ) Notwithstanding anything contained in 'any law, no transfer, by way of sale or gift, of any estate or part thereof (a) made on or after the first day of July, 1948, shall be recognised for the purpose of assessing the amount of rehabilitation grant payable to the intermediary; (2) Nothing in sub section (1 ) shall apply to (a) any sale made under order of a court in execution of any decree or order for payment of money; or; (b) any sale or gift made in favour of a wakf, trust, endowment or society established wholly for charitable purposes, unless the State Government in any particular case directs otherwise. " up(CI)/70 l1 358 Section 24(b) "Any contract or agreement made between an intermediary and any person on or after the first day of July, 1948, which has the effect, directly or indirectly, (a) (b) of entitling an intermediary to receive on account of rehabilitation grant an amount higher than what he would, but for the contract or agreement, be entitled to under this Act shall be made and is hereby declared null and void. " Section 73: "There shall be paid by the State Government to every intermediary (other than a thekedar), whose estate or estates have been acquired under the provisions of this Act, a rehabilitation grant as hereinafter provided; Provided that, where on the date immediately preceding the date of vesting, the aggregate land revenue payable by the intermediary in respect of all his estates situate in the areas to which this Act applies exceeded rupees ten thousand, no such grant shall be paid to him. " The principal question involved in this appeal is whether the Gujaranama deed dated October 5, 1949 executed by Raja Anand Brahma Shah is a transfer by way of sale or gift within the meaning of section 23 (1 ) of the Act 'and cannot, there,fore, be recognised for purpose of assessing the amount of Rehabilitation Grant. was argued on behalf of the appellant that on a true construction of the document the transaction must be taken to be a gift of the property by Raja Anand Brahma Shah to the respondent. In our opinion there is no warrant for this argument. The relevant portion of the Gujaranama deed dated October 5, 1949 states: " . I Shri Raja Anand Brahma Shah son of Shri Raja Sharda Mahesh Prasad Singh Shah of Agori Barhar Raj, Rampur Estate Pargana Barhar, Tehsil Robertsganj, District Mirzapur, am the proprietor of Angori Raj District Mirzapur which is an impartible estate. That according to law and custom the eldest son of the Raja becomes the owner of the estate on the death of the earlier Raja and the younger sons have a fight to maintenance and they are given a reasonable share of the estate in lieu of the right of maintenance so as to enable them to pass their life in accordance with their 359 status. The estate is under 'an obligation to provide ' maintenance of this type. Therefore it is obligatory upon me also to make some provision for the maintenance of my younger brother Shri Rukmini Raman Brahma by giving him some property. He also desires that some maintenance should be provided for him. Therefore I out of my sweet will 'and willingness do hereby execute this document in the terms following: 1. That from today 's date I give the property detailed below to my younger brother Shri Rukmini Raman Brahma in lieu of his right of maintenance and I deliver to him the proprietary possession of the properties aforementioned which include all rights pertaining to Sir land, self cultivated land, water and forest rates, houses and buildings, shops, jungles, hills etc. That Shri Rukmini Raman Brahma and his male lineal descendants will as per the custom of maintenance prevailing in my estate, remain in possession of the said properties from generation to generation and that in case of there being no male lineal descendants of the transferee the property shall revert to the holder of the jagir. That the erstwhile transferee for maintenance shall be competent to transfer the property detailed below subject to the condition that prior to sale it is and shall be obligatory on his part to give intimation in this behalf to the erstwhile holder of the jagir by means of a registered notice and if he be not willing to have the deed executed in his favour the property may be given in sale to. any other person. Otherwise the deed of sale shall be invalid and shall be liable to pre emption. That the transferee for maintenance shall pay land revenue and other customary dues and taxes to the Government. The jagir shall not be responsible for the payment of the same. That the transferee for maintenance may get his name entered in the revenue papers. We shall have No. objection in this regard. Since the decision of the Privy Council in Shiba Prasad Singh vs Rani Prayag Kumari Devi(1) 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 (1) 59 I.A. 331. 360 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 case of an ordinary joint family property the members of the family can claim four rights: (l)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 from the very nature of the property which is impartible that 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 Rant Sartaj Kuari vs Deoraj Kuari(1) and the First Pittapur case(2). The right of maintenance and the right of survivorship. , however, still remain and it is by reference to these rights that the property, though impartible has, in the eye 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 succession is, the right of survivorship can be renounced or surrendered. It was held by the Judicial Committee in Collector of Gorakhpur vs Ram Sunder Mal(3), the: right of maintenance to junior members out o,f an impartible estate was based on joint ownership of the junior members of the family. In that case Lord Blanesburgh after stating that the judgment of Lord Dunedin in Baijnath Prasad Singh vs Tej Bali Singh(4) had definitely negatived the view that the decisions of the Board in Sartaj Kuari 's case ( 1 ) and the First Pittapur case ( 2 ) were destructive of the doctrine that an impartible zamindari could be in any sense joint family property, went on to observe: "One result is at length clearly shown to be that there is no reason why the earlier judgments of the Board should not be followed, such as for instance the Challapalli case (Raja Yarlagadda Mallikariuna Prasad Nayadu vs Raja Yarlagadda Durga Prasad Nayadu(6) which regarded their right to maintenance, however, limited, out of an impartible estate as being based upon the joint ownership of th e junior members of the family, with the result that these members holding zamindari lands for maintenance could still be considered as joint in estate with the zamindar in possession." Lord Blanesburgh said: "The recent decisions of the Board constitute a further landmark in the judicial exposition of the question 'at issue here. While the power of the holder of (1) 15 I.A. 51. (2) 26 I.A. 83. (3) 61 I.A. 286, (4) 48 I.A. 195. (5) 271.A. 151. 361 an impartible raj to dispose of the same by deed (Sartaj Kuari 's case(1) or by will (the First Pittapur case(") and Protap Chandra Deo vs Jagadish Chandra Deo(3) remains definitely established, the right of the junior branch to succeed by survivorship to the raj on the extinction of the senior branch has also been definitely and emphatically re affirmed. Nor must this right be whittled away. It cannot be regarded as merely visionary. " As pointed out in Baijnath Prasad Singh 's case(4) when before the Allahabad High Court the junior members of a great zamindari enjoy a high degree of consideration, being known as babus, the different branches holding babuana grants out of the zamindari. Their enjoyment of these grants is attributable to their membership of the joint family, and until the decisions above referred to beginning in 1888 supervened, they had no reason to believe that their rights of succession were being imperilled by their estrangement from the zamindar in possession. " In the present case there is the statement of Raja Anand Brahma Shah in the Gujaranama deed that according to the law and custom of the estate, the eldest son of the Raja becomes the owner of the estate on the death of the earlier Raja and that the "younger sons have right to maintenance and they are given reasonable share of the estate in lieu of right of m 'aintenance". In view of this admission of Raja Anand Brahma Shah it is not possible to hold that the transfer of the properties in the Gujaranama deed was a transfer by way of gift. It is also not possible to contend that it was a sale of the properties for there is no money consideration. It is manifest that the transaction is by way of a settlement to the respondent by Raja Anand Brahm, a Shah in lieu of the right of maintenance of the respondent which is obligatory upon the holder of impartible estate. In our opinion, the Gujaranama deed dated October 5, 1949 is not hit by the provision of section 23 of the Act and the argument of the appellant on this aspect of the case must be rejected. It was contended on behalf of the appellant that the case should be remanded to the Rehabilitation Grants Officer on account of certain procedural irregularities. It was pointed out that the Rehabilitation Grants Officer did not follow the provisions of the Civil Procedure Code by treating the application under section 79 as a plaint and the objection of the State Government as a written statement. It was said that the Rehabilitation Grants Officer was bound to. frame proper issues and to take evidence of the parties (1) 15 I.A. 51. (2) 26 I.A. 83. (3) 54 I.A. 289. (4)481.A. 195. 362 on those issues as in the civil suit. But no case has been made out for remand because the appellant has not denied in the written statement that there was the customary right of maintenance of the junior members of the family of Raja Anand Brahma Shah. No disputed question of fact was raised on behalf of the appellant before the Rehabilitation Grants Officer, the award of the Rehabilitation Grants Officer was challenged only on a question of law. For these reasons we hold that this appeal fails and must be dismissed, with costs. G.C. Appeal dismissed.

The appellant was convicted and sentenced under r. 125(a) Defence of India Rules for contravening el. 4(b) of the Maharashtra Jwar (Restriction on purchases and sale and control of movement) Order, 1964, for contravening Buldana District Price Control Order, 1965; and for contravening el. 3 of the Maharashtra Foodgrains (Declaration of Stock) (Second) Order, 1964. The Magistrate further ordered that the maddamal (Juar) before the court be confiscated by the Government. The .appellant appealed unsuccessfully to the Sessions Judge. But the High Court set aside the conviction and sentence under el. 3 of the Maharashtra Food Grains (Declaration of Stock) Order, and maintained the other convictions in an appeal to this Court the appellant contended that (i) the High Court having set aside the conviction under el. 3 of the Maharashtra Foodgrains (Declaration of Stocks) (Second) Order, 1964 the order for forfeiture could not be maintained because the Maharashtra Jwar (Restriction on Purchase 'and sale and control of movement) Order,/964, and the Buldana District Jwar (Price Control) Order 1965 did not contain any provision authorising the court to forfeit; and (ii) r. 141(2) of the Defence of India Rules, 1962 was ultra vires because it laid down a rule of evidence contrary to the law contained in section 114 of the Indian Evidence Act. HELD: (i) The order of forfeiture was illegal. The only provision contained in the Maharashtra Jwar (Restriction on Purchase and Sale and Control of Movement) Order, 1964, is regarding forfeiture of packages covering or receptacles in which any stocks of juar are found. This does not enable the Court to order forfeiture of juar. The Buldana District Juar (Price Control) Order authorises the Collector to seize stocks but does not enable the Court to forfeit juar. [274 H] (ii) r. 141(2) is within the powers conferred by section 3(1) of the Defence of India Act. The fact that the rule is contrary to an existing Act does not matter because section 43 of the Defence of India Act provides that "the provisions of this Act or any rule made thereunder or any order made under any such rule shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act." [275 F G]

ition No. 461 of 1979. (Under Article 32 of the Constitution) Dr. Y. section Chitale, R. Mohan, P. N. Ramalingam and A. T. M. Sampath for the Petitioner. A. V. Rangam for the Respondent. The Judgment of the Court was delivered by PATHAK, J. The Tamil Nadu Commercial Taxes Service consists of a hierarchy of posts. At the base lies the post of Joint Commercial Tax Officer, above it is the post of Commercial Tax Officer, then of Assistant Commissioner, thereafter of Deputy Commissioner and 779 finally there is the post of Selection Grade Deputy Commissioner. The service is governed by the Special Rules for the Tamil Nadu Commercial Taxes Service (the "Special Rules"). Recruitment to the junior most post, the Joint Commercial Tax Officer, is made by (i) direct recruitment and (ii) recruitment by transfer from Deputy Commercial Tax Officers in the State Commercial Taxes Subordinate Service. Permanent vacancies in the posts of Joint Commercial Tax Officer are filled by direct recruitment and by "transfer" recruitment in the proportion 1:2. The higher posts are filled by promotion from officers in the category of posts immediately below. Under rule 2(b) of the Special Rules all promotions are to be made on the grounds of merit and ability, seniority being considered only where merit and ability are equal. Rule 5(c) provides that every person appointed as a Joint Commercial Tax Officer must be on probation for at least two years on duty; in the case of direct recruitment the probationary period commences from the date on which the Officer completes his training, and in the case of recruitment by transfer it commences from the date the officer joins duty. Under rule 7(b) the period of training of a direct recruit does not count towards probation. The petitioner was recruited to the cadre of Joint Commercial Tax Officers as a direct recruit in 1966, and was posted for training which he joined on 6th June, 1966; thereafter he completed the probationary period of two years. On 16th August, 1972 the petitioner was promoted to the post of Commercial Tax Officer. The second respondent was promoted as Commercial Tax Officer on 17th December, 1972. Promotion to the next higher category of posts, the Assistant Commissioners, followed. The petitioner was promoted as Assistant Commissioner on 14th January, 1976 while the second respondent was promoted on 26th August, 1976. Meanwhile, by G.O. Ms. No. 4103 dated 9th July, 1973 the Government passed an order notifying the combined inter se seniority list of directly recruited Joint Commercial Tax Officers during the years 1964 to 1967 and the transferee Joint Commercial Tax Officers recruited during the years 1964 and 1966 on the basis of the principles set forth in that order. The seniority list reflected the cyclical order based on rule 2(c) of the Special Rules, that is to say, (i) direct recruit (ii) transferee recruit (iii) transferee recruit. The petitioner was shown in the "1966 list" at serial No. 43 of the overall seniority list and 18th August, 1967 was shown as the date of commencement of his probation. The second respondent was also shown in the 1966 list, at serial No. 52 with 25th January, 1967 as the date of commencement of his probation. 780 The validity of the combined inter se seniority list was challenged by two writ petitions, Writ Petitions Nos. 2016 and 2017 of 1972 filed by certain other officers in respect of the ranking from serial number 51 to serial Number 78. The petitioner was not a party to the writ petitions. The writ petitions were allowed by the Madras High Court by its judgment dated 16th September, 1975. The High Court took note of the fact that no rules had been framed indicating how the inter se seniority between the direct recruits and the transferee recruits had to be fixed. The High Court quashed the seniority list and directed a fresh determination of the inter se seniority on the basis of three principles: 1. Each year should be taken as a unit for fixing the inter se seniority. Persons not actually appointed in the year 1966 should not be included in the 1966 year 's list and their seniority should be determined with reference to the date of their joining as Joint Commercial Tax Officers; and 3. The date on which an officer commences probation is the proper criterion for fixing the inter se seniority. Taking those principles into account, the Government then prepared a fresh combined inter se seniority list and published it by an order set forth in G.O. No. 2228 dated 27th December, 1977. The second respondent was now shown at serial number 48 and the petitioner was shown at serial number 49 in the 1967 list. The petitioner, apprehensive that the seniority assigned to him in the second combined inter se seniority list of Joint Commercial Tax Officers would prejudice him in the promotions to be made to the category of Deputy Commissioners, has challenged the validity of that seniority list. The petitioner contends that the High Court has no power to lay down the principles for determining inter se seniority between direct recruits and transferee recruits and, in any event, his seniority cannot be determined on the basis of the principles laid down by the High Court inasmuch as he was not a party to the writ petitions. The petitioner also takes exception to the statement contained in paragraph 16 of the State Government 's counter affidavit to the effect that the seniority of a Government Officer in the lower category is also the basis for assigning seniority in the higher category. Great emphasis has been laid by the petitioner on the circumstance that he joined as Joint Commercial Tax Officer earlier than the second respondent. 781 In our opinion, the principles which the High Court culled out as the basis for determining the inter se seniority of Joint Commercial Tax Officers are in the main drawn from the rules governing the service. The petitioner cannot claim that for the purpose of seniority has service must be considered with reference to the date on which he commenced the period of training. The special Rules require that a direct recruit must undergo a period of training. They also provide that he must pass through a period of probation. They further declare that the period of training will not count as a period spent on probation and that the probationary period commences only when the training ends. That being so, the relevant date for considering the petitioner 's seniority is 18th August, 1967. The rules do not contemplate any credit being given for the period of training undergone by a direct recruit and, therefore, the fact that he was appointed in 1966 is of little moment. The second respondent joined the post of Joint Commercial Tax Officer as a transferee recruit and therefore the date of commencement of his probation was 25th January, 1967. Clearly, he entered service effectively from an earlier date than the petitioner. Now having regard to the circumstance that the cadre of Joint Commercial Tax Officers is drawn both from direct recruits and transferee recruits, it is necessary to have a single combined inter se seniority list. There can be no quarrel with the principle that officers whose effective entry into the service pertains to a particular year should be regarded as a unit in themselves for fixing their inter se seniority. Correctly, therefore, the petitioner and the second respondent have been placed in the 1967 list. We have already observed that the effective date on which a direct recruit joins as a Joint Commercial Tax Officer is the date on which he commences his probation. In the determination of inter se seniority, the High Court has followed the provision in the Special Rules that the posts of Joint Commercial Tax Officers are to be filled in the proportion of 1 : 2 between direct recruits and transferee recruits. The cyclical order in which the vacancies will be filled on that basis are provided by the order of the Government published in G.O. Ms. No. 4103 dated 9th July, 1973. Where the rules are specifically silent there is no doubt that the Government is entitled to make an order filling up any lacuna or uncovered gap in the rules. It may also be observed that there is good reason in the principle followed in this case that seniority should be based on the length of effective service. The date of confirmation in a post then loses its relevance. In regard to the contention of the petitioner that he was not a party to the writ petitions decided by the High Court and that, therefore, the 782 principles laid down in the High Court judgment should not be applied to him, we think the submission to be without force. The principles propounded by the High Court are principles of general application and drawn from the rules governing the service and the concepts implied therein. They are not principles applicable peculiarly only to the parties to the writ petitions. Indeed, we find no fault with the terms in which the principles have been enunciated. They are principles which could legitimately form the basis of a combined inter se seniority list in respect of Joint Commercial Tax Officers. Having due regard to the considerations mentioned above, we are of opinion that the places assigned in the second seniority list to the petitioner and the second respondent truly represent their relative seniority. We may also observe that the second seniority list was prepared after issuing notice to the petitioner and affording him an opportunity to be heard in the matter. It was after all the objections had been considered that the list was finally drawn up. As regards the point whether the seniority of the petitioner in the category of posts higher than the category of Joint Commercial Tax Officers should be determined on the basis of his seniority as Joint Commercial Tax Officer, that is a question which does not arise presently. No combined inter se seniority list in respect of the cadre of Assistant Commissioners or of higher posts appears to have been drawn up. There is no material before us to show that it has and, if it has, what is the position of seniority assigned to the petitioner therein. In the circumstances we think it premature to express any opinion on this point. The second seniority list was prepared on 27th December, 1977. The writ petition was filed in this Court in May, 1979. The gross delay, plainly apparent, would constitute another ground for denying relief to the petitioner. But as, in our judgment, the petitioner fails on the merits we need not go further into the question of laches. The petition fails and is dismissed, but in the circumstances there is no order as to costs.

The appellant bank allowed a cash credit facility limited to Rs. 75,000/ to the principal debtor Harilal Parmananddas Adatia on his pledging 5,000 tins of groundnut oil under the lock and key of the Bank and on personal guarantee of the surety, respondent No. 2. The principal debtor executed a demand promissory note Ext. 81 in favour of the Bank on September 16, 1957, and on the same day the principal debtor also executed a demand promissory note, Ext, 30, in favour of the surety which the surety endorsed in favour of the Bank. Along with the two demand promissory notes, simultaneously the surety executed a letter of guarantee Ext. 31 in favour of the Bank and the principal debtor executed a bond Ext. 83 in favour of the Bank. The principal debtor also passed letter of continuity of the bond and the promissory note Ext. Thereafter the principal debtor enjoyed the cash credit facility by borrowing various amounts. By the end of February 1959 the principal debtor owed Rs. 76,368.04 P in this account to the Bank. Principal debtor died in November 1959. The Bank wrote to the surety letter Ext. 32 dated December 24, 1959, calling upon him to pay the outstanding balance of Rs. 70,879/ in cash credit account of principal debtor as in the circumstances mentioned in the letter the balance was required to be recovered from the surety. Some correspondence ensued thereafter between the Bank and the surety and ultimately the Bank filed the suit for recovery of Rs. 76,368.04 P. against defendant 1, the legal representative of principal debtor and defendant 2, the surety. The trial court round that there was negligence on the part of the Bank with regard to the safe custody of the pledged oil tins but as the contract of guarantee entered into by the surety with the Bank was independent of the pledge of goods given by the principal debtor, the surety is not discharged from his liability under the guarantee. So observing the trial court decreed the suit. The surety paid the entire amount demanded and appealed to the High Court. The High Court held that the two promissory notes, one executed by the principal debtor in favour of the Bank Ext. 81, and another by the principal debtor in favour of the surety and endorsed by the surety to the Bank, Ext. 30, and the letter of guarantee Ext. 31 executed by the surety in favour of the Bank as also the bond executed by the principal debtor in favour of the Bank Ext. 83 916 and the letter of continuity Ext. 82 executed by the principal debtor in favour of the Bank, all on September 16, 1957, constituted one composite transaction and they evidenced that the principal debtor had offered two securities, one the pledge of oil tins and another personal guarantee of the surety. The High Court further held that the Bank was utterly negligent and had not exercised such care as a prudent man would in the circumstances of the case which resulted in the loss of security, namely, pledged oil tins and, therefore, in view of combined operation of sections 139 and 141 of the Indian Contract Act, the surety is discharged. Accordingly, the appeal of the surety was allowed and the suit against him was dismissed. Hence this appeal by plaintiff Bank. Dismissing the appeal by certificate, the Court, ^ HELD: 1. In order to attract section 141 of the Contract Act, it must be shown that the creditor had taken more than one security from the principal debtor at the time when the contract of guarantee was entered into and irrespective of the fact whether the surety knew of such other security offered by the principal debtor, if the creditor loses or without the consent of the surety parts with the other security the surety would be discharged to the extent of the value of the security. In the instant case as found by the High Court and not controverted, the principal debtor had offered two securities, (i) the pledge of goods, (ii) personal guarantee of the surety. Verily, the General Manager of the Bank accepted the proposal for cash credit facility on the specific condition that the principal debtor shall offer two securities, one the pledge of goods to be kept under the lock and key of the Bank to be supervised by the Bank 's employee, and secondly, the personal guarantee of the surety. The surety himself agreed to give personal guarantee of the specific understanding and with the full knowledge of the Bank that the principal debtor was offering another security, namely, pledge of goods. The surety contracted on the good faith of the principal contract when entering into contract of guarantee in which case he is deemed so to contract that both the securities would be available to the creditor. If the two promissory notes Exts. 81 and 30 coupled with the letter of guarantee Ext. 31 executed by the surety and the bond Ext. 83 executed by the principal debtor at one sitting on September 16, 1957, evidence one composite transaction, it is an inescapable conclusion that the principal debtor offered two securities, one the pledge of goods and the other the personal guarantee of the surety. The surety in good faith contracted to offer personal guarantee on the clear understanding that the principal debtor has offered security by way of pledge of goods and the goods were to be in the custody of the creditor Bank. On this conclusion section 141 of the Act will be indubitably attracted. [922 A F] Sanderson vs Aston, [1873] L R. at 76, quoted with approval. Section 141 comprehends a situation where the debtor has offered more than one security one of which is the personal guarantee of the surety. Even if the surety of personal guarantee is not aware of any other security offered by the principal debtor yet once the right of the surety against the principal debtor is impaired by any action or inaction, which implies negligence appearing from lack of supervision undertaken in the contract, the surety would be discharged under the combined operation of sections 139 and 141 of the Act. In any event, if the creditor loses or without the consent of the surety parts with the security, the surety is discharged to the extent of the security lost as provided by section 141. [922 F H] State of Madhya Pradesh vs Kaluram, ; , followed. 917 Wulff and Billing vs Jay, , quoted with approval. In the instant case, clauses 5, 7 and 13 of the letter of guarantee, Ext. 31 would be of no assistance to the Bank. [926 B, G, H] (a) Clause 5 confers right upon the creditor Bank to grant any time or indulgence in payment of the debt or to determine, enlarge or vary its credit and to vary, exchange or take other securities or release any other securities held by the Bank but such an act on the part of the Bank would not have the effect of discharging the surety or in any manner affecting his liability under the letter of guarantee. It is not a case of granting time or indulgence to the principal debtor or variation of the credit or taking one set of security in substitution of some other security or release of any security. Release of security implies a volitional act on the part of the Bank. Loss on account of negligence cannot be equated with release. [925 G H. 926 A B] (b) Clause 7 provides for non discharge of surety even if the creditor Bank enters into a composition with the principal debtor and that the surety would nonetheless be liable even if the Bank has other guarantee, security or remedy guarantees, securities or remedies from the principal debtor. Upon a true construction of clause 7, the expression 'any other guarantee, security or remedy ' therein mentioned must be security other than the pledged goods. [926 B C] Amrit Lal Goverdhan Lal and ors. vs State Bank of Travancore and ors. ; , @ 731, followed. (c) Clause 13 provides for continuing the guarantee where the principal debtor is an association of persons and for continuance of the guarantee in the event of death, retirement etc. of one of such association of persons or the guarantee remaining intact and effective and legally enforceable irrespective of some defect arising from the internal management of such association of persons. First Security, namely, the pledged goods are lost to the Bank and the concurrent finding again incontrovertible is that the pledged goods were lost on account of the negligence of the creditor Bank. Whole of the security was lost and, therefore, the surety would be discharge in entirety because it is crystal clear that the principal debtor had agreed and had in fact pledged 5,000 tins of oil which even if sold at the then current market price would have satisfied the Bank 's entire claim. Accordingly, the surety would be discharged in entirety. [926 G H, 927 A B] 4. Accepting a contention that section 141 would not be attracted and the surety would not be discharged even if it is found that a creditor has taken more than one security on the basis of which advance was made and the surety gave personal guarantee on the good faith of other security being offered by the principal debtor which itself may be a consideration for the surety offering his personal guarantee and the creditor by its own negligence lost one of the securities, would tantamount to putting a premium on the negligence of the creditor to the detriment of the surety who is usually described as a 'preferred debtor '. A Court should not by its construction of such letter of guarantee enable the creditor to act negligently and yet be not in any manner accountable. [927 B E] 5. By section 144 of Civil Procedure Code 1908, as amended by the Amendment Act, 1976, the jurisdiction to grant restitution is conferred upon "the Court which passed the decree or order". By an explanation added to section 144 by the Amendment Act of 1976, the expression "Court which passed the decree or 918 order" shall be deemed to include where the decree or order has been varied or reversed in exercise of appellate or revisional jurisdiction, the Court of first instance. [927 G H, 928 A] In the instant case (i) the appellant was the plaintiff and its suit was decreed by the trial Court, i.e. the Court of Civil Judge, Senior Division, Gondal, on November 18, 1960. The present appellant by its letter dated February 14, 1961, demanded from the surety a sum of Rs. 84,828.07 P. inclusive of costs and interests on the principal amount decreed. The surety respondent 1 in this Court paid the appellant Rs. 84,828.07 P. On April 3, 1961. In the appeal by the surety the High Court reversed the decree and dismissed the suit against the surety. Accordingly, the surety is entitled to restitution; and (ii) the present one is the simplest case where the suit in favour of the appellant and against the surety was decreed by the trial court, i.e. the Court of first instance, and this decree has been reversed by the trial Court in exercise of its appellate jurisdiction. In such a situation clause (a) of the explanation would be attracted and an application for restitution will have to be made to the Court of first instance, i.e. the Court of Civil Judge, Senior Division, Gondal. It is nowhere suggested that such a Court does not exist. Therefore, it would not be proper for this Court to direct restitution. However, there will be no justification for the appellant Bank to withhold the amount which was collected from the surety on a mere demand. Therefore, an application for restitution made by the surety would not lie to this Court [928 B D, F H].

Civil Appeal No. 323 of 196. Appeal from the judgment and order dated September 25, 1958, of the Bombay High Court in I.T.R. No. 3 of 1958. K. N. Rajagopal Sastri and D. Gupta, for the appellant. R. J. Kolah, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent. January 31. The Judgment of the Court was delivered by 904 section K. DAS, J. The Commissioner of Income tax, Bombay City I, has preferred this appeal to this Court on a certificate of fitness granted by the High Court of Bombay under section 66A (2) of the Indian Income tax Act, 1922. The assessee, who is the respondent before us, was assessed to income tax as an individual in respect of his income for the assessment year 1954 55. The taxing authorities included in the assessee 's total income for the year to sums, namely, a sum of Rs. 410/ and a sum of Rs. 14,170/ . It was stated that these two sums accrued in the relevant account year in the following circumstances. On January 12, 1953 the assessee created a trust in respect of a sum of Rs, 25,000/ , the trustees whereof were the Central Bank Executor & Trustee Co., the assessee himself his wife and brother. The scheme of the trust deed was that the said sum of Rs. 25,000/ was set apart by the assessee and it was provided that the interest on that amount should be accumulated and added to the corpus and a minor daughter of the assessee, named Chandrika, was to receive the income from the corpus increased by the addition of interest, when she attained the age of 18 on February 1, 1959. She was to receive the income during her life time and after her death the corpus was to go to persons with whom we are not concerned. The income derived from the said trust fund amounted to Rs. 410/ in the relevant account year and the taxing authorities included this amount in the total income of the assessee, purporting to act under section 16(3)(b) and/or section 16(3)(a)(iv) of the Income tax Act. As regards the second sum of Rs. 14,170/ it appears that on December 1, 1941, the assessee 's father had created a trust in respect of some shares and a cash sum of Rs. 30,000/ for the benefit of his four sons including the assessee. The trustees were the Central Bank Executor and Trustee Co. Ltd., the assessee himself and one other person. The said trustees were to hold the trust funds upon trust to 905 pay the net interest and income thereof to the assessee "for the maintenance of himself and his wife and for the maintenance, education and benefit of all his children till his death". The sum of Rs. 14,170/ . it was stated, accrued as income in the hands of the assessee in the relevant account year from the said trust funds. The view of the taxing authorities and the Income tax Appellate Tribunal was that under the aforesaid provision of the trust deed the assessee was the sole beneficiary and that the amount was received by him for his own benefit and he was not accountable to any one in respect of the amount and, therefore, this amount was liable to be included in his total income. On behalf of the assessee the contention was that the sum of Rs. 410/ aforesaid was not liable to be included in the total income of the assessee inasmuch as Chandrika, the minor daughter of the assessee, had no right to the income nor any beneficial interest therein in the relevant year of account under the provisions of the trust deed and, therefore, neither section 16(2)(a)(iv) nor section 16(3)(b) applied to the case. As to the sum of Rs. 14,170/ the case of the assessee was that it should not be included in his total income as the sole beneficiary, because the beneficiaries under the trust settlement were not only the assessee but his wife and children as well. It was contended that the assessee received the amount in trust for himself and his wife and children and it was open to the Department to proceed under the first proviso to section 41 (1) of the Income tax Act and recover tax on a separate assessment made on the assessee as a trustee in respect of the said sum at the maximum rate, because the individual shares of the beneficiaries on whose behalf the money was receivable were indeterminate and not known. The Income tax Appellate Tribunal, on an appeal by the assessee, did not accept these contentions. The Tribunal was then moved to state a 906 case to the High Court on two questions of law those questions were: "1. Whether the sum of Rs. 410/ is properly includible in the assessee 's total income either in accordance with the provisions of section 16(3)(b) and/or section 16(3)(a)(iv) of the Indian Income tax Act, 1922? 2. Whether the sum of Rs. 14,170/ is properly includible in the total income of the assessee as the sole beneficiary thereof under the trust settlement made on 1 12 1941 by Dhanji Devsi?" On being satisfied that these questions of law arose out of the order of the Tribunal dated April 24, 1957, the Tribunal stated a case under section 66(1) of the Income tax Act. The High Court answered both the questions in favour of the assessee by its judgment and order dated September 25, 1958. There after the High Court granted a certificate of fitness under section 66A(2) of the Income tax Act and, as we have already stated, the present appeal has been brought to this Court on the strength of that certificate. We proceed now to deal with the first question which relates to the sum of Rs. 410/ . The question is whether this sum was properly includible in the assessee 's total income under the provisions of section 16(3)(b) of the Income tax Act, because Mr. Rajagopal Sastri appearing for the appellant has not pressed the claim which was made before the Tribunal on behalf of the Department under the provisions of section 16(3)(a)(iv). Before we go to the provisions of section 16(3)(b) it is advisable to set out the material portions of cls. 3 and 4 of the trust deed of January 12, 1953. Those clauses were in these terms: "3. The Trustees shall hold and stand possessed of the trust fund and the investments for the time being representing the 907 same and receive the income, divided, interest and rents thereof and invest the same and the resulting income, dividend, interest and rents thereof so as to accumulate at compound interest to the intent that such accumulations shall be added to the principal trust fund until the settler 's daughter Chandrika shall attain the age of eighteen years which age she will attain on the 1st February 1959 and after the expiration of the above named period the Trustees shall deal with and dispose of the trust fund as hereinafter stated. The Trustees shall hold and stand possessed of the trust fund and the accumulations thereof upon trust to pay the net interest and income thereof after deducting all out goings and charges for collection to the said Chandrika for her life for her maintenance. " It is clear from these clauses that during the minority of Chandrika, the income from the trust funds was to be accumulated and added to the trust funds and after the attained majority on February 1, 1959, she was to get only the income from the enlarged trust funds. Now, in the relevant year of account Chandrika was still a minor and under the terms of the trust deed she had no right to the trust income nor any beneficial interest therein; she could neither receive nor enjoy the income. She did not derive any benefit whatsoever from the trust funds during her minority and even after she attained majority, she did not have any right to the trust income which arose during her minority and her only right was to enjoy the income arising from the enlarged trust funds, i. e., the original trust funds and the accumulations of trust income during her minority. Therefore, the sum of Rs. 410/ was not the income of Chandrika, but was the income of the trustees and the income was impressed with a trust, namely, that it should be added to 908 the trust corpus. The question is, does section 16(3)(b) apply to such a case ? We shall presently read section 16(3), but before we do so it is necessary to refer to the scheme of section 16 of the Income tax Act. The section deals with the computation of total income as defined in section 2(15) of the Act, and provides that what sums are to be included or excluded in determining the total income. The definition of total income in section 2(15) involves two elements (a) the income must comprise the total amount of income, profits and gains referred to in section 4(1), and (b) it must be computed in the manner laid down in the Act. The exemption granted under the Act is of two kinds; certain classes of income are exempted from tax and also excluded from the computation of total income, while certain other classes of income exempted from tax are to be included in the assessee 's total income. Now cl. (a) of sub section (i) of section 16 provides the sums exempted from tax under certain provisions of the Act should be included in the assessee 's total income. Clause (b) lays down the mode of computing a partner 's share in the profit or loss of the firm. Under cl. (c) income which arises to any person by virtue of any settlement or disposition from assets remaining the property of the settler or disponer etc. is taxed as his income. The object of the legislation is clearly designed to overtake and circumvent a tendency on the part of the tax payers to endeavour to avoid or reduce tax liability by means of settlements. Sub section (2) deals with grossing up of dividend etc. Then we come to sub section (3). This sub section aims at foiling an individual 's attempt to avoid or reduce the incidence of tax by transferring his assets to his wife or minor child or admitting his wife as a partner or admitting his minor child to the benefits of a partnership in a firm in which such individual is a partner. The sub section creates an artificial 909 liability to tax and must be strictly construed. Now, let us read the sub section. (3) In computing the total income of any individual for the purpose of assessment there shall be included: (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly: (i) from the membership of the wife in a firm of which her husband is a partner; (ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner; (iii)from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (iv) from assets transferred directly or indirectly to the minor child, not being a married daughter by such individual otherwise than for adequate consideration; and (b) so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both. " The argument on behalf of the appellant is that the conditions laid down in cl. (b) of sub section (3) of section 16 are fulfilled in the present case and therefore the Department was intitled to include in the 910 total income of the assessee so much of the income in the hands of the trustees as arose from the assets transferred by the assessee for the benefit of his minor child. It is pointed out that the conditions laid down in cl.(b)are (1) that there must be income in the hands of any person or association of persons (trustees in the present cases;) (2) the income must arise from assets transferred otherwise than for adequate consideration to the trustees; and (3) the transfer must be for the benefit of the minor child. It is argued that when the conditions are fulfilled and the only exceptional case, namely, where the transfer is for adequate consideration is out of the way, cl. (b) must apply and the Department is entitled to include the income in the hands of the trustees in computing the total income of the individual assessee who made the transfer. At first sight the argument appears to be attractive and supported by the words used in the clause. On a closer scrutiny, however; it seems to us that cl. (b) must be read in the context of the scheme of 16 and the two clauses (a) and (b) of sub section (3) thereof must be read together. So read the only reasonable interpretation appears to be the one which the High Court accepted, namely, that the scheme of the section requires that an assessee can only be taxed on the income from a trust fund for the benefit of his minor child, provided that in the year of account the minor child derives some benefit under the trust deed either he receives the income, or the income accrues to him, or he has a beneficial interest in the income in the relevant year of account. But if no income accrues, or no benefit derived and there is no income at all (so far as the minor child is concerned), then it is not consistent with the scheme of section 16 that the income or benefit which is non existent so far as the minor child is concerned, will be included in the income of his father. Take, for example, a case where the assets 911 were transferred otherwise than for adequate consideration for the benefit of a minor child, but the child has attained majority before the relevant year of account. After the child attains majority the sub section would cease to apply and the income from assets transferred for the benefit of the child would no longer be taxable in the parent 's hands. The reason must be that in the relevant year of account there is no benefit to the minor child by the transfer, even though the transfer was originally made for the benefit of the child. The same principle may be illustrated by another example which has been dealt with by the High Court. Take a case where there are intermediate beneficiaries before the minor gets the benefit under the trust deed. In such a case the learned Advocate for the Department conceded in the High Court that cl. (b) of sub section (3) of section 16 would not be attracted till the minor derived benefit under the trust deed. Mr. Rajagopal Sastri did not make any such concession before us; but seems to us that principle underlying the illustration is incontestable. If the minor derives no benefit in the relevant year of account, it can hardly be said that for that year the transfer was for the benefit of the minor child. Section 4, the charging section, of the Income taxs Act makes it clear that what is taxed is the total income of the relevant account year, and total income, according to section 2 (15), is the income, profits and gains referred to in sub section (1) of section 4 and computed in the manner laid down in the Act. In other words, the tax is levied on a yearly basis. It is true that in the present case there was income in the hands of the trustees and the trustees were liable to pay tax thereon. That, however, is not the question before us. The question before us is whether such income in the hands of the trustees could be included in the total income of the assessee under cl. (b) of sub s.(3) of section 16. In our opinion, when 912 cl. (b) of sub section (3) of section 16 talks of benefit of the minor child it refers to benefit which arises or accrues to the minor in the year of account. If there be no such benefit, the income cannot be included in the total income of the individual who made the transfer. There is a third type of case which also illustrate the same principle. If only a portion of the income of the trust is reserved for the minor child, cl, (b) would apply and that portion of the income which is set apart for the benefit for the child would be taxable in the hands of the settler. All these illustrations only establish the principle that the minor child must derive some benefit in the relevant year of account before cl. (b) would apply. Furthermore, we are also of the view that cls. (a) and (b) of the sub section must be read together, Clause (a) begins with the expression "so much of the income of a wife or minor child of such individual as arises directly or indirectly", and this is followed by the four circumstances numbered (i), (ii), (iii) and (iv). There is no doubt that so far as cl. (a) is concerned, there must be income of the wife or minor child. Mr. Rajagopal Sastri has not disputed this. The obvious intention of the Legislature in enacting cl. (b) was to see that the provisions of cl. (a) were not defeated by the assessee creating a trust and in order to deal with that mischief it enacted cl. Instead of the expression "so much of the income of a wife or minor child" the expression used in cl. (b) is "so much of the income of any person or association of persons etc.". Obviously, when a trust is created the income is income in the hands of the trustees. But the underlying principle in the two cls. (a) and (b) appears to be the same, namely, there must be income of the wife or minor child under cl.(a) and there must be some benefit derived by the wife or minor child in the year of account under cl.(b). This is consistent with the scheme of section 16 913 and particularly sub section (3) thereof. which is intended to foil an individual 's attempt to avoid or reduce the incidence of tax by transferring his assets to his wife or minor child etc. When, however, the minor child derives no benefit under the trust deed in the year of account, it is not consistent with the scheme of section 16 to say that even though there is no accrual of and income or benefit in the year of account in favour of the minor child, yet the income must be included in the total income of the individual concerned. Our attention has been drawn to section 64 of the Income tax Act, 1961 (43 of 1961). That section corresponds to section 16 of the Income tax Act, 1922 and cl. (v) of section 64 has made the position clear by using the expression 'immediate or deferred benefit" so that even a benefit which is postponed and does not arise in the year of account will not entitle the Department to include the income in the hands of the trustees in the total income of the settler. We do not, however, think that the Act of 1961 can be taken as declaratory of the law which excited previously; nor can s 64 (v) be taken as determinative of the true scope and effect of cl. (b) of sub section (3) of section 16. The Legislature may have thought fit in its wisdom to widen the scope of the law that existed previous to it so as to take in deferred benefits as well. We think that we must interpret cl. (b) of sub section (3) of the context of the section as it occurs in the Income tax Act of 1922. We have been referred to two English decisions Dale vs Mitcalfe (1) and Mauray vs Commissioners of Inland Revenue (2). One of the decision Dale vs Mitcalfe (1) related to section 25 of the English Income Tax Act, 1918 (8 & 9 Geo. V. C. 40) and the other related to section 20(1)(c) of the English Finance Act 1922 (12 and 13 Geo V. C. 17). Those provisions were differently worded and appear in a different 914 context and decisions of the English Courts given on provisions differently worded and appearing in a different context are not, in our opinion, helpful in determining the true scope and effect of cl. (b) sub section (3) of section 16 of the Income tax Act, 1922. We have therefore, come to the conclusion that on a true construction of cl. (b) of sub section (3) of section (3), the view expressed by the High Court was correct and the sum of Rs. 410/ did not form part of the total income of the assessee. The High Court correctly answered the first question referred to it. We now turn to the second question. The relevant clause of the trust deed of December 1, 1941 is cl. 7 which reads as follows: "The trustees shall hold and stand possessed of the Trust Fund mentioned in the second Schedule hereto and the accumulations thereof referred to in clause 3 thereof upon Trust to pay the net interest and income thereof to the Settler 's son MANILAL for the maintenance of himself, his wife and for the maintenance, education and benefit of all his children till his death. " The question before us is whether under this clause the income received by the assessee is impressed with a trust in favour of himself, his wife and children to whom he is accountable as a trustee for the amount received. In other words, the question is whether the trust deed of December 1, 1941, created two trusts, the one requiring the trustees to pay the income from the trusts funds to the assessee and the second requiring the assessee to spend the income for the maintenance of himself and his wife and for the maintenance, education and benefit of his children. In cases where property is given to a parent or other person standing or regarded as in loco parentis, with a direction 915 touching the maintenance of the children, the question often arises whether the settler intended to impose a trust by the direction or whether the direction was only the motive of the gift. The line between the two classes of cases has not been drawn always very firmly. It is, however, clear that in construing provisions of this kind the Court will not enforce or treat as obligatory a mere wish or desire or hope on the part of the settler that the donee of the fund should or would ought to or is expected to apply it for the benefit of other persons; on the other hand, the Court does regard as binding and obligatory and does enforce a direction or trust in favour of third parties if such a binding obligation can be clearly ascertained from the document. Instances of cases where no trust is created and of cases where trust is created and detailed at pages 85 and 86 of Lewin on Trusts (15th Edition). We are unable to hold that in the case before us cl. 7 of the trust deed merely expressed a wish or desire or hope on the part of the settler. We are in agreement with the High Court that the direction contained in cl. 7 created a trust in favour of the assessee, his wife and children. The expression "for the maintenance of himself and his wife and for the maintenance, education and benefit of all his children" is not indicative of a mere desire or hope. It imposes a binding and obligatory trust. In re. Booth, Booth vs Booth (1) a testator gave the residue of his estate to his executors, on trust, to pay to his wife or permit her to receive the annual income thereof during her life, "for her use and benefit and for the maintenance and education of my children". It was held that the wife took the income subject to a trust for the maintenance and education of the 916 children. A similar view was expressed in Raikes vs Ward (1) and Woods vs Woods (2) On behalf of the appellant our attention was drawn to section 8 of the (II of 1882) which states that the subject matter of a trust must be property transferable to the beneficiary and it must not be merely beneficial interest under a subsisting trust. It is contended that the assessee held a beneficial interest in the income from the trust funds under the trust deed of December 1, 1941, and in respect of beneficial interest another trust could not be created in favour of himself, his wife and children. We think that this argument proceeds on a misconception. The assessee did not create a second trust in respect of the beneficial interest which he held under the trust deed of December 1, 1914. The assessee father created two trusts by that trust deed, one requiring the trustees to pay the trust income to the assessee and the other requiring the assessee, who was himself a trustee, to spend the income for the maintenance, education and benefit of his children. It is not disputed that by a single document more than one trust may be created. It is not, therefore, true to say that the subject matter of the trust in the present case was merely a beneficial interest under a subsisting trust. Under section 41 of the Income tax Act it was open to the Department either to tax; the trustees of the trust deed or to tax those on whose behalf the trustees had received the amount. The true position of the assessee in this case was that he was a trustee and not the sole beneficiary under the trust deed. He held the income on trust for himself, his wife and his children. The shares of the beneficiaries were indeterminate and therefore under the first proviso to section 41(1) of the 917 Income tax Act, it was open to the Department to levy and recover the tax at the maximum rate from the assessee; but that did not entitle the Department to include the sum of Rs. 14,170/ in the total income of the assessee as though he was the sole beneficiary under the trust deed, Mr. Rajagopal Sastri made it clear that the intention of the Department was to include the sum in the total income of the assessee in order to levy and charge super tax on him. This, we do not think, the Department was entitled to do. In respect of the sum of Rs. 14,170/ the assessee was a trustee, within the meaning of section 41 of the Income tax Act, appointed under a trust declared by a duly executed instrument in writing and as such trustee he had the right to contend that his assessment in respect of the money received by him not as a beneficiary but as a trustee could only be made under the first proviso to section 41 (1). We have, therefore, come to the conclusion that on the second question also the answer given by the High Court was correct. The result, therefore, is that the appeal fails and is dismissed with costs. Appeal dismissed.

In 1953 the assessee created a trust in respect of a sum of money and provided that the interest on that amount was to be accumulated and added to the corpus and that his minor daughter C was to receive the income from the corpus increased by the addition of interest when she attained the age of 18 years. In the relevant account year, when C was still a minor, the income derived from the trust fund was Rs. 410 Earlier in 1941, the assessee 's father had created a trust in respect of certain shares and money directing the trustees to pay the net interest and income thereof to the assessee "for the maintenance of himself and his wife and for the maintenance, education and benefit of all his children till his death". In the relevant account year a sum of Rs. 14,170 accrued as income in the hands of the assessee from the said trust funds, 903 The taxing authorities included both these incomes in the total income of the assessee. ^ Held, that neither of these two incomes could be included in the total income of the assessee. Under section 16(3)(b) of the Indian Income tax Act, upon which the authorities relied, the assessee could only be taxed on the income from the trust funds for the benefit of his minor child if in the year of account the minor child either received the income or it accrued to her or she had a beneficial interest in the income in the relevant year of account. In the present case though there was income in the hands of the trustees and they were liable to pay tax thereon, there was no benefit to the minor child in that year. As such the sum of Rs. 410 did not form part of the total income of the assessee. The trust deed of 1941 created two trusts, the one requiring the trustees to pay the income from the trust funds to the assessee and the second requiring the assessee to spend the income for the maintenance of himself and his wife and for the maintenance, education and benefit of his children. It was not a case where the settler merely expressed a wish or desire or hope but he gave as direction which created a trust in respect of the income in the hands of the assessee in favour of himself, his wife and children. The assessee did not create the second trust in respect of the beneficial interest which he held under the trust of 1941 and section 8 of the Indian Trusts Act which forbade the creating of such a trust was inapplicable. The assessee was a trustee and not the sole beneficiary; and since the shares of the beneficiaries were Indeterminate it was open to the Department to levy and recover tax at the maximum rate from the assessee as trustee under the first proviso to s.41(1) but the Department was not entitled to include the sum of Rs. 14,170 in the total income of the assesse as though he was the sole beneficiary under the trust deed.

Civil Appeal No. 1257 of 1975. Appeal by Special Leave from the Judgment and order dated the 5th May 1972 of the Allahabad High Court in Civil Misc. Writ Petition No. 5546 of 1971. M. Natesan and N. H. Hingorani, for the Appellant. Govind Das and Girish Chandra, for the Respondents. The Judgment of the Court were delivered by UNTWALIA, J. The appellant in this appeal by special leave is a registered partnership firm and is carrying on business of manufacturing a number of milk products including Condensed Milk and Condensed Skimmed Milk. By the Finance Act, 1969 item 1B was added to the First Schedule of The Central Excise and Salt Act, 1944. hereinafter called the Excise Act, levying 10% ad valorem duty on "prepared or preserved foods put up in unit containers and ordinarily intended for sale including preparations of . milk . " In exercise of the powers of the Central Government under sub rule (1) of Rule 8 of the Central Excise Rules, 1944 and in supersession of the earlier notifications the Central Government issued Notification No. G.S.R. 339 dated the 1st March, 1970 exempting prepared or preserved foods falling under Item No. 1B of the first Schedule of the Excise Act other than those specified in the Schedule annexed to the notification from the whole of the duty of excise leviable thereon. In the Schedule is mentioned as items 12 and 13: "12. Milk powder but excluding such powder specially prepared for feeding of infants;" ""13.Condenced milk, whether sweetened or not;" Thus preparations of milk leviable to excise duty under the Excise Act became exempt from the levy of the duty. But from that exemption were excluded certain milk preparations mentioned in items 12 and 13. on and from the 1st March, 1970 the Excise authorities levied excise duty on condensed milk and condensed skimmed milk manufactured by the petitioner treating both of them as included in Item 13 of the Exemption Notification dated the 1st March, 1970. For sometime the petitioner paid excise duty not only on condensed milk but also on condensed skimmed milk. Later he objected to the payment of such duty on the latter product on the ground that condensed skimmed milk fell within the Exemption Notification and not within the excluded Item 13 of that notification. The authorities did not accept his stand to be correct and issued two notices dated 4 8 1971 and 7 8 1971 demanding a sum of Rs. 1,048/ and Rs. 3.064/ respectively as duty payable on condensed skimmed milk manufactured by the petitioner during certain periods. The petitioner filed a writ application in the Allahabad High Court to challenge the (demand of excise duty on condensed skimmed milk. A Bench of the High Court took the view that condensed skimmed milk was also condensed milk covered by the excluded Item 13 of the Exemption Notification dated the 1 st March, 1970. It, therefore, dismissed the writ application. Hence this appeal. 95 It is well established by several authorities of this Court that for the purpose of levy of excise duty or any other similar tax the description of goods as popularly and commonly understood has to be taken as the description of the same goods in the relevant provisions of the Statute or the Rules. In this case there are materials to show that condensed milk and condensed skimmed milk are two different items of milk preparations. In common parlance milk means the full cream milk as milked from the cattle. It becomes skimmed milk when cream i.e. fat is extracted from milk. Thereafter the skimmed milk which also can be called a form of preparation of milk is known as such. It becomes easy to digest and is used in preparation of other milk products, which are different from the milk products prepared from full cream milk. In the Hand Book on Self Removal Procedure under The Central Excise Rules, 1944, 3rd edition published in June, 1972 by the Central Board of Excise and Customs is to be found Instruction 8(b) to say: "Every assessee is also required to maintain a daily account of important raw materials in Form IV (Annexure II) and also to submit a quarterly return in form RT5 (Annexure III) under Rule 55 of Central Excise Rules, 1944. One or two important raw materials, which have been prescribed for most of the excisable goods under Self Re moval Procedure, are shown in Annexure IV. The assessees may maintain daily account and submit quarterly RT5 return only in respect of these specified raw materials. " In Annexure IV are to be found Items 13 and 14 respectively in these terms: "13. Milk powder but excluding such powder specially pre pared for feeding of infants" ""14. Condensed milk whether sweetened or not. " In column 4, under the heading "names of important raw materials" against item No. 13 is mentioned "whole fresh milk/skimmed milk as the case may be" and against item 14 are found the words "fresh milk/and sugar". It would be noticed that the description in Items 13 and 14 of Annexure IV. is identical to that of items 12 and 13 in the list of excluded items from the Exemption Notification. Yet in item milk powder in Annexure IV as against the names of important raw materials, both "whole fresh milk" and "skimmed milk" are mentioned. But as against condensed milk only "fresh milk" is mentioned. Such a handling of the description of the milk products and preparations does indicate that the Central Government when it mentioned condensed milk in item 13 of the notification dated the 1st March, 1970 it meant to exclude from exemption only condensed milk of full cream milk and not the condensed skimmed milk prepared from skimmed milk. The milk preparation condensed skimmed milk prepared from skimmed milk fell within the Exemption Notification and not within excluded item 13. 96 Some support, although a feeble one, can be lent to the above view with reference to Rule 42 of The Prevention of Food Adulteration Rules, 1955. In clause (B) of the said Rules are mentioned the forms of label to be put on condensed milk and the four types of labels are: (1) Full Cream Milk (unsweetened) (2) Condensed Full Cream Milk (Sweetened) (3) Condensed Machine Skimmed Milk or Condensed Skimmed Milk (unsweetened) (4) Condensed Machine Skimmed Milk or Condensed Skimmed Milk (sweetened) " In Item 13 of the notification when the Government added the words "whether sweetened or not" it did mean to classify the condensed milk of sweetened or unsweetened variety but did not intend to include in item 13 condensed skimmed milk whether sweetened or unsweetened. Learned counsel for the respondents pointed out that the petitioner had obtained a licence for manufacture of condensed milk only under he Excise Act. It did not obtain a licence for manufacture of condensed skimmed milk. Counsel, therefore, submitted that for the purpose of the levy of the excise duty both would be on the same footing. Learned counsel for the appellant submitted in reply that if excise duty was not leviable on condensed skimmed milk then no licence was required for its manufacture. The position of law seems to be this. Under section 6 of the Excise Act no person can engage in the production or manufacture of any specified goods included in the First Schedule of the Act except under the authority and in accordance with the terms and conditions of a licence granted under the Act. It will have been seen, therefore, that since skimmed milk or condensed skimmed milk will be a milk preparation within the meaning of item 1B of the First Schedule, a licence to manufacture such milk would be required. If any goods specified in the First Schedule are exempted from the levy of excise duty by the Central Government in exercise of their power under Rule 8(1) of the Central Excise Rules that cannot affect the provision or taking licence for the manufacture of the said goods. But in this case we are not concerned to find out whether the petitioner was manufacturing condensed skimmed milk without a licence and if so, whether it was committing any offence. But even assuming that the petitioner had a manufacturing licence under section 6 of the Act only for manufacture of condensed milk that by itself will not take condensed skimmed milk out of the Exemption Notification and include it in the excluded item 13. For the purpose of levy of excise duty therefore condensed skimmed milk remains included in the Exemption Notification. Learned counsel also drew our attention to the form of price list of the petitioner showing separate prices for "Condensed milk (full 97 cream)" and "Condensed milk (Skimmed)". 'that again is of no help for the determination of the point at issue. Unless and until skimmed milk is included in item 13 of the Exemption Notification of the 1st March 1970 it remains an item of goods exempted from levy of excise duty. For the reasons stated above we allow this appeal, set aside the judgment and order of the High Court and direct the respondents B. not to enforce their demand of excise duty made in the two notices dated 4 8 1971 and 7 8 1971. In the circumstances we shall make no order as to costs. V.P.S. Appeal allowed.

By virtue of a Notification dated March 1, 1970, issued by the Central Government under r. 8(1) of the Central Excise Rules. 1944, preparations of milk, leviable to excise duty under the Excise Act, 1944, became exempt from the levy. but from that exemption were excluded certain milk preparations, namely, items 12 and l 3 of the Schedule annexed to the Notification. They refer to 'milk powder, but excluding such powder specially prepared for feeding of infants '. and 'condensed milk, whether sweetened or not ', respectively. The appellant challenged the levy of excise duty on condensed skimmed milk, which he manufactured, on the ground, that it fell within the exemption Notification and not within item 13 of the excluded items. The High Court dismissed the writ petition holding that condensed skimmed milk was also condensed milk. Allowing the appeal to this Court, ^ HELD: (1) For the purpose of levy of excise duty or any other similar tax the description of goods as popularly and commonly understood has to be taken as the description of the same goods in the relevant provisions of the statute or the rules. In common parlance milk means the full cream milk and it becomes skimmed milk when cream is extracted from it. [95 A B]. (2) In the present case, there are materials to show that the Government itself treated 'Condensed milk ' and 'Condensed skimmed milk ' as different milk preparations, [95 H]. (a) In Annexure IV to the Hand Book of Self Removal Procedure under central Excise Rules, 1944, published in June 1972 by the Central Board of Excise, are items 13 and. 14 corresponding to items 12 and 13 of the Schedule to the exemption Notification. Against each item certain important raw materials are mentioned of which the assessee has to maintain accounts. Against milk powder, the raw materials shown are both fresh milk and skimmed milk, while, against condensed milk only fresh milk is mentioned. [95 G H]. (b) Further, r. 42 of the Prevention of Food Adulteration Rules, 1955, prescribes various forms of labels to be put on tins of condensed milk and they also refer to condensed full cream milk and condensed skimmed milk separately. [96, A D]. (3) The fact that the appellant had a manufacturing licence only for the manufacture of condensed milk while he was in fact manufacturing condensed skimmed milk will not take ' condensed skimmed milk out of the exemption notification and include it in the excluded item Under section 6 of the Act a licence would be required for the manufacture of condensed skimmed milk and the appellant by manufacturing condensed skimmed milk without a licence, may be committing an offence. But, if condensed milk is exempt from the levy of excise duty by the Central Government in exercise of its power under r. 8(1), the exemption cannot be affected by the provision for taking a licence for its manufacture. [96 F H]. (4) The fact that the appellant was showing separate prices in the list of prices for condensed milk (full cream) and condensed milk (skimmed) would not help in the determination of the question. Unless and until skimmed milk is included in item 13 of the exemption Notification, it remains an item of goods exempt from the levy of excise duty. [97 A Bl. 94

Appeal No. 552 of 1963. Appeal by special leave from the order dated April 28, 1960 of the Deputy Secretary to the Government of India, Ministry of Rehabilitation, New Delhi, purporting to exercise the powers of Revision under section 33 of the Displaced Persons (Compensation of Rehabilitation) Act, 1954 in Case No. 38(894)/59 Neg. A. With Writ Petition No. 108 of 1960. Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights. Achhru Ram and N. N. Keswani, for the appellants and the petitioners. N. section Bindra and B. R. G. K. Achar, for respondents Nos. 1 and 2 (in both the appeal and petition). M. C. Setalvad, K. Jairam and R. Ganapathy Iyer, for the respondents Nos. 3 to 7 (in both the appeal and petition). March 10, 1964. The Judgment of the Court was delivered by AYYANGAR, J. The appeal, by special leave, is directed to question the correctness of an order passed by the Deputy Secretary to the Government of India, Ministry of Rehabilitation under section 33 of the Displaced Persons (Com pensation and Rehabilitation) Act, 1954 (Central Act XLIV of 1954) which for convenience will be referred to hereafter as the Act. The facts necessary to appreciate the points urged be fore us are briefly these: The property in dispute is agricul tural land of an extent of about 60 acres situated at Nizam abad in the former State of Hyderabad and now in the State 105 of Andhra Pradesh. On September 7, 1950 the Deputy Cus todian of Nizamabad District allotted 44 acres of this land to five persons who are the respondents before us. All these five were displaced persons and were entitled to this allotment. By a further order dated July 21, 1951 the balance of the 16 acres and odd was also allotted to them. The allotment was by way of lease and one of its stipulations was that the terms of the lease would be revised only after five years. The only point that needs to be stated about the terms of this lease is, that there was no condition imposed upon the lessees that they should cultivate the lands personally. While the lease was continuing in force, the Government of India issued a press note on November 13, 1953 by which they announced that they had decided to allot evacuee agricultural land in Hyderabad State to displaced persons whose claims for agricultural lands had been verified under the Displaced Persons (Claims) Act, 1950. It further stated that the allotments would be towards the settlement of claims in respect of their agricultural lands. The allotment was to be on the same terms as under the quasi permanent allotment scheme in the Punjab and applications for allotment were invited from persons residing inter alia in Hyderabad State whose verified claims included a claim for agricultural lands. The press note prescribed the 31st of December as the last date for the receipt of these applications. The appellants made an application in pursuance of this notification and on May 4, 1954 the land now in dispute, though under a sub sisting lease in favour of the respondents, was allotted to them on quasi permanent tenure. It is not disputed that the appellants satisfied the qualifications for making applications under the press note and for being allotted evacuee property thereunder. The order of allotment, a copy of which was forwarded to the Collector of Nizamabad district, contained a request that the allottees may be put in possession of the land and the fact intimated to the office of the Regional Settlement Commissioner. The revenue authorities acting on this request or direction dispossessed the respondents from the lands leased to them and put the appellants in possession thereof. Thereafter, the respondents made a representation to the Regional Settlement Commissioner, Bombay pointing out that they were displaced persons who having been rehabilitated by the allotment by way of lease were now being uprooted. They also pointed out that they had incurred large expenses in improving the land and bringing it into proper cultivation. These applications were considered by the Regional Settlement Commissioner who by his order dated July 10, 1954 rejected their application. It is not necessary 106 to set out the reasons for making this order except to say that one of them was the failure on the part of the lessees to personally cultivate the lands. The respondents, then, moved the Regional Settlement Commissioner requesting him to review his order and they also sought relief from the Gov ernment of India seeking intervention in their favour. Subsequent to this date the Act was enacted and it came in to force on October 9, 1954. Section 12 of the Act em powered the Central Government to acquire evacuee property for rehabilitation of displaced persons and in pursuance thereof the properties now in dispute were acquired by Government by a notification dated January 18, 1955. During the pendency of the proceedings by which the respondents ,sought to obtain a reversal of the order dated July 10, 1954 and without reference to them, the Regional Settlement Commissioner issued sanads in favour of appellants 1 to 4 on January 12, 1956 acting under section 20 of the Act. The Deputy Chief Settlement Commissioner who dealt with the representations made by the respondents passed an order on August 22, 1958 after obtaining a report from the Regional Settlement Commissioner. He pointed out in his ,order that there was no indication from the papers on the file that the land was originally leased to the respondents on condition that they should cultivate the lands personally. He therefore set aside the order of the Regional Settlement Commissioner dated July 10, 1954 and remanded it for further enquiry directing the passing of fresh orders after a thorough enquiry. Thereafter a report was called for and obtained from the Collector who conducted this enquiry and in his report dated June 13, 1959 he recorded a finding that there had been personal cultivation of the lands by the respondents. He pointed out that of the 60 acres comprising the entire extent, 26 guntas were allotted on a quasi permanent basis to other displaced persons in 1954 and this extent was therefore out of the controversy. It ought to be mentioned that the order of the Deputy Chief Settlement Commissioner which was of the date August 22, 1958 was apparently by inadvertence passed without notice to the appellants. When this was brought to his notice after the remand he issued notice to them and after hearing them, referred the case to the Government of India for action under section 33 of the Act. The matter was considered by the Deputy Secretary in the Rehabilitation Ministry who heard all the parties and recorded the following findings: (1) that the order dated July 10, 1954 refusing to transfer the lands to the respondents was wrong, and (2) that there was no justification for terminating the lease and depriving the respondents of possession of the 107 property now in dispute and on these findings directed the sanads granted to the appellants to be revoked and the res pondents be put in possession of the property. It is the legality of this order that is challenged in this appeal. Three points were urged by Mr. Achhru Ram learned Counsel for the appellant: (1) that the Central Government had no power under section 33 of the Act to revise the order of the Regional Settlement Commissioner dated July 10, 1954, (2) that even assuming that that order was capable of revision, the land in dispute had been transferred to the appellants irrevocably by way of quasi permanent allotment and sanads issued and that thereafter the title under the sanads which had been granted in the name of the President of India could not be disturbed except in accordance with the terms of the sanads, (3) that the Deputy Secretary in the Government of India had no materials before him on the basis of which he could find that the order dated July 10, 1954 was erroneous and required to be revised. We shall deal with these points in the same order. Section 33 under which the order under appeal was made reads: "The Central Government may at any time call for the record of any proceeding under this Act and may pass such order in relation thereto as in its opinion the circumstances of the case require and as is not inconsistent with any of the provisions contained in this Act or the rules made thereunder. " In considering the argument addressed to us under this head there are two points to be borne in mind. If the order dated July 10, 1954 passed by the Regional Settlement Com missiooner was "a proceeding under this Act" then obviously there is no limitation on the power of the Central Govern ment to pass "such order as in the circumstances of the case was required". Of course, the Central Government cannot pass an order which is inconsistent with any of the provisions contained in the Act or the Rules made thereunder and subject to the objection made that after the transfer of property and the grant of a sanad under section 20 of the Act read with r. 91(8) in the form specified in Appendix XXIV to the Rules which is the second point raised by learned Counsel, it was not suggested that the order now impugned was inconsistent with any of the provisions of the Act or the Rules made thereunder. Whether the opinion which the Central Government entertained was correct or incorrect on the evidence would, of course, not fall for consideration by this Court in an appeal under article 136 but as regards the contention that 108 the order is illegal or invalid as distinct from its being incorrect, we shall deal with it in considering the last of the arguments submitted to us by learned Counsel. It was urged that the order of the Regional Settlement Commissioner which the Central Government revised under section 33 was not "a proceeding under the Act" having been passed before the Act came into force and was therefore outside its jurisdiction under section 33 of the Act. The answer to this is, however furnished by section 39 of the Act. That section deals with orders passed prior to the commencement of the Act and renders "all things done" or "action taken" in the exercise of powers conferred by or under this Act as if the Act were in force on the date when such thing was done or action taken. Section 39 enacts: "Anything done or any action taken (including any order made) by the Chief Settlement Commissioner, Settlement Commissioner, Additional Settlement Commissioners or Settlement Officers for the purposes of payment of compensation or rehabilitation grants or other grants to displaced persons shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act were in force on the date on which such thing was done or action was taken. " It was then suggested that since the order dated July 10, 1954 had merely rejected an application filed by the respon dents for restoring them to possession of lands from which they complained they had been unjustly dispossessed, it was not "a thing done" or "action taken for the purpose of payment of compensation or rehabilitation grants to dis placed persons" so as to be deemed to be taken under the provisions of this Act. The same point was urged in a slightly different form by saying that even if the Central Government could interfere and set aside the order of the Regional Settlement Commissioner dated July 10, 1954 still they could not direct the cancellation of the sales and grants of sanads to the appellants and that as this was not a matter pending before them, the order in so far as it directed the cancellation of the sanads and the dispossession of the appellants from the disputed property was without jurisdiction. We do not see any substance in the points stated in either form. In the first place, even if learned Counsel is right in submitting that the Central Government should have stopped with setting aside the order dated July 10, 1954 the result would have been the same, because the prayer which was rejected by the Regional Settlement Commissioner when he 109 passed that order was that contained in an application by the respondents that they should be restored to the possession of the lands from which they had been dispossessed. If that prayer had to be granted on the reversal of the order dated July 10, 1954 it would inevitably have meant that the appellants should have been deprived of possession which is exactly what the order now impugned has directed. As the dispossession of the appellants was consequential on the setting aside of the order dated July 10, 1954 the appellants do not obtain any advantage by raising the contention that the Central Government should have confined itself to setting aside that order and doing nothing more. Besides, this submission proceeds from not appreciating the matters that were the subject of consideration before the Central Government and were considered by them at the time when the impugned order was passed. The facts were that there had been an allotment by way of lease as a rehabilitation grant to persons who were admittedly displaced persons in 1950 51. It was "this thing done" that had been upset in 1954 and which was restored by the order of July, 1954 being set aside by the order under section 33 of the Act. In substance and effect therefore the impugned order was dealing with and rectifying an error committed in relation to a "thing done or action taken" with respect to a rehabilitation grant to a displaced person. Not merely the order dated July 10, 1954 but the entire question as to whether the respondents as original allottees by way of lease were entitled to the relief of restoration was referred to the Central Government by reason of the order of the Regional Settlement Commissioner dated November 3, 1959. Both the parties were heard on all the points by the Central Government before the orders were passed and it would not therefore be right to consider that the matter in issue before the Central Government was technically merely the correctness of the order of the Regional Settlement Commissioner dated July 10, 1954, which read in vacuo might not be comprehended within section 39. The next point that was urged was that the appellant had been granted sanads on January 12, 1956 and that their sanads could. not be cancelled and the title acquired there displaced except in accordance with the terms of the sanads The term of the sanad which is relevant and which was referred to as the sole ground on which it could be set aside and the title of the appellants displaced reads: "It shall be lawful for the President to resume the whole or any part of the said property if the Central Government is, at any time, satisfied and records a decision in writing to that effect (the decision of the Central Government in this behalf 110 being final) that the transferee or his predecessor in interest had obtained or obtains any other compensation in any form whatsoever under the said Act by fraud or misrepresentation. " It is not disputed that this condition has not been ful filled but the question, however, is whether when the order of allotment on the basis of which the property was granted to the appellant and the sanad issued, is itself reversed or set aside can the sanad and the title obtained thereunder survive? On this point there are two decisions to which our attention was invited the first is a decision of the High Court of Rajasthan in Partumal vs Managing Officer, Jai pur(1), being a decision of a Full Bench of that Court. That case was concerned With the construction of section 24 of the Act which deals with the power of the Chief Settlement Commissioner to revise orders passed by a Settlement Officer, Assistant Settlement Officer, Assistant Settlement Commissioner, Additional Settlement Commissioner etc. The relevant part of the head note brings out the point of the decision. It reads: "Section 24 of the , no doubt confers very wide powers of revision on the Chief Settlement Commissioner, but it does not authorise cancellation of sal es after they are completed. No doubt, allotments can be set aside under section 24 of the Act, but after such allotments ripen into sales, they cannot be cancelled. The Chief Settlement Commissioner, but it does not authosioner exercising his power has no authority to cancel sale of property and an order of cancellation of sale of property is without jurisdiction and invalid. It would be too much to read in section 24 of the Act to hold that it extends to cancellation of sales by expressly providing for cancellation of allotments. The execution of a sale deed can not be regarded as only a formal expression of an order of allotment dependent on its subsis tence. " Subsequent to this decision a case arose before the High Court of Punjab: Balwant Kaur vs Chief Settlement Commiss ioner (Lands)(2 ) and a Full Bench of that Court by a majority dissented from this view and held that where an order making an allotment was set aside the title which was obtained on the basis of the continuance of that order also well with it We are clearly of the opinion that the judgment (1) I.L.R. (2) I.L.R. [1964] Punjab 36. 111 of the Punjab High Court is correct. The relevant provisions of the Act and the Rules have all been set out in the decision of the Punjab High Court and we do not consider it necessary to refer to them in any detail. It is sufficient to say that they do not contain any provision which militates against the position which is consistent with principle and logic. It is manifest that a sanad can be lawfully issued only on the basis of a valid order of allotment. If an order of allotment which is the basis upon which a grant is made is set aside it would follow, and the conclusion is inescapable that the grant cannot survive, because in order that that grant should be valid it should have been effected by a competent officer under a valid order. If the validity of that order is effectively put an end to it would be impossible to maintain unless there were any express provision in the Act or in the rules that the grant still stands. It was not suggested that there was any provision in the Act or in the rules which deprives the order, setting aside an order of allotment, of this effect. We do not therefore consider that there is any substance in the second point urged by learned Counsel. The last of the points urged was that the Deputy Secretary who passed the impugned order had no materials upon which he could find that the order dated July 10, 1954 was erroneous or justified being set aside. Learned Counsel is not right in this submission because if the respondents were entitled to remain in possession of the property originally leased to them by way of allotment and their leasehold interest had not been validly terminated a fact which on the materials the Deputy Secretary was competent to find the order that he passed restoring them to possession could not be said to lack material. We consider therefore that there is no merit in this submission. The result is that the appeal fails and is dismissed with costs. Writ Petition 108 of 1960: This petition under article 32 of the Constitution has been filed by the appellants in Civil Appeal 552 of 1963 and seeks the issue of a writ of certiorari to quash the same order of the Deputy Secretary to the Union Government as that whose legality is challenged in the appeal. Both the Writ Petition as well as the application for special leave came on for preliminary hearing on November 30, 1960 and while the leave prayed for was granted, rule nisi was also issued in the petition and the two matters have been heard together. In view of our decision in the appeal, the writ petition will stand dismissed, but there will be no order as to costs. Appeal and Writ petition dismissed.

The petitioners applied for the consent of the Central Government under section 87B of the Code of Civil Procedure to sue the Maharaja of Tripura, Ruler of a former Indian State, which has merged with India. They wanted to implead the Union of India as well, as party to the suit as their case was that they were entitled, as members of a joint Hindu family to receive either from the said Ruler or from the Union appropriate maintenance allowance under the custom of the Ruling family. Consent having been refused, they applied to this Court under article 32 of the Constitution. Their case was that section 87B of the Code in granting exemption to Rulers of former Indian States from being sued except with the consent of the Central Government contravened articles 14 and 19(1)(f) of the Constitution. Held, that in view of the previous decision of this Court section 87B of the Code of Civil Procedure was no longer open to challenge under article 14 of the Constitution. Mohan Lal Jain vs His Highness Maharaja Shri Sawai Man Singhji [1962] 1 S.C.R. 702, referred to. Regard being had to the legislative and historical back ground of section 87B of the Code, it could not be said that, that section in giving special treatment to ex Rulers had imposed an unreasonable restriction on the petitioner 's fundamental rights. Motivated as it was by the sole object of bringing the entire country including the former Indian States under one Central Government, it must be held to be reasonable and in the interest of the general public. But considered in the light of the basic principle of equality before law it would be odd to allow the section to continue prospectively for all time to come. It would therefore, be for the Central Government to consider whether it should not be confined to dealings and transactions previous to January 26, 1950. Nor should the section be used to stifle claims except such as are clearly far fetched or frivolous and consent should ordinarily if not as matter of course, be granted in the case of a genuine dispute which prima facie appears to be triable by a court of law such as the present one.

Appeal Nos. 1448 & 1587 of 1971. (From the Judgment and Decree dated the 29 1 1971 of the Madras High Court in Writ Appeal No. 119/70 and Writ Peti tion No. 471/70) Lal Narain Sinha, Solicitor General, 8. N. Prasad (in CA No. 1448/71) and Girish Chandra, for the appellants. 316 K.K. Venugopal and K.R. Nambiar for the respondents. The Judgment of the Court was delivered by RAY, C.J. These appeals are by certificate against judgment and order dated 29 January 1971 of the High Court of Madras. The respondents filed writ petitions in the High Court for a declaration that the Presidential Order dated 27 April 1960, the Railway Board orders dated 25 January 1962, Memo randa or Orders of the Ministry of Home Affairs dated 3 March 1966 and the Posts & Telegraph Department Orders dated 6 February 1965, 4 December 1965. 23 September 1967, 19 June 1968 and 9 February 1970 are void. The Presidential Order dated 27 April 1960 was inter alia as follows : XXX XXX XXX 5. Training of administrative personnel in the Hindi Medium . . (a) In accordance with the opinion expressed by the Committee in service training in Hindi may be made obligatory for Central Government employees who are aged less than 45 years. This will not apply to employees below Class III Grade, industrial establishtments and work charged staff. In this Scheme no penalty should be imposed for failure to attain the prescribed standard by the due date. Facilities for Hindi training may continue to be provided free of costs to the trainees. (b) Necessary arrangements may be made by the Ministry of Home Affairs for the train ing of typists and stenographers employed under the Central Government in Hindi type writing and stenography. (c) The Ministry of Education may take early steps to evolve a standard key board for Hindi typewriters. XXX XXX XXX 7. Recruitment to local offices of Central Government Department : (c) The Committee has agreed with the recommendation of the Commission that the Union Government would be justified in pre scribing a reasonable measure of knowledge of Hindi language as a qualification for entering into their services provided a sufficiently long notice is given and the measure of lin guistic ability prescribed is moderate, any deficiency being made good by further in service training. This recommendation may be applied for the present in regard to recruitment in the local offices of the Central Government De partments in the Hindi speaking areas only and not in the local offices in non Hindi speaking areas. The directions under (a), (b) and (c) above will not apply to offices under the Indian and Audit and Accounts Department . " 317 The Railway Board Notification dated 25 January 1962 inter alia stated as follows: "The progress of Hindi training of staff on the Railways is very slow and the facili ties provided by the Government are not being utilized properly. Immediate steps should be taken to correct the position and ensure that the facilities offered by the Government are not misused. Since training in Hindi is obligatory and is being imparted during work ing hours, wilful absence from Hindi classes should be treated as absence from duty and dealt with as such. " The Home Ministry Memorandum dated 3 March 1966 inter alia stated as follows: In service training in Hindi was made obligatory for all Central Government Employees below 45 years of age, excluding employees below Class III Grade, industrial establishments and workcharged staff. The pro gramme for facilitating the progressive use of Hindi should be completed by March 1966. Steps for the fuller use of facilities under the Hindi Teaching Scheme were being laid down. The facilities indicated that employees working in a Ministry should get themselves enrolled in the Hindi classes and failure to attend these classes should be discouraged and the obligatory training should include their appearance at the examinations. One of the Posts & Telegraph 's Orders referred to above is set out as a type. This Order provides teaching facili ties and free training in Hindi during office hours. One of the petitioners in the High Court was Murasoli Maran. He described himself as a sitting Member of Parlia ment and stated that he had duty to represent the people. The locus standi of the petitioner was challenged in the High Court '. The High CoUrt rightly held that the petition er could not maintain the petition in the High Court. The petitioner in the other writ petition described himself as Assistant Manager in the Office of the Post Master General, Madras. His locus standi was not chal lenged. The petitioners contended in the High Court that the Presidential Order ceased to have any effect because the Second Language Commission was not appointed as contemplated under Article 344 of the Constitution. The second conten tion was that the Presidential Order and other orders, circulars and memoranda issued pursuant thereto were incon sistent with section 3 of the Official Language Act 1963, as amended, inasmuch as they placed persons like the petition ers in a disadvantageous position on account of their having no proficiency in the Hindi language. The two relevant Articles in the Constitution are Arti cles 343 and 344. Broadly stated, Article 343 provides as follows. The official language of the Union shall be Hindi in Devanagari script. For a period of 15 years from the commencement of the Constitution, the English language shall continue to be used for all the official purposes of the Union for which it was being used immediately before such commencement. The proviso to Article 343 (2) is that the President may, 318 during the said period, by order authorise the use of the Hindi language in addition to the English language. Parlia ment may by law provide for the use, after the said period of 15 years,of the English language for such purposes as may be specified in the law. Article 344 is as follows. The President shall, at the expiration of five years from the commencement of the Con stitution and thereafter at the expiration of ten years from such commencement, by order constitute a Commission. It shall be the duty of the Commission to make recommendations to the President as to (a) the progressive use of the Hindi Language for the official purposes of the Union; (b) re strictions on the use of the English language for all or any of the official purposes of the Union; (c) the language to be used for all or any of the purchases mentioned in Article 348. Article 344 further provides that a Committee shall be constituted and it shall be the duty of the Committee to examine the recommendations of the Commission constituted under Article 344(1) and to report to the President their opinion thereon. Article 344(6), provides that notwithstanding anything in Article 343, the President may, after consideration of the report referred to in clause (5), issue directions in accordance with the whole or any part of that report. Article 351 provides that it shall. be the duty of the Union to promote the spread of the Hindi language, to devel op it so that it may serve as a medium of expression for all the elements of the composite culture of India. In exercise of the posers conferred on the Parliament by Article 343(3) of the Constitution, the Parliament passed the . Section 3 of the Act provided us follows : "Notwithstanding the expiration of the period of fifteen years from the commencement of the Constitution, the English language may, us from the appointed day, continue to be used, in addition to Hindi, (a) For all the official purposes of the Union for which was ,,being used immediately before that day, and (b) for the transaction of business in Parlia ment. " In 1968, the Parliament amended the and sub section (4) was added to section 3. Sub section (4) as introduced by Amendment in 1968 is as fol lows: "Without prejudice to the provisions of sub section (1) or sub section (2) or sub section (3), the Central Government may, by rules made under section 8, provide for the language or languages to be used for the official purpose of the Union, including the working of any Ministry, Department, Section or Office, and in making such rules, due consideration shall be given to the quick and efficient disposal 319 of the official business and the interests of the general public and in particular, the rules so made shall ensure that persons serving in connection with the affairs of the Union and having proficiency either in Hindi or in the English language may function effectively and that they are not placed at a disadvantage on the ground that they do not have proficiency in both the languages. " On 7 June 1955, the Official Language Commission was ap pointed by the President under Article 344(1) of the Consti tution. The Commission submitted its report in which the arrangements made by Government of India for training their employees on voluntary basis in Hindi Language was reviewed. The Commission was of opinion that if experience showed that no adequate results were forthcoming under such option al arrangements, necessary steps should be taken by the Government of India making it obligatory on Government ser vants to qualify themselves in Hindi within the requisite period, to the extent requisite for the discharge of their duties. The recommendations of the Official Language Com mission were placed before a Committee of the Parliament as envisaged under Article 344(4) of the Constitution. The Committee was of opinion that the Government should pre scribe obligatory requirements on Government servants to qualify themselves in Hindi language. The President of India after considering the report of the Committee, issued the Presidential Order dated 27 April 1960 to which a reference has already been made. Training in Hindi was made obligatory for employees. Pursuant to the Presidential Order of 27 April 1960, the Home Ministry issued an office Memorandum dated 3 March 1966.Reference has already been made to that order. The Home Ministry Order made it obligatory for Government em ployees below 45 years of age excluding certain classes of employees to have, what is described, "In service training in Hindi". The Memorandum stated that 20 per cent of the employees should be deputed to attend the Hindi classes every year. The Memorandum also stated that failure to attend these classes should attract penalties. The obligatory training was to include their appearance at the examinations. Pursuant to the Home Ministry instructions, the Post Master General, Madras, under the directions of the Director General of posts and Telegraph, issued a Memoran dum referring 10 the Presidential Order of 27 April 1960 and the Home Ministry Order dated 3 March 1966. The Posts & Telegraph Memorandum made "In service training in Hindi" compulsory for all Central Government employees who were aged less than 45 as on 1 January 1961. The Memorandum further outlined the facilities and incentives provided for the Hindi teaching. Specific mention was made that attend ance to Hindi class was compulsory and was treated as part of duty. Non compliance of Government Orders was to be treated as breach of discipline. Solicitor General contended on behalf of the appel lant that the instructions were aimed at promoting the policy of the constitutional 320 provisions that Hindi should be the official language of the Union It was said that with a view to achieving the objec tive the employees of the Government of India ought to be trained in Hindi language. It was also said that no one was placed at a disadvantage even if one could not qualify oneself in Hindi because no penalty was prescribed for an employee who did not attain any particular standard. It was submitted that the Government was within its right to issue orders obliging its employees to take training in the Hindi language, so that ultimately when Hindi became the language of the Union, they could perform their duties in an effi cient and smooth manner. The High Court upheld the contention of the respondents and held that the directions were inconsistent with section 3 of the . The High Court held that the penal consequences which followed if a Government employee absented himself from Hindi Classes had the effect of putting such an employee at a disadvantage. Counsel for the respondents contended first that under Article 343(3), Parliament may by law provide for the use, after the period of fifteen years, of the English language for such purposes as may be specified in the law. Emphasis was placed on Article 343 of the Constitution to submit that Article 343 is transitional and directions of the President are limited to the period of 15 years from the commencement of the Constitution. The following reasons were advanced: The fact that the Commission has to be constituted under Article 344 at the expiration of five years from the com mencement of the Constitution. namely, 1955 and thereafter at the expiration of ten years from the commencement of the Constitution, namely, 1960 and not thereafter, would show that the directions issued by the President under Article 344(6) are limited to the period of fifteen years from the commencement of the Constitution. The position which would prevail after 1965 would not be within the knowledge of the Commission of the years 1955 and 1960 because the Parliament has to decide the same. The recom mendations of the Commission and the directions of the President cannot relate to the period after 1965. By reason of Article 344(2)(a) and (b) the recommenda tions of the Commission as to the progressive use of the Hindi language and the restrictions on the use of the Eng lish language are matters to come within the period of fifteen years from the commencement of the Constitu tion. Article 344(3) of the Constitution which requires the Commission to have due regard to the claims of non Hindi speaking persons in public services, indicates that these claims cart be protected only when both English and Hindi language continue. Article 344(6) which states that notwithstanding any thing in Article 343, the President may issue directions should be related to purposes of sub clauses (a) to (e) of Article 344(2). 321 Council for the respondent relied on Article 349 in support of the contention that the affect of Article 349 is that after fifteen years from the commencement of the Con stitution, if Parliament desires to substitute Hindi for English it can do so under unfettered discretion but during fifteen years it can substitute Hindi for English language by Presidential directions. The second broad contention on behalf of the respondent was that the (referred to as the Act) occupies a field covered by Parliamentary Legislation. Reference was made to Objects and Reasons of the , to show that acquiring of proficiency in Hindi is the principal purpose. Section 3(4) of the Act which was introduced and inserted by Amendment in 1968, was said by the respondent to cover that area and inasmuch as the speaks of rules and the same being laid before Parliament that is the only mode of direc tions. In other words, it was said that the Presidential Order would not have any effect when the Official Lan guages Act occupied the field. The third head of submissions was that the Presidential Order is inconsistent with section 3(4) of the Act. It was said in the High Court that if the Presidential Order was inconsistent with section 3 (4) of the Act it would to that extent be void. It was stressed that Under section 3(4) of the Act, persons were not to be placed at a disad vantage on the ground that they do not have proficiency in both the languages, namely, English and Hindi. In the forefront stands Article 343 which states that the official language of the, Union shall be Hindi in Deva nagari script. Article 351 states that it shall be the duty of the Union to promote the spread of the Hindi language, to develop it so that it may serve as a medium of expression for all the elements of the composite culture of India and to secure its enrichment by assimilating without interfering with its genius, the forms, style and expressions used in Hindustani and in the other languages of India specified in the Eighth Schedule. The original calculation of the framers of the Constitution was that for a period of fif teen years the English language should be used for all official purposes. That is why two Commissions were contem plated under Article 344 one in 1955 and one in 1960. The provisions of Article 344 indicate that it shall be the duty of the Commission to make recommendations to the Presi dent as to the progressive use of the Hindi language. The provisions of the Constitution indicate the progress towards the use of Hindi language. It is in this context that Article 344 is enacted for the purpose of achieving the object of replacing English by Hindi within a period of fifteen years. Article 343(3) states that Parliament may by law after the period of fif teen years provide for the use of. English language. Al though the Constitution considered the period of 15 years for replacing English the Constitution also found that it might not be possible to complete it. Therefore, Article 343(3) provides merely for extension of time for the use of English language after the period of 15 years. The progres sive use of the Hindi language is thereby ,not to be im paired. Extending the time for the use of the English 322 language does not amount to abandonment of progress in the use of Hindi as the official language of the Union. Comparing clauses (2) and (3) of Article 343 it will be noticed that while English is permitted to be continued for all official purposes for which it was being used clause (3) contemplated that having regard to the progress made Parliament, if necessary will choose the purpose for which the use of the English language might be continued. Article 344(6) provides that notwithstanding anything in Article 343, the President may, after consideration of the report of the Committee referred to in clause (5), issue directions. The non abstante clause in Article 344(6) does not operate on1y against Article 344(1) and (2) but against the entire Article 344 for the reason that so far as transi tion is concerned the directions under Article 344(6) may continue. Article 343 and 344 deal with the processes of transition. The ultimate aim is provided in Article 351 which fulfils the object of the spread and development of the Hindi language and enrichment of the composite culture of India. Article 344(6) takes into account this objective and is intended to determine the pace of progress and to achieve the same. The provisions in Article 344 indicate that if there is a second Commission at the expiration of ten years from the commencement of the Constitution, the President may, after consideration of the report issue directions at the end of fifteen years. The provisions contained in Article 344(6) are not exhausted by using it once. The President can use it on more than one occasion. Further the effect of the power used cannot be said to be exhausted on the expiry of fifteen years. The PreSidential Order which was issued in 1960 continues to be in force and cannot be said to have exhausted itself at the end of 15 years from the commence ment of the Constitution. It would be strange that the steps necessary for the change should be given up at the expiry of 15 years because what is said to be a switch over from English to Hindi has not been possible and Parliament provided by law for r. he continued use of the English language for particular purposes specified in that law. The Presidential Order keeps in view the ultimate object to make the Hindi language as official language, but take is into note the circumstances prevailing in our country and considers it desirable that the change should be a gradual one and due regard should be given to the just claims and the interests of persons belonging to the nonHindi speak ing areas. The purpose of the Presidential Order is to promote the spread of the Hindi language and to provide the Central Government employees the facilities to take training in Hindi language when they are in service. The Presidential Order was validly made and there has been and can be no challenge to it. It is erroneous to suggest that the Presidential Order of 1960 became invalid after the passing of the Act. The High Court failed to see the sequence of the Presidential Order and the Act. 323 The Act merely continues the use of the English language in addition to Hindi. The Act does not provide anything which can be interpreted as a limitation on the power of the President to issue directions under Article 344(6) of the Constitution. The Presidential Order has no inconsist ency with the Act. The non obstante provisions in Article 344(6) empower the President. Therefore, the Presidential Order is paramount. Parliament is legislating in a different field. The filed is the per missive use of English language in addition to Hindi during the period following 15 years because the change to Hindi could not be complete. , The transitional period has exceeded 15 years. The Presidential Order keeps in view the steps to replace the use of English language. The operation of the Act and the Presidential Order is in different fields and has different purposes. The Act is to continue the use of English language after the expiry of fifteen years. Presidential Order on the other hand is to provide for the progressive use of the Hindi language. The contention of the respondent that persons are placed at a disadvantage is incorrect. The Presidential Order confers an additional qualification on those who learn Hindi. The Presidential Order does not take away anything from the Government employees. Prizes are offered and there may be increase in pay. These are incentives. The measures taken for enforcement of provisions for learning Hindi by providing for absence from classes as breach of discipline and insisting on appearance at the examinations are steps in aid of fulfilling the object of what is described as "in service training in Hindi language. " Such enforcement of attendance and examinations for proficiency is necessary for completion of training. The contention that the Presiden tial Order conflicts with section 3(4) of the Act is un sound. The "in service training" of the employees is during hours of duty and free of cost. Even if they fail there is no penalty. There is no treatment of unequals alike. For the foregoing reasons, the judgment of the High Court is set aside. The Presidential Order and other Orders challenged in the writ petitions are upheld. The appeals are accepted. The writ petitions are dismissed. Parties will pay and bear their own costs. S.R. Appeal allowed.

Presidential Orders dated 27th April 1960 and the var ious orders and circulars issued pursuant thereto by the Home Ministry, P & T Department and Railway Board, compel ling attendance in "Hindi in service training" as part of duty and providing for penal consequences for non attendance were quashed by the Madras High Court as being inconsistent with section 3 of the as amended by Act 1 of 1968 which was law made by Parliament under article 343(3) of the Constitution. In appeals to this Court on certificates, the appellant Union contended: (i) The instructions were aimed at promoting the policy of the constitutional revisions that Hindi should be the official language of the Union; (ii) No employee was placed at a disadvantage even if one could not qualify oneself in Hindi because no penalty was prescribed for an employee who did not attain any particular standard; and (iii) The Government was within its rights to issue orders obliging its employees to take training in Hindi language, so that ultimately when Hindi became the language of the Union they could perform their duty in an efficient and smooth manner. The respondents reiterated their stand, namely, (i) Article 343 of the Constitution is transitional and directions of the President are limited to the period of 15 years from the commencement of the Constitution in view of the provision in Articles 343, 344(1), 344(2)(a) and (b), 344 (3), 344 (6) indicating that directions should relate to purposes of subclauses (a) to (e) of Article 344(2); (ii) When the embodied the field covered by Parliamentary legislation, the Presidential Order would not have any effect; (iii) The Presidential Order is inconsistent with section 9 (4) of the as amended in 1968 and to that extent void; and (iv) Under section 3(4) of the , persons were not to be placed at a disadvantage on the ground that they do not have proficiency in both the languages, namely, English and Hindi. Dismissing the writ petitions and allowing the appeals, HELD: (1) The Presidential Orders dated 27th April 1960 and the various orders and circulars issued by Home Minis try, P & T Department and Railway Board pursuant thereto are valid. [323H] (2) The Presidential Order was validly made and there has been and can be no challenge to it. The President Order keeps in view the ultimate object to make the Hindi language as official language, but takes into note the circumstances prevailing in our country and considers it desirable that the change should be a gradual one and due regard should be given to the just claims and the interests of persons belonging to the non Hindi speaking areas. The purpose of the Presidential Order is to promote the spirit of the Hindi language and to provide the Central Government employees the facilities to take training in Hindi language when they are in service. [322F G] (3) The provisions in article 344 indicate that if there is a Second Commission at the expiration of ten years from the commencement of the Constitution, the President, may after consideration of the report, issue directions at the end of fifteen years. The provisions contained in article 344(6) are not exhausted by using it once. The President can use it on more than one occasion. Further the effect of the power used cannot be said to be exhausted on the expiry of fifteen 315 years. The Presidential Order which was issued in 1960 continues to be in force and cannot be said to have exhaust ed itself at the end of fifteen years from the commencement of the Constitution. It would be strange that the steps necessary for the change should be given up at the. expiry of fifteen years because what is said to be a switch over from English to Hindi has not been possible and Parliament provided by law for the continued use of the English lan guage for particular purposes specified in that law. [322D F] (4) Article 344 is enacted for the purpose of achieving the object of replacing English by Hindi within a period of 15 years. The ultimate object is provided in article 351 which fulfils the object of the spirit and development of the Hindi language and enlargement of the composite culture of India, Articles 343 and 344 deal with the process of transi tion. Article 343(3) provides merely for extension of time for the use of English language after the period of 15 years. The progressive use of the Hindi language is thereby not to be impaired. Extending the time for the use of the English language does not amount to abandonment of progress in the use of Hindi as the official language of the Union. [321G H, 322A B] (5) Article 344(6) provides that notwithstanding any thing in article 343, the President may after consideration of the report of the committee issue directions. The non obstante clause in article 344(6) does not operate only against article 344(1) and (2) but against the entire article 344 for the reason that so far as transition is concerned, the direc tions under article 344(6) may continue. Article 344(6) takes this objective and is intended to determine the pace of progress and to achieve the same. [322B C] (6) The High Court failed to see the sequences of the Presidential Order and the . It is erroneous to suggest that the Presidential Order of 1960 became invalid after the passing of the Act. The Act merely continues the use of English language in addition to Hindi. The Act does not provide anything which can be interpreted as a limitation on the vower of the President to issue directions under article 344(6) of the Constitution. The Presidential Order has no inconsistency with the Act. The non obstante provision in article 344(6) empowers the Presi dent. [322G H, 323A B] (7) Parliament is legislating in a different field. The field is the permissible use of English language in addition to Hindi during the period following 15 years because the change to Hindi could not be complete. The trasitional period has exceeded 15 years. The Presidential Order keeps in view the steps to replace the use of English in Hindi and the application of the Act and the Presidential Order is in different fields and has different purposes. The Offi cial Languages Act is to continue the use of English lan guage after the expiry of 15 years, but Presidential Order, on the other hand is, to provide for the progressive use of Hindi language. It confers an additional qualification on those who learn Hindi and does not take away anything from the Government employees. Prizes are offered and there may be increase in pay. These are incentives. The measures taken for enforcement of provisions for learning Hindi by providing for absence from classes as breach of discipline and insisting on appearance at the examinations are steps in aid of fulfilling the object of what is described as in service, training in Hindi language. Such enforcement of attendance in examinations for proficiency if necessary for completion of training. The contention that the Presiden tial. Order conflicts with section 3(4) of the Act is unsound. The "In service training" of the employees is during hours of duty and free of cost. Even if they fail, there is no penalty. There is no treatment of unequals alike.[323 B H] [323B F] Murasoli Maran etc. vs Union of India & Ors. 1972 Madras 40 reversed.

Appeal No. 87 of 1957. Appeal from the judgment and decree dated December 1, 1955, of the Allahabad High Court in Special Appeal No. 18 of 1955, arising out of the judgment and order dated November 30, 1954, of the ' said Court in Civil Misc. Writ No. 355 of 1952. H. N. Sanyal, Additional Solicitor General of India, G. C. Mathur and C. P. Lal, for the appellants. P. R. Das and B. P. Maheshwari, for the respondent. B. P. Maheshwari, for Agra Bullion Exchange (Intervener). K. Veeraswami and T. M. Sen, for the State of Madras (Intervener). R. C. Prasad, for the State of Bihar (Intervener). H. N. Sanyal, Additional Solicitor General of India, B. Gopalakrishnan and T. M. Sen, for the Union of India (Intervener). September 23. The Judgment of the Court was delivered by BHAGWATI J. The facts leading up to this appeal lie within a narrow compass. The respondent is a firm registered under the Indian Partnership Act dealing in Bullion, Gold and Silver ornaments and forward contracts in Silver Bullion at Banaras in the State of Uttar Pradesh. For the assessment years 1948 49, 1949 50 and 1950 51 the Sales Tax Officer, Banaras, the appellant No. 1 herein assessed the respondent to U. P. Sales Tax on its forward transactions in Silver Bullion. The respondent had deposited the sums of Rs. 150 12 0, Rs. 470 0 0 and Rs. 741 0 0 for the said 1352 three years which sums were appropriated to wards the payment of the sales tax liability of the firm under the respective assessment orders passed on May 31, 1949, October 30, 1950 and August 22, 1951. The levy of sales tax on forward transactions was held to be ultra vires, by the High Court of Allahabad by its judgment delivered on February 27, 1952, in Messrs. Budh Prakash Jai Prakash vs Sales Tax Officer, Kanpur (1) and the respondent by its letter dated July 8, 1952, asked for a refund of the amounts of sales tax paid as aforesaid. The appellant No. 2, the Commissioner of Sales Tax, U. P., Lucknow, however, by his letter dated July 19, 1952, refused to refund the same. The respondent thereafter filed in the High Court of Allahabad the Civil Misc. Writ Petition No. 355 of 1952 under article 226 of the Constitution and asked for a writ of certiorari for quashing the aforesaid three assessment orders and a writ of mandamus requiring the appellants to refund the aforesaid amounts aggregating to Rs. 1,365 12 0. The judgment of the Allahabad High Court was confirmed by this Court on May 3, 1954, in Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash () and the writ petition aforesaid was heard by Chaturvedi J. The learned judge by an order dated November 30, 1954, quashed the said assessment orders in so far as they purported to assess the respondent in respect of forward contracts in silver and also issued a writ of mandamus directing the appellants to refund the amounts paid by the respondent. The appellants filed a Special Appeal No. 18 of 1955 in the High Court of Allahabad against that order of the learned Judge. A Division Bench of the said High Court heard the said appeal on December 1, 1955. It was argued by the Advocate General on, behalf of the appellants that the amounts in dispute were paid by the respondent under a mistake of law and were therefore irrecoverable. The Advocate General also stated categorically that in that appeal he did not contend that the respondent ought to have (1) (1952) A.L.J 332. (2) [I955] 1 S.C.R. 243. 1353 proceeded for the recovery of the amount claimed otherwise than by way of a petition Under article 226 of the Constitution. The High Court came to the conclusion that section 72 of the applied to the present case and the State Government must refund the moneys unlawfully received by it from the respondent on account of Sales Tax. It accordingly dismissed the appeal with costs. The appellants then applied for a certificate under article 133(1)(b) of the Constitution which certificate was granted by the High Court on July 30, 1956, on the Advocate General 's giving to the Court an undertaking that the State will, in any event, pay the costs, charges and expenses incurred by or on behalf of the respondent as taxed by this Court. This appeal has accordingly come up for hearing and final disposal before us at the instance of the Sales Tax Officer, Banaras, appellant No. 1, the Commissioner, Sales Tax, U.P., Lucknow, appellant No. 2 and the State of U.P., appellant No. 3. The question that arises for our determination in this appeal is whether section 72 of the applies to the facts of the present case. The learned Additional Solicitor General appearing for the appellants tried to urge before us that the procedure laid down in the U.P. Sales Tax Act by way of appeal and/or revision against the assessment orders in question ought to have been followed by the respondent and that not having been done the respondent was debarred from proceeding in the civil courts for obtaining a refund of the monies paid as aforesaid. He also tried to urge that in any event a writ petition could not lie for recovering the monies thus paid by the respondent. Both those contentions were, however, not available to him by reason of the categorical statement made by the Advocate General before the High Court. The whole matter had proceeded on the basis that the respondent was entitled to recover the amount claimed in the writ petition which was filed. No such point had been taken either in the grounds of appeal or in the statement of case filed before us in this Court and we did not feel justified in allowing the 1354 learned Additional Solicitor General to take this point at this stage. Section 72 of the is in the following terms: " A person to whom money has been paid, or anything delivered by mistake or under coercion, must repay or return it. " As will be observed the section in terms does not make any distinction between a mistake of law or a mistake of fact. The term " mistake " has been used without any qualification or limitation whatever and comprises within its scope a mistake of law as well as a mistake of fact. It was, however, attempted to be argued on the analogy of the position in law obtaining in England, America and Australia that money paid under a mistake of law could not be recovered and that that was also the intendment of section 72 of the . The position in English law is thus summarised in Kerr on " Fraud and Mistake " 7th Edn., at p. 140: " As a general rule it is well established in equity as well as at law, that money paid under a mistake of law, with full knowledge of the facts, is not recoverable, and that even a promise to pay, upon a supposed liability, and in ignorance of the law, will bind the party. " The ratio of the rule was thus stated by James L. J. in Rogers vs Ingham(1) : " If that proposition were trite in respect of this case it must be true in respect to every case in the High Court of Justice where money has been paid under a mistake as to legal rights, it would open a fearful amount of litigation and evil in the cases of distribution of estates, and it would be difficult to say what limit could be placed to this kind of claim, if it could be made after an executor or trustee had distributed the whole estate among the persons supposed to be entitled, every one of them having knowledge of all the facts, and having given a release. The thing has never been done, and it is not a thing which, in my opinion, is to be encouraged. Where people have a (1) ,356. 1355 knowledge of all the facts and take advice, and whether they get proper advice or not, the money is divided and the business is settled, it is not for the good of mankind that it should be reopened. " (See also National Pari Mutual Association Ltd. vs The King (1) and Pollock on Contract, 13th Edn., at pp. 367 & 374). The American doctrine is also to the same effect as appears from the following passage in Willoughby on the Constitution of the United States, Vol. 1, p. 12: " The general doctrine that no legal rights or obligation can accrue under an unconstitutional law is applied in civil as well as criminal cases. However, in the case of taxes levied and collected under statutes later held to be unconstitutional, the tax payer cannot recover unless he protested the payment at the time made. This, however, is a special doctrine applicable only in the case of taxes paid to the State. Thus, in transactions between private individuals, moneys paid under or in pursuance of a statute later held to be unconstitutional, may be recovered, or release from other undertakings entered into obtained. " The High Court of Australia also expressed a similar opinion in Werrin vs The Commonwealth (2) where Latham C. J. and MacTiernan J. held that money paid voluntarily under a mistake of law was irrecoverable. Latham C. J. in the course of his judgment at p. 157 relied upon the general rule, as stated in Leake on Contracts, 6th Edn. (1911), p. 63 " that money paid voluntarily, that is to say, without compulsion or extortion or undue influence and with a knowledge of. all the facts, cannot be recovered although paid without any consideration. " It is no doubt true that in England, America and Australia the position in law is that monies paid voluntarily, that is to say, without compulsion or extortion or undue influence and with a knowledge of all facts, cannot here covered although paid without any consideration. Is the position the same in India ? (1) (2) 172 1356 It is necessary to observe at the outset that what we have got to consider are the plain terms of section 72 of the as enacted by the Legislature. If the terms are plain and unambiguous we cannot have resort to the position in law as it obtained in England or in other countries when the statute was enacted by the Legislature. Such recourse would be permissible only if there was any latent or patent ambiguity and the courts were required to find out what was the true intendment of the Legislature. Where, however, the terms of the statute do not admit of any such ambiguity, it is the clear duty of the courts to construe the plain terms of the statute and give them their legal effect. As was observed by Lord Herschell in the Bank of England vs Vagliano Brothers (1) : " I think the proper course is in the first instance to examine the language of the statute and to ask what is its natural meaning uninfluenced by any considerations derived from the previous state of the law, and not to start with enquiring how the law previously stood, and then, assuming that it was probably intended to leave it unaltered, to see if the words of the enactment will bear an interpretation in conformity with this view. " "If a Statute, intended to embody in a code a particular branch of the law, is to be treated in this fashion, it appears to me that its utility will be almost entirely destroyed, and the very object with which it was enacted will be frustrated. The purpose of such a statute surely was that on any point specifically dealt with by it, the law should be ascertained by interpreting the language used instead of, as before, by roaming oyer a vast number of authorities in order to discover what the law was, extracting it by a minute critical examination of the prior decision. . . This passage was quoted with approval by their Lordships of the Privy Council in Narendranath Sircar vs Kamal Basini Dasi (2) while laying down the proper mode of dealing with an Act enacted to codify a particular branch of the law. (1) , 144. (2) Cal. 563, 571. 1357 The Privy Council adopted a similar reasoning in Mohori Bibee vs Dhurmodas Ghose (1) where they had to interpret section 11 of the . They had before them the general current of decisions in India that ever since the passing of the the contracts of infants were voidable only. There were, however, vigorous protests by various judges from time to time; and there were also decisions to the contrary effect. Under these cir cumstances, their Lordships considered themselves at liberty to act on their own view of the law as declared by the Contract Act, and they had thought it right to have the case reargued before them upon this point. They did not consider it necessary to examine in detail the numerous decisions above referred to, as in their opinion the " whole question turns upon what is the true construction of the Contract Act itself ". They then referred to the various relevant sections of the and came to the conclusion that the question whether a contract is void or voidable presupposes the existence of a contract within the meaning of the Act and cannot arise in the base of an infant who is not " competent to contract. " In Satyabrata Ghose vs Mugneeram Bangur & Co. (2), section 56 of the came up for consideration by this Court. B. K. Mukherjea J. (as he then was) while delivering the judgment of the Court quoted with approval the following observations of Fazl Ali J. in Ganga Saran vs Ram Charan (3): " It seems necessary for us to emphasise that so far as the courts in this country are concerned, they must look primarily to the law as embodied in sections 32 and 56 of the . and proceeded to observe : " It would be incorrect to say that section 56 of the Contract Act applies only to cases of physical impossibility and that where this section is not applicable, recourse can be had to the principle of English law on the subject of frustration. It must be held also that to the extent that the deals (1) (1902) L.R. 30 I.A. 114. (2) ; (3) ; , 52. 1358 with a particular subject, it is exhaustive upon the same and it is not permissible to import the principles of English law dehors these statutory provisions. The decisions of the English courts possess only a persuasive value and may be helpful in showing how the courts in England have decided cases under circumstances similar to those which have come before our courts. " It is, therefore, clear that in order to ascertain the true meaning and intent of the provisions, we have got to turn to the very terms of the statute itself, divorced from all considerations as to what was the state of the previous law or the law in England or elsewhere at the time when the statute was enacted. To do otherwise would be to make the law, not to interpret it. (See Gwynne vs Burnell (1) and Kumar Kamalranjan Roy vs Secretary of State (2). The courts in India do not appear to have consistently adopted this course and there were several decisions reached to the effect that section 72 did not apply to money paid under a mistake of law, e.g., Wolf & Sons vs Dadyba Khimji & Co. (3) and Appavoo Chettiar vs section 1. Co. (4). In reaching those decisions the courts were particularly influenced by the English decisions and also provisions of section 21 of the which provides that a contract is not voidable because it was caused by a mistake as to any law in force in British India. On the other hand, the Calcutta High Court had decided in Jagdish Prasad Pannalal vs Produce Exchange Corporation Ltd. (5), that the word " mistake " in section 72 of the included not only a mistake of fact but also a mistake of law and it was further pointed out that this section did not conflict with section 21 because that section dealt not with a payment made under a mistake of law but a contract caused by a mistake of law, whereas section 72 dealt with a payment which was either not under a contract at all or even if under a contract, it was not a cause of the contract. (1) (2) L. R. 66 I. A. 1, 10. (3) Bom. 631, 649. (4) A.I.R. 1929 Mad. (5) A.I.R. 1946 Cal. 1359 The Privy Council resolved this conflict in Shiba Prasad Singh vs Srish Chandra Nundi(1). Their Lordships of the Privy Council observed that the authorities which dealt with the meaning of " mistake " in the section were surprisingly few and it could not be said that there was any settled trend of authority. Their Lordships were therefore bound to consider this matter as an open question, and stated at p. 253: " Those learned judges who have held that mistake in this context must be given a limited meaning appear to have been largely influenced by the view expressed in Pollock and Mulla 's commentary on section 72 of the , where it is stated (Indian Contract & Specific Relief Acts, 6th Edn., p. 402): " Mistake of law is not expressly excluded by the words of this section; but section 21 shows that it is not included ". For example, Wolf & Sons vs Dadyaba Khimji & Co. (2). Macleod J. said referring to section 72 " on the face of it mistake includes mistake of law. But it is said that under section 21 a contract is not voidable on the ground that the parties contracted under a mistaken belief of the law existing in British India, and the effect of that section would be neutralized if a party to such a contract could recover what he had paid by means of section 72 though under section 21 the contract remained legally enforceable. This seems to be the argument of Messrs. Pollock and Mulla and as far as I can see it is sound. " In Appavoo Chettiar vs South Indian Rly. (3), Ramesam and Jackson JJ. say: " Though the word ' mistake ' in section 72 is not limited it must refer to the kind of mistake that can afford a ground for relief as laid down in sections 20 and 21 of the Act. . Indian law seems to be clear, namely, that a mistake, in the sense that it is a pure mistake as to the law in India resulting in the payment by one person to another and making it equitable that the payee should return the money is no ground for relief." Their Lordships have found no case in which an opinion that ',mistake" in section 72 must be given a limited meaning has been based on any other ground. In their (1) (1949) L.R. 76 I.A. 244. (2) Bom. (3) A.I.R. 1929 Mad. 1360 Lordships ' opinion this reasoning is fallacious. If a mistake of law has led to the formation of a contract, section 21 enacts that that contract is not for that reason voidable. If money is paid under that contract, it cannot be said that that money was paid under mistake of law ; it was paid because it was due under a valid contract, and if it had not been paid payment could have been enforced. Payment " by mistake " in section 72 must refer to a payment which was not legally due and which could not have been enforced ; the " mistake " is thinking that the money paid was due when, in fact, it was not due. There is nothing inconsistent in enacting on the one hand that if parties enter into a contract under mistake in law that contract must stand and is enforceable, but, on the other hand, that if one party acting under mistake of law pays to another party money which is not due by contract or otherwise, that money must be repaid. Moreover, if the argument based on inconsistency with section 21 were valid, a similar argument based on incon sistency with section 22 would be valid and would lead to the conclusion that section 72 does not even apply to mistake of fact. The argument submitted to their Lordships was that section 72 only applies if there is no subsisting contract between the person making the payment and the payee, and that the does not deal with the case where there is a subsisting contract but the payment was not due under it. But there appears to their Lordships to be no good reason for so limiting the scope of the Act. Once it is established that the payment in question was not due, it appears to their Lordships to be irrelevant to consider whether or not there was a contract between the parties under which some other sum was due. Their Lordships do not find it necessary to examine in detail the Indian authorities for the wider interpretation of " mistake " in section 72. They would only refer to the latest of these authorities, Pannalal vs Produce Exchange Corp. Ltd. (1), in which a carefully reasoned judgment was given by Sen J. Their Lordships agree with this judgment. It may be well to add that their (1) A.I.R. 1946 Cal. 1361 Lordships ' judgment does not imply that every sum paid under mistake is recoverable, no matter what the circumstances may be. There may in a particular case be circumstances which disentitle a plaintiff by estoppel or otherwise. " We are of opinion that this interpretation put by their Lordships of the Privy Council on section 72 is correct. There is no warrant for ascribing any limited meaning to the word I mistake ' as has been used therein and it is wide enough to cover not only a mistake of fact but also a mistake of law. There is no Conflict between the provisions of section 72 on the one hand and sections 21 and 22 of the on the other and the true principle enunciated is that if one party under a mistake, whether of fact or law, pays to another party money which is not due by contract or otherwise that money must be repaid. The mistake lies in thinking that the money paid was due when in fact it was not due and that mistake, if established, entitles the party paying the money to recover it back from the party receiving the same. The learned Additional Solicitor General, however, sought to bring his case within the observations of their Lordships of the Privy Council that their judgment did not imply that every sum paid under mistake is recoverable no matter what the circumstances might be and that there might be in a particular case circumstances which disentitle a plaintiff by estoppel or otherwise. It was thus urged that having regard to the circumstances of the present case, (i) in so far as the payments were in discharge of the liability under the U.P. Sales Tax Act and were voluntary payments without protest and also (ii) inasmuch as the monies which had been received by the State of U. P. had not been retained but had been spent away by it, the respondent was disentitled to recover the said amounts. Here also, we may observe that these contentions were not specifically urged in the High Court or in the statement of case filed by the appellants in this court; but we heard arguments on the same, as they were necessarily involved in the question whether section 72 of 1362 the applied to the facts of the present case. Re: (i): The respondent was assessed for the said amounts under the U. P. Sales Tax Act and paid the same; but these payments were in respect of forward transactions in silver. If the State of U. P. was not entitled to receive the sales tax on these transactions, the provision in that behalf being ultra vires, that could not avail the State and the amounts were paid by the respondent, even though they were not due by contract or otherwise. The respondent committed the mistake in thinking that the monies paid were due when in fact they were not due and that mistake on being established entitled it to recover the same back from the State under section 72 of the . It was, however, contended that the payments having been made in discharge of the liability under the U. P. Sales Tax Act, they were payments of tax and even though the terms of section 72 of the applied to the facts of the present case no monies paid by way of tax could be recovered. We do not see any warrant for this proposition within the terms of section 72 itself. Reliance was, however, placed on two decisions of the Madras High Court reported in (1) Municipal Council, Tuticorin vs Balli Bros. (1) and (2) Municipal Council, Rajahmundry vs Subba Rao (2). It may be noted, however, that both these decisions proceeded on the basis that the payments of the taxes there were made under mistake of law which as understood then by the Madras High Court was not within the purview of section 72 of the . The High Court then proceeded to consider whether they fell within the second part of section 72, viz., whether the monies had been paid under coercion. The court held on the facts of those cases that the payments had been voluntarily made and the parties paying the same were therefore not entitled to recover the same. The voluntary payment was there considered in contradistinction to payment under coercion and the real ratio of the decisions was that there was no coercion or duress exercised by the authorities for (1) A.I.R. 1934 Mad. (2) A.I.R, 1937 Mad. 1363 exacting the said payments and therefore the payments having been voluntarily made, though under mistake of law, were not recoverable. The ratio of these decisions, therefore, does not help the appellants before us. The Privy Council decision in Shiba Prasad Singh vs Srish Chandra Nandi (1) has set the whole controversy at rest and if it is once established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law the party is entitled to recover the same and the party receiving the same is bound to repay or return it. No distinction can, therefore, be made in respect of a tax liability and any other liability on a plain reading of the terms of section 72 of the , even though such a distinction has been made in America vide the passage from Willoughby on the Constitution of the United States, Vol. 1, p. 12 opcit. To hold that tax paid by mistake of law cannot be recoverd under section 72 will be not to interpret the law but to make a law by adding some such words as " otherwise than by way of taxes " after the word " paid ". If this is the true position the fact that both the parties, viz., the respondent and the appellants were labouring under a mistake of law and the respondent made the payments voluntarily would not disentitle it from receiving the said amounts. The amounts paid by the respondent under the U. P. Sales Tax Act in respect of the forward transactions in silver, had already been deposited by the respondent in advance in accordance with the U. P. Sales Tax Rules and were appropriated by the State of U. P. towards the discharge of the liability for the sales tax on the res pective assessment orders having been passed. Both the parties were then labouring under a mistake of law, the legal position as established later on by the decision of the Allahabad High Court in Messrs. Budh Prakash Jai Prakash vs Sales Tax Officer, Kanpur (2) subsequently confirmed by this Court in Sales Tax Officer, Pilibhit vs Budh Prakash Jai Prakash (3) not having been known to the parties at the relevant (1) (1949) L. R. 76 1. A. 244. (2) (3) [1955] I S.C.R. 243. 173 1364 dates. This mistake of law became apparent only on May 3, 1954, when this Court confirmed the said decition of the Allababad High Court and on that position being established the respondent became entitled to recover back the said amounts which had been paid by mistake of law. The state of mind of the respondent would be the only thing relevant to consider in this context and once the respondent established that the payments were made by it under a mistake of law, (and it may be noted here that the whole matter proceeded before the High Court on the basis that the respondent had committed a mistake of law in making the said payments), it was entitled to recover back the said amounts and the State of U. P. was bound to repay or return the same to the respondent irrespective of any other consideration. There was nothing in the circumstances of the case to raise any estoppel against the respondent nor would the fact that the payments were made in discharge of a tax liability come within the dictum of the Privy Council above referred to. Voluntary payment of such tax liability was not by itself enough to preclude the respondent from recovering the said amounts, once it was established that the payments were made under a mistake of law. On a true interpretation of section 72 of the the only two circumstances there indicated as entitling the party to recover the money back are that the monies must have been paid by mistake or under coercion. If mistake either of law or of fact is established, he is entitled to recover the monies and the party receiving the same is bound to repay or return them irrespective of any consideration whether the monies had been paid voluntarily, subject however to questions of estoppel, waiver, limitation or the like. If once that circumstance is established the party is entitled to the relief claimed. If, on the other hand, neither mistake of law nor of fact is established. , the party may rely upon the fact of the monies having been paid under coercion in order to entitle him to the relief claimed and it is in that position that it becomes relevant to consider whether the payment has been a voluntary payment or a payment under coercion. The 1365 latter position has been elaborated in English law in the manner following in Twyford vs Manchester Corporation (1) where Romer J. observed: " Even so, however, I respectfully agree with the rest of Walton J. 's judgment, particularly with his statement that a general rule applies, namely, the rule that, if money is paid voluntarily, without compulsion, extortion, or undue influence, without fraud by the person to whom it is paid and with full knowledge of all the facts, it cannot be recovered, although paid without consideration, or in discharge of a claim which was not due or which might have been successfully resisted. " The principle of estoppel which has been adverted to by the Privy Council in Shiba Prasad Singh vs Srish Chandra Nandi (2) as disentitling the plaintiff to recover the monies paid under mistake can best be illustrated by the decision of the Appeal Court in England reported in Holt vs Markham (3) " here it was held that as the defendant had been led by the plaintiffs ' conduct to believe that he might treat the money as his own, and in that belief had altered his position by spending it, the plaintiffs were estopped from alleging that it was paid under a mistake; and this brings us to a consideration of point No. 2 above stated. Re: (ii): Whether the principle of estoppel applies or there are circumstances attendant upon the transaction which disentitle the respondent to recover back the monies, depends upon the facts and circumstances of each case. No question of estoppel can ever arise where both the parties, as in the present case, are labouring under the mistake of law and one party is not more to blame than the other. Estoppel arises only when the plaintiff by his acts or conduct makes a representation to the defendant of a certain state of facts which is acted upon by the defendant to his detriment; it is only then that the plaintiff is estopped from setting up a different state of facts. Even if this position can be availed of where the representation is in regard to a position in law, no (1) , 241. (2) [1949] L. R. 76 I. A. 244. (3) 1366 such occasion arises when the mistake of law is common to both the parties. The other circumstances would be such as would entitle a court of equity to refuse the relief claimed by the plaintiff because on the facts and circumstances of the case it would be inequitable for the court to award the relief to the plaintiff. These are, however, equitable considerations and could scarcely be imported when there is a clear and unambiguous provision of law which entitles the plaintiff to the relief claimed by him. Such equitable considerations were imported by the Nagpur High Court in Nagorao vs G. G. in Council where Kaushalendra Rao J. observed: " The circumstances in a particular case, disentitle the pltf. to recover what was paid under mistake." " If the reason for the rule that a person paying money under mistake is entitled to recover it is that it is against conscience for the receiver to retain it, then when the receiver has no longer the money with him or cannot be considered as still having it as in a case when he has spent it on his own purposes which is not the case here different considerations must necessarily arise. " We do not agree with these observations of the Nagpur High Court. No such equitable considerations can be imported when the terms of section 72 of the are clear and unambiguous. We may, in this context, refer to the observations of their Lordships of the Privy Council in Mohori Bibee vs Dhurmodas Ghose (2) at p. 125. In dealing with the argument which was urged there in regard to the minor 's contracts which were declared void, viz., that one who seeks equity must do equity and that the minor against whom the contract was declared void must refund the advantage which he had got out of the same, their Lordships observed that this argument did not require further notice except by referring to a recent decision of the Court of Appeal in Thurstan vs Nottingham Permanent Benefit Building Society (3) (1) A.I.R. 1951 Nag. 372,374. (2) [19O2] L. R. 30 I. A. 114. (3) [I9O2] 1 Ch. 1. 1367 since affirmed by the House of Lords and they quoted with approval the following passage from the judgment of Romer L. J., at p. 13 of the earlier report: " The short answer is that a Court of Equity cannot say that it is equitable to compel a person to pay moneys in respect of a transaction which as against that person the Legislature has declared to be void. " That ratio was applied by their Lordships to the facts of the case, before them and the contention was negatived. Merely because the State of U. P. had not retained the monies paid by the respondent but had spent them away in the ordinary course of the business of the State would not make any difference to the position and under the plain terms of section 72 of the the respondent would be entitled to recover back the monies paid by it to the State of U.P. under mistake of law. The result, therefore, is that none of the contentions urged before us on behalf of the appellants in regard to the non applicability of section 72 of the to the facts of the present case avail them and the appeal is accordingly dismissed with costs. Appeal dismissed.

Under section 72 of the : " A person to whom money has been paid . by mistake or under coercion must repay or return it ". The respondent, a registered firm, paid sales tax in respect of its forward transactions in pursuance of the assessment orders passed by the sales tax officer for the years 1949 51, but in 1952, the Allahabad High Court having held in Messrs. Budh Prakash jai Prakash vs Sales Tax Officer, Kanpuy, , that the levy of sales tax on forward transactions was ultra vires, the respondent applied for a refund of the amounts paid, by a writ petition under article 226 of the Constitution. It was contended for the sales tax authorities that the respondent was not entitled to a refund because (1) the amounts in dispute were paid by the respondent under a mistake of law and were therefore irrecoverable, (2) the payments were in discharge of the liability under the Sales Tax Act and were voluntary payments without protest, and (3) inasmuch as the monies which had been received by the Government had not been retaine but had been spent away by it, the respondent was disentitled to recover the said amounts. Held, that the term " mistake " in section 72 Of the Indian Con tract Act comprises within its scope a mistake of law as well as a mistake of fact and that, under that section a party is entitled to recover money paid by mistake or under coercion, and if it is established that the payment, even though it be of a tax, has been made by the party labouring under a mistake of law, the party receiving the money is bound to repay or return it though it might have been paid voluntarily, subject, however, to questions of estoppel, waiver, limitation or the like. Shib Prasad Singh vs Maharaja Srish Chandra Nandi, (1949) L.R. 76 I.A. 244, relied on. Where there is a clear and unambiguous provision of law which entitles a party to the relief claimed by him, equitable considerations cannot be imported and, in the instant case, the fact that the Government had not retained the monies paid by the respondent but had spent them away in the ordinary course 1351 of business of the State would not make any difference, and under the plain terms of section 72 Of the Act the respondent was entitled to recover the amounts. Observations in Nagorao vs Governor General in Council, A. 1. R. , 374, to the effect that where a party receiving money paid under a mistake has no longer the money with him, equitable considerations might arise, disapproved.

CIVIL APPEAL NOS . 1317 1318 of 1976. Appeals by Special Leave from the Judgment and order, dated 13 9 1973 of the Allahabad High Court in CIVIL Misc. Writ Petition NOS. 2719/69 & 4034/69. AND WRIT PETITION NOS. 864 / 79 and 251 / 80 (Under Article 32 of the Constitution) 452 R. K. Garg, V. J. Francis, D. K. Garg and Sunil Kumar Jain for the Appellants in CA No. 1317/76 and Petitioner in WP 251/80. K. K. Singhvi, Anil Kumar Gupta, Brij Bhushan, Virendra Singh, N. P. Mahendra, A. M. Tripathi and section section Khanduja for the Appellant in CA 1318 / 76. Yogeshwar Prasad, Ashok K. Srivastava and Mrs. Rani Chhabra for the Petitioners in WP No. 864/79. D. V. Patel, Anil Kumar Gupta, Brij Bhushan, Virendra Singh, N. P. Mahendra and A. M. Tripathi for the Intervener in CA No. 1317/76. G. N. Dikist and O. P. Rana for Respondent No. 1 in both the appeals. Shanti Bhushan and M. C. Bhndare for the Respondents Nos. 2 3 in CA No. 1317/76 & R 21 in CA No. 1318/76. section Markandaya and V. P. Singh for R. 9 in CA No. 1318/76. The Judgment of the Court was delivered by KRISHNA IYER, J. This case illustrates the thesis that unlimited jurisdiction under article 136 self defeatingly attracts unlimited litigation which, in turn, clogs up and slows down to zero speed the flow of ultimate decisions, what with the lengthy orality and legal nicety of lawyers ' advocacy. This bunch of appeals, affecting this fortunes of a large number of engineers, is evidence of the flood of 'service ' litigation which overwhelms the courts, paralyses public offices and demands of our pyramidal Justice System basic changes, jurisdictional and processual. The perennial problems of Service Justice, which currently crowd the dockets of the higher courts, save all cases of basic breaches of the fundamental law, may well be made over to expert bodies, high powered and final but presided over by top judicial personnel. Service Jurisprudence is a specialised branch best administered by Special tribunals, not routinely under article 226. We do not pontificate but share thoughts. We are concerned mainly with the competitive claims to seniority mainly as between three groups of engineers belonging to the U. P. Service of Engineers (Irrigation Branch Graduate engineers directly recruited by the Public Service Commission by competitive examination, graduate engineers once appointed in 453 numbers but later absorbed after consultation with the Public Commission and diploma holders later promoted as Assistant Engineers. Brushing aside the hoary history of the Service when the British were hardly concerned with the development of India 's natural resources, we may start the story with the U. P. Public Works Department of which the Irrigation Wing was a part, the other branch being Buildings and Roads. Later on, separate departments for Buildings and Roads and for irrigations were formed in 1946 as a developmental imperative of the State. Recruitment to the Service we are here concerned only with the Irrigation Department was governed by vintage Rules framed under section 96B of the Govt. Of India Act, 1919, which had a confused course, and that factor i.e. lack of comprehensive structural engineering of the Engineering Service Rules is largely responsible for frequent group clashes among the broad brotherhood of engineers whose whole hearted service, now distracted by litigation, is needed for national reconstruction. But national dedication so vital to poverty eradication,, is subject to one rider in our society viz. charity begins at home. And so, for their own justice oriented survival, the groups are fighting in courts while the demands of developmental justice to the people need their presence in the countryside. There were, to begin with, Class I and Class 11 officers, but in 1948, the two were fused into one, viz. the U. P. Service of Engineers (Junior and Senior Scales). The Service came into being but fresh rules of recruitment were not made. Thus, a Service was born but then the rules regulating recruitment, conditions and classifications were unborn. So, Government relied on the old Rules of 1936 for these purposes with some G. O. Or other issued under pressure of exigencies. The past projected into the present with ad hoc changes a process which, not being scientific nor systematic. was bound to produce injustice, as it has, in this Service. The dialectics of Justice to Public Services lead to conflicts between the thesis (the old conditions and anti thesis (the new expectations until a synthesis realist equilibrium without discrimination) is reached be enlightened governmental policy making. Had Rules for the Service, in tune with the Constitution and the updated facts of life been made by Government, instead of flirting with the past and improving for the present, things would have been different. Court litigation is not designed for the end, but judges cannot but make do with what fossil Service Rules with engrafted mutations survive. To dig into the past is our lot in this case. We do not blame Government for failure to make a whole scheme of post Constitution Rules of Service, pre occupied as it may well be with other priorities. 454 The struggle between the various groups is for seniority, in some cases even for retention of regular appointment. The State. had prepared a list of seniority first in December 1965. This list was attacked as bad in law and the High Court by its judgment of October 1967 in Civil Misc. Writ No. 4416 of 1966 ordered: "The petition, therefore, succeeds and is allowed. The respondents are directed not to give effect or act in virtue of the seniority list announced on December 30, 1965. They are further directed to redetermine the seniority inter se of the petitioner and respondents 2 to 49 in accordance with rule 23. " Purporting to act on this direction a fresh seniority list was drawn up by Government in May 1969, and this, in turn was challenged by many as violative of article 14 and the High Court allowed some of the writ petitions and held: "For the reasons set out above, Civil Misc. Writ Petition . No. 2719 of 1969 is allowed. The orders of appointment in the substantive capacity of respondents Nos. 2 to 169 and the seniority list, dated 13 5 1969 (Annexure 'K ' to the petitions are quashed. The State Government is directed to make fresh appointments and draw seniority list in accordance with law keeping in view the office Memorandum. dated 7 12 1961" The broad perspective we must adopt is plain enough in the light of this Court 's decision (see the concluding observations of Chandrachud, J. in the State of Jammu and Kashmir vs Shri Triloki Nath Khosa and Ors. The goal of an egalitarian society must be reflected in the process of classification of services, equalisation being the essential direction and perpetration of divisions and proliferation of classes being reduced to the minimum. Humanism cum equalism, as a way of life, is integral to our constitutional order and slow though the process be, sure shall our steps be towards fusion, not fission in the various Departments of Public Service. Unfortunately, this constitutional ethos has yet to be imprinted upon the genetic code of the "United Provinces Service of Engineers Class II Irrigation Branch Rules" framed under section 96B of the Government of India Act, 1919 and continued under article 313 of the Constitution. The result is micro classifications ad hoc amendments, uncertain service conditions, litigative excursions, and indefinite postponement of even a Seniority List. The ancient year extant 1936 Rules relating to Class II service framed under different conditions, still govern the Service with such 455 patch work modifications through Government Memoranda as were made by the State from time to time. A garment of seams and stitches to day drapes this developmentally strategic department despite Reports by two expert Committees. and this anachronistic set of Rules must be adapted by the Court now to fit the over grown anatomy of Irrigation Engineers (Junior Division). The fury of the controversy rages round seniority in service among the triple categories of Assistant Engineers which we will presently describe. Before that. the basic rules of 1936. Rule 23 regulates inter se seniority and reads thus: "Seniority in the service shall be determined according to the date of the order of appointment to it, provided that if the order of the appointment of two or more candidates bears the same date, their seniority inter se shall be determined according to the order in which their appointment has been notified". (emphasis added) So, the order of appointment to the Service is decisive of seniority and the service horoscope of each Assistant Engineer has to be cast with reference to his appointment order. The next question then, is, when is an engineer appointed to the Service? When, under the Rules, he becomes a member of the Service. until he gains entry into the Service he cannot claim to be appointed to it. To hover around with prospects of entry is not the same as actual entry. Therefore, we have to examine when an engineer becomes a member of the Service under the Rules. Clause (b) of Rule 3 defines 'Member of the Service ' to mean a government servants 'appointed in a substantive capacity under the provisions of these rules. to a post in the cadre Of the Service. ' What, then, is the cadre of the Service? What do we mean by appointment in a substantive capacity to a post in the cadre? Can there be a temporary post included in the cadre? Here, r. 1 becomes relevant. Rule 4 prescribes the sanctioned strength of the cadre. It provides that the government may, subject to the provisions of r. 40 of the Civil Services (Classification. Control and Appeal) Rules, 1930 'increase the cadre by creating permanent or temporary posts from time to time as may be found necessary. ' So a cadre post can be permanent or temporary and if an engineer were appointed substantively to a temporary or permanent post he becomes a member of the Service. The touchstone then, is the substantive capacity of the appointment. Here we get into service jargon with slippery semantics and flavoured officialese. 456 Now, we must go to the plural sources of recruitment the arrangement of the ratio among the sources and the requirements for them to get into the Service. Rules S and 6 relate to this branch of enquiry. The sources of recruitment are set out thus: Sources of Recruitment: (i) by direct appointment from amongst engineer students who have passed out of the Thomson Civil Engineering College. Roorkee, and who have completed a course of training in the Irrigation Branch as engineer students, after consulting a permanent Board of Selection, (ii) by direct appointment after advertisement and after consulting a permanent Board of Selection; (iii) by the appointment of officers in the temporary service of the United Provinces. in Public Works Department, Irrigation Branch, after consulting a permanent Board of Selection; (iv) by promotion of members of the United Provinces Subordinate Engineering Service or of Upper Subordinates in the Public Works Department, Irrigation Branch, who have. in the opinion of Government shown exceptional merit. We have stated earlier that these Rules were framed long before the Constitution of India and have suffered many amendments one of which is the substitution of the Public Service Commission for a permanent Board of Selection. A Proviso has been added to r. S and that runs thus: "Provided that it will not. be necessary to consult the Com mission in the case of appointment of a temporary officer to a permanent vacancy if he has already been appointed to a temporary post in the cadre of service after consultation with the Commission. The amendments shall have effect from the date of notification. " This Proviso shows 'that temporary officers (whatever that expression means) could be appointed to permanent vacancies without consultation with the Commission, if they had already been appointed to temporary posts after consultation with the Commission. Thus, we gel the idea of temporary posts and permanent posts, provisional appointments and substantive appointments. Indeed, the bewildering variety was brought out during arguments by reference to the Fundamental Rules. A permanent posts means "a post carrying a definite rate of pay sanctioned without limit of time 457 A temporary post means A "a post carrying a definite rate of pay sanctioned for a limited time [FR 9(30)] Fundamental Rule 22B speaks of holding a post in a substantive, temporary of officiating capacity. But this jargon is not the last word after the Constitution came to be enacted. Be that as it may, the sources of recruitment are 4 fold. The Thomson College appointments were formally stopped by a G. O. Of 1950. Another big change took place. Direct recruitment, routed through the Public Service Commission was introduced in 1961. The rules of procedure for direct recruitment and kindred matters are provided by an office Memorandum of December 1961 which we will consider more closely as they bear upon the crucial controversy. Rule 6 gives power to Government to fix quotas for the various sources and not less than 20% of the vacancies are reserved for selected qualified members of the Subordinate Engineering Service who are category 4 in r. section Persons who are recruited in terms of rr. 5 and 6 are appointed subject to r. 17 which stipulates a spell of probation in regard to all candidates who are not already in the permanent employment of the Irrigation Branch. We quote the rule: 17. All persons appointed to the service who are not already in the permanent employ of the Irrigation Branch of the United Provinces Government shall be placed on probation for four years provided that such of them as have undergone training as engineer students, or have served as temporary engineers in the Irrigation Branch of the United Provinces Government, may be permitted to count the period of such training and service respectively towards this period of probation: Provided also that the Government may extend the period of probation in any case. The Govt. may at any time during the period of probation dispense with the service of an officer, after giving him one moth 's notice. , G The probationer is confirmed in his appointment on his satisfactory completion of probation after passing the necessary tests. Rule 19 relates to confirmation in the appointment of a probationer and reads thus: 19(i) A probationer shall be confirmed in his appointment when (a) he has completed the prescribed period on probation, 458 (b) he has passed all the tests prescribed in the last preceding rule, and (c) the Government are satisfied that he is fit for confirmation. (ii) All confirmations under this rule shall be notified in the United Provinces Gazette. Two vital factors must guide us in this interpretative exercise. If a dated rule of colonial times is to be applied to day. that meaning which sustains it as constitutionally valid must be preferred to another which may be appealing, going by officialese or literal sense. We have to regard it as a case of 'new wine in old bottle '. We must re interpret the rules to comport with articles 14 and 16 by constitutionally acceptable construction, not rigid connotation given to expressions in the vintage vocabulary of British Indian days. We Stress this aspect because the argument urged is one of unconstitutionality of the Seniority List and of the Rules which deprive many engineers appointed in the normal course and serving for long years arbitrarily and unreasonably of the credit of such service merely because the literal rigour of old Rules requires it. We must strive to salvage the Rules, if need be, by assigning a fresh sense, language permitting, which will fit the Rules into the "fundamental rights" mould. We are thus thrown into the meaning of meanings, released from officially sanctified meanings. In short, while reading the Rules we must remember the Constitution., Secondly, words themselves are but them skins of thought and once we get that, the root though which the language of the rules seeks to express, it is possible to interpret the words accordingly. Even so, we cannot run away from the Rules as they are, though moth eaten by time and by tinkering amendments. One of the principal groups in this forensic battle is the direct recruits selected by competitive tests by the Public Service Commission. So we must bestow some attention on their genesis and position in the total scheme. We reject the submission that the official Memorandum incorporating these Rules, not being expressed to have been issued in the name of the Governor, is of no legal validity. We cannot 'bastardize ' these Rules made and published under Government authority, acted upon for two decades and recruitments made by the Public Service Commission and universally accepted as binding 'Rules Regulating Selection for Recruitment of Assistant Engineers (U. P. Service of Engineers class II) in the Various State Engineering Services in Uttar Pradesh '. We will set out some parts of these Rules of December 7, 1961. 459 We may, at this point, crystallise the effect of the Rules read A so far, so that it may serve as a spring board for further discussion. The battle between the parties or groups very much turns on what is the intent and effect of Rules 23, 3, 4, S, 6, 17 and 18 and their impact on r.23 read in the new context of this 1961 Rules. We have to grapple with the crucial question of seniority which, when we hark back to r.23, in turn, revolves round the "date of the order of appointment". The effect of probation and confirmation is also another consideration. But r.23 sets out the guideline and the entire endeavour of both sides has been to supply an answer which gives one group a superior position as against another in the competition for seniority which apparently has promotional value when posts of Executive Engineers fall vacant We must confess that because of the absence of a coherent policy of recruitment and conditions of service and on account of frequent changes through executive instructions, apart from the mystique of officialese, it has become difficult for us to rationalise the rules and decode the principles underlying regular appointments relevant to seniority. Even in court, as the argument proceeded. judges and advocates had to wrestle with the rules to extract a coherent system out of them. The High Court, on both the occasions, when challenges were made, quashed the seniority lists and directed fresh lists to be prepared. But in the absence of clear judicial guidelines the exercise by the Executive would lead to further confusion and cavil and that is why we express our dismay at the whole situation where from stage to stage, chaos, not cosmos, has been the result. Reference was made to an investigation by the Lal Committee and the Shukla Committee which went into the question of rationalisation of the scheme of recruitment. classification, seniority and promotion; but as late as 1980 we are in no better position than when the moth eaten rules and instructions were made decades ago. May be, the Reports of the Lal Committee and Shukla Committee to which reference was made need not, as is the fate of most Reports, gather dust but give light where the will to seek light exists. This is a sad commentary on the functional failure at the Service level of the State Government which has led not merely to incessant litigations among engineers, uncertainty about their future but also discontent and disincentive vis a vis their work in the Irrigation Department. We see nothing arbitrary in the 1961 Memorandum although in its application, we have to remember the prior rules and when the 460 two are woven into each other or, rather, when the later 1961 Memorandum is devetailed to the 1936 Rules the results that may follow will have to be ascertained with care and consistently until the ratio of the decisions of this Court in cognate situations. What is significant to know its that Govt. decided in 1961 to resort to direct recruitment of Assistant Engineers through competitive examinations held by the Public Service Commission. It was, however, alive to the fact that massive appointments had already been made, in the years gone by, to the posts of Asst. Engineers from among graduates in engineering by direct selection and later approval by the Public Service Commission apart from Thomson College graduates in engineering. The Government was also aware of the promotional claims of those in the subordinate services. Moreover, there were vacancies permanent and temporary and there were appointees, permanent and temporary. The equities of the situation had to be taken Dote of because Government could not, without being guilty of cruel snobbery relegate all those, except direct recruits, from among degree holders by competitive examinations through the Public Service Commission, to a secondary status. In this holistic view it was that the office Memorandum, dated December 7, 1961 was promulgated. We extract it because its import and impact are decisive to an extent of the fate of the cases before us: The principles regulating selection for recruitment to permanent and temporary posts of Assistant Engineers in the various State Engineering Services have been under the consideration of Government for some time past and after thorough consideration the Governor is pleased to order that in future direct recruitment to both permanent and temporary vacancies of Assistant Engineers (Civil, Electrical and Mechanical) in the Public Works, Irrigation and Local Self Government Engineering Departments will be made on the results of competitive examinations to be conducted by the Public Service Commission. Candidates possessing technical and other qualifications prescribed in the rules for the Uttar Pradesh Service of Engineers in the Departments concerned will be eligible to appear at the examination for that particular service. Successful candidates in order of merit will subject to the relevant rules regarding physical fitness and other matters. be appointed directly on probation against vacant permanent posts and those following will be appointed against temporary posts. 461 3. All vacancies in the permanent cadre in the Irrigation and Local Self Government Engineering Departments in a particular year will be pooled and filled as follows: (a) 50 per cent by direct recruitment through competitive examination. (b) 20 per cent by promotion from subordinate services. (c) 30 per cent by selection from amongst temporary Assistant Engineers recruited through the Public Service Commission. xx xx xx However, as measure of concession to the existing temporary Assistant Engineers who were recruited as temporary Assistant Engineers on the advice of the Public Service Commission prior to the introduction of this scheme for the time being distribution of vacancies in the permanent cadre of Assistant Engineers will be as follows: (a) 30 per cent by direct recruitment through competitive examination (25 per cent for the Public Works Department), (b) 20 per cent by promotion from subordinate service (25 per cent for the Public Works Department), (c) 50 per cent by selection from amongst existing temporary Assistant Engineers who were recruited as temporary Assistant Engineers through the Public Service Commission. The distribution of vacancies in the permanent cadre in the above manner will be subject to the condition that the Governor in consultation with the Public Service Commission, may, for special reasons. increase or decrease the percentage fixed for recruitment by selection and competitive examination in any particular year. The candidates selected on the results of competitive examination and appointed against permanent vacancies shall be placed on probation for a period of 3 years. However, in the case of such directly recruited candidates who have served as Assistant Engineers in a particular department in temporary capacity, continuous period of temporary service rendered as Assistant Engineer immediately before selection for permanent post of Assistant Engineer may be allowed to count towards this period of probation. The candidates will not be required to possess one year 's practical experience, prescribed in the existing rules for recruitment of Assistant Engineers as a pre requisite qualification for 462 recruitment of Assistant Engineer in the various departments. The period of practical experience will be covered by the period of probation. During the probationary period candidates will be required to pass the Departmental Examination prescribed by the various departments. Probationers may be confirmed subject to passing these examinations and their work continuing to be satisfactory. Temporary and officiating Assistant Engineers possessing the requisite technical qualifications will be eligible to appear in the competitive examination. The maximum age limit in the case of those working in the department with the approval of the Commission or after having been recruited by the Commission will be 40 years. Plan and the syllabus of the competitive examination will be as shown in Appendix 'A ' enclosed with these orders. There is more of this maze of rules and notifications but we desist from bringing them on record since they have not much bearing on the ultimate result. We must emphasise that while temporary and permanent posts have great relevancy in regard to the career of government servants, keeping posts temporary for long, sometimes by annual renewals for several years, and denying the claims of the incumbents on the score that their posts are temporary makes no sense and strikes us as arbitrary, especially when both temporary and permanent appointees are functionally identified. If, in the normal course, a post is temporary in the real sense and the appointee knows that his tenure cannot exceed the post in longevity, there cannot be anything unfair or capricious in clothing him with no rights. Not so, if the post is, for certain departmental or like purposes, declared temporary, but it is within the ken of both the government and the appointee that the temporary posts are virtually long lived. It is irrational to reject the claim of the 'temporary ' appointee on the nominal score of the terminology of the post. We must also express emphatically that the principle which has received the sanction of this Court 's pronouncements is that officiating service in a post is for all practical purposes of seniority as good as service on a regular basis. It may be permissible, within limits, for government to ignore officiating service and count only regular service when claims of seniority come before it, provided the rules in that regard are clear and categorise and do not admit of any ambiguity and cruelly arbitrary cut off of long years of service does not take place or there is functionally and qualitatively, substantial difference in the service rendered in the two types of posts. 463 While rules regulating conditions of service are within the executive power of the State or its legislative power under proviso to Article 309, even so, such rules have to be reasonable, fair and not grossly unjust if they are to survive the test of Articles 14 and 16. While assessing the effect of the totality of the two sets of rules placed before us, we have to make the broad approach set out above and not become prisoners of the 'official ' meaning of abstruse expressions used in the rules which themselves have frequently changed with a view to "rationalisation". The two committees (the Lal Committee and the Shukla Committee) examined the entire matter but we have no idea, from the Government 's affidavits, as to how far the rules ave been intelligently moulded by these reports. Right in the beginning, we have indicated that r. 23 is of spinal significance, and for purposes of seniority, one has to go by the order of appointment to the Service in a substantive capacity. It is difficult to overlook r. 23 or slur over the expression 'substantive capacity '. But we cannot attribute fixed connotations to expressions like 'substantive capacity ', 'service ', 'Cadre ' and the like because we find that probation even for temporary appointees is provided for in the rules which means that even temporary appointments Gan be substantive. For, there cannot be probation for a government servant who is not to be absorbed substantively in the Service on completion thereof. With this background, if we approach the scheme unfolded by the Office Memorandum of December 1961 superimposed on the 1936 Rules, we get three categories of Assistant Engineers and a fixation of the proportion among them. Firstly, there are to be direct recruits through open competition held by the Public Service Commission. 50% of the posts will go to them although it is stated that the vacancies are to be "in that permanent cadre". Secondly, the subordinate services will get 20% by promotion and thirdly, 30% will belong to the temporary Assistant Engineers recruited through the Public Service Commission in the past. The office Memorandum makes it clear that direct recruitments will be made to "both permanent and temporary vacancies of Assistant Engineers". But this scheme of 1961 cannot stand in isolation and has to be read as subordinate to the 1936 Rules. After all, the 1961 Memorandum cannot override the Rules which are valid under article 313, and so must be treated as filling the gaps, not flouting the provisions. So, read, what is the eventual conclusion? The State, in its counter affidavit, has urged that all parties must be deemed to have accepted the decision of the High Court in its judgment of October 30, quashing the seniority list of December 30, 1965. We are inclined to proceed on that footing because, after that decision 464 was rendered, Government accepted it and went through the exercise of preparing a fresh seniority list and all the engineers concerned acquiesced in the decision and never raised any objection to the fresh preparation of a seniority list consequent upon the High Court 's decision of 1967. That, by itself, does not give us any conclusive answer to the present question which has been agitated before us. First of all, we must understand the two grievances brought to our notice by the appellant and the writ petitioners. Their contention is that whether their appointments were to temporary posts or not, the long service they have put in must weigh in reckoning seniority. Their further contention is that if the Public Service Commission has arranged the order of merit in a particular manner and if appointments have been made irregularly without reference to that order or priority, they have no objection to marginal re adjustments while arranging the seniority of the various appointees by giving effect to The order in which the Public Service Commission has made its recommendations. It is also fairly apparent from the arguments, although not formally conceded by counsel, that officiation, from the date from which temporarily appointed Assistant Engineers have been formally approved by the Public Service Commission on reference by the State Governments must be given credit or at least from the date of Government 's acceptance. Of the Commission 's recommendation. There was nothing more by way of impediment in their appointments being treated as regular. They were Assistant Engineers duly qualified. Their appointments might have been temporary, but temporary posts and temporary appointments are within the Rules. The Public Service Commission has since been consulted and has concurred and Government has accepted it. Every indicium of regular appointment is thus present. There is nothing relied on by the rivals to dislodge the reckoning of service for purposes of seniority from then on except the sole contention that the temporary Assistant Engineers are not members of the Service because their appointment is not in substantive capacity and not a permanent post. We are free to confess that the rules, stricking divergent notes, like ill tuned cymbals, have vexed us a while. The touchstone of valid interpretation being the Constitution and harmonisation of rules with fundamental rights being the proper path we have tried to sensitize the provisions to do equal justice under the law refusing to petrify r. 23 or the other relevant rules we have referred to Rule 4 of the 1936 Rules clearly contemplates a cadre, as covering "permanent or temporary posts". So, a cadre takes in temporary posts. Once we cease to be allergic to 'temporary posts ' as a component of a cadre we reach 465 the next step that a cadre is, as it were, a layer in the Service. Rule 4 itself, while dealing with the strength of the cadre, speaks of a holder of a post in a cadre as a member of the Service may be the holder of a temporary or a permanent post. We have two, perhaps three, types of direct recruits. The first is the vanishing species of Roorkee University 'engineer students '. They were directly appointed but on a temporary footing. Massive appointments were made of other degree holders as Assistant Engineers on a temporary footing to meet the massive developmental requirements. No one can imagine that the guaranteed posts to the brilliant Roorkee boys was temporary only or that the large number of graduates were being lured into employment for long term engineering requirements on a fleeting footing for a few months. Surely, Government wanted to recruit them on a regular basis but hesitated to appoint them to permanent posts as such because budgetary provisions, creation of permanent posts by assessment of the total requirements and the like were not instant jobs but needed more time. The Plan was to take these degree holders on a regular lasting basis but to make them permanent after study of the situation. Permanency carries with it other rights than mere seniority and promotion. Permanent posts and temporary posts are, in ordinary officialese, sharply different but in the historical context of the evolving U.P. Service of Engineers 'thin partition do their bounds divide '. The recruitment of even temporary engineers under source (iii) of r. 5 requires consultation with the Public Service Commission. Likewise r. 14 requires for all the three types of direct recruits, temporary included, physical fitness tests. No person shall be appointed as a member of the service unless he is in good mental and bodily health and free from any physical defect likely to interfere with the efficient performance of his duties as a member of the service. Before a candidate is finally approved for appointment to the service under the provisions of rules 5(i), 5(ii) or 5(iii) he shall be required to pass an examination by a Medical Board at his own expenses and shall pay a fee of Rs. 16 for such examination. Probation, tests and confirmation are laid down under rr. 17 to 19 for "all persons appointed to the service". We delve into these details to drive home the propinquity in status of permanent and temporary engineers in the special conspectus of facts here. We see no reason to hold that when engineers are appointed to temporary posts but after fulfillment of all the tests for regular appointments, including consultation with the Public Service Commission, they are not appointments in a substantive capacity. In Service terminology, 466 perhaps, eye brows may be raised when we say so, but then, we must remember that the State itself in its counter affidavit has construed r. 17 of the Rules as providing "that all persons appointed to the Service who are not already in the permanent employment of the Irrigation Department shall be placed on probation for four years" (since reduced to two years). This means that persons who are not permanently appointed but only temporarily appointed are also placed on probation and officers are not put on probation unless they are on their way to membership in the Service on completion of probation. That is to say, although they are temporary appointees, if their probation is completed and other formalities fulfilled, they become members of the Service. It follows that merely because the person is a temporary appointee it cannot be said that he is not substantively appointed if he fulfils the necessary conditions for regular appointment such as probation and consultation with the Public Service Commission etc. From this stand of the State Government it follows that the temporary appointees, whose appointments have received the approval of the Public Service Commission and who have run out the two years of probation, must be deemed to be appointed in a substantive capacity. The only advantage for permanent appointees, i.e. Assistant Engineers who have been appointed to vacancies in the permanent cadre is what belongs to permanent public servants under various rules in different areas of official life. We are not interested in the arithmatics given in the affidavits and counter affidavits regarding the permanent vacancies in the various categories designated as A, B and C. What we focus on is the set of principles which must regulate the service available for computation of seniority. In paragraph 22 of the State 's counter affidavit the break up of the vacancies available in the various years to the various categories has been set out. Their accuracy has not been shown to be wrong and we may, perhaps, proceed on the correctness of those figures. It is also made clear by the State that many officers belonging to the class of temporary Assistant Engineers were directly recruited before October 1958 and some of them were promoted as temporally Assistant Engineers from the Subordinate Engineers Service. "These officers had been approved for temporary appointment by the Public Service Commission before 1958". Likewise, for the other years, particulars have been furnished. The Government has also clearly undertaken that the competitive seniority as between direct recruits and the temporary appointees who have been regularised may have to be taken up later on. The State 's affidavit asserts: "It is also correct that in the appointment order it was mentioned that seniority inter se and on the list of permanent Assistant 467 Engineer of the officers will be determined later on. " We do not consider it right or necessary to fix the seniority vis a vis the date of appointment of the various parties, as that is the administrative function of Government. Nor do we think we should interfere with the order of the High Court setting aside the seniority list of 1969. A fresh list has anyway to be prepared but the more meaningful judicial exercise is to lay down the correct principles and guidelines, free from discriminatory infirmities and fairly in keeping with the extant Service Rules. The Rules are, we make it clear, those made in 1936 under the Government of India Act, 1919 and continued by force of article 313 of the Constitution. Changes wrought by orders and instructions such as the 1961 Memorandum cannot over ride the Rules themselves but will operate subject to them in case of inconsistency. Even an Administration of Inaction Unlimited must remember that a systematic set of Service Rules is vital not only in fulfillment of its constitutional obligation under the proviso to article 309 but also to keep the morale and to promote contentment among the Civil Services by eliminating the 'inglorious uncertainties ' about career prospects which cut at the root of planned living. So we hope that, what with two expert committee reports slumbering in the Secretariat cells, Government will frame rules, tuned to the finer notes of article 16 and other mandates and in consonance with the realities obtaining in this and sister services, after hearing affected sides as a stroke of fair play and without being file logged for long. We hold that r. 23 is the relevant mariner 's compass when a question of seniority arises. Deducing therefrom we get the further guideline that the order of appointment in a substantive capacity is the significant starting point for reckoning seniority. Substantive capacity is a flexible expression which cannot be frozen by current officialese, nor by the conditions that obtained in the remote past when the rule was framed. On the contrary, its meaning must be consistent with article 16 and must avoid the pitfalls of arbitrariness and irrational injustice. So viewed, we hold that the appointment need not necessarily be to a permanent post. It is sufficient even if it is to a temporary post of long duration. In a Department which had permanent posts and temporary posts of a quasi permanent nature, there is not much to distinguish the quality of service as between the two. Patwardhan 's case and Chauhan 's case have primarily or in passing clarified the equal value of officiating service. 468 In Patwardhan 's case, Chandrachud, J. Observed in the course of the discussion "There is no universal rule, either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both. " Later, the learned Judge observed in the same strain: The fact that the permanent strength of the cadre was determined on the basis of permanent posts at any given time, as for example when the Bombay Government passed resolutions on March 22, 1937 and April 13, 1945 cannot detract, from the position that even temporary posts of Deputy Engineers were treated as additions, though temporary, to Class IV cadre. The Court, in that case, also held that confirmation cannot be the sole touchstone of seniority as that will be indefensible: Confirmation is one of the inglorious uncertainties of government service depending neither on efficiency of the incumbent nor on the availability of substantive vacancies. A glaring instance widely known in a part of our country is of a distinguished member of the judiciary who was confirmed as District Judge years after he was confirmed as a Judge of the High Court. It is on the record of these writ petitions that officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed. It shows that confirmation does not have to conform to any set rules and whether an employee should be confirmed or not depends on the sweet will and pleasure of the government. In Chauhan 's case this Court observed: "Seniority, normally, is measured by length of continuous officiating service the actual is easily accepted as the legal. " Of course, an appointee to a permanent post acquires certain rights which one who fills a temporary post cannot claim. Nevertheless, when the post is not purely temporary or ad hoc or of short duration or of an adventitious nature, the holder of such temporary post cannot be degraded to the position of one who by accident of circumstance or for a fugitive tenure occupies the temporary post for a fleeting term. We must make this distinction not only to be truthful to the facts of Service life but also to do justice to those who have otherwise rendered long and satisfactory work in the Irrigation Department. In short, while we do make a distinction between permanent and temporary posts, when we come to the dimension of mere seniority, we whittle down the difference considerably. A post of short duration, say of a few months, is different from another which is terminologically temporary but is kept on for ten or more years under the head 'temporary ' for budgetary or other technical reasons. Those who are appointed 469 and hold temporary posts of the latter category are also members of the Service provided they have been appointed substantively to that temporary post. What, in the context, is a substantive capacity vis a vis an appointment to a post ? In our view, the emphasis imparted by the adjective "substantive" is that a thing is substantive if it is "an essential part B ' or constituent or relating to what is essential". We may describe a capacity as substantive if it has "independent existence" or is of "considerable amount or quantity". What is independent in a substantial measure may reasonably be described as substantive. Therefore, when a post is vacant, however designated in officialese, the capacity in which the person holds the post has to be ascertained by the State. Substantive capacity refers to the capacity in which a person holds the post and not necessarily to the nature or character of the post. To approximate to the official diction used in this connection, we may well say that a person is said to hold a post in a substantive capacity when he holds it for an indefinite period especially of long duration in contra distinction to a person who holds it for a definite or temporary period or holds it on probation subject to confirmation. Once we understand 'substantive capacity ' in the above sense, we may be able to rationalise the situation. If the appointment is to a post and the capacity in which the appointment is made is of indefinite duration, if the Public Service Commission has been consulted and has approved, if the tests prescribed have been taken and passed, if probation has been prescribed and has been approved, one may well say that the post was held by the incumbent in a substantive capacity. Government will ascertain from this angle whether the capacity in which posts have been held was substantive or temporary. If it is not, the further point to notice is as to whether the appointments are regular and not in violation of any rule, whether the Public Service Commission 's approval has been obtained and whether probation, medical fitness etc., are complete. Once these formalities are complete the incumbants can be taken as holding posts in substantive capacities and the entire efficiating service can be considered for seniority. For other purposes they may remain temporary. It may well be that another interpretation may make r. 23 vulnerable. If a public servant serves for a decade with distinction in a post known to be not a casual vacancy but a regular post, experimentally or otherwise kept as temporary under the time honoured classification, can it be that his long officiation turns to ashes like a Dead Sea fruit because of a label and his counterpart equal in all 470 functional respects but with ten years less of service steals a march. Over him because his recruitment is to a permanent vacancy? We cannot anathematize officiation unless there are reasonable differentiations and limitations. We take the view that the G.O. of December 1961, in so far as it fixes the proportion of permanent vacancies to be filled from the various sources, has statutory force being under r. 6. So much so. the various. groups can claim permanency only in terms of that proportion although not being holder of a permanent post neither debars membership of the Service nor earning the benefit of officiating service for purposes of seniority. The normal rule consistent with equity is that officiating service, even before confirmation in service has relevancy to seniority if eventually no infirmities in the way of confirmation exist. We see nothing in the scheme of the Rules contrary to that principle. Therefore, the point from which service has to be counted is the commencement of the officiating service of the Assistant Engineers who might not have secured permanent appointments in the beginning and in that sense may still be temporary, but who, for all other purposes have been regularised and are fit to be absorbed into permanent posts as and when they are vacant. We, therefore, direct that a seniority list be prepared in the light of the principles laid down by us. It is not for the court to find out how many among the temporary Assistant Engineers are eligible for permanency, how many have cleared all the requirements regarding regular appointments even in temporary vacancies in short, how many must be deemed to have been appointed in a substantive vacancy though temporary. That will be worked but by the State in the light of what we have laid down. We do not agree with the High Court in the partly misleading reasoning it has adopted, but do concur in the conclusion that the seniority list deserves to be set aside. We do so in partial allowance of the appeals and dismiss the writ petitions. Parties will be 'heard ' by Government through written or oral representations as it chooses, when it prepares a seniority list but the principles we have put down shall govern. The parties will bear their costs through out. P.B.R. Appeals partly allowed. Petitions dismissed.

Under section 2(i)(L) (before it was amended in 1976) of the , an article of food is deemed to be adulterated "if the quality of 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". On November 1, 1969, sample of gingelly oil was purchased by the Municipal Food Inspector from the shop of the respondents. After completing the necessary formalities, the Food Inspector arranged to send one part of the sample to the Public Analyst for analysis. The Public Analyst analysed the sample on November 11, 1969 and reported that it contained 5.1% of Free Fatty Acid as against the permissible limit of 3%. On receipt of the report, the respondents were prosecuted for offences under Section 16(1)(a)(i) read with Section 7(i) and 2(i)(L) of the . At the trial, in pursuance of the respondents request, another sample was got analysed on February 6, 1970 by the Director, Central Food Laboratory. According to his report, the gingelly oil contained 6.2% of the Free Fatty Acid and was therefore, adulterated. The District Magistrate observing that the Free Fatty Acid had increased from 5.1% to 6.2% between November 11, 1969 and February 6, 1970 and it was therefore, likely that the Free Fatty Acid content in the oil might have similarly increased between November 1, 1969 when the sample was taken and November 11, 1969 when the sample was analysed by the Public Analyst, held that it was not possible to say that the prosecution had established that on the date when the sample was taken the Free Fatty Acid content of the oil exceed 3% and acquitted the respondents. The order of acquittal was confirmed by the High Court. In the appeal to this Court, it was, ^ HELD:1 (i) The judgments of the District Magistrate and the High Court are set aside. The second respondent is convicted under Section 16(1)(a)(i) and sentenced to pay a fine. [780C] (ii) There was no justification for the conclusion of the District Magistrate and the High Court that the Free Fatty Acid content of the oil on the date when the sample was taken might have been less than 3% and therefore not adulterated. [780B] 775 In the instant case, the Public Analyst report had been superseded by the certificate of the Director, Central Food Laboratory, and the latter certificate had become conclusive evidence of the facts mentioned in it. The sample, must therefore be held, to be adulterated. There was nothing in the evidence, nor had anything been shown from any scientific work which would suggest that the Free Fatty Acid content would so rapidly increase in the space of about three months. If it was less than 3% on November 1, 1969 when the sample was taken it could not have increased to 6.2% by February 6, 1970 when the sample was analysed by the Central Food Laboratory. [777H, 778D] 2. Gingelly (Til or Sesame) oil is a semi drying oil. It is only after Prolonged exposure to air and light that there may be some discernible chemical changes in gingelly (Til or sesame) oil. [779G] New Encyclopaedia Britannica, Vol. 13 pages 526 527 referred to.

Appeals Nos. 702 and 768 of 1964. Appeals by certificate/special leave from the judgment and decree dated June 7, 1962 of the Jammu and Kashmir High Court in Civil First Appeals Nos. I of 1957 and 15 of 1961 respectively. Naunit Lal, for the appellant (in both appeals). K. R. Chaudhuri, for the respondent (in C. A. No. 768/64). 793 The Judgment of the Court was delivered by Wanchoo J. These are two connected appeals on certificates granted by the Jammu and Kashmir High Court and raise a common question of law. We shall therefore give the facts of one appeal (No. 702) in order to appreciate the question of law which calls for decision. Sultan Mohd. Matawali Khan (hereinafter referred to as Sultan Mohd.), Ilaqadar of Kathai was the predecessor in interest of the respondents. He had borrowed a sum of Rs. 40,000/ from the apperant bank on the basis of a promissory note on November 5, 1941. Before the bank advanced the loan, the Government of the then State of Jammu and Kashmir was approached and it was arranged that the debt would be liquidated through Government. For that purpose, an order was issued by the Government that land revenue of certain villages from the jagir of Sultan Mohd. amounting to Rs. 5076/9/6 would be collected by Government and the amount credited in the treasury to the credit of the bank tin the sum of Rs. 40,000/ along with interest due thereon was liquidated. It was in consequence of this arrangement that the bank advanced the sum of Rs. 40,000/ to Sultan Mohd. After the loan had been taken and the pro note executed the bank opened an account in the name of Sultan Mohd. which started with a debit of Rs. 40,000 on November 5, 1941. Thereafter whatever sum became due to the bank as interest and incidental charges was debited to the account of Sultan Mohd. and the amount received from Government was credited to the account. This went on till 1953 when the jagir of Sultan Mohd. was resumed. The account of Sultan Mohd. with the bank showed a debit of Rs. 2,995/12/ on June 3, 1953. On June 4, 1953, the bank filed the suit out of which this appeal has arisen against the respondents as legal representatives of Sultan Mohd. for a sum of Rs. 31,025/1 1/ . To "plain the large discrepancy between the amount shown due in the account and the amount for which the suit was filed, the bank stated that a sum of Rs. 28,029/15/ had been erroneously credited to the account of Sultan Mohd. Consequently the erroneous entries with respect to this credit were corrected and after such correction the amount due came to be Rs. 31,025/1 I/ , for which the suit was filed. The suit was resisted by the respondents on various grounds, but in the present appeals we are concerned only with one ground, namely, that it was not open to the bank to reverse the credit entries in the account of Sultan Mohd. after they had been made in the manner in which it was done at the instance of the Accountant General of the State of Jammu and Kashmir. Therefore, the bank would be only entitled to recover Rs. 2,995/12/ , which was the amount shown as due from Sultan Mohd. in the account on June 3, 1953. Sup C.I./66 6 794 The main question that arose in the trial court therefore was whether the bank was entitled to reverse the entries with respect to Rs. 28,029/15/ in the manner in which that was done. The facts with respect to what happened in connection with this sum are not now in dispute and may be briefly narrated. The procedure which was followed, after money was realised by Government from the villages mentioned in the Council Order of October 28, 1941, was that after deducting the collection charges, the amount used to be credited in the State 's accounts and thereafter transferred by Government to the bank for credit to the account of Sultan Mohd. The transfer used to be made by hundis or treasury bills and on receipt of necessary hundis or treasury bills the bank used to credit the amount shown in them to the account of Sultan Mohd. It appears however that for about five years what happened was that hundis or treasury bills used to be sent to the bank both by the treasury and by the Accountant General with the result that for this period double the amount realised by Government was credited to the account of Sultan Mohd. on the basis of the hundis or treasury bills sent to the bank. In consequence, there was an over payment by Government to the bank to the tune of Rs. 28,029/15/ and this over payment was credited to the account of Sultan Mohd. in the bank. This mistake was realised by the Accountant General after about five years and thereupon the Accountant General asked the bank to reverse the entry and debit this amount to the account of Sultan Mohd. Apparently, the bank was unwilling to do so and it appears that the bank was then threatened that if the bank did not do so the amount would be realised from the subsidy given to the bank by Government. The bank thereupon reversed the entries and debited this amount to the account of Sultan Mohd., with the result that the figure of Rs. 2,995/12/ shown as debit balance against Sultan Mohd. was increased by this sum. The trial court held that the amount was paid twice over by mistake and therefore the bank was entitled to reverse the entries at the instance of the Accountant General without reference to Sultan Mohd. It therefore decreed the suit in full. The respondents then went in appeal to the High Court and contended that the entries could not be reversed in this manner by the bank without the consent of Sultan Mohd. The High Court accepted this contention and rejected the argument on behalf of the appellant that the bank was justified under section 72 of the Indian Contract Act, No. 9 of 1872, to reverse the entries. The High Court therefore allowed the appeal and disallowed the claim of the bank for Rs. 28,029/15/ and decreed the suit for the balance (namely, Rs. 2,995/12/ ). Thereupon the appellant obtained certificates from the High Court in both cases, and that is how the matter has come before us. 796 of the third person, who is a constituent of the bank, the money becomes the money of the constituent, and it is not open to the bank in such circumstances to reverse the entry of credit made in the account of the constituent and in effect pay back the money to the person who had deposited it even though might if have been deposited by mistake. As soon as the money is credited into the account of the constituent, even though the person paying in may have paid it by mistake, it becomes the money of the constituent, and the bank cannot pay it back to the person who paid it to the account of the constituent on his representation that it was paid by mistake, without obtaining the consent of the constituent. As we have already said the legal position is that for the purpose of payment, Government was the agent of Sultan Mohd. and whatever money was paid to be credited to the account of Sultan Mohd even though it was paid through Government, became his money and it could not be paid out of his account which is in substance the effect of reversing the entries without his consent. Section 72 could certainty have been availed of by Government against Sultan Mohd and the Government could have sued Sultan Mohd for return of the money which had been paid by mistake into his account. But the Government could not ask the bank to reverse the entries and thus in effect ask it to pay out the money from the account of Sultan Mohd into which it had been deposited and the bank could not do so without taking the consent of Sultan Mohd. Further though Government was the agent of Sultan Mohd for the purpose of payment of the money for liquidating the debt, the Government had no further authority on his behalf to ask the bank to pay back any sum once it had been credited into his account by Government. That could only be done on the authority of Sultan Mohd. and there was no authority in this case for paying back the sum paid in by mistake to Government, for the reversal of the entries in substance amounted to this. It has been urged that on this view the bank would not be able to correct any mistake in the account of any constituent. 'Mat is not so. If, for example, a bank credits a cheque in favour of A by mistake into the account of B, the bank can always correct that mistake, for it had received the money on behalf of A. Similarly if the bank receives (say Rs. 5,000/ on behalf of A from some person, but by mistake enters Rs. 50,000/ in as account, the bank can always correct that entry and mention the correct sum received. But the present case is very different from corrections of such mistakes. Here the bank had received certain moneys on behalf of Sultan Mohd. through treasury bills or hundis. There is no dispute that money was received for credit to the account of Sultan Mohd. and was correctly credited to that account. There was therefore nothing which the bank could correct, for the bank had 795 The only question in these circumstances is whether the bank was justified in reversing the entries and debiting the account of Sultan Mohd with this sum. Now the legal position so far as this payment is concerned was this. The bank had advanced the money to Sultan Mohd. and an account was opened in his name on November 5, 1941 with a debit entry of Rs. 40,000/ . Into this account the bank went on debiting interest and incidental charges due to it from Sultan Mohd. It also credited this account with the amounts received from Government through hundis or treasury bills. Clearly therefore though the amounts to be credited to the account of Sultan Mohd. used to come by treasury bills or hundis from Government they were amounts received by the bank on behalf of Sultan Mohd. to be credited to his account, and the Government was agent of Sultan Mohd. for the purpose of depositing the income from villages, management of which was taken over by Government under the Council Order, in order to liquidate the loan taken by Sultan Mohd. from the bank. The bank when it reversed the entries made no reference to Sultan Mohd. and did not take his consent thereto. In these circumstances the contention of the respondents is that it was not open to the bank to reverse the entries and thus saddle Sultan Mohd. with the liability for this sum after it had been credited into his account on the basis of hundis or treasury bills received by the bank from Government. We are of opinion that this contention of the respondents is correct, and the High Court was right in the view it took of the legal position. It is true that on the facts shown there was double payment for a certain period due to mistake on the part of Government. The question however is whether it was open to the bank to reverse the entries in the manner it did without reference to Sultan Mohd. It has not been and cannot be disputed that it is not open to the bank to debit the account of a constituent like Sultan Mohd. with any sum without the, authority of the constituent. What is however contended on behalf of the appellant is that Govern ment paid the sum twice over by mistake and it was entitled to ask the bank to return the money paid by mistake and reliance in this connection is placed on section 72 of the Contract Act. There is no, doubt that section 72 of the Contract Act provides that a person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it. That section in our opinion will only apply when we are dealing with a case of two persons one paying the money and the other receiving the money on behalf of the person paying it. In such a case if the payment is made by mistake the person receiving the money must return it. But section 72 in our opinion has no application to a case where money is paid by a person to a bank with instructions that it should be deposited in the account of a third person who is a constituent of the bank. 'As soon as the money is so deposited in the account 797 made no mistake in making the entries. The bank in our opinion in not concerned with any mistake made by the Accountant General or the treasury in sending the amounts to the bank for the credit of the same to the account of Sultan Mohd. If the Accountant General or the treasury had made any such mistake it was open to them to recover the amount paid in by mistake from Sultan Mohd. But the bank could not reverse the entries and thus pay out money from the account of Sultan Mohd. without his authority. It is obvious that the bank hesitated to reverse the entries and only did it on the threat that the amount would be deducted from the subsidy paid to the bank by the Government. We have no doubt that the High Court was right that in such circumstances where the amount had been paid even though by mistake into the account of a constituent of the bank it was not open to the bank to reverse the entries at the instance of the person paying in the money into the constituent 's account on the ground that the payer had made a mistake. We agree with the High Court that section 72 has no application to the facts of this case. Learned counsel 'for the appellant has referred us to Imperial Bank of Canada vs Bank of Hamilton (1) in this connection. We are of opinion that that case has no application to the present cases, for the facts therein were different. The payment had been made by one bank to another bank by mistake; there is nothing to show that the money had been paid into a constituent 's account and thereafter any entry had been reversed in that case. We are therefore of opinion that the appeals must fail. They are hereby dismissed. As the respondents in C.A. 702 did not appear, we pass no order as to costs in that appeal.

The appellant entered into a contract with the, Union of India for the construction of certain railway bridges. On disputes arising the matter went to arbitration and then to an umpire. After the umpire had made his award the appellant filed an application under section 14 of the Indian , praying that the umpire be directed to file the award or a signed Copy thereof in the terms of section 14(2). The umpire filed in the Court a copy at the top of which he wrote : "now I hereby reproduce a true copy of the said award which is as follows. " At the end of the copy of the award he wrote : "Certified as correct copy of the award dated 27th May 1961. " Under this the umpire 's signature appeared. It was objected by the Union of India before the court that the copy of the award so filed was not a "signed copy" of the award as required by section 14(2) but only a "certified copy". The objection was upheld by the court and the appellants application for passing a judgment in terms of the award was dismissed. A revision petition before the High Court failed. The appellant then came to this Court by special leave. HELD : When a document is an accurate or true, and full reproduction of the original it would be a copy. In the present case what was produced by the umpire was a true accurate and full reproduction of the original. It was therefore a copy of the original. [845 H] It was also a signed copy because it bore the signature of the umpire. A document must be signed in such a way as to make it appear that the person signing it is the author of it, and if that appears it does not matter what the form of an instrument is, or in what part of it the signature occurs. The fact that the umpire wrote the words "certified as correct copy of the award dated the 27th May 1961" above his signature did not make any difference and the document was still a signed copy of the award. If anything these words showed that the document filed was a true copy of the award. [846 D, H; 847 A B] Mohesh Lal vs Busunt Kumaree, I.L.R. (1881) VI Cal. 340, relied on.

isation is in public interest and for public good, some losses, some damages, some prejudices and some harsh consequences are bound to follow but this does not mean that the aforesaid considerations should result in a stalemate of the policy of State monopoly or nationalisation. [756 H] & CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 957 966(N) of 1973 and 435 442 of 1976. From the Judgment and order dated the 24th April, 1973 and 19th April, 1973 of the High Court of Madras in Writ Petition Nos. 1647, 1900, 1466, 1557, 1559, 1527, 1256, 1488, 1584 and 1585/73 and 741, 157, 132, 123, 288, 1486, 1528 and 876/1973 respectively. AND Writ Petition Nos. 8818 of 1982 and 312 313 of 1979. (Under article 32 of the Constitution) S.S. Ray, R.K. Garg and A. V. Rangam for the Appellants. Vineet Kumar for the respondent No. 1 in CA. 965, 966, 437 & 439. G.L. Sanghi and Miss Lily Thomas for the respondent No. 1 in CAs. 957 & 962 & W.P. No. 8818/82. K K. Venugopal, A.K Sen, A.T.M. Sampath, M.N. Rangachari, section Srinivasan and Mahabir Singh for the respondent No. 1 in CAs. 959,960 961,963,964 & Respd No. 1 in CAs. 435 42/76. J. Ramamurthi for the respondent No. 1 in C.A. No. 438. A.T.M. Sampath for the petitioners in WPs. 312 & 313/79. K G. Bhagat Additional Solicitor General Miss A. Subhashini, T. V.S. Narasihma Chari and C. V. Subba for the interveners. (For. article Genl). A.V. Rangam for Eherran Transport. 732 A.T.M. Sampath, M.N. Rangachari, section Srinivasan and Mahabir Singh for K.A. Kanappa Chetty & T.R. Subhraj. B. Parthasarthy for Adv. Orissa and Cherran Transport Employees Union. Ashak Grover for Adv. J & K. A.K. Sen, A.T.M Sampath and K. Ram Kumar for D. Kannia Pillai, M/s. Sundaram Finance P.T. Krishnan and S.K. Nandy for State of Assam. The Judgment of the Court was delivered by FAZAL ALI, J. One of the planks of building an egalitarian society in order to achieve socio economic emancipation is the policy of nationalisation of industries. Easy, cheap and dependable transport is a prime social necessity. Unfortunately, no State has been able to achieve this goal so far by a full fledged nationalisation. Reliance is largely placed on schemes framed under Chapter IV A of the . Perhaps Karanataka was the only State which having become 'sadder and wiser ' took the lead in enunciating the bold step of complete nationalisation of the entire transport industry but, unfortunately, it has not yet been able to implement it fully. There are two methods by which the transport industry can be nationalised: (1) where the Government acts under Chapter IV A (s.68 (b) & (c) of the ) and after due publication formulates a scheme for taking over route or routes and invites objections thereto. After the objections have been received they are decided and ultimately processed. This method however is dilatory and involves a time consuming process which leads to delaying tactics adopted by the operators. Even so, after the objections have been decided the operators or the persons concerned are not satisfied but go up in appeals to the law courts. These delaying tactics have resulted in most cases in an indefinite postponement of the scheme of nationalisation. Moreover, normally this process is 733 applied to a route or routes selected by the Government and is accomplished by stages which also takes a long time. (2) Another method which is the more effective one is to take over the running of the entire transport services by nationalising them, alongwith their units (vehicles, workshops, etc.) either by one stroke or by stages spread over a short time. This course is clearly permissible under cls. (b) & (c) of article 39 of the Constitution as would be discussed in a later part of the judgment. The Karnataka State tried the second method and succeeded, to some extent, but ran into difficulties for one reason or the other. The Tamil Nadu State following the Karnataka pattern passed the impugned ordinance, which later took the shape of the Tamil Nadu Stage Carriages and Contract Carriages (Acquisition) Act, 1973 (hereinafter referred to as the 'Act ') to nationalise the State transport industry by stages. The Madras High Court stayed the operation of the ordinance as also the Act and declared void all its provisions. As a result, nationalisation of transport became a stillborn child and its progressive policy was stifled the day it was put into action. It is this judgment of the High Court which is the subject matter of appeals and writ petitions before us. The Madras High Court declared the Act ultra vires as being violative of articles 14 and 19 of the Constitution as it did not fall within the protective umbrella contained in article 31C and on a number of other grounds which would be examined hereafter. It is manifest that the attempt of the Tamil Nadu legislature to give effect to the principles enshrined in Art.39(b)&(c) would have secured the socialist objective aimed by the Constitution in order to build up an egalitarian society. By virtue of complete nationalisation the numbers of the public or the community would have got much better and greater facilities than afforded to them by the private operators running vehicles under permits. Secondly, the efficiency and efficacy of the services would undoubtedly make a marked improvement in the manner and method of running the vehicles as compared to the services run by private operators. Thirdly, prior to the passing of the Act, the entire services were actually run behind the screen through various financiers in the name of the operators with whom they had entered into hire purchase agreements. This obviously led to concentration of wealth in the hands of a few. With the coming into force of the total 734 nationalisation scheme, this device of concentration of wealth would be completely nipped in the bud resulting in an equal distribution of wealth and services among the people of the country. Fourthly, the private services run by the operators mainly inspired by profit making motive neither had the will nor the capacity to penetrate as deep as possible into areas so far inaccessible to the travelling public and would confine their running of the services only to serve important points. When the State takes over the entire transport services, it would undoubtedly be its duty to see that the vehicles reach the most distant part or corner of the State and serve as many travelling public as possible so that nobody is caused any inconvenience. These are some of the initial advantages of a total nationalisation scheme, which would be brought to the fore and provide an ideal service for the members of the community at large. It may be that in this process some financiers would suffer loss and some operators may also be wiped out of the business but this cannot be helped as the scheme of our Constitution is that individual rights or benefits must yield to the larger benefits and good of the entire community. Some of these points were very elaborately dealt with in the case of State of Karnataka & Anr. vs Ranganatha Reddy & Anr. etc. (for facility, hereinafter referred to as 'Karnataka case '). The Act was for the purpose of carrying out and implementing the objects specified in Art.39(b)&(c) and was, therefore, immune from challenge on the ground that the Act or its provisions were violative of article 14, 19 or 31. This was accomplished by virtue of Art.31C, introduced by the 25th Constitution Amendment, which gave a protective umbrella to such acts so as to exclude them from the operation of Arts.14, 19 or 31. Before dealing with the provisions of the Act we might give a resume of the importance and significance of the directive principles contained in Art.39(b)&(c) which may be extracted thus: "39. The State shall, in particular, direct its policy towards securing (b) that the ownership and control of the material resources of the community are so distributed as best to subserve the common good; 735 (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment. " We would not like to tread on the difficult and delicate ground as to whether or not the directive principle or the fundamental rights have primacy over one or the other. Nevertheless, it would appear that right from 1959 uptodate this Court has stressed and emphasised the importance of directive principles in a number of cases, some of which may be listed below: (a) Mohd. Hanif Quareshi & Ors. vs State of Bihar ; at 648) (b) In Re the Kerala Education Bill, at 1020,1022) (c) I.C. Golak Nath & Ors. vs State of Punjab & Ors. ; at 789 790) (d) Chandra Bhavan Boarding & Lodging, Bangalore vs The State of Mysore & Anr. ; at 612) (e) His Holiness Kesavananda Bharati Sripadagalaveru vs State of Kerala (1973 Supp. SCR 1) In State of Kerala & Anr. vs N.M. Thomas & Ors. one of us (Fazal Ali, J) reviewed the earlier cases and has collected the ratio of all the decisions on this point at one place. In recent decisions on the subject the view that has crystallised is that the courts should attempt to give a harmonious interpretation to the directive principles contained in part IV of the Constitution even though not enforceable. Attempt should , therefore, be made to reconcile the two important provisions rather than to arrive at conclusions which bring into collision these two provisions one contained in part III and the other in part IV. We must appreciate that the reason why the founding fathers of our Constitution did not advisedly make these principles enforceable was perhaps due to the vital consideration of giving the Government sufficient latitude 736 to implement these principles from time to time according to capacity, situations and circumstances that may arise. On a careful consideration of the legal and historical aspects of the directive principles and the fundamental rights, there appears to be complete unanimity of judicial opinion of the various decisions of this Court on the point that although the directive principles are not enforceable yet the court should make a real attempt at harmonising and reconciling the directive principles and the fundamental rights and any collision between the two should be avoided as far as possible. In the instant case, we are really concerned with the second limb of the Constitution, viz., the importance and significance of the directive principles contained in part IV. We now propose to discuss the purport, significance, scope, ambit and rationale of Art.31C, which may be extracted thus: "31C. Saving of laws giving effect to certain directive principles 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 away or abridges any of the rights conferred by article 14 or article 19; 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. " A brief setting and origin of this Article is contained in the objects and Reasons of the Constitution (25th Amendment) Act, 1971, which show that the amendment was introduced with the main objective of getting over the difficulties placed in the way of giving effect to the directive principles of State policy. 737 It is manifest from a bare reading of the newly added Art.31C that any law effectuating the policy of the State in order to secure or comply with the directive principles specified in clauses (b) and (c) of Art.39 would not be deemed to be void even if it is inconsistent with or violates articles 14, 19 or 31. It was further provided that any law which contains a declaration that it was put on the statute book for giving effect to such a policy, the same could not be called into question in any court on the ground that the new law does not give effect to the policy. In other words, the position was that once Art.31C was put on the statute book, the question of any law being in violation or infraction of the fundamental rights contained in part III (Arts.14, 19 and 31) ceased to be justiciable. Art.31C further provided that where a law is made by the legislature of a State, the provisions of this Article would apply only if the law had received the assent of the President of India. We might mention here that it is undisputed in the instant case that the impugned law had received the assent of the President and is, therefore, fully enforceable in the State of Tamil Nadu if it fulfils the conditions of article 31C, which it doubtless does. A substantial part of this amendment appears to have been held to be valid by a majority of 7:6 in His Holiness Kesavananda Bharti Sripadagalaveru vs State of Kerala (hereinafter referred to as 'Bharti 's case '), but a portion of article 31C was held to be invalid. While considering the scope, ambit and constitutional validity of article 31C, the majority judgment in Bhararti 's case (supra) held that the first part of Art 31C was valid but the second part, viz., "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" was held to be invalid. In other words, so far as the present aspect of the case before us is concerned, the majority judgment clearly held that while article 31C permitted Parliament to make any law giving effect to the policy of the State towards securing the principles contained in cls. (b) and (c) of article 39, such law could not be declared void even if such a course of action violates or abridge any of the rights conferred by article 14, 19 or 31. Another crucial stage in the history of article 31C arose when the famous 42nd amendment of the Constitution was passed by the 738 Parliament. By virtue of this amendment a complete, irrevocable and impregnable constitutional protection was given to laws passed not only to implement the principles specified in cls. (b) & (c) of article 39 but also the principles contained in all the clauses of article 39. However, to put the record straight and to complete the history of article 31C we may briefly indicate the distinction between the 25th and 42nd amendments thus: Whereas in the 25th amendment, the protective umbrella given by the Constitution was restricted to laws passed only to promote objects in cls. (b) & (c) of Art.39, by virtue of the 42nd amendment the limitations which were confined to cls. (b) and (c) of Art.39 were taken away and the Article was given a much wider connotation by legislating that Acts or laws given effect to all or any of the principles laid down in part IV of the Constitution would be protected by the umbrella contained in article 31C and would be immune from challenge on the ground that they were violative of Art.14 or 19. Even so, in Minerva Mills Ltd. & Ors. vs Union of India Ors. , one of us (Chandrachud, CJ) while referring to the ratio of Bharati 's case on the unamended Art.31C observed as follows: "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 Art.31C was whether there is a direct and reasonable nexus between the impugned law and the provisions of Art 39(b) and (c). Reasonableness is regarding the nexus and not regarding the law." (Emphasis ours) Thus, it would appear from a combined reading of Bharati 's and Minerva Mills cases as also of the subsequent decisions that the undisputed position is that Art.31C, as introduced by the 25th amendment, is constitutionally valid in all respects and has survived the stormy decision of Bharati 's case. 739 Similar observations were made in Waman Rao & Ors. etc. vs Union of India & Ors. , where one of us (Chandrachud, CJ) observed thus: "Article 31 is now out of harm 's way. In fact, far from damaging the basic structure of the Constitution, laws passed truly and bona fide for giving effect to directive principles contained in clauses (b) and (c) of Article 39 will fortify that structure." (Emphasis supplied) In the latest Constitution Bench decision of this Court in Sanjeev Coke Manufacturing Co. vs M/s. Bharat Coking Coal Ltd. & Anr., it has been emphasised that the constitutional validity of Art.31C is now beyond challenge and in this connection one of us (Reddy, J.) speaking for the Court made the following observations: "In the second place, the question of the constitutional validity of Art.31C appears to us to be concluded by the decision of the Court in Kesavananda Bharati case. " In view of the aforesaid decisions, it is not necessary for us to dilate further on the question of the constitutional validity of Art.31C. Another important facet of Art.31C which has been emphasised by this Court is that there should be a close nexus between the statute passed by the legislature and the twin objects mentioned in clauses (b) and (c) of Art.39. In approaching this problem and considering the question of nexus a narrow approach ought not to be made because it is well settled that the courts should interpret a constitutional provision in order to suppress the mischief and advance the object of the Act. The doctrine of nexus cannot be extended to such an extreme limit that the very purpose of Art.39 (b)&(c) is defeated. By requiring that there should be nexus between the law and Art.39(b)&(c) what is meant is that there must be a reasonable connection between the Act passed and the objects 740 mentioned in Art.39(b)&(c) before the said Article can apply. If the nexus is present in the law then the protection of Art.31C becomes complete and irrevocable. Furthermore, the fact that there is a declaration in the Act regarding the purpose mention in Art.39(b)&(c) may generally be evidence of the nexus between the law and the objects of Art.39(b)&(c). In this connection, Iyer, J., in the Karnataka case observed thus: "The requisite declaration contemplated in Article 31C is thus made in the preamble as well as in section 2 of the Act. The nexus between the taking of property and the public purpose springs necessarily into existence if the former is capable of answering the latter. " There is no particular magical tinsel or ritualistic formula in the term 'nexus ' which may be closed in a strait jacket. Even a nationalisation scheme meant for the purpose of distribution or preventing concentration of wealth, as in this case, would be sufficient nexus to attract the operation of Art.39(b)&(c). On this aspect of the matter, Iyer,J. in the Karnataka case further observed thus: "The next question is whether nationalisation can have nexus with distribution. To 'distribute ', even in its simple dictionary meaning, is to, allot, to divide into classes or into groups ' and 'distribution ' embraces 'arrangement, classification, placement, disposition, apportionment, the way in which items, a quantity, or the like, is divided or apportioned; the system of dispersing goods throughout a community. " In a later decision in Sanjay Coke Manufacturing Co. 's case (supra), adverting to this very point, one of us (Reddy, J.) made the following observations: "We are firmly of the opinion that where Article 31C comes in Article.14 goes out. There is no scope for bringing in Article 14 by a side wind as it were, that is, by equating the rule of equality before the law of Article 14 with the broad egalitarianism of Article 39 (b) or by treating the principle of Article 14 as included in the principle of Article 39 (b). " 741 We might now mention in passing some important facets of article 31C which we shall discuss in detail when we deal with the various provisions of the Act in the light of the reasons given by the High Court and the contentions advanced before us. At this stage, suffice it to say that on a proper and true construction of article 31C in the light of the decisions of this Court, the question of compensation becomes totally irrelevant. If, once the conditions mentioned in article 31C are fulfilled by the law, no question of compensation arises because the said Article expressly excludes not only articles 14 and 19 but also 31 which, by virtue of the 25th amendment, had replaced the word 'amount ' for the word 'compensation ' in article 31 (2). As already extracted, Chandrachud, CJ in Waman Rao 's case has observed that once article 31C is attracted, articles 14, 19 and 31 are out of harm 's way. The question whether in a case where article 31C applies, compensation is necessary to be given, has the following facets: (a) if article 31C is taken, as it must be, to exclude article 31 (2), the question of compensation becomes irrelevant and otiose, (b) nationalisation of transport services by the State is unobjectionable and unexceptionable and can be accomplished in three different methods (i) nationalisation of the services and not the units thereof, (ii) nationalisation of the services alongwith the entire assets of the units, and (iii) nationalisation of the services and part of the assets of the units of the operators. In the instant case, the State of Tamil Nadu has taken recourse to method (iii) above. , i.e., it has nationalised the entire transport service as also a part of the entire assets of the units thereof. It is obvious that as nationalisation is a policy decision, an enquiry into the policy of the legislature or the considerations governing the same cannot be made by the courts unless the policy is so absurd as to violate the provisions of the Constitution. In view of article 31C, 742 which gives protective umbrella against article 31 (2) also, the court cannot strike down the Act merely because the compensation for taking over the transport services or its units is not provided for. The reason for this is that article 31C was not merely a pragmatic approach to socialism but imbibed a theoretical aspect by which all means of production, key industries, mines, minerals, public supplies, utilities and services may be taken gradually under public ownership, management and control. Even as far back as 1963 in Akadasi Padhan vs State of Orissa, Gajendragadkar, J., speaking for the Constitution Bench, observed thus: "To the rationalist, nationalisation or State ownership is a matter of expediency dominated by considerations of economic efficiency and increased output of production. The amendment made by the Legislature in article 19 (6) shows that according to the Legislature, a law relating to the creation of State monopoly should be presumed to be in the interests of the general public. article 19 (6) (ii) clearly shows that there is no limit placed on the power of the State in respect of the creation of State monopoly. In our opinion, the amendment clearly indicates that State monopoly in respect of any trade or business must be presumed to be reasonable and in the interests of general public, so far as article 19 (1) (g) is concerned." Thus, even in 1963 the change in the approach by the Supreme Court towards social problems had come to be seriously felt so much so that any policy of nationalisation of assets or State monopoly was held to be so necessary to acquire the goal of building an egalitarian society as to make the restrictions contained in article 19 (1) (g) reasonable. In other words, even if article 31C was not there, the policy of nationalisation of transport services could be held to be valid on the basis of this decision and would not violate article 19, being a reasonable restriction. The major part of the spirit of article 31C, which was introduced almost a decade after the above decision, 743 was clearly anticipated and accepted in Akadasi Padhan 's case (supra) and this Court in a way paved the way for more socialistic reform which may destroy any obstacle coming in the way of achieving the important directive principles of the Constitution. More than this we would not like to say anything regarding this decision because articles 14, 19 and 31 are completely excluded by article 31C. The provisions to validate laws made to secure the objects in article 39 (b) &(c) seem to be the conclusive chapter of a humble beginning with an appeal to the courts to make a doctrinaire and pragmatic approach in such cases. Mr. Ray rightly argued that in view of the provisions of article 31C, the Act squarely falls within the protective umbrella of the said Article inasmuch as in pith and substance, the Act seeks to subserve and secure the objects contained in clauses (b) & (c) of article 39 and is, therefore, fully protected from the onslaught of articles 14, 19 and 31. To counter the argument of Mr. Ray, S/Shri Ashoke Sen, Venugopal and Sanghi made two fold submissions. In the first place it was argued that the manner in which the transport services had been nationalised under the Act does not fall within the ambit of article 39 (b) & (c) as the buses or the vehicles were not an integral part of the policy of nationalisation. Secondly, Mr. Venugopal submitted that if the Act would have nationalised the transport services without taking over the units and the workshops, etc., then the operators could have had something to fall back upon to earn their livelihood. Complete deprivation of livelihood by the Act amounts to a confiscatory piece of legislation and therefore void. Although the arguments are attractive, on closer scrutiny they seem to be without substance. Once it is held that the policy of nationalisation of transport services is valid, which is no doubt an essential service and a type of a State monopoly, any consequence that may follow cannot be taken into consideration; otherwise no social reform can ever be brought about. All schemes of monopoly or nationalisation are meant to serve the public good and individual interests in such cases must yield to the good of the general public. Moreover, on a close examination of the argument it seems to us that it is wholly untenable. The various provisions of the Act clearly provide for a just and reasonable compensation which may not be equal to market value of the units taken over but cannot be said to be illusory or shocking to the conscience of the court. 744 Although we have found that article 31 having been excluded no question of compensation arises, even so it seems to us that the courts while interpreting the policy of total nationalisation and being imbued with a keen sense of the doctrine of justice and fair play have projected the question of compensation in a very limited sense and a restricted extent by holding that the word 'amount ' merely means some sort of a reasonable amount which may or may not be adequate in the circumstances. We feel that in view of the explicit and express provisions of article 31C the question of compensation does not arise at all and even if it does, the matter is concluded by a 7 Judge Bench decision of this Court in the Karnataka case. Having dealt with the various aspects of article 31C, we now proceed to examine the provisions of the Act in the light of the law laid down by this Court and the aforesaid conclusions reached by us. To being with, the Act gives a detailed preamble describing the ends and objects of the Act. We might mention that in the first paragraph of the preamble, cl. (c) of article 39 was not mentioned in the Ordinance but when the Ordinance was replaced by the Act, cl. (c) of article 39 was inserted. A perusal of the various clauses of the preamble reveals that the legislation was a purely progressive measure meant not to confiscate the property or destroy the business of the stage carriage operators but to take absolute control of the State transport services by stages in various revenue districts. As already indicated, the Act was preceded by an Ordinance, containing identical provisions, which was issued on 12.1.1973. The constitutional validity of the Ordinance was challenged in the Madras High Court and while the judgment of the High Court was pending, the Ordinance was replaced by the Act on March 14, 1973. The High Court struck down the Ordinance as being unconstitutional and an interim order was passed by which all the provisions of the Act were stayed, pending appeal to this Court. One time in June 1973, an interim order was passed by this Court by which the transport vehicles not taken over by the State were stayed from being taken over. Coming to the provisions of the Act, it would be seen that so far as section 1 is concerned, it is more or less descriptive with the only difference that as far as the Nilgiri District is concerned, the provision says that the policy of nationalisation shall come into force on the 14th of January 1973. In other words, the intention of the 745 Act is to start the nationalisation scheme with the Nilgiri district first and then extend it to other districts as and when it becomes necessary. Clause (iii) of sub cl. (4) (b) of section 1 lays down that with respect to stage carriages in any other district in the State, the Act will come into force on such date as the Government may by notification appoint. Section 2 codifies one of the clauses of the preamble by enacting a declaration that the Act is meant for giving effect to the policy of the State towards securing the principles specified in cls. (b) and (c) of article 39 of the Constitution and the acquisition in respect of the stage carriages and contract carriages and other properties referred to in section 4. After the Act was passed, by virtue of the decision in the Bharati 's case whatever may have been the legal status or position of the directive principles so far as clauses (b) & (c) of article 39 are concerned, they were held to be constitutional and any Act passed to enforce these principles clearly fell within the protective umbrella of article 31C and was therefore immune from challenge. We have already adverted to this aspect of the matter heretofore. Sub section 2 (a) of section 2 provides that the acquisition of the stage carriages shall commence with the districts wherein comparatively fewer number of stage carriages were operating. This provision appears to have been incorporated in order to cause the least possible inconvenience to the bus operators so that the operators of the other districts were the nationalisation of the scheme has not been enforced may make due preparations and alternative arrangements in case the concerned districts are also included in the nationalisation scheme by virtue of the notifications issued from time to time under the Act. Section 3 only gives the definitions of the various expressions used in the Act and, for the time being, it may not be necessary for us to give a detailed description of cls. (a) to (s) of this section. Section 4, which is the pivotal section, provides that on and from the date as may be specified by the Government in respect of any stage carriage or contract carriage operator, the permit issued to the operator shall vest in the Government absolutely free from all encumbrances and such carriages or contract carriages, which vest in the Government, shall by force of such vesting be freed and discharged from any trust, obligation and encumbrances, etc. In other words, the intention of the Act was that while nationalising the State transport services the State should not encumber itself with the liabilities that may have been incurred by the bus operators prior to 746 the enforcement of the Act so that the policy of nationalisation may run smoothly and without any obstruction or obstacle. At the same time, section 4 also provides that any person interested shall have no claim in relation to such carriages or contract carriages taken over by the State in pursuance of the aforesaid nationalisation policy and the claim, if any, would be limited to the amount payable in respect of such stage carriages or contract carriages as provided under the Act. Sub section (2) of section 4 lays down an important safeguard that all rights, title and interests of the stage carriage operators or contract carriage operators, including lands, buildings, workshops and other places, stores, instruments, machinery, tools, plants and other equipments used in connection with the service of these carriages would also vest in the State. There was a serious controversy regarding this provision and it was vehemently attacked by the counsel for the respondents on the ground that this is a very harsh and strident provision of the Act which completely destroys not only the fundamental right of the operators but also the right to equality under article 14. Even if article 14 or 19 apply, the vesting of machinery, tools, etc., which were the personal property of the operators meant to carry on their business, would amount to a confiscatory piece of legislation. We shall deal with this aspect of the case when we consider the various contentions advanced before us by counsel for both the parties. At this stage, it is sufficient to remark that even the books of account, registers, etc., would vest in the Government on the issue of the notification and all hire purchase agreements and transaction, etc, would be deemed to have been withdrawn. The main object in enacting this provision is that when the Government decides to nationalise the transport services or its units, all the means of business should vest in the Government so that after the vesting the Government does not feel itself bound by any commitment or contracts made by the operators which might make the policy abortive as a result of which the scheme of nationalisation itself may run into rough weather. Sub section (3) of section 4 contains a declaration that the vesting of the stage carriages and other properties shall be deemed to have been acquired for a public purpose, that is to say, acquisition of not only the stage carriages or the contract carriages used by the operators but also their tools, implements and workshops would be in public interest in order to prevent any legal or constitutional objection being taken against the various moveables which by virtue of the provisions of the Act vest in the Government. 747 Section 5 contains provisions of a routine nature regarding the submission of accounts, agreements, inspection by Government officers, furnishing of data and details and the like. Another important provision of the Act is section 6 which provides for a reasonable amount of compensation to be paid to the operators on their properties vesting in the Government. Sub section (1) of section 6 says that every person interested shall be entitled to receive such amount as may be determined in the second schedule to the Act, that is to say, where the amount can be fixed by agreement, the same shall be determined in accordance with the agreement. Secondly, where no agreement can be reached, the Government shall appoint as arbitrator a person who is or has been or is qualified for appointment as a District Judge. While appointing an arbitrator, the Government may, if necessary, nominate a person having expert knowledge as to the nature of the acquired property to assist the arbitrator. These two provisions clearly show the attitude of fairness that the Act displayed towards the operators on the vesting of their properties in the Government. (e) of sub section (1) of section 6 provides that the arbitrator after hearing the dispute and the parties concerned, would determine the amount which appears to him to be just and reasonable and also specify the person or persons who would be entitled to the aforesaid compensation. Clause 1 (f) of section 6 provides that where there is a dispute of title with respect to the distribution of the amount the same would be apportioned amongst the persons concerned by the Arbitrator. At the same time, to exclude any further disputes during the process of arbitration, cl. (g) of sub section (1) of section 6 provides that the provisions of the (Central Act X of 1940) shall not apply to the arbitrations made under section 6. Sections 7 and 8 contain the usual procedure for filing of claims and the conditions thereon. What is important to be noticed is that the award of the arbitrator is not made final but is subject to an appeal to the High Court. Section 12 clearly provides that any person aggrieved by an award, may within 30 days from the date of such award prefer an appeal to the High Court. The proviso however empowers the High Court to condone the delay in suitable cases where sufficient cause preventing a claimant from filing the appeal within the time prescribed is made out. 748 Before going to other provisions we would like to make a reference to the schedule which fixes the scale of compensation and enunciates the principles on the basis of which it is to be awarded to the operators whose stage carriages or contract carriages are taken over by the Government. The table containing the guidelines for payment of compensation may be extracted below: THE TABLE Period Percentage 1. Not more than six months prior to the 85 notified date 2. More than six months prior to the notified 75 date but not exceeding one year 3. More than one year but not exceeding two years 70 4. More than two years but not exceeding three years 68 5. More than three years but not exceeding four years 67 6. More than four years but not exceeding five years 66 2/3 7. More than five years but not exceeding six years 59 8. More than six years but not exceeding seven years 41 9. More than seven years but not exceeding eight 29 years 10. More than eight years but not exceeding nine 21 years 11. More than nine years but not exceeding ten years 14 12. More than ten years but not exceeding eleven 10 years 13. More than eleven years but not exceeding twelve 7 years 14. More than twelve years but not exceeding thirteen 5 years 15. More than thirteen years 4 749 It would be seen from a perusal of these guidelines that heavy compensation has not been provided for, obviously because if compensation at the market rate is given it would amount to a huge drain on the State treasury which may cause a complete financial breakdown and thus frustrate the very policy of nationalisation. We might mention here that the respondents argued that the rates of compensation were wholly inadequate and absolutely illusory because the arbitrator or the High Court cannot travel beyond the second schedule in assessing the compensation. Mr. S.S. Ray, appearing for the appellant State fairly conceded that the schedule was merely a sort of a guideline which was not exhaustive for determining the quantum of compensation and it may be taken as a concession on behalf of the State that the officers fixing the compensation were entitled to make marginal but not vital departures from the principles of compensation laid down by the Act which seems to be the real intention of the statute in question by providing for a broad based compensation and allowing the same to be decided by the highest court of justice in the State, viz., the High Court. In the circumstances, it cannot be said that the compensation provided is absolutely illusory or shocking to the conscience of the court which is the only requirement of article 31(2). Then there are other routine provisions contained in s.11 which provide the manner in which the payment of the amount adjudicated by the compensation authorities is to be given. Clause 1A even awards interest at the rate of 6 1/2 per cent per annum on the said amount and certain other options are given to the operators. Section 13 provides the legal procedure to be adopted in arbitration proceedings and for that purpose the arbitrator would have all the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908. Section 13 also applies this procedure for summoning and enforcing the attendance of witnesses, requiring discovery and production of documents, reception of evidence on affidavits, requisitioning any public record or a copy thereof from any court or office and issuing commissions for examination of witnesses or documents. Section 14 however carves out an exception regarding the acquisition of the stage carriages or contract carriages from applying for any new permit or renewal of the existing permit after the acquisition of the stage carriages or contract carriages by the State. It also provides that every application for grant of a new permit or 750 renewal of an existing permit or any appeal or revision relating thereto made or preferred before the 14th January 1973, the date of the enforcement of the Act, and pending before any court or any officer or authority or tribunal shall abate. This appears to us to be a very salutary provision in order to prevent future recurring disputes. Section 15 provides that the transfer of the stage or contract carriages on or after 14th January, 1973 and before the notified date, is prohibited. It further provides that no person shall after the aforesaid date transfer by way of sale or gift any stage or contract carriage liable to be acquired under the Act. Section 16 provides for grant of temporary permits to the operators and the circumstances under which and the period for which they could be extended or transferred and as a consequence of the pivotal Section it also provides that no stage or contract carriage operator would be able to obtain any temporary permit in respect of any area or route which has been notified in the Act. Section 17 prohibits transfers of any stage or contract carriage and enjoins that if any transfer is made, the shall be void and is liable to be acquired by the Government. Section 18 makes a provision for the appointment of administrators for arranging the taking over of the acquired property and for carrying out the duties assigned to them. Section 19 also makes an identical provision for appointment of authorised officers. Section 20 is also an important provision which has been introduced for the purpose of safeguarding the existing staff of the operators for being absorbed in the State Transport Department of the Government, on a given scale, or any corporation or company owned by the Government and for this purpose a number of steps have been detailed in this section. Section 21 gives the resultant consequences of the policy of nationalisation and prescribes the modes in which the newly acquired stage or contract carriages are to be run by the corporation or the company or the State Transport Department of the Government to which the acquired property is transferred. Section 25 is also a sort of a routine provision making provisions for issue of orders, notices and the manner of delivering the same etc. Section 26 is an important section which exempts 751 particular types of stage or contract carriages from the operation of the Act, such as stage or contract carriages held by the Central Government, any State Government, any company controlled or owned by the Central Government or any State Government. Section 27 is the usual section which provides immunity to persons discharging their duties in good faith in pursuance of the Act. Section 28 bars jurisdiction of civil courts in certain matters. Section 29 is a penal provision which provides for punishment for offences committed in violation of the provisions of the Act. Section 30 invests certain officers like administrators, arbitrators, authorised officers, etc., with the status of a public servant within the meaning of section 21 of the Indian Penal Code. Section 31 is the saving provision which overrides other laws on the passing of the Act. Section 32 is the rule making power given to the Act. Before discussing the reasons given by the High Court for striking down the Act we might dispose of an important argument advanced before us for the appellant to the effect that the provisions of this Act are almost in pari materia with the Karnataka Act which formed the subject matter of a constitution Bench decision of this Court by which the Karnataka Act was upheld. On the basis of the aforesaid decision, it was submitted that the matter stands concluded by a seven Judge Bench decision of this Court and the appeal should be allowed on this ground alone. On the other hand, the respondents challenged the correctness of the appellant 's submission and contended that there are marked and sharp points of difference between the two Acts. We are, however, unable to accept this contention for the reasons given hereafter. By and the large the provisions of the two Acts appear to be identical in many respects and the general structure and the fundamental features of the two Acts are almost the same. The broad features of the two Acts may be summarised as follows: (a) both the Acts aim at the policy of nationalisation of transport services (Karnataka Act started with only stage carriages but the Act has also taken within its fold contract carriages), (b) both the Acts clearly mention that the object of nationalisation was to secure the ends of article 39 (b) & (c), 752 (c) both the Acts seem to convey that being a national policy evolved by the Government itself, it would undoubtedly be in great public interest, (d) the process of distribution of material resources and the units taken over is more or less the same, (e) by and large the scope and ambit, the manner and method of formulation of the nationalisation policy are identical, and (f) the principles of compensation and the machinery provided for determining the same in both the Acts are absolutely similar with minor and negligible variations here and there. Thus, all the arguments addressed regarding the constitutional validity of the Karnataka Act before this Court apply equally and fully to the present Act and in view of the clear decision of this Court in the Karnataka case very little survives so far as the arguments in this case, advanced on behalf of the respondents, are concerned. On the other hand, three important decisions of this Court, viz, Minerva Mills, Waman Rao and Sanjeev Coke Manufacturing Co. cases, which were given after the Karnataka case, reinforce and reiterate the conclusions reached by this Court in the Karnataka case. Before examining the reasons given by the High Court we would like to mention certain important facts which have come into existence after the Act was passed by the Tamil Nadu legislature as also after the judgment of the High Court, which fall under three heads: (1) that by virtue of the Constitution (25th Amendment) Act, 1971 a new article in the shape of article 31C was inserted in the Constitution with the avowed object of highlighting the importance of some of the important directive principles contained in part IV of the Constitution. article 31C provides that no law made by a legislature in order to secure the principles specified in article 39 (b) & (c) shall deemed to be void on the ground that it abridges any of the rights enshrined in articles 14, 19 or 31. The said amendment further provides that no law containing a declaration that it has been passed for giving effect to such a policy shall be called in question any court on the 753 ground that is does not give effect to such a policy. There is a proviso to article 31C which mandates that before the provisions of the Article can apply, the law must have received the assent of the President of India. The Tamil Nadu legislature seems to have taken abundant precaution of mentioning the objects contained in article 31 by providing clearly is its preamble, as indicated above, that the Act was passed with the intention of giving effect to the principles enunciated in article 39 (b) & (c). (2) that when the new article 31C created controversies, 13 Judges of the Supreme Court examined not only the said article but also a number of other provisions of the Constitution in order to decide as to how far the amended provisions affected the basic structure of the Constitution. It may be sufficient to state here for the purpose of this case that so far as article 31C is concerned, it was unanimously held by the entire Court that the first part of article 31C, introduced by the Constitution 25th Amendment Act, was valid. (3) Thus, it is manifest that article 31C gives a complete protective umbrella to any law passed with the object of achieving the aims and goals of article 39 (b) & (c) so as to make it immune from challenge on the ground that the said law violates articles 14, 19 or 31. The only condition for application of article 31C is that there should be a direct and reasonable nexus between the law and the provisions of article 39 (b) & (c), and the reasonableness would be regarding the nexus rather than the law. In view of the aforesaid developments, most of the conclusions arrived at and the important reasons given by the High Court no longer survive and fade into oblivion. The counsel for the parties also realising this difficulty did not press all the arguments that were advanced before the High Court or accepted it but confined their arguments to the framework and applicability of article 39 (b) & (c). In fairness to the High Court, we cannot blame it because the law on article 31C was crystallised after the delivery of its judgment. We, therefore, propose to give a very brief summary of the reasons given by the High Court for striking down the Act laying stress only on the points that survive. In the first place, the High Court seems to have accepted the argument of Mr. Chari, appearing for the operators, that by virtue 754 of the Act the financiers who were the owners of the stage or contract carriages would be completely wiped out of their business and therefore article 19 was clearly violated. As article 31C gives complete immunity from challenge in respect in of any law made to promote objects enshrined in article 39 (b) (c), this argument no longer survives and was wrongly accepted by the High Court. This now brings us to the nature of compensation awarded to the operators in the Karnataka case which appears to be on all fours with the facts of this case. We must hasten to add that already discussed above, in view of article 31C no compensation is necessary as article 31 (2) is clearly excluded by article 31C but proceeding on the assumption that some sort of compensatory relief may be necessary, we approach this question only as a piece of an alternative argument. To begin with, while dealing with the question of compensation, Untwalia, J., in the Karnataka case clearly pointed out that by virtue of the 25th amendment, the question of compensation may not arise, yet right from Bharati 's case uptodate it was has now been held that the amount payable in respect of acquired property should be fixed by the legislature or determined on the basis of principles contained in the law of acquisition and should not be wholly arbitrary or illusory or monstrously undervalued, and in this connection, the learned Judge observed thus: "For the purpose of deciding the point which falls for consideration in these appeals, it will suffice to say that still the overwhelming view of the majority of Judges in Kesavanada Bharati 's case is that the amount payable for the acquired property either fixed by the legislature or determined on the basis of the principles engrafted in the law of acquisition cannot be wholly arbitrary and illusory. When we say so we are not taking into account the effect of Article 31C inserted in the Constitution by the 25th Amendment (leaving out the invalid part as declared by the majority)." (Emphasis supplied) The lines underlined by us contain an important emphasis to show that the complexion of the necessity of compensation has completely changed in view of the 25th Amendment by which article 31 C was introduced and Untwalia, J. was, therefore, careful enough 755 not to imply that even after the passing of the 25th Amendment, the question of compensation would still be necessary. In the same strain, Iyer, J., in that very case observed as follows: "Full compensation with a formal difference: The court will not question the 'adequacy ' directly, but 'interpret ' the amended articles into the same desideratum. . The Court could satisfy itself only about the amount not being a monstrous or unprincipled under value. . . . The payment may be substantially less than the market value, the principles may not be all inclusive, but the court would not, because it could not, upset the taking save where the principles of computation were too arbitrary and illusory to be unconscionably shocking." Thus, from a perusal of Bharati 's as also Karnataka cases the following principles for assessing compensation after the amendment of article 31 (2) by substitution of the word 'amount ', may be summarised: (1) that compensation should not be arbitrary or illusory, (2) that the amount fixed as compensation should not be unprincipled, (3) that the compensation sought to be paid should be so arbitrary or illusory as to be unconscionably shocking, and (4) it is not necessary that the compensation must represent the actual market value or be adequate, for even if compensation is inadequate but not illusory, the requirement of article 31 (2) is fully complied with. Relevant sections of the Act, on the question of compensation are completely in accordance with the principles enunciated above 756 and hence the argument of the counsel for the respondent that the compensation is wholly inadequate or illusory must be overruled. Applying these principles to the provisions of compensation, discussed above, it seems to us that the facts of this case are identical with those of the Karnataka case. The principles on which compensation was awarded in that case have been bodily lifted and placed in the present Act. The main features of the Act relating to compensation may be summarised thus: (1) A regular method and the manner in which compensation is to be assessed is to be found in the second schedule to the Act, (2) we have already mentioned that Mr. Ray conceded during the course of arguments that the said schedule is not exhaustive but it is open to the arbitrator or the High Court to make marginal changes as and when necessary, (3) the factors and circumstances to be taken into consideration vide section 6 and the second schedule clearly spell out that if compensation is allowed on the basis of those factors it cannot be said to be arbitrary, illusory or monstrously unconscionable. It is true that the compensation awarded may not represent the market value or perhaps may be even inadequate but that is now not the test laid down in the amended article 31 (2). On this ground, therefore, the constitutionality of the Act cannot be challenged. All said and done, it was contended by the respondents that at least the taking over of both the stage and the contract carriages alongwith the workshops, etc amounts to a very harsh provision so to be confiscatory. We have already dealt with this argument. In addition to what we have stated, it may be observed that once a policy of nationalisation is in public interest and for public good, some losses, some damages, some prejudices and some harsh consequences are bound to follow but this does not mean that the aforesaid considerations should result in a stalemate of the policy of State monopoly or nationalisation otherwise the country cannot move forwarded even an inch from where it was when out Constitution came into force. Gajendragadkar, J., in Akadasi Pabhan 's case (supra) 757 had pointed out that these are matters of high policy and the courts cannot go behind the policy unless the policy itself is patently unconstitutional or arbitrary. We have found that the compensation awarded or the principles contained in the various sections of the Act are not illusory but amount to a just and sufficient compensation to the operators whose properties are taken away. In fact, it was to meet such situations that article 31C was introduced so that any obstacle resulting in evil consequence to the operators or persons whose properties are taken over is completely removed. For these reasons, we reject this argument of the respondents ' counsel as being totally ill founded. It was then argued for the respondents that the nationalisation of the entire transport services along with the vehicles and workshops, etc., cannot be in public interest because it would not serve any public good. In the same token, it was argued that the manner and method in which the nationalisation policy has been enacted in the Act does not per se secure twin objects of article 39 (b) & (c) for two reasons (1) that taking over of the vehicles, tools, implements and the workshops, etc., is not contemplated by article 39 (b) as they are moveable properties and therefore not material resources, (2) that the measure, if translated into action, does not prevent the concentration of wealth in the hands of a few and hence article 39 (c) is not attracted at all. We shall deal with these arguments one by one. Coming to the first argument that the nationalisation is not in public interest, the said argument is to be stated only to be rejected as it has been clearly pointed out in the Karnataka case that a nationalisation policy of this type is undoubtedly in public interest. In Black 's Law Dictionary (Special Deluxe fifth edition) at page 1107 the words 'public purpose ' have been defined thus: "The term is synonymous with governmental purpose . . A public purpose or public business has for its objective the promotion of the public health, safety, morals, general welfare, security, prosperity, and content 758 ment of all the inhabitants or residents within a given political division, as, for example, a state, the sovereign powers of which are exercised to promote such public purpose or public business. " This matter is concluded by a decision of this Court in the Karnataka case where it was held that the purpose of a public body to run a public transport service is undoubtedly in public interest and in this connection Iyer, J., observed thus: The purpose of a public body to run a public transport service for the benefit of the people, operating it in a responsible manner through exercise of public power which is controlled and controllable by society through its organs like the legislature and, at times, even the court, is manifestly a public purpose." And Untwalia, J., speaking for the Court made the following observations: "Why can 't moveables be acquired for commercial purposes if the exigencies of the situation so require, A particular commercial activity of the State may itself be for a public purpose. " In the instant case also, it would appear that the State has nationalised the stage and contract carriages for the purpose of providing a general and expeditious transport at reasonable rates to the members of the public and in view of the observations referred to above, we can come to no other conclusion except that such a policy is undoubtedly in public interest and involves an important public purpose. As a limb of this argument, the High Court held that article 39 would not be applicable in the present case. As extracted above, Untwalia, J., in the Karnataka case summarily rejected this very argument and further pointed out that where a legislature thought of preventing misuse in the running of the vehicles by private operators and in order to provide better facilities to the transport passengers or to the general public, acquisition of vehicles or for that matter the rights and interests in the contract carriage operators alongwith their land, buildings, workshops, etc., would always be permissible. We cannot conceive of a greater public interest in respect of a policy 759 than where the legislature expressly intends to promoter or secure the objects of article 39 (b) & (c) particularly when, as indicated above, the said two clauses have been conferred a special status and given an impregnable protection by article 31C itself. We, therefore, fully agree with the view taken by this Court in the Karnataka case and hold that the nationalisation of the transport services is undoubtedly in public interest. As regards the application of article 39 (b) & (c), the High Court on the basis of previous decisions of this Court held that (1) the objects of article 39 (b) & (c) have not been subserved, and (2) article 39 has no application to moveable properties and since the vehicles taken over by the State under the Act were moveable properties, article 39 was not applicable in the present case. With due respect, this view is not correct and proceeds on a misconception of the law and interpretation of the words 'material resources ' as mentioned in article 39 (b). In fact, article 39 (b) does not mention either moveable or immovable property. The actual expression used is 'material resources of the community '. Material resources as enshrined in article 39 (b) are wide enough to cover not only natural or physical resources but also moveable or immovable properties. Black 's Law Dictionary (supra) defined the word 'resources ' thus: "Money or any property that can be converted to meet needs; means of raising money or supplies; capabilities of raising wealth or to supply necessary wants." (p.1178) The mere fact that the resources are material will make to difference in the concept of the word 'resources '. In Stroud 's Judicial Dictionary (Vol.3) at page 1634, the word 'material ' is defined thus: "Materials, tools, or implements, to be used by such artificer in his trade or occupation, if such artificer be employed in mining;. wooden props or "sprags" though neither "tools or implements" were "materials" 760 within these words. . 'Material ' includes a painter 's bucket of distemper and brush." In Webster 's Third New International Dictionary at page 1934 the word 'resources ' has been defined thus: 'available means (as of a country or business): computable wealth (as in money, property.)" In words and Phrases (Permanent Edition), Vol. 37A, the word 'Resources ' has been defined at page 16 thus: "Resources included products of farm, forest, manufacture, art, education, etc. The "resources" of a county include its land, timber, coal, crops, improvements, railways, factories and everything that goes to make up its wealth or to render it desirable. " In the Karnataka case, Iyer, J., observed thus: "And material resources of the community in the context of re ordering the national economy embraces all the national wealth, not merely natural resources, all the private and public sources of meeting material needs, not merely public possessions. " The question as to the connotation of 'material resources, as mentioned in article 39 (b) & (c) came up for consideration in a recent constitution Bench decision of this Court in Sanjeev Coke Manufacturing Co 's case (supra) where one of us (Reddy, J.) made the following observations: "The next question for consideration is whether the Coking Coal Mines (Nationalisation) Act is a law directing the policy of the State towards securing "that the ownership and control of the material resources of the community are so distributed as best to subserve the common good. Coal is, of course, one of the most important known sources of energy, and, therefore, a vital national resource. 761 Shri Sen argued that material resources had first to be acquired by the State before they could be distributed. A law providing for acquisition was not a law for distribution. We are unable to appreciate the submission of Shri Sen." The above decision therefore furnishes a complete answer to the reason given by the High Court or the arguments advanced before us by the counsel for the respondents on the question as to the nature and character of material resources. Summarising the arguments relating to compensation and the prejudice caused to the operators, and the nationalisation policy contained in the Act, the position seems to be as follows: In the first place, as indicated above, once article 31C applies, the net of the protective umbrella is so wide as to cut at the root of even article 31 (2) which alone survives after Bharati 's case. We have already pointed out that if the State chooses to monopolise trades in certain essential commodities or properties, for the purposes mentioned in article 39 (b) & (c), article 31 (2) would be completely excluded, otherwise no State monopoly is ever possible because a reasonable amount which may have to be paid as compensation may completely drain out the financial resources of the State or the public exchequer to such an extent that the noble endeavour to monopolise a particular trade would become almost impossible, as a logical result of which the purposes sanctified in article 39 (b) & (c) would also become incapable of implementation. It was for these reasons that Parliament thought it advisable to protect the objects contained in Art, 39 (b) & (c) from the purview of article 31 (2). Secondly, article 31 (2) by virtue of the 25th amendment has knocked out the word 'compensation ' and has substituted the word 'amount ' which gives ample discretion to the State to fix a reasonable amount if the property of an individual is taken over for public purpose. In the instant case, as an intense social purpose which is indicated by the Constitution, is involved even an apology of compensation would be sufficient to comply with the conditions required by article 31 (2). Even so, in the instant case, as pointed out above, there is a clear mode of compensation provided which is to be assessed by an arbitrator and is subject to judicial scrutiny by the highest court in the State, namely, the High Court. The schedule which contains the principles of compensation is wide enough to 762 ensure a fairly reasonable compensation to be given to the operators whose vehicles are taken over. The court in such matters cannot interfere with the amount so fixed unless it is shown to the court 's satisfaction that the amount fixed is so monstrous as to shock its conscience. Having regard to the provisions in the schedule and the manner and mode of grant of compensation, we are unable to hold that the compensation provided for is wholly inadequate or absolutely monstrous. Thus, so far as this aspect of the matter is concerned, two conclusions broadly emerge: (1) that in view of the express provisions of article 31C which excludes article 31 (2) also where a property is acquired in public interest for the avowed purpose giving effect to the principles enshrined in article 39 (b) & (c), no compensation is necessary and article 31 (2) is out of the harm 's way, and (2) that even if the law provides for compensation, the courts cannot go into the details or adequacy of the compensation and it is sufficient for the State to prove that the compensation was reasonable and not monstrous or illusory so as to shock the conscience of the court. The persons whose properties are taken over cannot be heard to complain that the compensation awarded to them should be according to market value which, if conceded, would defeat the very purpose and objective of article 39 (b) & (c). In the instant case, both the conditions mentioned above are fully satisfied having regard to the provisions of the Act. The last contention raised by the respondents was that the conditions or objects mentioned in article 39 (b) & (c) are not subserved by the nationalisation policy codified by the Statute because there is no distribution at all in the sense that the property taken over is distributed to various member of the community for their benefit. Moreover, the members of the community have been deprived of the services rendered to them by the operators under permits issued by the transport authority. So far as this argument is concerned, it is based on a serious misconception of understanding the real position. The word 'distribution ' used in article 39 (b) must be broadly 763 construed so that a court may give full and comprehensive effect to statutory intent contained in article 39 (b). A narrow construction of the word 'distribution ' might defeat or frustrate the very object which the Article seeks to subserve. In Black 's Law dictionary (supra) the word 'distribution ' has been defined thus: "The giving out or division among a number, sharing or parcelling out, allotting, dispensing, apportioning." (p. 426) Similarly, Webster 's Third International dictionary at page 660 defines 'distribution ' thus: "the position, placement, or arrangement (as of a mass or the members of a group); the disposition or arrangement in rational groups or classes: CLASSIFICATION the accurate distribution of several rare zoological specimens; delivery or conveyance (as of newspapers or goods) to the members of a group (the distribution of telephone directories to consumers) in charge of company sales and distribution; a device, mechanism, or system by which something is distributed (as from a main source); the marketing or merchandising of commodities. " In 'Family Word Finder ' published by Readers Digest the word 'distribution ' has been defined at page 237 thus: "dissemination, scattering, spreading, circulation, grouping, organisation, apportionment, allotment, allocation, division. " It is obvious, therefore, that in view of the vast range of transactions contemplated by the word 'distribution ' as mentioned in the dictionaries referred to above, it will not be correct to construe the word 'distribution ' in a purely literal sense so as to mean only division of a particular kind or to particular persons. The words, apportionment, allotment, allocation, classification, clearly fall within the broad sweep of the word 'distribution '. So construed, the word 'distribution ' as used in Art.39(b) will include various facets, aspects, methods and terminology of a broad based concept of distribution. In other words, the word 'distribution ' does not merely mean that property of one should be taken over and distributed to others like land reforms where the lands from the big 764 landlords are taken away and given to landless labourers or for that matter the various urban and rural ceiling Acts. That is only one of the modes of distribution but not the only mode. In the instant case, as we have already pointed out, distribution is undoubtedly there though in a different shape. So far as the operators were concerned they were mainly motivated by making huge profits and were most reluctant to go to villages or places where the passenger traffic is low or the track is difficult. This naturally caused serious inconvenience to the poor members of the community who were denied the facility of visiting the towns or other areas in a transport. By nationalising the transport as also the units the vehicles would be able to go to the farthest corner of the State and penetrate as deep as possible and provided better and quicker and more efficacious facilities. This would undoubtedly be a distribution for the common good of the people and would be clearly covered by cl.(b) of Art.39. In the Karnataka case, the word 'distribution ' clearly fell for interpretation and Iyer, J. made the following observations: "The key word is 'distribute ' and the genius of the article, if we may say so, cannot but be given full play as it fulfils the basic purpose of restructuring the economic order. Each word in the article has a strategic role and the whole article is a social mission. It embraces the entire material resources of the community. Its task is to distribute such resources. Its goal is so to undertake distribution as best to subserve the common good. It reorganizes by such distribution the ownership and control. . Furthermore, in the Sanjeev Coke Manufacturing Co. 's case, Reddy,J., observed thus: "To 'distribute ', even in its simple dictionary meaning, is to 'allot, to divide into classes or into groups ' and 'distribution ' embraces 'arrangement, classification, placement, disposition, apportionment, the way in which items, a quantity, or the like, is divided or apportioned; the system of dispersing goods throughout a community. " The very pertinent expression used by Reddy,J. is that those economists who believe in bringing about a social revolution would 765 hardly find any difficulty in treating nationalisation of transport as a distributive process for the good of the community. This is exactly what the Act seems to achieve in securing the objects contained in Art.39(b)&(c) of the Constitution. By nationalising the transport services the transport business which was run by a handful of capitalists would prevent the concentration of wealth in the hands of a few and would therefore benefit the community at large. This aspect of the matter was also argued in the Karnataka case but strongly repelled, were Untwalia, J. pointed out that taking over the transport services was undoubtedly for the common good of the people and was not meant for augmenting the revenue of the State because the profits, if any, made by the services would go to accomplish projects for the betterment of the community and made the following observations: "The legislature thought that to prevent such misuse and to provide for better facilities to transport passengers and to the general public it is necessary to acquire the vehicles, permits and all rights, title and interest of the contract carriage operators in or over lands, buildings, workshops and other places and all stores, instruments, machinery, tools, plants, etc., as mentioned in sub section (2) of section 4 of the Act." Thus, in short, the position seems to be that by virtue of the nationalisation policy the twin objects of Art.39(b)&(c) are fully secured. Finally, it was argued by the respondents that even if the transport services were nationalised, there was absolutely no rationale behind the taking over of the vehicles of the operators, some of whom were running on hire purchase basis. This argument has no force because once it is recognised that for the purposes mentioned in Art.39(b)&(c) the entire service including its units, workshops, etc, could be taken over on payment of some compensation, the fact that the vehicles should be spared is only an argument of desperation. These are, therefore, the important contentions advanced before us by the respondents and the reasons given by the High Court in striking down the Act. We are of the opinion that in fact this 766 case is clearly covered by the decision of the Karnataka case as reinforced by the later decision of Sanjeev Coke Manufacturing Co. 's case and all the contentions raised before us by the respondents (operators) fail. The Act is, therefore, held to be constitutionally valid in all respects. We allow the appeals, dismiss the writ petitions, set aside the judgment of the High Court and hold that the Act is constitutionally valid. However, as some portions of the Act, in view of the time lag, may have become out of date, a few consequential amendments may have to be made. Mr. Ray, appearing for the appellant, had also conceded that so far as the question of compensation was concerned, it was open to the arbitrator or the compensation authority not to confine itself strictly to the yardstick contained in the second schedule to the Act but they can make marginal changes as the circumstances require. As a appellants have succeeded in the appeals, we revoke the interim order passed by this Court on June 26, 1973 directing the appellants to pay Rs. 100 (Rupees one hundred) per day to the respondents. In the peculiar circumstances of this case we make no order as to costs. N.V.K. Appeals allowed and Petitions dismissed.

A first information report is not a substantive piece of evidence and can only be used to corroborate the statement of the maker under section I57 Of the Evidence Act or to contradict it under section 145 of that Act. It cannot be used as evidence against the maker at the trial if he himself becomes an accused, nor to corroborate or contradict other witnesses, It is a cardinal principle of criminal jurisprudence that the innocence of an accused person is presumed till otherwise proved. It is the duty of the prosecution to prove the guilt of the accused subject to any statutory exception. The maxim falsus in uno, falsus in omnibus has not received general acceptance in different jurisdictions in India, nor has it come to occupy the status of a rule of law. It is merely a rule of caution. All that it amounts to is that in such cases the testimony may be disregarded and not that it must be disregarded. The doctrine merely involves the question of weight of evidence which a court may apply in a given set of circumstances but it is not a mandatory rule of evidence,

minal Appeal No. 236 of 1969. Appeal by special leave from the judgment and Order dated March 13, 1969 of the Madhya Pradesh High Court in Miscella neous Criminal Case No. 268 of 1967. Ram Punjwani and P. C. Bhartari, for the appellant. R. P. Kapur and I. N. Shroff, for the respondent. 393 The Judgment of the Court was delivered by Mitter J. , This appeal by special from a judgment and order of the High Court of Madhya, Pradesh dismissing the ' writ petition of the appellant challenging the, order of the State Government under section 5 of the (Act XXIII of 1961) forfeiting the copies of a book published by the appellant under section 4(1) of the Act, can be disposed of on the short ground that the order did not disclose the grounds of the opinion formed by the State Government. The Criminal Law (Amendment) Act, 1961 (hereinafter referred to as the 'Act ') empowered the State Governments by section 4 to make order declaring any newspaper or book as defined in the Press and Registration of Books Act, 1867 or any other document wherever printed, to be forfeited to the Government if it appeared to the Government that the said book etc. questioned the territorial integrity or frontiers of India in a manner which was or was likely to be prejudicial to the interests of the safety or security of India. The relevant provisions of the Act are as follows : " section 2. Whoever by words either spoken or written, or by signs, or by visible representation or otherwise, questions the territorial integrity or frontiers of India in a manner which is, or is likely to be prejudicial to the interests of the safety or security of India, shall be punishable with imprisonment for a term which may extend to three years, or with fine, or with both. (1) Where any newspaper or book as defined in the Press and Registration of Books Act, 1867, or an other document,_ wherever printed, appears to the State Government to contain an matter the publication of which Is punishable under section 2 or sub section (2) of section 3, the State Government may, by notification in the Official Gazette, stating the grounds of its opinion, declare every copy of the issue of the newspaper containing such matter and every copy of such book or other document to be forfeited to the Government, and thereupon any police officer may seize the same wherever found and any Magistrate may, by warrant authorise any police officer not below the rank of Sub Inspector to enter upon and search for the same in any premises where any copy of such issue or any copy of such book or other document may be or may be reasonably suspected to be. (1) Any person having any interest in any news book or other document in respect of which an forfeiture has been made under section 4 may, within two months from the date of such order, apply to 394 the High Court to set aside such order on the ground that the issue of the newspaper, or the book or other document in respect of which the order was made did not contain any matter of such a nature) as is referred to in sub section (1) of section 4. (2) The provisions of sections 99 C to 99 F of the Code of Criminal Procedure, 1898, shall apply in relation to an application under sub section (1) as they apply in relation to an application under section 99 B of that Code and the reference in section 99 D to seditious or other matter of such a nature as is referred to in subsection (1) of section 99 A of that Code shall be construed as reference to any matter of such a nature as is referred to in sub section (1) of section 4 of this Act. (3) No order passed or action taken under section 4 shall be called in question in any Court otherwise than in accordance with the provisions of this section. " The appellant who was admittedly the proprietor of the Narmada Printing Works, Jabalpur had published a book under the name and style of "Madhyamic Bhoogol (Part I for Classes IX and X) written by C. P. Saxena. On 1St July, 1967 the State Government passed the order which is impugned in this case: "Whereas the books specified in the Schedule below question the territorial integrity and frontiers of India in a manner which is likely to be prejudicial to the interest of the safety and security of India; And whereas it appears to the State Government that the said three books contain matter the publication of which is punishable under section 2 of the (No. 23 of 1961); Now therefore in exercise of the powers conferred by, sub section (1) of section 4 of the Act, the State Government hereby declares every copy of the said three books and all other documents containing copies, reprint and repro duction of the said books to be forfeited in favour of the Government. " The second item in the Schedule relates to the appellant 's publication From the communication of the Deputy Secretary to the Government of Madhya Pradesh dated 5th August 1967 it would appear that the State Government took objection to pages 138, 147 and 149 of the said book as containing wrong maps. 395 According, to the said communication : "These books contain maps of India, part of India, maps of countries adjacent to India and maps of Asia. All these maps involve the external boundary of India which has been found to be grossly incorrect. Besides this, the island territories of 'Laccadive, Minicoy and Amindivi Islands ' which form an integral part of India are omitted together from every map of India. In some of the maps the territory of Bhutan has been omitted while in other Indo Pakistan boundary is ignored. " The communication refers not only to the publication with which we are concerned in this case but also two other publications both of which appear to be books on geography for school students. The appellant filed his writ petition on August 29, 1967 before High Court challenging the order of the 1st July 1967 inter alia on the ground That the grounds for the opinion of the State Government which had to be given in terms of section 4 of the Act were non existent in the order. He therefore filed the petition, within two months of the date of the order forfeiting the book in terms of section 5 of the Act. In the counter affidavit of the State the stand taken was that the State Government was not bound to place details of information on the basis of which its satisfaction was arrived at. Reference was however made 'in the counter affidavit to a communication of the Director of Map Publications to the Director of Public Instruction dated 21st March 1967 in which it was stated with regard to all the three alleged offending books that "they contain maps of India, part of India, maps of countries adjacent to India and maps of Asia. All these maps involve the external boundary of India which has been found to be grossly incorrect. Besides this, the island territories of 'Laccadive, Minicoy and Amindivi islands ' which form an integral part of India are omitted together from every map of India. In some of the maps the territory of Bhutan has been omitted while in other Indo Pakistan boundary is ignored. " The High Court of Madhya Pradesh took the view that the impugned order could not be said to have omitted to state the grounds for the opinion of the State Government. According to the High Court : "the grounds on which the said opinion was based were that the books contained matter which questions the territorial integrity and frontiers of India in a manner which is likely to be prejudicial to the interest of the safety and security of India." 8 L1286SupCI/72 396 In our view the High Court had clearly gone wrong in this view of the law on the subject. According to the Oxford Dictionary the meaning of the word 'ground ', in this connection must be "base, foundation, motive, valid reason. " what the State Government did in this case in the opening paragraph of the order was merely to quote a portion of the words of section 2 namely, that the books "questioned the territorial integrity and frontiers of India in a manner which is likely to be prejudicial to the interest of the safety or security of India". The order gives no indication of the facts or the statements or the representations contained in the book which according to the State Government offended section 2. In the order itself there is no reference to any map or any text in the book which would come within the mischief of the said section. A book may contain matter questioning the territorial integrity and frontiers of India in many ways one of which may be a wrong map which does not show the proper boundaries of India, either by omitting a portion of the Indian territory therefrom or by depicting a portion of what is really Indian territory as belonging to some other State. A book may also come within the mischief of section 2 if there is any express reference in the text containing suggestions based on historical or political or other reasons that some portion of what is generally known to the public as Indian territory is not so. There is a considerable body of statutory provisions which enable the State to curtail the liberty of the subject in the interest of the security of the State or forfeit books and documents when in the opinion of the Government, they promote class hatred, religious intolerance, disaffection against the State etc. In all such cases, instances of some whereof are given below the State Government has to give the grounds of its opinion. Clearly the grounds must be distinguished from the opinion. Grounds of the opinion must mean the conclusion of facts on which the opinion is based. There can be no conclusion of fact which has no reference to or is not ex facie based on any fact. The provisions of the Act have a close parallel in section 99 A of the Code of Criminal Procedure, 1898 in which a large number of matters are mentioned which according to the Government may lead it to form the opinion that the publication offended the said section. There are also decisions under the Indian Press Act which illustrate what the grounds in a case like this must be. In re. Mahomed Ali(1), a case of an order of forfeiture of a pamphlet under the Press Act of 1910, the order of Government went to show that the pamphlet "Come over to Macedonia and help us" contained words of the nature described in section 4 sub section (1) of the (1) 41 Calcutta 466. 397 Indian Press Act, 19 1 0 inasmuch as they are likely to bring into hatred or contempt certain classes of His Majesty 's subjects in British India. According to Jenkins C.J. (p. 476): "Those responsible for this Act foresaw this, and so they specifically provided that the forfeiting notification should state the grounds of the Local Government 's opinion. But when we turn to the notification no such grounds are stated; nothing in the nature of a fact is set forth, there is merely a citation of those words of the section which are invoked. But the repetition of an opinion cannot be its grounds, and yet that is all that the notification furnishes in the shape of grounds. This is obviously insufficient and not a compliance with the terms of the Act. " According to the other learned Judge Stephen, J. (p. 487) "The ground of an opinion must in this case, if not always, be a fact or facts, and no fact is disclosed merely by a specific relation of the elements that the law requires to be present in order for legal consequence to follow. " In Arun Ranjan Ghose vs State of West Bengal(1) a case under sections 99 A and 99 D of the Code of Criminal Procedure it was stated by Chakravartti, C.J. (p. 497): "It is useful to consider here what is meant by grounds of opinion. The formation of an opinion by Government is undoubtedly the ground for the action taken by them, but the grounds for the opinion are obviously different. The opinion, after it has been formed, furnishes a ground to Government for taking action contemplated, but the grounds on which the opinion itself is formed are and must be other grounds ' Those grounds must necessarily be the import or the effect or the tendency of matters contained in the offending publication, either as a whole or in portions of it, as illustrated by passages which Government may choose. " In Harnam Das vs State of Uttar Pradesh (2 ) the order under section 99 A of the Code of Criminal Procedure which was made went to show that the State Government declared the books forfeited on the ground that the said books contained matter the publication of which was Punishable under section 153 A and 295 A of the Penal Code. The two sections of the Indian Penal Code have little in common inasmuch as section 153 A relates to an offence of (1) (2) 398 promotion or attempt to promote feelings of enmity or hatred between different classes of citizens of India and section 295 A relates to an offence maliciously intended to outrage he religious feelings of any such class by insulting the religion or the religious belief of that class. The order which was considered by the court in that case gave no indication which formed the reason for Government taking the view that the book should be forfeited. The Court held that the order did not as it should have stated the rounds of opinion. It is not known which communities were alienated from each other or whose religious beliefs were wounded. We may also refer to article 22(5) of the Constitution which lays down that when any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order. In considering the question as to what the grounds of detention meant when an order under Preventive Detention Act was made this Court said in Naresh Chanra, Ganguli vs The State of West Bengal & others(1): " . the grounds for making an order of detention, which have to be communicated to the detenu as soon as practicable, are conclusions of facts, and those conclusions of facts have to be communicated to the detenu as soon as may be. " We may also refer to the judgment of this Court in State of Bombay vs Atma Ram Sridhar Vaidya(2), a case under the Pre ventive Detention Act, Kania C.J. said (p. 178): "By their very nature the grounds are conclusions of facts and not a complete detailed recital of all the facts . These conclusions are the "grounds" and they must be supplied. ' ' All the above decisions in our opinion clearly show what the requirements of the are and it appears to us that the State Government merely gave it 's opinion and not the grounds for its opinion. As such the judgment of the High Court must be set aside and the order of Government dated July 1, 1967 must be quashed. The appellant will be entitled to return of all the books forfeited. V.P.S. Appeal allowed. (1) at 421.

Differences having arisen among members of a family governed by the Aliyasantana Law, all the major members of the family except one referred the disputes to arbitration. As per the authority given to the arbitrators the arbitrators had to decide the disputes in accordance with the Aliyasantana Law of inheritance, according to which, partition was impermissible except with the consent of all the adult members of the family. The arbitrators were not required to divide the Kutumba properties on Kavaru basis; but the arbitrators divided the properties between the two Kavarus, which were then in existence in the family, in order to avoid disputes and to fix the responsibility for income, and loss. There was an award decree in terms of the award, Thereafter, the members of one Kavaru filed a suit for partition under section 35 of the Madras Aliyasantana Act, 1949, and the appellants and some other members of the other Kavaru, contended that the Kutunba had been partitioned by the award, decree or, that the arrangement thereunder was a deemed partition under section 36(6) of the Act. The trial court dismissed the suit, but the High Court, in appeal, held that the award decree did not evidence partition, and that it was not covered by section 36(6) as it was an award decree and not a mere award. Dismissing the appeal to this Court, HELD : (1) When the Act came into force, in addition to joint living by the members of the Kutumba, three types of arrangements were in existence in various Kutumbas, namely, (a) When the senior most member of the family (Yejman) or (Yejmanthi) made maintenance allotments which were purely temporary in character, (b) a permanent arrangement for maintenance, and (e) partition with the consent of all adult members. In the ease of a permanent, arrangement for maintenance it was usually done on Kavairu basis, the jointness of the family was kept intact, but arrangement was made for separate living and separate management of Kutumba properties on a permanent basis which; could not be disturbed without the consent of all the adult members of the Kutumba. Such of these permanent arrangements which came within the scope of section 36(6) are deemed to be partitions despite the fact that under those arrangements the jointness of the Kutumba was kept intact. [386A F] (2) The conditions to be satisfied before a document can be considered as coming within the scope of section 36(6) are : (a) there is a registered family settlement or award (b) all the major members of the Kutumba are parties to it; (c) the whole of the kutumba properties have been or were intended to have been distributed; and (d) the distribution is among all the Kavarus of the Kutumba for the separate and absolute enjoyment in perpetuity. [387 A D] 384 Gummanna Shetty vs Nagaveniamma, ; , followed. (3) In the present case, the award decree did not evidence a partition; because it contained clauses inconsistent with an out and out partition. The award decree recited that 'proper arrangements were made for the maintenance of the Kutumba Without disrupting its oneness '; that both Kavarus should together conscious functions; and the members of one of the Kavarus were to show accounts to the senior most member who continued to be the yejman of thee entire kutumba. [388G H] Ammalu Amma vs Vasu Menon, A.I.R. 1944 Mad. 108, approved. (4) (6) Award decrees have to be considered as awards for purposes of section 36(6). [391B C] (a) The principle underlying section 36(6) is not to disturb the finality of, arrangements made. If that were so, such permanency should be available, in a larger measure to an award decree, for otherwise, parties could enforce partition ignoring award decrees while they would be bound by awards. [390 G H] (b) After the coming into force of the , all awards had to be compulsorily made decrees of courts if they were to have force. The Akiyasahntana Act came into force in 1994 and the legislature would not have denied to the awards passed after 1940 (in terms of which decrees would have been passed) the benefit of section 36(6) of the Aliyasanatana Act. The Legislature, by using the expression 'award ' intended to include both awards simpliciter as well as awards which had been made decrees of Courts. [391A B] Parameshwari Hengsu vs Venkappa Shetty and ors., (1961) Mys. L.J. 686 on the interpretation if section 36(6), overruled. (5) (a) But the second condition for the application of the section is not satisfied in the present case, as one of the major members of the Kutumba was not a party to the award. [392D] (b) Even though he acquiesced in the arrangements made under the award decree he would not be a party to the arrangement. Before the arrangement can be deemed to be a partition under section 36(6), all the conditions should be fully satisfied, and substantial compliance is not sufficient, since, it is a case of a deemed partition and not an actual partition. [392E F]

Appeals Nos. 303 to 307 of 1960. Appeals by special leave from the judgment and order dated May 14, 1957, of the Madras High Court, in Case Referred No. 1 1 1 of 1953. R. Ganapathy Iyer and G. Gopalakrishnan for the appellant. K. N. Rajagopal Sastri and D. Gupta, for the respondent. January 18. The Judgment of the Court was delivered by KAPUR, J. These appeals are brought by special leave against the judgment and order of the High Court of Madras in an Income tax reference under section 66(1) of the Indian Income tax Act, hereinafter termed the " Act". The question referred was : " Whether the income tax assessment of the business of I Spade Clover Beedies ' belonging to the estate of the deceased and carried on during the previous years 1943 to 1946 as an association of persons for the assessment years 1944 45 to 1947 48 is valid? " And this question was decided in the affirmative and therefore against the appellants. The facts leading to the appeals are that one Khan Sahib Mohamed Oomer Sahib, who was carrying on the business of manufacture and sale of Spade Clover brand Beedies, died on December 17, 1942, leaving a minor son Mohamed Noorullah (the appellant) by his pre deceased wife, a widow, Luthfunnissa Begum, and four children by her who were all minors at the date of the death of Oomer Sahib. Noorullah through his next friend applied to sue in forma pauperis and during the pendency of those proceedings two Advocates of the Madras High Court were appointed joint receivers of the properties of the deceased on March 17, 1943. This appointment was by consent of parties. On 517 May 10, 1943, the widow, Luthfunnissa, filed a suit for partition and also applied for the continuance of the joint receivers. Noorullah opposed this application but by an order dated May 25,1943, the receivers were ordered to be continued and they carried on the business as before. In due course a preliminary decree for partition was passed. The High Court has observed that none of the parties wanted to break the continuity of the business after the death of the father. In the beginning Luthfunnissa and Dawood carried on the business and from the date of their appointment, i.e., May 17, 1943, the joint receivers continued the business till November 25, 1946, when during the course of the proceedings the business was put tip for sale by auction between the co heirs and was purchased by Noorullah. The years of assessment are 1944 45 to 47 48, the relevant accounting years for which were the calendar years 1943 to 1946. The profits of the business were assessed to tax in the hands of the receivers as the income of an association of persons and the contention of the appellant that the share of the profits of each of the co heirs should have been separately taxed, was rejected by the Income tax authorities as well as by the Income tax Appellate Tribunal. The only question which was raised both before the department as well as before the Tribunal was the assessment to tax of the income of the business. There was no dispute in regard to the income of the properties which was taxed under section 9(3) of the Act. The business was inherited by the heirs of Oomer Sahib and was carried on without break during the accounting years first by the widow and Dawood and then jointly by the receivers. The nature of the business was such that it could not be divided up and had to be carried on as one whole with a unity of control and all the parties desired to preserve and did preserve this unity. The opposition by the appellant to the application for receivership filed on behalf of Luthfunnissa, the widow, was only on the ground that the appellant wanted different persons to be appointed and not to the continuance of the business or to the unity 518 of control. The Income tax Appellate Tribunal in its order stated : " In fact, there was no change in the continuity of the business and from the date of death of Md. Oomer Sahib up to 24th March, 1943, the business was carried on by mutual agreement and consent by Luthfunnissa Begum acting on her own behalf and on behalf of her minor children and her minor step son Md. Noorullah. There can, therefore, be no gain saying the fact that immediately after the death of Md. Oomer his estate was inherited and run by combination of individuals who had pooled their resources for the common purpose of earning income. " And the High Court has observed The opposition was apparently to the persons to be appointed receivers and not to the continuance of the business or to the unity of control that was necessary. Noorullah himself had realised that when he applied earlier for the appointment of receivers to conduct the business among other things. Despite Noorullah 's opposition when Luthfunnissa asked for the continuance of receivers in her application No. 1162 of 1943, the existence of the desire of all the co sharers including Noorullah for the continuance of the business with proper persons to take charge of the business under the orders of court was clear. That intention was material on which the departmental authorities and the Tribunal which agreed with them could find that the co sharers did constitute an 'association of persons '. " From the finding of the Tribunal it is obvious that the business was such that it was not capable of division, it being the manufacture and sale of " Beedies " of a particular brand and the finding of the Tribunal was that the business was carried on with the consent of the parties. On this finding it has to be decided whether the business was the business of an " association of persons. " and its profits are assessable as such ? The contention of counsel for the appellant was (1) that on the death of Md. Oomer his estate including the business devolved upon his heirs in specific 519 shares; and (2) there was no consensus of opinion between the heirs which is shown by the fact that the appellant filed an application to sue in forma pauperis and before that application could be decided the widow sued for partition and even though receivers were appointed objection was taken by the appellant to the ' appointment of receivers. But these facts do not assist the case of the appellant. As has been said above, the business was in the first instance carried on by the widow and Dawood on behalf of the heirs of Oomer and subsequently when the suits were brought none of the parties wanted to break the unity of control of the business nor its continuity and it was of such a nature that it could not be carried on without such consensus and therefore the receivers carried on the business. On these findings the High Court has rightly come to the conclusion that the business was a business of an association of persons. This Court in Commissioner of Income tax, Bombay vs Indira Balkrishna (1) considered the question as to what an association of persons means. The test laid down in three cases: In re B. N. Elias & Others (2); Commissioner of Income tax vs Laxmidas Devidas and Another (3) and In re Dwarkanath Harischandra Pitale (4) was accepted by this Court as correctly laying down the crucial test for determining what is an association of persons and that in each case the conclusion has to be drawn from the circumstances. In the first case the test was laid down as applying to combinations of individuals who were engaged together in some joint enterprise but not constituting a partnership. Such a combination of persons formed for the promotion of a joint enterprise banded together as if they were " coadventurers " it was held would constitute an asssociation of individuals. In the second case, that is, Commissioner of Income tax vs Laxmidas Devidas and Another (3) Beaumont, C. J., at p. 589 laid down the test as follows: " In my opinion, the only limit to be imposed on the words 'other association of individuals ' is (1) ; (2) 67 (3) (4) , 520 such as naturally follows from the fact that the words appear in an Act imposing a tax on income, profits and gains, so that the association must be one which produces income, profits or gains. It seems to me that an association of two or more persons for acquisition of property which is to be managed for the purpose of producing income, profits or gains falls within the words 'other association of individuals ' in section 3; and under section 9 of the Act, the Association of individuals is the owner of the property and as such is assessable." In that case it was also held that the fact that one of the assessees was a minor during the year of the assessment did not affect the question. In In re Dwarkanath Harischandra Pitale (1) the assessees were two brothers who became entitled to certain house properties as tenants in common and held and managed the properties as such and derived profit therefrom. It was held that though the assessees in the first instance did not constitute an association of individuals, they became so when they elected to retain the property and managae it as a joint venture producing income. The test there laid down was that as soon as there was election to retain the property and manage it as a joint venture the persons so electing became an association of individuals. The Rangoon High Court in The Commissioner of Income tax, Burma vs M. A. Baporia and Others (2) also laid down the same interpretation of the words " association of individuals ". That was a case,, of Mohammedan co heirs and it was held that by merely inheriting a share of property no person can become a member of an association of individuals unless there is some forbearance or act upon his part to show that his intention and will accompanied the new status, that is, an association of individuals. One of the co heirs in that case was appointed an agent to realise the income from the properties left to the co heirs by their father and mother under Mohammedan Law and that was held to be sufficient to constitute them an association of individuals. (1) (2) 521 It is unnecessary to refer to other cases. Taking the test as laid down by this Court in Indira Balkrishna 's case (1) it appears to us that the appellant and other co heirs were rightly assessed as an association of persons. No doubt a suit for partition had been filed which was preceded by an application made by the appellant to sue in forma pauperis, but the suit in reality was for ensuring the proper conduct of the business and not its discontinuance. During the period that the suit was pending and even before that, i.e., after the death of the father the business was carried on by the consent of all parties as one unit as indeed it had to be, because it had to be carried on as one unit with unity of control and therefore the co heirs did form an association of persons within the meaning of section 3 of the Act. Counsel for the appellant relied on section C. Mazumdar,Receiver, Trigunait Brothers ' Estate vs Commissioner of Income tax (2). That was a case of persons who formed a joint family being governed by the Mitakshara School of Hindu Law. A suit for partition was filed and the court appointed a receiver and a preliminary decree was passed but the receiver was continued in regard to certain portion of the property and the income was assessed by the taxing authorities as the income of an association of persons. It was held that the income from property could not be taxed as such because the shares of the parties were definite and ascertainable. The amount paid by the lessees could not be taxed in a lump sum as being the profits of a business carried on by an association of persons and the assessment was, therefore, made in accordance with the provisions of section 9(3). It was also held that the assessees were not carrying on a trade or business themselves and there was no association of persons as contemplated by the Act. But that case can be of no assistance in the decision of the matter now before us. The income to be assessed there was not income of any business carried on by or on behalf of the assessees and it was held that letting out property was not a trade or business. With regard to the income received by the receiver (1) ; (2) 522 who employed contractors to carry on the business of coal cutting and raising it on the pit bead, it was held that that was not the income of an association of persons on the ground (1) that the receiver was in possession and he employed contractors for coalcutting and raising of coal; (2) that the assessees had no hand in the business which produced royalty and (3) that the assessees had disassociated themselves from each other because of this partition suit. In our opinion the case so far as it relates to the carrying on of the business and in so far as it is contrary to the opinion expressed by this Court in Indira Balkrishna 's case (1), is not correctly decided. Another case relied upon by the counsel for the appellant was Buldana District Main Cloth Importers ' Group, Khamgaon vs Commissioner of Income tax, Nagpur (2). In that case a certain group of persons were directed to import cloth in the district and had to work a scheme for the distribution and sale of cloth which had been evolved by the District authorities. That was held not to be an association of persons. It appears that although they were appointed as a group of importers, all of them did not participate in that scheme during the entire period. There were changes in the personnel of the group from time to time and there was no compulsion to work the scheme. On these facts it was held that the group did not agree to carry on the business or share the profits. That case must be taken to have been decided on its own facts and does not in any way affect the meaning of the phrase " association of persons. " Counsel also relied on Khan Bahadur M. Habibur Rahman vs Commissioner of Income tax, Bihar & Orissa (3 ) in which a waqf deed was executed by which the assessee dedicated the income with ultimate benefit to the poor and constituted himself the sole mutwali of the trust. The deed provided that the beneficiaries should be benefited concurrently and in the same proportion. It was held that section 41(1) was inapplicable and the assessee should, therefore, be taxed on the basis of profits falling to the share of (1) ; (2) (3) 523 each beneficiary and not on the footing that all the beneficiaries constituted an association of persons. Fazl Ali C. J. (as he then was) there observed at p. 194: " It seems to me therefore that the finding of the Tribunal that there were only 24 persons who were entitled to share the profits in the accounting year and that they were entitled to equal shares therein must be accepted. As it does not seem to have been contended that the assessee had any other relations than those enumerated by the Tribunal who would be entitled to share the profits, it is academic to discuss whether the various categories of persons referred to by the Appellate Assistant Commissioner of Income tax were included in the term 'family ' or not." On this ground the income was not assessed as the income of an association of persons and that case " as also decided on its own facts. The question in the present case is as to what income was to be taxed. The income was the income of a business which was carried on as a single business by the consent of all the parties. The mere fact that a suit was pending at the time for the administration of the estate of the deceased or for the separation of the shares of the co heirs does not affect the incidence of taxation in this case, because the business was carried on, as said above, as one business with unitary control and by the consent of the parties. The High Court was right in holding that the income was assessable as an income of an association of persons. The appeals must, therefore, be dismissed with costs. One hearing fee. Appeals dismissed.

The business of manufacture and sale of a particular brand of beedies was carried on by 0, a Mohamedan, who died in 1942 leaving a minor son, the appellant, by his pre deceased wife, his widow L, and four children by her. Proceedings were taken first by the appellant and later on by L in connection with the partition of the properties left by 0, including the business, and during the pendency of the proceedings the business was carried on by receivers who had been appointed by the court by consent of parties on May 17, 1943. The receivers continued the business till November 25, 1946, when during the course of the proceedings the business was put up for sale by auction between the co heirs and was purchased by the appellant. For the years of assessment, 1944 45 to 1947 48, for which the accounting years were 1943 to 1946, the profits of the business were assessed to income tax in the hands of the receivers as the income of an association of persons, and the claim of the appellant that the shares of the profits of each of the co heirs should have been separately taxed was rejected by the income tax authorities. The facts showed that the business was inherited by the heirs of 0 and was carried on without break during the accounting years first by L and another and then by the receivers, that the nature of the business was such that it could not be divided up and that all the parties desired that the business should be carried on as one whole with a unity of control. Held, that on the finding that the business was carried on by the consent of all parties as one unit with unity of control, the co heirs did form an association of persons within the meaning of section 3 of the Indian Income tax Act, 1922, and that the income of the business was assessable as the income of an association of persons ; and the mere fact that a suit was pending at the time for the administration of the estate of the deceased or for the separation of the shares of the co heirs did not affect the incidence of taxation in the case. Commissioner of Income tax, Bombay vs Indira Balkrishna, ; , followed. 516 section C. Mazumdar, Receiver, Trigunait Brothers ' Estate vs Commissioner of Income tax, , disapproved in so far as it was contrary to the above decision of the Supreme Court.

Appeal No. 111 of 1971. (Appeal by Special Leave from the Judgment and Decree dated 30 8 1968 of the Mysore High Court in Regular Appeal No. 165/57) Sachin Chaudhuri and Narayana Nettar, for the Appellant. K. Sen, K.N. Bhatt and K.R.D. Karanath, for the Re spondent through L.Rs. 338SCI/76 892 The Judgment of A.N. Ray, C.J. and P.N. Shinghal, J. was delivered by Shinghal, J.M.H. Beg, J. gave a separate Opin ion. SHINGHAL, J. This appeal by special leave arises out of the judgment of the High Court. of Mysore dated August 30, 1968, upholding the order of District Judge, South Kanara, dated November 9, 1956. By that order the District Judge set aside the decision. of the Board of Commissioners for Hindu Religious Endowments, Madras, hereinafter referred to as the Board, that the institution known as Sri Manjuna tha temple at Dharmasthal, Puttur Taluk, South Kanaka district, was a 'temple ' as defined in clause (12) of sec tion 9 of the Madras Hindu Religious Endowments Act, 1926 (Madras Act II of 1927), hereinafter referred to as the Act. The Commissioner under the Madras Hindu Religious and Char itable Endowments Act feels aggrieved because the impugned judgment has the effect of taking the temple out of the control provided by the Act. The respondent in this appeal was the "supplemental" petitioner before the District Judge and was brought on record on the death of Manjayya Heggade who was the original petitioner in the petition under sub section (2) of section 84 of the Act. The controversy relates to the Manjunatha temple, in Dharmasthal, which is now the name ' of a village in Belthan gady taluk of South Kanara district of Tamil Nadu. The original name of the village was Mallarmadi. The locality in which the temple is situated was called Kukya Kudume, but it came to be known as Dharmasthal after the visit of Sri Vadiraja Swamiar of Sode Mutt, Udipi, in the 16th century, to which reference will be made in a while. It is not in dispute that, even according to the Heggade, Dharmasthal has a number of institutions including the following main institutions, 1. Nelleyadi Beedu, 2. Chandranatha Basthi, 3. Manjunatha temple, 4. Ammanvaru temple, and 5. Heggadeship. These institutions have been shown in exhibit A 59 which is said to be a rough sketch of the Dharmasthal. It is also not in dispute before us that "Daivas" were first estab lished in Nolleyadi Beedu, by an ancestor of Heggade who was a Jain, and were worshiped there. Heggade began to give charity to persons of all religions, and the institution became well known and travellers began to visit it in large numbers. It is the common case of the parties that Sri Vadiraja Swamjar of Sode Mutt, Udipi, who was a Sanyasi, happened to pass that way and was invited by Heggade to stay there. The Swamiar however refused to accept food there on the ground that it was "Bhuta Kshetra". Heggade felt very sorry as the great Sanyasi was starving in his house. It is said that Heggade thereupon arranged to instal the idol of Sri Manjunatha in the "garbagriha. " The Swamjar was ap peased and performed the first "pooja" in that temple, which thereafter came to 893 be known as Dharmasthal. This is said to have happened in the sixteenth century and is, at any rate, said to be the origin of the Manjunatha temple in the Dharmasthal campus. The Board started proceedings under section 84(1) of the Act to decide whether Sri Manjunatha temple was a temple as defined in clause (2) of section 9 of the Act. Heggade urged before the Board, inter alia, that all the institu tions in Dharmasthal formed a single unit representing a private institution, that it had been rounded by his ances tors on their own private land, that there was no dedication to the Hindus and they could not claim any right of worship, that Dharmasthal was Jain in character, that it was a charitable but not a religious institution, that his status was not akin to that of a mere trustee and that "Heggadeship" was intimately and inseparately connected with the Dharmasthal institution and Manjunatha temple. The Board made an enquiry and reached the conclusion that Manjunatha temple was a separate entity and was the most important institution and that it was not the private property of the Heggade. I also held that it was not a Jain institution, but was a Hindu temple, and that it was a religious and not merely a charitable institution for its charity was connected with the temple. The Board also held that the public had used the temple freely ever since its foundation. It accordingly decided that Manjunatha was a temple as defined in the Act even though its trusteeship vested in Heggades who were Jains. As has been stated, an application was made by Manjayya Hegde to the District Judge, under sub section (2) of sec tion 84 of the Act for setting aside the Board 's decision. It was specifically pleaded in that application that the entire institution known as Dharmasthal was a "composite" institution and that his ancestors always claimed that the Manjunatha Devaru, its properties and deities belonged to them personally and that its 'patta ' stood in their names from time immemorial. On that basis, it was pleaded further that as the properties were outside the scope of the enquiry under section 84 of the Act, the Act "did not apply and the Board had no jurisdiction to hold an enquiry under section 84. " A counter affidavit was flied on behalf of the Board in which it was pleaded that Manjunatha temple of Dharmasthal was "an independent entity being a separate temple, owning its own property and having separate income. " It was pleaded further that there were properties in the name of the deity of the Manjunatha in Mysore State and other places. The District Judge did not frame any issued but formulated some points for determination including the points whether Manjunatha Devaru was only a part of the institution known as Dharmasthal, and not a separate insti tution in itself, and whether the provisions of the Act did not apply to it ? He recorded the evidence and heId that Manjunatha temple was one of the 3 or 4 shrines maintained from the income of the institution known as Dharmasthal, Heggade was a component part of the institution. the temple stood on the private land of Heggade, the Manjunatha shrine was a Hindu institution but it was so mixed up and connected with other Jain institutions that it was practically impos sible to separate it, and that Dharmasthal was a happy blending of charity and religion. The District Judge held further that the Manjunatha shrine was the private 894 temple of the Heggade, it had not been dedicated to the Hindu public, and it was not used by the public as of right. The District Judge did not decide whether the shrine of Ammanvaru and other deities was a Jain institution. He accordingly held that though the Manjunatha shrine may be a Hindu shrine, it was private property of the Heggade and the provisions of the Act were not applicable to it. The Dis trict Judge accordingly set aside the order of the Board dated March 9, 1949. The Commissioner filed an appeal to the High Court against that judgment of the District Judge dated November 9, 1956. One of the main questions presented for determina tion before the High Court was whether "all the institu tions" of Dharmasthal formed a single composite institution. It was not in dispute before the High Court that, apart from the question of Manjunatha temple being an adjunct to the composite Dharmasthal institution, the temple was not an institution at all. Even the Heggade did not deny the exist ence of Manjunatha temple as an institution and took the specific plea in his affidavit dated July 22, 1949 that the Manjunatha Deity "is a private institution belonging to the Heggade. " The High Court examined the "crucial question" whether Manjunatha was a temple within the definition of the Act and whether it was a "Religious Endowment" under section 9(11). It held that the Manjunatha temple was an adjunct to the composite institution of Dharmasthal and according to the customs and usages of the institution that temple could not be separated from the rest of the institution, that Dharmasthal was both a religious and charitable institution, that Manjunatha was a deity worshipped both by the Hindus and the Jains in accordance .with their respective faiths and that it was neither an exclusively Hindu deity nor an exclusively Jain deity. The High Court referred to the pleadings and the evidence and held that the institution was rounded by a Jain, its administration remained exclusively Jain since its inception, and that as Jains also worshipped along with Hindus, it could not be inferred that there was an implied dedication to the Hindus exclusively. The High Court thus hold that the temple was not a temple as defined in the Act, and it was therefore not necessary to examine the question whether it was a private temple of the Heggade. In the result, the High Court took the view that the Act did not apply to the institution and the Board had no jurisdic tion over it. It therefore dismissed the appeal with costs. The Commissioner has obtained special leave, and this is how the appeal has come up here for consideration. As the controversy in this case relates to the applica bility of the Act to the Manjunatha temple, it will be convenient to examine its relevant provisions. The preamble of the Act states, inter alia, that it is meant to provide for the better administration and gover nance of "certain Hindu religious endowments" described in it. Section 2 makes it clear that the Act applies "to all Hindu public religious endowments". Private religious endowments are therefore outside its scope. Then there is an Explanation to the following effect, 895 "Explanation, for the purpose of this Act, Hindu public religious endowments do not include Jain religious endowments. " The effect of the section therefore is to exclude not only private religious endowments, but also Jain religious endowments and it is around the provisions of section 2 that the controversy in this case has centred. The exclusion of Jain religious endowments has been emphasised by section 3(b) which empowers the Local Government to remove the exclusion and extend the provisions of the Act, and the Rules framed thereunder, to Jain religious endowments, subject to such restrictions and modifications as may be considered proper. As no such extension has been notified, the Act does not cover Jain religious endowments. It is confined to Hindu religious "endowments" and will not be applicable where there is no such endowment at all. The expression "Religious endowment" or "Endowment" has been defined in clause (ii) of section 9 as follows, "(11) 'Religious endowment ' or 'Endow ment ' means all property belonging to, or given or endowed for the support of maths or temples or for the performance of any service or charity connected therewith and includes the premises of maths or temples but does not include gifts of property made as personal gifts or offerings to the head of a math or to the archaka or other employee of a temple. " It follows that "all property" belonging to, or given or endowed for the support of a temple or for the performance of any service or charity connected with the temple will constitute its endowment, including the premises of the temple. It would therefore be necessary to examine whether there is evidence to prove any such endowment in respect of Sri Manjunatha temple. In this connection it will be neces sary to examine which property, if any, was endowed to the temple, and by whom, and which, if any, could be said to be the premises of the temple to the exclusion of all other temples ? The expression "Temple" has been defined by clause (12) of section 9 in these terms ' "(12) 'Temple ' means a place, by whatev er designation known, used as a place of public worship and dedicated to, or for the benefit of, or used as of right by, the Hindu community, or any section thereof, as a place of religious worship. " The definition thus emphasises that only those temples will fall within the purview of the Act which are places of "public religious worship" and are "dedicated" to, or for the benefit of, or are used "as of right" by the Hindu community. It may be mentioned in this connection that, as has been stated, the District Judge has held that although the Manju natha temple may be a Hindu temple, it is the private temple Of the Heggade and is not a temple expressly dedicated to Hindus or a temple which could be 896 said to have been used or resorted to by the Hindu public as of right. The High Court has, on appeal, held on the other hand, that Manjunatha is neither an exclusively Hindu deity nor an exclusively Jain deity and that it is not therefore a temple as defined in the Act. It has therefore not examined the other question whether it is a public or a private temple. As regards the property of the temple, the High Court has held that it is an "adjunct" to the composite institution consisting of Hindu and Jain Gods and Daivas worshipped by Hindus and Jains. Counsel for the parties have argued at length on the questions whether Manjunatha temple is an exclusively Hindu temple and whether it is a place of public religious worship dedicated to or used as of right by the Hindu community as a place of religious worship. There is considerable evidence for deciding these questions, but even if it were assumed that the answer to these questions should be in the affirma tive, that would not be decisive, of the controversy, for the other question would still remain whether it is an "endowment"? It will be recalled ' that by virtue of section 2, the Act applies only to Hindu public religious "endow ments. " The definition of "Religious endowment" and "Endowment" in clause (11) of section is common. Accordingly, the questions which arise for consideration in this connection are whether the temple has property belonging to, or given or endowed for its support or for the performance of any service or charity connected therewith. It has not been disputed before us, and is in fact beyond controversy, that there is considerable movable and immovable property of the Dharmasthal as a whole i.e. the entire complex or campus consisting of Nelleyadi Beedu, Chandranath Basthi, Manjuna tha temple, Ammanvaru temple and the Heggadeship. But the question is whether there is any such property exclusively of the Manjunatha temple so as to constitute a Hindu reli gious endowment for purposes of section 2 of the Act ? It will be recalled that it is not in dispute here that it were the "Daivas" who were first established in Nelleyadi Beedu and were worshipped there by an ancestor of Heggade who was a Jain. The High Court has in fact found that it has been clearly established by the evidence on the record that the institution was rounded by a Jain and that ever since its inception its administration has remained in the hands of a Jain, namely, the Heggade. So when Vadiraja Swamjar of Sode Mutt, Udipi, came there as mentioned earli er, there was only worship of Jain "Daivas" and of "no God". This is to be found in the report (exhibit A 108) of T. Narayan Nambiyar in the matter of the Manjunatha temple, which was taken in evidence and has been relied upon by the High Court. It was at the instance of the Swamiar that the idol of Manjunatha was brought and installed in the "garbagriha" and it was he who performed the first 'pooja '. It was therefore the Swamjar who was responsible for the installa tion of the Manjunatha idol, which was a 'lingam ', in a campus where there were shrines of Devas like Nelleyadi Beedu, the Chandranatha Basthi and several other buildings. It could not therefore be said that the mere installation of the idol of Manjunatha brought into existence any such property as 897 could be said to belong to that deity or given or endowed for the support of its temple or for the performance of any service or charity connected therewith. There is, on the other hand, evidence to show that all the buildings and institutions of the Dharmasthal, which was the composite name of the entire campus or complex consist ing of the buildings mentioned in plan exhibit A 59, were situ ated in the land belonging to the Heggade, and of which he held a 'patta '. This is evident from exhibit A 103 which is a certified copy of the statement of Kumara Heggade dated July 31, 1820, which appears to have been read in evidence with the consent of the parties. To the same effect is the statement of U. Seetharamayya dated October 12, 1954 who was acquainted with Dharmasthal since 1908. As it is, the Manjunatha temple does not have even a separate "prakaram". The shrine of Ammanvaru is in close proximity of the Manju natha temple and within the same "prakaram". It has not been disputed before us that, as has been stated by U. Seetharamayya, P.W. 2, its important deities are Kalarahu, Kalarhayi, Kumaraswami and Kanya Kumari some of which, at any rate, are the same as the Jain deities worshipped in Nelleyadi Beedu and Badinade both of which are admittedly Jain institutions. Moreover, Kanya Kumari in Ammanvaru shrine cannot be said to be Parvati, the consort of Shiva, for M. Govinda Psi R.W. 12, who claims to have studied Hindu and Jain religions and was examined on behalf of the Board, has stated that Parvati and Kanya Kumari are "not identical". The shrine of Annappa Daiva is also situated within the common "prakaram". The existence of the shrines of Ammanvaru and Annappa Daiva in the same "prakaram" as the Manjunatha temple therefore shows that Manjunatha temple cannot even claim to have any exclusive premises of its own so as to constitute an endowment within the meaning of clause (11 ) of section 9 of the Act. The High Court has found it as a fact that the shrine of Manjunatha is an "adjunct" to the composite institution of Dharmasthal and according to the customs and usages of the said institution, the shrine of Sri Manjunatha cannot be separated from the rest. In arriving at this conclusion the High Court has taken into consideration those facts which have been established by the evidence on the record. It will be sufficient to make a brief reference to the follow ing 14 facts 'which have been mentioned by the High Court, (i) All the shrines in Dharmasthal were rounded by the Heggade who was a Jain. (ii) All the shrines are situated in close proximity on "wrag" lands of which the 'patta ' is in the name of Heggade. (iii) The rituals of all the shrines are interconnected. (iv) All places of worship participate in the installa tion of the Heggade (Exs. A 58 and A 108). (v) The 'pooja ' is reciprocal e.g. whenever there is an important ceremony in Maniunatha shrine, special 'pooja ' has to be performed in Chandranatha Basthi which is a Jain institution (exhibit A 108). 898 (vi) All 'prasadam ' is normally given only from Amman varushrine and not from Manjunatha temple, (P. Ws. 3, 4 and 5). (vii) The festivals, including that relating to "makara shankranti", of all the shrines, are common (P.W.2 and exhibits A 69 and A 70). (viii) All offerings are made and received for the entire institution and not for any particular deity (Exs. A 69, A 70 and A 108), and the public do not make any distinc tion in making the offerings and whatever is given is for Dharmasthal as a whole (exhibit A 108). (ix) On Heggade 's death, 'pooja ' is ' stopped in all institutions until ' purification (exhibit A 108). (x) "Hoilus" or complaints are made to Dharmasthal as a whole ' and 'prasadam ' is given to the complainants from Ammanvaru shrine Ex A 72). (xi) Chandranatha Basthi, which is a Jain institution, is closely interlinked with aH the other institutions in Dharmasthal. (xii) The paraphernalia of "Daivas" (who are Jain dei ties) is kept in Manjunatha and Ammanvaru shrines (exhibit A 108). (xiii) There is extraordinary unity of interest between the Heggade and Dharmasthal (Exs. A 107 and A 103) and no distinction is made between the office of Heggade and the deities (exhibit A 104). (xiv) The deities which had been installed before the installation of the 'lingam ' in the Manjunatha temple con tinued to enjoy their previous importance (exhibit A 105) and Dharmasthal could not be said ' to have been dedicated to Manjunatha but to the earlier deities. To the above may be added the following further facts, (i) The entire income of all the institutions consti tutes one common fund from which the expenses of all the shrines and the Heggade are: met (Report exhibit B 2 of R.W. 3). (ii) The vast charity which is undertaken was in exist ence even before the installation of the 'lingam ' in Manju natha shrine (P.W. 3). (iii) While the 'lingam ' was installed in Manjunatha temple by Vadiraja Swamjar of Sode Mutt, Udipi, as an exclu sively Hindu God, in its present "garbagriha" which exclu sively contains that 'lingam ' and has no non Hindu God, the Jain Daivas have continued to be worshipped side by side, in the adjacent Ammanvaru shrine. Even in the presence of the Swamiar, the Heggade was present at the time of worship and offered 'Kanikam ' (R.W. 9). Whosoever went to Dharmasthal, whether a Hindu or a Jain worshipped Manjunatha and the other deities and Daivas alike (exhibit A 108). (iv) It may be that Brahmins perform 'pooja ' in Manjuna tha temple, but that is done in the presence of the Heggade (R.W. 11) who also worships Manjunatha and controls all the institutions as one integral Dharmasthal. (v) The Jain shrine of Anna Daiva is also within the same 'prakaram ' in which the temples of Manjunatha and Ammanvaru are ' situated. 899 It therefore appears that the High Court was justified in taking the view that Manjunatha temple is part and parcel of the composite institution known as Dharmasthal and is so inseparably connected with it that it is its integral part. It cannot therefore be held that the Manjunatha temple is an "endowment" within the meaning of clause (11 ) of section 9 of the Act for it has not been proved that any property belongs to it, or has been given or endowed for its support or for the performance of any service or charity connected therewith, or that it has any such premises of its own as could be said to form its own endowment. It would follow from what has been said above that even if 'the Manjunatha temple is assumed to be a place used, as of right, for public religious worship by Hindus, it could come under the purview of the Act only if it could be estab lished that it was a 'religious endowment ' within the meaning of section 2, but this has not been proved to be so. On the other hand it appears that the present institution of Dharmasthal was originally a Jain religious and charitable institution to which property was endowed by the ancestors of the present Heggade who was himself a Jain. It was that endowment which spread and gained more and more importance over the years because of the offerings made largely by Hindu and Jain devotees and worshippers. But it has not been established that there is any endowment which could be said to belong exclusively to Manjunatha temple. Even if any such endowment was made by some one in the name of Manjuna tha temple, (as stated by K.C. Nambayar R.W. 3), it was taken to be an endowment for the entire institution known as Dharmasthal and was treated as such. The Manjunatha temple cannot therefore be said to be a Hindu religious endowment within the meaning of section 2. The provisions of the Act are not applicable to it, and the Board clearly erred in holding otherwise. It has been argued by Mr. Chowdhary for the appellant that generally speaking Hindus include Jains. According to him, the underlying assumption in the Act is that Jains are also Hindus, and that the fact that Jains also worship in a Hindu temple will not detract from the fact that it is a Hindu temple as it is not necessary that a Hindu temple should be a place exclusively for Hindu public religious worship. Reference in this connection has been made to The All India Sai Samaj (Registered) by its President D. Bhima Rao, Mylapore vs The Deputy Commissioner for Hindu Reli gious and Charitable Endowments (Administration) Depart ment, Madras 34, and others, ( 1 ) The State of Madras by the Secretary, Revenue Department, Madras and another vs The Urumu Seshachalam Chettiar Charities, Tiruchirapalli, by its Board of Trustees and others,(2) and section Kannan and others vs The All India Sai Samaj (Registered) by its President, D. Bhima Rao, Mylapore(3). It will be sufficient to say that what section 9(12) of the Act requires by way of definition of a 'temple ' is that for purposes of the Act a 'temple ' should be dedicated for public religious worship, as of right, and it would not detract from its character as such if Jains also worship there. The argument of Mr. Chowdhary is, however, (1) (2) (3) 900 futile because, as has been mentioned, the provisions of the Act will not be attracted to the Manjunatha temple in the absence of any evidence to prove the existence of an endow ment for it. It has next been argued by Mr. Chowdhary that unless the temple of Manjunatha could be shown to be a Jain endowment it would come within the definition of 'temle ' in the Act. This argument has only to be stated to be rejected because, as has been shown, there is no evidence to show that there is any endowment for the Manjunatha temple as .such, and the temple is a part and parcel of Dharmasthal which came to be endowed in the facts and circumstances mentioned above. An ancillary argument has been made that an infer ence of Hindu endowment for the benefits of the public should be drawn from the facts that the deity belongs to the Hindu Trinity, the architecture of the temple is that of a Hindu temple, the rituals are performed by Brahmins ac cording to Hindu form of worship and honey is used for "abhisheka" which is contrary to the Jain form of worship. We have already assumed that the temple possesses the char acteristics which make it a Hindu temple, but even so there is no justification for the argument that there is any endowment for it as such. Then it has been argued by Mr. Chowdhary that Manjunatha temple is not an "adjunct" to the composite institution of Dharmasthal for it is the most important temple in the campus. It has been urged that mere common management .and control cannot justify the argument that Manjunatha temple is an inseparable part of the Dharmasthal It is not neces sary to examine this argument once again, for we have given our reasons for taking a contrary view. Another argument of Mr. Chowdhary is that formal dedica tion of the endowment to the temple of Manjunatha was not necessary and that its user by the Hindus as of right would be enough to prove the initial dedication. Reliance for the argument has been placed on B.K. Mukherjee on the Hindu Law of Religious and Charitable Trusts. third edition, page 27, which makes a mention of the rituals to be observed when a donor wants to consecrate a temple and establish a deity in it. It may be that, in a given case, it may be difficult to prove the original dedication because of the lapse of con siderable time but, in the present case it would not be possible to conclude that there was any such dedication because there is nothing to show how Vadiraja Swamiar, who installed the 'lingam ' in Manjunatha temple, could be said to be a donor when the property did not belong to him, In the view, we have taken, we find no force in this appeal and it is hereby dismissed with costs. BEG, J. I agree with the order proposed by my learned brother Shinghal. But, I would like to indicate my own reasons in this case for reaching this conclusion. The following facts appear from the petition filed on 22nd July, 1949, by the Heggade or trustee of the Manjunatha temple, and from affidavits and other documents filed either in support or in opposition to it, in the Court of the District Judge of South Kannara, in proceed 901 ings under Section 84(2) of the Madras Hindu Religious Endowments Act of 1927, (hereinafter referred to as 'the Act '): In 1926, the Manjunatha temple was exempted by a Government notification from the operation of the provisions of the Madras Hindu Religious Endowments Act 1923. On 28th June, 1945, the Board, which had been set up under Section 10 of the Act of 1927, informed the Heggade that it was examining the position afresh whether the exemption which had been granted in 1926 should be withdrawn. After due enquiry the Board had moved the Government on 26th October, 1945, to cancel the exemption and it was cancelled by the Government on both December, 1945, under the provisions of Act 2 of 1927. On 7th February, 1946, the Heggade had made an application to the Government to review the cancellation. Thereupon, the Government directed the Board to enquire into the whole question again. That enquiry before the Board took place on 27th July, 1946. The Board gave its decision on 9th March, 1949, holding that the temple was covered by the provisions of the Act. It was in circumstances stated above that the Heggade had made an application before the District Judge after the coming into force on May 15, 1946, of the amending of Act 10 of 1946. The whole proceeding before the District Judge took place as a fresh and original trial in the course of which detailed oral and documentary evidence was produced in support of the respective cases by the two sides to the dispute which were: the Heggade of the Jain Dharamas thala, of which the temple was said to be a part, and the Board of Commissioners under the Act (probably substituted by the Commissioner after the repeal of the Act and its substitution by other enactments on the subject). There was no argument before us on the question whether the proceedings were governed by the provisions of the Act before its amendment in 1946 or its provisions as they stood after the amendment. But, it appears to me that the case proceeded on the footing that the amended Act, which had come into force before the Heggade had petitioned to the District Judge, governed the rights of the parties and the scope of the enquiry. The question whether the Institution known as Dharmasthala included the Manjunatha temple or whether Manjunatha temple could be said to have a separate legal entity of its own as an Institution seems to me to be covered by the provisions of Section 84 as they stood both before the amendment in 1946 and after it was amended in 1946. An appeal to the High Court, however, lay under the amended provisions only, There was no objection to the appeal to the High Court on the ground that the unamended provisions did not contain such a right. Here, I may, for the purpose of clarifying the exact scope of the enquiry out of which the case now before us by special leave has arisen, reproduce the provisions of Section 84 of the Act both before and after its amendment in 1946. The unamended provisions of Section 84 read as follows: "84(1) If any dispute arises as to whether an institution is a math or temple as defined in this Act or whether a temple is an excepted temple, such dispute shall be decided by the Board. 902 (2) Any person affected by a decision under sub section (1) may, within one year, apply to the Court to modify or set aside such decision, but, subject to the result of such application, the order of the Board shall be final". After the amendment by Act X of 1946, Section 84 reads as follows: "84(1) If any dispute arises as to (a) whether an institution is a math or temple as defined in this Act, (b) whether trustee is a hereditary trustee as defined in this Act or not, or (c) whether any property or money endowed is a specific endowment as ' defined in this Act, or not. Such dispute shall be decided by the Board and no Court in the exercise of its original jurisdiction shall take cognizance of any such dispute. (2) Any person affected by a decision under sub section (1), may within six months apply to the Court to modify or set aside such decision. (3) From every order of a District Judge, on an application under sub section (2), an appeal shall lie to the High Court within three months from the date of the order. (4) Subject to the result of an applica tion under subsection (2) or of an appeal under Sub section (3), the decision of the Board shall be final. (Substituted by Madras Act X of 1946)". The case of the Heggade or the managing trustee was far from consistent. He took up the following positions: firstly, that the temple was "private" and not a public temple and was exempt from the provisions of the Act for that reason; secondly, that the temple was a Jain institution, or, an integral part of it, and, therefore, excluded from the purview of the Act; and, thirdly, that the temple, even if it was to be deemed to be a Hindu temple, as a place at which the Hindu public could worship as of right, was really not separable from the larger Jain institution, so that, irrespective of the character of worship or the beliefs of the worshippers at the temple, it was not an institution which could be viewed separately from the Dharamasthala or be held to be just a Hindu temple as an "institution '. The Board considered the Heggade 's case to be "that the Institu tion is a unique institution where a Hindu temple was round ed and managed by a Jain family". A subtle distinction was thus made between the temple as a place of worship and as a part of a larger Jain institution. Although, I am doubtful of the correctness of this distinction, on facts, yet, for the reasons given below, I do not consider this to be a fit case for interference with the findings of the High Court, accepting the correctness of this distinction, on the par ticular facts of the case before us. 903 It seems to me that the question whether the Manjunatha temple could be described as a Hindu temple as defined by the Act, could be conclusively answered by a reference to a number of admissions of the Heggade and his witnesses. Indeed, the exemption of the temple from the provisions of the Act by the State Government in exercise of its powers under Section 3(1) of the Act, could be sought by the Heg gade only on the assumption that the temple constituted a Hindu religious endowment which ought to be exempted from the operations of the provisions of the Act. If it was exempt by virtue of a statutory provision from the provi sions of the Act, as a Jain institution, there was no need for an order to exempt it. The scope of proceedings which have come up before us seems to go no further than resolu tion of certain disputes. They may, however, involve making of certain declarations. The origin of the temple was said to be given in a document containing a statement of 1806, 'by the then Dharmasthala Heggade, produced by the managing Heggade, which runs as follows: "There was formerly a woman called Amoo Devi Ballalthi placed there by the favour of God to perform the ceremonies. The God 's name was Durga Amba Kallarkie, but was subsequently changed to Kanya Kumari. God appeared to the woman in a dream and revealed himself to her telling her he would remain in her house and 'she should therefore procure a bed and a light for him to perform ceremonies, also that she should build another house near to his to perform ceremonies in and that her children and heirs should accordingly succeed her. Under this arrangement, the temple shall ever flourish. As related before, the God in the shape of a woman revealed himself to Ballalthy and the Ballalthy acted accordingly. In the 1396 Sahvahanam, the Peer of Udipi, Wadirajas wamy, arrived at Dharmasthala where the Bal lalthy ordered him to prepare his dinner and on the next day to leave the place. The Peer replied: "This is the residence of Devil. I must establish God in it before I eat my din ner". On this, the Ballalthy consulted he God in her sleep, who appeared and encouraged her, desired her to give the Peer whatever was required and told her he would establish the Kuddera God there saying 'you will tell this to the Peer who on hearing it will eat his dinner '. When I bring the God from Kuddera you will have a place prepared on the left hand side for his residence and a Brahmin appointed to perform ceremonies. "On the same evening the Manjunatha (Kudder God) was brought and a house built and he was lodged in it on the next morning, this was all seen. The Ballalthi informed the Peer of this. He accordingly came and after dining departed. Sometime afterwards the Ballalthy built a house on the right hand side and made it the residence of the God and Brahmins were ap pointed to perform ceremonies to both. The old God (viz., that of the Ballalthy) some time afterwards told the Ballalthy he had appointed the devil Kulataya to preside over the offerings and therefore she must build a house for him, 904 to expend all the religious offerings proper ly, should any dispute arise, proper investi gations were to be made. 'Some delay being made in the collection of the offerings by Kulataya, Annappa, another Devil was fixed, for whom another residence was built and four people were chosen to superintend the chari ties which the offerings admitted of. ". As the Board observed, it appeared that Sri Manjunatha idol was installed on the occasion of Vadirajaswamy of Udipi 's visit to the Dharmasthala. This was taken to be the introduction of the worship of God as opposed to that of the Devil. Sri Manjunatha was the installed God. It was as serted that this was in accordance with Jain beliefs. It was said that God spoke through the Heggade who acted as the oracle and used to answer questions put to him by devotees at special sessions arranged for this purpose. It was, however, clear that Hindus in general were not prohibited from worshipping at this temple. They had worshipped here long enough freely and publicly to acquire the right to worship as members of the Hindu public in general. This right, I think, could not now be denied to them whatever be its origin. After an elaborate discussion of the nature of beliefs and worship, the Board had concluded: ". it is clear that Shri Manjunatha Temple, Dharmasthala, Puttur Taluk, South Kanara District is a 'temple ' as defined in Madras Act II of 1927 and we decide accordingly". When the matter went up before the District Judge under Section sub. section (2) of the Act, the District Judge, after discussing the evidence, recorded his conclusion as follows: "Therefore it appears to me that taking into consideration all these circumstances the claim of the petitioner that this Shri Manju natha Shrine though it may be a Hindu one in his private temple seems to be well founded and it is not a temple which is either ex pressly dedicated to the Hindu public or which has been used or resorted to by the Hindu public as of right". It is difficult for me to understand where the District Court found the law which requires "express" dedication for use by the Hindu public or why he thought that the public had not acquired a right to worship. Its findings, at any rate, carried with them the implication that, although there was a dedication, it was for "private" purposes. I find it difficult to conceive of such a transaction. Dedication to a deity necessarily implies a cessation of individual human ownership. The dispute was then taken to the High Court of Mysore, which reached the conclusion, after a detailed discussion of the whole evidence: "If, 'Sri Manjunatha ' were a Hindu deity exclusively and not a deity worshipped by the Jains as well, it is inconceivable that the name 'Manaya ' should be found among 9 Jains also. In our opinion, Sri Manjunatha is a deity worshipped 905 both by the Hindus as well as the Jains in accordance with their respective faiths and it is neither an exclusively Hindu deity nor an exclusively Jain deity". It then stated its views as follows: "Since the institution is not a 'Temple ' as defined in the Act, the further question whether it is a private temple of Nellyadi Beedu family as contended by the Neggade does not arise for determination. The proceedings before the Board and the Court below are under the Act. In view of our finding that the Institution is not a 'temple ' under the Act, the Board has no jurisdiction over the Institution. Having held that the Act has no application to the Institution and the Board has no jurisdiction over it as contended by the Heggade, the Court below should have desisted from giving any finding on the ques tion whether it is a private temple of Nellya di Beedu family. We express no opinion on the said issue". The High Court 's view seemed to be that there was a "dedication" but for mixed purposes Outside the Act. Jain beliefs, as distinct from generally held and accepted Hindu beliefs, the origin and nature of the endowments, the estab lished practices and customs relating to management of the temple, the receipt and disbursement of income of what was held to be a single institution called Dharmasthala, had been taken into account by the High Court in order to decide whether "the institution" is a "temple" as defined in the Act or something more. Its opinion seemed to be that the real question to be decided here was not whether there was a temple, as defined by the Act, but whether the temple, which existed there, was an inseparable part and parcel of a Jain institution which was outside the Act, or, it was an insti tution which, taken by itself, was covered by the Act. If the temple was, so to speak, a mere appendage of the larger multi purposed institution, all the parts of which were managed as a single entity, the temple could not, in the opinion of the High Court, be "the institution". Although, I am prepared to accept the High Court 's findings on questions of fact, I do not find it possible to agree with the High Court 's view that, if a place of worship is open to both Jains and Hindus in general, or, has a mixed character, it is not a temple within the meaning of that term as defined in Section 9, sub. section (12) of the Act. All that Section 9, sub. section (12) requires is that it should be a place of worship either dedicated for the benefit of or used as of right by the Hindu community or a section thereof as a place of religious worship. The word exclusively is not there at all so as to justify any exclusion of a place of worship from the definition of a temple on the ground that the place of worship is not confined to worship, as a matter of right, to either Hindus as members of the general public or to any section of Hindus. The Act does not define the term "Hindu". This word has had a fairly wide connotation. In origin, it indicated people living in the Indus region. It is only by subsequent usage and extension of meaning 906 that the word acquired a religious, and, therefore, in this sense, a more limited significance. But, in some contexts, the term. "Hindu", even today, stands for Indians in gener al. In foreign countries all Indians are sometimes described as "Hindus". Even as a term used for Indians professing a particular type of beliefs, which are presumed to have an indigenous origin, it is wide enough to include Jains and Sikhs. Hence, this is the meaning given to the term Hindu in the Hindu Succession Act. In a statute deal ing with religious endowments, the term, even though not defined, may be presumed to stand for people of this country with certain religious beliefs held or forms of religious worship practised by people of this country originally. But, this would also embrace a very wide sector of the public. And, in any event, there is nothing whatsoever in the definition of "temple" by the Act to justify the infer ence that Jains or any other group of person must be exclud ed from worship before it can be a "temple". For reasons given above, I am unable to read into the defi nition of the word, "temple", given in the Act, the idea of excluding from the benefits of the Act temples open for worship to Hindus of all sects and beliefs. This means that a place of worship where Jains, as a section of Indian citizens, even when distinguished by their special doctrines and practices from the rest of the Hindus, worship together with Hindus of other sects, could not be a temple outside the Act. All that the Act requires is that Hindus in gener al, or even a section of Hindus, should be able to worship there as of fight. This requirement is, in my opinion, satisfied by Shri Manjunatha temple on the findings of the High Court which I accept, not without hesitation, as correct. The view I have taken above is, however, not enough, in my opinion, to dispose of an issue under section 84(1)(a) of the Act. It has to to borne in mind that the issue to be decided under Section 84(1)(a) of the Act is whether an "institution" is a math or temple as defined in the Act. It is not whether a particular place is a temple, in the sense that it is set apart for worship by the Hindu public in general or a section of it. It is whether an "institution" itself is a temple as defined by the Act. The term temple has been defined in section 9(12) of the Act as follows : "9(12) 'Temple ' means a place, by what ever designation known, used as a place of public religious worship and dedicated to, or for the benefit of, or used as of right by, the Hindu community or any section thereof, as a place of religious worship". It, therefore, becomes necessary, in order to decide a dispute under section 84(1)(a) whether a particular place is a temple as contemplated by the Act. But, that is not enough for the decision of the whole issue to be decided under Section 84(1)(a) of the Act. For that purpose, atten tion has to be also directed towards deciding the question whether the "institution" to be considered is a temple and nothing more. If the temple, as a place of worship, is an integral part of an institution, so that it is not separable as an institution, in itself, the mere fact that there is a 'temple ', as defined by the Act, where 907 Hindu members of the public worship as a matter of right, will not do, In such a case, the "institution" is not the temple,although a temple can, by itself, be an institution. The term "institution" is not defined in the Act of 1927, although, in the more elaborate provisions of Madras Hindu Religious and Charitable Endowments Act XXII of 1959, there is now definition of the term "religious institution" as well showing that this concept is wider than that of a temple. If, therefore, there is a distinction between the mean ings of "temple" merely as a place of worship, as defined in Section 9(12), and a "temple" as an institution, as there seems to me to be, an authority deciding the issue whether it is an "institution", as contemplated by Section 84(1)(a) of the Act, will have to consider whether the history, the beliefs lying at the inception and sought to he propagated, the forms of worship meant to be kept alive, the prevalent customs and practices, the exact nature and process of the endowments connected with the institution, the established rules for its management, the objects to be carried out by those in charge of the endowment, taken together, would justify the inference that a particular "temple", as defined by the Act, is also a separate or separable institution by itself or is just an integral and organically inseparable part of an institution or organisation outside the Act. These wider aspects, which may not appear to be relevant at first sight, seem quite necessary to consider when we close ly examine the nature of the issue contemplated by Sec tion 84(1)(a) of the Act and decided by the High Court. In the case before us, the findings of the High Court show that the institution or organisation of which Manjuna tha temple is an inseparable part, is predominantly Jain in character. On such a finding, it would be exempt from the operation of the Act by reason of the explanation to section 2 excluding Jain "religious endowments" from the benefits of the Act. It may be that very good grounds could be given for holding that the temple is a separable or separate entity dedicated, by user, for worship by Hindus in general, without restriction of worship by Jains only as a matter of right. But, as two views seer, to be reasonably open on the question whether it is such a separate or separable insti tution or entity: I do not consider it fit to be reopened by us under Article 136. A consideration of the property which belongs to or is "endowed for the support of maths or temples or for perform ance of any service or charity connected therewith and includes the premises of maths or temples" may also become necessary so as to determine the character of an endowment as a part of the "institution" and the process by which it took place. The institution endowed, on the findings of the High Court, being more than or wider than the Manjunatha temple, is not just a Hindu temple although a temple, by itself, could be such an institution if it were a separable entity. The origin and process of dedication is not always found embodied in a document. Where the dedication itself is evidenced by a document, its objects, such as they may be can be determined by interpreting the document which makes the task of the authorities deciding the question generally easier. There are, however, many cases in 8 1338SCI/76 908 which dedication or endowment of property for a particular purpose has to be inferred from immemorial user of a property in a particular manner or from the conduct of a party, such as permission to build a road for use by the public or permission to bury the dead on a piece of land. The last. mentioned type of case may also give rise some times to an estoppel against the owner of the land. Cases where an inference of "dedication" results from what may be considered immemorial user or a kind of permissible user giving rise to an estoppel, because others have spent money or done 'some act on the strength of 'a licence or permission to use the land for a particular purpose, are not uncommon in our country. They should not, as Lord Macnaghten hinted in Bholanath Nundi vs Midnapore Zemindary Co. Ltd.,(1) be complicated by resorting to the peculiar English notions of dedication, when he said: "It appears to their Lordships that on proof of the fact of enjoyment from time immemorial there could be no difficulty in the way of the Court finding a legal origin for the right claimed. Unfortunately however (in the lower Courts) the question was over laid, and in some measure obscured, by copious references to English authorities and by the application of principles or doctrines, more or less refined, rounded on legal conceptions not altogether in harmony with Eastern no tions". After quoting the passage, set out above, Lord Radcliffe, in Lakshmindhar Misra & Ors. vs Rangalal & Ors. ,(2) pointed out (atp. 58) about such dedications in English law: "But dedication is only known to English law as something equivalent to an irrevocable licence granted by the owner of soil to the use of the public. Dedication of a piece of land to a limited section of the public, such as the inhabitants. of a village, is a claim unknown in law, and evidence limited to such special user would not justify a finding of dedication: see Poole vs Huskinson, ; (63 R.R. 782), Hildrath vs Adam son; , ; (125 R.R. 794). Berrnondsey vs Brown, It was explained in Lakshmidhar Misra 's case (supra) that the doctrine of lost grant originated in English law "as a technical device to enable title to be made by prescription despite the impossibility of proving immemorial user". Prescription by a convention,was deemed to start in 1189, when Normans conquered England. The real basis of such rights in English law seemed to be prescription. In this very case, differences were pointed out between a dedication and a customary right enjoyed by people of a locality to use a particular piece of land on certain occa sions. It was indicated here that a. dedication, by pre sumed lost grant, in English law, unlike. customary rights, which (1) 31 I.A. 75. (2) A.I.R. 1950. P.O. 56. 909 may become attached to land, postulates a grantee and the creation of an estate. Although certain essential or basic prerequisites of a valid trust in English law, such as the three reasonable certainties laid down by Lord Eldon in Knight vs Knight(1) that of the obligation to be carried out, that of the subject matter or of property affected by it, and that of the object to be served or the persons to be benefited are required in this country too for valid endow ments no less than they are in England, yet, valid dedica tions can be inferred, under our law__, without showing compliance with at least some of the technical requirements of English law. Dedications in Hindu law do not require acceptance of property dedicated for a religious or a public purpose. In Monohar Ganesh V. Lakhmiram(2), a rule of Hindu law coming down from ancient times was thus stated: "A Hindu who wishes to establish a religious or charitable institution may, according to his law, express his purpose and endow it, and the ruler will give effect to the bounty or at least protect it so far, at any rate, as is consistent with his own Dharma or conception of morality". Neither a document nor express words are essential for a dedication for a religious or public purpose in our country. Such dedication may ' be implied from user permitted for public and religious purposes for sufficient length of time. The conduct of those whose property is presumed to be dedicated for a religious or public purpose and other. circumstances are taken into account in arriving at the inference of such a dedication. Although religious ceremo nies of Sankalpa and Samarpanam are relevant for proving a dedication, yet, they are not indispensable (see: B.K. Mukherjee on the "Hindu Law of Religious. and Charitable Trusts" Third Edn. 1970 p. 80). The question of an implied dedication by user by the public is particularly important in cases like the one before us where a claim that a trust is private or sectarian in nature is set up against a wider claim on behalf of the general public. In Deoki Nandan vs Murlidhar(3), this Court said: "the distinction between a private and a public trust is that whereas in the former the beneficiaries are specific individuals, in the latter they are the general public or a class thereof. While in the former the bene ficiaries are persons who are ascertained or capable of being ascertained, in the latter they constitute a body which is incapable of ascertainment". In B.K. Mukherjea 's Tagore Law Lectures on the Hindu Law of Religious and Charitable Trusts (1970) (3rd edition), we find the following passage at page 143: (1) ; (2) 1. , 263; (3) ; 910 "In cases where no express dedication is proved, the character 'of the endowment must always be a legal inference from proved facts. As in the case of highways, long user is. undoubtedly a material element from which an inference of dedication may arise. If the public have been in the habit of worshipping in the temple in an open and unconcealed manner, for a long period of time, and were never denied any access to it, that would be a strong evidence of dedication. With regard to period of user, no hard and fast rule has been laid down. 'There is no minimum which must be fulfilled, and there is no maximum which compels the inference '. Each case would depend upon its own circumstances. Besides user by the public, conduct of the founder and his descendants is also relevant, and if they in fact held out the temple to be a public temple, a very strong presumption of dedica tion would arise". Cases are also cited there where reliance had been placed upon circumstances such as the structure or the location of a temple outside a private residence or dwelling so as to be exposed to public view and ' worship by members of the gener al public to infer dedication for the public. In Pujari Lakshmana Goundan vs Subramaniya,(1) the question for determination was whether a Hindu temple round ed between 1841 and 1856 had been dedicated for use by the public by its founder who had executed no deed showing this. But, the founder, Lakshmana Goundan, was shown to have in stalled an idol at his house and allowed Brahmins and Hindus to worship the idol as if it was a public place of worship. The Hindu public was admitted free of charge, though only on certain days in the week, in the greater part of the temple, and, in one part only on payment of a fee, and, in the inner shrine, not at all. It appears that the income from offer ings and fees was spent by the Pujari founder on the temple and the idol as well as on himself. Nevertheless their Lordships of the Privy Council held that Lakshmans Goundan, having held out and represented u:, the Hindu public that the temple was for their benefit, the inference was irre sistible that had dedicated the temple for use by the public. In B.K. Mukharji 's Lectures (supra), the facts of this case have been cited as an example of an application of the principle of estoppel. Our law reports abound with similar cases where dedication by founders or owners is inferred or presumed, irrespective of their own religious persuasions, from ' the purposes for which a piece of proper ty has been used for long enough. In some cases the ele ments of an estoppel are present. But, the basis of such dedications seems, in many cases of this type, to be, strictly speaking, nothing more than a presumption from certain ' facts. Perhaps we could describe it, in most cases of this sort, as a "deemed dedication" although it must not be confused with a fiction. It is, after all, an inference from facts which must exist and lead to the con clusion deduced. (1) 911 In view of tiffs well established doctrine .of. implied endowment of property, by its long user for a particular religious or public purpose. , based on a presumed consent of the owner, I do not think that the High Court could be held to have reached a wrong conclusion even if it has inferred that, whatever be the origin of the Manjunatha temple, it had become a separate institution with an endowment of its own consisting at least of the land over which the temple had been built, 'the building, and the idol installed with free access to it by the Hindu public in general which made offerings even though Jains also worship there. Neverthe less, in view of the discussion of a good deal of evidence of the peculiar composite character of the institution known as Dharmasthala, and, bearing in mind our general rule of practice that we do not disturb findings of the final Court of fact where two views are possible, I do not propose to differ from the conclusion reached by the High Court that the temple was not a separate institution. The Manjunatha temple, on the findings of the High Court, which we are upholding, had become an accretion or growth on the body, if one may so .out it, of the institution known as Dharmastha la, even though it could be removed from that body by a surgical operation. It is not for us to say, on the find ings before us, whether a situation has arisen in which a surgical operation may be called for. Such an opinion can only be given upon the results of a more thorough investiga tion 'into the objects of the institution, its properties, the sources of its income, and the manner in which they are utilised than we have before us. The question which troubles me, however, is whether a religious 'institution or even that part of it to which members of the public make .contributions, through their offering and gifts, is to be left entirely uncontrolled by authorities specially appointed by the State in order to see that such income or donations are not misused or are uti lised for the purposes for which they are meant. It seems to me that religious beliefs, professions, and practices, which have a powerful hold over the minds and feelings of the people, particularly in our country, should not be permitted to become mere cloaks for exploiting the credu lity of the simple minded and the ignorant and unsophisti cated. When a religious institution becomes a means of obtaining money or material benefits, in the form of offer ings or donations or gifts, as it generally does, from members of the public, a danger of its misuse can only be effectively averted. by appropriate supervision. It seems to me that this is the whole purpose of the Act. 'The income from the public, through a religious institution, seems to me to bring in that secular aspect which justifies interference by State authorities through adequate supervi sion. However, these are matters which so far as religious endowments, such as the one before us, held to be predomi nantly Jain, for the reasons given by the High Court, are concerned, the State Government can take into account in deciding whether it 912 should exercise its powers under Section 3(2) of the Act, to extend the benefits of the Act to them, or, if necessary, to amend the Act. The District Court did not specifically frame or try any issue on the question whether any endowment existed at all. It had framed the following points for determination: "( 1 ) Is the Sri Manjunatha 'Devaru only a part of the institution known as Dharmasthala and not a separate institution in itself?. (2) Is the Dharmasthala a charitable institution? (3) Is the Dharmasthala and in particular the Manju natha Devaru not an exclusively Hindu place of worship ? If not do not the provisions of the Hindu Religious Endowments Act apply? (4) Is the Manjunatha Devaru a private place of wor ship. (5) Is the order of the Board dated 9th March 1949 liable to be set aside?" The High Court also did not give the finding that no endowment whatsoever exists. The extent of property cov ered by any endowment was also not really investigated as to issue was flamed on it. Atleast the structure of the temple with the idol installed and the ground upon which the temple stands must be deemed to be dedicated even though these may not, for purposes of management, form separable units. The High Court took the view that the dispute falling under Section 84(2)(a) could be disposed of by deciding issues or points numbered 1 and 3 only. The District Court had chosen to resolve the principal dispute that arose by deciding issue No.4. Other questions were treated as merely subsidiary or even unnecessary to decide. I have tried to indicate above what seemed to me to be the real nature of the proceedings in the course of which a dispute covered by Section 84(1)(a)of the Act arose and also the principles on which such a dispute should, in my opin ion, be resolved, although I do not consider it necessary, in exercise of the special powers of this Court under article 136 to interfere with the High Court 's findings of fact; because I think that the powers of the Government which is not even a party, acting under Section 3 of the Act, are not restricted by decisions given by Courts in resolving a dispute covered by Section 84(1) of the Act. All that the Government was bound to do under Section 3 of the Act was to consult the Board. The Madras Hindu Religious and Charita ble Endowments Act of 1959, which contains the law governing the subject today, has section 2 relating to a general power to extend the provisions. of the Act to Jain public reli gious institutions and endowments as a mater of policy, irrespective of the. character of management, whether good or bad and Section 3, for the extension of the provisions of the Act to particular. Jain religious 913 and charitable institutions, in cases of mismanagement, after due inquiry. These powers are not, in any way, affected by the dispute which has been brought before us under the provisions of an Act repealed long ago. For the reasons given above, I concur with the order proposed by my learned brother Shinghal that this .appeal be dismissed and parties be left to bear their own costs throughout. V.P.S. Appeal dismissed.

Section 9(12) of the Madras Hindu Religious Endowments Act, 1926, defines 'temple ' as a place, by whatever designa tion known, used as a place of public worship and .dedicated to, or for the benefit of, or used as of right by the Hindu community, or any section thereof, as a place of religious worship Section 9(11) provides that all property belonging to, or given or endowed to the support of a temple or for the performance of any service or charity connected with the temple will constitute its endowment, including the premises of the temple. Section 2 provides that the Act applies to all Hindu public religious endowments. The Section, the Explanation to the section, and section 3(b) shown that Hindu public religious endowments ' do not include private endow ments and Jain religious endowments. Dharmasthal, in which the temple in dispute was situate has a number of institutions which were under the management of a person known as Heggade who was a Jain. The Religious Endowments Board, after an enquiry, held that the Act ap plied to the temple. On application made under section 84(2), the District Judge held that it was a private temple, and that, therefore, the Act did not apply to it. On appeal, the High Court did not .consider whether it was a private temple, but held that the temple was an adjunct to the composite insti tution of Dharmasthal, that, according to the customs and usages of the institution, the temple could not.be separated from the rest. of the institutions, that Dharmasthal was both a religious and charitable institution, that the deity in the temple was worshipped both by .the Hindus and the Jains in accordance with their respective faiths, that the deity was .neither an exclusively Hindu deity not an exclu sively Jain deity, that the institution. of Dharmasthal was rounded by the Jain, that its administration remained exclu sively Jam since its inception, that it could not be in ferred that there was an implied dedication to the Hindus exclusively, and that therefore the temple, was not a temple as defined in the Act, and that the Act did not apply to it. The High Court also held that its property was also an adjunct to the composite institution consisting of Hindu Gods, Jain Gods and Daivas, worshipped by Hindus and Jains. Dismissing the appeal by special leave to this Court, HELD: (Per A.N. Ray, C.J., and P.N. Shinghal, J): (1) Section 9(12) of the Act only requires that the temple should be dedicated for public religious worship, as of right by Hindus, but it would not detrace from its char acter of a temple as such if Jains also worship there. The pro visions of the Act will however not be attracted to it in the absence of and evidence to prove the existence of an endowment for it, as the Act applies only to Hindu public religious endowments. [899 H, 900 A] (2) The evidence in the case shows that the institution of Dharmasthal was originally a Jain religious and charita ble restitution to which property was endowed by the ances tors of the present Heggade who was himself a Jain. It was that endowment which spread and gained more and more impor tance over the years because of the offerings made largely by Hindu and Jain devotees and worshippers. A lingam was installed in the temple by a Hindu Sanyasi only in the 16th century; but, it has not been established that there is any endowment which could be said to belong exclusively to the temple. Even if any such 890 endowment was made by some one in the name of the temple it was taken to be an endowment for the entire institution known as Dharmasthal and was treated as such. The temple cannot therefore be said, to be a Hindu religious endowment within the meaning of section 2 and the provisions of the Act are not applicable to it. [896 F H: 897 A] (3) The evidence also shows that the temple is part and parcel of the composite institution known as Dharmasthal and is so inseparably connected with it that it is its integral part, and it cannot therefore be held to be an endowment within the meaning of section 9(11). It has not been proved that any property belongs to the temple or has been given or endowed for its support or for the performance of any serv ice or charity connected therewith, or that it has any such premises of its own as could be said to form its own endow ment. The mere installation of the idol in the temple could not be said to bring into existence any such property as could be said to belong to the deity or given or endowed for the support of its temple or for the performance of any service or charity connected therewith. The temple does not have even a separate prakararn. The shrine of the adja cent shrine is in dose proximity of the temple and within the same prakaram. The existence of other shrines of Jain Daivas in the same prakaram as the temple, therefore, shows that this temple cannot even claim to have any exclusive premises of its own so as to constitute an endowment within the meaning of section 9(11) of the Act. [897 A, F] (4) In a given case, it may be difficult to prove the original dedication because of the lapse of considerable time and its user by Hindus as of right may be enough to prove an initial dedication. But, in the present case, it would not be possible to conclude that there was any such dedication because there is nothing to show how the Hindu Sanyasi, who installed the lingam in the temple in the 16th century, could be. said to be a donor when the property did not belong to him. [900 ,F G] (5) The facts that the temple was not shown to be a Jain endowment, and hat it possesses the characteristics of a Hindu temple will not make, any difference because, there is no evidence to show that there is any endowment ' to the temple, as such, and the temple is a part and parcel of Dharmasthal. [900 A_B] Per Beg, J. (1) In order to decide a dispute under section 84(1)(a) it is necessary to. decide whether a particular place is a temple as contemplated by the Act. But, that is not enough for the decision of the whole issue to be decided. For that purpose attention has also to be directed towards deciding the question whether the institution to be considered is a temple and nothing more. If the temple, as a place of worship, is an integral part of an institution so that it is not separable as an institution in itself, the mere fact that there is a temple as defined by the Act, where Hindu members of the public worship as a matter of right, will not go. In such a case, the institution is not the temple, although a temple can by itself, be an institution. There is thus a distinction between the meanings of temple ' merely as a place of worship as defined in section 9(12) and a 'temple ' as an institution. It is therefore, necessary to consider the history, the beliefs underlying at the inception and sought to be propagated the forms of worship meant to be kept alive, the prevalent customs and practices, the exact nature and process of the endowments connected with the institution, the established rules for its management, the objects to be carried out by those in charge of the endow ment, and whether all these taken together justify the inference. that a particular temple, as defined by the Act, is also a separate or separable institution by itself, or is just an integral and organically inseparable part of an institution or an organisation outside the Act, [903 A B, 906E,H 907 A C] (2) A consideration of the property which belongs to or is endowed for the support of temples or for performance of any service or charity connected therewith including the premises of temples may also become necessary so as to determine the character of an endowment as a part of the institution and the process by which it took place. [907 F G] (3) The origin ,and process of dedication is not always found embodied in document. Where the dedication itself is evidenced by a document, its objects, 891 such as they may be, can be determined by interpreting the document. There are, however, many cases in which dedica tion or endowment of property for a particular purposes has to be inferred from immemorial or long user of a property in a particular manner or from the conduct of a party. Neither a document nor express words are essential for a dedication for a religious or public purpose in our country. Although religious ceremonies of Sankalpa and Samarpanam are relevant for proving a dedication, yet, they are not indis pensable. [907 G H; 908 A B] Bholanath Nandi vs Midnapora Zamindary Co. Ltd. 31 I.A. 75, Lakshmidhar Misra & Ors. vs Rangalal & Ors. AIR 1950 PC 56, Manohar Gandhi vs Lakhmiram, ILR @ 263, Deoki Nandan vs Murlidhar, [1956] S.C.R. '756 and Puajri Lakshmana Goundan vs Subramaniya referred to. All that section 9(12) requires is that the place should be a place of worship either dedicated for the benefit of or used as of right by the Hindu community or a section thereof as a place of religious worship. The word 'exclusively ' is not there at all so as to justify any exclusion of a place of worship from the definition of a temple on the ground that Jains worship together with Hindus of 'other sects. But, the issue to be decided is whether the 'institution ' is a temple as defined in the Act. It is not whether a particu lar place is a temple, in the sense that it is set apart for worship by the Hindu public in general or a section of it, but it is whether an institution itself is a temple as defined by the Act. [905; D G, 906 F H, 907 A D]. (5) In the present case, the findings of the High Court show that the institution or organisation of which the temple is an inseparable part, is predominantly Jain in character. In view of the well established doctrine of implied endowment of property, by its long user for a par ticular religious or public purpose, based on a presumed consent, it could be said that the temple had become a separate institution with an endowment of its own consisting at least of the land over which the temple had been built, the building and the idol installed with free access to it by the Hindu public in general which made offerings even though Jains also worship there. But, in view of the general rule of practice under article 136 of the Constitution that this Court does not disturb findings of the final court of fact where two views are possible, this Court would not differ from the conclusion reached by the High Court that the temple was not a separate institution. On such a finding it would be exempt from the operation of the Act by reason of the Explanation to section 2 excluding Jain religious endowments from the benefits of the Act. [905 E H, 907 D F] (6)In the present case, neither the District Judge nor the High Court had given any findings whether any endowment whatsoever of the temple existed. The extent of property covered by an endowment was also not really investigated as no issue was framed on it. At least the structure of the temple with the idol installed and the ground upon which the temple stands must be deemed to be dedicated even though these may not for purposes of management, form separable units. When a religious institution becomes a means of obtaining money or material benefits, in the form of offer ings or donations or gifts, as it generally does, from members of the public, a danger of its misuse can only be effectively averted by appropriate supervision. The powers of the Government, .under the relevant Act to extend the provisions of the Act to Jain public religious institutions which are not affected by the dispute brought before the Court, are however, adequate to deal with such situation. [912 A H, 913A]

Civil Appeal Nos. 2007 2014 of 1972. From the Judgment and Order dated 24 4 1970 of the Madras High Court in Tax Case No. 156/67 (Ref. No. 54/67). section T. Desai, section P. Nayar and Miss A. Subhashini for the Appellant. T. A. Ramachandran (Amicus Curiae) for the Respondent. The Judgment of the Court was delivered by TULZAPURKAR, J. These appeals by certificates under section 66A(2) of the Indian Income Tax Act, 1922 (hereinafter referred to as 'the Act ') raise the question whether the respondent assessee was a resident in the taxable territories under section 4A(a)(ii) of the Act for the concerned assessment years? The facts giving rise to the aforesaid question are these: Subramania and Arumuga were two brothers; the former had three sons Ratnaswamy, the assessee, Ganpathi and Velayudham while the latter had only one son Ganesa. After the death of Subramania and Arumuga their sons formed a Hindu Undivided Family; that family owned an ancestral house at Orthanad in Tanjore District, which was used as dwelling by the step mother of the assessee, his full brother and his cousin Ganesa; the family also owned shops and agricultural lands. The family properties were managed by Ganesa and were maintained by him out of the agricultural and rental income. Admittedly, the 522 assessee never enjoyed any portion of the family income. Born and brought up in Ceylon, the assessee had his own business and properties in Ceylon. He had eight children all born and educated in Ceylon. It appears that he started constructing a theatre in Orthanad in 1953 which was completed in 1957 and during the said construction he paid occasional visits and stayed sometimes in the family house, sometimes in a chatram in Tanjore and at times in a hotel. Thus, from 1 4 1952 to 31 3 1953 he stayed for 8 days in India, from 1 4 1953 to 31 3 1954 he did not come to India at all, from 1 4 1954 to 31 3 1955 he stayed for 28 days in India, from 1 4 1955 to 31 3 1956 he stayed for 47 days in India and from 1 4 1956 to 31 3 1957 he stayed for 23 days in India. In July 1958 the assessee on the one hand and other members of the family on the other executed a mutual deed of release, relinquishing each party 's rights in favour of the other; inter alia, the assessee released all his rights, title and interest in the family properties in favour of his brothers, reciting therein that the family properties were never enjoyed by him but only by others. There is no dispute and the Tribunal has also found that the deed of release was an instrument bona fide entered into between the parties. In the above circumstances for the assessment year 1952 53, 1953 54, 1956 57 and 1957 58, the assesses filed returns, but for the first two years after proceedings were initiated under section 34(1)(a) of the Act and for the latter two years on his own offering his income in Ceylon for assessment. The status declared in all the returns was that he was 'a resident and ordinarily resident person. ' The Income Tax Officer completed the assessments on the basis of the returns filed. He also initiated penalty proceedings against the assessee under section 28(1)(a) for not filing the returns in time and levied penalties on him. In the appeals preferred by the assessee, which were principally directed against the rejection of the claim made by him in respect of the double taxation relief, an additional ground was taken that the assessee should have been treated as a 'non resident ' in all the years. The Appellate Assistant Commissioner upheld this additional ground taking the view that since during his sojourn in India the assessee was staying in the family house more as a guest, he neither maintained nor had maintained for him a dwelling place in the taxable territories and, therefore, section 4A (a) (ii) of the Act was inapplicable. The Department carried the matter in further appeals to the Tribunal but the Tribunal called for a remand report from the Appellate Assistant Commissioner after a fuller examination as to the factual position whether the assessee did maintain a dwelling place in India or the same was maintained for him by others inasmuch as the Tribunal felt that the Department did not have an effective opportunity to meet the 523 aspect raised for the first time before the Appellate Assistant Commissioner. In the remand proceedings oral evidence was recorded by examining the assessee and two others and the final report was forwarded to the Tribunal. On the basis of the material collected and forwarded to it, the Tribunal took the view that the assessee was a natural born Ceylon citizen staying in Ceylon most of the time, that his visits to India in the aggregate were for 137 days in the period of 11 years (from 1 4 46 to 31 3 67), that the evidence supported the theory that he was more a guest in family house in India than an inhabitant of his own house or home, that there was nothing to show that the assessee enjoyed any of his family income or had any separate portion of the family house reserved for him during his sojourn to India and that there were no enough materials to say that there was a residence either run or maintained by the assessee in India. In this view of the matter the Tribunal upheld the Appellate Assistant Commissioner 's order cancelling the assessment orders made against the assessee. As a consequence, the Tribunal also cancelled the penalties that were levied on the assessee. At the instance of the Revenue and on a direction from the High Court the Tribunal referred the following two questions to the High Court for its opinion: "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was non resident? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that there was no liability to penalty under section 28(1)(a) ?" The High Court answered both the questions in favour of the assessee and against the Revenue. While dealing with the first question, which was the principal question raised in Reference, the High Court took the view that the answer to that question depended upon a bundle of facts and their cumulative effect and in its view the cumulative effect of the totality of facts found by the Tribunal did not lead to the inference that a dwelling place or dwelling house was maintained by the assessee or the same was maintained by others for him but on the other hand the evidence showed that the assessee was enjoying the hospitality of his kith and kin during his stay in the family house where he was treated as a guest. The High Court further held that the mere fact that the assessee had a right in the family house at Orthanad in Tanjore District and that he was occasionally lodging 524 there did not mean that he was maintaining the same or had it maintained for him and that what the law required was the maintenance of a dwelling place which should be his domus mansionalis; in other words, if the dwelling place was not his second home or the real centre of his life then the assessee would be a non resident. It is this view of the High Court that is being challenged before us in these appeals by the Revenue. Since the question raised before us pertains to the proper construction of section 4A (a) (ii) of the Act and the requirements thereof, it will be desirable to set out the said provision. It runs thus: "For the purposes of this Act (a) any individual is resident in the taxable territories in any year if he . (ii) maintains or has maintained for him a dwelling place in the taxable territories for a period or periods amounting in all to one hundred and eighty two days or more in that year, is in the taxable territories for any time in that year. " Since the section is prefaced by the phrase "for the purposes of this Act", it is clear that it raises a statutory fiction; further the language of the provision makes it clear that it lays down a technical test of territorial connection amounting to residence applicable to all individuals foreigners as well as Indians, including Hindus, Christians, Muslims, Parsis and others irrespective of the personal law governing them. On a reading of the provision it becomes clear that before any individual can be said to be a resident in the taxable territories in any previous year two conditions are required to be fulfilled: (a) there must be a dwelling place maintained in the taxable territories either by the assessee himself or by some one else for him for the requisite period and (b) the assessee must live in the taxable territories (though not necessarily therein) for some time, howsoever short, in the previous year. In the instant case it was not disputed before us that the second condition was satisfied in regard to the assessee. The question that we have to consider is whether on the facts found by the Tribunal it could be said that the assessee maintained or had maintained for him a dwelling place in the taxable territories for the requisite period. It was not disputed that the assessee himself did not maintain the family house but it was maintained by Ganesa as the manager of the Hindu Undivided Family. If the family house, which was maintained by Ganesa as the Karta, in which the assessee had a share or interest and stayed for short periods during the previous years 525 relevant to the assessment years in question could be considered to be a dwelling house or a dwelling place maintained for him or for his benefit, then no difficulty would arise with regard to the requisite period because undoubtedly that dwelling place was there during all the previous years relevant to the assessment years and the assessee will have to be regarded as a resident in the taxable territories for the concerned years. Counsel for the Revenue contended that the expression "maintains a dwelling place" inter alia connotes the idea that an assessee owns a dwelling house which he can legally and as of right occupy if he is so minded during his visits to India while the expression "has maintained for him a dwelling place" would cover a case where the assessee has a right to occupy or live in a dwelling place during his stay in India though the expenses of maintaining such dwelling place are not met by him wholly or in part and since in the instant case it was a joint family dwelling house maintained by the Manager for the family wherein the assessee had a right of dwelling without any let or hindrance, it must be held that the assessee had maintained for him a dwelling house. In support of these contentions strong reliance was placed by him upon two decisions one of the Madras High Court in section M. Zackariah Saheb vs C.I.T. Madras and the other of Gujarat High Court in Ramjibhai Hansjibhai Patel vs Income Tax Officer, Special Circle, Ahmedabad. According to him the section merely speaks of a dwelling place of an assessee and does not require his actual residence in it nor does it require any establishment maintained by him or for him and it would be, therefore erroneous to introduce into the section the concept of 'attachment ' or 'permanence ' or 'home '. On the other hand, counsel for the assessee contended that three aspects emerge from the phrase "he maintains or has maintained a dwelling place for him": (i) the volition of the assessee in maintaining the dwelling place or its maintenance being at his instance, behest or request, (ii) the expenses of maintenance must be met by the assessee and (iii) the house or a portion thereof must be set apart and kept fit for the dwelling of the assessee. According to him what is contemplated by section 4A (a) (ii) is the de facto maintenance of a dwelling place for the assessee and not maintenance for him as one of a body of individuals; in other words, the section cannot apply to a case where a dwelling place is in possession of other members of the Hindu Undivided Family and the assessee has a right of common enjoyment. Counsel contended that on the facts found in the case the 526 assessee had stayed in the family house as a guest and enjoyed the hospitality of his kith and kin and, therefore, though as a co parcener he had a right in the family house his occasional lodging there could not mean that he was maintaining the same or had it maintained for him. In other words it was not his home. Strong reliance was placed by him on the Bombay High Court decision in C.I.T. Bombay North, etc. vs Falabhai Khodabhai Patel where the connotation of a "dwelling place" occurring in s.4A (a) (ii) was equated with a house which could be regarded by the assessee as his hime. He urged that both the Tribunal and the High Court were right in coming to the conclusion that the family house had not been maintained for the benefit of the assessee as his abode or home away from Ceylon and, therefore, he was rightly regarded as a non resident. At the outset it may be pointed out that the section uses the expression 'dwelling place ', a flexible expression, but the expression must be construed according to the object and intent of the particular legislation in which it has been used. Primarily the expression means 'residence ', 'abode ' or 'home ' where an individual is supposed usually to live and sleep and since the expression has been used in a taxing statute in the context of a provision which lays dawn a technical test of territorial connection amounting to residence, the concept of an abode on home would be implicit in it. In other words, it must be a house or a portion thereof which could be regarded as an abode or home of the assessee in the taxable territories. In our view, this aspect of the matter has been rightly emphasized by the Bombay High Court in Phulabhai Khodabhai 's case (supra), where Chief Justice Chagla has observed thus: "When we look at the language used by the Legislature, it is clear that what is sought to be emphasized is that there must be not only a residence or a house for the assessee in the taxable territories, but there must be a home. The connotation of a dwelling place is undoubtedly different from a mere residence or a mere house in which one finds oneself for a temporary or short period. A dwelling place connotes a sense of permanency, a sense of attachment, a sense of surroundings, which would permit a person to say that this house is his home. Undoubtedly a man may have more than one home; he may have a home at different places; but with regard to each one of these he 527 must be able to say that it is something more than a mere house or a mere residence. " Similar view was expressed by Mr. Justice Rowlatt in Pickles vs Foulsham, where the question whether the assessee was a resident in England for the purpose of payment of Income tax had to be decided on general principles in the absence of any statutory provision in the English statute with regard to residence as we have in our taxing statute. At page 275 of the report the learned Judge observed thus: "A man, I suppose, may keep a house for his wife and come there merely as a visitor; he may keep a house for his mother, and, when he can get away, always go there to see her; but it may be that it is his mother 's house, even if he is paying for it, and he is going there as a visitor. He keeps the house for his wife and children; it may be that he is going there as going home; it may be that that is the centre really of his life, that he keeps many belongings there, and so on, and his time in Africa is really, in truth, a period of enforced absence from what is truly his residence. Now it may be one, or it may be the other. " In other words, the test which the learned Judge laid down was that when you go to a house you should be really going home, then you are going to a dwelling house whether maintained by you or by someone else, a nda house may be your home whether it belongs to you or belongs to someone else. In other words, with regard to the house where he goes and lives, he must be able to say that it is his abode or home. It is, therefore, not possible to accept the contention of learned counsel for the Revenue that it is erroneous to introduce the concept of home or abode into the section. Secondly, the section uses two expressions: "he maintains a dwelling place" and "he has maintained for him a dwelling place. " The latter expression, obviously, means he causes to be maintained for him a dwelling place. This is clear from the fact that the relevant provision in the 1961 Act has now been altered and it says "he causes to be maintained for him" and in the Notes on Clauses to the concerned Bill it has been explained that the words "has maintained" in section 4A(a)(ii), have been replaced in the draft by the words "causes to be maintained", which express the intention better. Now, in either of these expressions the volition on the part of the assessee in the maintenance of the dwelling place emerges very clearly; whether he maintains it or he causes 528 it to be maintained, the maintenance of the dwelling place must be at his instance, behest or request and when it is maintained by someone else other than the assessee, it must be for the assessee or for his benefit. Therefore, the question that will have to be considered in the instant case is whether on the facts found by the Tribunal the family house which was maintained by Ganesa as the Karta could be regarded as an abode or home of the assessee maintained at the instance of the assessee and for his benefit? The facts found in the instant case are: (1) the assessee, born and brought up in Ceylon, had his own business and properties in Ceylon, (2) he had 8 Children all born and educated in Ceylon, (3) the H.U.F. (of which the assessee was a coparcener at the material time) owned an ancestral house at Orthanad, which had been and was being used as a dwelling by the assessee 's step mother, his full brothers and his cousin Ganesa, and the same was being maintained by Ganesa out of income of family properties, (4) during the previous years relevant to the assessment years in question while the construction of the assessee 's theatre in Orthanad was in progress, the assessee paid occasional visits and stayed sometimes in the family house, sometimes in chatram at Tanjore and at times in a hotel, (5) there was positive evidence on record that during his stay in the family house the assessee was considered only as a guest enjoying the hospitality of the family, (6) the assessee admittedly never enjoyed any portion of the family income nor was he connected with the management of the family properties, including the house and (7) in July 1958 by a deed of release the assessee relinquished all his right, title or interest in the family properties in favour of his brothers. On these facts it becomes transparently clear that the assessee whenever he stayed in the family house during the relevant previous years was more a guest therein enjoying the hospitality of his kith and kin than an inhabitant of his own abode or home and further that the family house was maintained by Ganesa not at the instance of the assessee nor for his benefit but it was maintained by him for the rest of the family. It is true that the house at Orthanad was at the material time a joint family house in which the assessee as a co parcener had a share and interest; it is also true that as a coparcener he had a right to occupy that house without any let or hindrance, but mere ownership of a fractional share or interest in the family house with the consequent right to occupy it without anything more would not be sufficient to satisfy the requirements of section 4A(a)(ii), for, the requirements thereof are: not only there must be a dwelling place in which the assessee has a right to live but he must maintain it as his home or he must have it maintained for him as his home. The material on record shows that the family house in which he stayed was neither his abode or home nor 529 was it maintained by Ganesa at the instance of the assessee or for his benefit. Turning to the two decisions one of the Madras High Court and the other of the Gujarat High Court on which reliance was placed by counsel for the Revenue, we may at once say that both the decisions are clearly distinguishable. The decision of the Madras High Court in Zackriah Sahib 's case (supra) dealt with a case of an assessee who was a Muhammadan merchant. He carried on business in Ceylon and resided there. His parents lived in British India, as it then was, in a house owned by his mother. The assessee 's wife also lived in British India sometimes with his parents and sometimes with her parents. The assessee was remitting monies now and then to his parents for their maintenance. He visited British India during the year of account and stayed in his mother 's house with his parents. The Appellate Tribunal held that the assessee was resident in British India within the meaning of s 4A(a)(ii). Reversing this decision, the Madras High Court held that the assessee did not maintain a dwelling place in British India and that his mother 's house was maintained for the parents of the assessee and not for the assessee himself. Obviously, the house belonged to the mother of the assessee which he had no legal right to occupy and, therefore, it could not be said that the assessee maintained a dwelling place in British India. Counsel, however, relied upon certain observations made by Vishwanatha Sastri, J., in that Judgment, which run thus: "The expression 'maintains a dwelling place ' connotes the idea that the assessee owns or has taken on rent or on a mortgage with possession a dwelling house which he can legally and as of right occupy, if he is so minded, during his visit to British India. .In our opinion, the expression 'has maintained for him ' would certainly cover a case where the assessee has a right to occupy or live in a dwelling place during his stay in British India though the expenses of maintaining the dwelling place are not met by him in whole or in part. A member of an undivided Hindu family. .has a right to live in the family house when he goes there, though the house is maintained by the manager of the family and not by the assessee from his own funds. In such cases it can be said that the assessee has a dwelling place maintained for him by the manager of the family for he has a right to occupy the house during his visits to British India. " Relying on the aforesaid passage, counsel urged that in the instant case the house at Orthanad was maintained by Ganesa as a Karta of the family and since the assessee as a coparcener had a right to live in it 530 during his visits to India it must be held that the assessee had maintained for him a dwelling place in India. It is not possible to accept this contention, for, in our view, the aforesaid passage, taken in its content, does not lay down as a proposition of law that mere ownership of a fractional share in a family house with a consequent right to occupy the same with nothing more would constitute it a dwelling house of such owner within the meaning of section 4A(a)(ii); for, it must further be shown that it was maintained by the manager at the instance of the assessee and for his benefit. That is how the aforesaid passage has been partly explained and, in our view, rightly, by the Madras High Court in a subsequent decision in C.I.T. Madras vs Janab A. P. Mohamed Noohu & Ors. The Gujarat decision in Ramjibhai Hansjibhai 's case (supra) was clearly a case where the joint family house was maintained as a dwelling place for the benefit of all members of the joint family, including the assessee. The main contention urged on behalf of the assessee in that case was that the dwelling house was not maintained for the assessee as an individual but it was maintained not only for him but for other members of the joint family as well and, therefore, the requirements of the section were not satisfied. The contention was negatived. In other words, it was not disputed in the Gujarat case that a dwelling house was maintained by the manager of the family for the benefit of the assessee. In the instant case on the facts it has been found that the family house was maintained by Ganesa not for the assessee, nor for his benefit but for the other family members. Having regard to the above discussion it is clear that though the assessee could be said to have had a share in the joint family house with a consequent right to occupy the same it could not be said that the said family house was maintained by Ganesa as the Karta of the family as a dwelling place for the assessee or for his benefit nor was it maintained by him at the instance of the assessee. Moreover, his stay in the family house has been found to be as a guest enjoying the hospitality of his kith and kin rather than as an inhabitant of his abode or home. In this view of the matter the assessee, in our view, was rightly regarded as a non resident. The appeals are therefore, dismissed. S.R. Appeals dismissed.

The purported object of the Andhra Pradesh Recognised Private Educational Institutions Control Act 1975 was to regulate the service conditions of teachers in private educational institutions and for ensuring the security of service of the teachers. Section 3(1) of the Act provides "Subject to any rule that may be made in this behalf, no teacher employed in any private educational institution shall be dismissed, removed or reduced in rank nor shall his appointment be otherwise terminated except with the prior approval of the competent authority". The proviso to this sub section states that if any educational management etc. contravenes the provisions of this sub section, the teacher affected shall be deemed to be in service. Where a proposal to dismiss etc. any teacher is communicated to the competent authority, according to sub section (2) of this section, that authority shall, if satisfied that there are adequate and reasonable grounds for such proposal, approve such dismissal, removal or reduction in rank or termination of appointment. Clause (a) of sub section (3) of this section states that no teacher employed in any private educational institution shall be placed under suspension, except when an enquiry into the gross misconduct of such teacher is contemplated. Clause (b) provides that no such suspension shall remain in force for more than a period of two months from the date of suspension and if such inquiry is not completed with that period, such teacher shall, without prejudice to the inquiry, be deemed to have been r restored as teacher. The proviso states that the competent authority may, for reasons to be recorded in writing, extend the said period of two months for a further period not exceeding two months, if in his opinion, the inquiry could not be completed within the said period of two months for reasons directly attributable to each teacher. Section 4 gives a right of appeal to teachers employed in private educational institutions against orders of punishment imposed on them. Section 5 deals with special provisions regarding appeal in certain past disciplinary cases. Section 6 which deals with retrenchment of teachers provides that where retrenchment of any teacher is rendered necessary consequent on any order of the Government relating to education or course of instructions or to any other matter, such retrenchment may be effected with the prior approval of the competent authority. Section 7 provides for payment of pay and allowances to teachers in the prescribed manner. 925 The appellants who were minority educational institutions established by members of the Christian community filed writ petitions before the High Court impugning various provisions of the Act as being violative of the guarantee contained in Article 30(1) of the Constitution by permitting or compelling interference with the internal administration of their private educational institutions. In particular they challenged the provisions of sections 3 to 7 of the Act on the ground that they deprive them of their right to administer the affairs of minority institutions by vesting the ultimate administrative control in an outside authority. The contentions having been rejected by the High Court they filed appeals by special leave. ^ HELD s Permajority (Chandrachud, C.J., and Fazal Ali, J. Kailasam,J., dissenting.): Sub sections (1) and (2) of section 3 are invalid and cannot be applied to minority institutions. Per majority (Chandrachud, C.J., and Kailasam J. Fazal Ali, J. dissenting). Clauses (a) and (b) of section 3(3) do not offend against article 30(1) and are valid. By the Court: Sections 4 & 5 are unconstitutional as being violative of article 30(1). Per majority (Chandrachud, C.J., and Kailasam J Fazal Ali, J, dissenting). Section 6 is valid. By the Court: Section 7 is valid. Per Chandrachud, C.J. Section 3(1) and 3(2) are unconstitutional in so far as they are made applicable to minority institutions since in practice these provisions are bound to interfere substantially with their right to administer institutions of their choice. [937E] 1. (a) Section 3(1) gives an unqualified mandate that no teacher shall be dismissed etc. except with the prior approval of the competent authority. Under the proviso, contravention of the section results in a total invalidation of the proposed action. If the section is contravened the teacher shall be deemed to be in service. Secondly, the sub section applies not only to cases in which the teacher is punished by an order of dismissal etc. but to cases in which the appointment is otherwise terminated. An order of termination simpliciter is also required to be submitted for the prior approval of the competent authority. All this shows that the true object of the sub section is not that which one could liberally assume by reading down the section. [935H; 936AB] (b) In the absence of any rules furnishing guidelines on the subject, it is difficult to predicate that in practice the operation of the section would be limited to a certain class of cases only. The absence of rules on the subject makes the unguided discretion of the competent authority the sole arbiter of the question as to which cases would fall within the section and which would fall outside it. [936 E F] (c) Section 3(2), under the guise on conferring the power of approval, confers upon the competent authority an appellate power of great magnitude. That authority is made a judge both of facts and on law by the conferment upon 926 it of a power to test the validity of the proposal on the vastly subjective touchstone of adequacy and reasonableness. The sub section leaves no scope for reading down the provision of section 3(1). The two sub sections together confer upon the competent authority, in the absence of proper rules, a wide and untrammeled discretion to interfere with the proposed order whenever in its opinion the order is based on grounds which do not appear to it either adequate or reasonable. [936G H; 937A] (d) Though the section provides that the competent authority "shall" approve the proposed order if it is satisfied that it is based on adequate and reasonable grounds, its plain and necessary implication is that it shall not approve the proposal unless it is satisfied. The conferment of such a power on an outside authority, the exercise of which is made to depend purely on subjective consideration arising out of twin formula of adequacy and reasonableness, cannot but constitute an infringement of the right guaranteed by article 30(1). [937C] State of Kerala vs Very. Rev. Mother Provincial ; , D.A.V. College vs State of Punjab [1971] Suppl. S.C.R. 688 and Ahmedabad st. Xaviers College Society vs State of Gujarat ; ; referred to. (a) Section 3(3)(a) and 3(3)(b) of the Act do not offend against the provisions of article 30(1) and are valid. [939B C] (b) Clause (a) contains but an elementary guarantee of freedom from arbitrariness to the teachers. The provision is regulatory in character since it neither denies to the management the right to proceed against an erring teacher nor does it place an unreasonable restraint on its power to do so. It assumes the right of the management to suspend a teacher but regulates that right by directing that a teacher shall not be suspended unless an inquiry into his conduct is contemplated and unless the inquiry is in respect of a charge of gross misconduct. These restraints which bear a reasonable nexus with attainment of educational excellence cannot be considered to be violative of the right given by article 30(1). The limitation of the period of suspension initially to two months, which can in appropriate cases be extended by another two months, as provided in clause (b) and its proviso, partakes of the same character as the provisions contained in clause (a). A provision founded so patently on plain reason is difficult to construe as an invasion of the right to administer an institution unless that right carried with it the right to maladminister. [938 G H] 3. Section 4 is unconstitutional as being violative of article 30(1) of the constitution. The section confers upon the government the power to provide by rules that an appeal might lie to such authority or officer as it designates, regardless of the standing or status of that authority or officer. Secondly an appeal is provided for on all questions of fact and law, thereby throwing open the order passed by the management to the unguided scrutiny and unlimited review of the appellate authority, which would mean that, in the exercise of the appellate power, the prescribed authority or officer can substitute his own view for that of the management even in cases in which two views are reasonably possible. Lastly, while a right of appeal is given to the aggrieved teacher against the order passed by the management, no corresponding right is conferred on the management against the order passed by the competent authority under section 3(2) of the Act. In the absence of a provision for appeal against the order of the competent autho 927 rity refusing to approve the action proposed by the management, the management is pleased in a gravely disadvantageous position vis a vis the teacher who is given the right of appeal by section 4. [939D H] Section 5 must fall with section 4. [940B] 4. Section 6 is valid. The section aims at affording a minimal guarantee of security of tenure to teachers by eschewing the passing of mala fide orders in the garb of retrenchment. It is implicit in the provisions of this section that the limited jurisdiction which it confers upon the competent authority is to examine whether, in cases where the retrenchment is stated to have become necessary by reason of an order passed by the Government, it has in fact so become necessary. The conferment of a guided and limited power on the competent authority for the purpose of finding out whether, in fact the retrenchment has become necessary by reason of a Governmental order cannot constitute an interference with the right of administration conferred by article 30(1). [940D F] Section 7 is regulatory in its character and is valid. [940H] Per Fazal Ali, J. On an exhaustive analysis of the authorities of this Court on the various aspects of the fundamental right enshrined in article 30(1) of the Constitution the following propositions of law emerge: (i) Article 30(1) enshrines the fundamental right of the minority institutions to manage and administer their educational institutions. [967H] (ii) Although, the right conferred by this article is absolute, unfettered and unconditional, it does not mean that it gives a licence for maladministration so as to defeat the avowed object of the article, namely to advance excellence and perfection in the field of education. [968B] (iii)While the State or any other statutory authority has no right to interfere with the internal administration of the minority institution, it could take regulatory measures to promote the efficiency and excellence of educational standards and issue guidelines for ensuring the security of the services of the teachers and other employees of the institution. [968C] (iv) Under the garb of adopting regulatory measures, the State or any other authority cannot destroy the administrative autonomy of the institution or interfere with the management of the institution so as to render the right of administration of the management of the institution illusory. [968E] (v) By its very nature article 30 implies that where an affiliation is asked for, the university cannot refuse the same without sufficient reason or try to impose such conditions as would completely destroy the autonomous administration of the educational institution. [968G] (vi) Induction of an outside authority in the governing body of the minority institution to conduct the affairs of the institution would be completely destructive of the fundamental right under article 30(1), where a high authority like the Vice Chancellor or his 928 nominee is appointed in the administration, such authorities should not be thrust so as to have a controlling voice in the matter overshadowing the powers of the managing committee. [968H] (vii)It is open to the Government or the University to frame rules and regulations governing the conditions of service of teachers in order to secure their tenure of service and to appoint a high authority to see that the rules are not violated or the members of the staff are not victimised. In such cases the purpose is not to interfere with the autonomy of the institution but merely to improve the excellence and efficiency of education. Even so, an authority should not be given a blanket uncanalised and arbitrary powers. [969E F] (viii)Where a minority institution affiliated to a university is enjoined to adopt courses of study of the syllabi or the nature of books prescribed and the holding of examination to test the ability of the students of the institution, it does not follow that the freedom contained in article 30(1) of the Constitution is violated. [970A] (ix) Where a high authority is appointed to exercise vigilance on the work of the teachers and to ensure security of tenure for them the authority must be given proper guidelines. Before coming to any decision which may be binding on the managing committee the head of the institution or the senior member of the managing committee must be associated and they should be allowed to have a say in the matter. [970C] Kerala Education Bill, 1957; , ; Sidhajbhai Sabhai and Ors. vs State of Bombay and Anr. ; ; Rev. Father W. Proost & Ors. vs State of Bihar ; ; State of Kerala etc. vs Veru Rev. Mother Provincial etc. ; ; D.A.V. College etc. vs State of Punjab & Ors. and The Ahmedabad St. Xaviers College Society & Anr. vs State of Gujarat ; ; referred to. (a) Section 3 in its entirety is ultra vires as being violative of article 30(1) and is wholly inapplicable to the appellants who are minority institutions. [975B] (b) The proviso enjoins that any contravention of the provisions would not affect the teachers who would be deemed to be in service. It is manifest that in the absence of any rules the proviso would have no application and even if it applied it would amount to a serious inroad on the fundamental right of the minority institutions to administer or manage their own affairs. [971H] (c) Sub section 2 of section 3 is unconstitutional as being violative of article 30(1). It suffers from the vice of excessive delegation of powers and confers undefined, absolute and arbitrary powers to grant or to refuse sanction to any action taken by the managing committee and almost reduces the institution to a helpless position. [973B C] (d) If the State wanted to regulate the conditions of service of the teachers, it should have taken care to make proper rules giving sufficient 929 powers to the management in the manner in which it was to act. Induction of an outside authority into the institution and making his decision final was a blatant interference with the autonomy of the institution. The words "adequate and reasonable" are too vague and do not lay down any objective standard to judge the discretion to be exercised by the competent authority whose order would be binding on the institution. [972F G] (e) While section 4 gives a right of appeal to the aggrieved teacher no such right has been given to the management to file an appeal against the order of the competent authority if it refuses to grant sanction to the order of the Managing Committee of the institution. The competent authority is only the District Educational Officer who is not a very high authority such as a Director of Public instruction or Vice Chancellor of a University. No time limit has been fixed by the statute within which the competent authority is to give its approval. The cumulative effect of clause (a) and (b) of section 3(3) and the proviso is to interfere with the internal administration of the minority institutions and curb the power of suspension. It deprives the institution of the right of taking any disciplinary action against a teacher. The adjective "gross" before the term "misconduct in clause (a) destroys the power of suspension which the minority institution possesses. The provision contained in clause (b) of section 3(3) providing that no suspension shall remain in force for a period of more than two months from the date of suspension and if no inquiry is completed within this period the teacher would have to be reinstated, gives an unqualified right to a teacher in the matter of suspension which even a government servant does not enjoy. [973A, 974D E] 2. Section 4 is ultra vires and is violative of article 30 of the Constitution. It does not contain any guidelines as to the manner in which the power could be exercised, nor does it contain any provision which may entitle the minority institution to be heard by the appellate authority. The conferment of an absolute and unguided power on the appellate authority would amount to a direct interference with the right enshrined in article 30(1) and makes the minority institution a powerless body. [976B; 975G] 3. If section 4 is inapplicable to the minority institution Section 5 also follows the same fate. [976C] 4. Section 6 which contains an un canalised and unguided power suffers from the same vice as in the case of section 3. The words "administer educational institutions of their choice" in article 30 clearly indicate that the institution has an absolute right to select teachers, retain them or retrench them at its sweet will according to the norms prescribed by the institution or by the religious order which has founded the institution. [976H] 5. Section 7 is an innocuous provision and is valid. [977C] 6. Sections 8, 9, 12 and 13 are inapplicable to the minority institutions. [977D, 978B] 7. Section 16 suffers from a serious defect namely that the provision regarding appeal to the appellate authority was valid then it completely bars the right of the management to file a suit to challenge the validity of the order of the appellant. To this extent the section makes serious inroad on the fundamental right of the minority institutions and is inapplicable to the minority institutions. [978G] Section 17 is inapplicable. [978F] 930 Per Kailasam, J. 1. A reading of the various decisions rendered by this Court on the interpretation of article 30(1) of the Constitution makes it clear that while the right to establish and administer a minority institution cannot be interfered with, restrictions by way of regulations for the purpose of maintaining the educational standards of the institution can be validly imposed. For maintaining the educational standards of the institution as a whole, it is necessary to ensure that it is properly staffed. Conditions imposing the minimum qualifications of the staff, their pay and other benefits, their service conditions, the imposition of punishment will all be covered and regulations of such a nature are valid. In the case of institutions that receive aid it is the duty of the government who grants aid to see that the funds are properly utilised. Regulations can be made by the government for ensuring the proper conditions of service of the teachers and for securing fair procedure in the matter of disciplinary action against them. Prescribing uniformity in the conditions of service and conduct of teachers in all non governmental colleges would promote harmony, avoid frustration and, therefore, is permissible. Rules prescribed by the university or other authority may require that no member of the teaching or non teaching staff of a recognised or approved institution shall be dismissed etc., except after a proper enquiry. If the regulations require the approval of the competent authority for safeguarding the rights of the teachers and for securing the procedure there can be no objection. Such authority can also interfere with the decision of the private institutions when the punishment awarded is malafide or by way of victimisation or for similar causes. [989B; 993D G] Kerala Education Bill [1959] SCR, 995, Rev. Sidhajbhai Sabhai & Ors. ; , Rev. Father W. Proost and Ors. vs State of Bihar & Ors. ; , State of Kerala vs Very. Rev. Mother Provincial ; , D.A.V. College etc. vs State of Punjab & Ors. [1971] Suppl. S.C.R. 688 and Ahmedabad St. Xaviers College Society and Anr. vs State of Gujarat ; , referred to. 2. It is not only reasonable but proper that a restricted meaning is given to the power of prior approval conferred on the competent authority under section 3 of the Act. It is a well established principle of interpretation that the statement of objects and reasons could be referred to for the limited purpose of ascertaining the conditions prevalent at the time which actuated the sponsor of the Bill to introduce the same and the extent of urgency and the evil sought to be remedied. Clearly the legislation was intended to regulate the service conditions of teachers employed in the private educational institutions and for the security of service of the teachers. The power contained in section 3(1) and 3(2) is restricted to regulating the service conditions of teachers and for ensuring their security of service. [1001C; 998A B] 3. While interpreting a provision of law the Court will presume that the legislation was intended to be intra vires and also reasonable. The section ought to be interpreted consistent with the presumption which imputes to the legislature an intention of limiting the direct operation of its enactment to the extent that is permissible. A reading down of a provision of a statute puts into operation the principle that so far as it is reasonably possible to do so, the legislation should be construed as being within its power. It has the principle effect 931 that where an Act is expressed in language of generality, which makes it capable, if read literally, of applying to matters beyond the relevant legislative powers, the Court will construe it in a more limited sense so as to keep it within power. [998E F] The State of West Bengal vs Subhodh Gopal Bose and Ors. ; , Att. vs HRH Prince Earnest Augstas of Hanover, , Keshavananda Bharti vs State of Kerala , 101, Towns vs Bigner 245 U.S. , 376 and Kedar Nath Singh vs State of Bihar ; ; referred to. In the instant case it must be presumed that the legislature was conscious of the limitations of the power which the competent authority can have in granting or withholding approval in the case of disciplinary proceedings conducted by private institutions. The object of the legislation in this case was very different from other cases in which the legislation was aimed at depriving the minority institutions of all their powers. Its only aim is to provide security of service. There are sufficient guidelines in the objects and reasons as well as in the preamble. [1001 B C] 4. (a) The contention that section 3(1) and (2) lack guidelines and have conferred a blanket power cannot be accepted. Section 3(1) and (2) must be read together. The words "adequate and reasonable" should be given a restricted meaning so as to validate the provisions of the section. The approval of an order contemplated by sub section (2) will have to be read with sub section (1). Sub section (2) required the competent authority to approve such a proposal if it is satisfied that there are adequate and reasonable grounds for such proposal. The words "adequate and reasonable" furnish sufficient guidelines. The competent authority can interfere if there are no materials at all for sustaining the order of punishment or when on the materials found the charge is completely baseless and preserve. The word "adequate" will have to be understood as being confined to such examination of the proposal. The word "reasonable" would indicate that the power of the competent authority is confined to the power of an authority to interfere with the enquiry and the conclusions arrived at by the domestic tribunal. It cannot be understood as conferring absolute power to interfere with the enquiry by the tribunal as a Court of appeal on merits. [1002E; 1001G H] (b) The plea that the "competent authority" may be any petty officer cannot be upheld because it is defined in section 2(1) to mean "any authority, officer or person authorised by notification performing the functions of competent authority". The officers of the educational department who are incharge of the administration of educational institutions in the area cannot be called petty officers. [1002H] (c) Clauses (a) and (b) of sub section (3) cannot be said to interfere with the right of administration of the private institutions. The two clauses are regulatory in nature and are intended to safeguard the teachers from being suspended for unduly long periods without there being an enquiry into "gross mis conduct." [1003C] (d) Sub section (4) of section 3 which states that every teacher placed under suspension shall be paid subsistence allowance at such rates as may be 932 prescribed during the period of his suspension is purely regulatory in nature and, therefore, unobjectionable. [1003D] 5. Section 4 is invalid. The vice contained in this section is that the right of appeal which is confined only to the teachers is not available to institutions. [1003F] 6. Section 5 which confers power on the competent authority to hear appeals in certain past disciplinary cases will have to fall along with section 4. [1003G] 7. Section 6 is also regulatory in nature and its validity cannot be questioned. [1003H] 8. Section 7 is regulatory in nature and is intended for securing regular payment to the teachers. [1004A]

: Special Leave Petition (Criminal) No. 372 of 1985. From the Judgment and Order dated 18/19.9.1984 of the Bombay High Court in Criminal Appeal No. 423 of 1981 S.B. Bhasme, A.B Bhasme and M.A, Firoz for the Petitioner. The Order of the Court was delivered by CHINNAPPA REDDY, J. This Special Leave Petition by the first accused in Session Case No. 134 of 1980 before the Sessions Judge, Sholapur whose conviction by the Sessions Judge under section 302 has been confirmed by the High Court, has to be dismissed as it rests entirely on appreciation of evidence. While dismissing the Special Leave Petition we are however, constraint to make a few remarks about some of the observations of the High Court. In paragraph 18 of the judgment of the High Court it has been said "the case of the prosecution stands on the pedestal of a tripod having the eye witness account of Shrimant and Nirmala as one leg; the discovery of axes, spear and a pair of trousers as the second leg and the animosity generated by high handed behaviour of Malkari regarding diversion of rain water as the third leg. The confession made by accused No. 1 Nogeshi which was subsequently retracted forms the additional fourth lee of the tripod but it is well settled that the confessional statement can never be an evidence upon which a to found a conviction. It can at best furnish an additional reenforcement when the other evidence is clinching enough to pronounce a verdict of guilt. The confessional statement alone and by itself would lead us nowhere; if one of the legs of the tripod on which the prosecution bases its case gives way, the whole case like Humpty Dumpty would come tumbling down and the additional fourth leg that is, the confession, will not, like all the King 's horses and all the King 's men would put Humpty Dumpty together. " 463 The metaphor used by the judges is entirely misapplied and misleading. The evidence of the eye witness, if accepted, is sufficient to warrant conviction though in appropriate cases the Court may as a measure of caution seek some confirming circumstances from other sources. But ordinarily, the evidence of a truthful eye witness is sufficient without anything more, to warrant a conviction and cannot for instance, be made to depend for its acceptance on the truthfulness of other items of evidence such as recovery of weapons etc. at the instance of the accused by the police. The Judges of the High Court were wrong in treating the evidence of eye witness as 'one of three legs of a tripod which must collapse if any of the other legs collapses. Again the High Court is wrong in thinking that a confession cannot be the foundation of a conviction but can only constitute 'a fourth leg to a tripod '. This statement has been repeated again in paragraph 30, where the High Court has observed "the confession alone and by itself cannot prove the guilt of an accused. " We are not a little surprised that such a statement should have been made by the High Court. We wish to make it clear and this is only to repeat what is so well established that a retracted confession by an accused may form the basis of a conviction of that accused if it receives some general corroboration from other independent sources. It cannot however, be the basis for convicting co accused though it may be taken into consideration against co accused also. It is entirely wrong to think that a confession can lead nowhere. We are sorry to find such careless statements in the judgment of a High Court. Special leave petition is dismissed.

The petitioner was convicted by the Sessions Judge under Section 302, IPC. and the conviction was confirmed by the High Court. Dismissing the Special Leave Petition, ^ HELD: 1. The evidence of an eye witness, if accepted is sufficient to warrant conviction though in appropriate cases the Court may as a measure of caution seek some confirming circumstances from other sources. But ordinarily, the evidence of a truthful eye witness is sufficient without anything more to warrant a conviction and cannot for instance be made to depend for its acceptance on the truthfulness of other items of evidence such as recovery of weapons etc. at the instance of the accused by the police. [463 B]] 2.A retracted confession by an accused may form the basis of a conviction of that accused if it receives some general corroboration from other independent sources. It cannot however, be the basis for convicting a co accused though it may be taken into consideration against co accused also R It is entirely wrong to think that a confession can lead nowhere. [463D E] 462 In the instant case, the High Court was wrong in treating the evidence of the eye witness as 'one of three legs of a tripod ' which must collapse if any of the other Legs collapses. It was also wrong in holding that a confession cannot be the foundation of a conviction but can only constitute 'a fourth leg to a tripod ', and that "the confession alone and by itself cannot prove the guilt of an accused." [463C D]

Appeal No. 2394 of 1966. Appeal by special leave from the judgment and decree dated June 26, 1964 of the Calcutta High Court in Appeal from Appellate Decree No. 1011 of 1962. section V. Gupte and D. N. Mukherjee, for the appellants. 667 Bishan Narain and P. K. Ghosh, for respondents Nos. 1, 2(c), 2 (d), 2 (f ) and 2 (g). The Judgment of the Court was delivered by Mitter, J. The main question in this appeal is, whether the defendants appellants perfected their title to the property in respect of which partition was claimed by the plaintiffs by adverse, possession for the prescriptive period of twelve years or more. The relevant facts are as follows. The parties are all descendants of one Durgadas Mukherjee who died many years back, leaving six sons and inter alia the property which is the subject matter of this litigation, recorded as Dag No. 444 Khatian No. 72 in Mauja Barasat, District 24 Parganas during the last Cadastral survey. Of the two plaintiffs the first Saradindu is a great grandson of the said Durgadas Mukherjee of the branch of the youngest son, his co plaintiff being a grandson in another branch. The defendants belong to other branches of the said family. The first plaintiff based his title on several conveyances from other members of the family as also purchase at an execution sale of a fractional interest of the members of the branch of Bama Charan, the second son of Durgadas. The second plaintiff claims by inheritance. The property consists of 34 acres together with two structures thereon which are quite separate from each other. One portion of the structures i.e. that to the east, popularly known as Bamacharan Babu 's ' Bati is a fairly commodious building with a separate municipal number. The other structure in the western portion known as Baitakhana Bati was and is admittedly the joint property of the descendants of Durgadas with a municipal number of its own. The plaintiffs claim that the land and the two buildings are joint property while the whom are appellants before this the said eastern building with the case of the appellants was that the contesting defendants, some of Court, claim exclusive title to land on which it stands. The eastern structure was constructed, by Bama Charan with his own money and that. the co sharers of Bama Charan, by ekramamas, gave up their interest in the land on which the same stood. The High Court agreeing with the finding of the first appellate court found that there was no, evidence on record to show that Bama Charan had put up the said building with his own money or that he was the exclusive owner of the said two storeyed building or that the other co sharers gave up their ownership of the subjacent soil and rejected the exclusive title sought to be set up with regard thereto. This is a conclusion of fact which does not require further scrutiny. The High Court also agreed with the lower appellate court in rejecting the story of permissive possession of the defendants over the said building set up by the plaintiffs and came to the conclu 13 918 Sup. C.I./71 668 sion that "at all material times the heirs in the line of Bama Charan including the appellants were in separate possession of the eastern two storeyed building. " The point for consideration before the High Court was and before us is, whether by such exclusive possession the heirs in the line of Bama Charan including the appellants acquired title by adverse possession to the eastern portion i.e. Bama charan Babu 's Bati. With regard to the Baitakhana Bati there is no dispute about its jointness. No question can be raised about the 'first plaintiff 's having become a co sharer with the heirs in the line of Bama Charan.in the year 1941 by private treaties and the auction purchase of the shares of three of his sons in execution of an award under a Co operative Societies Act. By the kobalas the first plaintiff acquired fractional interest in the shares of some of the descendants of Bama Charan as also of the descend ants of his brother Shyama Charan. In the sale certificate following the ;auction purchase there is a reference to "Dalan 3 Privy 2" but there is no express reference to these in the koabalas (exhibit 6 series). In the courts below the defendants appellants contended that the eastern two storeyed building was neither intended to be nor was conveyed under Ex.6 series kobalas and exhibit 9 a), the sale certificate. Both the trial court and the first a ale court :held that the kobalas and sale certificate were sufficiently comprehensive so as to include all or any structures which stood on the aforesaid plot of land at the material time and that there was, nothing express or implied in the kobalas to show that the two storeyed building on the eastern side was intended to be excluded from their operation. The High Court also found that so far as the sale certificate was concerned the first plaintiff had acquired the interest of three sons of Baba Charan. The point as to adverse possession canvassed by the appel lants arises in the following manner. Their contention is that although the sale certificate was obtained in 1941 inasmuch as the suit for partition was filed in 1955 the requisite period of 12 years under article 144 of the Limitation Act of 1908 had elapsed in the meanwhile resulting in the perfection of their title by exclusive separate possession of the property. To this the plaintiffs ' rejoinder was that the two storeyed building in the eastern wing had indisputably been in the occupation of the military authorities by requisition under the Defence of India Act and the Rules, 1939 for four years from 1942 to 1946. It was argued that there was thus a break in the claim to the prescriptive title set up and adverse possession, if any, was limited to the period between 1946 and 1955. This was sought to be repelled by the plea that the military authorities had taken possession of the property from the defendants and had restored possession W them in 1946 and 669 that their possession was really under or on behalf of the defendants without causing a break in the continuity of their possession. An attempt was made to substantiate this by reference to several documents which form part of the record. The order of requisition dated May 28, 1942 made under rule 75 A of the Defence of India Rules issued by the Collector of the District of 24 Parganas ' shows that the building together with fixtures, fittings etc. was to be placed at the disposal and under the control of Brigadier Commander 36 Indian Infantry Brigade, Barrackpore on and from 8 2 1942 until six months after the termination of the war unless relinquished earlier. A copy of the notice was served on Prakash Chandra Mukherjee of Barasat described as "the owner/occupier" of the said property. ' The notice of an award under section 19 of the Defence of India Act 1939 addressed to Prokash Chandra Mukherjee, another descendant of Bama Charan shows that compensation had been adjudged and awarded in respect of the property at Rs. 125. A third notice dated June 24, 1946 sent out from the office of the Land Acquisition Collector addressed to Pankaj Kumar Mukherjee and others shows that possession of Cadastral survey plot No. 444 Mouza Barasat requisitioned under rule 75 A would be restored to, the addressee on July 2, 1946. exhibit D, a memo forwarding a cheque for Rs. 2,100 was addressed to Prokash Chandra Mukherjee. and others by way of rent for terminal compensation in respect of the premises which had been requisitioned. In our view possession by Government or the military autho rities of immovable property under rule 75 A of the Defence of India Rules 1939 cannot be said to be in the character of an agent or by virtue of any implied permission from the true owner or occupier. section 2 of the Act of 1939 under which rules were made and in particular cl. (xxiv) of sub section (2) of that section empowered the authorities mentioned to make orders providing for the requisitioning of any property, movable or immovable, including the taking possession thereof 'and the issue of any orders in respect thereof. section 19 (1) of the Act only enjoined upon the Government to pay compensation in every case of such requisition and under section 19 B(1) Government was under an obligation, whenever any property requisitioned under any rule was to be released therefrom, to make such enquiry, if any, as was considered necessary and specify by order in writing the person to whom possession was to be given. Sub section (2) of this section clearly shows that delivery of possession of the property to the person specified in an order under sub section (1) was to operate as full discharge to the Government from all liabilities in respect of the property, but was not to prejudice any rights in respect thereof which any other person might be entitled by due process of law to enforce against the person to whom possession of the pro 670 perty was given. Rule 75 A enabled the Central Government of the Provincial Government to requisition any property, movable. or immovable, subject to certain exceptions mentioned therein. The net result of the Act and the Rules and the effect of orders of requisition and relinquishment of possession and or payment ' of Compensation must be taken to be that possession was taken by virtue of the powers under the Act and the rules irrespective of any consideration as to the rights of the true, owner or the occupier who could only make a claim to compensation. It is further clear that even if possession was taken from A but was made over to B after relinquishment, A could have no cause of action against Government if relinquishment was in terms of cl. (2) of section 19 B(1). In other words possession of Government was neither by permission nor in the character of, an agent. If possession under the requisition had been taken from a trespasser but had been restored to the lawful owner after the end of the period of requisition, the trespasser could not contend that he was wrongfully deprived of possession or that the, period of Government 's occupation should be added to the period of his preceding trespass to enable him to claim a prescriptive right by adverse possession. The High Court relied on the decision of the Judicial Com mittee of the Privy Council in Karan Singh vs Bakar Ali Khan(1) in coming to the conclusion that such requisition put an end to the claim for adverse possession, if any, which might have started from an anterior date. The Judicial Committee held that possession of the defendants since 1863 when the Collector had relinquished possession was not, 12 years ' possession but it was contended on behalf of the defendant that he was justified in tacking to his possession the possession of the Collector from 1861. The Board found that pending a dispute between the parties the Collector, in order to secure the Government revenue had attached and taken possession of the property and retained possession of it from 1861 until October 1863 when in consequence of the decree of the civil court he delivered possession to the defendant and paid over to him the surplus profits of the estate after deducting the Government revenue and expenses. As the suit was brought in the year 1874 the period of 12 years had to commence some time in 1862. The Board observed that it must be assumed that "the Collector properly took possession for the purpose of protecting the Government revenue. It was the duty of the Collector whi1st in possession under the attachment, to collect the rents from the ryots, and having paid the Government revenue and the expenses of collection to pay over the surplus to the real owner. If the defendant was the real owner the surplus belonged (1) 9 I.A. 99. 671 to him; but if, on the other hand, the infants were the right owners, then the surplus belonged to them. The Collector, by paying over the money to Karan Singh, did not give Karan Singh a title. " Accordingly it was held that the suit was not barred by limitation. Mr. Gupte on behalf of the appellants relied on Halsbury 's Laws of England (Third Edition, Vol. 24) article 484 at P.253 in support of his contention that the exclusive possession of s client was not disturbed by the requisition. The article relied on reads "The mere fact that land is taken under the Lands Clauses Consolidation Act, 1845, for the purposes of a public undertaking, and is not superfluous land, does not prevent a person, who has exclusive possession of such land for the statutory period, from acquiring title under the statute;" The decision relied on by Mr. Gupte is that of Bobett vs The South Eastern Railway Co. (1). In our view neither the above passage nor this judgment helps the appellants in any way. One of the points raised in Bobett 's case was, whether the plaintiff in an action of trespass and to recover possession of land could be allowed to set up a plea that inasmuch as he had been let into possession by the defendants or that he had been in possession to the exclusion of the defendants without any tenancy at all during the time required by the Statute of Limitation for the acquisition of a prescriptive title, he was absolutely entitled to the land when ousted by the defendants. It was argued on behalf of the defendants that even if the plaintiff was a tenant at will for the requisite period and in exclusive possession of the land the Statute of Limitation did not apply to the case, for the land in question was inalienable by the company under section 127 of the Lands Clauses Act and therefore could, by the mere aches of its officers have vested in the plaintiff contrary to the intention of the Legislature which only allowed the company to take possession of the land for the purposes of the undertaking and subject to the provisions of its Acts and not give it up to others. There on a consideration of section 7 of 3 and 4 wm. 4, c. 27 and other statutory provisions Denman, J. arrived at the conclusion: ". .that the mere fact that the property in question was land taken for the purposes of the undertaking and not superfluous land, would not prevent the plaintiff if he had exclusive possession since 1863, either as a (1) 672 wrongdoer or as tenant at will in the first instance from being entitled to the land by virtue of the Statute of Limitations. " Put simply the dictum only meant that the Statute of Limitation would be applicable to possession of a trespasser notwithstanding the provisions of the Lands Clauses Act, 1845. The question before us is altogether of a different character. If the defendants appellants could have established that an order under r. 75 A of the Defence of India Rules merely enabled the military authorities to take possession of the land for the period of their need by their permission or in the character of agents, they would have probably been on firm ground. But, as already observed by us, the nature of the order of requisition under r. 75 A is altogether different and such possession cannot enure for the benefit of the person who was in possession before for the purpose of acquisition of a prescriptive, title. The only other decision to which our attention was drawn is that of Dagdu vs Kalu(1). In this case it was found that the plaintiff had been admittedly out of possession of the lands since 1881 and the defendant had been in adverse possession of them from that time until the date of suit October 2, 1895, with the exception of a period of three years during which period he had been dispossessed by one Barsu who wrongly alleged that he was a donee of the plaintiffs. On that allegation the donee obtained possession of the land under the decree of the court of first instance but it was reversed by the High Court and the land was as a reversal restored by the court to the defendant on 9th April 1895. It was observed by the High Court that (p. 736) : "The erroneous action of the Court of first instance cannot, we think, prejudice the defendant, or put him in a worse position that he would have occupied, had the erroneous decree not been made. " This decision too, in our opinion, does not help the appellants. The possession of the defendants was disturbed by a wrong order of the court which was ultimately put right and the court no doubt acted on the maxim that a litigant is not to be prejudiced by any wrong order of the court. A faint attempt was made to re agitate the question that the auction sale of 1941 did not include the eastern portion. This in our opinion is concluded by the finding of the High Court already noted. (1) 22 Bombay 733. 673 The last, point put forward was that the plaintiffs had not asked for possession in their plaint. This can be rejected summarily. The prayers in the plaint not only include one, for preliminary decree for partition but for the appointment of a commissioner for effecting partition of the property by separating the shares of the plaintiffs from those of the defendants in the suit property. Clearly the plaintiffs were asking for demarcation of ' the portion of the property which should be theirs as a result of the partition. Imbedded in this prayer is a claim for possession. In the result the appeal fails and is dismissed with costs. V.P.S. Appeal dismissed.

The plaintiff became a co sharer with the defendant in the suit property in the year 1941 as a result of some conveyances by members of the defendants ' family. The property was in the occupation of military authorities by requisition under the Defence of India Act, 1939, and the Rules made thereunder, for four years from 1942 to 1946. The defendants were in exclusive possession thereafter from 1946 to 1955 when the plaintiff filed a suit for partition and possession of his share. On the question whether the suit was barred by limitation under article 144 of Limitation Act, 1908, on the plea that as the military authorities had taken possession of the property from the defendants and had restored the possession to them in 1946 the possession of the said authorities was really under or on behalf of the defendants without causing any break in the continuity of their possession, HELD : The possession of the Government was neither by permission of the defendants nor in the character of an agent of the defendants. The orders of requisition, relinquishment of possession and payment, of compensation under the Defence of India Act read with Act and the Rules how that the possession was taken by Virtue of the powers under the Act and the Rules irrespective of any consideration as to the rights of the true owner or the occupier who could make a claim to compensation. Therefore, possession of Government by requisition under rule 75 A can not enure for the benefit of the person who was in possession before, for the purpose of enabling such person to acquire a prescriptive title. [669 E F; 670 B D] Karan Singh vs Bakar Ali Khan, 9 I.A. 99, applied. Bobett vs South Eastern Railway Co. and Dagdu vs Kalu, 22 Bombay 733, explained.

Civil Appeal No. 871 of 1964. Appeal from the judgment and order dated January 16, 17, 1961 of the Gujarat High Court in Special Civil Application No. 233 of 1960. N. D. Karkhanis, T. A. Ramachandran, 0. C. Mathur, Ravinder Narain and J. B. Dadachanii, for the appellant. A. V. Viswanatha Sastri, R. Ganapathy Iyer, B. R. G. K. A char and R. N. Sachthey, for the respondents. The Judgment of the Court was delivered by Shah, J. The appellants Company registered under the Indian Companies Act, 1913 was assessed in the assessment years 1948 49 to 1953 54 in respect of the profits earned in its business, and was allowed rebate under the appropriate provisions contained in the Schedules to the relevant Finance Acts on the undistributed profits of the previous years. On December 31, 1956 at an annual general meeting of the shareholders the Company declared an aggregate sum of Rs. 2,15,232/ as dividend for the year ending December 31, 1956. Thereafter a special resolution was passed for voluntary winding up of the Company with effect from October 1, 1957, and for appointing a liquidator to wind up the affairs of the Company. On October 20 & 21, 1957 the liquidator distributed to the shareholders thereafter on February 21 & 22, 1958; July 27, 1959 the liquidator distributed to the shareholders. In respect of each liquidator issued an "income tax refund that the amount was distributed out of accumulated profits of earlier years. The Income tax Officer, Special Investigation Circle B, Ahmedabad in exercise of the power under section 35(10) of the Indian Income tax Act, 1922, passed an order withdrawing the rebate, 734 granted in respect of each of the six assessment years 1948 49 to 1953 54 and demanded payment of tax on the amount of the rebate. The appellant then applied to the High Court of Bombay for writs quashing the orders of the Income tax Officer and the notice of demand and directing the Income tax Officer to withdraw and cancel the order and notice of demand. The petition was dismissed by the High Court. With certificate granted by the High Court, this appeal has been preferred. Two questions are raised for determination in this appeal (1) Whether section 35(10) authorises the Income tax Officer to bring to tax rebate granted in assessment years commencing prior to April 1, 1956; and (2) whether distribution by the liquidator of accumulated profits in the previous years could be regarded as declaration of dividend within the meaning of section 35(10) so as to attract the applicability of the provisions enabling withdrawal of rebate and demand for tax. The first question is concluded by a recent judgment of this Court in Ahmedabad Manufacturing and Calico Printing Co. Ltd. vs section G. Mehta, Income tax Officer and Another(1). In that case this Court held that section 35(10) applied even though dividend was declared before April 1, 1956. Counsel for the Company urged that in the Ahmedabad Manufacturing and Calico Printing Co. 's case it was held that power to withdraw rebate granted in the year before April 1, 1952 was not exercisable by the Incometax Officer under section 35(10) and consistently with that view withdrawal of rebate granted in the years ending on and before March 31, 1952 was unauthorised. In Ahmedabad Manufacturing and Calico Printing Co. 's case(1) declaration of dividend by the Com pany was made on April 20, 1953. The financial year in which the amount on which rebate of income tax was allowed was availed of by the Company for declaring dividends was 1953 54, and within four years from the end of that year an order calling upon the Company to show cause why action should not be taken under section 35(10) to recall the proportionate part of the rebate was issued. It was said by Hidayatullah, J. : "Since the power commenced on April 1, 1956, the utmost reach of the Income tax Officer would be the end of the assessment year 1952. Any declaration of (1) [1963] Supp. 2 S.C.R. 92. 735 dividend after 1st day of April, 1952, out of accumulated profits of any of the years in which rebate was earned would be within the time for the recall of any rebate. But a declaration prior to April 1, 1952, would be beyond the power of the Income tax Officer to recall." Power to withdraw rebate was in that case held exercisable within four years from the end of the financial year in which the amount of rebate was availed of : it was not held that the power was exercisable in respect of rebate granted only in respect of four years before April, 1956. The argument raised by counsel importing a limitation contrary to the plain words of the statute must therefore be rejected. Sub section (10) of section 35 was inserted in the Income tax Act by section 19 of the Finance Act, 19@6, with effect from April 1, 1956. It provides "Where, in any of the assessments for the years beginning on the 1st day of April of the years 1948 to 1955 inclusive, a rebate of income tax was allowed to a company on a part of its total income under clause (i) of the proviso to Paragraph B of Part I of the relevant Schedules to the Finance Acts specifying the rates of tax for the relevant year, and subsequently the amount on which the rebate of income tax was allowed as aforesaid is availed of by the company, wholly or partly, for declaring dividends in any year, the amount or that part of the amount availed of as aforesaid, as the case may be, shall, by reason of the rebate of incometax allowed to the company and to the extent to which it has not actually been subjected to an additional income tax in accordance with the provisions of clause (ii) of the proviso to Paragraph B of Part I of the Schedules to the Finance Acts above referred to,. be deemed to have been made the subject of incorrect relief under this Act, and the Income tax Officer shall recompute the tax payable by the company by reducing the rebate originally allowed, as if the recomputation is a rectification of a mistake apparent from the record within the meaning of this section and the provisions of sub section (1) shall apply accordingly, the period of four years specified therein being reckoned from the end of the financial year in which the amount on which rebate of 736 income tax was allowed as aforesaid was availed of by the company wholly or partly for declaring dividends. " It is urged by counsel for the Company that power under sub section (10) of section 35 cannot be exercised because distribution of accumulated profits by the liquidator is not distribution by the Company. The argument is wholly without substance. On the passing of a special resolution by the Company that it be wound up voluntarily under the Companies Act 1 of 1956, the Company does not stand dissolved. That is so expressly provided by section 487, of the Companies Act. A Company which has resolved to be voluntarily wound up may be dissolved in the manner provided by section 497(5) : till then the Company has corporate existence and corporate powers. The property of the Company does not vest in the liquidator : it continues to remain vested in the Company. On the appointment of a liquidator, all the powers of the Board of directors and of the managing or whole time directors, managing agents, secretaries and treasurers cease (section 491), and the liquidator may exercise the powers mentioned in section 512, including the power to do such things as may be necessary for winding up the affairs of the Company and distributing its assets. The liquidator appointed in a members ' winding up is merely an agent of the Company to administer the property of the Company for purposes prescribed by the statute. In distributing the assets including accumulated profits the liquidator acts merely as an agent or administrator for and on behalf of the Company. It is then urged that on the commencement of winding up, distinction between the capital and accumulated profits of the Company disappears, and what remains in the hands of the liquidator are the assets of the Company, and distributions made by the liquidator are distributions of capital, regardless of the source from which the funds are distributed is capital or accumulated profits. In distributing the surplus assets in his hands, the liquidator is therefore not "declaring dividends" within the meaning of section 35(10). In support of this contention, reliance was placed upon Inland Revenue Commissioners vs George Burrell(1). The Court in that case held that on the winding up of a limited company the undivided profits of the past year and the year in which winding up occurred were only assets of the company and on distribution amongst the shareholders supertax was not payable on the undivided profits as income. (1) 737 Under the , accumulated profits of the Company at the commencement of the winding up of the Company undoubtedly come into the hands of the liquidator as assets for the purpose of satisfying liability of the Company and for distribution among the shareholders. But the rule in Burrell 's cave(1) since the amendment of the definition of "dividend" in section 2(6A) by the Finance Act, 1956, no longer applies, when the liability to assessment of income tax in respect of amounts distributed out of accumulated profits by a liquidator in a winding up falls to be determined. The Parliament had devised by the Indian Income tax (Amendment) Act 7 of 1939, a special inclusive definition for the Income tax Act, 1922 of "dividend" in section 2(6A). Being an inclusive definition, the expression "dividend" means dividend as ordinarily understood under the and also the heads of payment or distribution specified therein. Clause (c) as originally enacted, included distributions made to the shareholders of a Company out of accumulated profits on the liquidation of the Company. This was clearly an attempt to supersede the rule in Burrell 's case(1). It was pointed out by this Court in Dhandhania Kedia & Co. vs Commissioner of Income tax(2) that section 2 (6A) (c) was enacted to remove the anomaly which was created by the judgment in Burrell 's case(1), and to assimilate the distribution of accumulated profits by a liquidator to a similar distribution by a Company which is working. But the language of the clause and the proviso thereto included only those accumulated profits which had not been capitalized, and which arose during the six previous years preceding the date of commencement of the year of account in which the liquidation commenced. By the Finance Act, 1955, the proviso to cl. (c) was omitted : thereby accumulated profits whether capitalized or not and without any restriction as to time were brought within the definition. By the Finance Act, 1956, cl. (c) was recast as follows : " any distribution made to the shareholders of a company on its liquidation, to the extent to which the distribution is attributable to the accumulated profits of the company immediately before its liquidation, whether capitalized or not. " Amendment to cl. (c) in section 2(6A) was made and section 35(10) was inserted in the Income tax Act simultaneously by the Finance Act, 1956. It would be reasonable to regard the provisions of section 35(10) and amended cl. (c) of sub section (6A) of section 2 as part of a (1) L3Sup. CI/66 18 (2) 738 single scheme to declare distribution of accumulated profits, capitalized or not, as dividends, and to bring the rebate granted on undistributed profits to tax if availed of by the company or by the liquidator of a company for distributing dividends. Counsel for the Company contended that the amount distributed out of accumulated profits by the liquidator is not dividend in the hands of the Company. For this distinction again there is no warrant. Distribution of accumulated profits by a Company not subject to winding up is distribution of dividend by virtue of section 2(6A) (a), and distribution of accumulated profits in the course of liquidation is dividend by virtue of section 2(6A)(c). It is true that the definition of "dividend" in section 2(6A)(c) win apply only if there is nothing repugnant in the subject or context in which the expression "dividend" occurs in section 35(10), but there is nothing in section 35(10) which suggests that the expression "dividend" was to have a meaning different from the meaning assigned to it by the interpretation clause. It was urged that assuming that accumulated profits of a Company distributed by the liquidator may be regarded as dividends, power under section 35(10) cannot be exercised in respect of those profits, because the liquidator is not in distributing the profits "declaring dividends". But the assumption underlying the argument that the provides that dividends may be deemed to be declared only if certain mandatory provisions are complied with is without substance. By section 205 of the Indian (before it was amended in 1960) it was provided that no dividend shall be declared or paid except out of the profits of the company or out of moneys provided by the Central or a State Government for the payment of the dividend in pursuance of a guarantee given by such Government. The Company in the present case was registered under the Indian Companies Act, 1913. The Articles of Association of the Company are not before us, but the Articles relating to distribution of dividend being under section 17(2) of the Companies Act, 1913, obligatory, articles 95, 96 and 97 in Table A of Act 7 of 1913 applied. By article 95 it was provided that a company in general meeting may declare divi dends, but no dividends shall exceed the amount recommended. But to the distribution of interim dividends, the condition that it must be declared in general meeting of the Company did not apply, and such interim dividends as appeared to the directors to be justified by the profits of the company could be distributed (article 96). The only other relevant condition was in article 97 that no dividend shall be paid otherwise than out of profits of the year or any other undistributed profits. 739 The liquidator of the appellant company did from time to time distribute accumulated profits, and within the meaning of section 2(6A)(c) read with the provisions of the Companies Act, they were distribution of interim dividends. It is true that power under section 35(10) may be exercised if accumulated profits are availed of by the Company "for declaring dividends in any year", but since the Companies Act does not in the matter of distribution of interim dividends set up any special machinery, nor impose any special condition before power in that behalf may be exercised, no artificial meaning can be attached to the word "declaring dividends". Distribution of accumulated profits by the liquidator together with the income tax refund certificate in the course of voluntary winding up may therefore, for the purpose of section 2(6A)(c), be regarded as declaration of dividend. The appeal therefore fails and is dismissed with costs. Appeal dismissed.

The respondent was appointed Treasurer of a Bank in respect of certain of its branches, sub agencies and pay offices. In the previous year corresponding to the assessment year 1950 51, he suffered a loss in performing his duties as Treasurer. But the Incometax Officer, in assessing the respondent to income tax, declared that the loss could not be carried forward to the next year under section 24(2) of the Income tax Act ' 1922, on the ground that it was not a business loss. For the assessment year 1951 52, the Income tax Officer refused Lo allow the loss to be set off against the net profit for the year and brought that amount of profit to tax as remuneration received by the respondent as Treasurer of the Bank. The order was confirmed by the Appellate Assistant Commissioner,. but the Appellate Tribunal held that the remuneration received by the respondent was income arising from the pursuit of a profession or vocation. within the meaning of section 10 of the Act and therefore the loss suffered during the preceding year could be set off against his income in the subsequent year. On a reference the High Court agreed with the Tribunal. In appeal to this Court, HELD:(i) The decision recorded by the Income tax Officer, who. computed the loss in the previous year under a. 24(3), that the loss could. not be set off against the income of the subsequent year was not binding on the respondent, as, under section 24(2), it is for the Income tax Officer dealing with the assessment in the subsequent year to determine whether the loss of the previous year may be set off against the profits of that year. [534 A C (ii)The use of the expressions "serve the Bank" and "in the service of the Bank" in the contract appointing the respondent as Treasurer of the Bank have to be read in the setting of the other covenants and are not decisive of the question whether the respondent was a servant of the Bank. Under the contract the respondent had to procure due performance of the duties of the cash department by employees under his supervision and he was to be responsible for all acts done by them and to make good the loss which might result from any embezzlements theft, fraud, misappropriation, mistake, misconduct, omission, negligent act or default of any such person. in carrying out his duties under the contract he was not to be controlled or supervised by the Bank and the agreement was not liable to summary determination. The contract was therefore for service and the respondent could not be called a servant of the Bank. Therefore, the remuneration received by him was not "salaries" within, the meaning of section 7 of the Act. [538 F 0; 540 E F; 543 B) Section 24(2) confers a statutory right upon the assessee who sustains a loss of profits in any year in any business, profession or vocation to carry forward so much of the loss as is not set off under sub section (1) to the following year, and to set it off against his profits and gains, if 532 any, from the same business, profession or vocation for that year. The occupation of a Treasurer is not a profession, nor does it partake of the character of a business or trade. But taking into consideration the nature of the duties performed, and the obligati7on undertaken, together with the right to remuneration subject to compensation for loss arising to the Bank from his own acts and omissions or of the servants introduced by 'him into the business of the Bank, the respondent could be regarded as following a vocation. His remuneration must therefore be computed under section 10 and loss of profit suffered in that location in any Vear could be carried forward to the next year and be set off against the profit of that year. [543 B, C D, F G] Dharangadhara Chemical Works Ltd. vs State of Saurashtra, ; , followed. Shivnandan Sharma vs The Punjab National Bank Ltd. ; and Piyare Lal Adishwal Lal vs Commissioner of Income tax, Delhi , distinguished.

minal Appeal No. 101 of 1972. Appeal by special leave from the Judgment and order dated the 25th February, 1972 of the Rajasthan High Court at Jodhpur in section B. Criminal Revision No. 52 of 1972. B. D. Sharma, section K. Bagga, section Bagga, Rani Arora and Yash Bagga, for the appellant. section M. Jain, for respondent No. 1. section N. Prasad, for respondent No. 2. The Judgment of the Court was delivered by ALAGIRISWAMI, J. The appellant filed a complaint against the 2nd respondent before the Add. Munsiff Magistrate of Jodhpur City under sections 323 and 504 I.P.C. The 2nd respondent was the Post Master General, Rajasthan and the appellant a clerk in the Head Post Office 560 at Jodhpur. He was also the, Divisional Secretary of National Union of Postal Employees. The relevant portion of the complaint is as follows "4, That the accused came on tour to Jodhpur on 25 10 1971. He arrived at the Head Post Office Jodhpur, in connection with the inspection at 5.45 P.M. The complainant reached to submit his representation to the accused for cancelling his transfer, when. the accused just sat in his jeep and the complainant started narrating his story '. That the accused being enraged by this complaint, kicked him in his abdomen and abused him by saying "Sale, Goonda, Badmash, on one hand you are complaining and on the other hand you are requesting for the cancellation of transfer. That the complainant became very much enraged over this incident but he suppressed his anger because of being responsible citizen and to avoid any further disturbance. That after kicking and abusing the complainant the accused ran away in his jeep. " The 2nd respondent filed an application under section 197 of the Code of Criminal Procedure praying that the court should not take cognizance of the offence without the sanction of the Government as the acts alleged, if at all done by the accused, were done while discharging his duties as a public servant. The Munsiff Magistrate dismissed the application but Justice Mehta of the Rajasthan High Court allowed the revision petition filed by the 2nd respondent and set aside the order of the lower court holding that the 2nd respondent could not be prosecuted unless prior sanction of the Central Government had been obtained. This appeal is against that order. The law regarding the circumstances under which sanction under s.197 of the Code of Criminal Procedure is necessary is by now well settled as result of the decisions from Hori Ram Singh 's(1) case to the latest decision of this Court in Bhagwan Prasad Srivastava vs N. P. Misra. (2) While the law is well settled the difficulty really arises in applying the law to the facts of any particular case. The intention behind the section is to prevent public servants from being unnecessarily harassed. The section is not restricted only to cases of anything purported to be done in good faith, for a person who ostensibly acts in execution of his duty still purports so to act, although he may have a dishonest intention. Nor is it confined to cases where the act, which constitutes the offence, is the official duty of the official concerned. Such an interpretation would involve a contradiction in terms, because an offence can never be an official duty. The offence should have been committed when an act is done in the execution of duty or when an act purports to be done in the execution of duty. The test appears to be not that the offence is capable of being committed only, by a (2) [1971] (1) section C. R. 317. (1) 561 public servant and not anyone else, but that it is committed by a public servant in an act done or purporting to be done in the execution of his duty. The section cannot be confined to only such acts as are done by a public servant directly in pursuance of his public office, though in excess of the duty or under a mistaken belief as to the existence of such duty,. Nor need the act constituting the ,offence be so inseparably connected with the official duty as to form part and parcel of the same transaction. What is necessary is that the offence must be in respect of an act done or purported to be done in the discharge of an official duty. It does not apply to acts done purely in a private capacity by a public servant. Expressions such as the "capacity in which the act is performed", "Cloak of office" and "professed exercise of office" may not always be appropriate to describe or delimit the scope of the section. An act merely because it was done negligently does not cease to be one done or purporting to be done in execution of a duty. In Hori Ram Singh 's case (supra) Sulaiman, J. observed : "The section cannot be confined to only such acts as are done by a public servant directly in pursuance of his public office, though in excess of the duty or under a mistaken belief as to the existence of such duty. Nor is it necessary to go to the length of saying that the act constituting the offence should be so inseparably connected with the official duty as to form part and parcel of the same trans action. " In the same case Varadachariar, J. observed "there must be something in the nature of the act complained of that attaches it to the official character of the person doing it." In affirming this view, the Judicial Committee of the Privy Council observed in case: "A public servant can only be said to act or purport to act in the discharge of his official duty, if his act is such as to lie within the scope of his official duty. The test may well be whether the public servant, if challenged, can reasonably claim that, what he does, he does in virtue of his office." In Matajog Dobey vs H. C. Bhari(2) the Court was of the view that the test laid down that it must be established that the act complained of was an official act unduly narrowed down the scope of the protection afforded by section 197. After referring to the earlier cases the court summed up the results as follows : "There must be a reasonable connection between the act and the discharge of official duty; the act must bear such relation to the duty that the accused could lay a reasonable, but not a pretended or fanciful claim, that he did it in the course of the performance of his duty. " Applying this test it is difficult to say that the acts complained of i.e. of kicking the complainant and of abusing him, could be said to (1) 1948 L R. 75 1. A. 41. (2) [1955](2) section C. R. 925. 562 have been done in the, course of performance of the 2nd respondent 's duty. At this stage all that we are concerned with is whether on the facts alleged in the complaint it could be said that what the 2nd respondent is alleged to have done could be said ' to be in purported exercise of his duty. Very clearly it is not. We must make it clear, however, that we express no opinion as to the truth or falsity of the allegations. We must also make it clear that this is not the end of the matter. As was pointed out in Sarjoo Prasad vs The King Emperor(1), referring to the observations of Sulaiman, J. in Hori Ram Singh 's case (supra) the mere fact, that the accused proposes to raise a defence of the act having purported to be done in. execution of duty would not in itself be sufficient to justify the case being thrown out for want of sanction. At this stage we have only to see whether the acts alleged against the 2nd respondent can be said to be in purported execution of his duty. But facts subsequently coming to light during the course of the judicial inquiry or during the course of the prosecution evidence at the trial may establish the necessity for sanction. Whether sanction is necessary or not may have for depend from stage to stage. The necessity may reveal, itself in the court of the progress of the case (see observations in Matajog Dobey vs H. C. Bhari (supra) In Bhagwan Prasad Srivastaval vs N. P: Misra (supra), also it was pointed out that it would be, open. to the appellant (.the 2nd respondent in this case) to place the material on record during the course of the trail for showing what his duty was and also that the acts complained of were so interrelated with, his official duty, so as to attract the protection afforded by s.197, Cr. This appeal is, therefore allowed and the order of the learned Judge of the High Court is set aside. S.B.W. Appeal allowed.

Plot No. 4635A (old number 5199) admeasuring bigha and 2 biswas and located in the Meerut municipal area was leased by the Lala Nanak Chand Trust to the predecessor in interest of the present respondents. According to the lease deed dated June 23, 1926 the lease was granted "for the purpose of planting a grove, erecting buildings and digging wells etc.". The period of the lease was 30 years but the lessor agreed that on the expiration of that period he would at the request of the lessee renew the lease for another 30 years. On the expiry of the initial period of 30 years on July 1, 1956 the lessor Trust instituted a suit for recovery of possession of the aforesaid land. The suit was dismissed by the trial court but decreed by the first appellate court. The respondents thereafter, on permission granted by the said first appellate court instituted a suit for the specific performance of the agreement to re let the land for another term of 30 years. The suit was dismissed on the ground of limitation by the trial court, as well as the first appellate court. In both the suits the present respondents filed second appeals in the High Court. While these appeals were pending the U.P. Urban Areas Zamindari Abolition and Land Reforms Act, 1956 was enforced in the city of Meerut. The land in dispute was declared an agricultural area ' under the Act and a notification under section 8 of the Act vesting the land in the State was issued on July 16, 1964. Rule 39 of the Uttar Pradesh Urban Areas Zamindari Abolition and Land Reforms Rules, 1957 provided for abatement of certain suits and appeals. Applying the rule the High Court abated the two aforesaid appeals filed by the respondents before it. The Trustees appealed to this Court by special leave. They also filed a writ petition under article 32 of the Constitution praying that the notifica tion under section, 8 of the Act dated July 16, 1964 be quashed as violative of Articles 14, 19(1)(f) and 31 of the Constitution. It was further contended that section 2(1)(d) of the Act whereby land held on lease duly executed before the first day of July 1955 for the purposes of erecting buildings thereon was included in the term 'agricultural area ' was protected by article 31 A of the Constitution. HELD : (i) The lease was not exclusively a building lease. Admittedly no building had been constructed. The respondents claimed to have planted a grove. If so, the land would be covered by section 2(1)(c)(viii) The lease could not therefore be held to fall exclusively under section 2(1)(d). [790B] 784 (ii) In Durga Prasad 's case the Allahabad High Court has pointed out the history of cl. The High Court has taken the view that section 2(1)(d) is limited to lands which are being used for agricultural purposes. The conclusion must be held to be correct though for different reasons, On this construction of section 2(1)(d) it cannot be said that this provision is not connected with agricultural reforms. It could accordingly receive the protection of article 31A and would be immune from attack on the ground of violation of Articles 14, 19 and 31. [792C] Durga Prasad vs Board of Revenue U.P. Allahabad and others, A.I.R. 1970 All. 159, referred to. (iii) The report of the Commission would not show that the land in dispute was a grove within the meaning of section 2(6) of the U.P. Tenancy Act, 1939. As the appellants had given the old number of the plot in their petition the Government did not reply to the allegation in the petition. Accordingly it was not possible to express any concluded opinion on the question whether the land in dispute was an 'agricultural area ' on the date specified under section 2(1) and was being used for horticulture. , The issue must be decided afresh by the appropriate authority under the Act. If it is held by him that the land in dispute is an 'agricultural area ' and the State Government issues a notification under section 8 of the Act with respect to the land, the appeals will be, disposed of by the High Court in accordance with the provisions of the Act. [793C] [Notification dated June 16, 1964 quashed, and orders of the High Court abating the appeals and suits set aside.]

it Petition (Civil) No. of 1990. (Under Article 32 of the Constitution of India) N.D.R. Ramachandra Rao and Vineet Kumar for the petitioner. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ. This is a petition under article 32 of the Constitution of India. The petitioner claims to be "a public spirited individual". He further claims to be a person aggrieved and seeks to assail the constitutional validity of the State of Karnataka and the Union of India not promoting, enforcing and carrying out the policy of prohibition i.e. manufacturing, sale and consump tion of intoxicating drinks and drugs throughout the coun try India Bharat, and also assails the constitutional validity of clause (b) of sub rule 1 of rule 3 of the Karnataka Excise (Sale of Indian and Foreign Liquors) Rules, 1968 as amended by the Karnataka Excise (Sale of Indian and Foreign Liquors) (Amendment) Rules, 1989 which came into fore on 10th September, 1989. The petitioner refers to the Preamble to the Constitution which, 3 according to him, explains the general purpose behind the general provisions of the Constitution. He refers to Mahatma Gandhi and his commitment to prohibition. According to the petitioner, manufacture, sale and consumption of intoxicat ing drinks and drugs have become a stumbling block and a dangerous dragon to the progress and stability of the nation as a whole. The petitioner states that unless this dragon is completely destroyed the country could never think of achieving the objects of the Constitution and justice social, economic and political. People are flouting the laws of this country, therefore, the petitioner objects that the State should take upon the business of selling liquors. He has asserted that the State of Karnataka instead of bringing total prohibition in the State, has evinced interest in taking up the responsibility of selling liquors to the general public. Hence, it is bad and contrary to the Constitution, and he challenges the amendment which pre scribes the licence for sale shall be issued to only such company owned or controlled by the State Government as the State Govt. may specify. According to the petitioner, such a rule is unconstitutional. He draws our attention to Article 47 of the Constitution of India which indicates directive principles. In the aforesaid view of the matter he claims that this Court should direct the Union of India and other State Governments to enforce the policy of total prohibition throughout the country including the State of Karnataka and to impose restrictions on manufacture, sale and consumption of intoxicating drinks and to declare rule 3 of the these rules as void and unconstitutional. We are unable to entertain this writ petition under article 32 of the Constitution. The petition of the peti tioner is that the policy of prohibition is not being imple mented as enjoined by article 47 of the Constitution. In our opinion, it is not entertainable. Article 47 of the Consti tution, which is part of our Directive Principles of State Policy enjoins that the State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health. Article 47 is in Part IV of the Constitution which contains Directive Principles of State Policy. Article 37 enjoins that the provisions of this Part shall not be enforceable by any court, but the principles therein laid down are nevertheless fundamental in the gover nance of the country and it shall be the duty of the State to apply these principles in making laws. It has to be borne in mind that Article 4 32 of the Constitution gives the Supreme Court the power to enforce rights which are fundamental rights. Fundamental rights are justifiable, Directive Principles are not. Direc tive Principles are aimed at securing certain values or enforcing certain attitudes in the law making and in the administration of law. Directive Principles cannot in the very nature of things be enforced in a court of law. See in this connection the observations of this Court in Akhil Bharatiya Soshit Karamchari Sangh vs Union of India, ; Whether a law should be made embodying the prin ciples of Directive Principles depends on the legislative will of the legislature. What the petitioner seeks to achieve by this application is to inject a sense of priority and urgency in that legislative will. Determining the choice of priorities and formulating perspective thereof, is a matter of policy. Article 32 is not the machinery through which policy preferences or priorities are determined and this Court is not the forum where the conflicting claims of policies or priorities should be debated. See the observa tions of this Court in Rustom Cavasjee Cooper vs Union of India, ; at p. 584. We find no direct or casual violation of any fundamental right of which the petitioner can legitimately claim en forcement in this application. To make the State accept a particular policy, desirable and necessary as the policy might be is not the function of Article 32 of the Constitu tion. Article 32 of the Indian Constitution is not the nest for all the bees in the bonnet of 'public spirited persons '. In the aforesaid view of the matter, we decline to entertain this application and the same is accordingly dismissed. P.S.S. Petition dismissed.

Rule 9(2) of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 provides that an appeal filed under the direction of the Collector or the Administrator shall be accompanied by an attested copy of the order containing such direction. Pursuant to a general authority and an order of the Collector (on the file note sheet) the appellant filed an appeal before the Customs, Excise and Gold (Control) Appellate Tribunal which dismissed it by holding that it was not in consonance with Rule (2). Hence this appeal by the Revenue. Setting aside the order of the Tribunal and disposing the appeal, this Court, HELD: 1. Having regard to the purpose of the rules namely, to ensure that there was an application of mind to the points in respect of which the question for filing an appeal arose and that the appeal was duly authorised by the Collector, and was filed by the person authorised by the Collector in order to ensure that frivolous and unnecessary appeals are not filed, it must be held that in the present context and in view of the terms of the rules and the pur pose intended to be served, the appeal was competent and was duly filed in compliance with the procedure as enjoined by the rules. The rules were to carry out the purposes of the Act. Therefore, the Tribunal was in error in dismissing the appeal. [1030D F, G] 2. The matter is remanded to the Tribunal for considera tion of the Appeal on merits. [1030H] 1028

Appeal No. 306 of 1961. 198 Appeal by special leave from the Judgment and order dated May 16. , 1959, of the Industrial Court Bombay, in Appeal (I.C.) No. 90 of 1959. J.P. Mehta and I.N. Shroff, for the appellant. N.M. Barot, Secretary, Labour Association, for the respondent No. 3. 1962. February 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The appellant, the Fine Knitting Co. Ltd., was incorporated in 1908 and its principal activity then Was to Manufacture hosiery. In 1924, when the appellant shifted its factory from. Barejadi to Ahmedabad, it installed spinning machinery with 9000 spindles with a view to ensure suitable and even supply of yarn for its hosiery manufacture. On May 30, 1939, the Government of Bombay issued a notification under the Bombay Industrial Disputes Act, 1938 (No. XXV of 1938), whereby hosiery concerns were included in the definition of 'Cotton Textile Industry '. Subsequently on July 17, 1945, another notification was issued as a result of which the hosiery manufacture was excluded from the Cotton Textile Industry and it was covered by a separate notification issued under the said Act. This latter notification which was made applicable to the Hosiery Industry specified that the said notification inter alia, to all concerns using power and employing twenty or more persons which are engaged in the manufacture of hosiery or other knitted articles made of cotton and all processes incidental or supplementary thereto. After this notification was issued, the appellant ceased to be covered by the extended and inclusive definition of the 'Cotton Textile Industry ' and was recognised as a Hosiery concern being engaged in the Manu facture of hosiery. Later, in 1946, the Bombay Industrial Relations Act, 1946 (No. XI of 1947) (hereinafter called the Act.), was applied to the 199 industries to which the Bombay Industrial Disputes Act bad been applied, as a result of s.2(3) of the former Act. In consequence, for the purposes of the Act, the appellant concern was recognised as an undertaking of the Hosiery Industry under section 11 This was the result of notification No. 10 of 1948, issued by the Registrar under the Act. This position was recognised by the Industrial Tribunal in indus trial adjudications concerning disputes between the appellant and its workmen. Even so, respondent No. 3, the Textile Labour Association, Ahmedabad, sought to reopen the issue by applying by to the Registrar on October 16 1953, that the appellant 's factory should be recognised as an undertaking both in the Cotton Textile Industry and the Hosiery Industry. The Registrar who is the second respondent in the present appeal hold an enquiry and ultimately came to the conclusion that there was no justification for splitting up the concern into two units and recognising them as suggested by the third respondent. The third respondent did not prefer an appeal against the said decision of the second respondent; but respondent No. 4 who are the five elected representatives of the employees of the appellant sought to challenge the said decision of the second respondent by preferring an appeal to the Industrial Court, respondent No. 1. The appellant contended that respondent No. 4 were not entitled to prefer an appeal because they were not parties to the proceedings in the original application before the second respondent. This preliminary objection was upheld and the appeal preferred by respondent No. 4 was dismissed. The result was that the order passed by the Registrar rejecting the application made by respondent No. 3 concluded the dispute. Even while the said appeal was pending before the first respondent, respondents Nos. 3 and 4 200 initiated the present proceedings by means of two applications made before the second respondent in which the same relief was claimed that the appellant concern should be recognised as an undertaking both in the Cotton Textile Industry and in the Hosiery Industry. The second respondent, however, rejected these applications on the ground that since he gave his earlier decision, there had been no change of circumstances and so there was no justi fication for reconsidering the matter over again. The third and the fourth respondents then went in appeal before the first respondent and their appeals were allowed by the first respondent and a direction was issued that the appellant company should be recognised as two undertakings one in the Cotton Textile Industry and the other in the Hosiery Industry. The appellant then moved the High Court of Bombay under Articles 226 and 227 of the Constitution and challenged the validity of the order passed by the first respondent. , In the High Court the parties took an order by consent on August 20, 1958. As a result of this consent order, the direction issued by the first respondent was set aside and the matter was remanded to the second respondent to enable him to hold a fresh enquiry and to dispose of the dispute between the parties in accordance with law. On February 14, 1959, the second respondent pronounced his decision. He came to the conclusion that in the circumstances disclosed on evidence, the best courts would be to recognise the spinning and hosiery sections of the appellant company as two separate undertaking and treat them as two separate enterprises. That is why under section 11(1) he decided to recognise the Fine Knitting Co. Ltd. (Hosiery Section) and the Fine Knitting Co. Ltd. (excluding Hosiery Section) as undertakings in the Hosiery Industry and the Cotton Textile Industry respectively The appellant was aggrieved by this order and so is preferred appeals before the first 201 respondent. The respondents Nos. 3 and 4 also challenged the decision of the second respondent and contended that the entire concern of the appellant should be treated as Cotton Textile Undertaking. All the three appeals failed and the first respondent confirmed the order passed by the ,second respondent. The result is that the appellant concern is recognised as consisting of two undertakings, the Hosiery Section and the rest excluding the Hosiery Section. It is against this order of the first respondent that the appellant has come to this Court by special leave. The first point which Mr. Mehta has strenuously urged before us on behalf of the appellant is that on a proper application of the tests laid down by this Court, it should be held that the spinning and the Hosiery Sections in the appellant 's establishment are one concern and in support of this argument he has referred us to the decisions in the Associated Cement Companies Ltd. vs Their Workmen(1), Pratap Press vs Their Workmen (2) and Pakshiraja Studios V. Its Workmen (3). This question has been recently considered by this Court in the case of the Honorary Secretary, The South India Millowners ' Association vs ' The Secretary,Coimbatore District Textile Workers ' Union, Coimbatore (1). in which judgment has been pronounced on February 1, 1962. In the last mentioned case, this Court has examined the relevant earlier decisions and has come to the conclusion that though the question about the unity of two industrial establishments has to be considered in the light of the relevant tests laid down from time to time, it would be unreasonable to treat any one of the said tests as decisive. As has been observed in that case, in dealing with the problem, several factors are relevant, but it must be remem bered that the significance of the several factors (1) [1960) I S.C.R. 703. (3) [19611 (2) [1960] I. L.L,J. 497. (4) [1962] Supp. 2 S.C R. 925 202 would not be the same in each case nor their importance. It is in the light of these decisions that the point raised by Mr. Mehta has to be considered . Mr. Mehta contends that in the present case there is unity of ownership and as a necessary corollary, there is unity of management , supervision and control; there is unity of purpose and design and he argues that there is complete functional integration. According to him , as no hosiery could be maufactured without yarn, there is such a functional unter dependence between the cannot exist without the former. There is also unity of finance and in consequence, there is one capital and depreciation fund account, of expenditure and income, one balance sheet and one profit and loss account . There is also unity of employment and the two concerns functions under the same roof; so there is unity of habitiation . It is on these grounds that Mr. Mehta contends that the first and the second respondents were in error in splitting up the appellant 's establishment into two sections and recoginsing them separately as such. In dealing with the significance and the effect of the factors on which Mr. Mehta has righlty relied it is necessary to bear in mind certain other relevant factors on which the decision under appeal is substantially based. It is true that in 1924, the spinning section of the establishment may have begun as a subsidiary to the hosiery section and in order to serve as its feeder. But the evidence on the record clearly shows that the position is now reversed and that the spinning section has now assumed major importance and hosiery takes a minor place in the industrial activities of the app minor place in the industrial activities of the appellant. The inspection notes made by the second respondent show that it was admitted by the 203 management that the spinning, section has now developed to such an extent that it is like aspinning mill by itself; it can no longer be regarded as a minor, section attached to the hosiery works. It was conceded before the second respondent that only about 20% of the yarn manufactured in the spinning section is consumed for hosiery purposes while the rest is available to be sold in the market. The production. figures in the spinning section and the consumption of the yarn produced in that section unmistakably point to the fact that the spinning section is no longer a minor department run by the appellant solely for the purpose of its hosiery section. ID 1955 in the months of November and December, the production in the Spinning department was worth Rs. 1,17,742 whereas whatever was consumed in the knitting department was only Rs. 23,817 leaving a balance which was sold for Rs. 93,925. The corresponding figures for the year, 1956 are Rs. 6,70,854, Rs. 1,40,105 and Rs.5 30,749. Similar figures for 1957 are Rs.8, 17, 153, Rs. 1,31,725 and Rs. 7,04,018 and for 1958 are Rs. 6,68,095, Rs. 1,26,252 and Rs. 5,40,873. The balance sheet for the year 1954 shows that the total hosiery sale was worth Rs. 2,37,232 6 0 whereas the total yarn sale was worth Rs. 14,82,705 5 0. Similarly, for the year. 1955, the, hosiery sale was kW. 2 56,986 and the yarn :sale was Rs. 14,44,929. strength of the employees engaged in the two respective sectors tells the same story. The table prepared by the second respondent from the information supplied by the management shows that for the year 1955, spinning employees were 174, hosiery employees 56 and the common workmen 35. For the year 1956, the figures were 217, 54 and 38; for 1957, the figures were 194, 65 and 38; and for 1958 the figures were 178, 60 and 32. Mr. Mehta quarrels with some of these figure but does not dispute the broad conclusion which is drawn from the figures that the number of employees engaged in the spinning section is far more 204 than that employed in the hosiery section. Thus, there can be no doubt that the spinning activity of the, appellant which may have begun as subsidiary to the hosiery activity has now grown in importance and has taken a place of pride in the industrial activity of the appellant considered as a whole; it can no longer be regarded as subsidiary to hosiery. It is common ground that by the notification issued under the Cotton Textile (Control) Order, 1948, the appellant is called upon to supply to the Government the prescribed quantity of yarn produced by the spinning department. It is unnecessary to refer to the details of the order or to the extent of the yarn required to be supplied by the appellant under it. What is significant is the fact that by the application of the order issued in that behalf, the Government has treated the appellant as a producer who has a spinning plant and in that sense, the existence of the spinning activity of the appellant has been treated as an independent activity liable to be controlled by the notification issued under the Cotton Textile (Control) Order, 1948. Then as to the argument that the spinning and the hosiery are functionally integrated, it is clear that hosiery can exist without spinning, provided the industry engaged in hosiery purchases yarn required for the purpose of hosiery. That is one aspect of the matter. But the more important aspect on which reliance has been placed against the appellant is that the appellant 's spinning department produces yarn of all counts some of which would admittedly not be useful for hosiery work. When the appellant was asked whether the allegation made by respondents Nos. 3 and 4 in that behalf was true or not, the management of the app ellant hesitatingly denied the said allegation. But an advertisement published in the local daily "Sandesh" was produced by respondents Nos. 3 205 and 4 and it clearly showed that yarn of all counts was offered by the appellant for sale in the general market. Therefore, it would be idle to contend that the spinning work carried on in the spinning department is meant exclusively or solely for the hosiery department. If the spinning department produces yarn which is not useful or necessary for, and which cannot be used by, the hosiery sections the only inference is that the spinning department is working on its own and is producing yarn to be sold in the market. That being so, the argument of functional inter dependence or integrality cannot be treated as valid. Besides, it is not disputed that when the knitting department was closed in 1948, the spinning department was not. If the two departments are functionally inter dependent, the closure of the one without the closure of the other may need an explanation. The explanation which has appealed to the first and the second respondents apparently is that though the spinning work carried on by the appellant may, to some extent, be useful for the hosiery work, the major part of its work is carried on independently with an eye on the market and so the closure of the hosiery cannot and did not affect the continuance of the spinning department. There is yet another circumstance on which considerable reliance has been placed by the first and second respondents in rejecting the appellant 's contention that the two departments constitute one unit. This circumstance refers to the conduct of the appellant itself in dealing with the employees engaged in spinning and in knitting departments. It is admitted that the minimum wages paid to the employees in knitting differed from the minimum wages paid to the employees in spinning and so does the amount of dearness allowance paid to the respective employees differ. It is difficult to understand how an employer can make a distinction ui 206 the payment of minimum wages between one class of employees and another if both the classes of employees are engaged in different departments Of the same establishment or concern. If there is unity of employment and unity of purpose and design as suggested by Mr. Mehta, it is inconceivable that the employees engaged in two departments integrally connected with each other and constituting one unit would be paid different minimum wages. What is true about the minimum wages and the dearness allowance is also true about the bonus. It appears that even in years in which the appellant made profits and actually paid bonus to the work men employed in the spinning department, no bonus was paid to the employees engaged in the knitting department. That again can be explained and justified only on the basis that the appellant treated the two departments as distinct and separate and so the employees in the one got bonus and not the employees in the other. It was suggested by Mr. Metha that the genesis of the present dispute lies in the anxiety of the third respondent to take within its jurisdiction the employees engaged by the appellant in its spinning depart ment. On the other hand, Mr. Barot for respondents Nos. 3 and 4 contends that the present trouble arose because the appellant began to deny to its employees in the spinning department the benefits of all relevant conditions of service which were applicable to the employees in the Textile Industry in Ahmedabad. Whatever may be the background of the dispute and its genesis, it is clear beyond doubt that the way in which the appellant has treated its employees in spinning is distinguished from its employees in knitting leads very strongly to the inference that the, appellant treated the two departments not as one unit but as separate units each one functioning on its own and independently of the other. It is in the light of these circumstances that 207 the first and the second respondents were not impressed by the relevant factors on which the appellant relied in support of its plea of the unity of the two activities and came to the conclusion that the two activities were separate and as such, as must be separately recognised under, section 11. We do not see how the appellant can successfully challenge the correctness of this conclusion. There is one more point which yet remains to be considered. Mr. Metha argues that the impugned order recognising two different undertakings under section 11(1) is not justified by the provisions of the statute. Section II provides that the Registrar may, after making such inquiry as he deems fit, recognise for the purposes of the Act (1) any concern in an industry to be an undertaking ; (2) any section of an undertaking to be an occupation. The argument is that section II (1) does not authorise the splitting up of a concern into two undertakings. A concern, says Mr. Metha, is the whole of the concern or establishment run by the appellant and as such it has to be recognised as one undertaking in so far as the order under appeal treats the appellant 's concern as two undertakings, it is contrary to section 11(1). We are not impress,, (I by this argument. The appellant is undoubtedly engaged in the hosiery industry and that part of its business cannot be recognised as Cotton Textile Industry because it is a concern engaged in spinning only which can be recognised under that category. If that is so, industrial activity of the appellant in relation to hosiery industry must be recognised separately from the textile undertaking. If one concern or company carries on several businesses or undertakes different types of industrial works, these businesses or works would amount to separate enterprises or undertakings and would have to be 208 recognised as such. In fact, if the appellant itself has been treating the two kinds of work separately and has thus split up its whole business into two independent sections, it is not easy to understand why the Registrar cannot recognise the existence of two undertakings carried on by the appellant and treat the said undertakings as such. We see no justification for the assumption made by Mr. Metha that section II (1) does not permit the recognition, of several undertakings carried on by the same company separately. It all depends on whether the undertakings are separate, distinct and independent of each other or are functionally integral or inter dependent. In the former case, the Registrar would be, justified in treating the several undertakings separately while in the latter case, he may recognise all of them as one undertaking. There is one minor point to which reference may incidentally be made. It appears that before the first respondent, it was urged by the appellant that the present applications made by respondents Nos. 3 and 4 were barred by res judicata. The argument was that since the second respondent had on an earlier occassion considered the merits of the case and refused to grant the request made by the third respondent for recognising the two undertakings separately, the same question could not be re agitated again before the same authority. In our opinion, there is no substance in this argument. As we have already pointed out, when the second respondent passed his earlier order, an appeal was preferred against the said order by the fourth respondent before the first respondent. That appeal was, however, dismissed on the ground that the fourth respondent was not party to the proceedings before the second respondent and, therefore, he could not prefer an appeal. If the fourth respondent had no right to make an appeal because he was not a party. to the said. proceedings, it is difficult to see, how he can 209 be precluded from making the present application on the ground of res judicata. At the highest, a plea of res judicata pay perhaps be raised against the third respondent but that would not be effective in view of the fact that in the present case, an application has been made by the fourth respondent as well. That is why Mr. Mehta did not seriously press the point of res judicata before us. In the result, fails the appeal and is dismissed with costs. Appeal dismissed.

The appellant agreed to stand surety for an overdraft allowed by the respondent Bank to section A blank form of guarantee was given by the Bank to S, who then had it filled up by the appellant stating the maximum amount which he guaranteed as Rs. 25000/ . When S brought the letter of guarantee duly signed by the appellant and himself to the Bank the latter refused to accept the guarantee up to that limit as it was not prepared to give S accommodation for a larger sum than Rs. 20000/ and wanted it to be limited to Rs. 20000/ . S then made alterations in the letter with the amount of the maximum limit corrected to Rs. 20000/ and gave it to the Bank. In a suit instituted by the Bank against the principal debtor, S, and the appellant on the basis of the contract of guarantee for Rs. 20000/ , the appellant pleaded that as the document was altered without his knowledge or consent, he was discharged from his liability. Held, (per Kapur and Hidayatullah, JJ., Sarkar, J., dissenting), that the appellant was not discharged from his liability under the contract of guarantee. 64 per Kapur, J. S was acting for and on behalf of the appellant since it was at his instance that the appellant was standing surety and the appellant handed over the deed of guarantee to S for the purpose of being given to the Bank. The plea of avoidance of contract by material alteration was of no avail to the appellant because the document was not altered while in possession of the promisee but was altered by S who was at the time acting as the agent of the appellant. per Sarkar, J. The suit against the appellant as framed must fail. The altered document was not binding on the appellant, for the alteration had not been made to carry out the intention of the parties. If the alteration, is ignored as immaterial, then the document creates no liability in the appellant, for the Bank refused to accept a guarantee on the terms contained in it before it was altered and therefore there was no contract made between the parties by the document. Further, the contract sued upon is different from the contract which might have been made by acceptance of the document as it stood before the alteration. The unaltered document cannot establish the contract sued on. per Hidayatullah, J. The document in this case could not be said to have been materially altered because it was not al tered in such a manner as to change its nature. The alteration was made by a co executant who reduced not only his own liability but that of the surety also. The document was altered while in the possession of S, the very person who, as the agent of the surety, brought it to the Bank. The surety must be deemed to have held out S as his agent for this purpose and this created an estoppel against the surety because the Bank believed that S had the authority. Accordingly, the alteration of the document did not save the surety from liability under it.

Civil Appeal No. 577 of 1975. Appeal by Special Leave from the Judgment and order dated the 4 11 74 of the orissa High Court in M.A. No. 75 of 1970. G. section Pathak, Santosh Chatterjee and G. section Chatterjee for the Appellant. Sachin Chowdhury (Respondent No. 2) and Vinoo Bhagat for the Respondent No. 1. The Judgment of the Court was delivered by SHlNGHAL J. , Maguni Charan Dwivedi, the appellant, filed a title suit in the Court of Munsif, Sundargarh against the State of orissa, for declaration of his title and recovery of possession of plot No. 99 meaguring 3.80 acres in khata No. 89 of village Mahulpali claiming it as his "ganju bhogra" land. The suit was decreed on October 14, 1958, in respect of 3.45 acres. The defendant State of orissa, did not file an appeal and the decree became final. Decree holder Dwivedi applied for its execution. The case was transferred to the court of the Subordinate Judge of Sundargarh. An objection was taken there by the Notified Area Council, Rourkela, respondent No. 2, hereinafter referred to as the Council, under sections 37 and 38 and order XXI rule 58 of the Code of Civil Procedure on the ground that it was in actual physical possession of the land. The objection application was however rejected by the execution court on March 31, 1965. The Council applied for revision or the order of rejection, but its application was dismissed with the observation that the Council might file a regular suit for adjudication of its right if it so desired. No suit was filed by the Council and decreeholder Dwivedi filed an application on September S, 1966 for proceeding with the execution of his decree. The Council and the State then 77 made an application under section 47 of the Code of Civil Procedure stating A that the decree was not executable because the orissa Merged Territories (Village offices Abolition) Act, 1963, hereinafter referred to as the Act, had come into force in the area on April 1, 1966, and the "bhogra land" in question had vested in the State free from all encumbrances. The Subordinate Judge upheld that objection and dismissed the execution application. Decree holder Dwivedi felt aggrieved, and filed an appeal which was heard by Additional District Judge, Sundargarh, who held by his order dated May 2, 1970 that the decree was executable. He therefore set aside the order of the execution court, and the State of orissa and the Council went up in appeal to the High Court. The High Court held that as the decree holder was not in actual physical possession of the land, the tenure had vested in the State free from all encumbrances C under section 3 of the Act, the decree was "rendered non est", and the Collector could not settle the land with him under section S of the Act. It therefore allowed the appeal by its impugned judgment dated November 4, 1974, and ordered that the decree holder could not execute the decree. He applied for and obtained special leave, and has filed the present appeal. It is not in dispute before us that the appellant held the "village office" within the meaning of section 2(j) of the Act. It is also not in dispute that it was in that capacity that he held the "bhogra land" in question by way of emoluments of his office. Moreover it is not in dispute that the appellant 's village office stood abolished in accordance with the provisions of section 3(a) of the Act. The consequences of the abolition, have been stated in cls. (a) to (g) of section 3. It will be sufficient for us to say, for purposes of the present controversy, that as a result of the abolition of the office, all incidents of the appellant 's service tenure, e.g., the right to hold the "bhogra land", stood extinguished by virtue of the provisions of cl. (b) of section 3, and all settlements, sanads and all grants in pursuance of which the tenure was being held by the appellant stood cancelled under section 3(c). The right of the appellant to receive the emoluments was also deemed to have been terminated under cl. (d), and by virtue of cl. (f) his "bhogra land" stood resumed and "vested absolutely in the State Government free from all encumbrances. " Section 3 of the Act in fact expressly provided that this would be the result, notwithstanding anything in any law, usage, settlement, grant, sanad or order or "in any judgment, decree or order of a Court. " All these consequences therefore ensued with effect from April 1, 1966 when, as has been stated, the Act came into force in the area with which we are concerned. There can be no doubt therefore that from that date appellant Dwivedi suffered from these and the other disabilities enumerated in section 3 of the Act; the "bhogra land" in respect of which he obtained the decree dated October 14, 1958 declaring his title and upholding his right to possession, was therefore lost to him as it vested "absolutely" in the State Government free from all encumbrances. The decree for possession also thus lost its efficacy by virtue of the express provisions of the Act referred to above, and there is nothing wrong if the High rt has held that it was rendered incapable of execution by operation of the law. 78 Section S of the Act deals with the settlement of the resumed "bhogra land" and has been the subject matter of controversy before us. It provides as follows: "5. Settlement of Bhogra lands: (1) All Bhogra lands resumed under the provisions of this Act shall subject to the provisions of sub section (2) be settled with rights of occupancy therein on a fair and equitable rent with the holder of the Village office or with him and all those other persons, if any, who may be in the enjoyment of the land or any part thereof as his co sharers or as tenants under him or under such co sharer to the extent that each such person was in separate and actual cultivating possession of the same immediately before the appointed date. (2) The total area of such land in possession of each such person shall be subject to a reservation of a certain fraction thereof in favour of the Grama Sasan within whose limits the land is situate and the extent of such reservation shall be determined in the following manner, namely: Land in possession Extent of reservation For the first 10 acres Nil For the next 20 acres 5 per cent For the next 70 acres 10 per cent For the next 100 acres 30 per cent For the remaining 40 per cent: Provided that the area reserved shall, as far as practicable be in compact block or blocks of one acre or more." (Emphasis added) . It would appear that once a "bhogra land" stood resumed and vested absolutely in the State Government to the exclusion of the village officer concerned, it was required to be "settled", with rights of occupancy thereunder, with the erstwhile holder of the village office, or with him and all those other persons, if any, who may be in enjoyment of the land or any Part thereof as his co sharer to the extent that each such person was in separate and actual cultivating possession of the same immediately before the date appointed for the coming into force of the Act. The settlement of the land contemplated by section 5 had therefore to be with the holder of the village office and the other persons who were enjoying it (or part of it) as his co sharers or as tenants under him or his co sharers, but that was to be so on the condition that "each such person" namely, the holder of the village office, and his co sharers, or the tenants under the holder of the office or his co sharers, was in "separate and actual cultivating possession" of the land immediately before April 1, .1966. There is nothing in sub section (1) of section S to justify the argument of Mr. Pathak that we should so interpret the words "each such person" as to exclude the holder of the village office from its purview. In fact the same words occur in sub section (2) of section S as well, which deals with the question of reservation of a fraction of the "bhogra land" in favour of Grama Sasan, and Mr. Pathak has not found it possible to argue that the land in possession of the holder of 79 the village office was immune from the liability to such fractional reservation. We have no doubt therefore that in order to be entitled to the settlement contemplated by sub section (1) of section S, the village officer or the other persons mentioned in the sub section had to be in "separate and actual cultivating possession" immediately before the appointed date. It has also been argued by Mr. Pathak that the provisions of section 3 of the Act were subject to the provisions of section 5, and that the High Court committee an error in losing sight of that requirement of the law. He has urged that if section 3 had been read as suggested by him, it would have been found that, in spite of the resumption and vesting of the "bhogra land" under section 3, the appellant 's right to possess the "bhogra land" in question continued to subsist so long as it was not converted into a right of occupancy under sub section (1) of section 5. Counsel has gone on to argue that the appellant was therefore entitled to ignore any trespass on his possession of the "bhogra land", and to ask for execution of the decree for possession against the respondents as they were mere trespassers and were not co sharers or tenants within the meaning of sub section (1) of s.5. Reference in this connection has been made to Maxwell on Interpretation of Statutes, twelfth edition, p. 86, where it has been stated that it is necessary to interpret the words of the statute so as to give the meaning "which best suits the scope and object of the statute. " It has been argued that grave injustice would otherwise result for, by a mere act of trespass committed on the eve of the coming into force of the Act, a village officer would lose the right of settlement of his "bhogra land" under sub section (1) of s.5. It has also been argued that the words "each such person" occurring in that sub section do not include the holder of the village office himself, so that it was not necessary for him to show that he was in separate and actual cultivating possession of his "bhogra land". Reliance for this proposition has been placed on a bench decision of the High Court of Orissa in State of Orissa vs Rameswar Patabisi (Civil Revision Petition No. 257 of 1974 decided on June 27,1975) and on Meharaban Singh and others vs Naresh Singh and others(1). As will appear, there is no force in this argument. Section 3 of the Act expressly provides for the abolition of village offices under the Act, and the consequences of such abolition. We have made a reference to cls. (a) (b) (c) (d) and (f) of that section, and we have no doubt that the consequences stated in the section in regard to the abolition of village offices, the extinction of the incidents of the service tenures, cancellation of the settlements and sanads etc. creating those office, termination of the right to receive any emoluments for the offices, the resumption and vesting of the "bhogra lands" free from all encumbrances ensued "with effect from and on the appointed date" and were not put off until after the settlement provided for in sub section (1) of section 5 had been made. Section 3 in fact expressly made provision for those consequences and there is no justification for the argument that they remained suspended or were put off until occupancy rights were settled on the persons concerned. As has been (1) 80 stated, sub section (1) of section S deals with the settlement of such lands, with rights of occupancy, with the holder of the village office or with him and the other persons, if any, referred to in the sub section, but such settlement was required to be made as a result of the consequences referred to in section 3 and not otherwise. It is therefore futile to contend that the appellant did not suffer from those consequences merely because the "bhogra land" claimed by him had not been settled with rights of occupancy under sub section (1) of section 5 because it was the subject matter of the decree which had not been executed. We have gone through the decision in State of Orissa vs Rameshwar Patabisi (supra) and it has no doubt been held there that actual cultivating possession of the village officer was not necessary for purposes of sub section (1) of section S, but, as has been shown, we have no doubt that the words "each such person" occurring in sub section (1) of section 5 include the holder of the village office, so that in order to be eligible for settlement of the land with occupancy rights, he must also be in separate and actual cultivating possession of the "bhogra land" immediately before the appointed date. It appears that the earlier bench decision to the contrary, which is the subject matter of the present appeal, was not brought to the notice of the Bench which decided Rameswar Patabisi 's case. We have gone through Maharabansingh 's(1) case also but that was quite a different case which was decided in accordance with the provisions of a different Act. It has next been argued by Mr. Pathak that the High Court lost sight of the provisions of section 9 of the Act which provided for submission of records and delivery of possession of other land but did not require delivery of possession of the "bhogra land" even after its resumption. The argument is however untenable because section 9 was meant to serve quite a different purpose inasmuch as it made provision for the delivery of all records maintained by the village officer in respect of the land or village held by him in relation to his office, the rendering of all accounts appertaining to his office in respect of the dues payable by and to him, and the delivery of possession of all abandoned and surrendered holdings etc. The section did not therefore have any bearing on the question of the vesting of the "bhogra land" absolutely in the State Government and the extinction of the right of the village officer to hold it. That had in fact been. expressly provided in those clauses of section 3 to which reference has been made by us already. As it is, section 9 did not deal with the question of delivery of possession of the "bhogra land" and its provisions could not justify the argument that the village officer was entitled to continue his possession of the "bhogra land" under that section in spite of the fact that the land stood resumed and vested absolutely in the State Government free from all encumbrances under section 3. It may be mentioned that Mr. Pathak has argued further that as the application which had been filed by the Council under order XXI r. 58 C.P.C. had been rejected on March 31, 1965 and the Council did not file a suit to establish its right to the "bhogra land", the decree in favour of the appellant became final and could not be challenged for 81 any reason whatsoever, and the High Court committed an error in A taking the view that it was rendered inexecutable merely because of the coming into force of the Act. It will be sufficient for us to say in this connection that whatever might have been the consequences of the rejection of the Council 's application under order XXI r. 58 C.P.C. and the failure to institute a suit thereafter, those normal consequences were rendered nugatory by the express provisions of the Act to which reference has been made above. The question of executability of the decree has therefore been rightly decided with reference to the Act. It may be mentioned that in a given case there may be no "bhogra land" to be settled with a village officer, or a village officer may feel aggrieved on the ground that the Act provides for the acquisition of property by the State, but we find that provision has been made in the Act for the payment of solatium or compensation under sections 8 and 10 in such cases and it cannot be said that they have been left without a remedy. For the reasons mentioned above, we find no force in the arguments which have been advanced on behalf of the appellant. It however appears to us that there is justification for the other argument of Mr. Pathak that there was really no occasion for the High Court to express the view that the appellant "had no possession of the land" so as to claim its settlement under section 5(1) of the Act, and that the Collector could not settle the land with him. As is obvious, that was clearly a matter for the authorities concerned to examine and decide under section 5 and it was, at any rate, outside the purview of the question relating to the executability of the decree which was the subject matter of the appeal in the High Court. While therefore the appeal fails and is dismissed, the observation of the High Court that the decree holder had no possession of the land and the Collector could not settle the land with him, is set aside, and it is left to the authorities concerned to examine the question of settlement of the land under section 5(1). The appellant may rely on such matters as may be open applellant the law. In the circumstances of this case, we leave the parties to pay and bear their own costs.

In the execution proceedings to satisfy a decree dated 14 10 1958 for title and recovery of possession of certain "ganju Bhogra lands" obtained by the appellant against the State, the Notified Area Council. Rourkela claimed the suit lands by an application u/o XXI Rule 58 r/w sections 37 and 38 Code of Civil Procedure. The said application was rejected. A revision against it was also dismissed with the observation that the council was free to file a regular suit for adjudication of its rights. When the appellant took out a fresh application for execution u/s 47 of the Code` of Civil Procedure, the Council which never filed any suit, and the respondent State which never appealed against the original decree, opposed the execution application on the ground that the decree became infructuous by virtue of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The Executing court upheld the objection and dismissed the execution petitition. On appeal the Additional District Judge, by his order dated 2 5 1970, held that the decree was executable resulting in a second appeal to the High court by the respondent State. The High Court allowed the appeal by its order dated 4 11 1974 holding that as the decree holder was not in actual physical possession of the land, the tenure has vested in the State free from all encumbrances u/s 3 of the Act and the decree was rendered "non est". Dismissing the appeal by special leave, the Court, ^ HELD: (1) As a result of the abolition of the village office under section 3 of the OMTA, all incidents of the appellant 's service tenure, e.g., the right to hold the "bhogra land" stood extinguished by virtue of the provision of clause (b) of section 3, and ail settlements, sanads and all grants in pursuance of which the tenure was being held by the appellant, stood cancelled under section 3(c). The right of the appellant to receive emoluments was also deemed to have been terminated under Cl. (d) and by virtue of Cl. (f), his bhogra land stood resumed and "vested absolutely" in the State free from all encumbrances. Section 3 of the Act, in fact, expressly provided that this would be the result, notwithstanding anything in law, usage, settlement, grant, sanad, order or "in any judgment, decree or order of a court. " All these consequences ensued with effect from April 1, 1966 the date of coming into force of the orissa Merged territories (Village offices Abolition) Act, 1963. From that date, the appellant suffered from these and other disabilities enumerated in section 3 of the Act, the "bhogra land" in respect of which he obtained the decree dated October 14, 1958 declaring his title and upholding his right to possession was, therefore, lost to him as it vested "absolutely" in the State Government free from all encumbrances. The decree for possession also thus lost its efficacy by virtue of the express provisions of the Act and there is nothing wrong in holding that the decree was rendered incapable of execution by operation of law. [77 D H] (2) Under sec. 5 of orissa Merged Territoies ((Village offices Abolition) Act, 1963, once a "bhogra land" stood resumed and vested absolutely in the State Government to the exclusion of the village officer concerned, it was required to be "settled" with rights of occupancy thereunder. The settlement of the land contemplated by sec. S had to be with the holder of the village office and the other persons who were enjoying it (or part of it) and as his co sharers, as tenants under him or his co sharers, but that was to be so on the condition 76 that "each such person, namely, the holder of the village office and his cosharers or the tenants under the holder of the office or his co sharers was in separate and actual cultivating possession" of the land immediately before April, 1966. The words "each such person" occurring in sub section I of Sec. 5 include the holder of the village office so that in order to be eligible for settlement of the land with occupancy rights, he must also be in separate and cultivating possession of the "bhogra land" immediately before April 1, 1966. There is nothing in sub section I of Sec. 5 to justify the argument that the interpretation of the words "each such person" should be such as to exclude the holder of v the village office from its purview. [78 E, F H] State of orissa vs Rameswar Patabisi (Civil Revision Petition No. 257 of 1974) decided on 27 6 1975 (orissa High Court) over ruled; Meharabansingh and Ors. vs Nareshaingh and ors. (held not applicable). (3) The provisions of sec. 9 do not justify the argument that the village officer was entitled to continue his possession of the "bhogra land" under that section in spite of the fact that the land. stood resumed and vested absolutely in the State Government free from all encumbrances. [80 E] (4) The normal consequences arising out of the rejection of the application under o. XXI, r. 58, Civil Procedure Code and the failure to institute the suit thereafter, were rendered nugatory by the express provisions of section 3 of the orissa Merged Territories (Village offices Abolition) Act, 1963. The question of executability of the decree did not arise. [81 A B] [The Court left open to the authorities concerned to examine the question of settlement of the land under section 5(1) of the orissa Merged Territories (Village Dr offices Abolition) Act, 1963, with liberty to the village officer to rely upon such matters as may be available according to law.]

Civil Appeal No. 1074(N) of 1977. From the Judgment and order dated 26.11.1976 of the High Court of Orissa in original Jurisdiction Case No. 811 of 1974. Rajinder Sachher and Amrish Kumar for the Appellant. Pankaj Kalra, Amicus Curiae and R.K. Mehta for the Respondents. The Judgment of the Court was delivered by SHARMA, J. The respondent Padmanabha Padhy was appointed as a Lecturer in the appellant College on the 26th July, 1971 and was placed under probation for one year. He was informed by the letter dated the 28th March, 1972 that his services were no longer required and would stand terminated with effect from the afternoon of the 30th April, 1972. He challenged the termination order by a writ application before the orissa High Court, which was allowed and the writ petitioner was declared to have continued in service. The appellant has filed the present appeal against the High Court judgment after obtaining special leave. The respondent, in the first instance had filed a writ application which was registered as O.J.C. No. 308 of 1972 but later withdrew it and approached the Director of Public Instruction (in short referred to as the DPI), present respondent No. 2, for the necessary relief. Subsequently on 12.8.1974 he filed a second writ application being o. J.C. No. 811 of 1974 which has been allowed by the judgment presently impugned. It is stated before us on his behalf that the D.P.I. by his order dated 19.9.1973 declined to interfere which necessitated the filing of the second case. It has been, inter alia, contended by Sri Padhy in his writ application that his appointing authority was "the Managing Committee or the Governing Body" and as such the impugned order of termination of his services by the Principal was without jurisdiction. The stand of the College was that the Principal who was the Ex officio Secretary was the appointing authority and was vested with the power to terminate the appellant 's services. The counter 710 affidavit of the D.P.I. stated that both the orders of appointment and termination had been passed by the Governing Body and the Principal was, in sending the orders to Sri Padhy, acting on behalf of the Governing Body. It has further been said that he (D.P.I.) was not concerned with termination orders passed before the 3rd of May, 1972, the date from which the relevant 1974 Amendment of the Orissa Education Act, 1969 took effect and he had, therefore, no power to look into the matter. The High Court held that, "undoubtedly, until confirmation petitioner had no right to the post and during the period of probation he could be turned out from service", but in view of the language of the appointment letter and the termination order it proceeded to point out that both the orders had been passed by some authority other than the Principal and the Principal was merely a communicating agent. The High Court further opined that the Principal was acting on behalf of the Management of the Trust which had established the College, and the termination order did not emanate from the Governing Body. Observing that it is only the Governing Body of a College which has power to terminate the services of a teacher, it was further held that the impugned order was without jurisdiction. The objection to the maintainability of the writ application on the ground that the College was a private institution was rejected and it was held that in view of the provisions of the Orissa Education Act, 1969, Berhampur University Act, 1966 and the Berhampur University Statutes, 1966, the college must be considered to be a statutory body amenable to the writ jurisdiction. Mr. Sachher, learned counsel appearing in support of the appeal, has contended that both the orders of appointment and termination of service were passed by one and the same body and the finding of the High Court to the contrary is not based on any material and, therefore, has to be set aside. Referring to the statement of Sri Padhy in paragraph 7 of the writ petition that the Governing Body of the College and the Managing Committee are one and the same body, it was argued that the termination order was passed by the appointing authority of the writ petitioner and it could not be set aside on the ground of lack of jurisdiction. The maintainability of the writ application in the High Court has also been seriously challenged and it has further been urged that in any view of the matter the High Court on the facts and in the circumstances of the case should have refused to allow any relief to the writ petitioner. 711 5. Mr. Kalra, learned counsel representing Sri Padhy respondent No. 1, has submitted that the. finding of the High Court as to the authorship of the appointment and termination orders should not be disturbed by this Court. He also supported the view of the court below that the writ petition was maintainable and that it is a fit case in which the High Court was right in granting the relief as prayed for. The learned counsel for both sides placed before us the appointment and termination orders more than once and there is no manner of doubt that none of the orders was passed by the Principal alone. The termination order stated that the Principal had been directed to inform Sri Padhy that his services were being no longer required and stood terminated with effect from 30.4.1972. It is true that none of the two letters expressly states about the authority passing the respective orders but this much is clear that the Principal was only conveying the decision of another authority and was thus acting in the same capacity on both occasions. The writ petition was founded on the assumption that it was the Principal who had passed the termination order by himself and that he had no jurisdiction to do so. Instead of merely pointing out that it was not so, the affidavit on behalf of the College made a confused statement forgetting that the Principal was only one of the members of the Governing Body. Both sides, thus, misrepresented the situation before the Court and it was only the D.P.I. who correctly appreciated the position. In this background the question arises as to whether the High Court was right in assuming that the termination order was passed by an authority other than the appointing authority. No material or basis has been referred to in the Judgment of the High Court in support of its view and neither side has pointed out before us any evidence to that effect. Mr. Kalra contended that in view of the statutory provisions it should be presumed that Sri Padhy had been appointed by the Governing Body as envisaged in law, and further in view of the stand of the College before the High Court that the Principal had issued the termination order, it should be held that the same was without jurisdiction. The finding of the High Court in this regard is in his opinion thus supported by the supposed admission of the College in its pleading. We are afraid, the argument cannot be accepted. The case of the College has been that both the appointment and the termination orders were given by the Principal. This plea is of course incorrect but for that reason the statement by the College cannot be truncated and part of it accepted while rejecting the other part. 712 As was observed by the Privy Council in M.M. Essabhoy vs M. Haridas, AIR 1915 PC 2, although it is permissible for a tribunal to accept part and reject the rest of any witness 's testimony, so far as admission in pleading is concerned, it cannot be so dissected. It may be accepted as a whole or not at all. We therefore, hold that the assumption made by the High Court in this connection being not supported by any material whatsoever on the records has to be set aside. The burden of proving the necessary facts for grant of relief was on the writ petitioner which was not discharged. The writ application was, therefore, bound to fail. The appeal accordingly must succeed on this ground and it is, therefore, not necessary to consider the other questions raised on behalf of the appellant. In the result, the appeal is allowed, the decision of the High Court is set aside and the writ petition is dismissed. Parties shall bear their own costs throughout. N. V. K. Appeal allowed.

% Civil Appeal Nos. 2049 and 3129 of 1979 were filed in this Court by special leave against the judgment of the High Court in a Writ Petition filed by respondents 6 to 51 of Civil Appeal No. 2049 of 1979. One appeal was. by the employees and the other, by the State of Bihar, etc., against the judgment of the High Court above said. There were three different wings of Engineers in the Department of Agriculture, viz., Irrigation, minor Irrigation and River Valley Projects. On January 9, 1969, the State Government amalgamated the cadres of engineers and other employees of the Irrigation and the River Valley departments. Engineers and other employees of the minor Irrigation wing were not amalgamated. Later, the Directorate of minor Irrigation was made permanent and a distinct and permanent cadre of overseers termed as Junior Engineers, was created. 191 permanent posts of overseers were sanctioned. Thereafter, the minor Irrigation wing was also amalgamated with the other two wings, and a combined final gradation list prepared on the basis of the status of the overseers as obtaining on. January 9, 1969, was issued. On the Writ Petition of the respondents 6 to 51 above mentioned, the High Court quashed the orders contained in the various annexures viz 11.11/1, 12, 13, 13/1, 15 and 16 directed the State Government to prepare a fresh combined gradation list in accordance with the principles laid down by the High Court. Allowing the appeals in part, the Court, ^ HELD: The three wings though under the administrative control of the Agricultural Department, were separate before amalgamation. Permanent posts had been sanctioned in the minor Irrigation wing to 411 which the petitioners before the High Court belonged and they were appointed on permanent basis. When integration takes place and officers in different cadres are merged into one, there is bound to be some difficulty in the matter of adjustment. That has occurred in this case. The approach of the High Court has been that if within the cadre earlier confirmation gives seniority why should that basis be not extended to the combined gradation list. That may not be applicable in every situation particularly when there is a merger of cadres and the combined gradation list is proposed. [414C D,FJ] Seniority would ordinarily depend upon the length of service, subject, of course, to the rules holding the field. This view has been taken by this Court in several cases. The High Court recorded a finding that there is no applicable rule in the matter of fixing inter se seniority in a situation of this type. In the absence of rules, the more equitable way of preparing the combined gradation list would be to take the total length of service in the common cadre as the basis for determining the inter se seniority The Court does not agree with the High Court that confirmation should be the basis and would substitute it by the length of service test, but the Court upholds the direction that in fixing the combined gradation list the inter se seniority of incumbents in their respective departments would not be disturbed. The gradation list as published by the Government has to be modified. The conclusion of the High Court that Annexures 11, 11/1, 12,13, 1311, 15 and 16 should be quashed and a fresh combined gradation list has to be published, is confirmed. The test for fixing the seniority inter se generally, is altered, but the direction of inter se seniority in their own departments to be respected is approved. The respondent State directed to prepare and publish the fresh combined gradation list keeping these directions in view. [4t4G; 4t5C F] A. Janardhana vs Union of India and Ors., ; and K.S. Vora and Ors. vs State of Gujarat and Ors. , ; , referred to.

ivil Appeal No. 1065 of 1987. From the Judgment and Order dated 21.10.1986 of the Kerala High Court in S.A. No. 491 of 1980. G. Vishwanatha Iyer, section Balakrishnan and M.K.D. Namboo dri for the Appellants. T.S. Krishnamoorthy Iyer, A.K. Srivastava and S.C. Birla for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal by leave is from the judgment and order of the High Court of Kerala, dated 21st October, 1986. It arises in the following circumstances: The building in question which is a shop building No. T.C. 887, M.G. Road, Pazhavangadi, Trivandrum, is part of a pucca three storeyed building belonging to one M.P. Philip and as per his settlement the disputed shop building and two other rooms devolved on one of his sons M.M. Philip. While this disputed shop building was in the possession of a tenant under the owner, the owner mortgaged the disputed building and the remaining portions to the first defendant with a direction to receive the rent from the tenant. The mortgagor directed the tenant also to attorn to this mortga gee. The first defendant subsequently in the course of his management of the mortgaged property, gave the building on lease to the appellants for a higher rent when the former tenant vacated the same. Subsequently, the owner executed a subsequent mortgage with a direction to redeem the mortgage in favour of the first defendant and before the subsequent mortgagee took steps to redeem the mortgage, the owner assigned his equity of redemption to the respondent. The respondent and the subsequent mortgagee together as plain tiffs 1 and 2 filed a suit to redeem the mortgage of the first defendant impleading the appel 977 lants as well as respondents and claimed recovery of the khas possession of the building. The appellants contended that they are tenants of the building inducted into posses sion by the mortgagee as a mode of enjoyment that the mort gage deed authorised the mortgagee to enjoy the building by letting it out and they were not liable to be evicted through a decree of court in a redemption suit without an order under the Kerala Building (Lease & Rent Control) Act, 1965 (hereinafter referred to as 'the Act '). The trial court decreed the suit and directed recovery of possession of the shop building on the ground that the mortgagee could not induct a tenant and give him any right to continue in pos session even after the redemption of the mortgage. On appeal by the appellants, the first appellate court held that the disputed building was a shop building which was never in the enjoyment of the owner and the mode of enjoyment of the owner of the property was by letting it out and when the mortgagee enjoyed the property in that manner, by letting it out, the person put in possession as a tenant was entitled to continue in possession even after redemption, until evicted under the Rent Control Act. The first appellate court further found that the mortgage deed impliedly autho rised the mortgagee to let out the building. In that view the decree for khas possession of the shop building in possession of the appellants was denied to the respondent. The respondent filed a second appeal before the High Court, raising the following three contentions: (1) Whether under section 76(a) of the Trans fer of Property Act, 1882, a tenancy created by the mortgagee in possession of an urban immovable property would be binding on the mortgagor after redemption of the mortgage, assuming that the tenancy was such as a pru dent owner of property would have granted in the usual course of management. (2) Whether a tenancy created in exercise of a general power to grant a lease expressly or impliedly conferred on the mort gagee would survive the redemption of the mortgage in view of Sec. 111(c) of the Trans fer of Property Act, 1882; and (3) Whether a tenant inducted on the property by a mortgagee with possession, would after redemption of the mortgage be protected under the provisions of section 11(1) of the Act. The High Court was of the view that as the appellants had not pleaded that they were inducted into possession by the mortgagee as 978 prudent act of management, it was not open to the appellants to contend that they could continue in possession even after redemption. Further, the High Court was of the view that it was not open to the mortgagee to induct a person into pos session which conferred any right on the tenant to continue in possession even after redemption. The High Court categorically came to the conclusion that protection under section 76(a) of the was never claimed in the written statement. On the other hand, it was contended by the appellants that this was a pure question of law unconnected with the question of fact and, therefore, no pleadings were necessary and even without pleading such contention could be raised and considered by the Court at the time of argument. Whether a particular lease is bona fide or prudent act of management, is primari ly a question of fact, though whether on account of the bona fide or prudent act of the mortgagor his lessee was entitled to continue even after the mortgage was determined, is a question of law. The High Court was of the view that the decision on the question of law is dependent on the question of fact whether the lease was bona fide or a prudent act of a person of ordinary prudence, who would manage it as if it were his own. On that question of fact, there should be definite pleading so that the plaintiff must have an oppor tunity of meeting the claim and adduce evidence in rebuttal. The High Court therefore could not sustain the right of the tenant under section 76(a) of the , as a matter of prudent management. There was no issue in this respect and the judgment of the trial court did not show, according to the High Court, that such a contention was raised. The only contention that was raised was that the lease was with the knowledge or consent of the mortgagor. The High Court further came to the conclusion that there was no evidence in support of that contention. The finding of the District Judge that the mortgagee had implied authority of the mortgagor to let out, was not only lacking in plead ings or issue, but it was also not warranted by the provi sion of the mortgage deed or the evidence. The High Court relied on several decisions and came to the conclusion that the provision of Sec. 76(a) of the , which was an exception to the general rule embodied in Sec. 111(c) applies in appro priate cases ordinarily only to the management of agricul tural lands and had seldom been extended to urban property so as to tie up in the hands of lessee or to confer on him rights under special statutes. The High Court further came to the conclusion that the general 979 proposition of law is that no man can convey a better fight than he himself has. Therefore, a mortgagee in possession cannot create tenancy with a right to continue in possession beyond the period of redemption. Normally, lease by the mortgagee is determined when the mortgage is redeemed since there is no privity between the mortgagor and the lessee. The question of prudent management under Sec. 76(a) of the by granting of lease or otherwise normally arises only in rural agricultural lands and not in urban immovable property. The High Court further came to the conclusion that a mere authorisation to the mortgagee to lease the property itself does not amount to any intention to allow expressly the creation of a tenancy beyond the term of the mortgage. Only where the words of the mortgage deed clearly and expressly allowed creation of tenancy beyond the term of the mortgage that the lease would be binding on the mortgagor. In that view of the matter, the High Court held that the learned District Judge was wrong in holding that the defendants Nos. 2 & 3 were not liable to be evicted in this suit and that they could be evicted only through an order of a competent Rent Controller. In the premises, the second appeal was allowed and a decree for eviction was passed. Aggrieved thereby, the appellants have come up before this Court. The question is was the High Court right. The first contention of Sri Vishwanatha Iyer, learned counsel for the appellants, was that in view of the terms of the mortgage in the instant case, the appellants were enti tled to be in possession after redemption of mortgage as against the mortgagor. He drew our attention to the mortgage deed dated 4th July, 1960. The mortgagor in that mortgage deed stated that he was the absolute owner of the property and therefore he was mortgaging the property. Thereafter, the deed proceeded to state as follows: "This property is hereby secured to you on otti for a term of 2 years for Rs.7,000 which I have received as recited hereunder. There fore, you may possess and enjoy the property by collecting the rent from the tenants and after the expiry of two years I shall pay you the sum of Rs.7,000 and get a release of the otti ands the expenses for the release should be shared by us. " The mortgagee was to enjoy the property by collecting the rent from the tenants. This mortgage was renewed for the second time on 980 17th August, 1977. The second mortgage deed recited that the shop in Item I which was in possession of Carona Shoe Compa ny, was given for enjoyment. Therefore, the fact that the tenant was there, is accepted. It was contended that as no amount was being paid as interest, the mortgagee was entitled to the benefit, that is to say, the rent from the premises in question. It was contended that the High Court was wrong in holding that it was not an act of prudent management. Sri Iyer referred to the document dated 3rd June, 1977 which recited as follows: "But the portion where the Ringal shop was situate alone was given possession to you and the remaining portion forming upstairs to the shop previously Ringal Shop, now Carona Shoe Mart, and the shed portion behind it was let out to Chellamma Pillai by the mortgagor and she is occupying it while so the mortgagor has executed a subsequent mortgage and an agree ment for sale to Chellamma Pillai and she is entitled to redeem you and recover posses sion of the building." These contentions, in our opinion, are concluded by the decision of this Court in PomaI, Kanji Gvoindji & Ors. vs Vrajlal Karsandas Purohit & Ors., [1988] 4 Jmt. Today SC 307, wherein it was held that except in cases where the leases specifically and categorically make exceptions in favour of the tenants that they would continue to be in possession even after the expiry or termination of the mortgage, and those leases are acts of prudent management, the tenants inducted by the mortgage would be entitled to the protection under the Rent Act after the redemption of mortgage .and in no other cases. Sri Iyer, in our opinion, is wrong in contending that in the instant case the mortgage deed specifically empowered the mortgagor to induct tenant who would continue to be in possession even after the redemption or end of the mortgage. It is true that the mortgage deed recited that the tenants were there. It is also true that the mortgage deed also enjoined that the method of realisation of the rent as the method of having the usufruct of the mortgage by the mortga gee. But it must be understood that so long as the mortgage subsisted, there was relationship of tenant and landlord. It could not be so after the mortgage was redeemed. There is nothing in the mortgage deed in the instant case which warranted the conclusion that the mortgagee could 981 induct tenants who Would continue beyond the term of the existence of the mortgage or who would be given rights even after the expiry of the mortgage. Sri Iyer then submitted that this Court in the aforesaid decision had referred to another decision of this Court, namely, Jadavji Purshottam vs Dhami Navnitbhai Amaratlal & Ors., where it was held that if the lease granted to the tenant by the mortgagee had the approval or concurrence of the mortgagor, the same would entitle the tenant to claim tenancy rights even as against the mortgagor after he had redeemed the mortgage, then in such a case, such tenants would continue to be in possession. Sri Iyer drew our attention to the observations of this Court in the aforesaid decision at para 13 of page 236 of the report. With reference to the term of the mortgage in the instant case and the communications between the parties, Sri Iyer tried to contend that the lease granted in favour of the appellants by the mortgagee had the approval or concurrence of the mortgagor. We are, however, unable to accept or find in the correspondence any such approval or concurrence. We have referred to the mort gage deed and the sale deed as mentioned hereinbefore. Sri Iyer drew our attention to a letter dated 7th October, 1977 addressed to the Rent Controller with a copy to the General Manager, Carona Shoe Co. Ltd. Therein, the respondent had negotiated or made an offer and expressed preference for the appellant company. The letter contained the following state ments: "Under the circumstances, I have now finally decided to settle all the issues and start the construction of the rear portion as early as possible as I have two more offers (other than yours) for renting out the entire ground floor (about 1,500 sq. ft.) which includes the space now occupied by you and a portion of the first floor. I am writing this letter to you because my first preference is for your company. The main reason is that you are conducting the business in the same shop for some years. Second thing is that I have already agreed to you at the discussion even though there was no written consent. In the light of the above, I give below my terms and conditions for renting out the shop with additional space annexed, if you are interested to continue the business in my building. Of course, the expenses (portion) for the same will have to be borne by you. But I will provide you with a very good show room considering your requirements. Necessary bathroom, lavatory, office cabin etc. will also be provided in consulta 982 tion with your representative. I had a discus sion with Mr L.W. Baaker, A.R.I.B.A. (The British Architect who is doing so many artis tic modern buildings and show room etc. throughout India including the Chitralekha Film Studio) and the article Director and Interi or Decorator of our Studio regarding the subject. " Thereafter, certain terms and conditions of the proposed lease were suggested. Ultimately, however, no such lease was executed. This communication strictly, in our opinion, negates the submission that there was any concurrence or approval of the mortgagor of the continuance of the appel lant 's as tenants after the expiry or redemption of the mortgage. It was then submitted by Sri Iyer that in view of the provisions of the Act, it was not possible for the respond ents to execute the decree. After an exhaustive discussion of the relevant authorities, it has been held by this Court in Pomal Kanji Govindji 's case (supra) that in respect of the urban immovable properties, the tenants do not get any protection after the redemption of mortgage. Sri Iyer, however drew our attention to Sec. 11 of the Act, to contend that notwithstanding anything contained in any other law or contract, a tenant shall not be evicted, whether in execu tion of a decree or otherwise, except in accordance with the provisions of the Act. He drew our attention to the defini tion of 'tenant ' under sec. 2(6) of the Act which defines a tenant as a person by whom or on whose account rent is payable for a building and includes the heir or heirs of a deceased tenant and a person continuing in possession after the termination of the tenancy m his favour. Similarly, landlord is defined under section 2(3) of the Act as follows: "(3) "landlord" includes the person who is receiving or is entitled to receive the rent of a building, whether on his own account or on behalf of another or on behalf of himself and other or as an agent, trustee, executor, administrator, receiver or guardian or who would so receive the rent or be entitled to receive the rent, if the building were let to a tenant. " But in view of the said definitions, we are of the opinion that between the appellants and the respondent, there was never any landlord or tenant relationship. The appellants were never the tenants of the respondent. Sri Iyer drew our attention to the observations of this 983 Court in Raj Brij Krishna & Anr. S.K. Shaw & Bros., , where it was held that the non obstante clause would be applicable. Our attention was drawn to the observa tions of Fazal Ali, J. at page 150 of the report. There, the Court observed that Section 11 of the Bihar Buildings (Lease, Rent & Eviction) Control Act, 1947 was a self con tained section, and it was wholly unnecessary to go outside the Act for determining whether a tenant was liable to be evicted or not, and under what conditions he could be evict ed. But in the instant case, the appellants were not the tenants. The respondent, the original mortgagor, would never after the redemption of the mortgage have treated the appel lants to be tenants. There was no relationship ever between the appellants and the respondent. The mortgagor had a separate and distinct interest which was wiped out on the redemption of the mortgage or expiry of the period of mort gage. The mortgagor on redemption of mortgage gets back his own right, he is not the successor in interest of the mort gagee. Interest, if any, created by the mortgagee on the mortgagor 's right, must disappear on ceasing of interest of the mortgagee. In that view of the matter, in our opinion, thus the said observations would not be of any relevance to the present case. Similarly, reliance was placed on the observations of this Court by Sri Iyer in M/s Raval & Co. vs K.G. Ramachandran & Ors., ; The observa tions that the definitions of 'landlord ' and 'tenant ' might apply even if the contractual tenancy has come to an end. But that is not the situation here in the instant case. In the said case, Bhagwati, J. as the Chief Justice then was, in his judgment at page 439 of the report observed that sub section (1) of section 4 of the Act in question i.e., Tamil Nadu Buildings (Lease & Rent Control) Act, 1960 con templated that an application for fixation of fair rent of a building might be made by the tenant or the landlord. The definition of 'tenant ', it was observed, included contractu al tenant as well as tenant remaining in possession of the building after determination of the contractual tenancy, i.e. statutory tenant, and both contractual tenant and statutory tenant could, therefore, apply. It was, therefore, submitted in this case that on the analogy of the contractu al tenant, the appellants were entitled to the protection of the Act. We are unable to agree. It is not a question of a contractual tenancy coming to an end. The limited estate created in favour of the mortgagee having disappeared, all rights emanating from that limited estate disappear and the superior fight of the mortgagor comes not in place of the mortgagee but as a result of an independent title, and as such the mortgagor cannot be bound by any act created or any relationship contracted between the mortgagee and the ten ant, unless it is permitted by the mortgage deed Reliance was also placed on certain observations of 984 this Court in V. Dhanpal Chettiar vs Yesodai Ammal, 14. Therein, it was held that under the State Rent Acts, the concept of contractual tenancy has lost much of its significance and force. Therefore, giving of the notice was a mere surplusage and unlike the law under the , it does not entitle the landlord to evict the tenant. In our opinion, the observations of the said decision cannot have any assistance or significance for the purpose of the issues involved in the present controver sy. Our attention was also drawn to the observations of this Court in Pomal Kanji Govindji 's case (supra) at para 42 of page 326 and it was contended that in this case impliedly the mortgage deed specifically and categorically made an exception in favour of the tenants that they would continue in possession even after the termination or redemption of the mortgage and that these leases were acts of prudent management. In this connection, reference may be made to Section 60 of the . It is this which gives the mortgagor right to redeem after the date fixed for payment. The mortgagor 's right of redemption and the mortga gee 's right of foreclosure or sale are co extensive. Simi larly, Section 76(a) of the which determines the liabilities of the mortgagee and imposes the obligation to manage the property as a person of ordinary prudence. In the instant case, it has been held by the High Court that the induction of the appellants as tenant was not an act of prudent management. Our attention was also drawn by Sri Iyer to the observa tion of this Court in Gian Devi Anand vs Jeevan Kumar & Ors., ; in support of his submission that in the emerging jurisprudence of tenancy legislation the dis tinction between statutory tenant and contractual tenant has disappeared. The said view, in our opinion, would be of no avail as the respondent is not the successor in interest and does not come in place of the mortgagee but by virtue of its independent title. Reliance was also placed on the observations of this Court in G. Ponniah Thevar vs Nalleyam Perumal Pillai & Ors., ; That decision, in our opinion, has no application. The person inducting the tenant appellant was a co widow who had a life interest in the lands. It was observed that the terms of the statutory protection applied clearly to all tenancies governed by the Madras Cultivating Tenants Protection Act irrespective of the nature of fights of the person who leased the land so long as the lessor was entitled to create a tenancy. In our opinion, the said observations would not be applic 985 able. The said decision deals with the right of the co widow in the land. Reference may be made to the facts of that case at page 504, para 10. In our opinion, in view of the said facts, the decision would not apply to the facts of the instant case. On the other hand, in view of the facts and ratio of the principle of the decisions in Jadavji Purshot tam, (supra) and PomaIii Govindji, (supra) we are of the opinion that the contentions of Sri Iyer cannot be sus tained. The non obstante clause in Section 11(a) of the Act is applicable only to a decree for eviction obtained by a landlord against a tenant. The appellants were never the tenants of the respondent. In the aforesaid view of the matter, we are unable to accept the submissions urged in this case and, therefore, the appeal must fail. But in view of the fact that the appellants have been carrying on the business for some time in the premises in question in order to enable them to adjust their business, we direct that the order for eviction of the appellants should not be executed upon 31st October, 1989 if the appellants give an undertaking within a period of four weeks from this date to give vacant possession in a peaceful manner on 3 1st October, 1989; and also containing the usual terms of undertaking. In default of such undertak ing being given within the time aforesaid, the decree will be forthwith executed. The appeal is accordingly dismissed with costs. Y.L. Appeal dis missed.

The appellants are tenants. The premises in dispute is a shop building bearing No. T.C. 887, M.G. Road, Pazhavangadi, Trivandrum, part of a Pucca three storeyed building owned by one M.P. Phillip. As per the settlement the shop in dispute devolved on one of his sons, while the shop was in the possession of the tenant. During the tenancy owner mortgaged the premises in dispute and the remaining portions to the first defendant with a direction to receive the rent from the tenant. The tenant was asked to attorn to the mortgagee. The first defendant in course of management of the property gave the building on lease to the appellants for a higher rent; the earlier tenant having vacated the same. The owner thereafter executed the second mortgage with a direction to redeem the mortgage in favour of the first defendant and before the subsequent mortgagee took steps to redeem the mortgage, the owner assigned his equity of redemption to the respondent. The Respondent and the subsequent mortgagee together as plaintiffs 1 & 2 filed a suit to redeem the mortgage of the first defendant impleading the appellants as parties and claimed recovery of the Khas possession of the building. The appellants contended (i) that they are tenants of the build ing inducted into possession by the mortgagee as a mode of enjoyment; (ii) that the mortgage deed authorised the mort gagee to enjoy the building by letting it out and that they were not liable to be evicted through a decree of Court in redemption Suit without an order under the Kerala Building (Lease and Rent Control) Act 1965. The trial Court decreed the suit and directed recovery of possession of the Shop building. It took the view that the mortgagee could not induct a tenant and give him any right to continue in possession even after the redemption of the mortgage. 975 On appeal, the first appellate Court held that the disputed building was a shop building which was never in the enjoyment of the owner; mode of enjoyment of the owner being by letting it out and when the mortgagee enjoyed the proper ty in that manner by letting it out, the person put in possession as a tenant was entitled to continue in posses sion even after redemption, until evicted under the Rent Control Act. It also found that the mortgage deed impliedly authorised the mortgagee to let out the building. In that view of the matter, the trial Court 's order was set aside. The Respondent thereupon filed a second appeal before the High Court The High Court took the view that it was not open to the mortgagee to induct a person into possession which conferred any right on the tenant to continue in possession even after redemption. Accordingly it allowed the appeal and a decree for eviction was passed. Hence this appeal by the appellants tenant. Dismissing the appeal, but directing that the decree for eviction should not be executed till the 31st October, 1989 if the appellants give usual undertaking to deliver vacant possession on 31st October, 1989, this Court, HELD: That the mortgagor on redemption of mortgage gets back his own right; he is not the successor in interest of the mortgagee. Interest, if any, created by the mortgagee on the mortgagor 's right, must disappear on ceasing of the interest of the mortgagee. [983C D] The limited estate created in favour of the mortgagee having disappeared, all rights emanating from that limited estate disappear and the superior right of the mortgagor comes not in place of the mortgagee but as a result of an independent title, and as such the mortgagor cannot be bound by any act created or any relationship contracted between the mortgagee and the tenant, unless it is permitted by the mortgage deed [983G H] The mortgagor 's right of redemption and the mortga gee 's right of foreclosure or sale are co extensive. [984D] Jadavji purshottam vs Dhani Navnitbhai Amaratlal & Ors., and Pornal Kanji Govindji & Ors. vs Vrajlal Karsandas Purohit & Ors., [1988] 4 Judgment Today SC 307, followed. 976 Raj Brij Raj Krishna & Anr. S.K. Shaw & Bros., ; M/s. Raval & Co. vs K.G. Ram Chandran & Ors., ; ; V. Dhanpal Chettiar vs Yesodai Ammal, ; ; Gian Devi Anand vs Jeevan Kumar & Ors., ; and G. Ponnial Thevar vs Nalleyam Perumal Pillai & Ors., ; not applicable.

minal Appeal Nos. 39, 49 of 1962. Appeals by special leave from the judgment and order dated August 26, 1960 of the Court of Judicial Commissioner of Tripura at Agartala in Criminal Revision Nos. 9, 8, 16, 22, 21, 32, 23, 18, 20, 24 and 17 of 1960. C. K. Daphtary, Attorney General, D. N. Mukerjee and R. H. Dhebar, for the appellant (in all the appeals). P. K. Chatterjee, for the respondents (in Appeals Nos. 39, 42, 23, 46, 48 and 49 of 1962). May 5, 1964. The Judgment of the Court was delivered by: AYYANGAR, J. The respondents in these several appeals were prosecuted before Magistrates in Tripura for offences under section 26(1) of the and were convicted and sentenced to terms of imprisonment and fine, Their appeals to the learned Sessions Judge, Tripura having been dismissed, they preferred Criminal Revision Petition,, to the Judicial Commissioner, Tripura. The learned Judicia 161 Commissioner allowed their revisions by a common judgment and directed their acquittal. From these orders of acquittal the Union of India has filed these appeals by virtue of special leave granted by this Court under article 136 of the Constitution. Before proceeding to narrate the facts which have led to these appeals it is necessary to mention that three of these II appeals Criminal Appeals 40, 41 and 45 of 1962 have become infructuous. The notices issued to the respondents in Appeals 40 and 45 of 1962 of the filing of the appeals could not be served on them as it was reported that they had left for Pakistan. The appeals could not accordingly be prosecuted. In regard to Criminal Appeal 41 of 1962 it is reported that the accused died pending the hearing of the appeals and hence the appeal has abated. We are, therefore, concerned only with the other 8 appeals. The material clauses of section 26(1) of the for contravention of which the respondents in the several appeals were prosecuted read: "26. (1) Any person who (a) makes any fresh clearing prohibited by section 5, or who, in a reserved forest (d) trespasses or pastures cattle, or permits cattle to trespass: (e) (f) fells, girdles, lops, taps or burns any tree or strips off the bark or leaves from, or other. wise damages, the same; (g) (h) clears or breaks up any land for cultivation or any other purpose; shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both, in addition to such corn 51 S.C. 11. 162 sensation for damage, done to the forest a , the convicting Court may direct to be paid. " The magistrate convicted some of the accused respondents of offences under cls. (a) and (d) others of offences under cls. (d) & (h). It is common ground that in order to constitute an offence under section 26(1) the acts specified in the clauses of the sections should be committed in an area which is a "reserved forest" under the Act. We might point out that if the area concerned was a reserve forest, the guilt of the respondents would practically be made out and their conviction by the Magistrates, confirmed by the Sessions Judge, Tripura might have to be upheld. The principal, if not the sole question for consideration in the appeals, however, is whether the forest area where the respondents were held to have committed the acts alleged against them was such a "reserve forest". Before, however, dealing with that question, it would be convenient to set out very briefly the facts which have given rise to these prosecutions. The forests wherein the several respondents are stated to have committed the offences set out in the clauses of s.26(1) of the Act quoted above are comprised in three distinct areas in the former Indian State of Tripura. These three areas are known, respectively, as the Garjichhera reserve, Chandrapur reserve and the North Sonamura reserve. In April, 1958 an officer of the Forest Department went on circuit duty in these forest areas and found that the several accused had cleared the forests, reclaimed some land and had dug tanks for the purpose of cultivation and had made homesteads there. On the averment that these acts on the part of the several accused who are respondents in the several appeals constituted offences under section 26(1) (a) and (h) and in some cases under section 26(1) (a), (d) and (h) and in still some others under section 26(1)(d), (f) and (h), the accused were produced in the courts of the Magistrates having jurisdiction. The accused admitted that they had made homesteads and were living in structures constructed at the places where they were found and the only defence then raised was that they were entitled 163 to do so under a claim of jote rights on the lands. No evi dence was, however, produced by any of the accused to substantiate their claim to trespass on and plough up and cultivate and erect homesteads on the lands on which they were found squatting and the learned Magistrates holding that while the prosecution had made out their case, the accused had not established their defence, found the accused guilty and passed appropriate sentences on them. Appeals were filed against these convictions by the several accused to the learned Sessions Judge of Tripura. At that stage the accused raised the contention that the forest areas comprised in the Garjichhara, Chandrapur and North Sonapura reserves were not "Reserve forests" within the meaning of the Act. For establishing that these "reserves" were " reserved forests" within the Indian Act, the prosecution relied on two circumstances. First, there was a Forest Act promulgated by the Ruler of the Tripura State (Act 2 of 1257 TE 1297 T.E.?) which contained provisions some what analogous to those contained in the Indian Act. Next, section 5 of the Tripura Act enabled the State Government to declare by notifications published in the State Gazette, the boundaries of the forest areas to be governed by the State Act. There were three such notifications published in the Tripura State Gazette in 1346 and 1349 T.E. corresponding to 1936 and 1938 by which the boundaries of the three reserves of the Garjichhera, Chandrapur and North Sonamura forests were defined. The contention urged by the proseution was that the Tripura Act was replaced by the by reason of legislative provisions to which we shall advert later and that the notifications under the Tripura Act which were continued in force by these same provisions rendered these three reserves "Reserved forests" under the . We shall have to set out the terms of the Act as well as of the notifications later but it is sufficient to mention at this stage that the places where the respondents cleared the forests and built their homesteads were admittedly within one or other of these three reserves. The respondents in Appeals 39, 43, 47 and 49 had trespased into the Garjichhera reserve, while those concerned in appeals 42, 46 and 48 had trespassed into the Chandrapur reserve, and the respondent in appeal 44 was found to have 164 committed a similar offence in respect of the forest described as the North Sonamura reserve. When these three notifications were produced before the learned Sessions Judge he held that by reason of these notifications the three forest areas became "reserved forests" under the relevant provisions of the and he therefore upheld the order of the Magistrate convicting the accused and dismissed the appeals of the several accused. Thereafter revisions were filed to the Judicial Commissioner, Tripura. The same question of law viz., whether having regard to the terms and provisions of the Tripura Forest Act, the notifications setting out the boundaries of the three reserves constituted these "reserves" "reserve forests" within the , was again debated before the learned Judicial Commissioner, the learned Judicial Commissioner differing from the Sessions Judge held that they were not, and on this finding, directed the acquittal of the several accused. It is the correctness of this conclusion of the learned Judicial Commissioner that is challenged in these appeals. It would be seen from the above narrative that the question for consideration is whether the areas where the offence are said to have been committed were within "reserve forests" within the meaning of the . On the terminology employed by the reserve forests" are those areas of forest land which are constituted as "reserve forests" under Ch. II of the Act Chapter II comprises sections 3 to 27 and is headed "Of Reserveed Forests". Section 3 empowers the State Government to constitute "any forest land or waste land which is the pro perty of Government or over which the Government has proprietary rights or to the whole or in part of the forest produce to which the Government is entitled, a reserve forest in the manner hereinafter provided". Section 4 require that the State Government, when it has decided to constitute any land as a "reserved forest", should notify by the issue of a notification in the Official Gazette specifying the situation, 'limits, etc. of that land and declare its decision constitute the land as "a reserved forest". Section 6 make 165 provision for a proclamation of the notification issued under s.4 by publication in several places, so that persons who might be affected by the issue of the notification may prefer objections thereto. Section 7 directs an enquiry by a Forest Settlement Officer of all claims made by persons in response to the publication of the notification under section 6. Section 9 provides generally for the extinction of rights in respect of which no claim has been preferred under section 6. Where claims are preferred and are found to be made out section I I provides for the acquisition of such rights or of lands in respect of which the rights are claimed in the manner provided by the Land Acquisition Act. The next succeeding provisions of the Act enable appeals to be filed against the orders and for their hearing by the appellate authorities. These are followed by section 20 under which, after the stage of enquiry and decisions on claims made is completed, the State Government is directed to issue a notification in the Official Gazette `specifying definitely, according to boundary marks erected or otherwise the limits of the forest which is to be reserved, and declaring the same to be reserved from a date fixed by the notification. Sub section (2) of the section enacts: "20.(2) From the date so fixed such forest shall be deemed to be a reserved forest." Section 21 provides for the translation of the notification and its publication in every town or village in the neighbourhood of the forest. The next relevant provision is section 26 which prohibits the doing of certain acts in "a reserved forest" and provides for punishment for these contraventions the material parts of which we have already set out. From these provisions it would be seen that it is the notification under section 20 after complying with the procedure prescribed by the other sections of the Chapter commencing with section 4 that constitutes a forest area "a reserved forest" within the Act. The forests in the former State of Tripura were not dec clared "reserved forests" under a notification issued under section 20 of the after following the procedure prescribed by Ch. H. We have, therefore, to examine the steps by which this result is said to have been reached. We have already referred to the existence of the Tripura Forest (1297?) T.E. enacted by the Ruler of Tripura under which certain provisions were made for the preservation of Forest areas in the State and the notifications issued thereunder constituting the three areas as "reserve forests" for the purpose of that Act. It would be necessary to exa mine the details of these provisions, but this we shall defer till we complete the narration of the constitutional changes which brought the State of Tripura into the Indian Union and the legislation which accompanied and accomplished these changes. Tripura was a native State and the ruler by a merger agreement with the Governor General of India merged his State with the Dominion in the year 1949. By para 5 of the Tripura Administration Order, 1949 issued on October 15, 1949 under the powers conferred in that behalf by the Extra Provincial Jurisdiction Act, 1947 all the laws in force in the State of Tripura immediately before the commencement of the said Order were continued in force until they were repealed or amended by a competent legislature or authority. Then came the Constitution which was operative from January 26, 1950 and under it Tripura became a Part C State of the Union of India. By virtue of Art 372 of the Constitution the laws in force in the territory of India which would have included the Tripura Forest Act in so far as it applied to the territory of the former Tripura State, were continued in force until repealed or anended by competent legislation. Next, came the Part C States (Laws Act, 1950 enacted by Parliament. By its section 3 the Acts and Ordinances specified in the Schedule to the Merged State (Laws) Act, 1949 were extended to and directed "to be in force in the State of Tripura. as they were general in force in the territories to which they extended immediate before the commencement of that Act". One of the enactments specified in the Schedule to the (Act LIX of 1949) was the . The was thus extended to the Tripura State. Section 4 of the States (Laws) Act 1950 provided that "any law which immediately before the commencement of the Act (April 15, 1950) was in form in any of the States which included Tripura and correspondent to an Act extended to that State by the Act was there repealed". The operation of the repeat was subject to the I67 provisos and it is the second of these provisos that calls for construction in these appeals. This proviso ran: Provided further that, subject to the preceding proviso, anything done or any action taken, including any appointment or delegation made, notification, order, instruction or direction issued, rule, regulation, form, bye law or scheme framed, certificate, patent, permit or licence granted or registration effected, under such law shall be deemed to have been done or taken under section 2 or, as the case may be, under the corresponding provision of the Act or Ordinance as now extended to the State by section 3, and shall continue in force accordingly, unless and until superseded by anything done or any action taken under the said section 2 or, as the case may be, under the said Act or Ordinance. " Shortly stated, the question for consideration in these appeals is whether as a result of the operation of sections 3 and 4 of the Part C States (Laws) Act read in the light of the proviso above quoted the three reserved forests which were notified under the Tripura Act of 1257 (T.E.) could be de emed to be "reserved forests" under Ch. II of the . Stopping here, it would be convenient to notice a few mat ters. In the first place, when the was extended to the State of Tripura in 1950 it would have been open to Government to have taken steps to constitute " reserved forests" within the State by following the procedure prescribed by Ch. II to which we have already adverted. But this was not done and the Government seem to have proceeded on the basis that the areas notified as "reserved forests" under the Tripura Act were "reserved forests" under the . Next, it is common ground that the Tripura Act which was continued by the Tripura Administration Order, 1949 did not survive 168 the Part C States (Laws) Act, 1950 because the being "a corresponding law" to the Tripura Forest Act stood repealed by the operation of section 4 of that enactment. Besides, the provisions of the Tripura Forest Act under which the notifications constituting these forests as "reserved forests" were issued were under the proviso to section 4 "deemed to have been done under the corresponding provi sion of the Act as now extended to the State by section 3". The position, however, is that the whose ex tension to the Tripura area effected the repeal of the Tripura Act, contains provisions of two distinct types or kinds for the exercise of control over forests and forest areas and the question then arises as to which of the provisions of the Indian Act, "correspond" to those of the Tripura Act, to enable one to say that the notifications under the latter Act should be deemed to have been issued. On a consideration of the relevant provisions of the Tripura Forest Act the learned Judicial Commissioner held that at the most the corresponding provision of the to which the Tripura notification could be related was as a "protected forest" under Ch. IV of the and not a " reserved forest" under Ch. 11 of the Act. He, therefore, decided that as the offence for which the accused were being prosecuted was one under section 26 the accused could not be held guilty since there was no legal or effective notification of the forest area as a "reserved forest" within section 20 of the and accordingly directed the acquittal of the accused. The appeals challenge the correctness of this last conclusion. The principal submission of the learned AttorneyGeneral who appeared for the Union of India in support of the appeals was directed to establish that the notification constituting the three forests as reserved forests under the repealed Tripura Forest Act 11 of 1257 (1297?) T.E. must be deemed to have been taken under Ch. 11 of the which, it was contended, was the provision corresponding to the repealed Tripura Act. it is the validity of this submission that now calls for consideration. Before entering on a discussion of this question we might dispose of a minor consideration which might be urged in I69 order to show that the notification under the Tripura Act could not be deemed to be a notification under section 20 of the . One of the submissions under this head, and this was one of the points that appears to have appealed to the learned Judicial Commissioner, was that Ch. II of the prescribes an elaborate procedure which is mandatory and is required to be complied with, before any land could be constituted into a "reserved forest" under that Act. The Tripura Act admittedly does not make provision for any such procedure being followed before an area is notified as "a reserved forest" or is constituted into one. The argument based on this was that in the absence of identity between the procedural requirements of the two Acts, a notification under the revealed Act could not be deemed to be one under a "corresponding provision" of the Act extended to the territory, the emphasis being on the words "corresponding provision". We are unable to accept the correctness of this submission. The scheme of the Part C States (Laws) Act is this. In the first place, by reason of section 3 certain enactments are extended to these States. If there is no law in that State which was in force on the date of the extension of a parti cular enactment under section 3 which is in pari materia and covers the same field as the law that is extended, section 4 does not come into play and consequently there is no question of the repeal of any pre existing law. If such were the case the law in force in the native State of Tripura would have first continued by reason of the provision contained in section 5 of the Administration of Tripura (Laws) Order, 1949, already referred to which was promulgated on October, 15, 1949 and later by reason of article 372 of the Constitution. To the extent to which there was no repeal by virtue of section 4 of the Part C States (Laws) Act, 1950 the Tripura law would have continued in force. It is only on the basis that the whose operation was extended to that territory by section 3 was "a corresponding law" that the Tripura Act can stand repealed. For the purpose of effecting the repeal under section 4 the only consideration is whether any existing law of that State "corresponded" to a law which, was extended by reason of section 3. 170 As stand earlier, it is common ground that the Tripura Forest Act "corresponded" to the and that the former therefore stood repealed on the extension to Tripura of the latter enactment. If then the extension of the to the State effected a repeal of the Tripura Forest Act we have next to consider whether the notification under the Tripura Act could be deemed to be a notification under "the corresponding provision" of the . For that purpose the preliminaries to the notification or the procedure which must precede a notification are not of any relevance but only whether the particular notification could be held to be under a corresponding provision under the extended enactment, viz., the . If the notifications had been issued after complying with the formalities prescribed by the State law and they are kept alive by the proviso to section 4, the notifications would necessarily have to be deemed to have validly been made under the latter Act. Judged by this test it appears to us that the fact that under the Tripura law there were no preliminaries prescribed before a forest could be notified as a reserved forest does not detract from such a notification being a notification under the . We have next to consider whether the notification under the Tripura Act could be deemed to be a notification under Ch. 11 or under section 20 of the for that is the basis upon which the entire prosecution case rests. For this purpose it is necessary to analyse the provisions of the Tripura Act and also examine the corresponding provisions of the . We shall first. take up the Tripura Act. Its preamble, after reciting that some classes of trees are regarded as protected ones from times immemorial, goes on to state that it was expedient to consolidate the law with a view to bring order in the matter of the supervision of the protected trees and also to place the same on a sound footing. This would appear to indicate that the Act was designed for the protection of particular trees as distinguished from the reservation of an area as a forest for the purpose of protecting all the trees within that forest. We shall in due course have to refer to the provisions of Ch. TV of the Indian 17I Forest Act headed "Of Protected Forests" under which also the aim of the law is to afford protection to certain trees in particular areas. To revert to the Tripura Act, its section 3 provides for the repeal of the earlier laws and saves only rules or customs not inconsistent with the Act. Section 4 is one of the key provisions of the Act and under it are specified seven classes of trees which shall be deemed to be protected within the independent State of Tripura. The Act is divided into seven chapters of which the first one is headed "Of protection of Rakshita Bana" which, as stated earlier, has been translated as "Protected Forests". Section 5 under which the three notifications to which we have already referred were issued reads: "The boundaries of 'Rakshita Bana ', shall be fixed and publication of the same shall be made in all police stations, offices, markets, ports and other public places within this independent State". Section 6 runs: "No person shall be entitled to carry out any 'Jhum ' cultivation (shifting cultivation) within half a mile radius of a Rakshita Bana". Sections 9 to 11 specify the acts which are prohibited in the notified forest areas. These enact: "9. No person shall set fire to the hills in such a manner which may cause damage to a Rakshita Bana in any way". No person shall enter into a Rakshita Bana car rying fire. " I 'll. No person shall enter into a Rakshita Bana carrying axe or other weapons which may be used for cutting trees without permission." Chapter 11 with which section 12 opens is headed "Of Gradual Development of Rakshita Banas. " The relevant sections of this Chapter are sections 12 to 17 and they read: "12. In each year protected trees like sal etc. and other valuable trees shall be grown either by sowing seeds or otherwise. 172 "13. In order to give effect to the provisions of section 12, suitable sites will be selected at regular intervals after taking sanction for the same." "14. If there are other trees in a Rakshita Bana than those mentioned in section 4, and if it is considered expedient that such other trees are harmful to the growth of the protected trees, then such trees shall be cut." "15. In case any old tree referred to in section 4 is cut, then a new tree shall be grown in its place. " "16. No person on any account shall be allowed to cut any tree within the reserved forest in a manner which might cause any damage to the block. " "17. If there be dense growth of any specific type of tree as mentioned in section 4 and if such growth is mutually detrimental to the general growth of the trees then to facilitate growth of the species some may be cut according to neces sity. " Chapter III is headed "Of Penalties" and of the sections comprised in it is sufficient to refer to section 18 under which any person kindling fire in a forest is made punishable with imprisonment, section 19 on which much stress was laid which ran: "Whoever fells any tree within the limits of a Rakshita Bana shall be punished with rigorous imprisonment which may extend to three months or with fine which may extend to Rs. 5001or with both". and section 20 which ran: "20. Any person who cuts any tree as specified under section 4 outside the limits of a reserved forest shall be punished with rigorous imprisonment which may extend to two months or with fine which may extend to Rs. 200/ or with both. " 173 In this connection it is necessary to point out that under s.20 the cutting of the protected trees specified in section 4 is made an offence even if the cutting were to take place beyond the limits of the forest notified under section 5. The only point of difference brought in by the cutting being within the boundaries of the forest is that in that case the punishment is heavier. The other chapters relate to the officials and the manner in which they should perform their duties and have not much relevance for the purposes of these appeals. From the above summary of the provisions it would be seen that in substance the object and purpose of the Tripura Act was the protection of particular trees the seven types of trees specified in s.4. The notification under section 5 is for the purpose of constituting areas where these types of trees would be protected. The penal provisions enacted are for ensuring the protection of these trees. No doubt, section 16 enacts a ban against the cutting of any tree within a forest so as to cause damage to any block and section 19 penalises the cutting of any tree within the area of a forest, but it is obvious that in the context of the other provisions of the Act and the purpose which the enactment is intended to subserve, these prohibitions under penal sanctions were designed primarily and essentially to ensure more effective protection to the trees specified in s.4. Now, let us see whether Ch. II of the could be said to be a provision which corresponds to the Tripura Act, so that the notification under section 5 of the latter ,enactment could be deemed to be a notification under Ch. II ,or section 20 of the Forest Act. We have set out the several provisions of Ch. II and their object. The prime purpose of that Chapter is the constitution of reserved forests in which (1) all private rights within the reserved area are completely eliminated by their being bought up where these are ascertained to exist by payment of compen sation, (2) the entire area being devoted to siviculture, every tree in the forest being protected from injury and within the scope of the penal provision contained in section 26. In other words, the reservation here is to the "forest area" as such and not the protection of particular specified trees or species of trees in such a forest. 174 In this connection some point was sought to be made from the terms of the notification under section 5 of the Tripura Act by which the boundaries of the several forests were specified. The three notifications were substantially in the same form and it is, therefore, sufficient to set out the one setting out the boundaries of the Garjichhera reserve. The relevant conditions are: "2. Jhum cultivation will not be permissible in this forest area. The land previously settled within this forest a ea shall remain valid. Plough cultivation will be permissible in that area. The fallow Taluka land falling within this area shall be deemed as not being within this reserve. Until further orders, cutting of all kinds of trees are prohibited within this Reserve. Cutting and export of unclassified forest products. . will be permissible. Except in the settled area, grazing of all kinds of animals elsewhere within this Reserve will be prohibited. AR kind of hunting within this Reserve is prohi bited. " In regard to these conditions stress was laid principally on condition No. 5 under which all cutting of trees was forbid den. The provision here appears to be a reproduction of section 16 of the Act and to have no further or more extended operation. We are therefore unable to accept the submission that by reason of this clause the area which is notified as the reserved forest is constituted a reserved forest of the same type as under Ch. II of the . In the first place, as the notification was issued under the Tripura Act it would be reasonable to construe it with reference to the prohibition against cutting of trees contained in the Act itself and we have already adverted to the terms of section 16 which we have held was designed for the purpose of protecting the trees set out in section 4. But that apart, clause 5 175 itself permits the cutting of certain forest produce which it was evidently thought would not interfere with the functioning of the forest as a place for the protection of the protected trees. The other two notifications do not permit the cutting of Bamboo etc. without Government permit, but this in our opinion makes no difference. If one now turns to the provisions of Ch. IV of the the correspondence between the Tripura Act and the provisions of Ch. IV would become clear. Section 30, corresponding to section 4 of the Tripura Act, in Ch. 11 enables the State Government by notification in the Official Gazette (a) to declare any trees or class of trees in a protected forest to be reserved from a date fixed by the notification; (b) declare that any portion of such forest specified in the notification shall be closed for such term, not exceeding thirty years, as the State Government thinks fit, and that the rights of private persons, if any, over such portion shall be suspended during such term, provided that the remainder of such forest be sufficient, and in a locality reasonably convenient, for the due exercise of the rights suspended in the portion so closed; or (c) prohibit, from a date fixed as aforesaid, the quarrying of stone, or the burning of lime or charcoal, or the collection or subjectionto any manufacturing process, or removalof, any forest produce in any such forest andthe breaking up or clearing for cultivation,for building, for herding cattle or for any other purpose, of any land in any such forest. " Section 31 provides for the publication of a notification under section 30 and section 32 for the regulations which may be made for protected forests i.e., areas in which particular trees are protected and section 33 provides for penalties for acts in contravention of a notification under section 30 or of rules under section 32. This section enacts: 176 "33. (1) Any person who commits any of the following offences, namely: (a) fells, girdles, lops, taps or bums any tree reserved under section 30, or strips off the bark or leaves from, or otherwise damages, any such tree; (b) contrary to any prohibition under section 30, quarries any stone or burns any lime or charcoal, or collects, subjects to any manufacturing process, or removes any forestproduce; contrary to any prohibition under section 30, breaks up or clears for cultivation or any other purpose any land in any protected forest; (d) sets fire to such forest. kindles a fire without taking all reasonable precautions to prevent its spreading to any tree reserved under section 30, whether standing, fallen or felled, or to any closed portion of such forest; (e) leaves burning any fire kindled by him in the vicinity of any such tree or closed portion; (f) fells any tree or drags any timber so as to damage any tree reserved as aforesaid; (g) permits cattle to damage any such tree; (h) infringes any rule made under section 32; shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both. It would thus be clear that the object of Ch. TV is the protection of particular trees and the setting apart of particular areas as protected forests for the purpose of ensuring the growth and maintenance of such trees. The object I77 sought to be achieved by the reservation in Ch. IV of the is thus seen to be exactly similar to that which is sought to be achieved by the Tripura Act. Only the Tripura Act makes the cutting of protected trees even outside a forest an offence, whereas there is no such provision under the . If, therefore, one has to seek a provision "corresponding" to the repealed Tripura Forest Act that provision will be found not in Ch. 11 of the but only in Ch. As the present prosecutions have been launched for offences under section 26 the learned Judicial Commissioner was right in holding that the prosecution has not been able to establish that the accused had committed an offence in respect of the provision under which they were charged since the three forests were not notified as reserved forests under a provision corresponding to Ch. II of the . We, therefore, hold that the learned Judicial Commissioner was right in considering that the provision in the "corresponding" to the Tripura Forest Act under which the notifications fixing the boundaries of these three forests were issued is that as regards "a protected forest" under Ch. IV and not a "reserved forest" within section 20 contained in Ch. The order acquitting the several respondents was therefore right and the appeals fail. In the view that we have taken of the main question argued before us, we do not find it necessary to consider whether there were any other legal defences open to the several accused. For instance, it will be noticed that the accused in these cases were held guilty of offences under section 26(1)(a), (d) and (h). As regards the offence under cl. (a) the learned Attorney General conceded that it was a prerequisite for a person being held guilty of an offence under that clause that there should be a notification under section 4 because section 5 which is referred to in section 26(1) (a) reads: "5. After the issue of a notification under section 4, no right shall be acquired in or over the land comprised in such notification, except by succession or under a grant or contract in writing made or entered into by or on behalf of the Government or some person in whom 51 S.C. 12 178 such right was vested when the notification was issued; and no fresh clearings for cultivation or for any other purpose shall be made in such land except in accordance with such rules as may be made by the State Government in this behalf. " In the absence, therefore, of such a notification the accused could not have been held guilty of a contravention of section 26(1)(a). Coming next to cls. (d) and (h), the question for consideration would be whether if these were not offences under the Tripura law, the accused could be prosecuted by reason of (a) the extension of the Forest Act to the Tripura State and (b) the notification. under the Tripura law being "deemed to be a notification" under the corresponding provision of the Indian Act. We consider it unnecessary to examine this problem or to express any opi nion on this matter in view of the conclusion that we have reached that the notification under section 5 of the Tripura Act would constitute the area in question only as a protected forest under Ch. IV of the and not as a " reserved" forest under section 20 contained in Ch. ]El of that Act. The appeals fail and are dismissed. The appellant had undertaken to pay the costs of the respondents at the time of the admission of the appeals. In accordance with that undertaking the appellant will pay the costs to the respon dents. One hearing fee. Appeals dismissed.

A testator was carrying on business in Ayurvedic drugs under the name and style of Arya Vaidya Sala. Under his will his properties, A including the business, were held under trust and the object of the trust was to utilise 60 per cent of the profits of the business for 20 years and 85 per cent thereafter for religious and charitable purposes. The assessment years in question fell within 20 years from the death of the testator and the question was whether the 60 per cent of the income from the trust properties was exempt from assessment to income tax under section 4(3)(1) of the Indian Income tax Act, 1922. The Income tax authorities rejected the claim for exemption and assesses. the entire income from the said properties, on the ground that the substantive cl. (i) of section 4(3) was not applicable to the case but only cl. (b) of the proviso and that the conditions laid down thereunder were not complied with. HELD: (i) The business run under the name and style of Arya Vaidya Sala was property within the meaning of section 4(3)(i) of the Indian Income tax Act, 1922, and as the entire business was held in trust for utilising a part of its profits for religious or charitable purposes, the said income was exempt from assessment to income tax under that section. (ii) Cl. (b) of the proviso to section 4(3)(i) was applicable only to a business not held in trust but carried on on behalf of a religious or charitable institution, (iii) A business held in trust wholly or in part for religious or charitable purposes was not a business carried on on behalf of a religious or charitable institution. (iv) The dichotomy between the two expressions "wholly" and "in part" in section 4(3)(i) was not based upon the dedication of the whole or a fractional part of the property, but between the dedication of the said property the income from which was to be utilized wholly for religious or charitable purposes or in part for such purposes. (v) The expression "such income" in the opening words of the proviso to section 4(3)(i) meant "income accruing or arising in favour of the trust".

Civil Appeal No.2215 of 1977. From the Judgement and Order dated 237 1976 of the Madhya Pradesh High Court in Misc. Appeal No.23 of 1976. T.U.Metha, S.K. Gambhir, Vivek Gambhir and Surinder Karnail for the Appellants. Uday U. Lalit and A.G.Ratnaparkhi for the Respondents. The Judgement of the Courtwas delivered by SHAREMA,J,. The question for decision in this appeal by special leave is whether a petition under s.11 of the , for declaring the marriage of the petitioner as nullity is maintainable after the death of the petitioners ' spouse. The appellent No. 1, hereinafter referred to as the Maharani, was marriedto Maharaja Rameshwarsighji in1960 and a daughter, the appellant no.2, was born of the wedlock in 1964. The relationship between the husband and the wife thereafter ceased to be cordial and the appellants started living in Bombay and the Maharaja within his estate in Madhya Pradesh. According to the case of the respondent no.1 the Maharaja decided to remarry without legally separating from the appellant Maharani. The respondent who is a relation of the Maharaj 's mother, respondent No.2, was misled both by theMaharaja and his mother in believing that the first marriage of the Maharaja had been dissolved and under the belief she married the Maharaja and the couple got several issues. In 1974 when the Maharaja died, an application for grant of Letters of Administration was filed by the appellant Maharani and the respondent applied for probate on the basis of an alleged will which is denied by the appellant. The proceedings are still pending. In this background the respondent 197 No. 1 filed the present application under section 11 of the for declaring her marriage as nullity. The Maharaja 's mother was impleaded as the sole respondent. When the appellants learnt about the case, they intervened and were joined as parties. The appellants challenged the maintainability of the application on the ground that the marriage could not be declared nullity after the death of the Maharaja. Both the trial court and the High Court have rejected the appellants ' plea. 4. mr. Mehta, the learned counsel for the appellants, has contended that having regard to the very special relationship between husband and wife, a marriage cannot dissolved or declared to be a nullity unless both of them are parties thereto. The marital status of a person stands on a much higher footing than other positions one may hold in the society or may have in relation to a property; and cannot be allowed to be challenged lightly. The marriage of a person, therefore, cannot be declared as a nullity after his death when he does not have an opportunity to contest. He relied upon the language of s.11. After its amendment in 1976 the section read this: "11. Void marriages: Any marriage solemnized after the commencement of this Act shall be null and void and may , on a petition presented by either party thereto against the other party, be so declared by a decree of nullity if it contravenes any one of the conditions specified in clauses (i),(iv) and (v) of Section 5." (emphasis added) 5. The present proceeding was started in 1974, that is, before the amendment, and the section did not contain the words which have been underlined by us above. At that time all that was required was that the application had to be filed by a party to the marriage under challenge. On the plain language of the section as it stood then, it could not be claimed that in absence of the other spouse as a party to the proceeding, the same would not be maintainable. The argument of Mr. Mehta is that the section had the same meaning before and after the amendment and the addition of the words in 1976 was merely clarificatory in nature. He strongly relied upon the 69th Report of the Law Commission. 6. The Report recommended several amendments in the which led to the passing of the Amending Act of 1976. 198 Reliance was placed on paragraph 6.1A of Chapter 6 of the Report which referred to the divergent views taken by the High Courts of Punjab and Madras on the question of maintainability of a petition under s.11 after the death of the other spouse. The Commission, thereafter, observed thus: "We ought, however, to point out that in such a case, the proper remedy is a suit under the Specific Relief Act. A petition under section 11 of the cannot be appropriate, because the other spouse is an essential party to any such petition. This should be clarified by an amendment. " It has been argued before us that the view of the Madras High Court referred to in the Report is the correct view which was accepted by the Law Commission, and since there was scope for controversy on the language of the section, the legislature agreeing with the Law Commission added the aforementioned additional words by way of clarification. It is urged that such interpretation of the section did not lead to any injustice inasmuch as a suit for such a declaration was and is maintainable in the civil court. Reliance has also been placed on "Rayden and Jackson 's Law and Practice in Divorce and Family matters." (15th Edn.), and several English cases in support of the proposition that on the death of a party to a matrimonial action the cause of action does not service. Reference has been made to the case of Butterfield vs Butterfield, I.L.R. (Vol.50) Calcutta 153, where after the wife had obtained a decree nisi for dissolution of her marriage the husband died. Following the English case of Stanhope vs Stanhope,[1886] 11 P.D.103, it was held that the decree could not be confirmed. The learned counsel for the respondent relied upon certain observation made in other High Courts ' judgments supporting his stand. He pointed out that having regard to the language of section 16, as it stood before the amendment, the children born of the respondent would not have been entitled to the benefit of the section in the absence of a decree declaring the marriage of their parents as nullity, and this was precisely the reason that the respondent had to commence the present litigation. We have considered the argument of Mr. Mehta closely but do not find ourselves in a position to agree with him. It is not correct to suggest that one uniform rule shall apply for deciding the maintainability of all proceedings involving issues relating to marital status. The 199 question will be dependent upon the nature of the action and law governing the same. The provisions of the relevant statute relating to a proceeding in question will be very material. This aspect has been taken note of by Rayden and Jackson also in their book which has been relied upon by Mr. Mehta. The passage at page 650 summarises the position in the following words: "Death of a party: effect on suit. In many cases the fact of the death of one of the parties will render the process meaningless by reason of the circumstances that a marriage brought to an end by death could no longer be dissolved by an Act of the court. But there is no general rule that, where one of the parties to a divorce suit has died, the suit abates, so that no further proceedings can be taken in it. It has been said that it is unhelpful to refer to abatement at all. The real question in such cases is whether, where one of the parties to a divorce suit has died, further proceedings in the suit can or cannot be taken. The answer to that question, when it arises, depends in all cases on two matters and in some cases also on a third. The first matter is the nature of the further proceedings sought to be taken. The second matter is the true construction of the relevant statutory provision or provisions, or of a particular order made under them, or both. The third matter is the applicability of section I (I) of the Law Reforms (Miscellaneous Provisions) Act 1934. The dispute issue in the present appeal has to be answered by considering the nature of the proceedings and the true construction of the relevant provisions of the . Under the general law a child for being legitimate has to be born in lawful wedlock, and if the marriage is void or declared to be so by the court, it will necessarily have the effect of bastardising the child born of the parties to such a marriage. By enacting section 5(i) of the Act, the legislature abolished polygamy, which had always remained permissible and prevalent among the Hindus in the past. The Act was bringing about a very significant departure in this regard; and taking into account the possibility of violation of the law in numerous cases atleast for sometime to come special provisions were included under s.16 of the Act with the object of protecting the legitimacy of the children. The original section before the amendment of 1976 read as follows: "16. Where a decree of nullity is granted in respect 200 of any marriage under section 11 or section 12, any child begotten or conceived before the decree is made who would have been the legitimate child of the parties to the marriage if it had been dissolved instead of having been declared null and void or annulled by a decree of nullity shall be deemed to be their legitimate child notwithstanding the decree of nullity. Provided that nothing contained in this section shall be construed as conferring upon any child of a marriage which is declared null and void annulled by a decree of nullity any rights in or to the property of any person other than the parents in any case where, but for the passing of this Act, such child would have been incapable of possession of acquiring any such rights by reason of his not being the legitimate child of his parents. " It will be seen that the benefit of the section was confined to only such cases where a decree of nullity was granted under section 11 or s.12. it did not extend to other cases. In 1976 s.11 was amended by inserting the words "against the other party", and along with the same s.16 was amended as it read now. the following words in section 16(i). ". and whether or not a decree of nullity is granted in respect of that marriage under this Act and whether or not the marriage is held to be void otherwise than on a petition under this Act." enlarged the applicability of the beneficial provisions, so as not to deny the same to children who are placed in circumstances similar to those of the present respondent. By the amendment in s.11, in so far the cases where marriage can be declared as nullity, the application of the rule protecting the legitimacy was widened. If that had not been done, the children born of such marriage would have been deprived of the advantage on the death of either of the parents. By the simultaneous amendment of the two sections it can safely be deduced that the Parliament did not hold identical views as expressed by the Law Commission 's Report. Even if it be assumed that the meaning of the section was not free from ambiguity, the rule of beneficial construction is called for in ascertaining its meaning. The intention of the legislature in enacting s.16 was to protect the legitimacy of the children who would have been 201 legitimate if the Act had not been passed in 1955. There is no reason to interpret s.11 in a manner which would narrow down its field. With respect to the nature of the proceeding, what the court has to do in an application under s.11 is not bring about any change in the marital status of the parties. The effect of granting a decree of nullity is to discover the flaw in the marriage at the time of its performance and accordingly to grant a decree declaring it to be void. we, therefore, hold that an application under s.11 before its amendment in 1976, was maintainable at the instance of a party to the marriage even after the death of the other spouse. Accordingly, this appeal is dismissed with costs.

The appellant No.1 Maharani was married to a Maharaja in 1960 and the daughter appellant no.2 was born of the wedlock in 1964. The relationship between the husband and the wife thereafter ceased to be cordial and the appellant started living in Bombay and the Maharaja within his estate in Madhya Pradesh. It is the case of the respondent No.1 that the Maharaja decided to remarry without legally separating from the appellant. The respondent who is a relation of the Maharaja 's mother, respondent No.2,was misled both by the Maharaja and his mother, respondent No.2 was misled both by the Maharaja and his mother in believing that the first marriage of the Maharaja had been dissolved and under that belief she married the Maharaja had been dissolved and under that belief she married the Maharaja and several issues were born of this wedlock. In 1974 when the Maharaja died, on application for grant of Letters of Administration was filed by the appellant Maharani, and the respondent No.1 applied for probate on the basis of an alleged will. This will was denied by the appellants. These proceedings are still pending. Respondent No.1 filed an application under Section 11 of the for declaring her marriage as nullity, and the Maharaja 's mother was impleaded as the sole respondent. The appellants intervened and were impleaded as parties. The maintainability of the aforesaid application was challenged by the appellants on the ground that the marriage could not be declared 194 a nullity after the death of the Maharaja but both the trial court and the High Court have rejected this plea. In the appeal to this Court it was contended on behalf of the appellants that having regard to the very special relationship between husband and wife,a marriage cannot be dissolved or declared to be a nullity unless both of them are parties thereto. The martial status of a person sands on a much higher footing than other positions one may hold in the society and cannot be allowed to be challenged lightly,and that the marriage of a person, therefore, cannot be declared as nullity after his death when he does no have an opportunity to contest. Reliance was placed upon the language of Section 11 of the . On behalf of the respondent, it was pointed out that having regard to the language of Section 16 of the as it it stood before its amendment in 1976,he children born of the respondent would not have been entitled to the benefit of the section in absence of a decree declaring the marriage of their parents as nullity, and this was precisely the reason that the respondent had to commence the present litigation On the question: whether a petition under Section 11 of the for declaring the marriage of the petitioner as a nullity is maintainable after the death of the petitioner 's spouse. Dismissing the appeal, this Court, HELD: 1 .An application under Section11 of the before its amendment in 1976, was maintainable at the instance of a party to the marriage even after the death of the other spouse.[201B]. In the instant case, the proceeding was started in 1974 that is, before the amendment was made in the Hindu Marriage Act,1955. Section II did not contain the words "against the other party". At that time all that was required was that the application had to be filed by a party to the marriage under challenge. On the plain language of the section as it stood then,it could not be claimed that in absence of the other spouse as a party to the proceedings, the same would not be maintainable.[197F] 3.Under the general law a child for being legitimate has to be 195 born in lawful wedlock and if the marriage is void or declared to be so by the Court, it will necessarily have the effect ofbastardising the child born of the parties to such a marriage.[199F] 4. By enacting Section 5(i) of the the legislature abolished polygamy, which had always remained permissible and prevalent among the Hindus in the past. The Act was bringing about a very significant departure in this regard; and taking into account the possibility of violation of the law in numerous cases at least for sometime to come special provisions were included under Section 16 of the Act with the object of protecting the legitimacy of the children.[199G] 5. The benefit of Section 16 was confined to only such cases where a decree of nullity was granted under Section 11 or section 12. It did not extend to other cases. in 1976 section 11 was amended by inserting the words "against the otherparty" and alongwith the same section 16 was amended.[200D] 6. By the amendment in section 11, in so far the cases where marriage can be declared as nullity, the application of the rule protectingthe legitimacy was widened. If that had notbeen,the children born of such marriages would have been deprived of the advantage on the death of either of the parents. By the simultaneous amendment of the two sections it can safely be deducted that the Parliament did not hold identical views as expressed by the law Commission in its59th Report.[200F G] 7. The intention of the legislature in enacting section 16 was to protect the legitimacy of the children who would have been legitimate if the Act had not been passed in 1955.[200H] 8. There is no reason to interpret section 11 in a manner which would narrow down its field. With respect to the nature of the proceedings, what the court has to do in an application under section 11 is not to bring about any change in the marital status of the parties. The effectof granting a decree of nullity is to discover the flow in the marriage at the time of its performance and accordingly to grant a decree declaring it tobe void. [201A B] Butterfield vs Butterfield; I.L.R.(Vol.50) Calcutta 153 and Stanhope vs Stanhope, , and Law Commission of India 59th Report Chapter 6, para 6.1A referred to. 196 9.It is not correct to suggest that one uniform rule shall apply for deciding the maintainability of all proceedings involving issues relating to marital status. The question will be dependent upon on the nature of the action and law governing the same. The provisions of the relevant statue relating to a question will be very material.[198H 199A] Rayden and Jackson 's Law and Practice in Divorce and Family Matters, (15th Edn.). p.650, referred to.

ition No. 57 of 1979. Mrs. K. Hingorani for the Petitioners. Lal Narain Sinha, U. P. Singh and section N. Jha for the Respondent. section V. Gupte, Attorney General, R. N. Sachthey for the Attorney General. The Order of the Court was delivered by BHAGWATI, J. The Government of Bihar has filed before us a note containing the proposed clarification of paragraph 2(e) of the Government Order dated 9th February, 1979, pursuant to the suggestion made by us in our order dated 19th February, 1979. This clarification states in paragraph one that where the police investigation in a case has been delayed by over two years, the Superintendent of Police will see to it that the investigation is completed expeditiously and final report or charge sheet is submitted by the police as quickly as possible and the responsibility to ensure this has been laid personally on the Superintendent of Police. We are glad to note that the State Government has responded to our suggestion but we are not at all sure whether it is enough merely to provide that the investigation would be completed expeditiously and the final report or charge sheet submitted as quickly as possible. We are of the view that a reasonable time limit should be set by the State Government within which these steps should be taken, so that no further delay is occasioned in the submission of the final report or charge sheet. We fail to see how any police investigation can take so long as two years and if police investigation cannot be completed within two years, then there must be something radically wrong with the police force in the State of Bihar. It appears that there are a number of cases where police investigation has not been completed for over two years and persons have been in jail as under trial prisoners for long periods. This is a shocking state of affairs so far as the administration of law and order is concerned. We would, therefore, suggest that in those cases where police investigation has been delayed by over two years, the final report or charge sheet must be submitted by the police within a further period of three months and if that is not done, the State Government might well withdraw such cases, because if after a period of over two years plus an additional period of three months, the police is not able to file a charge sheet, one can reasonably assume that there is no case against the arrested persons. 395 The Government of Bihar has also filed a counter affidavit made by Mr. Mrinmaya Choudhry, Assistant Inspector General of Prisons (1), Bihar setting out the particulars in regard to 18 under trial who have been ordered to be released by us on their personal bond. The particulars given in this counter affidavit make very distressing reading. It appears from this counter affidavit that there are quite a few women prisoners who are in jail without even being accused of any offence, merely because they happen to be victims of an offence or they are required for the purpose of giving evidence or they are in "protective custody". The expression 'protective custody ' is a euphemism calculated to disguise what is really and in truth nothing but imprisonment. It is an expression intended to appease the conscience. It cannot be gainsaid that women who have been kept in jail under the guise of 'protective custody ' have suffered involuntary deprivation of liberty for long periods without any fault on their part. We may point out that this so called 'protective custody ' is nothing short of a blatant violation of personal liberty guaranteed under Article 21 of the Constitution, because we are not aware of any provision of law under which a woman can be kept in jail by way of "protective custody" or merely because she is required for the purpose of giving evidence. The Government in a social welfare state must set up rescue and welfare homes for the purpose of taking care of women and children who have nowhere else to go and who are otherwise uncared for by the society. It is the duty of government to protect women and children who are homeless or destitute and it is surprising that the Government of Bihar should have come forward with the explanation that they were constrained to keep women in 'protective custody ' in jail because a welfare home maintained by the State was shut down. We direct that all women and children who are in the jails in the State of Bihar under 'protective custody ' or who are in jail because their presence is required for giving evidence or who are victims of offence should be released and taken forthwith to welfare homes or rescue homes and should be kept there and properly looked after. We also find from the counter affidavit that Bhola Mahto was in jail from 23rd November, 1968 until 16th February, 1979 when he was released on his personal bond pursuant to the directions given by us by our order dated 5th February, 1979. He is accused in a case under Section 363 & 368 of the Indian Penal Code and he was committed to the court of Sessions on 13th September, 1972 but his sessions trial has not yet commenced. It is amazing that a sessions 396 trial of a person committed to the court of sessions as far back as 13th September 1972 should not have been commenced for about seven years. We direct that the Sessions Judge, Patna should forward to this Court through the High Court of Patna an explanation as to why the sessions trial of Bhola Mahto has not yet commenced. This is also a matter to which we would invite the attention of the High Court of Patna. The same may be said also of Ram Sagar Mistry who was admitted in jail on 28th March, 1971 and committed to the Court of Sessions on 28th June, 1972 on a charge under section 395 of the Indian Penal Code but whose trial has not yet commenced before the Court of Sessions though a period of more than six years has elapsed since the date of his commitment and a period of eight years since the date of his imprisonment. The counter affidavit shows that Babloo Rai who is reported to be a Naxalite is in jail since 15th May, 1975. He is alleged to be involved in five cases which are set out in the counter affidavit. So far as he is concerned, it will be open to him to make an application to the Magistrate before whom he is produced, for being released on bail or on his personal bond and the Magistrate will deal with his application in accordance with broad guidelines laid down by us in our judgment dated 12th February, 1979. We are not at all sure on reading the counter affidavit whether the under trial prisoners whose particulars are given there, are being produced periodically before the Magistrate as required by the proviso to Section 167(2) of the Code of Criminal Procedure, 1973. We should like to know from the Government in a proper affidavit to be filed before us on or before 3rd March, 1979 whether these under trial prisoners were periodically produced before the Magistrate in compliance with the requirement of the proviso to Section 167(2). The proviso to Section 167(2) says that the Magistrate may authorise the detention of the accused person beyond the period of 15 days if he is satisfied that adequate grounds exist for doing so. We hope and trust that in these cases the Magistrates concerned did not act mechanically but applied their mind and satisfied themselves that adequate grounds existed for remanding these persons to judicial custody from time to time over a period varying from two to ten years, though we fail to see how the Magistrates could possibly have been satisfied about the existence of adequate grounds for remanding these persons to judicial custody for such long periods of time ranging from two to ten years for the purpose of police investigation. This is also a matter which we would like the High Court of Patna to consider after making a detailed inquiry. 397 The Government of Bihar has also filed before us a list giving particulars of the under trial prisoners who are confined in 17 jails in Bihar for more than 18 months as on 1st February, 1979. The chart shows that there are under trial prisoners confined in these jails for long periods of time and sometimes even exceeding the maximum punishment which could be awarded to them even if they are found guilty of the offences charged against them. To take an example, we find at Item 30 one Lambodar Gorain has been in Ranchi Jail since 18th June, 1970 for an offence under Section 25 of the Arms Act for which the maximum punishment is two years, with the result that he has been in jail as an under trial prisoner for 8 1/2 years for an offence for which even if convicted, he could not have been awarded more than two years ' imprisonment. There are many such cases in the chart, but it is not possible to identify them easily from the chart because the chart contains a large number of names of under trial prisoners. We would, therefore, direct the Government of Bihar to submit to us on or before 3rd March, 1979 a revised chart showing yearwise break up of the particulars of the under trial prisoners in these jails after dividing them broadly into two categories, one of minor offences and the other of major offences. Our attention has also been drawn to Section 468 of the Code of Criminal Procedure 1973 which in sub section (1) provides that except as otherwise provided elsewhere in the Code, no court shall take cognizance of an offence of the category specified in sub section (2) after the expiry of the period of limitation and under sub section (2) the period of limitation provided is six months, if the offence is punishable with fine only, one year if the offence is punishable with imprisonment for a term not exceeding one year and three years if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. It would, therefore, be seen that the under trial prisoners against whom charge sheets have not been filed by the police within the period of limitation provided in sub section (2) of Section 468 cannot be proceeded against at all and they would be entitled to be released forthwith, as their further detention would be unlawful and in violation of their fundamental right under Article 21. We, therefore, direct the Government of Bihar to scrutinise the cases of under trial prisoners charged with offences which are punishable with fine only or punishable with imprisonment for a term not exceeding one year or punishable with imprisonment for a term exceeding one year but not exceeding three years and release such of them who are not liable to be proceeded against by reason of the period of limitation having expired. This direction shall be carried out by the Government of Bihar within a 398 period of six weeks from today and compliance reports containing particulars shall be submitted to this Court, first at the end of four weeks and then at the end of the next two weeks. We also find from section 167(5) of the Code of Criminal Procedure, 1973 that if in any case triable by a Magistrate as a summons case, the investigation is not concluded within a period of six months from the date on which the accused was arrested, the Magistrate shall make an order stopping further investigation into the offence, unless the officer making the investigation satisfies the Magistrate that for special reasons and in the interest of justice the continuation of the investigation beyond the period of six months is necessary. We are not at all sure whether this provision has been complied with, because there are quite a few cases where the offences charged against the under trial prisoners are triable as summons cases and yet they are languishing in jail for a long number of years far exceeding six months. We, therefore, direct the Government of Bihar to inquire into these cases and where it is found that the investigation has been going on for a period of more than six months without satisfying the Magistrate that for special reasons and in the interest of justice the continuation of the investigation beyond the period of six months is necessary, the Government of Bihar will release the under trial prisoners, unless the necessary orders of the Magistrate are obtained within a period of one month from today. We would also request the High Court to look into this matter and satisfy itself whether the Magistrates in Bihar have been complying with the provisions of section 167(5). We adjourn the hearing of the Writ Petition to 5th March, 1979 and on that date, we shall proceed to hear and dispose of the Writ Petition on merits on the various questions arising for determination.

At the further hearing of the case on release of under trials in the State of Bihar, ^ HELD: (a)(i) The expression 'protective custody ' is an euphemism calculated to disguise what is really and in truth nothing but imprisonment. It is an expression intended to appease the conscience. This so called 'protective custody ' is nothing short of a blatant violation of personal liberty guaranteed under article 21 of the Constitution, because there is no provision of law under which a woman can be kept in jail by way of 'protective custody ' or merely because she is required for the purpose of giving evidence. [395C D] (ii) The Government in a social welfare state must set up rescue and welfare homes for the purpose of taking care of women and children who have nowhere else to go and who are otherwise uncared for by society. [395E] (b) The under trial prisoners against whom charge sheets have not been filed by the police within the period of limitation provided for in sub section (2) of section 468 cannot be proceeded against at all and they would be entitled to be released forthwith, as their further detention would be unlawful and in violation of their fundamental right under article 21. [397 G] (c) The provision of section 167(5) of the Code of Criminal Procedure 1973 requiring the investigating officer to satisfy the Magistrate on the necessity of continuation of the investigation beyond a period of six months has not been complied with, because there are quite a few cases where the offences charged against the under trial prisoners are triable as summons cases and yet they are languishing in jail for a long number of years far exceeding six months. [398C] And the Court directed that: (a) All women and children in the jails in the State of Bihar under 'protective custody ' should be released and taken forthwith to welfare homes or rescue homes and should be kept there and properly looked after. [395F] (b) The State Government should scrutinise the cases of under trial prisoners and release such of them who are not liable to be proceeded against by reason of the period of limitation provided in section 468 Cr. P.C. having expired. [397H] (c) The State Govt. should inquire into those cases where the investigation has been going on for a period of more than six months without the satisfaction 394 of the Magistrate as envisaged in section 167(5) and to release the under trials unless the necessary orders of the Magistrate are obtained within one month. [398D E]

Civil Appeal No. 360 of 1980. From the Judgment and order dated the 15th and 17th May, 1979 of the High Court of Karnataka at Bangalore in Civil Writ Petition No. 4293 of 1975. G. L. Sanghi and A. K. Sanghi for the Appellant. Abdul Khader, N. C. Talukdar and Miss A. Subhashini for Respondent Nos. 1 and 2. 943 P. R. Mridul and H.K. Puri for Respondent Nos. 3 to 11. M. K. Ramamurthi and Jatindra Sharma for Respondent No. 12. Dr. Y. section Chitale and A.K Sanghi for intervener. The Judgment of the Court was delivered by B DESAI, J. Appellant A. Janardhana filed Writ Petition No. 4293 of 1979 questioning the validity and legality of the revised seniority list exhibit 'D ' circulated with the letter dated June 14, 1974 to which the revised seniority list exhibit 'C ' was annexed and as a consequence to cancel the panel of promotion dated January 13, 1975, drawn up in respect of 102 officers. A mandamus was sought directing the respondents to give effect to the 1963 Seniority List drawn up on the principle of length of service continuous officiation as set out in the notification memorandum dated March 11, 1965. A cognate Writ Petition No. 4273 of 1979 by one Manjunatha was also heard and disposed of by the Court along with the writ petition filed by the appellant. The factual matrix in juxtaposition with the relevant rules may be set out in details because the very narration of chronology of events would illumine the contours of controversy. Appellant joined service as Supervisor in the year 1953 in what is styled as Military Engineering Services (MES ' for short). He came to be promoted as Assistant Executive Engineer (AEE) in 1962. In the seniority list of 'AEE ' drawn up in the year 1963 the appellant was shown at Serial No. 357. In the revised seniority list dated June 14, 1974 impugned in the petition, the appellant did not find a place because consistent with the quota rule on the basis of which the impugned revised seniority list of 1974 was prepared, the appellant was surplus and could not find his berth in the seniority list. It is necessary to note an intervening event. One Bachan Singh and Anr., the two promotees to the post of 'AEE ' in the years 1958 and 1959 respectively, filed a writ petition in the High Court of Delhi challenging the appointment of several direct recruits to 'MES ' on the ground that their appointment was contrary to and in violation of the rules of recruitment and they were not validly appointed and, therefore; could not become members of the service. The writ petition was dismissed by the High Court of Delhi and the 944 matter was carried in appeal in this Court. The decision rendered A by a Constitution Bench of this Court in Bachan Singh & Anr vs Union of India & ors(l) was interpreted by the first respondent to mean that the direct recruitment, not by competitive examination but by interview and viva voce test, was valid and such appointments being in consonance with the rules, the confirmation of said direct recruits was within the quota of direct recruits in permanent vacancies and was hence valid. The first respondent understood the decision to mean that there was a quota for recruitment in the cadre of 'AEE ' in 'MES ' Class I of 9 direct recruits to 1 promotee (9:1) since 1951 and the quota must lead to rota for confirmation and proceeded to redraw the seniority list in 1974 with the startling result in respect of the appellant and several persons similarly situated as hereinabove set out. The appellant in his writ petition questioned the criteria adopted for preparing revised seniority list of June 1974 on diverse grounds based on the ratio of the decision in Bachan Singh 's case. Criteria may be extracted from the memoranda covering the seniority list dated June 14, 1974: "(a) The inter se seniority of direct recruits and depart mental promotees is to be fixed in accordance with the quota laid down in ME (RPS) Rules 1951 from time to time. The same quota is to apply both in the matter of confirmation and fixation of seniority. (b) Seniority List of Assistant Executive Engineers is to be prepared upto 1968 and excess departmental promotees who cannot be brought into the cadre have to be shown separately and brought in the cadre on the basis of quota as and when vacancies become available. (c) From 1.2.1969, the date on which the rules became statutory, the seniority of excess departmental promotees (Approx 'B ') of the list is to be regulated as under: (i) The seniority of departmental promotees who are brought into cadre from 1969 onwards will count along with direct recruits of the year in 945 which the promotees are brought into the cadre and any service for further promotion to higher posts. For example a departmental promotee of 1966, if brought on the incadred list in 1970 will count only the service in the grade of AEE after 1970 for seniority in that grade for further promotion as EE. (ii) All excess promotees who are holding higher appointment will be eligible for consideration for further promotion on completion of the requisite service after their adjustment in the cadre. (d) The revised seniority list based on the above decisions will be subject to the out come of the writ petition pending in the Andhra Pradesh High Court and any other legal pronouncement that may be made in this behalf. All promotions based on this seniority list will also be subject to revision on the availability of the judgment in the writ petition. While making promotions therefore, it may be made clear that these promotions will be subject to any further decision of the Court. " It would be advantageous to mention that the criteria had the flavour emanating from the reading and understanding of the decision in Bachan Singh 's case. If the understanding or interpretation of the ratio Bachan Singh 's decision is incorrect or contrary to what is laid down, the unavoidable consequence would be that the seniority list drawn up on such incorrect or misinterpreted ratio would not only fall but it would have to be quashed. Let us therefore first refer to the various stages through which relevant rules have moved leading to the decision in Bachan Singh 's case. There is a glut and mass of rules bearing on the subject and we may briefly weave through them. By notification dated September 17, 1949, the Ministry of 1 Defence published Rules styled as Military Engineer Services, Class I (Recruitment, Promotion and Seniority) Rules (1949 Rules for short). 'Service ' was defined to mean Military Engineer Services. 946 Class I. Rules 3 and 4 have provided the cornerstone for all contentions canvassed in this appeal and may be extracted: "3. The service (other than the Architect 's Service and the Barrack and Stores Service) shall be recruited by the following methods: (i) By competitive examination held in India in accor dance with part II of these Rules. (ii) By promotion in accordance with Part III of these Rules 4. Subject to the provisions of Rule 3, Government shall determine the method or methods to be employed for the purpose of filling any particular vacancies or such vacancies as may require to be filled during any particular period, and the number of candidates to be recruited by each method provided that not more than 10 per cent, of the vacancies in the service (not being vacancies filled by promotion from one grade to another within the service) shall be filled by the method specified in clause (ii) of Rule 3 above. The recruitment was to be from two sources: (i) direct recruitment by competitive examination; and (ii) by promotion in accordance with Part III of the Rules. Rule 4 confers discretion on the Government circumscribed by the provision of Rule 3 enabling the Government to determine the method or methods to be employed for the purpose of filling in particular vacancies or such vacancies as may be required to be filled during any particular period, and the number of candidates to be recruited by each method. There is a proviso to Rule 4 and it is the subject matter of acrimonious debate in the Court. One submission of Mr. P. R. Mridul, learned counsel for direct recruits was that the proviso is the proviso to sub rule (ii) of Rule 3 and it fixes the quota of 9 to 1 between direct recruits and promotees. At the other end of the spectrum, the submission was that it merely provides a. ceiling and not an inviolable quota rule. We would examine both the submissions a little while after. Part II of the Rules makes detailed provision for the competitive examination to be held in India for selecting direct recruits. Rule 21 to 23 in Part III of the 1949 Rules, prescribe qualification and method 947 for recruitment by promotion. One worth noticing is Rule 23 which prescribes that no individual shall be eligible for promotion to the A service unless, he would, but for age, be qualified for admission to the competitive examination under Part II. This would mean that except for age all other qualifications including educational qualification for direct recruits and promotees are the same. There are S Appendices to 1949 Rules. Para 3 in Appendix V provides for inter se seniority between direct recruits and promotees. Sub para (iii) of para 3 is relevant and may be extracted: "(iii) A roster shall be maintained indicating the order in which appointments are to be made by recruitment and promotion in accordance with the percentages fixed for each method of recruitment in the recruitment rules. The relative seniority of promotees and direct recruits shall be determined by the dates on which the vacancies reserved for the direct recruits and the promotees occur. " Though the 1949 Rules were published on September 17, 1949, they were brought into operation by a notification of the Ministry of Defence dated July 29, 1950 with effect from April 1st, 1951. 1949 Rules when enacted were admittedly non statutory in character. By the notification dated July 18, 1953 of the Ministry of Defence, the Rules styled as Military Engineer Service Class I Recruitment Rules were promulgated. Rules 3 and 4 are in pari materia with Rules 3 and 4 of the 1949 Rules. Part II of the Rules makes detailed provision for the competitive examination and the Rules in Part III deal with appointment by promotion. It was not made clear whether the 1953 Rules superseded the 1949 Rules. They are almost identical save and except for a provision in Appendix V. Para 3 in Appendix V of 1949 Rules provided for inter se seniority of direct recruits and promotees, while para 3 in Appendix V of 1953 Rules recited that 'the principles for determining seniority are under consideration. ' It is, therefore, suggested that para 3 in Appendix V of 1949 Rules was abrogated and fresh principles for determining seniority were yet to be devised. The contention arising from these two sets of Rules occupying the same field would in course of time become worst confounded by what has been done in 1969 but that would come later on. 948 Moving to the next stage, the Ministry of Defence by its notification dated January 7, 1961 promulgated statutory Rules enacted in exercise of the power conferred by the proviso to Article 309. These Rules were to regulate the recruitment to the Military Engineer Services, Class I? (1961 Rules for short). These Rules largely relate to the method to be adopted for direct recruitment, the manner of holding examination and the persons eligible for entrance to the examination. In a way 1961 Rules left rules 3 and 4 of 1949 Rules and rules 3 and 4 of 1953 untouched, except to the extent provided in para 8 of appendix lV wherein it is stated that promotions to the Superior and Administrative posts are dependent on occurrence of vacancies in the sanctioned establishment and are made wholly by selection in consultation with the Departmental Promotion Committee and Commission as laid down in the Home Department office memorandum No. 33/46 Ests(R) dated June 17th, 1946; mere seniority is considered to confer no claim to promotion. Though these Rules are styled as Rules for recruitment to Military Engineer Services, Class I, omits any reference to recruitment by promotion is wholly absent yet Rule 3 in Appendix IV restated the position that the principles for determining seniority are under consideration. 1961 Rules do not even refer to 1949 Rules, but it may be mentioned that 1961 Rules were superseded by 1962 rules. In 1962, the Ministry of Defence by its notification dated April 27, 1962 in exercise of the power conferred by the proviso to Article 309 framed Rules regulating the recruitment to the Military Engineer Services Class I in supersession of 1961 Rules. Both the 1961 and 1962 Rules neither refer to Rule 3 and Rule 4 of 1949 Rules permitting recruitment by promotion and the permissible limit of recruitment by promotion. 1962 Rules restated in Rule 3 in Appendix IV that the principles for determining seniority are under consideration. Further para 8 in Appendix IV was repeated at the same place as in 1961 Rules. By the notification of Ministry of Defence dated April 17, 1965 Rule 7 of 1962 Rules was amended. But it has no relevance to the point under consideration. Then comes a noteworthy pro vision. Rule 3 in Appendix IV of 1962 Rules which provided that 'the principles for determining seniority were under consideration ' was substituted as under: "3. Relative seniority of officers appointed to service on the basis of the combined Engineering Services 949 Examination or otherwise will be determined in accordance with the orders issued by Government A from time to time. " By the notification of the Ministry of Defence dated February 18, 1967, a further amendment was introduced in 1962 Rules with regard to the eligibility of persons who can offer themselves as candidates for the competitive examination. By the Ministry of Defence notification dated February 25, 1967, non statutory in character sub rule (h) was added to Rule 20 in Part III of 1949 Rules providing reservation of 50% of the permanent vacancies to be filled through direct recruitment after 17th May, 1963 of graduate engineers who are commissioned in the Armed Forces on a temporary basis during the Emergency and are later released subject to certain conditions therein prescribed. Then comes the land mark change of 1969. On February 1, 1969, the President in exercise of the power conferred by the proviso to Article 309 framed and promulgated amendments to 1949 Rules styled as Military Engineer Service Class I (Recruitment, Promotion and Seniority) Amendment Rules, 1969 which came into force on February 1, 1969. Rule 4 was amended by substituting '25 ' of the vacancies ' in place of '10% of the vacancies. ' In other words, the quota between direct recruits and promotees was modified from 9:1 to 3:1. We may at this stage notice Army Instruction 241 of 1950. It provided for seniority of civilian employees in lower cadre. The instruction refers to the order contained in para 2 of the Ministry of Defence office Memorandum No. 0240/6362/0 12 dated 1st September 1949 which was published as an annexure to the instruction. The instruction is that the rule for determining seniority amongst Assistants recently devised must be followed as a model. The model was that in any particular grade seniority as a general rule, be determined on the basis of the length of service in that grade as well as service in an equivalent grade irrespective of whether the letter was under the Central or Provincial Government in India or Pakistan. Having journeyed through the maze of Rules, we may turn to the primary contention raised in this appeal. Before we do so, let 950 it be remembered that the appellant is a promotee to AEE in MES cl. I of the year 1962 and by the impugned seniority list of June 14, 1974, he does not find his place in the seniority list and is still in the surplus list to be accommodated at a future date and Mr. Sanghi learned counsel for the appellant asserted with some vehemence that he cannot come into the service till 1989 when it may be time for him to retire from the service. In other words after having rendered service in a post included in the class I, he is hanging out side the service, without finding a berth in service, whereas direct recruits of 1976 have found their place and berth in the service. This is the situation that stares into one 's face while interpreting the quota rota rule and its impact on the service of an individual. But avoiding any humanitarian approach to the problem, we shall strictly go by the relevant rules and precedents and the impact of the Rules on the members of the service and determine whether the impugned seniority list is valid or not. But, having done that we do propose to examine and expose an extremely undesirable, unjust and inequitable situation emerging in service jurisprudence from the precedents namely, that a person already rendering service as a promotee has to go down below a person who comes into service decades after the promotee enters the service and who may be a schoolian, if not in embryo, when the promotee on being promoted on account of the exigencies of service as required by the Government started rendering service. A time has come to recast service jurisprudence on more just and equitable foundation by examining all precedents on the subject to retrieve this situation. The contentions canvassed before the High Court at the time of hearing this group of petitions are (i) what is the character of '1949 Rules ' when they were enacted and whether and when they acquired statutory character ?; (ii) In making recruitment in the manner it was done till '1949 Rules ' acquired statutory character, was there a violation of quota rule assuming that there was quota prescribed in Rule 4 of '1949 rules ' ?, (iii) If Rule 4 of '1949 Rules ' prescribed a quota of 9:1 between direct recruits and promotees, had the Government the power to relax the quota rule when necessary or under certain circumstances ?; (iv) What if any, is the effect on the status of the promotees promoted to the service in relaxation of the quota rule ?; (v) whether such promotees became the members of the service so as to be assigned a place in the seniority list ?; (vi) If prior to '1949 Rules ' acquiring statutory character in 1969 promotions were made in excess of the quota, which principle 951 governed determination of inter se seniority of later direct recruits with earlier promotees ?, (vii) If 1963 Seniority List when drawn up was according to the Rules then in force, could it be rendered ineffective by a revised rule for determining inter se seniority devised in 1974 and given retrospective effect. These and the connected questions call for answer in this appeal. We were often reminded in the course of hearing that the Court is not scribbling on a clean slate and that some of the contentions canvassed in this appeal are concluded by a decision of the Constitution Bench of this Court in Bachan Singh & Anr. vs Union of India & Ors.(1). It must be confessed that in Bachan Singh 's case (supra), various rules to which we have drawn attention in the earlier part of the judgment came in for consideration by the Constitution Bench. Therefore, both the sides extensively referred to the various observations and conclusions recorded in the decision and it is incontrovertible that this decision is binding on us and therefore, the contentions canvassed before us will have to be answered within the parameters of the decision of the Constitution Bench. To steer clear of a possible unintended transgression of this binding decision, it is necessary to set out in some details the ratio of the decision of the Constitution Bench in that case ? Bachan Singh and Anr. were promoted in the years 1958 and 1959 respectively to AEE in MES (Class I Some of the respondents in that case were appointed by direct recruitment after they had appeared in the competitive examination, but all the respondents were appointed to the service in the years 1962, 1963 and 1964. The first contention raised on behalf of the promotee appellants was that the recruitment of some respondents as direct recruits not as the result of competitive examination as provided in the Rules but by mere interview by the Union Public Service Commission was contrary to and in violation of the relevant Rules and thus the recruitment being invalid they did not become members of the service. It was said that if they are not members of the service, they cannot claim seniority over promotees the petitioners in that case. The second contention was that such of the respondents who were recruited by interview and as a result of the competitive examination after the appellants had been promoted to the service, are not entitled to be confirmed in permanent posts before the appellants. 952 These contentions necessitated focussing attention on the character A of ' 1949 Rules '. After briefly reviewing the history of the rules from 1949 to 1969, the first important conclusion of the Court is that the '1949 Rules ' acquired statutory character in 1969 because as a result of 1969 amendment! the entire body of rules of Class I became statutory rules by incorporation. The Court then referred to rules 3 and 4 of ' 1949 Rules ' when they came into force in 1951 and noticed that the recruitment to MES Class I could be made from two sources only, namely, by competitive examination held in India in accordance with Part II of the Rules and by promotion in accordance with Part III of the Rules. As set out in earlier portion of the Judgment, Part II makes extensive provisions for holding examination including the eligibility for admission to the same. It was conceded in Bachan Singh 's case that some of the respondents were directly recruited by interview by the Union Public Service Com mission. In other words, some of the respondents in that case had not appeared at competitive examination ar required by Rule 3. The rules did not permit direct recruitment by mere interview by the Union Public Service Commission. The question arose: What was the status of such direct recruits recruited in utter violation of Rule 3 ? Promotee petitioners contended that such direct recruits had not become members of the service. Repelling this contention, the Constitution Bench held as under: "The appointments to Class I Service by interview were made by the Government in consultation with the Union Public Service Commission. The selection was made by the Union Public Service Commission. The li appointments by competitive examination proved fruit less. The country was in a state of emergency. Appoint ment and selection by interview was the only course possible. It could not be said that all appointments should have been made by promotion. That would be not in the interest of the service. The service Rules were administrative in character. The Government relaxed the Rules. The amendments of the rules in 1967 recognised the reality of the situation of appointment by interview. That is why the 1967 amendment recognised that 50 per cent of "the direct recruits by competitive! ad hoc appointment were to be reserved for graduate engineers who were commissioned in the Armed Forces on a temporary basis. " 953 At an earlier stage, the Court held that during the years 1962,1963 and 1964 particularly and until the year 1969, the Class I Service A Rules were not statutory in character. The Union Government relaxed the Rules both in regard to recruitment by interview and in regard to the quotas fixed by the Rules for direct recruitment and recruitment by promotion to Class I Service. Keeping in view the contention raised on behalf of the appellants before us that Rule 4 does not prescribe a quota to be invariably followed, but merely a ceiling and the contention of Mr. P. R. Mridul for some of the direct recruits that rule 4 prescribes an invariable quota any violation of which would render the appointees in excess of quota invalid, we would proceed as held in Bachan Singh 's case that rule 4 prescribes the quota. If the contention was open to consideration by us, we have our own reservations about the same. However, as it has been held in a binding decision that Rule 4 did prescribe a quota rule of 9: 1 between direct recruits and promotees, we would proceed on that basis. The Court then noticed that in 1962, there was a state of emergency. Engineers were immediately required to fill the temporary posts in Class I Service. To meet the emergency the Union Government in consultation with the Union Public Service Commission decided to recruit candidates by advertisement and selection by interview only by the Union Public Service Commission. The Government with the aid of selection and interview by the Union Public Service Commission directly recruited some respondents to Class r Service in the years 1962, 1963 and 1964. The candidates were selected after viva voce examination. ' The Court then proceeded to notice the vacancies that occurred between 1951 and 1971 and concluded that it is because of the conditions of emergency that the quota for filling the temporary posts was ignored both for departmental promotees and direct recruitment. After taking this view, the Court proceeded to answer the contention whether the recruitment of some of the respondents in that case by a method not permitted by rules was legal and valid which necessitated the Court considering and answering the question as to whether the Government had the power to make recruitment in relaxation of the Rules ? In this connection, the Court categorically concluded as under: "It is apparent that during the years 1959 to 1969, there was a relaxation in the observance of rules in the case of appellants and the other departmental promotees. The Union Government all throughout acted in consultation with the Union Public Service Commission. The 954 departmental promotees gained considerable advantage A by relaxation of the rules. The direct recruits were not shown any preference at all, The proportion of confirmation of departmental promotees and of direct recruits by interview was 1:1." The Court then upheld the appointment of those direct recruits who were appointed after interview by the Union Public Service Commission by holding that was done in relaxation of the rules both as to competitive examination and the promotions were given after relaxing the quota rule. The Court held that direct recruits who were appointed by interview fall within the class of direct recruits. What emerges from the decision in Bachan Singh 's case? '1949 Rules ' and the subsequent amendments thereto acquired statutory flavour in 1969 and '1949 Rules became statutory in character by incorporation only in 1969 and till then they were mere administrative instructions. Rule 3 of '1949 Rules ' permitted recruitment only from two sources i.e. by competitive examination and by promotion. Rule 4 permitted the Government to fill in any particular vacancies or such vacancies as may require to be filled during any particular period, the method or methods to be employed for the purpose of filling any particular vacancy and the number of candidates recruited by each method. Rule 3 provides for the sources of recruitment, namely, direct recruitment and promotion. Rule 4 confers discretion on the Government either to fill the vacancies and from which service subject to the proviso to Rule 4 which prescribes, according to Bachan Singh 's case. a quota, Rule 4 which was introduced in 1967 conferred power on the Union Government for the reasons to be recorded in writing and after consultation with the Union Public Service Commission to relax all or any of the rules with respect to class or category of persons/ posts. As the '1949 Rules ' were non statutory in character till 1969 and this Court read power of relaxation is in ' 1949 Rules ' till 1969, the power of relaxation was exercised during 19611962 1963 because there was emergency during this period. The Government was in need of large number of Engineers and therefore, had to make recruitment by a method not prescribed by the rules in relaxation of the rules, and large number of persons had to be given departmental promotion with the same end in view which would amount to relaxation of the quota rule. This Court in terms 955 held that the Government had the power to relax 1949 Rules till they acquired statutory character in 1969 and Government did make recruitment from both sources after exercising the power to relax rules. This ratio of the decision is binding on us. Even apart from this, in the statement of case filed in this case on behalf of the Union of India, it is conceded that in view of the exigencies of service relaxation was made in the matter of promotion to the cadre of Assistant Executive Engineers between 1951 and 1963. Rule 24 enabled the Government to make recruitment in relaxation of the rule by making an order to that effect in writing and after consulting the Union Public Service Commission. Strictly speaking Rule 24 is hardly helpful as the rule was introduced in 1967 and we are concerned with years 1959 61 62 63. We asked Mr. Abdul Khader, learned counsel for the Union of India whether orders were made at the time of each recruitment for making recruitment by relaxing the rules and if such orders were made after consulting the Union Public Service Commission and if there are such orders in existence, same may be produced. Pursuant to this querry, an affidavit was filed by Lt. Col. section C. Sethi, Staff officer Grade I (Personnel) dated December 7, 1982. This affidavit does not satisfy the query and hardly illumines. the blurred area. It merely refers to the variation in the quota, namely, it was raised from 9:1 to 1:1 upto the end of 1963 and it was again restored to 9:1 after 1964 and the statutory rules of 1969 revised the quota. To this Affidavit, some correspondence is annexed which hardly throws any light on the question raised by the Court. If rule 3 provided methods of recruitment indicating the sources from which recruitment could be made and if rule confers discretion on Government to make recruitment from either source because Rule 4 opens with a limitation, namely, that it is subject to Rule 3, now if as held in Bachan Singh 's case 1949 Rules ' while prescribing the quota conferred power on the Union Government to make recruitment in relaxation of the rules, it is implicit in this power to G make recruitment in relaxation of the quota rules and it is admitted that because of the emergency and because of the exigencies of service, recruitment was made in relaxation of the rules. Now, where the rule provides for recruitment from two sources and simultaneously prescribes quota, unless there is power to relax the rule as has been held in a catena decisions, any recruitment in excess of the quota from either of the sources would be illegal and the excess recruits unless they find their place by adjustment in subsequent 956 years in the quota, would not be members of the service. In A section G. Jai Singhani vs Union of India & ors(l) a Constitution Bench of this Court held as under. "We are accordingly of the opinion that promotees from Class II, Grade III, to class I Grade II Service in excess of the prescribed quotas for each of the years 1951 to 1956 and onwards have been illegally promoted and the appellant is entitled to a writ in the nature of mandamus commanding respondents 1 to 3 to adjust the seniority of the appellant and other officers similarly placed like him and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to 1956 and onwards in accordance with the quota rule prescribed . ' In reaching this conclusion, the Court held that the absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based. The Court observed that in a system, governed by rule of law, discretion, when conferred upon executive authorities, must be confined within clearly defined limits. The view was to some extent re affirmed in B. section Gupta vs Union of India & ors.(a) and B. section Gupta etc. vs Union of India & Ors. etc. etc.(3) But this result will not follow where even though the rules prescribe sources of recruitment, methods of recruitment and quota, if the very rules simultaneously confer power on the Government to make recruitment in relaxation of the rules, unless mala fides are alleged and attributed. Where rules thus confer a discretion on the Government to relax the rules to meet with the exigencies of service, any recruitment made in relaxation of the rules would not be invalid. This is no more res integra in view of the decision of this Court in N. K. Chauhan & ors. vs State of Gujarat & ors.(1) In that case, a resolution of the Government of Bombay dated July 30, 1959 'directing that, as far as practicable, 50 percent of the substantive vacancies occurring in the cadre with effect from 1st January 1959 should be filled in by nomination of candidates to be selected in accordance with the Rules appended 957 herewith, came in for consideration of this Court. "The contention was that the Resolution prescribed a quota and the Government had no discretion to make recruitment in relaxation of the quota and therefore, any recruitment made in excess of the quota in view of the decision in Jaisinghani 's case and 2 B.S. Gupta 's cases would be invalid. Repelling this contention and distinguishing both the decisions in Jaisinghani 's case and 2 B.S. Gupta 's cases, the Court observed that the sense of the rule is that as far as possible the quota system must be kept up and if not practicable promotees in place of direct recruits or direct recruits in place of promotees may be inducted applying the regular procedures without suffering the seats to lie indefinitely vacant. ' After examining the facts of the case, the Court held that the State had tried as far as practicable to fill 50% of the substantive vacancies from the open market, but failed during the years 1960 1962 and that therefore it was within its powers under the relevant rule to promote mamlatdars who, otherwise, complied with the requirement of efficiency. It thus becomes crystal clear that when recruitment is from two independent sources, subject to prescribed quota, but the power is conferred on the Government to make recruitment in relaxation of the rules, any recruitment made contrary to quota rule would not be invalid unless it is shown that the power of relaxation was exercised mala fide. That is not the contention here, nor any such contention was voiced in Bachan Singh 's case. In Bachan Singh 's case the Court has extensively referred to the emergency situation in the market of recruitment of engineers between 1959 and 1969 and that fact situation not only was not controverted but conceded before us. It is this emergency and the dire need of urgently recruiting engineers, which led the Government to make recruitment in relaxation of quota rule by fore going the competitive examination and promoting subordinate ranks to Class I service. Petitioners and similarly situated persons were thus promoted to meet the dire need of service in relaxation of the quota rule. Now if recruitment contrary to Rule 3, namely, by interview by the Union Public Service Commission, which is not the recognised mode of recruitment, is held valid in Bachan Singh 's case on the ground that it was done in relaxation of the rules, it must follow as a corollary that the same emergency compelled the Government to recruit by promotion engineers to the post of AEE Class I in excess of the quota by exercising the power of relaxation and such recruitment ipso facto would be valid. The promotees being validly 958 promoted as the quota rule was relaxed, would become the members of the service. Whether the vacancies were in the permanent strength or in the temporary cadre is irrelevant because none of them is reverted on the ground that no more vacancy is available. Appellant and those similarly situated were recruited by promotion as provided in Rule 3(ii) and it must be conceded that the recruitment by promotion during these years was in excess of the quota as provided in Rule 4. But the recruitment having been done for meeting the exigencies of service by relaxing the rules including the quota rule, the promotion in excess of quota would be valid. In this connection, it may be recalled that the expression 'service ' has been defined to mean Military Engineering Service Class I. The rules are silent on the question of the strength of the service. Keeping in view the exigencies of service and the requirements of the State, temporary posts would be a temporary addition to the strength of the cadre, unless it is made clear to the contrary that the temporary posts are for a certain duration or the appointments to temporary posts are of an ad hoc nature till such time as recruitment according to rules is made. In the absence of any such provision, persons holding permanent posts and temporary posts would become the members of the service provided the recruitment to the temporary posts is legal and valid. Once the recruitment is legal and valid, there is no difference between the holders of permanent posts and temporary posts in so far as it relates to all the members of the service. This clearly follows from the decision of this Court in section B. Patwardhan & ors. vs State of Maharashtra ors. ,( ') that there is no universal rule, either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both. That is primarily a matter of. rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises. '1949 Rules ' throw no light on this aspect and therefore, if the recruitment is made from either of the sources and is otherwise legal and valid, persons recruited to temporary. posts would nonetheless be members of the service. The High Court while rendering the judgment under appeal unfortunately did not examine this aspect even though vehemently argued, with the result that the petitions were again set down for decision on a memo filed by the learned counsel on behalf of the 959 present appellants in the High Court on the very next day of the judgment informing the Court that several important contentions A urged by him during the course of arguments at the hearing of the writ petitions, have not been noticed by the Court in its judgment dated May 15, 1979. One such contention was that Union of India In its statement of case had conceded that as direct recruits were not available during that period, even though the qualification of competitive examination for direct recruits was completely relaxed and a mere interview by the Union Public Service Commission was considered sufficient, large number of persons from subordinate ranks had to be given promotion but this aspect was not examined by the Court. Repelling this submission, the High Court observed that the learned counsel was not able to point out any express admission to that effect in the statement of objections filed on behalf of the Union Government and the averment in Exhibit 'F ' that there has been a relaxation from time to time in the observance of the said rules by the Government in consultation with Union Public Service Commission to meet the emergent requirements of the Service, was not sufficient to permit an inference sought to be drawn as desired by the learned counsel. With respect, the High Court was in error in approaching the matter from this angle. In fact, before the High Court rendered its decision, the Judgment of the Constitution Bench in Bachan Singh 's case was reported and as pointed out by us, this Court specifically held that the recruitment from both the services was made in relaxation of the rules And in the statement of case filed in this Court, there is a specific admission to that effect. We are therefore of the view that the High Court was in error in rejecting this contention The next question is, on what principle then in force inter se seniority of promotees and direct recruits recruited to service in relaxation of 1949 Rules including the quota rule was to be determined and how they were to be integrated in the cadre of AEE for further promotion to the cadre of Executive Engineers. The appellant has impugned the seniority list prepared by the Union Government on June 14, 1974. Prior to the impugned seniority list, a seniority list of AEE was drawn up in the year 1963 in which the place of the present appellant was at serial No. 357. There was another seniority list drawn up in the year 1967 in which the appellant found his place at serial No. 234. Then came the decision of the Constitution Bench in Bachan Singh 's case whereupon 960 the Union Government set aside the two aforementioned seniority A list and drew up a fresh list on the criteria drawn from the decision in Bachan Singh 's `case as set out in the earlier portion of this Judgment. In this seniority list, appellant did not find his place because he was still surplus in 1974 seniority list and he was hanging out of the service (Trishanku) because he was pushed down after applying the quota from the date of the constitution of the service itself in 1951. The traumatic effect of this approach can be gauged by merely pointing out that the appellant who was promoted in the year 1962 as AEE and has held the post un interruptedly till today would be junior to the direct recruits of 1976,1977 and 1978. If unfortunately, the law is to that effect, nothing can be done. Could the law be that unjust ? Law being no respector a person must take its own course. But is that the law ? or the approach overlooks a vital aspect which has a bearing on the point. The contention of the Union Government is that the earlier seniority lists of 1963 and 1967/68 were not drawn up according to any particular principle. In para 4 of the statement of the case of the Union Government it is averred that 'seniority list drawn before 1973 were not based on any set rules but were prepared provisionally on the basis of the then available rules to regulate the functioning of department. ' This statement apart from being self contradictory to some extent, is misleading and would not be borne out by reference to the relevant rules on the subject. It is a well recognised principle of service jurisprudence that any rule of seniority has to satisfy the test of equality of opportunity in public service as enshrined in Article 16. It is an equally well recognised canon of service jurisprudence that in the absence of any other valid rule for determining inter se seniority of members belonging to the same service, the rule of continuous officiation or the length of service or the date of entering in service and continuous uninterrupted service thereafter would be valid and would satisfy the tests of article 16. However, as we would presently point out we need not fall back upon this general principle for determining inter se seniority because in our view there is a specific rule governing inter se seniority between direct recruits and promotees in MES Class I Service, and it was in force till 1974 when the impugned seniority list was drawn up. 961 In the '1949 Rules ' which came into force on April 1, 1951, a provision was made for determining inter se seniority between A direct recruits and promotees. In para 3(iii) of Appendix V of '1949 Rules ' it was provided that a roster shall be maintained indicating, the order in which appointments are to be made by direct recruitment and promotion in accordance with the percentages fixed for each method of recruitment in the recruitment rules. The relative seniority of promotees and direct recruits shall be determined by the dates on which the vacancies reserved by the direct recruits and the promotees occur. It would appear at a glance that this rule was related to the quota of 9:1 between direct recruits and promotees prescribed in rule 4. A combined reading of rule 4 and para 3(iii)) of Appendix V would clearly show that a roster has to be maintained consistent with the quota so that the relative inter se seniority of promotees and direct recruit be determined by the date on which vacancy occurred and the vacancy is for the direct recruit or for the promotee. If quota prescribed by rule 4 was adhered to or was inviolable, the rule of seniority enunciated in para 3(iii) of Appendix V will have to be given full play and the seniority list has to be drawn in accordance with it. But as pointed out by this Court in Bachan Singh 's case during the years 1959, 1969 and especially during 1962, 1963 and 1964 on account of adverse market conditions for recruitment of engineers, the Government had to be make recruitment in complete relaxation of rules 3 and 4 including the relaxation of the quota rule. As quota rule was directly inter related with the seniority rule, and once the quota rule gave way, the seniority rule enunciated in para 3(iii) of Appendix V became wholly otiose and ineffective. It is equally well recognised that where the quota rule is linked with the seniority rule if the first breaks down or is illegally not adhered to giving effect to the second would be unjust, inequitous and improper. An identical situation was noticed by this Court in First B. section Gupta 's case wherein this Court while rejecting the contention of the promotees that the quota rule and the seniority rule deserved to be independent of each other held that with the upgrading of the large number of posts and the appointments to them of promotees, the quota rule collapsed and with that the seniority rule also. Therefore, once the quota rule was wholly relaxed between 1959 and 1969 to suit the requirements of service and the recruitment made in relaxation of the quota rule and the minimum qualification rule for direct recruits is held to be valid, no effect can be given to the seniority rule enunciated in para (iii), which was wholly inter linked with the quota rule and cannot 962 exist apart from it on its own strength. This is impliedly accepted A by the Union Government and is implicit in the seniority lists prepared in 1963 and 1967 68 in respect of AEE. because both those seniority lists were drawn up in accordance with the rule of seniority enunciated in Annexure 'A ' to Army Instruction No. 241 of 1950 dated September 1, 1949, and not in compliance with para 3(iii) of Appendix vs The Ministry of Defence issued Army Instruction No. 241 of 1950 styled as 'Seniority of civilian employees in lower formations ', which provides that in accordance with the orders contained in para 2 of Ministry of Defence O.M.No. 0240/6362/D 12 dated September 1,1949 published as Annexure 'A ' to this instruction, seniority of persons employed in a particular grade is to be determined as indicated herein. Annexure 'A ' reproduced the rule of seniority which was then followed as a model in the grade of Assistant which had been adopted by the Ministry of Defence. The principle of seniority therein enunciated is that the rule for determining inter se seniority in the cadre of Assistants should generally been taken as the model in framing the rules of seniority for other services and in respect of persons employed in any particular grade seniority should as a general rule, be determined on the basis of the length of service in that grade as well as service in an equivalent grade irrespective of whether the latter was under the Central or Provincial Government in India or Pakistan. This was the rule of seniority which would be applicable in the absence of any other rule specifically enacted for MES class I service. It could have been urged with confidence that the seniority rule enunciated in part 3(iii) of Appendix V of '1949 Rules ' was the one specifically enacted for MES Class I service and the special rule would prevail over the general rule issued in Army Instruction No. A.I. 241 of 1950. But as pointed out earlier, the rule in para 3(iii) of Appendix V gave way when the quota rule was relaxed. This is recognised by the Ministry of Defence when while enacting '1953 Rules ', a provision was made in para 3 of Appendix v that the principles for determining seniority are under consideration. Assuming that the rule of seniority of para 3(iii) of Appendix V of '1949 Rules ' held the field, it appears to have been abrogated by the '1953 Rules ' because a clear provision is made that principles for determining seniority are under consideration. Similar situation is recognised in '1961 Rules ' which to some extent imparted a statutory flavour to '1949 Rules '. In para 3 of Appendix IV of '1961 Rules ' it was stated that principles for determining seniority of 963 members of the service meaning Military Engineer Services Class I are under consideration. This position was reiterated when '1962 A Rules ' were enacted in relation to the service. In Para 3 of Appendix IV of '1962 Rules ' it is reiterated that the principles for determining seniority are under consideration. It is nowhere suggested that till the decision in Bachan Singh 's case, any other rule for determining inter se seniority was prescribed. That takes us to the impugned seniority list of 1974. On June 14, 1974, seniority list of AEE was circulated. The preamble to the seniority list sets out the criteria on which inter se seniority of members is determined. Amongst other things, it states that the inter se seniority of direct recruits and departmental promotees is to be fixed in accordance with the quota laid down in '1949 Rules ' which came into force on April 1, 1951. It further recites that the same rule for determining seniority list is to be applied in both the matter of confirmation and fixation of seniority. Therefore, it clearly transpires that the seniority list is drawn up on the basis of fixed quota as enunciated in rule 4, that is, 9:1 direct recruit, promotee, revised between 1959 and 1963 to 1:1 and again restored to 9:1 from 1964. The 1974 seniority list would be without anything more invalid, as it proceeds on the assumption that there was a rigid quota rule and that the recruitment in excess of the quota would be invalid and the excess recruits from either source will have to be adjusted and regularised in succeeding years. Probably, the authorities concerned while drawing up the seniority list were influenced by some of the observations in Jaisinghani 's case and the two successive B. section Guuta 's cases, all of which were clearly distinguishable and will have no application to the facts of the present case. Another error that has crept in prescribing the criteria on which the impugned 1974 seniority list is founded, is the assumption that there was an inviolable quota rule which could not be relaxed. The second criterion recites that seniority list of Assistant Executive Engineers is to be prepared upto 1968 and excess departmental promotees who cannot be brought into the cadre have to be shown separately and brought into the cadre on the basis of quota as and when vacancies become available. As clearly brought out hereinbefore, the recruitment was made in relaxation of the quota. Once the quota rule was relaxed, the rota for confirmation disappeared. In the absence of any other rule coupled with the Army Instruction upto 1968 continuous officiation would be the only available rule for determining the inter se seniority. And it may be recalled that 964 both the 1963 and 1967 seniority lists were drawn up in accordance A with that principle. Thus the two fundamental basic assumptions on which the impugned seniority list was drawn up are wholly invalid and contrary to the relevant rules, and any seniority list based thereon must fail. But this conclusion alone would leave the matter again in the hands of the first respondent with a fresh exercise. It is therefore necessary to proceed further and determine on what basis the seniority list of AEE was to be drawn up upto 1969, when the '1949 Rules ' became statutory according to the decision in Bachan Singh 's case. Between 1959 and 1969 and especially during the years 1962, 1963 and 1964 and some subsequent years, the Government consistent with its requirements and exigencies of service made recruitment including recruitment by promotion in relaxation of the '1949 & subsequent rules ' which the Government undoubtedly had the power to do. A good number of persons were so promoted. The direct recruits enjoyed comparatively greater benefit in that they entered service avoiding a competitive examination, which the re required to be held and through which alone direct recruits could enter service. Equally a good number of persons entered MES Class I through the comparatively easy and highly subjective test, namely, interview. Therefore, it cannot be gainsaid that a considerable number of direct recruits derived the advantage of the power of relaxation of rules exercised by the Union Government. In Bachan Singh 's case, this Court also has rightly observed that some depart mental promotees also obtained advantage of the same. It is not necessary for us to consider comparative advantage. The supervening consideration was the exigencies of service of which the best judge, as recognised in Bachan Singh 's case, is the Government. It may also be made clear that the promotees were not less qualified then direct recruits. They have to meet the same rigorous test of qualifications save and except the qualification as to age. This becomes abundantly clear from para 3 of rule 23 of '1949 Rules ' which provided for appointment by promotion. Rule 23 provided that 'no individual shall be eligible for promotion to the service unless he would, but for age, be qualified for admission to the competitive examination under Part II of these Rules, and satisfies the Commission that he is in every respect suitable for appointment to the service. ' Part II contains provisions prescribing eligibility criteria for taking the competitive examination. Amongst others, it provided minimum educational qualification of an Engineering degree. 965 Therefore, as for as the minimum educational qualification is concerned, promotees and direct recruits are on par. One need not therefore, look upon promotees as persons belonging to an inferior breed. The promotees were promoted by the Government to man its services keeping in view the exigencies of service and non availability of direct recruits as held in Bachan Singh 's case and as admitted before us. And while giving promotion, it was not even for a moment suggested that the promotions are ad hoc or till such time as direct recruits are available or for a limited period. Therefore, the promotions were regular promotions, may be to the temporary posts which was a temporary addition to the strength of the service. But to all intents and purposes, the promotion of the promotees during this period was a regular promotion and the promotees have held the posts uninterruptedly for all these years meaning thereby that it could never be said that posts were not available. Even then by the impugned seniority list, 1962 promotee is hanging, outside the cadre and the list drawn up on such an illegal and invalid criteria has led to such a startling result that is 1962 promotee does not find his berth in service even in 1974. The next question is whether 1963 seniority list and 1967 seniority list were valid when drawn up. As pointed out earlier, the rule of quota enunciated by para 3(iii) of Appendix V of '1949 Rules ' has ceased to be of any legal efficiency till 1969. The Army Instructions of September 1, 1949 directed seniority list to be drawn up in accordance with the principle of continuous officiation. In the absence of any other valid principle, seniority determined on the basis of continuous officiation is valid because it satisfies the test of article 16. There is nothing to suggest that 1963 and 1967 seniority lists were provisional or were likely to be re drawn. Therefore till the 1949 Rules acquired statutory character in 1969, the seniority lists of 1963 and 1967 in respect of AEE were quite legal and valid and were drawn up on the basis of the principle which satisfies the test of Article 16. The question is whether a new principle for determining inter se seniority evolved in 1974 could be retrospectively applied from 1951 thereby setting at naught all previous seniority lists validly drawn up. It is open to the Government to prescribe principles for determining inter se seniority of persons belonging to the same service or cadre except that any such principle must meet the test of article 16. It is equally open to the Government to retrospectively 966 revise service rules, if the same does not adversely affect vested A rights. But if the rule for determining inter se seniority is revised or a fresh rule is framed, it must be constitutionally valid. The criteria on which 1974 seniority list is founded are clearly illegal and invalid and this stems from a misunderstanding and misinterpretation of the decision of this Court in Bachan Singh 's case. It also g overlooks the character of the appointments made during the period 1959 to 1969. It treats valid appointments as of doubtful validity. It pushes down persons validly appointed below those who were never in service and for reasons which we cannot appreciate, it is being made effective from 1951. In our opinion, there was no justification for redrawing the seniority list affecting persons recruited or promoted prior to 1969 when the rules acquired statutory character. Therefore, the 1974 seniority list is liable to be quashed and the two 1963 and 1967 seniority lists must hold the field. At this stage, we must briefly deal with some technical contentions of minor importance. It was contended that those members who have scored a march over the appellant in 1974 seniority list having not been impleaded as respondents, no relief can be given to the appellants. In the writ petition filed in the High Court, there were in all 418 respondents. Amongst them, first two were Union of India and Engineer in Chief, Army Headquarters, and the rest presumably must be those shown senior to the appellants. By an order made by the High Court, the names of respondents 3 to 418 were deleted since notices could not be served on them on account . Of the difficulty in ascertaining their present addresses on their transfers subsequent to the filing of These petitions. However, it clearly appears that some direct recruits led by Mr. Chitkara appeared through counsel Shri Murlidhar Rao and had made the submissions on behalf of the directs. Further any application was made to this Court by 9 direct recruits led by Shri T. Sudhakar for being impleaded as parties, which application was granted and Mr. P. R. Mridul, learned senior counsel appeared for them. Therefore, the case of direct recruits has not gone unrepresented and the contention can be negatived on the short ground. However, there is a more cogent reason why we would not countenance this contention. In this case, appellant does not claim seniority over particular individual in the background of any particular fact controverted by that person against whom the claim is made. The contention is that criteria adopt 967 ed by the Union Government in drawing up the impugned seniority list are invalid and illegal and the relief is claimed against the Union Government restraining it from upsetting or quashing the already drawn up valid list and for quashing the impugned seniority list. Thus the relief is claimed against the Union Government and not against any particular individual. In this background, we consider it unnecessary to have all direct recruits to be impleaded as respondents. We may in this connection refer to General Manager, South Central Railway, Secunderabad & Anr. vs A.V.R. Sidhanti and ors. etc.(l) Repelling a contention on behalf of the appellant that the writ petitioners did not implead about 120 employees who were likely to be affected by the decision in this case, this Court observed that the respondents (original petitioners) are impeaching the validity of those policy decisions on the ground of their being violative of articles 14 and 16 of the Constitution. The proceedings are analogous to those in which the constitutionality of a statutory rule regulating the seniority of government servants is assailed. In such proceedings, the necessary parties to be impleaded are these against whom the relief is sought, and in whose absence no effective decision can be rendered by the Court. Approaching the matter from this angle, it may be noticed that relief is sought only against the Union of India and the concerned Ministry and not against any individual nor any seniority is claimed by anyone individual against another particular individual and therefore, even . if technically the direct recruits were not before the Court, the petition is not likely to fail on that ground. The contention of the respondents for this additional reason must also be negatived. Appellant had also sought a discretion for quashing the penal for promotion dated January 13, 1975 of 102 officers included in F E in Cs Proceedings No. 65020/EE/74/EIR on the ground that the panel for promotion is drawn up on the basis of impugned seniority list, in which the appellant and several similarly situated AEE promoted way back in 1962 onwards did not find their place and were therefore not treated as being within the zone of selection. This relief must follow as a necessary corollary because once 1974 seniority list is quashed and consequently a declaration is being made that 1963 and 1967 seniority lists were valid and cannot be set at naught by principles of seniority determined in 1974, any panel drawn up on the basis of the invalid seniority must fall and must be quashed. 968 Pursuant to an integrated reading of Judgment in Bachan Singh 's case and this case a fresh panel for promotion will have to be drawn up consistent with the seniority list of 1963 & 1967 because it was not disputed that promotion from the cadre of AEE to Executive Engineer is on the principle of seniority cum merit. It may be mentioned that the appellant had sought interim relief by way of injunction restraining the respondents not to promote anyone on the basis of the panel. This Court declined to grant such relief because exigencies of service do demand that the vacancies have to be filled. But in order to protect the interest of the appellant and those similarly situated, it was made abundantly clear that any promotion given subsequent to the date of the filing of the petition in the High Court must be temporary and must abide by the decision in this appeal. Therefore, consequent upon the relief being given in this appeal, the promotions will have to be readjusted and the case of appellant and those similarly situated will have to be examined for being brought on the panel for promotion. Before we conclude this judgment, we will have qualm of conscience if we do not draw attention to a very unjust, unfair and inequitable situation having a demoralising effect on public services probably ensuing from certain rules framed by the Government and the decisions of this Court. Even where the recruitment to a service . is from more than one source and a quota is fixed for each service, yet more often the appointing authority to meet its exigencies of service exceeds the quota from the easily available source of promotees because the procedure for making recruitment from the market by direct recruitment is long prolix and time consuming. The Government for exigencies of service, for needs of public services and for efficient administration, promotees person easily available because in a hierarchical service one hopes to move upward. After the promotee is promoted, continuously renders service and is neither found wanting nor inefficient and is discharging his duty to the satisfaction of all, a fresh recruit from the market years after promotee was inducted in the service comes and challenges all the past recruitments made before he was born in service and some decisions especially the ratio in Jaisinghani 's case as interpretted in two B. section Gupta 's cases gives him an advantage to the extent of the promotee being preceded in seniority by direct recruit who enters service long after the promotee was promoted. When the promotee was promoted and was rendering service, the direct recruit may be a schoolian or college going boy. He emerges from the educational insti 969 tution, appears at a competitive examination and starts challenging everything that had happened during the period when he has had nothing to do with service. A mandamus issued in Jaisirlghani 's case led to a situation where promotees of the year 1962 had to yield place to direct recruits of 1966 and the position worsoned thereafter. In the case in hand, appellant a promotee of September 27, 1962 is put below N. K. Prinza who appeared at competitive examination in April 1976 i.e. One who came 14 years after the appellant, and it does not require an intelligent exercise to reach a conclusion that 14 years prior to 1976 Mr. Prinza who is shown to be born on July 20, 1950 must be aged about 12 years and must have been studying in a primary school. Shorn of all service jurisprudence jargon one can bluntly notice the situation that a primary school student when the promotee was a member of the service, barged in and claimed and got seniority over the promotee. If this has not a demoralising effect on service one fails to see what other inequitous approach would be more damaging. It is therefore, time to clearly initiate a proposition that a direct recruit who comes into service after the promotee was already unconditionally and without reservation promoted and whose promotion is not shown to be invalid or illegal according to relevant statutory or non statutory rules should not be permitted by any principle of seniority to score a march over a promotee because that itself being arbitrary would be violative of articles 14 and 16. Mr. Ramamurthi, learned counsel for some of the direct recruits in this connection urged that if at the time when the promotee was recruited by promotion, his appointment/promotion was irregular or illegal and which is required to be regularised, any subsequent direct recruits coming in at a later date can seek relief and score a march over such irregular and illegal entrant. We find it difficult to subscribe to this view. Though we have dwelt at some length on this aspect any enunciation of general principle on the lines indicated by us would require a reconsideration of some of the decisions of this Court. We say no more save that we have solved the riddle in this case in accordance with the decisions of this Court and interpretation of relevant rules. Accordingly, this appeal must succeed and is hereby allowed. The judgment of the High Court dated May IS/17, 1979 is set aside and the writ petition filed by the appellant in the High Court to the extent herein indicated is accepted. Let a writ of certiorari be issued quashing and setting aside the seniority list dated June 14, 1974. It is further hereby declared that the seniority lists of 1963 and 970 1967/68 were valid and hold the field till 1969 and their revision can be made in respect of members who joined service after 1969 and the period subsequent to. The Panel for promotion in respect of 102 officers included in E in C 's proceedings No. 65020/EE/741/EIR dated January 13, 1975 is quashed and set aside. All the promotions given subsequent to the filing of the petition in the High Court are subject to this decision and must be readjusted by drawing up a fresh panel for promotion keeping in view the 1963 and 1967/68 seniority list of AEE in the light of the observations contained in this judgment. In the circumstances of the case, there will be no order as to costs. S.R. Appeal allowed.

A Food Inspector visited the appellant 's grocery shop and demanded a sample of dhania for analysis. Leaving the shop on a false pretext, the appellant did not return to the shop for quite a long time. Thereupon after following the requisite procedure the Food Inspector took a sample of dhania in the absence of the appellant. On a charge under Section 16(1)(c) of the that the appellant had prevented the Food Inspector from taking a sample of the article of food, the trial court convicted and sentenced him. The conviction and sentence were affirmed on appeal. The High Court dismissed his criminal revision petition. In appeal to this Court it was contended that mere disappearance from the shop after the sample was demanded by the Food Inspector, without anything more, did not constitute an offence of prevention of the Food Inspector from taking a sample. Dismissing the appeal. ^ HELD: The appellant had been rightly convicted and sentenced under section 161(1) (c) of the Act. The appellant 's disappearance from the shop for a long time, amounted to prevention of the Food Inspector from taking a sample in accordance with the provisions of the Act and the Rules. No other overt act is necessary to constitute the offence. [361 F H] Municipal Board. Sambhal vs Jhaman Lal, AIR 1961 All. 103; Mam Chand vs State, ; Habib Khan vs State of Madhya Pradesh, , approved. Jagannath vs State of Madhya Pradesh, 1977 Crl. L.J. 974; Narain Prasad vs State of Rajasthan, AIR overruled.

tition (C) Nos. 13748 84 of 1984. With Writ Petition (c) Nos. 1580626 of 1984. (Under Article 32 of the Constitution of India. ) 48 N.N. Keshwani and R.N. Keshwani for the Petitioners. O.P. Sharma, Girish Chandra, C.V. Subba Rao and Miss section Relan for the Respondents. The following Order of Court was delivered: It is not disputed that the Air conditioned Coach In chargesAttendants are being paid overtime allowances for extra duty hours exceeding 96 hours in two weeks in the Western Railway, Central Railway and Eastern Railway. There is no justification for denying overtime allowances on the same basis to the Air conditioned Coach Incharges Attendants in the Northern Railway. We accordingly direct the Union of India and the Railway Administration to pay with effect from July 1, 1984 the overtime allowance to the Air conditioned Coach Incharges Attendants working in the Northern Railway on the same basis on which the Air conditioned Coach In charges Attendants in the other three Railways, referred to above, are paid. All arrears of such allowances upto date shall be paid as early as possible and in any event not later than four months from today. The benefit of this order shall be extended to all such employees including those who have retired and those who have not joined as petitioners herein. The Writ Petitions are allowed. No costs. P.S.S. Petitions allowed.

The appellant, who was a Patwari, had been demanding money for supply of copies from the revenue record to the complainant who needed them in connection with the execution of a sale deed. The bargain was settled for Rs.200. Rs.50 were paid in advance and therefore copies were given, but the appellant was to receive the balance of Rs. 150 for which the complainant had promised to pay it on the date of registration and accordingly on the date of registration it was fixed up that the appellant will be available at the tea stall near the Tehsil where this amount will be paid. The complainant brought the conduct of the appellant to the notice of the Sub Divisional Officer who sent a complaint to the Police Station, on the basis of which first information report was lodged. As the concerned Police Officers were not available, the Sub Divisional Officer himself laid a trap. The complainant handed over the currency notes initialled by the Sub Divi sional Officer to the appellant. On receiving a signal, the Sub Divisional Officer and the witnesses reached there and on personal search currency notes of Rs. 150 were recovered from the person of the appellant. The appellant was prosecuted and convicted under s.5(2) of the Prevention of Corruption Act, 1947 and sentenced to rigorous imprisonment for two years and fine of Rs. 150 and also under section 161 of the Indian Penal Code to rigorous imprisonment for one year and a fine of Rs. 100. The plea of the appellant that the Government wanted to collect money from the land holders for small savings scheme and the Patwaris were instructed to collect this amount was rejected by the Special Judge. 116 The appeal of the appellant was dismissed by the High Court. In further appeal to this Court, on behalf of the appel lant it was contended that the copies of the revenue record which were needed by the complainant had already been sup plied to him and the sale deed was registered before the trap and that the appellant had received the money for depositing the same under the small savings scheme on behalf of the complainant. Partly allowing the appeal, HELD: 1. The conviction of the appellant under s.5(2) of the Prevention of Corruption Act, 1947 and section 161 of the Indian Penal Code is maintained. However, his sentence as regards sentence of imprisonment is reduced to the sentence already undergone but the sentence of fine is maintained, [120D E] 2. The explanation given by the appellant was that he had received the amount to be deposited in the small savings scheme on behalf of the complainant. He had neither made any note of this fact nor given any receipt to the complainant. The Sub Divisional Officer was a Revenue Officer and the appellant being a Patwari was his subordinate. The normal conduct of the appellant would have been to tell him as soon as he arrived for search that in fact he had received this amount for depositing it under the small savings scheme. The conduct of the appellant in not coming out with this expla nation instantaneously goes a long way to make his explana tion just an after thought specially when Sub Divisional Officer conducted the search and recovered the amount from his person. The Courts below were right in discarding this explanation of the appellant. [119G H;120A B] 3. Where the receipt of the amount and Rs recovery is not disputed it is not necessary for this Court to go through the evidence and examine it afresh. [119E]