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These appeals raise several matters which are important to the international market in telecommunications. The first (in all three appeals) is whether a court in the United Kingdom (UK) has jurisdiction and may properly exercise a power, without the agreement of both parties, to (a) grant an injunction to restrain the infringement of a UK patent where the patented invention is an essential component in an international standard of telecommunications equipment, which is marketed, sold and used worldwide, unless the implementer of the patented invention enters into a global licence of a multinational patent portfolio, and (b) determine royalty rates and other disputed terms of such a global licence. Secondly, there is a dispute (in the Conversant appeals: para 17 below) whether England is the appropriate forum to determine those matters. Thirdly, (in the Unwired appeal: para 16 below) there is a question as to the nature of the requirement that the licence, which the owner of a Standard Essential Patent (SEP) must offer to an implementer, be non discriminatory. Fourthly, (again in the Unwired appeal) there is a question whether the court should refuse to grant the owner of such a SEP an injunction on the ground that it has breached EU competition law because it has not complied with the guidance given in the judgment of the Court of Justice of the European Union (CJEU) in Huawei v ZTE (Case C 170/13) EU:C:2015:477; [2015] 5 CMLR 14; [2016] RPC 4. Fifthly, the appeals raise a more general question as to the circumstances in which it is appropriate for an English court to grant a prohibitory injunction or to award damages instead. Each member of the panel has contributed to this judgment which addresses those matters. Patents: the legal background The starting point is the patent bargain which promotes innovation and justifies the monopoly which a patent gives an inventor. The patent bargain is this: an inventor receives the reward of a time limited monopoly of the industrial use of its invention in return for disclosing the invention and dedicating it to the public for use after the monopoly has expired. See for example Actavis Group PTC EHF v ICOS Corpn [2019] UKSC 15; [2019] Bus LR 1318, para 53. The patents conferring such monopoly rights are national in scope and are usually conferred by national governments. Legal questions as to their validity and their infringement are determined by the national courts of the state which has conferred the patent right or, in the case of a European patent, in a designated state. An inventor has to protect its invention by applying for patents to the national authorities of each of those states in which it seeks to obtain a monopoly (unless it obtains a patent from the European Patent Office under the European Patent Convention which creates a nationally enforceable patent within each designated state). It is not unusual for a national patent for an invention to be upheld by the courts of one state and another national patent for what in substance is the same invention to be invalidated by the courts of another state. Within Europe, the same European patent can on occasion be upheld by the courts in one signatory state but be invalidated in another. Much may depend on the differing evidence led and arguments advanced in national legal proceedings. In English law, once a patent owner has established that a patent is valid and has been infringed, it is prima facie entitled to prevent further infringement of its property rights by injunction. In Scots law an interdict provides a similar remedy. We discuss this matter (the fifth issue) in more detail in paras 159 169 below. This prima facie entitlement and the patent owners entitlement in other jurisdictions to obtain similar prohibitory remedies form part of the backdrop to the contractual arrangements which lie at the centre of these appeals. To promote the development of global markets for telecommunications products, including mobile phones, the infrastructure equipment and devices produced by competing manufacturers need to communicate and inter operate with one another and the phones need to be available for use internationally by consumers who travel with their phones from one jurisdiction to another. Two attributes of patent law have militated against this development. First, the prima facie entitlement of the owner of a patent to prohibit by injunction the use of its invention within a national jurisdiction has the potential to disrupt a global market for equipment using that invention. Secondly, the national nature of patent monopolies, which forces the patent owner seeking to protect its monopoly to raise proceedings in individual national courts, makes it very difficult, if not wholly impracticable, for a patent owner to protect an invention which is used in equipment manufactured in another country, sold in many countries and used by consumers globally. The first attribute may give owners of patents included in an agreed standard excessive power to disrupt an otherwise global market to the prejudice of manufacturers of equipment using such inventions (implementers) and to exact excessive royalties for the use of their inventions. The second attribute may enable implementers to avoid paying an inventor a proper price for the use of its invention internationally. There was therefore potential for the alternative evils of the abuse by a patent owner of its monopoly rights and of the denial by implementers of the patent owners legitimate rights. Organisations involved in the telecommunications industry have sought to address those evils by establishing Standard Setting Organisations (SSOs) to which they bring their most advanced technologies, promoting standards using those technologies, and putting in place contractual arrangements to which we now turn. SSOs aim to promote both technological innovation, which is made available to the public, and competition between manufacturers, and thereby to benefit consumers through more convenient products and services, interoperability, lower product costs and increased price competition. Standard Setting Organisations Telecommunications SSOs have been established in China, Europe, India, Japan (two), South Korea and the United States. The first telecommunications SSO was the European Telecommunications Standards Institute (ETSI), which is a French association formed in 1988 and which has adopted an intellectual property rights (IPR) policy and contractual framework governed by French law. ETSI is recognised as the SSO in the European Union telecommunications sector. It has over 800 members from 66 countries across five continents. Its purposes, as set out in article 2 of its Statutes (5 April 2017), include the production of the technical standards which are necessary to achieve a large unified European market for telecommunications [etc] and to contribute to world wide standardization in that field. SSOs bring together industry participants to evaluate technologies for inclusion in a new standard. ETSI is the relevant SSO as the patents which are the subject of these appeals are the UK designations of European patents (UK patents) which have been declared to ETSI as essential. The relevant standards in these appeals are telecommunications standards for 2G (GSM), 3G (UMTS) and 4G (LTE) telecommunications equipment and devices. The seven SSOs have cooperated to form the 3rd Generation Platform Partnership (3GPP) to develop and oversee those standards. ETSI through its secretariat manages the process by which its members contribute to the development of international standards. Participants in SSOs have an incentive to put forward their technology as a component of a proposed standard as inclusion in the standard ensures a market for the technology. Alternative technologies which are not included in a standard may well disappear from the market. Participants also accept obligations to declare IPRs which might potentially have an effect on the implementation of standards developed by the SSOs. Although it is necessary to examine the arrangements in more detail below, it may be useful to give an overview of how ETSI deals with Essential IPRs, a term which we equate with SEPs, when it devises those standards. Owners of patented inventions which might be used in a telecommunications industry standard, which is under preparation, declare their patents to ETSI. When considering whether to include a technology in a standard, ETSI requires the patent owner to enter into an irrevocable undertaking or contract with it to allow implementers of the standard to obtain a licence to use the relevant patented technology on fair, reasonable and non discriminatory (FRAND) terms. If the declared patented invention is included in a standard and it is not possible to make, sell, use or operate etc equipment or methods which comply with the standard without infringing that IPR, it is treated as an Essential IPR. The irrevocable undertaking to give a licence on FRAND terms to implementers applies to any such Essential IPRs. But ETSI is not under an obligation to check whether patents declared to be essential are in fact essential. Nor does ETSI make any binding judgment on the validity or status of any such patents: ETSI Guide on IPRs (19 September 2013) (the Guidance) para 3.2.1. Those are matters for the relevant national courts. ETSI leaves it to the relevant parties, if they so wish, to resolve those questions by court proceedings or alternative dispute resolution: the Guidance para 4.3. The purpose of the ETSI IPR Policy is, first, to reduce the risk that technology used in a standard is not available to implementers through a patent owners assertion of its exclusive proprietary interest in the SEPs. It achieves this by requiring the SEP owner to give the undertaking to license the technology on FRAND terms. Secondly, its purpose is to enable SEP owners to be fairly rewarded for the use of their SEPs in the implementation of the standards. Achieving a fair balance between the interests of implementers and owners of SEPs is a central aim of the ETSI contractual arrangements. The ETSI IPR Policy The ETSI IPR Policy (the IPR Policy) is a contractual document, governed by French law. It binds the members of ETSI and their affiliates. It speaks (clause 15(6)) of patents which are inevitably infringed by the sale, lease, use, operation etc of components which comply with a standard as Essential IPR. By requiring an IPR holder whose invention appears to be an Essential IPR to give an irrevocable undertaking to grant a licence of the IPR on FRAND terms, it creates a stipulation pour autrui, in other words an obligation which a third party implementer can enforce against the IPR holder. The IPR Policy falls to be construed, like other contracts in French law, by reference to the language used in the relevant contractual clauses of the contract and also by having regard to the context. In this case, that context is both the external context and the internal context of the IPR Policy document itself, such as the policy objectives declared in the document. The external context includes (i) the Guidance (above) which ETSI has produced on the operation of the IPR Policy, (ii) ETSIs statutes (above), (iii) the globalised market which ETSI and other SSOs were and are seeking to promote, which we have discussed in para 4 above, and (iv) the fact that ETSI is a body comprising experts and practitioners in the telecommunications industry who would be expected to have a good knowledge of the territorial nature of national patents, the remedies available to patent owners against infringement of their patents, the need to modify by contract the application of patent law to promote the development of a globalised market in telecommunications products, and the practice of the industry in negotiating patent licensing agreements voluntarily. The policy statements which provide the internal context include the objectives set out in clause 3 of the IPR Policy. They include the statement in clause 3.1 that the IPR Policy: seeks to reduce the risk to ETSI, MEMBERS, and others applying ETSI STANDARDS and TECHNICAL SPECIFICATIONS, that investment in the preparation, adoption and application of STANDARDS could be wasted as a result of an ESSENTIAL IPR for a STANDARD or TECHNICAL SPECIFICATION being unavailable. That statement clearly reveals a policy of preventing the owner of an Essential IPR from holding up the implementation of the standard. But that policy is to be balanced by the next sentence of clause 3.1 which speaks of seeking a balance, when achieving that objective, between the needs of standardization for public use in the field of telecommunications and the rights of the owners of IPRs. The importance of protecting the rights of the owners of IPRs is declared in the second policy objective (clause 3.2) in these terms: IPR holders whether members of ETSI and their AFFILIATES or third parties, should be adequately and fairly rewarded for the use of their IPRs in the implementation of STANDARDS and TECHNICAL SPECIFICATIONS. This objective seeks to address the mischief of holding out by which implementers, in the period during which the IPR Policy requires SEP owners not to enforce their patent rights by seeking injunctive relief, in the expectation that licence terms will be negotiated and agreed, might knowingly infringe the owners Essential IPRs by using the inventions in products which meet the standard while failing to agree a licence for their use on FRAND terms, including fair, reasonable and non discriminatory royalties for their use. In circumstances where it may well be difficult for the SEP owner to enforce its rights after the event, implementers might use their economic strength to avoid paying anything to the owner. They may unduly drag out the process of licence negotiation and thereby put the owner to additional cost and effectively force the owner to accept a lower royalty rate than is fair. Having looked at context, we turn to the operative clauses of the IPR Policy. A member of ETSI is obliged to use its reasonable endeavours to inform ETSI in a timely manner of Essential IPRs during the development of a standard or technical specification. If a member submits a technical proposal for a standard or technical specification it is obliged to inform ETSI of its IPRs which might be essential (clause 4.1). Clause 4.3 confirms that this obligation of disclosure applies to all existing and future members of a patent family and deems the obligation in respect of them to be fulfilled if an ETSI member has provided details of just one member of the patent family in a timely manner, while also allowing it voluntarily to provide information to ETSI about other members of that family. A patent family is defined as all the documents having at least one priority in common, including the priority document(s) themselves and documents in this context means patents, utility models, and applications therefor (clause 15(13)). The patent family thus extends to patents relating to the same invention applied for and obtained in several jurisdictions. It shows an intention for the arrangement to apply internationally. This is important because the undertaking to grant a licence under clause 6, to which we now turn, extends to all present and future Essential IPRs in that patent family. The key to the IPR Policy is clause 6, which provides the legal basis on which an owner of an Essential IPR gives an irrevocable undertaking to grant a licence and thereby protects both ETSI and implementers against holding up. Clause 6.1 provides so far as relevant: When an ESSENTIAL IPR relating to a particular STANDARD or TECHNICAL SPECIFICATION is brought to the attention of ETSI, the Director General of ETSI shall immediately request the owner to give within three months an irrevocable undertaking in writing that it is prepared to grant irrevocable licences on fair, reasonable and non discriminatory (FRAND) terms and conditions under such IPR It provides that the licences must at least cover the manufacture of equipment, the sale, lease or other disposal of equipment so manufactured, and the repair, use or operation of such equipment. FRAND licensing undertakings made pursuant to clause 6 are intended to bind all successors in interest in respect of a SEP, and upon transfer of a SEP the SEP owner is required to take steps to ensure that this is achieved (clause 6.1bis). The undertaking made in respect of a specified member of a patent family is applied to all existing and future Essential IPRs of that patent family unless specified IPRs are excluded in writing when the undertaking is made (clause 6.2). It is envisaged in the IPR Policy that this process will usually take place while ETSI is working to create a standard because clause 6.3 provides that, if the IPR owner does not grant the requested undertaking, relevant office bearers in ETSI will decide whether to suspend work on the relevant parts of the standard or technical specification until the matter is resolved, or to submit any relevant standard or technical specification for adoption. Similarly, if, before a standard or technical specification is published, an IPR owner is not prepared to license an IPR, clause 8.1 provides for the adoption of a viable alternative technology for the standard or technical specification if such a technology exists. If such technology does not exist, clause 8.1 provides an option for work on the standard or technical specification to cease. If the refusal to grant a licence occurs after ETSI has published a standard or a technical specification, clause 8.2 provides the option of modifying the standard so that the relevant IPR is no longer essential. Clause 6bis instructs members of ETSI to use one of the declaration forms annexed to the Policy. So far as relevant, the licensing declaration is an irrevocable declaration by the declarant and its affiliated legal entities that, to the extent that disclosed IPRs are or become and remain Essential IPRs, they (a) are prepared to grant irrevocable licences in accordance with clause 6.1, and (b) will comply with clause 6.1bis. It appears from this brief review of the IPR Policy in its context that the following conclusions may be reached. First, the contractual modifications to the general law of patents are designed to achieve a fair balance between the interests of SEP owners and implementers, by giving implementers access to the technology protected by SEPs and by giving the SEP owners fair rewards through the licence for the use of their monopoly rights. Secondly, the SEP owners undertaking, which the implementer can enforce, to grant a licence to an implementer on FRAND terms is a contractual derogation from a SEP owners right under the general law to obtain an injunction to prevent infringement of its patent. Thirdly, the obtaining of undertakings from SEP owners will often occur at a time when the relevant standard is being devised and before anyone may know (a) whether the patent in question is in fact essential, or may become essential as the standard is developed, in the sense that it would be impossible to implement the standard without making use of the patent and (b) whether the patent itself is valid. Fourthly, the only way in which an implementer can avoid infringing a SEP when implementing a standard and thereby exposing itself to the legal remedies available to the SEP owner under the general law of the jurisdiction governing the relevant patent rights is to request a licence from the SEP owner, by enforcing that contractual obligation on the SEP owner. Fifthly, subject only to an express reservation entered pursuant to clause 6.2, the undertaking, which the SEP owner gives on its own behalf and for its affiliates, extends to patents in the same patent family as the declared SEP, giving the implementer the right to obtain a licence for the technology covering several jurisdictions. Finally, the IPR Policy envisages that the SEP owner and the implementer will negotiate a licence on FRAND terms. It gives those parties the responsibility to resolve any disputes as to the validity of particular patents by agreement or by recourse to national courts for determination. Industry practice in negotiating licensing agreements The parties do not dispute that SEP owners, which have a large portfolio of patents covering many countries, and implementers, which market their products in many countries, would as a matter of practice voluntarily negotiate worldwide licences, or at least licences from which a given territory is carved out while the rest of the world is licensed. Implementers in the telecommunications industry are often also owners of many SEPs and negotiate cross licences with other implementers. As Birss J explained in his judgment at first instance ([2017] EWHC 2988 (Pat); [2017] RPC 19, para 544), no rational business would seek to license products country by country if it could be avoided. This is, as Birss J said, in part because of the effort required to negotiate and agree so many different licences and thereafter to keep track of so many different royalty calculations and payments. It is also, as he recognised, because businesses and consumers will move mobile handsets across borders and an implementer would want to be able to bind the SEP owner into allowing the entry of otherwise unlicensed handsets into the jurisdictions in which the SEP owner had a valid SEP or valid SEPs. The Court of Appeal in its judgment in the Unwired appeal ([2018] EWCA Civ 2344; [2018] RPC 20, paras 55 56) also referred to the prohibitive cost of litigating the validity and essentiality of patents territory by territory. These obvious considerations must have been part of the factual background of which the expert framers of the IPR Policy were aware when they devised that Policy. The parties to the appeals In this judgment the court addresses three appeals. In the first, the appellants are Huawei Technologies Co Ltd (Huawei (China)), a Chinese company which develops telecommunications technology and also implements the technology of others, and Huawei Technologies (UK) Co Ltd (Huawei (UK)), a UK subsidiary of Huawei (China) (collectively Huawei). The respondents are Unwired Planet International Ltd and Unwired Planet LLC (collectively Unwired) which are registered in Ireland and the United States of America respectively. They are both intellectual property licensing companies (sometimes called Patent Assertion Entities) which obtain income from the licensing of patents to companies which make and sell telecommunications equipment. In 2013 Unwired acquired a portfolio of patents and patent applications from Ericsson, which was a major developer of telecommunications technology and a participant in standard setting. At the time of trial, the portfolio covered 42 countries and comprised 276 patents and applications declared as essential, of which 29 were UK patents or applications. Each of Ericsson and Unwired made an ETSI IPR Licensing Declaration and a Specific IPR Licensing Declaration in respect of patent families which encompass five of the UK patents on which Unwired sued Huawei in England. Ericsson had licensed patents to Huawei, including the UK patents which are the subject of these proceedings, but the licence expired in 2012. Huaweis continued use of the technology covered by the patents in suit forms the backdrop to its appeal. In the second and third appeals the appellants are respectively (i) Huawei and (ii) ZTE Corporation (ZTE (China)), a Chinese company, and its UK subsidiary ZTE (UK) Ltd (ZTE (UK)), collectively ZTE and both part of the ZTE group, which is a global supplier of telecommunications and information technology equipment. The respondent in both appeals is Conversant Wireless Licensing SRL (Conversant), a company registered in Luxembourg and part of a Canadian group of companies which is managed from the United States. It is an intellectual property licensing company or Patent Assertion Entity, which licenses patents for royalty income. Conversant acquired a portfolio of about 2,000 patents and patent applications, covering over 40 countries, from Nokia in 2011. Conversant pleads that the portfolio includes 28 patent families which are essential. It also pleads that it and/or Nokia have given an ETSI IPR Licensing Declaration and a Specific IPR Licensing Declaration in respect of its portfolio, which include the UK patents in suit, and that Conversant gave a General IPR Licensing Declaration on 22 July 2014. We also received short written interventions from Apple Inc, Ericsson and Qualcomm Incorporated, in the in which telecommunications industry set out their views on industry practice and on the principal issues of these appeals, including the interpretation of the IPR Policy. We are very grateful for their assistance. The legal proceedings important players three (i) Unwired v Huawei Unwired commenced proceedings in England on 10 March 2014 against Huawei, Samsung and Google, alleging infringement of the UK designation of six European patents (EP), and requesting, among other remedies, an injunction to prevent further infringement. Unwired began parallel proceedings in Germany at the same time. Before the proceedings commenced, Unwired and Huawei had discussed the possibility of Huawei buying some of Unwireds patents but Huawei did not do so. We discuss the further exchanges between Unwired and Huawei, both before the proceedings commenced and during the course of those proceedings, when we address the fourth issue (whether the court should refuse an injunction because of any failure to comply with the guidance of the CJEU in Huawei v ZTE) in paras 128 158 below. In 2015 and 2016 three trials were held to determine whether the UK patents in suit were valid and infringed. After a seven day trial, Birss J held that one patent (EP 744) was both valid and essential. His findings were upheld on appeal. In the second trial, after a hearing over eight days, two patents (EP 287 and EP 514) were held to be invalid, permission to appeal was granted, and the appeal was stayed in July 2017. In the third trial, after a five day hearing, a patent (EP 818) was held to be valid and essential. Permission to appeal was granted and the appeal was stayed in July 2017. The equivalent technical trial on the remaining UK SEP (EP 991) has been postponed indefinitely. At the same time Unwired brought proceedings in Germany, in which it had mixed success and from which appeals are pending. In particular, the German designation of EP 744 has been held to be valid but not infringed and an appeal on infringement is pending. The German designations of EP 287 and EP 514 have been held to be infringed but the Opposition Division of the European Patent Office has held those patents to be invalid and appeals from those decisions to the EPO Technical Board of Appeal are pending. The German designation of EP 818 has been held to be valid and infringed and those judgments have been upheld on appeal. The claims of EP 991 which were alleged to be infringed were revoked for the German designation and an appeal against that judgment is pending, as is a proceeding relating to the infringement of that patent. Huawei (China) challenged several of Unwireds patents in China. The Patent Re examination Board (PRB) has held that two Chinese family members of Unwireds European patents (EP 287 and 514) are invalid but those findings are under appeal. The PRB has held the Chinese family member of EP 744 to be valid and Huawei (China) has appealed. Huawei (China) has also challenged five other patents, which Unwired declared to be SEPs; three have been upheld, one upheld in part and one invalidated. Appeals from those decisions are pending. As matters currently stand, and subject to continuing appeal proceedings in Germany and China, Huawei has been held to be infringing one or more of Unwireds SEPs through its use of patented technology in both the UK and Germany and in China challenges to two patents have failed. Unwired settled with Google in 2015 and with Samsung in July 2016, after the technical trials of the UK patents but before Birss J held the trial to determine remedies for infringement of its UK patents, in an arrangement in which it granted Samsung a global licence for its portfolio. Unwired was sold to the PanOptis group of companies in July 2016. It was in serious financial trouble and was close to insolvency. We address in more detail the Samsung settlement when we discuss the third issue, namely what is required to make the licence offered by a SEP owner non discriminatory, in paras 105 127 below. Between October and December 2016 Birss J held a trial to determine the remedies for the infringement of Unwireds valid SEPs. In his judgment of 5 April 2017 ([2017] EWHC 711 (Pat)), later reissued with revised redactions on 30 November 2017, [2017] EWHC 2988 (Pat)) he concluded, among other things, that the FRAND undertaking was justiciable and enforceable in the English courts and that an implementer who refused to take a licence on terms which the court held to be FRAND exposed itself to an injunction for infringing a UK patent which the court held to be valid and infringed. He held that a willing licensor, with Unwireds portfolio of patents, and a willing licensee, with almost global sales, acting reasonably and on a willing basis would agree a worldwide licence. He concluded that such parties would regard the negotiation of licences country by country as madness. Having been presented with detailed expert evidence, Birss J determined the rates of royalty and other terms of the licence, so far as they were in dispute, that he considered to be FRAND. He held that in the circumstances a UK portfolio licence, for which Huawei had argued, would not be FRAND but that a FRAND licence between Unwired and Huawei had to be a worldwide licence. In case he was wrong in his conclusion that only a worldwide licence was FRAND, he also determined the rates and terms of a UK only licence covering Unwireds UK portfolio. The judge also made findings which are relevant to the third and fourth issues which we discuss below. He held that the royalty rates which he settled for the global licence were FRAND notwithstanding that they were higher than those in the licence which Unwired gave to Samsung. He also held that Unwired had not breached article 102 of the Treaty on the Functioning of the European Union (TFEU) and that the Huawei v ZTE case did not give Huawei a defence if it decided not to enter into the global licence which he had settled. In a hearing on 7 June 2017 Birss J granted an injunction to restrain infringement of the relevant UK patents with a proviso that the injunction would cease to have effect if the defendant entered into the FRAND global licence which he had settled. He stayed the injunction pending appeals: [2017] EWHC 1304 (Pat); [2017] RPC 20. Huawei has given certain undertakings to the court and has sought to conduct itself according to those undertakings pending the determination of all appeals in the English proceedings. Huawei appealed against Birss Js orders. On 23 October 2018 the Court of Appeal (Lord Kitchin, and Floyd and Asplin LJJ) handed down a judgment dismissing the appeal: [2018] EWCA Civ 2344; [2018] RPC 20. The court disagreed with the judges conclusion that in any particular case there could only be one set of FRAND terms. Ifa circumstance were to arise in which either a local or a global licence would be FRAND, it would be for the SEP owner to choose which it preferred because the SEP owner performed its obligation by offering a licence on FRAND terms. But this aspect of the judges reasoning had no material effect on the conclusion which he had reached because he had not erred in deciding that, in the circumstances of this case, only a global licence would be FRAND. (ii) Conversant v Huawei and ZTE Conversant commenced proceedings against Huawei and ZTE in England in July 2017. It seeks among other things a declaration that the global licence which it offered the defendants is FRAND, alternatively, if that is not granted, a determination of FRAND terms. It also seeks, after amending its pleadings, injunctions in respect of UK patents found to be valid and infringed which will last until the defendants enter into a licence which the court determines is FRAND. Huawei and ZTE challenged the jurisdiction of the English courts on the grounds of (a) a lack of jurisdiction to determine the validity of foreign patents and (b) forum non conveniens. Conversant sought permission to serve the Chinese defendants out of the jurisdiction. In a judgment handed down on 16 April 2018, Henry Carr J dismissed the jurisdiction challenges and granted Conversants application to serve out of jurisdiction: [2018] EWHC 808 (Pat); [2018] RPC 16. Commenting on Birss Js judgment, he held that the English courts had jurisdiction to enforce the contract contained in the IPR Policy and to determine such terms of a licence as were in dispute. Enforcing the contract and determining the terms of a FRAND licence did not involve the English courts intruding on the jurisdiction of foreign courts in relation to the validity or infringement of foreign patents. The licences determined by the English courts could be adjusted to reflect the rulings of foreign courts on such matters. The effect of this jurisdiction was to put the onus on an implementer to challenge foreign patents once the court had found a UK SEP to be valid and infringed. The royalty rates which the court could adopt would be based on evidence of comparable real life licences which could be expected to take into account the competition policies of foreign states. He concluded on the basis of expert legal evidence led before him that the Chinese courts did not have jurisdiction to determine FRAND royalty rates in respect of non Chinese patents without the agreement of the parties. He regarded it as no more than speculative whether the Chinese courts would have such jurisdiction, even if the parties consented, and he rejected the plea of forum non conveniens. Before the hearing in England on the jurisdiction challenges, Huawei and ZTE raised proceedings in China to challenge the validity of Conversants declared Chinese patents. After Henry Carr J handed down his judgment on the jurisdiction challenge in England, Conversant raised proceedings in Germany against Huawei (China) and ZTE (China) and their German subsidiaries claiming infringement of its German patents. In England, four UK patents were in suit but trials of two of them were stayed once they had expired. After a technical trial of EP (UK) 659 Arnold J handed down a judgment on 4 July 2019 in which he held that the patent was infringed but that the patent was invalid for added matter. Conversant was given permission to appeal and that appeal has now taken place. The technical trial of EP (UK) 177 and its divisional family members (EP (UK) 722 and EP (UK) 206) took place in the autumn of 2019. Birss J handed down a judgment on 8 January 2020 in which he held that EP (UK) 177 and EP (UK) 722 were partially valid and infringed and that EP (UK) 206 was invalid. An appeal is scheduled to take place in November 2020. A FRAND trial was listed for April 2020 with a time estimate of 15 days but was adjourned due to the Coronavirus pandemic and to await the outcome of these appeals. Huawei and ZTE appealed the judgment of Henry Carr J on jurisdiction. On 30 January 2019, the Court of Appeal (Patten, Floyd and Flaux LJJ) handed down judgment, dismissing the appeal: [2019] EWCA Civ 38; [2019] RPC 6. In the Conversant appeals to this court therefore, Huaweis and ZTEs cases relate to the preliminary questions of jurisdiction and forum non conveniens. In the Chinese proceedings Huawei (China) and ZTE (China) challenged 11 Chinese patents. As at the date of the chronology which the parties provided, the PRB had ruled that of those 11, eight are invalid, two are valid and one is partially valid. Those decisions are under appeal. None of the Chinese patents held to be valid are of the same families as the UK patents in suit. Huawei (China) and ZTE (China) have raised separate proceedings in China with the aim of obtaining a determination of FRAND royalty rates for Conversants Chinese patents if they are found to be valid and essential. Huawei and ZTE have offered Conversant to allow the Chinese courts to address global FRAND terms and rates for Conversants non Chinese patents in its portfolio. Conversant did not accept those offers and Henry Carr J held that it acted reasonably in so doing. In the German proceedings Conversant has claimed infringement of the German designations of EP 177, EP 659 and EP 986. Hearings on those claims took place on 18 June 2020 and Conversant has given undertakings which seek to address the possibility of conflict between judgments of the English courts and the German courts. (iii) Overview of the markets and the proceedings It is clear from the UK, German and Chinese proceedings that ascertaining the validity, essentiality and infringement of national patents within a portfolio by legal proceedings in several different jurisdictions involves the expenditure of a prodigious amount of money and effort by both claimants and defendants, although the proceedings in China are significantly less costly than those in the West. It is not disputed that it would be impracticable for the parties to litigate these matters in each of the countries which the portfolio covers. It also appears to be clear and it is not disputed that within a substantial portfolio of patents there may be many patents, which (if subject to examination in proceedings) would be found to be invalid in whole or in part or not infringed by the technology used in the standard. These are in our view relevant facts when one addresses the fair balance between the interests of the SEP owner and the implementer which the IPR Policy seeks to achieve. At the same time, Huawei and ZTE point out that only a very small proportion of their worldwide sales are made in the UK. Huawei manufactures in China and its principal market is in China. It asserts that 64% of its relevant sales occur in China or in countries in which Unwired has no patent protection and is dependent on the validity and infringement of Chinese patents for its claim for royalties. In relation to the Conversant claim, Huawei asserts that the Chinese market accounts for 56% of its groups worldwide sales on which Conversant makes claims, and a further 19% of such sales occur in countries in which Conversant has no patents, so that Conversants claims in those countries depend on the Chinese patents. The UK market comprises only 1% of Huaweis sales of those products. Similarly, ZTE manufactures in China and in the first six months of 2017 60% of the groups operating revenue was from China. At that time only 0.07% of its turnover was generated in the UK. Thus, Huawei and ZTE submit that questions as to the validity and infringement of Chinese patents, which are within the jurisdiction of the Chinese courts, are of central importance to the value of a global licence of declared SEPs. The force of this contention can be seen from the current state of play in litigation which Huawei commenced in China, seeking declarations that Conversants Chinese patents were invalid or were not essential. Of the 15 patents which Conversant put forward for trial from its portfolio of Chinese patents, 14 were held to be either invalid or not infringed and only one was found to be essential but the trial of its validity has yet to take place. In China, the Nanjing Intermediate Peoples Court of Jiangsu Province in a judgment dated 16 September 2019 in actions raised by Huawei ((2018) Su 01 Min Chu No 232, 233 and 234) criticised Conversant for seeking to obtain a global rate for its patents from a foreign judge without obtaining the view of the Chinese courts on the validity and infringement of its Chinese patents. As we have said, many of the foreign judgments have been appealed, but they nonetheless show what is in fact common ground between the parties, that declared SEPs within a portfolio are often invalid or not essential. Before turning to the challenges raised in these appeals we set out briefly the methodology which Birss J adopted in determining what was a FRAND licence between Unwired and Huawei. An understanding of the nature of the exercise which he undertook is important to an analysis of the relationship between the determination of the terms of a FRAND licence on the one hand and, on the other, the exclusive right of foreign courts to adjudicate on the validity and infringement of their national patents. (iv) Birss Js methodology in the Unwired case Birss J did not purport to determine the validity of any non UK patent or to find that any such patent was or was not a SEP. What he sought to do was to value the portfolio as a whole, recognising that it was likely to include patents which were not valid and patents which although valid were not infringed and so were not SEPs. One possible method, called the top down method, was to take a view on what the total aggregate royalty burden would be for all the intellectual property relating to the standardised telecommunications technology in a product such as a handset. We refer to that aggregate burden as T. Various companies in the industry had made public statements as to the value of T. The task was then to share out the aggregate royalty T across all licensors in proportion to the value of each licensors patent portfolio as a share S of the total relevant patent portfolio essential to the standard. By this method the FRAND rate for a portfolio was the product of T and S (ie T x S). The second method was to use comparable licences. These are licences which parties engaged in the telecommunications industry had already agreed and operated. As the experts who gave evidence recognised and Birss J accepted, many patent licences including cross licences may have different terms, including different ways of calculating royalties, which make comparison difficult. The experts had to adopt methods of unpacking the licences in order to make them comparable and this introduced uncertainty into the exercise of comparison. Unwired had obtained most of the patents in its portfolio from Ericsson. Thus, Ericssons licences in the past had included all the SEPs in issue. That made Ericssons licences particularly relevant as comparables. As Birss J explained (para 180), if the rate for Ericssons portfolio was E and the relative value of Unwireds portfolio to Ericssons portfolio was R, the Unwired rate is E x R. Birss J accepted evidence that parties when agreeing licences of a substantial portfolio of declared SEPs did not evaluate the importance of individual patents but adopted methods involving patent counting. While it may be possible sometimes to identify a patent which is a keystone invention underpinning the technical approach on which a standard is based, none of Unwireds patents were in that category. Patent counting therefore involved identifying from among the declared SEPs those which were to be treated as essential, which he described as Relevant SEPs. There is a problem that more patents are declared to be essential than in fact are essential. This problem of over declaration is in part the result of the IPR Policy process which requires patent owners to declare SEPs in a timely manner when a standard is being prepared, as it encourages patent owners to err on the safe side by making a declaration. In part, there are difficulties in interpreting both the patents and the standards. In part also, patent claims are amended over time; different national patents within a patent family will vary in scope around the world; and standards themselves will vary over time. Further, the process of negotiating rates by counting patents within a portfolio creates a perverse incentive to over declare. This phenomenon must be recognised and be taken into account when identifying Relevant SEPs and calculating shares and ratios S and R above. Significantly, Birss J held, on the evidence led before him, that no one in counting Relevant SEPs takes account of the validity of the patents. Much of Birss Js impressive judgment involved an analysis of the competing methods by which the parties sought to carry out this exercise. He also analysed a number of licences which Unwired and Ericsson had agreed and identified those licences to which Ericsson was a party on which he was prepared to place any weight (para 462) in determining a rate for E in relation to each of the standards for handsets and infrastructure. Birss J also looked for guidance to decisions of courts in Japan and China (paras 472 474). The Intellectual Property High Court in Japan used the top down method described above (ie looking to the total royalty burden) in Apple Japan v Samsung Electronics (Case No 2013 [Ne] 10043). In China, the Guangdong High Peoples Court in Huawei v Interdigital (2013), Guangdong High Ct Civ. Third Instance No 305, fixed a FRAND rate for Interdigitals portfolio in China by unpacking other Interdigital licences. The Chinese courts judgment supported Huaweis case that rates in China were low in comparison with rates elsewhere. But of more significance for present purposes is the fact that the Japanese and Chinese courts used methods similar to those presented to and adapted by Birss J, who relied principally on the analysis of comparable licences and used the top down method as a cross check. Birss J, having heard the evidence, including that of the parties experts, and having analysed comparable international licences, concluded that on a FRAND approach the royalty rates for China would be 50% lower than the rest of the world. He divided the rest of the world into major markets and other markets and held that the rate applicable in the latter markets would be the same as in China. He provided a mechanism for the adjustment of royalties payable in major markets if successful challenges to the validity or infringement of SEPs reduced the number of declared SEPs in any of those markets (paras 582 592). In deciding that a worldwide licence was FRAND Birss J had regard to practice in the telecommunications industry to agree portfolio licences and observed that every patent licence which the parties had produced in the trial bundles was a worldwide portfolio contract, although some licences carved out a particular territory while licensing the rest of the world (paras 524 534). Unwireds portfolio covered 42 countries and was large enough that it would not be practicable to fight over every patent. A willing licensor of such a portfolio and a willing licensee such as Huawei with global sales would agree on a worldwide licence (paras 538 543). He recorded that it was common ground that the industry assessed patent families rather than individual patents within a family (para 546). He thus drew on industry practice in deciding that a FRAND licence would be a worldwide licence. Against that background we turn to address the first issue. Issue 1: Whether the English courts have jurisdiction and may properly exercise a power without the agreement of both parties (a) to grant an injunction restraining the infringement of a UK SEP unless the defendant enters into a global licence on FRAND terms of a multinational patent portfolio and (b) to determine royalty rates and other disputed items for a settled global licence and to declare that such terms are FRAND. The principal arguments which Huawei advances against the finding that it must take a worldwide licence of the SEP owners relevant patents on FRAND terms fixed by the English court in order to avoid an injunction restraining the infringement of a UK SEP are as follows. First, the English courts are not entitled to grant an injunction for the infringement of a UK patent unless an implementer agrees to take a licence of disputed foreign patents because this involves the implementer having to compromise foreign rights, including the right to challenge (a) the validity of those foreign patents and (b) the assertion that they are SEPs in the use of the standards in the foreign jurisdictions. The validity or infringement of disputed foreign patents is not justiciable in the courts of England and Wales. If the declared SEPs were foreign patents, the relevant national courts alone can determine validity and infringement. Foreign patents should be exposed to proper scrutiny by the national courts which determine their validity and infringement. An English court cannot compel a company to take a licence in respect of rights which may not exist. Thus, once an implementer disputes the validity or infringement of a foreign patent, the English courts have no jurisdiction to require the implementer to take a global licence to avoid an injunction. Secondly, the English courts in so acting are fixing the terms and the royalty rates on which foreign patents are to be licensed without regard to what the foreign courts with jurisdiction over the foreign patents would decide. English judges were, in Mr Howard QCs words, setting up the English jurisdiction as a de facto international or worldwide licensing tribunal for the telecommunications industry. In so acting the English courts were out of step with the approach of other national courts. Thirdly, a clear distinction falls to be drawn between what two global telecommunications companies might do voluntarily in a commercial negotiation to license patents to enable the conduct of a global business and what a national court may impose on such companies. Companies may choose to compromise rights which otherwise might be enforced and challenges to validity and infringement which might otherwise be made; national courts cannot or should not impose such compromises. Fourthly, the IPR Policy, when properly construed, removes the SEP owners right to obtain an injunction and limits its remedy to monetary compensation for infringement of such patents as the SEP owner has established or the implementer has agreed are valid and infringed. Once a SEP owner has established that a national patent was valid and infringed, a national court can determine the terms of a licence of such a patent if the parties cannot agree on those terms. The IPR Policy does not overturn the legal right of an implementer to challenge the validity of a patent or to seek to establish that the patent was not infringed. The IPR Policy, it is submitted, is not focussing on an international portfolio of patents but addresses particular SEPs, the validity and infringement of which, if challenged, would have to be established in national courts. In construing the IPR Policy it is important to note that ETSI has not established an international tribunal or forum to determine the terms of global licences of portfolios of patents. This points against a construction which would allow a national court to determine a global licence. Fifthly, Huawei also submits that it is improper for an English court to exclude the products of implementers, both handsets and infrastructure, from the UK market as the result of an infringement of a SEP. Such a remedy is said to be disproportionate. It is also said to be anomalous that an implementer should be liable only for damages for infringing the established UK SEP if it chose to withdraw from the UK market but that infringement of that patent should entitle the SEP owner to receive global royalties if the implementer wished to market its products in the UK. Huawei also argues that there is a fundamental difference between what commercial parties may choose to do in their own interests and what an intellectual property court can impose on them. It also expresses concern about the role of Patent Assertion Entities in litigation to enforce SEPs. Huawei also argues, based on general principles of English equity, that the only appropriate remedy which the English courts should consider is to address only the UK rights and to require an implementer to enter into a licence to pay in the future the same royalty as it has awarded as damages for past infringement. This is an argument which we address under Issue 5 in paras 159 169 below. ZTE generally supports Huaweis submissions but accepts that patent by patent licensing is unlikely to be FRAND. It focusses its case on jurisdiction on questions of comity and as a fall back argues forum non conveniens. It submits that the determination by one national court of a worldwide FRAND licence raises issues of comity as it amounts to interference with the patent regimes of other states which adopt different approaches to the licensing of their national patents and as to what terms would be FRAND. Such a licence could also impair a partys ability to comply with foreign law such as the competition law of a country in which it was active. Mr Bloch QC submits that the English courts have placed themselves out on a limb through their willingness to determine the terms of a compulsory licence of foreign patents. We discuss in more detail his arguments on forum non conveniens under issue 2 below (paras 92 104). In addressing the submissions set out above, we recognise, as is undisputed, (a) that questions as to the validity and infringement of a national patent are within the exclusive jurisdiction of the courts of the state which has granted the patent and (b) that in the absence of the IPR Policy an English court could not determine a FRAND licence of a portfolio of patents which included foreign patents. It is the contractual arrangement which ETSI has created in its IPR Policy which gives the court jurisdiction to determine a FRAND licence and which lies at the heart of these appeals. We therefore address first the fourth of Huaweis submissions concerning the interpretation of the IPR Policy. In our view, the submission attaches too much weight to the protection of implementers against holding up, which is the purpose stated in clause 3.1, and fails to give due weight to the counterbalancing purpose of clause 3.2, which seeks to secure fair and adequate rewards for SEP holders and which requires protection against holding out. The suggestion that the IPR Policy removes a SEP owners right to exclude implementers from a national market while requiring the SEP owner to establish the validity and infringement of each of its alleged SEPs, in the absence of a concession by the implementer, runs counter to the balance which the IPR Policy seeks to achieve. The submission also fails adequately to take into account the external context which we have discussed. Operators in the telecommunications industry or their assignees may hold portfolios of hundreds or thousands of patents which may be relevant to a standard. The parties accept that SEP owners and implementers cannot feasibly test the validity and infringement of all of the patents involved in a standard which are in a sizeable portfolio. An implementer has an interest in taking its product to the market as soon as reasonably possible after a standard has been established and to do so needs authorisation to use all patented technology which is comprised in the standard. The implementer does not know which patents are valid and infringed by using the standard but needs authority from the outset to use the technology covered by such patents. Similarly, the owner who declares a SEP or SEPs does not know at this time which, if any, of its alleged SEPs are valid and are or will be infringed by use pursuant to the developing standard. The practical solution therefore is for the SEP owner to offer to license its portfolio of declared SEPs. That is why it is common practice in the telecommunications industry for operators to agree global licences of a portfolio of patents, without knowing precisely how many of the licensed patents are valid or infringed. It is a sensible way of dealing with unavoidable uncertainty. It ought to be possible for operators in an industry to make allowance for the likelihood that any of the licensed patents are either invalid or not infringed, at least in calculating the total aggregate royalty burden in the top down method. By taking out a licence of an international portfolio of generally untested patents the implementer buys access to the new standard. It does so at a price which ought to reflect the untested nature of many patents in the portfolio; in so doing it purchases certainty. The IPR Policy was agreed against that background and the undertaking required from the SEP owner likewise needs to be interpreted against that background. We therefore do not construe the IPR Policy as providing that the SEP owner is entitled to be paid for the right to use technology only in patents which have been established as valid and infringed. Nor do we construe the IPR Policy as prohibiting the SEP owner from seeking in appropriate circumstances an injunction from a national court where it establishes that an implementer is infringing its patent. On the contrary, the IPR Policy encourages parties to reach agreement on the terms of a licence and avoid litigation which might involve injunctions that would exclude an implementer from a national market, thereby undermining the effect of what is intended to be an international standard. It recognises that if there are disputes about the validity or infringement of patents which require to be resolved, the parties must resolve them by invoking the jurisdiction of national courts or by arbitration. The possibility of the grant of an injunction by a national court is a necessary component of the balance which the IPR Policy seeks to strike, in that it is this which ensures that an implementer has a strong incentive to negotiate and accept FRAND terms for use of the owners SEP portfolio. The possibility of obtaining such relief if FRAND terms are not accepted and honoured by the implementer is not excluded either expressly or by necessary implication. The IPR Policy imposes a limitation on a SEP owners ability to seek an injunction, but that limitation is the irrevocable undertaking to offer a licence of the relevant technology on FRAND terms, which if accepted and honoured by the implementer would exclude an injunction. The IPR Policy is intended to have international effect, as its context makes clear. This is underlined by the fact that the undertaking required of the owner of an alleged SEP extends not only to the family of patents (subject only to reservations entered pursuant to clause 6.2 of the IPR Policy) but also to associated undertakings, as stated in the declaration forms in the IPR Policy. In imposing those requirements and more generally in its requirement that the SEP owner makes an irrevocable undertaking to license its technology, ETSI appears to be attempting to mirror commercial practice in the telecommunications industry. We do not accept the distinction which Huawei draws (in its third submission above (para 53)) between voluntary agreements which operators in the telecommunications industry choose to enter into on the one hand and the limited powers of a court on the other, since the IPR Policy envisages that courts may determine whether or not the terms of an offered licence are FRAND when they are asked to rule upon the contractual obligation of a SEP owner which has made the irrevocable undertaking required under the IPR Policy. It is to be expected that commercial practice in the relevant market is likely to be highly relevant to an assessment of what terms are fair and reasonable for these purposes. Moreover, the IPR Policy envisages that the parties will first seek to agree FRAND terms for themselves, without any need to go to court; and established commercial practice in the market is an obvious practical yardstick which they can use in their negotiation. In our view the courts below were correct to infer that in framing its IPR Policy ETSI intended that parties and courts should look to and draw on commercial practice in the real world. We now turn to the submission (para 51 above) that the English courts have no jurisdiction to determine the terms of a licence involving disputed or potentially disputed foreign patents. We disagree. If the judgments of the English courts had purported to rule on the validity or infringement of a foreign patent, that would indeed be beyond their jurisdiction. But that is not what Birss J and the Court of Appeal have done. Instead, they looked to the commercial practice in the industry of agreeing to take a licence of a portfolio of patents, regardless of whether or not each patent was valid or was infringed by use of the relevant technology in the standard, and construed the IPR Policy as promoting that behaviour. We agree with the parties that the FRAND obligation in the IPR Policy extends to the fairness of the process by which the parties negotiate a licence. If an implementer is concerned about the validity and infringement of particularly significant patents or a group of patents in a particular jurisdiction which might have a significant effect on the royalties which it would have to pay, it might in our view be fair and reasonable for the implementer to reserve the right to challenge those patents or a sample of those patents in the relevant foreign court and to require that the licence provide a mechanism to alter the royalty rates as a result. It might also be fair and reasonable for the implementer to seek to include in the licence an entitlement to recover sums paid as royalties attributable to those patents in the event that the relevant foreign court held them to be invalid or not infringed, although it appears that that has not been usual industry practice. Huawei suggests that it would serve no purpose for a UK court to fix the terms of a global licence but to provide for the alteration of royalties in the event of successful challenges to declared SEPs overseas. This would, it suggests, reduce a licence to an interim licence. Again, we disagree. Under a FRAND process the implementer can identify patents which it wishes to challenge on reasonable grounds. For example, in the Conversant case, it might well be argued by Huawei or ZTE at trial that the obligation of fairness and reasonableness required any global licence granted by Conversant to include provision to allow for Huawei or ZTE to seek to test the validity and infringement of samples of Conversants Chinese patents, with the possibility of consequential adjustment of royalty rates, given the importance of China as a market and a place of manufacture. In other cases, such challenges may make little sense unless, at a cost proportionate to what was likely to be achieved in terms of eliminating relevant uncertainty, they were likely significantly to alter the royalty burden on the implementer. In the Unwired case, Huawei appears not to have sought any provision in the draft global licence to alter the royalties payable if Unwireds Chinese patents or a relevant sample of them were successfully challenged. As we have said (para 47 above) the only adjustment mechanism which the draft licence provided was to the royalties payable in relation to major markets. Huawei has not appealed the detailed terms of that draft licence but has focussed its attack on the principle of a national court determining that a global licence was FRAND without the consent of the parties to such an exercise. That notwithstanding, it would be open to Huawei in another case to seek to make such a reservation when negotiating or debating in court the terms of a licence and to seek to persuade the court at first instance that the reservation was appropriate in a FRAND process. We turn to the submission (para 52 above) that the English courts are out of step with foreign courts in requiring an implementer to enter into a global licence in order to avoid an injunction for infringement of a national patent and in being prepared to determine the disputed terms of a global FRAND licence. Huawei suggests that the English courts are uniquely setting themselves up as a de facto global licensing tribunal. We are not persuaded by this submission. The Court of Appeal in the Unwired case (paras 59 74) analysed the cases which the parties had presented to the court and concluded that they did not support the contention that Birss Js approach lost sight of the territorial nature of patents and did not accord with the approach taken in other jurisdictions. We agree. We recognise that Birss J has gone further than other courts have done thus far in his willingness to determine the terms of a FRAND licence which the parties could not agree, but that does not involve any difference in principle from the approach of courts in other jurisdictions. Otherwise his approach is consistent with several judgments in other jurisdictions, which, as this is a developing area of jurisprudence, we now examine briefly. The principles stated in those judgments contemplate that, in an appropriate case, the courts in the relevant jurisdictions would determine the terms of a global FRAND licence. The United States: the US Court of Appeals Federal Circuit has recognised that an injunction against infringement of a national patent may be an appropriate remedy if an implementer refuses to enter into a FRAND licence or unreasonably delays in negotiating such a licence: Apple Inc v Motorola Inc 757 F 3d 1286 (Fed Circuit 2014), Judge Reyna at para 49, p 1332, with whom Chief Judge Rader agreed on this point. That case did not involve a proposed global FRAND licence. The court did not pronounce an injunction in that case because it considered on the facts of the case that the claimant had not suffered irreparable harm and that monetary compensation would suffice. But the judgment is clearly inconsistent with the submission that the standard setting regime which obliges a SEP owner to offer FRAND licences confines the SEP owner to monetary remedies. Three judgments in a dispute between Microsoft Inc and Motorola Inc show the willingness of US courts to enforce the contractual obligation on a SEP owner in a SSO policy to offer an implementer a global FRAND licence (the specific obligations in the case were to offer a licence on reasonable and non discriminatory, ie RAND, terms, but no relevant distinction arises from that). The case was concerned with obligations owed by a SEP owner in relation to a SSO, the International Telecommunication Union (ITU), in relation to video coding technology and the Institute of Electrical and Electronics Engineers (IEEE) in relation to wireless local area network (WLAN). The relevant policies of the IEEE and the ITU expressly envisaged the grant of worldwide licences, but as we have construed the IPR Policy as encompassing the grant of such licences, that is not a basis for distinguishing these cases. Motorola offered Microsoft a worldwide licence of its portfolio of patents which might be SEPs but Microsoft disputed the offers, arguing that Motorola had breached its obligation to offer a RAND licence because its proposed royalty rates were unreasonable. Microsoft commenced proceedings in the USA alleging breach of contract and Motorola counterclaimed that it had offered a RAND licence and that Microsoft had rejected it and so had lost its entitlement to a RAND licence. Several months after Microsoft initiated its lawsuit in the USA, Motorola commenced proceedings in Germany to enforce its German patents. Microsoft sought an anti suit injunction to prevent the enforcement of any injunction which the German courts might grant to enforce the European patents. In Microsoft Corpn v Motorola Inc 871 F Supp 1089 (W D Wash 2012) Judge Robart granted Microsoft a preliminary anti suit injunction. In his reasoning he recorded that a trial had been fixed in the USA to determine the RAND terms and conditions of any licence which Motorola was obliged to provide, including a RAND royalty rate. He stated (p 9): Thus, at the conclusion of this matter, the court will have determined (1) whether Microsoft is entitled to a worldwide RAND license for Motorolas standard essential patents, including the European Patents, (2) whether Microsoft has repudiated its rights to such a license, (3) whether Motorola may seek injunctive relief against Microsoft with respect to its standard essential patents, and (4) in the event Microsoft is entitled to such a license, what the RAND terms are for such a license. He found that the US action was dispositive of whether a German court might issue an injunction against Microsoft. He also observed that his injunction did not prohibit the pursuit of the German proceedings in so far as Motorola sought rulings on the validity or infringement of the German patents and non injunctive relief. On appeal, the US Court of Appeals Ninth Circuit (Microsoft Corpn v Motorola Inc 696 F 3d 872 (9th Cir 2012)) upheld Judge Robarts decision. In her judgment Circuit Judge Berzon explained that the US courts had jurisdiction in a contract action ie an action to enforce the obligation on the SEP owner to grant a RAND licence and therefore not enforce its patents to grant an anti suit injunction against enforcement of foreign patents covered by the contractual obligation. She observed that the ITU contract encompassed all of Motorolas SEPs worldwide and stated (p10): When that contract is enforced by a US court, the US court is not enforcing German patent law but, rather, the private law of the contract between the parties. Although patents themselves are not extraterritorial, there is no reason a party may not freely agree to reservations or limitations on rights that it would have under foreign patent law (or any other rights that it may have under foreign law) in a contract enforceable in US courts. She went on to observe (p 12) that an anti suit injunction was less likely to threaten comity in the context of a private contractual dispute than in a dispute involving public international law or government litigants. The dispute then returned to Judge Robart. The Court of Appeal discussed this decision (Microsoft Corpn v Motorola Inc. Case C10 1823JLR, 2013 US Dist LEXIS 60233) in para 69 of its judgment in the Unwired case. As the parties remained in disagreement as to the meaning of RAND, and that dispute needed to be resolved in order to ascertain whether Motorola was in breach of its obligation to license its patents on RAND terms, Judge Robart held a trial to determine a RAND licensing rate and a RAND royalty range for Motorolas worldwide portfolio of patents. In his judgment he used evidence of real world negotiations in simulating the hypothetical negotiation to determine the rate and range. Mr Howard seeks to distinguish this case on the basis that Microsoft had consented to the courts determination of the RAND terms. We do not consider that to be a material distinction as Huawei has sought the determination of a FRAND licence and because, in any event, the operation of the ETSI regime requires the SEP owner to offer a FRAND licence and the implementer to decline it as preconditions of the grant of an injunction. We were referred to Apple Inc v Qualcomm Inc, Case No 3:17 cv 00108 GPC MDD, which is a judgment by District Judge Curiel in the US District Court, Southern District of California given on 7 September 2017, which the Court of Appeal discussed in paras 67 and 68 of its judgment. In this case Apple was the implementer and Qualcomm the SEP owner. Apple challenged Qualcomms patents in eleven lawsuits in several jurisdictions on the grounds of invalidity, non infringement and breaches of foreign competition law. Apples claim in the US proceedings included assertions of breach of contract and challenges to Qualcomms US patents on the ground of invalidity or non infringement and also on grounds of anti trust/competition law. In a counterclaim Qualcomm sought a declaration that it had complied with its irrevocable undertaking given pursuant to ETSIs IPR Policy and asked the court to hold that particular offers were FRAND or in the alternative to determine worldwide FRAND royalty rates. Judge Curiel refused Qualcomms application for an anti suit injunction on grounds which included that the determination of the global FRAND issue would not dispose of Apples foreign claims, which challenged the foreign patents. The judge did not decide whether he had authority to adjudicate upon Qualcomms claim for a worldwide FRAND determination. His decision therefore is not inconsistent with Birss Js judgment. We were referred to orders of the US International Trade Commission and the US Federal Trade Commission which treated offers by a SEP owner of global licences to prospective licensees as FRAND. We were also referred to a District Court judgment in Optis Wireless Technology LLC v Huawei Case No 2:17 cv 00123 JRG RSP but it has no bearing on the matters before us. Germany: In Pioneer v Acer 7 O 96/14, which the Court of Appeal discussed in para 63 of its judgment, the Regional Court of Mannheim in a judgment dated 8 January 2016 considered the geographical scope of a FRAND licence in the light of the usual practices of the industry. Pioneer sought to restrain infringement of its German patent. As it owned SEPs in many countries and as the defendant was active in many countries it offered to grant the defendants parent company a worldwide portfolio licence. The defendant implementer was prepared to take a licence only of Pioneers German patent rights. The court held that the defendants offer was not FRAND and granted an injunction against infringement. In so concluding it drew on the jurisprudence of the CJEU in the application of competition law to the practices of SEP owners and implementers, which emphasised the importance of complying with usual industry practices, and held that in the light of such practices the offer of a Germany only licence was not FRAND. In accepting as FRAND the SEP owners offer of a worldwide licence it stated (para 119): It does not matter that the offer calls for a worldwide portfolio license and was addressed to the parent company as contract partner and not to the Defendant itself. The [CJEU] relies essentially on the customary practices current in the particular industry. In the view of the chamber, it is the aim of the behavior program set forth by the [CJEU] to lead the parties to license agreements which are otherwise also customary in the particular business area. Evidently it was not the intent of the [CJEU] to artificially bring about licence contracts stipulated for individual countries or even separate licence contracts for each individual SEP used when this does not comport with the business practices of the particular business area. Such a market intervention ignoring the market realities was not the purpose of the [CJEU]. In the experience of the chamber, it corresponds to the usual practices in the area of worldwide applicable standards to make license contracts for SEPs in the case of a patent user active in many affected countries with patent protection not individually for each country with the group company of the patent user there for each individual patent, but instead to stipulate worldwide portfolio licences with the group parent, which the individual national group companies can then also utilize. This judgment is clearly consistent with and supports Birss Js approach both of looking to industry practice when determining the geographical scope of a FRAND licence and of granting an injunction against infringement of a national patent if the implementer is not prepared to accept or delays in accepting the offer of a FRAND licence. The judgment of the District Court of Dsseldorf in St Lawrence v Vodafone 4a 073/14 dated 31 March 2016, which is discussed in para 64 of the Court of Appeals judgment, is consistent with and supports this approach. The SEP owner offered a worldwide licence to the implementer, covering its affiliated companies, in accordance with standard industry practice, and received a counter offer from the implementer, which was active worldwide, to license only its German patents. The court held that the offer by the SEP owner of a worldwide licence would normally be FRAND unless the circumstances of the case justified a different conclusion. The court treated the SEP owners offer as FRAND appropriate and held that the failure of the implementer to make a prompt counter offer which was FRAND exposed it to an injunction. The court also held that the implementer could reserve the right to challenge the validity and infringement (standard essentiality) of the SEP but could not delay concluding the contract of licence for that nor, because it was not consistent with industry practice in licensing contracts, could the implementer refuse to pay the licence royalties or claim repayment of earlier paid royalties. We accept Mr Speck QCs submission that these judgments suggest that the current approach of the German courts, in deciding whether to grant an injunction to a SEP owner for the breach of a national patent, is, first, to look to see whether the SEP owners offer of a licence is apparently FRAND. If it is not, they will not grant an injunction. Secondly, the courts look at the implementers behaviour to see if its response is FRAND before deciding whether to grant the injunction. Thirdly, as the quoted para 119 of Pioneer v Acer illustrates, the courts look to see if the parties behaviour conforms to industry practice, and if in the real world parties would voluntarily agree a global portfolio licence, but the implementer refuses to take such a licence, the way is open to the grant of an injunction. It is also relevant to observe that in Germany, where the courts which determine infringement of a patent are separate from those which determine its validity, it is possible to obtain an injunction against infringement from one court before the validity of a patent has been established in the other. Where there is an obvious challenge to validity, such as a challenge to novelty, the German court dealing with infringement may suspend an injunction pending determination of that challenge. But otherwise an injunction may be granted without the patent owner having established the validity of the relevant patent. In the UK, by contrast, it is necessary first to establish both validity and infringement of the national patent, as Birss J did in this case, before the courts will grant an injunction against infringement. Before leaving Germany, we record that we were referred to the recent case of Huawei Technologies Co Ltd v Unwired Planet International Ltd 4b 0 49/14 G, a judgment of the Higher Regional Court of Dsseldorf concerning the disclosure of information relevant to financial remedies. We are satisfied that the judgment has no bearing on the issue of jurisdiction which we are considering. China: In para 73 of the Court of Appeals judgment it considered the judgment of the Guangdong High Peoples Court in Huawei v Interdigital (para 46 above). The Court of Appeal observed that the trial courts holding that Interdigitals offers of a licence were not FRAND was not made on the basis that the offers were for a worldwide licence and that that court appeared to think that a worldwide licence of Interdigitals SEPs would be both reasonable and feasible. The High Peoples Court upheld the trial courts judgment. Before this court Mr Howard states correctly that the Chinese court settled a FRAND royalty between Huawei and Interdigital in relation to Interdigitals Chinese SEP portfolio but he does not suggest that the Chinese court ruled out a worldwide FRAND licence. Mr Howard also referred this court to the judgment of the Nanjing Intermediate Peoples Court of Jiangsu Province in Huawei Technologies Ltd v Conversant Wireless Licensing SarL (para 39 above) as an example of the Chinese courts fixing a FRAND licence rate for Chinese patents only. In that case, as we have said, the court criticised Conversant for having failed to test the Chinese patents in its portfolio in the Chinese courts and for adopting the device (as it saw it) of seeking a foreign court, ie the High Court in London, to fix a global rate of royalties. Having regard to Conversants lack of success in selecting for testing Chinese patents which were then held to be either invalid or not infringed (para 36 above) one can readily understand the importance of establishing the quality of Conversants Chinese patents. But the Chinese court was responding to Huaweis application for, among other things, the fixing of the Chinese rates and did not criticise the idea of a court in an appropriate case having jurisdiction to fix royalty rates in a worldwide FRAND licence. Japan: We were referred to the judgment of the Intellectual Property High Court of Japan in Samsung Electronics Co Ltd v Apple Japan Godo Kaisha (Case No 2013 (Ne) 10043) dated 16 May 2014, which is discussed in para 72 of the Court of Appeals judgment. As the Court of Appeal said, the Japanese court was not asked to find and did not find that a global portfolio licence cannot be FRAND. Samsung as a SEP owner under the ETSI regime had given an undertaking to enter into a FRAND licence which Apple had not accepted. The case, in so far as relevant to the issue we are considering, concerned the nature of the damages which Samsung could recover from the infringement by Apple, the implementer, of Samsungs Japanese patent and in particular whether those damages could exceed the FRAND royalty. The court in that case declined Samsungs application for an injunction and focussed on its claim for damages, but the judgment is not inconsistent with Birss Js approach. The European Commission: In Motorola (Case AT.39985), which was issued on 29 April 2014, the European Commission (EC) held that Motorola had infringed article 102 of the TFEU, which is concerned with the abuse of a dominant position, by seeking and enforcing an injunction against Apple in the German Federal Court for Apples infringement of one of its German SEPs. In the course of the proceedings Apple had offered to take a licence of relevant SEPs for Germany on terms to be settled by the German courts, if necessary. Motorola argued that this offer was not FRAND for several reasons, including that the offered licence was not worldwide. The EC rejected Motorolas argument, finding that Apples offer was FRAND and that Motorola did not need an injunction to protect its commercial interest. The Court of Appeal discussed this decision in paras 59 and 60 of its judgment, suggesting that this was the high water mark of Huaweis case and that it was based on the view that a licence limited to Germany was FRAND. But the Court of Appeal noted that the EC was not expressing a concluded view that in other circumstances a worldwide licence would not be FRAND. We agree. The Court of Appeal referred to the subsequent communication by the EC to the European Parliament, the Council and the European Social and Economic Committee dated 29 November 2017 (COM (2017) 712 final) (the Communication) setting out a European approach to SEPs. The Communication in so far as relevant for the question in hand endorsed portfolio licensing of products with a global circulation in the interests of efficiency and recognised that a country by country approach might not be efficient or conform to the established practice of the relevant industrial sector. It acknowledged that there was no one size fits all solution to identifying what is FRAND, as what can be considered fair and reasonable varies from sector to sector and over time. Mr Howard played down the Communication, pointing out correctly that it did not purport to be a statement of the law and that it cited only Birss Js judgment as a legal authority in support of global licences. But in our view the Communication represents the considered view of the EC regarding the proper working of the ETSI regime and is consistent with judicial developments in Germany and the United States which we have discussed above. Conclusions about foreign jurisprudence on jurisdiction: In summary, the US case law shows (i) a recognition that the court in determining a FRAND licence in such cases is being asked to enforce a contractual obligation which limits the exercise of the patent owners IP rights including its IP rights under foreign law; (ii) a willingness in principle to grant an injunction against the infringement of a national patent which is a SEP, if an implementer refuses a licence on FRAND terms; (iii) a willingness in principle to determine the FRAND terms of a worldwide licence; (iv) a practice of looking to examples of real life commercial negotiation of licences by parties engaged in the relevant industry when fixing the FRAND terms of a licence; and (v) a recognition that the determination of a FRAND licence by one national court does not prevent an implementer from challenging foreign patents on the grounds of invalidity or non infringement in other relevant national courts. Similarly, in Germany the developing case law shows (i) a recognition that a worldwide licence might be FRAND and an implementers counter offer of a national licence confined to Germany might not be FRAND; (ii) a practice of having regard to the usual practices of parties in the relevant industry when the court determines the FRAND terms of a licence; and (iii) a willingness to grant an injunction against infringement of a national patent if the court holds that a SEP owners offer of a licence is FRAND and the implementer refuses to enter into it. The courts in China have not rejected the proposition that a worldwide licence might be FRAND, nor have the courts ruled that they do not have jurisdiction to determine the FRAND terms of a worldwide licence with the consent of the parties, although it remains a matter of speculation whether they would or would not accept jurisdiction. We therefore reject the submission that Birss J was out of line with the approach of courts in most significant jurisdictions. We can then deal briefly with the various arguments which Huawei raises as to the propriety of the English courts grant of an injunction, which we have summarised in para 55 above. Those arguments do not go to the existence of a jurisdiction to grant an injunction where an implementer refuses a FRAND worldwide licence but to the consequences of a courts decision to grant such an injunction in the exercise of a discretion. As such they overlap with our discussion of the remedy of injunction (issue 5) in paras 159 169 below. The first argument is that in the context of a global standard it is disproportionate to exclude an implementer from the UK market unless it enters into a worldwide licence of untested patents solely because it has infringed a UK patent. But this argument fails to acknowledge that what the implementer is purchasing in entering into such a licence with a SEP owner, which has a sufficiently large international portfolio of patents, is not solely access to the UK market but certainty that it has the ability legally to manufacture and sell products which comply with the standard on a worldwide basis. The second argument is that it is anomalous that an implementer should be liable in damages only for the loss which a SEP owner incurs through the infringement of one or more of its UK patents if the implementer chooses to withdraw from the UK market rather than enter into a worldwide licence but that, if the implementer wishes to market its products in the UK, it must pay global royalties. It is premised on the misplaced equation of the fixing of a licence which requires the payment of royalties for past and future use of patented technology and the separate or alternative award by the court of damages for past infringement of a UK patent. In our view this argument fails for two reasons. First, the award of damages is not to be equated with the royalties that are paid under a contractual licence. If an implementer agrees to enter into a FRAND licence which a SEP owner offers, it is entering into a voluntary obligation. If the court awards damages it does so on proof of the loss which the SEP owner has suffered through the infringement of its patent or patents. It may be that the measure of damages which a court would award for past infringement of patents would equate to the royalties that would have been due under a FRAND licence. That does not alter the different nature of the exercises which the court performs in (i) awarding damages and (ii) determining the terms of a licence, which will usually contain many important provisions in addition to the fixing of royalties. Secondly and in any event, as mentioned above, what the implementer purchases in entering into a worldwide licence is the ability legally to manufacture and sell standard compliant products on a worldwide basis. Thirdly, Huawei argues that there is a fundamental difference between what parties may voluntarily do in reaching agreements with other participants in an industry to compromise their rights for commercial and other pragmatic reasons and what a court may properly compel them to do. In our view this argument is without substance precisely because, as the US courts in particular have recognised, SSOs such as ETSI have crafted a contractual arrangement which enables the courts to determine a FRAND licence which, if accepted by the implementer, may prevent a SEP owner from obtaining a prohibitory injunction to exclude the implementers products from a particular jurisdiction. The implementer has the choice whether to exclude the risk of injunction by accepting a FRAND licence. Fourthly, Huawei points to the increasing involvement of Patent Assertion Entities (PAEs) in the SEP licensing market and in litigation. Such entities accumulate portfolios of patents from patent owners which were or are globally active mobile phone companies, as Unwired has done from Ericsson and Conversant from Nokia, and derive income from licensing them to implementers, if necessary after pursuing expensive legal actions. Huawei expresses concern that PAEs may abuse the power which ownership of SEPs gives. The EC in its Communication which we mentioned in para 83 above noted the increased involvement of PAEs in European litigation and the potential for harmful effects from the behaviour of certain PAEs. In the US Supreme Court, Justice Kennedy in a concurring judgment in eBay Inc v Mercexchange 547 US 388 (2006) has also expressed concerns about the risk that PAEs which do not produce and sell goods may use injunctions as a bargaining tool to charge exorbitant royalties. We are alive to that risk. In our view, however, the rights which PAEs acquire through the transfer by assignment of patents are the same as those which the assignor patent owners had held: assignatus utitur iure auctoris that which is assigned possesses for its use the rights of the assignor or cedent. In some cases, the assignment of rights to a PAE and the reservation of a share of the royalties which it negotiates or obtains through litigation may be the most straightforward means by which a SEP owner can obtain value from its intellectual property which is the fruit of its research and innovation, and if the rights are treated as qualified in the hands of the PAE the consequence will be that the SEP owner will not receive the reward which its investment merits. In the exercise of those rights in pursuit of a FRAND licence the assignee PAE, like the assignor patent owner, must act fairly and reasonably as FRAND is an obligation which governs the process of negotiation as well as the outcome of the determination of a FRAND licence. There is no legal basis under the general law for treating PAE owners of SEPs differently from other SEP owners unless they have different interests which merit different remedies. In so far as the risk of the grant of injunctions may be necessary to achieve the balance which the IPR Policy promotes, it is not evident that a PAE should necessarily be treated differently from a SEP owner which manufactures and sells telecommunications equipment. SEP owners have an interest in making sure that the ETSI regime is enforced. In any event the point does not go to the question of jurisdiction. Finally, Huawei submits that if a national court were prepared to determine that a worldwide licence is FRAND and that entering into such a licence is a precondition of the refusal of an injunction to prohibit infringement of a national patent, there is a risk of forum shopping, conflicting judgments and applications for anti suit injunctions. In so far as that is so, it is the result of the policies of the SSOs which various industries have established, which limit the national rights of a SEP owner if an implementer agrees to take a FRAND licence. Those policies, which either expressly or by implication provide for the possibility of FRAND worldwide licences when a SEP owner has a sufficiently large and geographically diverse portfolio and the implementer is active globally, do not provide for any international tribunal or forum to determine the terms of such licences. Absent such a tribunal it falls to national courts, before which the infringement of a national patent is asserted, to determine the terms of a FRAND licence. The participants in the relevant industry, which have pragmatically resolved many disputes over SEPs by the practice of agreeing worldwide or international licences, can devise methods by which the terms of a FRAND licence may be settled, either by amending the terms of the policies of the relevant SSOs to provide for an international tribunal or by identifying respected national IP courts or tribunals to which they agree to refer such a determination. In the final analysis, the implementers and the SEP owners in these appeals are inviting a national court under the current IPR Policy to rule upon and enforce the contracts into which the SEP owners have entered. If it is determined that the SEP owners have not breached the FRAND obligation in the irrevocable undertakings they have given, they seek to enforce by obtaining the grant of injunctive relief in the usual way the patents which have been found to be valid and to be infringed. The English courts have jurisdiction to rule upon whether the UK patents in suit are valid and have been infringed, and also have jurisdiction to rule on the contractual defence relied upon by the implementers based upon the true meaning and effect of the irrevocable undertaking the SEP owners have given pursuant to the ETSI regime. In agreement with Birss J (para 793), we observe that Huawei is before this court without a licence in respect of infringed UK patents when it had the means of obtaining such a licence. Subject to the plea of forum non conveniens, to which we now turn, this court has no basis for declining jurisdiction. Similarly, ZTEs submission, that if a global licence is FRAND, a FRAND process would identify the courts of China as the appropriate courts to fix the terms of such a licence, is an argument which we address under issue 2 below. Issue 2: Forum non conveniens This issue arises only in the Conversant appeals, where it has two limbs of unequal size. The first and larger limb, which may be said to be a forum conveniens issue strictly so called, is whether the High Court should have set aside service out of the jurisdiction on the two Chinese defendants (Huawei (China) and ZTE (China)) and permanently stayed the proceedings as against the two English defendants (Huawei (UK) and ZTE (UK)) on the ground that China rather than England was the appropriate forum. The second much smaller limb, which may better be labelled case management, is whether the claim for injunctive relief in the English proceedings should be temporarily stayed or otherwise case managed so as to enable relevant matters in dispute first to be litigated to a final conclusion in pending proceedings in the Chinese courts. We will address them in turn. Both these issues necessarily proceed upon the assumption, with which we agree, that, contrary to the appellants main case, the English court has jurisdiction to settle a global licence on FRAND terms for a multinational SEP portfolio. This is mainly because issues as to a global licence need to be determined so as to enable the court to adjudicate upon a contractual defence to the enforcement of an English patent by injunction. Nonetheless the main plank in the appellants case on forum conveniens is that, in substance, the real dispute between the parties is as to the terms of a FRAND licence, with the claim to enforce English patents by injunction being no more than a convenient peg upon which to hang the dispute so as to attract English jurisdiction, which it is said (by Huawei and ZTE) that Conversant would prefer to the less generous outcome likely to be obtained in the Chinese courts. Leaving aside questions as to the burden of proof, at common law the forum conveniens doctrine requires the English court to decide whether its jurisdiction or that of the suggested foreign court is the more suitable as a forum for the determination of the dispute between the parties. The traditional way in which this question has been framed speaks of the forum in which the case can be suitably tried for the interests of all the parties and for the ends of justice (per Lord Collins JSC in Altimo Holdings and Investment Ltd v Kyrgyz Mobil Tel Ltd [2011] UKPC 7; [2012] 1 WLR 1804, para 88, adopting the language of Lord Goff in Spiliada Maritime Corpn v Cansulex Ltd (The Spiliada) [1987] AC 460). The requirement in complex litigation to define, at the outset, what is the case to be tried runs the risk that the court will by choosing a particular definition prejudge the outcome of the forum conveniens analysis, as the Court of Appeal decided had occurred at first instance in In re Harrods (Buenos Aires) Ltd [1992] Ch 72. Harman J had characterised the case as a petition under the English Companies Act for relief for unfair prejudice in the conduct of the affairs of an English registered company, which made it blindingly obvious to him that England was the appropriate forum. But the company carried on business entirely in Argentina. The matters complained of all occurred there, where there was a parallel jurisdiction to provide relief under Argentinian legislation. So the Court of Appeal preferred Argentina as the appropriate forum. Like the Court of Appeal in the present case, we therefore prefer for present purposes to identify the dispute between the parties as the matter to be tried, lest reference to the case should introduce undue formalism into the analysis of a question of substance. The question how the dispute should be defined has been the main bone of contention between the parties, both in this court and in the courts below. Is it, as the appellants say, in substance a dispute about the terms of a global FRAND licence, or is it, as the respondent maintains, both in form and in substance about the vindication of the rights inherent in English patents, and therefore about their validity and infringement, with FRAND issues arising only as an aspect of an alleged contractual defence? Thus far the respondent has had the better of that argument, both before the judge and the Court of Appeal. At the heart of the analysis which has thus far prevailed is the recognition that the owner of a portfolio of patents granted by different countries is in principle entitled to decide which patents (and therefore in which country or countries) to seek to enforce, and cannot be compelled to enforce patents in the portfolio granted by other countries merely because a common FRAND defence to the enforcement of any of them raises issues which might more conveniently be determined in another jurisdiction than that which exclusively regulated the enforcement of the chosen patents. Were it necessary to choose between the rival characterisations of the substance of the dispute, we would have agreed with the choice made by the courts below. But we think, like the judge, that there is a compelling reason why the appellants must fail on this issue which would apply even if the appellants characterisation had been correct, so that the dispute was in substance about the terms of a global FRAND licence. A challenge to jurisdiction on forum conveniens grounds requires the challenger to identify some other forum which does have jurisdiction to determine the dispute. Even in a case where permission is required to serve out of the jurisdiction, so that the burden then shifts to the claimant to show that England is the more appropriate forum, that still requires there to be another candidate with the requisite jurisdiction. In the present case, China is the only candidate which the appellants have put forward. There may be others, but the court is not required to carry out its own independent search, and such other jurisdictions as might exist in theory may not be remotely convenient. After hearing extensive expert evidence, the judge found that the Chinese courts do not, at present, have jurisdiction to determine the terms of a global FRAND licence, at least in the absence of agreement by all parties that they should do so. Even in the event of such an agreement, he described the prospect that the Chinese courts would embark on the exercise as no more than speculative. Notwithstanding the admission of fresh evidence on this issue, the Court of Appeal reached the same conclusion. In sharp contrast, we have decided, for the reasons set out above, that the English court does have such a jurisdiction, even in the absence of consent by the parties, and it has of course exercised that jurisdiction in the Unwired case. Directions have been given in the Conversant case (subject to the outcome of this appeal) for it to be done again. Furthermore, against the speculative possibility that the Chinese courts might accept jurisdiction to settle a global FRAND licence by consent, there is the judges finding that Conversant had acted reasonably in refusing to give its consent, for reasons connected with the conditions which the appellants sought to impose, a conclusion which was not met with any persuasive challenge in this court. We therefore agree with the judge that the forum conveniens challenge falls at this first hurdle, notwithstanding the fresh evidence introduced in the Court of Appeal. Had it not done, a number of further issues would have arisen, in particular arising from the application of the Owusu principle (Owusu v Jackson and Others ((Case C 281/02) EU:C:2005:120; [2005] QB 801 (ECJ)) to the English defendants, set against the possibility that there might be a reflective application of article 24 of the Brussels I Regulation (Regulation (EU) 1215/2012 of 12 December 2012), and the recent decision of this court in Lungowe v Vedanta Resources plc [2019] UKSC 20; [2019] 2 WLR 1051. But we consider that those issues, which may well arise in future if and when other countries decide to exercise jurisdiction to settle global licences, would best be determined in a context when they might be decisive. We therefore turn to case management. The English courts have wide case management powers, and they include the power to impose a temporary stay on proceedings where to do so would serve the Overriding Objective: see CPR 1.2(a) and 3.1(2)(f). For example a temporary stay is frequently imposed (and even more frequently ordered by consent) in order to give the parties breathing space to attempt to settle the proceedings or narrow the issues by mediation or some other form of alternative dispute resolution. A temporary stay may be ordered where there are parallel proceedings in another jurisdiction, raising similar or related issues between the same or related parties, where the earlier resolution of those issues in the foreign proceedings would better serve the interests of justice than by allowing the English proceedings to continue without a temporary stay: see Reichhold Norway ASA v Goldman Sachs International [2000] 1 WLR 173. But this would be justified only in rare or compelling circumstances: see per Lord Bingham MR at pp 185 186, and Klckner Holdings GmbH v Klckner Beteiligungs GmbH [2005] EWHC 1453 (Comm). No such application has thus far been made in the Conversant case. At first instance the defendants went all out to obtain the permanent termination of the proceedings, by having service on the Chinese defendants set aside, and by having the proceedings against the English defendants permanently stayed. The whole basis of their application was that the Chinese courts were the appropriate forum to decide the whole dispute, or that the dispute should be split into its Chinese and English parts, leaving only (in England) the question what royalty or compensation for infringement they should pay in relation to the English patents. At the hearing of case management issues consequential upon Henry Carr Js judgment, the appellants did suggest that the FRAND trial should be stayed to await the outcome of pending proceedings in China. The judge provided some accommodation by directing that the FRAND trial should not take place before November 2019, so that the outcome of the Chinese proceedings, to the extent relevant, could be factored into the determination of a FRAND global licence. A case management alternative was put forward by Huawei in the Court of Appeal, but still on the basis that the global FRAND issues could and therefore should first be determined in China, before any determination in England of the claim for infringement of UK patents. It was rejected by the Court of Appeal first because the pending proceedings in China sought only to determine the terms of a FRAND licence for Conversants Chinese patents, not a global licence which would extend to the use of its English patents, and secondly because the age of Conversants portfolio militated against allowing further delay. In this court the case management solution was briefly resurrected during argument, although not as a distinct ground of appeal. Meanwhile the FRAND trial had by then been fixed to start in April 2020 and was no doubt the subject of intensive preparation. It has since then been adjourned due to the Coronavirus pandemic. We think it sufficient to confine ourselves to the issue whether the Court of Appeal was wrong to refuse any case management solution, for the reasons it gave, as summarised above. In our view the Court of Appeals reasons cannot be faulted. We have already concluded that the prospect that the Chinese courts might determine a global FRAND licence, even if the parties consented, is no more than speculative. The current proceedings in China relate only to Conversants Chinese patents, and Conversant has been held to have acted reasonably in refusing (even if it were possible) to confer a wider global jurisdiction on the Chinese courts. Further the adverse commercial effect of further delay in the enforcement of Conversants elderly patents is a factor which, in a case management context, the Court of Appeal was plainly entitled to take into account, and to attribute such weight as it thought fit. Issue 3: FRAND and non discrimination Huawei submits that a further error in the judgment of Birss J at first instance and in the judgment of the Court of Appeal in the Unwired case relates to the non discrimination limb of Unwireds FRAND undertaking. This was dealt with under Ground 2 in the judgment of the Court of Appeal (paras 130 210). Huawei relies on the Samsung licence entered into by Unwired on 28 July 2016 (the Samsung licence) as a relevant comparator for the purpose of working out the FRAND licence terms which should have been offered to Huawei by Unwired. The worldwide royalty rate under the Samsung licence was much lower, and hence much more favourable to the licensee, than the worldwide royalty rate which the judge found was required to be on offer to Huawei pursuant to Unwireds FRAND undertaking. Huawei submits that the judge should have held that Unwireds FRAND undertaking meant that Unwired should have offered Huawei a worldwide royalty rate which was as favourable as that agreed with Samsung. Huaweis case is that the non discrimination limb of the undertaking must be given its ordinary and unadorned meaning, which is that like situations must be treated alike and different situations differently. The non discrimination limb of the undertaking means that the SEP owner must grant the same or similar terms to all similarly situated licensees, unless it can be shown that there are objective grounds for treating them differently. Huawei says that this corresponds with the usual meaning given to obligations not to discriminate in other contexts. Birss J used the term hard edged in relation to the non discrimination obligation to describe the interpretation contended for by Huawei. The practical effect of Huaweis submission is that the non discrimination obligation means that a SEP owner is required to grant licence terms equivalent to the most favourable licence terms to all similarly situated licensees. Before the judge, Unwired deployed three lines of defence to this part of Huaweis case. First, it argued that the Samsung licence was not an equivalent or comparable transaction such as could engage the non discrimination obligation. Secondly, if that was wrong, it said that the non discrimination element in the FRAND undertaking did not involve a distinct hard edged discrimination obligation as submitted by Huawei. Instead, Unwired said that the non discrimination element is to be read as part of a single, unitary obligation to license on terms which are fair, reasonable and non discriminatory. To comply with that obligation, a licensor has to offer a royalty rate set by reference to the true value of the SEPs being licensed; that is, a standard fair market royalty rate available to market participants for use of the SEPs. A rate set in this way, which is available to all licensees without discriminating between them by reference to their individual characteristics, does not cease to be FRAND because the SEP owner has previously granted a licence on more favourable terms. The judge referred to the obligation interpreted in this way as a general non discrimination obligation. Thirdly, if the non discrimination obligation was engaged and if the general non discrimination interpretation were rejected, Unwired argued that the mere existence of differential royalty rates is not sufficient to amount to a breach of the obligation. There is an additional element: Huawei had to demonstrate that the difference is such as to cause a distortion of competition, which it had failed to do. For this submission, Unwired said that the non discrimination part of the FRAND undertaking was to be construed by analogy with the obligation of non discrimination as found in EU competition law in article 102(c) of the TFEU. Birss J rejected the first argument. On the facts, he found that there were specific economic circumstances applicable in relation to the negotiation of the Samsung licence which meant that the royalty rates in it were not a good comparator or basis for assessment of the uniform market royalty rate required under the FRAND obligation. The Samsung licence was granted by Unwired after it had been acquired by PanOptis. At that time, Unwired was in a distressed financial position and Samsung was able to take advantage of this in driving down the royalty rates under the licence. Also, PanOptis had a wider commercial interest in building trust with Samsung to develop a strategic relationship with it so as to encourage it to enter into other transactions, and again this gave special bargaining power to Samsung in the circumstances in which the Samsung licence royalty rates were negotiated. This aspect of the judges findings was not challenged in the Court of Appeal (paras 137 146) and is not in issue on this appeal. However, Birss J held that these features of the circumstances in which the Samsung licence was negotiated did not support Unwireds argument that the non discrimination obligation owed to Huawei was not engaged in relation to the Samsung licence. He held that Huawei and Samsung were similarly situated and that the licences available to each of them were equivalent or comparable for the purposes of engagement of the non discrimination element in the FRAND undertaking. Huawei and Samsung were in a similar position as market participants wishing to be able to make use of Unwireds SEPs and the licences were directed to allowing similar forms of use of the relevant SEPs for the provision of products and services with operability around the world. That ruling was upheld by the Court of Appeal (paras 160 176). There is no appeal in relation to this aspect of the judgments below. Birss J accepted Unwireds second argument. He held that the non discrimination element in the FRAND undertaking was general in nature rather than hard edged. The undertaking did not require that royalty rates in the licence on offer to Huawei should be fixed by reference to the royalty rates in the Samsung licence. On this basis, the judge found that the worldwide licence on offer to Huawei was on non discriminatory terms. The Court of Appeal agreed (paras 177 207). This part of the judgments below is under challenge on the appeal to this court. Birss J also ruled in favour of Unwired on the basis of its third argument, should it transpire that he was wrong to hold that the non discrimination obligation was general rather than hard edged. Since the Court of Appeal upheld his judgment on Unwireds second argument, it found it unnecessary to deal with this alternative part of his reasoning (paras 208 209). Huawei submits in this court that Birss J erred in this part of his reasoning as well. This court upholds the judgment of Birss J and the Court of Appeal on the second of Unwireds arguments. They were right to find that the non discrimination element in the FRAND undertaking is general and not hard edged and that there had been no breach of it. Accordingly, the third argument does not arise. The choice between regarding the non discrimination obligation as general or hard edged is a matter of interpretation of the FRAND undertaking in clause 6.1 of the IPR Policy. The obligation set out in that provision is that licences should be available on fair, reasonable and non discriminatory terms and conditions. In our view, the undertaking imports a single unitary obligation. Licence terms should be made available which are fair, reasonable and non discriminatory, reading that phrase as a composite whole. There are not two distinct obligations, that the licence terms should be fair and reasonable and also, separately, that they should be non discriminatory. Still less are there three distinct obligations, that the licence terms should be fair and, separately, reasonable and, separately, non discriminatory. The text of clause 6.1 lends itself naturally to being read in this unitary way. The non discriminatory part of the relevant phrase gives colour to the whole and provides significant guidance as to its meaning. It provides focus and narrows down the scope for argument about what might count as fair or reasonable for these purposes in a given context. It indicates that the terms and conditions on offer should be such as are generally available as a fair market price for any market participant, to reflect the true value of the SEPs to which the licence relates and without adjustment depending on the individual characteristics of a particular market participant. Put another way, there is to be a single royalty price list available to all. This interpretation of the FRAND obligation promotes the purposes of the ETSI regime in general and the IPR Policy in particular, which we have discussed in paras 4 14 above. A powerful indication that the non discrimination obligation is general rather than hard edged is that ETSI had previously considered and rejected the imposition of a most favourable licence clause in the undertaking. This was done in documents which were published and accessible to all market participants. To interpret the FRAND undertaking as incorporating the hard edged non discrimination obligation for which Huawei contends would have the effect of re introducing a most favourable licence term by the back door. The fact that ETSI made a public choice not to incorporate a most favourable licence term into the FRAND undertaking which it eventually decided to introduce means that any reasonable person participating in the relevant market, whether as a SEP owner or as an implementer seeking to enforce the FRAND undertaking, would understand that the FRAND undertaking as eventually promulgated by ETSI did not incorporate a hard edged non discrimination obligation. The background is as follows. In 1993, ETSI published its original proposed licensing regime, Appendix A of which set out the draft of the then proposed ETSI IPR Undertaking. The proposed undertaking to be given by a SEP owner was to grant a licence which should be non exclusive, on fair, reasonable and non discriminatory terms and conditions (the third indented subparagraph of clause 3.1 in Appendix A) and which, under the fourth indented subparagraph in clause 3.1, should: include a clause requiring the licensor to promptly notify a licensee of any licence granted by it to a third party for the same IPRs under comparable circumstances giving rise to terms and conditions that are clearly more favourable, in their entirety, than those granted to the licensee and allowing the licensee to require replacement of the terms and conditions of its licence, in their entirety, either with those of the third party licence, or with such other terms and conditions as the parties may agree. The 1994 and subsequent versions of the IPR Policy did not include this term. The inclusion of such a most favourable licence term in the 1993 draft IPR Policy as an obligation distinct from the FRAND obligation in the previous subparagraph shows that the FRAND obligation (which was expressed in the same terms as in the later versions of the IPR Policy) was not intended to include a most favourable licence term itself. Further, the deletion of the relevant most favourable licence term from the undertaking in 1994 and in the later versions of the IPR Policy shows that a deliberate choice was made not to subject a SEP owner to an obligation of this kind. In TCL Communication Technology Holdings Ltd v Telefonaktiebolaget LM Ericsson Case No 8:14 cv 00341 JVS DFM (CD Cal, Nov 8, 2017), the US District Court for the Central District of California noted the deletion and regarded it as providing guidance regarding the interpretation of the FRAND obligation (pp 13 14 and 91). The Court of Appeal, in the judgment below, took the same view: para 199. We agree. Ms Ford QC for Unwired made further submissions to the Court of Appeal in support of Unwireds proposed general non discrimination interpretation which were repeated to us (see the Court of Appeal judgment, para 192). They have considerable force. First, Unwired submits that to interpret the non discrimination obligation in the general sense for which it contends gives full effect to the non discrimination limb of the FRAND undertaking. Non discrimination between licensees is achieved, because the FRAND rate is objectively determined based on the value of the portfolio and it does not take into account the characteristics of individual licensees. It satisfies the obligation to treat like cases alike, because the same rate is made available to all licensees who are similarly situated in the sense that they seek the same kind of licence. We agree. This reflects our reasoning above. Secondly, Unwired submits that the non discrimination limb of the FRAND undertaking should not be read in isolation so as to trump all other considerations; that is to say, as a separate free standing obligation. Birss J and the Court of Appeal correctly read it as working together with the fair and reasonable limb of FRAND as part of a unitary concept. The role of the non discrimination limb is to ensure that the fair and reasonable royalty is one which does not depend on any idiosyncratic characteristics of the licensee. Huawei's approach, by contrast, would mean that the existence of a prior licence which the judge had expressly and legitimately held did not represent useful evidence of the value of the portfolio compelled Unwired to license its SEPs at the same rate, and therefore receive remuneration which was less than a fair and reasonable return for its portfolio. This would be to give the non discrimination limb an unnecessarily extreme effect. Again, we agree. The conclusion for which Huawei contends cannot be justified with reference to the intended purposes of the ETSI licensing regime and would conflict with those purposes. Thirdly, it cannot be said that there is any general presumption that differential pricing for licensees is problematic in terms of the public or private interests at stake. The position has been summarised in this way: Most important of the lessons that the economics literature has clearly established is that price discrimination is not always or necessarily harmful. On the contrary, in some cases, it can increase efficiency, raise incentives to innovate by easing the recoupment of necessary upfront investments, broaden the markets served, and improve consumer welfare. This is a welcome finding, because price discrimination is the norm within IP licensing. That is, a typical comparison of contracts for two or more firms with licenses to the same IP will generally reveal different royalty rates, terms, and conditions. As long as the patent holder negotiating these differential rates and terms has no market power, there is no need for any concern, because different prices are a natural consequence of the IP licensing process (Anne Layne Farrar, Nondiscriminatory Pricing: Is Standard Setting Different? (2010) Journal of Competition Law and Economics 1, at p 3) Since price discrimination is the norm as a matter of licensing practice and may promote objectives which the ETSI regime is intended to promote (such as innovation and consumer welfare), it would have required far clearer language in the ETSI FRAND undertaking to indicate an intention to impose the more strict, hard edged non discrimination obligation for which Huawei contends. Further, in view of the prevalence of competition laws in the major economies around the world, it is to be expected that any anti competitive effects from differential pricing would be most appropriately addressed by those laws. It is unnecessary and inappropriate (and could well be counterproductive) to adopt the hard edged non discrimination interpretation of the FRAND undertaking urged by Huawei on the basis that this might promote competition and hence innovation and consumer welfare. Any reasonable person who seeks to engage with the ETSI regime, whether as a SEP owner or as an implementer who is a potential licensee, would understand this. Those engaging with the ETSI regime are highly sophisticated and well informed about economics, practice in the market and competition laws across the world. Fourthly, the approach of Birss J and the Court of Appeal reflects commercial reality and sense, in that there may be circumstances in which the owner of a SEP portfolio would choose to license its portfolio at a rate which does not actually reflect its true, FRAND royalty rate value. For example, the concept of so called first mover advantage in some market circumstances is well recognised. It may be economically rational and commercially important for the owner of a SEP portfolio to offer a lower rate to the first implementer to take a licence, because it provides the owner with initial income on its portfolio and may serve to validate the portfolio in the eyes of the market and hence encourage others to seek licences as well. Huaweis proposed interpretation of the FRAND undertaking would eliminate this as a viable approach. But since such an approach is well recognised and may have great commercial importance for a SEP owner, it would have required far clearer language to be used in the ETSI FRAND undertaking if the intention had been to eliminate it. Similar points can be made in relation to the elimination of another important set of commercial options for the owner of a SEP portfolio. If in commercial difficulties, the owner might seek to engage in a fire sale licensing deal at low royalty rates for a particular licensee in order to secure its (the owners) commercial survival. On the judges findings, there was an element of this in Unwireds grant of the Samsung licence. But if the fire sale royalty rate were to be taken to dictate the FRAND royalty rate for the portfolio for the rest of the participants in the market, there would be no incentive for implementers to take advantage of such an opportunity (as they would gain nothing by comparison with their competitors) and portfolio owners would be unable to utilise such means of raising funds without, in effect, permanently devaluing the portfolio. There is nothing in the ETSI scheme or the language of the FRAND undertaking to indicate that it was intended that the undertaking should have these effects. For these reasons, we dismiss Huaweis non discrimination ground of appeal. Issue 4: Competition law and the CJEUs judgment in Huawei v ZTE The fourth issue arises only in the Unwired appeal. It requires consideration of the CJEUs decision in Huawei v ZTE. Huawei argues that the CJEU there laid down a series of mandatory conditions which must be complied with if a SEP owner is to obtain injunctive relief. If the SEP owner fails to comply, its claim for an injunction will be regarded as an abuse of its dominant position, contrary to article 102 TFEU. In the Court of Appeal, Huaweis argument was that the SEP owner had to have complied before even issuing proceedings for injunctive relief (see para 231 of the Court of Appeal judgment). It is not entirely clear whether Huawei continues to pursue its argument in quite such absolute terms. Although our attention is invited to other respects in which Unwired failed to comply with the CJEUs conditions, Huaweis central focus now is upon Unwired not having made a FRAND offer at any stage, its offers being too high to be FRAND. It is not enough, Huawei says, for a SEP owner to be willing to enter into a licence agreement on terms determined by the court; it has to make a FRAND licence offer itself. In Huaweis submission, Birss J therefore erred in granting Unwired an injunction when it had not complied with the CJEUs conditions. It should have been limited to damages. Unwired responds that Birss J and the Court of Appeal interpreted Huawei v ZTE correctly, and it presented no obstacle to the grant of an injunction. Unwired accepts the conclusion of the lower courts that the CJEU did lay down one mandatory condition, namely the notice/consultation requirement in para 60, which must be observed by the SEP owner, who will otherwise fall foul of article 102. But, in its submission, that is the sole mandatory condition that the CJEU laid down; the other steps set out by the court were intended only as a safe harbour. If they are followed, the SEP owner can commence proceedings for injunctive relief without that amounting to an abuse of its dominant position, but failure to follow them does not necessarily mean that article 102 is infringed, because it all depends on the circumstances of the particular case. Article 102 TFEU So far as material, article 102 provides: Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States. The decision in Huawei v ZTE Huawei v ZTE arose in connection with a dispute in Germany between Huawei, which held a telecommunications SEP and had given an undertaking to grant licences on FRAND terms, and ZTE which marketed products using the SEP without paying a royalty or exhaustively rendering an account in respect of the use. Discussions as to a licence did not bear fruit. Huawei brought an action for infringement, seeking an injunction prohibiting infringement, accounts, recall of products and damages. It was not disputed that Huawei was in a dominant position, for article 102 purposes, but the referring court requested assistance from the CJEU as to the circumstances in which a SEP owner would abuse its dominant position as a result of bringing an action for a prohibitory injunction. The referring court identified two different approaches that might be taken to this question, which would produce different results on the facts of the case. On the one hand, the Bundesgerichtshof had held, in 2009, in Orange Book (KZR 39/06) (referred to in paras 30 to 32 of the CJEU judgment) that the applicant will only breach article 102 if, in essence, the defendant has made an unconditional offer to conclude a licensing agreement, not limited exclusively to cases of infringement, and, where the defendant uses the teachings of the patent before the applicant accepts the offer, it complies with its obligations to account for use and to pay the sums resulting therefrom. On this approach, there would have been no abuse of Huaweis dominant position. On the other hand, the European Commission (in press releases No IP/12/1448 and MEMO/12/1021, referred to in para 34 of the CJEU judgment) appeared to take the view that it would be an abuse to bring an action for an injunction where the infringer is willing to negotiate a FRAND licence, even if terms cannot be agreed. As ZTE was willing to negotiate, this approach would have made Huaweis action for an injunction unlawful under article 102. The referring courts central question was therefore whether it was an abuse to seek an injunction even though the infringer has declared that it is willing to negotiate concerning a licence or only where the infringer has submitted to the proprietor of the [SEP] an acceptable, unconditional [FRAND] offerand the infringer fulfils its contractual obligations for acts of use already performed in anticipation of the licence to be granted (see para 39 of the CJEU judgment). The CJEU commenced its consideration of the referred questions with the following observation: 42. For the purpose of providing an answer to the referring court and in assessing the lawfulness of such an action for infringement brought by the proprietor of an SEP against an infringer with which no licensing agreement has been concluded, the Court must strike a balance between maintaining free competition in respect of which primary law and, in particular, article 102 TFEU prohibit abuses of a dominant position and the requirement to safeguard that proprietors intellectual property rights and its right to effective judicial protection, guaranteed by article 17(2) and article 47 of the Charter respectively. It went on to note, at paras 48 to 52, the special features that distinguish SEPs from other patents, namely that the use of the patent is indispensable in manufacturing products which comply with the standard to which it is linked, and that SEP status is obtained only in return for the SEP owners irrevocable undertaking to grant licences on FRAND terms. It observed that, in those circumstances, a refusal by the proprietor of the SEP to grant a licence on [FRAND] terms may, in principle, constitute an abuse within the meaning of article 102 (para 53), and the abusive nature of such a refusal may, in principle, be raised in defence to actions for a prohibitory injunction or for the recall of products (para 54). The court then went on to deal with the situation where the parties could not agree on what FRAND terms were, observing: 55. In such a situation, in order to prevent an action for a prohibitory injunction or for the recall of products from being regarded as abusive, the proprietor of an SEP must comply with conditions which seek to ensure a fair balance between the interests concerned. It is of particular note that in the following paragraph, before embarking on its consideration of what conditions might ensure a fair balance, the court emphasised the need to take account of the specific circumstances of the case, saying: 56. In this connection, due account must be taken of the specific legal and factual circumstances in the case (see, to that effect, judgment in Post Danmark A/S v Konkurrenceradet [(C 209/10)] EU:C:2012:172; [2012] 4 CMLR 23 at para 26 and the case law cited). The passage from Post Danmark A/S to which reference is made is as follows: 26. In order to determine whether a dominant undertaking has abused its dominant position by its pricing practices, it is necessary to consider all the circumstances and to examine whether those practices tend to remove or restrict the buyers freedom as regards choice of sources of supply, to bar competitors from access to the market, to apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage, or to strengthen the dominant position by distorting competition (see, to that effect, Deutsche Telekom v Commission, para 175 and case law cited). The irrevocable undertaking to grant licences on FRAND terms could not, the court said, negate the entitlement of the SEP owner to have recourse to legal proceedings to ensure effective enforcement of his exclusive intellectual property rights (paras 58 and 59), but: 59. it does, none the less, justify the imposition on that proprietor of an obligation to comply with specific requirements when bringing actions against alleged infringers for a prohibitory injunction or for the recall of products. Paras 60 and 61 appear (from para 62) to be inspired by the possibility that the infringer of a SEP may not be aware that it is using the teaching of a SEP that is both valid and essential to a standard, and deal, in the following terms, with the need to alert the infringer: 60. Accordingly, the proprietor of an SEP which considers that that SEP is the subject of an infringement cannot, without infringing article 102 TFEU, bring an action for a prohibitory injunction or for the recall of products against the alleged infringer without notice or prior consultation with the alleged infringer, even if the SEP has already been used by the alleged infringer. 61. Prior to such proceedings, it is thus for the proprietor of the SEP in question, first, to alert the alleged infringer of the infringement complained about by designating that SEP and specifying the way in which it has been infringed. In paras 63 to 69, the court went on to anticipate that, thereafter, there would be a number of further exchanges between the SEP owner and the alleged infringer. Para 63 deals with the position once the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms. At this point: it is for the proprietor of the SEP to present to that alleged infringer a specific, written offer for a licence on FRAND terms, in accordance with the undertaking given to the standardisation body, specifying, in particular, the amount of the royalty and the way in which that royalty is to be calculated. Then, it is for the alleged infringer diligently to respond to that offer, in accordance with recognised commercial practices in the field and in good faith, with no delaying tactics, and it may rely on the abusive nature of an action for a prohibitory injunction only if it has submitted promptly and in writing, a specific counter offer that corresponds to FRAND terms (paras 65 and 66). And finally, if the counter offer is rejected, and the alleged infringer is using the teachings of the SEP already, from the point at which the counter offer is rejected, it is for that alleged infringer to provide appropriate security, in accordance with recognised commercial practices in the field, for example by providing a bank guarantee or by placing the amounts necessary on deposit (para 67). In paras 68 and 69, the court clarified that: i) in default of agreement on terms, the parties may, by common agreement, request that the amount of the royalty be determined by an independent third party without delay (para 68); and ii) the alleged infringer cannot be criticised for challenging, in parallel to the negotiations relating to the grant of licences, the validity and/or the essential nature of the patents, and/or their actual use, or for reserving the right to do so in the future (para 69). The court then went on, in paras 70 and 71 to address itself to the referring court, and to answer the questions it had referred: 70. It is for the referring court to determine whether the above mentioned criteria are satisfied in the present case, in so far as they are relevant, in the circumstances, for the purpose of resolving the dispute in the main proceedings. 71. It follows from all the foregoing considerations that the answer to [the questions referred] is that article 102 TFEU must be interpreted as meaning that the proprietor of an SEP, which has given an irrevocable undertaking to a standardisation body to grant a licence to third parties on FRAND terms, does not abuse its dominant position, within the meaning of article 102 TFEU, by bringing an action for infringement seeking an injunction prohibiting the infringement of its patent or seeking the recall of products for the manufacture of which that patent has been used, as long as: prior to bringing that action, the proprietor has, first, alerted the alleged infringer of the infringement complained about by designating that patent and specifying the way in which it has been infringed, and, secondly, after the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms, presented to that infringer a specific, written offer for a licence on such terms, specifying, in particular, the royalty and the way in which it is to be calculated, and where the alleged infringer continues to use the patent in question, the alleged infringer has not diligently responded to that offer, in accordance with recognised commercial practices in the field and in good faith, this being a matter which must be established on the basis of objective factors and which implies, in particular, that there are no delaying tactics. The facts of the present case Turning to the facts of the present case, between 2009 and 2012, Huawei had a licence from Ericsson which included the SEPs which were assigned to Unwired in 2013. In 2013, there was brief discussion between Unwired and Huawei about the possibility of Huawei buying some of the SEPs, but Huawei did not do so. In September 2013, Unwired wrote to Huawei proposing discussion with a view to concluding a licence, but received no reply. Unwired then wrote, in November 2013, to Huaweis IP department which replied very promptly, and there was communication between the companies. Before proceedings were begun against Huawei in March 2014, on Birss Js findings (see particularly para 750 of his judgment), the position was as follows: Huawei had sufficient notice that Unwired Planet held particular SEPs and they knew or ought to have known that if the declared SEPs held by Unwired Planet were indeed valid and essential, then a licence was required. They did not yet have claim charts. All the same, for Huawei, the only realistic and foreseeable ways in which the existing contact with Unwired Planet was going to conclude would be by Huawei persuading Unwired Planet that they had no good SEPs or proving it in court or by Huawei taking a licence. Huawei also knew that Unwired Planet wanted to license Huawei. In these circumstances the information Huawei had by March 2014 was quite sufficient for Huawei to understand that issuing proceedings including an injunction claim did not represent a refusal to license. Quite the reverse. In April 2014, Unwired made the first of a number of offers of licensing terms. Huawei responded, saying that no licence was needed, but also denying that the offered terms were FRAND. Birss J found (para 706) that Huawei never made an unqualified commitment to enter into a FRAND licence, its stance having always been that it was willing to enter into what it contended was a FRAND licence. Until shortly before the trial in front of Birss J, its contention was that only a patent by patent licence for any patent found valid and infringed would be FRAND, and from 11 October 2016, this was replaced by the contention that a FRAND licence meant a UK portfolio licence. Birss J contrasted this with Unwireds stance (para 709). Whereas Huawei had only been prepared to take a licence with a particular scope, Unwireds case in the High Court involved trying to insist on a worldwide licence, but its approach took account of the possibility that it might not be entitled to demand that. The position it took was that if the court decided that it was not entitled to insist on a global licence, it would accept that there be a UK portfolio licence at a rate and on terms set by the court (Birss J, para 23(i)). The decisions of Birss J and the Court of Appeal Birss J did not accept Huaweis argument that it had a defence to the injunction claim because the proceedings were commenced before FRAND terms were offered to it by Unwired. He interpreted the CJEU as saying that it would necessarily be abusive for the SEP owner to bring an action without some kind of prior notice to the alleged infringer, but otherwise he saw the CJEUs scheme as setting out a standard of behaviour against which both parties behaviour can be measured to decide in all the circumstances if an abuse has taken place, rather than imposing mandatory requirements which had to be complied with in all cases (para 744 (iv) and (v)). Measuring the parties behaviour against the standard, Birss J was satisfied that the commencement of the action, including the claim for an injunction, was not an abuse of Unwireds dominant position (para 755). It can be seen from the extract from para 750 which is quoted above that he considered that Huawei had sufficient notice prior to the commencement of proceedings, that it was clear that issuing the proceedings did not represent a refusal to license, and that Huawei knew that Unwired wanted to license it. The issue of the proceedings did not prevent the parties from negotiating (para 752). Unwired provided key terms of its offer to Huawei a few weeks after commencing proceedings (para 753), but Huawei never made an unqualified offer to accept whatever were FRAND terms (para 754). The Court of Appeal agreed with Birss Js interpretation of the CJEUs judgment, which it considered entirely correct, and it saw no reason to interfere with his conclusion that Unwired had not behaved abusively. Discussion In our view, Birss J and the Court of Appeal interpreted the CJEUs decision in Huawei v ZTE correctly. Bringing an action for a prohibitory injunction without notice or prior consultation with the alleged infringer will amount to an infringement of article 102, as para 60 of the CJEUs judgment sets out. In that paragraph, the language used is absolute: the SEP owner cannot bring the action without infringing the article. We agree with Birss J and the Court of Appeal, however, that the nature of the notice/consultation that is required must depend upon the circumstances of the case. That is built into the reference to notice or prior consultation, which conveys the message that there must be communication to alert the alleged infringer to the claim that there is an infringement, but does not prescribe precisely the form that the communication should take. This is to be expected, given that the CJEU had just introduced its discussion of the conditions which seek to ensure a fair balance between the various interests concerned in a SEP case with a very clear statement, at para 56 (set out above), that account had to be taken of the specific legal and factual circumstances in the case. In so saying, the court was reflecting its well established approach in determining whether a dominant undertaking has abused its dominant position, as it demonstrated by its reference back to the Post Danmark case, and the case law there cited. It also makes obvious sense that the court should have built in a degree of flexibility, given the wide variety of factual situations in which the issue might arise, and the fact that different legal systems will provide very different procedural contexts for the SEP owners injunction application. In Germany, for example, as we observed earlier, validity and infringement are tried separately, so that the alleged infringer faces the risk that the SEP owner could obtain a final injunction against it without validity first being determined, and in some member states, an injunction might be granted before a FRAND rate is determined. In contrast, in the United Kingdom, it is not the practice to grant a final injunction unless the court is satisfied that the patent is valid and infringed, and it has determined a FRAND rate. The courts statement in para 56 also colours the interpretation of the scheme it set out between paras 63 and 69 of its judgment. As the Court of Appeal observed, para 56 does not sit comfortably with the notion that the CJEU was laying down a set of prescriptive rules, intending that failure to comply precisely with any of them would necessarily, and in all circumstances, render the commencement of proceedings for an injunction abusive. It is important, it seems to us, to take account of where para 56 is placed in the judgment. Immediately preceding it, the court had identified the very real problem that occurs where, as in the case which had generated the reference to it, there is no agreement as to what terms would be FRAND, and then said (in para 55, quoted above) that in order to prevent an action being regarded as abusive, the SEP owner must comply with conditions which seek to ensure a fair balance between the interests concerned. This identifies what the conditions need to seek to ensure, but is no more prescriptive than that, and it is of considerable significance that para 56 immediately follows, requiring that [i]n this connection, which must surely be a reference back to the conditions which seek to ensure a fair balance, due account must be taken of the specific legal and factual circumstances of the case. It would be surprising if the steps then set out by the CJEU were expected by it to apply in all cases, no matter what their legal and factual circumstances. Unwired submits that the language used by the CJEU is language intended to signpost a safe harbour for the SEP owner. We agree that this does lend a degree of support to Unwireds argument. In particular, in contrast to the absolute language of para 60, in para 71, the court speaks of the SEP owner not abusing its dominant position as long as it follows the steps laid out. This does not tell us that if the SEP owner does not follow the steps, it will be abusing its dominant position. To answer that, due account has to be taken of the particular circumstances of the case, although, of course, it is likely to be valuable to compare what occurred with the pattern set out by the CJEU. By way of further reinforcement for its contention that the CJEU was providing guidance only, Unwired points to the unfairness that would arise, in a case (such as the present one) which began before the CJEU gave judgment in Huawei v ZTE, if the application for injunctive relief were to be condemned as abusive by virtue of a failure to comply with conditions which had not yet been spelled out when the proceedings were commenced, but which, once spelled out, operated ex tunc. The fact that any rigid and prescriptive rules laid down by the CJEU would necessarily operate in this way makes it unlikely, says Unwired, that the CJEU was actually seeking to lay down a mandatory protocol. Had the CJEUs judgment been in terms clearly intended to lay down universal, immutable, conditions, this point would not have been sufficient to displace that interpretation of it, but, in our view, given that the judgment is not in such terms, the point does perhaps provide a degree of further confirmation that all the circumstances of the case must be taken into account before concluding that article 102 has been infringed. It is worth noting how the European Commission has interpreted the CJEUs decision. In its communication of 29 November 2017, setting out the EU approach to Standard Essential Patents (see para 83 above), it encapsulated, at para 3, the conflicting considerations which operate in relation to injunctive relief in SEP cases, saying that: [s]uch relief aims to protect SEP holders against infringers unwilling to conclude a licence on FRAND terms. At the same time, safeguards are needed against the risk that good faith technology users threatened with an injunction accept licensing terms that are not FRAND, or in the worst case, are unable to market their products (hold ups). It then went on, at para 3.1 of the Communication, to set out its understanding of the CJEUs judgment: In its Huawei judgment, the CJEU established obligations applying to both sides of a SEP licensing agreement, when assessing whether the holder of a SEP can seek an injunction against a potential licensee without being in breach of Article 102 TFEU. SEP holders may not seek injunctions against users willing to enter into a licence on FRAND terms, and the CJEU established behavioural criteria to assess when a potential licensee can be considered willing to enter into such a licence. The following paragraphs consider further the various elements in the negotiation, but make clear that what precisely is required is, in the Commissions view, dependent on the facts of the individual case. This coincides with the interpretation that we would adopt of the CJEUs decision. As the Commission pointed out, the objective is to protect both the intellectual property rights of SEP owners and the interests of what it calls good faith technology users. The scheme set up by the CJEU, as we would interpret it, does this. It prevents an organisation which is unwittingly using a SEP without a licence from being ambushed by injunction proceedings without any prior notification of the problem, provides the SEP owner with a route map which, if followed precisely, will ensure it can seek an injunction without risking infringing article 102, and otherwise provides a number of points of reference to assist in assessing the all important question of whether each of the parties is willing to enter into a licence on FRAND terms. Interpreted in this way, it has sufficient flexibility built into it to cater for the inevitable variations that will occur from case to case, and from country to country. Given that we share Birss Js interpretation of the CJEUs judgment, we see no reason to interfere with his assessment that Unwired had not behaved abusively. He found that sufficient notice was given to Huawei before the injunction application was made. He properly evaluated the course of the negotiations between the parties in light of what the CJEU had said. There was no mandatory requirement that Unwired itself make an offer of terms which coincided with those that were ultimately determined by the court to be FRAND. Apart from the more general points that we have made earlier, in rejecting the argument that the CJEUs scheme was mandatory, such an absolute requirement to hit the target precisely with an offer could not sit easily alongside para 68 of the CJEUs judgment, which contemplates determination of the amount of the royalty by an independent third party. What mattered on the facts of this case was that Unwired had shown itself willing to license Huawei on whatever terms the court determined were FRAND, whereas Huawei, in contrast, had only been prepared to take a licence with a scope determined by it. Issue 5: The equitable jurisdiction to award a prohibitory injunction The fifth issue in the appeal raises a point which was not argued in the courts below. Huawei contends that even if it is infringing the claimants UK SEPs, and even if the claimants are willing to offer a licence on terms which the court has found to be FRAND, nevertheless the court should not grant the claimants an injunction to prevent the continuing infringement of their patents, since such a remedy is neither appropriate nor proportionate. Since the claimants only interest in the observance of the UK SEPs is in obtaining reasonable royalties, and that interest can be fully recognised by an award of damages in lieu of an injunction, it follows that such an award, based on the royalties which would reasonably be agreed for a licence of each of the UK patents infringed, is the appropriate and proportionate remedy. In support of that argument, Huawei refers to the discussion of awards of damages in lieu of an injunction under section 50 of the Senior Courts Act 1981 (formerly under Lord Cairnss Act) in One Step (Support) Ltd v Morris Garner [2018] UKSC 20; [2019] AC 649, where Lord Reed explained at paras 43 44 and 95(3) that such damages can be awarded in respect of an injury which has not yet occurred, and that they are a monetary substitute for what is lost by the withholding of injunctive relief. Reference is also made to Co operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, where the House of Lords decided that damages were normally a more appropriate remedy than a mandatory injunction requiring the carrying on of a business, and Lawrence v Fen Tigers Ltd [2014] UKSC 13; [2014] AC 822, where damages were considered to be a more appropriate remedy, in the circumstances of that case, than an injunction to prevent the continuation of a nuisance. Huawei also refers to eBay Inc v Mercexchange LLC 547 US 388 (2006), where the United States Supreme Court vacated a decision by the Federal Circuit reversing the District Courts denial of permanent injunctive relief to a PAE. The Supreme Court held that neither court had exercised its discretion in accordance with traditional principles of equity, as established in the law of the United States. The Court of Appeals was held to have erred in applying a rule that courts would issue infringement absent exceptional permanent circumstances. The District Court was held to have erred in adopting a rule that injunctions against patent injunctive relief would not issue where the plaintiff was willing to licence its patents rather than bringing them to market itself. The Supreme Court took no position on whether permanent injunctive relief should or should not issue in that case. Huawei relies in particular on the concern expressed by Kennedy J, in a concurring opinion in which Stevens, Souter and Breyer JJ joined, that an injunction could be employed by a PAE as a bargaining tool to charge exorbitant fees. Kennedy J expressed the opinion that where the patented invention was only a small component of the product the defendant sought to produce, and the threat of an injunction was employed simply for undue leverage in negotiations, damages might well be sufficient to compensate for the infringement, and an injunction might not serve the public interest. As Lord Neuberger remarked in the case of Lawrence at para 120, the court's power to award damages in lieu of an injunction involves a classic exercise of discretion. In most cases of patent infringement, judges have exercised their discretion in favour of granting an injunction. As Roberts CJ observed in the eBay case, in a concurring judgment in which Scalia and Ginsburg JJ joined: From at least the early 19th century, courts have granted injunctive relief upon a finding of infringement in the vast majority of patent cases. This long tradition of equity practice [Weinberger v Romero Barcelo, 456 US 305, 320 (1982)] is not surprising, given the difficulty of protecting a right to exclude through monetary remedies that allow an infringer to use an invention against the patentees wishes. (Emphasis in original) In the present case, the courts below were not invited to consider the possibility of awarding damages in lieu of an injunction. We are not in any event persuaded that there is any basis on which this court could properly substitute an award of damages for the injunction granted by Birss J and upheld by the Court of Appeal. There are, in the first place, no grounds in this case for a concern of the kind expressed by Kennedy J in the eBay case. The threat of an injunction cannot be employed by the claimants as a means of charging exorbitant fees, or for undue leverage in negotiations, since they cannot enforce their rights unless they have offered to license their patents on terms which the court is satisfied are fair, reasonable and non discriminatory. This point was clearly in the mind of Birss J. He stated at para 562: If a worldwide licence is not FRAND then a putative licensee should not be coerced into accepting it by the threat of an injunction in one state. However, if a worldwide licence is FRAND then the situation changes. The logic of the FRAND undertaking applied in the context of patent rights is that the remedy of an injunction to restrain infringement, granted in respect of a patent found valid and infringed/essential, should present the licensee with a simple choice either to take a FRAND licence or stop dealing in the products. He returned to this point at the end of his judgment, when explaining at para 793 why an injunction was appropriate: The relevant patents have been found valid and infringed. Unwired Planet wish to enter into a worldwide licence. Huawei is willing to enter into a UK portfolio licence but refuses to enter into a worldwide licence. However a worldwide licence is FRAND and Unwired Planet are entitled to insist on it. In this case a UK only licence would not be FRAND. An injunction ought to be granted because Huawei stand before the court without a licence but have the means to become licensed open to them. Secondly, in a case of the present kind, an award of damages is unlikely to be an adequate substitute for what would be lost by the withholding of an injunction. The critical feature of a case of this kind is that the patent is a standard technology for products which are designed to operate on a global basis. That is why standard technology is essential, and why the patent holders whose patents are accepted as SEPs are required to give an undertaking that licences will be made available on FRAND terms. Once the patents have been accepted as SEPs, it may well be impractical for the patent holder to bring proceedings to enforce its rights against an infringing implementer in every country where the patents have been infringed. That is because, as Huaweis witness Mr Cheng accepted in evidence, the cost of bringing enforcement proceedings around the world, patent by patent, and country by country, would be impossibly high. In those circumstances, if the patent holder were confined to a monetary remedy, implementers who were infringing the patents would have an incentive to continue infringing until, patent by patent, and country by country, they were compelled to pay royalties. It would not make economic sense for them to enter voluntarily into FRAND licences. In practice, the enforcement of patent rights on that basis might well be impractical, as was accepted in the present case by Huaweis witness, and by the courts below. An injunction is likely to be a more effective remedy, since it does not merely add a small increment to the cost of products which infringe the UK patents, but prohibits infringement altogether. In the face of such an order, the infringer may have little option, if it wishes to remain in the market, but to accept the FRAND licence which ex hypothesi is available from the patent holder. However, for the reasons explained in paras 164 165, that does not mean that the court is enabling the patent holder to abuse its rights. This point was understood by the courts below. In the Court of Appeal, Lord Kitchin observed at paras 55 56: It may be wholly impractical for a SEP owner to seek to negotiate a licence of its patent rights country by country, just as it may be prohibitively expensive for it to seek to enforce those rights by litigating in each country in which they subsist. This latter point was accepted by Mr Cheng in the course of his evidence: he agreed that the costs of such litigation for [Unwired] would be impossibly high [I]t seems to us, at least as a matter of principle, that there may be circumstances in which it would not be fair and reasonable to expect a SEP owner to negotiate a licence or bring proceedings territory by territory and that in those circumstances only a global licence or at least a multi territorial licence would be FRAND. Lord Kitchin also noted at para 111 the implications of accepting Huaweis contention that country by country licensing was appropriate: The patentee must then bring proceedings country by country to secure the payment of the royalties to which it is entitled. But unlike a normal patent action, where an unsuccessful defendant faces the prospect of an injunction, the reluctant licensee would know that, on the assumption it could only be required to take licences country by country, there would be no prospect of any effective injunctive relief being granted against it provided it agreed to pay the royalties in respect of its activities in any particular country once those activities had been found to infringe. So it would have an incentive to hold out country by country until it was compelled to pay. That reasoning was criticised by Huawei, but far from being erroneous, it identifies the central reason why an injunction is necessary in order to do justice, and why damages in lieu would not be an adequate substitute. Conclusion Before concluding we would like to record our appreciation of the high quality of the judgments of the courts below and the help which we gained from the judgments of the Court of Appeal in each of these cases. It follows from what we have discussed above that the appeals must fail. We therefore dismiss the appeals.

UK-Abs

There are two appeals before the Supreme Court, both of which raise issues that are important to the international market in telecommunications. The appeals concern actions for infringement of UK patents said to be essential to the implementation of international standards for mobile telephony, such that it is not possible to make, sell, use or operate mobile phones and other equipment that is compliant with the standards without infringing the patents. Patents of this kind are called Standard Essential Patents (SEPs). The international standards in question are those set by the European Telecommunications Standards Institute (ETSI) for 2G (GSM), 3G (UMTS) and 4G (LTE). ETSI has over 800 members from 66 countries across five continents, and is recognised as the standard setting organisation in the European Union telecommunications sector. Amongst other things, it produces the technical standards needed to achieve a large unified European market for telecommunications, so that mobile phones and other telecommunications equipment can be used internationally. Once a standard has been adopted, there is a risk that owners of SEPs could disrupt the international telecommunications market by refusing to license their inventions or by charging excessively high royalties for their use. ETSI therefore requires its members to declare any patents which might be used in a telecommunications industry standard. Under its IPR Policy, ETSI then requires the SEP owner to give an irrevocable undertaking to license their patented technology on terms that are fair, reasonable and non discriminatory (FRAND). This gives those implementing the standards access to the technology protected by SEPs, while also providing the SEP owners with a fair reward for the use of their SEPs. The first appeal (the Unwired appeal) concerns an action brought by Unwired against Huawei for infringement of five UK patents which Unwired claimed to be SEPs. The SEPs in issue form part of a worldwide patent portfolio, which Unwired acquired from Ericsson. Unwireds business is licensing patents to companies who make and sell telecommunications equipment. Ericsson had previously licensed the relevant SEPs to Huawei, but the licence expired in 2012. In 2015 and 2016, three technical trials were held in which two of the SEPs were found to be both valid and essential. Two other SEPs were found to be invalid. Huawei has also been held to be infringing one or more of Unwireds SEPs in Germany, and its challenge to two of Unwireds patents in China has not succeeded. In the subsequent non technical trial, the judge held that Unwireds undertaking to license its SEPs on FRAND terms was justiciable and enforceable in the English courts. He also held that an implementer who refused to take a licence on terms which the court held to be FRAND exposed itself to an injunction for infringing a UK patent. In the circumstances, willing and reasonable parties would agree on a global license, which was the FRAND licence for a licensor with Unwireds patent portfolio and an implementer with almost global sales like Huawei. The judge went on to determine the royalty rates and other licence terms that he considered to be FRAND. The second appeal (the Conversant appeal) concerns an action brought by Conversant against Huawei and ZTE for infringement of four of its UK patents. These form part of a portfolio of about 2,000 patents and patent applications, covering 40 countries, which Conversant acquired from Nokia in 2011. Conversant argues that the portfolio includes 28 patent families which are SEPs. Like Unwired, Conversant is an intellectual property licensing company which licenses patents for royalty income. Huawei and ZTE applied for an order dismissing Conversants claims on the basis that the English courts did not have jurisdiction to determine the validity of foreign patents or, in the alternative, for a stay of proceedings on the ground that the English courts were not the appropriate forum for trying the case. The trial judge dismissed both applications. He held that the English courts had jurisdiction to enforce the undertaking made under ETSIs IPR Policy and to determine the terms of a FRAND licence. This did not intrude on the jurisdiction of foreign courts in relation to the validity or infringement of foreign patents, because the terms of any licenses determined by the English courts could be adjusted to reflect relevant rulings of foreign courts. The Court of Appeal upheld the trial judges orders in both the Unwired appeal and the Conversant appeal. Huawei and ZTE now appeal to the Supreme Court. The Supreme Court unanimously dismisses both appeals. The full Court gives the judgment, which confirms that the contractual arrangements ETSI has created under its IPR Policy give the English courts jurisdiction to determine the terms of a global license of a multi national patent portfolio. The appeals raise five issues, all of which are important to the international market in telecommunications [1]. Issue 1: The jurisdiction issue The jurisdiction issue arises in both appeals. The Supreme Court is asked to decide whether the English courts have jurisdiction and may properly exercise a power, without both parties agreement: (a) to grant an injunction to restrain the infringement of a UK patent that is a SEP unless the implementer of the patented invention enters into a global licence of a multi national patent portfolio; and (b) to determine the royalty rates and other terms of such a licence [49]. The Court finds that the English courts have jurisdiction and may properly exercise these powers. Questions as to the validity and infringement of a national patent fall to be determined by the courts of the state which has granted the patent. However, the contractual arrangements ETSI has created under its IPR Policy give the English courts jurisdiction to determine the terms of a license of a portfolio of patents which includes foreign patents [58]. The Court begins by considering Huaweis argument that, properly construed, ETSIs IPR Policy only permits the English courts to determine the terms of a license of UK SEPs and only where those SEPs have already been held by the English courts to be valid and infringed [54]. The Court rejects this argument on the basis that it runs counter to the aims of the IPR Policy and does not adequately take the wider context into account [59 60]. The Court also rejects Huaweis submission that the IPR Policy prohibits a SEP owner from seeking an injunction from a national court where it establishes that an implementer is infringing its patent. Rather, the possibility that a national court might grant an injunction is a necessary part of the balance which the IPR Policy seeks to strike, because it incentivises implementers to negotiate and accept FRAND terms for the use of the SEP owners portfolio [61]. Huawei argues that there is a clear distinction between the terms that operators might choose to agree voluntarily as part of a commercial negotiation and the terms that can be imposed on them by the courts [53]. The Court rejects this distinction. It finds that the IPR Policy envisages both that the courts may decide whether or not the terms of an offered licence are FRAND and that the courts should look to and draw on commercial practice in the real world when making this assessment [62]. The Court goes on to disagree with Huaweis submission (at [51]) that the English courts do not have jurisdiction to determine the terms of a licence of disputed (or potentially disputed) foreign patents. In the present appeals, the lower courts did not attempt to rule on the validity or infringement of foreign patents, which would have been beyond their jurisdiction. Instead, they looked to the industry practice of taking a license of a portfolio of patents and construed ETSIs IPR Policy as promoting that behaviour [63]. If an implementer is concerned about the validity and infringement of particularly significant patents in a portfolio, it could seek to reserve the right to challenge those patents and to require that the royalties payable under the licence should be reduced if the challenge is successful [64 65]. The Court also disagrees with Huaweis submission (at [52]) that the approach of the English courts is out of step with that of foreign courts [66]. It finds that the trial judges approach in the Unwired appeal is consistent with several judgments in other jurisdictions, which contemplate that, in an appropriate case, the courts would determine the terms of a global FRAND licence [67 84]. The Court also dismisses Huaweis argument (at [55]) that it is improper for an English court to exclude Huaweis products from the UK market by exercising a discretion to grant an injunction in respect of an infringement of a SEP [85 90]. Issue 2: The suitable forum issue The suitable forum issue arises in the Conversant appeal only. It has two limbs. The first limb asks whether the High Court should have: (a) set aside service of Huawei and ZTE out of jurisdiction; and (b) permanently stayed the proceedings as against the English subsidiaries of Huawei and ZTE on the basis that China was a more suitable forum for hearing the dispute than England [92]. The suitable forum (or forum conveniens) doctrine requires the English court to decide whether it or a suggested foreign court with jurisdiction would be the more suitable forum for determining the dispute between the parties [94]. Huawei and ZTE argue that the Chinese courts would be a more suitable forum for determining their dispute with Conversant. However, the Court holds that this argument must fail because the Chinese courts do not currently have the jurisdiction needed to determine the terms of a global FRAND licence, at least, without all parties agreement that they should do so. In contrast, the English court has jurisdiction to do this [96 97]. The second limb, which the Court labels case management, is whether the English proceedings should be stayed temporarily until the Chinese proceedings challenging the validity of Conversants Chinese patents have been concluded [92]. The Court finds that the Court of Appeal was right to refuse any case management solution [103 104]. Issue 3: The non discrimination issue The non discrimination issue arises in the Unwired appeal and relates to the requirement that license terms must be non discriminatory. Huawei argues that the non discrimination limb of the FRAND undertaking is hard edged, which means that like situations must be treated alike and different situations differently. SEP owners like Unwired must therefore grant the same or similar terms to all licensees, unless it can be shown that there are objective reasons for treating them differently. Accordingly, Unwired should have offered Huawei a licence with a worldwide royalty rate which was as favourable as those it had previously agreed with Samsung [105 106]. The Court holds that Unwired had not breached the non discrimination limb of the FRAND undertaking [112]. ETSIs IPR Policy requires SEP owners, like Unwired, to make licenses available on fair, reasonable and non discriminatory terms and conditions. This is a single, composite obligation, not three distinct obligations that the licence terms should be fair, and separately, reasonable, and separately, non discriminatory [113]. The non discriminatory part of the undertaking indicates that, to qualify as FRAND, a single royalty price list should be available to all market participants. This must be based on the market value of the patent portfolio, without adjustment for the characteristics of individual licensees [114]. However, there is no requirement for SEP owners to grant licences on terms equivalent to the most favourable licence terms to all similarly situated licensees. Indeed, ETSI previously rejected proposals to include a most favourable licence term of this kind in the FRAND undertaking [116 119]. Issue 4: The competition issue In the Unwired appeal, Huawei argues that Unwireds claim for an injunction should be regarded as an abuse of its dominant position, contrary to Article 102 of the Treaty on the Functioning of the European Union. This is because Unwired has failed to comply with the guidance given by the Court of Justice of the European Union in Huawei v ZTE (Case C 170/13), since it did not make a FRAND licence offer before issuing proceedings for injunctive relief. Huawei argues that, as a result, Unwireds remedy should have been limited to damages [128 129]. The Court considers Article 102 [131], Huawei v ZTE [132 143], the facts of the present case [144 145] and the decisions of the trial judge and the Court of Appeal [146 148]. It confirms that bringing an action for a prohibitory injunction without notice or prior consultation with the alleged infringer will infringe Article 102 [150]. However, the nature of the notice or consultation required will depend on the circumstances of the case: there is no mandatory requirement to follow the protocol set out in Huawei v ZTE. On the facts, what mattered was that Unwired had shown itself to be willing to grant a licence to Huawei on whatever terms the court decided were FRAND. Unwired had not therefore behaved abusively [151 158]. Issue 5: The remedies issue In both appeals, Huawei argues that, even if it is infringing Unwired and Conversants SEPs, the court should not have granted an injunction to stop the continuing infringement. Instead, the more appropriate and proportionate remedy would be for the court to award the claimants damages, based on the royalties which would reasonably be agreed for a licence of the infringed UK patents [159]. The Supreme Court rejects this argument. It holds that there is no basis on which the Court could properly substitute an award of damages for the injunction granted in the Unwired appeal and upheld by the Court of Appeal [163]. There is no risk that Unwired or Conversant could use the threat of an injunction as a means of charging exorbitant fees, since they cannot enforce their rights unless they have offered to license their SEPs on terms which the court is satisfied are FRAND [164 165]. Moreover, an award of damages would not be an adequate substitute for an injunction [166 169].

The main issue in this appeal concerns the meaning and effect of a short, innocent sounding, phrase in article 221(4) of the (now superseded) Customs Code of the EU, contained in Council Regulation (EEC) No 2913/92 of 12 October 1992. The Customs Code regulated the collection of, and accounting for, customs duty throughout the EU (in 1992, the EEC). As is spelt out in the recitals to Regulation No 2913/92, the purposes of the Customs Code include securing a balance between the needs of the customs authorities in ensuring the correct application of customs legislation, on the one hand, and the rights of traders to be treated fairly, on the other, the establishment of uniform rules and procedure within the internal market, and the prevention of fraud or irregularity which would be liable adversely to affect the General Budget of the EU. In order to understand the main issue about the meaning and effect of article 221(4) as inserted by Council Regulation (EC) No 2700/2000 of 16 November 2000, it is necessary first to explain some of the basic concepts used within the Customs Code. At the heart of it lies the concept of customs debt which is defined in article 4(9), in relation to imports, as follows: Customs debt means the obligation on a person to pay the amount of the import duties (customs debt on importation) or export duties (customs debt on exportation) which apply to specific goods under the Community provisions in force. By article 4(12) debtor means any person liable for payment of a customs debt. In relation to imports, article 201(2) provides that a customs debt shall be incurred at the time of acceptance of the customs declaration in question, and article 201(3) identifies as the debtor the person making the declaration, and (if relevant) the person on whose behalf the declaration is made. Recovery of the amount of the customs debt is governed by Chapter 3 of the Customs Code. Section 1 deals with entry of the debt in the accounts and communication of the amount of duty to the debtor (in both cases by the customs authority of each member state). Articles 218 to 220 lay down strict time limits for the accounting by customs authorities for customs debts including, in article 220, correcting the accounts where a customs debt has originally been entered at a level lower than the amount legally owed. Article 221 provides for the communication to the debtor of the amount of duty as soon as it has been entered into the accounts. Section 2, which begins with article 222, provides time limits and procedures for payment of the duty by the debtor. Those time limits run from the date of communication to the debtor of the amount of duty owed. Thus, although the debtor incurs a customs debt at the time of importation (when making the customs declaration), liability to pay it occurs only upon receipt of communication of the amount by the relevant customs authority. Returning to article 221, it provided (at the material time) so far as is relevant as follows: Article 221 1. As soon as it has been entered in the accounts, the amount of duty shall be communicated to the debtor in accordance with appropriate procedures. 2. 3. Communication to the debtor shall not take place after the expiry of a period of three years from the date on which the customs debt was incurred. This period shall be suspended from the time an appeal within the meaning of article 243 is lodged, for the duration of the appeal proceedings. 4. Where the customs debt is the result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings, the amount may, under the conditions set out in the provisions in force, be communicated to the debtor after the expiry of the three year period referred to in paragraph 3. I have italicised the phrase which falls to be interpreted and applied on this appeal. By article 4(23) provisions in force include both Community and national provisions. The issue may be summarised as follows. For the importer FMX Food Merchants Import Export Co Ltd, the respondent, which is the relevant customs debtor, it is said that article 221(4) confers an option on each member state to provide, in advance, an alternative fixed time limit in substitution for the three year time limit for communication of the amount of duty, where the qualifying condition (namely an act which was liable to give rise to criminal court proceedings) is satisfied. I will call it the criminal proceedings condition. If the member state does not do so (and the UK did not) then the three year time limit provided by article 221(3) remains in force, because any other outcome would offend against the EU principle of legal certainty. For HMRC, the appellant, it is submitted that the three year time limit in article 221(3) is automatically displaced wherever the criminal proceedings condition is satisfied. In such a case the requirement for legal certainty may be met either by a member states provision of a substitute fixed time limit, or by the combination of a number of specific provisions of the national law which, together, satisfy the requirement for legal certainty or, as a last resort, by the general requirement of EU law that the communication should take place within a reasonable time. The relevant provisions of national law, it is argued, include one or more of the UKs provisions about abuse of process, the equitable doctrine of laches, or the provisions of the Limitation Act 1980. Thus far, FMXs arguments have been broadly accepted by the First tier Tribunal (the FtT) and by the Court of Appeal, whereas the Upper Tribunal (the UT) found in favour of HMRC. The Facts The facts which gave rise to the present dispute are not (now at least) contentious and may be briefly stated. Between August 2003 and January 2004, FMX imported ten consignments of garlic, which were declared to be of Cambodian origin, thus purportedly entitling them to exemption from all import duties under the Everything But Arms amendment to the EUs generalised system of preferences made in favour of, amongst other countries, Cambodia in 2001. In fact, the consignments all originated in China, so that (being outside the relevant quota for fresh garlic) they were subject both to ad valorem duty of 9.6% and additional anti dumping duty of 120 per 100kg. The duty which should have been paid was 503,577.63. The false declarations as to origin came to light in the course of HMRCs investigation of later imports, occurring after January 2004, leading to post clearance demands in February 2007 for duty of 370,872.50 issued within three years from the relevant importations. The FtT dismissed FMXs appeal against those demands in December 2010, holding that the imports had all originated in China. Following that outcome HMRC issued the post clearance demand for duty in respect of the August 2003 January 2004 series of imports in March 2011, long after the expiry (if applicable) of the three year time limit for communication in article 221(3), but only just over three months after the FtTs decision about the later imports. It was found by the FtT and is now common ground that, in relation to the 2003 04 imports, all the garlic originated in China, that the makers of the certificates of origin knew that they were false, and would be used for the purposes of UK import declarations, that FMX presented these certificates to HMRC and that, although not implicated in the underlying fraud, FMX thereby committed an act that was liable to give rise to criminal court proceeding under section 167(3) of the Customs and Excise Management Act 1979, which creates a strict liability offence. The result of those factual findings is that the criminal proceedings condition for disapplication of the three year time limit for communication set out in article 221(4) was satisfied. It is, in passing, common ground that it is not necessary for HMRC to show that criminal court proceedings actually ensued or that the customs debtor was the person who or which committed the relevant criminal act: see Gilbert Snauwaert v Belgium (Joined Cases C 124/08 and C 125/08) [2009] ECR I 6793. Conditions set out in the provisions in force It is common ground that this phrase is apt to describe both EU provisions and applicable provisions of any relevant member state. The UK has not in fact enacted or prescribed any provisions taking the form of a substitute time limit for communicating a customs debt where the criminal proceedings condition in article 221(4) is satisfied. The UK has, of course, a substantial body of statutory limitation provisions, now consolidated in the Limitation Act 1980 (for England and Wales), but section 37(2)(a) provides that the 1980 Act shall not apply to any proceedings by the Crown for the recovery of any tax or duty, or interest thereon. The result is that there were no provisions in force in England and Wales at the material time which imposed any specific or fixed time limit for the communication of a customs debt in circumstances where the criminal proceedings condition in article 221(4) applied. If, as FMX contends, article 221(4) gives member states the option to prescribe a substitute time limit, failing which the three year time limit in article 221(3) remains in force, that option has not been exercised in respect of England and Wales. The principle of legal certainty In Test Claimants in the FII Group Litigation v Revenue and Customs Comrs (formerly Inland Revenue Comrs) [2012] UKSC 19; [2012] 2 AC 337, 394, Lord Sumption, after mentioning the EU principles of effectiveness and equivalence, continued at para 146: There is a third principle which features less prominently in the case law on this subject but is of considerable importance because it informs the approach of the Court of Justice to the first two. This is the principle of legal certainty, which lies at the heart of the EU legal order and entails (among other things) that those subject to EU law should be able clearly to ascertain their rights and obligations. Later, at para 149, he continued: The implications of these principles for the operation of rules of limitation in national systems of law is the subject of a considerable body of case law in the Court of Justice. Not only is limitation a feature of every national legal system of the EU, but the recognition of national rules of limitation as both necessary and desirable is treated as part of the principle of legal certainty in EU law. In Rewe I [1976] ECR 1989, one of the first cases to come before the Court of Justice about the application of limitation periods to claims to enforce directly effective rights in the area of tax, the court observed, at para 5, that the laying down of such time limits with regard to actions of a fiscal nature is an application of the fundamental principle of legal certainty protecting both the taxpayer and the administration concerned. This is so, notwithstanding that the effect of that rule is to prevent, in whole or in part, the repayment of those charges: Haahr Petroleum Ltd v Abenra Havn (Case C 90/94) [1997] ECR I 4085, para 45. Subject to the overriding principles of effectiveness and equivalence, EU law recognises the public interest in orderly national budgeting and equity between generations of taxpayers, which will generally require rules for establishing clear limits beyond which tax accounts may not be reopened. Two potentially conflicting strands of EU jurisprudence have been identified by the parties to this appeal as emerging from decisions of the Court of Justice of the European Union (the CJEU). The first is that, where the provisions in force appear to have a lacuna which, because of the absence of any time limit, would appear to permit a relevant body to pursue a claim or take action against a person without any limit of time, then the principle of legal certainty will require that the claim be made or action be taken within a reasonable time. The second strand is that where the principle of legal certainty calls for the provision of a time limit, or permits a member state to prescribe a time limit of its own by way of derogation from an EU wide time limit, then nothing other than a time limit which is both fixed in its duration, and laid down in advance, will do. Central to the outcome of this appeal is the question which of those strands of EU jurisprudence best illuminates the meaning and effect of article 221(4). The earliest case which the court was shown in the first strand of EU authority is Sanders v Commission of the European Communities (Case T 45/01) [2004] ECR II 3315, CFI (Sanders). This was a claim for damages for loss sustained as a result of the alleged failure to recruit the applicants as temporary servants of the European Communities during the time they worked for the Joint European Torus (JET) Joint Undertaking. It was, in essence, a complaint of discrimination by the Commission made by 95 of its employees. The procedural rules governing such an application, contained in the Staff Regulations of Officials of the European Communities, imposed no time limit for the bringing of such claims. Nonetheless, the court held that the applicants were under a duty to do so within a reasonable time after becoming aware of the relevant facts, and that this duty arose from the general principles of Community Law, in particular the principle of legal certainty: see paras 59 61 and 66 of the judgment. At para 59 it was held that: There is an obligation to act within a reasonable time in all cases where, in the absence of any statutory rule, the principles of legal certainty or protection of legitimate expectation preclude Community institutions and natural persons from acting without any time limits, thereby threatening, inter alia, to undermine the stability of legal positions already acquired. At para 60, the court held that, for Community institutions, the duty to act within a reasonable time is an aspect of good administration and derives from the fundamental need for legal certainty. In Allen v Commission of the European Communities (Case T 433/10) EU:T:2011:744, EGC (Allen), another case about the JET project, 110 employees brought discrimination claims under the Staff Regulations of Officials of the European Communities, which were dismissed by the European Union Civil Service Tribunal (First Chamber) as having been brought out of time. On appeal to the General Court, the applicants argued that there was no time constraint for the bringing of such claims. In rejecting that argument the court held, at para 26, as follows: In that regard, it must be held that the appellants argument that the absence of a time limit automatically means that it is possible to bring a claim for damages without any time limit cannot succeed. It should be noted on that point that, contrary to what the appellants contend, there is an obligation to act within a reasonable time in all cases except those where the legislature has expressly excluded or expressly laid down a specific time limit. The legal basis for setting a reasonable time limit, in the absence of any statutory rule, is the principle of legal certainty, which precludes institutions and natural persons from acting without any time limits, thereby threatening to undermine the stability of legal positions already acquired Thus, in the absence of any statutory rule, it is for the judicature to decide on the length of the reasonable period for submitting a claim for damages, in the light of the circumstances of the case Nencini v European Parliament (Case C 447/13P) EU:C:2014:2372 (Nencini) was a case about recovery of expenses over claimed by an MEP, by the European Parliament. Although the relevant procedural rules imposed a five year limitation period running from the notification of such a claim to an MEP, no time limit was specified for the making of that notification itself. The communication was made to the MEP more than five years after the Parliament had become aware of the relevant facts. The General Court and the Second Chamber on appeal held that the reasonable time principle applied to the communication by the Parliament of such a claim, because the fundamental requirement of legal certainty prevented Community institutions from indefinitely delaying the exercise of their powers. The CJEU concluded that, in the circumstances, a delay of more than five years from becoming aware of the relevant facts, before communicating the claim, was to be presumed to be unreasonable, in the absence of special facts, such as conduct by the debtor causing delay or other time wasting manoeuvres or bad faith. I turn now to the cases cited to this court in the second strand of EU authority, again in chronological order. The most important of those, heavily relied upon by the Court of Appeal in the present case, is Ze Fu Fleischhandel GmbH v Hauptzollamt Hamburg Jonas (Joined Cases C 201/10 and C 202/10) [2011] ECR I 3545, CJEU (Fleischhandel). It concerned the interpretation of article 3(1) and (3) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests and of the principles of proportionality and legal certainty. The underlying claim was for repayment by Fleischhandel of wrongly claimed export refunds in relation to goods which had been cleared for export to Jordan but, in fact, transported to Iraq. Article 3 of Regulation No 2988/95 provided (so far as relevant) as follows: 1. The limitation period for proceedings shall be four years as from the time when the irregularity referred to in article 1(1) was committed. However, the sectoral rules may make provision for a shorter period which may not be less than three years. 3. Member states shall retain the possibility of applying a period which is longer than that provided for in [paragraph] 1 The exports in question had taken place in 1993, and the claim for repayment was made, in proceedings in the German courts, in 1999, after the discovery of the true export destination during an inspection carried out early in 1998. The first instance court, the Finanzgericht Hamburg, decided that the claim was out of time under article 3(1) of Regulation No 2988/95, but the Bundesfinanzhof stayed the proceedings of the Hauptzollamts appeal, and referred the matter to the CJEU. The referring courts provisional view was that a general 30 year limitation period in German law could be applied by analogy and, if unreasonably long, could in principle be reduced by judicial decision, but not so as to have rendered the claim in that case time barred. The CJEU held that, in principle, a national limitation period as long as 30 years would not offend the principle of legal certainty, but that it would be disproportionately long. If the national court sought to reduce a disproportionate period to one which satisfied the requirements of proportionality this would not satisfy the principle of legal certainty unless the reduced period was fixed in advance so as to be sufficiently foreseeable by a person affected by it: see para 52 of the judgment. The result was that, no such reduced period having been laid down by the German courts in advance, there was no national limitation period which satisfied the principles of legal certainty and proportionality sufficient to displace the four year period prescribed by article 3(1) of Regulation No 2988/95, by reference to article 3(3). It was not argued in that case that there was a lacuna which could be filled by an obligation on the claimant to proceed within a reasonable time, no doubt because, in accordance with the clear language of article 3, the four year limitation period prevailed in the absence of any shorter or longer period which complied with the requirements of EU law. Firma Ernst Kollmer Fleischimport und export v Hauptzollamt Hamburg Jonas (Case C 59/14) EU.C:2015:660 (Kollmer) was also about article 3 of Regulation No 2988/95. At para 30 of his opinion Advocate General Cruz Villaln said that: If a four year limitation period were to appear, from the national authorities point of view, too short to enable them to bring proceedings in respect of irregularities displaying a certain complexity, it would always be open to the national legislature to adopt a longer limitation rule suited to irregularities of that type, which would have to meet the requirements of foreseeability and proportionality deriving from the principle of legal certainty. He thus analysed article 3(3) as conferring a form of option enabling member states to substitute the four year period with a longer period of their own choosing, provided that the longer period was compliant with the principle of legal certainty. Failing a compliant exercise of that option, the four year period would prevail. Valsts iemumu dienests v Veloserviss SIA (Case C 427/14) EU:C:2015:803 was relied upon by the Court of Appeal and by FMX in this court as affording some additional support for the proposition that a taxpayer or customs debtor is entitled, under the principle of legal certainty, not to have his position open to challenge indefinitely: see para 31 of the judgment. It was a case about the Customs Code, but it was more concerned with national rules about the time for the conduct of post clearance examinations, than time limits for the communication of a customs debt. Article 221(4) of the Customs Code is referred to in passing, but it is not a case in which the criminal proceedings condition for the application of article 221(4) was satisfied. The importer in that case was neither implicated in the false declaration of Cambodian origin of the bicycles concerned, nor found to have acted otherwise than in good faith (ie, in the context, without reasonable care). There was therefore no issue as to whether the three year time limit for communication of a customs debt was inapplicable in the circumstances. I must finally mention Agra Srl v Agenzia Dogane Ufficio delle Dogane di Alessandria (Case C 75/09) [2010] ECR I 5595. Although it does not fall squarely into either of the streams of European authority to which I have thus far referred, it is specifically about article 221(4) of the Customs Code, and sheds some light on the purpose behind the criminal proceedings exception from the generally applicable three year time limit for the communication of customs debts. The case concerned an irregular import declaration made by Agra for the purpose of obtaining licences for the import of frozen boned meat, submitted in June 2002, which was found to have been false during an inspection in 2007, leading to a subsequent criminal investigation, and communication of a reassessment of the duty payable in March 2008. The relevant provisions of the Italian Customs Code in force at the time provided for a five year limitation period for the recovery of customs duties but, where the failure to pay duties had its origins in a criminal offence, time for the purposes of that period was to run from the date on which the order or judgment in the criminal proceedings became final. The question referred to the CJEU was whether a time limit prescribed to run from the date of the conclusion of the criminal proceedings complied with article 221(3) and (4) of the Customs Code. The CJEU ruled that it did. At paras 34 35 of the judgment the CJEU held: 34. Secondly, it should be observed that, by merely referring to the conditions set out in the provisions in force article 221(4) of the Customs Code defers to national law as regards the rules governing the extinction of the customs debt through the passage of time, where that debt arises as a result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings. 35. Accordingly, in so far as EU law does not lay down common rules in this field, it is for each member state to determine the rules governing the extinction, through the passage of time, of customs debts which it has not been possible to assess because of an act which could give rise to criminal court proceedings (see, by analogy, Case C 91/02 Hannl Hofstetter [2003] ECR I 12077, paras 18 to 20, and Molenbergnatie, para 53). That was, of course, a case in which a national provision in force dealt in express terms with the time limit for pursuing a customs debt in circumstances where the criminal proceedings condition in article 221(4) applied rather than, as in the present case, where there is no such specific national provision in force. It may readily be supposed that, if what may loosely be called the Fleischhandel test had by then been enunciated, the Italian provision would have complied with it even though the limitation period was set to run from a date (namely when the criminal proceedings became final) which could not be ascertained by the taxpayer in advance of factual matters specific to his case. Nonetheless it is of some assistance that the language chosen by the CJEU speaks in terms of the complete disapplication of any community wide time limit (or other common rules) where the act creating the customs debt could give rise to criminal court proceedings, treating the matter as entirely governed by the rules put in place by the relevant member state. In short, the disapplication of the three year time limit in article 221(3) is treated as the automatic result of the likelihood of criminal court proceedings, rather than the result of an election by a member state to choose a different time limit for that already prescribed by the EU as appropriate for those circumstances. Analysis The starting point for an understanding of the meaning and effect of article 221(4) is an examination of its purpose. It describes the second of two circumstances in which the ordinary three year time limit for communication of a customs debt is not to apply. The first, in article 221(3), is where the liability for duty is subject to an appeal, within the meaning of article 243. Then, the three year period is suspended for the duration of the appeal proceedings. The second is where the debt is the result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings. The purpose of the first exception is because, in the event of an appeal, the amount of the customs debt has not been finally determined as it would otherwise be by its amount being entered in the accounts. The purpose of the second exception is not so clear. Under the legal systems of some member states it may be that the amount of the customs debt arising from the potentially criminal act may be determined in the criminal proceedings themselves, with a similar consequence in the unsuitability of the ordinary three year time limit as would flow from the lodging of an appeal. In other member states, and in the UK in particular, it may be because civil proceedings for the determination of the amount of the debt may be liable to be stayed until the determination of the criminal proceedings, so as to preserve the integrity of the criminal process. This would render the ordinary three year period equally inappropriate, but would not necessarily make a simple suspension of the period until the end of the criminal proceedings a satisfactory substitute. It is easy to see why, there being likely divergences in the consequences of criminal proceedings as between different member states, that the decision was taken to leave the conditions (including time limits) for communication of a customs debt, where the criminal proceedings condition applies, to each member state. The important point for present purposes is that it is reasonably clear from the language and purpose of article 221(4), read in its context, that the three year period in article 221(3) is regarded as inappropriate for cases where there is a prospect of criminal court proceedings, rather than as a prima facie appropriate period from which, nonetheless, member states are given the option to depart. This is consistent with a plain reading of the language of article 221(4), which simply provides that communication of the debt may be made after the expiry of the three year period, where the debt is the result of an act which was liable to give rise to criminal court proceedings. The permission given to communicate such a debt after the expiry of the three year period is, nonetheless, subject to any relevant conditions in the provisions in force which, as appears from article 4(23), includes Community or national provisions. There is a sharp difference therefore between this case and the circumstances under review in the Fleischhandel and Kollmer cases, both of which concerned article 3 of Regulation No 2988/95. There, member states had the possibility of applying a longer period than the four year EU wide time limit, not in special circumstances where that time limit was disapplied, but in every situation to which it did apply, namely the commission of a relevant irregularity. The disapplication of the EU wide time limit was therefore triggered precisely by the exercise of an option conferred upon member states to prescribe a longer time limit. If that option was not exercised in accordance with EU law then, leaving aside the provision for a shorter period in article 3(1), there is nothing in that article, or elsewhere in Regulation No 2988/95, which would make it appropriate to disapply the four year time limit in favour of a longer one. There was therefore no lacuna in the provisions in force which needed to be filled by reference to an obligation to act within a reasonable time. Returning to the present case, the next question is whether there was any provision of UK law in force sufficient to prevent communication of the customs debt arising from the false declaration of origin of the garlic being able to be given without any limit of time, contrary to the principle of legal certainty which the existence of such a liberty on the part of HMRC would involve. In my view, there is none. In the UT Birss J considered that there were relevant provisions. At para 34 he said: The common law (and rules of equity) already equip the courts to prevent procedural unfairness in proper cases and, for example, go as far striking out a claim as abusive as a result of inordinate delay which would make a fair trial impossible. To take an extreme example, if HMRC knew all the relevant facts but still waited a further 20 years before issuing a communication and seeking to enforce the debt claim, that sort of conduct would very likely make a fair trial impossible and would be abusive. Such a case would very probably be struck out. In para 35 he identified the relevant UK law principles as being abuse of process and laches, and HMRC has supported that analysis in its submissions to this court. I respectfully disagree. Both abuse of process and laches are concerned with the conduct of, or delayed institution of, legal proceedings. But this case is concerned with the need, recognised by the EU principle of legal certainty, for there to be some control upon the timing of the communication of a customs debt, rather than upon the institution of subsequent legal proceedings if, after communication of it, the debt has not paid. The doctrine of laches suffers from the additional difficulty that it relates to the pursuit of equitable relief: see Snells Equity, 33rd ed (2015), para 5 011. The recovery of a post clearance customs debt is far removed from the class of equitable claims. An attempt was made by HMRC to argue that, if UK law was otherwise deficient it would be necessary to reinstate the protection to debtors afforded by the Limitation Act 1980, by disapplying section 37(2)(a) of that Act, which renders the Act inapplicable to tax or duty claims by the Crown. Again, I disagree. There are two difficulties with that analysis. The first is whether, even if the provisions of the Limitation Act 1980 were by that route to be re instated for the purpose of protecting debtors from late claims for post clearance customs duty, they would in fact serve that purpose. The second is whether, even if they would, section 37(2)(a) would be sufficiently inconsistent with the requirements of EU law for it to have to be disapplied. The Limitation Act 1980 provides limitation periods under which (subject to suspension or postponement) time runs against claimants from the moment when they have a complete cause of action. The Act is, in short, about limitation of action, rather than time limits for the taking of steps which make the claimants cause of action complete, or steps which would remove a procedural bar to the taking of proceedings. In the present context the ability to take proceedings for recovery of a post clearance customs debt depends upon the communication of the debt, followed by non payment during the period prescribed for payment thereafter: see articles 221, 222 and 232 of the Customs Code. While it is true that the debt is incurred at the time of the acceptance of the relevant declaration under article 201(2), I consider it unreal to suppose that HMRC is therefore entitled to sue for or enforce the debt before the time when, under the Customs Code as summarised above, it becomes due and payable, and timely payment has not been made. Furthermore it would be strange indeed for the Customs Code to have made detailed provision in relation to the time permitted for communication of the debt, if the relevant national customs authority of a member state could nonetheless sue for it regardless of communication, and, in particular, where communication had been made out of time. The provision for communication to be made in a timely fashion in article 221 must at least have been designed to prevent the debtor from exposure to liability to proceedings for the enforcement of a debt which had not been communicated to him at all. But the existence of a requirement to take certain steps before bringing proceedings for the enforcement of a statutory debt does not always mean that there is no cause of action until those steps have been taken: see Swansea City Council v Glass [1992] QB 844. Whether the taking of those steps is a part of the cause of action or simply a procedural requirement is a question of construction of the statute in question; see per Taylor LJ at p 852B C, applying Coburn v Colledge [1897] 1 QB 702 and Sevcon Ltd v Lucas CAV Ltd [1986] 1 WLR 462. In written submissions at the courts request following the hearing, both parties were of one accord in asserting that the cause of action in the present case was complete on the date when, pursuant to article 201(1), the customs debt was incurred, rather than upon, or following, the communication of it under article 221. I am not at all sure that this is correct, and there may have been tactical reasons behind what, on FMXs case, would appear to amount to a concession. It seems to me to be well arguable that communication of the debt to the debtor is part of the cause of action for recovery, so that HMRC would have to plead both communication of the debt and (perhaps) non payment within the prescribed time, as part of its cause of action for recovery. This is, in particular, because article 222(1) speaks not merely of the right of HMRC to take proceedings for recovery, but of the obligation of the debtor to pay, as following upon the communication of the debt. But for the purposes of what follows I will assume that the parties agreement about this is correct. Plainly, on that basis, the application of the Limitation Act 1980 would go some way to alleviate the otherwise open ended ability of HMRC to recover the debt at any time, where article 221(4) disapplies the three year time limit. Communication of the debt, as a procedural pre condition to bringing proceedings, would have to be made within the relevant limitation period. But section 37(2)(a) of the Act is not lightly to be disapplied. There must be a real inconsistency with EU law: see Fleming (trading as Bodycraft) v Revenue and Customs Comrs [2008] UKHL 2; [2008] 1 WLR 195, para 25, per Lord Walker of Gestingthorpe. Plainly no process of construction can be employed to make section 37(2)(a) mean the exact opposite of what it plainly says. The supposed inconsistency with EU law is said to be that, without the three year time limit in article 221(3) HMRC could delay until the crack of doom before communicating the debt, there being no provisions in force to the contrary. But EU law has its own remedy for the filling of just such a lacuna, namely the requirement that communication be made within a reasonable time, if otherwise the principle of legal certainty would be offended. It is precisely to fill such a lacuna that the EU law requirement to take relevant steps within a reasonable time exists, as is explained and exemplified in the Sanders, Allen and Nencini cases which I have summarised above. It was submitted for FMX that this solution had been created only for cases between institutions and national authorities, so that it had no application to a claim by a national authority against a private person such as a customs debtor. Again, I disagree. That analysis is not born out by those authorities, which apply the duty to act within a reasonable time not only to EU institutions, but also to private individuals, such as employees bringing a discrimination claim against the Commission for which there is no prescribed time limit. Since the principle of legal certainty is one of those fundamental principles of general application in EU law I can see no good reason why it should not be generally applicable to fill any lacuna constituted by the absence of a sufficient time limit in relevant provisions in force, whether that is attributable to a failure by EU legislators to provide one (as in the discrimination cases) or to what I regard as a failure by the UK to provide one in the context of the Customs Code, where the prospect of criminal court proceedings leads to the disapplication of the three year time limit in article 221(3). It follows that there is no need or requirement to disapply section 37(2)(a) of the Limitation Act 1980 to remedy an inconsistency with EU law. If, as I conclude, EU law has its own way of dealing with the need to avoid communication of the debt being delayed to an extent which undermines the principle of legal certainty, by the imposition of the requirement that it be made within a reasonable time, then there is no inconsistency in the Limitation Act 1980 regime being made unavailable, by section 37(2)(a), for that purpose. Disposition I would allow the appeal. I have considered whether this court should make a reference to the CJEU but in my view the above analysis demonstrates a clear answer to the question how article 221(4) is to be interpreted and applied in a situation where there are no national provisions in force which limit the time for the communication to the debtor of the amount of duty, where the three year time limit in article 221(3) is displaced. The communication must be made within a reasonable time. I have also considered whether the question whether this communication was made within a reasonable time needs to be referred back to the FtT or to the UT so that it can be decided. It has yet to be decided as a discrete issue, at any level, because the Court of Appeal and the tribunals all decided the appeal on different grounds. Neither of the parties invited this court to take that course, in the event that the reasonable time analysis should prevail. Furthermore, it is not a case in which further facts need to be decided. HMRC made the relevant communication within four months of the outcome of the related appeal to the FtT concerning the post January 2004 imports, which raised similar issues about their provenance. It has not been suggested by FMX that this was outside a reasonable time for such a communication and, in my view, it clearly was not. It was reasonable for HMRC to delay issuing a communication under article 221 in relation to the pre January 2004 imports while the closely related litigation about the later imports remained on foot. The result is that I would restore the decision of the UT, albeit for slightly different reasons. LADY ARDEN: I agree with Lord Briggs that this appeal should be allowed but, as appears below, in part by a different route, which places more reliance on domestic law. The starting point, as I see it, is the interpretation of article 221(4) of the Customs Code as in force at the material time, set out at para 5 above. This does not require member states to adopt legislation extending the three year period for communicating the amount of a customs debt if it is the result of an act which when committed was liable to give rise to criminal court proceedings. In this Lord Briggs and I agree: see the final sentence of para 31 above. It would be odd if member states had to decide to extend the period for communicating a post clearance customs demand resulting from a potentially criminal act since the purpose of article 221(4) is to protect the finances of the EU on whose behalf member states collect customs duties: see, in this connection, the last recital to the Customs Code which states that when adopting measures to implement the Code, the utmost care must be taken to prevent any fraud or irregularity liable to affect adversely the General Budget of the European Communities. Article 221(4) provides that such communication may take place, semble without there having to be any enabling member state legislation, under the conditions set out in the provisions in force. That means that a communication of a post clearance customs debt is not permitted if it does not comply with the conditions for a valid communication set out in the relevant national law or in EU law. Those conditions can trump the extension of time. EU law therefore defers to national law. For these conditions to apply, there must be some provision of EU law or national law which prevents the communication from taking place with operative effect. That would be the case if under national law the customs debt had been extinguished by effluxion of time, for example because of some general provision of the law preventing the state from pursuing claims after a specified period: see Agra Srl v Agenzia Dogane Ufficio delle Dogane di Alessandria (Case C 75/09) [2010] ECR I 5595 (Agra), paras 34 and 35, set out at para 30 above. These paragraphs are very important because in them the Court of Justice of the European Union (the CJEU) takes what may be thought to be an unusual step of stating in terms that EU law defers to national law. The structure of article 221(4) is quite distinct from the equivalent provision of Regulation No 2988/95 in issue in Ze Fu Fleischhandel GmbH v Hauptzollamt Hamburg Jonas (Joined Cases C 201/10 and C 202/10) [2011] ECR I 3545 (Fleischhandel) (para 23 above), which gave member states the option of providing a limitation period and so the principles of EU law applied to any exercise of that member state option. Lord Briggs makes this point, and other points with which I agree, at paras 32 to 37 of his judgment. Contrary to FMXs submission, it is in my judgment beyond the reach of a purposive interpretation to read a similar provision into article 221(4). The principle of legal certainty applies to acts done by EU institutions and member states in exercise of the powers conferred by them under EU rules: see Valsts iemumu dienests v Veloserviss SIA (Case C 427/14) EU:C:2015:803 (Veloserviss), para 30 and see Test Claimants in the FII Group Litigation v Revenue and Customs Comrs (formerly Inland Revenue Comrs) [2012] UKSC 19; [2012] 2 AC 337, para 146 per Lord Sumption. Legal certainty may apply to the imposition of criminal offences when done under a power conferred by the treaties or EU legislation: see Hannl + Hofstetter Internationale Spedition GmbH v Finanzlandesdirektion fr Wien, Niedersterreich und Burgenland (Case C 91/02) [2003] ECR I 12077 which contrary to the submission of FMX, is therefore distinguishable from article 221(4). Proceedings to recover payments exacted in breach of EU law also stand in a different category because they are required by EU law to give effect to EU law. On that basis, I would distinguish the decisions of the CJEU in Test Claimants in the FII Group Litigation v Revenue and Customs Comrs (formerly Inland Revenue Comrs) (Case C 362/12) [2014] AC 1161, Marks & Spencer plc v Customs and Excise Comrs (Case C 62/00) [2003] QB 866 and Halifax plc v Customs and Excise Comrs (Case C 255/02) [2006] Ch 387, on which FMX relies as showing that EU principles apply even to domestic proceedings. It follows that the Court of Appeal were wrong to extract from Fleischhandel a principle of EU law that, where a remedy was left to domestic law, there always had to be a finite limitation period fixed in advance. Firma Ernst Kollmer Fleischimport und export v Hauptzollamt Hamburg Jonas (Case C 59/14) EU:C:2015:660, discussed by Lord Briggs in para 28 above, is similarly distinguishable. Article 221(4) leaves it to domestic law to determine whether the communication of a post clearance demand under that sub article is valid. The provisions referred to in article 221(4) include provisions contained in EU law as well as national law (article 4(23) of the Customs Code). Moreover, the term provisions has an extended meaning and is not limited to provisions in legislation. This may be seen from article 221(1). One of the conditions applying to the communications is that they must follow appropriate procedures (see article 221(1)). In Belgische Staat v Molenbergnatie NV (Case C 201/04) [2006] ECR I 2049, para 53 the CJEU held that, in the absence of EU legislation or national law setting out appropriate procedures, the competent authorities in the member states had to ensure that the communication would allow persons liable for customs debts to have full knowledge of their rights. That decision clearly indicates that the provisions mentioned in article 221(4) need not be rules of law but may be administrative practices. But there still has to be a provision: a principle of EU law is not enough because EU law under article 221(4) defers to national law. section 37(2)(a) of the Limitation Act 1980 (para 15 above). The CJEU has accepted that national law may not impose a limitation period in the context of the recovery of state aid: see, for example, Italian Republic v Commission of the European Communities (Case C 298/00 P) [2004] ECR I 4087, paras 82 to 91. There is no reason to suggest that it would not similarly accept the notion in other areas. Likewise the Court of Appeal in Revenue and Customs Comrs v GMAC (UK) plc [2016] EWCA Civ 1015; [2017] STC 1247, para 150 (a decision in which the leading judgment was given by Floyd LJ, with which Theis J and I agreed) held that, where proceedings were governed by national law, it was possible for there to be no period of limitation. I do not accept FMXs submission that this holding is inapplicable because the case concerned a claim by the taxpayer and not one, as here, by the state since, as HMRC points out, the need for certainty would exist so far as the taxpayer is concerned in both situations. In England and Wales, there is no statutory limitation period because of There was a further ruling by the Court of Appeal in GMAC (UK) plc which is not relevant in this case. The court concluded, in agreement with the earlier decision of the Court of Appeal in British Telecommunications plc v Revenue and Customs Comrs [2014] EWCA Civ 433; [2014] STC 1926, that the EU reasonable time rule could not be applied to defeat the taxpayers claims for recovery of overpaid VAT because HMRC had invalidly imposed a condition that the taxpayer had to prove in an insolvency in order to claim bad debt relief and there was no indication in the domestic legislation that a reasonable time limit for making a claim was being imposed. That ruling turned on the domestic law provisions and has no resonance for this appeal. Contrary to Lord Briggs at para 29 above, I consider that some minor assistance can be gained in the present case from Veloserviss since at para 37 the CJEU made it clear that customs authorities could act under article 221(4) after expiry of the three year period, and made no reference to the need for any limitation period in domestic law. Even applying the extended meaning of provision explained above, there is, so far as this court has been informed, no relevant provision of EU law stipulating the limit of the period within which a communication must be made. As the CJEU held in Agra, EU law defers to domestic law. Contrary to FMXs submissions, nothing in that case requires a member state to adopt a limitation period. All the CJEU holds is that the question of the effect of the elapse of time is a matter for national law. The timeliness of a communication of the post clearance demand is only a relevant issue in connection with proceedings for enforcement of the customs debt, and therefore logically it falls to be determined for that purpose under the domestic law governing the time bar. It follows that it is not, as I see it, relevant whether there was any finding of fact in these proceedings as to reasonable time or whether a reasonable time rule fulfils the EU principle of legal certainty. So far as the law of England and Wales is concerned, it has been said that there is a general duty to exercise statutory powers within a reasonable time: see R (S) v Secretary of State for the Home Department [2007] EWCA Civ 546; [2007] Imm AR 781, para 51 per Carnwath LJ. However, reasonableness is a flexible standard. If HMRC were to delay unreasonably in communicating a customs debt, it might also be said that its failure to make a decision was irrational in judicial review proceedings: see, for example, R v Inland Revenue Comrs, Ex p Opman International UK [1986] 1 WLR 568. It is not necessary to express a final view on these points and there may be a difference of approach between myself and Lord Briggs on this point (cf paras 38 to 39 above). It follows that, for the purpose of determining whether HMRC is time barred from recovering a post clearance customs debt under domestic law, I consider that the reasonable time principle in Sanders v Commission of the European Communities (Case T 45/01) [2004] ECR II 3315 (cf paras 45 to 46 above) is inapplicable. Under the principle of conferral, the reasonable period principle of EU law can only apply to any incidental issue of law concerning that communication to which EU law applies. It cannot restrict the operation of a domestic law to which EU law has been held by the CJEU to defer. Thus, in my judgment, it does not so apply in the circumstances under consideration. There may be other control mechanisms under domestic law, such as that of judicial review, as already mentioned. This may be one of the reasons why article 221(4) has now been revised. I need not question the parties agreement as to when the cause of action for a customs debt is complete (cf para 43 above). The question does not arise because there is no limitation period. Nor do I consider that any question of disapplying section 37(2)(a) arises (cf paras 40 44 above). In conclusion, for the reasons given above, which differ in part from those given by Lord Briggs, it is no answer to HMRCs case that they have duly communicated a post clearance customs debt for FMX, which seeks to uphold the decision of the Court of Appeal, to contend that in breach of EU law there is no limitation period fixed by the law of England and Wales for communicating a post clearance customs debt under article 221(4) of the Customs Code. I would also therefore allow this appeal.

UK-Abs

Customs duty is usually paid around the time goods are imported. In some situations, Her Majestys Revenue and Customs (HMRC) may issue a post clearance demand to require payment at a later date. This appeal is about the time limits for making such demands under a previous version of the EUs Customs Code, Council Regulation (EEC) No 2913/92 as amended. (The issues in this appeal do not arise under the current version of the Customs Code, Council Regulation (EU) No 952/2013.) FMX imported ten consignments of garlic to the UK in 2003 and 2004. It declared the garlic came from Cambodia and claimed exemption from import duties under the EUs Generalised System of Preferences. In 2007, following an investigation, the European Anti Fraud Office (OLAF) concluded that the garlic was actually from China. If the garlic was Chinese, FMX would be liable for import duties and anti dumping duties totalling 503,577.63. In March 2011, HMRC issued a post clearance demand for 503,577.63 on the basis that the garlic originated in China. FMX argued it was too late to issue demands due to a three year time limit set out in article 221(3) of the old Customs Code. HMRC relied on article 221(4) which provides that, where the debt arises from activity which is liable to give rise to criminal court proceedings, the amount may, under the conditions set out in the provisions in force, be communicated to the debtor after the expiry of the three year period. The First tier Tribunal accepted the false import declarations were liable to give rise to criminal proceedings for the purposes of article 221(4) even though FMX was not involved in the underlying fraud. However, it held that HMRC could not rely on article 221(4) because the UK had no provisions in force extending the three year time limit. The Upper Tribunal disagreed and accepted HMRCs argument. It held that article 221(4) of the old Customs Code automatically displaces the three year time limit in cases involving criminality, even if the relevant member state has not enacted provisions which provide an alternative time limit. The Court of Appeal reinstated the First tier Tribunals decision, considering the Upper Tribunals approach violated the EU law principle of legal certainty and would expose taxpayers to stale demands without any time limit. HMRC appealed to the Supreme Court. The issue before the Supreme Court is (in summary) whether HMRC can rely on article 221(4) to displace the normal three year time limit even though the United Kingdom has not enacted a finite alternative time limit. The Supreme Court unanimously allows the appeal, giving judgment in favour of HMRC. Lord Briggs gives the main judgment. Lady Arden agrees the appeal should be allowed, but for different reasons. Article 221(4) states that HMRC may communicate a customs debt after the expiry of the three year period in article 221(3) if the debt results from an act which was liable to give rise to criminal court proceedings. Its purpose is to preserve the integrity of the criminal process whilst leaving the conditions (including time limits) for communication of a customs debt to each member state. Therefore, the disapplication of the three year time limit is the automatic result of the likelihood of criminal court proceedings. It does not require the selection by a member state of a different time limit [31]; [34] [36]; [51] [52]. The next question is whether this would allow HMRC to issue demands without any time limit, and whether this would breach the fundamental principle of legal certainty in EU law [38]. The majority considers a number of options suggested by the parties, and by the courts below, to mitigate the risk of late demands: (1) The domestic law doctrines of abuse of process and laches do not assist because they concern the conduct of legal proceedings, not the communication of a customs debt [39]. (2) The Limitation Act 1980 cannot be invoked because this would require the Court to disapply section 37(2)(a) of that Act (which provides that the Act does not apply to customs debts) on the basis that it was inconsistent with EU law. There is no real inconsistency with EU law because its requirement for legal certainty is adequately met by the reasonable time principle at (3) below [40] [44]; [46]. (3) There is a strand of EU jurisprudence to the effect that, where the provisions in force appear to allow legal action without any time limit, then the principle of legal certainty requires it to be done within a reasonable time: e.g. Sanders v Commission [2004] ECR II 3315 [18]; [20] [22]. The majority applies this approach and concludes that HMRC was obliged to issue its post clearance demands within a reasonable time [45]. On the facts, HMRC did act within a reasonable time [48]. Since this analysis gives a clear answer to the question how article 221(4) applies where there are no national provisions in force, it is unnecessary to make a reference to the Court of Justice of the European Union [47]. Lady Arden adopts different reasoning for allowing the appeal. She holds that the effect of EU jurisprudence concerning the old Customs Code is that EU law defers to national law and therefore does not require members states to enact a definite time limit [64]; [67]. She expresses the view that domestic public law may impose a requirement for HMRC to act within a reasonable time which may be enforced by judicial review [66] but rejects the majoritys reliance on EU decisions such as Sanders v Commission on the basis that the old Customs Code leaves the question of time limits to individual member states. This may be one of the reasons why article 221(4) has now been revised [67]. Therefore, the communication of the post clearance demand in the present case was not subject to a time limit [68] [69].

On 9 November 2016, this Court handed down judgment in the series of cases collectively reported as R (Carmichael) v Secretary of State for Work and Pensions [2016] UKSC 58; [2016] 1 WLR 4550 (Carmichael (SC)). This was a judicial review of the regulations governing the removal of the spare room subsidy, otherwise known as the bedroom tax. Regulation B13 of the Housing Benefit Regulations 2006 (first introduced in 2013) required a percentage reduction in the eligible rent for social sector housing if the number of bedrooms in the property exceeded the number defined by regulation B13(5) and (6) as appropriate for the size of the household living there. This Court held that where there was a transparent medical need for an additional bedroom not catered for in regulation B13(5) and (6) there was unjustified discrimination on the ground of disability and thus a violation of the claimants rights under article 14 read with article 8 of the European Convention on Human Rights. Mrs Carmichael could not share a bedroom with her husband because of her disabilities, but whereas the regulation catered for children who could not share a bedroom for that reason, it did not cater for a couple who could not do so. Mr and Mrs Rutherford cared for their grandson who needed an overnight carer because of his disabilities, but whereas the regulation catered for adults who needed an overnight carer, it did not cater for children who did so. In both cases, the relief granted was a declaration that the claimant had suffered discrimination contrary to article 14 of the Convention: see Carmichael (SC) above and R (Rutherford) v Secretary of State for Work and Pensions [2016] EWCA Civ 29; [2016] HLR 8. On 2 March 2017, the Secretary of State for Work and Pensions laid before Parliament the Housing Benefit and Universal Credit (Size Criteria) (Miscellaneous Amendments) Regulations 2017 (SI 2017/213) which were intended to cater for the two instances in which this Court had held that the previous version of regulation B13(5) and (6) led to violations of a Convention right. They came into effect on 1 April 2017 and were not retrospective. The principal issue in this case is the effect of this Courts decision in Carmichael (SC) upon the decision makers in the housing benefit system the local authorities, responsible for the payment of housing benefit, and the First tier Tribunal (FTT) and the Upper Tribunal (UT) hearing appeals from local authority decisions in claims relating to periods before the regulations were amended. Do they have to carry on applying the regulation in its original form? Or do they have to calculate housing benefit without making the percentage deduction in cases where to do so will breach the Convention rights of the claimants in the way determined in the Carmichael and Rutherford cases? This is an important constitutional question. A secondary issue is whether, if the housing benefit is to be calculated without the percentage deduction in such cases, account should be taken of any discretionary housing payments (DHPs) received by the claimant during the period in question. The history The appellant, RR, lives with his severely disabled partner in a two bedroomed rented social housing property for which he claims housing benefit. The respondent local authority, Sefton Borough Council, applied regulation B13 and decided that, because they were a couple, they were only entitled to one bedroom and so applied the 14% discount required by regulation B13(3)(a) with effect from 1 April 2013. RR appealed to the FTT. On 15 August 2014, the FTT found as a fact that RR and his partner required separate bedrooms because of her disabilities and her need to accommodate medical equipment and supplies. Sefton accepted that, as her primary carer, RR needed to be able to get a nights sleep. The FTT further held that RR had suffered discrimination as between a member of a couple with a disability and a member of a couple without disability which could not be objectively and reasonably justified. To avoid this discrimination, the FTT held, applying the interpretative obligation in section 3(1) of the Human Rights Act 1998 (the HRA), that regulation B13(5)(a) should be read so as to apply either to a couple or to one member of a couple who could not share a bedroom because of the disability of one of them. Meanwhile, in parallel to the judicial review proceedings which culminated in this Courts decision in Carmichael (SC), Mr Carmichael had appealed to the FTT against the local authoritys decision that his housing benefit entitlement should be reduced by 14%. The FTT allowed his appeal on a similar basis to that on which it had allowed the appeal of RR. The Secretary of States appeals against both decisions were stayed until the outcome of Carmichael (SC) was known. Both stays were lifted in January 2017. Mr Carmichaels appeal was determined by the UT in April 2017: Secretary of State for Work and Pensions v Carmichael [2017] UKUT 174 (AAC) (Carmichael (UT)). The UT held that the FTTs reading of regulation B13(5)(a) was impermissible but nevertheless reached the same result by holding that Mr Carmichaels housing benefit was to be calculated without making the 14% deduction because to make it would be a clear breach of his Convention rights, contrary to section 6(1) of the HRA. The Secretary of State appealed the Carmichael (UT) decision to the Court of Appeal and that Court stayed the appeal in RR and some 130 other cases (referred to as the Carmichael/Rutherford lookalike cases) pending the outcome of that appeal. The Court of Appeal gave judgment on 20 March 2018: Secretary of State for Work and Pensions v Carmichael [2018] EWCA Civ 548; [2018] 1 WLR 3429 (Carmichael (CA)). The appeal was allowed. The majority (Sir Brian Leveson PQBD and Flaux LJ) held that the UT did not have power to direct as it did, as this would amount to an impermissible rewording of the regulation: any remedy for the violation of Convention rights was to be found in an action for damages under section 8(2) of the HRA. Leggatt LJ dissented: he would have held that the UT did have power to do what it did. However, he also held that the UT had erred in not taking into account the DHPs that Mr Carmichael had received. So the Court was unanimous in allowing the Secretary of States appeal. Mr Carmichael has not appealed to this Court. Nevertheless, this case is effectively a challenge to that decision. The stay on the Secretary of States appeal to the UT in the case of RR (and another) was lifted on 4 May 2018. RR accepted that the UT was bound by Carmichael (CA) to allow the appeal, which by a decision dated 28 August 2018, it duly did: Secretary of State for Work and Pensions v RR and Sefton Borough Council [2018] UKUT 355 (AAC). The UT also commented that it seemed eminently arguable the problem of double payment, identified by Leggatt LJ, could be overcome by reason of regulation 8(2)(b) of the Discretionary Financial Assistance Regulations 2001 (SI 2001/1167). The UT granted RR a leapfrog certificate under section 14A of the Tribunals, Courts and Enforcement Act 2007, enabling him to appeal directly from the UT to this Court (leapfrogging the Court of Appeal) if given permission to do so. This Court granted permission on 11 February 2019. The evolution of regulation B13 In its original form, introduced by the Housing Benefit (Amendment) Regulations (SI 2012/3040), regulation 5(7), the relevant parts of regulation B13 read as follows: (1) The maximum rent (social sector) is determined in accordance with paragraphs (2) to (4). (2) The relevant authority must determine a limited rent by (a) determining the amount that the claimants eligible rent would be in accordance with regulation 12B(2) (b) where the number of bedrooms in the dwelling exceeds the number of bedrooms to which the claimant is entitled in accordance with paragraph (5), reducing that amount by the appropriate percentage set out in paragraph (3); (3) The appropriate percentage is (a) 14% where the number of bedrooms in the dwelling exceeds by one the number of bedrooms to which the claimant is entitled; and (b) 25% where the number of bedrooms in the dwelling exceeds by two or more the number of bedrooms to which the claimant is entitled. a couple (within the meaning of Part 7 of the (5) The claimant is entitled to one bedroom for each of the following categories of person whom the relevant authority is satisfied occupies the claimants dwelling as their home (and each person shall come within the first category only which is applicable) (a) Act); (b) (c) (d) (e) a person who is not a child; two children of the same sex; two children who are less than ten years old; a child, and one additional bedroom in any case where the claimant or the claimants partner is a person who requires overnight care (or in any case where each of them is). The first amendment (made by SI 2013/665), which came into force on the same day that the regulation came into force, 1 April 2013, repealed the tailpiece to paragraph (5) and incorporated it in a new paragraph (6) as follows: (6) The claimant is entitled to one additional bedroom in any case where (a) the claimant or the claimants partner is (or each of them is) a person who requires overnight care; or (b) the claimant or the claimants partner is (or each of them is) a qualifying parent or carer. A person who requires overnight care was defined in regulation 2(1) in terms which had the effect of not including any child. The inclusion of claimants or their partners who required overnight care in the original and amended regulation was as a result of the decision of the Court of Appeal in Burnip v Birmingham City Council [2012] EWCA Civ 629; [2013] PTSR 117. The next amendment (made by SI 2013/2828 in December 2013) added to the list in paragraph (5): (ba) a child who cannot share a bedroom; This was as a result of the decision of the Court of Appeal in Gorry v Wiltshire County Council, decided at the same time as Burnip and reported with it. The category of adults whose disabilities might count for the purpose of paragraph (6) was also expanded to include people responsible for the rent and their partners. Thus it will be seen that, by the time of Carmichael (SC), the regulation catered for children who could not share a bedroom but not for members of a couple who could not do so. It also catered for adults who needed overnight care but not for children who needed it. It was in those two respects that the regulation was held discriminatory by this Court and the third amendment (made by SI 2017/213) was designed to cure them. As the effect of those amendments is not in issue in this appeal, and their wording is by no means crystal clear, there is no need to prolong this judgment by quoting them. The arguments on the principal issue Mr Richard Drabble QC, who appears for the appellant, does not argue that regulation B13 is ultra vires. Rather, he argues that it is unlawful for the local authority, the FTT and the UT to apply the deduction mandated by regulation B13(2)(b) and (3) in breach of the appellants Convention rights. Under section 6(1) of the HRA, It is unlawful for a public authority to act in a way which is incompatible with a Convention right. A local authority is undoubtedly a public authority for this purpose. Further, by virtue of section 6(3)(a), a public authority includes a court or tribunal. It is therefore unlawful for a local authority, the FTT, the UT, or indeed the Court of Appeal or this Court, to make or uphold an award which is incompatible with the claimants Convention rights. This would not be the case if the decision were mandated by primary legislation. Section 6(2)(a) of the HRA provides that subsection (1) does not apply to an act if as the result of one or more provisions of primary legislation, the authority could not have acted differently. But the regulation is not primary legislation. Nor does primary legislation require that the regulation take the form that it does: it has subsequently been amended with a view to curing the incompatibility found in Carmichael (SC). Thus section 6(2)(b) is also inapplicable. This provides that subsection (1) does not apply to an act if in the case of one or more provisions of, or made under, primary legislation which cannot be read and given effect in a way which is compatible with the Convention rights, the authority was acting so as to give effect to or enforce those provisions. The regulation is not primary legislation and, although made under primary legislation, the enabling Act does not mandate a regulation which, in some respects, was incompatible with a Convention right. Under section 7(1)(b) of the HRA, A person who claims that a public authority has acted (or proposes to act) in a way which is made unlawful by section 6(1), may rely on the Convention right or rights concerned in any legal proceedings. Hence the appellant did not have to bring separate, free standing proceedings to claim a remedy for a breach of his Convention rights. He could rely on it in the tribunal proceedings. The authority, and the tribunals, should have made an award of housing benefit without the 14% reduction which, in the light of the FTTs findings of fact, was incompatible with the appellants Convention rights. Mr Drabble is able to pray in aid at least two decisions at the level of this Court which support that analysis. Closest to it is Mathieson v Secretary of State for Work and Pensions [2015] UKSC 47; [2015] 1 WLR 3250. The regulations governing entitlement to disability living allowance (DLA) suspended the entitlement of a child under 16 after the first 84 days of free in patient treatment in an NHS hospital. This Court held that, in the circumstances of that case, to suspend entitlement was a violation of the childs Convention rights under article 14 read with article 1 of the First Protocol. The Secretary of State was not obliged by any provision of primary legislation to suspend payment; thus he had acted unlawfully under section 6(1) of the HRA in deciding to do so. The FTT should have allowed the childs appeal against that decision and substituted a decision that he was entitled to continued payment of DLA from the date when it was suspended until the date when it was reinstated. This Court allowed the childs appeal and made the order which the FTT should have made. Significantly, the Court declined to make a declaration that the Secretary of State had violated the childs rights. In a statutory appeal such as this, the FTT, UT and Court of Appeal had no power to make a formal declaration: see sections 12(4) and 14(4) of the Tribunals, Courts and Enforcement Act 2007. Even if the powers of this Court were wider, to make a declaration would add nothing to the substantive order made by the Court. The Court also declined to use the interpretative obligation in section 3(1) of the HRA, to read the regulations relating to suspension so as not to apply to children. Section 3(1) requires that So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights. Lord Wilson did not think that possible in that case. But in any event, the 84 day rule would not always or inevitably be in breach of a childs Convention rights: much would depend upon the circumstances of the individual case. The Mathieson approach had previously been applied in a number of other benefit cases. In Francis v Secretary of State for Work and Pensions [2005] EWCA Civ 1303; [2006] 1 WLR 3202, the regulations governing entitlement to a maternity grant were held incompatible with the Convention rights of a woman who had obtained a residence order giving her parental responsibility for her sisters baby son, because they treated the holder of a residence order less favourably that the holder of an adoption order. The remedy was not to construe the regulations in her favour but to make a declaration that she was entitled to the maternity grant. In Burnip v Birmingham City Council [2012] EWCA Civ 629; [2013] PTSR 117, mentioned earlier, the Court of Appeal remitted each case where a violation had been found to the local authority for the decision to be remade in accordance with the Court of Appeals judgment. Each claimant was entitled to such further sum as was necessary to comply with the judgment and article 14. As Leggatt LJ explained in Carmichael (CA), at para 94, Thus, the Court of Appeal treated the Housing Benefit Regulations as having no effect in the three individual cases before them insofar as applying the Regulations in calculating the claimants entitlement to housing benefit violated their Convention rights by treating them as under occupying their accommodation. A further example of the application of the same approach, albeit in a rather different context, is the decision of the House of Lords in In re G (Adoption: Unmarried Couple) [2008] UKHL 38; [2009] AC 173. Article 14 of the Adoption (Northern Ireland) Order 1987 (SI 1987/2203) provided that an adoption order could only be made in favour of more than one person if they were married to one another. The House of Lords held that this discrimination between married and unmarried couples was irrational and in breach of article 14 read with article 8 of the Convention. The remedy was a declaration that this particular couple were entitled to apply to adopt the child. Had the Order been primary legislation, the courts would have been bound to give effect to it: the most they would have done was to make a declaration of incompatibility under section 4 of the HRA. But, at para 116, it was explained that: The courts are free simply to disregard subordinate legislation which cannot be interpreted or given effect in a way which is compatible with the Convention rights. Indeed, in my view, this cannot be a matter of discretion. Section 6(1) requires the court to act compatibly with the Convention rights if it is free to do so. A more recent example of the same approach is JT v First tier Tribunal [2018] EWCA Civ 1735; [2019] 1 WLR 1313. This concerned a rule in the criminal injuries compensation scheme which barred victims who had suffered injury before 1979 from making a claim if at the time of the injury they were living under the same roof as the perpetrator. The Court of Appeal held that this was incompatible with article 14 read with article 1 of the First Protocol and granted a declaration that the claimant was not prevented by the rule from being paid an award of compensation under the scheme. As Leggatt LJ explained, at para 122: Where, as here, a provision of subordinate legislation cannot be given effect in a way which is compatible with a Convention right and there is no primary legislation which prevents removal of the incompatibility, the courts duty under section 6(1) is to treat the provision as having no effect, as to give effect to it would be unlawful. Against that, Sir James Eadie QC, for the Secretary of State, accepts that the regulation was incompatible in the respects identified in Carmichael (SC), and that it could not be interpreted under section 3(1) of the HRA in a way which avoided that incompatibility. No one sought to defend the FTTs rewriting of the regulation so as to add words in. It was the size criteria rather than the 14% deduction which gave rise to the incompatibility. Rectifying that would require rewriting the regulation, which could be done in a variety of ways. It was not for the local authority or the tribunals to redesign the legislative scheme so as to render it compatible with the Convention rights. That would be constitutionally inappropriate, usurping the role of the legislator. It was also outside their statutory powers. He did not accept that Mathieson represented a consistent line of authority that incompatible provisions in subordinate legislation could simply be ignored. It was a case in which a specific finding was made that could be dealt with as an individual case, not a structural problem as in this case. The court declined to go further and did not address the constitutional problems of what it had done. Further, he argues that to allow the tribunals to disapply the regulation would be to cut across the provisions of the HRA relating to damages. Section 8(1) of the HRA provides that In relation to any act (or proposed act) of a public authority which the court finds is (or would be) unlawful, it may grant such relief or remedy, or make such order, within its powers as it considers just and appropriate. Section 8(2) provides that damages may be awarded only by a court which has power to award damages, or to order payment of compensation, in civil proceedings. Making an award of housing benefit without the deduction would be tantamount to making an award of damages or compensation which the tribunals have no power to do. Thus, if there has been a violation of the Convention rights, the correct remedy is a free standing application, under section 7(1)(a) of the HRA, to a court which does have power to award damages. Conclusions on the principal issue Although the majority of the Court of Appeal in Carmichael (CA) accepted the arguments of the Secretary of State, in my view Leggatt LJ was entirely right to accept the arguments of the appellant. There is nothing unconstitutional about a public authority, court or tribunal disapplying a provision of subordinate legislation which would otherwise result in their acting incompatibly with a Convention right, where this is necessary in order to comply with the HRA. Subordinate legislation is subordinate to the requirements of an Act of Parliament. The HRA is an Act of Parliament and its requirements are clear. The HRA draws a clear and careful distinction between primary and subordinate legislation. This is shown, not only by the provisions of section 6(1) and 6(2) which have already been referred to, but also by the provisions of section 3(2). This provides that the interpretative obligation in section 3(1): (a) applies to primary and subordinate legislation whenever enacted; (b) does not affect the validity, continuing operation or enforcement of any incompatible primary legislation; and (c) does not affect the validity, continuing operation or enforcement of any incompatible subordinate legislation if (disregarding any possibility of revocation) primary legislation prevents the removal of the incompatibility. Once again, a clear distinction is drawn between primary and subordinate legislation. The obligation in section 6(1), not to act in a way which is incompatible with a Convention right, is subject to the exception in section 6(2). But this only applies to acts which are required by primary legislation. If it had been intended to disapply the obligation in section 6(1) to acts which are required by subordinate legislation, the HRA would have said so. Again, under section 3(2), primary legislation which cannot be read or given effect compatibly with the Convention rights must still be given effect, as must subordinate legislation if primary legislation prevents removal of the incompatibility. If it had been intended that the section would not affect the validity, continuing operation or enforcement of incurably incompatible subordinate legislation, where there was no primary legislation preventing removal of the incompatibility, the HRA would have said so. Contrary to the Secretary of States argument, Mathieson was not a one off. As shown by the authorities listed in paras 21 to 23 above, the courts have consistently held that, where it is possible to do so, a provision of subordinate legislation which results in a breach of a Convention right must be disregarded. There may be cases where it is not possible to do so, because it is not clear how the statutory scheme can be applied without the offending provision. But that was not the case in Francis, where the maternity grant could be paid to the holder of a residence order who qualified for it in all other respects; nor was it the case in In re G, where the unmarried couple could be allowed to apply to adopt (in reaching my Opinion, I satisfied myself that this would not cause problems elsewhere in the statutory scheme); nor was it the case in Burnip and Gorry, where housing benefit could simply be calculated without making the deduction for under occupation; nor was it the case in Mathieson, where DLA could simply continue to be paid during the whole period of hospitalisation; nor was it the case in JT, where criminal injuries compensation could be paid without regard to the same roof rule; and nor is it the case here, where the situation is on all fours with Burnip and Gorry. There is no legislative choice to be exercised. As Dan Squires QC, for the Equality and Human Rights Commission, put it, where discrimination has been found, a legislator may choose between levelling up and levelling down, but a decision maker can only level up: if claimant A is entitled to housing benefit of X and claimant B is only entitled to housing benefit of X Y, and the difference in treatment is unjustifiably discriminatory, the decision maker must find that claimant B is also entitled to benefit of X. The Secretary of State did suggest that the incompatibility could not be cured in the same way for houses rented in the private sector, because the amount of housing benefit is calculated in a different way under regulation 13D, although the same size criteria are applied. That situation is not before us and we have not heard proper argument upon it, but I would be surprised if an equivalent calculation could not be made, so as to place Carmichael and Rutherford type claimants in the same position as Burnip and Gorry type claimants. As that great judge, Lord Bingham of Cornhill, put it in Attorney Generals Reference (No 2 of 2001) [2003] UKHL 68; [2004] 2 AC 72, 92, I cannot accept that it can ever be proper for a court, whose purpose is to uphold, vindicate and apply the law, to act in a manner which a statute (here, section 6 of the Human Rights Act 1998) declares to be unlawful. The secondary issue The question of whether any DHPs received by the appellant should be deducted from the housing benefit to which he is entitled as a result of this decision can be dealt with shortly, as the parties are agreed as to the position. The initial decision which is under appeal to this Court was made by the local authority on 5 March 2013, applying the size criteria which were to come into force on 1 April 2013. At that stage no question of DHPs could have arisen. The appeal against that decision was heard a year later. The task of the FTT was to decide whether the local authoritys decision was correct. As a Tribunal of Social Security Commissioners, presided over by His Honour Judge Hickinbottom put it in R (IB) 2/04 (unreported) 21 January 2004, at para 25: Taking the simple case of an appeal against a decision on an initial claim, in our view the appeal tribunal has power to consider any issue and make any decision on the claim which the decision maker could have considered and made. The appeal tribunal in effect stands in the shoes of the decision maker for the purpose of making a decision on the claim. In deciding a housing benefit appeal, the FTT is not permitted to take into account any circumstances not obtaining at the time when the decision appealed against was made: Child Support, Pensions and Social Security Act 2000, Schedule 7, paragraph 6(9). The task of the UT was the same. In remaking the decision having set aside the decision of the FTT, it has power to make any decision which the FTT could make if the FTT were remaking the decision: Tribunals, Courts and Enforcement Act 2007, section 12(4). Thus, neither the initial decision maker in the local authority, nor the FTT on appeal, nor the UT on appeal, was concerned with anything other than entitlement to housing benefit. They were not concerned with DHPs and had no power to take them into account. Indeed, the Secretary of State relied upon this fact to bolster the argument that an award of damages under section 8 of the HRA was a more appropriate remedy than applying section 6, because such an award could take DHPs into account. But we are concerned with whether the initial decision was correct and in my view it was not. It is for the local authority to consider whether there are any steps which they can take to recover any DHPs and if there are whether they wish to take them. Final conclusion I would allow this appeal. I would make the same order as the UT made in Carmichael (UT) that (1) the appeal against the local authoritys decision of 5 March 2013 is allowed; and (2) that RRs housing benefit entitlement is to be recalculated without making the under occupancy deduction of 14%. The reason for doing so is the same as that which the UT gave: if the tribunal or the council were to apply this deduction there would be a clear breach of [RRs] Convention rights, contrary to section 6(1) of the Human Rights Act 1998 (R (Carmichael) v Secretary of State for Work and Pensions [2016] UKSC 58; [2016] 1 WLR 4550).

UK-Abs

On 9 November 2016 the Supreme Court gave judgment in a series of judicial review claims concerning Regulation B13 of the Housing Benefit Regulations 2006, which governed the removal of the spare room subsidy, otherwise known as the bedroom tax (R (Carmichael) v Secretary of State for Work and Pensions [2016] UKSC 58 (Carmichael SC)). It declared that where there was a transparent medical need for an additional bedroom, which was not catered for in regulation B13 (5) and (6), there was unjustified discrimination on the ground of disability, contrary to article 14 of the European Convention on Human Rights (the Convention). Regulation B13 was amended in 2017 by Parliament to reflect the ruling, but this was not retrospective. The principal question arising in this appeal is the effect of the Supreme Courts decision in Carmichael SC on decision makers in the housing benefit system local authorities, and the First tier Tribunal (FTT) and the Upper Tribunal (UT) hearing appeals from local authority decisions in claims relating to periods before the amendment. A second issue is whether account should be taken of any discretionary housing payments (DHPs) received by the claimant during the period, if the deduction to housing benefit should not have been applied. RR lives with his severely disabled partner in a two bedroomed social housing property for which he claims housing benefit. They require separate bedrooms because of her disabilities and her need to accommodate medical equipment and supplies. In 2013 his local authority applied the discount to his housing benefit required by Regulation B13. He appealed to the FTT which found that he had suffered unjustified discrimination. To avoid this discrimination the FTT held that regulation B13(5)(a) should be read so as to apply to persons in RRs position, pursuant to s 3 of the Human Rights Act 1988 (HRA). The respondent Secretary of State appealed to the UT. The appeal was stayed while a similar appeal by Mr Carmichael proceeded to the UT and then to the Court of Appeal. The UT held that the FTTs reading of regulation B13(5)(a) was impermissible but reached the same result by holding that the decision to make a deduction from Mr Carmichaels housing benefit was a clear breach of his Convention rights, contrary to s 6(1) HRA (Carmichael UT). The Court of Appeal reversed that decision. The stay in RRs case was then lifted and the Secretary of States appeal was allowed by the UT. The UT granted RR a leapfrog certificate under s 14A Tribunals, Courts and Enforcement Act 2007, enabling him to appeal directly to the Supreme Court. The Supreme Court unanimously allows the appeal against the local authoritys decision. It orders that RRs housing benefit is to be recalculated without making the under occupancy deduction of 14%, in order to avoid a breach of RRs rights under the Convention, contrary to s 6(1) HRA. Lady Hale gives the only reasoned judgment. It is not unconstitutional for a public authority, court or tribunal to disapply a provision of subordinate legislation which would otherwise result in their acting incompatibly with a Convention right, where this is necessary in order to comply with the HRA. Subordinate legislation is subordinate to the HRA, which is an Act of Parliament [27]. The HRA draws a clear and careful distinction between primary and subordinate legislation, both in s 6 (the requirement for public authorities to act compatibly with Convention rights) and in s 3 (the interpretative obligation) [28]. Primary legislation which cannot be read or given effect compatibly with Convention rights must still be given effect under the exception in s 6(2), but this exception does not extend to subordinate legislation, where there is no primary legislation preventing removal of the incompatibility [29]. The courts have consistently held that, where it is possible to do so, a provision of subordinate legislation which results in a breach of a Convention right must be disregarded, if it is possible to do so without affecting the statutory scheme [18 23, 30]. A decision maker must find that a claimant who is unjustifiably discriminated against is entitled to the housing benefit he would have received if the discrimination had not occurred [30]. Otherwise the local authority or court would be acting in a manner which s 6 HRA declares to be unlawful [32]. On the question of whether any DHPs received by the appellant should be deducted from the housing benefit to which he is entitled as a result of this decision, the parties were agreed as to the position. The appeal concerns the initial decision made by the local authority to make a deduction under regulation B13 to the appellants housing benefit. At that stage no question of DHPs could have arisen and the only question was entitlement to housing benefit. It is for the local authority to consider whether there are any steps which they can or wish to take to recover any DHPs [33 34]. It follows that the Supreme Court should make the same order as the UT made in Carmichael UT for the same reason as the UT gave in that case [35].

Mr Martin Fowler is a qualified diver, resident in the Republic of South Africa. During the 2011/12 and 2012/13 tax years he undertook diving engagements in the waters of the UK Continental Shelf. Although his status has yet to be determined, the preliminary issue which is the subject of this appeal requires it to be assumed that he undertook those engagements as an employee, rather than as a self employed contractor. HMRC claim, but Mr Fowler denies, that the income which he earned from those diving engagements is subject to UK taxation. That depends on how the double taxation treaty between the UK and South Africa (the Treaty) applies to a person in his position. In a nutshell, the Treaty provides for employment income to be taxed in the place where it is earned, in the present case in the UK, but for the earnings of self employed persons to be taxed only where they are resident, in Mr Fowlers case in South Africa. Thus far the answer might appear to be simple. If (as is to be assumed) Mr Fowler was an employee, then he should be taxable only in the UK. But the matter is complicated by two factors. The first is that employed divers doing the particular kind of diving work in UK waters which Mr Fowler did are, under UK tax law, to be treated as if they were self employed for income tax purposes. The second is that terms used in the Treaty, if not defined in the Treaty itself, are to be given the meaning which they have in the tax law, or the general law, of the state seeking to recover tax, here the UK. Thus, if the effect of the UK tax laws requirement to treat Mr Fowler as if he was self employed is to govern the meaning of relevant terms in the Treaty, the outcome might be that he was to be treated as self employed under the Treaty, and therefore taxable, if at all, in South Africa. This was the conclusion of the majority in the Court of Appeal, from which HMRC appeals to this court. In fact, such an outcome could mean that Mr Fowler was not taxable in either country, because the question whether he was taxable in South Africa would not be governed by the meaning of Treaty terms established by reference to UK tax law. He would probably be treated in South Africa as an employee. To the extent that domestic South African tax legislation did not tax the earnings of residents employed abroad he would not be taxable there or in the UK. There is no general provision in this Treaty, as there is in many others, to deal with what is called double non taxation. But the question whether South Africa did tax the earnings of its residents employed abroad was not investigated in these proceedings so it would be inappropriate to place any weight on this consideration in construing the Treaty. The Treaty The Double Taxation Treaty between the UK and South Africa takes the form of a Convention ( and is described in the Treaty as the Convention) which came into force in the UK by means of the Double Taxation Relief (Taxes on Income) (South Africa) Order 2002 (SI 2002/3138), being annexed to the order in the form of a Schedule. Its preamble recites that it had been agreed for the purpose of promoting and strengthening the economic relations between the two countries, avoiding double taxation and preventing fiscal evasion. For present purposes the most relevant provisions are as set out below. Other provisions will be mentioned in due course. Article 1 headed Persons Covered provides that: This Convention shall apply to persons who are residents of one or both of the Contracting States. Article 2 headed Taxes Covered provides in paragraph (1) that: This Convention shall apply to taxes on income and on capital gains imposed on behalf of a Contracting State or of its political subdivisions, irrespective of the manner in which they are levied. Article 3 is a definition provision. Paragraph (1) contains a number of specific definitions, some exclusive and some non exclusive, and all under the preamble unless the context otherwise requires. Only three need be quoted. the term business includes the performance of (d) professional services and of other activities of an independent character; (g) business; the term enterprise applies to the carrying on of any (h) the terms enterprise of a Contracting State and enterprise of the other Contracting State mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; There is no definition of employment. Article 3(2) is all important: As regards the application of the provisions of this Convention at any time by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that State for the purposes of the taxes to which this Convention applies, any meaning under the applicable tax laws of that State prevailing over a meaning given to the term under other laws of that State. Looking at article 3 as a whole, the following points may be noted. First, paragraph (2) provides an always speaking means of ascertaining the meaning of terms in the Treaty which are undefined therein. It is always speaking because it requires meaning to be ascertained by reference to the national law of a Contracting State at that time, that is at the time when the Treaty falls to be applied. Secondly, the terms of the Treaty which fall to be given meaning for the purposes of this appeal are employment, business and enterprise. Employment is not a defined term, so that article 3(2) applies to it with full force. But enterprise is defined, and business has a partial definition, in both cases in article 3(1). Article 7 is concerned with business profits. Its relevant provisions are as follows: (1) The profits of an enterprise of a Contracting State shall be taxable only in that state unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other state but only so much of them as is attributable to that permanent establishment. (6) Where profits include items of income or capital gains which are dealt with separately in other articles of this Convention, then the provisions of those articles shall not be affected by the provisions of this article. Applying the definitions in article 3(1) quoted above, if Mr Fowler had been, within the meaning of the Treaty, carrying on an enterprise by his diving activities on the UK continental shelf, it would nonetheless have been an enterprise of South Africa and the profits taxable (if at all) there. This is because it is common ground that he had no permanent establishment in the UK. Article 14 is about income from employment. It is only necessary to consider paragraph (1): Subject to the provisions of articles 15, 17 and 18 of this Convention, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State. It is to be noted that article 14(1) does not prohibit the state in which an employee is resident from taxing him on his income earned abroad. It merely permits (but does not require) the state where he is working to tax him. In such a case article 21 then avoids double taxation, by requiring the state where the employee is resident to give credit for the tax paid in the state where he works. Nonetheless states may choose, in certain circumstances, not to tax resident employees on all or part of their foreign earnings. Article 17 deals with pensions and annuities. Paragraph (1) provides that: Subject to the provisions of paragraph (2) of article 18 of this Convention: (a) pensions and other similar remuneration paid in consideration of past employment, and (b) any annuity paid, to an individual who is a resident of a Contracting State shall be taxable only in that State. Articles 7, 14 and 17 illustrate one of the main methods by which the Treaty seeks to avoid double taxation, namely by identifying specific categories of income (or profits) and providing for each to be taxable in one or other Contracting State. Thus employment income is taxed where it is earned, whereas business profits are (subject to the rules about permanent establishment) taxable where the relevant business enterprise is resident. By contrast with employment income, pensions are taxable where the employee is resident. The other main method by which double taxation is avoided is by requiring credit to be given by one contracting state for tax charged or paid in the other. Article 21 headed Elimination of Double Taxation is the main provision to this effect. Article 24 headed Mutual Agreement Procedure enables a taxpayer to raise an objection to double taxation, leading to resolution by discussion between the competent tax authorities of both states. Finally, the recited objective of dealing with tax evasion is dealt with by provisions for exchange of information and mutual assistance in tax collection in articles 25 and 25A (as, respectively, substituted and inserted by the Schedule to the Double Taxation Relief and International Tax Enforcement (South Africa) Order 2011 (SI 2011/2441)). Guidance as to how the Treaty is to be interpreted as a whole is to be found in the Vienna Convention on the Law of Treaties, concluded in May 1969, in OECD commentaries on the OECD Model Tax Convention (the MTC), on which the Treaty is based, and in some UK authorities. Beginning with the Vienna Convention, article 31 provides, so far as is relevant, that: 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 4. A special meaning shall be given to a term if it is established that the parties so intended. Articles 7 and 14 of the Treaty have their origin in similar but differently numbered provisions in the MTC. The predecessors of articles 7 and 14 are articles 7 and 15 of the MTC. The OECD Commentary on article 15 notes, at para 8.1, that: It may be difficult, in certain cases, to determine whether the services rendered in a State by an individual resident of another State, and provided to an enterprise of the first State (or that has a permanent establishment in that State), constitute employment services, to which article 15 applies, or services rendered by a separate enterprise, to which article 7 applies or, more generally, whether the exception applies. The Commentary recognises that in different states, the national law may focus on either the form or on the substance of the relationship (paras 8.2 8.7). At para 8.7 it is acknowledged that the domestic law of the state applying the MTC is likely to prevail, but subject to two qualifications. The first is that the context may require otherwise (see again para 8.7). This qualification is of course expressly made in article 3(2) of the Treaty. The second qualification (expressed in para 8.11) is that: The conclusion that, under domestic law, a formal contractual relationship should be disregarded must, however, be arrived at on the basis of objective criteria. For instance, a State could not argue that services are deemed, under its domestic law, to constitute employment services where, under the relevant facts and circumstances, it clearly appears that these services are rendered under a contract for the provision of services concluded between two separate enterprises. Conversely, where services rendered by an individual may properly be regarded by a State as rendered in an employment relationship rather than as under a contract for services concluded between two enterprises, that State should logically also consider that the individual is not carrying on the business of the enterprise that constitutes that individuals formal employer The OECD Commentaries are updated from time to time, so that they may (and do in the present case) post date a particular double taxation treaty. Nonetheless they are to be given such persuasive force as aids to interpretation as the cogency of their reasoning deserves: see Revenue and Customs Comrs v Smallwood (2010) 80 TC 536, para 26(5) per Patten LJ. Existing UK authority gives some relevant general guidance on the interpretation of double taxation treaties. In Comrs for Her Majestys Revenue and Customs v Anson [2015] STC 1777 this court was considering the UK / USA Treaty. It was common ground that article 31 of the Vienna Convention applied. At paras 110 111, giving the leading judgment, Lord Reed said: Article 31(1) of the Vienna Convention requires a treaty to be interpreted in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. It is accordingly the ordinary (contextual) meaning which is relevant. As Robert Walker J observed at first instance in Memec [1996] STC 1336 at 1349, 71 TC 77 at 93, a treaty should be construed in a manner which is international, not exclusively English. [111] That approach reflects the fact that a treaty is a text agreed upon by negotiation between the contracting governments. The terms of the 1975 Convention reflect the intentions of the US as much as those of the UK. They are intended to impose reciprocal obligations, as the background to the UK/US agreements from 1945 onwards makes clear. In the Smallwood case the Court of Appeal was considering the UK / Mauritius double tax treaty. At paras 26 29 Patten LJ provided a useful summary of the correct approach to interpretation, largely based on dicta of Mummery J in Inland Revenue Comrs v Commerzbank AG [1990] STC 285. The whole passage repays reading, but para 29 is worth quoting in full: As explained earlier, the provisions of the DTA [the UK / Mauritius double tax treaty] are given statutory effect in relation to the taxpayers concerned by section 788 TA 1988 [the Income and Corporation Taxes Act 1988 (ICTA)] as a form of relief against what would otherwise be the relevant tax liability under UK law. But the DTA is not concerned to alter the basis of taxation adopted in each of the Contracting States as such or to dictate to each Contracting State how it should tax particular forms of receipts. Its purpose is to set out rules for resolving issues of double taxation which arise from the tax treatment adopted by each countrys domestic legislation by reference to a series of tests agreed by the Contracting States under the DTA. The criteria adopted in these tests are not necessarily related to the test of liability under the relevant national laws and are certainly not intended to resolve these domestic issues. Although this passage was about a different treaty implemented under earlier legislation, its description of what the DTA was and was not concerned with is equally applicable to the UK / South Africa Treaty. The relevant UK tax legislation Tax on the earnings of employees is regulated by the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). Section 4 defines employment, as follows: Employment for the purposes of the employment income Parts (1) includes in particular In the employment income Parts employment any employment under a contract of any employment under a contract of (a) service, (b) apprenticeship, and (c) Crown. In those Parts employed, employee and any employment in the service of the (2) employer have corresponding meanings. Sections 6 and 7 of ITEPA deal with employment income (section 6(5) as amended by section 882(1) of, and paragraph 585 of Schedule 1 to, the Income Tax (Trading and Other Income) Act 2005 (ITTOIA)). The relevant parts are as follows: 6. Nature of charge to tax on employment income (1) The charge to tax on employment income under this Part is a charge to tax on (a) general earnings, and (b) specific employment income. The meaning of employment income, general earnings and specific employment income is given in section 7. (5) Employment income is not charged to tax under this Part if it is within the charge to tax under Part 2 of ITTOIA 2005 (trading income) by virtue of section 15 of that Act (divers and diving supervisors). 7. Meaning of employment income, general earnings and specific employment income. (1) This section gives the meaning for the purposes of the Tax Acts of employment income, general earnings and specific employment income. There follow detailed and precise definitions of each of those terms, the detail of which does not matter. The Tax Acts referred to in section 7(1) include ITEPA and ITTOIA. Section 5 of ITTOIA contains the primary charging provision on trading profits, in the simplest possible terms: 5. Charge to tax on trade profits Income tax is charged on the profits of a trade, profession or vocation. Section 15, dealing with the income of certain divers and diving supervisors is central to this appeal. It provides: 15 Divers and diving supervisors (1) This section applies if a person performs (a) the duties of employment as a diver or diving supervisor in the United Kingdom or in any area designated by the duties consist wholly or mainly of Order in Council under section 1(7) of the Continental Shelf Act 1964 (c 29), (b) seabed diving activities, and (c) any employment income from the employment would otherwise be chargeable to tax under Part 2 of ITEPA 2003. (2) The performance of the duties of employment is instead treated for income tax purposes as the carrying on of a trade in the United Kingdom. (3) For the purposes of this section the following are seabed diving activities taking part as a diver in diving operations (a) concerned with the exploration or exploitation of the seabed, its subsoil and their natural resources, and (b) any such diving operations. acting as a diving supervisor in relation to Certain points about section 15 are plain, and common ground. First, it only applies to a particular class of employed divers, whose employment income would otherwise be taxable under ITEPA. Secondly, the types of divers covered are defined by reference to a particular kind of diving, and only if undertaken in UK or related waters. Thirdly, it may therefore apply only to part of the activities of divers under a particular contract of employment, since they might also be engaged to do other types of diving as well, or diving of the specified type in other waters. The reason for this particular tax treatment of this class of divers was a matter of some debate in submissions before this court. But the FtT found that it was because, at least at the time of the enactment of the precursor to section 15, section 29 of the Finance Act 1978, this class of divers commonly incurred their own costs, and therefore deserved the more generous expenses regime afforded to the self employed, by comparison with employees. The FtT relied on an opinion to that effect published by the Office of Tax Simplification in March 2011, in preference to broader but less persuasive observations by the Financial Secretary to the Treasury in February 1978 when announcing the intention to introduce section 29: Hansard (HC Debates), 3 February 1978, written answers, col 359. There is no good reason to doubt that essentially factual finding by the FtT. It is clear that it was not a purpose of the deeming provision in section 15(2) to resolve some legal or factual uncertainty about whether such divers were genuinely employed or self employed. On the contrary, section 15 applies only to employed divers. ITTOIA contains two other deeming provisions similar to section 15(2), in section 9(1) relating to farming and market gardening and in section 12(2) relating to the profits of mines and quarries. But neither of these provisions, or their underlying purposes, shed useful light on the issues in this appeal. Deeming provisions There are useful but not conclusive dicta in reported authorities about the way in which, in general, statutory deeming provisions ought to be interpreted and applied. They are not conclusive because they may fairly be said to point in different directions, even if not actually contradictory. The relevant dicta are mainly collected in a summary by Lord Walker in DCC Holdings (UK) Ltd v Revenue and Customs Comrs [2011] 1 WLR 44, paras 37 39, collected from Inland Revenue Comrs v Metrolands (Property Finance) Ltd [1981] 1 WLR 637, Marshall v Kerr [1995] 1 AC 148; 67 TC 56 and Jenks v Dickinson [1997] STC 853. They include the following guidance, which has remained consistent over many years: (1) The extent of the fiction created by a deeming provision is primarily a matter of construction of the statute in which it appears. (2) For that purpose the court should ascertain, if it can, the purposes for which and the persons between whom the statutory fiction is to be resorted to, and then apply the deeming provision that far, but not where it would produce effects clearly outside those purposes. (3) But those purposes may be difficult to ascertain, and Parliament may not find it easy to prescribe with precision the intended limits of the artificial assumption which the deeming provision requires to be made. (4) A deeming provision should not be applied so far as to produce unjust, absurd or anomalous results, unless the court is compelled to do so by clear language. (5) But the court should not shrink from applying the fiction created by the deeming provision to the consequences which would inevitably flow from the fiction being real. As Lord Asquith memorably put it in East End Dwellings Co Ltd v Finsbury Borough Council [1952] AC 109, at 133: The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. Analysis Mr Jonathan Schwarz for Mr Fowler persuaded a majority of the Court of Appeal (Henderson and Baker LJJ), and has sought to persuade this court, that section 15 of ITTOIA compels us to treat a qualifying diver as carrying on a trade for all purposes under UK income tax law and therefore also under the Treaty as required by article 3(2), with the result that article 7 rather than article 14 applies to the taxation of his earnings. As Henderson LJ put it in the Court of Appeal at para 38: What, then, is the state of affairs which section 15(2) requires us to imagine? In my judgment there can be no room for doubt about the answer to this question. It is that the relevant duties of Mr Fowlers actual employment are instead to be treated for income tax purposes as the carrying on of a trade in the UK. Accordingly, in the imaginary world which we have to enter, the actual earnings of Mr Fowler from his employment must instead be regarded as profits (or, more accurately, as receipts which form part of a computation of trading income) of the trade which he is now deemed to have carried on. It follows that this deemed trade is the only source, for income tax purposes, from which taxable income can arise to Mr Fowler in respect of his relevant activities. Like Lewison LJ and Marcus Smith J in the Upper Tribunal I have, with respect, reached the opposite conclusion. My reasons follow. The starting point is that the question which of articles 7 and 14 of the Treaty applies to Mr Fowlers diving activities depends upon the true construction of those articles, in the context of the Treaty as a whole and its purposes, with the meaning of terms within those articles ascertained as required by article 3(2) by reference to UK income tax law. The relevant terms are, in article 7, profits and enterprise of a contracting state and, in article 14, salaries, wages and other similar remuneration and employment. Nothing in the Treaty requires articles 7 and 14 to be applied to the fictional, deemed world which may be created by UK income tax legislation. Rather they are to be applied to the real world, unless the effect of article 3(2) is that a deeming provision alters the meaning which relevant terms of the Treaty would otherwise have. This much is confirmed by paragraph 8(11) of the OECD Commentary quoted above, and it would be contrary to the requirement to treat the Treaty as a bilateral international agreement to do otherwise, as required by the dicta in the Anson case. Were it not for section 15 of ITTOIA, there would be no doubt that article 14, not article 7, would apply to Mr Fowlers diving activities, at least on the necessary but as yet untested assumption that he really was an employee. The meaning of employment is laid down in section 4 of ITEPA, and his remuneration plainly constitutes employment income within sections 6 and 7. UK tax law would not regard him as making profits from a trade, or his business as being that of an establishment. So the question is whether section 15 gives a different meaning to the relevant terms. That is not how a deeming provision works generally, nor does section 15(2) in particular. Section 15(1) uses employment and employment income in exactly the same way as is prescribed by sections 4, 6 and 7 of ITEPA, and the phrase performance of the duties of employment in section 15(2) again uses employment in the same way. Section 15 is about the taxation of income arising from the performance of those duties of employment but, introduced by the word instead, provides that the income is to be taxed as if, contrary to the fact, it was profits of a trade. Section 15 also uses trade in its conventional sense and does not therefore alter the meaning of enterprise in article 7, it being common ground that enterprise is descriptive of a business, and that business includes trade. In short, nothing in section 15 purports to alter the settled meaning of the relevant terms of the Treaty, viewed from the perspective of UK tax law. Rather it takes the usual meaning of those terms as its starting point, and erects a fiction which, applying those terms in their usual meaning, leads to a different way of recovering income tax from qualifying divers. Furthermore section 15 creates this fiction not for the purpose of deciding whether qualifying employed divers are to be taxed in the UK upon their employment income, but for the purpose of adjusting how that income is to be taxed, specifically by allowing a more generous regime for the deduction of expenses. This appears clearly from the express language of section 6(5) of ITEPA, which recognises that the income being charged to tax under section 15 is indeed employment income. If one asks, as is required, for what purposes and between whom is the fiction created, it is plainly not for the purpose of rendering a qualifying diver immune from tax in the UK, nor adjudicating between the UK and South Africa as the potential recipient of tax. It is for the purpose of adjusting the basis of a continuing UK income tax liability which arises from the receipt of employment income. Therefore to apply the deeming provision in section 15(2) so as to alter the meaning of terms in the Treaty with the result of rendering a qualifying diver immune from UK taxation would be contrary to its purpose. It would also produce an anomalous result. Nor should article 3(2) of the Treaty be construed so as to bring a qualifying diver within article 7 rather than article 14. To do so would be contrary to the purposes of the Treaty. This is because, as is recognised by article 2(1), the Treaty is not concerned with the manner in which taxes falling within the scope of the Treaty are levied. Section 15, understood in the light of section 6(5) of ITEPA, charges income tax on the employment income of an employed diver, but in a particular manner which includes the fiction that the diver is carrying on a trade. For those reasons I would allow this appeal.

UK-Abs

Mr Martin Fowler is a qualified diver who is resident in the Republic of South Africa. During the 2011/12 and 2012/13 tax years he undertook diving engagements in the waters of the UKs continental shelf. HMRC says Mr Fowler is liable to pay UK income tax for this period. Whether he is liable depends on the application of a Double Taxation Treaty between the UK and South Africa. Article 7 of the Treaty provides that self employed persons are taxed only where they are resident (i.e. South Africa), whereas article 14 provides that employees may be taxed where they work (i.e. the UK). For the purposes of this appeal, the parties have assumed that Mr Fowler was an employee. Mr Fowler claims he is nevertheless not liable to pay tax in the UK. His case centres on a deeming provision in section 15 of the UKs Income Tax (Trading and Other Income) Act 2005 (ITTOIA). This provides that an employed seabed diver is treated as self employed for the purposes of UK income tax. A previous provision of this kind was originally enacted in the 1970s in order to allow employed seabed divers, who commonly paid for their own expenses, to access the more generous regime tax deductible expenses which was available to the self employed. Mr Fowler argues that, since he is treated as self employed for income tax purposes, he must be treated as self employed under the Treaty and is therefore only taxable in South Africa. HMRC, on the other hand, says ITTOIA does not affect whether someone is an employee, but only regulates the manner in which an employee is taxed. The issue has divided the courts below. The First tier Tribunal (Tax Chamber) was persuaded by Mr Fowlers arguments but the Upper Tribunal (Tax and Chancery Chamber) allowed HMRCs appeal. The Court of Appeal was divided on the question, with the majority agreeing with Mr Fowler. HMRC now appeals to the Supreme Court. The Supreme Court unanimously allows HMRCs appeal, holding that (if the parties factual assumptions are correct) Mr Fowler should be treated as an employee and is subject to UK income tax. Lord Briggs gives the only judgment. Expressions in the Treaty such as salaries, wages and other remuneration, employment and enterprise should be given their ordinary meaning unless domestic legislation alters the meaning which they would otherwise have [18; 30]. Section 15 of ITTOIA provides that a person who would otherwise be taxed as an employee is instead treated as self employed for the purposes of domestic income tax. Deeming provisions of this kind create a statutory fiction which should be followed as far as required for the purposes for which the fiction was created. The courts will recognise the consequences of that fiction being real, but not where this will produce unjust, absurd or anomalous results [27]. Although section 15 uses the expressions income, employment and trade, it does not alter the meaning of those terms but takes their ordinary meaning as the starting point for a statutory fiction [31 32]. Properly understood, it taxes the income of an employed diver in a particular manner which includes the fiction that the diver is carrying on a trade. That fiction is not created for the purpose of rendering a qualifying diver immune from tax in the UK, or for adjudicating between the UK and South Africa as potential recipients of tax, but to adjust the basis of a continuing UK income tax liability [33]. Since the Treaty is not concerned with the manner in which taxes are levied, it would be contrary to the purposes of the Treaty to redefine its scope by reference to ITTOIA. It would also be contrary to the purpose of ITTOIA and would produce an anomalous result [33 34].

These appeals are concerned with a dispute over the preliminary question of the jurisdiction of the High Court of England and Wales in proceedings which commenced in December 2016. As I explain more fully below, the underwriters, Aspen Underwriting Ltd and others (the Insurers), insured the Atlantik Confidence (the Vessel) under a hull and machinery risks insurance policy (the Policy) on the Vessel. Credit Europe NV (the Bank), a bank which is domiciled in The Netherlands, funded the re financing of two vessels, including the Vessel, and took mortgages over the Vessel and assignments of the Policy, which identified the Bank as mortgagee, assignee and loss payee. The Policy had an exclusive jurisdiction clause by which each party submitted to the exclusive jurisdiction of the courts of England and Wales. After the Vessel sank, the Insurers entered into a settlement agreement with the owners and managers of the Vessel (the Owners and Managers) and paid out under the Policy. That payment was made to the insurance brokers, Willis Ltd, at the Banks direction. Thereafter, the Admiralty Court ([2016] EWHC 2412 (Admlty); [2016] 2 Lloyds Rep 525) held after the trial in a limitation action that the Owners and Managers had procured the scuttling of the Vessel. The Insurers commenced legal proceedings in the High Court against the Owners, the Managers and the Bank to recover the sums paid under the settlement agreement by seeking to avoid the settlement agreement on the grounds of the Owners and Managers misrepresentation or the Insurers mistake, and by seeking damages or restitution. The Bank challenges the jurisdiction of the High Court in respect of the Insurers claims against it. The appeals raise four issues which concern the interpretation of the Brussels Regulation Recast (Regulation (EU) 1215/2012) (the Regulation). The issues are: (i) Does the High Court have jurisdiction pursuant to the exclusive jurisdiction clause contained in the Policy? (ii) Are the Insurers claims against the Bank matters relating to insurance within Chapter II, section 3 of the Regulation? (iii) If the answer to (ii) is yes, is the Bank entitled to rely on section 3 by virtue of it falling within a class of persons who are entitled to the protection afforded by that section? (iv) Are the Insurers claims for restitution matters relating to tort, delict or quasi delict under article 7(2) of the Regulation? it is not necessary to address the fourth issue. In this judgment I address the first three issues. For reasons explained below, The background facts By a loan agreement dated 9 March 2010 (which was subsequently amended) the Bank lent $38.2m to the Owners and to an associated company, Capella Shipping Ltd, the owners of the Atlantik Glory, to re finance the purchase of the Vessel and the Atlantik Glory. The loan was secured by a first mortgage on both vessels and by a deed of assignment which included an assignment of the insurances on the vessels. In 2011 the Bank lent a further $3.5m to the Owners which was secured by a second mortgage and a second deed of assignment. choice of law and exclusive jurisdiction clause in these terms: The Policy: The Policy gives the value of the Vessel as $22m. It contains a This insurance shall be governed by and construed in accordance with the law of England and Wales and each party agrees to submit to the exclusive jurisdiction of the courts of England and Wales. The Policy includes a schedule of owners and mortgagees. A contract endorsement dated 8 February 2013 records that the Vessel was mortgaged in favour of the Bank as per Notices of Assignment and Loss Payable Clauses attached. The Notice of Assignment dated 11 February 2013 (the Notice of Assignment), provides that the Owners: GIVE NOTICE that, by assignment in writing dated 11 February 2013, we assigned to [the Bank] , a company incorporated under the laws of the Netherlands acting through its Malta branch all our right, title and interest in and to all insurances effected or to be effected in respect of the Vessel, including the insurances constituted by the policy on which this notice is endorsed, and including all money payable and to become payable thereunder or in connection therewith The Loss Payable Clause notes the assignment and provides (as far as relevant): Claims payable under this policy in respect of a total or constructive total or an arranged or agreed or compromised total loss or unrepaired damage and all claims which (in the opinion of the Mortgagee) are analogous thereto shall be payable to the Mortgagee up to the Mortgagees mortgage interest. The Banks Letter of Authority: After the Vessel sank off the coast of Oman on 3 April 2013, discussions took place between the Owners and the Bank about the payment of the Owners operational costs and other matters. The Owners informed the Bank that the insured value ($22m) rather than the Vessels then market value would be paid out under the Policy and there was some debate as to how the insurance proceeds would be applied. On 4 April 2013, the Owners asked the Bank for a letter formally authorising the Insurers to pay the proceeds of the insurance claim to the brokers, Willis Ltd. The Bank issued a Letter of Authority dated 5 April 2013 relating to the loss of the Vessel and addressed to the Underwriters concerned in these terms: We hereby authorise you to pay to Willis Ltd all claims of whatsoever nature arising from the above mentioned casualty provided that (i) there are no amounts due under the policy and (ii) [the Bank] is the sole loss payee of the policy. We agree that settlement of such amounts in account or otherwise with Willis Ltd shall be your absolute discharge in respect of such amounts paid. The negotiation of the Settlement Agreement: On 18 April 2013, the Bank asked the Owners for the current status of the claim. The Owners replied that they would ask their lawyer for a weekly report but that the correspondence could not be shared because it was private and confidential. The settlement was negotiated between the Owners, the Managers and the Insurers. The Bank was not involved in the negotiations or in the settlement of the insurance claim. Willis Ltd in an email dated 29 July 2013 stated its understanding that the Settlement Agreement would be signed by solicitors on Owners/Banks behalf but that understanding was mistaken because the Settlement Agreement, dated 6 August 2013, was signed by Clyde & Co LLP as agents only for and on behalf of the Assureds (defined as being the Owners and the Managers) and by Norton Rose Fulbright LLP as agents only for and on behalf of Underwriters. The Settlement Agreement was between the Underwriters on the one hand and Kairos Shipping Ltd of Malta (as the Owners) and Zigana Gemi Isletmeleri AS of Turkey (as the Managers) and their associated companies on the other. In its recitals it narrated the purchase of the Policy, the Banks status as mortgagee and loss payee under the Policy and the Banks consent to the payment of the insurance proceeds to Willis Ltd. The recitals also narrated the loss of the Vessel and the wish of the parties to resolve all claims in relation to the Vessel and the casualty. In the operative clauses, the Underwriters agreed to pay $22m to the Assureds in full and final settlement and the Assureds agreed to discharge and release the Underwriters upon payment of the sum to Willis Ltd. The Assureds warranted that, subject to the interests of the Bank, they were the only parties entitled to the settlement sum. Clause 4 of the Settlement Agreement confirmed that (subject to an irrelevant exception) the parties did not intend to confer any benefit on third parties which could be enforced by third parties under the Contracts (Rights of Third Parties) Act 1999. Clause 5 provided that English law was the governing law of the contract and that the parties submitted to the exclusive jurisdiction of the English High Court in respect of any claims arising in connection with the agreement. The insurance proceeds were paid to Willis Ltd in London on or around 16 August 2013. Thereafter, Willis Ltd paid US$21,970,272.74 to the Bank in Malta. Of that sum US$20,294,143.56 was transferred into an account held by Kairos Shipping Ltd to discharge various debts and US$1,676,129.18 was transferred into the account of Capella Shipping Ltd as part repayment of the debt against the Atlantik Glory. After the Admiralty Court held, in Kairos Shipping Ltd v Enka & Co LLC (The Atlantik Confidence) [2016] 2 Lloyds Rep 525, a limitation action raised by Kairos Shipping Ltd, that the master and chief engineer of the Vessel had sunk the Vessel at the request of Mr Agaoglu, the alter ego of the Owners, the Insurers raised the legal proceedings to which I now turn. The legal proceedings The Insurers alleged that, in presenting a claim under the Policy, the Owners and Managers on their own behalf and on behalf of the Bank) made express or implied representations which included that the Vessel had been lost by an insured peril, that the loss was accidental, that the Owners and Managers had not been guilty of misconduct in procuring the loss of the Vessel and that the Owners, Managers and Bank were entitled to an indemnity in respect of that loss. The Insurers also contended that the Bank had independently made such representations or was vicariously liable for the Owners and Managers representations. They averred that the representations, which were untrue and material, had induced them to enter into the Settlement Agreement. The Insurers therefore asked the court (i) to avoid or rescind the Settlement Agreement on grounds of misrepresentation or mistake; (ii) because of that avoidance or rescission to order restitution of the sums paid; (iii) to award damages in deceit, for negligent misrepresentation and/or pursuant to sections 2(1) and 2(2) of the Misrepresentation Act 1967; and (iv) to order restitution of the sums paid by mistake. In response the Bank challenged the jurisdiction of the High Court. On 27 July 2017 Teare J in his first judgment ([2018] 1 All ER (Comm) 228; [2017] 2 Lloyds Rep 295; [2017] EWHC 1904 (Comm)) held that the High Court had jurisdiction in respect of the claims for damages for misrepresentation under article 7(2) of the Regulation but not in respect of the claims for restitution. He also held that the court did not have jurisdiction based on the exclusive jurisdiction clauses in the Settlement Agreement and the Policy. In a second judgment dated 1 December 2017 ([2017] EWHC 3107 (Comm)) Teare J held that the court had jurisdiction in respect of the Insurers claim for damages for misrepresentation pursuant to the Misrepresentation Act 1967. Both the Insurers and the Bank appealed to the Court of Appeal with Teare Js permission. The Court of Appeal (Gross, Moylan and Coulson LJJ) in a judgment dated 21 November 2018 ([2018] EWCA Civ 2590; [2019] 1 Lloyds Rep 221) affirmed Teare Js decisions. In the judgment given by Gross LJ, with whom the other Lord Justices agreed, the Court of Appeal held, first, that the Bank was not bound by the exclusive jurisdiction clause in the Settlement Agreement and that the Insurers did not have a good arguable case that the Bank was a party to that agreement. That finding is not in issue in the appeals to this court. Secondly, the Bank was not bound by the exclusive jurisdiction clause in the Policy by asserting its right to payment under the Policy as loss payee and assignee. The Bank would not be so bound unless and until it commenced legal proceedings against the Insurers. In any event the Bank did not assert its rights against the Insurers by issuing the Letter of Authority. Those findings are the subject of issue 1 in these appeals. Thirdly, the Bank was not entitled to rely on section 3 of the Regulation because its business of ship finance involved it in the settlement of insurance claims and was analogous to that of an insurance professional and the Bank fell within a class of persons not deemed to be a weaker party. These findings are the subject of issues 2 and 3 in these appeals. Fourthly, the Insurers claims against the Bank for damages for misrepresentation were matters relating to tort, delict or quasi delict under article 7(2) of the Regulation with the harmful event occurring in England. The validity of this finding depends on this courts answers to issues 1, 2 and 3. Finally, the Insurers claims against the Bank for restitution were not matters relating to tort, delict or quasi delict within article 7(2) of the Regulation. That is issue 4 in these appeals. Discussion The Regulation: Before discussing the issues raised in these appeals it may be helpful to say something about the structure of the Regulation. I discuss the relevant provisions of the Regulation more fully below. In order to promote the free circulation of judgments within member states, the Regulation seeks to set out rules which are highly predictable and are founded on the principle that jurisdiction is generally based on the defendants domicile. Thus article 4 provides that: (1) Subject to this Regulation, persons domiciled in a member state shall, whatever their nationality, be sued in the courts of that member state. And article 5(1) provides: Persons domiciled in a member state may be sued in the courts of another member state only by virtue of the rules set out in sections 2 to 7 of this Chapter. It is only in well defined circumstances that jurisdiction based on domicile is replaced by a different connecting factor based on the subject matter of the dispute or the autonomy of the parties (recital (15)). The Court of Justice of the European Union (CJEU) has repeatedly held, as I will show below, that articles which provide for the exclusion of jurisdiction based on domicile are to be narrowly interpreted. There are also articles which provide for alternative grounds of jurisdiction in addition to the defendants domicile. The alternative grounds, which include matters relating to contract and matters relating to tort, delict or quasi delict (article 7(1) and (2)), are based on a close connection between the court and the action or are in order to facilitate the sound administration of justice. The requirement of the close connection is to promote legal certainty (recital (16)). Subject to certain exclusive grounds of jurisdiction, the Regulation also respects the autonomy of parties to a contract to determine the courts to have jurisdiction but it restricts that autonomy in insurance, consumer and employment contracts (recital (19)). It appears to me that when a court comes to interpret an article in the Regulation it must consider whether on the one hand the rule contained in the article supports the general rule of jurisdiction based on the defendants domicile or on the other hand purports to exclude or provide an alternative to that general rule. The relevant test: Although there was a challenge in the Court of Appeal, there is now no disagreement between the parties that in relation to the preliminary question of the jurisdiction of the English courts it is for the Insurers to show that they have a good arguable case in the sense that they have the better of the argument. Issue 1: Does the High Court have jurisdiction pursuant to the exclusive English jurisdiction clause contained in the Policy? Mr MacDonald Eggers QC for the Insurers contends in summary that the Bank is bound by the exclusive jurisdiction clause in the Policy because in issuing the Letter of Authority it asserted a claim under the Policy for payment of the insured sums as assignee and loss payee. It was not disputed by the parties that the Bank would be bound by the clause if it had sued the Insurers. But the obligation to submit to the jurisdiction of the English courts went further than the commencement of legal proceedings and covered any assertion of, or indeed reliance on, its rights in relation to the Policy by the Bank. For, on its proper construction, the exclusive jurisdiction clause extends to an obligation on an assignee to submit to the jurisdiction of the English courts if there were a dispute or claim relating to the Policy, as for example if the Bank received the Policy proceeds without any dispute at the time and without having initiated legal proceedings but there was later a dispute about its entitlement to those funds. Further, the Insurers would be entitled to sue the Bank in the English courts for negative declaratory relief and such a claim would be the same cause of action as a claim by the Bank for payment. The Insurers submit that it would be incoherent for the law to apply the exclusive jurisdiction clause only when the assignee initiated a formal legal claim. I am satisfied that these arguments should not be accepted and that Teare J and the Court of Appeal did not err on this issue. I begin by examining EU law in the jurisprudence of the CJEU before turning to domestic law. Under EU law a jurisdiction agreement in a contract will bind a defendant only if there is actual consensus between the parties which is clearly and precisely demonstrated: Coreck Maritime GmbH v Handelsveem BV (Case C 387/98) [2000] ECR I 9337, paras 13 15 (a case concerning article 17 of the Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters 1968, as amended); Profit Investment Sim SpA v Ossi (Case C 366/13) [2016] 1 WLR 3832 (CJEU), para 27 (a case on article 23 of the earlier Brussels Regulation, Regulation (EC) No 44/2001). Thus a jurisdiction agreement in an insurance contract does not bind a third party beneficiary of insurance who is domiciled in a different contracting state and who has not expressly subscribed to the clause: Socit financire et industrielle du Peloux v Axa Belgium (Case C 112/03) [2006] QB 251, para 43 (a case on article 12 of the 1968 Brussels Convention as amended). Nor does such an agreement bind a victim of insured damage who wishes to bring an action directly against the insurer: Assens Havn v Navigators Management (UK) Ltd (Case C 368/16) [2018] QB 463 (CJEU), para 40 (a case on article 13(5) of Regulation No 44/2001). EU law however recognises that a person who is not a party to a jurisdiction agreement may be taken to have consented to it if, under the applicable national law, it became the successor to the rights and obligations under the contract: Partenreederei M/S Tilly Russ v Haven & Vervoerbedrijf Nova NV (Case 71/83) [1985] QB 931, paras 24 26. That case concerned a bill of lading, which, under the relevant national law, vested in a third party holder all the rights of the shipper under the bill of lading and subjected it to all of the shippers obligations mentioned in the bill of lading, including the agreement on jurisdiction. Thus, in Coreck Maritime (above) the CJEU stated (para 27): a jurisdiction clause agreed between a carrier and a shipper which appears in a bill of lading is enforceable against a third party bearer of the bill of lading if he succeeded to the rights and obligations of the shipper under the applicable national law when he acquired the bill of lading. If he did not, it must be ascertained whether he accepted that clause having regard to the requirements laid down in the first paragraph of article 17 of the Convention. The first paragraph of article 17 (as article 25 of the Regulation now does) required that an agreement on jurisdiction had to be in writing or evidenced in writing, or in a form which accorded with practices which the parties had established between themselves, or in international trade or commerce in a form which conformed with an established trade usage of which the parties were or ought to have been aware. In this case it is not suggested that there was an agreement in any of those forms. The court must therefore look to national law to determine whether the Bank can be seen in EU law as the successor of the Owners and Managers who are subject to the jurisdiction clause. The Banks entitlement to receive the proceeds of the Policy in the event that there was an insured casualty rests on its status as an equitable assignee. It is trite law that an assignment transfers rights under a contract but, absent the consent of the party to whom contractual obligations are owed, cannot transfer those obligations: Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660, 668 670 per Collins MR. An assignment of contractual rights does not make the assignee a party to the contract. It is nonetheless well established that a contractual right may be conditional or qualified. If so, its assignment does not allow the assignee to exercise the right without being subject to the conditions or qualifications in question. As Sir Robert Megarry V C stated in Tito v Waddell (No 2) [1977] Ch 106, 290, you take the right as it stands, and you cannot pick out the good and reject the bad. This concept, which has often been described as conditional benefit, is to the effect that an assignee cannot assert its claim under a contract in a way which is inconsistent with the terms of the contract. Several examples of its application or consideration were cited to the court. See, for example, Montedipe SpA v JTP RO Jugotanker (The Jordan Nicolov) [1990] 2 Lloyds Rep 11, 15 16 per Hobhouse J; Pan Ocean Shipping Co Ltd v Creditcorp Ltd (The Trident Beauty) [1994] 1 WLR 161, 171 per Lord Woolf; Schiffahrtsgesellschaft Detlev von Appen GmbH v Voest Alpine Intertrading GmbH (The Jay Bola) [1997] 2 Lloyds Rep 279, 286 per Hobhouse LJ; Youell v Kara Mara Shipping Co Ltd [2000] 2 Lloyds Rep 102, paras 58 62 per Aikens LJ; Shipowners Mutual Protection and Indemnity Association (Luxembourg) v Containerships Denizcilik Nakliyat Ve Ticaret AS (The Yusuf Cepnioglu) [2016] 1 Lloyds Rep 641; [2016] Bus LR 755, paras 23 25 per Longmore LJ; and Aline Tramp SA v Jordan International Insurance Co (The Flag Evi) [2017] 1 Lloyds Rep 467, para 40 per Sara Cockerill QC, sitting as a Deputy High Court Judge. In my view, the formulation of the principle by Hobhouse LJ in The Jay Bola, which the Court of Appeal approved in The Yusuf Cepnioglu, is the best encapsulation. In The Jay Bola the insurers of cargo for the voyage charterer asserted rights, which had been assigned to them by the voyage charterer by subrogation under foreign law, by raising court proceedings in Brazil against the owners and the time charterer. On the application of the time charterers, Morison J granted an anti suit injunction against the insurers because the arbitration clause in the voyage charter regulated the means by which the transferred right could be enforced. The Court of Appeal upheld his order. Hobhouse LJ stated ([1997] 2 Lloyds Rep 279, p 286): the insurance company is not entitled to assert its claim inconsistently with the terms of the contract. One of the terms of the contract is that, in the event of dispute, the claim must be referred to arbitration. The insurance company is not entitled to enforce its right without also recognizing the obligation to arbitrate. This formulation emphasises the constraint on the assertion of a right as being the requirement to avoid inconsistency and, whether the clause is an arbitration clause, as in The Jay Bola, or an exclusive jurisdiction clause, as in Youell (above), it is the assertion of the right through legal proceedings which is in conflict with the contractual provision that gives rise to the inconsistency. In Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA [2016] 5 SLR 455, para 55, the Singapore Court of Appeal, commenting on The Jay Bola and the proposition that an assignee does not become a party to the contract but would not be entitled to enforce its rights against the other party without also recognising the obligation to arbitrate, stated: This approach of entitlement rather than obligation may be more easily reconcilable with the consensual nature of arbitration. This is because the assignee is only taken to submit to arbitration at the point it elects to exercise its assigned right. In the present case the Bank did not commence legal proceedings to enforce its claim. Indeed, it did not even assert its claim but left it to the Owners and the Managers to agree with the Insurers the arrangements for the release of the proceeds of the insurance policy by entering into the Settlement Agreement. It is not disputed that the Bank was not a party to the Settlement Agreement and the Bank derived no rights from that agreement. The Letter of Authority, which the Bank produced at the request of the Owners and the Managers, enabled both the Insurers and Willis Ltd to obtain discharges of their obligations and to that end it was attached to the Settlement Agreement. The Letter of Authority facilitated the settlement between the Insurers and the Owners and provided the Owners/Managers with a mechanism by which the Bank as mortgagee, assignee and loss payee could receive its entitlement. At the time of payment of the proceeds of the Policy there was no dispute as to the Banks entitlement and no need for legal proceedings. There was therefore no inconsistency between the Banks actions and the exclusive jurisdiction clause. The Bank therefore is not bound by an agreement as to jurisdiction under article 15 or article 25 of the Regulation. The Insurers argue that, if they had refused to pay the proceeds of the Policy to the Bank and had commenced proceedings against the Bank in England seeking negative declaratory relief, the Bank would have been bound by the exclusive jurisdiction clause. They submit that it makes no sense to distinguish a claim for negative declaratory relief from the Banks claim. This is because the Banks right to sue for an indemnity under the Policy and the Insurers right to sue for a declaration that it is not liable to the Bank are the same cause of action: Gubisch Maschinenfabrik KG v Palumbo (Case 144/86) [1987] ECR 4861, paras 15 19. This incoherence, it is submitted, militates against the Banks analysis. I disagree. The Bank is not a party to the contract contained in the Policy. The Bank is not bound by that contract to submit to the jurisdiction of the English courts if the Insurers raise an action in England. If the Insurers claims fall within section 3 of the Regulation, the Insurers may bring proceedings against the Bank only in the courts of the member state of the Banks domicile, that is The Netherlands. I turn then to that question. Issues 2 and 3: Are the Insurers claims against the Bank matters relating to insurance within section 3 of the Regulation and if so, is the Bank entitled to rely on that section? Section 3 of chapter II of the Regulation is entitled Jurisdiction in matters relating to insurance. The section sets out rules which govern jurisdiction in matters relating to insurance. The relevant article in this appeal is article 14(1) which provides (so far as relevant): an insurer may bring proceedings only in the courts of the member state in which the defendant is domiciled, irrespective of whether he is the policyholder, the insured or a beneficiary. (Emphasis added) It is noteworthy that the article, unlike many articles in the Regulation, is not creating an alternative ground of jurisdiction in addition to domicile of the defendant nor is it purporting to exclude the domicile of the defendant as an available ground. On the contrary, it makes that ground of jurisdiction, which is the same as the principal ground of jurisdiction under article 4, the exclusive ground in those circumstances in which article 14 applies. Teare J held that the nature of the Insurers claim against the Bank was so closely connected with the question of the Insurers liability to indemnify for the loss of the Vessel under the Policy that the subject matter of the claim can fairly be said to relate to insurance. The Court of Appeal, agreeing with Teare J, stated ([2019] 1 Lloyds Rep 221, para 78): [A]s a matter of reality and substance, the foundation of the Underwriters claims lies in the Policy. The crucial (if not the only) question is whether the Vessel was lost by reason of a peril insured against under the Policy or whether the loss arose by reason of wilful misconduct on the part of the Owners. On this footing, there is the most material nexus between the Underwriters claims and the Policy. But in spite of this success the Bank did not obtain the protection of article 14 of the Regulation because (although their reasoning diverged) both Teare J and the Court of Appeal held that that protection was available only to the weaker party in circumstances of economic imbalance between the claimant insurer and the defendant. Mr Steven Berry QC for the Bank appeals against the finding that article 14 did not apply to the claim because of the absence of economic imbalance between the Insurers and the Bank. Mr MacDonald Eggers argues against the finding that the subject matter of the claim relates to insurance and defends the exclusion of article 14 on the ground that the Bank was not the weaker party. On issue 2 Mr MacDonald Eggers submits that a claim can be regarded as a matter relating to insurance only if the subject matter of the claim is, at least in substance, a breach of an obligation contained in, and required to be performed by, an insurance contract. He submits that this proposition is supported by the CJEU case of Brogsitter v Fabrication de Montes Normandes EURL (Case C 548/12) [2014] QB 753 (Brogsitter), which is a case concerning matters relating to a contract under article 7(1) of the Regulation. The heading of section 3, Matters relating to insurance should be read as matters relating to insurance contracts and he refers to recitals (18) and (19) and articles 15(5), 26(2), 31(4) and 45(1)(e)(i) in support of that contention. Secondly, there is no logical reason for the test for the link between the contract and the claim to be wider for the particular contracts covered by sections 3 (insurance), 4 (consumer contracts) and 5 (employment contracts) of the Regulation than it is for general contracts under article 7(1). Thirdly, the application of the Brogsitter test to the meaning of the title of section 3 promotes legal certainty and predictability. Fourthly, the Brogsitter test has been applied by courts outside the context of article 7(1). He refers to Bosworth v Arcadia Petroleum Ltd [2016] EWCA Civ 818; [2016] 2 CLC 387, para 66, Granarolo SpA v Ambrosi Emmi France SA (Case C 196/15) [2016] IL Pr 32, paras 21 22, and Committeri v Club Mditerrane SA [2018] EWCA Civ 1889; [2019] IL Pr 19, para 52. Fifthly, he submits that there is support for the Insurers approach in the Court of Appeals judgment in National Justice Cia Naviera SA v Prudential Assurance Co Ltd (The Ikarian Reefer) (No 2) [2000] 1 WLR 603; [2000] 1 Lloyds Rep 129. While Mr MacDonald Eggers presented these submissions clearly and attractively, I am not persuaded that Teare J or the Court of Appeal erred in their approach. I have reached this view for the following reasons. First, it is to my mind important to note that the title to section 3 Jurisdiction in matters relating to insurance is broader than the words of article 7(1) matters relating to a contract (emphasis added). Similarly, it is wider than the titles of section 4 Jurisdiction over consumer contracts and section 5 Jurisdiction over individual contracts of employment. The difference in wording is significant as it would require to be glossed if it were to be read as Matters relating to an insurance contract. Such a gloss would not be consistent with the requirement of a high level of predictability of which recital (15) speaks. Secondly, the scheme of section 3 is concerned with the rights not only of parties to an insurance contract, who are the insurer and the policyholder, but also beneficiaries of insurance and, in the context of liability insurance, the injured party, who will generally not be parties to the insurance contract. Thirdly, the recitals on which the Insurers found do not carry their case any distance. Recital (18), to which I will return below, sets out a policy of protecting the weaker party to certain contracts including insurance contracts. Recital (19) which calls for respect for the autonomy of parties to certain contracts to select the jurisdiction in which to settle their claims does not assist. Neither does article 15(5), which provides that in contracts of insurance which cover the risks set out in article 16 (such as damage to sea going ships and aircraft) the parties may agree to contract out of section 3. The references to the policyholder, the insured, and the beneficiary of the insurance contract in the other recitals to which the court was referred cast no light on the meaning of the title to section 3. Fourthly, as I will show below (para 57) the CJEU has often held that articles, such as article 7(1), which derogate from the general rule of jurisdiction under article 4 should be interpreted strictly. Article 14 by contrast reinforces article 4. The Ikarian Reefer (No 2) also does not assist the Insurers. The dispute in that case involved an action by the owners of the vessel against her hull and machinery underwriters which were represented by Prudential, and the Court of Appeal held that the vessel had been deliberately run aground and deliberately set on fire on the authority of her owners. Prudential recovered much of their costs from the owners and then applied under section 51 of the Supreme Court Act 1981 to recover the balance of their costs from a non party, Mr Comninos, who was the principal behind the owners, and who it was said had directed and financed the litigation. The Court of Appeal held that, if the claim for costs constituted proceedings, those proceedings were not proceedings relating to insurance matters. If the claims were ancillary to the action by the owners against the underwriters that action related to insurance matters and had properly been raised in England. The underwriters were not seeking to raise claims relating to insurance matters against Mr Comninos. Rather they were seeking to recover unpaid costs incurred in a litigation relating to insurance matters in which they had been successful. Fifthly, and in any event, as Mr Berry submits, if the Brogsitter test is as Mr MacDonald Eggers characterises it and is applicable in relation to section 3, that test is met in the circumstances of this case. The Insurers claim is that there has been an insurance fraud by the Owners and the Managers for which the Bank is vicariously liable. Such a fraud would inevitably entail a breach of the insurance contract as the obligation of utmost good faith applies not only in the making of the contract but in the course of its performance: Versloot Dredging BV v HDI Gerling Industrie Versicherung AG (The DC Merwestone) [2016] UKSC 45; [2017] AC 1, para 8 per Lord Sumption. It is therefore not necessary for this Court to analyse the proper application of the jurisprudence in Brogsitter. I therefore conclude that, subject to issue 3, which concerns the recitals and case law which refer to the protection of the weaker party, the Insurers claims against the Bank are matters relating to insurance within section 3 of the Regulation. Teare J ([2017] EWHC 1904 (Comm)), in holding that the Bank could not take the benefit of article 14, relied on recital (18) of the Regulation, which provides: In relation to insurance, consumer and employment contracts, the weaker party should be protected by rules of jurisdiction more favourable to his interests than the general rules. Teare J also referred to the judgment of the CJEU in Vorarlberger Gebietskrankenkasse v WGV Schwbische Allgemeine Versicherungs AG (Case C 347/08) [2009] ECR I 8661; [2010] Lloyds Rep IR 77 (Vorarlberger), paras 40 45 in support of the proposition that the section 3 protections should not be extended to persons for whom that protection was not justified. In the Court of Appeal, Gross LJ ([2019] 1 Lloyds Rep 221, paras 81 123) elaborated on the judges reasoning, referred to several cases, which post dated the judgment at first instance and which I discuss below, and upheld the judges decision on this issue. I respectfully disagree with that conclusion. There is no weaker party exception which removes a policyholder, an insured or a beneficiary from the protection of article 14. I have come to this view for the following six reasons, which I will vouch when I discuss the case law below. First, the reason why article 14 protects the policyholder, the insured and the beneficiary of an insurance policy is because they are generally the weaker party in a commercial negotiation with an insurance company and are as a matter of course presented with a standard form contract. Secondly, while recital (18) explains the policy behind, among others, section 3 of the Regulation, it is the words of the relevant articles which have legal effect and the recitals are simply an aid to interpretation of those articles. Thirdly, derogations from the jurisdictional rules in matters of insurance must be interpreted strictly. Fourthly, the CJEU in its jurisprudence has set its face against a case by case analysis of the relative strength or weakness of contracting parties as that would militate against legal certainty. Instead, it has treated everyone within the categories of the policyholder, the insured or the beneficiary as protected unless the Regulation explicitly provides otherwise. Fifthly, the CJEU looks to recital (18) not to decide whether a particular policyholder, insured or beneficiary is to be protected by section 3 but in the context of reaching a decision whether by analogy those protections are to be extended to other persons who do not fall within the list of expressly protected persons. Sixthly, the policy which underlies the jurisprudence of the CJEU when it decides whether to extend the protection to persons not expressly mentioned in section 3 is that the court seeks to uphold the general rule in article 4 that defendants should be sued in the courts of the member state of their domicile and allows extensions to the protection of section 3 only where such an extension is consistent with the policy of protecting the weaker party. The CJEUs justification for the protection conferred on the policyholder, the insured and the beneficiary is to be seen in Gerling Konzern Speziale Kreditversicherungs AG v Amministrazione del Tesoro dello Stato (Case 201/82) [1983] ECR 2503 (Gerling), which concerned the validity of a jurisdiction clause under the predecessor of article 25 of the Regulation. The CJEU stated: 15. the insurer, if his original consent has been made clear in the provisions of the contract, cannot object to such an exclusion of jurisdiction on the sole ground that the party benefiting from the requirement imposed on others, not being a party to the contract, has not himself satisfied the requirement of writing prescribed by article 17 of the Convention. 16. Consideration of the provisions of section 3 of the Convention relating to jurisdiction in matters relating to insurance confirms this view. 17. It is apparent from a consideration of the provisions of that section in the light of the documents leading to their enactment that in affording the insured a wider range of jurisdiction than that available to the insurer and in excluding any possibility of a clause conferring jurisdiction for the benefit of the insurer their purpose was to protect the insured who is most frequently faced with a predetermined contract the clauses of which are no longer negotiable and who is in a weaker economic position. (Emphasis added) This is consistent with the statement by Advocate General Mancini in Gerling that the policyholder, the insured and the beneficiary were given protection because they were the persons regarded as weaker. Turning to the second reason which I have set out in para 43 above, it is clear that the recitals of the Regulation are a useful tool in interpreting the operative provisions contained in the articles of the Regulation. But a distinction falls to be made between the justification or rationale of a ground of jurisdiction and the ground itself. See the judgment of the CJEU in Folien Fischer AG v Ritrama SpA (Case C 133/11) [2013] QB 523, paras 30 40 and the judgment of this court in AMT Futures Ltd v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH [2017] UKSC 13; [2018] AC 439, paras 14 and 29. It is noteworthy that article 14 of the Regulation speaks of the policyholder, the insured and the beneficiary without further qualification. Thirdly, in Socit financire et industrielle du Peloux v Axa Belgium (Case C 112/03) [2006] QB 251 (Peloux), a case which concerned what are now articles 15 and 23 of the Regulation and the ability of a party by agreement to depart from the provisions of what is now section 3 of the Regulation, the CJEU treated the Convention (now the Regulation) as establishing a system in which derogations from the jurisdictional rules in matters of insurance must be interpreted strictly (para 31). The existence of an unexpressed exception to the protection given to the policyholder, the insured and the beneficiary is scarcely consistent with this approach. Fourthly, it is clear that the CJEU does not enquire into relative strengths and weaknesses of particular parties in applying the provisions of section 3 of the Regulation. Such an exercise would risk giving rise to legal uncertainty and would prevent the rules of jurisdiction from being highly predictable. Instead the in to protection. Thus, Regulation defines Landeskrankenanstalten Betriebsgesellschaft KABEG v Mutuelles du Mans Assurances MMA IARD SA (Case C 340/16) [2017] IL Pr 31 (KABEG), Advocate General Bobek (para AG47) stated: those who are entitled in contrast to matters relating to employees and consumers, the notion of the weaker party in insurance related matters is defined rather broadly. It includes four categories of persons: the policyholder, the insured, the beneficiary and the injured party. As a matter of fact, these parties may be economically and legally rather strong entities. That flows from the broad language of the insurance related provisions of Regulation No 44/2001 as well as from the types of insurance described therein. (Emphasis added) The reference to the injured party is a reference to the provision relating to liability insurance which is now article 11 of the Regulation. The breadth of the protection given in section 3 was acknowledged by the CJEU in its judgment in KABEG in which the court stated (para 32): As the Advocate General observed in [AG47] of his Opinion, the notion of the weaker party has a wider acceptance in matters relating to insurance than those relating to consumer contracts or individual employment contracts. The CJEU went on to state (para 34): a case by case assessment of the question whether an employer which continues to pay the salary may be regarded as the economically weaker party in order to be covered by the definition of injured party within the meaning of article 11(2) of Regulation No 44/2001 [now article 13(2) of the Regulation], would give rise to the risk of legal uncertainty and would be contrary to the objective of that Regulation, laid down in recital (11) thereof [now recital (15) of the Regulation], according to which the rules of jurisdiction must be highly predictable. In Peloux (para 46 above) the CJEU observed (para 31) that what is now article 15 of the Regulation lists exhaustively the cases in which the parties may derogate by agreement from the rules laid down in section 3. It is article 15(5) which is relevant in this case as it provides that the provisions of section 3 may be departed from by an agreement which relates to a contract of insurance in so far as it covers one or more of the risks set out in article 16. Those risks include perils covered by marine insurance and by the insurance of aircraft and offshore installations. The exceptions which articles 15(5) and 16 establish are the result of a request by the United Kingdom on its accession to the Brussels Convention in 1968 that the protections given to policyholders in articles 7 12 of that Convention be restricted to exclude among other things the insurance of large risks. The solution which was adopted in line with the recommendations of the Report on the Convention by Professor Dr Peter Schlosser (OJEC, 5 March 1979) was to introduce the list of certain types of policy in what are now articles 15(5) and 16 of the Regulation. The Schlosser Report explains the thinking behind those provisions. It states (para 140): The problem was one of finding a suitable demarcation line. Discussions on the second Directive on insurance had already revealed the impossibility of taking as criteria abstract, general factors like company capital or turnover. The only solution was to examine which types of insurance contracts were in general concluded only by policyholders who did not require social protection. It is in my view clear that the protections afforded to the policyholder, the insured and the beneficiary are given because such classes of person generally are the weaker party and that the Regulation has identified specific types of insurance contracts and allowed the parties to those types of insurance contract to exclude by agreement the protections which otherwise would be in place. Fifthly, the case law of the CJEU, to which the Court of Appeal referred for support of the view that the Bank should be excluded from the protection of article 14 of the Regulation because there was not an economic imbalance between it and the Insurers, does not support that conclusion. Instead it shows that the CJEU has regard to recital (18) and the concept of the party in the weaker economic position when it is asked to extend the protection of section 3 beyond the policyholder, the insured, the beneficiary and the injured party. In Universal General Insurance Co (UGIC) v Group Josi Reinsurance Co SA (Case C 412/98) [2001] QB 68 (Group Josi) the CJEU had to consider whether the rules on jurisdiction specific to matters relating to insurance were to be applied to a dispute between a reinsured and a reinsurer under an insurance contract. The court held that a reinsurance contract could not be equated with an insurance contract and the protections afforded to policyholders could not be extended to a reinsured. The CJEU stated (para 65): The role of protecting the party deemed to be economically weaker and less experienced in legal matters than the other party to the contract which is fulfilled by [the provisions of section 3] implies, however, that the application of the rules of special jurisdiction laid down to that end should not be extended to persons for whom that protection is not justified (Emphasis added) It is of note that the CJEU interpreted section 3 as deeming the named parties, the policyholder, the insured, the beneficiary and (under liability insurance) the injured party to be economically weaker and applied the economic weakness criterion to prevent an extension of the protection from those persons to a reinsured. The CJEU adopted the same approach in Groupement dintrt conomique (GIE) Runion Europenne v Zurich Espaa Socit Pyrenenene de Transit dAutomobiles (Case C 77/04) [2005] ECR I 4509; [2006] Lloyds Law Rep 215 (GIE) which concerned an attempt by an insurer, which had been sued by its insured, to bring Zurich Espaa into the action as a third party on the basis that it also had covered the loss as the insurer of the claimant which had sued the insured. The dispute was as to whether Zurich could invoke the protection of what is now article 14 of the Regulation requiring it to be sued in the courts of its domicile or whether the insurer could invoke the third party jurisdiction in what is now article 8(2) of the Regulation. The CJEU repeated the formula in para 65 of Group Josi, which I have quoted above, and (para 22) spoke of the authors of the Convention having taken as their premise that the provisions of section 3 applied only to relations characterised by an imbalance between the parties. It referred to the express exclusion by what are now articles 15(5) and 16 of the Regulation of the insurance contracts specified therein (see para 48 above) which was justified because the insured in those types of insurance contracts enjoyed considerable economic power. It concluded that it was consistent with the letter, spirit and purpose of the provisions in section 3 to hold that they were not applicable to relations between insurers in the context of third party proceedings (para 23). Thus again, the CJEU invoked the policy of protecting the weaker party not to look behind the categories of persons expressly protected by section 3 but to ascertain whether that protection should be extended by analogy to persons who were not expressly protected. In Vorarlberger (para 42 above) a social security institution had provided benefits for the victim of a road traffic accident while she was unfit for work and, using its statutory rights of assignment of the victims claim, sought indemnification from the liability insurers of the driver who was allegedly responsible for the accident. The social security institution sought to invoke what are now articles 11(1)(b) and 13(2) of the Regulation to raise legal proceedings in the courts of its own domicile as assignee of the injured party against the insurers of the alleged wrongdoer. The CJEU rejected this attempt to extend the rules on jurisdiction derogating from the general principle that jurisdiction is generally based on the defendants domicile beyond the situations expressly envisaged in the Regulation ([2009] ECR I 8661, paras 36 39). It invoked the weaker party rationale of the section 3 protections as a reason for not extending the protections to persons who did not need to be protected, recognising that the heirs of an injured party ought to be able to benefit from the section 3 rules but holding that a social security institution could not (paras 40 44). In KABEG (para 47 above) an Austrian public law establishment (KABEG), which ran private hospitals, paid the salary of an employee while he was off work as a result of injuries incurred in a road traffic accident. Under Austrian law the employees compensation claim passed to his employers. Relying on what are now articles 11(1)(b) and 13(2) of the Regulation, KABEG raised legal proceedings in Austria, the member state of its domicile, against the French insurers of the driver of the car involved in the accident. KABEG in substance argued that it was the injured party which, under article 13(2), was allowed to raise proceedings in the courts of the member state of its domicile against a liability insurer. The defendants argued that the Austrian court did not have jurisdiction because section 3 did not apply to the employers which were not the weaker party. Again, it is clear that the claimant was seeking an extension of the protections of section 3 of the Regulation by including the employer, with a claim for reimbursement of the salary paid to the injured party, within the concept of injured party. That claim succeeded. Having rejected a case by case assessment (as I have shown), the CJEU held that pursuant to article 13(2) of the Regulation (para 35), employers to which the rights of their employees to compensation have passed may, as persons which have suffered damage and whatever their size and legal form, rely on the rules of special jurisdiction laid down in articles [10 12] of that Regulation. Finally, in Hofsoe v LVM Landwirtschaftlicher Versicherungsverein Mnster AG (Case C 106/17) [2018] IL Pr 184 (Hofsoe) Mr Hofsoe, whose professional activity inter alia consisted in recovering claims for damages from insurers and who took assignments of the claims of victims of road traffic accidents, sought unsuccessfully to extend the concept of injured party so as to invoke the jurisdiction of injured partys domicile under articles 11(1)(b) and 13(2) of the Regulation. In paras 37 42 the CJEU referred among others to KABEG, Vorarlberger, Group Josi and GIE, and acknowledged that the jurisdiction of the forum actoris had been extended under articles 11(1)(b) and 13(2) to include the heirs of an injured party and also the employer who continues to pay the salary of the injured party while he was on sick leave. But reasserting that the derogations from the principle of the defendants domicile must be exceptional in nature and be interpreted strictly, the CJEU held that the special rules of jurisdiction should not be extended to persons for whom the protection is not justified, such as professionals in the insurance sector. The CJEU (para 45) attached no significance to the fact that Mr Hofsoe carried on business on a small scale and reaffirmed its rejection of a case by case assessment because that risked legal uncertainty. In none of these cases where the CJEU has relied on the weaker party criterion to rule on applications to extend the scope of the section 3 protections beyond those parties who were clearly the policyholder, the insured, the beneficiary or the injured party, did the court call into question the entitlement of those expressly named persons to that protection by reason of their economic power. On the contrary, the CJEU has treated the exceptions to the entitlement of those persons as confined to the exceptions expressly stated in articles 15(5) and 16 of the Regulation. As I have said, the CJEU has repeatedly stated that derogations from the principle of the jurisdiction of the defendants domicile must be exceptional in nature and be interpreted strictly: Group Josi, paras 36, 49 50; Vorarlberger paras 36 39; Hofsoe, para 40. The jurisdiction of the forum actoris, which articles 11(1)(b) and 13(2) of the Regulation confer, is a derogation from the general principle of the jurisdiction of the defendants domicile. Article 14, which requires the insurer to bring proceedings only in the courts of the member state of the domicile of the insured, involves no such derogation but on the contrary supports the general principle. It is correct, as Gross LJ observed in para 111 of his judgment ([2019] 1 Lloyds Rep 221), that the present case concerns a marine insurance risk, and that the policyholder and the Insurers would have been able to enter into a jurisdiction agreement under articles 15(5) and 16. But that does not exclude the protections of section 3 in the absence of such an agreement which is binding on the policyholder, the insured or the beneficiary. It is important to recall the opening words of article 15: The provisions of this section may be departed from only by an agreement. The clear implication is that in the absence of such an agreement, the policyholder, insured or beneficiary of an insurance contract falling within article 16 would come within the section 3 protections unless it contracted out of those provisions. There is no such agreement binding on the Bank in this case. In my view under the test laid down in CILFIT Srl v Ministero della Sanita (Case 283/81) [1982] ECR 3415, para 21, it is acte clair that a person which is correctly categorised as a policyholder, insured or beneficiary is entitled to the protection of section 3 of the Regulation, whatever its economic power relative to the insurer. It is not necessary to refer a question to the CJEU on this issue. The Bank as the named loss payee under the Policy is the beneficiary of the Policy. It is entitled to benefit from the protections of section 3, including the requirement under article 14 that it must be sued in the courts of the member state of its domicile. It follows that the Insurers cannot assert jurisdiction under article 7(2) of the Regulation in respect of the claims for misrepresentation. Further, issue 4, the question whether claims in unjust enrichment fall within article 7(2) does not arise. As a result, the Insurers fail in their appeal and the Bank succeeds in its appeal because the courts of England and Wales have no jurisdiction in respect of the Insurers claims against the Bank. Conclusion I would dismiss the Insurers appeal, allow the Banks appeal and declare that the High Court does not have jurisdiction over the Insurers claims against the Bank.

UK-Abs

These appeals concern whether the High Court of England and Wales has jurisdiction to hear claims to recover sums paid under a settlement agreement relating to the loss of an insured vessel. The parties dispute the interpretation of the Brussels Regulation Recast (Regulation (EU) 1215/2012) (the Regulation). Article 4 of the Regulation provides that defendants must be sued in the member state where they are domiciled. This is subject to article 7(2), which provides that, in matters relating to tort, delict or quasi delict, a defendant may be sued in the place where the relevant harmful event occurred. Article 7(2) is, in turn, subject to section 3 of the Regulation, which provides (in article 14) that, in matters relating to insurance, an insurer may only bring proceedings in the courts of the member state where the defendant is domiciled. Aspen Underwriting Ltd and others (the Insurers) insured the Atlantik Confidence (the Vessel) under an insurance policy (the Policy), which valued the Vessel at $22m. The Policy had an exclusive jurisdiction clause in favour of the courts of England and Wales. Credit Europe NV, a bank which is domiciled in the Netherlands (the Bank), funded the re financing of the Vessel. In exchange, the Bank took a mortgage of the Vessel and an assignment of the Policy. The assignment identified the Bank as the sole loss payee under the Policy. After the Vessel sank, the Bank (at the request of the Owners) issued a letter to the Insurers, authorising them to pay any claims relating to the loss of the Vessel to a nominated company, Willis Ltd (the Letter of Authority). For the next several months, the Insurers engaged in settlement discussions with the owners and managers of the Vessel (the Owners). The Bank was not involved in those discussions. Eventually, the Insurers concluded a settlement agreement with the Owners and made a payment of $22m to Willis Ltd. Three years later, in an action not involving the Insurers, the Admiralty Court held that the Owners had deliberately sunk the Vessel. Following this judgment, the Insurers began legal proceedings in the High Court against the Owners and the Bank, seeking to set aside the settlement agreement and recover the sums paid under it, either in restitution or as damages for alleged misrepresentations by the Owners and the Bank. The Bank challenged the jurisdiction of the High Court to hear the Insurers claims against it. In two first instance judgments, Mr Justice Teare held that the Bank was not bound by the exclusive jurisdiction clause in the Policy but nor could it rely on section 3 of the Regulation, since it was not the weaker party in its relations with the Insurers. He found that the High Court had jurisdiction to hear the damages claims under article 7(2) of the Regulation but not the restitution claims, since these were not matters relating to tort, delict or quasi delict. The Court of Appeal affirmed Teare Js decisions. The Insurers and the Bank each appealed to the Supreme Court. The Supreme Court unanimously dismisses the Insurers appeal and allows the Banks appeal, declaring that the High Court does not have jurisdiction over any of the Insurers claims against the Bank. Lord Hodge gives the sole judgment with which the other Justices agree. The Supreme Court affirms the findings of Teare J and the Court of Appeal that the Bank is not bound by the exclusive jurisdiction clause in the Policy [23]. Under EU law, a jurisdiction agreement will only bind a party if there is actual consensus between the parties which is clearly and precisely demonstrated [24]. Although not a party to the Policy, EU law recognises that the Bank may be taken to have consented to the jurisdiction clause if, as a matter of national law, it became a successor to the Owners under the Policy [25]. As an equitable assignee, the Bank did not take on the Owners obligations under the Policy. However, nor was it entitled to assert its assigned rights in a way that was inconsistent with the terms of the Policy, including the jurisdiction clause [26 28]. In fact, the Bank had not asserted its rights under the Policy at all: it left the settlement negotiations to the Owners and its Letter of Authority merely facilitated that settlement [29]. Not being a party to the Policy, it is not required to submit to the jurisdiction of the English courts in an action brought by the Insurers [30]. The Supreme Court finds that the Insurers claims against the Bank are matters relating to insurance within the meaning of section 3 of the Regulation [41]. The Supreme Court notes that the title of section 3 is drafted in broader language than other sections of the Regulation, which refer to individual contracts [35]. It is also significant that the scheme of section 3 is concerned with the rights not only of parties to an insurance contract but also of beneficiaries and injured parties, who will typically be non parties [36]. The recitals to the Regulation do not operate to narrow the scope of section 3 [37]. Whereas EU case law indicates that articles derogating from the general rule in article 4 should be interpreted strictly, article 14 operates to reinforce article 4 and so need not be read narrowly [38]. Even if section 3 were to apply only to claims based on a breach of an individual insurance contract, the insurance fraud alleged by the Insurers would inevitably entail a breach of the Policy [40]. The Supreme Court holds that there is no weaker party exception to the protection of article 14 [43]. Article 14 protects certain categories of person because they are generally the weaker party in a commercial negotiation with an insurance company, not because of their individual characteristics [44]. Whilst recital (18) explains the policy behind section 3, it is the words of article 14 which have legal effect [45]. Article 14 refers to the policyholder, the insured and the beneficiary without further qualification and derogations from the jurisdictional rules in matters of insurance must be interpreted strictly [46, 57]. In any case, it would undermine legal certainty if the applicability of section 3 were to depend on a case by case analysis of the relative strength or weakness of contracting parties. This is why the Court of Justice of the European Union (CJEU) has treated everyone within the categories identified in article 14 as protected unless the Regulation explicitly provides otherwise [47 49]. The CJEU only has regard to recital (18) in deciding whether to extend the protections of article 14 to persons who do not fall within the identified categories, not to decide whether a particular policyholder, insured or beneficiary is to be protected [50 56]. Further, in deciding whether to extend the protections of article 14 in this way, the CJEU seeks to uphold the general rule in article 4 [43]. As a result of these conclusions, it is not necessary for the Supreme Court to address whether the Insurers restitution claims are matters relating to tort, delict or quasi delict under article 7(2) [61].

1. Highbury Poultry Farm Produce Ltd (HPFPL) operates a poultry slaughterhouse in Shropshire under the approval of the Food Standards Agency. The average throughput is 75,000 chickens per day, equating to 19.5m or so chickens per annum. The birds have their legs shackled to a moving line and are then submitted to a number of sequential processes, including stunning, bleeding and scalding. On each of 31 August, 12 September and 5 October 2016 a chicken went into the scalding tank (where its feathers would be removed) while still alive because, after stunning, its neck had not been properly cut by a certificated operative. HPFPL was charged with two offences in respect of each of the three incidents. The two offences were particularised as follows: 1. Highbury Poultry Farm Produce Ltd being the business operator of the slaughterhouse, failed to comply with a specified EU provision, namely article 3 of Regulation (EC) No 1099/2009, which required that animals should be spared avoidable pain, distress or suffering during their killing and related operations, in that a bird that had been subject to simple stunning was not stuck and bled out before being processed, contrary to regulation 30(1)(g) of the Welfare of Animals at the Time of Killing (England) Regulations 2015. 2. Highbury Poultry Farm Produce Ltd being the business operator of a slaughterhouse, failed to comply with a specified EU provision, namely article 15(1) of Regulation (EC) No 1099/2009, which required you to comply with the operational rules for slaughterhouses laid down in Annex III of the said Regulation, including point 3.2 setting down requirements for the bleeding of animals, in that, following the simple stunning of a chicken, there was a failure to systematically sever the carotid arteries or the vessels from which they arise and the animals entered the scalding tank without the absence of signs of life having been verified, contrary to regulation 30(1)(g) of the Welfare of Animals at the Time of Killing (England) Regulations 2015. HPFPL raised a preliminary point of law which became sub divided into two related issues: (1) whether the offences under regulation 30(1)(g) require proof of mens rea (ie proof that the defendant had knowledge of the factual circumstances constituting the alleged offence) and (2) whether the prosecution must prove a culpable act or omission on the part of the defendant. Having heard the case in November 2017, District Judge Cadbury, sitting at Telford Magistrates Court, handed down his ruling on 9 January 2018. He held that these offences did not require proof of mens rea or culpability on the part of HPFPL. Rather they were offences of strict liability. On 19 March 2018 District Judge Cadbury stated a case seeking the opinion of the Divisional Court of the Queens Bench Division of the High Court on the following two questions: 1. Did I err in ruling that proof of an offence contrary to regulation 30(1)(g) of the Welfare of Animals at the Time of Killing (England) Regulations 2015 did not require the prosecution to prove mens rea on the part of the business operator? 2. Did I err in ruling that the prosecution was not required to prove a culpable act and/or omission on the part of the business operator when prosecuted for offences alleged to be contrary to [regulation 30(1)(g) of the] Welfare of Animals at the Time of Killing (England) Regulations 2015? Given concerns as to the applicability of the case stated procedure to a situation where the Magistrates Court had not made a final determination of guilt, HPFPL also brought judicial review proceedings in the Divisional Court against District Judge Cadburys ruling. In its judgment, [2018] EWHC 3122 (Admin), the Divisional Court (Hickinbottom LJ and Jay J) decided that the correct way to proceed was via judicial review. On the substantive matter, it dismissed HPFPLs application for judicial review because the District Judge was correct to have decided the preliminary issue of law in favour of the Crown Prosecution Service. It decided that the offences are ones of strict liability and do not require proof of mens rea or culpability by the business operator. HPFPL now appeals to the Supreme Court against that decision of the Divisional Court dismissing its application for judicial review. While recognising that the same questions would be answered in the same way whichever of the two procedures was used, the Divisional Court decided that the case stated procedure could not here be used because the Magistrates Court had not made a final determination whether HPFPL was guilty or not. There has been no appeal against that decision on procedure and it is therefore unnecessary to say anything more about it. What this court has to determine is whether the Divisional Court and District Judge Cadbury were correct to decide that the two offences charged under regulation 30(1)(g) of the Welfare of Animals at the Time of Killing (England) Regulations 2015 (SI 2015/1782) (WATOK Regulations 2015) namely the breach by HPFPL, as a business operator, of, first, article 3(1) and, secondly, article 15(1), Annex III, point 3.2, of Regulation (EC) No 1099/2009 on the protection of animals at the time of killing (the EU Regulation) are offences of strict liability so that negligence by the business operator does not have to be proved. It is helpful to set out immediately the precise provisions that create the two offences with which we are concerned. Regulation 30(1)(g) of the WATOK Regulations 2015 reads: It is an offence to contravene, or to cause or permit a person to contravene [] a provision of the EU Regulation specified in (g) Schedule 5 . Schedule 5 specifies, inter alia: article 3(1) of the EU Regulation; and article 15(1), Annex III, point 3.2, of the EU Regulation. The first offence refers to article 3(1) of the EU Regulation which reads: Animals shall be spared any avoidable pain, distress or suffering during their killing and related operations. The second offence refers to article 15(1), Annex III, point 3.2 of the EU Regulation. Article 15(1) reads: Business operators shall ensure that the operational rules for slaughterhouses set out in Annex III are complied with. By Annex III, point 3.2: In case of simple stunning the two carotid arteries or the vessels from which they arise shall be systematically severed Further dressing or scalding shall only be performed once the absence of signs of life of the animal has been verified. This judgment will proceed from the general to the particular. That is, before moving to look in detail at the correct interpretation of the two offences, one needs to clarify whether the relevant principles for the interpretation of legislation are those of EU law or domestic law or both. The judgment therefore starts by examining, in some depth, the relationship between the EU Regulation and the WATOK Regulations 2015. It will then look briefly at whether the imposition of strict liability in the context of criminal law is contrary to EU law before turning to examine the two offences. 2. The relationship between the EU Regulation and the WATOK Regulations 2015 (1) One bite of the cherry Stephen Hockman QC for HPFPL submitted that, even if he failed to show that negligence is required under the EU Regulation, he could still succeed in arguing that negligence is required under the domestic regulation; and that, in interpreting a legislative provision under domestic law, it is well established that there is a presumption that a crime requires mens rea or culpability (see, for example, Sweet v Parsley [1970] AC 132, Gammon (Hong Kong) Ltd v Attorney General of Hong Kong [1985] AC 1, and B (A Minor) v Director of Public Prosecutions [2000] 2 AC 428). The Divisional Court accepted that that two bites of the cherry approach is correct. Jay J said, at para 56: [T]he EU Regulation does not create any criminal offences. These are created by member states in line with their own legislative techniques and established approaches to the criminal law whilst at the same time adhering at all material times to the language, principles and policies of the EU Regulation Ultimately, the analysis must come down to regulation 30(1)(g) of our domestic legislation, but Mr Hockman was fully entitled to attempt two bites of the cherry: first of all, to seek to persuade us that the obligations on business operators under EU law are not absolute; and, secondly, that in any event domestic law does not create offences of strict liability in this regard. And later, at para 73, having rejected Mr Hockmans submissions that the EU Regulation required negligence, Jay J said: [M]y rejection of Mr Hockmans first group of submissions cannot be regarded as conclusive. He has, as has been pointed out, a second bite of the cherry. Ultimately, the answer to this case hinges on whether regulation 30(1)(g) requires proof of mens rea. I agree with those submissions of Mr Perry for reasons which will now be set David Perry QC for the Crown Prosecution Service submitted that that was not the correct approach. The interpretation of the EU Regulation should be the beginning and the end of the enquiry. According to Mr Perry, the correct way to think about the relationship between the EU Regulation and the domestic regulations in this case is that the domestic regulations are merely the mechanism whereby the EU Regulation is given effect in this jurisdiction. It is therefore the interpretation of the EU Regulation that matters. The cases in domestic law on the presumption that a crime requires mens rea or culpability are not directly relevant. HPFPL has only one bite of the cherry. out in some detail. It is trite law that an EU Regulation has direct effect in a member state without the need for domestic enactment. Nevertheless, the combination of EU Regulation and domestic regulations is commonplace where detailed rules are being imposed and the only discretion being left to the member state is in relation to the penalties to be imposed for contravention of those rules. Looked at another way, in general (subject to the exceptions in article 83 of the Treaty on the Functioning of the EU) the EU does not have competence to impose criminal penalties (see, for example, Commission of the European Communities v Council of the European Union (Case C 176/03) [2005] ECR I 7879, para 47). In line with this, it would appear that an EU Regulation in the area of animal welfare could not have created a free standing crime in a member state. The EU Regulation therefore laid down the detail of the duties imposed while leaving the member states with the discretion to decide whether to create criminal offences, by imposing criminal penalties, in their domestic legislation. The relevant discretion is provided for in article 23. This reads as follows: The member states shall lay down the rules on penalties applicable to infringements of this Regulation The penalties provided for must be effective, proportionate and dissuasive. In principle, it would have been possible for a member state to implement this EU Regulation by imposing only civil or administrative penalties, provided such penalties were effective, proportionate and dissuasive. However, the implementation of the EU Regulation in England by the WATOK Regulations 2015 perhaps not least so as to ensure effectiveness has been by imposing criminal penalties thereby making infringements of the rules criminal offences. Of course, it is the UK, not England, that is the member state, but animal welfare is a devolved area within the UK legislative arrangements so that each of England, Wales, Scotland and Northern Ireland has its own regulations (which are materially identical so far as the provisions relevant to this appeal are concerned). It is of central importance that, while the member states have a discretion as regards penalties, they have no discretion to lower the standards required by the EU Regulation. We regard it as untenable to interpret article 23 as allowing member states to lower the standards imposed in so far as they have decided to implement the EU Regulation through criminal, rather than non criminal, penalties. It follows that, if the EU Regulation imposes strict liability, the domestic regulation must (as a matter of EU law) do the same; and certainly, without a clear indication in the domestic regulation that the EU Regulation is being departed from, the best interpretation of the domestic legislation must be that it is merely the mechanism for implementing what has been laid down in the EU Regulation. Indeed, applying the Marleasing principle (set out in Marleasing SA v La Comercial Internacional de Alimentacin SA (Case C 106/89) [1990] ECR I 4135), even if there are words in a domestic regulation that, on their face, depart from what an EU Regulation requires, the courts of a member state are required, if at all possible, to interpret the words of the domestic regulation so as to conform with that EU Regulation. In any event, in this case, the words of the relevant domestic regulation make clear that it is implementing whatever standards are imposed by Schedule 5 to the EU Regulation: ie regulation 30(1)(g) precisely specifies that It is an offence to contravene a provision of the EU Regulation specified in Schedule 5. In my view, therefore, if HPFPL fails to establish that negligence is required under the EU Regulation (ie if, contrary to Mr Hockmans submissions, the EU Regulation imposes strict liability), HPFPL cannot then succeed on the basis that, in any event, the domestic regulation requires negligence and does not impose strict liability. There can be no question of the domestic regulation imposing a lower standard (ie negligence rather than strict liability) than that laid down by the EU Regulation because to do so would contravene the requirement of EU law for proper implementation of the EU Regulation. Mr Hockman prayed in aid Criminal Proceedings against Vandevenne (Case C 7/90) [1993] 3 CMLR 608. That case dealt with Council Regulation (EEC) No 3820/85 which imposed maximum driving times for lorry drivers. The European Court of Justice (the ECJ) held that article 15, which imposed a duty on employers to use best endeavours to ensure that their drivers took the required rest breaks, left member states free to enact domestic legislation imposing strict criminal liability on employers. In other words, member states were held to be free to impose a stricter standard in domestic criminal law than that laid down in Regulation No 3820/85. But that decision does not help Mr Hockman because it recognises only the reverse of what he is arguing for. The ECJ held that the domestic legislation validly imposed a stricter, not a lower, standard than Regulation No 3820/85. Therefore, the correct approach in this case, as submitted by Mr Perry, is that HPFPL has only one bite of the cherry. It needs to establish that on the correct interpretation of the EU Regulation, as implemented through the domestic regulations, the offences require negligence and are not offences of strict liability. (2) EU law principles of legislative interpretation It follows from the acceptance of Mr Perrys submissions (set out in para 12 above) that the relevant principles of legislative interpretation to be applied here are the principles of legislative interpretation established by the ECJ or the Court of Justice of the European Union (the CJEU) which I shall refer to as the EU law principles of legislative interpretation not the English law principles of statutory interpretation. In R v Henn [1981] AC 850, 905, Lord Diplock referred to: the danger of an English court applying English canons of statutory construction to the interpretation of the Treaty or, for that matter, of Regulations or Directives. This was said in the context of the Court of Appeals not having been referred to relevant decisions of the ECJ on the meaning of article 30 (concerned with quantitative restrictions on imports) in the Treaty establishing the European Economic Community (also known as the Treaty of Rome). Similarly, in the Scottish case of Westwater v Thomson 1993 SLT 703, 709 710, Lord Justice General Hope (as he then was), sitting in the High Court of Justiciary (Appeal), said the following: Counsel for the respondents last point was that we should construe these rules strictly in the respondents favour in view of their penal consequences. But that submission is inconsistent with Community law which leaves it to the member state to take whatever steps it thinks appropriate, whether penal or otherwise, to give effect to Community legislation. Community legislation as such is not penal in character and it must be applied uniformly throughout the Community. For us to attempt to construe it by reference to domestic rules about the construction of penal legislation would be to apply rules of construction which have no part to play in the construction of regulations issued either by the Council or the Commission. In R v Henn [1981] AC 850, 904H Lord Diplock issued a warning against the danger of an English court applying English canons of statutory construction to the interpretation of the treaty or for that matter of Community regulations or directives. More recently, in Assange v Swedish Prosecution Authority (Nos 1 and 2) [2012] UKSC 22; [2012] 2 AC 471, in the context of interpreting an EU Framework Decision, Lord Phillips of Worth Matravers at para 15 said: The approach to interpretation must be one that would be acceptable to all the member states who have to strive to identify a uniform meaning of the Decision. [O]ne cannot simply apply the canons for construction or even the principles that apply to interpreting domestic legislation. It is clear, therefore, that, in so far as they are different (and it is unnecessary in this case to try to pinpoint what the precise differences might be), the domestic rules of statutory interpretation are here displaced by the EU law principles of legislative interpretation. Although one is interpreting domestic criminal regulations, those regulations, because they implement the EU Regulation, must be interpreted by applying the principles laid down in EU law. A contrary approach would undermine the objective of harmonisation (which involves, among other things, ensuring that an autonomous meaning is applied to terms used in EU law so as to impose uniform standards across the EU). It is therefore the courts task in this case to apply EU law principles of legislative interpretation. What then are those principles? In the context of it being permissible, under EU principles of legislative interpretation, to consider the recitals, which expressly set out the objectives of the EU Regulation, Mr Hockman referred us to Omejc v Republika Slovenija (Case C 536/09) [2011] ECR I 5367. In what has now become a commonly cited formulation, the CJEU said the following at para 21: according to the Courts settled case law, in interpreting a provision of European Union law, it is necessary to consider not only its wording but also its context and the objectives pursued by the rules of which it is part . In R v V [2011] EWCA Crim 2342, which concerned UK regulations implementing an EU Regulation by imposing strict criminal liability in relation to the transportation of waste, Cranston J giving the judgment of the Court of Appeal (Criminal Division) said at para 19: When interpreting European Union legislative instruments, an English court does not deploy the ordinary principles of statutory construction but rather those so called principles of teleological construction established by the jurisprudence of the Court of Justice of the European Union. One aspect of that is that the substantive provisions of an instrument are to be interpreted in the light of its objectives, which are most readily available in the recitals. Lord Phillips in Assange v Swedish Prosecution Authority (Nos 1 and 2), at para 15, helpfully pointed out that relevant factors to consider, in interpreting European legislation, are: the terms of the instrument, including its preamble; the usual meaning of the expressions used with a comparison of the different languages of the instrument; the purpose and general scheme of the instrument; and the preparatory materials. It would appear that the most important point to have in mind is that the teleological approach to legislative interpretation adopted by the ECJ and CJEU means that there is a heavy stress on seeking to ensure that the interpretation of the words fulfils the purpose of the legislative provision and, more generally, the purposes of the EU. For helpful discussions see, for example, T Koopmans, The Theory of Interpretation and the Court of Justice, in Judicial Review in European Union Law, eds D OKeeffe and A Bavasso (2000), p 45, especially at p 54; and Professor John Bell, writing the section headed European teleological approaches, in English Private Law, 3rd ed (2013), ed A Burrows, paras 1.36 1.39. EU law and strict liability in the context of criminal law Before I move on to consider the application of the EU law principles of legislative interpretation to the two offences in issue, it is important to clarify, lest there be any doubt about this, that, just as one can have strict liability in domestic criminal law (despite there being a presumption that a crime requires mens rea or culpability) so the imposition of strict liability in the context of criminal law is not contrary to EU law (even though a principle of nulla poena sine culpa or no punishment without fault may be applicable: see the reference to this principle in, for example, Kserei Champignon Hofmeister GmbH & Co KG v Hauptzollamt Hamburg Jonas (Case C 210/00) [2002] ECR I 6453, paras 35, 44, 49 and 52). I have already indicated that, in general, the EU does not have competence in relation to creating crimes. But the fact that EU law is not averse to strict liability in the context of criminal law is well illustrated by Public Prosecutor v Hansen & Son I/S (Case C 326/88) [1992] ICR 277. In that case, the ECJ considered whether the imposition by a member state of strict criminal liability for breach of a provision of Community law was compatible with the EU principle of proportionality. The case concerned Council Regulation (EEC) No 543/69, which imposed maximum driving limits for lorry drivers (and was the predecessor of the Regulation considered in the Vandevenne case, referred to above at para 17). Denmark enacted legislation holding employers strictly liable in criminal law for the breach by their employees of those limits. A Danish court referred the question whether the Regulation precluded national legislation imposing strict criminal liability. The ECJ concluded that member states had a discretion to include provisions imposing such liability. At paras 19 20 the court said the following: 19. it is necessary to bear in mind, first, that a system of strict liability may prompt the employer to organise the work of his employees in such a way as to ensure compliance with the Regulation and, secondly, that road safety, which, according to the third and ninth recitals in the preamble to Regulation No 543/69, is one of the objectives of that Regulation, is a matter of public interest which may justify the imposition of a fine on the employer for infringements committed by his employees and a system of strict criminal liability. Hence the imposition of a fine, which is consistent with the duty of co operation referred to in article 5 of the EEC Treaty, is not disproportionate to the objective pursued. The application of the principle of proportionality to the amount of the fine has not been called in question in this case. 20. It follows from all the foregoing considerations that neither [Regulation 543/69] nor the general principles of Community law preclude the application of national provisions under which an employer whose drivers infringe articles 7(2) and 11 of the Regulation may be the subject of a criminal penalty notwithstanding the fact that the infringement cannot be imputed to an intentional wrongful act or to negligence on the employers part, on condition that the penalty provided for is similar to those imposed in the event of infringement of provisions of national law of similar nature and importance and is proportionate to the seriousness of the infringement committed. The two relevant offences Having established that the court must apply EU law principles of legislative interpretation with their heavy emphasis on effecting the purpose of the relevant provisions and that the imposition of strict liability in the context of criminal law is not contrary to EU law, I can now turn to the interpretation of the two offences in this case. The two offences charged under regulation 30(1)(g) of the WATOK Regulations 2015 are the breach by HPFPL as a business operator of, first, article 3(1) of the EU Regulation (the first offence) and, secondly, article 15(1), Annex III, point 3.2, of the EU Regulation (the second offence). I have set out in para 9 above the precise provisions that create the two offences. I should make clear as a prelude to what follows that, although there have been decisions of the CJEU on the EU Regulation (and by the ECJ on the predecessors of the EU Regulation), none of those decisions is relevant to the questions that this court has to decide. I have also derived no assistance from either the preparatory materials to the EU Regulation or other language versions of the EU Regulation. (1) The second offence For reasons that will become apparent, it is convenient to consider the second offence first. On the face of it, the relevant words of article 15(1), Annex III, point 3.2 impose strict liability. By article 15(1), business operators shall ensure that the operational rules are complied with. And the operational rules are specified in Annex III, point 3.2 in very clear and precise terms: the two carotid arteries or the vessels shall be systematically severed. There is no hint that business operators shall be liable only if the operational rules are intentionally or negligently infringed. If strict liability were not being imposed, words importing culpability could have easily been included; but they have not been. Nor is there anything in the context of the EU Regulation as a whole (and see para 43 below for what I say about recital (2)) that would indicate that intention or negligence is required in relation to this offence. True it is that some of the provisions are concerned to impose monitoring and system checking and, in that sense, may be said to be concerned with imposing due diligence. But that is in no sense inconsistent with recognising that other provisions (including those creating the second offence) go beyond requiring due diligence. That the best interpretation is that strict liability is being imposed is reinforced when, in accordance with the heavy emphasis placed on this by EU law principles of legislative interpretation, one concentrates on the purpose of the provision. Strict liability imposes a clear and easily enforceable standard and is therefore in line with a principal goal of uniformity across the EU. In contrast, enforcing a negligence standard would potentially be prone to difficulty. Indeed, it is not even clear what would here be meant by a negligence standard. In particular, would one be requiring negligence by an operative and then attaching blame vicariously on the business operator? If so, there may be a serious difficulty in identifying the relevant operative, not least where the operations are mechanical. I tend to agree with the main point made by Karl Laird in his short commentary on the decision of the Divisional Court in this case at [2019] Crim LR 528, 530. Albeit apparently viewing the issue as one of domestic statutory interpretation, he wrote that if strict liability were rejected the aim in enacting [the offence] would have been fatally undermined, given the difficulty in pinpointing the individual upon whom the requisite state of mind must be attributed. Moreover, although one might argue this both ways and without empirical evidence one cannot be confident which side of the argument is to be preferred it is at least plausible that imposing strict liability (rather than negligence) acts as an incentive to improve standards. For a helpful consideration of the arguments both ways, in the context of a decision that accepted the merits of a half way house whereby a defendant would be permitted a defence of due diligence to what would otherwise be a strict liability offence, see the judgment of Dickson J, giving the judgment of the Supreme Court of Canada, in R v City of Sault Ste Marie [1978] 2 SCR 1299, especially at pp 1310 1312. If one were to reason by analogy from domestic statutory interpretation, it is noteworthy that one is not here concerned with traditional core criminal offences but rather with what have sometimes been termed, in the context of domestic criminal law, regulatory offences. These are offences created by statute and, in modern times, primarily enforced by regulators (in this case the Food Standards Agency) either alone or in combination with the Crown Prosecution Service. In domestic law, strict liability has often been regarded as less problematic in relation to such regulatory offences: see, for example, Blackstones Criminal Practice, 2020 ed, para A2.22 citing Parker v Alder [1899] 1 QB 20. Looking at the words used in the EU Regulation, in their context and especially in the light of the purpose of the Regulation, it is therefore my view that, applying EU law principles of legislative interpretation and bearing in mind that imposing strict criminal liability is not contrary to EU law, the second offence is correctly interpreted as imposing strict liability. (2) The first offence To put this offence in context, it is helpful to set out some parts of article 3(2) and the whole of article 3(3) as well as article 3(1). General requirements for killing and related operations 1. Animals shall be spared any avoidable pain, distress or suffering during their killing and related operations. For the purposes of paragraph 1, business operators 2. shall, in particular, take the necessary measures to ensure that animals (b) are protected from injury (d) do not show signs of avoidable pain or fear or exhibit abnormal behaviour Facilities used for killing and related operations shall be 3. designed, constructed, maintained and operated so as to ensure compliance with the obligations set out in paragraphs 1 and 2 under the expected conditions of activity of the facility throughout the year. On the face of it, the relevant words of article 3(1) impose strict liability: animals shall be spared avoidable pain, distress or suffering. This use of the passive voice leaves no obvious room for a requirement of intention or negligence. And the requirement that the pain, distress or suffering is avoidable would be met where the business operator has contravened a specific operational rule (as here) which is designed to ensure the avoidance of pain, distress or suffering. That the words of article 3(1) are imposing strict liability gains strong support from the rest of article 3 which in article 3(2) and 3(3) uses the verb to ensure. So the relevant words of article 3(2) are shall take the necessary measures to ensure that; and the relevant words of article 3(3) are shall be operated so as to ensure compliance with . The reasoning in paras 34 36 above, there put forward to support the view that the second offence imposes strict liability, is equally relevant and forceful in relation to the first offence. Leaving aside recital (2), it is therefore clear, in my view, that article 3(1) imposes strict liability. Before looking at recital (2), one point should be clarified. In his short judgment in the Divisional Court agreeing with Jay J, Hickinbottom LJ, at para 97, appeared to suggest that, for the purposes of article 3(1), there is an irrebuttable presumption a deeming provision that where the second offence has been committed (ie where the two carotid arteries or the vessels from which they arise were not systematically severed) the bird, despite being stunned, has inevitably been caused avoidable pain, distress or suffering. It may be that Hickinbottom LJ was here focussing solely on whether the pain, distress or suffering was avoidable rather than on whether pain, distress or suffering was experienced. But in so far as his words might be interpreted as referring to the experiencing of the pain, distress or suffering, I do not agree with what he said. If there is any doubt (in relation to the first offence) about the bird experiencing pain, distress or suffering, that will be a matter for the prosecution to prove in the normal way. There is no reason to interpret article 3(1) as laying down that pain, distress or suffering has inevitably been experienced. Note also that, while the phrase irrebuttable presumption is commonly used by lawyers in various contexts, I would suggest that it is best avoided because, as Hickinbottom LJ indicated by his immediate reference to a deeming provision, it has nothing to do with presumptions in the true sense and simply means that there is a legal rule to that effect. Turning now to recital (2), this reads: Whereas: Killing animals may induce pain, distress, fear or other forms of suffering to the animals even under the best available technical conditions. Certain operations related to the killing may be stressful and any stunning technique presents certain drawbacks. Business operators or any person involved in the killing of animals should take the necessary measures to avoid pain and minimise the distress and suffering of animals during the slaughtering or killing process, taking into account the best practices in the field and the methods permitted under this Regulation. Therefore, pain, distress or suffering should be considered as avoidable when business operators or any person involved in the killing of animals breach one of the requirements of this Regulation or use permitted practices without reflecting the state of the art, thereby inducing by negligence or intention pain, distress or suffering to the animals. (Emphasis added) Mr Hockman submitted that recital (2) provides a definition of what is meant by avoidable pain, distress or suffering in article 3(1) and that that definition requires negligence or intention because those are the express words used in recital (2). Indeed, Mr Hockman went further and submitted that this recital is of general relevance to the whole of the EU Regulation so that one should treat it as being relevant to the second offence and not just the first. While it is clear that recital (2) is seeking to explain the purpose of article 3, I accept that article 3 lays down a general requirement, not least because it is headed general requirements for killing and related operations. However, even if that general requirement does impose a standard of negligence or intention, rather than strict liability, that is not inconsistent with the imposition of strict liability by other specific provisions (including those creating the second offence). Irrespective of the detailed arguments analysed below, I therefore see no good reason to read recital (2) as affecting my reasoning, set out above, on the second offence. But what about the central submission of Mr Hockman that recital (2) expressly requires one to read into article 3(1) a requirement of negligence or intention? In the Divisional Court Jay J rejected this submission by preferring two alternative interpretations of recital (2). First, Jay J said, at para 58: I would read the subordinate clause thereby inducing as qualifying [the] second limb rather than the first. Jay J was therefore interpreting the clauses as saying the following: Pain, distress or suffering should be considered as avoidable when business operators or any person involved in the killing of animals (i) breach one of the requirements of this Regulation or (ii) use permitted practices without reflecting the state of the art, thereby inducing by negligence or intention, pain, distress or suffering to the animals. The problem with this first interpretation is that it is clear that the breach of one of the requirements of the EU Regulation has to be causally linked to the pain, distress or suffering to the animals. Without such a causal link a breach of the Regulation might have nothing to do with any such pain, suffering or distress. For example, a breach of the provision of the EU Regulation requiring there to be an animal welfare officer or requiring operatives to be certified cannot, in the abstract, without any causal link, mean that there has been relevant pain, distress or suffering. It follows that the phrase thereby inducing pain, distress or suffering to the animals has to qualify the first limb as well as the second. Jay J gave a second, alternative, interpretation at paras 58 59: In any event, I certainly would not read this subordinate clause as setting forth an essential component of all regulatory breaches Even if this clause does not merely cover the second limb of the final sentence of the recital, all that it is doing is saying that a breach of the Regulation will usually entail fault. That second interpretation is compelling. The words are making clear that a breach of article 3(1) will usually entail fault but they are not laying down that fault is an essential element. An equally persuasive and slightly different way of putting this is that negligence or intention are being provided as examples of the ways, and not as an exhaustive list of the ways, in which a breach of the Regulation, or a failure to use permitted practices reflecting the state of the art, induces pain, distress or suffering that should have been avoided. It is also important to stress that the words negligence or intention are in a recital and are not in the operative provisions of the EU Regulation. It is clear that under EU law principles of legislative interpretation, one can take a recital into account in interpreting a relevant provision of the Regulation: see, for example, Omejc v Republika Slovenija (Case C 536/09) [2011] ECR I 5367, para 26. There is also no doubt that, under EU law principles of legislative interpretation, the recitals are of considerable importance. As one is applying the teleological approach, the express setting out of the purposes is bound to be highly significant. However, what one has here is a clear provision of the EU Regulation, imposing strict liability, and a somewhat ambiguous provision in the recital referring to negligence or intention. In that situation, it appears to be well established that the recital should be interpreted in such a way as not to contradict the Regulation. For example, in Criminal Proceedings against Caronna (Case C 7/11) EU:C:2012:396, the CJEU stated as follows at para 40: the preamble to a European Union act cannot be relied on either as a ground for derogating from the actual provisions of the act in question or for interpreting them in a manner clearly contrary to their wording (Case C 308/97 Manfredi [1998] ECR I 7685, para 30; Case C 136/04 Deutsche Milch Kontor [2005] ECR I 10095, para 32; and Case C 134/08 Tyson Parketthandel [2009] ECR I 2875, para 16). R (International Air Transport Association) v Department of Transport (Case C 344/04) [2006] 2 CMLR 20 is a particularly clear illustration of this approach to recitals. The case concerned Regulation (EC) No 261/2004. Articles 5, 6 and 7 established rules on the immediate compensation and assistance to be given by airlines to passengers who were denied boarding or whose flights had been cancelled or delayed. Recital (14) of the Regulation read as follows: (14) As under the Montreal Convention, obligations on operating air carriers should be limited or excluded in cases where an event has been caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken. Such circumstances may, in particular, occur in cases of political instability, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating air carrier. The claimant airline associations sought judicial review of the UK Department of Transports implementation of articles 5, 6 and 7. They claimed, among other things, that those articles infringed the principle of legal certainty. One of their arguments, summarised by the ECJ at para 75, was that Regulation No 261/2004 envisages, in an inconsistent manner in the 14th and 15th recitals in its preamble, that extraordinary circumstances may limit or exclude an operating air carriers liability in the event of cancellation of, or long delays to, flights whereas articles 5 and 6 of the regulation, which govern its obligations in such a case, do not accept such a defence to liability except with regard to the obligation to pay compensation. The ECJ rejected this argument on the basis that the operative provisions were clear. It stated as follows in para 76: while the preamble to a Community measure may explain the latters content (see Alliance for Natural Health [(R (Alliance for Natural Health) v Secretary of State for Health (Cases C 154/04 and C 155/04) [2005] 2 CMLR 61)], para 91), it cannot be relied upon as a ground for derogating from the actual provisions of the measure in question (Case C 162/97 Nilsson and Others [1998] ECR I 7477, para 54; and Case C 136/04 Deutsches Milch Kontor [2005] ECR I 10095, para 32). [T]he wording of those recitals indeed gives the impression that, generally, operating air carriers should be released from all their obligations in the event of extraordinary circumstances, and it accordingly gives rise to a certain ambiguity between the intention thus expressed by the Community legislature and the actual content of articles 5 and 6 of Regulation No 261/2004 which do not make this defence to liability so general in character. However, such an ambiguity does not extend so far as to render incoherent the system set up by those two articles, which are themselves entirely unambiguous. Applying EU law principles of legislative interpretation, therefore, the unclear recital (2) does not override the clear article 3(1). Finally, there is a further background (or contextual) consideration that supports the interpretation of the first offence as imposing strict liability. Article 28 of the EU Regulation repealed Directive 93/119/EC. That Directive set out the previous EU law on the protection of animals at the time of slaughter or killing. Article 3 of that Directive read: Animals shall be spared any avoidable excitement, pain or suffering during movement, lairaging, restraint, stunning, slaughter or killing. By article 5(1): Solipeds, ruminants, pigs, rabbits and poultry brought into slaughterhouses for slaughter shall be (d) bled in accordance with the provisions of Annex D. Under Annex D, para 2: All animals which have been stunned must be bled by incising at least one of the carotid arteries or the vessels from which they arise. The recital relevant to article 3 read simply as follows: Whereas at the time of slaughter or killing animals should be spared any avoidable pain or suffering. The important point for present purposes is that that relevant recital the forerunner of recital (2) in the EU Regulation with which we are concerned did not include the words negligence or intention in relation to the avoidable pain or suffering. There was also no other hint in that Directive that it was an essential element of avoidable pain or suffering that it was caused by negligence or intention. It would therefore appear that that previous Directive required member states to impose strict liability. As it is highly unlikely that the EU would have made its animal welfare requirements less stringent under the EU Regulation than under the Directive it replaced, this adds further support to the strict liability interpretation of article 3(1). Looking at the words used in the EU Regulation, in their context and especially in the light of the purpose of the Regulation, it is therefore my view that, applying EU law principles of legislative interpretation and bearing in mind that imposing strict criminal liability is not contrary to EU law, the first offence, like the second offence, is correctly interpreted as imposing strict liability. Final observations and conclusion I agree with what Jay J said at para 88 of his judgment in the Divisional Court: [T]he EU Regulation should be seen as setting forth a comprehensive code or rule book which must be complied with by the business operator at all material times. On the facts of the present case, there was a strict obligation to sever the main arteries systematically, and a concomitant strict obligation to spare these birds avoidable pain. The Divisional Court went on to reach the same strict liability conclusion applying domestic law. Although that two bites of the cherry approach was incorrect I add, by way of footnote, that had it been correct to apply domestic law, I would have agreed with the Divisional Courts view that the presumption of mens rea or culpability was here rebutted. Neither counsel asked the court to make a reference to the CJEU on the questions raised. Such a reference is neither required nor appropriate because the matter is acte clair. For the reasons I have given, the two offences in issue are offences imposing strict liability on the business operator. There is no requirement to prove negligence. Although my reasoning differs in some respects from that of the Divisional Court, the appeal of HPFPL is dismissed. The criminal proceedings must now proceed before District Judge Cadbury to be finally determined on the basis of whatever further evidence the parties wish to adduce.

UK-Abs

Highbury Poultry Farm Produce Ltd (HPFPL) operates a poultry slaughterhouse. The average throughput is 75,000 chickens per day, equating to 19,500,000 or so chickens per annum. The birds have their legs shackled to a moving line and are then submitted to a number of sequential processes, including stunning, bleeding and scalding. On 31 August, 12 September and 5 October 2016 a chicken went into the scalding tank (where its feathers would be removed) while still alive because its neck had not been properly cut by a certified operative. HPFPL was charged with two offences in respect of each of the three incidents: failure to comply with article 3 of Regulation (EC) No 1099/2009 (the EU Regulation), (i) which required that animals should be spared avoidable suffering during their killing, contrary to regulation 30(1)(g) of the Welfare of Animals at the Time of Killing (England) Regulations 2015 (the WATOK Regulations 2015); and failure to comply with article 15(1) of the EU Regulation by failing to sever the carotid arteries and verify that the animal presented no signs of life before scalding, contrary to regulation 30(1)(g) of the WATOK Regulations 2015. The trial judge dismissed HPFPLs argument that regulation 30(1)(g) of the WATOK Regulations required proof of mens rea (ie proof that the defendant had knowledge of the factual circumstances constituting the alleged offence) or culpability on the part of the defendant. HPFPL challenged this ruling by way of judicial review. The Divisional Court found that there was a presumption that the WATOK Regulations 2015 required proof of mens rea, but that this presumption was displaced, not least due to social concern regarding animal welfare. HPFPL appealed to the Supreme Court. The Supreme Court unanimously dismisses the appeal. Lord Burrows gives the sole judgment. The Court holds that both offences are offences of strict liability. Negligence by the business operator does not have to be proved. Regulation 30(1)(g) of the WATOK Regulations provides that it is an offence to contravene the EU Regulation. Article 3(1) of the EU Regulation provides that Animals shall be spared any avoidable pain, (ii) distress or suffering during their killing and related operations. Article 15(1), Annex III, point 3.2 of the EU Regulation provides that in case of simple stunning the two carotid arteries or the vessels from which they arise shall be systematically severed Further dressing or scalding shall only be performed once the absence of signs of life of the animal has been verified [9]. HPFPL submitted that it was sufficient for negligence to be required under either the EU Regulation or the WATOK Regulation. As to the latter, in interpreting a domestic legal provision, there is a presumption that a crime requires mens rea or culpability [11]. However, the Court holds that the WATOK Regulations are no more than the mechanism through which the EU Regulation is given effect in domestic law. It is solely the interpretation of the EU Regulation that matters. In general, an EU regulation leaves Member States with the discretion to decide whether to create criminal offences in their domestic legislation. The WATOK Regulations 2015 create such offences [14]. However, while member states have a discretion as regards penalties, they have no discretion to lower the standards required by the EU regulation in question. If the EU regulation imposes strict liability, the domestic regulation must do the same [15]. Thus, if HPFPL fails to establish that negligence is required under the EU Regulation, then it cannot succeed on the basis that, in any event, regulation 30(1)(g) of the WATOK Regulations 2015 requires negligence and does not impose strict liability [16]. The EU Regulation has to be interpreted in accordance with EU law principles [19]. Insofar as they are different, domestic rules of statutory interpretation are displaced by those principles [23]. The teleological approach to legislative interpretation required by EU law means that there is a heavy stress on seeking to ensure that the interpretation of the words fulfils the purposes of the legislative provision and, more generally, the purposes of the EU [27]. The imposition of strict liability in the context of criminal law is not contrary to EU law [28]. The wording of article 15(1), requiring the severing of the carotid arteries, suggests the imposition of strict liability. There is no hint that business operators shall be liable only if the operational rules are intentionally or negligently infringed [33]. This interpretation is supported by the purpose of the provision. Strict liability imposes a clear and easily enforceable standard, uniform across the EU, and avoids the difficulty in pinpointing the individual upon whom the requisite state of mind must be attributed [34]. Article 15(1) therefore imposes strict liability [37]. The wording of article 3(1), requiring animals to be spared any avoidable suffering during their killing, also suggests strict liability [39]. Recital (2) to the EU Regulation, despite mentioning suffering being induced by negligence or intention, does not affect the wording of article 3(1). It merely clarifies that a breach of article 3(1) will usually entail fault. Negligence or intention are examples of the ways in which a breach of the EU Regulation induces suffering, but they do not form an exhaustive list [48]. The recitals to an EU regulation cannot be interpreted in such a way as to contradict the clear wording of that regulation [49]. Further, the earlier incarnation of the EU Regulation, Directive 93/119/EEC, did not include the words negligence or intention in the relevant recital. It is highly unlikely that the EU would have made its animal welfare requirements less strict under the EU Regulation than under the Directive it replaced [52]. Article 3(1) therefore also imposes strict liability [53].

This is the first time the highest court (whether the House of Lords or Supreme Court) has been required to decide an appeal on section 84 of the Law of Property Act 1925. That section confers on the Upper Tribunal a power, in specified circumstances, to discharge or modify restrictive covenants affecting land. In this case the party entitled to the benefit of a restrictive covenant, preventing development of an area of open land, is the Alexander Devine Childrens Cancer Trust (the Trust). The party seeking the discharge or modification of the restrictive covenant under section 84 of the 1925 Act is now Housing Solutions Ltd (Housing Solutions) which is a property company concerned with the provision of affordable housing. Housing Solutions acquired the land encumbered by the restrictive covenant (which I shall refer to as the application land) from a property developer, Millgate Developments Ltd (Millgate). It was Millgate which made the application to the Upper Tribunal under section 84. Housing Solutions was named as having an interest in the application land as prospective purchaser. The underlying dilemma posed by this case is clear. On the one hand, there is a charitable childrens cancer trust that seeks to maintain the benefit of a restrictive covenant, to which it is entitled, so that terminally ill children in a hospice built on the Trusts land can fully enjoy, in privacy, the use of the grounds. On the other hand, there is a company that is seeking to ensure that 13 units of affordable housing, built in breach of the restrictive covenant on the application land adjoining the Trusts land, do not go to waste. Millgates application succeeded before the Upper Tribunal (Lands Chamber) (Martin Rodger QC and Paul Francis FRICS): [2016] UKUT 515 (LC). The Upper Tribunal decided that the restrictive covenant should be modified to allow the occupation and use of the application land for the 13 housing units built on it provided that Millgate paid 150,000 as compensation to the Trust. That decision was overturned by the Court of Appeal ([2018] EWCA Civ 2679; [2019] 1 WLR 2729) with the leading judgment being given by Sales LJ with whom Underhill and Moylan LJJ agreed. The basis of the Court of Appeals decision was that the Upper Tribunal had made various errors of law; and, exercising its powers to re make the decision, the Court of Appeal refused the application. Housing Solutions now appeals to this court against that decision. It is our essential task to decide whether the Court of Appeal was correct that errors of law were made by the Upper Tribunal. The facts will first be summarised before setting out section 84 of the Law of Property Act 1925 and explaining the distinction contained within it between the Upper Tribunals jurisdiction and discretion. After looking at the proceedings below, I shall then turn to the central issue on this appeal which is the relevance of Millgates cynical breach (a term which is explained at para 36). Finally, I shall briefly examine the two other issues raised on this appeal. The facts This summary of the facts draws heavily on the very clear factual background set out by Sales LJ in his judgment in the Court of Appeal for which I am most grateful. The application land is close to Maidenhead and is located in an area designated as Green Belt in the applicable development plan. The relevant restrictive covenants are contained in a conveyance dated 31 July 1972 made between John Lindsay Eric Smith (Mr John Smith) as vendor and Stainless Steel Profile Cutters Ltd (SSPC) as purchaser. Mr John Smith was a local farmer who owned extensive open agricultural land. SSPC owned some land and industrial buildings next to the application land (I shall call this the unencumbered land). By the conveyance, the application land was sold and transferred by Mr John Smith to SSPC making, in combination with the unencumbered land already owned by SSPC, a rectangular plot of land (the Exchange House site). The conveyance provided that SSPC covenanted for the benefit of the owners for the time being of the land then belonging to Mr John Smith (and situated within three quarters of a mile of the application land) that at all times thereafter it would observe and perform certain stipulations which included the relevant restrictive covenants. Those restrictive covenants provide as follows: 1. No building structure or other erection of whatsoever nature shall be built erected or placed on [the application land]. 2. The [application land] shall not be used for any purposes whatsoever other than as an open space for the parking of motor vehicles. The conveyance also contained an overage provision. This provided that if, within 21 years from the date of the conveyance, planning permission was granted for the development of the application land for any purpose other than the parking of vehicles, SSPC would pay an overage payment equivalent to 75% of the uplift in the value of land. On payment of the overage sum, those with the benefit of the restriction would execute a discharge to enable the planning permission to be implemented. The overage provision expired in 1994. In due course, Mr John Smiths son Bartholomew (Mr Barty Smith) inherited from his father agricultural land, including land next to the application land. In December 2011 he proposed making a gift to the Trust of part of his land (next to the application land), for the construction of a hospice for seriously ill children with terminal cancer and their carers. Mrs Fiona Devine is the co founder and chief executive of the Trust. The plans for the hospice were to make full use of the land to be given by Mr Barty Smith, including recreational areas and a wheelchair path around its circuit. Planning permission was granted for the construction of the hospice on 2 December 2011. In March 2012 Mr Barty Smith made the gift of the land to the Trust. However, construction of the hospice had to await the raising of adequate funds from charitable donations. Millgate acquired the Exchange House site in the first part of 2013. Millgate was aware of the restrictive covenants at the time it acquired the site, presumably as a result of its own investigation of title at that time. Millgate did not adduce evidence to suggest that it made any attempt to identify those entitled to enforce the restrictive covenants. The Upper Tribunal found that Millgates solicitors, DAC Beachcroft, could readily have identified Mr Barty Smith and the Trust as beneficiaries of the restrictive covenants if they had tried; and it drew the inference (which was not challenged) that Millgate either took no steps to find out who the beneficiaries were or knew the identity of some or all of them and chose not to raise the issue of the restrictive covenants before beginning to build in breach of them. In July 2013 Millgate applied for planning permission to build 23 affordable housing units on the Exchange House site. This was linked to Millgates application for planning permission to build 75 housing units on another site (the Woolley Hall site) for commercial sale. In due course, in March 2014 the local planning authority granted planning permission for both developments, with the permission for the development of the Woolley Hall site being conditional on the provision of the affordable housing on the Exchange House site. By a clause in a deed made pursuant to section 106 of the Town and Country Planning Act 1990, Millgate unilaterally undertook not to occupy (ie not to make available for sale) more than 15 units constructed pursuant to the planning permission for the Woolley Hall site until 23 units constructed pursuant to the planning permission for the Exchange House site had been transferred to an affordable housing provider. The plans submitted with the application for permission for the development of the Exchange House site showed ten residential units to be provided in a block of flats on the unencumbered land plus nine two storey houses and four bungalows on the application land. It seems that the local planning authority was not aware of the position in relation to the restrictive covenants affecting the application land although, in any event, it is unlikely that the local planning authority would have viewed it as its role to use its planning powers to ensure compliance with those covenants. Its concern was to ensure that the requisite number of affordable housing units should be provided on the Exchange House site. It is a very important point (as I shall later explain) that the Upper Tribunal recorded (at para 62 of its decision) that, had Millgate chosen to lay out its development of the Exchange House site differently so as to honour the restrictive covenants, by building a larger block of flats with 23 units on the unencumbered land, with the application land (presumably) remaining as a car park for the flats, the local planning authority indicated that it would have approved such a proposal. In July 2013 Mrs Devine had a conversation about the Exchange House site with a director of Millgate, Mr Graeme Simpson. As appears from paras 44 45 of the Upper Tribunals decision, it was about this time that Mrs Devine became aware of Millgates application for planning permission in relation to that site, although she did not see the plans it had submitted and was unaware of the detail of Millgates proposals. She was also unaware of the restrictive covenants. She only learned of their existence after Millgate made its application to the Upper Tribunal to have them discharged or modified. In the period prior to that application, Mrs Devine, for the Trust, made no adverse comment concerning Millgates application for planning permission for its development of the Exchange House site. In granting planning permission for the application land in March 2014, the local planning authority determined that although the proposal was, in principle, inappropriate for the Green Belt, and was contrary to the development plan, special circumstances existed which justified the grant of permission. The local planning authority considered that those special circumstances were that the development would enhance the character and amenity of the area, was on previously developed land, would improve the access to and relationship with the hospice (for which, as we have seen in para 10, planning permission had already been approved) and was sensitive to adjoining uses. On 1 July 2014 Millgate began clearing the site preparatory for construction. Mr Barty Smith was unaware of Millgates application for planning permission in relation to the Exchange House site. He first became aware of physical development of the site when he flew over it in a light aeroplane on 30 August 2014. He consulted a solicitor. He visited the site on 15 September 2014, by which time the original light industrial buildings on the unencumbered land had been cleared and work on the new foundations across the whole site had commenced. By letter dated 26 September 2014, Mr Barty Smith wrote to Millgate to object to the development on the application land. He referred to the restrictive covenants and stated that Millgate seemed to be in breach of them by reason of the works it had already carried out on the application land. His letter stated that Millgate should immediately halt any plans it had to build on the application land. Despite this, Millgate continued with its construction works. It appears that Millgate passed Mr Barty Smiths letter on to DAC Beachcroft for reply. The eventual reply was by a letter sent by DAC Beachcroft to Mr Barty Smith dated 20 November 2014. This pointed out that the restrictive covenants had to touch and concern the land of anyone claiming to be entitled to enforce them; said that Mr Barty Smith could only enforce them if they benefited land which he owned; and suggested that as he only owned open land close to the site it is not immediately obvious why the covenants benefit your land. Mr Barty Smith took counsels advice. With the benefit of this, he replied to DAC Beachcroft by a letter dated 11 December 2014. He maintained that the restrictive covenants self evidently touch and concern the land neighbouring the application land and specifically asserted that they benefited both his own land (open fields retained by him in the vicinity of the application land, as identified in a map he enclosed with his letter) and the hospice land adjacent to the application land. He claimed that it was improper for Millgate to commence building works in breach of covenant and said that any application to the Upper Tribunal to modify the restrictive covenants would be vigorously opposed. He explained the reason why the enforcement of the restrictive covenants was particularly important in relation to the hospice: In 2012 I donated land worth 500,000 to the charity to build the hospice as a peaceful place for children with terminal cancer to end their days in calm and dignity with access to private country gardens. Now your client seeks to build multiple units with windows and open areas facing directly into hospice land. That is regrettable. It seems that at this stage Millgate was still far from completing the buildings on the application land. It was not suggested that it had yet erected the second storey of the nine houses which would directly overlook the hospice gardens. In continued breach of the restrictive covenants, Millgate continued to build the houses and bungalows on the application land. It was only on 10 July 2015 that the development of the 23 residential units on the Exchange House site, together with a childrens recreation area next to the bungalows, was completed. The 13 housing units on the application land comprise the following: four bungalows, the roofs of which are visible over a timber boundary fence separating the gardens of the bungalows from the hospice land; and nine two storey houses, the gardens of which are separated from the hospice land by a timber fence. The upper floor bedrooms of these houses directly overlook the hospice grounds. By an agreement dated 22 May 2015, Millgate agreed to sell the development at the Exchange House site, once it was completed, to Housing Solutions. The sale of the site was subject to a condition that there should be no reasonable risk of any court application being successful, in respect of the restrictive covenants, for an injunction to stop or restrict the development or demolish the existing development; and Millgate provided Housing Solutions with the benefit of certain insurance policies and an indemnity against any wasted expenses or losses which Housing Solutions might suffer if that condition was not fulfilled. On 20 July 2015 Millgate issued its application to the Upper Tribunal seeking modification of the restrictive covenants pursuant to section 84. The modification sought was to allow the nine houses and four bungalows, which Millgate had already built on the application land, to continue to stand there and to be occupied as residential properties. Millgate gave notice of the application to Mr Barty Smith and the Trust. They both entered objections to the application. On 28 July 2015 Millgate conveyed to Housing Solutions the unencumbered land (with the block of ten residential flats on it). In September 2015, the construction of the hospice began. By an agreement dated 9 February 2016, the relevant section 106 obligation in respect of the Woolley Hall site (referred to in para 12 above and which required Millgate to provide 23 units of affordable housing on the Exchange House site as a condition for being able to release properties at the Woolley Hall site for sale) was varied to permit Millgate, in partial substitution for that original obligation, to make a payment of 1,639,904 to the Council if Millgates application to the Upper Tribunal was not successful and the application land was not transferred to Housing Solutions by 30 September 2017. This payment was intended to enable the Council to secure an equivalent amount of replacement affordable housing (13 units) at other locations in its area. The effect of Millgate making this payment would be that it would be able to market and sell the residential units it had built on the Woolley Hall site. This agreement was designed to ensure that the Councils requirement for affordable housing as the quid pro quo for planning permission for development of the Woolley Hall site would be satisfied whether the restrictive covenants remained in place and were enforced or not. The Upper Tribunal found that the Exchange House Site as a whole gave the appearance of having been well designed and built. The houses and bungalows, which the Upper Tribunal inspected, were described as simple and functional but neither shoddy nor utilitarian. The Upper Tribunal regarded the development as one which would be likely, in time, to mellow into a modest and not unattractive environment providing decent accommodation suitable for people in different stages of life living in what might become a neighbourly community. The Upper Tribunal found that despite the proximity of the houses to the boundary of the hospice, and their visibility from the hospice, it was unlikely that they would make much visual impression on the children, or on staff or visitors, while within the hospice building itself. However, the visual impact of the buildings would be much more apparent from the grounds of the hospice land. On 18 November 2016 the Upper Tribunal gave its decision on Millgates application to modify the restrictive covenants. The Upper Tribunal held that the restrictive covenants should be modified pursuant to section 84 so as to permit the occupation and use of the application land for the houses and bungalows which had been constructed on it. As a condition of this ruling, Millgate was ordered to pay 150,000 as compensation to the Trust, that being the Upper Tribunals assessment of the cost of remedial planting and landscaping works to screen the hospice grounds plus an element of compensation for loss of amenity. On 15 February 2017, the day before the last day on which the Trust could serve an in time notice of appeal according to the Civil Procedure Rules, when no application had been received for permission to appeal, the view was taken that the condition in the sale agreement between Millgate and Housing Solutions (referred to in para 22 above) had been satisfied and Millgate immediately that day transferred the 13 housing units on the application land to Housing Solutions. No effort was made to check with the Trust whether it intended to apply for permission to appeal. On the following day, 16 February, Millgate received notice of the Trusts application for permission to appeal and for a short extension of time in which to do so. Floyd LJ granted permission to appeal and an extension of time. Housing Solutions is therefore now the owner of the 13 housing units on the application land. This means that, in the event, Millgate did not have to pay the Council the sum stipulated in the agreement of 9 February 2016, referred to in para 24 above. As against Millgate, Housing Solutions continues to have the benefit of the indemnity provision in the sale agreement, should the decision of the Upper Tribunal be reversed and the restrictive covenants enforced. The 13 housing units are now occupied by tenants. On 28 November 2018, the Court of Appeal (as has been mentioned in para 4 above) overturned the Upper Tribunal and re made the decision by refusing the application. Housing Solutions appeals against that decision. As at the time of the hearing before the Supreme Court, the Trust had not made any application for an injunction to demolish the nine houses and four bungalows built on the application land or for damages for breach in lieu of an injunction. Following the Court of Appeals decision, the Trusts solicitors, Russell Cooke, wrote to the solicitors for Housing Solutions, DAC Beachcroft, by letter dated 19 December 2018, indicating an intention to issue injunction proceedings. By a letter dated 20 December 2018 the solicitors for Housing Solutions responded that, since these proceedings were ongoing, it would be inappropriate for the Trust to apply for injunctive relief and that, should the Trust choose to do so, Housing Solutions would apply for a stay pending the outcome of this appeal. Section 84 of the Law of Property Act 1925, jurisdiction and discretion 3. So far as relevant to this case, section 84 of the Law of Property Act 1925 (as amended by section 28(1) (3) of the Law of Property Act 1969 and paragraph 5(a) of Schedule 1 to the Transfer of Tribunal Functions (Lands Tribunal and Miscellaneous Amendments) Order 2009) reads as follows: 84. Power to discharge or modify restrictive covenants affecting land (1) The Upper Tribunal shall have power from time to time, on the application of any person interested in any freehold land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon, by order wholly or partially to discharge or modify any such restriction on being satisfied that by reason of changes in the character of the (a) property or the neighbourhood or other circumstances of the case which the Upper Tribunal may deem material, the restriction ought to be deemed obsolete; or (aa) that in a case falling within subsection (1A) below the continued existence thereof would impede some reasonable user of the land for public or private purposes or, as the case may be, would unless modified so impede such user; or (b) that the persons of full age and capacity for the time being or from time to time entitled to the benefit of the restriction have agreed, either expressly or by implication, by their acts or omissions, to the same being discharged or modified; or (c) that the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction: and an order discharging or modifying a restriction under this subsection may direct the applicant to pay to any person entitled to the benefit of the restriction such sum by way of consideration as the Tribunal may think it just to award under one, but not both, of the following heads, that is to say, either (i) a sum to make up for any loss or disadvantage suffered by that person in consequence of the discharge or modification; or (ii) a sum to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it. (1A) Subsection (1)(aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the Upper Tribunal is satisfied that the restriction, in impeding that user, either (a) does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or (b) is contrary to the public interest; and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification. (1B) In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the Upper Tribunal shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances. (9) Where any proceedings by action or otherwise are taken to enforce a restrictive covenant, any person against whom the proceedings are taken, may in such proceedings apply to the court for an order giving leave to apply to the [Upper Tribunal] under this section, and staying the proceedings in the meantime. The original version of section 84 of the Law of Property Act 1925 laid down four grounds under which the relevant Authority (now the Upper Tribunal) was given the power to discharge or modify restrictive covenants. These were, in short, where the restrictive covenant was obsolete; where the restriction was impeding the reasonable user of the land without securing practical benefits; where the persons entitled had agreed to the discharge or modification; and where the discharge or modification would be non injurious. These correspond (with some modification to the second ground) to what are now, respectively, section 84(1)(a); section 84(1)(aa), (1A)(a); section 84(1)(b); and section 84(1)(c). However, following a Report of the Law Commission on Transfer of Land: Restrictive Covenants (1967) (Law Com No 11), pp 21 23, a significant extension was made by adding a fifth ground (what is now section 84(1)(aa), (1A)(b)) so that discharge or modification may be ordered where the restriction is impeding the reasonable user of land and that impeding of reasonable user is contrary to the public interest (and provided money will be adequate compensation for any loss suffered by the person entitled to the benefit of the restrictive covenant). It is with that contrary to the public interest ground that this appeal is concerned. It is well established (see, for example, Driscoll v Church Comrs for England [1957] 1 QB 330) that, if satisfied that one of the prescribed grounds has been made out, the Upper Tribunal has a discretion whether or not to make an order for modification or discharge of the restrictive covenant. The important statutory words to this effect are in section 84(1): the Upper Tribunal shall have power. The five grounds are therefore concerned with establishing the Upper Tribunals jurisdiction and can be helpfully labelled the jurisdictional grounds: at least one of those jurisdictional grounds must be established by the applicant before the Upper Tribunal can go on to make what is ultimately a discretionary decision. The proceedings below and the appeal to this court The Upper Tribunal held that the contrary to public interest jurisdictional ground (section 84(1)(aa), 84(1A)(b)) was made out by Millgate. The reasoning was as follows: (i) It was common ground that the proposed use of the application land to provide 13 units of affordable housing was a reasonable user of the land. (ii) Impeding that reasonable user was contrary to the public interest because it is not in the public interest for these houses to remain empty and the covenants are the only obstacle to them being used (para 106 of the decision). That public interest was so important and immediate that, even assuming that the cautious approach to the public interest ground put forward in In re Collins Application (1975) 30 P & CR 527, 531, remains good law, the public interest here justified the serious interference with private rights and with the sanctity of contract (para 107). (iii) Although the provision of significant additional boundary planting would not insulate the hospice land from all the adverse consequences of the use of the application land for housing, an award of money to allow for such additional planting was capable of providing adequate compensation to the Trust (para 110). Turning to the exercise of its discretion, the Upper Tribunal looked at the conduct of Millgate. In an earlier passage, referring to Mr Barty Smiths view, it described Millgates behaviour as highhanded and opportunistic (para 105). It contrasted the conduct of applicants in past cases (such as In re SJC Construction Co Ltds Application (1974) 28 P & CR 200 (LT), affd (1975) 29 P & CR 322; Winter v Traditional & Contemporary Contracts Ltd [2007] EWCA Civ 1008; [2008] 1 EGLR 80; and In re Trustees of the Green Masjid and Madrasahs Application [2013] UKUT 355 (LC)). It was not prepared to accept that Millgate had acted in good faith and without any intention to force the hand of the beneficiary of the covenant (para 117). Nevertheless, the Upper Tribunal considered that it should exercise its discretion to grant Millgates application because the public interest outweighed that high handed and opportunistic conduct (and all other factors) in this case. In the words of the Upper Tribunal, at para 120: [O]ur decision will have an effect not only on the parties but also on 13 families or individuals who are waiting to be housed in these properties if, and as soon as, the restrictions are modified. We consider that the public interest outweighs all other factors in this case. It would indeed be an unconscionable waste of resources for those houses to continue to remain empty. I interject here that the description of Millgates behaviour as highhanded and opportunistic is what some commentators, especially in the context of breach of contract, have described as cynical: see, for example, Peter Birks, Restitutionary Damages for Breach of Contract: Snepp and the Fusion of Law and Equity [1989] LMCLQ 421. In line with this, I shall use the phrase cynical breach as a useful shorthand description of the conduct of Millgate in deliberately committing a breach of the restrictive covenant with a view to making profit from so doing. The Trust appealed against the Upper Tribunals granting of the section 84 application. It put forward four grounds of appeal ie four grounds on which it alleged that the Upper Tribunal had erred in law. Those four grounds of appeal were as follows (see Sales LJs judgment at para 41): applying Lawrence v Fen Tigers Ltd [2014] UKSC 13; [2014] AC 822 by analogy (ground one); at the jurisdictional stage, ignoring Millgates cynical breach while regarding as highly relevant the fact that, by the time of the application, 13 housing units had been built (ground two); ignoring (including in the exercise of the Upper Tribunals discretion) Millgates ability to satisfy its planning obligation by making alternative provision of equivalent affordable housing elsewhere (ground three); failing properly to take account of Millgates cynical breach in the exercise of the Upper Tribunals discretion (ground four). The first two grounds of appeal and part of the third ground went to the jurisdiction of the Upper Tribunal (under the contrary to public interest jurisdictional ground), whereas part of the third ground of appeal and the whole of the fourth ground went to the discretion of the Upper Tribunal. The Court of Appeal overturned the decision of the Upper Tribunal on all four grounds of appeal and re made the decision by refusing the application. I shall explain in due course the Court of Appeals reasoning in doing so. In the appeal by Housing Solutions to this court, counsel for Housing Solutions, Martin Hutchings QC, submits that the Court of Appeal was wrong as a matter of law on all those four grounds of appeal and that the Upper Tribunals decision should be restored. In contrast, Stephen Jourdan QC for the Trust, the respondent, submits that the Court of Appeal was correct, for the reasons it gave, to have overturned the decision of the Upper Tribunal and to have re made the decision by refusing the application. It follows that, on this appeal, it is convenient to continue to refer to the four grounds of appeal with the questions being whether the Court of Appeal was correct in holding that the Upper Tribunal had erred in law on each of those four grounds. The focus of most of the submissions of counsel reflecting this as being the central issue in the case was on the relevance of Millgates cynical breach (using that shorthand description of Millgates conduct as explained in para 36 above). In other words, I am primarily concerned with grounds two and four of the grounds of appeal. I shall therefore deal with that central issue first before going on to look more briefly at grounds one and three of the grounds of appeal. 5. The central issue: the relevance of Millgates cynical breach (1) Did the Upper Tribunal, at the jurisdictional stage, make an error of law by ignoring Millgates cynical breach while regarding as highly relevant the fact that, by the time of the application, 13 housing units had been built? The essential elements of section 84 in relation to the contrary to public interest jurisdictional ground are sections 84(1)(aa) and (1A)(b). These have been set out in para 31 above. Reduced to their core, they read as follows: (1) [The Upper Tribunal shall have the power to discharge or modify a restrictive covenant on being satisfied] (aa) that in a case falling within subsection (1A) below the continued existence [of the restriction under the covenant] would impede some reasonable user of the land ; (1A) Subsection (1)(aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the Upper Tribunal is satisfied that the restriction, in impeding that user (b) is contrary to the public interest; and that money will be an adequate compensation for the loss or disadvantage (if any) which any person will suffer from the discharge or modification. Mr Hutchings submitted that the statute requires a narrow interpretation of what is meant by contrary to the public interest. I agree. It is clear from the statutory words that one must ask whether the impeding of the reasonable user of the land by the continuation of the restrictive covenant is contrary to the public interest. If one is satisfied that the proposed use of the land is reasonable (and it was common ground that that was satisfied in this case) one must ask whether the impediment of that use by the continuation of the restrictive covenant is contrary to the public interest. It is of central importance that the question that has to be asked is not the wider one of whether in all the circumstances of the case it would be contrary to the public interest to maintain the restrictive covenant. Rather the wording requires one to focus more narrowly on the impeding of the reasonable user of the land and to ask whether that impediment, by continuation of the restrictive covenant, is contrary to the public interest. On the facts of this case, therefore, that narrow wording required the Upper Tribunal to determine whether it was contrary to the public interest for the 13 housing units not to be able to be used. The waste involved would be a very strong factor indicating that that would indeed be contrary to the public interest. To be weighed against that would be the public interest in the hospice providing a sanctuary for children dying of cancer which would be protected by the continuation of the restrictive covenant. Two competing uses of the land are therefore pitted against each other. It is the resolution of a land use conflict that we are here dealing with. That was the approach taken by the Upper Tribunal and there was no error of law in its deciding that the contrary to public interest jurisdictional ground was made out on these facts. Once one appreciates that the relevant wording requires a narrow enquiry and does not involve asking the wide question of whether in all the circumstances it is contrary to the public interest to maintain the restrictive covenant, it is clear that the good or bad conduct of the applicant is irrelevant at this jurisdictional stage. The manner of the breach of the restrictive covenant (ie whether the breach was cynical or not) is irrelevant because that tells us nothing about the merits of what the burdened land is being used for or will be used for. This, of course, is not to deny that the manner of breach the cynical breach by the applicant is a highly relevant consideration when it comes to the discretionary stage of the decision. But it is irrelevant at the jurisdictional stage. There are three further points supporting that interpretation of the contrary to the public interest jurisdictional ground: (i) There is plainly no room for a consideration of the manner of breach the applicants cynical breach under any of the other four jurisdictional grounds. Yet at least in relation to the first limb of section 84(1)(aa) the jurisdictional ground concerned with where the restriction was impeding the reasonable user of the land without securing substantial practical benefits it must be relevant to the ultimate decision to take into account at the discretionary stage the applicants cynical breach. There is no other stage at which to consider it. And that is borne out by, for example, In re Trustees of the Green Masjid and Madrasahs Application where the applicants conduct was considered at the discretionary stage in a case in which jurisdiction arose under the first limb of section 84(1)(aa). It undermines the coherence of section 84 if the same conduct is taken into account at the jurisdictional stage in relation to one jurisdictional ground and at the discretionary stage in relation to other jurisdictional grounds. (ii) Linked to that first point is that the purpose of section 84, reflected in its structure, is that the five jurisdictional grounds (with the possible exception of the consent jurisdictional ground in section 84(1)(b)) are concerned to identify restrictive covenants that unreasonably fetter a preferable use of the land. The manner of the defendants breach is irrelevant to that. As the Law Commission in its Report on Transfer of Land: Restrictive Covenants (1967) (Law Com No 11) at p 23 said of its proposal to introduce the contrary to public interest ground: This [proposal] is designed to contain a restatement of the powers of the Lands Tribunal [the predecessor of the Upper Tribunal] in such terms as to enable it to take a broader view of whether the use of land is being unreasonably impeded Kevin Gray and Susan Gray, Elements of Land Law, 5th ed (2009), helpfully set out, at p 292, at the start of their examination of section 84, what may be regarded as the high level aim of the section: Like all property in land, the benefit of a restrictive covenant cannot be regarded as absolute and inviolable for all time [citing Sir Thomas Bingham MR in Jaggard v Sawyer [1995] 1 WLR 269, 283]. Restrictive covenants place a long term fetter upon the affected land, but in some cases it is clearly undesirable that the inhibition upon land use should continue indefinitely. There may arise changes of circumstance where it becomes preferable, in the interests of general social utility, that the constraints imposed by a particular covenant should be abrogated or modified. Narrowly conceived private interests cannot be allowed to frustrate proposed developments which promise a distinct benefit to the entire community or to some significant section of it. (footnotes omitted) See also Law Commission Report on Making Land Work: Easements, Covenants and Profits Prendre (2011) (Law Com No 327), paras 7.3 7.4. (iii) As the conduct of an applicant can embrace a wide spectrum of blameworthy behaviour (from negligence through to outrageous dishonesty), it is ideally suited to being considered at the discretionary rather than the jurisdictional stage. It should also be noted that section 84(1B) is consistent with the interpretation advocated by Mr Hutchings and with which I agree. That subsection reads as follows: (1B) In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the Upper Tribunal shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances. The main body of this emphasises, as one would expect for the resolution of a land use conflict, that the development plan and patterns of planning permission in the area are relevant considerations. The last phrase any other material circumstances means that the circumstance must be material to the question one is asking; and I have clarified in para 42 above that the question one should be asking in relation to the contrary to public interest jurisdictional ground is whether the impeding of the reasonable user of the land by the continuation of the restrictive covenant is contrary to the public interest. What the phrase does not mean is that one should be taking into account all circumstances that may be said to be relevant to deciding the incorrect and wider question of whether it would be contrary to the public interest to maintain the restrictive covenant. It follows that, with great respect, I cannot agree with the approach taken by the Court of Appeal which regarded the manner of breach/cynical breach as being of importance at the jurisdictional stage under the contrary to the public interest ground. Of course, the Court of Appeal was correct that these considerations are important to the overall decision and must be taken into account at the discretionary stage. But, on the correct interpretation of the Act, they are relevant at the discretionary stage only and not at the jurisdictional stage. As I am respectfully disagreeing with his reasoning (and with Mr Jourdans submissions on this point), it is appropriate to set out Sales LJs full discussion of this matter which extended over several paragraphs: 56. There is a public interest in having private contractual and property rights respected in dealings between private persons. Further, if private contractual/property rights under a restrictive covenant are to be overridden in the public interest, the Upper Tribunal should be astute to see that the public interest reasons for discharge or modification of the covenant are clearly made out. 57. In my judgment, this means that at the stage of application of the contrary to the public interest test in section 84(1A)(b) the Upper Tribunal should have regard to whether the applicant has made fair use of opportunities available to it to try to negotiate a waiver of a restrictive covenant or, if necessary, to test the public interest arguments in an application made under section 84 in advance of acting in breach of that covenant. In general, if the applicant has not made fair use of opportunities available to it to test the position in a way which affords proper recognition to the contractual/property rights of the beneficiary of the restrictive covenant, it will not be contrary to the public interest for the restriction (ie the restrictive covenant) to be allowed to continue to impede the applicants proposed user of the restricted land. The contrary to the public interest test has an important dimension which is concerned with such procedural matters and the process followed by the applicant before making its application under section 84. 58. I note in that regard that the then President of the Lands Tribunal, Douglas Frank QC, also took the view (rightly, in my opinion) that the way in which the applicant had behaved in bringing about a state of affairs in which building had taken place on the restricted land was relevant to the question whether the test in section 84(1A)(b) was satisfied, in In re SJC Construction Co Ltds Application (1974) 28 P & CR 200, 205. The case went on appeal on a different point: SJC Construction Co Ltd v Sutton London Borough Council (1975) 29 P & CR 322. On the appeal, the Lands Tribunal judgment on the other aspects of section 84, including section 84(1)(b), was noted by Lord Denning MR at pp 324 325 without him suggesting any doubt about the tribunals reasoning in respect of them. 59. As I have said, enforcement of contractual and property rights is generally in the public interest, so it is relevant when assessing under section 84(1A)(b) whether the restriction, in impeding [some reasonable user of land], is contrary to the public interest to see whether an applicant has behaved appropriately in seeking to respect and give due weight to such rights in the course of its dealings with the holder of such rights, so that the question of the public interest has been tested in an appropriate way. If the property developer has bargained for a waiver of the restrictive covenant and it is found that there is a price acceptable to both parties, it could not be said (at any rate, in ordinary circumstances) to be contrary to the public interest that the covenant should be maintained in place unless and until that price is paid. Similarly, if an application under section 84 is made in advance of any conduct by the developer in breach of the covenant, that will allow the public interest to be tested in the context of due weight being given to upholding the public interest as regards respect for property and contract rights, rather than in a context where the developer has unilaterally and unlawfully violated those rights. 61. In my view, in the circumstances of this case, in which Millgate had deliberately circumvented the proper procedures for testing and respecting the Trusts rights under the restrictive covenants, the Upper Tribunal could not properly be satisfied that it was contrary to the public interest for the restrictive covenants to be maintained in place. Millgate has acted in an unlawful and precipitate manner by building in breach of the restrictive covenants. It has acted with its eyes open and completely at its own risk. As a result it is appropriate and in conformity with the public interest that it should bear the risk that it may have wasted its own resources in building the 13 housing units on the application land. 64. in general terms it is in the public interest that contracts should be honoured and not breached and that property rights should be upheld and protected. A property developer which knows of a restrictive covenant which impedes its development of land has a fair opportunity before building either to negotiate a release of the covenant or to make an application under section 84 to see if it can be modified or discharged. That is how the developer ought to proceed. It is contrary to the public interest in ensuring that proper respect is given to contractual or property rights for a property developer to proceed without any good excuse to build in violation of such rights, as contained in an enforceable restrictive covenant, in an attempt to improve its position on a subsequent application under section 84. Put another way, it is contrary to the public interest for the usual protections for a person with the benefit of a restrictive covenant to be circumvented by a developer seeking to obtain an advantage for itself by presenting the tribunal with a fait accompli in terms of having constructed buildings on the affected land without following the proper procedure, and then in effect daring the tribunal to make a ruling which might have the result that those buildings have to be taken down. If the presence on the affected land of a building constructed in breach of the relevant covenant is to be regarded as capable of being relevant to the public interest question under subsection (1A)(b) as in principle it is I consider that the issue of how that situation arose is also highly relevant to that question. 65. It should be noted that the discussion in relation to these grounds is directed to the issue whether the condition in section 84(1A)(b) has been satisfied, which is a precondition for the Upper Tribunal to have any discretionary power under section 84(1) to discharge or modify a restrictive covenant. That is different in important respects from the distinct issue of how such a discretionary power should be exercised, once it is found to have arisen. In this case, the Upper Tribunal wrongly postponed consideration of the conduct of Millgate to the discretionary stage (paras 113 121), and at para 117 treated the decision of the Lands Tribunal (Douglas Frank QC, President) in In re SJC Construction Co Ltds Application (1974) 28 P & CR 200 as relevant to that stage, even though in the relevant passage (at p 205) referred to by the Upper Tribunal the President in fact referred to the conduct of the applicant in the context of addressing the question whether the precondition in section 84(1A)(b) had been satisfied. 66. In my view, it is appropriate to bring into account the rights based and procedural dimension of the public interest in the interpretation of section 84(1A)(b), as in the SJC Construction Co case, in order to secure fuller protection and due respect for the contractual rights with property characteristics which are sought to be overridden on an application under section 84. I do not consider that Parliament intended that section 84 should operate so as to allow those rights to be deliberately ignored by an applicant, with it then being left as a purely discretionary matter for the Upper Tribunal to decide whether to override them. I shall not repeat the reasons set out above why I regard that approach as incorrect. But I would like to make two final points on this issue triggered by Sales LJs discussion. The first is that, as Mr Hutchings submitted, one can detect in various passages in Sales LJs judgment (for example, in paras 59 and 61) a diversion into the wider and incorrect question of whether maintaining the restrictive covenant is contrary to the public interest. Secondly, I do not regard it as entirely clear that Douglas Frank QC in In re SJC Construction Co Ltds Application took the applicants conduct into account at the jurisdictional stage. The difficulty is that that decision made no reference to the two distinct stages of jurisdiction and discretion and, as Mr Hutchings submitted, one can read the relevant passage about the applicants behaviour as in effect a point in parenthesis that cuts across the five matters that Douglas Frank QC said he was taking into account. In any event, the applicants conduct in question in that case was acting in good faith in the sense that they did not intend to force the Councils hand (at p 205) whereas, as we have seen at para 35 above, in the instant case, the Upper Tribunal was not prepared to accept that Millgate had acted in good faith and without any intention to force the hand of the beneficiary of the covenant (para 117). It follows from my reasoning above that, contrary to the decision of the Court of Appeal on the second ground of appeal, the Upper Tribunal did not make an error of law at the jurisdictional stage by ignoring Millgates cynical breach while regarding as highly relevant the fact that, by the time of the application, 13 housing units had been built. (2) Did the Upper Tribunal make an error of law by failing properly to take account of Millgates cynical conduct in the exercise of its discretion? It should be stressed at the outset that the issue here is whether the Upper Tribunal made an error of law in the exercise of its discretion. In this case, it would only be appropriate for an appellate court (including this court) to interfere, at the discretionary stage, with the decision of the specialist tribunal charged by Parliament with exercising the discretionary power to decide matters under section 84, if that tribunal has made an error of law. While I may not have reached the same decision when balancing the considerations taken into account by the Upper Tribunal, it is clear that that is not a sufficient reason for this court to intervene with the discretionary decision of the Upper Tribunal. I am acutely conscious of the need to tread very carefully so as to avoid simply substituting my view of how the considerations should be weighed for that of the specialist tribunal. I also accept that the Upper Tribunal in the Trustees of the Green Masjid case was correct to say, at para 129, that once a jurisdictional ground has been established, the discretion to refuse the application should be cautiously exercised. Nevertheless, I agree with the decision of the Court of Appeal that, in relation to the cynical conduct of Millgate, there was indeed an error of law made by the Upper Tribunal in the exercise of its discretion. However, I have some reservations about how the Court of Appeal chose to explain that error of law. Sales LJ said the following: 77. On the assumption that the relevant discretion under section 84(1) had arisen, I consider that the Upper Tribunal fell into error I reach the view I have notwithstanding the discretionary nature of the exercise which the Upper Tribunal had to conduct at this stage in the analysis and even though the Upper Tribunal correctly referred in this part of its decision to relevant authority and reminded itself at paras 114 115 of factors which pointed against the exercise of discretion in favour of Millgate. In my view, the Upper Tribunal still arrived at a conclusion which was wrong within the meaning of CPR rule 52.21(3)(a) (ex rule 52.11(3)(a)), in that it failed to attach sufficient weight to the deliberately unlawful and opportunistic conduct of Millgate in the circumstances of this case, which was directed to subverting the proper application of section 84 without good reason. 82. Millgate acted in a high handed manner by proceeding to breach the restrictive covenants without any justification or excuse. Millgate had attempted to steal a march on the Trust and had sought to evade the jurisdiction of the Upper Tribunal at the appropriate stage, by failing to make its section 84 application before building. In my judgment, the appropriate course for the Upper Tribunal in the present case, having regard to the need for due protection of the Trusts rights and to the general public interest in having the section 84 procedure invoked at the proper time and in the proper manner, was to exercise its discretion to refuse Millgates application. It is highly desirable that there should be consistency and predictability as regards the exercise of discretion under section 84(1), and I consider that those values are best promoted by the exercise of discretion against acceding to Millgates application in the present case. 84. the application should have been refused in the exercise of discretion by the Upper Tribunal because Millgate had acted without proper regard to the rights of the Trust and with a view to circumventing the proper consideration of the public interest under section 84. Clearly, such an exercise of discretion is called for in part to deter others; and from a certain perspective it might be thought to have a punitive character; but the true reason for the exercise of discretion in this way in the present case is wider than that. It would be inappropriate for an appellate court to interfere with a discretionary decision of a specialist tribunal just because it considers that the tribunal failed to attach sufficient weight (see Sales LJ at para 77) to a particular factor. Sales LJ would, of course, be well aware of that. My interpretation of what he was saying, therefore, was that the Upper Tribunals approach was contrary to principle. And the relevant principle in play here was, as I understand it, that an applicant who has committed a cynical breach of the type committed on these facts should have its application refused. In other words, as a matter of principle, a cynical breach such as that committed in this case outweighs what would otherwise be the public interest in discharging or modifying the restrictive covenant. I am sorely tempted to agree that there is such a principle. However, I have major concerns as to whether, without discretionary qualifications to cater for exceptions, such a principle would be too rigid and would inappropriately fetter the Upper Tribunals discretion. And once one lets in discretionary qualifications to temper such a principle, it is hard to see how the Upper Tribunal in this case could be said to have made an error of law. In deciding that the public interest in allowing the houses to be used outweighed all other considerations, including Millgates cynical conduct, the Upper Tribunal can be said to have been applying such qualifications to any such principle within the legitimate exercise of its discretion. Certainly it is plain that the Upper Tribunal took into account the cynical nature of the breach by Millgate. This is made clear at paras 116 118 of the judgment which included a careful consideration of whether, for example, the egregious nature of the breach of covenant should lead to a denial of the application so as to punish the wrongdoer. The cynical conduct in this case was compared and contrasted with other cases where, for example, the applicant had acted in good faith without knowledge of the covenant or had already partly completed the buildings before objections were raised. What the Upper Tribunal said at para 118 is particularly important in this context: Ms Windsor emphasised that, unlike the applicants in Green Masjid, Millgate had acted with professional advice and suggested that its behaviour was so egregious and unconscionable that relief should be refused. We have taken into account all of the matters of conduct which she relied on in reaching our conclusion. We were supplied with Ms Windsors expanded closing submissions (for the objectors) at the Upper Tribunal hearing. Those submissions replaced previous skeleton arguments. Under the heading of Conduct, they set out over ten paragraphs (paras 41 50) Ms Windsors submissions regarding Millgates conduct. The details of the alleged egregious and unconscionable conduct are particularised at paragraph 46(a) (k). Nevertheless, like the Court of Appeal, I am satisfied that, even though it took into account Millgates cynical conduct, something has gone fundamentally wrong with the Upper Tribunals exercise of discretion on the particular facts of this case such that one can say that there has been an error of law. In my view, the correct way of pinpointing this is to recognise that the Upper Tribunal failed to take into account in the exercise of its discretion two particular factors, concerned with the effect of Millgates conduct, that should have been taken into account. I shall refer to these factors as the two omitted factors. Taken separately, and certainly taken together, they make the facts of this case exceptional. Neither was referred to by Ms Windsor in her closing submissions and neither was mentioned in the judgment of the Upper Tribunal. Both relate to the important recognition by the Upper Tribunal (see para 14 above) that, had Millgate initially applied for planning permission to build all the required affordable housing on the unencumbered land, the local planning authority indicated that permission would have been granted. The first omitted factor is that, had the developer respected the rights of the Trust by applying for planning permission on the unencumbered land, there would then have been no need to apply to discharge the covenant under section 84 and the hospice would have been left unaffected. Millgate was not just a cynical wrongdoer which had gone ahead with the development in deliberate breach of the covenants and in the face of objections raised. Rather, in addition, and crucially, Millgate, by its cynical breach, put paid to what, on the face of it, would have been a satisfactory outcome for Millgate and, at the same time, would have respected the rights of the Trust (because building on the unencumbered land would not have involved any breach of the restrictive covenant). It is important to deter a cynical breach under section 84 but it is especially important to do so where that cynical conduct has produced a land use conflict that would reasonably have been avoided altogether by submitting an alternative plan. The second omitted factor is that, had Millgate respected the rights of the Trust by applying under section 84 before starting to build on the application site, it is likely that the developer would not have been able to satisfy the contrary to public interest jurisdictional ground under section 84. This is because Millgate would have been met with the objection that planning permission would be granted for affordable housing on the unencumbered land so that the upholding of the restriction would not be contrary to the public interest. It follows that the effect of Millgates cynical breach of covenant was to alter fundamentally the position in relation to the public interest. As Mr Jourdan expressed it, in a submission with which I agree, It is not in the public interest that a person who deliberately breaches a restrictive covenant should be able to secure the modification of the covenant in reliance on the state of affairs created by their own deliberate breach. By going ahead without first applying under section 84, Millgate put itself in the position of being able to present to the Upper Tribunal a fait accompli where the provision of affordable housing meant that it could (and did) satisfy the contrary to public interest jurisdictional ground. It is important to deter a cynical breach under section 84 but it is especially important to do so where, because the Upper Tribunal will look at the public interest position as at the date of the hearing, that cynical conduct will directly reward the wrongdoer by transforming its prospects of success under the contrary to public interest jurisdictional ground. The Upper Tribunal touched on the second of these factors in discussing the contrary to public interest jurisdictional ground: 106. It is no answer to the current wasteful state of affairs to say, as Ms Windsor did, that Millgate could have built their allocation of affordable housing on other land, or that it could now buy its way out of the problem by making a payment towards the provision of social housing elsewhere. Whether those would have been sufficient answers to Millgates case on public interest if we had been dealing with an application before any housing had been built on the site is not a question which arises. The question for the Tribunal is whether in impeding the occupation of the houses which now stand on the application land, and which are otherwise immediately available to meet a pressing social need, the covenants operate in a way which is contrary to the public interest. We are satisfied that they clearly do because it is not in the public interest for these houses to remain empty and the covenants are the only obstacle to them being used. This makes clear that at the jurisdictional stage the UT was, correctly, looking at matters as they then stood at the date of the hearing and not as they stood prior to the breach of covenant. But at the discretionary stage the importance of that change having been brought about by the developers cynical breach should have come back into the reasoning and should have been highly relevant. But that step in the reasoning taking into account, in the exercise of its discretion, the second of the two omitted factors was simply never taken by the Upper Tribunal. It might perhaps be counter argued that the second of those two omitted factors was obliquely referred to by the Upper Tribunal at the discretionary stage at para 115: If it was thought to be easier to secure a modification in favour of a completed development than for one which had not yet commenced the contract breaker would have a real incentive to press on even in face of strong objections by the beneficiaries of a covenant. Any developer who thinks in that way should think again or risk [a] rude awakening However, even if the second factor was here being referred to, it clearly cannot have been taken into account in reaching the decision because the decision directly contradicted the reasoning in that paragraph. The decision of the Upper Tribunal precisely would encourage developers to ignore covenants and to press on with a development even in the face of strong objections. If the Upper Tribunal had been taking that factor into account, an explanation for that contradiction would have been required. Mr Jourdan submitted that the Upper Tribunal was paying lip service to the warning it was giving in para 115. I agree. In truth, the Upper Tribunal ignored that factor in reaching its decision. As I have stressed in para 57, what makes this an exceptional case on the facts is the presence of the two omitted factors. The Upper Tribunals failure to take either into account in the exercise of its discretion constituted an error of law. Although my precise reasoning is different, I therefore agree with the Court of Appeal that (in relation to the fourth ground of appeal) the Upper Tribunal made an error of law by failing properly to take account of Millgates cynical conduct in the exercise of its discretion. My decision on that fourth ground of appeal is sufficient for the dismissal of this appeal. But in the light of the full submissions of Mr Hutchings and Mr Jourdan, I shall explain briefly in the next section why I respectfully disagree with the Court of Appeal that the Upper Tribunal made errors of law on the other two issues, which were the first and third grounds of appeal. 6. The other two issues (1) Applying Lawrence v Fen Tigers Ltd by analogy The first and successful ground of appeal to the Court of Appeal was that the Upper Tribunal had made an error of law by applying by analogy, in relation to the contrary to public interest jurisdictional ground in section 84(1)(aa), what Lord Sumption had said in Lawrence v Fen Tigers Ltd [2014] UKSC 13; [2014] AC 822, paras 155 to 161. That was a case concerned with the tort of private nuisance. The Supreme Court (with the leading judgment being given by Lord Neuberger) held that the defendants were committing a private nuisance by noise against the claimants who lived in a bungalow 850 yards away from the defendants speedway racing stadium. There was no appeal against the grant of a (prohibitory) injunction, should the continuing tort be established. However, the Supreme Court took the opportunity to lay down that, while an injunction should prima facie be ordered where a tort of nuisance is continuing, the strong primacy traditionally afforded to the injunction as a remedy for the tort of nuisance should be modified so that the public interest should always be a relevant consideration in deciding whether to grant an injunction for such a tort. In other words, the courts should be more willing than has traditionally been the case to award damages in lieu of an injunction in this context. Lord Sumption indicated that an even more radical rethink of the relationship between an injunction and damages in relation to the tort of nuisance might in due course be needed. Having earlier said, at para 160, that the traditional primacy afforded to an injunction was based mainly on the courts objection to sanctioning a wrong by allowing the defendant to pay for the right to go on doing it and that that seemed an unduly moralistic approach to disputes, he went on to say the following at para 161: The whole jurisprudence in this area will need one day to be reviewed in this court. There is much to be said for the view that damages are ordinarily an adequate remedy for nuisance and that an injunction should not usually be granted in a case where it is likely that conflicting interests are engaged other than the parties interests. In particular, it may well be that an injunction should as a matter of principle not be granted in a case where a use of land to which objection is taken requires and has received planning permission. However, at this stage, in the absence of argument on these points, I can do no more than identify them as calling for consideration in a case in which they arise. As regards Lord Sumptions emphasis on planning permission, the Upper Tribunal made clear that the existence of planning permission for the use of the application land for housing was a material consideration under the contrary to public interest jurisdictional ground in section 84(1)(aa). It also said this, at para 102: The fact that planning permission has been granted does not mean that private rights can necessarily be overridden, but it does reflect an objective assessment of appropriate land use which fully takes into account the public interest. Sales LJ, in the Court of Appeal, thought that that was an incorrect statement because one also needed to take into account the cynical conduct of the defendant in assessing the public interest at the jurisdictional stage. I have made clear earlier that I do not agree with Sales LJs wide interpretation of the contrary to public interest jurisdictional ground and I need say no more about that here. But as regards Lord Sumptions wider comments on the relationship between an injunction and damages, with respect I cannot agree with the Court of Appeal that the Upper Tribunal made an error of law by applying that approach by analogy. This is not because I disagree with what Sales LJ said, in characteristically powerfully reasoned paragraphs (paras 51 54), about Lord Sumptions wider views not being endorsed by the other Supreme Court justices and the important difference in context between remedies for the tort of private nuisance and an application under section 84 (although I would be inclined to accept that, at a high level of generality, useful parallels can be drawn). Rather the important point, as submitted by Mr Hutchings, is that the Upper Tribunal clearly did not take into account the wider comments of Lord Sumption. At para 107, the Upper Tribunal said that it was mindful of the traditional approach, and in particular the dictum of Douglas Frank QC in In re Collins Application (1975) 30 P & CR 527, 531, that for an application to succeed under the contrary to public interest jurisdictional ground it had to be shown that that interest is so important and immediate as to justify the serious interference with private rights and the sanctity of contract. It then said this: Whether that restrictive gloss remains the correct approach may require reconsideration in light of Carnwath LJs explanation of the policy underlying ground (aa) in Shephard v Turner and Lord Sumptions observations on the reconciliation of public and private rights in Lawrence v Fen Tigers Ltd, but it is not necessary to pursue that thought further at this time. We are satisfied that the public interest in play in this case is sufficiently important and immediate to justify the exercise of the Tribunals power under section 84(aa) to override the objectors private rights. (Emphasis added) The emphasised words make clear that the Upper Tribunal was not here applying Lord Sumptions wider comments. There is a subsidiary issue that it is convenient to deal with at this stage. The Court of Appeal thought that the Upper Tribunal had failed to apply section 84(1B) correctly because the planning permission granted did not support the Upper Tribunals view of the public interest. Section 84(1B) has been set out at paras 31 and 46 above. Putting to one side the Court of Appeals view on the relevance of Millgates conduct, which I have already dealt with, the point made by the Court of Appeal was this (at para 68): The development plan placed the application land in the Green Belt, thereby indicating that there was the usual strong presumption against its residential development as proposed by Millgate. The Upper Tribunal did not identify any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant area, let alone one which supported Millgates arguments regarding the public interest. While the Court of Appeal was correct that the Upper Tribunal did not appear to take into account, as subsection (1B) required it to do, any pattern of planning permissions, the Upper Tribunal did expressly refer to the words in subsection (1B); and, in its description of the facts, it made clear that the planning permission had here been granted, despite the application land being contrary to the development plan and in the Green Belt, because the local authority had decided that there were special circumstances which justified the grant of permission. Moreover, the Upper Tribunal set out (at para 25 of its description of the facts) what those circumstances were said to be (see para 16 above). In my view, while the Upper Tribunal should have taken into account any pattern of planning permissions, that was not a serious error of law given the planning permission that had actually been granted in this case; and it was certainly not a sufficient error to justify overturning the decision of the Upper Tribunal. (2) Ignoring (including in the exercise of the Upper Tribunals discretion) Millgates ability to satisfy its planning obligation by making alternative provision of equivalent affordable housing elsewhere This was the third and successful ground of appeal to the Court of Appeal. The Upper Tribunal had observed, at para 53, that the effect of the variation of Millgates section 106 planning obligation by the agreement of 9 February 2016 was that Millgate could secure release from its obligation to the Council to provide the outstanding 13 units of affordable housing on the application land by payment of 1,639,904, thus allowing [the Council] to provide equivalent affordable housing elsewhere. But although the Upper Tribunal considered the provision of affordable housing as important in deciding on the public interest, at both the jurisdictional and discretionary stages, the Court of Appeal took the view that this precise point was left out of account at both stages and that that constituted an error of law at both stages. I agree with the submission of Mr Hutchings that the Upper Tribunal at para 106 expressly did take account of this precise alternative but regarded it as outweighed by the waste of not using the affordable housing already built, and immediately available, on the application land. 106. It is no answer to the current wasteful state of affairs to say, as Ms Windsor did, that Millgate could now buy its way out of the problem by making a payment towards the provision of social housing elsewhere. Whether those would have been sufficient answers to Millgates case on public interest if we had been dealing with an application before any housing had been built on the site is not a question which arises. The question for the Tribunal is whether in impeding the occupation of the houses which now stand on the application land, and which are otherwise immediately available to meet a pressing social need, the covenants operate in a way which is contrary to the public interest. We are satisfied that they clearly do because it is not in the public interest for these houses to remain empty and the covenants are the only obstacle to them being used. (Emphasis added) This was an analysis at the jurisdictional stage but there is no reason to think that this point was then left out of account at the discretionary stage where the Upper Tribunal, at para 120, referred back to it being in the public interest not to waste resources by these houses remaining empty. Upper Tribunal as having made an error of law on this point. 7. Conclusions and re making the decision For the reasons I have given: In my view, therefore, the Court of Appeal was wrong to have regarded the (i) The Court of Appeal was correct to overturn the decision of the Upper Tribunal for its failure properly to take account of Millgates cynical breach in the exercise of its discretion (ground four of the grounds of appeal). But my reasoning in relation to that ground differs from the reasoning of the Court of Appeal: I have held that the Upper Tribunal erred in law by failing to take into account, as it should have done, the two relevant factors, concerned with the effect of Millgates cynical conduct, that I have termed the two omitted factors (see paras 58 59 above). (ii) The Court of Appeal was incorrect, as a matter of law, in overturning the Upper Tribunal on the other three grounds of appeal. That is, applying Lawrence v Fen Tigers Ltd by analogy (ground one); ignoring, at the jurisdictional stage, Millgates cynical breach while regarding as highly relevant the fact that, by the time of the application, 13 housing units had been built (ground two); and ignoring (including in the exercise of the Upper Tribunals discretion) Millgates ability to satisfy its planning obligation by making alternative provision of equivalent affordable housing elsewhere (ground three). (iii) Overall, because of my conclusion on (i), the appeal should be dismissed. Given the above conclusions, a further question arises. Should this matter be remitted back to the Upper Tribunal to exercise its discretion afresh in the light of this judgment or should this court exercise its power to re make the decision? The power to re make the decision is conferred by section 14(2)(b)(ii) and (4) of the Tribunals, Courts and Enforcement Act 2007. By this: (1) Subsection (2) applies if the relevant appellate court finds that the making of the decision concerned involved the making of an error on a point of law. (2) The relevant appellate court (a) may (but need not) set aside the decision of the Upper Tribunal, and (b) if it does, must either (i) (ii) remit the case to the Upper Tribunal , or re make the decision. In acting under subsection (2)(b)(ii), the relevant (4) appellate court (a) may make any decision which the Upper Tribunal could make if the Upper Tribunal were re making the decision and (b) may make such findings of fact as it considers appropriate. The Court of Appeal exercised its power to re make the decision by refusing the application. However, that was in the context of the Court of Appeal having decided that, on three separate grounds, the Upper Tribunal had not had jurisdiction to allow Millgates section 84 application. My reasoning has been that the Upper Tribunal has made no errors of law going to jurisdiction but did err in law by failing to take two relevant factors (the two omitted factors) into account in exercising its discretion. Nevertheless, I am satisfied that this Court should now re make the decision. I am especially influenced by the fact that the application under section 84 was issued by Millgate over five years ago (on 20 July 2015). Given the length of time that has elapsed and the corresponding uncertainty for the parties involved and for many others, including residents and potential residents of the 13 housing units and the patients and those working at the hospice I would regard it as a last resort to send the case back to the Upper Tribunal. Although I have in the forefront of my mind that this court is not a specialist tribunal, had the Upper Tribunal properly taken into account the two omitted factors in exercising its discretion, it would surely have concluded that the application to discharge or modify the restrictive covenants should be refused in this exceptional case. Moreover, that is the decision which, in my view, taking all relevant considerations into account and especially bearing in mind the cynical conduct of Millgate and the two omitted factors, is the correct decision. Therefore, exercising the discretion afresh, the decision of the Upper Tribunal is set aside and re made by refusing the application. I should add, finally, lest there be any confusion about this, that nothing that I have here said is determinative of how the courts will decide any claim by the Trust for a prohibitory injunction to enforce the restrictive covenant by stopping the 13 housing units being occupied or for a mandatory restorative injunction ordering the removal of the units in part or whole. Mr Jourdan pointed to the range of monetary remedies, going beyond conventional compensatory damages, that a refusal of the section 84 application would leave the Trust free to pursue. Not least given the cynical breach of the restrictive covenant and the difficulty of accurately assessing the Trusts loss, he suggested that these might include an account of profits (see Attorney General v Blake [2001] 1 AC 268) as well as negotiating damages (see Morris Garner v One Step (Support) Ltd [2018] UKSC 20; [2019] AC 649). I make no comment on that suggestion. But it is only realistic to recognise that the impact of this decision will plainly be to strengthen the Trusts hands in relation to any financial settlement of this dispute.

UK-Abs

This case raises a fundamental dilemma over the use of land. On the one side, there is a property company which seeks to ensure that 13 new affordable houses do not go to waste. On the other, there is a charitable childrens trust which seeks to ensure that terminally ill children in a hospice can enjoy, in privacy, the use of the hospice grounds without being overlooked, or otherwise detrimentally affected, by the new houses. The legal issues concern restrictive covenants over land and the procedure, under section 84 of the Law of Property Act 1925 (the 1925 Act), by which an application may be made to a tribunal for the discharge of a restrictive covenant. It is the first time that the highest court (whether the House of Lords or the Supreme Court) has been required to decide an appeal on section 84. In July 1972 a farmer sold part of his land (the application land) to a company (SSPC) that already owned the land next door (the unencumbered land). The application land and the unencumbered land together form a rectangular plot (the Exchange House site). As part of the sale, SSPC covenanted that at all times thereafter: (i) no building structure would be built on the application land; and (ii) the application land would only be used for car parking (the restrictive covenants). The farmers son, Mr Barty Smith, later inherited the land adjacent to the Exchange House site. In 2012 he made a gift of part of this land (the hospice land) to the Alexander Devine Childrens Cancer Trust (the Trust) for the construction of a childrens hospice. Soon afterwards, and with knowledge of the restrictive covenants, Millgate Developments Ltd (Millgate) acquired the Exchange House site. In July 2013 Millgate applied for planning permission to build 23 affordable houses on the site, in line with its affordable housing planning obligations. Thirteen of these houses were to be built on the application land, in breach of the restrictive covenants. Some of them would overlook the hospices planned gardens and wheelchair walk. Planning permission was granted in March 2014 and Millgate began construction in July 2014. In September 2014 Mr Barty Smith wrote to Millgate objecting to them building on the application land. Millgate continued regardless and in May 2015 agreed to sell the development at the Exchange House site to Housing Solutions Ltd (Housing Solutions). In July 2015, after completing the development, Millgate applied to the Upper Tribunal (the UT) seeking modification of the restrictive covenants, pursuant to section 84 of the 1925 Act. Mr Barty Smith and the Trust objected to this application. Shortly afterwards, in September 2015, construction of the hospice began. On 18 November 2016 the UT allowed Millgates application to modify the restrictive covenants, on the condition that it paid 150,000 to the Trust as compensation. On 28 November 2018 the Court of Appeal overturned the UTs decision. Housing Solutions now appeals to the Supreme Court. The Supreme Court unanimously dismisses the appeal, though for different reasons to those given by the Court of Appeal. Lord Burrows writes the judgment. The application to modify the restrictive covenants is refused. Section 84 of the 1925 Act, as amended, confers upon the UT the power to discharge or modify restrictive covenants on five grounds. The exercise of this power has two stages. At least one of the grounds must be satisfied (the jurisdictional stage) before the UT can then decide whether to exercise its discretion to discharge or modify the restrictive covenants (the discretionary stage). The ground relevant to this appeal is whether the restrictive covenants, by impeding a reasonable user of land, are contrary to the public interest: sections 84(1)(aa) and 84(1A)(b) [31 33]. The first issue is whether Millgates deliberate and cynical breach of the restrictive covenants is relevant at the jurisdictional stage [41]. The Court of Appeal found that it was [47]. The Supreme Court finds that it is not. The contrary to the public interest ground requires a narrow interpretation. Its focus is on the impeding of a reasonable user of the land and whether that impediment, by continuation of the restrictive covenant, is contrary to the public interest. The question is not the wider one of whether in all the circumstances it would be contrary to the public interest to maintain the restrictive covenant [42]. This narrow interpretation requires weighing the public interest in 13 affordable housing units not going to waste against the public interest in the hospice providing a sanctuary for children dying of cancer. [43]. The good or bad conduct of the applicant is irrelevant at the jurisdictional stage. It tells us nothing about the merits of what the land in question is being or will be used for [44]. This narrow interpretation is also in line with the other four grounds under section 84, accords with the purpose of section 84, and reflects the fact that the applicants conduct can still be considered at the discretionary stage [45]. The second issue is whether the UT failed properly to consider, at the discretionary stage, Millgates cynical conduct. The Court of Appeal found that it did [54]. The Supreme Court agrees, but for different reasons [53]. It is only appropriate for an appellate court to interfere in a discretionary decision of a specialist tribunal if that tribunal has made an error of law [51]. In this case, however, even though the UT took into account Millgates conduct, it did make an error of law [53]. The UT failed to consider two relevant factors at the discretionary stage: (i) Millgate could have built on the unencumbered land, not the application land; and (ii) Millgate would have been unlikely to satisfy the contrary to the public interest ground had it applied to modify the restrictive covenants prior to building on the application land. Millgate could not be rewarded for presenting the UT with a fait accompli [57 62]. This is sufficient to dismiss the appeal. But, having heard full submissions on two further issues, the Court considers them briefly [63]. First, the UT did not rely on Lord Sumptions comments in Coventry v Lawrence [2014] UKSC 13 and so any dispute about whether or not it had been correct to do so does not arise [64 66]. Second, the UT correctly considered at both stages the fact that Millgate had built on the application land in order to fulfil its affordable housing planning obligations [70 73]. The Court therefore upholds the Court of Appeals decision, but for different reasons [74]. The UTs decision is re made and the application to modify the restrictive covenants refused [77].

This appeal raises the issue as to whether a third country (ie non member state) national (TCN) otherwise benefiting from the derivative right to reside within the territory of the European Union pursuant to the principle in Ruiz Zambrano v Office national de l'emploi (Case C 34/09) EU:C:2011:124; [2012] QB 265 (Zambrano) enjoys enhanced protection against deportation, such that she can be deported in exceptional circumstances only. In Zambrano, the Court of Justice of the European Union (the CJEU) held that a TCN parent of a Union citizen child resident in Union territory who was dependent on the TCN parent, was entitled to a right of residence if expulsion of the TCN parent would require the child to leave the territory of the Union, thereby depriving the child of the genuine enjoyment of the substance of the childs Union citizenship rights. The principle extends to dependants who are not children, and applies even though the Union citizen has not exercised their right of free movement. The right of residence of the TCN is a derivative right, that is, one derived from the dependent Union citizen. It flows from article 20 of the Treaty on the Functioning of the European Union (article 20FEU) and was expressed in unqualified terms in Zambrano so as to be thought to prevent expulsion of the TCN parent in all circumstances. The Upper Tribunal (the UT) in its decision promulgated on 23 August 2013 proceeded on the basis that the Zambrano right of residence was unqualified, so that there was an absolute prohibition preventing deportation of the TCN parent without any consideration of proportionality even if that parent had committed serious crimes. The Secretary of State for the Home Department (the Secretary of State) appealed to the Court of Appeal against the determination of the UT which appeal was stayed to await the judgments of the CJEU in S v Secretary of State for the Home Department (Case C 304/14) EU:C:2016:674; [2017] QB 558 (CS) and Rendn Marn v Administracin del Estado (Case C 165/14) EU:C:2016:675; [2017] QB 495 (Marn). These judgments were delivered on 13 September 2016. By its judgments in CS and Marn the CJEU held that there was a limitation on the Zambrano derivative right of residence so that the right was not absolute. In CS at para 36 it stated that article 20FEU does not affect the possibility of member states relying on an exception linked, in particular, to upholding the requirements of public policy and safeguarding public security. In the same judgment at para 50 it stated However, in exceptional circumstances a member state may adopt an expulsion measure provided that it is founded on the personal conduct of that third country national, which must constitute a genuine, present and sufficiently serious threat adversely affecting one of the fundamental interests of the society of that member state, and that it is based on consideration of the various interests involved, matters which are for the national court to determine (emphasis added). Following the delivery of the judgments in CS and Marn the issues on appeal narrowed. The appellant accepted that the UT had erred in law in that it had wrongly concluded that protection against removal was absolute and there was no need to consider proportionality if it concluded that the deportation of a TCN parent would require a child who was a Union citizen to depart from the territory of the Union with the person being deported. On behalf of the Secretary of State it was submitted and the Court of Appeal [2018] EWCA Civ 85; [2018] WLR 81 held at para 67, that exceptional circumstances in para 50 of CS simply means that it is an exception to the general rule which general rule was that a person who enjoys the fundamental rights of an EU citizen cannot be compelled to leave the EU. The Court of Appeal added that It does not mean that, where the criteria set out in the proviso are satisfied, there is an additional hurdle that there must also be exceptional circumstances. The Court of Appeal remitted the case to the UT in order to carry out the proportionality exercise required by the decisions of the CJEU in CS and Marn. The appellant applied for permission to appeal to the Supreme Court on three grounds: a. Ground one: Whether the Court of Appeal was wrong to conclude that there was no need for exceptional circumstances to be established before a person relying on Zambrano could be deported. b. Ground two: Whether there was a sufficient evidential basis for finding that the deportation of the appellant was potentially lawful. c. Ground three: Whether the Court of Appeal erred by remitting rather than determining proportionality directly. On 4 July 2019 permission to appeal was granted on ground one only (whether exceptional circumstances need to be established before a Zambrano carer could be deported). That is the only question to be determined in this appeal. After the Court of Appeal delivered its judgment on 2 February 2018 the CJEU on 8 May 2018 delivered judgment in KA v Belgische Staat (Case C 82/16) EU:C:2018:308; [2018] 3 CMLR 28 (KA) which again addressed the test that should be applied as an exception to the Zambrano principle. This means that there are now three CJEU decisions addressing the sole issue in this appeal. It is a feature of this appeal that the decisions in Zambrano, Marn, CS and KA were all decisions of the CJEU (Grand Chamber). In this judgment I will refer to these decisions as the decisions of the CJEU to avoid repeating Grand Chamber on each occasion. II Factual background The appellant is a national of Jamaica who was born on 13 March 1975. She is now aged 45. Initially she entered the United Kingdom as a visitor on 2 August 2002 and was granted leave to enter until 23 August 2002. Further extensions were made permitting her to remain as a student until 28 February 2004. On 11 November 2003 the appellant married Marlon MacPherson, a person present and settled in the United Kingdom. Following her marriage and on 24 February 2004, she applied for leave to remain as the spouse of a person present and settled in the United Kingdom. She was granted leave until 2 March 2006. On 28 February 2006 she applied for indefinite leave to remain which was granted on 22 March 2006. The appellant committed a serious criminal offence, of supplying a class A drug (cocaine). On 5 October 2006, at Wood Green Crown Court the appellant was convicted of this offence and was sentenced to a period of imprisonment of two years and six months. The appellants evidence to the First tier Tribunal was that she decided to sell drugs as she needed additional funds because her grandmother had fallen seriously ill in Jamaica with heart failure, arthritis, and high blood pressure. On 20 November 2007 a deportation order in respect of the appellant was signed by the Secretary of State. On 24 September 2008 the appellant was detained, pending removal but her removal was subsequently deferred as she was pregnant. On 29 December 2008, the appellant gave birth to a boy, whom I will call D, who is now almost 12 years old. His father is Mr MacPherson. D is a British national and a citizen of the Union. The appellants evidence is that D has lived in the United Kingdom with her throughout his life. There was a history of unsuccessful challenges to the deportation order culminating on 7 January 2009 with an unsuccessful judicial review application following which the appellant failed to co operate with the authorities between 2009 and 2012, being listed as an absconder on 6 May 2009. On 20 February 2012, the appellant submitted an application for leave to remain outside the Immigration Rules. This was treated by the Secretary of State as an application to revoke her deportation order. On 29 August 2012, the Secretary of State refused the application. It is that decision which gave rise to a further right of appeal to the First tier Tribunal and is the subject of these proceedings. III The judgments of the Tribunals and the Court of Appeal (a) The First tier Tribunal On appeal to the First tier Tribunal before Judge Mitchell the appellant contended that her deportation would violate rights under article 8 of the European Convention on Human Rights (ECHR). The judgment of the CJEU in Zambrano which had been delivered on 8 March 2011 was referred to in the determination of Judge Mitchell promulgated on 7 December 2012. However, the appeal before Judge Mitchell proceeded purely on the basis that deportation would violate the article 8 ECHR rights of the appellant, D and of Mr MacPherson. In summary the evidence before Judge Mitchell was that by 22 February 2012 the appellant and her husband were living separately but had prior to the hearing reconciled so that they were back together again. The appellant stated that her husband played an important role in Ds life and that the deportation order requiring the appellant to leave the United Kingdom would also require D to leave with her so as to separate the appellant and her son from her husband who would remain in the United Kingdom. Judge Mitchell carried out an article 8 ECHR proportionality exercise stating at para 74 that the appellant was convicted of extremely serious offences. She is a foreign criminal. The scourge of drugs on society has been held many times to be utterly reprehensible. The decision of the Secretary of State to deport a foreign criminal who has received such a significant sentence for drugs offences is proportionate even taking into account the circumstances of the appellants family and herself. The judge dismissed the appellants appeal finding that deportation would not violate article 8 ECHR. (b) The Upper Tribunal The appeal before the UT proceeded not only on the basis that deportation would violate article 8 ECHR but also on the basis of the appellants derived right of residence under the Zambrano principle. The UT (which comprised UT Judges Jordan and Pitt) allowed the appeal with the determination being given by UT Judge Jordan. He held that the effective care of D was in the hands of the appellant so it followed that the appellants removal would be the effective cause of Ds removal to Jamaica. At para 19 he stated that the rights of Union citizens arising from Ruiz Zambrano are not derived from rights arising under the Citizens [Parliament and Council Directive 2004/38/EC] or the Immigration (European Economic Area) Regulations 2006 (2006 No 1003) transposing them into domestic law. They are a principle of European Union citizenship law developed by the Court of Justice in [Luxembourg]. Importantly, they are not a principle of European human rights law operated on principles of proportionality. In other words, the court or tribunal is not deciding whether it [is] proportionate to remove the British child so that his best interests (as a primary consideration) are weighed against the public interest in favour of removing those who commit serious crimes. The prohibition against removal is absolute and prevents removal, notwithstanding the seriousness of the offence. (Emphasis added) On this basis the UT held that no question of proportionality arose as a matter of EU law and that the removal of the appellant was not permitted under the Zambrano principle. The UT then remade the decision and allowed the appeal against the Secretary of State. This meant that it was not necessary to consider proportionality, but for the sake of completeness the judge proceeded to do so in the context of article 8 ECHR. He stated at para 28 The appellant was sentenced to 30 months imprisonment. Whilst this is at the low end of sentences for supplying cocaine, this was nevertheless serious offending and the canker caused by the spread of drugs particularly those recognised as Class A creates a substantial public interest in removing those who are involved, if their removal is permissible. Ds best interests (those of a single individual) have to be weighed against the interests of society in its entirety. That interest includes, UT Judge Jordan held, following Wilson LJ in OH (Serbia) v Secretary of State for the Home Department [2008] EWCA Civ 694 the role of a deportation order as an expression of societys revulsion at serious crimes and in building public confidence in the treatment of foreign citizens who have committed serious crimes. On this basis UT Judge Jordan held that he was not persuaded that the appellants removal together with D would be disproportionate, notwithstanding that the best interests of D was a primary consideration. I would add as a footnote to the quotation from OH (Serbia) v Secretary of State for the Home Department that in Ali v Secretary of State for the Home Department [2016] UKSC 60; [2016] 1 WLR 4799, at para 70 Lord Wilson regretted his reference to societys revulsion at serious crimes as being too emotive a concept to figure in this analysis. However, he maintained the substance of the point made by stating that Laws serve society more effectively if they carry public support. He continued that Unless it lacks rational foundation (in which case the courts should not pander to it), the very fact of public concern about an area of the law, subjective though that is, can in my view add to a courts objective analysis of where the public interest lies: in this context it can strengthen the case for concluding that interference with a persons rights under article 8 by reason of his deportation is justified by a pressing social need. (c) The Court of Appeal The issues before the Court of Appeal (which comprised Underhill, Lindblom, Singh LJJ) had become narrower because of the CJEUs determination in CS and Marn that the prohibition against removal was not absolute so that it was conceded by the appellant that there were errors of law made by the UT. The Secretary of State submitted that the case should be remitted to the UT for redetermination, after considering any further evidence that might be necessary. The appellant submitted that the errors of law were not material as the decision of the UT would inevitably have been the same so that the appeal should be dismissed. The appellants submission raised the issue as to whether the test that should be applied in the light of the decisions of the CJEU in Marn and CS included a requirement of exceptional circumstances to justify the appellants deportation. At para 47 Singh LJ giving the judgment of the court, identified all the remaining issues before the Court of Appeal as being: (1) Should this court perform the proportionality exercise itself or should it remit the case to the UT? (2) What is the correct test that should be applied in the light of the decisions of the CJEU in Rendn Marn and (CS)? (3) What is the current status and effect of the decision in R v Bouchereau (Case C 30/77) EU:C:1977:172; [1978] QB 732? (4) What is the relevance, if any, of the Rehabilitation of Offenders Act 1974? Singh LJ having referred to In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 WLR 1911, rejected the appellants submission that the Court of Appeal should perform the proportionality exercise itself. At paras 50 52 Singh LJ identified three difficulties with the appellants submission, none of which could be subject to any sensible challenge particularly given that at no previous stage had the threat which the appellant posed to the United Kingdoms public policy or public security been considered in accordance with the proportionality test set out by the CJEU in Marn and CS. It is sufficient to refer solely to the third difficulty which Singh LJ identified. At para 52 he stated This leads me to my third point. It is that the question of proportionality should be addressed in the present case only after full consideration has been given to the issues of fact and, in particular, up to date information should be placed before the UT. One reason for this in the present case is that it concerns the potential impact of deportation on a young child, D. Since the best interests of a child must always be a primary consideration for the court, it is important that the UT should have available to it the most up to date information about the likely impact of Ds mothers deportation on him. Singh LJ held that the case should be remitted to the UT for redetermination, but proceeded to address the remaining issues to provide guidance to the UT as to how it should approach the case on remittal. In relation to the correct test which should be applied in the light of the decisions of the CJEU in Marn and CS Singh LJ conducted a careful and comprehensive analysis of both of those judgments together with the joint opinion of the Advocate General (M Szpunar) in CS and Marn (p 500). The Advocate General made the following recommendation to the CJEU in the case of CS (at point 177 of his opinion): , I propose that the courts answer should be that it is, in principle, contrary to article 20FEU for a member state to expel from its territory to a non member state a third country national who is the parent of a child who is a national of that member state and of whom the parent has sole care and custody, when to do so would deprive the child who is a citizen of the Union of genuine enjoyment of a substance of his or her rights as a in exceptional citizen of circumstances, a member state may adopt such a measure, provided that it: observes the principle of proportionality and is based on the personal conduct of the foreign national, which must constitute a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society, and is based on an imperative reason relating to public security. (Emphasis added) the Union. Nevertheless, As is apparent from the words to which I have added emphasis, the Advocate Generals recommendation included the phrase exceptional circumstances and a requirement of an imperative reason confined solely to public security so as to exclude an imperative reason relating to public policy. Relying on that recommendation and the CJEUs reference to exceptional circumstances in para 50 of its judgment in CS, Mr Southey QC on behalf of the appellant sought to establish an enhanced level of protection for carers by restricting the exception to the Zambrano principle. Singh LJs conclusions at paras 66 67 were as follows: 66. Mr Blundell [on behalf of the Secretary of State] invites this court to attach significance to the fact that the last phrase in that passage (and is based on an imperative reason relating to public security) did not find its way into the judgments of the CJEU. He submits that the CJEU did not adopt that part of the recommendation made by the Advocate General. He also points out that the language used by the Advocate General is the language of (Directive 2004/38/EC), in particular article 28(3). He submits that it imposes a higher test than the test that was eventually adopted by the CJEU in the context of articles 20 21FEU. I agree with those submissions by Mr Blundell. 67. Mr Southey emphasises the use of the phrase exceptional circumstances in the opinion of the Advocate General, at para 177, and in the judgment of the CJEU in (CS), at para 50. I do not attach the significance to that phrase which Mr Southey submits it has. In my view, it does not import an additional requirement which the state must satisfy on top of what follows; rather the phrase is a helpful summary of what follows (provided . ). In other words exceptional circumstances simply means that it is an exception to the general rule, which is that a person who enjoys the fundamental rights of an EU citizen cannot be compelled to leave the EU. It does not mean that, where the criteria set out in the proviso are satisfied, there is an additional hurdle that there must also be exceptional circumstances. Accordingly, the Court of Appeal held that the correct test that should be applied did not require exceptional circumstances to be established before someone in the appellants position could be deported. Rather the reference to exceptional circumstances in the relevant case law of the CJEU was merely a reference to the fact that deportation of someone in the appellants position is a departure from the general rule that a person who enjoys the fundamental rights of an EU citizen cannot be compelled to leave the territory of the EU. Singh LJ then addressed at paras 68 86 the current status and effect of the decision of the European Court of Justice in R v Bouchereau. That decision envisages that past conduct alone which has caused public revulsion and is therefore a threat to the requirements of public policy may be sufficient to justify deportation without there necessarily being any clear propensity on behalf of the individual to act in the same way in the future. Singh LJ concluded that, subject to various limitations this remained good law. That conclusion has not been appealed to this court. In relation to the final issue as to the relevance of the Rehabilitation of Offenders Act 1974 Mr Southey conceded, and for the reasons set out at paras 87 90 Singh LJ held, that the Act had no direct application in the present context. The outcome in the Court of Appeal was that the Secretary of States appeal was allowed and the case was remitted to the UT for redetermination on the merits. IV The impact on this appeal of the United Kingdoms withdrawal from the EU Section 2(1) of the European Communities Act 1972 (the 1972 Act) provides: All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression enforceable EU right and similar expressions shall be read as referring to one to which this subsection applies. Section 1 of the European Union (Withdrawal) Act 2018 (the 2018 Act) repealed the 1972 Act on exit day which is defined by section 20 as 11pm on 31 January 2020. However, exit day is followed by an implementation period (IP) which ends on the IP completion day defined in section 39 of the European Union (Withdrawal Agreement) Act 2020 (the 2020 Act) as 31 December 2020 at 11pm. During this period the 1972 Act continues to have effect pursuant to section 1A of the 2018 Act, as amended by the 2020 Act. The Charter of Fundamental Rights of the European Union (the Charter) also continues to have effect during this period: see Part Four of the Agreement on the Withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community (OJ 2019, C384 l, p 1) and section 1A(3) of the 2018 Act. As to the position after IP completion day the current position is that the Immigration (European Economic Area) Regulation 2016, and relevant provisions of the FEU Treaty to the extent that they are not implemented in domestic law, would continue to have effect as retained EU law pursuant to sections 2 and 4 of the 2018 Act. However, this is subject to the Immigration and Social Security Co ordination (EU Withdrawal) Act 2020 as well as secondary legislation made under it. This Act provides for repeal of the main retained EU law relating to free movement. The present position is that the United Kingdoms withdrawal from the EU has no impact on this appeal but the legal principles to be applied may change after 31 December 2020 at 11pm. V Legal landscape (a) Union citizenship and the right to move and reside freely Article 20(1)FEU establishes Union citizenship and provides that Every person holding the nationality of a member state is a citizen of the Union. Under article 20(2)(a)FEU, citizens of the Union have the right to move and reside freely within the territory of the member states. Article 21(1)FEU also provides that Every citizen of the Union shall have the right to move and reside freely within the territory of the member states. This right is not absolute but is subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect. The significance of citizenship of the Union is apparent from Zambrano at para 41 and KA at para 47 in that citizenship of the European Union is intended to be the fundamental status of nationals of the member states. The CJEU confirmed at para 48 of KA that Union citizenship conferred a primary and individual right to move and reside freely within the territory of the member states but continued that this was not absolute as it was subject to the limitations and restrictions laid down by the Treaty and the measures adopted for their implementation. (b) Parliament and Council Directive 2004/38/EC On 29 April 2004 the Parliament and Council of the European Union adopted Parliament and Council Directive 2004/38/EC of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of member states (OJ 2004 L158, p 77) (the Directive). The Directive lays down the conditions surrounding the exercise of the right of free movement and residence within EU territory, the right of permanent residence and the limits placed on those rights. Under the rubric of Beneficiaries article 3(1) provides that the Directive applies to all Union citizens who move to or reside in a member state (the host member state) other than that of which they are a national and to their family members who accompany or join them. Accordingly, the Directive does not apply in this case as the only Union citizen is D and he has not moved to or resided in a member state other than that of which he is a national, see Zambrano at para 39, CS at para 22 and Marn at para 40. In so far as D is not covered by the concept of beneficiary for the purposes of article 3(1) of the Directive, a member of his family is not covered by that concept either, given that the rights conferred by that Directive on the family members of a beneficiary of the Directive are not autonomous rights of those family members, but derived rights, acquired through their status as members of the beneficiarys family: see McCarthy v Secretary of State for the Home Department (Case C 434/09) EU:C:2011:277; [2011] ECR I 3375; [2011] All ER (EC) 729, para 42. However, both articles 27 and 28 of the Directive are relevant as the CJEU has used some but not all of the language in those articles in relation to the limitation on the Zambrano derived right of residence under article 20FEU. Articles 27 and 28 are in Chapter VI of the Directive under the rubric Restrictions on the right of entry and the right of residence on grounds of public policy, public security or public health. Article 27 of the Directive under the rubric General principles and in so far as relevant provides: 1. Subject to the provisions of this Chapter, member states may restrict the freedom of movement and residence of Union citizens and their family members, irrespective of nationality, on grounds of public policy, public security or public health. These grounds shall not be invoked to serve economic ends. 2. Measures taken on grounds of public policy or public security shall comply with the principle of proportionality and shall be based exclusively on the personal conduct of the individual concerned. Previous criminal convictions shall not in themselves constitute grounds for taking such measures. The personal conduct of the individual concerned must represent a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society. Justifications that are isolated from the particulars of the case or that rely on considerations of general prevention shall not be accepted. (Emphasis added) The CJEU has incorporated into the limitation on the Zambrano derived right of residence many parts of article 27, including those parts to which I have added emphasis. In relation to the grounds of public policy and public security see Marn at para 81, CS at para 36 and KA at para 90. In relation to the requirement to comply with the principle of proportionality see Marn at para 85, CS at para 41 and KA at paras 93 and 97. In relation to the requirement that the conduct must represent a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society see Marn at para 84, CS at para 40 and KA at para 92. Article 28(1) of the Directive under the rubric Protection against expulsion provides Before taking an expulsion decision on grounds of public policy or public security, the host member state shall take account of considerations such as how long the individual concerned has resided on its territory, his/her age, state of health, family and economic situation, social and cultural integration into the host member state and the extent of his/her links with the country of origin. Again, the CJEU has incorporated into the limitation on the Zambrano derived right of residence the language of article 28(1). In relation to the requirement to take into account considerations such as how long the individual concerned has resided on its territory, his/her age, state of health (etc) see Marn at para 86, CS at para 42 and KA at para 94. As expected given the context of both a crime committed by the TCN parent and the interests of children, the list of factors identified by the CJEU as in particular to be taken into account include factors not mentioned in article 28(1), such as the nature and gravity of the offence committed, the extent to which the person concerned is currently a danger to society, the age of the children at issue and their state of health, as well as their economic and family situation. The CJEU also referred to the legality of the residence of the TCN parent as a relevant factor, which is not specifically mentioned in article 28(1). Article 28(2) and (3) provides: 2. The host member state may not take an expulsion decision against Union citizens or their family members, irrespective of nationality, who have the right of permanent residence on its territory, except on serious grounds of public policy or public security. 3. An expulsion decision may not be taken against Union citizens, except if the decision is based on imperative grounds of public security, as defined by member states, if they: (a) have resided in the host member state for the previous ten years; or (b) are a minor, except if the expulsion is necessary for the best interests of the child, as provided for in the United Nations Convention on the Rights of the Child of 20 November 1989 [the UNCRC]. The CJEU has not incorporated into the limitation on the Zambrano derived right of residence the parts of article 28(2) and (3) to which I have added emphasis. However, in relation to the UNCRC the Zambrano derived right of residence is within the ambit of EU law so that article 24(2) of the Charter applies which provides that In all actions relating to children, whether taken by public authorities or private institutions, the childs best interests must be a primary consideration. Furthermore, article 7 of the Charter which provides for the right to respect for private and family life must be read in conjunction with the obligation to take into consideration the childs best interests, recognised in article 24(2) of the Charter, see Marn at paras 66 and 81. In considering article 28(3) it should be recalled that the Directive does not apply in this case. However even if the Directive did apply D is not the individual subject to the expulsion decision so that article 28(3) would not be engaged. It is correct that the effective result of the expulsion of Ds Zambrano carer is that D also is expelled. However, the consequences are different as between D and a minor expelled under article 28(3). D is entitled to return to the territory of the Union at any time whilst a minor expelled under article 28(3) is restricted to submitting an application under article 32 after a reasonable period, depending on the circumstances, and in any event after three years from enforcement of the final exclusion order by putting forward arguments to establish that there has been a material change in the circumstances which justified the decision ordering their exclusion. It is then for the member state concerned to reach a decision on this application. Furthermore, a minor expelled under article 28(3) has no right of entry to the territory of the member state concerned while their application under article 32 is being considered. (c) The Directive was implemented into domestic law by the Immigration (European Economic Area) Regulations 2006 (SI 2006/1003) (the 2006 Regulations). Those Regulations were amended on 16 July 2012 to give effect to a number of derivative rights of residence in EU law and to include an associated power of removal for persons enjoying such rights, where removal would be conducive to the public good. The 2006 Regulations were further amended on 8 November 2012 to make wider provision reflecting CJEU case law, as then embodied in the Zambrano decision, based, as it was, on article 20FEU and to apply the conducive to the public good removal provision to such persons. The 2006 Regulations have since been replaced by new Regulations made in 2016 (the 2016 Regulations). However, it was the 2006 Regulations that applied at the time of the impugned decision (see paragraph 5 of Schedule 6 to the 2016 Regulations). The 2006 Regulations must, to the extent possible, be interpreted to ensure conformity with article 20FEU. If, in its case law since the Zambrano decision, the CJEU has interpreted article 20FEU as requiring exceptional circumstances as an additional Implementation of the Directive into domestic law requirement, then national courts must strive to interpret the 2006 Regulations on that basis in accordance with the Marleasing principle, see Marleasing SA v La Comercial Internacional de Alimentacin SA (Case C 106/89) EU:C:1990:395; [1990] ECR I 4135; [1992] 1 CMLR 305, para 13 and Pfeiffer v Deutsches Rotes Kreuz Kreisverband Waldshut eV (Joined Cases C 397/01 and C 403/01) EU:C:2004:584; [2005] ICR 1307; [2004] ECR I 8835; [2005] 1 CMLR 44, para 115. So, the focus of this appeal returns to the decisions of the CJEU in order to determine what test is to be applied in order to accord with CJEUs case law. (d) The Zambrano right of residence The CJEUs ruling in Zambrano is the landmark decision. Mr Ruiz Zambrano and his wife, Mrs Moreno Lopez, were both nationals of Colombia. While they were living in Belgium Mrs Moreno Lopez gave birth to two children, who acquired Belgian nationality by operation of Belgian law. Accordingly, both children were also citizens of the EU and their parents were TCN parents. The two children did not at any stage exercise their right to move freely within the EU but remained in Belgium with their parents. Mr Zambrano applied for unemployment benefit. That application was rejected on the ground that, since he had never held a work permit in Belgium, he did not have the requisite qualifying period as required by national legislation governing the residence and employment of foreign workers. The Employment Tribunal in Belgium made a reference to the CJEU which held that article 20FEU is to be interpreted as precluding a member state from refusing a TCN on whom his minor children, who are European Union citizens, are dependent, a right of residence in the member state of residence and nationality of those children, and from refusing to grant a work permit to that TCN, in so far as such decisions deprive those children of the genuine enjoyment of the substance of the rights attaching to the status of European Union citizen. (e) The Zambrano right of residence is a derivative right As is apparent from para 50 of KA the Treaty provisions on citizenship do not confer any autonomous right on third country nationals. Any rights conferred on third country nationals are not autonomous rights of those nationals but rights derived from those enjoyed by a Union citizen. The purpose and justification of those derived rights are based on the fact that a refusal to allow them would be such as to interfere, in particular, with a Union citizens freedom of movement: see also CS at para 28. (f) The consideration of a Zambrano right of residence falls within the ambit of European Union law Consideration of whether there is a Zambrano derived right of residence falls within the ambit of EU law. Accordingly, account must be taken of the right to respect for private and family life, as laid down in article 7 of the Charter, an article which, must be read in conjunction with the obligation to take into consideration the childs best interests, recognised in article 24(2) of the Charter, see Marn at para 81. (g) The very specific situations giving rise to the Zambrano derived right of residence The very specific situations giving rise to this derived right of residence are set out in Zambrano at paras 43 and 44, in Chavez Vilchez v Raad van bestuur van de Sociale verzekeringsbank (Case C 133/15) EU:C:2017:354; [2018] QB 103; [2017] 3 CMLR 35 at para 63 and most recently in KA at paras 51 and 52 as follows: 51. , a right of residence must nevertheless be granted to a third country national who is a family member of that Union citizen, since the effectiveness of Union citizenship would otherwise be undermined, if, as a consequence of refusal of such a right, that citizen would be obliged in practice to leave the territory of the EU as a whole, thus depriving him of the genuine enjoyment of the substance of the rights conferred by that status 52. However, a refusal to grant a right of residence to a third country national is liable to undermine the effectiveness of Union citizenship only if there exists, between that third country national and the Union citizen who is a family member, a relationship of dependency of such a nature that it would lead to the Union citizen being compelled to accompany the third country national concerned and to leave the territory of the EU as a whole The requirement of being compelled to leave the territory of the EU as a whole as opposed to being compelled to leave the territory of the member state was specifically referred to in the decision of the CJEU in Dereci v Bundesministerium fr Inneres (Case C 256/11) EU:C:2011:734; [2011] ECR I 11315; [2012] All ER (EC) 373; [2012] 1 CMLR 45. The CJEU stated at para 66 of its judgment that the criterion refers to situations in which the Union citizen has, in fact to leave not only the territory of the member state of which he is a national but also the territory of the Union as a whole. (h) The first question to be addressed by the national court On this basis the first question to be addressed in determining whether there is a Zambrano derived right of residence is whether there is a relationship of dependency of such a nature that it would lead to the Union citizen being compelled to accompany the TCN concerned and to leave the territory of the Union as a whole. In determining that question the CJEU set out at para 71 of KA the factors to be taken into account. The CJEU stated: More particularly, in order to assess the risk that a particular child, who is a Union citizen, might be compelled to leave the territory of the EU and thereby be deprived of the genuine enjoyment of the substance of the rights conferred on him by article 20 TFEU if the childs third country national parent were to be refused a right of residence in the member state concerned, it is important to determine, in each case at issue in the main proceedings, which parent is the primary carer of the child and whether there is in fact a relationship of dependency between the child and the third country national parent. As part of that assessment, the competent authorities must take account of the right to respect for family life, as stated in article 7 of the Charter, that article requiring to be read in conjunction with the obligation to take into consideration the best interests of the child, recognised in article 24(2) of the Charter (Chavez Vilchez [2017] 3 CMLR 35, para 70). (i) The second question to be addressed by the national court In CS at para 40 the CJEU stated that an expulsion decision founded on the existence of a genuine, present and sufficiently serious threat to the requirements of public policy or of public security, in view of the criminal offences committed by a TCN who is the sole carer of children who are Union citizens, could be consistent with EU law. At para 46 it stated that the national court has the task of examining what, in the TCNs conduct or in the offence that she committed, constitutes a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society or of the host member state, which may justify, on the ground of protecting the requirements of public policy or public security, an order deporting her from the United Kingdom. Accordingly, the second question to be addressed is whether there is such a threat. It is clear from CS at para 41 and Marn at para 85 that the existence of such a threat cannot be drawn automatically on the basis solely of the criminal record of the person concerned. Furthermore, article 20FEU must be interpreted as precluding national legislation which requires a TCN parent of minor children who are Union citizens in his sole care to be automatically refused the grant of a residence permit on the sole ground that he has a criminal record, where that refusal has the consequence of requiring those children to leave the territory of the European Union. Rather it is incumbent upon the national court to assess (i) the extent to which the TCN parents criminal conducts is a danger to society and (ii) any consequences which such conduct might have for the requirements of public policy or public security of the member state concerned, see Marn at para 87 and CS at para 47. (j) The third question to be addressed by the national court If there is such a threat then the national court carries out an exercise balancing, on the one hand, the nature and degree of that threat which leads to the legitimate aim of safeguarding public order or public security. On the other hand, the national court has to take account of the fundamental rights whose observance the CJEU ensures, in particular the right to respect for private and family life, as laid down in article 7 of the Charter and to ensure that the principle of proportionality is observed. In a case involving children account is to be taken of the childs best interests when weighing up the interests involved. Particular attention must be paid to his age, his situation in the member state concerned and the extent to which he is dependent on the parent: see CS at paras 48 49. VI Whether exceptional circumstances need to be established before a Zambrano carer can be deported (a) The parties submissions On behalf of the appellant Mr Southey submitted that the use of the phrase exceptional circumstances demonstrates the weight to be attached to the interests of the Zambrano child when conducting a proportionality balancing exercise. He also submitted that the use of the phrase exceptional circumstances in CS at para 50 cannot merely connote a departure from the norm but rather that it implies that the interests of the Zambrano child must carry great weight that can only be outweighed by particularly compelling reasons. On behalf of the Secretary of State Mr Blundell relied on the CJEU decisions in CS, Marn and KA in order to submit that the imperative grounds test does not apply, and nor does any broader exceptional circumstances test. He submitted that on a proper textual analysis of the judgment in CS the single use of the phrase exceptional circumstances was to be read as an exception to the usual application of the Zambrano principle. (b) Rejection by the CJEU of imperative grounds of public security Advocate General M Szpunar in his opinion in CS proposed the adoption of enhanced protection based on imperative grounds relating to public security. At point 168 he stated that In the present case, given that the minor child who is a citizen of the Union might, as a consequence of the expulsion of his mother, temporarily have to leave the territory of the European Union altogether, it is appropriate, to my mind, that he should be accorded the enhanced protection implied by the term imperative grounds of public security. Accordingly, only imperative grounds of public security are capable of justifying the adoption of an expulsion order against (CS) if, as a consequence, her child would have to follow her. (Emphasis added) In this paragraph he did not propose the adoption of the phrase exceptional circumstances. At point 177 Advocate General M Szpunar proposed that the courts answer in CS should be that it is, in principle, contrary to article 20FEU for a member state to expel from its territory to a non member state a third country national who is the parent of a child who is a national of that member state and of whom the parent has sole care and custody, when to do so would deprive the child who is a citizen of the Union of genuine enjoyment of the substance of his or her rights as a citizen of the Union. He went on to define a proposed limitation on the derived right of residence in terms that used the phrases exceptional circumstances and based on an imperative reason relating to public security. He proposed that Nevertheless, in exceptional circumstances, a member state may adopt such a measure, provided that it: observes the principle of proportionality and is based on the personal conduct of the foreign national, which must constitute a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society, and is based on an imperative reason relating to public security. (Emphasis added) At para 36 of the judgment in CS the CJEU recognised an exception to the Zambrano principle linked, in particular, to upholding the requirements of public policy and safeguarding public security. That is entirely inconsistent with the test of imperative grounds in article 28(3) of the Directive which is only linked to public security. The rejection of the test of imperative grounds is also apparent from para 40 which requires the expulsion decision to be founded on the existence of a genuine, present and sufficiently serious threat. That is not a test of imperative grounds. Again, in that paragraph it is made clear that this is a threat to either the requirements of public policy or of public security. I consider that it is clear that the CJEU rejected the proposal of enhanced protection based on imperative grounds of public security. Two questions remain. The first is whether by using the phrase exceptional circumstances Advocate General M Szpunar was proposing that a Zambrano carer should enjoy enhanced protection against deportation, such that she can be deported in exceptional circumstances only. In view of his associated proposal that there should be an imperative reason relating to public security I am prepared to proceed, without deciding the point, on the basis that he was proposing an additional requirement of exceptional circumstances. On the basis of that assumed answer to the first question the second remaining question is whether the CJEU adopted Advocate General M Szpunars proposal of exceptional circumstances. (c) Textual analysis of the judgment in CS CJEU did not adopt the proposal in relation to exceptional circumstances. In CS the applicant, a TCN, married a British national and was granted indefinite leave to remain in the United Kingdom where she had a child for whom she was the sole carer. She was convicted of a criminal offence in the United Kingdom and sentenced to a term of imprisonment whilst her child was still very young. The Secretary of State rejected the applicants asylum application and ordered her deportation after she had been released from prison, in reliance on, inter alia, section 32(5) of the UK Borders Act 2007 under which deportation would always be ordered in respect of a TCN who was convicted of an offence of a certain gravity, unless that order breached the offenders rights under, inter alia, the European Union treaties. The applicants appeal was allowed by the First tier I consider that a textual analysis of the judgment in CS makes it clear that the Tribunal on the ground that her deportation would lead to, inter alia, a breach of her childs right as a Union citizen to move and reside within the European Union under article 20FEU in that, if the applicant were deported, her child would also have to leave the European Union. On the Secretary of States appeal, the UT referred to the CJEU for a preliminary ruling the question whether article 20FEU precluded the national legislation. The CJEU held that a decision to expel a TCN who was the sole carer of a Union citizen child on the ground of public policy or public security could not be made automatically on the sole basis of the criminal record of the person concerned. The CJEU went on to consider the basis upon which such an expulsion decision could be made. In paras 34 50 of the judgment and under the heading The possibility of limiting a derived right of residence flowing from article 20FEU the CJEU set out its analysis of the limitation on the Zambrano right of residence. At para 36 the CJEU stated as follows: It should be pointed out that article 20FEU does not affect the possibility of member states relying on an exception linked, in particular, to upholding the requirements of public policy and safeguarding public security. (Emphasis added) In other words, conduct which is potentially contrary to the interests of public policy and public security in most cases, the commission of a criminal offence was capable, in principle, of justifying an exception to the ordinary general rule (namely, that a Zambrano carer cannot be expelled where to do so would lead to the departure of the dependent EU citizen from the territory of the Union). As I have emphasised the CJEU specifically referred to reliance on an exception, rather than the existence of exceptional circumstances. At para 37 in relation to the exception the CJEU relying on its case law stated that the concepts of public policy and public security must be interpreted strictly. At para 38 the CJEU considered the exception as linked to upholding the requirements of public policy identifying that in addition to the disturbance of the social order which any infringement of the law involves there must exist a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society. At para 39 the CJEU analysed its case law in relation to the public security exception. At para 40 the CJEU set out the test as being whether the expulsion decision is founded on the existence of a genuine, present and sufficiently serious threat to the requirements of public policy or of public security. Then at paras 41 42 and 46 49, the CJEU set out in detail the particular factors which have to be considered when deciding whether that test was satisfied. I consider that para 50 provides a summary of what is contained in the preceding paragraphs so that the reference to exceptional circumstances can only sensibly be read in the context of what comes before. When seen against the background of the analysis beginning at para 34, it is clear that the CJEU did not add any additional criterion through the use of the words exceptional circumstances. On the contrary, and as the Court of Appeal correctly decided, it was simply explaining that, in the prescribed circumstances, an exception could be made to the general rule that a Zambrano carer could not be compelled to leave the territory of the Union. It was not stating that certain undefined exceptional circumstances had first to be demonstrated. (d) The judgments in Marn and KA In Marn under the same heading as used in CS (The possibility of limiting a derived right of residence flowing from article 20FEU) the CJEU at paras 81 88 carried out the same analysis as in CS as to the exception to the Zambrano derived right of residence, specifying the test to be applied and the factors to be taken into account. In that respect the analysis of the CJEU in Marn is identical to the analysis in CS. Furthermore, the test in para 84 of Marn is in the same terms as the test in para 40 of CS. In paras 85 and 86 in Marn the CJEU set out the matters to be taken into account. There is no reference in Marn to the phrase exceptional circumstances. The CJEU also took the same approach in KA, at paras 85 97. In that case, the Belgian authorities refused to consider applications for residence permits from the TCN parents of Belgian children on the grounds that the applicant was subject to an entry ban. Having dealt with the circumstances in which a Zambrano right could come into being at paras 63 76, the CJEU repeated at para 90 that article 20 TFEU did not affect the possibility of member states relying on an exception linked to upholding the requirements of public policy and safeguarding public security. The CJEU went on, at paras 90 97, to repeat the factors set out in CS and Marn which should be taken into account when that test is being applied. At para 92 it stated: , it must be held that, where the refusal of a right of residence is founded on the existence of a genuine, present and sufficiently serious threat to the requirements of public policy or public security, in view of, inter alia, criminal offences committed by a third country national, such a refusal is compatible with EU law even if its effect is that the Union citizen who is a family member of that third country national is compelled to leave the territory of the EU Again, this is a repetition of the test in para 84 of Marn and in para 40 of CS. Nowhere in its detailed analysis in KA does the CJEU state or even imply that there is an additional hurdle that there must also be exceptional circumstances. On three occasions, the CJEU has set out what must be taken into account when the deportation of a Zambrano carer is being considered. Not once has it stated that an imperative grounds test applies, nor has it stated that there is an additional hurdle that there must also be exceptional circumstances. I consider that it is inconceivable that the CJEU would have omitted to mention this on three occasions if such a test applied. VII Disposal of the appeal For my part I consider that the Court of Appeals clearly reasoned conclusion cannot be faulted and was plainly right. The phrase exceptional circumstances simply means that it is an exception to the general rule that a person who enjoys the fundamental rights of an EU citizen cannot be compelled to leave the territory of the EU. The phrase does not import an additional hurdle. I would dismiss the appeal and would, as a consequence maintain the order of the Court of Appeal remitting the case to the UT for redetermination on the merits.

UK-Abs

This appeal concerns the extent to which a non member state national, who is the parent of a dependent European Union (EU) citizen child, is protected against deportation from the territory of the EU pursuant to the principle in Ruiz Zambrano v Office national de l'emploi (Case C 34/09) [2012] QB 265 (the Zambrano principle, and a person protected pursuant to it a Zambrano carer). The issue is whether a Zambrano carer enjoys enhanced protection, such that she can only be deported in exceptional circumstances. Ms Robinson is a Jamaican national. She was convicted and imprisoned of a serious criminal offence in the UK of dealing in cocaine and subsequently made the subject of a deportation order. Prior to her removal, she gave birth to a boy, D who is a British national and an EU citizen. Ms Robinson thereafter applied for leave to remain. The Secretary of State refused that application. That is the decision which is the subject of these proceedings. On appeal to the Upper Tribunal, Ms Robinson argued that she had a right to reside in the EU derived under the Zambrano principle from Ds rights as an EU citizen. As she was Ds effective carer, her removal would require D to accompany her to Jamaica. D would thereby be deprived of the enjoyment of his rights as an EU citizen. The Upper Tribunal agreed. It held that her protection from deportation was absolute. The Secretary of State appealed to the Court of Appeal. Before the appeal was heard, the Court of Justice of the EU (the CJEU) delivered judgment in two cases which restricted the extent of the Zambrano principle. In S v Secretary of State for the Home Department (Case C 304/14) [2017] QB 558, (CS), it held that in exceptional circumstances a member state may adopt an expulsion measure provided that it is founded on the personal conduct of that third country national, which must constitute a genuine, present and sufficiently serious threat adversely affecting one of the fundamental interests of the society of that member state, and that it is based on consideration of the various interests involved, matters which are for the national court to determine (para 50). On that basis, the Court of Appeal allowed the appeal and remitted the case to the Upper Tribunal for redetermination. The Court of Appeal held that the phrase exceptional circumstances in CS was not an additional requirement which the state must satisfy, but merely summarised an exception to the general rule that D, an EU citizen, cannot be compelled to leave the territory of the EU. Ms Robinson appeals to the Supreme Court contending that the phrase created an additional hurdle to deportation. The Supreme Court unanimously dismisses the appeal and holds that the phrase exceptional circumstances does not import an additional hurdle before a Zambrano carer can be deported from the territory of the EU. The case is remitted to the Upper Tribunal for redetermination on that basis. Lord Stephens gives the judgment, with which all members of the Court agree. The Zambrano principle applies in very specific situations where, if a third country (ie non member state) national were not given a right to reside in the EU, a dependent EU citizen would be forced in practice to leave the territory of the EU. The EU citizen would then be deprived of the genuine enjoyment of the substance of the rights conferred by EU citizenship [42] [43]. The right of residence of a Zambrano carer therefore derives from the rights of the dependent EU citizen. It flows from article 20 of the Treaty on the Functioning of the EU [1], which establishes EU citizenship. The CJEU has recognised the significance of EU citizenship, while confirming that it is subject to limitations [31]. The United Kingdoms withdrawal from the EU has no impact on this appeal, but the legal principles to be applied may change after 31 December 2020 [30]. The case law of the CJEU shows that a national court must consider three questions. The first question is to determine whether a third country national has a right of residence under the Zambrano principle. If a right of residence is established, then the second and third questions address whether the third country national can still be deported. Accordingly, the first question is whether there is a relationship of dependency between the third country national and the EU citizen, such that the EU citizen would be forced to accompany the third country national and leave the territory of the EU as a whole [44]. The second question is whether the third country nationals conduct or offence constitutes a genuine, present and sufficiently serious threat affecting one of the fundamental interests of society of the host member state, which may justify, on the ground of protecting the requirements of public policy or public security, an order deporting them from the member state [45]. The third question arises if there is such a threat and requires the national court to carry out a balancing exercise. Against the nature and degree of the threat, it must balance the fundamental rights which the CJEU recognises as relevant in this context: in particular, the right to respect for private and family life in article 7 of the Charter of Fundamental Rights of the European Union. In a case involving children, account is to be taken of the childs best interests, and particular attention must be paid to their age, situation in the member state concerned, and the extent to which they are dependent on their parent. The national court must ensure that the principle of proportionality is observed [46]. The CJEU derived these limitations on the Zambrano principle from some of the language in articles 27 and 28 of Parliament and Council Directive 2004/38/EC (the Directive) [32] [37]. Ms Robinson argues that the CJEUs use of the phrase exceptional circumstances in CS demonstrates that the interests of a child of a Zambrano carer must carry great weight and can only be outweighed by particularly compelling circumstances. She relies on the Advocate Generals opinion in CS that deportation of a third country parent could only be justified in exceptional circumstances based on an on imperative reason relating to public security (CS, AG Opinion para 177) [47] [50]. The Supreme Court holds that the CJEU did not adopt the Advocate Generals proposed test. In CS, the CJEU recognised an exception to the Zambrano principle linked, in particular, to upholding the requirements of public policy and safeguarding public security (CS, para 36). That is inconsistent with an imperative grounds test [51], derived from article 28 of the Directive, which the CJEU did not incorporate into the exception to the Zambrano principle [36]. Viewed in context, the CJEUs reference to exceptional circumstances in CS simply explains that, in the prescribed circumstances, an exception can be made to the rule that a Zambrano carer cannot be compelled to leave EU territory [57]. The CJEU repeated this formulation of the test in Rendn Marn v Administracin del Estado (Case C 165/14) [2017] QB 495 [58] and in KA v Belgische Staat (Case C 82/16) [2018] 3 CMLR 28 [59]. Not once in any of these cases did the CJEU state that the imperative grounds test applies, or that there is an additional hurdle of exceptional circumstances before a Zambrano carer can be deported [60].

The object of damages in tort is to put the claimant, as far as possible, back in the position in which she would have been had the tort not been committed. Money has to compensate, as far as it can, for those injuries that cannot be cured. For some women, the ability to bear and to rear children is a vital part of their identity. What then should be the measure of damages for a woman who has been wrongfully deprived of the ability to bear children herself? Along with general damages for pain, suffering and loss of amenity, should it include the cost of making surrogacy arrangements with another woman to bear a child for her to bring up? In particular, should it include the cost of making commercial surrogacy arrangements abroad? The history The claimant was born in 1983 and so was aged 29 when the negligence in question was discovered. She had a cervical smear test in 2008 which was wrongly reported as negative when in fact it showed severe dyskariosis. She had another smear test in February 2012 which again was wrongly reported as inadequate when in fact it showed invasive carcinoma. She had a repeat smear test in September 2012 which again was wrongly reported as showing severe dyskariosis when in fact it showed features suggestive of invasive carcinoma. In September and October 2012 she underwent cervical biopsies and these too were wrongly reported as showing pre malignant changes when in fact they showed evidence of invasive carcinoma. The hospital admitted negligence in respect of the 2008 and February 2012 smear tests and both the biopsies. Had appropriate action been taken in 2008, there was a 95% chance of a complete cure, and she would not have developed cancer at all. The errors were detected in 2013 when her pathology was reviewed as a result of the symptoms she was suffering. In June 2013 she was told that she had cervical cancer and was referred to another hospital. That hospital assessed her condition as too far advanced for her to have the surgery which would have preserved her ability to bear a child. She was advised to have chemo radiotherapy which would result in her being unable to bear a child. This was confirmed by two further medical opinions. In June 2013, therefore, the claimant underwent a round of ovarian stimulation and egg collection as a result of which she has eight mature eggs frozen in storage. After that, she had surgery and chemo radiotherapy. As a result of this she suffered significant complications, long term disability and psychiatric injury, for which she has been awarded substantial damages. The damage to her womb was such that she could not bear children herself. The focus of this appeal is upon the damages payable for the loss of the ability to bear her own child. The claimant has always wanted a large family. Both her parents come from large families and they had one of their own. Her sister has ten children. Her partner also comes from a large family. They would like to have four children. The expert evidence is that it is probable that they can have two children using her eggs and his sperm. They would then like to have two further children using donor eggs and his sperm. The claimant would prefer to use commercial surrogacy arrangements in California. But if this is not funded, she will use non commercial arrangements in the United Kingdom. Liability was admitted and judgment entered in May 2016. Damages were assessed, after a hearing in June 2017, by Sir Robert Nelson in September 2017: [2017] EWHC 2318 (QB); [2018] PIQR Q2. Much of his judgment relates to matters other than the surrogacy claim. In relation to surrogacy he held that he was bound by the decision of the Court of Appeal in Briody v St Helens and Knowsley Area Health Authority [2001] EWCA Civ 1010; [2002] QB 856, first, to reject the claim for commercial surrogacy in California as contrary to public policy, and second, to hold that surrogacy using donor eggs was not restorative of the claimants fertility. Non commercial surrogacy using the claimants own eggs, however, could be considered restorative of the claimants fertility. Hence he awarded her the sum of 37,000 per pregnancy, a total of 74,000. The claimant appealed against the denial of her claim for commercial surrogacy and the use of donor eggs. The hospital cross appealed against the award for the two own egg surrogacies. The Court of Appeal (McCombe, King and Nicola Davies LJJ) dismissed the cross appeal and allowed the claimants appeal on both points: [2018] EWCA Civ 2832; [2019] 3 WLR 107. Public policy was not fixed in time and had now to be judged by the framework laid down by this court in Patel v Mirza [2016] UKSC 42; [2017] AC 467. Attitudes to commercial surrogacy had changed since Briody; perceptions of the family had also changed and using donor eggs could now be regarded as restorative. The hospital now appeals to this court. There are three issues: (1) Are damages to fund surrogacy arrangements using the claimants own eggs recoverable? If so, are damages to fund surrogacy arrangements using donor eggs (2) recoverable? (3) arrangements in a country where this is not unlawful recoverable? In either event, are damages to fund the cost of commercial surrogacy The UK law relating to surrogacy UK law on surrogacy is fragmented and in some ways obscure. In essence, the arrangement is completely unenforceable. The surrogate mother is always the childs legal parent unless and until a court order is made in favour of the commissioning parents. Making surrogacy arrangements on a commercial basis is banned. The details are more complicated. The starting point is that the woman who bears the child is always the childs legal mother when the child is born (Human Fertilisation and Embryology Act 1990, section 27; Human Fertilisation and Embryology Act 2008, section 33). This means that she has (in English law) parental responsibility or (in Scots law) parental responsibilities and rights. A person who has parental responsibility for a child may not surrender or transfer any part of that responsibility to another (Children Act 1989, section 2(9)). Even without the Surrogacy Arrangements Act 1985, this would mean that any contract between a surrogate mother and the commissioning parent or parents is unenforceable against her. But section 1A of that Act (as inserted by section 36(1) of the Human Fertilisation and Embryology Act 1990) goes further and expressly provides that no surrogacy arrangement is enforceable by or against any of the persons making it. If she refuses to surrender the child, the commissioning parent or parents will have to go to court seeking an order that the child is to live with them. The welfare of the child is the paramount consideration in deciding whether to make such an order. The agreement would be a relevant factor, but is by no means decisive. If the mother is not married or in a civil partnership, and the commissioning father has provided the sperm, then he will be the childs legal father. However, if the mother is married or in a civil partnership, her husband, wife or civil partner will automatically be the childs other legal parent, unless it is shown that he or she did not consent to the placing in her of sperm and eggs, or the embryo, or the artificial insemination which led to the pregnancy (1990 Act, section 28; 2008 Act sections 34, 35 and 42). This complicates any decision as to where the child should live with the gestational mother (who may also be the genetic mother) and her partner or with the commissioning parents one or both of whom will have a genetic relationship with the child but not a gestational one. It also makes it even more important that there be a mechanism for transferring legal parenthood from surrogate to commissioning family. That mechanism is to be found in the scheme for making parental orders, which has existed since 1994 but is now contained in sections 54 and 54A of the Human Fertilisation and Embryology Act 2008. Applications can be made jointly by a married couple, by civil partners or by two people who are living as partners in an enduring family relationship (but are not within the prohibited degrees of relationship, such as siblings) (section 54(2)). Applications can also now be made by a single person (following the insertion of section 54A(1) by the Human Fertilisation and Embryology Act 2008 (Remedial) Order 2018 (SI 2018/1413)), made after a declaration that their exclusion was incompatible with the right to respect for private and family life in article 8 of the European Convention on Human Rights (ECHR): In re Z (Surrogate Father: Parental Order) (No 2) [2016] EWHC 1191 (Fam); [2017] Fam 25. All applicants must be aged at least 18 when the order is made. The child must have been carried by another woman as a result of the placing in her of eggs and sperm, or an embryo, or her artificial insemination. The gametes of at least one of the applicants must have been used to create the embryo. This may have been done anywhere in the world, so the procedure is available after a foreign surrogacy and if the commissioning parents are the legal parents according to the law of the place where that took place. Without it, they would not be recognised as legal parents here. Applications cannot be made until after the child is born but must then be made within the period of six months beginning with the day on which the child was born (section 54(3); section 54A(2)). Nevertheless, in In re X (A Child) (Parental Order: Time Limit) [2014] EWHC 3135 (Fam); [2015] Fam 186, Sir James Munby, President of the Family Division held that the deadline could be relaxed and the courts now frequently make parental orders in respect of children who are much older (in A v C [2016] EWFC 42; [2017] 2 FLR 101, for example, as old as 12 and 13). The child must have his home with the applicants or sole applicant both at the time of making the application and at the time of making the order (section 54(4)(a), section 54A(3)(a)). This too was liberally interpreted in In re X, as not requiring the applicants to have a single family home, as long as the child had his home with both of them. This has been applied in many cases where the commissioning parents have separated either before the application or before it is granted. At least one of the applicants must be domiciled in the UK, Channel Islands or Isle of Man, both at the time of the application and at the time of the order (section 54(4)(b), section 54A(3)(b)). Residence here is neither necessary nor sufficient. The court must be satisfied that the woman who carried the child and anyone else who is a legal parent (not being an applicant) has freely and with full understanding of what is involved agreed unconditionally to the making of the order. The womans agreement is ineffective if given less than six weeks after the childs birth. The only exceptions to the agreement requirement are if the person cannot be found or is incapable of giving agreement. The surrogate mother may therefore refuse her consent even if she has handed over the child. Not only that, another legal parent may do so, even if the surrogate has agreed. In In re AB (Surrogacy: Consent) [2016] EWHC 2643 (Fam); [2017] 2 FLR 217, both the surrogate and her husband refused to agree to the order even though they had handed over the child to the commissioning parents. All the court could do was make a child arrangements order which gave them parental responsibility but left the child a member of the surrogates family. Theis J commented that an adoption order would be inappropriate as the parents would be asking to adopt their own children: a parental order recognises their genetic link to the child. She did, however, adjourn the parental order application generally in the hope of a change of mind or a change in the law, as the President had done in In re Z. The court must also be satisfied that no money or other benefit, other than for expenses reasonably incurred, has been given or received by any applicant for making the arrangements, handing over the child, giving agreement, or making the order, unless authorised by the court (section 54(8), section 54A(7)). This might be thought to discourage the making of parental orders following a foreign (or indeed any) commercial surrogacy. But what is the court to do when confronted with a fait accompli? It was soon held that payments other than reasonable expenses could be authorised retrospectively, after they had been made: In re Q (Parental Order) [1996] 1 FLR 369. In In re X and Y (Foreign Surrogacy) [2008] EWHC 3030 (Fam); [2009] Fam 71, which was the first case dealing with payments for a foreign commercial surrogacy, Hedley J asked himself whether the sums paid were disproportionate to reasonable expenses, whether the applicants were acting in good faith in their dealings with the surrogate, and whether they were party to any attempt to defraud the authorities. This set the tone. The Law Commissions are not aware of any case in which a parental order has been refused on the basis of payments which exceed reasonable expenses (Building families through surrogacy: a new law (2019) (LCCP 244, SLCDP 167), para 5.93). This is not surprising: the deed has been done, the child is here living with the commissioning parents, and his welfare will almost always require that he is not left legally parentless (and possibly also stateless). This has led one academic commentator to remark that: English law, as developed through the jurisprudence of the High Court in the 30 years since [the Warnock Report] does not view commercial surrogacy as an intrinsic wrong (Claire Fenton Glynn, Outsourcing Ethical Dilemmas: Regulating International Surrogacy Arrangements (2016) 24 Med LR 59, 67). Certain provisions in the Adoption and Children Act 2002 and its equivalent in Scotland are applied to parental order applications by Regulations (currently the Human Fertilisation and Embryology (Parental Orders) Regulations 2018 (SI 2018/1412), replacing those in 2010). These include the requirement that the court treat the welfare of the child as its paramount consideration: the court is required to have regard to the welfare of the child, not only during childhood, but throughout his life. As the Law Commissions comment, although laudable, this creates a tension: welfare considerations will almost always point towards making a parental order but this makes it difficult for the court to police even the requirements of sections 54 and 54A, let alone to enforce any public policy against commercial surrogacy arrangements which might be deduced from the Surrogacy Arrangements Act 1985. The Surrogacy Arrangements Act 1985 was passed as a result of the Report of the Committee of Inquiry into Human Fertilisation and Embryology chaired by Dame Mary Warnock (1984) (Cmnd 9314). The view of the majority was this (para 8.17): Even in compelling medical circumstances the danger of exploitation of one human being by another appears to the majority of us far to outweigh the potential benefits, in almost every case. That people should treat others as a means to their own ends, however desirable the consequences, must always be liable to moral objection. Hence they recommended that the criminal law should ban all agencies, whether profit or non profit making, recruiting surrogates and making surrogacy arrangements; and also ban all professionals from knowingly assisting in the establishment of a surrogate pregnancy; and that surrogacy agreements should be illegal contracts and unenforceable (paras 8.18, 8.19). The minority (Dr Wendy Greengross and Dr David Davies) took the view that the question of exploitation of the surrogate mother, or the treating of her as a means to other peoples ends, is not as clear cut a moral issue as our colleagues suggest (para 3). They agreed that there was no place for commercial surrogacy agencies, as with commercial adoption agencies; but they disagreed with preventing gynaecologists from helping couples to achieve a surrogate pregnancy; they thought that arrangements made by a regulated non profit making body should not be illegal; and that payments made to a surrogate mother should not be a barrier to adoption by the commissioning couple: most surrogate mothers would expect payment for their services (para 7). The resulting Act was a compromise. Professionals were not banned from taking part in surrogate pregnancies, but the activities of agencies, whether or not for profit, if on a commercial basis, and advertisements, were banned. Section 2 of the 1985 Act bans third parties (but not the surrogate or the commissioning parents) from initiating or taking part in negotiations, offering or agreeing to do so, and compiling information for use in making surrogacy arrangements on a commercial basis: this means for payment to the third party or anyone else except the surrogate mother (section 2(1), (2), (3)). However, amendments made by the 2008 Act permit non profit making bodies to initiate (but not actually take part in) negotiations with a view to making a surrogacy arrangement and to compile information for use in negotiating or making surrogacy arrangements in respect of which any reasonable payment is received by that body or another (section 2(2A), (2B)); payment to the body must not exceed the bodys reasonable costs in doing those things (section 2(2C)). Commercial surrogacy agencies are banned from receiving money from the surrogate or commissioning parents (section 2(5)) Taking part in the management and control of commercial surrogacy agencies is also banned (section 2(7), (8)). Once again, however, the 2008 Act introduced exceptions for non profit making bodies taking part in surrogacy arrangements in the UK (sections 2(5A), (8A), (8B)). Section 3 of the 1985 Act bans advertisements indicating that anyone might be willing to enter into or negotiate a surrogacy arrangement or that anyone is looking for a surrogate mother or asking for such persons (section 3(1)). Once again, however, the 2008 Act introduced an exception for advertisements placed by a non profit making body relating to acts done by that body which would not fall within the ban in section 2 even if done on a commercial basis (section 3(1A)). The surrogacy arrangements referred to might be anywhere in the world. The offences, however, can only be committed in the United Kingdom. There is nothing to stop agencies based abroad from helping to make surrogacy arrangements on a commercial basis abroad. Nor is there anything to stop commissioning parents and surrogate mothers from making their arrangements directly, either here or abroad, even on a commercial basis. The Review for Health Ministers of Current Arrangements for Payments and Regulation, chaired by Professor Margaret Brazier (1998) (Cm 4068), recommended that payments to the surrogate mother be expressly limited to expenses occasioned by the pregnancy; but this has not been implemented. Agreements for such payments are, of course, unenforceable and could result in the refusal of a parental order. As seen above, however, that is highly unlikely. In the circumstances, it is scarcely surprising that the claimants clear preference is for a commercial surrogacy arrangement in California. As Sir Robert Nelson said, the system is well established, the arrangement binding and the intended parents can obtain a pre birth order from the Californian court confirming their legal status in relation to the surrogate child (para 31). A further disadvantage of the UK system in the claimants eyes is that it is the surrogate mother who chooses the intended parent rather than the other way around the idea of being at the mercy of someone elses choosing, and attending informal parties to meet surrogate mothers frightens her (para 32). In other words, the friendship model of altruistic surrogacy arrangements promoted by surrogacy organisations here does not appeal. Briody v St Helens and Knowsley Area Health Authority Owing to medical negligence, the claimant underwent a sub total hysterectomy when aged around 19, having lost two babies in quick succession. Her ovaries were left intact. Many years later, she brought proceedings claiming damages for, among other things, the cost of a Californian surrogacy. The claim was on the basis that there should be two cycles of treatment using her own eggs, which it was accepted would probably fail, and four cycles using donor eggs, all using her partners sperm. Ebsworth J rejected both proposals, partly because the chances of success using her own eggs were so low and partly because a commercial surrogacy was not lawful here. By the time the case reached the Court of Appeal, however, eggs had been successfully recovered from the claimant and fertilised with her partners sperm. There were now six embryos in storage. Nevertheless, the chances of success were still no more than 1%. The claimant was now proposing two cycles using her own embryos and if that failed up to four more cycles using the surrogates eggs and if successful three more to have a second child. All of this would be arranged, not commercially abroad, but here through the well known self help group, Childlessness Overcome Through Surrogacy (COTS). I gave the leading judgment on the issue of principle. Having set out the law relating to surrogacy, I commented that these provisions do not indicate that surrogacy as such is contrary to public policy. They tend to indicate that the issue is a difficult one, upon which opinions are divided, so that it would be wise to tread with caution. If there is a trend, it is towards acceptance and regulation as a last resort rather than towards prohibition (para 11). On the Californian proposals put before the judge, I had no difficulty in agreeing with her that they were contrary to the public policy of this country, clearly established in legislation, and that it would be quite unreasonable to expect a defendant to fund it (para 15). As to the new proposals, I also agreed with the judge that it would not be reasonable to expect the defendant to pay for the implantation of the claimants embryos when this had such a slim chance of success (para 22). As to a surrogacy using donor eggs, I took the view that this was not in any sense restorative of Ms Briodys position before she was so grievously injured. It is seeking to make up for some of what she has lost by giving her something different. Neither the child nor the pregnancy would be hers (para 25). Having reached the conclusion that, even with the evidence of the new proposals, the claim should not succeed, it was not strictly necessary to decide whether that evidence should be admitted (para 33). I agreed, however, with Judge LJ, who explained that it should not be admitted because it would inevitably require a new trial and the claimant should not have two bites of the cherry (para 53). Judge LJ agreed with me that in any event there was no sufficient basis for an award of damages to reflect these new proposals (para 54). Henry LJ agreed with us both (para 56). Developments since Briody This Court is not, in any event, bound by the ratio of Briody. But the persuasiveness of that ratio is inevitably affected by the developments in law and social attitudes which have taken place since then. We have also had the benefit of the joint Consultation Paper issued in June 2019 by the Law Commission and the Scottish Law Commission, Building families through surrogacy: a new law (LCCP 244, SLCDP 167), which contains much useful information. The developments in the law have been quite dramatic. Under the 1985 Act, originally all third parties were banned from taking part in surrogacy arrangements for payment, whereas under the 2008 Act amendments, non profit making bodies may initiate negotiations and compile information for reasonable payment. Non profit making bodies can also advertise. There are now three not for profit organisations facilitating surrogacy arrangements in the UK, COTS, Brilliant Beginnings and Surrogacy UK (Building families through surrogacy: a new law, para 3.17). More dramatic still have been the developments in the laws ideas of what constitutes a family. Traditionally, families were limited to those related by consanguinity (blood) or affinity (marriage). Hence at first only opposite sex married couples could apply for parental orders. Now they have been joined by same sex married couples, by same sex and opposite sex civil partners, and by couples, whether of the same or opposite sexes, who are neither married nor civil partners, but are living together in an enduring family relationship. They have also been joined by single applicants. All of these would be regarded as family relationships within the meaning of article 8 of the ECHR. The law now recognises and supports same sex relationships and parenthood in almost exactly the same way as it recognises and supports opposite sex relationships. Civil partnerships between same sex couples were introduced throughout the UK by the Civil Partnerships Act 2004. Gay marriage was introduced in England and Wales by the Marriage (Same sex Couples) Act 2013, in Scotland by the Marriage and Civil Partnership (Scotland) Act 2014, and in Northern Ireland by the Marriage (Same sex Couples) and Civil Partnership (Opposite sex Couples) (Northern Ireland) Regulations 2019 (SI 2019/1514). Same sex couples have been able to adopt jointly in England and Wales since the Adoption and Children Act 2002 and in Scotland since the Adoption and Children (Scotland) Act 2007. In In re G (Adoption: Unmarried Couple) [2008] UKHL 38; [2009] 1 AC 173, this Court declared the exclusion of unmarried couples from the Northern Ireland Adoption Order incompatible with the equal enjoyment of the right to respect for family life protected by articles 8 and 14 of the ECHR. Obviously, male same sex couples can achieve parenthood only through adoption or surrogacy and there is evidence of a growing demand from them for surrogacy arrangements. The UK surrogacy organisations report a growing proportion of male same sex couples using their services, as many as 50% of those using COTS and Brilliant Beginnings (Building families through surrogacy: a new law, paras 3.18 to 3.21). All of this supports the observations of King LJ in this case (para 101): It is unnecessary to resort to statistics or research in order to appreciate the social changes in the years since Briody. These changes have led to the current acceptance of an infinite variety of forms of family life of which single sex, single person and so called blended families are but examples. The creation of these families is often facilitated consequent upon the advances in fertility treatment including the acceptance of and increased use of donor eggs. Not only does family law recognise a much wider set of relationships as family life these days. Government policy has moved strongly in the direction of supporting surrogacy arrangements in appropriate cases. The Children and Families Act 2014, section 122, provides for the extension of the right to shared parental leave under the Employment Rights Act 1996 and statutory paternity and adoption pay under the Social Security and Contributions Act 1992 to people who have applied for or intend to apply for a parental order under the 2008 Act. The Human Fertilisation and Embryology (Parental Orders) Regulations 2018 adapt the Children Act 1989 and the Foster Children (Scotland) Act 1984 so that commissioning parents who propose to apply for a parental order no longer fall within the definition of private foster parents who are required to inform the local authority that the child is living with them. As well as these statutory changes, the Department of Health and Social Care published guidelines on the practice of surrogacy in February 2018 (updated November 2019): The Surrogacy Pathway: Surrogacy and the legal process for intended parents and surrogates in England and Wales and Care in Surrogacy: guidance for the care of surrogates and intended parents in surrogate births in England and Wales. The former states as follows: The government supports surrogacy as part of the range of assisted conception options. Our view is that surrogacy is a pathway, starting with deciding which surrogacy organisation to work with, deciding which surrogate or intended parent(s) to work with, reaching an agreement about how things will work, trying to get pregnant, supporting each other through pregnancy and then birth, applying for a parental order to transfer legal parenthood and then helping your child understand the circumstances of their birth. This guidance gives more information about each stage. Not only that, it was the Department of Health and Social Care which asked the Law Commissions to consider reforms to the law of surrogacy in the United Kingdom. Another change which has taken place over the decades since the Surrogacy Arrangements Act was passed in 1985 is the progress of the medicine and science of assisted reproduction, coupled with their regulation by the Human Fertilisation and Embryology Authority (HFEA), and increasing public familiarity with and acceptance of such methods of founding a family. When the Act was passed, donor insemination had become safer because sperm could be successfully frozen, but IVF and embryo transfer were in their infancy and success rates were very low, and eggs could not be frozen. Public concern about the ethics of these techniques had led to the Warnock committees report, which in turn led to the pioneering work of the HFEA as the first body in the world to regulate such treatments. Since then, new techniques have been developed, success rates have improved, and people who are experiencing problems in conceiving or bearing children, or who are in same sex relationships, increasingly turn to assisted reproduction rather than to adoption in order to fulfil their desire to have a family. While treatment is sometimes available on the NHS, much of it is also provided commercially. It is probable that most gestational surrogacy arrangements in this country involve treatments provided by a clinic licensed by the HFEA. This is required where IVF or embryo transfer are involved. The HFEAs first Code of Practice had one paragraph about surrogacy: this advised that, because either the carrying mother, and in certain circumstances her husband or partner, or the commissioning parents might become the childs legal parents, the welfare of any resulting child should be assessed in relation to both sets of parents, and any risk of disruption to the childs early care and upbringing in the event of a dispute between them considered (para 3.16.a). The most recent, ninth, edition of the Code of Practice, version 2 (2019), has a section on The welfare of the child assessment process for surrogacy arrangements which emphasises the need for a standard operating procedure for centres offering surrogacy treatment (paras 8.9 to 8.13); and a whole chapter (paras 14.1 to 14.14) on surrogacy generally which emphasises the need for full information and discussion about the legal and other implications, as well as counselling, for both the surrogate and the commissioning parents. While this may be off putting for some, and centres are advised to be alive to the vulnerability of all parties, there is no suggestion that such arrangements should be viewed with particular suspicion or discouraged. As to changes in the attitudes of society in general to surrogacy arrangements, the Law Commissions say this (para 1.9): Whilst we acknowledge that there is a lack of public attitudinal research in this area, the research that exists suggests that public attitudes to surrogacy also now stand in stark contrast to the prevailing hostile attitudes at the time of the [Surrogacy Arrangements Act] 1985. The available research reflects the fact that the legislation is now out of step with attitudes towards surrogacy. They cite a YouGov poll in 2014 showing that 59% of adults in Great Britain supported using gestational surrogacy to have children. The Law Commissions paper, Building families through surrogacy: a new law, also includes a full discussion of the empirical evidence about the possible harmful effects of surrogacy on the participants involved and the children and of the ethical arguments about surrogacy (Chapter 2). The latter debate reflects a tension between autonomy and paternalism (para 2.69). The concerns about exploitation and commodification feature most prominently in relation to commercial arrangements. Domestically, those concerns could be alleviated by more effective regulation (para 2.71). Internationally, where the arrangements are almost invariably commercial in nature, it is impossible for UK law to effect change, except in situations involving intended parents who will bring the child back to the UK (para 2.72): In that respect, we make a provisional proposal for reform that would enable legal parenthood granted overseas to be recognised in the UK, only after an appraisal of the law and practice of surrogacy in each country. We hope that such a development would encourage UK intended parents who do look for an international surrogacy arrangement to use countries where there is a level of confidence in the protection provided to women who become surrogates. The reality is that there is a spectrum of surrogacy arrangements. At one end of the scale there are desperately poor women who are induced to sell one of the few things they have for sale, their wombs, and are often grossly exploited by the agents and middlemen who make serious profits from the large sums which desperate commissioning parents are prepared to pay. At the other end of the scale are altruistic women who enjoy being pregnant and are happy to make a gift of their child bearing capacity to people who need it. It is no longer thought that women should not have the right to choose to use their bodies in this way. But it is thought that both they and the commissioning parents should be protected from exploitation and abuse. It is also thought that surrogacy arrangements, whether altruistic or commercial, should guard against any possibility that children are being bought and sold: see the Report of the United Nations Special Rapporteur on the sale and sexual exploitation of children, including child prostitution, child pornography and other child sexual abuse material (A/HRC/37/60, 15 January 2018). Application to this case This case is about the assessment of reasonable damages to compensate a woman who has been wrongly deprived of the ability to bear her own children. With the greatest of respect to the argument on behalf of the claimant, accepted by the Court of Appeal, it is not about the illegality defence and the new framework adopted in Patel v Mirza [2017] AC 467. Nor is it to be likened to a case like Gray v Thames Trains Ltd [2009] UKHL 33; [2009] 1 AC 1339, where the injury suffered by the claimant led to his committing a serious criminal offence and suffering the consequences of doing so, for which he claimed but was denied compensation. Nothing which the claimant proposes to do involves a criminal offence either here or abroad. Her preferred solution is a Californian surrogacy which is lawful there and UK law does not prohibit her from arranging or taking part in it. Her second best solution would be lawful surrogacy arrangements here. The general principle upon which damages in tort are assessed was stated by Lord Blackburn in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39: I do not think there is any difference of opinion as to its being a general rule that, where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been in if he had not sustained the wrong for which he is now getting his compensation or reparation. There are qualifications to that principle, of course. The first is that some heads of damages which would readily fall within that principle are nevertheless irrecoverable because to allow this would be contrary to legal or public policy. A well known example is McFarlane v Tayside Health Board [2000] 2 AC 59. The Inner House of the Court of Session held that a couple who had a child after the husband had had a vasectomy, allegedly because of negligent advice, could claim damages, not only for the pregnancy and birth, but also for the cost of bringing up the child they never meant to have. The House of Lords held that they could not claim the costs of bringing up a healthy child. They gave a variety of reasons for this, but they all amount to a policy against awarding what would be the normal measure of the claimants loss. A second qualification is that, in seeking to restore what has been lost, the steps taken must be reasonable ones and the costs thereby incurred must be reasonable. The first question, therefore, is whether it is ever possible to claim damages for the cost of surrogacy arrangements, even where these are made on a lawful basis in this country and using the claimants own eggs. It might once have been possible to argue that the law should not facilitate the bringing into the world of children who would otherwise never have been born. But the acceptance and widespread use of assisted reproduction techniques, for which damages are payable, means that this is no longer possible. In Briody, I did not consider that an arrangement which conformed to English law would be contrary to public policy. The question was whether it was reasonable to seek to remedy the loss of a womb through surrogacy (para 30). This would depend upon the chances of a successful outcome. In that case they were vanishingly small. Nevertheless, had they been better, I expressed the tentative view that it would be a step too far. But I recognised the force of the contrary argument that, given the right evidence of the reasonableness of the procedure and the prospects of success, it should be capable of attracting an award (para 32). Sir Robert Nelson found it difficult to see why, on general principle, where the prospects of success are reasonable, if not good, and the claimant had delayed her cancer treatment to ensure that her eggs were harvested, the claim should not succeed (para 49). McCombe LJ agreed (para 84). So do I. The next question is whether it is possible to claim damages for UK surrogacy arrangements using donor eggs. In Briody, I expressed the view that this was not truly restorative of what the claimant had lost. It was seeking to make up for what she had lost by giving her something different (para 25). We need not concern ourselves with whether or not this view was technically obiter. In my view it was probably wrong then and is certainly wrong now. It was argued for the claimant that this is no different from other artificial means of replacing what has been lost, for example, by having an artificial limb fitted to replace the one which has been amputated. It is not ones own genetic material and it is not as good as a real limb, but it is the closest one can get to putting the claimant in the position she would have been in had she not been injured. Of course, the analogy is not exact, because the claimant is not being supplied with a replacement womb. But in many ways that is indeed what she is being supplied with, albeit temporarily, through the generosity of a surrogate mother who offers the use of her own womb. Not only that, as counsel had argued for Mrs Briody, a woman can hope for four things from having a child: the experience of carrying and giving birth to a child; the perpetuation of ones own genes; the perpetuation of ones partners genes; and the pleasure of bringing up a child as ones own (para 24). Donor egg surrogacy using a partners sperm gives her two of those. And for many women, the pleasure of bringing up children as ones own is far and away the most important benefit of having children. If this is the best that can be achieved to make good what she has lost, why should she be denied it? This view is reinforced by the dramatic changes in the idea of what constitutes a family which have taken place in recent decades, referred to earlier. There are many different kinds of family these days. As King LJ pointed out in the Court of Appeal, psychologically and emotionally the baby who is born is just as much their child as if one of them had carried and given birth to him or her (para 103). This is the experience of those judges who have the happy experience of granting parental orders. I would therefore hold that, subject to reasonable prospects of success, damages can be claimed for the reasonable costs of UK surrogacy using donor eggs. That leaves only the most difficult question: what about the costs of foreign commercial surrogacy? Surrogacy contracts are unenforceable here. It is well established that the UK courts will not enforce a foreign contract which would be contrary to public policy in the UK: see Rousillon v Rousillon (1880) 14 Ch D 351; Israel Discount Bank of New York v Hadjipateras [1984] 1 WLR 137. Why then should the UK courts facilitate the payment of fees under such contracts by making an award of damages to reflect them? In this case, we have the advantage of evidence about the comparative costs of UK and Californian surrogacy. One thing becomes clear. Many of the items in the Californian bill would also be claimable if the surrogacy took place here. The costs of the fertility treatment and egg donation itself, although they are higher in the US than here, would be recoverable for a UK surrogacy. Then there is the cost of the payment to the surrogate mother herself, which is higher than the reasonable expenses thought acceptable here. But, as we have seen, it is not unlawful for commissioning parents to make such payments here. And whether made here or abroad they are likely to be retrospectively authorised by the court. Then there are the fees paid to the UK lawyers, which would also be recoverable here, if reasonable. They are very much higher for a US than for a UK surrogacy, presumably because there is so much more work to be done, but we must also presume that such work does not fall foul of the Surrogacy Arrangements Act 1985. That leaves the fees paid to the US lawyers and surrogacy agency, which would be unlawful here but are not in the US. To what extent should that taint all of the items in the bill? The damages would be awarded to the claimant, the commissioning parent. It is not against the law in this country for a commissioning parent to do any of the acts which are prohibited by section 2(1) of the Surrogacy Arrangements Act 1985 (see section 2(2)(b)). Nor is it against the law in this country for an intending surrogate to do so (see section 2(2)(a)). That is true even of activities in this country, let alone in another country. It has never been the object of the legislation to criminalise the surrogate or commissioning parents. The only deterrent is the risk that the court hearing an application for a parental order might refuse retrospectively to authorise the payments. As we have seen, there is no evidence that that has ever been done. The courts paramount consideration is the welfare of the child involved, which will almost certainly be best served by cementing his home and his family links with the commissioning parents. Added to that are all the other developments which have taken place since the decision in Briody. The courts have bent over backwards to recognise the relationships created by surrogacy, including foreign commercial surrogacy. The government now supports surrogacy as a valid way of creating family relationships, although there are no plans to allow commercial surrogacy agencies to operate here. The use of assisted reproduction techniques is now widespread and socially acceptable. The Law Commissions have provisionally proposed a new pathway for surrogacy which, if accepted, would enable the child to be recognised as the child of the commissioning parents from birth, thus bringing the law closer to the Californian model, but with greater safeguards. While the risks of exploitation and commodification are heightened in commercial surrogacy, they are not thought an insuperable ethical barrier to properly regulated arrangements. For all those reasons, I conclude that it is no longer contrary to public policy to award damages for the costs of a foreign commercial surrogacy. However, that does not mean that such damages, still less damages such as are claimed in this case, will always be awarded. There are some important limiting factors. First, the proposed programme of treatments must be reasonable. There may be good reasons to think that, but for the negligence, the claimant would have had the number of children now proposed, but there may not. Second, it must be reasonable for the claimant to seek the foreign commercial arrangements proposed rather than to make arrangements within the UK. This is unlikely to be reasonable unless the foreign country has a well established system in which the interests of all involved, the surrogate, the commissioning parents and any resulting child, are properly safeguarded. Unregulated systems where both surrogate and commissioning parents are at the mercy of unscrupulous agents and providers and children may be bought and sold should not be funded by awards of damages in the UK. This has not been explored in this case, but it should not be concluded that, even in California, all is always well (as the Report of the United Nations Special Rapporteur shows). Third, the costs involved must be reasonable. This too has not been put in issue in this case, which has been argued as a matter of principle, but it should certainly not be taken for granted that a court would always sanction the sorts of sums of money which have been claimed here. With those caveats, therefore, I would dismiss this appeal. LORD CARNWATH: (dissenting) (with whom Lord Reed agrees) I am grateful for Lady Hales full exposition of the facts, and of the legislative and policy background. This enables me to deal with the remaining issues between us relatively briefly, without in any way diminishing the impact of these tragic events on the claimant, or the seriousness of the legal issues to which they give rise. On the first two issues identified by Lady Hale (para 8), I agree with her reasoning and conclusions. I differ only on the last issue: damages to fund the cost of commercial surrogacy arrangements in a country (in this case California) where this is not unlawful. As I think Lady Hale accepts, her conclusion on that issue is a departure from the clear, indeed emphatic, position on this issue, expressed in 2001 in her leading judgment in Briody v St Helens and Knowsley Area Health Authority [2001] EWCA Civ 1010; [2002] QB 856. It is important to note that in Briody there was a difference between the claimants case as presented to the judge, and as sought to be advanced in the Court of Appeal. Before the judge it was based solely on a proposed commercial surrogacy agreement in California (para 4). Before the Court of Appeal, as Lady Hale noted (para 9), the claimant had abandoned the Californian agreement and sought leave to adduce evidence of a proposed surrogacy arrangement through the self help group, COTS (Childlessness Overcome Through Surrogacy), governed by English law. Having observed that English law on surrogacy is quite clear, that the activities of commercial surrogacy agencies are unlawful, and that it is an offence for any person to take part in negotiating surrogacy arrangements on a commercial basis (para 10), and having reviewed the varying practice round the world, she had no difficulty in agreeing with the judge that the proposals put to her were contrary to the public policy of this country, clearly established in legislation, and that it would be quite unreasonable to expect a defendant to fund it. (para 15) By contrast, she found it impossible to say that the claimants new proposals were contrary to public policy in that sense (para 16). The remainder of the judgment is devoted largely to that aspect. We are not of course bound by that decision even as respects commercial surrogacy. But I do not understand it to have been seriously questioned as a reflection of the law and policy as it stood at the time. However, in her present judgment, Lady Hale has described the dramatic developments in law and social attitudes (para 28ff) which lead her to conclude ultimately that it is no longer contrary to public policy to award such damages (para 53). I agree with her (para 40) that the resolution of this issue is not assisted by reference to recent judgments of this court on the scope of the illegality defence (such as Patel v Mirza [2016] UKSC 42; [2017] AC 467). A commercial surrogacy arrangement, such as is proposed, is not in itself unlawful in the country in which it would take place. Nor is the claimants participation in such an arrangement from this country. For that reason I agree that the case cannot be likened directly to a case like Gray v Thames Trains Ltd [2009] UKHL 33; [2009] AC 1339, which involved a serious criminal offence by the claimant. However that is not the end of the enquiry. As Lady Hale recognises (para 42), there is a further question of legal or public policy perhaps best exemplified by McFarlane v Tayside Health Board [2000] 2 AC 59. It is not easy to extract a single ratio to support the conclusion in that case that the damages could not extend to the cost of bringing up a healthy but unwanted child. However further light was cast by the speeches in Rees v Darlington Memorial Hospital NHS Trust [2003] UKHL 52; [2004] 1 AC 309, in which the House had to consider the application of the McFarlane principles to the birth of an unwanted child to a mother with a severe visual handicap. Lord Bingham (para 6) spoke of the different approaches and different reasons adopted by the members of the House in McFarlane but thought it clear that all of them were moved to adopt it for reasons of policy (legal, not public, policy). He explained: The policy considerations underpinning the judgments of the House were, as I read them, an unwillingness to regard a child (even if unwanted) as a financial liability and nothing else, a recognition that the rewards which parenthood (even if involuntary) may or may not bring cannot be quantified and a sense that to award potentially very large sums of damages to the parents of a normal and healthy child against a National Health Service always in need of funds to meet pressing demands would rightly offend the communitys sense of how public resources should be allocated. Kirby J was surely right to suggest in Cattanach v Melchior [2003] HCA 38, para 178) that: Concern to protect the viability of the National Health Service at a time of multiple demands upon it might indeed help to explain the invocation in the House of Lords in McFarlane of the notion of distributive justice. To similar effect Lord Steyn said (para 29): The House did not rest its decision on public policy in a conventional sense Instead the Law Lords relied on legal policy. In considering this question the House was bound, in the circumstances of the case, to consider what in their view the ordinary citizen would regard as morally acceptable. Invoking the moral theory of distributive justice, and the requirements of being just, fair and reasonable, culled from case law, are in context simply routes to establishing the legal policy. Lord Millett also spoke of legal policy (para 105): In their speeches [in McFarlane] the individual members of the Appellate Committee all based this conclusion on legal policy, though they expressed themselves in different terms. My noble and learned friend, Lord Steyn, spoke of distributive justice; he asked himself what would be morally acceptable to the ordinary person. Others spoke of what was fair, just and reasonable which expresses the same idea. I spoke openly of legal policy. I said, at p 108: The admission of a novel head of damages is not solely a question of principle. Limitations on the scope of legal liability arise from legal policy, which is to say our more or less inadequately expressed ideas of what justice demands (see Prosser & Keeton on Torts, 5th ed (1984), p 264). This is the case whether the question concerns the admission of a new head of damages or the admission of a duty of care in a new situation. Legal policy in this sense is not the same as public policy, even though moral considerations may play a part in both. The court is engaged in a search for justice, and this demands that the dispute be resolved in a way which is fair and reasonable and accords with ordinary notions of what is fit and proper. It is also concerned to maintain the coherence of the law and the avoidance of inappropriate distinctions if injustice is to be avoided in other cases. Others too made it clear that this was not the same as public policy in the traditional sense of that expression. It would not have been contrary to public policy to award damages to the pursuers in McFarlane any more than it would be contrary to public policy to award damages for breach of contract beyond the limits imposed by the rule in Hadley v Baxendale (1854) 9 Exch 341. But in both cases the denial of damages rests upon policy considerations. It seems clear therefore that the issue is seen as one of legal policy, to be determined by the courts. It is more difficult to identify the criteria which the court is to use for that purpose. In the present context I find most helpful Lord Milletts emphasis on maintaining the coherence of the law. In that respect the present case seems to me easier than either McFarlane or Rees. It is difficult to think of a better guide to where to draw the line in a highly sensitive area such as this than that indicated by Parliament. Although this case is not concerned with illegality as such, the underlying principle of coherence or consistency in the law is of broader application. Although, as noted above, Gray v Thames Trains Ltd is not directly relevant, the speeches of Lord Hoffmann and Lord Rodger contain a valuable discussion of the underlying principle. The same idea is echoed in some of the judgments in Patel v Mirza (see para 155 per Lord Neuberger; para 191 per Lord Mance: the law must aspire to be a unified institution, the parts of which contract, tort, the criminal law must be in essential harmony quoting McLachlin J in Hall v Hebert [1993] 2 SCR 15, 175 176). Lord Rodger, in particular, referred in Gray to the desirability of different organs of the same legal system adopting a consistent approach to the same events (para 76). He continued: 77. In British Columbia v Zastowny [2008] 1 SCR 27, 38, para 23, Rothstein J treated the need to preserve the integrity of the justice system, by preventing inconsistency in the law, as a matter of judicial policy that underlay the ex turpi causa doctrine. In other words, in the circumstances of that case the application of the ex turpi causa doctrine helped to promote the more fundamental legal policy of preventing inconsistency in the law. That such a policy exists is beyond question. In Zastowny and the preceding cases, the need was to ensure that the civil and criminal courts were consistent in their handling of the plaintiffs criminal conduct and its consequences. But that is simply one manifestation of a desirable attribute of any developed legal system. In classical Roman law the jurists were at pains to ensure that the various civil law and praetorian remedies worked together in harmony in relation to the same facts. One of the hallmarks of a good modern code is that its provisions should interrelate and interact so as to achieve a consistent application of its overall policy objectives. Complete harmony may well be harder to achieve in an uncodified system hence the constant attention paid by the classical jurists to the problem since different remedies will have developed at different times and in response to particular demands. But the gradual drawing together of law and equity in English law illustrates the same pursuit of harmony and consistency. And, certainly, the courts are conscious that inconsistencies should be avoided where possible. So, for instance, a court should not award damages in tort if a contractual claim based on the same events would be excluded by some term in the contract between the parties. Similarly, a court should not give a remedy on the ground of unjust enrichment if this would be tantamount to enforcing a contract which the law would treat as void in the circumstances. Likewise, in the present case, when considering the claim for loss of earnings, a civil court should bear in mind that it is desirable for the criminal and civil courts to be consistent in the way that they regard what the claimant did. As Samuels JA observed in State Rail Authority of New South Wales v Wiegold [(1991)] 25 NSWLR 500, 514, failure to do so would generate the sort of clash between civil and criminal law that is apt to bring the law into disrepute. As that passage makes clear, the objective is consistency or coherence between the civil and criminal law within a particular system of law. The fact that the laws of other jurisdictions and other systems may reflect different policy choices seems to me beside the point. It would in my view be contrary to that principle for the civil courts to award damages on the basis of conduct which, if undertaken in this country, would offend its criminal law. It is true that there have been striking developments in societys approach to many issues affecting family life, including surrogacy, as the Law Commissions comprehensive report demonstrates. There has however been no change to the critical laws affecting commercial surrogacy, which led to the refusal in 2001 of damages on that basis. Nor does the Law Commission propose any material change in that respect. It is also apparent from recent studies that public attitudes remain deeply divided (see for example the Second Report of the Surrogacy UK Working Group on Surrogacy Law Reform (December 2018). So long as that remains the state of the law on commercial surrogacy in this court, it would not in my view be consistent with legal coherence for the courts to allow damages to be awarded on a different basis. In short, I consider that the decision of the Court of Appeal was correct in 2001, and remains correct today. I would therefore allow the appeal on the third issue.

UK-Abs

The claimant (respondent to this appeal) was born in 1983. She had cervical smear tests in 2008 and 2012 and cervical biopsies in 2012. Each of these tests was negligently wrongly reported by the defendant hospital (the appellant). In 2013, when the errors were detected, her cervical cancer was too far advanced for her to have surgery which would preserve her ability to bear a child. She was advised to have chemo radiotherapy, which would result in her being unable to do so. Before having the treatment, she had eight eggs collected and frozen. The focus of this appeal is on the damages payable for the loss of the ability to bear her own child. She and her partner wanted to have four children. It was probable that, through surrogacy arrangements, they could have two children using her eggs and his sperm. They then wished to have two more children using donor eggs and his sperm. Her preference was for surrogacy arrangements in California on a commercial basis. If this was not funded, she intended to use non commercial arrangements in the UK. The hospital admitted liability. Assessing damages, the judge held in relation to surrogacy that, following Briody v St Helens & Knowsley Area Health Authority [2000] EWCA Civ 1010; [2002] QB 856 (Briody), he was bound to reject the claim for commercial surrogacy in California as contrary to public policy, and to hold that surrogacy using donor eggs was not restorative of the claimants fertility. By contrast, damages could be awarded for two own egg surrogacies in the UK. The claimant appealed against the denial of her claim for commercial surrogacy and the use of donor eggs. The hospital cross appealed against the award for the two own egg surrogacies. The Court of Appeal dismissed the cross appeal and allowed the appeal on both points. The hospital now appeals to the Supreme Court. The appeal raises three issues. First, can damages to fund surrogacy arrangements using the claimants own eggs be recovered? Second, if so, can damages to fund arrangements using donor eggs be recovered? Third, in either event, can damages to fund the cost of commercial surrogacy arrangements in a country where this is not unlawful be recovered? By a majority, the Supreme Court dismisses the appeal. Lady Hale gives the majority judgment, with which Lord Kerr and Lord Wilson agree. Lord Carnwath gives a judgment dissenting on issue three, with which Lord Reed agrees. Lady Hales judgment explains that under UK law, in essence, surrogacy arrangements are completely unenforceable; the surrogate mother is always the childs legal parent unless and until a court makes a parental order transferring legal parenthood to the commissioning parents; and the making of surrogacy arrangements on a commercial basis is banned. The details are more complicated [9]. For example, section 2(1) of the Surrogacy Arrangements Act 1985 (the 1985 Act) bans third parties from (among other things) initiating or taking part in negotiations with a view to making surrogacy arrangements on a commercial basis. However, offences under the 1985 Act can only be committed in the UK, and so there is nothing to stop agencies based abroad from making surrogacy arrangements on a commercial basis abroad. Nor does this ban extend to acts by commissioning parents or surrogate mothers [19 21]. As for Briody, it is not binding on the court, and its persuasiveness is affected by subsequent developments in the law and social attitudes relating to surrogacy (see below) [29 39]. Nothing which the claimant proposes to do involves a criminal offence here or abroad. Damages in tort seek to put the injured party in the position she would have been in had she not been injured; but they cannot be recovered where it would be contrary to legal or public policy, or unreasonable [40 43]. On the first issue in the appeal, Briody did not rule out the award of damages for own egg surrogacy arrangements made in the UK; rather, it held that whether it was reasonable to seek to remedy the loss of a womb through surrogacy depended on the chances of a successful outcome. Here, those chances are reasonable, and the claimant delayed cancer treatment to ensure that her eggs were harvested. It is therefore difficult to see why the claim should not succeed [44]. On the second issue, the view expressed in Briody, that damages for donor egg surrogacy arrangements could not be recovered as they were not restorative of what the claimant had lost, was probably wrong then, and is certainly wrong now. There have been dramatic developments in the laws idea of what constitutes a family [30]. And this is the closest one can get to putting the claimant in the position she would have been in had she not been injured. Therefore, as long as the arrangement has reasonable prospects of success, damages for the reasonable costs of it may be awarded [45 48]. On the third issue, UK courts will not enforce a foreign contract if it would be contrary to public policy. But most items in the bill for a surrogacy in California could also be claimed if it occurred here. In addition, damages would be awarded to the claimant, the commissioning parent, and it is not against UK law for such a person to do the acts prohibited by section 2(1) of the 1985 Act. Added to that are developments since Briody: the courts have striven to recognise the relationships created by surrogacy; government policy now supports it; assisted reproduction has become widespread and socially acceptable; and the Law Commissions have proposed a surrogacy pathway which, if accepted, would enable the child to be recognised as the commissioning parents child from birth. Awards of damages for foreign commercial surrogacy are therefore no longer contrary to public policy. However, there are important factors limiting the availability and extent of such awards: both the treatment programme and the costs involved must be reasonable; and it must be reasonable for the claimant to seek the foreign commercial arrangements proposed rather than to make arrangements within the UK; this is unlikely to be reasonable unless the foreign country has a well established system in which the interests of all involved, including the child, are properly safeguarded [49 54]. Lord Carnwaths dissenting judgment differs from the majority on the third issue only. In his view, while this case is not concerned with illegality, there is a broader principle of legal coherence, which aims to preserve consistency between civil and criminal law. It would go against that principle for civil courts to award damages based on conduct which, if undertaken in the UK, would offend its criminal law. Societys approach to surrogacy has developed, but there has been no change in the critical laws on commercial surrogacy which led to the refusal in Briody of damages on that basis. It would not be consistent with legal coherence to allow damages to be awarded on a different basis [55 68].

Two appeals have been brought to this court from the judgment of the Divisional Court of the High Court in Northern Ireland in In re McGuinnesss Application [2019] NIQB 10. The judgment was given in relation to judicial review proceedings relating to the treatment of Mr Michael Stone, who was convicted of serious offences, is currently in prison, and who maintains that his case should be referred by the Department of Justice for Northern Ireland (the Department) to the Parole Commissioners for Northern Ireland for consideration whether he should be released on licence. The respondent, Mrs McGuinness, the sister of one of the victims of Mr Stones crimes, brought these proceedings against the Department to challenge the lawfulness of its decision to refer Mr Stones case to the Commissioners and was successful in the Divisional Court. The Department appeals and, by a second appeal, so does Mr Stone, who was joined as an interested party in the proceedings. The Attorney General for Northern Ireland has intervened in the appeals in order to raise an issue regarding the jurisdiction of this court to entertain the appeals. That issue concerns the interpretation of section 41(1) of the Judicature (Northern Ireland) Act 1978 (section 41(1) and the 1978 Act, respectively). By virtue of section 41(1), subject to certain conditions, there may be an appeal to the Supreme Court from any decision of the High Court in a criminal cause or matter. The Attorney General submits that the decision of the Divisional Court which is under appeal is not a decision in a criminal cause or matter, on the proper interpretation of that phrase. The Attorney General says that, contrary to what the parties have assumed to be the position, the proper avenue of appeal from the Divisional Court in these judicial review proceedings is to the Court of Appeal in Northern Ireland, not to the Supreme Court. Factual background On 16 March 1988 Mr Stone attacked a group of mourners at Milltown Cemetery, Belfast, killing several of them. One of them was the brother of Mrs McGuinness. On 3 March 1989 Mr Stone was sentenced to life imprisonment and certain concurrent terms of imprisonment, having been convicted of six counts of murder, five counts of attempted murder, three counts of conspiracy to murder and 21 further counts relating to the possession of explosive substances, the possession of firearms and ammunition, causing an explosion and wounding with intent. The trial judge recommended a tariff of 30 years imprisonment. The Belfast Agreement of 1998 between the United Kingdom and Irish governments included provision for the introduction of an early release scheme for certain prisoners convicted of crimes related to sectarian violence in the Troubles. The Northern Ireland (Sentences) Act 1998 (the 1998 Act) gave effect to that part of the Belfast Agreement. Mr Stone made an application under the 1998 Act to the Sentence Review Commissioners (the SRC), seeking early release pursuant to that Act. On 17 February 1999, the SRC made a formal determination acceding to Mr Stones application for a declaration of eligibility for early release. The SRC specified that such eligibility would take effect on 22 July 2000. On 24 July 2000 Mr Stone was released on licence pursuant to the 1998 Act. On 24 November 2006, Mr Stone committed further serious offences, on this occasion at Parliament Buildings, Stormont. He was arrested the same day and was remanded in custody the following day. On 25 November 2006 the Secretary of State for Northern Ireland suspended Mr Stones licence under the 1998 Act. The SRC became seised of his case again. On 6 September 2007 the SRC informed Mr Stone that they were minded to revoke his licence. On 14 November 2008 Mr Stone was convicted of two counts of attempted murder, together with seven further counts, mainly in relation to firearms and explosives offences, in respect of the incident at Stormont. On 8 December 2008 Mr Stone received two determinate sentences each of 16 years imprisonment in respect of his convictions for attempted murder and other determinate sentences of between one and ten years imprisonment, all to run concurrently. Mr Stones subsequent appeals against conviction were dismissed in January 2011. On 6 September 2011 the SRC revoked the licence granted to Mr Stone under the 1998 Act, pursuant to which he had spent the period from 24 July 2000 to 24 November 2006 on release. The Life Sentences (Northern Ireland) Order 2001 (SI 2001/2564) (the 2001 Order) introduced a new regime according to which a life prisoners tariff period before he could be considered for release on licence should be determined by a judge, and not by the Secretary of State. On 29 July 2013, pursuant to the 2001 Order, the Lord Chief Justice of Northern Ireland determined that the tariff in respect of the sentence of life imprisonment imposed on Mr Stone in relation to the incident at Milltown Cemetery in 1988 should be 30 years imprisonment. By letter dated 20 September 2017 the Northern Ireland Prison Service, an agency of the Department of Justice for Northern Ireland, referred Mr Stones case to the Parole Commissioners and notified them that his tariff expiry date would be 21 March 2018. This was on the footing that the period during which Mr Stone had been on release from prison on licence (the contested period) should count towards the 30 year tariff period. On the basis of the same assumption, the Parole Commissioners conducted a three year pre tariff review of Mr Stones case on 20 March 2015. In the event, pursuant to the notice given by the Department, the Parole Commissioners made a formal determination dated 16 April 2018 that he should not be released upon expiry of his tariff. Mr Stone has a right under the 2001 Order to seek a further hearing before the Parole Commissioners, to seek his release on licence. The next hearing was scheduled to take place on 15 January 2019. In the meantime, on 22 November 2018 Mrs McGuinness issued these judicial review proceedings to challenge the Prison Services notification of a tariff expiry date of 21 March 2018. On her submission, the Prison Service erred in law in bringing into account the contested period of release on licence in calculating Mr Stones tariff expiry date. Leaving the contested period out of the calculation, his tariff expiry date would be on or about 22 July 2024. Mrs McGuinness and the Department of Justice made written submissions to the effect that the judicial review was a criminal cause or matter, so that it should be heard by a Divisional Court of the High Court with any appeal being to the Supreme Court, according to section 41(1). As the court explained in its judgment, it was decided that a Divisional Court should hear the case, notwithstanding that the court harboured reservations about whether the case really was a criminal cause or matter; but in view of the need for expedition in a case concerning the liberty of the subject it was decided on a pragmatic basis to treat it as such (para 2). The logic of this was that if it turned out that this is not a criminal cause or matter, any appeal could proceed in the usual way to the Court of Appeal. By contrast if the case proceeded as a normal judicial review without a Divisional Court and it then transpired that it was properly to be classified as a criminal cause or matter, there would be no right of appeal to the Court of Appeal and the opportunity to appeal to the Supreme Court would have been lost as well. The court proceeded in this way because of uncertainty which it thought arose from the jurisprudence on what it described as this troubled subject of the meaning of criminal cause or matter in the statute, including the decisions in In re JR27 [2010] NIQB 12 (JR27) and R (Belhaj) v Director of Public Prosecutions (No 1) [2018] UKSC 33; [2019] AC 593 (Belhaj). Mrs McGuinnesss application for judicial review was heard by the Divisional Court on an expedited basis on 10 January 2019. Its judgment, upholding Mrs McGuinnesss challenge, was delivered on 15 January 2019. On the basis that the Divisional Court was prepared to proceed on the basis that the judicial review was a criminal cause or matter within the meaning of section 41(1), as all the parties were willing to accept, it certified a question of law of general public importance for the purposes of section 41(2) of the 1978 Act. Pursuant to section 41(2), the Supreme Court granted permission to appeal to the Department of Justice and to Mr Stone. However, having learned of this, the Attorney General issued an application to intervene to dispute the assumption that Mrs McGuinnesss application for judicial review constituted a criminal cause or matter within the meaning of section 41(1) and to challenge the jurisdiction of this court to hear the appeals. According to the Attorney General, Mrs McGuinnesss application for judicial review constitutes a civil cause or matter in relation to which an appeal lies from the High Court to the Court of Appeal. The Supreme Court granted permission to the Attorney General to intervene in the appeals and at the hearing of the appeals it also heard full argument on the jurisdiction point raised by him. The 1978 Act regime Section 35 makes provision regarding the jurisdiction of the Court of Appeal to hear appeals from the High Court. It provides in relevant part as follows: (1) Subject as otherwise provided in this or any other statutory provision, the Court of Appeal shall have jurisdiction to hear and determine in accordance with rules of court appeals from any judgment or order of the High Court or a judge thereof. (2) No appeal to the Court of Appeal shall lie except as provided by the following provisions of (a) this Part from any judgment of the High Court in any criminal cause or matter; Section 39 made provision for appeals to the Court of Appeal in respect of convictions before and sentences imposed by the Crown Court (see now Part I of the Criminal Appeal (Northern Ireland) Act 1980, the 1980 Act). Section 40 made provision for appeals to the House of Lords from the Court of Appeal in respect of such matters (see now Part II of the 1980 Act, as amended by the Constitutional Reform Act 2005 to take account of the transfer of jurisdiction from the House of Lords to the Supreme Court). Section 41 (as amended) provides in relevant part as follows: 41. Appeals to Supreme Court in other criminal matters (1) Subject to the provisions of this section, an appeal shall lie to the Supreme Court, at the instance of the defendant or the prosecutor, from any decision of the High Court in a (a) criminal cause or matter; (b) from any decision of the Court of Appeal in a criminal cause or matter upon a case stated by a county court or a magistrates court. (2) No appeal shall lie under this section except with the leave of the court below or of the Supreme Court; and, subject to section 45(3), such leave shall not be granted unless it is certified by the court below that a point of law of general public importance is involved in the decision and it appears to that court or to the Supreme Court, as the case may be, that the point is one which ought to be considered by the Supreme Court. (6) any reference to the defendant shall be In this section, (a) construed (i) in relation to proceedings for an offence, and in relation to an application for an order of mandamus, prohibition or certiorari in connection with such proceedings, as a reference to the person who was or would have been the defendant in those proceedings; (ii) in relation to any proceedings or order for or in respect of contempt of court, as a reference to the person against whom the proceedings were brought or the order was made; (iii) in relation to a criminal application for habeas corpus, as a reference to the person by or in respect of whom that application was made, and any reference to the prosecutor shall be construed accordingly; (b) application for habeas corpus means an application for a writ of habeas corpus ad subjiciendum and references to a criminal application or civil application shall be construed accordingly as the application does or does not constitute a criminal cause or matter; (c) the Supreme Court under this section; leave to appeal means leave to appeal to Section 42 (as amended) provides in relevant part as follows: 42. Appeals to Supreme Court in civil cases (1) Subject to the provisions of this section and to any restriction imposed by any statutory provision which has effect by virtue of subsection (6), an appeal shall lie to the Supreme Court from any order or judgment of the Court of Appeal in any civil cause or matter. (2) No appeal shall lie under this section except with the leave of the Court of Appeal or the Supreme Court. Section 120 is the interpretation provision. Subsection (1) provides in relevant part as follows: (1) In this Act, unless the context otherwise requires, the following expressions have the meanings hereby assigned to them respectively, that is to say: action means a civil proceeding commenced by writ or in such other manner as may be prescribed by rules of court, but does not include a criminal proceeding by or in the name of the Crown; cause includes any action, suit or other original proceeding between a plaintiff and a defendant, and any criminal proceeding by or in the name of the Crown; defendant includes any person served with any writ of summons or process or served with notice of, or entitled to attend, any proceedings; matter includes every proceeding in court not in a cause; party includes every person served with notice of or attending any proceeding, although not named on the record; plaintiff includes every person asking any relief (otherwise than by way of counter claim as a defendant) against any other person by any form of proceeding, whether the proceeding is by action, suit, petition, motion, summons or otherwise; The use of the phrase a criminal cause or matter The phrase has been used in two different statutory contexts. It was first used in 1873 in the context of a provision governing rights of appeal, and it has been used in later statutes in that context, including now in the 1978 Act in Northern Ireland and equivalent legislation in England and Wales. It has also been used in a different context in section 6 of the Justice and Security Act 2013 (the JSA 2013), in a provision concerned with determining the availability of a special closed procedure for dealing with secret intelligence material relevant to determination of judicial review and other proceedings. Belhaj was concerned with the meaning and effect of the phrase in this latter context. Caution is required in working out the extent to which the judgments in Belhaj provide guidance regarding the meaning of the phrase in the context of rights of appeal. The principle of consistent interpretation of statutory words and phrases across statutes, as referred to in Barras v Aberdeen Steam Trawling and Fishing Co Ltd [1933] AC 402 (Barras) at p 411, only applies where the language and context of the statutory provisions being compared is the same. In Belhaj, all the justices accepted that, for the purposes of the Barras principle, the statutory context of section 6 of the JSA 2013 is different from the statutory context of section 41(1) and its equivalent in England and Wales. In order to understand the contexts in which the phrase a criminal cause or matter has been used, it is relevant to trace briefly the historical background. In the 19th century, English law allowed very little scope for appeals in criminal cases: see Holdsworth, A History of English Law, vol I, p 217. Instead, in 1848 the Court for Crown Cases Reserved was created as a court constituted by a panel of judges to which a judge in a trial on indictment could refer questions of law for authoritative ruling. Where it emerged that a conviction was unsafe, recourse had to be made to the exercise of the prerogative of mercy. However, in addition, the Court of Queens Bench was a superior court which had jurisdiction to control the exercise of jurisdiction by magistrates and other inferior courts in criminal cases, as well as in civil matters, by means of the issue of the prerogative writs and by declaratory and other relief in what are in modern times categorised as judicial review proceedings. By section 4 of the Supreme Court of Judicature Act 1873 (the 1873 Act) the Supreme Court was constituted in two divisions: one of which, under the name of Her Majestys High Court of Justice shall have and exercise original jurisdiction, with such appellate jurisdiction from inferior courts as is hereinafter mentioned, and the other of which, under the name of Her Majestys Court of Appeal shall have and exercise appellate jurisdiction, with such original jurisdiction as hereinafter mentioned By section 16 of the 1873 Act, the High Court was designated a superior court of record and the original jurisdiction of a range of specified courts, including the Court of Queens Bench, was transferred to it. By section 19, the Court of Appeal was given jurisdiction to hear appeals from the High Court, save as set out later in the Act. By section 47, the judges of the High Court were given jurisdiction to hear Crown cases reserved, as follows: The jurisdiction and authorities in relation to questions of law arising in criminal trials which are now vested in the justices of either Bench and the Barons of the Exchequer by the Act of the session of the 11th and 12th years of the reign of Her present Majesty, Chapter 78, intituled An Act for the further amendment of the administration of the Criminal Law, or any Act amending the same [that is, the Court for Crown Cases Reserved], shall and may be exercised after the commencement of this Act by the judges of the High Court of Justice, or five of them at the least, of whom the Lord Chief Justice of England, the Lord Chief Justice of the Common Pleas, and the Lord Chief Baron of the Exchequer, or one of such chiefs at least, shall be part. The determination of any such question by the judges of the said High Court in manner aforesaid shall be final and without appeal; and no appeal shall lie from any judgment of the said High Court in any criminal cause or matter, save for some error of law apparent upon the record, as to which no question shall have been reserved for the consideration of the said judges (Emphasis added) Section 71 of the 1873 Act provided that: the practice and procedure in all criminal causes and matters whatsoever in the High Court of Justice and in the Court of Appeal respectively, including the practice and procedure with respect to Crown Cases Reserved, shall be the same as the practice and procedure in similar causes and matters before the passing of this Act. Section 100 of the 1873 Act provided definitions of relevant terms equivalent to those in section 120 of the 1978 Act. The 1873 Act included provision (section 20) to abolish the appellate jurisdiction of the House of Lords, but that was never brought into effect. Its implementation was postponed until 1875 by section 2 of the Supreme Court of Judicature (Commencement) Act 1874 and then until 1876 by section 2 of the Supreme Court of Judicature Act 1875 (the 1875 Act), before being repealed by section 24 of the Appellate Jurisdiction Act 1876. Section 71 of the 1873 Act was replaced by section 19 of the 1875 Act, which made similar provision. It was established early on that the last clause of section 47 of the 1873 Act was intended simply to freeze the pre existing position in relation to appeals in criminal cases, both as regards the High Court sitting in place of the Court for Crown Cases Reserved (from which there had been no appeal) and in relation to the other aspects of jurisdiction in criminal cases which were transferred to it; the general intention of the section being not to take away any right of appeal which already existed, but, on the other hand, not to give any new right of appeal in such cases (as Lord Coleridge CJ explained in R (Hargraves) v Steel (1876) 2 QBD 37, p 40; see also pp 41 42 per Mellish LJ and p 42 per Brett JA; and this view was confirmed in R v Fletcher (1876) 2 QBD 43, pp 44 45 per Mellish LJ and pp 46 47 per Brett JA). In the Steel case, an order for costs against a prosecutor in a criminal case made by a master in the Crown Office of the High Court, on the basis of a statutory provision which stipulated that costs should follow the event, was held to be part of the procedure in a criminal matter (p 41 per Lord Coleridge CJ). Therefore, according to section 47 no appeal lay to the Court of Appeal, just as there had been no appeal from such an order when made before the 1873 Act (p 42). In the Fletcher case, the issue was whether the Court of Appeal had jurisdiction in an appeal from the decision of the High Court (Queens Bench Division) by which it had dismissed a claim for a writ of certiorari (now called a quashing order) to quash a summary conviction of the appellant by local magistrates for the offence of trespass in pursuit of game. The High Court had thus affirmed the conviction. The Court of Appeal held that the last clause of section 47 had the effect that it had no jurisdiction to entertain the appeal, because this was a proceeding in a criminal matter. As Brett JA said, the High Courts ruling was in effect a judgment or decision on the question whether a man shall be fined or imprisoned or not (p 47). Mellish LJ was careful to explain that the limitation on the jurisdiction of the Court of Appeal set out in the last clause of section 47 did not extend to all matters on the Crown side of the Queens Bench Division (ie matters relating to habeas corpus and the issue of the prerogative writs), as [T]here are cases on the Crown side which are really civil cases (pp 44 45). In their reasoning regarding Parliaments intention in relation to the last clause of section 47, Mellish LJ and Amphlett JA both emphasised that Parliament could not have intended to have created a regime in which there could be an appeal in a petty criminal matter not just to the Court of Appeal, but onwards to the House of Lords (p 45 and p 47, respectively). The judges accordingly recognised that a material aspect of the context relevant for interpreting the phrase any criminal cause or matter in relation to a provision governing routes of appeal was the effect which any particular interpretation might have on the distribution of business within the appellate courts. The proceedings before the High Court constituted in substance an appeal against the conviction by the magistrates, so what was in issue was whether there should be a second appeal to the Court of Appeal and the possibility of a third appeal to the House of Lords. The Supreme Court of Judicature Act (Ireland) 1877 followed the scheme of the 1873 and 1875 Acts. Section 50 followed the drafting of section 47 of the 1873 Act. In Ex p Woodhall (1888) 20 QBD 832 a magistrate committed the appellant to prison under section 10 of the Extradition Act 1870 with a view to her extradition to the USA to face trial there. The appellant applied to a Divisional Court of the Queens Bench Division of the High Court for a writ of habeas corpus on the ground of a procedural error by the magistrate, who had refused to postpone the hearing of the case to allow time for the appellant to adduce more evidence. The High Court refused the application and the appellant sought to appeal to the Court of Appeal. That court held that by virtue of section 47 of the 1873 Act it had no jurisdiction to entertain the appeal, as it was a criminal cause or matter. Lord Esher MR (as Brett JA had become) said that the case which helps one most to the true construction of that phrase was Fletcher, following Steel (p 835). He said that the decided cases showed that this phrase in section 47 should receive the widest possible interpretation. The intention was that no appeal should lie in any criminal matter in the widest sense of the term, [the Court of Appeal] being constituted for the hearing of appeals in civil causes and matters. (p 835) In context, what he meant by this was that the phrase should be given a wide interpretation in order to secure the object of the 1873 Act as identified in the earlier cases, which he confirmed, by quoting from the judgment of Mellish LJ in Fletcher referring to his judgment in Steel, was to leave the procedure in criminal cases substantially unaltered (p 836). Lord Esher MR recapitulated the position in this way: I think that the clause of section 47 in question applies to a decision by way of judicial determination of any question raised in or with regard to proceedings, the subject matter of which is criminal, at whatever stage of the proceedings the question arises (p 836). The decision of the High Court in refusing habeas corpus was a decision by way of judicial determination of a question raised in or with regard to the proceedings before the magistrate, and the subject matter of those proceedings was criminal in nature; so the Court of Appeal had no jurisdiction. Lindley LJ and Bowen LJ agreed, though expressing themselves in different language. Lindley LJ, like Lord Esher MR, said that the true construction of the phrase was that given by Mellish LJ in Steel (pp 837 838) and likewise held that the proceedings in the High Court were a criminal cause or matter, since the object of the extradition was for the appellant to be sent for trial in the USA (p 837). Bowen LJ emphasised that the questions upon which the application for a writ of habeas corpus depended, which in view of the double criminality rule in extradition cases included whether or not there was evidence sufficient according to English law to justify the appellant being committed for trial, were criminal in nature (p 838). Lord Esher MR and Lindley LJ indicated that there were other habeas corpus proceedings which were civil in nature in which an appeal would lie. In 1908 the Court of Criminal Appeal was created pursuant to the Criminal Appeal Act 1907 (the 1907 Act) to hear appeals from superior courts exercising criminal jurisdiction outside the Crown side of what was then the Kings Bench Division. The Court of Criminal Appeal was not part of the Supreme Court of Judicature and the jurisdiction of the Court of Appeal to deal with all civil matters was unaffected. The jurisdiction for Crown Cases Reserved was transferred from the High Court to the Court of Criminal Appeal. The experience of the Court of Criminal Appeal in reviewing criminal cases and finding a significant number of errors in criminal trials quickly dispelled any scepticism about the value of having a regular and accessible appellate jurisdiction in this area: Holdsworth, A History of English Law, vol I, pp 217 218; Glover Alexander, The Administration of Justice in Criminal Matters (in England and Wales) (1915), pp 128 129; Cornish et al, Law and Society in England 1750 1950, 2nd ed (2019), pp 601 602. Section 1(6) of the 1907 Act provided that a decision of the Court of Criminal Appeal should be final, save that there could be an appeal to the House of Lords if a party obtained the certificate of the Attorney General that the decision raised a point of law of exceptional public importance and that it was desirable in the public interest for there to be a further appeal. Again, Parliaments concern to ensure a coherent and principled distribution of business between appellate courts is evident. The effect of the final clause of section 47 of the 1873 Act was preserved in section 31(1)(a) of the Supreme Court of Judicature (Consolidation) Act 1925 (the 1925 Act), which stated: No appeal shall lie (a) except as provided by the Criminal Appeal Act 1907 or this Act, from any judgment of the High Court in any criminal cause or matter. The general jurisdiction of the High Court was continued: section 18. Section 27 continued the general jurisdiction of the Court of Appeal to hear and determine appeals from the High Court, [s]ubject as otherwise provided in this Act. Section 225 re enacted equivalent definitions of relevant terms as in section 100 of the 1873 Act. By the time of the leading decision of the House of Lords in relation to this provision in Amand v Home Secretary [1943] AC 147 (Amand), a considerable body of case law had developed. This was reviewed in Amand. That case concerned a soldier in the Netherlands army in Great Britain during World War II who was arrested as being absent without leave and taken before a magistrate with a view to being handed over to the Netherlands military authorities pursuant to the Allied Forces Act 1940 for punishment according to military law. He applied to the High Court for a writ of habeas corpus, which was refused. The Court of Appeal held that the judgment of the High Court was in a criminal cause or matter, with the result that by virtue of section 31(1)(a) of the 1925 Act it had no jurisdiction to hear the appeal. The House of Lords upheld that ruling. As the headnote accurately summarises the decision, the distinction between cases in which the Court of Appeal has jurisdiction to entertain an appeal from a refusal to grant a writ of habeas corpus and those in which it does not turns on the nature and character of the proceeding in which the writ is sought: If the matter is one, the direct outcome of which may be trial of the applicant and his possible punishment for an alleged offence by a court claiming jurisdiction to do so, the matter is criminal and there can be no appeal to the Court of Appeal. The appellate committee emphasised that the wide application of section 31(1)(a), following R v Fletcher and Ex p Woodhall, was required to avoid an unduly narrow focus on the nature of the particular proceedings before the High Court (which could in some respects be regarded as civil) and instead to require a focus on the nature of the underlying proceedings in relation to which the High Court was asked to intervene. As Lord Wright said, looked at in this way, the situation in Amand was closely similar to a case in which the High Court was invited to intervene in extradition proceedings, as in Ex p Woodhall (p 162: It only differs from an extradition case in that the foreign authority which has power to try and punish, exercises that power in England, in virtue of the special provisions of the Allied Forces Act ). At pp 159 160 Lord Wright explained: The words cause or matter are, in my opinion, apt to include any form of proceeding. The word matter does not refer to the subject matter of the proceeding, but to the proceeding itself. It is introduced to exclude any limited definition of the word cause. In the present case, the immediate proceeding in which the order was made was not the cause or matter to which the section refers. The cause or matter in question was the application to the court to exercise its powers under the Allied Forces Act and the order, and to deliver the appellant to the Dutch military authorities. It is in reference to the nature of that proceeding that it must be determined whether there was an order made in a criminal cause or matter. That was the matter of substantive law. At p 162 Lord Wright referred to the speech of Viscount Cave in In re Clifford and OSullivan [1921] 2 AC 570, 580 (a case in which the underlying proceeding was held not to be criminal in nature): Viscount Cave said there must be two conditions fulfilled to satisfy the word criminal. There must be the consideration of some criminal offence charged under criminal law, and the charge must be preferred or about to be preferred before some court or judicial tribunal having or claiming jurisdiction to impose punishment for the offence or alleged offence. What I think Viscount Cave was particularly emphasizing was the latter condition. In his opinion, the military officers who purported to try the men and pass sentence, were in no possible sense a court martial or a court of any kind. The principle which I deduce from the authorities I have cited and the other relevant authorities which I have considered, is that if the cause or matter is one which, if carried to its conclusion, might result in the conviction of the person charged and in a sentence of some punishment, such as imprisonment or fine, it is a criminal cause or matter. The person charged is thus put in jeopardy. Every order made in such a cause or matter by an English court, is an order in a criminal cause or matter, even though the order, taken by itself, is neutral in character and might equally have been made in a cause or matter which is not criminal. The order may not involve punishment by the law of this country, but if the effect of the order is to subject by means of the operation of English law the persons charged to the criminal jurisdiction of a foreign country, the order is, in the eyes of English law for the purposes being considered, an order in a criminal cause or matter, as is shown by Ex p Woodhall and Rex v Brixton Prison (Governor of), Ex p Savarkar [1910] 2 KB 1056. Viscount Simon LC (with whom Lord Atkin and Lord Thankerton agreed) likewise emphasised the similarity with extradition proceedings, in which no appeal would lie to the Court of Appeal. He went on (p 156): It is the nature and character of the proceeding in which habeas corpus is sought which provide the test. If the matter is one the direct outcome of which may be trial of the applicant and his possible punishment for an alleged offence by a court claiming jurisdiction to do so, the matter is criminal. This is the true effect of the two conditions formulated by Viscount Cave in In re Clifford and OSullivan. Lord Porters speech was to similar effect. An appeal from the High Court would not lie in a case in which the magistrate in the proceedings under review there purported to be exercising criminal not civil jurisdiction, and the decision of the High Court was given in that matter (p 164), and: The proceeding from which the appeal is attempted to be taken must be a step in a criminal proceeding, but it need not itself of necessity end in a criminal trial or punishment. It is enough if it puts the person brought up before the magistrate in jeopardy of a criminal charge: see Ex p Pulbrook [1892] 1 QB 86, and Rex v Brixton Prison (Governor of), Ex p Savarkar. If these principles be sound, and I believe they are, the only remaining question is whether the appellant, when he was brought before the magistrate, was put in peril of trial and punishment upon a criminal charge. Amand remains the leading decision at the highest level regarding the meaning of the phrase criminal cause or matter in the context regarding rights of appeal. Three points may be made about it. First, the wide interpretation of the phrase is required to direct attention to the nature of the underlying proceedings in which the High Court is asked to intervene, rather than focusing on the abstract categorisation of the proceeding in the High Court itself. Secondly, as Lord Wright put it, the word matter does not refer to the subject matter of the proceeding, but to the proceeding itself. It is not sufficient for the underlying proceeding to relate to a subject matter which might be described as criminal in a broad sense; the proceeding itself has to be criminal in nature. Thirdly, in order for the proceeding (in respect of which an application is made to the High Court to intervene) to be a criminal matter the two conditions identified by Viscount Cave must be satisfied, so that it can be said that the applicant is put in jeopardy of criminal punishment by the proceeding; and such jeopardy has to be the direct outcome of the proceeding (p 156 per Viscount Simon LC). Although the House of Lords in Amand was not giving an exhaustive definition of the phrase, it identified the paradigm type of case which is covered by it. Any extension beyond that type of case would require to be clearly justified. Section 1(1)(a) of the Administration of Justice Act 1960 (the 1960 Act) created a right of appeal to the House of Lords at the instance of the defendant or the prosecutor, (a) from any decision of a Divisional Court of the Queens Bench Division in a criminal cause or matter; (b) from any decision of the Court of Criminal Appeal on an appeal to that court. Section 1(2) provided: No appeal shall lie under this section except with the leave of the court below or of the House of Lords; and such leave shall not be granted unless it is certified by the court below that a point of law of general public importance is involved in the decision and it appears to that court or to the House of Lords, as the case may be, that the point is one which ought to be considered by the House of Lords. Section 18 of and the Second Schedule to the 1960 Act made parallel provision in respect of appeals in relation to Northern Ireland. Again, as with section 1(6) of the 1907 Act, Parliaments concern that the time of the House of Lords, as the highest court within the legal system, should not be unduly taken up with routine appeals in criminal matters (however meritorious such appeals might be with reference to the particular facts) is clear. Accordingly, the scope for an appeal from the High Court in a criminal cause or matter (in an application for certiorari or other public law relief and in those cases where an appeal in a criminal case lay to the High Court) was far more restricted than in a civil matter. The reference in section 1(1) of the 1960 Act to the application being made at the instance of the defendant or the prosecutor in relation to a decision within sub paragraph (a) shows Parliaments understanding, in line with the decision in Amand, that for a proceeding to qualify as a criminal cause or matter a person had to be placed in jeopardy of criminal trial and punishment as the direct outcome of that proceeding, such that it was possible to identify the defendant and the prosecutor in respect of it. The same point applies in relation to section 41(1) of the 1978 Act. The 1960 Act also made new provision in relation to appeals in habeas corpus proceedings (section 15 and, for Northern Ireland, section 18(3)) and in cases of contempt of court. Section 17(1) provided: In this Act any reference to the defendant shall be construed (a) in relation to proceedings for an offence, and in relation to an application for an order of mandamus, prohibition or certiorari in connection with such proceedings, as a reference to the person who was or would have been the defendant in those proceedings; (b) in relation to any proceedings or order for or in respect of contempt of court, as a reference to the person against whom the proceedings were brought or the order was made; (c) in relation to a criminal application for habeas corpus, as a reference to the person by or in respect of whom the application was made, and any reference to the prosecutor shall be construed accordingly. This provision reinforces the inference that Parliament intended the phrase criminal cause or matter to refer to proceedings in which an individual, the defendant, is directly in jeopardy pursuant to a process potentially leading to his punishment under the criminal law in this jurisdiction or abroad. The Court of Criminal Appeal continued to have jurisdiction to hear appeals in criminal cases other than from the High Court. It seems that this distribution of routes of appeal was chosen because the High Court was a court of co ordinate jurisdiction with the Court of Criminal Appeal. Both were constituted of High Court judges (or in the case of the Divisional Court, often a Lord Justice of Appeal and High Court judges). The Court of Criminal Appeal regularly sat as a court of three High Court judges. The Criminal Appeal Act 1966 abolished the Court of Criminal Appeal and transferred its jurisdiction to the Court of Appeal. Thereafter, the Court of Appeal operated as a court with a civil division and a criminal division. The 1978 Act for Northern Ireland, which is in issue in this appeal, replicated with relevant adjustments the basic appeal structure which existed in England and Wales and re enacted for Northern Ireland equivalent provisions governing appeals from the High Court to the Court of Appeal and to the House of Lords. What is now called the Senior Courts Act 1981 (the 1981 Act) preserved this distribution of appellate jurisdictions for England and Wales. The general jurisdiction of the Court of Appeal for appeals from the High Court is preserved by sections 15 and 16, but subject to other provision in the 1981 Act or other specified legislation. Section 19 preserves the general jurisdiction of the High Court as before. Section 18(1)(a) provides: No appeal shall lie to the Court of Appeal (a) except as provided by the Administration of Justice Act 1960, from any judgment of the High Court in any criminal cause or matter. Section 151 of the 1981 Act enacted similar definitions to those used in the 1873 Act and the 1978 Act. By section 31, the 1981 Act also modernised the procedure for seeking relief pursuant to the prerogative writs by introducing the application for judicial review, which is now the relevant procedure to be used in proceedings in respect of control of public bodies according to rules of public law. A somewhat tangled jurisprudence regarding the meaning of the relevant phrase in the context of the creation of rights of appeal continued to develop after the 1960 Act and the 1981 Act. It was reviewed in detail by the Court of Appeal in R (Guardian News and Media Ltd) v City of Westminster Magistrates Court [2011] EWCA Civ 1188; [2011] 1 WLR 3253 (Guardian News). In that case, Lord Neuberger of Abbotsbury MR said that any sort of final coherence in relation to the scope and effect of section 18(1)(a) [of the 1981 Act] can only be provided by the Supreme Court (para 43). The Justice and Security Act 2013 and Belhaj By contrast with the statutory provisions referred to above, section 6 of the JSA 2013 is not concerned with routes of appeal. Rather, it makes provision for a court seised of relevant civil proceedings to make a declaration that they are proceedings in which a closed material application may be made to the court. Section 6(11) states that relevant civil proceedings means any proceedings (other than proceedings in a criminal cause or matter) before (a) the High Court, (b) the Court of Appeal, (c) the Court of Session, or (d) the Supreme Court. The closed material procedure allows for the presentation to the court in those proceedings of sensitive material the disclosure of which would be damaging to the interests of national security, with the material being withheld from the opposing party but subjected to review by the court in private session with the benefit of submissions from a special advocate to represent the interests of that party in the closed session. When use of the closed material procedure is authorised under this provision, the effect is that there is a limited departure, where justified, from usual standards of openness of justice and equality of arms. In Belhaj, the claimants brought judicial review proceedings against the Director of Public Prosecutions (DPP) to challenge his decision not to bring prosecutions in respect of alleged criminal offences said to have been committed by an officer of the Secret Intelligence Service in respect of unlawful rendition of the claimants from Thailand to Libya, made on the grounds that there was insufficient evidence for there to be any realistic prospect of conviction. The Secretary of State for Foreign and Commonwealth Affairs applied for a declaration under section 6 of the JSA 2013 to allow the use of the closed material procedure. The claimants contended that the judicial review proceedings constituted a criminal cause or matter for the purposes of section 6, so that the court had no power to authorise the use of that procedure. The Divisional Court of the High Court (Irwin LJ, and Popplewell J who agreed with his judgment) rejected that contention, holding that the proceedings were civil in nature: [2017] EWHC 3056 (Admin); [2019] AC 593. Irwin LJ distinguished the position as regards the use of the phrase in the different context of setting out routes of appeal. The appeal to this court was allowed by a majority of three to two. However, all the justices agreed that the context of the JSA 2013 and the context of the statutory provisions regarding routes of appeal were very different, with the result that the Barras principle was not applicable so as to require the transposition of the case law on the meaning of the phrase criminal cause or matter in the latter context into the former: see para 19 (Lord Sumption, with whom Baroness Hale of Richmond and Lord Mance agreed, although Lord Mance also gave a concurring judgment) and paras 44 51 (Lord Lloyd Jones, with whom Lord Wilson agreed). Instead, all the justices considered the ordinary meaning of the phrase, as read in the light of the mischief or rationale for the introduction of the closed material procedure in the JSA 2013 as set out in the preceding Justice and Security Green Paper (October 2011) (Cm 8194) (albeit they came to opposing conclusions on that basis): paras 20 24 (Lord Sumption), paras 26 37 (Lord Mance) and paras 52 57 (Lord Lloyd Jones). Lord Sumption noted that the DPP and the Secretary of State accepted that an application for judicial review of the prosecutorial decision at issue in Belhaj was a proceeding in a criminal cause or matter for the purpose of any right of appeal: para 18. He said that his view about the natural meaning of the words was in line with the view of Lord Esher MR in Ex p Woodhall and Lord Wright in Amand: para 20. Lord Sumption observed that counsel for the Secretary of State had accepted that judicial review of an extradition order would be a proceeding in a criminal cause or matter and continued: On that footing it seems to me to be impossible to contend that this judicial review was anything else. The reality of the appellants application is that it is an attempt to require the Director of Public Prosecutions to prosecute [the officer]. That is just as much a criminal matter as the original decision of the Director not to prosecute him. In what follows I discuss (1) the statutory scheme; (2) the position of the Lord Lloyd Jones agreed that in the context of the provisions regarding routes of appeal, judicial review both of decisions to prosecute and of decisions not to prosecute would qualify as decisions in a criminal cause or matter, so that an appeal would lie to the House of Lords or, now, the Supreme Court: para 47(5). Discussion present case in the statutory scheme; and (3) recent authority. (1) The statutory scheme It is unsatisfactory that there should be uncertainty regarding the meaning of the important procedural provisions in section 41(1) of the 1978 Act (for Northern Ireland) and section 18(1) of the 1981 Act (for England and Wales: section 18(1)). The phrase a criminal cause or matter as employed in those provisions defines a legal category of cases before the High Court for which there is only a highly circumscribed possibility of appeal to the Supreme Court, involving specified procedural hurdles; and outside which there is the usual right of appeal to the Court of Appeal, involving different procedural hurdles. Parties in a matter before the High Court need to be able to understand into which category their case falls, so that if they want to appeal they can know what their right of appeal is and how it may be exercised. Parliament intended that these procedural provisions should have a reasonably fixed and readily comprehensible effect. By the time of the enactment of section 41(1) (for Northern Ireland) and section 18(1) (for England and Wales), the original rationale of freezing rights of appeal as they stood in 1873 was long in the past and provides no sound guide to the interpretation of the relevant phrase. There have been substantial changes in the relevant context both in procedural terms and in terms of substantive law. There are considerably wider rights of appeal in criminal cases and the value of appeal rights has come to be recognised as it was not in 1873. The substantive law of judicial review to control the activities of public authorities and inferior courts when exercising administrative discretions in dealing with the public continued to grow throughout the 20th century and is recognised as a major protection for the rights and liberty of citizens. The direct link back to the legal position in 1873 has been broken not once but twice, by the enactment of a consolidation Act in 1925 (which is a factor which reduces the relevance of the fine detail of preceding law: see Farrell v Alexander [1977] AC 59) and by the revision of the law by the 1978 Act and the 1981 Act in light of the 1960 Act regarding appeals in a criminal cause or matter to the House of Lords. The Divisional Court described the jurisprudence on this subject as troubled. It is true that over the years since the first introduction of the phrase in the 1873 Act there has been a fairly steady trickle of cases about it, but in my view the true position should be regarded as settled, albeit that difficulties sometimes arise in marginal cases. In my opinion, for reasons which appear below, the present case is not a marginal case. According to the relevant criteria established in the case law, the present proceedings do not constitute a criminal cause or matter. In the procedural context in which section 41(1) and section 18(1) apply, two basic features of the regime of appeal rights are important. First, the appeal rights in relation to a decision by the High Court in a criminal cause or matter are directed primarily to maintaining the coherence of the legal system, rather than to rectifying errors which are made by courts in individual cases. An appeal is to the Supreme Court and is only possible if a point of law of general public importance has been certified, and even then only if permission is granted. These restrictive conditions reflect the need to ration access to the highest court, which has to deal with appeals across the whole range of cases in the three jurisdictions in the United Kingdom. However, there will be many cases in which an appellant may have a meritorious complaint about a decision made by the High Court which is not corrected because it happens not to raise of point of law of general public importance. Secondly, in contrast, in all other cases appeal rights from the High Court to the Court of Appeal are directed to ensuring that errors at first instance in individual cases can be rectified. Generally, in these cases, an appellant only needs to show that they have an arguable case with a real prospect of success to be able to appeal. They do not need to show in addition that their appeal gives rise to a point of general public importance. Accordingly, an overly expansive interpretation of the phrase a criminal cause or matter in section 41(1) and section 18(1) would have the effect of reducing to an unacceptable degree parties access to justice at appellate level, leaving pockets of unchallengeable, potentially erroneous first instance decisions. The importance of appeal rights to rectify errors in individual cases, including when no point of law of general public importance is in issue, has long been recognised across the legal system in both the civil sphere and the criminal sphere (in the latter case, in particular since the success of the 1907 Act and the prevalence of worrying errors by first instance courts which the implementation of that Act revealed). The former acceptance that there should be an emphasis on finality of disposal in criminal cases which underlay the position prior to 1873 and was to some degree encapsulated in section 47 of the 1873 Act has, since the early 20th century, been greatly eroded. Therefore, in construing the intended meaning and effect of the criminal cause or matter phrase in the context of the operation of the modern statutes which define rights of appeal, namely the 1978 Act and the 1981 Act, it is to be inferred that the intention is that the phrase defines a reasonably tightly drawn category of case focused directly on the process for bringing and determining criminal charges. At the same time, Parliament obviously intended that cases with a direct bearing on that process should be captured by the phrase, without drawing subtle and ultimately unsustainable distinctions depending on the precise nature of the procedure by which a matter concerning the process for bringing and determining criminal charges might be brought before the High Court. This was the point emphasised in the early case law, as reviewed above, as justifying the widest possible interpretation of the phrase (see Ex p Woodhall). That is to say, the phrase was to be given the widest possible interpretation in order to catch those cases with a clear and direct connection to the process for bringing and determining criminal charges, by contrast with the narrow interpretation urged by counsel in those cases which sought rather to focus on the nature of proceedings in the High Court (where a claim for habeas corpus or for the prerogative writs might be classified as a civil claim). Although a claim in the High Court for habeas corpus or for one of the prerogative writs could not itself readily be described as a criminal cause, as defined, the significance of the words or matter is to widen the meaning of the phrase so as to create a category defined, in effect, by reference to the criminal nature of the underlying proceedings in respect of which the decision under review in the High Court was taken (see Amand at pp 159 160 per Lord Wright and Belhaj, paras 17 and 20 per Lord Sumption). Over the years, the courts have settled on an interpretation of the phrase which accommodates both these points. The process for bringing a criminal charge against a person under domestic law begins with a decision to prosecute. It was authoritatively established by the decision of the House of Lords in Provincial Cinematograph Theatres Ltd v Newcastle upon Tyne Profiteering Committee (1921) 90 LJ (KB) 1064, in reliance on Ex p Woodhall, that a resolution by the committee to authorise their clerk to take steps to bring a prosecution for a criminal offence was an inherent part of the process for bringing a criminal charge, so that a decision on judicial review of that resolution in the High Court was a decision in a criminal cause or matter within the meaning of the final clause of section 47 of the 1873 Act and no appeal lay to the Court of Appeal. As Lord Sumner put it at p 1068, It seems to me that the commencement of those proceedings by passing the resolution was itself the commencement of a criminal matter, because in one unbroken proceeding, although no doubt by various steps and processes, the termination of the whole matter was fine or imprisonment. Similarly, steps taken to institute extradition proceedings against a person with a view to the bringing and determination of criminal charges in a foreign jurisdiction are an inherent part of the process of bringing and determining a criminal charge, so it has long been recognised, as established in Ex p Woodhall and affirmed in Amand, that an application in the High Court for habeas corpus or for one of the prerogative writs on judicial review to interrupt that process is a criminal cause or matter. Although the early cases were concerned with judicial review in the High Court of decisions to prosecute (or to allow extradition to proceed), it is now established that judicial review of a decision in an individual case not to bring forward a criminal charge in relation to a particular matter is of the same character and qualifies as a decision by the High Court in a criminal charge or matter within the meaning of section 41(1) and section 18(1), so that again no appeal lies to the Court of Appeal. This was assumed to be the position in R (Pretty) v Director of Public Prosecutions (Secretary of State for the Home Department intervening) [2001] UKHL 61; [2002] 1 AC 800 (Pretty) (judicial review challenge to the refusal of the DPP to undertake not to prosecute the claimants husband if he assisted her to commit suicide) and R (Corner House Research) v Director of the Serious Fraud Office (JUSTICE intervening) [2008] UKHL 60; [2009] AC 756 (Corner House Research) (judicial review challenge to the decision of the Director not to commence a prosecution against a potential defendant). There is a strong case for the assimilation of such cases concerning decisions not to prosecute a person with cases concerning decisions to prosecute. A prosecution authority might at the same time have to consider whether to bring prosecutions against two defendants in respect of the same matter and based on the same evidence, and decide in the one case to proceed and in the other not to proceed; if judicial review challenges were brought, it would be very contrived to place the two cases in different categories for the purposes of section 41(1) and section 18(1) (see also Belhaj, para 20, per Lord Sumption). The position was put beyond doubt by the judgments in Belhaj, a case concerning judicial review of a decision not to prosecute, which state in terms that this was a proceeding in a criminal cause or matter for the purpose of any right of appeal: paras 18 and 20 (Lord Sumption) and para 47(5) (Lord Lloyd Jones). See also R (Thakrar) v Crown Prosecution Service [2019] EWCA Civ 874; [2019] 1 WLR 5241. Two comments may be made about the limits of the criminal cause or matter phrase regarding the commencement of (or decision not to commence) criminal proceedings. First, the decision has to relate to the question of prosecution of a specific person in relation to a particular criminal offence, as in Pretty and Corner House Research. Those cases may be contrasted with R (Purdy) v Director of Public Prosecutions [2009] UKHL 45; [2010] 1 AC 345, which concerned a judicial review of the refusal of the DPP to publish details of his policy as to the circumstances in which a prosecution would be brought for the offence of aiding or abetting suicide contrary to section 2(1) of the Suicide Act 1961. This was not directly concerned with a decision whether to prosecute an individual and all counsel and all the courts involved assumed, rightly, that the proceedings were not a criminal cause or matter and hence should proceed by appeal from the High Court to the Court of Appeal and from there to the House of Lords, as they did. See also R (Nicklinson) v Ministry of Justice (CNK Alliance Ltd intervening) [2014] UKSC 38; [2015] AC 657 (Nicklinson), concerning claims for a declaration of incompatibility of section 2(1) with Convention rights under the Human Rights Act 1998 (the HRA) and regarding the content of the DPPs policy in relation to commencement of prosecutions for offences under that provision, which also proceeded by appeal to the Court of Appeal; and R (Conway) v Secretary of State for Justice (Humanists UK intervening) [2018] EWCA Civ 1431; [2020] QB 1 (Conway) (another claim for a declaration of incompatibility in relation to section 2(1) of the 1961 Act). Secondly, the tort of malicious prosecution is concerned with the malicious preferment of an unreasonable criminal charge against the claimant (see Clerk & Lindsell on Torts, 22nd ed (2018), ch 16). However, proceedings in the High Court concerning the tort are not categorised as proceedings in a criminal cause or matter. This is because the proceedings themselves have no bearing on the determination of a criminal charge against a person. The simple fact that, as a matter of language, without regard to context, one might describe a decision in such a case as a criminal cause or matter is not sufficient to engage section 41(1) or section 18(1). The next stage of the criminal process is the trial of a person on a criminal charge. Where the High Court is invited to exercise its judicial review powers in relation to this, the proceedings in that court are directly related to the trial and qualify as a criminal cause or matter, as the Fletcher case made clear. However, various matters can arise for decision in the course of a criminal trial which are collateral to the criminal process and which have stronger affinities with civil cases regarding compliance by a public authority (including a court) with its general obligations under public law. Judicial review proceedings in the High Court in relation to these matters are not categorised as a criminal cause or matter, so normal rights of appeal to the Court of Appeal apply. This is the type of case discussed in the judgment of Lord Neuberger MR in the Court of Appeal in the Guardian News case. He there discusses in detail many of the authorities bearing on the application of the phrase in relation to review in the High Court of various steps taken or orders made by criminal courts in the course of conducting criminal proceedings. Examples include a decision by a judge in a criminal trial whether to order disclosure to a newspaper of documents relating to that trial (as in Guardian News itself) and a decision in criminal proceedings to make an order estreating a recognisance (R v Southampton Justices, Ex p Green [1976] QB 11). For present purposes, it is not necessary to traverse the same ground. This is not the occasion to try to resolve every uncertainty and to rule upon every marginal case that has arisen. Finally, there is the type of case of which the Steel decision is illustrative, where an order is made (either by the High Court or the court which conducted the trial of a person on a criminal charge) which is directly consequential upon the outcome of the criminal process. In Steel, the order made by the High Court was identified as being part of the criminal process and hence was likewise categorised as a criminal cause or matter. The limit to this principle is illustrated by R v Secretary of State for the Home Department, Ex p Dannenburg [1984] QB 766. In that case, the Court of Appeal held that a decision of the Divisional Court refusing to quash a recommendation for deportation made by justices after the conviction of the defendant for several offences was a decision in a criminal cause or matter (since the recommendation for deportation formed an integral part of the criminal proceedings in which it was made). But it was also held that the Divisional Courts decision on judicial review of the subsequent decision of the Secretary of State to deport pursuant to that recommendation was not a criminal cause or matter, so that the ordinary right of appeal to the Court of Appeal was applicable in relation to that decision. The speeches in Amand, in the passages set out above, explain how to identify what counts as a decision in a criminal cause or matter for the purposes of knowing which appeal rights apply. This involves asking the question in relation to the proceedings which underlie those in the High Court: are they proceedings the direct outcome of which may be trial of the applicant and his possible punishment for an alleged offence by a court claiming jurisdiction to do so (p 156 per Viscount Simon LC) and which, if carried to [their] conclusion, might result in the conviction of the person charged and in a sentence of some punishment (p 162 per Lord Wright)? If so, the proceedings in the High Court to challenge such criminal process will be categorised as a criminal cause or matter, taking their character from the nature of those underlying proceedings. This guidance strikes a coherent and principled balance regarding rights of appeal, giving appropriate but not excessively wide content to the phrase a criminal cause or matter in the present statutory context. (2) The position of the present case in the statutory scheme The common issue raised by Mrs McGuinness in her claim in the present case and by the Department of Justice and by Mr Stone in their appeals does not relate to the commencement or conduct of any underlying criminal process involving Mr Stone. He is not currently the subject of any outstanding, undetermined criminal charge against him on which he is to be tried and may be subjected to sentence. The present proceedings are concerned with whether the Department of Justice has correctly understood and implemented a criminal sentence imposed on Mr Stone in the past. The criminal process against him was exhausted before the Department of Justice took the decision which is under challenge in these proceedings. Applying the guidance in Amand, therefore, the High Courts decision was not in a criminal cause or matter. The relevant right of appeal is to the Court of Appeal, not to the Supreme Court. That conclusion gains further support from a number of matters. First, since the 1873 Act the relevant statutes have provided for a general right of appeal from the High Court to the Court of Appeal. The criminal cause or matter category operates as an exception to that general right. It is appropriate that it should be construed in a way which is focused with some precision on an underlying criminal process which is under review in the High Court, so that it does not improperly undermine the general right of appeal which the relevant statutes confer. Secondly, the decision making process of the Department is not at all like a judicial criminal process against a defendant on a charge. Therefore the judicial review proceedings in the High Court here are not equivalent to an appeal in relation to a judicial proceeding, as in cases like Fletcher, Ex p Woodhall and Amand. Accordingly, the aspect of the underlying rationale for section 41(1) and section 18(1) which is to limit the scope for what can in substance be regarded as a second appeal does not apply. The Divisional Courts decision in this case is the first judicial decision in relation to the matter at issue, and it is desirable that it should be capable of being tested on appeal by whichever side is aggrieved at the outcome, according to the usual merits based right of appeal to the Court of Appeal. It is true that in cases involving judicial review of the exercise of prosecutorial discretion (eg the Provincial Cinematograph Theatres Ltd case) or the award of costs (eg Steels case) there is no element of a second appeal, but that is an argument for focusing the interpretation of the criminal cause or matter rubric in relation to them quite tightly, as has happened. Thirdly, application of the guidance in Amand ensures that overall coherence regarding the availability of the right of appeal to the Court of Appeal is maintained in relation to cases which raise similar issues. R v Governor of Brockhill Prison, Ex p Evans (No 2) [2001] 2 AC 19 (Evans (No 2)) was a case in which the governor had to calculate the claimants due date for release on licence in respect of a determinate prison sentence according to a statutory formula. The governor followed guidance in a series of cases to delay the claimants release, but the claimant brought judicial review proceedings to challenge this calculation of the release date and to claim damages for false imprisonment (see the account of the proceedings given by Lord Hope of Craighead at p 30). The Divisional Court held that, on proper construction of the statutory provisions, the claimant should have been released on an earlier date and granted her declaratory relief accordingly, and her claim for damages was adjourned to be decided on a later occasion. In due course that claim was dismissed, and she appealed successfully to the Court of Appeal (and the governors further appeal to the House of Lords was dismissed). Counsel and all the courts involved understood the claim to be civil in nature. It would have made no sense to separate out the claim in respect of calculation of the claimants release date and her claim for damages for false imprisonment, as the latter was predicated on the former and might well have been dealt with at a single hearing. It would have been obviously undesirable, and cannot have been the intention of Parliament, that different appeal rights should apply in relation to different but inherently related aspects of the reasoning leading to the outcome of the proceedings. Similarly, in the present case, if the Department of Justice had initially decided that on proper construction of the statutory provisions the calculation of the date for reference of Mr Stones case to the Parole Commissioners for consideration of whether he should be released on licence was as the Divisional Court determined it to be, Mr Stone could have brought judicial review proceedings to challenge that calculation and in those proceedings he could have sought to claim damages for false imprisonment (if he could show that he would have been released on licence promptly by the Parole Commissioners upon such a reference). Again, application of the guidance in Amand in this case gives a sensible and coherent result, according to which all aspects of such a claim would be regarded as ordinary civil proceedings. There would be no scope for bifurcation of rights of appeal. In R v Board of Visitors of Hull Prison, Ex p St Germain [1979] QB 425, following a riot at a prison the board of visitors heard charges against a number of prisoners for disciplinary offences contrary to the Prison Rules, found them guilty and imposed punishments including loss of remission. The prisoners applied to the Divisional Court for orders of certiorari to quash the decisions of the board, but their applications were refused. They sought to appeal to the Court of Appeal and the board objected to that court hearing the appeals, on the grounds that the proceedings in the Divisional Court concerned a criminal cause or matter. The Court of Appeal applied the guidance in Amand and dismissed that objection, holding instead that it had jurisdiction to hear the appeal. The charges related to disciplinary offences, not offences against the public criminal law, and Amand was distinguished on that basis. None of the judges or counsel involved suggested that the fact that the loss of remission meant that the prisoners release dates would be put back made this a case concerning a criminal cause or matter. That was simply an aspect of the implementation of the sentences of imprisonment which had been imposed on the prisoners long before. For these reasons, I would hold that this court has no jurisdiction to hear the appeals by the Department and Mr Stone. They should challenge the decision of the Divisional Court by way of appeal to the Court of Appeal. (3) Recent authorities Having obtained a hearing date and prepared for the hearing of the appeals to this court, the Department, Mr Stone and Mrs McGuinness were understandably reluctant to accept that the hearing before us should be lost for this jurisdictional reason. They submitted that the decision of the Divisional Court is properly to be categorised as one in a criminal cause or matter within section 41(1). They relied in particular on Belhaj, the decision of the Court of Appeal for England and Wales in R (McAtee) v Secretary of State for Justice [2018] EWCA Civ 2851; [2019] 1 WLR 3766 (McAtee) and the decision of the Divisional Court in Northern Ireland in JR27 [2010] NIQB 12. In my judgment, these authorities cannot be taken to determine the matter. I have already referred to Belhaj. The judgments in that case do not support the argument that the decision of the Divisional Court in this case was in a criminal cause or matter within section 41(1). Although both Lord Sumption (paras 17 and 20) and Lord Lloyd Jones (para 50) refer to Ex p Woodhall and Lord Lloyd Jones (para 50) referred to reasons for giving the relevant phrase a comparatively wide meaning in the context of the 1873 Act and the question of routes of appeal, both judgments are consistent with the analysis set out above. In so far as the reasoning in the case touches in specific detail on the law in relation to rights of appeal, the justices were simply in agreement that judicial review proceedings to challenge a prosecutorial decision were a criminal cause or matter, as previous authority made clear. The present judicial review proceedings are not concerned with such a decision, nor with any other decision falling within the guidance given in Amand. McAtees case was concerned with the implementation of a sentence of imprisonment for public protection (IPP) under section 225 of the Criminal Justice Act 2003. The effect of the Crime (Sentences) Act 1997 was that a prisoner sentenced to an indeterminate term by way of IPP and then released on licence could, after a qualifying period of ten years after release, seek an order from the Parole Board to require the Secretary of State for Justice to order that the licence should cease to have effect (ie that his release should become unconditional). One prisoner subject to IPP (Mr Lee) commenced judicial review proceedings, as a test case, to seek a declaration under the HRA that the relevant statutory provision requiring him to wait for the expiry of ten years before applying to be free from licence conditions was incompatible with his article 8 Convention rights under the HRA. A Divisional Court of the High Court dismissed that claim. Mr Lee applied to the Court of Appeal for permission to appeal and was granted such permission. Mr Lee then dropped out of the proceedings and an application was made for his place to be taken by Mr McAtee to continue the appeal. On consideration of that application, Irwin LJ considered that an issue arose regarding the jurisdiction of the Court of Appeal to entertain the appeal and directed that the issue be argued in open court. In a judgment of the court (Sir Brian Leveson P, Davis and Lewison LJJ), it was held that the appeal was in respect of a criminal cause or matter, so that no appeal lay to the Court of Appeal. I respectfully disagree with that conclusion. In my opinion, the court read too much into the decision of this court in Belhaj and treated it (see paras 33 to 35, 41, 50 and 51) as indicating that a broad meaning is to be given to the phrase criminal cause or matter as it appears in section 18(1), thereby limiting the availability of ordinary rights of appeal to the Court of Appeal to a degree which is not warranted by the section. But all the justices in the Supreme Court in Belhaj held that the Barras principle did not apply, so it was not appropriate for the Court of Appeal to approach the case on the basis that there should be a direct reading across of the meaning of the relevant phrase in the JSA 2013 into the statutes dealing with routes of appeal. The Court of Appeal also seems to have thought that the question whether an appeal was in relation to a criminal cause or matter was a matter of impression from the words used (para 43). However, I do not think that is a satisfactory approach, given the overlap between civil and criminal matters in some cases. Clearer criteria are needed to provide guidance in this procedural context so parties can know where they stand, and to avoid the risk of courts reaching decisions as a matter of impression which are hard to reconcile. In my view, there was no good reason to conclude that section 18(1) was applicable in relation to the claim for a declaration of incompatibility which was in issue in McAtees case, and good reason to think that it was not applicable. The proceedings had nothing to do with the bringing of criminal charges against the appellant. Those charges had been brought and dealt with in criminal proceedings in court a long time previously, including by the sentence the appellant had been given. Claims under the HRA for declarations of incompatibility in respect of statutory provisions are a familiar feature of the legal landscape and are generally treated as civil claims in relation to which an appeal lies to the Court of Appeal in the usual way. Only the High Court (or a court above that) can issue a declaration of incompatibility, not some other court such as one exercising criminal jurisdiction: section 4(5) of the HRA. Further, if a claim is made for such a declaration, notice has to be given to the government so that it has the opportunity to appear and resist the claim (section 5). The debate about whether a declaration of incompatibility should be granted is an exercise in review of the statute book against human rights standards and is distinct from the criminal process itself. These provisions indicate that an application for a declaration of incompatibility in the High Court is not a criminal cause or matter, and the appeal routes which have been followed in the leading cases (albeit on the basis of assumptions made by counsel and the courts) confirm this. In each of Nicklinsons case and Conways case the appeal lay to the Court of Appeal; so also in R (Anderson) v Secretary of State for the Home Department [2002] UKHL 46; [2003] 1 AC 837 (declaration of incompatibility in relation to the Home Secretarys involvement in setting the tariff for a life prisoner in relation to his sentence); R (Stott) v Secretary of State for Justice [2018] UKSC 59; [2018] 3 WLR 1831 (application for declaration of incompatibility regarding the statutory regime governing early release from prison of those serving extended determinate sentences for sexual offences, by way of a leap frog appeal pursuant to section 12 of the Administration of Justice Act 1969, ie on the basis that the usual route of appeal would be to the Court of Appeal); and R (Miranda) v Secretary of State for the Home Department (Liberty intervening) [2016] EWCA Civ 6; [2016] 1 WLR 1505 (declaration of incompatibility in relation to stop and search powers under the terrorism legislation and the article 10 Convention right in the HRA, as regards protection of journalists). The possibility of overlap with criminal proceedings cannot be ruled out. An application for a declaration of incompatibility may emerge from a failed argument, which is available in a criminal court below the High Court, that pursuant to section 3 of the HRA a statutory provision which defines a criminal offence should receive some modified interpretation in light of Convention rights. In such a case, it may be that the association of the application for a declaration of incompatibility in the High Court with the underlying criminal proceedings is so strong that they are to be taken together as a criminal cause or matter in the High Court. Prettys case is another example. The need to avoid bifurcation of the rights of appeal in relation to what, in the particular circumstances, are closely related dimensions of the same proceedings points towards this result. But what is important in such cases is that the usual procedural position in relation to applications for a declaration of incompatibility is strongly outweighed in the particular circumstances by the close association of that claim with underlying proceedings which are clearly criminal in nature. The interpretation of the phrase is necessarily informed by the context in which it falls to be applied. However, the Court of Appeal in McAtees case did make some highly pertinent comments with which I agree and which support the analysis above. In particular, I endorse what they said at para 42: It is, in our view salutary that there should not be an over expansive interpretation of the phrase criminal cause or matter and neither should there be an over expansive approach to addressing the jurisdictional issue. After all, while some cases in the Divisional Court or Administrative Court are at a second level of judicial decision making for example, appeals by way of case stated many are not (the present case is an example). If a case is a criminal cause or matter then the only route of appeal is to the Supreme Court. Not only is that complex and expensive for litigants but also (and importantly) such an appeal is only possible if the court has first certified that a point of law of general public importance arises. That is a high bar to cross; many, indeed most, cases are not likely to be able to cross it. Moreover, for those relatively few cases which do raise an important point of law, the Supreme Court will then be required to deal with them without what one would hope would be considered the benefit of the decision and reasoning of a three judge constitution of the Court of Appeal. See also R (Thakrar) v Crown Prosecution Service at para 41 per Davis LJ. I also agree with observations of the court in McAtees case in para 52 regarding the view reached in relation to the decision of the Divisional Court in Gilbert (Michael) v Secretary of State for the Home Department [2005] EWHC 1991 (Admin). That concerned a judicial review challenge, not to a sentence imposed by a criminal court but to a decision of the prison authorities in calculating the date on which the claimant was to be released and the date on which his licence expired. The case was thus similar to Evans (No 2), referred to above. Permission to appeal to the Court of Appeal was refused by Smith LJ after a brief oral argument, on the basis that the judgment was in a criminal cause or matter within section 18(1). In McAtees case, the Court of Appeal expressed reservations about this conclusion. They were right to do so. In my view, section 18(1) did not apply. As the Court of Appeal observed: it certainly would seem surprising that, for example, a decision on a consequential claim by any person for damages for wrongful detention (on the footing that the release date had been miscalculated) which is a claim of a kind not infrequently ultimately assigned to a Queens Bench master or to the County Court, could only attract an appeal, on certification, to the Supreme Court. The court also referred at para 27 to authority which I consider is directly supportive of the analysis above: it was assumed, without discussion, that the Court of Appeal had jurisdiction to decide an appeal relating to a prisoners asserted rights of notification of the judicial decision on the tariff term for a mandatory life sentence before (as was then the procedure) the Secretary of State set the ultimate tariff term: R v Secretary of State for the Home Department, Ex p Doody [1993] QB 175. Jurisdiction was also assumed in a case concerning the entitlement (or otherwise) to unconditional release on licence in the light of subsequently introduced legislation: R (Stellato) v Secretary of State for the Home Department [2007] 1 WLR 608. The same assumption was made in a case (in which a declaration of incompatibility was claimed) involving the absence of review procedures for indefinite notification requirement under the provisions of the Sexual Offences Act 2003: R (F) (A Child) v Secretary of State for Justice (Lord Advocate intervening) [2011] 1 AC 331. Finally, in R (Minter) v Chief Constable of Hampshire Constabulary [2014] 1 WLR 179 it had been held that an issue as to whether the extended licence period in an extended sentence was to be taken into account for the purpose of assessing the period of the notification requirements under the Sexual Offences Act 2003 was not a criminal cause or matter: see per Laws LJ, at para 2. I do not find the courts attempt later in its judgment to distinguish these cases persuasive. The courts reasoning (in particular at paras 43 to 51) depended on their view that no distinction could be drawn in this context between the imposition of a sentence by the criminal court and the working out of what that sentence means in light of the relevant statutory regime. I do not accept this. The imposition of a sentence by a court at the end of criminal proceedings is an inherent part of a criminal cause or matter for the purposes of section 18(1). But in my view proceedings in relation to decisions by non judicial actors regarding the effect of such a sentence are not; nor are judicial decisions regarding the human rights compatibility of the regime according to which such effect is determined. As to the former category, it is unfortunate that the courts attention was not drawn to a case such as Evans (No 2); and to the other authorities to which I have referred in relation to the latter. Finally, I turn to recent authority from Northern Ireland on the meaning of section 41. The Northern Ireland Divisional Court embarked upon a lengthy examination of the meaning of the relevant phrase in section 41 in JR27. That concerned a judicial review of the refusal of the police to destroy certain data relating to the claimant collected under the Police and Criminal Evidence (Northern Ireland) Order 1989 with a view to a possible prosecution, though in the event charges were not brought. McCloskey J, with whom Weatherup J agreed, reviewed a number of authorities and concluded that the primary test (from Amand) focused on whether the underlying proceedings could place an individual in jeopardy of criminal proceedings or punishment. Although no investigation was underway, an investigation and potential prosecution of the claimant for a criminal offence on some future date was nevertheless a possible and foreseeable outcome. As a result, the impugned measure was to be considered a step in the criminal proceedings that put the claimant in jeopardy (albeit slight) of a criminal charge. Sir Declan Morgan LCJ dissented. In his view the proceedings did not constitute a criminal cause or matter because the possibility of criminal proceedings was too remote to satisfy the need for proximity between the application before the court and the matter putting the individual in jeopardy. As will be clear from what has been said above, I consider that Sir Declan Morgan LCJ was correct about this. The jeopardy principle as adumbrated in Amand is much more tightly focused on court proceedings in relation to a specific criminal charge than the majority thought. Issues regarding the holding and use by public authorities of information relating to an individual are firmly in the sphere of civil public law, and there was no close connection with the bringing of a criminal charge in this case to change that position. The relevant route of appeal was to the Court of Appeal, as in the closely similar case of R (S) v Chief Constable of the South Yorkshire Police [2004] UKHL 39; [2004] 1 WLR 2196: see para 49 per Sir Declan Morgan LCJ. As he rightly observed at para 50, The requirement to appeal directly to the Supreme Court now seems anomalous. Similar comments have been made recently by the Court of Appeal in England and Wales: see R (Thakrar) v Crown Prosecution Service at para 41 (Davis LJ) and para 55 (Irwin LJ). Accordingly, there are strong arguments against reading section 18(1) and section 41(1) expansively. I would, however, enter one note of caution about Sir Declan Morgan LCJs judgment. At para 46 he said that cases in which, after the imposition of a sentence by a court in criminal proceedings, there is a challenge concerning the number of days the applicant has to serve in custody as a result of the sentence imposed involve proceedings in a criminal cause or matter (citing In re Montgomerys Application [2008] NIQB 130). I do not agree. There is a clear distinction between proceedings leading up to the imposition by a court of a sentence in relation to a criminal charge, which fall within the relevant phrase according to the guidance in Amand, and proceedings brought to challenge some non judicial body, such as a prison governor or a minister, which has to calculate the date of release in relation to such a sentence in the exercise of their administrative functions under public law, which does not. In my view, procedural clarity regarding rights of appeal requires that this distinction should be respected. In In re McGuinness (No 3) [2019] NIQB 76, the Divisional Court in Northern Ireland (McCloskey J and Keegan J) gave a judgment in which it held that related judicial review proceedings brought by Mrs McGuinness to challenge the exercise of jurisdiction by the SRC in relation to Mr Stone to consider his application for early release did not constitute a criminal cause or matter within section 41(1). As will be clear, I agree with that conclusion. However, the courts reasoning proceeded by reference to the majority judgment in JR27, Belhaj and McAtees case, and I would not endorse it. In my view, the conclusion is correct because the SRCs decision related to the exercise of their administrative functions, arising in the light of a sentence previously imposed and involving the working out of the effects of that sentence in the context of their public law duties under the relevant statutory regime. Conclusion For the reasons given above, I would hold that the present proceedings do not constitute a criminal cause or matter for the purposes of section 41, with the result that this court does not have jurisdiction to entertain these appeals. That being so, and because this court is likely to be assisted by consideration of the Northern Ireland Court of Appeal of the operation of the special prisoner regime in that jurisdiction under the Northern Ireland (Sentences) Act 1998 and pursuant to the Belfast Agreement, should the case come back for consideration by this court, I do not think it is appropriate to say anything about the merits of the appeals.

UK-Abs

The two appeals before the Court relate to judicial review proceedings concerning the treatment of Mr Michael Stone. In 1988, Mr Stone attacked a group of mourners at Milltown Cemetery, Belfast, killing several. One of them was the brother of the appellant, Mrs McGuinness. In 1989, Mr Stone was convicted and sentenced to life imprisonment and certain concurrent terms of imprisonment, with a recommended tariff of 30 years imprisonment. The Belfast Agreement of 1998 between the United Kingdom and Irish governments introduced an early release scheme for certain prisoners convicted of crimes related to sectarian violence in the Troubles. The Northern Ireland (Sentences) Act 1998 (the 1998 Act) gave effect to that part of the Belfast Agreement. Mr Stone made an application under the 1998 Act to the Sentence Review Commissioners (the SRC) seeking early release. In 1999, the SRC made a determination that Mr Stone was eligible for early release. Mr Stone was released on licence on 24 July 2000. In 2006, Mr Stone committed further offences at Parliament Buildings, Stormont. The Secretary of State for Northern Ireland suspended his licence. In 2008, Mr Stone was convicted and received two determinate sentences of 16 years imprisonment and other determinate sentences of between one and ten years imprisonment, all to run concurrently. In 2011, the SRC revoked Mr Stones licence. In 2017, the Northern Ireland Prison Service referred Mr Stones case to the Parole Commissioners, notifying them that his tariff expiry date would be 21 March 2018, on the basis that the period during which Mr Stone had been released on licence should count towards his 30 year tariff period. In the event, the Parole Commissioners made a formal determination in 2018 that Mr Stone should not be released upon expiry of his tariff. Mrs McGuinness issued these judicial review proceedings to challenge the Prison Services notification of a tariff expiry date of 21 March 2018, on the ground that the Prison Service erred in law in including the period of release on licence in Mr Stones tariff. The Divisional Court of the High Court heard the case, deciding to treat it as a criminal cause or matter on a pragmatic basis, and certified a question of law of general public importance suitable for appeal to the Supreme Court under section 41 of the Judicature (Northern Ireland) Act 1978 (the 1978 Act). The Attorney General for Northern Ireland intervened in the appeal to dispute the assumption that Mrs McGuinnesss application for judicial review constituted a criminal cause or matter and to challenge the Supreme Courts jurisdiction to hear the appeals. The Supreme Court unanimously holds that the present proceedings do not constitute a criminal cause or matter, with the result that the Court does not have jurisdiction to consider the appeals. Lord Sales gives the judgment, with which all the members of the Court agree. Section 41 of the 1978 Act provides for an appeal to the Supreme Court from any decision of the High Court in a criminal cause or matter [21]. The phrase a criminal cause or matter has been used in two different statutory contexts: first in provisions governing rights of appeal; and second in section 6 of the Justice and Security Act 2013 (the JSA 2013) in relation to a special closed procedure for secret intelligence material in court proceedings. As accepted by the Supreme Court in R (Belhaj) v Director of Public Prosecutions (No 1) [2018] UKSC 33; [2019] AC 593, the statutory context of section 6 of the JSA 2013 is different from that of section 41(1) of the 1978 Act [24]. The Supreme Court reviews the history of the phrase from its first use in section 47 of the Supreme Court of Judicature Act 1873 to the 1978 Act, which replicated in Northern Ireland the appeal system of England and Wales [25] [56]. Two basic features of the regime of appeal rights are important. First, the appeal rights in relation to a High Court decision in a criminal cause or matter are directed primarily to maintaining the coherence of the legal system rather than rectifying specific errors. An appeal to the Supreme Court is only possible if a point of law of general public importance is certified [66]. Second, in contrast, in all other cases appeal rights from the High Court to the Court of Appeal are directed to ensuring that errors at first instance in individual cases can be rectified. No showing of public importance is required [67]. The leading case on the meaning of the phrase a criminal cause or matter is that of the House of Lords in Amand v Home Secretary [1943] AC 147. The approach set out in that decision requires consideration of the proceedings which underlie those in the High Court. A criminal cause or matter will be: (a) one that puts the applicant in jeopardy of criminal punishment; and (b) where that punishment is the direct outcome of the proceeding [66], [77]. The issue raised in the present case does not relate to the commencement or conduct of any underlying criminal process involving Mr Stone. He is not subject to any outstanding undetermined criminal charge on which he will be tried and may be subjected to sentence. The present proceedings are concerned with whether his past criminal sentence has been correctly understood and implemented. The High Court decision was therefore not in a criminal cause or matter and the relevant right of appeal is to the Court of Appeal, not the Supreme Court [78]. As a result, and because the Supreme Court is likely to be assisted by consideration by the Northern Ireland Court of Appeal on the operation of the 1998 Act, should the case return for consideration, the Supreme Court does not think it appropriate to say anything about the merits of the appeals [96].

This appeal and cross appeal raise important questions about the compatibility of two statutory regimes, namely the adjudication of construction disputes and the operation of insolvency set off. In bare outline, section 108 of the Housing Grants, Construction and Regeneration Act 1996 (the 1996 Act) confers a right upon a party to a construction contract to refer a dispute arising under that contract to adjudication. Rules made under the Insolvency Act 1986 (now rule 14.25 of the Insolvency (England and Wales) Rules 2016 (SI 2016/1024)) (the IR) make provision for automatic set off of cross claims between a company in liquidation and each of its creditors, giving rise to a single net balance between them, to be ascertained by the taking of an account. Rule 14.24 does the same for a company in distributing administration. The 1996 Act does not deny the right of a company to refer disputes to adjudication merely because it is in liquidation, but it is argued on this appeal that, if there are cross claims between parties to a construction contract and one of them is in liquidation, then there can be no adjudication of any dispute between them about those cross claims even if, but for the liquidation and the existence of cross claims, one or more of those disputes would fall within the right to refer to adjudication conferred by section 108. This objection to the use or availability of adjudication in the context of insolvency set off is put on two grounds, which may be labelled jurisdiction and futility. First it is said that since insolvency set off replaces the former cross claims with a single claim for the net balance, there is no longer a claim, or therefore a dispute, under the construction contract, so that the adjudicators jurisdiction under section 108 (or under a bespoke or standard form contractual provision to similar effect) is not engaged. There is only a dispute about the net balance arising under the regime for insolvency set off. Secondly it is submitted that, even if there is jurisdiction, the conduct of an adjudication in the context of insolvency set off will, generally speaking, not lead to an enforceable award, and will therefore be an exercise in futility which the court can and ordinarily should restrain by injunction, before costs are thrown away upon a process which serves no useful purpose. In short, it is said that the two regimes are simply incompatible. Both these submissions were endorsed by the trial judge in the present proceedings, but only the futility argument prevailed in the Court of Appeal. This court is therefore faced with an appeal against the order made by the Court of Appeal by way of an injunction restraining the pursuit of the adjudication, and a cross appeal seeking to restore the judges ruling that the adjudicator lacked jurisdiction. The two objections to the use of adjudication in the context of insolvency set off are conceptually distinct and, as the parties recognised, the question of jurisdiction logically comes first. It is a question of construction of section 108 and of the express or implied terms of a construction contract made in accordance with its requirements. But the general need to construe and apply both statutes and contracts in context and by reference to their purpose makes it convenient to begin, after a summary of the facts, with an overview of the respective contexts and purposes of both the adjudication and corporate insolvency regimes, set off being only a subordinate part of the latter. Furthermore a conclusion that the two regimes really are incompatible might well incline the court to a construction which recognised that reality, rather than forced the two regimes into unprofitable co existence. By the same token, the opposite conclusion about compatibility might encourage a more generous approach to the construction of the provisions conferring jurisdiction. The Facts Both the appellant Bresco Electrical Services Ltd (Bresco) and the respondent Michael J Lonsdale (Electrical) Ltd (Lonsdale) are electrical works contractors. By a sub sub contract dated 21 August 2014 (the Contract) Bresco agreed to perform electrical installation works for Lonsdale at a site at 6, St Jamess Square, London SW1. The Contract is a construction contract to which section 108 applies, and it included express provision for adjudication of disputes arising under it which complied with the section. In December 2014 Bresco ceased to attend the site, alleging much later that it did so by way of acceptance of repudiatory breach of the Contract by Lonsdale. In March 2015 Bresco went into creditors voluntary liquidation. Thereafter Bresco acted as described below by its liquidator or from time to time by its agent Pythagoras Capital Ltd (Pythagoras) which is funding the claim against Lonsdale in the liquidation. In correspondence in late 2017 both Bresco and Lonsdale made claims against each other for breach of the Contract. Each accused the other of repudiatory breach. Lonsdales claim included 325,000 odd for the cost of having Brescos contracted works done by another contractor. Bresco says that those were additional to the works for which it contracted, and claimed for the value of works which it had carried out under the Contract, for which it had not been paid. Both parties claimed damages against the other. Both Brescos claims and Lonsdales cross claims arose entirely from the Contract. Each denied the others claims in their entirety. On 18 June 2018 Bresco served on Lonsdale notice of intention to refer a dispute to adjudication, seeking payment of 219,000 odd for the value of work done, and damages for loss of profits under the Contract. On 21 June RICS appointed Mr Tony Bingham as adjudicator on Brescos application. Bresco served its notice of referral to adjudication on the same date. Lonsdales response was, on 22 June, to assert that the Adjudicator was without jurisdiction, for the reason described above relating to insolvency set off and, on 26 June, to issue the present proceedings in the Technology and Construction Court (TCC) under CPR Part 8 for a declaration that the Adjudicator lacked jurisdiction and for an injunction restraining the further conduct of the adjudication. Lonsdales claim was tried with commendable speed on 11 July 2018 by Fraser J, who delivered an equally speedy reserved judgment on 31 July, acceding to Lonsdales case on lack of jurisdiction. On its appeal to the Court of Appeal (Sir Andrew McFarlane P, King and Coulson LJJ) Bresco succeeded on jurisdiction, but the injunction restraining the further conduct of the adjudication was continued on the basis that, since there could be no enforcement, it would be an exercise in futility and a waste of time and money. Accordingly Bresco appeals to this court against the continuation of the injunction, while Lonsdale cross appeals on jurisdiction. The Construction Adjudication Regime Introduced as a statutory regime by the 1996 Act, adjudication of construction disputes has been a conspicuously successful addition to the range of dispute resolution mechanisms available for use in what used to be an over adversarial, litigious environment. It builds upon a purely contractual structure for adjudication which was already by 1996 regarded by many in the industry as best practice. Speaking generally, adjudication is one of a spectrum of dispute resolution mechanisms which range from party and party negotiation at one end, through mediation, early neutral evaluation (ENE) and arbitration to litigation at the other end, lying roughly between ENE and arbitration. ENE delivers a private non binding opinion on the merits of the dispute from an independent, respected and often expert source. Arbitration delivers a (usually) private determination from a similar source which is binding subject to very limited scope for appeal. Adjudication shares with ENE the independent, often expert, respected source together with the speed and economy of ENE, with a provisional element of binding decision, unless and until the matter in dispute is later resolved by arbitration, by litigation or by agreement. The statutory regime was introduced in response to the report and recommendations of Sir Michael Latham, commissioned in July 1993 to review the procurement and contractual arrangements in the UK construction industry. His final report, called Constructing the Team, published in July 1994, contained at chapter 9 a section headed Dispute Resolution. Drawing upon experience of the development of alternative dispute resolution (ADR) in the USA, he noted at paragraph 9.2 that debate over adjudication, conciliation/mediation and arbitration had been strong throughout his review, with a growing consensus over the action needed. Of those alternatives his main focus was upon adjudication. He recommended that adjudication should extend to the widest range of potential disputes under the construction contract, that it should be available immediately, that adjudicators decisions should be swiftly implemented and that litigation or arbitration should be resorted to only after practical completion. A very important underlying objective, both of adjudication and of other recommendations which were eventually implemented in the 1996 Act, was the improvement of cash flow to fund ongoing works on construction projects. A particular concern was that a dispute between (say) a sub contractor and a sub sub contractor which could only be resolved by litigation or arbitration could in the meantime disrupt the entire project while a refusal of interim payment led to the cessation of significant works. The motto which has come to summarise the recommended approach is pay now, argue later. Adjudication was one of five reforms introduced by Part II of the 1996 Act designed to facilitate the realisation of the cash flow aspiration behind that motto. The way in which adjudication initially emerged as a consensual industry solution to this cash flow problem, before being mandated by the 1996 Act, is graphically described by May LJ in Pegram Shopfitters Ltd v Tally Weijl (UK) Ltd [2003] EWCA Civ 1750; [2004] 1 WLR 2082, paras 1 3. It is achieved by rigorous time limits for the conduct of the adjudication, the provisionally binding nature of the adjudicators decision and the readiness of the courts (and in particular the TCC) to grant speedy summary judgment by way of enforcement, leaving any continuing disagreement about the merits of the underlying dispute to be resolved at a later date, by arbitration, litigation or settlement agreement. But solving the cash flow problem should not be regarded as the sole objective of adjudication. It was designed to be, and more importantly has proved to be, a mainstream dispute resolution mechanism in its own right, producing de facto final resolution of most of the disputes which are referred to an adjudicator. Furthermore the availability of adjudication as of right has meant that many disputes are speedily settled between the parties without even the need to invoke the adjudication process. This is in part because Parliament chose to confer the right to adjudicate at any time, so that it can be and is used to resolve disputes eg about final accounts between the parties after practical completion, rather than merely at the interim stage: see Connex South Eastern Ltd v MJ Building Services Group plc [2005] EWCA Civ 193; [2005] 1 WLR 3323, paras 34 38 per Dyson LJ, who concluded that in section 108: The phrase at any time means exactly what it says. There is a chorus of observations, from experienced TCC judges and textbook writers to the effect that adjudication does, in most cases, achieve a resolution of the underlying dispute which becomes final because it is not thereafter challenged. Underlying statistics are hard to find, but judicial confirmation that this is so may be found in Carillion Construction Ltd v Devonport Royal Dockyard [2005] EWHC 778 (TCC), para 78 per Jackson J, Aspect Contracts (Asbestos) Ltd v Higgins Construction plc [2013] EWHC 1322 (TCC); [2013] Bus LR 1199, para 29 per Akenhead J, Severfield (UK) Ltd v Duro Felguera UK Ltd [2015] EWHC 3352 (TCC), para 63 per Coulson J, Meadowside Building Developments Ltd v 12 18 Hill Street Management Co Ltd [2019] EWHC 2651 (TCC), paras 63 64 per Adam Constable QC and Balfour Beatty Civil Engineering Ltd v Astec Projects Ltd [2020] EWHC 796 (TCC), paras 20 21 per Waksman J. It is worth quoting Mr Constables observations in full. After noting Coulson LJs comment in the present case (in the Court of Appeal) that many adjudication decisions become final either because the parties so agree, or because neither party challenges it, he continued: This plainly reflects the reality across the construction industry. Although it may have been a process which had its origins in a desire to maintain cashflow, the lifeblood of the construction industry (and alluded to in para 37 of Bresco, quoted above), it would in my view be wrong to restrict the utility of adjudication, in light of the breadth of the statutory scheme and its practical use within the industry, as being solely about short term cashflow. The scheme is, for example, used to determine final account disputes, and professional negligence claims, neither of which are usually primarily (or at all) about cashflow. Adjudication is often about achieving a quicker and cheaper resolution to the parties disputes. Where one party regards an adjudicators decision as a real miscarriage of justice, it has the right to take the dispute to litigation or arbitration to have that decision effectively overturned; where, as is so often the case, the parties regard the decision as a decent attempt to arrive at a fair resolution of the competing positions, the parties generally treat the decision as binding or negotiate a settlement around it. This is good for the overall administration of justice and no doubt many cases which would otherwise end up in the TCC are resolved without burdening public resources as a result of the practical utility of adjudication, notwithstanding its temporary nature. Confirmation from leading textbooks may be found in Glover and Elliott, Building Contract Disputes: Practice and Precedents looseleaf ed, paras 5 1 and 5 7, and Keating on Construction Contracts 10th ed (2016), para 18 028. In a 2014 article in Building, there is attributed to David Adamson (former Deputy Chair of the Construction Clients Forum) the suggestion that only around 2% of adjudication decisions have since been challenged in the courts (Joey Gardner, Lathams report: Did it change us?, Building, 27 June 2014). Statistics do not appear available to confirm this figure, but the overall picture of most adjudication decisions achieving de facto final resolution of the underlying dispute appears clear. Turning to the mechanics, section 108 of the 1996 Act was slightly amended (and augmented by section 108A) by the Local Democracy, Economic Development and Construction Act 2009, following a further report by Sir Michael Latham. It is convenient for present purposes to refer to section 108 in its amended form. It provides, so far as is relevant, as follows (with the 2009 amendments in square brackets): (1) A party to a construction contract has the right to refer a dispute arising under the contract for adjudication under a procedure complying with this section. For this purpose dispute includes any difference. (2) The contract shall [include provision in writing so as to] enable a party to give notice at any time of his (a) intention to refer a dispute to adjudication; (b) provide a timetable with the object of securing the appointment of the adjudicator and referral of the dispute to him within seven days of such notice; (c) require the adjudicator to reach a decision within 28 days of referral or such longer period as is agreed by the parties after the dispute has been referred; allow the adjudicator to extend the period of 28 (d) days by up to 14 days, with the consent of the party by whom the dispute was referred; (e) impartially; and impose a duty on the adjudicator to act enable the adjudicator to take the initiative in (f) ascertaining the facts and the law. (3) The contract shall provide [in writing] that the decision of the adjudicator is binding until the dispute is finally determined by legal proceedings, by arbitration (if the contract provides for arbitration or the parties otherwise agree to arbitration) or by agreement. The parties may agree to accept the decision of the adjudicator as finally determining the dispute. [(3A) The contract shall include provision in writing permitting the adjudicator to correct his decision so as to remove a clerical or typographical error arising by accident or omission.] (4) The contract shall also provide [in writing] that the adjudicator is not liable for anything done or omitted in the discharge or purported discharge of his functions as adjudicator unless the act or omission is in bad faith, and that any employee or agent of the adjudicator is similarly protected from liability. (5) If the contract does not comply with the requirements of subsections (1) to (4), the adjudication provisions of the Scheme for Construction Contracts apply. The Scheme for Construction Contracts (the Scheme) referred to in section 108(5) is contained in the Schedule to the Scheme for Construction Contracts (England and Wales) Regulations 1998 (SI 1998/649). Part 1 of the Schedule contains what is, in effect, a default adjudication framework if the parties to a construction contract fail to include one expressly with terms that are compliant with section 108, which operates as a set of statutorily implied terms: see section 114(4) of the 1996 Act. The detailed terms of the default framework do not matter for present purposes, save to note that by paragraph 8 the adjudicator may determine more than one dispute, and disputes under more than one relevant contract, if the parties so agree. In the present case the Contract contained express provision for adjudication which complied with the requirements of section 108. Construction adjudication does not generally allow for party and party costs shifting. Paragraph 25 of the default framework only permits adjudicators to determine the amount of their own reasonable fees and expenses and to apportion them between the parties. Section 108A (introduced in 2009) significantly limits the ability of the parties to contract otherwise. In the present case the Contract provided for joint and several liability for the adjudicators fees. Certain aspects of this machinery will need closer review, in particular the one dispute rule and the scope for the respondent to an adjudication reference to rely upon set off (at law or in equity) as a defence. But the following features are uncontentious and worthy of note at the outset. First, construction adjudication is semi compulsory. That is, the parties are not required to adjudicate every dispute. Rather each party is given a statutory and contractual right to require an adjudication of any dispute, including difference, which may arise under a construction contract, and to do so at any time, even after the contract has been fully performed or come to an end, whether by effluxion of time or discharge, including discharge by breach. Secondly, that right is conferred upon every legal person who or which is, or was, a party to a construction contract (as defined). There is no exclusion of particular types of person, such as a company in liquidation, as there is in some comparable jurisdictions such as New South Wales. Thirdly, the jurisdiction of the adjudicator is defined in the simplest of terms. It extends to every dispute which arises under a qualifying contract which a party entitled to adjudicate chooses to include in their reference. Fourthly, adjudication is remarkably speedy, because of the time limits imposed both on the parties and the adjudicator. A bespoke adjudication framework which does not include those time limits will not be in accordance with section 108(2), and will be overridden by the time limits in the default framework. Fifthly, as a direct corollary of speed, the adjudication process is almost bound to be cheaper, usually very much cheaper, than arbitration or litigation. This is mainly because, as lawyers and their clients know, the scope for expenditure on a dispute increases with the time available to argue about it. It is also because adjudicators are not confined to a purely passive role, but may investigate both fact and law as they think fit, within the time constraints imposed. It is unusual for there to be an oral hearing. Sixthly, the adjudicator will be both independent and equipped with the requisite subject matter expertise. Though not usually a lawyer, the adjudicator may obtain independent legal advice if necessary. Finally, when compared with arbitration and litigation, speed and economy come at an inevitable price in terms of reliability. There is no formal avenue of appeal against an adjudicators decision, and the court will in general summarily enforce it, regardless whether it is correct on the merits, provided that the adjudicator acted independently and within their jurisdiction. But a dissatisfied party can insist on having the dispute redetermined de novo in court or by arbitration (if available) even though the adjudicators decision will continue to bind in the meantime. Insolvency Set off The special rules as to set off in the context of insolvency (usually labelled insolvency set off) form a small but important part of the wider statutory insolvency code, which is directed to ensuring that the assets of an insolvent person (individual or company) are first collected in and then distributed mainly pari passu among those with relevant claims of the same priority. Speaking generally, those objectives are served by the imposition of substantial restraints upon what creditors might otherwise be able to do by way of enforcing their rights. These restraints serve both to optimise the collection and realisation of the insolvent persons assets and to prevent a free for all among the creditors in seeking to get their hands on them. By contrast there are, unsurprisingly, few corresponding restraints upon the enforcement of the insolvent persons rights by the relevant office holder. In what follows I will concentrate on corporate insolvency, and therefore refer to the insolvent person as the company. Although substantially the same scheme governs the insolvency process in both liquidation (voluntary or compulsory) and in a distributing administration, I will refer for present purposes to the office holder as the liquidator. The basic scheme whereby an unsecured creditors claims may only be pursued by way of proof and participation in a pari passu distribution of any available surplus after discharge of prior claims, whereas the liquidator may pursue the companys claims in full, and with every available tool for enforcement, risks causing a real injustice where there are cross claims between the company and one of its creditors arising from their mutual dealings. Leaving aside the special position of fiduciaries, there is no fairness in a creditor having to accept only a proportion of the debt due, while the company can recover on its cross claim against the same creditor in full. The legal and equitable rules for asserting set off as a defence to the companys claim by no means encompass every type of cross claim, in relation to current, contingent and future liabilities. But the statutory regime for set off in insolvency, now to be found in IR 14.25 operates upon an altogether more comprehensive and rigorous basis. First, it applies to every type of pre liquidation mutual dealing, and also to secured, contingent and future debts: see IR 14.25(1), (2), (6) and (7). Secondly, whereas legal or equitable set off is essentially optional, taking effect only if the cross claim is pleaded as a defence to the claim, insolvency set off is mandatory, and takes effect upon the commencement of the insolvency (the cut off date). It is said to be self executing, and for some purposes the original cross claims are replaced by a single claim for the balance: see IR 14.25(3) and (4). Thus the separate cross claims may no longer be assigned after the cut off date: see Stein v Blake [1996] AC 243. But the separate claims may survive for other purposes: see Wight v Eckhardt Marine GmbH [2003] UKPC 37; [2004] 1 AC 147, paras 26 27 per Lord Hoffmann. One example is the balance of contingent or prospective claims under IR 14.25(5). Within the liquidation, a net balance owing to the creditor must be pursued by proof of debt in the ordinary way. The liquidator is entitled to be paid the full amount of any net balance owing by the creditor, and may exercise any available remedies for its quantification and recovery, including litigation, arbitration or ADR: see IR 14.25(4) and (5). The identification of the net balance is to be ascertained by the taking of an account: see IR 14.25(2). If there is no dispute as to the existence and amount of the claims and cross claims this is in practice a matter of simple arithmetic, the net balance being the difference between the aggregate of the claims and the aggregate of the cross claims. But if any of the claims and cross claims are in dispute, then those disputes will need first to be resolved, by reference to the individual merits of each, before the arithmetic resumes: see again Stein v Blake (supra) per Lord Hoffmann at 255E G. This schematic portrayal of the way in which insolvency set off works should not mask the reality, namely that set off may, and commonly does, arise both in the ordinary process of proof by a creditor and in the ordinary course of litigation or other dispute resolution processes when the liquidator is seeking to pursue a claim of the company. The account is not an essential first step in the process. Thus a proof by a creditor must acknowledge an undisputed cross claim by the company (see IR 14.4(1)(d)), or the claim may be allowed in part by the liquidator after reducing the creditors claim by reference to a disputed cross claim of the company. In a claim in court by the company the liquidator may acknowledge an undisputed cross claim by the defendant, or be met by the defendant asserting a disputed cross claim against the company by way of set off (and therefore defence) in those proceedings: see Stein v Blake (supra) at p 253 per Lord Hoffmann. The process of proof of debt in the insolvency regime shares a number of the essential features of adjudication. Once initiated it is designed to operate both speedily and relatively cheaply. The liquidator is a professional likely to have some experience or expertise in business of the type being conducted by the company, together with accounting expertise. The liquidator is also semi independent. Although nominally asserting the companys position against the proving creditor, the liquidator is in substance adjudicating between the creditors as a whole in deciding what share of the available assets each should receive. The liquidator holds no brief for any particular creditor. The process of proof is (by comparison with litigation or arbitration) relatively light touch and inquisitorial, and the outcome is only provisionally binding, in the sense that both the proving creditor and any other dissatisfied creditor may challenge the liquidators ruling, by proceedings in court in which the issues are addressed de novo. It becomes final only if not challenged. In practice, as with adjudication, most of the liquidators rulings in the process of proof are not challenged. Where there are real disputes between the company and third parties (who may be creditors or debtors) the insolvency code is inherently flexible as to the best means for their resolution. A disputed pending claim (in court proceedings or in arbitration) against the company (as at the cut off date) may be allowed to continue by the liquidator or by the court supervising the insolvency process, as the best means of resolving the dispute: see Cosco Bulk Carrier Co Ltd v Armada Shipping SA [2011] EWHC 216 (Ch); [2011] 2 All ER (Comm) 481, para 58. New proceedings may be authorised for the same purpose. The liquidator may take the initiative by seeking the directions of the court in relation to particular disputes or to legal issues common to a number of disputed claims, and for that purpose join interested parties or representatives of interested classes. Within those proceedings the court has almost unlimited procedural flexibility, as the numerous matters referred to court by the administrators of the top Lehman company in London (Lehman Brothers International (Europe)) demonstrated. Furthermore there is no rule that, merely because there exists set off between cross claims, and the need to take an account, disputes about all the claims and cross claims need to be adjudicated upon in a single proceeding. Again, the Lehman litigation contains numerous examples of the separate resolution, in successive proceedings, of different issues between the same parties within the Lehman group, concerning their mutual dealings. More generally liquidators are no strangers to ADR, or to the pursuit of the most cost effective and proportionate means of resolution of disputes. Specific provision is made for the expenses incurred by liquidators in the pursuit of other dispute resolution procedures to be treated as liquidation expenses: see IR 7.108(4)(a)(ii). The court has expressly approved the inclusion of third party determination procedures similar to adjudication in insolvency schemes of arrangement: see In re Pan Atlantic Insurance Co Ltd [2003] EWHC 1696 (Ch); [2003] 2 BCLC 678, para 32 per Lloyd J. The Cross Appeal Jurisdiction As already noted the question whether the determination of a matter in dispute falls within the jurisdiction of an adjudicator turns on the true construction of section 108 and the contractual provision for adjudication in the relevant construction contract. There is no single, universal, form of words in current use but a form which does not confer a right to refer any dispute arising under the relevant contract will not be compliant with section 108 of the 1996 Act, in which case the form used in the default scheme is statutorily implied. Paragraph 1(1) of the Scheme, which was expressly incorporated into the Contract in the present case, provides that: Any party to a construction contract (the referring party) may give written notice (the notice of adjudication) of his intention to refer any dispute arising under the contract to adjudication. Thus an adjudicator properly appointed has jurisdiction to determine a dispute if it arises under the construction contract and has been referred to the adjudicator by one of the parties to the contract. It is common ground in the present case that the disputed claim of Bresco referred to Mr Bingham would have been within his jurisdiction as a dispute under the Contract, even though Bresco was by then in liquidation and the Contract had ended, if Lonsdale had not had a cross claim qualifying (if well founded) for insolvency set off. The main submission for Lonsdale is that because of the automatic operation of insolvency set off (on the cut off date in March 2015) all claims and cross claims under the Contract then ceased to exist, and were replaced by a single claim to the balance (by whichever of the parties turned out to have the larger claim). This was not a claim under the Contract but a claim under Brescos insolvency. Accordingly any dispute or disputes about that claim for the balance was also a dispute under the insolvency rather than under the Contract. Lonsdale advanced a number of subordinate arguments to bolster this central submission. First, it was said that the liberal construction afforded to similar provisions in agreements to arbitrate was inappropriate in the present context, mainly because adjudication was imposed upon the parties by the 1996 Act, rather than freely agreed, but also because arbitration was different in kind from adjudication. Secondly, a narrow construction of the gateway to jurisdiction was warranted as a simple means of avoiding the various respects in which adjudication was said to be incompatible with the process of accounting required by insolvency set off. Thirdly it was submitted that, even if disputes under the Contract survived insolvency set off, the requirement to resolve them all together in a single account could not be accommodated within an adjudication because of the single dispute rule, and the limited scope within adjudication for the determination of cross claims. It is convenient to address these subordinate arguments first, even though some of them overlap with the second issue, which is directly about incompatibility. There is some reported authority, but little agreement, on the question whether the liberal construction afforded to jurisdiction provisions in arbitration agreements should inform the construction of section 108 of the 1996 Act and paragraph 1 of the Scheme, in relation to the jurisdiction of an adjudicator. In the leading arbitration case Fiona Trust and Holding Corpn v Privalov [2007] UKHL 40; [2007] Bus LR 1719, the question was whether an arbitration agreement which conferred jurisdiction in relation to a dispute about repudiation of the contract should extend to the question whether the contract should be rescinded for bribery or misrepresentation in its inception. The House of Lords held that it did, and that this did not depend upon fine distinctions about whether the contract required that the dispute arose under or in relation to or in connection with the contract. A similar issue arose in relation to adjudication under a construction contract in Hillcrest Homes Ltd v Beresford and Curbishley Ltd [2014] EWHC 280 (TCC). At para 50 HHJ Raynor QC saw considerable force in the submission that the reasoning in Fiona Trust was inapplicable to construction adjudication because the provision for adjudication was the consequence of statutory intervention. By contrast in J Murphy & Sons Ltd v W Maher & Sons Ltd [2016] EWHC 1148 (TCC); [2017] Bus LR 916 Sir Robert Akenhead reached the opposite conclusion, treating the learning about arbitration in Fiona Trust as a useful analogy at para 23. The editors of Hudsons Building and Engineering Contracts 14th ed (2019) prefer Judge Raynors view, at para 11 022, while the editors of Keating on Construction Contracts, Supplement to 10th ed (2019), para 18 077 appear to veer toward recognising the force of Fiona Trust by analogy. There is in my view little to be gained by an extensive analysis of the question how close is the analogy between arbitration and adjudication for the purpose of applying or not applying the learning in Fiona Trust. There are plainly points to be made on both sides. There are obvious differences between arbitration and adjudication, but they are both types of dispute resolution procedures for which provision is made by a contract between the parties, in which recourse to that procedure is conferred by way of contractual right. I am not persuaded that the statutory compulsion lying behind the conferral of the contractual right to adjudicate points at all towards giving the phrase a dispute arising under the contract a narrow meaning, by comparison with a similar phrase in a contract freely negotiated. The fact that, after due consideration of the Latham Report, Parliament considered that construction adjudication was such a good thing that all parties to such contracts should have the right to go to adjudication points if anything in the opposite direction. Indeed, the fact that the right to adjudicate is statutorily guaranteed is a powerful consideration favourable both to its recognition as a matter of construction, and to the caution which the court ought to employ before preventing its exercise by injunction. Incompatibility with insolvency set off, as a spur to a narrow construction of the adjudication jurisdiction, is a much deeper question and underlies the whole of these proceedings. It is the central question on the issue whether the adjudication should be restrained by injunction. I would prefer to address it in a single section of this judgment, below, rather than either to analyse it twice, or split it into inconvenient and arbitrary parts. Suffice it to say, for present purposes, that for reasons to follow I do not regard construction adjudication as in any way incompatible with the operation of the insolvency code in general, or with insolvency set off in particular. The single dispute rule was deployed as the second prong of a forensic Mortons Fork. Either there was a single dispute about the net balance, in which case it did not arise under the contract, or there were multiple disputes (arising under the various cross claims if they survived) which needed to be resolved on the taking of a single account, but which could not fall within the adjudicators jurisdiction because of the single dispute rule. I consider this argument to be misconceived. The starting point is that nothing in the 1996 Act or in the Scheme expressly creates a single dispute rule, as a matter of jurisdiction. The jurisdiction of the adjudicator is, subject to the overriding requirement that the dispute or disputes referred arise under the contract, mainly defined by the terms of the reference in each particular case. The only guidance from the Scheme is, in paragraph 8, that the adjudicator may determine more than one dispute, or disputes under more than one contract, if the parties so agree. However narrowly the referring party chooses to confine the reference, a claim submitted to adjudication will nonetheless confer jurisdiction to determine everything which may be advanced against it by way of defence, and this will necessarily include every cross claim which amounts to (or is pleaded as) a set off. This much was common ground, but it is supported by authority: see Bailey Construction Law 3rd ed (2020), para 24.57 and PC Harrington Contractors Ltd v Multiplex Constructions (UK) Ltd [2007] EWHC 2833 (TCC); [2008] BLR 16, paras 40 41 per Christopher Clarke J. The set off may be advanced by way of defence to the exclusion of the claim referred to adjudication, but not as an independent claim for a monetary award in favour of the respondent to the reference. To the same effect, in relation to a cross claim in fraud, is Speymill Contracts Ltd v Baskind [2010] EWCA Civ 120; [2010] BLR 257, paras 36 37 per Jackson LJ. What is or is not a single dispute within the rule is by no means straightforward. The most comprehensive judicial analysis of the rule appears in Witney Town Council v Beam Construction (Cheltenham) Ltd [2011] EWHC 2332 (TCC); [2011] BLR 707, para 38 per Akenhead J, in the following principles: (i) A dispute arises generally when and in circumstances in which a claim or assertion is made by one party and expressly or implicitly challenged or not accepted. (ii) A dispute in existence at one time can in time metamorphose into something different to that which it was originally. (iii) A dispute can comprise a single issue or any number of issues within it. However, a dispute between parties does not necessarily comprise everything which is in issue between them at the time that one party initiates adjudication; put another way, everything in issue at that time does not necessarily comprise one dispute, although it may do so. (iv) What a dispute in any given case is will be a question of fact albeit that the facts may require to be interpreted. Courts should not adopt an over legalistic analysis of what the dispute between the parties is, bearing in mind that almost every construction contract is a commercial transaction and parties cannot broadly have contemplated that every issue between the parties would necessarily have to attract a separate reference to adjudication. (v) The Notice of Adjudication and the Referral Notice are not necessarily determinative of what the true dispute is or as to whether there is more than one dispute. One looks at them but also at the background facts. (vi) Where on a proper analysis, there are two separate and distinct disputes, only one can be referred to one adjudicator unless the parties agree otherwise. An adjudicator who has two disputes referred to him or her does not have jurisdiction to deal with the two disputes. (vii) Whether there are one or more disputes again involves a consideration of the facts. It may well be that, if there is a clear link between two or more arguably separate claims or assertions, that may well point to there being one dispute. A useful if not invariable rule of thumb is that, if disputed claim No 1 cannot be decided without deciding all or parts of disputed claim No 2, that establishes such a clear link and points to there being only one dispute. These principles were applied with apparent approval by Coulson J in Deluxe Art & Theme Ltd v Beck Interiors Ltd [2016] EWHC 238 (TCC); [2016] BLR 274, paras 15 16. They were not subjected to any sustained challenge in these proceedings. Applying Akenhead Js useful rule of thumb, it appears that a dispute about a cross claim relied on as a set off by way of defence to the claim referred will be part of the dispute raised by the reference, because the claim cannot be decided without consideration of the cross claim by way of defence. However that may be, the single dispute rule would only assist Lonsdales argument on jurisdiction if the law of insolvency set off compelled the liquidator to bring all disputes about the claims and cross claims qualifying for set off for resolution in a single proceeding. But the law and practice of insolvency set off does no such thing. The liquidator may, if it appears economical and proportionate to do so, untangle a complex web of disputed issues arising from mutual dealings between the company and a third party by picking some as suitable for adjudication, others for arbitration and others for disposal by an application to the court for directions, or by ordinary action. At the same time the liquidator may seek to deploy ADR and negotiation to narrow the issues in the meantime. Returning to the main submission, the existence of a cross claim operating by way of insolvency set off does not mean that the underlying disputes about the companys claim under the construction contract and (if disputed) the cross claim simply melt away so as to render them incapable of adjudication. The submission that they are replaced by a dispute in the insolvency is wrong for the reasons which follow. First, the submission proves too much. It is common ground that a disputed claim by the company in liquidation for (say) 300,000 under a construction contract can be referred by the liquidator to adjudication. But suppose there is an undisputed cross claim for 25. This would trigger insolvency set off and on Lonsdales argument (as Ms Sinclair QC ruefully admitted) deprive the adjudicator of jurisdiction. True it is that the liquidator would have to give credit for 25 against the companys claim, but in reality the only dispute would be as to the merits of that claim under the construction contract. To treat the existence of the undisputed cross claim for 25 as a basis for depriving the company of its right to adjudication of its disputed claim would be a triumph of technicality over substance. Now suppose that there is a disputed cross claim under the same contract for 100,000. Again, this dispute would be entirely a dispute or disputes under the contract, and the cross claim would be available by way of insolvency set off, as a defence to one third of the companys claim. Using Akenhead Js rule of thumb, there would still be a single dispute under the contract. Finally, suppose that the cross claim is alleged to overtop the companys claim (as here). It would still be available as a defence to the companys claim, now to the whole of it, and form part of the same dispute. The only constraint upon the adjudicators jurisdiction would be that he could not award the balance to the creditor, but he could dismiss the claim and even make a declaration as to the value of the cross claim, as part of his reasons why the companys claim wholly failed, leaving the creditor to prove for it in the liquidation under IR 14.25(3). Secondly, the submission assumes, from an over literal reading of the language of Lord Hoffmanns speech in Stein v Blake, that the claims and cross claims which fall within insolvency set off lose their separate identity for all purposes, on the cut off date. It is true that they do for the purpose of assignment, but there are important examples of purposes where they do not. Lord Hoffmann himself acknowledged this in Stein v Blake at p 255E, when he said that: The cross claims must obviously be considered separately for the purpose of ascertaining the balance. For that purpose they are treated as if they continued to exist. As already noted a future or contingent claim may survive set off so as to be enforceable as to the balance after the debt becomes due: see IR 14.25(5), which gave effect (by amendment) to part of the reasoning of the Court of Appeal in In re Kaupthing Singer and Friedlander Ltd [2010] EWCA Civ 518; [2011] BCC 555. More prosaically, when a liquidator causes a company in liquidation to pursue a contractual claim by litigation or arbitration, the pleaded claim remains one based upon the underlying contract, even if an undisputed set off is acknowledged, or a disputed set off is raised by way of defence. Nor does the existence of insolvency set off deprive the owner of the original claim of ancillary rights under the transaction which created it. For example, insolvency set off is now considered to apply to secured claims: see In re Lehman Brothers International (Europe) (No 4) [2017] UKSC 38; [2018] AC 465, paras 167 170 per Lord Neuberger of Abbotsbury and MS Fashions Ltd v Bank of Credit and Commerce International SA [1993] Ch 425, 446 per Dillon LJ, impliedly overruling dicta to the contrary by Rose LJ in In re Bank of Credit and Commerce International SA (No 8) [1996] Ch 245, 256 and In re Norman Holding Co Ltd [1991] 1 WLR 10. This is because mutual dealings in IR 14.25 are not limited to provable debts. Thus where a secured claim for (say) 300,000 is reduced to 200,000 by a set off, the creditor for the balance retains its security rights. By analogy the company retains its rights as to dispute resolution, whether to go to court, or a contractual right to arbitrate or adjudicate. A main plank in the reasoning of the Court of Appeal that the challenge to jurisdiction was unfounded was that if (as is not in dispute) a liquidator was entitled to pursue the companys claims by arbitration (pursuant to a clause referring disputes under the contract to arbitration) then the same must apply to the right to refer disputes to adjudication: see per Coulson LJ at para 31. I agree. I can see no reason why the two forms of dispute resolution should be treated differently. For all those reasons I would dismiss the cross appeal on jurisdiction. The Appeal Futility The reasoning of the Court of Appeal that the adjudication triggered by the reference made on Brescos behalf should be restrained by injunction may be captured from the following extracts from the judgment of Coulson LJ: 37. I consider that there is a basic incompatibility between adjudication and the regime set out in the Rules. The former is a method of obtaining an improved cashflow quickly and cheaply. The latter is an abstract accounting exercise, principally designed to assist the liquidators in recovering assets in order to pay a dividend to creditors. 38. This incompatibility can be seen in the different processes that each regime entails; in a comparison of the results that may be available; and in a consideration of the wider issues that could arise if companies in insolvent liquidation regularly sought to refer claims to adjudication. 45. a decision of an adjudicator in favour of a company in liquidation, like Bresco, would not ordinarily be enforced by the court. in my view, judgment in favour of a company in insolvent liquidation (and no stay), in circumstances where there is a cross claim, will only be granted in an exceptional case. 46. As a result of this . a reference to adjudication of a claim by a contractor in insolvent liquidation, in circumstances where there is a cross claim, would be incapable of enforcement and therefore an exercise in futility. The Court of Appeal was encouraged in its view by the following additional considerations. First, participation in adjudication would involve the waste of limited financial resources by the liquidator. Secondly it would expose the respondent to the reference to wasting costs in a futile process, where there would be no basis of recovering them even if successful. Thirdly the respondent would, if the liquidator obtained summary judgment for an excessive amount, have to spend further costs on court proceedings to rectify the position, with doubtful recovery from the company even if successful. Finally the pursuit by liquidators of adjudication followed by enforcement would put undue pressure on the TCC, to the detriment of solvent court users. In considering that those considerations of futility and incompatibility justified the grant of an injunction, the Court of Appeal relied upon Twintec v Volkerfitzpatrick Ltd [2014] EWHC 10 (TCC); [2014] BLR 150. At paras 63 64 Edwards Stuart J said this: By section 37 of the Senior Courts Act 1981, the court may grant an injunction in all cases in which it appears to the court to be just and convenient to do so I am unable to see how it would be either just or convenient to permit an adjudication to continue in circumstances where the decision of the adjudicator will be incapable of enforcement. In the present case if the adjudication went ahead and the adjudicator purported to give a decision in Twintecs favour, that decision would not be binding on VFL. Precisely the same issue would still have to be resolved in the litigation. Accordingly a victory by Twintec in the adjudication would be one that would make no difference to its legal rights. On the contrary, Twintec would have diverted valuable resources in order to deal with the issues in the adjudication and to incur substantial irrecoverable expenditure in doing so. Conversely, a purported decision in VFLs favour would be unenforceable and would, in itself, achieve nothing. It is true that a well reasoned decision by an adjudicator might encourage the parties to settle their dispute, but that, it seems to me, is a fairly nebulous advantage. I cannot see how it outweighs the significant and otherwise unproductive expenditure of money and resources by both parties that the adjudication will involve. In this court Lonsdale broadly supported the reasoning of the Court of Appeal. If a just and convenient test for the grant of an injunction might be thought too broad, Ms Sinclair QC submitted that a useful analogy was to be found in the principles applied by the court when restraining the presentation of a winding up petition for the enforcement of a disputed debt. For Bresco Mr Arden QC suggested that the exceptional jurisdiction to grant an anti suit injunction might be more appropriate by way of analogy. Trenchant expressions of the futility of adjudication, and its incompatibility with insolvency set off, from two judges with great experience in construction disputes deserve real respect, although the observations by Edwards Stuart J may have arisen from the particular facts of the Twintec case. Nonetheless I am unable to accept that they afford any proper basis for the grant of an injunction to restrain the pursuit of adjudication merely because the company making the reference is in an insolvency process and there are cross claims between the company and the respondent to the reference which trigger insolvency set off. The starting point, once it is appreciated that there is jurisdiction under section 108 in such circumstances, is that the insolvent company has both a statutory and a contractual right to pursue adjudication as a means of achieving resolution of any dispute arising under a construction contract to which it is a party, even though that dispute relates to a claim which is affected by insolvency set off. It follows that it would ordinarily be entirely inappropriate for the court to interfere with the exercise of that statutory and contractual right. Injunctive relief may restrain a threatened breach of contract but not, save very exceptionally, an attempt to enforce a contractual right, still less a statutory right. That very steep hurdle is not surmounted, either generally (in the context of insolvency set off) or on the particular facts of this case. For reasons already explained it is simply wrong to suggest that the only purpose of construction adjudication is to enable a party to obtain summary enforcement of a right to interim payment for the protection of its cash flow, although that is one important purpose. In the context of construction disputes adjudication has, as was always intended, become a mainstream method of ADR, leading to the speedy, cost effective and final resolution of most of the many disputes that are referred to adjudication. Dispute resolution is therefore an end in its own right, even where summary enforcement may be inappropriate or for some reason unavailable. Nor is there any basis for a conclusion that this beneficial means of dispute resolution is incompatible with the insolvency process, or with the requirement to deal with cross claims in insolvency by set off, still less an exercise in futility. First, as already described, the process of proof of debt in insolvency shares many of the attractive features of adjudication, in terms of speed, simplicity, proportionality and economy, but adjudication has the added advantage that a construction dispute arising during an insolvency will be more amenable to resolution by a professional construction expert than by many liquidators. In many cases, disputed cross claims needing to be resolved as a prelude to a final arithmetical set off account will both, or all, arise under the same construction contract, as in the present case, because all the mutual dealings between the parties will have arisen under the aegis of that single contract. Even if they arise under more than one construction contract, the adjudicator will be better placed than most liquidators to resolve them. The Scheme contains provision whereby that may be achieved by consent, and the need to take cross claims into account as defences (by way of set off) may well mean that there is in reality one single dispute within Akenhead Js helpful rule of thumb in the Witney Town Council case. It is true that the effect of insolvency set off may mean that cross claims raise issues wholly outwith the purview of one or more construction contracts, such as the apportionment of liability for personal injuries, or liability under mutual dealings between the same parties in some other commercial field. In such a case the adjudicator will need to have regard to them, if they amount to a defence to the disputed construction claim being referred, but may have simply to make a declaration as to the value of the claim, leaving the unrelated cross claim to be resolved by some other means. That is a remedy well within the adjudicators powers. Nonetheless the adjudicators resolution of the construction dispute referred by the liquidator may be of real utility to the conduct of the process of set off within the insolvency process as a whole. Thus it is no answer to the utility (rather than futility) of construction adjudication in the context of insolvency set off to say that the adjudicators decision is unlikely to be summarily enforceable. The reasons why summary enforcement will frequently be unavailable are set out in detail in Bouygues (UK) Ltd v Dahl Jensen (UK) Ltd [2001] 1 All ER (Comm) 1041, paras 29 35 per Chadwick LJ. As he says, the court is well placed to deal with those difficulties at the summary judgment stage, simply by refusing it in an appropriate case as a matter of discretion, or by granting it, but with a stay of execution. There is in those circumstances no need for an injunction, still less a need to prevent the adjudication from running its speedy course, as a potentially useful means of ADR in its own right. Furthermore it will not be in every case that summary enforcement will be inappropriate. There may be no dispute about the cross claim, and the claim may be found to exist in a larger amount, so that there is no reason not to give summary judgment for the company for the balance in its favour. Or the disputed cross claim may be found to be of no substance. Or, if the cross claim can be determined by the adjudicator, because the claim and cross claim form part of the same dispute under the contract, the adjudicator may be able to determine the net balance. If that is in favour of the company, there is again no reason arising merely from the existence of cross claims why it should not be summarily enforced. True it is that the adjudicator may over value the net balance in favour of the company, so that summary enforcement may leave the respondent to the reference having first to establish a true balance in its favour and then to pursue it by proof (or possibly as a liquidation expense) against an under funded liquidation estate. But over valuation is a problem that may arise in any liquidation context, even where there is no cross claim. There is no suggestion that, absent insolvency set off, adjudication is ordinarily futile merely because the company making the reference is in liquidation or distributing administration. The proper answer to all these issues about enforcement is that they can be dealt with, as Chadwick LJ suggested, at the enforcement stage, if there is one. In many cases the liquidator will not seek to enforce the adjudicators decision summarily. In others the liquidator may offer appropriate undertakings, such as to ring fence any enforcement proceeds: see the discussion of undertakings in the Meadowside case. Where there remains a real risk that the summary enforcement of an adjudication decision will deprive the respondent of its right to have recourse to the companys claim as security (pro tanto) for its cross claim, then the court will be astute to refuse summary judgment. There remain the issues about costs and the burden on the TCC. Taking costs first, Parliament chose to make this form of semi compulsory ADR costs neutral, even when invoked after the completion or other termination of the contract, when issues of cash flow have passed into history. Thus the statutory and contractual right with which an injunction would interfere has costs neutrality built into it. The very considerable success of construction adjudication since 1996 suggests that costs neutrality was built in for good reason. Many forms of ADR, including mediation, are costs neutral, and are none the worse (many would say all the better) for that. So are small claims procedures in the County Court, and many other court or tribunal dispute resolution processes. So also, in the insolvency context, is the process of proof of debt. Similarly it is inherent in the adjudication procedure that a party may be put to expense in having an incorrect decision put right in later litigation (or arbitration), at least part of which will usually be irrecoverable even if the litigation succeeds. That cannot of itself be a reason for preventing by injunction the statutory right to adjudication. Lonsdale makes the particular point, in the insolvency context, that a joint and several liability to pay the adjudicators costs and expenses (as in the Contract in this case and in the Scheme) may leave the respondent having to pay the whole of those amounts, with no effective recourse against the insolvent company for its half share. But that liability of the company will be a liquidation (or administration) expense, rather than a matter of proof: see IR 7.108(4)(a)(ii). Although this may not be a complete guarantee of payment by the company, it provides reasonable reassurance, and a joint and several liability of this kind is not generally risk free, for example where insolvency of one party follows the reference to adjudication. And it is a point equally applicable to all adjudication in the insolvency context, even where there are no cross claims, so it proves too much. In my view, consideration of costs and of burdens on the court militate against, rather than in favour, of admitting applications for injunctions to restrain adjudications before they have run their course. The tight time limits and document based investigatory nature of construction adjudication means that, if left to proceed, it would probably be completed before any opposed injunction application could be determined by the court, and at a fraction of the likely cost. The outcome of the adjudication may mean that no risks of the respondent losing the benefit of insolvency set off arise, for example if the respondent is successful. Opposition to such attempts to enforce as there may be can then, if necessary, be dealt with on their merits, when the outcome of the adjudication is known, rather than having to be guessed at. I have therefore reached the opposite conclusion from that of the Court of Appeal on the issue of futility. Construction adjudication, on the application of the liquidator, is not incompatible with the insolvency process. It is not an exercise in futility, either generally or merely because there are cross claims falling within insolvency set off, and there is no reason why the existence of such cross claims can constitute a basis for denying to the company the right to submit disputes to adjudication which Parliament has chosen to confer. For those reasons I consider that the appeal should be allowed.

UK-Abs

This case is about the relationship between (a) the adjudication regime for building disputes and (b) a rule of insolvency law called insolvency set off. Adjudication was introduced by Parliament in 1996 to help resolve disputes in the building industry. Parties to a construction contract have the right to refer their disputes to an independent adjudicator for a quick decision. The adjudicators decision is binding unless and until it is successfully challenged in court. In the meantime, the losing party must comply with the adjudicators decision a principle known as pay now, argue later which is designed to stop financial disputes from holding up the projects cash flow. Insolvency set off means that, when a company enters liquidation and there are mutual debts between the company and one of its creditors, the debts in each direction automatically cancel each other out. This leaves a single net balance owed in one direction. The liquidator of the company will calculate the balance and decide how much the company owes or is owed overall. The facts of the case Bresco and Lonsdale are electrical contractors. In 2014 Bresco carried out installation work for Lonsdale on a construction site at 6 St Jamess Square, London SW1. In 2016 Bresco entered insolvent liquidation. Both parties claimed they were owed money by the other. Lonsdale said Bresco had abandoned the project prematurely, forcing them to pay 325,000 for replacement contractors. Bresco said Lonsdale had never paid for some work Bresco had done, so Lonsdale owed 219,000 in unpaid fees plus damages for lost profits. In 2018 Brescos liquidators took steps to refer their 219,000 claim to an adjudicator. Lonsdale objected to the adjudication. They said Brescos claim (if any) and Lonsdales cross claim had cancelled each other out by the process of insolvency set off. This meant there was no longer any claim, or therefore any dispute under the contract, so adjudication was unavailable (the jurisdiction point). In any case the adjudicators decision would not be enforced until the liquidator calculated the net balance. So an adjudication was pointless (the futility point). Mr Justice Fraser accepted both Lonsdales points and granted an injunction to stop the adjudication. Following an appeal by Bresco, the Court of Appeal rejected the jurisdiction point but upheld the injunction on the basis of the futility point. Bresco appealed again to the Supreme Court. Lonsdale cross appealed on the jurisdiction point. The Supreme Court unanimously allows the appeal and dismisses Lonsdales cross appeal, with the result that the adjudication can go ahead. Lord Briggs gives the only judgment. (1) The jurisdiction point The Supreme Court concludes that the adjudicator does have jurisdiction. The insolvency set off between Brescos claim and Lonsdales cross claim does not mean that there is no longer a dispute under the construction contract, or that the claims have simply melted away [47]. The claims maintained their separate identity for many purposes [29]. Despite insolvency set off, Bresco could have brought court proceedings to determine the value of its claim, or exercised a contractual right to go to arbitration [50 51]. It follows that Bresco could also refer its claim to adjudication [52]. (2) The futility point The Court of Appeal thought there was a basic incompatibility between adjudication and insolvency set off. If the adjudicator found in favour of Bresco, the courts would refuse to enforce the award because it would interfere with the insolvency process. The adjudication would not promote the goal of pay now, argue later: it was futile and a waste of resources [54 56]. The Supreme Court rejects that view [58]. Bresco has a statutory and contractual right to adjudication. It would ordinarily be inappropriate for the court to interfere with the exercise of that statutory and contractual right [59]. Maintaining cash flow is not the only purpose of adjudication under the 1996 Act. Adjudication was designed to be a method of alternative dispute resolution (ADR) in its own right. In reality most decisions of an adjudicator are never challenged in court and they lead to a speedy, cost effective and final resolution of the dispute [13 15]. Here an adjudication will be a simple, proportionate method for Brescos liquidators to determine the net balance [60 62]. It is possible that the courts will not grant summary enforcement of the adjudicators decision due to the insolvency process, but that does not deprive the adjudication of its potential usefulness to the liquidators [64 67].

This is a more than usually anxious case. It concerns the death penalty. The United Kingdom is party to the Thirteenth Protocol to the European Convention on Human Rights (2004). In its preamble, the contracting states state that they are convinced that everyones right to life is a basic value in a democratic society and that the abolition of the death penalty is essential for the protection of this right and for the full recognition of the inherent dignity of all human beings. The UK Parliament had already demonstrated this conviction by finally abolishing the death penalty for murder in 1969 and for the few remaining offences to which it applied in 1998. As Lord Dyson MR put it, in R (Sandiford) v Secretary of State for Foreign and Commonwealth Affairs [2013] EWCA Civ 581; [2013] 1 WLR 2938, the death penalty is (in my view) rightly regarded by the Government as immoral and unacceptable (para 61). But it is not enough to think the death penalty immoral and unacceptable. The issue in this case is the legality of the Governments decision to provide mutual legal assistance to the United States in the shape of the product of police enquiries to facilitate the prosecution of the claimants son in the United States for very serious offences, some carrying the death penalty, without seeking assurances that the death penalty would not be imposed or, if imposed, would not be carried out. What is immoral and unacceptable is not necessarily unlawful. As judges, our role is to uphold the law. It is understandable, therefore, that this judgment has taken a long time to emerge, as members of the court hold different views about the current state of the law. Because of that, I have prepared this short guide to the judgments which follow. The decision is attacked on two grounds (the questions certified by the Divisional Court are set out at para 19 of Lord Kerrs judgment): (i) it is unlawful at common law for the Government to facilitate the carrying out of the death penalty in a foreign state, not only by deporting or removing a person from the United Kingdom to be tried in that state, but also by providing information which may be used by that state in the trial of a person who is not currently in the United Kingdom; (ii) the decision to provide such information, insofar as it consists of personal data within the meaning of the Data Protection Act 2018 (the 2018 Act), was unlawful under Part 3 of that Act. The leading judgment in this case is given by Lord Kerr. It contains a comprehensive account of the facts, the issues, the competing arguments and the relevant national and international materials. It is essential reading. The crimes of which the claimants son is accused are the worst of the worst. Nevertheless, having surveyed the development of the law in great detail, Lord Kerr concludes that the decision was unlawful both at common law and under the 2018 Act. The majority of the Justices are unable to share his view of the common law. The reasons for considering that the common law has not (at least yet) developed so far are explained by Lord Reed and Lord Carnwath. Lord Reed also explains that the decision might be open to challenge on the more conventional ground that it lacked rationality. He refers to two aspects of the Secretary of States reasoning: first, that prosecution in a foreign state was necessary to ensure that justice is done, even though there is insufficient evidence to prosecute him in the UK for an offence under UK law and UK law might regard his prosecution as an abuse of process; and second that possible execution in the US was regarded as preferable to detention in Guantanamo Bay. Where the right to life is at stake, even decisions taken under prerogative powers may be subject to more anxious scrutiny than they otherwise would be, given the value which UK law attaches to the sanctity of all human life. Lord Reed does not express a view on either point. It is not open to the court to decide the case on this basis, as the claimant did not argue that the decision was irrational for these reasons and the Secretary of State has not had the opportunity of responding to it in this appeal. The issue of whether the allegations could be tried in the UK has been the subject of separate judicial review proceedings. The court is, however, unanimous in holding that the decision was unlawful under the 2018 Act. We have had the benefit, not only of very full argument on the matter from Richard Hermer QC on behalf of the claimant, but also of a very helpful intervention by Gerry Facenna QC on behalf of the Information Commissioner. The 2018 Act is discussed by Lord Kerr at paras 152 to 159 of his judgment and by Lord Carnwath at paras 207 to 228 of his judgment. The short point is that, insofar as the information provided, or to be provided, to the US authorities consisted of personal data (which much of it did) the processing of such data by the Secretary of State as data controller required a conscious, contemporaneous consideration of whether the criteria for such processing were met. Substantial compliance with those criteria, as found by the Divisional Court, is not enough. It is not in dispute that the Secretary of State, when making the decision in question, did not address his mind to the 2018 Act at all. There is, moreover, a further point under the 2018 Act (referred to by Lord Carnwath at para 220 of his judgment) which raises the question of whether such processing in these circumstances could ever be lawful. This question was explored in the argument before us but in the light of our decision on the main point it is unnecessary for us to express a concluded view. Nevertheless, it is worth some fuller explanation because it would undoubtedly merit further consideration if a similar issue were to arise in future. Part 3 of the 2018 Act makes provision about the processing of personal data by competent authorities for the law enforcement purposes and implements the European Unions Law Enforcement Directive (Directive (EU) 2016/680) (the LED) (section 1(4)). That Directive is therefore a legitimate aid to the interpretation of the 2018 Act. The law enforcement purposes listed in section 31 include the investigation, detection and prosecution of criminal offences. Chapter 5 of Part 3 deals with the transfer of personal data to third countries or international organisations. Sections 73 to 76 set out the general conditions which apply to such transfers (section 72(1)(a)). The data controller cannot transfer personal data unless three conditions are met (section 73(1)(a)). Condition 3 need not concern us, because Condition 1 was not met and it is arguable that Condition 2 could never be met. Condition 1 is that the transfer is necessary for any of the law enforcement purposes (section 73(2)). In Guriev v Community Safety Development (UK) Ltd [2016] EWHC 643 (QB), Warby J held (in the context of restricting the subjects right of access to his personal data) that: The test of necessity is a strict one, requiring any interference with the subjects rights to be proportionate to the gravity of the threat to the public interest (para 45). The parties agree that the same test applies in this context. This obviously requires the data controller to address his mind to the proportionality of the transfer. Condition 2 is that the transfer (a) is based on an adequacy decision of (at that time) the European Commission (see section 74); (b) if not based on an adequacy decision, is based on there being appropriate safeguards; transfers must be documented (see section 75); or (c) if not based on an adequacy decision or appropriate safeguards, is based on special circumstances (see section 76) (section 73(3)). This transfer was not based on an adequacy decision or on there being appropriate safeguards, because there were none. In this connection, it is instructive that recital (71) to the LED contemplates among those safeguards that personal data will not be used to request, hand down or execute a death penalty or any form of cruel and inhuman treatment. In the absence of an adequacy decision or appropriate safeguards, Condition 2 could only be met if there were special circumstances. Once again, it is instructive that recital (72) to the LED regards these as derogations from its requirements and as such they should be interpreted restrictively and limited to data which are strictly necessary. A transfer to a third country or international organisation is based on special circumstances if it is necessary for any of the five purposes listed in section 76(1). Only two could be relevant here: (d) in individual cases for any of the law enforcement purposes; or (e) in individual cases for a legal purpose. Once again, the test of necessity is a strict one, requiring the controller to address his mind to the proportionality of the transfer. Crucially, however, section 76(2) provides: But subsection (1)(d) and (e) do not apply if the controller determines that fundamental rights and freedoms of the data subject override the public interest in the transfer. Once again, this obviously requires the controller to address his mind to the fundamental rights and freedoms of the data subject and to whether they override the public interest in the transfer. Recital (1) to the LED states that the protection of natural persons in relation to the processing of their personal data is a fundamental right. Recital (17) makes it clear that the protection it affords should apply to natural persons whatever their nationality or place of residence. Crucially in this connection, recital (46) states that any restriction on the rights of data subjects must comply with the Charter of Fundamental Rights of the European Union and the European Convention on Human Rights and in particular respect the essence of those rights. Clearly, therefore, the fundamental rights and freedoms of the data subject referred to in section 76(2) must include the rights protected by the European Convention. These are to apply even where the data are to be transferred to a third country outside the European Union and whatever the nationality or place of residence of the data subject. The most fundamental of the rights protected by the European Convention is the right to life. This is an absolute right, not qualified by the possibility of restrictions or interferences which are necessary in a democratic society. Article 2.1 prohibits the state from taking anyones life intentionally: the former exception for the death penalty when provided by law has gone following the Sixth and Thirteenth Protocols to the European Convention. There are three limited exceptions in article 2.2, none of which apply to the infliction of the death penalty as such. However, article 2.2(a) does allow for a death which results from the infliction of force which is no more than absolutely necessary in defence of any person from unlawful violence. And recital (73) to the LED acknowledges that there may be an urgent need to transfer personal data to save the life of a person who is in danger of becoming a victim of a criminal offence or in the interest of preventing an imminent perpetration of a crime, including terrorism. The Government did not engage directly with the argument. Collectively, these provisions point towards an interpretation of section 76(2) which would not allow the transfer of personal data to facilitate a prosecution which could result in the death penalty; but which would allow such a transfer if it was urgently necessary to save life or prevent an imminent crime. Had it been necessary, I would have been prepared so to hold. LORD KERR: Introduction Shafee El Sheikh is the son of the appellant, Maha Elgizouli. Mr El Sheikh and another, Alexanda Kotey, are suspected of involvement in heinous offences committed in Syria. The enormity of those offences was rightly accepted by Mr Edward Fitzgerald QC who appeared on behalf of Mrs Elgizouli on this appeal. Indeed, Mrs Elgizouli also admits that these crimes are of the most awful nature. She accepts without question that her son should face trial for his alleged involvement in those dreadful offences. But she considers that that trial should take place in this country rather than in the United States of America, where, at the time of the hearing of this appeal, it was contemplated that Mr El Sheikh and Mr Kotey would be tried. So that there be no doubt as to the monstrous nature of the crimes of which it is claimed Mr El Sheikh and Mr Kotey are guilty, one may refer to the summary of those offences in the witness statement of Mr Graeme Biggar, the Director of National Security in the Home Office. His account of those crimes has not been disputed by any of the parties to this appeal. Mr El Sheikh and Mr Kotey are believed to be part of a group which was responsible for extremely grave offences committed against several individuals. These include the beheadings of 27 men. The US citizens James Foley, Steven Sotloff and Peter Kassig and the British citizens David Haines and Alan Henning are believed to be amongst those killed. These killings came to global attention by all, except one, being filmed and posted on the internet. It is difficult to imagine more horrific murders than those which Mr El Sheikh and Mr Kotey are alleged to have carried out. It is entirely understandable, therefore, that Mr Biggar should aver that the deaths suffered by those men who were brutally killed have brought untold anguish to their families. It is equally understandable that the families affected wish to see those responsible brought to justice. That aim, Mr Biggar says, is strongly supported by HM Government. It is an aim which must surely be shared by all right thinking members of our society. The proceedings so far This appeal raises the issue whether it was lawful for the Secretary of State for the Home Department to provide evidence to the United States that could facilitate the imposition of the death penalty. The appellant brought a judicial review of the provision of mutual legal assistance (MLA) relating to her son after the Daily Telegraph published a letter from the Secretary of State to the US Attorney General revealing that such assistance had been provided. The Divisional Court dismissed her claim on the merits, but certified two questions of law of public importance: (i) Whether it is unlawful for the Secretary of State to exercise his power to provide MLA so as to provide evidence to a foreign state that will facilitate the imposition of the death penalty in that state on the individual in respect of whom the evidence is sought; and (ii) Whether (and if so in what circumstances) it is lawful under Part 3 of the Data Protection Act 2018, as interpreted in light of relevant provisions of European Union data protection law, for law enforcement authorities in the UK to transfer personal data to law enforcement authorities abroad for use in capital criminal proceedings. Jihad in Syria and Mr El Sheikhs suspected involvement Thousands of extremists wishing to engage in violent jihad have travelled to Syria from around the world. A significant number of these have joined the Islamic State of Iraq and the Levant (Daesh). The nature of the conflict in Syria and the presence of these terrorists have made that country a significant source of threat to United Kingdom and United States interests. The activities of Daesh in Syria have put civilian life there at considerable risk. They also constitute a wider risk to the stability of the region. Adherents to the terrorist cause of Daesh have been involved in the most abhorrent of crimes, including murder, rape, kidnap and the enslavement of people. A number of persons from the United Kingdom have joined Daesh and other terrorist organisations in Syria. They present particular challenges for this country. They pose risk to life by (among other things) radicalising, inspiring, enabling or directing potential terrorists in the UK. The government has responded to this phenomenon in three ways. In the first place, attempts are made to prevent UK citizens from leaving this country to fight abroad. Where those attempts are not successful, the government seeks to stop those who have engaged in fighting abroad from returning to the UK, where it is appropriate and lawful to do so per Mr Biggars witness statement. Where, despite those efforts, terrorists manage to return, a range of measures is deployed designed to minimise the risk that they might present to the public. The effort to defeat Daesh has resulted in many foreigners who are suspected of having been terrorist fighters being detained by, among others, the Syrian Democratic Forces. Mr El Sheikh and Mr Kotey were captured by these forces in northern Syria in January 2018. It is believed that both were members of a notorious group nicknamed the Beatles on account of their British accents. It is also suspected that this group was responsible for many unspeakable crimes against UK and US citizens. Since this appeal was heard, the court has been informed that Mr El Sheikh and Mr Kotey have been taken into US custody. No information has been given as to their current whereabouts. Although he had been a British citizen, on 22 December 2014 Mr El Sheikh was deprived of his citizenship under section 40(2) of the British Nationality Act 1981. This provides that the Secretary of State may deprive a person of a citizenship status if satisfied that the deprivation is conducive to the public good. It may not be ordered, however, if the subject is rendered stateless. It was determined that Mr El Sheikh was entitled to Sudanese citizenship. The decision to deprive him of his British citizenship is not under challenge in these proceedings. The request for mutual legal assistance A treaty between the governments of the United Kingdom and the United States on mutual legal assistance in criminal matters was made in 1994. It came into force in 1996. Under its terms, the governments agreed to provide mutual assistance in the form, inter alios, of documents, records and evidence (article 1(2)(b)) for the purposes of criminal and other proceedings. Proceedings are defined in article 19 of the treaty as including proceedings related to criminal matters and any measure or step taken in connection with the investigation or prosecution of criminal offences . In June 2015 the United States made a request to the United Kingdom under the treaty for MLA in respect of a criminal investigation that it was conducting into the activities of terrorists who had a connection with the UK, who were operating in Syria, and who were suspected of involvement in the murders of United States citizens there. The US request was for materials which had been gathered by UK police as part of a UK investigation into this group. Two of the offences which the US was investigating (homicide and hostage taking resulting in death) carried the death penalty. The Rt Hon Theresa May MP, who was then the Home Secretary, was prepared to accede to the mutual legal assistance request. But, as was customary, she sought a number of assurances from the US. These were outlined in a letter sent on her behalf to the US Department of Justice on 29 October 2015. It stated: As you will be aware, the UK will not provide formal mutual legal assistance in cases where the death penalty is a likely or possible punishment without a written assurance from the Requesting State that they would not seek to impose or, if imposed, carry out such penalty. As two of the offences for which the suspects are sought (homicide and hostage taking) carry the death penalty, we require, as a pre condition to the provision of the assistance requested by you, that you provide a written undertaking that the death penalty will not be sought or imposed or, if imposed, will not be carried out against anyone found guilty of any criminal offence arising from this investigation and/or UK assistance provided. This request was precisely in line with the long standing policy of steadfast opposition by successive UK governments to the imposition of the death penalty in any circumstances whatever. The unequivocal terms of the letter are significant. It is firmly stated that the UK will not provide MLA where the death penalty is a possible punishment without the normal death penalty assurances. The letter makes it plain that a written undertaking to that effect is required as a pre condition to the supply of the information. The imperative tone of the letter reflects the circumstance that not only has the death penalty been abolished in this country (capital punishment was suspended for murder in 1965 and finally abolished in 1969 (1973 in Northern Ireland)), governments since then have refused to countenance its imposition on UK citizens. Moreover, in 2004 the Thirteenth Protocol to the European Convention on Human Rights (ECHR) became binding on the United Kingdom, prohibiting the restoration of the death penalty for as long as the UK is a party to the Convention. The abhorrence with which our law regards the imposition of this most dire penalty is also reflected in the jurisprudence of the Judicial Committee of the Privy Council which shall be referred to below. The US response to the Home Secretarys letter was given in a letter from the Department of Justice of 21 March 2016 which said: With regard to potential application of the death penalty to any person found guilty of an offense arising from this investigation, we can respond as follows: While no persons have yet been charged in connection with this conduct, persons charged with offenses arising from such conduct could be subject to the federal death penalty. The United States provides the assurance that it will introduce no evidence obtained in response to this request in a proceeding against any person for an offense that is subject to the death penalty. In the event the evidence were to be so introduced, the United States would take a decision not to seek the death penalty, a decision which in the federal system absolutely precludes the death penalty from being imposed. While, therefore, the evidence actually supplied by the UK would not be directly used in order to seek the death penalty, on the basis of this letter, that penalty could have been sought by recourse to other material which might have been generated as a result of the information which the authorities in this country had provided. This point was made in a letter from the Home Office dated 10 August 2017: The contents of your letter of 21 March 2016 have been carefully considered. However, it is our view that the assurance provided in respect of the death penalty falls short of that which was requested In light of this [we invite] you to reconsider your response to our request for assurances as provided by article 3(2) and article 7(3)(a) of the UK US Mutual Legal Assistance Treaty. As stated in our earlier letter, the UK will not provide mutual legal assistance in cases where the death penalty is a likely or possible punishment without a written assurance that the Requesting State would not seek to impose or, if imposed, would not carry out such a penalty. As offences for which the suspects are sought carry the death penalty, we require, as a pre condition to the provision of the requested assistance, that you provide a written undertaking that the death penalty will not be sought or imposed or, if imposed will not be carried out against anyone found guilty of any criminal offence arising from this investigation and/or UK assistance provided. In any event, the assurance proposed by you in March 2016 would, in our view, allow UK assistance to be used for the purposes of another investigation to obtain other evidence which would not be caught by the assurance and which could lead to the death penalty being imposed and carried out. The UK wishes to provide the widest measure of assistance in this case but regrets that we will only be in a position to accede to your request if you are able to give the undertakings as requested above. No official response to this letter was received. It was informally indicated that the assurances sought would not be given. The terms of the correspondence from the British government are important and significant. They reflect the deep seated nature of this countrys opposition to the death penalty. Indeed, it is noteworthy that some of the families of the victims of the alleged depredations of Mr El Sheikh and Mr Kotey have publicly stated that they do not wish to have that penalty imposed upon them. These considerations, while in no way determinative, are indications as to whether our common law should now be recognised as having developed to the point where there is a right enshrined in the law of this country that our government will not act to facilitate in any way the possibility of the imposition of that most extreme punishment. Mr El Sheikhs detention in January 2018 marked what Mr Biggar described as a profound shift in the importance of the request for assistance. As he explained, it brought immediate political reality and urgency to the question of where he could and should be brought to justice. This prompted greater focus on the request which the British authorities had made for assurances and the reaction of the US Department of Justice to that request. Importantly also, there had been a change in the administration in America since the original request for assurances had been made. Mr Biggar explained the significance of this in his witness statement: It was the strong (and publicly stated) view of senior members of the new US administration that those states from which [foreign terrorist fighters] had originally come ought to try those individuals. The US position was that other states should not assume that it would take up responsibility for non US terrorists apprehended in Syria or Iraq. In the aftermath of the capture of El Sheikh in January 2018, set against the wider issues of responsibility for [foreign terrorist fighters] in detention in Syria, US representatives strongly reiterated this message to the UK. The new US administration also had different views on the US military detention facility at Guantanamo Bay. President Trump had been elected on, among other things, a commitment to reverse his predecessors decision to close Guantanamo It was made clear that the strong preference of the US government was that the UK should assume responsibility for Mr El Sheikh and that he should be prosecuted in this country. The Crown Prosecution Service had determined, however, in January 2016 that the evidence available was not sufficient to warrant charging Mr El Sheikh. That position was reviewed in February 2018 and it was again concluded that there was insufficient evidence to charge him. The authorities in the US and the UK decided, however, that there should be a joint review of the prospects of a successful prosecution in either jurisdiction. This took place in March 2018. Police officers from the Counter Terrorism Command and specialist prosecutors from the CPS visited the US at the end of March 2018 and were given access to the evidence which the US investigators had gathered. FBI agents had already visited the UK and had seen and considered the evidence gathered by UK investigators. At the time of the hearing of the appeal it was not considered feasible to prosecute Mr El Sheikh in this jurisdiction. That decision by the CPS was the subject of a separate challenge which need not be referred to further here. The court has learned, however, that, in light of Mr El Sheikhs being in the custody of US authorities, the feasibility of his being tried in this country may be revisited. Any prosecution of Mr El Sheikh in the US depends critically on the evidence which has been obtained by the British authorities. According to Mr Biggar, following the meeting between US and UK officials in March 2018, the clear view of the UK officials was that a prosecution of Mr El Sheikh in the US federal court system, which included the UK evidence, represented the only realistic prospect of securing justice for the victims and their relatives. Despite this, again according to Mr Biggar, senior members of the US administration continued to state their opposition to foreign terrorist fighters, including Mr El Sheikh, being tried in the US. This reflected the ongoing concern of the US that it should not fall to that country to bring within its criminal justice system those such as Mr El Sheikh for whom it felt other states bore responsibility. In particular, the US considered that the UK ought to set an example to the wider international community by accepting responsibility for bringing foreign terrorist fighters such as Mr El Sheikh and Mr Kotey to trial. Another factor that was present to the mind of the British authorities was the prospect that the US might transfer Mr El Sheikh to Guantanamo Bay. The assessment made in this country was that the US was more likely to do that than to try him in the federal criminal system. In March 2018, the then Home Secretary visited Washington and spoke to US Attorney General Sessions. As well as expressing his clear view that all foreign terrorist fighters should be prosecuted in their home countries, the Attorney General referred to them as prisoners of war and suggested that transfer to Guantanamo Bay was therefore appropriate (its purpose, in the Attorney Generals view, being the detention of prisoners of war). The UK has consistently opposed the regime in Guantanamo Bay. In this case, an additional consideration, according to Mr Biggar, was that the families of those kidnapped and killed have a strong desire to ensure that those suspected of involvement should be tried before a civilian court. The UK, he has said, was conscious that a number of families of those killed by terrorist acts in Syria opposed the transfer of those suspected of involvement in those killings to Guantanamo Bay, because they felt that this would end any prospect of securing justice for the murder of their loved ones. A third consideration was the apprehension that Mr El Sheikh might be released from custody in Syria. This was not believed to be likely, but it nevertheless played some part in the governments deliberations. It seems clear, however, that the factor of overwhelming importance was what Mr Biggar described in his witness statement as the strong message from the US administration, relayed directly by US officials as well as through the UK Embassy, that it was strongly opposed to the UK seeking death penalty assurances, in the event that the UK, itself, decided that it could or would not prosecute; and that, if the UK was pressing the US to prosecute because a UK prosecution was not viable. Mr Biggar has averred that in early March 2018 the UKs lobbying on the death penalty had been described as an irritant by a very senior US official. This statement is both enlightening and concerning. It indicates how the UK authorities were coming under (and might become susceptible to) political pressure from the US. For reasons discussed below that pressure does not appear to have taken into account, much less reflected, either the UKs longstanding policy in this area nor the joint experience of the UK and the US in the request for and the furnishing of such assurances. The statement also raises questions as to whether pragmatic considerations, at the expense of a principled approach, might begin to influence the UKs reaction to the demand that it should cease its lobbying in relation to the death penalty assurances. On 16 April 2018, the Office for Security and Counter Terrorism in the Home Office and the UK Central Authority (UKCA) each provided submissions to the then Home Secretary, the Rt Hon Amber Rudd MP, and the Security Minister, the Rt Hon Ben Wallace MP. UKCA recommended that the Home Secretary should maintain her predecessors decision to accede to the request dated 19 June 2015, but only on the basis that a full death penalty assurance would be provided. It also suggested that she should endorse the UKCA decision to reject the current direct use death penalty assurance offered by the US. (It should be noted that this submission was made on the premise that the earlier direct use assurance was still available, although UK officials understanding was that later contact with the Department of Justice had cast some doubt on the continued availability of this assurance.) The Security Minister responded to this advice on 17 April 2018 saying that he agreed with the first recommendation but disagreed with the second. He indicated that the views of the Foreign Secretary should be sought on whether the assurance, then believed still to be on offer, should be accepted. The Home Secretary did not consider this submission before she resigned on 29 April. Mr Wallace had talks with Department of Justice officials on 20 April 2018. A theme of those exchanges was that senior officials in the US administration did not consider that Mr El Sheikh and Mr Kotey should be tried in the US federal courts. Mr Wallace was also told that if the US was required to deal with them, their transfer to Guantanamo Bay was more likely if the UK imposed restrictions on the release of information to the US authorities. The picture which emerges from these exchanges is one of increasing and applied pressure by the US on the UK to minimise any restrictions on the use of the released evidence. That pressure was two pronged. First that a trial in the federal courts of America might be refused on the basis that the UK should undertake their trial. Secondly, that if Mr El Sheikh and Mr Kotey were transferred to the US, the chances of their being incarcerated in Guantanamo Bay increased, if assurances from the US authorities about the use of the evidence were sought. The US authorities must have known that these indications would put pressure on the UK to dilute or eliminate the request for assurances. Indeed, it seems highly likely that this was their purpose. And, as it proved, before long the pressures began to have effect. Mr Biggars assessment of the exchanges between the Americans and the British was that if the UK wanted to obtain support for a US prosecution, it would be critical that evidence provided by the UK came with the [fewest number] of restrictions possible. The US authorities position was put bluntly by Attorney General Sessions when he gave evidence at a Senate panel hearing on 25 April 2018. He expressed disappointment that the British are not willing to try the cases but tend to tell us how to try them and they have certain evidence that we need . He also indicated that he was supportive of sending Mr El Sheikh and Mr Kotey to Guantanamo Bay. Inasmuch as this statement might be taken to indicate that the British authorities considered that Mr El Sheikh could have been tried in the UK but preferred to transfer that responsibility to the US, it is plainly wrong. As pointed out in para 32 above, the CPS had decided that it was not feasible to prosecute Mr El Sheikh in this country and that decision had been confirmed after a review in February 2018. The Rt Hon Sajid Javid MP became Home Secretary on 30 April 2018. He spoke to Attorney General Sessions on 4 May 2018. Mr Biggar gives the following account of the conversation in para 39 of his statement: This was their first conversation and it was regarded as significant that this case was one of the first topics that the US Attorney General raised with the Home Secretary. The US Attorney General indicated that he was concerned that the UK had said that it was not interested in prosecuting El Sheikh; that the death penalty should not be an issue for the UK and that he did not want the UK to tie his hands in relation to the use of the material. The US Attorney General also referred favourably to Guantanamo Bay. The Home Secretary indicated that a formal decision would be taken shortly. There is no reference in Mr Biggars account of that conversation to the Attorney General having been told of the longstanding practice of the British authorities to seek assurances in relation to the death penalty. It does not appear that Mr Sessions was told that a decision not to follow that practice would represent a very significant departure from the UKs policy over very many years. Nor was he told of the Death Penalty Assistance Policy which provides that, in general, where there is a significant risk of the death penalty being imposed, before it is agreed that assistance be provided, assurances should be sought that that penalty will not be imposed. (It is, of course true that the policy does contemplate that in certain exceptional circumstances, the request for assurances may be foregone but the pre eminence of the general rule it appears at para 1 of the policy is testament to how deeply embedded is the practice of seeking assurances.) In May 2018 the UK ambassador in Washington was asked for his opinion as to the likely reaction of the US authorities if the request for assurances was persisted in. He replied that Department of Justice career officials would not be surprised; indeed, it is what they would expect. But he advised that this did not apply to senior political figures in the administration. His advice continued: Their reaction is likely to be something close to outrage. They already feel that we are dumping on them a problem for which we should take responsibility. They have been signalling to us for weeks now that we are in no position to attach any conditions to this. At best they will think we have tin ears. At worst, they will wind the President up to complain to the PM and, potentially, to hold a grudge. We might argue that the UK position on this is well known and that we were simply behaving in a way consistent with our long term policy. There might be some understanding of this. But I have to warn that there might also be some damage to the bilateral relationship. (Emphasis added) In the italicised sentences above, it had been suggested that it could be pointed out that the UK position was not only familiar but that it reflected this countrys longstanding policy. There is nothing in Mr Biggars statement or in the evidence presented to the Divisional Court to indicate that this suggestion was taken up. The ambassador considered that seeking death penalty assurances might prompt the US not to pursue a prosecution. Some officials had suggested as much. And it would point the way towards transfer to Guantanamo. If the well established practice of requiring death penalty assurances in all but exceptional cases was not drawn to the attention of the senior political figures in the administration, this is surely surprising. If their anticipated reaction was one of outrage, is it not to be expected that information about this practice would or, at least, should have been mitigated by a patient and well marshalled account of how this practice had operated in the past? Attorney General Sessions, in his presentation to the Senate panel hearing in April 2018, had portrayed the UK stance as one of unwillingness to try Mr El Sheikh, while seeking to dictate how he should be tried in the US. That is a portrayal which it should have been easy to correct. This was not a case of the UK being unwilling to have Mr El Sheikh tried in this jurisdiction. Rather, it was considered by the CPS, an institution entirely independent of government, that such a trial was not feasible. Equally, the UK did not seek to dictate how Mr El Sheikh should be tried in the US. The assurances sought were directed solely to the question of penalty, not the mode of trial. Indeed, the assurances sought did not even preclude the possibility that the death penalty might be imposed (although that was the preliminary request). Ultimately, the request was for an undertaking that, if imposed, the death penalty would not be carried out. The absence of direct evidence as to what passed between senior political figures in the US administration and the UK authorities cannot be deemed to establish that there was a failure on the part of the latter adequately to make the case for acceptance of or the need for compliance with the assurances, however. There may well have been exchanges which are not referred to in the evidence which was presented to the Divisional Court and relied on before this court. In any event, it would have been a matter for political judgment as to whether representations along those lines would have been availing. Absent a glaring and obviously irrational failure on the part of the UK government to make pertinent representations to the US administration, the courts are powerless to intervene. On 18 May 2018 UKCA made a further submission to ministers. They maintained their advice that the Home Secretary should continue to require a full death penalty assurance. In a telling passage in the submission, the following appears: [The need for a comprehensive assurance that the suspects will not be subject to the death penalty] is critical to the consistency with which we apply HMGs policy on Overseas Security and Justice Assistance Were we not to apply this practice to this case, it could undermine all future efforts to secure effective written death penalty assurances from the US authorities for future UK security and justice assistance. The exception made for the US in this case could also undermine future efforts to secure similar assurances from other countries with which we have a security relationship particularly if as seems likely there is litigation which leads to the disclosure of the level of assurance. It could leave HMG open to accusations of western hypocrisy and double standards which would undermine HMGs Death Penalty Policy globally, including in the US. These were formidable arguments in favour of maintaining the long standing policy of the UK and of resisting the pressure from the US authorities. But, in a note of 24 May 2018, the director of Home Office International declined to accept them: Although it clearly runs the risk of creating a precedent for the future and with other countries, taken in the round I am comfortable that proceeding with no assurances is appropriate in securing justice for the families; notwithstanding the fact [that] we understand the families wish to avoid application of the death penalty. There appears to me to be an inherent illogicality in this statement. As the director had observed, the families wished to avoid the application of the death penalty. Yet, the mooted justification for the decision not to seek assurances concerning the death penalty was the securing [of] justice for the families. The species of justice that the families wished to have was one where there was not the possibility of the imposition of the death penalty. The decision not to seek assurances opened up that very possibility. To fulfil their wishes, it was surely required that the hallowed practice of seeking death penalty assurances be observed. On 24 May 2018, the Security Minister notified Home Office officials that his final position was to make a strong recommendation, in this exceptional case, that HMG does NOT seek assurances (either full or direct use) around the death penalty, when sharing evidence for a Federal Prosecution only. The Home Secretarys private secretary confirmed on 29 May that both ministers had concluded that no assurances should be sought from the US. A meeting took place between the Home Secretary and Attorney General Sessions on 30 May 2018. Mr Sessions repeated his view that the US should not be left to assume responsibility for other nations terrorist fighters. He said that if the US were to [be] willing to try Mr El Sheikh in a civilian court as opposed to a military one, he could not see how the US could do that without the UK evidence or without recourse to the death penalty. Mr Biggar described Mr Javids reaction to this approach in the following passage of his witness statement: It became clear to the Home Secretary during the course of [that] meeting that the position of the US remained unchanged and that there was no prospect of the Attorney General offering any form of undertaking whatsoever. He assessed that, if he asked for assurances (whether full or partial), it was likely to prompt the sort of outrage he had been advised of, and would damage the prospects of a US criminal prosecution. He judged that the question of assurances was critical to whether Attorney General Sessions consented in due course to such a prosecution. Into his calculation about pressing the assurances point during the meeting, he also considered the wider UK government interests at stake, including co operation on security issues and potential damage to the bilateral relationship. Again, it is not suggested that the Home Secretary raised the point that the seeking of assurances about the death penalty was a traditional feature of this type of exchange. Nor does it appear to have been suggested that the UK was opposed, as a matter of entrenched principle, to the taking of any step that would facilitate the imposition and carrying out of the death penalty. One may not assume, however, (largely for the reasons given at para 51 above) that these matters were not drawn to the attention of the Attorney General. Still less may one assume that it was not decided that it was either pointless or impolitic to do so. On either basis, the omission to raise these matters, however cursorily surprising, does not warrant judicial interference. The Home Secretary made it clear, however, that the UK could not provide material to be used in a military court or any process at Guantanamo Bay. This is somewhat perplexing. Why was the prospect of detention so much less favourable than the possibility of Mr El Sheikh being executed? This has not been explained. The day after the Home Secretarys meeting with the American Attorney General, a submission was made by civil servants to the Secretary of State for Foreign and Commonwealth Affairs. Three options were identified: first, to seek a full death penalty assurance; secondly, to seek a partial death penalty assurance; and thirdly to seek no assurance. The advice to the Foreign Secretary was to urge the Home Secretary to seek a full assurance. Seeking comprehensive assurances was consistent, the submission stated, with the general expectations set out in UK policy on overseas security and justice assistance and with all past practice when dealing with US mutual legal assistance requests. The submission accepted that sharing information without assurances provided the greatest chance that the US would pursue a federal prosecution. It then continued: A successful prosecution will serve as a deterrent to others and give the public confidence in our ability to see justice served. However, there are wider national security risks if the prosecution results in execution as this could be used by radicalisers in the UK. The Home Secretary wrote to the Foreign Secretary on 11 June 2018, indicating that significant attempts had been made to obtain full assurances but that the time had arrived to accede to the request for information without seeking any assurance. He acknowledged that there was a serious risk that Mr El Sheikh and Mr Kotey would, if prosecuted and convicted, face execution as a direct result of UK assistance. The Foreign Secretary replied on 20 June 2018. His letter concluded, On a balanced assessment of the key risks , I agree that as this is a unique and unprecedented case, it is in the UKs national security interests to accede to an MLA request for a criminal prosecution without death penalty assurances for Mr Kotey and Mr El Sheikh. The Home Secretary duly informed Attorney General Sessions on 22 June 2018 that the UK would not seek death penalty assurances. Many witness statements were then supplied to the US authorities. As the Divisional Court has pointed out, however, this does not render the present challenge academic. Further material may be sought and it is, in any event, entirely possible that the UK would refuse to permit witnesses employed by the state, such as police officers, to travel to the US to give evidence without adequate assurances. The appellants arguments (i) There is a common law principle that the UK will not give mutual legal assistance where there is a risk that this would lead to the imposition of the death penalty. The appellant submits that the UK, by signing two death penalty protocols to the ECHR, in 1999 and 2004, is committed to the abolition of the death penalty in all circumstances. In particular, since the signing of the Sixth Protocol to the European Convention in 1999, the UK has maintained a firm policy of refusing extradition or deportation to countries that impose the death penalty, no matter how serious the offence, and no matter how repellent the offender. The appellant argues that this is not just some alien obligation imposed on us by the European Court. To the contrary, the UK has taken that stance as a legal principle and it now forms part of the common law of this country. That claim is fortified, the appellant claims, by the circumstance that the UK has signed the Second Optional Protocol to the United Nations International Covenant on Civil and Political Rights (ICCPR) on the abolition of the death penalty in December 1989. It is further suggested that the UK has adopted a policy of not providing evidence that might give rise to the risk of the imposition of the death penalty unless assurances are given by the requesting state that that penalty will not be carried out. At the Thirteenth Special Session of the UN General Assembly on 19 April 2016, the UK declared: The United Kingdom has a proud history of championing human rights, and we oppose the use of the death penalty in all circumstances as a matter of principle. The United Kingdom does not provide criminal justice or other assistance that may result in a death sentence being applied. We will hold international agencies funded by the United Kingdom to account for compliance with that principle and all other human rights obligations. The appellant points out that the policy of seeking assurances has been repeatedly referred to by UK authorities as the logical consequence of this countrys position of rejecting the death penalty as wrong in all circumstances everywhere. It was reflected in the statement to the UN in April 2016, and in the Foreign Office recommendation recorded in the UKCA briefing of 18 May 2018 (para 52 above). The policy accords, the appellant claims, with the obligation imposed on abolitionist states by the ICCPR, as authoritatively interpreted by the Human Rights Committee in its General Comment No 36, para 63, which says, inter alia, that states who are parties to the covenant have an obligation to respect and to ensure the rights of all persons who are subject to its jurisdiction, that is, all persons over whose enjoyment of the right to life it exercises power or effective control. The appellant argues that the frequently declared policy of the UK government, reflecting as it does the obligation in the ICCPR, to which it has subscribed, gives effect to a principle of law. That principle is that, in the exercise of its formal powers in the criminal justice field, the government of this country should not act in any way that is directly instrumental in the imposition of the death penalty. The appellant accepts that, in providing evidence to the United States, the Home Secretary was exercising a prerogative power. But she argues that that power must be exercised in accordance with the fundamental principles of the common law, the dictates of humanity, and the requirements of international human rights law. It is argued that the death penalty offends against the evolving requirements of humanity enshrined in the common law. It is also argued that the death penalty (and any facilitation of it) is contrary to article 10 of the Bill of Rights 1688 which prohibits the infliction of cruel and unusual punishments. The Bill of Rights is, the appellant says, an always speaking statute and its prohibition of cruel and unusual punishments must be interpreted dynamically in accordance with evolving standards of decency. For these reasons, the appellant contends that it is an unlawful exercise of public power to impose the death penalty, or knowingly and directly to facilitate its imposition. (ii) The non facilitation argument The appellant submits that it cannot be lawful or rational to facilitate a penalty that the UK regards as inhuman. At para 34 of the Human Rights Committees General Comment No 36 (see para 65 above) it is stated: States parties that abolished the death penalty cannot deport, extradite or otherwise transfer persons to a country in which they are facing criminal charges that carry the death penalty, unless credible and effective assurances against the imposition of the death penalty have been obtained. The facilitation of inhuman treatment, it is suggested, is contrary to the fundamental principles of the common law and the European Convention. The appellant accepts that Strasbourg case law on the non facilitation principle has not yet been expressly extended beyond cases involving extradition or expulsion. It has not yet been applied to cases where the facilitation takes the form of the provision of mutual legal assistance which is likely to contribute causally to the imposition of the death penalty in a foreign state. But, as a matter of logic, it should be, the appellant says. If it is wrong to extradite or deport persons who would face execution in the countries to which they are extradited or deported, it is equally wrong to supply information or evidence which would lead to their execution in the country to which the evidence has been provided. The practical reason for the fact that Strasbourg jurisprudence and the case law of this country founded on the Human Rights Act 1998 (HRA) have not addressed this question is, the appellant says, that the person who invokes Convention protections must be within the jurisdiction of a Convention state at the time of the injustice he complains of. But this, it is claimed, should not inhibit the development of the common law. The appellant is herself in this jurisdiction and therefore within the jurisdiction of the Convention. It might have been argued that, as the close relative of Mr El Sheikh, she could claim to be a victim of a potential breach of her sons right to life (see Rabone v Pennine Care NHS Trust (INQUEST intervening) [2012] UKSC 2; [2012] 2 AC 72). This is not the basis of the appellants case, however, which is that the common law prohibition on facilitation applies regardless of the location of any individual. It is therefore not necessary for this court to consider any alternative route under the Convention. The domestic law principle on which the appellant relies is said to be founded on the duty of the state not knowingly to contribute to the imposition of an inhuman punishment through the exercise of its formal powers. That duty, it is claimed, cannot rationally or justly be limited to cases where the individual in question is in the UK. The person who is extradited to face the death penalty is in precisely the same position as he whose execution has been facilitated by the provision of mutual legal assistance. In both instances there is in play an underlying principle that it is inconsistent with a fundamental common law principle of justice for the government to facilitate the imposition of a cruel and inhuman punishment in a foreign state. (iii) Should the common laws development outstrip the limits of Strasbourg case law? The Divisional Court held that the HRA set the limits of any development in this area when it gave effect to the European Convention, with the accompanying territorial limits to the application of the Convention. It then held that it was wrong to develop the common law in a manner not sanctioned by the relevant statutory provisions. In challenging these conclusions, the appellant argues that the HRA contains no express or considered limitation to the developments of common law principles in respect of the non facilitation of the death penalty. It is too general a statute to serve such a function. It is pointed out that in such cases as R (Osborn) v Parole Board [2013] UKSC 61; [2014] AC 1115, Kennedy v Information Comr (Secretary of State for Justice intervening) [2014] UKSC 20; [2015] AC 455 and A v British Broadcasting Corpn (Secretary of State for the Home Department intervening) [2014] UKSC 25; [2015] AC 588 this court has asserted that the HRA does not remove or limit the power of the common law to develop so as to protect fundamental rights. It was further submitted that the HRA should not be regarded as providing the sum of common law wisdom on the death penalty. The jurisdictional limits of that Act and the Convention were the product of the way in which the Convention was drafted nearly 70 years ago. There was no reason, the appellant argued, that domestic principles of public law should not go further, particularly when they give effect to the underlying rationale of the extradition cases, namely that the UK should not make itself complicit in the imposition of the death penalty by positively facilitating it. The Divisional Court held that the decisions in R (Sandiford) v Secretary of State for Foreign and Commonwealth Affairs [2014] UKSC 44; [2014] 1 WLR 2697 and R (Zagorski) v Secretary of State for Business, Innovation and Skills [2010] EWHC 3110 (Admin); [2011] HRLR 6 presented obstacles to the recognition of the common law right claimed by the appellant. It was submitted that these decisions were readily distinguishable. That submission will be considered in the discussion section of this judgment. (iv) Does the US death penalty regime give rise to cruel and inhuman punishment? Relying on, among other cases, the decision of Pratt v Attorney General of Jamaica [1994] 2 AC 1, the appellant argued that the death penalty regime in the US gave rise to a specific risk of inhuman and cruel punishment. This was because inevitably execution was delayed many years after the death penalty had been imposed. Prolonged delay by itself violates the protection against cruel, inhuman or degrading treatment, the appellant argued. The Divisional Court rejected this argument, observing that the decision in Pratt turned on the interpretation of the Jamaican Constitution and that it did not establish a rule of the common law, either in Jamaica or generally, that particular periods of delay made the enforcement of the death penalty unlawful. The appellant contended that this constituted a misunderstanding of the Pratt decision. It was also argued that what was described as the death row phenomenon was contrary to customary international law. In this context, the appellant relied on article 5 of the Universal Declaration of Human Rights 1948, which provides: No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment, and article 7 of the UN International Covenant on Civil and Political Rights and the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. Again, these arguments will be considered in the discussion section of this judgment. (v) Does the provision of mutual legal assistance breach the Data Protection Act 2018 (DPA)? Finally, the appellant argued that the provision of mutual legal assistance in the form of various statements from witnesses etc was in breach of the 2018 Act as interpreted in light of relevant provisions of European Union data protection law. The DPA was intended to give effect to the UKs obligations under the EU Law Enforcement Directive 2016/680 (the LED). It was argued that the DPA should be interpreted by reference to the EU Charter of Fundamental Rights (the Charter). On that basis, the appellant claimed that it was unlawful for law enforcement authorities in the UK to transfer personal data to law enforcement authorities abroad for use in capital criminal proceedings. It was common ground between the appellant and the respondent that the transfer of material by the Home Secretary to the US in July 2018 pursuant to the mutual legal assistance request involved processing of personal data for a law enforcement purpose by a controller which is a competent authority for the purposes of Part 3 of the Act. On this account, the appellant claimed, the Home Secretarys decision to transfer personal data to authorities in the US without seeking and obtaining a death penalty assurance was an unlawful breach of (1) the first data protection principle in section 35 of the Act; (2) the second data protection principle in section 36; (3) the provisions governing international transfers of personal data for law enforcement purposes in sections 73 to 76; and (4) the special processing restrictions in section 80. It is claimed, moreover, that the Home Secretary paid no regard to the duties imposed on him by the 2018 Act. These arguments will also be considered below. The respondents case The respondent submits that there is no support as a matter of ECHR law or international law for the existence of an obligation not to provide legal assistance to another state on the basis that it may be used to charge an individual and then, if convicted and so sentenced, lead to the imposition of the death penalty. The essence of the appellants case is, the respondent says, that, despite her sons being excluded from the protection of the ECHR/HRA and, having elected to go abroad to engage in terrorist activities, he is nonetheless entitled to rights which extend well beyond any ECHR rights recognised to date. The second principal submission of the respondent was that there is no recognised common law prohibition on the provision of legal assistance to a foreign state, where such assistance might be used in proceedings leading to the death penalty in that state. Indeed, the respondent claims, the case law indicates that, aside from those established categories of case in which a duty of care is imposed, there is no general common law duty on the Secretary of State to take positive steps to protect an individuals life from the actions of a third party. Nor should, the respondent says, the common law be developed to recognise such a contemporaneous principle. The common law develops incrementally. The recognition of a right prohibiting the provision of mutual legal assistance to a country whose legal system permits (in appropriate cases) the imposition of the death penalty would not be an incremental change. Such a development would be a considerable and controversial step. There were, the respondent claimed, specific reasons for particular caution here: the creation of the prohibition would take effect in the context of a treaty with a state with whom the UK co operates closely and which adheres to the rule of law; the UK is equally a beneficiary of that co operation; the provision of mutual legal assistance relates to extremely serious crimes (with international ramifications); it risked having a significant, adverse impact upon UK relations with a most important international partner, the US (and indeed on relations with any other state which continues to impose the death penalty). The respondent submitted that the recognition of a common law principle forbidding mutual legal assistance in all circumstances where that might lead to the imposition of the death penalty would carry the prospect of it being applied in a myriad of circumstances with consequences which could not be foretold. The principle has the potential to be expanded into spheres where it would risk creating real damage, for example, to public protection and national security, as Hughes LJ acknowledged in R v Ahmed (Rangzieb) [2011] EWCA Crim 184; [2011] Crim LR 734. The respondent poses the questions, what degree of causal connection to the death penalty would suffice? To what forms of cruel, degrading or inhuman treatment would the principle extend would it extend to the provision of assistance in a case in which there were serious concerns about the state of prisons in the foreign jurisdiction?. These issues, the respondent claims, illustrate that the extension of the common law in the way contended for by the appellant would be no small step and are powerful factors in favour of not extending the common law. On the question of facilitation, the respondents overarching submission was that there is nothing in the jurisprudence of the ECHR, international law or the common law which supported the notion of an obligation going beyond not removing an individual from within the jurisdiction to another state where there exist substantial grounds for believing the individual will be subject to the death penalty. The concept of facilitation has not been extended beyond this. In particular, the respondent relied on the circumstance that the contracting states had ceded to the European Court of Human Rights (ECtHR) a jurisdiction with well defined territorial limits. Unless an individual was within the jurisdiction of one of the member states of the Council of Europe, he or she was not entitled to have recourse to rights arising under the ECHR. The domestic transposition of the ECHR into the HRA gave rise to a similar restriction. In any event, the respondent says, relying on the decision of the Strasbourg court in Khan v United Kingdom (2014) 58 EHRR SE15, the ECtHR does not consider that the substantive protections of the ECHR apply to prevent or control decisions or steps taken by the state (within its jurisdiction) which may expose persons to ill treatment at the hands of a foreign state. In this connection, the respondent also relied on the decision of this court in Sandiford. It had been held in that case that there was no general Convention principle that the United Kingdom should take steps within the jurisdiction to avoid exposing persons, even United Kingdom citizens, to injury to rights which they would have if the Convention applied abroad para 23. On the question of customary international law, the respondent submitted that, while some multilateral international conventions oblige state signatories not to impose the death penalty within their own jurisdictions, this was by no means a universal prescription. The example of the ICCPR was cited. Subject to the conditions enshrined in article 6 of that Convention (which provides, inter alia, that no one is to be arbitrarily deprived of life and that the sentence of death may only be imposed in those countries where that penalty has been retained for the most serious crimes) the death penalty continues to be permitted. The respondent points out that the UN Human Rights Committees (UNHRC) General Comment No 36 (2018) on article 6 ICCPR at para 34 does not stipulate that mutual legal assistance cannot be provided by states where the death penalty has been abolished to states where it remains a possible penalty. The material part of the relevant paragraph reads, States parties that abolished the death penalty cannot deport, extradite or otherwise transfer persons to a country in which they are facing criminal charges that carry the death penalty, unless credible and effective assurances against the imposition of the death penalty have been obtained. It is therefore plain, the respondent says, that UNHRC regards the obligations which apply to state parties to the ICCPR that have abolished the death penalty as limited to deportation, extradition or transfer to a state which carries the death penalty. The omission of mutual legal assistance in this General Comment is reflective, it is claimed, of there being no authority or state practice supporting the extension of the concept of facilitation to the provision of mutual legal assistance in the international law sphere. The case for the existence of a right under customary international law forbidding the provision of mutual legal assistance without death penalty assurances is, the respondent claims, further undermined by the absence of specific reference to the death penalty in important mutual legal assistance treaties and the absence of any state practice preventing this type of assistance. In particular, the respondent has referred to the 1994 Treaty on Mutual Legal Assistance in Criminal Matters between the UK and the US (as amended); the Agreement between the US and the European Union (both of which are silent on the question of obtaining death penalty assurances where mutual legal assistance is sought and provided); and the Agreement between the EU and Japan on mutual legal assistance in criminal matters (article 11 of which expressly recognises that the death penalty should be a discretionary rather than a mandatory ground for the refusal of assistance). Australia has made express reference (in the Mutual Assistance in Criminal Matters Act 1987, as amended, section 8(1A) and (1B)) to the question whether mutual legal assistance should be provided in death penalty cases. The relevant provisions require that a request by a foreign country for assistance must be refused if it relates to the prosecution or punishment of a person charged with, or convicted of, an offence in respect of which the death penalty may be imposed in the foreign country, unless the Attorney General is of the opinion, having regard to the special circumstances of the case, that the assistance should be granted. In relation to the argument that the inevitable delay in carrying out a sentence of death gave rise to a distinct basis for concluding that the regime in the US constituted cruel and inhuman punishment, the respondent contended that there was no consensus in international law to support that claim. Moreover, it was expressly disavowed by the jurisprudence of UNHRC see LaVende v Trinidad and Tobago, (Communication No 554/1993) (unreported) 14 January 1998. Indeed, said the respondent, the UNHRC had consistently rejected the contention that delay in applying the death penalty amounts to a breach of either article 7 or article 10 of the ICCPR. Finally on the question of international law, the respondent submitted that, even if any support could be discerned from that source for a prohibition on the provision of mutual legal assistance in circumstances such as arise in the present case, the question of transposition or incorporation into domestic law as a controlling principle of public law provides an insuperable barrier. Any state obligation under customary international law does not automatically become a domestically enforceable public law obligation. The constraints on transposition are constitutional. The translation of a particular international obligation into domestic law was something for Parliament to consider. It was not one for the courts to impose. The respondent presented several arguments in reaction to the case made by the appellant on data protection. It is unnecessary to rehearse all of them here. In broad summary, the respondent submitted firstly that neither the Charter nor EU law in fact contains the prohibition the appellant claimed arose from the DPA. Secondly, the respondent says that, whether or not the Home Secretary gave separate consideration to the DPA, there was substantive compliance with its provisions, and it was the substantive lawfulness of the transfer of the information which was critical. Thirdly, it was common ground between the parties that the transfer of evidence in the present case was outside the scope of EU law. In particular, on 1 December 2014, the UK exercised its right under article 10(4) of Protocol 36 to the EU Treaties to opt out of acts of the Union in the field of police cooperation and judicial cooperation in criminal matters which have been adopted before the entry into force of the Treaty of Lisbon. The opt out included the EU US MLA agreement. Since the opt out, mutual legal assistance between the UK and the US has been governed exclusively by the 1994 Treaty on Mutual Legal Assistance in Criminal Matters between the UK and the US (as amended), the respondent argues. Different interpretational approaches apply to Part 3 of the DPA depending on whether the LED applies to the processing in question. Where the LED does apply, the full purposive approach of EU law (including the Charter) will apply to the implementing measures. Where it does not apply, the LED is of more attenuated relevance, although the respondent accepts that it may still be a legitimate aid to construction as a matter of domestic law. But this is no warrant for introducing the Charter through the back door. In any event, the respondent says, the Charter has never been interpreted to preclude transfer of evidence in a case such as the present. Article 19(2) provides: No one may be removed, expelled or extradited to a state where there is a serious risk that he or she would be subjected to the death penalty, torture or other inhuman or degrading treatment or punishment. That formulation simply reflects the jurisprudence of the ECtHR. It is dealing with a situation in which the individual concerned is within the jurisdiction of the member state and is removed, expelled or extradited. It does not deal with a situation in which information or evidence is transferred. As to the appellants claim that the transfer of information offended the first data protection principle in section 35 of the DPA, the respondent argued that the transfer was both lawful and fair as the section required. It was also necessary in the sense of being necessary for the performance of a task carried for [the law enforcement purpose] by a competent authority section 35(2)(b). On the appellants argument relating to the various conditions which must be met for the transfer of personal data for law enforcement purposes, the respondent challenged the appellants claim that section 73 established a hierarchy of steps to be taken sequentially by the data controller at least to the extent that it is argued that the final step, namely, where there are special circumstances which justify the transfer, may only be invoked as a last resort. It is common case that the decision was not based on a European Commission adequacy decision, the first condition under section 73(3). The second step is to consider whether there were adequate safeguards in place. The respondent disputes the suggestion that this gave rise to an obligation on the part of the controller to investigate whether adequate safeguards existed, and in all cases refrain from transferring unless it was deemed that the safeguards were inappropriate. In any event, the respondent says that section 35 of the Act (which deals with sensitive processing) did not apply in the case of Mr El Sheikh. The respondent disputed that there had been a breach of the second data principle. (It arises where personal data collected for a law enforcement purpose may be processed for any other law enforcement purpose section 36(3)). Even if the decision to transfer the evidence to the US constituted a different law enforcement purpose, such that the second data protection principle applied, it was patently authorised by law, necessary and proportionate to that other purpose, the respondent argued. As to the appellants argument based on section 80 of the Act, the respondent submitted that this provision simply did not apply to Mr El Sheikhs case. Discussion (i) How the common law develops Article 10 of the Bill of Rights 1688 prohibits the infliction of cruel and unusual punishments. Of course, at that time, and for almost three centuries afterwards, the carrying out of the death penalty continued without its being thought to offend article 10. But, for the reasons set out below, the death penalty is now recognised by the common law as constituting such punishment. The Bill of Rights may be considered to provide the backdrop to contemporary consideration of whether the facilitation of the imposition of the death penalty is contrary to what should now be recognised as the common law of the United Kingdom. What is conceived to be cruel and unusual punishment adjusts, like so many other societal perceptions, to changes in the standards and values of society which develop over time with the growth of knowledge and the evolution of attitudinal changes. The common law of the UK rises to the challenge of those changes. As long ago as 1800, Lord Kenyon uttered these celebrated words in R v Rusby (1800) 2 Pea 189, 192: The common law, though not to be found in the written records of the realm, yet has been long well known. It is coeval with civilised society itself, and was formed from time to time by the wisdom of man. Good sense did not come with the Conquest, or at any other one time, but grew and increased from time to time with the wisdom of mankind. In A v Secretary of State for the Home Department (No 2) [2005] UKHL 71; [2006] 2 AC 221, para 152, Lord Carswell picked up that theme when he said: We have long ceased to give credence to the fiction that the common law consists of a number of preordained rules which merely require discovery and judicial enunciation. Two centuries ago Lord Kenyon recognised that in being formed from time to time by the wisdom of man it grew and increased from time to time with the wisdom of mankind: R v Rusby Sir Frederick Pollock referred in 1890 in his Oxford Lectures, p 111 to the freshly growing fabric of the common law and McCardie J spoke in Prager v Blatspiel, Stamp and Heacock Ltd [1924] 1 KB 566, 570 of the demand of an expanding society for an expanding common law. Similarly, in the US Supreme Court 121 years ago Matthews J said in Hurtado v California (1884) 110 US 516, 531 that: as it was the characteristic principle of the common law to draw its inspiration from every fountain of justice, we are not to assume that the sources of its supply have been exhausted. On the contrary, we should expect that the new and various experiences of our own situation and system will mould and shape it into new and not less useful forms. As Peter du Ponceau said of the common law (A Dissertation on the Nature and Extent of the Jurisdiction of the Courts (1824), Preface): Its bounds are unknown; it varies with the successions of ages, and takes its colour from the spirit of the times, the learning of the age, and the temper and disposition of the judges. It has experienced great changes at different periods, and is destined to experience more. It is by its very nature uncertain and fluctuating; while to vulgar eyes it appears fixed and stationary. The common law will not develop in an area where Parliament has legislated definitively. But that is not the case here. The HRA does not prevent the common law from upholding rights or obligations that are outside the scope or jurisdiction of the ECHR. Moreover, nothing can be inferred from the fact that Parliament has not legislated to prohibit the provision of assistance without death penalty assurances. The respondent makes the point that section 16 of the Crime (Overseas Production Orders) Act 2019 (the 2019 Act) does not require the obtaining of an assurance, only the seeking of one, before designating an agreement under section 52 of the Investigatory Powers Act 2016 (IPA). But section 52 of the IPA does not concern the transfer of information to another country. It deals only with the obtaining of information by interception of communications. It may be considered appropriate for the Secretary of State to designate an agreement without a general assurance, as later a specific assurance can be requested before transferring specific information collected. This is emphatically not a case of Parliament stepping into the arena. It has said nothing about the legality of transferring information without a death penalty assurance. The only relevance of the 2019 Act is, as the appellant has contended, that it shows Parliaments general support for seeking death penalty assurances in the context of MLA. (ii) ECHR jurisprudence Development of the common law is not immune from nor does it disavow external influence. In R (Osborn) v Parole Board [2013] UKSC 61; [2014] AC 1115, this court endorsed the view that the courts of the United Kingdom are able to (and should where appropriate) take account of obligations arising under the ECHR in the development of the common law see per Lord Reed at para 57. To like effect, the remarks of Lord Mance in Kennedy v Information Comr (Secretary of State for Justice intervening) [2014] UKSC 20; [2015] AC 455, para 46 where he said, Convention rights represent a threshold protection; and, especially in view of the contribution which common lawyers made to the Conventions inception, they may be expected, at least generally even if not always, to reflect and to find their homologue in the common or domestic statute law. And in Lin v Comr of Police of the Metropolis [2015] EWHC 2484 (QB), applying Kennedy and relying also on Pham v Secretary of State for the Home Department (Open Society Justice Initiative intervening) [2015] UKSC 19; [2015] 1 WLR 1591, Green J at para 51 stated that it was perfectly plain . that the common law, EU law and the Convention can walk side by side when protecting rights. What then are the external influences which ought to bear on the question whether there should now be recognised a common law principle that the UK government will not facilitate the imposition of the death penalty? First, the jurisprudence of the Strasbourg court. The case law relating to Protocol 13 does not exactly constitute an external influence, since the UK has ratified this in October 2003, with it coming into force on 1 February 2004. (Ratification of Protocol 6, which expressed a general tendency in favour of abolition of the death penalty, had taken place in 1999. But Protocol 13 is of greater contemporary relevance.) Protocol 13 in article 1 abolished the death penalty. Article 2 forbade any derogation from the provisions of the Protocol under article 15 of the Convention and article 3 stipulated that no reservation may be made under article 57 of the Convention in respect of the provisions of the Protocol. It is therefore a comprehensive charter forbidding the death penalty in all circumstances. The Protocol was considered by the ECtHR in Al Saadoon v United Kingdom (2010) 51 EHRR 9. Its nature and extent and the background to its introduction are described in paras 115 118 of the judgment. These are of significance when considered in the context of the claim that it is now a principle of the common law that there should not be any facilitation of the imposition of the death penalty either by the extradition or deportation of an individual to a foreign country where such a sentence might be carried out or by the provision of legal assistance to such a country where the individual is already located. The paragraphs therefore merit quotation in full: 115. The court takes as its starting point the nature of the right not to be subjected to the death penalty. Judicial execution involves the deliberate and premeditated destruction of a human being by the state authorities. Whatever the method of execution, the extinction of life involves some physical pain. In addition, the foreknowledge of death at the hands of the state must inevitably give rise to intense psychological suffering. The fact that the imposition and use of the death penalty negates fundamental human rights has been recognised by the member states of the Council of Europe. In the preamble to Protocol No 13 the Contracting States describe themselves as convinced that everyones right to life is a basic value in a democratic society and that the abolition of the death penalty is essential for the protection of this right and for the full recognition of the inherent dignity of all human beings. 116. Sixty years ago, when the Convention was drafted, the death penalty was not considered to violate international standards. An exception was therefore included to the right to life, so that article 2(1) provides that No one shall be deprived of his life intentionally save in the execution of a sentence of a court following his conviction of a crime for which this penalty is provided by law. However, as recorded in the explanatory report to Protocol No 13, there has subsequently been an evolution towards the complete de facto and de jure abolition of the death penalty within the member states of the Council of Europe. Protocol No 6 to the Convention, which abolishes the death penalty except in respect of acts committed in time of war or of imminent threat of war, was opened for signature on April 28, 1983 and came into force on March 1, 1985. Following the opening for signature of Protocol No 6, the Parliamentary Assembly of the Council of Europe established a practice whereby it required states wishing to join the Council of Europe to undertake to apply an immediate moratorium on executions, to delete the death penalty from their national legislation and to sign and ratify Protocol No 6. All the member states of the Council of Europe have now signed Protocol No 6 and all save Russia have ratified it. 117. In October 1997 the Council of Europe Heads of State and Government called for the universal abolition of the death penalty. Resolution II adopted at the European Ministerial Conference on Human Rights on 3 November 2000 invited the Committee of Ministers to consider the feasibility of a new additional protocol to the Convention which would exclude the possibility of maintaining the death penalty in respect of acts committed in time of war or of imminent threat of war. Protocol No 13, which abolishes the death penalty in all circumstances, was opened for signature on May 3, 2002 and entered into force on July 1, 2003. At the date of adoption of the present judgment, Protocol No 13 has been ratified by 42 member states and signed but not ratified by a further three. Azerbaijan and Russia are alone in not having signed the Protocol. It was signed by the United Kingdom on May 3, 2002, ratified on October 10, 2003 and entered into force in respect of that State on February 1, 2004. 118. The court considers that, in respect of those states which are bound by it, the right under article 1 of Protocol No 13 not to be subjected to the death penalty, which admits of no derogation and applies in all circumstances, ranks along with the rights in articles 2 and 3 as a fundamental right, enshrining one of the basic values of the democratic societies making up the Council of Europe. As such, its provisions must be strictly construed. A number of features should be noted from this passage. First, how attitudes to the death penalty have evolved over the period since the drafting of the Convention, and, indeed since the ratification of Protocol 6. Secondly, the all embracing reach of Protocol 13. No derogation from it is permitted. The right not to be subjected to the death penalty applies in all circumstances. Thirdly, it is to be regarded as a fundamental right, ranking alongside article 2 (the right to life) and article 3 (the right not to be subject to torture or inhuman or degrading treatment). Fourthly, the near universal subscription to this charter by the countries which comprise the Council of Europe is testament to the widespread abhorrence to the imposition of the death penalty, whatever the prevailing circumstances or conditions. The respondent dismissed the relevance of the ECtHR jurisprudence, relying on Khan v United Kingdom (see para 88 above) and Sandiford and Zagorski (para 74 above). It was submitted that the ECHR/HRA jurisprudence is positively against the concept of the state being responsible for any broader concept of facilitation extending beyond the physical removal of the individual. Specifically, the case law was said to be against the state being under an obligation not to take steps within its jurisdiction which might expose an individual who is not within the jurisdiction to the risk of treatment that would or might otherwise be contrary to the ECHR. I will examine those decisions presently but, by way of preliminary comment, one may observe that the purpose of referring to ECtHR jurisprudence is not to suggest that the Strasbourg court has endorsed the notion that there is an extra territorial dimension to the obligation not to facilitate the death penalty. To the contrary, the significance of the Strasbourg case law and Protocol 13 lies in its illustration of the practically unanimous opposition to the death penalty in any circumstances whatever. The jurisprudence is thus important and noteworthy as an influencer to the conclusion that the contended for common law right should be recognised, rather than as providing any directly binding decision to that effect. In Khan at paras 25 and 26, the court said: 25. A states jurisdictional competence under article 1 is primarily territorial. However, the court has recognised two principal exceptions to this principle, namely circumstances of state agent authority and control and effective control over an area (see Al Skeini v United Kingdom (2011) 53 EHRR 18, paras 130 141). In the present case, where the applicant has returned voluntarily to Pakistan, neither of the two principal exceptions to territorial jurisdiction apply. This is particularly so when he does not complain about the acts of British diplomatic and consular agents in Pakistan and when he remains free to go about his life in the country without any control by agents of the United Kingdom. He is in a different position, both to the applicants in Al Saadoon (who were in British detention in Iraq and thus, until their handover to the Iraqi authorities, were under British authority and control) and to the individuals in Al Skeini (who had been killed in the course of security operations conduct by British soldiers in South East Iraq). 26. Moreover, and contrary to the applicants submission, there is no principled reason to distinguish between, on the one hand, someone who was in the jurisdiction of a Contracting State but voluntarily left that jurisdiction and, on the other, someone who was never in the jurisdiction of that state. Nor is there any support in the courts case law for the applicants argument that the states obligations under article 3 require it to take this article into account when making adverse decisions against individuals, even when those individuals are not within its jurisdiction. From these passages it is clear that the courts principal preoccupation was with the territorial reach of the Convention, not with opposition to the death penalty. Likewise, in Sandiford and Zagorski, although in the latter case observations were made concerning the nature of a common law obligation to take positive steps to protect an individuals life from the actions of a third party. These observations will require close consideration. In Sandiford, as the respondent in the present case submitted, the appellant had argued unsuccessfully that the UK was obliged to fund legal representation for a person facing a capital charge in Indonesia; or had applied too rigid a policy against doing so. The Supreme Court concluded that the claimant was not within the jurisdiction of the UK so as to engage any ECHR/HRA rights. But that is nothing to the present point. The appellant does not argue that she or her son are entitled to rely directly on a Convention right. Mr El Sheikh is not within the territorial jurisdiction of the ECHR. The purpose of referring to ECtHR jurisprudence and Protocol 13 is to demonstrate the almost complete ubiquity of opposition in the countries which comprise the Council of Europe to the imposition of the death penalty in any circumstances whatever. Observations by Lord Dyson MR in Sandiford when it was before the Court of Appeal ([2013] EWCA Civ 581; [2013] 1 WLR 2938) are, however, worthy of note. At para 7 of his judgment he said: It is the longstanding policy of the UK to oppose the death penalty in all circumstances as a matter of principle. Its strategy and policy in relation to the death penalty is set out in the HMG Strategy on Global Abolition of the Death Penalty: 11 October 2010. The strategy confirms that the goals of the UK government are to increase the number of abolitionist countries or countries where a moratorium exists on the use of the death penalty; to seek further restrictions on the use of the death penalty in countries where it is used and a reduction in the number of executions; and to ensure that EU minimum standards are met in countries which retain the death penalty. (Emphasis added) and at para 61: The death penalty is (in my view) rightly regarded by the government as immoral and unacceptable. No challenge was made by the respondent to the correctness of these statements. The appellant therefore submits that they provide powerful support for the recognition of a common law principle that the death penalty should not be facilitated by the government of this country. I shall examine EU law on this issue later. But in the meantime, Lord Dyson MRs statement, that one goal of the governments strategy was to ensure that EU minimum standards [were] met in countries which retain the death penalty must be viewed against the background that both EU and ECHR law have a consistent theme, viz that the death penalty is to be condemned and opposed in every circumstance. How could compliance with that position be reconciled with a decision to provide material to a country which retains the death penalty when the very provision of that material could lead to the imposition of that penalty? In Zagorski the claimants were citizens of the US who had been sentenced to death in that jurisdiction. They were due to be executed by lethal injection consisting of an anaesthetic, sodium thiopental, followed by other injections. They applied for judicial review to challenge the decisions of the Secretary of State for Business, Innovation and Skills refusing to impose a control pursuant to the Export Control Act 2002 on the export of sodium thiopental from the United Kingdom to the United States. It was held that the claimants were not entitled to the protection of ECHR. The obligation of the United Kingdom under the Convention did not extend to securing Convention rights to these claimants as they had never been, at any material time, within the territorial jurisdiction of the United Kingdom. The Divisional Court acknowledged that the common law can act to protect human rights independently of the HRA but there was no general common law duty on the government to take positive steps to protect an individuals life from the actions of a third party. At para 80 Lloyd Jones J said: I require no persuading that the common law can act to protect human rights quite independently of the Human Rights Act 1998. However, the extent of such protection and the relationship of the common law to the statutory rights conferred by the Human Rights Act require careful consideration. For example, beyond the established categories of case where a duty of care is imposed, there is no general, common law duty on Her Majestys Government to take positive steps to protect an individuals life from the actions of a third party. Moreover, the common law has shown a reluctance to remedy apparent lacunae in the ECHR regime. The appellant in the present case argues that the ratio in Zagorski was that there was no general common law duty on the Secretary of State to take positive steps to protect an individuals life from the actions of a third party. Here, by contrast, the position is not one of abstaining from taking an action that could prevent the US from carrying out the death penalty. In this case the respondent has authorised the provision of assistance which, on his own admission, has created a serious risk that the individuals concerned will, if prosecuted and convicted, face execution as a direct result of UK assistance in this matter. If there is a common law principle that the UK should not facilitate the carrying out of the death penalty in any circumstances whatever, there should not be a valid distinction between taking positive steps to prevent an execution and taking an action that facilitates the execution. But it ought to be noted that, although originally the claimants in Zagorski had argued that the common law must step in to impose the fundamental principle of the right to life, where for purely jurisdictional reasons the Human Rights Act does not protect that fundamental right, that argument was substantially modified in the course of the hearing see paras 78 and 79 of the judgment. At para 83, Lloyd Jones J outlined the change of position of the claimants: Miss Lieven came to accept in her oral submissions that the essence of her case on the common law in this context was that the importance the common law attaches to fundamental rights means that they have to be given very considerable weight in any decision making process where they are in play. She accepted that that would not mean that a decision refusing to impose a ban on the export of the drug to the United States would necessarily be unlawful. However, the standards which the court would apply to such a decision would be intensified and an increased level of justification would be required. It was therefore unnecessary for the court in Zagorski to address the question whether there existed a common law principle that the government should not facilitate the imposition or the execution of the death penalty in a foreign state. True it is that Lloyd Jones J said (at para 84) that there was no free standing, common law ground for challenging the decisions in issue but that observation must be seen against the modification which the claimants had made to their original case. I do not consider that Zagorski can be regarded as authority for the proposition that the common law should not now be regarded as having evolved to the point where there should be no facilitation of the death penalty. Moreover, the case in Zagorski had been framed as one where the court should act to fill what was regarded as a lacuna in ECHR law. For the reasons given earlier, I consider that the principal significance of Convention jurisprudence is as an indicator of the prevalence throughout the countries of the Council of Europe of settled opposition to the death penalty. I do not accept that it is an appropriate exercise to seek to identify gaps in ECHR law and then consider whether those should be filled by the development of the common law. Rather, I believe that the common law should be seen as an autonomous organism, open to external influence but developing on its own initiative rather than in response to perceived deficiencies in other systems of law. (iii) European Union law Article 2 of the European Charter provides in para 1 that everyone has the right to life and in para 2 that no one shall be condemned to the death penalty or executed. The Divisional Court (at para 181 of its judgment) rejected a submission made on behalf of the appellant that the absolute objection to the death penalty contained in the Charter permeates all aspects of EU decision making at both the political and legislative level. Before this court, the appellant submits that the Divisional Court was wrong to reject her argument as to the effect of EU law. In addition to the absolute prohibition on the death penalty reflected in various articles in the Charter, the EUs absolute opposition to the death penalty is, the appellant says, reflected in an array of other instruments including: (1) the EU Guidelines on Death Penalty (2013), which set out the EUs strong and unequivocal opposition to the death penalty in all times and in all circumstances; (2) Council Regulation (EC) No 1236/2005 of 27 June 2005 concerning trade in certain goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment; (3) Parliament and Council Regulation (EU) 2016/2134 of 23 November 2016 concerning trade in certain goods which could be used for capital punishment, torture or other cruel, inhuman or degrading treatment or punishment (which specifically focuses on the death sentence rather than the generalised prohibition on torture and inhumane treatment); (4) numerous Resolutions of the European Parliament; and (5) recital (71) to the LED, which requires a data controller to take into account that the personal data will not be used to request, hand down or execute a death penalty or any form of cruel and inhuman treatment before transferring data to a foreign law enforcement authority. On 10 October 2018 the EU and the Council of Europe issued a Joint Declaration marking the European and World Day against the Death Penalty. The Joint Declaration stated: On the European and World Day against the Death Penalty, the Council of Europe and the European Union (EU) reiterate their strong opposition to capital punishment in all circumstances and for all cases. The death penalty is an affront to human dignity. It constitutes cruel, inhuman and degrading treatment and is contrary to the right to life. The death penalty has no established deterrent effect and it makes judicial errors irreversible Member states should continue taking effective measures to prevent their involvement, however indirect, in the use of the death penalty by third countries, such as by adopting measures that prevent the trade in goods that could subsequently be used to carry out executions The reason that the Divisional Court concluded that there was no absolute EU law prohibition against the death penalty was the provision in article 11(1)(b) of the EU Japan MLA agreement. The Divisional Court considered that this indicated that the existence of the death penalty in Japan is treated as a discretionary, rather than a mandatory, ground for the refusal of assistance para 89. The appellant submitted that these conclusions were erroneous for the following reasons: (1) Article 11(1)(b) of the EU Japan MLA agreement makes it clear that member states may provide mutual legal assistance in connection with an offence punishable by death under the laws of the requesting state if the requested state and the requesting state agree on the conditions under which the request can be executed. In other words, it permits member states to make the provision of MLA conditional upon exactly the sort of death penalty assurance which the appellant submits the Home Secretary was required to obtain in this case. Nothing in the EU Japan MLA agreement qualifies or detracts from the EUs longstanding and consistent stance of absolute opposition to the death penalty in all circumstances. the EU Japan agreement (2) The suggestion that demonstrates that EU law is not absolutely opposed to the death penalty is also inconsistent with: (a) The travaux preparatoires of the agreement, which record that the EUs specific objective in negotiating the agreement was to allow for effective mutual legal assistance but at the same time ensure that evidence transmitted by a member state, could in no circumstances be used to impose a death sentence (b) the European Parliaments resolution of 16 February 2012 on the death penalty in Japan; and (c) the statement of the European Union Delegation to Japan and the Heads of Mission of EU member states dated 6 July 2018, which stated that the European Union is strongly and unequivocally opposed to the use of capital punishment under all circumstances and we aim at its universal abolition and which called on the Japanese Government to abolish capital punishment. The respondent disputes all of this. It is submitted that article 11 of the EU Japan MLA agreement leaves it to the discretion of the member state to decide whether to refuse to provide data on the basis that it relates to a capital offence. Reliance on the travaux preparatoires of the agreement was misguided the respondent says. The document demonstrates that the EUs line to take in respect of the provision of MLA in a death penalty case was open to negotiation: The aim of a possible agreement between the European Union and Japan on mutual legal assistance would be to enhance and facilitate mutual legal assistance between Japan on the one hand and the 27 member states of the EU on the other hand based, while safeguarding fundamental rights and guaranteeing that the death penalty could not be imposed on the basis of evidence submitted by the EU member states. it has been made clear to Japan that the issue of death penalty/life imprisonment is of crucial importance to the EU. It appears that a satisfactory solution to this issue could be found in the negotiations. This, the respondent says, clearly indicates that the arrangement was one that was open to negotiation as regards its implementation. The respondent also claims that the appellants reliance on the European Parliaments resolution of 16 February 2012 on the death penalty in Japan [AB/99] (para 12.4(2)(b)) and the statement on executions in Japan of the EU Delegation to Japan and the Heads of Mission of EU member states dated 6 July 2018 was misconceived. These do not constitute a legally binding prohibition on the provision of MLA to Japan in the context of an offence punishable by death. Reliance on various non binding statements of policy opposition to the death penalty is likewise misconceived, the respondent says. These do not amount to a legal prohibition on the provision of MLA in a case such as the present. I find it unnecessary for present purposes to resolve the dispute as to whether the EU Japan agreement precluded completely the provision of MLA. It is relevant to the data protection issue which I shall turn to later in this judgment. The context for the present examination of EU law is to assess its influence on the possible development of the common law. Whether it is technically possible under the EU Japan agreement for mutual legal assistance to be provided without death penalty assurances is not directly germane in this context. I find it impossible to resist the conclusion that the overwhelming character of EU law is one of settled, unmistakable opposition to the death penalty in every circumstance. It cannot be irrelevant to the development of our common law that the UK was a member of the EU for more than 40 years. The influence that EU law in general and its hostility to the death penalty in particular has on a decision as to the current state of the common law is undeniable. (iv) Delay in carrying out the death penalty In Pratt v Attorney General for Jamaica [1994] 2 AC 1 the Judicial Committee of the Privy Council held that a state which wished to retain capital punishment must ensure that execution followed as swiftly as practicable after sentence, allowing a reasonable time for appeals. To execute a prisoner years later, after long delays caused by his legitimate use of all the appellate procedures available, was to subject him to an inhuman or degrading punishment. The appellant in the present case, drawing on the reasoning in Pratt and observing that the inevitable delay in carrying out any execution of her son after the imposition of the death penalty by a US court was unchallenged, submitted that to facilitate such a process would involve complicity in the infliction of punishment which was cruel and inhuman. The Divisional Court dealt with the Pratt case at para 86 of its judgment: There is undoubtedly support in international jurisprudence for the contention that prolonged delay in carrying out a sentence of death may be unlawful. For example, in Pratt v Attorney General of Jamaica [1994] 2 AC 1, the Privy Council held that section 17(2) of the Jamaican Constitution authorised the death penalty but that did not prevent the court investigating the circumstances in which the executive intended to carry out the sentence. It held that execution should take place as soon as reasonably practicable after sentence; to carry out executions after a delay of 14 years would constitute inhuman punishment contrary to section 17(1) of the Constitution. But that case turned on the construction of the Jamaican Constitution. It did not establish a rule of the common law, either in Jamaica or generally, that particular periods of delay made the enforcement of the death penalty unlawful. The appellant criticised this passage, submitting that in reaching its decision, the Privy Council had to address the question of whether delayed execution was contrary to the common law. That was necessary in order to establish that the practice of execution after long delay was already unlawful pre independence. That practice was therefore not rescued by the savings clause in section 17(2) of the Constitution, which only protected from constitutional challenge treatment and punishment that had been lawful prior to independence. I consider that the appellants submissions on this point must be accepted. At p 19C D, Lord Griffiths, who delivered the judgment of the Board, said, Prior to independence, applying the English common law, judges in Jamaica would have had the power to stay a long delayed execution (emphasis added). Lord Griffiths relied on statements to like effect by Lord Diplock in Abbott v Attorney General of Trinidad and Tobago [1979] 1 WLR 1342, 1348 and Lord Templeman in Bell v Director of Public Prosecutions [1985] AC 937, 950. Moreover, at p 20G H and p 28F G of the judgment, the Board expressly stated that execution after long delay could have been stayed as an abuse of process before independence by the application of common law principles. Finally, in a telling passage at p 29G H, Lord Griffiths said: There is an instinctive revulsion against the prospect of hanging a man after he has been held under sentence of death for many years. What gives rise to this instinctive revulsion? The answer can only be our humanity; we regard it as an inhuman act to keep a man facing the agony of execution over a long extended period of time. The case therefore did not turn on the construction of the Jamaican Constitution, as the Divisional Court held. On the contrary, it was because the common law before the enactment of the Constitution condemned a long extended period between the passing of a sentence of death and execution that the Jamaican Constitution could not save the situation. That this was the product of the common law was confirmed in the later case of Guerra v Baptiste [1996] AC 397, 409G H, where the Privy Council again held that the prohibition on execution after long delay was consonant with the tradition of the common law. And in Henfield v Attorney General of the Commonwealth of the Bahamas [1997] AC 413, 425B C, where a lesser period of three and a half years was deemed inhuman. That prolonged delay by itself violates the protection against cruel, inhuman or degrading treatment was confirmed by the decision of the Caribbean Court of Justice in the case of Attorney General for Barbados v Boyce [2006] CCJ 1 (AJ), which pronounced that Pratt was rightly decided and that: the practice of keeping persons on death row for inordinate period of time is unacceptable, and infringes constitutional provisions that guarantee humane treatment at para 47. The same approach has been taken by a number of the highest courts in the Commonwealth India (Singh v State of Punjab (1983) 2 SCR 583, 593); Zimbabwe (Catholic Commission for Justice and Peace in Zimbabwe v Attorney General (2001) AHRLR 248 (ZwSC 1993), paras 119 120) and Uganda (Attorney General v Kigula [2009] UGSC 6, pp 47 48), where three years from confirmation of sentence was regarded to be the maximum period. (v) Factors favouring recognition of the common law principle The factors and strands of influence which tell in favour of a common law right not to have ones trial in a foreign state facilitated where there is a prospect that such a trial would lead to the death penalty being carried out may now be assembled and enumerated. 1. The Bill of Rights, an always speaking statute, forbade cruel and unusual punishment. It is surely now beyond controversy that the death penalty is regarded by the common law to constitute such punishment. 2. British contemporary values are reflected in the abolition of the death penalty for murder in 1965 and the resolute refusal of government and Parliament to countenance any change to that position. The Death Penalty Project (DPP), an intervener in this appeal, has submitted that the UKs consistent and long standing approach to the death penalty is clear and supports the assertion that the death penalty is now regarded by this country as a cruel and unusual punishment. To that end the DPP points out that for more than 15 years, it has been funded by the Foreign and Commonwealth Offices Human Rights and Democracy Department in its work to promote restriction of the use of the death penalty worldwide. DPPs work furthers the FCOs Human Rights and Democracy Programme, which lists one of its priority targets to be the abolition of the death penalty abroad. The FCO recognises that the death penalty is an inhuman punishment and has stated that: Our ambition remains a world free of capital punishment and torture and that: [we] oppose the death penalty in all circumstances as a matter of principle, because we consider that its use undermines human dignity, that there is no conclusive evidence of its deterrent value, and that any miscarriage of justice leading to its imposition is irreversible and irreparable. (Human Rights and Democracy: The 2014 Foreign & Commonwealth Office Report, dated 12 March 2015, Executive Summary, and Human Rights and Democracy: The 2017 Foreign and Commonwealth Report, updated 5 October 2018, chapter 1.) 3. ECHR jurisprudence. Although it does not arise directly in this case because of jurisdictional restrictions, it can and should inform the development of the common law see paras 107 124 above. Moreover, the UKs ratification of the Thirteenth Protocol is an unequivocal statement of this countrys stance on the death penalty. Developments in international human rights law are significant pointers to the interpretation of the common law. As Lord Hoffmann said in R v Lyons [2002] UKHL 44; [2003] 1 AC 976, para 27, there is a strong presumption in favour of interpreting English law (whether common law or statute) in a way which does not place the United Kingdom in breach of an international obligation. And in A v Secretary of State for the Home Department (No 2) [2005] UKHL 71; [2006] 2 AC 221, para 27 Lord Bingham of Cornhill said that where development of the common law is called for, such development should ordinarily be in harmony with the United Kingdoms international obligations and not antithetical to them. 4. EU jurisprudence. The European Union has categorically condemned the death penalty as absolutely wrong in all circumstances. This declamation chimes exactly with UK standards and values as described in the DPPs intervention. 5. The fundamental illogicality of, on the one hand, refusing to extradite or deport individuals for trial in a foreign state where there was a risk of the imposition of the death penalty, without requisite assurances, and, on the other hand, facilitating such a trial when precisely the same outcome is in prospect without demanding assurances. The irrationality of this approach can be illustrated by a decision of the Constitutional Court of South Africa Mohamed v President of the Republic of South Africa [2001] ZACC 18. The court identified a principle of non complicity as a justification for the refusal to extradite without a death penalty assurance. The court referred to the commitment implicit in the Constitution that South Africa will not be party to the imposition of cruel, inhuman or degrading punishment (para 59). The rationale was not confined to the fact that the person to be extradited was within the jurisdiction of the courts of South Africa. It extended to any complicity in the imposition of cruel, inhuman or degrading punishment. If it is objectionable to be complicit in exposing an individual to the risk of execution by extraditing him, it is surely equally objectionable to be complicit in facilitating that result by providing material which has the same result. As the appellant submitted, what matters is whether the state whose actions are impugned has, by its actions, established the crucial link in the causal chain that would make possible the execution of the author: per the decision of the UNHRC in Judge v Canada (2005) 40 EHRR SE4, para 10.6. The anomaly created by the difference in approach was well captured by Professor Christof Heyns, a former UN Special Rapporteur and currently a member of the UNHRC, in Report of the Special Rapporteur on extrajudicial, summary or arbitrary executions, A/70/304, 7 August 2015, para 102: A dilemma emerges when abolitionist states provide assistance to retentionist states in criminal matters and that assistance leads to the use of the death penalty. Even though the individual facing the death penalty in such cases may never have been in the jurisdiction of the abolitionist state, such assistance could amount to complicity in the death penalty. The same legal principles apply here as in the case of transfer of persons: states that have abolished capital punishment may not assist in bringing about the death penalty in other countries. JCPC jurisprudence and case law from Commonwealth countries 6. paras 135 140 above. Although the cases discussed in this section relate to delays in carrying out execution, rather than objection to the death penalty itself, they carry unmistakable evidence of the growing revulsion for that punishment felt by many throughout the world. Drawing all these factors together, I believe that the time has arrived where a common law principle should be recognised whereby it is deemed unlawful to facilitate the trial of any individual in a foreign country where, to do so, would put that person in peril of being executed. This is not a conclusion of the considerable and controversial variety suggested by the respondent. It is a natural and inevitable extension of the prohibition (in the common law as well as under the HRA) of extradition or deportation without death penalty assurances. If it appears to be an incremental step, that is only because this is the first time the matter has come before the courts for consideration, largely because the two previous occasions since 2001 on which according to the respondent MLA was provided without a death penalty assurance, that was done without public knowledge and so without the possibility of judicial scrutiny. I have therefore decided that the combination of the above factors (beginning with the recognition in Pratt that delayed execution was contrary to common law) leads inexorably to the conclusion that it is unlawful at common law for the state to facilitate the execution of the death penalty against its citizens or others within its jurisdiction anywhere in the world. Law, whether enacted or developed through the common law, if it is operating as it should, must be responsive to societys contemporary needs, standards and values. It is a commonplace that these are in a state of constant change. That is an essential part of the human condition and experience. As a deeper understanding of the human psyche and the enlightenment of society increase with the onward march of education, tolerance and forbearance in relation to our fellow citizens, the law must march step by step with that progress. I am convinced that the adjustment to the common law which I propose reflects the contemporary standards and values of our society. There is no evidence that the insistence on assurances in the case of extradition or deportation has led to any rupture in the relations between the two countries. Moreover, several other countries have required assurances without any evidence of negative consequences (for example, Germanys requiring an assurance before providing MLA for the federal prosecution of Zacarias Moussaoui, one of the 9/11 conspirators). In any event, the reaction of the US has no bearing on the existence of the common law principle. Nor is there any warrant for suggesting that the recognition of the proposed common law principle would forbid mutual legal assistance in all circumstances. It would be applied precisely as is the rule relating to deportation and extradition. Mutual legal assistance can continue when the appropriate assurances are given. I likewise do not accept that the principle has the potential to be expanded into spheres where it would risk creating real damage, for example, to public protection and national security. The principle will only apply in cases where proceedings are either in train or contemplated and where a possible outcome is the infliction of the death penalty. The free flow of information on matters of public protection and national security between this country and its allies will continue unimpeded. It is suggested by Lord Carnwath in para 191 of his judgment that there is as yet no established principle (under the common law, the Convention or any other recognised system of law), which prohibits the sharing of information relevant to a criminal prosecution in a non abolitionist country. Since the passing of the Human Rights Act 1998, there may have been a tendency to see the law in areas touched on by the Convention solely in terms of Convention rights. But ECHR rights represent a threshold protection; and, although they may be expected to reflect and to find their homologue in the common or domestic statute law, they should not be regarded as an inhibitor to the development of the common law. Lord Goff of Chieveley in Attorney General v Guardian Newspapers Ltd (No 2) [1990] 1 AC 109, 282 284 expressed the view that in the field of freedom of speech there was no difference in principle between English law and article 10 of ECHR. But, in some areas, the common law may go further than the Convention, and in some contexts it may also be inspired by the ECHR rights and jurisprudence (the protection of privacy being a notable example). And in time, of course, a synthesis may emerge. But the natural starting point in any dispute is to begin with domestic law, and it is certainly not to focus exclusively on the Convention rights, without surveying the wider common law scene. As Toulson LJ said in R (Guardian News and Media Ltd) v City of Westminster Magistrates Court [2012] EWCA Civ 420; [2013] QB 618, para 88: The development of the common law did not come to an end on the passing of the Human Rights Act 1998. It is in vigorous health and flourishing in many parts of the world which share a common legal tradition. (vi) Customary international law In his intervention in this case Professor Heyns suggested that there is an emerging norm of customary international law that the death penalty as such is a violation of the absolute right against torture and cruel, inhuman and degrading treatment of punishment, and that a norm against the facilitation of the death penalty follows from that. Professor Heyns accepts that in order to determine the existence and content of a rule of particular customary international law, it is necessary to ascertain whether there is a general practice among the states concerned that is accepted by them as law among themselves Celiberti de Casariego v Uruguay: (1981) 68 IRL 41, paras 10.1 10.3. In my opinion, the material on which one could reasonably conclude that there is such a general practice has not been produced. The arguments advanced by the respondent (and set out between paras 88 and 92 above) do not establish that customary international law is not in the process of evolving to the point where the death penalty as such is a violation of the absolute right against cruel and inhuman punishment. But those arguments and the material on which they were based are sufficient to cast sufficient doubt on that proposition. As Professor Heyns has pointed out, the United Nations Special Rapporteur on torture and other cruel, inhuman or degrading treatment or punishment, concluded in 2012: there is an evolving standard whereby states and judiciaries consider the death penalty to be a violation per se of the prohibition of torture or cruel, inhuman or degrading treatment The Special Rapporteur is convinced that a customary norm prohibiting the death penalty under all circumstances, if it has not already emerged, is at least in the process of formation. Interim Report of the Special Rapporteur on torture and other cruel, inhuman or degrading treatment or punishment, 9 August 2012, (A/67/279), para 72. In the absence of firm, tangible evidence that the process of evolution has been completed or that there is a general practice such as is referred to in para 144 above, it is impossible to accept the appellants argument based on customary international law. (vii) Data protection The starting point on this subject is the agreement between the parties that the provision of material by the Home Secretary to the United States in July 2018 involved processing of personal data for a law enforcement purpose by a controller which is a competent authority for the purposes of Part 3 of the Act. It is also agreed that the Home Secretary did not expressly consider his duties under the Act. The respondent argues, however, that there was substantial compliance with the Act. Section 34 of the DPA provides an overview and general duty of the data controller. It summarises six data protection principles. The appellant complains that the first two of these were breached. So far as relevant to this case they are (i) that the processing of personal data for any law enforcement purposes must be lawful and fair section 35(1) and (ii) that the law enforcement purpose for which personal data is collected on any occasion must be specified, explicit and legitimate section 36(1)(a). Since I have concluded that the transfer of material to the US authorities without obtaining death penalty assurances was contrary to law, it follows that neither condition can be said to have been met. The processing of the material was not lawful. Nor was the law enforcement purpose for which it was collected legitimate, since it was to be used in the prosecution of Mr El Sheikh in a trial where he was at risk of being sentenced to death and executed in consequence. That purpose cannot be legitimate in light of my view as to the current state of the law of this country. On that account, it is unnecessary for me to consider the elaborate arguments deployed by the parties on the proper approach to the interpretation of the DPA, beyond paying tribute to the ingenuity of those arguments and the skill with which they were presented. Sections 73 to 76 set out the general conditions that apply to the transfer of personal data to third countries or international organisations. A controller may not transfer personal data to a third country or to an international organisation unless the three conditions set out in subsections (2) to (4) of section 73 are met. The second condition is the relevant one for the purposes of this case. It is contained in section 73(3) and is in these terms: (3) Condition 2 is that the transfer is based on an adequacy decision (see section (a) 74), (b) if not based on an adequacy decision, is based on there being appropriate safeguards (see section 75), or (c) if not based on an adequacy decision or on there being appropriate safeguards, is based on special circumstances (see section 76). It is not in dispute that the transfer was not based on an adequacy decision. In view of my finding in relation to the need to obtain proper death penalty assurances, I am bound to find that the decision to transfer the material to US authorities was not based on there being appropriate safeguards. Section 76 deals with transfers on the basis of special circumstances. In material part it provides: (1) A transfer of personal data to a third country or international organisation is based on special circumstances where the transfer is necessary to safeguard the legitimate interests of the data to protect the vital interests of the data subject or (a) another person, (b) subject, (c) for the prevention of an immediate and serious threat to the public security of a member state or a third country, (d) enforcement purposes, or (e) in individual cases for any of the law in individual cases for a legal purpose. The Divisional Court held that the transfer could be justified on the basis of special circumstances. The appellant submits that the court was wrong to characterise the transfer as being necessary for any purpose. Accordingly, the condition in section 76(1) was not met. Secondly, the appellant submits that, since section 76 refers to a transfer which is based on or takes place in reliance on the existence of special circumstances, conscious and contemporaneous reliance on the gateway by the transferor at the time of the transfer is required and there was no such reliance in this case. Thirdly, the narrowness of this residual gateway is reinforced by recital (72) to the LED which states that the gateway should be interpreted restrictively and should be limited to data strictly necessary. I consider that the requirement that the data be limited to that which is strictly necessary behoves the data controller to make an assessment of what, in the context of the DPA, is strictly necessary and, since it is accepted that the Home Secretary did not have regard to his duties as data controller, the special circumstances gateway was not available. Moreover, it is not enough to say that the data protection provisions were substantially met, where direct, personal evaluation was required. The appellants final argument in relation to the DPA was based on section 80 (regarding special processing restrictions where, for a law enforcement purpose, a controller transmits or otherwise makes available personal data to an EU recipient or a non EU recipient). I am inclined to accept the respondents argument that this provision does not apply to Mr El Sheikh but, in light of my other conclusions, it is unnecessary for me to reach a final conclusion on it. I refrain from making a finding on that argument, therefore. Conclusions I have concluded that a common law principle should now be recognised to the effect that it is unlawful to facilitate by the provision of material to be used in the trial of a person in a foreign country where there is a risk that, as a result of those proceedings, that person would be at risk of execution. On that account the Home Secretary should not have supplied the material to the US authorities in July 2018 without having obtained the customary death penalty assurances. It matters not that the Home Secretary was exercising a prerogative power. This court is required by long established law to examine the nature and extent of the prerogative power and to determine whether the respondent has transgressed its limits particularly where the prerogative power may be being used to infringe upon an individuals rights. The courts have carried out a similar examination in several earlier cases, including Sandiford (considered above) see also the recent decision of this court in the associated cases of R (Miller) v Prime Minister (Lord Advocate intervening) [2019] UKSC 41; [2019] 3 WLR 589, paras 30 32 and, in particular, para 35. It might be said that the limit on the prerogative is grounded in the private law right to life and freedom from cruel and unusual treatment but this does not mean that a private law claim could be brought against a private individual choosing to give evidence in a death penalty trial, as the focus here is on the public law principle regarding the use of executive powers. The challenge here may be said to stem from the asserted right that Mr El Sheikh should not be exposed to the risk of having the death penalty imposed on him. And it is possible to characterise that as a private law right. But the decision to release papers and other material without obtaining death penalty assurances involves the exercise of the prerogative which is rooted firmly in the public law domain. If there is recognised a common law principle that the death penalty should not be facilitated (save in wholly exceptional circumstances which I shall discuss in the next paragraph and which do not obtain in this instance), then the exercise of the prerogative must yield to that principle and be exercised in accordance with it. The restraint on the power to exercise the prerogative in the way that the authorities have done and wish to do in this case derives from such a common law principle, not from the assertion of a private law right. It lies emphatically therefore in the sphere of public law. The only circumstances in which I conceive that the common law principle should not apply are these: if the relay of information or intelligence was absolutely necessary as a matter of urgency in order to save lives or to protect the security of the nation, the possibility of facilitating the imposition of the death penalty on someone whose identity or activities would thereby be revealed would be outweighed by those momentous considerations. There is nothing of the kind here. No one has suggested that the information was required because of any imminent threat. Had I not held that it was unlawful to facilitate the trial of a person in a foreign country where there was a risk of his being executed, I would nevertheless have held that facilitating his trial in the US with the attendant and inevitable considerable delay between the passing of the sentence of death and its being carried out would be unlawful. For the reasons earlier given, the respondent failed to comply with the requirements of a number of the provisions in the DPA. On that account also his decision to supply the material was unlawful. It follows that no further assistance should be given for the purpose of any proceedings against Mr El Sheikh in the United States of America without the appropriate death penalty assurances. LORD REED: (with whom Lady Black and Lord Lloyd Jones agree) I agree with Lord Carnwath, for the reasons which he gives, and with the other members of the court, that the Secretary of States decision is vitiated by his failure to comply with the requirements of the Data Protection Act 2018. The second ground of appeal should therefore be upheld, and the appeal must be allowed. I also agree with Lord Carnwath that the first ground of appeal should be dismissed, for the reasons which he gives, and for also the additional reasons given below. I regret that I am unable to agree with Lord Kerrs conclusion that individuals (including citizens of foreign states) possess a common law right under English law not to have their trial in a foreign jurisdiction facilitated where there is a prospect that such a trial would lead to the death penalty being carried out. Out of respect for Lord Kerrs careful judgment, I should briefly explain the additional reasons, besides those given by Lord Carnwath, for my taking a different view. I fully accept that the common law is subject to judicial development, but such development builds incrementally on existing principles. That follows from two considerations. The first is that judicial decisions are normally backward looking in the sense that they decide what the law was at the time which is relevant to the dispute between the parties. In order to preserve legal certainty, judicial development of the common law must therefore be based on established principles, building on them incrementally rather than making the more dramatic changes which are the prerogative of the legislature. Following that approach, new rules may be introduced, or existing rules may be reformulated or departed from, but the courts continue to apply principles which formed an established part of the law at the time of the events in question. The judges are then faithful to their oath to do right to all manner of people after the laws and usages of this Realm. Secondly, that constraint on judicial law making is also compatible with the pre eminent constitutional role of Parliament in making new law, and with the procedural and institutional limitations which restrict the ability of litigation before the courts to act as an engine of law reform. The development of the law proposed by Lord Kerr does not appear to me to be an incremental step. I do not find in the sources cited by Lord Kerr an established principle, of which a right having the characteristics he describes can be regarded as an incremental development, largely for the reasons given by Lord Carnwath. For example, the principal domestic source on which Lord Kerr relies is article 10 of the Bill of Rights 1688. That article appears under the heading The Subjects Rights, and states that excessive Baile ought not to be required nor excessive Fines imposed nor cruel and unusual Punishments inflicted. Its prohibition of cruel and unusual punishments concerns the infliction of punishment by the Crown. That is not the subject matter of the present case. Nevertheless, there is no doubt that, as Lord Bingham of Cornhill observed in R (Amin) v Secretary of State for the Home Department [2003] UKHL 51; [2004] 1 AC 653, para 30, [a] profound respect for the sanctity of human life underpins the common law. There are many areas of the law which reflect that respect, including the criminal law relating to homicide, the law of tort and the law relating to coroners. The present case is not, however, concerned with a deprivation of life which would constitute a crime or a tort under English law, or would call for a coroners inquest. It is concerned with a decision by the Secretary of State, taken (it is accepted) in the exercise of prerogative powers, to provide mutual legal assistance to a foreign government, in the form of information concerning a foreign citizen for use in a criminal investigation, and possibly at a trial, in that jurisdiction. The special feature of the case is that it is possible that the person under investigation may be tried on charges for which the death penalty is an available punishment. If he were to be convicted of such charges, a trial could result in his judicial execution. It also appears from the evidence before this court that a prosecution overseas would be reliant on the material provided by the Secretary of State. The consequence of the Secretary of States decision is therefore to place a person at risk of execution. In my opinion, Sir James Eadie was correct in submitting on behalf of the Secretary of State that the common law rights and obligations which are relevant to that situation are to be found in public law. There is however a risk of over simplification if one says, as Sir James put it, that public law goes no further than to recognise that rational and proper judgments have to be made. It is necessary to bear in mind that the context of a decision, and in particular, its potential implications for the life of the person concerned, may affect the application of the familiar grounds of judicial review of administrative action to which Sir James was referring. In that regard, it is relevant to consider the idea of a right to life, which is included among the common law constitutional rights listed in De Smiths Judicial Review, 8th ed (2018), eds Woolf et al, para 11 054, and has been discussed in a number of authorities. Those authorities do not vouch the existence of a right in the sense in which that term is used in the law of obligations, and the idea that there might be a right of that character is absent from leading cases concerned with questions of life and death, such as Airedale NHS Trust v Bland [1993] AC 789, R v Cambridge Health Authority, Ex p B [1995] 1 WLR 898, In re A (Children) (Conjoined Twins: Surgical Separation) [2001] Fam 147 and R (Nicklinson) v Ministry of Justice (CNK Alliance Ltd intervening) [2014] UKSC 38; [2015] AC 657. Nevertheless, the authorities support the recognition of what might more aptly be described as a value to which the courts attach great significance when exercising their supervisory jurisdiction. Judicial recognition of the right to life, understood in that sense, can have an important influence on adjudication. A well known example is the case of R v Secretary of State for the Home Department, Ex p Bugdaycay [1987] AC 514, which concerned the approach which should be adopted to the consideration of applications for asylum, where it was claimed that the asylum seekers life would be at risk if his application were refused. Lord Bridge of Harwich, in a speech with which the other members of the Appellate Committee expressed agreement, referred to the limitations on judicial review of the exercise of discretion, and continued at p 531: Within those limitations the court must, I think, be entitled to subject an administrative decision to the more rigorous examination, to ensure that it is in no way flawed, according to the gravity of the issue which the decision determines. The most fundamental of all human rights is the individuals right to life and when an administrative decision under challenge is said to be one which may put the applicants life at risk, the basis of the decision must surely call for the most anxious scrutiny. To similar effect, Lord Templeman stated at p 537: In my opinion where the result of a flawed decision may imperil life or liberty a special responsibility lies on the court in the examination of the decision making process. On that basis, the House of Lords carried out a more searching review of the Secretary of States consideration of the facts of the case than would be usual on an application for judicial review. Another example is the case of R v Cambridge Health Authority, Ex p B [1995] 1 WLR 898, concerned with a challenge to a health authoritys refusal to provide what was argued to be potentially life saving medical treatment. Sir Thomas Bingham MR, with whom Sir Stephen Brown P and Simon Brown LJ agreed, stated at pp 904 905: [I]t is important that I should state very clearly, as the judge did, that this is a case involving the life of a young patient and that that is a fact which must dominate all considerations of all aspects of the case. Our society is one in which a very high value is put on human life. No decision affecting human life is one that can be regarded with other than the greatest seriousness. This approach is now firmly established. For example, in R (Sandiford) v Secretary of State for Foreign and Commonwealth Affairs [2014] UKSC 44; [2014] 1 WLR 2697, para 66, Lord Carnwath and Lord Mance stated: Irrationality is a high threshold, but it may be easier than otherwise to surmount in a case involving an imminent risk of death by execution of a British citizen deprived of financial support abroad. The courts role is given added weight in a context where the right to life is at stake (see R v Secretary of State for the Home Department, Ex p Bugdaycay [1987] AC 514). A keen scrutiny of the policy and its application must on any view be required in such circumstances. In the more recent case of Pham v Secretary of State for the Home Department [2015] UKSC 19; [2015] 1 WLR 1591, Bugdaycay was cited as one of a number of authorities demonstrating that the intensity of rationality review depends on the context, and that a more rigorous approach is required when the courts are reviewing the exercise of discretion in contexts where fundamental rights are at stake: see paras 105 106 and 114. Sir James Eadie submitted that the Secretary of States decision in the present case complied with that standard. There was, he said, no irrational change of position by the Secretary of State. The decision was subjected to the most anxious scrutiny. Sir James also emphasised that the decision was taken in the conduct of foreign affairs, in an area shot through with diplomatic judgement. This was an area where the courts recognised the institutional competence and democratic legitimacy of the executive. I fully accept that in reviewing a decision such as that in issue, the court has to take full account of the considerations to which Sir James referred. I also accept that, contrary to the submission made on behalf of the appellant, the fact that the Secretary of States decision represented a departure from the Governments usual approach in death penalty cases did not in itself render it irrational: the Governments policy in this area was more nuanced than was acknowledged in those submissions. Postscript However, I should not leave this matter without observing that, examining the decision with the intense care which its potential consequences require, there are some other aspects which might have given rise to a question as to whether it complied with the common law requirement of rationality, if they had been raised. I should make it clear that, as these matters were not raised on behalf of the appellant, I do not express any view on them, and they have played no part in my decision as to the outcome of the appeal. I mention them only because they might be relevant if a similar issue were to come before the Secretary of State on some future occasion. One such aspect is the Secretary of States conclusion that the provision of the information in question was justified because it was in the interests of justice that Mr El Sheikh should be tried in the United States. According to a witness statement of Mr Graeme Biggar, a senior official in the Home Office whose statement was said by Sir James to set out the Secretary of States reasoning, the Crown Prosecution Service (the CPS) considered that there was insufficient evidence for a prosecution to take place in the UK, even taking into account the cumulative effect of the evidence available in both the UK and the US. Against that background, Mr Biggar stated, [t]he Home Secretarys priority was to ensure insofar as possible that Mr El Sheikh faced justice before a criminal court. The Secretary of State himself wrote, in the relevant letter dated 22 June 2018: The UKs aim is for these individuals to face justice in the most appropriate jurisdiction which maximises our collective chances of a successful prosecution. To this end the (operationally independent) Counter Terrorism Command of the Metropolitan Police (S015) and Crown Prosecution Service (CPS), have been engaged in a dispassionate assessment of the evidence available and likelihood of prosecution in the UK. In parallel our investigators have also been working with the FBI to explore the likelihood of prosecution in the US or other jurisdictions Regretfully, as a result of this process, the CPS have determined there is insufficient evidence to prosecute Shafee El Sheikh in the UK Ensuring foreign fighters face justice raises a real challenge for all our jurisdictions, however in this instance we believe a successful federal prosecution in US is more likely to be possible because of differences in your statute book and the restrictions on challenges to the route by which defendants appear in US courts. The US currently has additional charges for terrorism offences which are not available under UK criminal law, and those offences carry long sentences. We are therefore committed to assisting the US with a federal prosecution of Alexanda Kotey and Shafee El Sheikh, and after careful consideration I have decided to accede to your current request for mutual legal assistance which is with the UK Central Authority. This letter implies that the problem faced by the CPS was not merely that there was insufficient evidence to convict Mr El Sheikh of any offence under UK law. Two other matters were mentioned: the need to create new offences, and possible challenges to the route by which defendants appear in court. In relation to the second point, Sir James Eadie explained that there was a concern that Mr El Sheikh could challenge the procedure by which he might be brought before a UK court as an abuse of process, on the basis of R v Horseferry Road Magistrates Court, Ex p Bennett [1994] 1 AC 42. The Secretary of States reasoning appears therefore to be based on the view that the prosecution of a person in a foreign jurisdiction is necessary to ensure that justice is done, notwithstanding that (a) the conduct for which he might be prosecuted does not constitute an offence under the law in force in the UK, (b) there is insufficient evidence to establish that he has committed any offence under UK law, and (c) the law in force in the UK might treat his prosecution as an abuse of process. A second aspect of the reasoning is that the Secretary of State seemingly regarded the prospect of Mr El Sheikhs possible execution as preferable to the prospect of his detention at Guantanamo Bay. In relation to that matter, Mr Biggar states: The second issue was the prospect that the US might transfer El Sheikh to Guantanamo Bay The UK has consistently and publicly opposed Guantanamo Bay; and considers that it is a radicalising factor in the UK It was the Home Secretarys assessment in his meeting with the US Attorney General that to press for an assurance would be to imperil the prospect of prosecution (and instead pave the way for a transfer to Guantanamo). To view the risk of Mr El Sheikhs execution as preferable to the risk of his detention at Guantanamo Bay is understandably described by Lord Kerr as perplexing. LORD CARNWATH: I am grateful for Lord Kerrs comprehensive account of the legal and factual background to this troubling case. Taken with the similarly complete judgment of the Divisional Court, it enables me to express my own views relatively briefly. The appellants submissions fall under two main headings: (i) Unlawfulness of facilitating the death penalty; (ii) Violations of the Data Protection Act 2018. In short, I would dismiss the appeal under the first heading, substantially for the reasons given by the Divisional Court; but in agreement with Lord Kerr I would allow the appeal under the second heading. On the latter issue we have had helpful submissions, not available to the Divisional Court, from Mr Facenna QC on behalf of the Information Commissioner. Facilitating the death penalty The citations given by Lord Kerr leave no doubt as to the strength of the opposition to the death penalty in this and many other countries. The issue is how far that is reflected in a rule of law applicable to the present facts. Certain principles of law or policy are not in doubt: (i) It is the clear policy of the UK to oppose the death penalty in all circumstances as a matter of principle, to seek to increase the number of abolitionist countries and to seek further restrictions on the use of the death penalty in countries where it is used (see the citations in R (Sandiford) v Secretary of State for Foreign and Commonwealth Affairs [2013] EWCA Civ 581; [2013] 1 WLR 2938 CA, para 7). (ii) Within countries subject to the European Convention on Human Rights the right not to be subjected to the death penalty (article 2 and the Thirteenth Protocol) is now recognised as a fundamental right and as one which admits of no derogation and applies in all circumstances (Al Saadoon v United Kingdom (2010) 51 EHRR 9, para 118). (iii) There is as yet no settled rule of customary international law to like effect (Lord Kerr para 149). (iv) It is an established principle both of the common law and other jurisprudence (including the European Convention) that prolonged delay in carrying out the death penalty (the death row phenomenon) may be unlawful as violating protections against cruel, inhuman or degrading treatment (Pratt v Attorney General of Jamaica [1994] 2 AC 1, Soering v United Kingdom (1989) 11 EHRR 439; and other cases cited by Lord Kerr at paras 138 140). I agree with Lord Kerr that the Divisional Court in this respect took too narrow a view of the principle. (v) Convention law (under article 2) also prohibits In addition to prohibiting the death penalty in member states, the extradition or deportation of an individual to another state where substantial grounds have been shown for believing that he or she would face a real risk of being subjected to the death penalty there. (Al Saadoon at para 123) The same principle applies under article 3 where there is a real risk of prolonged exposure to the death row phenomenon (Soering at para 111). (vi) To similar effect UN Human Rights Committees (UNHRC) General Comment No 36 (2018) on article 6 of the International Covenant on Civil and Political Rights provides (para 34): States parties that abolished the death penalty cannot deport, extradite or otherwise transfer persons to a country in which they are facing criminal charges that carry the death penalty, unless credible and effective assurances against the imposition of the death penalty have been obtained. These points are not in dispute. However, so far as appears from the materials before the court, there is as yet no established principle (under the common law, the European Convention or any other recognised system of law), which prohibits the sharing of information relevant to a criminal prosecution in a non abolitionist country merely because it carries a risk of leading to the death penalty in that country. Against that background Mr Fitzgerald QC faced an uphill task in seeking to persuade the court that it should now fashion a common law rule to that effect. He sought to do so, first, by invoking Lord Carswells well known affirmation in A v Secretary of State for the Home Department (No 2) [2005] UKHL 71; [2006] 2 AC 221, para 152, of the evolving character of the common law, citing for example Matthews J in Hurtado v California (1884) 110 US 516, 531: as it was the characteristic principle of the common law to draw its inspiration from every fountain of justice, we are not to assume that the sources of its supply have been exhausted. On the contrary, we should expect that the new and various experiences of our own situation and system will mould and shape it into new and not less useful forms. Secondly, he relied on recent statements in this court as to the ability of the common law to respond to developments in European Convention law: R (Osborn) v Parole Board [2013] UKSC 61; [2014] AC 1115, para 57 per Lord Reed; Kennedy v Information Comr (Secretary of State for Justice intervening) [2014] UKSC 20; [2015] AC 445, para 46 per Lord Mance. Neither reference seems to me to assist his case. As the Divisional Court said, the power of the courts to develop the common law is not in doubt, but it is a power to be exercised with caution. The recent statements in this court support the development of the common law in line with the European Convention, but not beyond as here proposed. So far as concerns Lord Carswells comments in the A case, he was speaking in the context of an issue as to the admissibility of evidence obtained by torture, against a background in which from its very earliest days the common law of England set its face firmly against the use of torture (per Lord Bingham of Cornhill at para 11, citing authorities dating from the 15th century). As Lord Carswell acknowledged, other members of the House had accepted the view that the common law as it stands would forbid the reception in evidence of any statement obtained by the use of torture. In that context his proposal represented at most a very limited development of the law. By contrast, as the Divisional Court pointed out (para 94), the death penalty as such has never attracted the attention of the common law. It is notable that the developments of the law have come relatively recently, from Parliament or the European Court of Human Rights, rather than the domestic courts. It was not until 1965 that the death penalty was abolished for murder (Murder (Abolition of Death Penalty) Act 1965); abolition of the penalty for the remaining offences had to wait until the Crime and Disorder Act 1998. Much more recently Parliament has made express provision in respect of death penalty assurances in one context. Section 16 of the Crime (Overseas Production Orders) Act 2019, which amends section 52 of the Investigatory Powers Act 2016 (interception of communications in accordance with overseas requests) to provide, in the case of agreements with non abolitionist countries, a prohibition on designation unless the Secretary of State: has sought a written assurance, or written assurances, relating to the non use of information obtained by virtue of the agreement in connection with proceedings for a death penalty offence in the country or territory. The possible relevance is two fold. First it confirms that this is an area in which Parliament remains directly involved. Secondly, where the statute applies, the Secretary of State is required to seek assurances, but there is no specific prohibition on the exchange of material where no such assurance is ultimately obtained. As regards the European Convention, the right to life under article 2 of the Convention in its original form included an exception for the execution of a sentence of a court following his conviction of a crime for which this penalty is provided by law. It was not until 2004 that the Thirteenth Protocol to the European Convention was adopted excluding the death penalty in all circumstances. Nor can it be assumed that the domestic courts unaided by Strasbourg would have developed a rule of law corresponding to the Soering principle. The principle itself was not uncontroversial. In the later Grand Chamber decision in Chahal v United Kingdom (1997) 23 EHRR 413 there was strong minority support for a more flexible approach when dealing with removal on security grounds. In a dissenting judgment, seven judges (including the British judge Sir John Freeland) said: We agree with the majority that national security considerations could not be invoked to justify ill treatment at the hands of a Contracting State within its own jurisdiction, and that in that sense the protection afforded by article 3 is absolute in character. But in our view the situation is different where, as in the present case, only the extra territorial (or indirect) application of the article 3 is at stake. There, a Contracting State which is contemplating the removal of someone from its jurisdiction to that of another state may legitimately strike a fair balance between, on the one hand, the nature of the threat to its national security interests if the person concerned were to remain and, on the other, the extent of the potential risk of ill treatment of that person in the state of destination Under domestic law, powers to deport or extradite are conferred by statute and as such subject to review on public law grounds, including, where the right to life is at stake the anxious scrutiny principle (R v Secretary of State for the Home Department, Ex p Bugdaycay [1987] AC 514). However, it is difficult to see how, under established common law principles of statutory construction (apart from the European Convention), the discretion conferred on the Secretary of State by the relevant statutes could have been construed as subject to an absolute prohibition on removal by reference to the possible consequences in the receiving state, as opposed to a discretion along the lines of that proposed by the minority in Chahal. In any event, even if such a common law principle relating to physical removal could be made out, I am unpersuaded that the references given by Mr Fitzgerald could properly lead the court to recognise as part of the common law a broader non facilitation principle: that is a principle (in his words) that it cannot be lawful or rational to facilitate a penalty that we ourselves regard as inhuman. I take them in turn. He relies first on the words of Lord Kerr in R (Ismail) v Secretary of State for the Home Department [2016] UKSC 37; [2016] 1 WLR 2814 to describe the basis of the Soering principle: It was because the actions of the UK authorities, in extraditing the applicant to a country where he faced the possibility of suffering the death penalty, facilitated that outcome that a violation of article 3 was held to be present. In effect, the UK would have been directly instrumental in exposing Soering to the risk of being executed (para 35 emphasis added) As I understand that passage in context, Lord Kerr was giving no more than shorthand description of the basis of the Soering principle, with a view not to extending it, but to distinguishing it as applied to the facts of the case before him. To similar effect is the reference by the Constitutional Court of South Africa in Mohamed v President of the Republic of South Africa [2001] ZACC 18 to the states commitment under its Constitution not to be party to the imposition of cruel, inhuman or degrading punishment (para 59). The full paragraph shows that again it was concerned with physical removal rather than other forms of assistance: For the South African government to cooperate with a foreign government to secure the removal of a fugitive from South Africa to a country of which the fugitive is not a national and with which he has no connection other than that he is to be put on trial for his life there, is contrary to the underlying values of our Constitution. It is inconsistent with the governments obligation to protect the right to life of everyone in South Africa, and it ignores the commitment implicit in the Constitution that South Africa will not be party to the imposition of cruel, inhuman or degrading punishment. (para 59 emphasis added) The same can be said of Mr Fitzgeralds reference to the UNHRC decision in Judge v Canada (2005) 40 EHRR SE4, para 10.6. The full paragraph reads: 10.6 For these reasons, the Committee considers that Canada, as a state party which has abolished the death penalty violated the authors right to life under article 6, para 1, by deporting him to the United States, where he is under sentence of death, without ensuring that the death penalty would not be carried out. The Committee recognizes that Canada did not itself impose the death penalty on the author. But by deporting him to a country where he was under sentence of death, Canada established the crucial link in the causal chain that would make possible the execution of the author. Mr Fitzgerald relies on the reference to a causal chain, but that again was in the narrow context of physical removal to a country where he was already under sentence of death. Finally Mr Fitzgerald relies on the report of the UN Special Rapporteur (Professor Christof Heyns) on extrajudicial, summary or arbitrary executions, A/70/304, 7 August 2015, which states: A dilemma emerges when abolitionist states provide assistance to retentionist states in criminal matters and that assistance leads to the use of the death penalty. Even though the individual facing the death penalty in such cases may never have been in the jurisdiction of the abolitionist state, such assistance could amount to complicity in the death penalty. The same legal principles apply here as in the case of transfer of persons: states that have abolished capital punishment may not assist in bringing about the death penalty in other countries. (para 102 emphasis added) The report goes on (para 106) to refer to the possible need for further guidance on what sort of assistance might constitute unlawful complicity in the death penalty, supported by a non exhaustive list drawn up by OHCHR detailing what assistance might be proximate enough to engage responsibility. While the earlier passage might be thought to imply a more general principle aimed at any form of assistance, the report does not suggest that it has achieved the status of a binding rule of law by virtue of any legal instrument or judicial pronouncement, national or international. It is also relevant that we are not here considering facilitation in general, but facilitation by the transfer of information. The development of a common law rule would have to take account of the fact that, at least as respects the transfer of personal data, Parliament has recently legislated in this field, in the 2018 Act. That provides a detailed and carefully calibrated regime for the transfer of such information to third countries. It is difficult to reconcile that scheme with the development of an absolute common law prohibition of transfer of information in defined circumstances. Notably, even where transfer would otherwise be prohibited, for example because of the lack of appropriate safeguards, transfer may be allowed in special circumstances, including in section 76(1)(c) for the prevention of an immediate and serious threat to the public security of a member state or a third country. It is not difficult to envisage circumstances where urgent exchange of information with the US security forces might be required relating to an immediate threat to public security, which should not be inhibited by concerns that it might ultimately lead to a risk of the death penalty. For these reasons I would dismiss the appeal under the first heading. Data Protection Act 2018 The provisions of the Data Protection Act 2018, which regulates the processing of personal data, are set out and discussed in detail in the Divisional Courts judgment (paras 141ff). It is not in dispute that the data transmitted to the US authorities include personal data relating to Mr El Sheikh together with personal data relating to any other suspect, to witnesses and possibly others, along with other material not falling within the definition of personal data. It is also not in dispute that in the course of their consideration of the question whether to provide the US authorities with the material, the UK authorities gave no separate consideration to the requirements of the 2018 Act (Divisional Court paras 141 142). It is Part 3 of the Act that is of particular relevance in the present case. As the Divisional Court explains (paras 143, 175), Part 3 is designed to implement the EUs Law Enforcement Directive (Directive (EU) 2016/680) or LED, which accordingly is a legitimate aid to construction. The appellant argues that the authorities breached the provisions of the 2018 Act in a number of respects. I propose to turn straight to the arguments that she advances in relation to the provisions governing transfers of personal data to a third country (sections 72 to 78 of Part 3), because it is these provisions which, to my mind, provide the answer to the data protection issues in this case. Section 73 sets out general principles for such transfers. It prohibits transfer of personal data unless the three conditions set out in subsections (2) to (4) are met. Condition 1 is that the transfer is necessary for any of the law enforcement purposes. It is common ground that the test of necessity is a strict one (Guriev v Community Safety Development (UK) Ltd [2016] EWHC 643 (QB), para 45). The law enforcement purposes are: the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, including the safeguarding against and the prevention of threats to public security. (section 31) is based on an adequacy decision (see section Condition 2 is that: the transfer (a) 74), (b) if not based on an adequacy decision, is based on there being appropriate safeguards (see section 75), or if not based on an adequacy decision or on there (c) being appropriate safeguards, is based on special circumstances (see section 76). Condition 3 concerns the status of the intended recipient of the data. There is no dispute that it is satisfied, and it need not concern us further. It is upon Condition 2 that the argument in the instant case has centred. Each of the three limbs of this condition directs the reader on to a further section of Part 3. There was no adequacy decision in this case (Condition 2(a)), so section 74 need not be considered. However, there is debate as to the applicability of both Condition 2(b) and Condition 2(c), and it is therefore necessary to turn to sections 75 and 76. Section 75 defines the circumstances in which a transfer is based on there being appropriate safeguards, and sets out procedural requirements which must be complied with, including as to documentation and as to providing information to the Information Commissioner. Relevant also to appropriate safeguards is recital (71) of the LED: Transfers not based on such an adequacy decision should be allowed only where appropriate safeguards have been provided in a legally binding instrument which ensures the protection of personal data or where the controller has assessed all the circumstances surrounding the data transfer and, on the basis of that assessment, considers that appropriate safeguards with regard to the protection of personal data exist In addition, the controller should take into account that the personal data will not be used to request, hand down or execute a death penalty or any form of cruel and inhuman treatment (Emphasis added) The Divisional Court rejected the appellants submission based on recital (71) that in the absence of an assurance as to use, the safeguards would necessarily be inadequate. They said: if this recital were intended to be a red line prohibition it (a) would be expressed clearly as such, (b) would be expressed in imperative terms (must rather than should and not merely take into account), and (c) would be in an article rather than a recital. (para 182) The court (paras 202ff) also rejected the submission that the section required express consideration of the applicability of the requirements before transfer takes place: What matters is whether, in substance, appropriate safeguards for the protection of the data existed; whether, in other words, the decision proceeded in circumstances where there were appropriate safeguards in place. It was evident, in the Divisional Courts view, that ministers and officials took account of the potential use of the data in respect of the death penalty: in fact, that was central to the assessment. The terms on which the data were transferred to the US authorities were set out in the letter under challenge, and the careful consideration by ministers and officials of the question whether to make the transfer in the absence of death penalty assurance met the requirement that the data controller must assess all the circumstances surrounding transfer of that type of personal data to the US as required by section 75(1)(b). As to the lack of communication with the Information Commissioner as required by section 75(2) the court accepted the submission of counsel for the Secretary of State that a failure in that regard cannot operate to undermine a transfer which in substance is lawful. Mr Facenna for the Information Commissioner submits that the Divisional Court erred in its understanding of the applicable gateway under sections 73 to 76. Section 73 requires, as he puts it, conscious and contemporaneous consideration of the statutory tests prior to any transfer taking place. Further, the record keeping requirement, including the requirement to set out the justification for the transfer (which features in both section 75 and section 76) cannot sensibly be read as requiring no more than ex post facto consideration of whether a transfer was justified. He submits also that the court was wrong to focus on the extent to which ministers took account of the potential use of the data in respect of the death penalty, and he emphasises the particular reference in the LED to the consideration that the data will not be used to request, hand down or execute a death penalty. In my view, Mr Facenna is correct to submit that section 73 requires specific consideration by the relevant controller of the statutory tests, including the strict test of necessity. The clear purpose of the provisions is to set out a structured framework for decision making, with appropriate documentation. This did not happen in this case, and to that extent there was a clear breach of the Act. I also agree that the issue under Condition 2 is not what matters the controller took into account, but whether the decision was based on there being appropriate safeguards or (when we come to sections 73(3)(c) and 76) special circumstances. It is true that recital (71) is no more than an interpretative aid, and that its wording could be clearer. However, the words will not be used seem to leave little room for discretion. The expectation is that the appropriate safeguards will be designed to achieve that objective. That is also consistent with the governments long standing policy of seeking full death penalty assurances in all cases. Given that in this case the information was transferred without any safeguards at all, I am unable to see how (if the question had been considered) the Secretary of State could have regarded this condition as satisfied. The Divisional Court was wrong in my view to find otherwise. The lawfulness of the transfer therefore stands or falls on the special circumstances condition contained in section 73(3)(c). The circumstances in which a transfer is based on special circumstances are defined in section 76, which, like section 75, also includes procedural requirements. According to section 76(1), a transfer is based on special circumstances where it is: necessary (a) another person, to protect the vital interests of the data subject or to safeguard the legitimate interests of the data (b) subject, (c) for the prevention of an immediate and serious threat to the public security of a member state or a third country, (d) enforcement purposes, or (e) in individual cases for any of the law in individual cases for a legal purpose. It is upon paragraphs (d) and (e) that the Secretary of State relies. [L]aw enforcement purposes (paragraph (d)) are defined in section 31, see para 210 above. A legal purpose (paragraph (e)) includes the purpose of any legal proceedings (including prospective legal proceedings) (section 76(4)(a)). Paragraphs (d) and (e) do not apply if the controller determines that fundamental rights and freedoms of the data subject override the public interest in the transfer (section 76(2)). Also relevant to section 76 is recital (72) of the LED, which states: Where no adequacy decision or appropriate safeguards exist, a transfer or a category of transfers could take place only in specific situations, if necessary [inter alia] in an individual case for the purposes of the prevention, investigation, detection or prosecution of criminal offences or the execution of criminal penalties, including the safeguarding against and the prevention of threats to public security Those derogations should be interpreted restrictively and should be limited to data strictly necessary. Such transfers should be documented and should be made available to the supervisory authority on request in order to monitor the lawfulness of the transfer. (Emphasis added) The Divisional Court held that if necessary the Secretary of State was entitled to rely on the special circumstances condition: 207. The transfer here was necessary in an individual case for any of the law enforcement purposes (section 76(1)(d)) or, alternatively, in an individual case for a legal purpose: section 76(1)(e). Given the specific nature of the evidence transferred in the present case it cannot be said to fall within the categories of frequent, massive and structural transfers of person data, or large scale transfers of data (which recital (72) suggests would not be permitted under this head). 208. The controller had not determined that the fundamental rights and freedoms of the data subject overrode the public interest in the transfer: section 76(2). Although no specific document was created to meet the requirements of section 76(3) the details of the transfer were documented by UKCA and the justification for the transfer is reflected in various contemporaneous documents. I agree with Lord Kerr (para 158), in line with the submission of the Information Commissioner, that the Act requires a specific assessment under section 73, and that this did not take place. Insofar as reliance might be placed on the derogation for the prosecution of criminal offences (recital (72)), the Secretary of State would need to be satisfied that that the transfer of any personal data was strictly necessary for that purpose. A convenient summary of the thinking at the time is set out in the email of 6 June 2018 from the Home Secretarys private office (referred to by Mr Biggar, para 68): a. He was extremely mindful of the greater imperative of ensuring the prosecution of these individuals. That must be the highest priority in this instance given their shocking crimes. b. He weighed the decision of seeking assurances against the likelihood of being able to agree them with American counterparts. Again the priority must be to ensure prosecution in the US system, as there was insufficient evidence for prosecution in the UK. c. He also judged that by not assisting the US in bringing this to trial, it ran the risk of the two being moved to Guantanamo. He was aware of the victims families clear wish for a criminal prosecution to take place. It was his judgment that prosecution was most likely in a US court and therefore this was the best course of action to meet the families wishes. d. Lastly he was mindful of the UKs international obligation to tackle [foreign terrorist fighters]. This course of action was best judged to achieve that commitment. He felt we must send a clear message that people who commit these acts will be brought to justice, and they cannot be allowed back on the streets to radicalise others. It is apparent that the decision was based on political expediency, rather than strict necessity under the statutory criteria. There was no consideration as to whether transfer of personal data as such was required. There was also a notable lack of any assurance, if the information were made available, as to the prospects of a prosecution in fact taking place in the US. Given that there was insufficient evidence to prosecute in the UK, it is not clear why the legal position was thought to be any different in the US. So long as the prospects of any prosecution was uncertain, it would seem premature to say that any particular information was strictly necessary for that purpose. Of course, if there were no prosecution, concerns about the risk of the death penalty would fall away, but that in itself could not affect the need for the transfer to be justified under the statutory criteria. As Lady Hale explains, a further issue arises under section 76(2) relating to special circumstances. Although I would have welcomed fuller argument on the point, I see the force of her comments. At the least, failure to consider this point is a further reason for holding that the decision cannot stand. Conclusion For these reasons I would allow the appeal on the second issue only. It seems that circumstances may have changed since the hearing of the appeal, in that the Crown Prosecution Service is understood to be reconsidering the possibility of a prosecution in this country. That would clearly be relevant to any reconsideration of the issues by the Secretary of State, in particular the necessity of the transfer. I would seek further submissions on the appropriate form of order. LORD HODGE: I agree that the appeal must be allowed. The Secretary of States decision cannot stand because in reaching that decision he did not comply with the requirements of the Data Protection Act 2018 (the 2018 Act). In this regard I agree with Lady Hale, Lord Reed, Lord Kerr and Lord Carnwath, essentially for the reasons given by Lord Reed and Lord Carnwath. I see the force of Lady Hales point in relation to section 76(2) of the 2018 Act, but, as it was not fully argued, would reserve my position on it. But, for the reasons given by Lord Reed and Lord Carnwath, I agree that the first ground of appeal must be dismissed. I am satisfied that the common law does not recognise a right to life which can be used to bar the Secretary of State, in his exercise of prerogative powers in the conduct of foreign affairs, from providing information to a foreign country concerning a foreign citizen in the context either of mutual legal assistance or the sharing of intelligence. In the domestic laws of the United Kingdom it is Parliamentary legislation rather than the common law which has created and delimits the right to life by the abolition of the death penalty for all offences and the enactment of the Human Rights Act 1998 (the 1998 Act). It is in the 1998 Act that the right to life has become part of our domestic laws. Further protection has been provided, indirectly, by data protection legislation, now the 2018 Act, and, as far as it goes, by section 16 of the Crime (Overseas Production Orders) Act 2019 (the 2019 Act), which amends section 52 of the Investigatory Powers Act 2016. It is not difficult to envisage circumstances in which the Secretary of State might want to provide intelligence to the government of another country to avert serious loss of life in a planned terrorist attack and that intelligence might expose a person in the custody of the foreign state to criminal charges which may carry the death penalty. The United Kingdoms international obligation to protect the right to life under article 2 of the European Convention on Human Rights, which section 1 of the 1998 Act introduced into our domestic laws, would, it appears to me, require the Secretary of State to balance the necessity of providing information to save lives against the possibility of facilitating the imposition of the death penalty on that person. Were the courts to recognise a parallel common law right to life and similar qualifications to that right, that would not be the incremental development of the law building on established principles of the common law; it would amount to judicial legislation. It is for Parliament to decide whether it wishes to go beyond the amendment which it made in the 2019 Act. Our public law reflects the very high value which our society places on human life by requiring the courts to adopt an especially intense scrutiny when reviewing the legality of a decision which may imperil a persons life. Having regard to the arguments advanced in this appeal, that scrutiny involves the review of the exercise of prerogative powers against the common law criterion of reasonableness (in relation to the Secretary of States change of position) and against the requirements which Parliament has imposed in the 2018 Act. While the appeal fails on the former basis, it succeeds on the latter.

UK-Abs

The appellants son is alleged to have been one of a group of terrorists operating in Syria, involved in the murder of US and British citizens. In June 2015, the US made a mutual legal assistance (MLA) request to the UK in relation to an investigation into the activities of that group. The Home Secretary requested an assurance that the information would not be used directly or indirectly in a prosecution that could lead to the imposition of the death penalty. The US refused to provide a full death penalty assurance. Ultimately, in June 2018, the Home Secretary agreed to provide the information to the US without requiring any assurance whatever. The appellant challenged the Home Secretarys decision by way of judicial review. Her claim was dismissed by the Divisional Court, which certified two questions of law of public importance: (i) whether it is unlawful for the Secretary of State to exercise his power to provide MLA so as to supply evidence to a foreign state that will facilitate the imposition of the death penalty in that state on the individual in respect of whom the evidence is sought; and (ii) whether (and if so in what circumstances) it is lawful under Part 3 of the Data Protection Act 2018 (DPA), as interpreted in the light of relevant principles of EU data protection law, for law enforcement authorities in the UK to transfer personal data to law enforcement authorities abroad for use in capital criminal proceedings. The Supreme Court allows the appeal. The majority of the Justices (Lord Reed, Lord Carnwath, Lord Hodge, Lady Black and Lord Lloyd Jones) dismiss the challenge to the decision brought under the common law, but the Court unanimously holds that the decision failed to comply with the DPA. Lord Kerr would have allowed the appeal on both grounds. Lady Hales judgment acts as a short guide to the other judgments. Ground (i): Has the common law evolved to recognise a principle prohibiting the provision of MLA that will facilitate the death penalty? The majority answer this question no. The reasons for considering that the common law has not developed so far are explained by Lord Reed and Lord Carnwath. Lord Carnwath finds that the power of the courts to develop the common law must be exercised with caution [193]. The death penalty as such has never attracted the attention of the common law: the key legal developments have come from Parliament and the ECHR, not from the domestic courts [194]. One recent development is section 16 of the Crime (Overseas Production Orders) Act 2019. This section confirms: (i) that this is an area in which Parliament remains directly involved; and (ii) that, where the Act applies, there is nothing that specifically prohibits the Home Secretary from exchanging material in cases whether they have sought but have not received assurances that the information they exchange will not be used to facilitate the death penalty. This suggests that the common law has not developed as suggested by Lord Kerr [195]. Lord Carnwath also finds that powers to deport or extradite under domestic law are subject to review on public law grounds, but are not subject to an absolute prohibition on removal by reference to the possible consequences in the receiving state [198]. Finally, it is difficult to reconcile the DPA scheme with the development of an absolute common law prohibition as advanced by Lord Kerr [205]. Lord Reed agrees with Lord Carnwath for the reasons given in his judgment and for additional reasons. He finds that the common law is subject to judicial development, but such development must build incrementally on existing principles. This is necessary to: (i) preserve legal certainty; and (ii) ensure compatibility with the pre eminent constitutional role of Parliament in making new law [170]. The development of the law proposed by Lord Kerr does not seem to Lord Reed to be an incremental step [171]. Lord Reed adds that judicial recognition of the value of life can have an important influence on adjudication in this context. This is because the courts are required to take a more rigorous approach when reviewing the exercise of discretion where life may be at stake [176 178]. Lord Reed refers to the respondents submissions that the Home Secretarys decision making complied with that higher standard of review [179]. He notes that the Home Secretarys decision might have been open to challenge on the ground that it failed to comply with the common law requirement of rationality, but declines to express a view on this [181 182]. Lord Hodge agrees with Lord Reed and Lord Carnwath that the common law does not recognise a right to life which can be used to prevent the Home Secretary from providing information to a foreign country in the context either of MLA or the sharing of intelligence [231 234]. Lord Kerr underlines the steadfast opposition by successive UK governments to the imposition of the death penalty in any circumstances, and the related long standing policy not to provide MLA unless death penalty assurances are received [26]. He notes that the common law is not immutable but develops over time to reflect the changing values of society [102]. Lord Kerr summarises six factors favouring recognition of the common law principle in question at [141]: (i) the Bill of Rights; (ii) British contemporary values; (iii) European Court of Human Rights (ECHR) jurisprudence (discussed at [107 124]); (iv) EU jurisprudence (discussed at [125 134]); (v) the fundamental illogicality of refusing to extradite or deport individuals for trial where there is a risk of the imposition of the death penalty, on the one hand, and facilitating precisely such an outcome by the provision of MLA without requiring assurances, on the other; and (vi) Judicial Committee of the Privy Council jurisprudence (discussed at [135 140]). Lord Kerr concludes that a common law principle should be recognised whereby it is deemed unlawful to facilitate the trial of any individual in a foreign country where, to do so, would put that person in peril of being executed [142]. This principle should be disapplied only if MLA is absolutely necessary as a matter of urgency in order to save lives or protect the nations security [164]. Law must be responsive to societys contemporary needs, standards and values, which are in a state of constant change. That is an essential part of the human condition and experience. The adjustment to the common law proposed reflects the contemporary standards and values of our society [144]. Ground (ii): Is it lawful under Part 3 of the DPA to transfer personal data to law enforcement authorities abroad for use in capital criminal proceedings? The Court is unanimous in holding that the Home Secretarys decision was unlawful under the DPA. The DPA requires the data controller to address his mind to the specific requirements of the Act and this was not done. The DPA is discussed by Lady Hale at [6 15], Lord Kerr at [152 159] and Lord Carnwath at [207 228]. Lady Hale outlines the basic structure of the DPA at [8 12]. She explains that Part 3 of the DPA makes provision about the processing of personal data by competent authorities for law enforcement purposes. Sections 73 to 76 set out the general conditions that apply to such transfers. The data controller cannot transfer data unless the three conditions in section 73(1)(a) are met [8]. Condition 1 is that the transfer is necessary for any of the law enforcement purposes [9]. Condition 2 is that the transfer is (a) based on an adequacy decision of the European Commission; (b) if not based on an adequacy decision, is based on there being appropriate safeguards; or (c) if not based on an adequacy decision or appropriate safeguards, is based on special circumstances [10]. She notes that this transfer was not based on an adequacy decision or appropriate safeguards, because there were none [10]. Nor does the transfer meet the special circumstances requirement: a transfer is based on special circumstances only if it is necessary for any of the five purposes listed in section 76(1). This condition is not met [12]. Lord Carnwath agrees that there has been a breach of the DPA. He focuses on the provisions governing transfers of personal data to a third country in sections 72 to 78 of Part 3. section 73 deals specifically with transfers of personal data to a third country and prohibits such transfers unless a number of conditions are met. As Lady Hale, he notes that Condition 2 is that the transfer must be based on an adequacy decision, or on there being appropriate safeguards, or on special circumstances. There was no adequacy decision here, hence the discussion centres upon whether there were appropriate safeguards or special circumstances sanctioning the transfer [209 213]. section 75 defines the circumstances in which a transfer is based upon there being appropriate safeguards, discussed at [214 219]. Lord Carnwath concludes that the information in question was transferred without any safeguards at all [220]. The lawfulness of the transfer therefore stands or falls on the special circumstances condition [221]. The circumstances in which a transfer is based on special circumstances are defined in section 76, discussed at [221 224]. Lord Carnwath concludes that the Act requires a specific assessment under the section, and that this did not take place [225]. The decision was based on political expediency, rather than consideration of strict necessity under the statutory criteria [227]. It was consequently unlawful under the DPA. Lady Hale raises a further issue under section 76(2) DPA, which concerns the special circumstances gateway. section 76(2) provides that: subsection (1)(d) and (e) do not apply if the controller determines that fundamental rights and freedoms of the data subject override the public interest in the transfer [12]. Lady Hale finds that these fundamental rights and freedoms include the rights protected by the European Convention on Human Rights, the most fundamental of which is the right to life [13 14]. This points towards an interpretation of section 76(2) which would not allow the transfer of personal data to facilitate a prosecution which could result in the death penalty [15]. Lord Carnwath sees the force of Lady Hales comments. He concludes that, at least, failure to consider this point is a further reason for holding that the Home Secretarys decision cannot stand [228]. Lord Hodge also sees the force of Lady Hales comments, but as the point was not fully argued, he reserves his position on it [230]. Lord Kerr agrees that there is a breach of the DPA, but for different reasons. He notes that it is common ground that provision of MLA involved the processing of personal data falling within Part 3 DPA. Such processing is only lawful where it complies with the data protection principles in section 34 DPA. Unlike the other justices, Lord Kerr held, under ground 1, that the transfer of material to the US authorities without obtaining death penalty assurances was contrary to the common law. He therefore concludes that it follows that the first and second data protection principles in section 34 requiring processing that is lawful and fair are not met [152 153]. Lord Kerr goes on to discuss section 73 DPA [154]. He agrees that there was no adequacy decision and no appropriate safeguards [155]. Transfer on the basis of special circumstances can only occur following an assessment of what is strictly necessary. Such an assessment was not made [158], hence the transfer of data breached section 73.

Siblings can be as important as parents in the lives of those who have them. While parents have been likened to the doctors doing their ward rounds to see the bigger picture, siblings have been likened to the nurses: they are there every day. These siblings are often fellow travellers through adversity or significant life events; they can act as a source of support for some children and a source of conflict for others. For these reasons, siblings are a potentially powerful influence on development (White & Hughes, Why Siblings Matter: The Role of Brother and Sister Relationships in Development and Wellbeing (2018)). These appeals concern the role of siblings in the procedures by which childrens hearings in Scotland make compulsory supervision orders (CSOs). The principal issue concerns the procedures required to make sure that public authorities comply with the obligation in article 8 of the European Convention on Human Rights (ECHR) to show respect for the private or family life established between a sibling and a child who might be the subject of a CSO. Although the procedures are very different in different parts of the United Kingdom, the applicable Convention rights are the same. The potential importance of sibling relationships to the welfare of children is not in dispute. What is in dispute is how that importance should be reflected in the childrens hearings procedure: specifically, should those siblings who want it be accorded the same status as parents as relevant persons in the proceedings? Or will something more flexible suffice? The proceedings which have led to these appeals have revealed that there has hitherto been a gap in the legislation and the guidance given on this matter. In this judgment when we refer to sections of an Act we are referring to the Childrens Hearings (Scotland) Act 2011 (the 2011 Act) unless we state otherwise. The childrens hearings system There are no less than 17 grounds for referring a child to a childrens hearing (2011 Act, section 67(2)). Broadly speaking, they cover three different types of situation: where a child is at risk of harm from a lack of parental care or of physical or sexual abuse; where a child has committed a criminal offence; and where a child is misbehaving in some other way, such as abusing alcohol or drugs or not going to school. There are about 2,500 volunteer panel members who sit on childrens hearings. Childrens hearings are conducted by a panel of three members, one of whom is selected to be the chairing member. The hearings are designed to be child friendly and to be conducted in a manner which prizes informality, minimises the numbers involved at a hearing and avoids legalistic procedures. The hearing is conducted as a discussion. It is not like a court of law; there is no cross examination of witnesses. Panel members are not lawyers but are skilled and experienced in communicating with children and understanding their needs. The aim is to achieve what the UN Committee on the Rights of the Child, General Comment No 12 (2009) (para 34) describes as child appropriate proceedings. The 2011 Act transferred the administration of childrens hearings from local authorities to national bodies. It established the role of National Convener, who appoints the members of the Childrens Panel and appoints the members of a childrens hearing, and the chairing member, from amongst the members of the Panel. The National Convener is empowered to provide advice to childrens hearings about any matter arising in relation to their functions, including legal advice and advice about procedural matters (section 8), but he cannot direct or guide a hearing in carrying out its functions (section 9). We refer to the guidance which is relevant to these appeals in para 35 below. The 2011 Act also established Childrens Hearings Scotland, a corporate body set up to assist and facilitate, but not to direct or guide, the National Convener in carrying out his or her functions (sections 11 and 12). This involves facilitating, in keeping with national standards set by the National Convener, the recruitment, training and quality assurance of the Childrens Panel. The Principal Reporter and the Scottish Childrens Reporter Administration (SCRA) operate a national reporter service, give training to reporters, and provide the administration of the childrens hearings. A reporter decides whether to refer a child to a childrens hearing for it to determine whether to make a CSO, arranges the childrens hearings and issues notifications, invitations to attend and the papers for the hearings. The reporter also keeps a record of proceedings at the childrens hearing, supports the hearing to maintain a fair process and conducts court proceedings relating to the childrens hearing. The Principal Reporter and the SCRA provide guidance to the reporters in the exercise of their functions. Although called a supervision order, a CSO may contain any of the requirements listed in section 83(2). These include a requirement as to where the child is to reside, which can result in the child being removed from the family home and placed in foster care or some other residential setting identified by the childrens hearing. They also include a direction regulating contact between the child and a specified person or class of persons, a requirement that the child comply with any specified condition, and a requirement that the implementing local authority carry out specified duties in relation to the child. The relevant local authority (the implementation authority) is responsible for making sure that there is compliance with the CSO and that the child obtains such help as is needed. CSOs last for up to one year and can be continued on review for further periods of up to a year at a time until the child is 18 years old (section 83(1) and (7)). The procedure for the making of a CSO can be summarised briefly. The reporter compiles grounds of referral. There is then a grounds hearing before the childrens hearing (section 69) at which the grounds are explained to the child and to relevant persons (section 90). If the child and the relevant persons accept the grounds, a CSO may be made at the grounds hearing or else at a further childrens hearing. If the child or any of the relevant persons reject the grounds of referral, the reporter takes the case to the sheriff court to establish the grounds, and if the sheriff holds that the grounds are established, the case returns to a childrens hearing to decide whether to make a CSO. If the child or any relevant person is unable to understand any of the grounds, the case must be referred to the sheriff court or the referral discharged on that ground (section 94). In advance of any hearing relating to a CSO, the reporter is required to provide details of the date, time and place of the hearing to among others the referred child, any relevant persons (sections 81 and 200) and also any individual who has had significant involvement in the upbringing of the child (Childrens Hearings (Scotland) Act 2011 (Rules of Procedure in Childrens Hearings) Rules 2013, rule 22 (SSI 2013/194) (the 2013 Rules)). In certain cases, the childrens hearing will appoint a safeguarder whose role is to prepare reports on matters relevant to the hearing and to make recommendations as to the referred childs best interests. The reporter also notifies the safeguarder of such hearings. Central to the challenges which are the subject of these appeals are the definition of the relevant person and the concept of a deemed relevant person which we describe at paras 14 to 16 below. The focus of these appeals is on the article 8 rights of siblings of the referred child. But it is important to bear in mind that the referred child also has article 8 rights. And whenever they come to any decision about a child, the childrens hearing, a pre hearing panel, and a court must regard the need to safeguard and promote the welfare of the child throughout the childs childhood as the paramount consideration (section 25(2)). The primary focus of the childrens hearing must therefore be on the welfare of the child who is the subject of the proceedings, although it is, of course, the duty of the hearing to act compatibly with the Convention rights. The relevant person and the deemed relevant person Section 78(1) names the people who have a right to attend a childrens hearing. Among those listed is a relevant person in relation to the child. Section 200 defines who is a relevant person in relation to a child. Those persons include a parent or guardian having parental responsibilities or parental rights in relation to the child (section 200(1)(a)) and others on whom parental responsibility is conferred by statute, including the Children Act 1989 (which applies in England and Wales). The Scottish Ministers are given a power under section 200(1)(g) to make an order specifying that another person is to be a relevant person, but that power has been exercised to date only in relation to a parent, or person with parental responsibilities under the law in Northern Ireland (Childrens Hearings (Scotland) Act 2011 (Review of Contact Directions and Definition of Relevant Person) Order 2013 (SSI 2013/193), article 3). But sections 79 to 81 provide a mechanism by which a person may be deemed to be a relevant person in relation to a child. If the individual, the child or a relevant person in relation to the child requests, the Principal Reporter must refer the matter for determination by a pre hearing panel of three members selected by the National Convener. By section 81(3) the pre hearing panel is bound to deem the individual a relevant person if it considers that the individual has (or has recently had) a significant involvement in the upbringing of the child. When an individual, who has been deemed a relevant person, has ceased to have significant involvement in the childs upbringing, there is a procedure by which a pre hearing panel can determine that that person is no longer to be deemed to be a relevant person (sections 79(5A) and 81A). The status of relevant person (or deemed relevant person) confers a right to be notified of and an obligation to attend a childrens hearing. It is a criminal offence to fail to attend if required to do so (section 74(4)). The status also gives access to the papers before the childrens hearing. A relevant person can accept or not accept the grounds for referral at a grounds hearing. The status allows the person to have legal representation and to make submissions to the panel, and it gives the person a right of appeal from a decision of the childrens hearing and a right to seek a review of a contact direction or a CSO. It is clear that the statutory scheme confers the right to be deemed a relevant person only on a person who has, or has recently had, a significant involvement in the childs upbringing. In most cases that would not include a sibling; and that is the gravamen of the appellants complaint. The factual background i) The circumstances of ABC and XY ABC is a 16 year old. He has a younger brother, DEF, aged nine and two older sisters. ABC and DEF were made the subjects of a CSO in 2016 and were accommodated by different foster carers. Until then both ABC and DEF had lived together in a family unit. DEF remains subject to a CSO but has remained in contact with ABC. On 7 September 2017 there was a childrens hearing concerning DEF. ABC did not receive an invitation to the hearing and was not asked to provide his views in advance of the hearing. ABC attended the hearing without having given any prior indication of his wish to do so. He was not given an opportunity to speak at the hearing and was then made to leave the hearing. There is a dispute of fact, which we cannot, and have not been asked to, resolve, as to whether his exclusion was the result of a confrontation at the hearing. The childrens hearing made contact directions allowing ABC direct contact with his brother for a minimum of once a fortnight for a minimum of two hours and prohibiting telephone contact. ABC then lodged an incompetent appeal against the decision of the childrens hearing. At the request of his solicitors, the Principal Reporter invited ABC to produce written information for the next hearing to consider. ABC and his solicitor were permitted to attend the next childrens hearing on 5 December 2017 and the chairperson of the hearing exercised discretion under section 78(2)(a) to allow ABC to express his views. XY is a 24 year old. He has three sisters who are now aged 17, 16 and 14. He and his sisters were removed from the care of their parents under a child protection order in 2012 and were made subject to CSOs in 2013. At the date of the hearing of his appeal the circumstances were as follows. XY was allowed supervised contact with his siblings once a month. He and his parents wished to have the family reunited. The eldest sister did not wish XY to become a relevant person in her case. The second eldest sister did, and so did the youngest sister but her safeguarder remained of the view that it is not in her best interests that XY become a relevant person in her case. In August 2017 a pre hearing panel, acting under section 81, refused XYs application to be a deemed relevant person in relation to his sisters. That decision was overturned by the sheriff but, on an appeal by the eldest sister to the Sheriff Appeal Court, the decision of the pre hearing panel was restored in relation to her. In 2018 a childrens hearing, acting under section 81A, determined that XY should not continue to be a deemed relevant person in relation to the two younger sisters. The hearing again refused to deem him a relevant person in respect of his eldest sister. XY appealed unsuccessfully to the sheriff and his appeal by stated case to the Inner House under section 164(1) was refused. As a result, XY is no longer a deemed relevant person in relation to any of his siblings. ii) The claims by ABC and XY ABC has raised an application for judicial review claiming that the decisions of the childrens hearings on 7 September and 5 December 2017 were unlawful. He seeks, among other remedies, a declarator that (a) the definition of a relevant person in section 200, (b) the mechanism by which a person can be deemed to be a relevant person in section 81 and (c) the provisions for the review of a contact direction in section 126 are all incompatible with his rights under article 8 of the ECHR, are outside the legislative competence of the Scottish Parliament and are therefore not law. ABC argues that his rights under article 8 of the ECHR mean that he should have the following procedural rights in the childrens hearing proceedings. First, he is to be notified of a childrens hearing and informed whether a CSO is being sought and if contact directions may be made. Secondly, he is to be provided with all of the papers which are to be considered at the childrens hearing. Thirdly, he has a right to attend the childrens hearing and be legally represented at it. Fourthly, he has the right to make representations. Fifthly, he has a right to appeal or seek a review of the decision of the childrens hearing. Sixthly, he has a right to require the childrens hearing to review its direction as to contact between siblings after three months. He also seeks a mandatory direction to the chairing member of a childrens hearing to adjourn a hearing if a sibling of the child has not been notified of the hearing. In his written case he explained why he sought access to the written material before the hearings: The reports to which ABC was not given access will have greatly informed both childrens hearings and will have been central to the decisions made. Matters such as DEFs health, development, welfare, educational development, his current care arrangements, the local authority view on his contact with others, including ABC, as well as formal recommendations as to the need for continued measures of supervision, whether DEF should remain accommodated in foster care and the nature and extent of his contact with all the members of his family including ABC. In a judgment dated 31 July 2018 ([2018] CSOH 81) the Lord Ordinary (Lady Wise) relied on dicta in the judgment of this Court in Principal Reporter v K [2010] UKSC 56; 2011 SC (UKSC) 91; [2011] 1 WLR 18 to read down section 81(3) to extend the people to be deemed a relevant person to include persons whose established family life with the child may be interfered with by the hearing and whose rights require the procedural protection of being a relevant person. On that basis she was not persuaded that the decisions of the childrens hearings were unlawful and refused the orders which ABC sought. ABC appealed to the Inner House. The First Division of the Inner House (the Lord President, Lord Drummond Young and Lord Malcolm) in an opinion delivered by Lord Malcolm on 27 November 2018 ([2018] CSIH 72) refused the reclaiming motion but recalled the Lord Ordinarys interlocutor in so far as it declared that words were to be read in to section 81(3). The First Division held that the ECHR did not require that ABC be afforded the status of a relevant person or the opportunity to apply for such status. They held that decisions affecting the article 8 rights of a relative other than a parent would not generally require the same level of involvement as that of a parent. They held that fairness might require that a sibling be given the opportunity to provide written information to a childrens hearing but that only exceptionally would a siblings attendance at the childrens hearing be required. They concluded that the provisions of the 2011 Act and the supporting regulations were sufficiently flexible to allow the legitimate interests of family members who were not relevant persons to be taken into account in the childrens hearing and were sufficient to protect ABCs article 8 rights. ABC, with the support of his parents, appeals to this Court with the permission of this Court granted on 27 June 2019. XY also appeals to this Court with the permission of this Court granted on 16 July 2019. XYs appeal is made under section 98 of and paragraph 13(b) of Schedule 6 to the Scotland Act 1998 against the determination of a devolution issue. He challenges the lawfulness of the provisions (sections 81(3) and 81A(3) of the 2011 Act) which govern the right to be a deemed relevant person. He argues that those provisions are not compatible with his rights under articles 6 and 8 of the ECHR and therefore not within the legislative competence of the Scottish Parliament under section 29(1) and (2)(d) of the Scotland Act 1998, unless one can read them down under section 3 of the Human Rights Act 1998 to render them compatible. XY has attended some childrens hearings concerning his siblings and has made written representations to other hearings. There is a factual dispute as to whether he has been invited to all of the relevant childrens hearings. But, again, that is not something that this Court can resolve. His appeal is supported by his parents and one of his siblings and is opposed by another sibling. His appeal to the Inner House against the sheriffs judgment to uphold the decision of the childrens hearing that he should not be accorded the status of a relevant person in relation to any of his sisters was heard by the First Division comprising the same judges as those who heard ABCs reclaiming motion. In a short Opinion of the Court dated 27 March 2019 ([2019] CSIH 19) delivered by Lord Malcolm, the First Division founded on their opinion in ABCs appeal and the opinion of the same Bench in DM v Locality Reporter [2018] CSIH 73; 2018 SLT 1308 (again a judgment delivered by Lord Malcolm) to hold that there was no merit in XYs appeal. In a short postscript the First Division expressed their and the safeguarders shared concern about the privacy rights of the children if XY were to be given the status of a relevant person, about the number of people who would attend the childrens hearings, and about the disputatious nature of the hearings which had been held. The problem which the challenges have identified The challenges which ABC and XY have mounted have revealed concerns about whether the childrens hearing system has been and is operated in a way that gives adequate protection to the legitimate interests of siblings and other family members, such as aunts, uncles and grandparents, who do not have a significant involvement in the upbringing of the child, to preserve a family relationship with the child and indeed to the legitimate interest of the child in preserving a family relationship with siblings and other relatives. The respondents in these appeals accept that these are legitimate interests. But they do not accept that it is necessary to afford the status of relevant person in order to respect them. What is the right and what is the test? In our view article 8 of the ECHR provides the appropriate framework for analysis in these cases. Article 8 includes procedural as well as substantive rights: the decision making process leading to measures of interference must be fair: McMichael v United Kingdom (1995) 20 EHRR 205, para 87. We are not persuaded that the requirement of a fair hearing under article 6 of the ECHR adds anything to that right in these cases. Under article 8(1) everyone has the right to respect for his private and family life. Public authorities may only interfere with that right in the circumstances laid down in article 8(2). The first question, therefore, is whether siblings enjoy private or family life together. The general principles were summarised recently by the European Court of Human Rights in Nazarenko v Russia (2019) 69 EHRR 6, para 56: The Court reiterates that the notion of family life under article 8 of the Convention is not confined to marriage based relationships and may encompass other de facto family ties. The existence or non existence of family life for the purposes of article 8 is essentially a question of fact depending upon the real existence in practice of close personal ties [referring to K v Finland (2003) 36 EHRR 18, para 150]. That case concerned the mothers husband, who had thought himself the father of the child until the couple divorced. There are not many cases concerning other relatives. In Lazoriva v Ukraine (Application No 6878/14) (unreported) 17 April 2018, which concerned an aunt who wished to become the childs guardian, the court pointed out that: Close relationships short of family life would generally fall within the scope of private life (see Znamenskaya v Russia, no 77785/01, para 27, 2 June 2005). Cases concerning siblings are few and far between, but an instructive example is Akin v Turkey (Application No 4694/03) (unreported) 6 April 2010. A married couple had two children, a boy and a girl, aged 11 and 6 when the couple divorced. The court awarded custody of the boy to the father and of the girl to the mother and ordered that the children should swap places for a few weeks each year. The father and son complained that this meant that the children were never together under the same roof. The court considered that family life existed between the siblings (and in any event this was not disputed). The original court order constituted an interference but the failure of later court hearings to put this right, during which they did not have due regard to the best interests of the family, constituted a violation of the States positive obligation to maintain and develop family ties. The Akin case reminds us that article 8 imposes both negative and positive obligations not to interfere in family life without justification and to take positive steps to maintain and develop family ties. In both cases, the case law under article 8 emphasises the authorities obligation to have regard to the best interests of the child (see Maslov v Austria [GC] [2009] INLR 47 (Application No 1638/03) 23 June 2008, para 82). And the decision making process must be such as to show that the authorities had a sufficient evidentiary basis for their decisions and that the interested parties, including the children themselves, were able to express their views (see, eg, Havelka v Czech Republic (Application No 23499/06) (unreported) 21 June 2007). However, the role of a parent, involving, in the absence of intervention by public authorities, the right to decide how a child is to be brought up, is qualitatively different from the role of most siblings. As noted above, a siblings role can be very important to the well being and development of a child. But where a child is being cared for away from the family, what matters is the maintenance and development of the relationship between the siblings, whether through placing them together or through staying in regular contact with one another. In the context of a childrens hearing respect is shown to that interest if, in the particular circumstances of the case, the sibling is enabled to have an involvement in the decision making process, seen as a whole, to a degree sufficient to protect his or her interest: W v United Kingdom (1988) 10 EHRR 29, para 64; McMichael v United Kingdom (above) para 87; Lazoriva v Ukraine (above) para 63; SJP and ES v Sweden (Application No 8610/11) (unreported) 28 August 2018, para 92. The required degree of involvement in the decision making process depends upon the relationship or bond between the applicant and the referred child and the applicants role, if any, in the childs life. In Boyle v United Kingdom (1995) 19 EHRR 179, para 46, the European Commission of Human Rights recognised that a denial of contact with a child would generally be an interference with a parents right to respect for family life but that that would not necessarily be the case where other close relatives were concerned so long as a restriction of access does not deny a reasonable opportunity to maintain the relationship. The central question in these appeals is therefore whether the 2011 Act and related subordinate legislation, if operated sensibly, afford the appellants a sufficient opportunity to take part in the decision making process, without their being given the status of a relevant person, or whether only the conferral of that status will suffice. Measures taken to respect a family members family life In response to the appellants contention that their interest in maintaining family life will be properly respected only if they are given the status of a relevant person, Mr Moynihan for the Principal Reporter and Ms Dunlop for the Lord Advocate submit that the legislation is compatible with article 8 of the ECHR if it is operated sensibly. Mr Moynihan and Ms Dunlop submit, correctly in our view, that the Court when assessing the operation of the childrens hearing system should look not only to the regime set out in the 2011 Act and related subordinate legislation but also to the requirements of the common law and the procedural rights under article 8 of the ECHR which govern the behaviour of the relevant public officials. They accept that these challenges have resulted in changes of practice in relation to childrens hearings. It is now the practice for notice of hearings to be given to the siblings of a child if they are sufficiently mature, for invitations to attend a hearing to be sent to a sibling and for the chairing member of the hearing to exercise her or his discretion to allow the sibling to attend the hearing. Under section 78(2)(a) the chairing member can allow a person to attend the hearing if that persons attendance is necessary for a proper consideration of the matter and under section 78(2)(b) and (3) the chairing member also has a discretion to allow such attendance unless the child or a relevant person in relation to the child objects. The SCRAs Practice Direction 3 concerning relevant persons advises reporters when arranging a hearing to consider whether there is anyone other than a relevant person and a person who may be deemed to be a relevant person whose attendance is likely to be necessary under section 78(2)(a) (para 9.1). Since 2019, para 9.2 of the Practice Direction has also stated as follows: In particular, the reporter is to invite anyone who has (i) established family life and an ongoing relationship with the child and (ii) sufficient age and maturity to participate in the hearing where: the hearing is likely to consider including a contact direction about them in a CSO for the first time or to vary a contact direction about them in a CSO, or the person has made clear that they want the hearing to consider their contact with the child. The paragraph goes on to recognise that it will be for the chairing member of the hearing to decide whether and when the individual is allowed to attend the hearing. Para 9.3 deals with situations where it was not foreseen that a hearing would consider a contact direction or where a person was not of sufficient age and maturity to be invited. In those circumstances the reporter is directed to invite the hearing to satisfy itself that it has the views of the person in relation to their contact or, if not, that the person has been given an opportunity to provide their views. The direction states that the hearing can defer the decision to allow the person to give their views directly or indirectly. Mrs Scott drew the Courts attention to sections 8 and 9 of the 2011 Act (see para 7 above). Section 8 empowers the National Convener to provide advice to childrens hearings including legal advice and advice about procedural matters. This has the aim that the hearing should not have to rely on the Principal Reporter or the legal representative appearing before it for such advice. Section 9, which protects the independence of childrens hearings, confirms that it is for the members of the childrens hearing to make the relevant decisions in carrying out their functions. But, as the respondents submitted, a reporter would advise a childrens hearing against refusing to hear or otherwise obtain the views of a sibling of sufficient age and maturity. These measures do not give a sibling access to the papers which have been given to the members of the childrens hearing and the relevant persons. But at a hearing after the grounds of referral have been accepted, the chairing member is required to inform every person present at the hearing of the substance of any relevant document: sections 91, 119 and 138 and rule 60(2)(a) of the 2013 Rules. To allow these procedures to work effectively, it is necessary that the decision makers have adequate information about the family members and the history of their involvement or contact with the child. Childrens Hearings Scotland has updated its Childrens Hearing Practice and Procedure Manual in September 2019. The Manual has in Part 2 a chapter 8 entitled Maintaining important relationships. At para 8.26 it states: Para 8.27 states: There is no statutory requirement for a childrens hearing to think about sibling contact in the same way as they must consider contact with those with parental responsibilities who are relevant persons for the purposes of childrens hearings. Panel members should have information about a childs relationships with their brothers and sisters and give careful consideration to how these relationships can be maintained and protected. The key considerations of the hearing will be: Identifying all the childs brothers and sisters, including those who have had a similar role in the childs life, such as children brought up in the same placement; The views of the children about their relationships and existing contact provisions; Promoting face to face contact where possible; The practical and emotional capacity of carers to facilitate contact; How contact can be achieved in as relaxed and natural manner as possible. Under section 17(6) of the Children (Scotland) Act 1995 (the 1995 Act), a child who is subject to a CSO or an interim CSO in respect of which the local authority is the implementation authority is a looked after child. Under section 17(1) it is the duty of the authority to safeguard and promote the welfare (which is to be their paramount concern) of any child whom they are looking after in a manner prescribed by the Secretary of State (now the Scottish Ministers). Section 17(3) requires the authority, before making any decision about a child they are looking after or proposing to look after, so far as reasonably practicable to ascertain the views of the child, as well as of the parents and others with parental responsibility and any other person whose views the authority consider relevant. The Looked After Children (Scotland) Regulations 2009 (SSI 2009/210) require the local authority to carry out an assessment of a child whom they look after or whom they are about to look after and, in so doing, to obtain details of a childs siblings and their contact with the child (regulations 3 and 4 and Schedule 1, paragraphs 7 and 8). The result of that assessment is a childs plan which must include arrangements for contact between the child and others, including any person whose views the local authority consider relevant to the matter to be decided (regulation 5 and Schedule 2, paragraph 7). Section 66(4) of the 2011 Act empowers the Principal Reporter, when investigating whether a child needs protection, guidance, treatment or control, to require the local authority to provide a report on a child, which could include relevant information about his or her siblings or other matter relating to the child which the Principal Reporter specifies. On reaching the view that it is necessary for a CSO to be made in respect of a child, the Principal Reporter has power to request further information from the local authority (section 69(4) and (5)). The Principal Reporter has a further opportunity to obtain a report from the implementation authority when arranging a childrens hearing to review a CSO (section 137(4) and (5)). Since 2013 it has been a statutory requirement that when making, varying or continuing a CSO in relation to a child, the childrens hearing must consider whether to include in the CSO a contact direction (section 29A). The Principal Reporters Practice Direction, Childrens Hearings Scotlands Practice and Procedure Manual and the statutory provisions to which we have referred provide mechanisms by which the childrens hearings can show respect for the family life of family members who are not entitled to the status of relevant person. The parents and the referred child can also make representations on behalf of members of the wider family in order to protect their article 8 interests: Principal Reporter v K (above), para 68. Family members who have or have recently had a significant involvement in the upbringing of the child, whether siblings, aunts, uncles or grandparents have the right to be deemed a relevant person under section 81(3) and they also have the right to call for a review of a contact direction: section 126 and article 2 of the Childrens Hearings (Scotland) Act 2011 (Review of Contact Directions and Definition of Relevant Person) Order 2013 (SSI 2013/193). Finally, when the grounds have been accepted by the child and each relevant person, the childrens hearing can direct the release of documents under rule 61(1)(g) of 2013 Rules so far as is necessary to enable the hearing to decide whether to make a CSO and if so the measures to be included in that order. Therefore, there is a range of measures which can be used to ensure that the relevant public authorities the childrens hearings themselves, the reporters and the local authorities comply with their duty to act compatibly with the article 8 rights of family members. We agree with the respondents that those measures should work if the childrens hearings are conducted in a practical and sensible manner and in compliance with the guidance given by the Principal Reporter and Childrens Hearings Scotland. It is, of course, a great help if there can be continuity of membership, or at least of the chairing member, between the pre hearing panel where procedural decisions are often made and the hearing itself. But the appellants contend that their rights will be adequately protected only if they have the right to obtain the status of a relevant person. Mrs Scott criticises the measures which we have described as a hotchpotch. Principal Reporter v K Both ABC and XY found on statements made by this Court in Principal Reporter v K (above) in support of their challenges. The case concerned the article 8 rights of an unmarried father of a child in respect of whom he did not have parental rights or responsibilities. The father claimed that the provisions of the 1995 Act, which then contained the definition of a relevant person, must be read compatibly with article 8 of the ECHR so as to include him and thereby afford him a proper opportunity to take part in the decision making process concerning his child at childrens hearings. In the judgment of the Supreme Court, delivered by Lord Hope and Lady Hale, his claim was upheld. The Court held (para 48): a parent (or other person) whose family life with the child is at risk in the proceedings must be afforded a proper opportunity to take part in the decision making process. As currently constituted the childrens hearing system violated the article 8 right of this father (and indeed of his child) and risks violating the rights of others in the same situation. From this it can be seen that the Courts focus was on the article 8 rights of the father and the child and extended to others only if they were in the same situation. The Court went on in para 60ff to consider how to cure the violation of those rights. The solution set out in para 69 was to interpret section 93(2)(b)(c) of the 1995 Act, which set out a part of the definition of who was a relevant person, so that the words which we italicise below were included in the statutory definition: any person who appears to be a person who ordinarily (and other than by reason only of his employment) has charge of, or control over, the child or who appears to have established family life with the child with which the decision of a childrens hearing may interfere. Giving a literal and non contextual interpretation to the inserted words would mean that every person who had established family life with the child would be a relevant person. Mr Moynihan and Ms Dunlop submit that the solution which this Court adopted in Principal Reporter v K requires to be read in its context of the article 8 rights of an unmarried father who did not have parental rights in domestic law and that the Court was addressing the rights of the parent and the child. In reading down the then current statutory provision the Court was not creating a statutory formula which could be applied across the board. We agree with this submission and with the First Divisions analysis of this Courts approach in Principal Reporter v K in paras 14 17 of its clear and succinct opinion in ABCs case. We agree with the First Divisions reading of the judgment that the reading down of the statutory provision which then governed was intended to be limited to unmarried fathers and to a limited class of others with a significant involvement in the upbringing of the child (para 17). As the First Division stated, this approach was later enacted in section 81(3). It is important to recognise that there are differences between the relationship of a parent and a child and the relationship between a sibling and a child. People who have parental responsibilities are treated as relevant persons because of those responsibilities and people who have a significant role in the upbringing of a child also have the right to be deemed a relevant person. As the European Court of Human Rights stated in Haase v Germany (2005) 40 EHRR 19, para 82, the mutual enjoyment by parent and child of each others company constitutes a fundamental element of family life. The parents and other people who have a significant involvement in the upbringing of the child are those who make decisions for the child. It is those decisions which are now being made by the public authorities through the CSO. The interference with the article 8 rights of such people is qualitatively different from the interference with the article 8 rights of siblings, which normally will be concerned with maintaining their relationship with the referred child, whether through contact or (if they are both the subject of CSOs) through being placed together. The conferment of the status of relevant person is an acknowledgement of the gravity of the interference with the family life of the child and the parents and others with that significant involvement in the childs upbringing. But there are several other reasons why it is not appropriate for a sibling, who has not taken on such responsibility for the upbringing of a child, to be given the status of a relevant person. As we have said, being a relevant person involves an obligation to attend a childrens hearing which can be enforced through the criminal law (section 74). It would not be appropriate to impose that obligation on every sibling. Each relevant person has the power to agree or not to agree the grounds of a referral. Again, that power is not obviously appropriate to a sibling who has not had a significant involvement in the upbringing of the child; and it could result in unnecessary and disruptive referrals to the sheriff court if the status of relevant person were to be so extended. A relevant person has comprehensive access to the papers before the childrens hearing. These may give a detailed account of the childs life, including confidential information about the childs education and health, any abuse that the child may have suffered, and possibly about the childs involvement in criminal activity or other anti social behaviour. The information may include details of and adverse comments concerning the problems and behaviour of the parent or parents. A childrens hearing may withhold information about the referred child from a person if its disclosure to that person would be likely to cause significant harm to that child: section 178. But the childs confidentiality is not otherwise protected. Nor is there such protection for the parents and others. Public authorities have to show respect for the article 8 rights, including the privacy rights, of everyone involved. Article 8(2) recognises that public authorities may legitimately interfere with a persons rights to family life for the protection of the rights and freedoms of others. The rights to privacy of the referred child, the parents and others must also be respected. The views of the child are an important consideration in the decision making process (section 27). There are matters relating to a child, such as adverse school reports, health problems and involvement in criminal activity, about which a parent may need to know, but not every sibling. Indeed, in XYs case, one of his younger sisters has objected to his becoming a relevant person in order to preserve her privacy. While XY has abandoned his claim to be made a relevant person in relation to that sister, the point of principle remains. Similarly, there are matters concerning a parent or parents about which the panel need to know but which may not be suitable to be divulged to one of their children. In ABCs case, his father has expressed concern about ABC having access to confidential information concerning him. In our view, the requirement to respect the privacy of others, the concerns about the dissemination of sensitive information, and the statutory requirement on the chairing member to take all reasonable steps to keep to a minimum the number of persons present at a childrens hearing at the same time (section 78(4)), all militate against reading down the statutory definition of a relevant person so as to confer the status of relevant person on anyone who appears to have established family life with the referred child with which a decision of the childrens hearing may interfere. In our view, article 8 of the ECHR does not require the public authorities to give a sibling, who has not, and has not recently had, a significant involvement in the upbringing of the child, the status of a relevant person. Thus, for reasons which are essentially the same as those of the First Division, we are satisfied that the challenges to the legislative competence of the Scottish Parliament in enacting the relevant provisions of the 2011 Act must fail. We nonetheless acknowledge that the initiation of these challenges has served to uncover a gap in the childrens hearings system which has had to be adapted to meet the requirements of article 8 in relation to siblings and other family members. There is now a clear recognition of the interest of both the child and the sibling in maintaining a sibling relationship through contact (or through placement if both are subject to CSOs) in most cases. The nature of the sibling relationship will vary from family to family and there needs to be a nuanced approach which addresses the extent of family life in that relationship, the home circumstances, how far the interests of the parents, the sibling and the child coincide and the possibility that the child, the parents and other siblings may have article 8 rights which are in conflict with those of the sibling. There needs, in short, to be a bespoke enquiry about the childs relationship with his or her siblings when the childrens hearing is addressing the possibility of making a CSO. To make effective the rights of the sibling and other family members with a similar interest in maintaining contact with a child, it is necessary both that the relevant public authorities are aware of those interests and that the siblings and family members are informed of the nature of the proceedings concerning the child and of their rights in relation to the proceedings. Each person involved in the process the Principal Reporter, the Childrens Panel members, the local authority, the social worker preparing a care plan, and the safeguarder need to be aware of those interests if the system is to operate compatibly with the article 8 rights of siblings and other family members. We have described in paras 32 to 40 above the arrangements now in place by which this may be achieved. It is for the public authorities involved to address whether further steps are desirable to protect the relevant article 8 interests. But we are persuaded that the legislative scheme of the 2011 Act can be operated in accordance with those rights. The orders sought It follows that a declarator as to legislative incompetence should not be made, for there is no such incompetence. Nor is it necessary to make any other order in ABCs case. It may be that the childrens hearing on 7 September 2017 did not adequately respect his article 8 procedural rights to have his views taken into account, but the matter was rectified in December 2017 and the contact directions have been the subject of later review decisions to which he has been able to contribute by written submission or by attendance at the childrens hearing. On each occasion, his contact with his younger brother has been preserved. Conclusion We would dismiss these appeals.

UK-Abs

These appeals concern the role of siblings in the procedures by which childrens hearings in Scotland make compulsory supervision orders (CSOs) under the Childrens Hearings (Scotland) Act 2011 (the 2011 Act). A CSO is an order in respect of a child which may (among other things) direct where the child is to reside and regulate the childs contact with any person. The 2011 Act provides for certain persons to have (or to be deemed to have) relevant person status in relation to a child. This status confers a right to be notified of, and an obligation to attend, any childrens hearing in relation to the child. The status also confers ancillary rights, such as access to the papers, the right to make submissions, and the right to seek a review of any CSO. Under section 81(3) of the 2011 Act, a person is deemed to be a relevant person if that person has (or has recently had) significant involvement in the upbringing of the child. In most cases that would not include a sibling. ABC is a 16 year old. His younger brother, DEF, is subject to a CSO which regulates his contact with ABC. ABC is not a deemed relevant person in relation to DEF. ABC argues that the relevant person scheme is incompatible with his right to respect for his family life under article 8 of European Convention on Human Rights (ECHR) and is therefore outside the legislative competence of the Scottish Parliament. The Lord Ordinary dismissed ABCs petition for judicial review but held that the test for deemed relevant person status in section 81(3) of the 2011 Act was too narrow to be compatible with article 8 of the ECHR, unless it was read down to include a broader range of people having established family life with the child. The First Division of Inner House of the Court of Session dismissed ABCs appeal and reversed the finding that there was a need to read down section 81(3). XY is a 24 year old with three younger sisters who are all subject to CSOs. XY applied to be deemed a relevant person in relation to each of his siblings and was briefly granted this status. However, following a series of decisions by childrens hearings, sheriffs and the Sheriff Appeal Court, XY is no longer deemed to be a relevant person in relation to any of his siblings. The First Division of the Inner House of the Court of Session, applying its own decision in the ABC case, dismissed XYs appeal against these decisions. XY argues that the provisions of the 2011 Act governing the grant and removal of deemed relevant person status (sections 81(3) and 81A(3)) are not compatible with his rights to a fair hearing and to respect for his family life under articles 6 and 8 of the ECHR. He argues that these provisions are therefore not within the legislative competence of the Scottish Parliament, unless they can be read down to render them compatible. The Supreme Court unanimously dismisses the appeals. Lady Hale and Lord Hodge give the sole judgment with which the other Justices agree. The Supreme Court considers that article 8 of the ECHR provides the appropriate framework for analysis. The requirement of a fair hearing under article 6 does not add anything to that right in the present circumstances [27]. In each case, the relevant interest for the purposes of article 8 is the maintenance and development of the relationship between the sibling and the referred child [29]. In the context of a childrens hearing, respect is shown to that interest if, in the particular circumstances of the case, the sibling is enabled to have an involvement in the decision making process, seen as a whole, to a degree sufficient to protect that interest [30]. The required degree of involvement will vary based on the nature and extent of the siblings relationship with the referred child. The Supreme Court concludes that article 8 does not require public authorities to grant relevant person status to a sibling, who does not have, and has not recently had, a significant involvement in the upbringing of the child [51]. Whilst the guidance has not always been clear, there is a range of measures which can be used to ensure that the relevant public authorities comply with their duty to act compatibly with the article 8 rights of family members who are not relevant persons [41]. For instance, the Scottish Childrens Reporter Administration directs reporters, when arranging a hearing, to consider whether there is anyone other than a (deemed) relevant person who ought to be invited under the discretionary powers contained in section 78 of the 2011 Act [32]. Childrens hearings also have recourse to advice from the National Convener of Children's Hearings Scotland, who would advise against refusing to obtain the views of a sibling of sufficient age and maturity [33]. Further guidance is provided in Childrens Hearings Scotlands Practice and Procedure Manual, which directs childrens hearings to obtain information about a childs relationships with siblings and to give careful consideration to how these relationships can be maintained and protected [35]. Under the Children (Scotland) Act 1995 and the Looked After Children (Scotland) Regulations 2009, the responsible local authority must obtain details of the childs siblings and their contact with the child and prepare a childs plan with arrangements for contact between the child and others [36]. In addition, the Principal Reporter, who is responsible for investigating whether a CSO is necessary, may require the local authority to provide a report or further information about a child, including relevant information about the childs siblings [37]. The child or any relevant person may also make representations on behalf of the childs wider family, including siblings [39]. Taken together, these mechanisms allow childrens hearings to show respect for the family life of those who are not entitled to the status of relevant person [38], provided that hearings are conducted in a practical and sensible manner and in line with the guidance of the Principal Reporter and Childrens Hearings Scotland [41]. As such, the Supreme Court holds that the relevant provisions of the 2011 Act are within the competence of the Scottish Parliament and need not be read down [50, 51]. Those who have a significant involvement in the upbringing of a child are those who make decisions for the child. Relevant person status is granted to such persons because CSOs interfere with their rights to make such decisions [46]. A sibling, who has not taken on such responsibility and does not face such interference, should not be given relevant person status. It would not be appropriate for every sibling to be required to attend all the childrens hearings under pain of criminal sanction [47], or to have comprehensive access to the referred childs documents (which might include highly sensitive information about the child and other family members) [48], or to have the power to delay or disrupt referrals by withholding their agreement to the underlying grounds [47]. Nor would this be consistent with the statutory requirement for childrens hearings to minimise the number of people present at any given time [50].

This appeal concerns the proper interpretation and effect of section 4(1) of the Explosive Substances Act 1883 (section 4(1) and the 1883 Act, respectively). This provides in material part as follows: Any person who makes or knowingly has in his possession or under his control any explosive substance, under such circumstances as to give rise to a reasonable suspicion that he is not making it or does not have it in his possession or under his control for a lawful object, shall, unless he can show that he made it or had it in his possession or under his control for a lawful object, be guilty of an offence As originally enacted, section 4(1) provided that a person convicted of this offence was liable to penal servitude for a term not exceeding 14 years, or to imprisonment for a term not exceeding two years with or without hard labour. Currently, the maximum sentence is imprisonment for life. The Court of Appeal certified the following point of law of general public importance: for the purposes of section 4(1) can personal experimentation or own private education, absent some ulterior unlawful purpose, be regarded as a lawful object? Factual background and the proceedings below The appellant is aged 22 and has no convictions. He was diagnosed with Autism Spectrum Disorder as a child. In April 2018 he was living in a terraced house in Coventry with his mother. The appellant had been purchasing quantities of chemicals online. His explanation for this is that he had from a young age developed an obsessive interest in things military. He became interested in bomb disposal after watching the film The Hurt Locker about a US bomb disposal unit in Iraq and wanted to understand how explosives worked and to experiment with them. On 24 April 2018 a search warrant was executed at the house. The chemicals the appellant had purchased were found in a garden shed which he used as a laboratory. The appellant had managed to make a small quantity, of the order of about 10 grams or less, of Hexamethylene Triperoxide Diamine (HMTD) from Hydrogen Peroxide, Hexamine and Citric Acid. HMTD is a sensitive primary high explosive that can easily be detonated. According to the Statement of Facts and Issues for the appeal, such a small amount of HMTD potentially carries a risk of insubstantial injury or damage. It should also be noted that the appellant might only have used part of this quantity at any one time when experimenting with it. The HMTD was found in the form of a powdery substance in a petri dish in the shed and in another in the appellants bedroom. Material found in the appellants bedroom and on his computer included manuals for making explosives, notes on the making of HMTD and a video downloaded to his mobile telephone of a demonstration of the making of HMTD. Over the previous months the appellant had made explosive substances with other chemicals on about six or seven occasions. By means of homemade initiators made from fairy lights filled with firework powder or by means of a mobile telephone signal, he had detonated or attempted to detonate these substances in his back garden and had made a video record of this on his mobile telephone. According to his explanation, his plan was to conduct similar experiments with the HMTD he had made. The appellant was interviewed by the police over many days. He admitted his actions and gave the explanations referred to above. He was charged with a number of offences, including six counts of having possession of information likely to be useful for an act of terrorism contrary to section 58 of the Terrorism Act 2000. The two relevant charges on the indictment for present purposes are in identical terms, as counts 1 and 2, as follows: STATEMENT OF OFFENCE MAKING OR POSSESSION OF EXPLOSIVE UNDER SUSPICIOUS CIRCUMSTANCES, contrary to section 4(1) of the Explosive Substances Act 1883 PARTICULARS OF OFFENCE CHEZ COPELAND on 24 day of April 2018 knowingly had in his possession or under his control a certain explosive substance, namely [HMTD], in such circumstances as to give rise to a reasonable suspicion that he had not made it for a lawful object. As this court pointed out at the hearing, and as counsel on both sides agreed, this charge is in defective form. It elides the two limbs of section 4(1), ie (1) making any explosive substance under circumstances giving rise to a reasonable suspicion that the defendant is not making it for a lawful object and (2) knowingly having in his possession or control any explosive substance under circumstances giving rise to a reasonable suspicion that he does not have it in his possession or control for a lawful object. Mr Louis Mably QC, for the Crown, gave an undertaking to amend the charge so as to replace the words after reasonable suspicion with the phrase that he did not have it in his possession or under his control for a lawful object. Mr Paul Bogan QC, for the appellant, accepted that this amendment would not cause any prejudice to the appellant and said it would not be resisted. On the particular facts of this case, the alteration makes no material difference, since the appellants defence would be the same whether he was charged under limb (1) or limb (2), namely that he had both made the HMTD and had it in his possession with a view to experimentation and self education regarding its manufacture and properties, by conducting detonations with it in the garden of his home. The appeal therefore proceeded on the basis that the indictment could be taken to refer to limb (2) of the offence. The appellants defence statement in relation to counts 1 and 2 on the indictment was as follows: It is the defence case that: 1. The circumstances do not give rise to the reasonable suspicion that the defendant had not made [the HMTD] for a lawful object; and 2. The defendant made it for a lawful object. The defendant has a longstanding obsession with the armed forces and has collected military paraphernalia over many years. More recently, and inspired by the film The Hurt Locker, he has been interested in explosives. In pursuit of this interest he has researched manuals and recipes on the internet. He sought to understand how explosives could be made and acquired certain chemicals to do so. He experimented with the chemicals and caused small explosions to be made in the back garden of his home. His own ambition to join the armed forces has been thwarted by a diagnosis of Autism Spectrum Disorder when aged around 14 years. He had regularly engaged in role play, dressing and purporting to behave as a member of the armed forces. The condition of Autism Spectrum Disorder has manifested itself in interests and hobbies becoming obsessional and, in the context of explosives, an obsessional need to understand how explosives work. By way of an addendum, in the appellants written submissions at first instance it was asserted that, For the avoidance of doubt the defendants object or objects encompass interest, education and experimentation. On 23 October 2018 a preparatory hearing took place before His Honour Judge Wall QC in the Crown Court at Birmingham, at which it was agreed that he should determine, among other things, whether the potential defence to counts 1 and 2 on the indictment could amount to a defence in law. The judge ruled that the appellants proposed defence that he made the HMTD and had it in his possession for a lawful object, being experimentation and self education, was not good in law, holding that he was bound to reach that conclusion by the decision of the Court of Appeal in R v Riding [2009] EWCA Crim 892. This ruling meant that the judge proposed that he would direct the jury accordingly and would exclude evidence and prevent submissions directed to trying to support that part of the defence case. The appellant appealed to the Court of Appeal, Criminal Division (Sir Brian Leveson P, Elisabeth Laing and Whipple JJ). The appeal was dismissed: [2019] EWCA 36 (Crim). Like Judge Wall QC, the Court of Appeal considered that it was bound by R v Riding to reach the conclusion that the appellants proposed defence under section 4(1) was bad in law. The court certified the point of law set out above at para 3. The statutory context The Offences Against the Person Act 1861 (the 1861 Act) consolidated various enactments in England and Ireland relating to offences against the person, including the offences of destroying or damaging a building with gunpowder or other explosive substance, with intent to murder (section 12, now repealed), unlawfully and maliciously causing bodily injury by gunpowder or other explosive substance (section 28), unlawfully and maliciously causing gunpowder or other explosive substance to explode etc, with intent to do grievous bodily harm to some person (section 29), placing gunpowder or other explosive substance near a building etc, with intent to do bodily injury to any person (section 30) and making or having possession of gunpowder or any explosive substance etc, with intent by means thereof to commit any of the felonies set out in the Act (section 64). In parallel with these primary provisions of the criminal law, the Explosive Substances Act 1875 (the 1875 Act) amended the previous regulatory regime in relation to such substances. Although the Act uses the term gunpowder in its operative provisions, by virtue of section 3 this term also covers other explosive substances. Section 4 provided that gunpowder should not be manufactured except at a lawfully existing factory or one licensed under the Act, [p]rovided that nothing in this section shall apply to the making of a small quantity of gunpowder for the purpose of chemical experiment and not for practical use or sale. Section 5 provided that gunpowder should only be kept at certain approved places including places licensed under the Act, subject to a proviso that it should not apply to (among others) a person keeping for his private use and not for sale gunpowder to an amount not exceeding on the same premises 30 pounds. Thus, the 1875 Act recognised that possession of small quantities (or, in the case of section 5, a comparatively large quantity) of explosive substances for private use for experimentation or otherwise could be legitimate and would not require regulation. In fact, there is a long and well established tradition of individuals pursuing self education via private experimentation in a range of fields, including with chemicals and explosives. The 1875 Act acknowledged and made allowance for such practices. The penalties for breach of the regulatory provisions in the 1875 Act were at a much lower level than the penalties in respect of the primary criminal provisions in the 1861 Act and the 1883 Act, underlining the distinction between those primary criminal provisions and the regulatory offences. The 1883 Act was a measure passed by Parliament at great speed as a reaction to fears of Irish nationalist terrorism, and in light of a concern that the offences in the 1861 Act did not provide sufficient protection for the public. The 1883 Act created the new offences of unlawfully and maliciously causing an explosion likely to endanger life (section 2); acting unlawfully and maliciously with intent to cause an explosion likely to endanger life or cause serious injury to property (section 3(a)); unlawfully and maliciously making any explosive substance or having it in possession or under control with intent to endanger life or cause serious injury to property (section 3(b)); and the offence in section 4(1). The 1883 Act applies to Scotland: section 9. Section 9(1) provides a very wide definition of explosive substance: The expression explosive substance shall be deemed to include any materials for making any explosive substance; also any apparatus, machine, implement, or materials used, or intended to be used, or adapted for causing, or aiding in causing, any explosion in or with any explosive substance; also any part of any such apparatus, machine or implement. In relation to the offence in section 4(1), section 4(2) provided that the accused and their spouse should be competent to give evidence for the defence (this at a time when according to the ordinary law the accused and their spouse could not give evidence). Parliament considered that, for the accused to have a fair and effective opportunity of availing himself of the defence in section 4(1) of showing that he had made the explosive substance or had in in his possession or under his control for a lawful object, he and his spouse should have the opportunity of giving evidence about that at trial. The regulatory regime in relation to explosives is now contained primarily in the Explosives Regulations 2014 (the Regulations). The Explanatory Memorandum published with the Regulations and Guidance in relation to the Regulations issued by the Health and Safety Executive in 2014 make it clear that it continues to be expected that private individuals may manufacture explosives and have them in their possession for their own private use. The Explanatory Memorandum referred at para 7.1 to the explosives sector being fragmented and diverse, ranging from the storage and manufacture of large amounts of highly energetic and flammable material to individual hobbyists. See also the section of the Explosive Regulations 2014 Safety Provisions Guidance at para 9: Duty holders such as employers, private individuals and other people manufacturing explosives, storing larger quantities of explosives or storing explosives that present higher hazards or greater risks of initiation should use the relevant subsector guidance to supplement the guidance in this document. And para 13: Explosives for work, personal and recreational use [The Regulations apply] to explosives operations 13. whether they are for work or non work purposes. They therefore apply to anyone storing explosives for personal recreational use, or to voluntary clubs or societies storing explosives (examples include storage for firework displays, bonfire processions or re enactment events). Authorities In R v Fegan (1984) 78 Cr App R 189, a decision of 1971, the Court of Criminal Appeal in Northern Ireland considered the meaning and effect of section 4(1). Lord MacDermott CJ, delivering the judgment of the court, explained that section 4(1) illustrates a means of meeting a legislative problem, of how to curb a grave evil which postulates a guilty mind or mental element on the part of offenders, when proof of that guilty mind or mental element is likely to be a matter of inherent difficulty (p 191). In other words, section 4(1) was enacted because Parliament was not satisfied that the existing offences in the 1861 Act and the other offences created by the 1883 Act, involving as they did the need to prove a specific mental element, were sufficient fully to meet the risk posed by the making or possession of explosives. As Lord MacDermott CJ explained (p 191): Section 4(1) of the Act of 1883 may be said to proceed by way of compromise. It does not make it an offence to possess explosive substances for an unlawful purpose, nor does it create an absolute offence by prohibiting the mere possession of explosive substances. Instead, its two limbs provide for a dual enquiry (1) Was the person charged knowingly in possession under such circumstances as to give rise to a reasonable suspicion that his possession was not for a lawful object? and (2) if the answer to (1) is in the affirmative, has the person charged shown that his possession was for a lawful object? If the answer to (1) is in the affirmative and the answer to (2) in the negative a conviction follows; otherwise there must be an acquittal. The first limb allows for a conviction on reasonable suspicion. The second allows what may be very much a subjective defence, with the accused and his or her spouse permitted by section 4(2) (as an exception to the then existing law) to give evidence on oath as ordinary witnesses. (Emphasis in original) The appellant in Fegan was a young Roman Catholic man married to a Protestant woman, who by reason of his religion was subjected to threats of serious violence in the Protestant area in which he lived and told to move out of the district. The appellant acquired a pistol and live ammunition, maintaining that he did so to protect himself and his family. He was charged with a number of offences and was convicted at trial on three counts: possession of the pistol without holding a firearm certificate; possession of the ammunition without holding a firearm certificate; and possession of explosive substances (the pistol and the ammunition) under such circumstances as to give rise to a reasonable suspicion that he did not have them in his possession for a lawful object, contrary to section 4(1). He appealed against his conviction on the section 4(1) count. His appeal was allowed. The Court of Appeal found that the jury had clearly been entitled to find that limb (1) of the offence had been made out by the prosecution, but there had been a misdirection because the trial judge had not properly directed them regarding the possibility of a defence under limb (2), in relation to which there was evidence on which the jury could have found for the appellant. The court made it clear that a person may have a lawful object for the purposes of section 4(1) even though his possession of the explosive substances in question is in breach of regulatory offences (p 194): A, for example, borrows a shot gun to shoot birds despoiling his orchard. He has no certificate or other authority for possessing the gun and his possession is unlawful. To say that his object cannot be lawful is to confuse possession and purpose A firearm in lawful possession may undoubtedly be possessed for an unlawful object and there seems to be no good reason why the converse should not be true. The court also explained that the words possession for a lawful object in limb (2) should be construed as meaning possession for a lawful object and no other: The defence cannot have been meant to exonerate the possessor of a firearm for a lawful object if his possession was also for an unlawful object. Again, as a matter of construction, a defence under the second limb of section 4(1) cannot be made by the possessor proving that he had no unlawful object. The onus resting on him is specific and positive. He has to show possession for a lawful object. (p 194) Finally, the court gave guidance regarding the limits of the concept of lawful object in a case where self defence is relied upon as the relevant object: Possession of a firearm for the purpose of protecting the possessor or his wife or family from acts of violence may be possession for a lawful object. But the lawfulness of such a purpose cannot be founded on a mere fancy, or on some aggressive motive. The threatened danger must be reasonably and genuinely anticipated, must appear reasonably imminent, and must be of a nature which could not reasonably be met by more pacific means. A lawful object in this particular field therefore falls within a strictly limited category and cannot be such as to justify going beyond what the law may allow in meeting the situation of danger which the possessor of the firearm reasonably and genuinely apprehends. One does not, for example, possess a firearm for a lawful object if the true purpose is merely to stop threats or insults or the like. (p 194) Accordingly, possession with the general object of using the items for self defence should the need arise was capable of being possession for a lawful object for the purposes of limb (2) of section 4(1). This was so, even though the availability of a defence of self defence, should the pistol ever be used by the appellant, would depend upon the particular circumstances in which it was so used, including consideration whether use of it was a proportionate reaction to the specific threat experienced at the time and whether there were other means of avoiding that threat. No one could know in advance whether those conditions would be satisfied or not. There was no challenge to the correctness of any part of this reasoning. Fegan was followed by the Criminal Division of the Court of Appeal of England and Wales (Lord Lane CJ, McCowan and Leggatt JJ) in Attorney Generals Reference (No 2 of 1983) [1984] QB 456. The accused, whose property had been attacked and damaged by rioters, and fearing that it would be attacked again, made some petrol bombs, which he intended to use purely to repulse raiders from his property. A prosecution submission that self defence could not constitute a defence to an offence under section 4(1) was dismissed by the trial judge, and the jury acquitted the accused. The Attorney General referred for the courts opinion the question whether self defence could be a defence to an offence under that provision. The court endorsed the reasoning in Fegans case and held that self defence could constitute a lawful object for the purposes of section 4(1). It noted that, as was common ground, the accused had committed offences contrary to provisions of the 1875 Act by making and possessing explosive substances. However, the court held that a person in danger may arm himself for his own protection, if the exigency arises, although in so doing he may commit other offences (p 471). The court said, In our judgment, approaching a priori the words lawful object it might well seem open to a defendant to say, My lawful object is self defence. The fact that in manufacturing and storing the petrol bombs the respondent committed offences under the Act of 1875 did not necessarily involve that when he made them his object in doing so was not lawful The object or purpose or end for which the petrol bombs were made was not itself rendered unlawful by the fact that it could not be fulfilled except by unlawful means. The fact that the commission of other offences was unavoidable did not result in any of them becoming one of the respondents objects. (p 470) The court answered the point of law referred to it by saying that the defence under limb (2) of section 4(1) is available if the accused can satisfy the jury on the balance of probabilities that his object was to protect himself or his family or his property against imminent apprehended attack and to do so by means which he believed were no more than reasonably necessary to meet the force used by the attackers (p 471). The court so concluded, even though the question whether the defence of self defence would eventually be available if the accused happened to make use of the petrol bombs would depend upon the particular circumstances in which they were used. Thus, as in Fegans case, the courts ruling was based on the idea of self defence as a general object of the accused, even though a defence of self defence might not in fact be made out if the accused ever came to be charged with offences arising from actual use of the petrol bombs. In R v Riding [2009] EWCA Crim 892; 2009 WL 1096 171, the Criminal Division of the Court of Appeal of England and Wales (Hughes LJ, King J and Judge Radford) again considered section 4(1). The appellant made a pipe bomb and kept it at his home. He was convicted of the offence of making an explosive substance, contrary to section 4(1). He appealed against his conviction on grounds which included that the trial judge was wrong to hold that it could not be a lawful object to make the pipe bomb that he did out of no more than curiosity to see whether he could do it. The contention of the appellant was that for the purposes of section 4(1) a lawful object is the absence of any object which is criminal (para 8). The Court of Appeal rejected that submission. It rightly held that section 4(1) provides that if a person is found in possession of or has made an explosive substance in circumstances in which there is a reasonable suspicion that there is no lawful object, it is an offence unless there was in fact some affirmative object which was lawful (para 10); lawful object in limb (2) of section 4(1) does not mean the absence of criminal purpose, but rather requires the accused to identify a positive object which is lawful (para 12). The court followed what Lord MacDermott CJ said about this in Fegans case: the onus resting on the accused is specific but positive. He has to show possession for a lawful object (para 12, quoting from the passage set out above). Discussion In my view, the structure of section 4(1) is clear. If, under limb (1), the prosecution proves circumstances as to give rise to reasonable suspicion that the making or possession/control of an explosive substance which is in issue is not for a lawful object, that gives rise to a specific onus on the accused under limb (2) to identify the specific object or purpose for which he made the substance or had it in his possession/control. The burden of proof at the limb (2) stage is on the accused, and the standard of proof is the balance of probabilities. The object or purpose so identified by the accused under limb (2) has to be lawful in the place in which it is to be carried into effect: see R v Berry [1985] AC 246. In the present case, that was in England and lawful has the usual sense of that term in English law, namely that the object in question is not an object or purpose which is made unlawful by the common law or statute. As it was put by Sir Robert Megarry V C in Malone v Metropolitan Police Comr [1979] Ch 344, 357: England is not a country where everything is forbidden except what is expressly permitted: it is a country where everything is permitted except what is expressly forbidden. There is no other sensible criterion of lawfulness to be applied. Nothing said in any of the authorities referred to above suggests otherwise. Moreover, the general requirement that the criminal law should be clear and give fair notice to an individual of the boundaries of what he may do without attracting criminal liability supports this interpretation: a person should not be penalised except under clear law, sometimes called the principle against doubtful penalisation: see Bennion on Statutory Interpretation, 7th ed (2019) (D Bailey and L Norbury, eds), section 27.1. As explained in Fegans case and Attorney Generals Reference (No 2 of 1983), the fact that the making or possession of the substance may involve the commission of regulatory offences does not prevent an accused who seeks to make out a defence under limb (2) of section 4(1) from relying on an object at a more general level which is lawful. If an accused does identify a specific object for which he made the substance or had it in his possession/control, which is lawful in the requisite sense, issue will be joined on that at trial. The prosecution may seek to show that this was not in fact his object, or that it was not his sole object and that his object, as correctly understood, included an unlawful element. For example, as indicated in Fegans case, if the accused had not been put in fear of a reasonably imminent risk of serious physical harm such as might be capable of providing a justification for use of the pistol, there would not be a sufficient connection between his possession of the pistol and any use of it in his reasonable contemplation which could be lawful. In my view, it would also be open to the prosecution to meet the defence under limb (2) by seeking to show that pursuit of the object specified by the accused, although the object might be lawful in a general sense, would involve such obvious risk to other people or their property from use of the explosive substance that the inference should be drawn that the object of the accused was mixed, and not wholly lawful in the sense indicated in Fegans case. If the accused knew that his proposed use of the explosive substance in his possession would injure others or cause damage to their property or was reckless regarding the risk of this, the ostensibly lawful object identified by him would be tainted by the unlawfulness inherent in his pursuit of that object. Typically, these would be matters to be explored at trial. In Ridings case at para 12 the Court of Appeal, having approved and adopted what had been said by Lord MacDermott CJ, continued by saying Mere curiosity simply could not be a lawful object in the making of a lethal pipe bomb and observed that the appellant did not have a lawful object for making the bomb. The court therefore dismissed the appellants appeal against conviction in relation to the section 4(1) offence. This conclusion was correct on the facts of the case. The trial judge and the Court of Appeal explained that there was no need for the appellant to use an explosive substance to satisfy his curiosity whether he could successfully construct a pipe bomb: instead of filling it with gunpowder, he could have used an inert substance such as sand, which would equally have demonstrated whether or not he was capable of constructing it (para 3). He had constructed the pipe bomb in the spring of 2006, a considerable time before it was found in his possession, and had not attempted to detonate it (para 3). It was not part of his case that he had made the pipe bomb in order to see if he could make it explode. The courts statement that [m]ere curiosity simply could not be a lawful object in the making of a lethal pipe bomb has to be read in this context. Unfortunately, however, that statement was taken as having wider significance by Judge Wall QC and the Court of Appeal in the judgments below in the present case. The critical part of the reasoning of the Court of Appeal is at paras 42 and 43: 42. In summary, we conclude that Riding was not decided per incuriam the various cases relied on by the applicant. The outcome in Riding would have been the same, even if the court had been shown those cases. In any event, we agree with Riding. We accept that a person in possession of explosives must show, on balance of probabilities, that he or she has an affirmative or positive object for possessing those explosives. We reject the proposition that an absence of unlawful purpose is the same thing as a lawful purpose. We conclude that on a proper interpretation, section 4 requires that the defence is only made out when the person in possession of the explosives can show that the way in which those explosives will be used is itself lawful. That means, the person must be able to show both, first, the use to which the explosives will be put and second, that such a use is lawful. 43. We come then to the applicants case that he possessed these explosives out of curiosity, or because he wished to experiment with them. Consistent with Riding, we reject the proposition that curiosity or experimentation is a lawful object. The fact that a person is curious or wishes to experiment may be an explanation for why that person has accumulated the explosives; but it says nothing about his continued possession of them and the use to which they will be put. Indeed, it would be perfectly possible, if unattractive, to argue that explosives were detonated, with potential loss to life and limb, out of mere curiosity or in order to experiment. These are not objects in and of themselves; they are not uses to which explosives may be put; they are just explanations for past actions. With respect, I consider that the court fell into error in its reasoning in the latter part of para 42 and in para 43. Experimentation and self education, including to satisfy ones curiosity in relation to the subject of investigation, are lawful objects. As a matter of ordinary language, they are objects every bit as much as self defence is an object. That is true as a general proposition. It is particularly true in relation to section 4(1), enacted against the background of the 1875 Act, which in sections 4 and 5 recognised the lawfulness and legitimacy of individuals making or possessing quantities of explosives for the purposes of private experimentation and other private use. In the first part of para 42, the Court of Appeal rehearsed the analysis correctly set out in Ridings case. But in the latter part of para 42, the court set the bar to be cleared by an accused under limb (2) of section 4(1) rather too high, when it said that he must show that the way in which [the explosives in his possession] will be used is itself lawful. In my judgment, the accused does not have to identify precisely how the explosives will be used in future and that this will be lawful. To require that would be inconsistent with Fegans case and Attorney Generals Reference (No 2 of 1983), in which it was held that the accused only had to identify a relatively general object for which the explosive substances were to be used, which object was lawful (ie self defence), and that it was in the reasonable contemplation of the accused that the explosive substances might be required for that purpose and could lawfully be used for that purpose. As noted above, the defendants in those cases could not demonstrate precisely how the substances might come to be used; nor could it be guaranteed that if and when they were used, such use would necessarily be lawful. In my view, in para 43 the Court of Appeal erred by treating the statement in Ridings case that [m]ere curiosity simply could not be a lawful object in the making of a lethal pipe bomb as, in effect, a proposition of law rather than a statement regarding the position on the facts in that case; and in rejecting the idea that experimentation or self education can be objects for the purposes of section 4(1). In my judgment, they clearly can be objects for the purposes of that provision, as a matter of the ordinary use of language. The word object is synonymous with purpose, and similarly has a relatively general meaning. The object or purpose for which something is done is distinct from the precise conditions under which it might be done. Moreover, Parliament must have contemplated that that is how an accused or their spouse, speaking naturally when giving evidence pursuant to section 4(2) of the 1883 Act, would be likely to express themselves when giving an explanation in the witness box of the kind which it considered they should have the opportunity to present by way of defence under limb (2) of section 4(1). In line with the approach in Attorney Generals Reference (No 2 of 1983), the word object is to be given its natural meaning as a matter of ordinary language. In Berrys case, Lord Roskill, in giving the only substantive speech in the appellate committee, emphasised that the term object as used in section 4(1) is an ordinary English word, and accordingly was to be given its ordinary meaning so that unlawful object is synonymous with an unlawful purpose or an unlawful intent ([1985] AC 246, 254). There is nothing unlawful about experimentation and self education as objects, in themselves, so they are capable of being lawful objects within the meaning of section 4(1). Further examples can be given to illustrate the intended meaning of lawful object in section 4(1): see para 40 below. In the penultimate sentence of para 43 of its judgment the Court of Appeal called attention to a case of mixed objects. In my view, contrary to that of the Court of Appeal, the example given does not show that experimentation cannot be an object for the purposes of section 4(1). Rather it provides an illustration that, as contemplated in Fegans case, in a case of mixed objects where one of the objects is unlawful or in a case where unlawfulness taints the potentially lawful object on which the accused seeks to rely in his defence, the defence under limb (2) will fail. Whether that is so in a particular case will usually be a matter to be determined on the evidence at trial. Mr Mably sought to supplement the reasoning of the Court of Appeal. He submitted that Judge Wall QC was right at the preparatory hearing to disallow presentation by the appellant at trial of his proposed defence under limb (2) of section 4(1) by reference to the objects of experimentation and self education, because in his defence statement he had not given a detailed account of how he proposed to use the HMTD such as would demonstrate that his detonation of it in his back garden would not cause harm to other people or damage to their property. I do not accept that submission. Section 4(1) has general application. It can apply in the case of a teacher in the chemistry department of a school or university, or a person in a commercial research laboratory, who makes explosive substances or has them in his possession. If a charge were brought against such a person under section 4(1) and the prosecution was able to surmount the relatively low hurdle in limb (1) of the provision, the accused would be entitled to defend himself under limb (2) by proving that his object in making or keeping the substances was experimentation, education or research. It is apt to describe each of those as an object, as a matter of ordinary use of language. It might be the case that the accused had no developed and precise plan in mind as to how he proposed using the substance for those purposes, but that would not disable him from presenting a defence under limb (2). The absence of a precise plan as to how the substance was to be used in the course of pursuing those purposes might be a relevant matter to be taken into account at trial. But it would be for the jury to assess, on the evidence at trial, whether the defence was made out despite the absence of precise details as to proposed use. That view is supported by the approach taken to the lawful object of self defence in Fegans case and Attorney Generals Reference (No 2 of 1983), as explained above. For his defence under limb (2), the appellant only had to establish that he proposed using the HMTD in his possession for the lawful objects of experimentation and self education. The term lawful object in limb (2) does not require specification of the precise way in which the substance in question will be used by the accused. The appellants proposed defence was that he intended to use the HMTD in small amounts to produce insignificant detonations of the order to be expected from a simple domestic firework, ie at a level which was lawful. It was possible that he could have achieved this, or that he genuinely believed that he could, as he had done using other explosive substances on previous occasions. Therefore his defence under limb (2) should have been allowed to be presented at trial, rather than being ruled out at the preliminary hearing. In parts of his submissions, Mr Mably appeared to be taking what amounted to a pleading point. He said that the appellants defence statement did not give sufficient details of how he proposed using the HMTD in his experiments. As I understood the submission, this point was made by Mr Mably in support of his general argument regarding the meaning of lawful object in section 4(1), which I have addressed above. However, to the extent that he was seeking to make a different point, as a distinct complaint about a want of particularity in the defence statement, that is not within the scope of the issues which arise on this appeal. In any event, in my view the defence statement gave fair notice to the prosecution of the defence which the appellant proposed to present at trial, in accordance with the requirements of section 6A of the Criminal Procedure and Investigations Act 1996. Conclusion For the reasons given above, I would allow the appeal. I would answer the question certified by the Court of Appeal in the affirmative. LORD LLOYD JONES AND LORD HAMBLEN: (dissenting) We regret that we are unable to agree with the decision of the majority. Counts 1 and 2 of the indictment charge the appellant with the offence of making or possession of an explosive under suspicious circumstances contrary to section 4(1) of the Explosive Substances Act 1883. During the course of argument before this court, a defect in the drafting of the particulars of offence having been identified, the parties agreed that we should approach this appeal on the basis that the particulars of the offence on each count allege that the appellant knowingly had in his possession or under his control an explosive substance in such circumstances as to give rise to a reasonable suspicion that it was not in his possession for a lawful object. Mr Mably QC for the respondent told us that an application will be made to the Crown Court to amend the particulars of offence in each count accordingly. Mr Bogan QC for the appellant was also content that we should proceed on the basis of the defence statement as presently drafted because it would still reflect the substance of the defence. We will do so and we will limit our discussion to the offence committed in cases of possession. The scheme of the offence created by section 4(1) is that the prosecution is required to prove that the defendant was in possession of an explosive in circumstances giving rise to a reasonable suspicion that the defendant did not have the explosive in his possession for a lawful object. If that is established, it is for the defendant to prove that he had it in his possession for an object which was lawful. In the present case the Court of Appeal noted (at para 37) that a reasonable suspicion is enough for the offence to be made out and continued: This accords with common sense, because possessing or controlling explosives is dangerous (see Riding at para 10) and so it is understandable that the criminal law should be engaged in cases of reasonable suspicion, it not necessarily being possible for the prosecution to establish the precise object. The obvious purpose of the statute is to protect human life and property from harm by explosions. In the present case, each count alleges the possession by the appellant of HMTD, a sensitive primary high explosive that can easily be detonated from a spark, friction or impact and which has no commercial applications. The respondent contends that the circumstances give rise to a reasonable suspicion that he did not possess it for a lawful object. The appellant contends that he can rely on the statutory defence under section 4(1) as he can show that he had it in his possession for a lawful object. In particular, he maintains that, he was in possession as a result of an obsessional interest in the armed forces and a need to understand how explosives work and that his object or objects encompassed interest, education and experimentation. This is summarised in the certified question which asks: For the purposes of section 4(1) of the Explosive Substances Act 1883 can personal experimentation or own private education, absent some ulterior unlawful purpose, be regarded as a lawful object? Whether the appellants possession of HMTD may have been, quite independently of section 4(1), unlawful, for example under the Explosives Regulations 2014, is irrelevant for present purposes. A person in possession of an explosive in suspicious circumstances does not commit an offence contrary to section 4(1) if he can show on the balance of probabilities that he was in possession for a lawful object. The defence may be available even if the possession is otherwise unlawful. In R v Fegan (1971) 78 Cr App R 189, Court of Appeal of Northern Ireland, Lord MacDermott CJ accepted as correct a concession that a firearm held without certificate, permit or other authority might be possessed for a lawful object for the purposes of section 4(1). The Lord Chief Justice observed (at p 194): A firearm in lawful possession may undoubtedly be possessed for an unlawful object and there seems no good reason why the converse should not be equally true. The defence turns on the defendants object in having the explosive in his possession. It would be insufficient, in order to make out a defence under section 4(1), for a defendant to establish that he was not in possession of an explosive for a purpose which was unlawful. He must show that he was in possession for a lawful purpose. That is the natural meaning of the words in the statute and it was the interpretation adopted by the Court of Appeal of Northern Ireland in Fegan where Lord MacDermott observed, at p 194: as a matter of construction, a defence under the second limb of section 4(1) cannot be made by the possessor proving that he had no unlawful object. The onus resting on him is specific but positive. He has to show possession for a lawful object. Similarly, in R v Riding [2009] EWCA Crim 892 the Court of Appeal Criminal Division held that lawful object does not mean the absence of a criminal purpose. It is necessary to identify a positive object which is lawful. Hughes LJ referred in this regard to Attorney Generals Reference (No 2 of 1983) [1984] QB 456, where the defendant had made petrol bombs. The Court of Appeal in that case had been prepared to accept that self defence against rioters was capable of amounting to a lawful object, at least if the defendant could demonstrate that that was his sole object and that the means adopted were no more than he believed to be reasonably necessary. However, as Hughes LJ observed in Riding (at para 12), It is plain that the court took the view that the defendant could only be within the defence if the necessary immediacy of danger and reasonableness of the response was present. There was no question of the possession of the petrol bombs being lawful unless some criminal purpose for them existed. In the present case it has been made clear on behalf of the appellant, both in the defence statement and in the appellants written case, that it was never his case that the mere absence of an unlawful object could suffice to establish the statutory defence. Indeed, Mr Bogan on behalf of the appellant has accepted that a generic and unspecified plea or a passive plea of having no unlawful object could not succeed as it would rob the tribunal of the ability to make findings as to what was the true object and whether it was lawful or unlawful. Against this background, the central issue in this appeal is whether the explanation provided in the defence statement ie that the appellant had explosives in his possession for the purpose of personal experimentation or private education, is capable of being a sufficient lawful object within section 4(1). The trial judge and the Court of Appeal held that it was not. We agree with them. The statutory defence requires proof, on the balance of probabilities, of both (1) the object of the possession of the explosive substance and (2) that that object is lawful. The natural meaning of the word object is a reason for doing something, or the result you wish to achieve by doing it (Cambridge English Dictionary). It involves identification of what you wish to do and why. We agree with the Court of Appeal (at para 42) that in the present context that means showing the use to which the explosives will be put. It also necessarily involves identifying that use with sufficient particularity to show that the use may be lawful. In our view, to say that something is done for ones own private education is not a sufficient object for the purposes of the section 4(1) defence, as it does not identify the use to which the explosives will be put in order to provide such education. Similarly, personal experimentation is not a sufficient object for this purpose as, although it identifies in very general terms what is to be done with the explosives, it does not identify any purpose for so doing. This accords with the decision of the Court of Appeal in Riding. There, the defendant had made a pipe bomb which he kept in his home. He was convicted of making an explosive substance contrary to section 4(1). He appealed on the ground that the trial judge had been wrong to hold that it could not be a lawful object that, as he claimed, he made the pipe bomb out of no more than curiosity to see whether he could do it. Dismissing the appeal, Hughes LJ observed (at para 12): Mere curiosity simply could not be a lawful object in the making of a lethal pipe bomb. It would indeed be very remarkable indeed if it could. [Counsel for the appellant] was frank enough to accept that if the statute had used the words good reason instead of lawful object the defendant could not have established that he had good reason for making the bomb. We are entirely satisfied that he did not have a lawful object for it either. Furthermore, as the Court of Appeal pointed out in the present case (at para 42), the defence is only made out when the person in possession of the explosives can show that the way in which those explosives was intended to be used is itself lawful. It is not enough to show that it may be lawful. Even if it were accepted that personal experimentation for the purpose of ones own private education may be an object, this does not describe with any particularity how the experimentation is to be carried out in a manner which is lawful. At the defence statement stage, it is necessary to identify a use which could be found to be lawful. This requires, at the very least, some details to be provided of the nature of the proposed experimentation or use. In this case, for example, it was apparently envisaged that experimentation would take the form of detonations of the explosives in the appellants back garden. (It is the prosecution case that over the months prior to his arrest the appellant had made explosive substances with other chemicals on approximately six or seven occasions, had detonated or had attempted to detonate those explosive substances in his back garden by means either of homemade initiators made from fairy lights filled with firework powder or by means of a mobile telephone, and had made video recordings of these detonations or attempted detonations on his mobile telephone.) Such detonations involve an obvious risk of causing injury and damage to property and causing a public nuisance. For such experimentation to be capable of being lawful it would be necessary to particularise how it was to be carried out so as to avoid any such risk or how it would otherwise be lawful. Defence statements are meant to set out particulars of the matters of fact intended to be relied upon for the purposes of a defence (section 6A of the Criminal Procedure and Investigations Act 1996). We consider that the vague and generalised statements referring to personal experimentation and private education, whether considered individually or taken together, fail to provide sufficient particularity of how these claimed objects were to be carried out lawfully. The self defence cases, Fegan and Attorney Generals Reference (No 2 of 1983), referred to above are distinguishable. In those cases what was accepted as capable of constituting a lawful object was use for purposes of self defence in circumstances where the necessary immediacy of danger and reasonableness of the response were present (see Riding per Hughes LJ at para 12, cited above). In Fegan and in Attorney Generals Reference (No 2 of 1983) the claimed object was intended use to meet a future contingency which use could be sufficiently defined by reference to the limits of lawful self defence. That necessarily involved the assertion that the explosive substances would only be used in circumstances where the defendant believed that it was necessary to use force and that the amount of force used was reasonable. In the present case, by contrast, no lawful use of the explosives within the statutory provision is identified. Reliance on personal experimentation and own private education gives no sufficient indication of the use to which it was intended the explosives should be put, nor does it permit any assessment of its lawfulness. For these reasons we consider that the judge was correct in his conclusion that the explanation set out in the defence statement was not capable of amounting to a lawful object within section 4(1). We would answer the certified point of law as follows: For the purposes of section 4(1) of the Explosive Substances Act 1883, personal experimentation or own private education, absent some ulterior unlawful purpose, cannot be regarded as a lawful object. We would accordingly dismiss the appeal.

UK-Abs

The appellant is 22 years old and, prior to these proceedings, had no convictions. He was diagnosed with Autism Spectrum Disorder as a child and, in 2018, he was living with his mother. He began purchasing quantities of chemicals online. According to his account, this was because he had an obsessive interest in military matters, including bomb disposal. He claimed that he had acquired the chemicals because he wished to understand how explosives worked and to experiment with them. A search warrant was executed at the appellants home on 24 April 2018, where it was found that he had managed to make a small quantity (about 10 grams or less) of a sensitive primary explosive, Hexamethylene Triperoxide Diamine (HMTD). He also possessed manuals for making explosives, notes on making HMTD and a video on his mobile phone demonstrating the making of HMTD. When interviewed by the police, the appellant admitted his actions in acquiring chemicals and making explosives, and gave the explanation above. He was subsequently charged with certain offences, including two counts under section 4(1) of the Explosive Substances Act 1883 (1883 Act). As clarified in the course of the appeal, these counts are that the appellant knowingly had HMTD in his possession or under his control, in such circumstances as to give rise to a reasonable suspicion that he did not possess or control it for a lawful object. There is a defence if the accused can show that in fact he had the explosive substance in his possession or control for a lawful object which he identifies. In his defence statement, the appellant maintained that he had made the HMTD for a lawful object, namely interest, education and experimentation. The appellant said that he had made other explosives and used them to create small explosions in the garden of his house without causing harm, and he intended to do the same with the HMTD. At a preparatory hearing in the Crown Court at Birmingham, HH Judge Wall QC held that he was bound by Court of Appeal authority, R v Riding [2009] EWCA Crim 892, to find that experimentation and self education did not amount to a lawful object for the purpose of section 4(1). Accordingly, the judge ruled in advance of trial that the appellants proposed defence was bad in law. The appellant appealed unsuccessfully to the Court of Appeal, who considered themselves similarly bound. The court certified the following point of law of general public importance: for the purposes of section 4(1) of the 1883 Act, can personal experimentation or own private education, absent some ulterior unlawful purpose, be regarded as a lawful object? By a majority, the Supreme Court allows the appeal. Lord Sales gives the majority judgment, with which Lord Reed and Lord Carnwath agree. Lord Lloyd Jones and Lord Hamblen deliver a joint dissenting judgment. The majority examines the 1883 Act in light of other amendments to the criminal law around the same time, namely the Offences Against the Person Act 1861 (1861 Act) and the regulatory Explosive Substances Act 1875 (the 1875 Act) [14 15]. The 1883 Act was passed by Parliament with great speed due to fears around Irish nationalism and a perception that the 1861 Act, in particular, did not provide sufficiently for protection of the public [16]. The current regulatory regime is now primarily contained in the Explosives Regulations 2014, which like the 1875 Act before them, make clear that it is expected that private individuals, including hobbyists, may manufacture and keep explosives for their own private use [18]. In R v Fegan (1984) 78 Cr App R 189, the Court of Criminal Appeal in Northern Ireland explained that section 4(1) had been passed to address perceived deficiencies in other offences. These required proof of a specific mental element, and so were inadequate to guard against the risk of making or possessing explosives. The appellant, Fegan, acquired a firearm and ammunition (which qualified as explosive substances for the purpose of the 1883 Act) to protect himself and his family from threats against their safety and was convicted of an offence under section 4(1) of the 1883 Act. His appeal was successful, on the basis that although he had no licence for the possession of the firearm and ammunition, nonetheless he possessed them for a lawful purpose, i.e. to defend himself and his family [19 22]. Fegan was followed on similar facts in Attorney Generals Riding, the Criminal Division of the Court of Appeal of England and Wales held that in the particular circumstances of that case, curiosity did not qualify as a lawful object for the possession of a home made pipe bomb [26]. Under section 4(1), it is for a defendant to prove on the balance of probabilities that he had possession or control of an explosive substance for a lawful object. In English law, a purpose is lawful unless it is made unlawful by statute or the common law. A lawful object may, however, be tainted by an ulterior, unlawful purpose, including by knowledge or recklessness of a risk of injury or damage; but these would be matters to be explored on the evidence at trial [27 29]. The decision in Riding was correct on its facts, because the defence of the accused in that case was that he acted out of curiosity to see if he could construct a pipe bomb but he did not need to use real explosives for that; and it was no part of his defence that he had wanted to experiment by making it explode. The decision does not provide an answer in the different circumstances of the present case and was misinterpreted in the courts below. Experimentation and self education are objects within the ordinary meaning of that term and are capable of being lawful objects for the purposes of section 4(1). This view is reinforced by the background against which section 4(1) was enacted, including the 1875 Act, under which possession of explosive substances for private experimentation and use was regarded as lawful and legitimate [30 33], [35]. The Court of Appeal was wrong to conclude that the appellant was obliged to specify more precisely than he had done how the explosives would be used and that this would be lawful. The Court of Appeals reasoning was inconsistent with the Fegan and Attorney Generals was lawful [34]. As there is nothing unlawful about experimentation and self education as objects in themselves, they are capable of being lawful objects [37]. There is no requirement in law that a defence statement in relation to a charge under section 4(1) has to give a more detailed account of the proposed use of the explosive substance than that provided by the appellant [39]. The appellant ought to have been permitted to present his defence at trial [41], [43]. Lord Lloyd Jones and Lord Hamblen dissent from the majoritys reasoning and would dismiss the appeal. They take the view, in common with the courts below, that personal experimentation and private education cannot in law amount to lawful objects within the meaning of section 4(1) [51]. The word object refers to the reason for doing something, or the result you wish to achieve by doing it. As such, the Court of Appeal was correct to hold that, to make out the defence, a defendant is required to show the use to which the explosive substance is to be put, and to do so with sufficient particularity to demonstrate that that use is lawful [52]. education and personal experimentation is not enough, as the Court of Appeal previously held in Riding [54]. The defence is only made out if it is shown that the way in which the explosives were intended to be used is lawful. It is not enough to show that it may be lawful. A defence statement in response to a charge under section 4(1) should elaborate upon this and provide some details of the intended use. In the present case the appellant envisaged that experimentation would take the form of detonations of the explosives in his back garden, carrying an obvious risk of causing injury, damage to property, and a public nuisance. It was necessary to particularise how this would be carried out so as to avoid any such risk or would otherwise be lawful. Vague and general statements referring to personal experimentation or private education were insufficient and did not show how that was to be carried out lawfully [55]. Finally, Fegan and Attorney Generals was plausibly raised in each. In contrast, in the present case no lawful use is identified, and the claimed objects neither give sufficient indication of the use to which the explosives are to be put, nor do they permit assessment of the lawfulness of any such use [56].

The question on this appeal is whether a bingo promoter is entitled to a refund of Value Added Tax (VAT) paid to the Commissioners of Her Majestys Revenue and Customs (HMRC) over many years on fees charged to customers for the right to play bingo. The question itself has only retrospective significance, as VAT on commercial bingo operations was replaced in 2003 by a separate bingo duty. But the appellants case also raises some broader issues about the assessment of VAT. The taxpayers operations The appellant company (which I shall refer to as the taxpayer) operates bingo clubs in Scotland. A customer who wishes to play bingo at one of its clubs pays a fee which entitles the customer to take part in a number of games of bingo, forming a session. On payment of the fee, the customer receives a book of cards. Each card contains a grid of numbers for one of the games in the session. The customer does not need to participate in every game. Cash prizes are paid to those who participate in games of bingo and win. As is well known, games of bingo are presided over by a caller who draws and announces random numbers. If the number called out is on a players card, the player marks it off. The game continues until one of the players has marked off on their card all the numbers required to win and announces that fact. The bingo club manager decides, after the sale of tickets for a particular session has concluded and immediately before the session begins, what the prize money for each game in the session will be save that some games, typically the jackpot game in the session, are played for fixed prizes advertised in advance. Such prizes tend to be consistent for the same sessions from week to week. VAT on bingo VAT is a tax charged on the supply of goods or services. There is a common system of VAT for member states of the European Union established by Council Directive (EC) 2006/112 of 28 November 2006 (the Principal VAT Directive). This directive continues to have effect in the United Kingdom during the transition period following the UKs exit from the European Union. The Principal VAT Directive replaced the Sixth Council Directive (Council Directive 77/388/EEC of 17 May 1977). It is sufficient to quote the relevant provisions of the Principal VAT Directive, as it made no changes from the Sixth Council Directive which matter for present purposes. The main UK national legislation is the Value Added Tax Act 1994 (the VAT Act) and the Value Added Tax Regulations 1995 (SI 1995/2518) made under that Act (the 1995 Regulations). The national legislation must be interpreted so far as possible in conformity with the underlying directive, which also creates rights that are directly enforceable by individuals against the state in so far as the national legislation has not implemented the directive or has not done so correctly: Marshall v Southampton and South West Hampshire Area Health Authority (Teaching) (Case C 152/84) [1986] QB 401, paras 46 47. Article 73 of the Principal VAT Directive provides: In respect of the supply of goods or services, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party Article 73 is implemented in the UK by section 19 of the VAT Act, which includes the following provisions: (2) If the supply is for a consideration in money its value shall be taken to be such amount as, with the addition of the VAT chargeable, is equal to the consideration. (4) Where a supply of any goods or services is not the only matter to which a consideration in money relates, the supply shall be deemed to be for such part of the consideration as is properly attributable to it. VAT is a tax on turnover, not profit. Thus, in the normal case the tax is charged on the full amount which the customer agrees to pay to the trader without any deduction for costs incurred by the trader in making the supply (although VAT on inward supplies to the trader can be deducted as input tax from the traders output tax in calculating the amount of tax payable to HMRC). In the case of commercial gambling, however, it has been recognised that it would be wrong to regard all the money received from participants by the organiser as consideration for the supply of a service. As pointed out by Jacobs AG in H J Glawe Spiel und Unterhaltungsgerate Aufstellungsgesellschaft mbH & Co KG v Finanzamt Hamburg Barmbeck Uhlenhorst (Case C 38/93) [1994] STC 543; [1994] ECR I 1679, paras 14 30, and Fischer v Finanzamt Donaueschingen (Case C 283/95) [1998] QB 833, paras 32 59, the basic activity of gambling involves money changing hands through placing bets and receiving winnings and does not involve the consumption or supply of any goods or service at all. What can be seen as a service is promoting and organising the activity and providing facilities for it. In so far as money received from customers by the promoter or organiser is paid out again to players as winnings, it cannot fairly be regarded as consideration for the supply of this service. It is therefore only the net sum retained by the promoter after deduction of winnings which may be included in the taxable amount for VAT purposes. That approach was endorsed by the court now known as the Court of Justice of the European Union (the CJEU) in the Glawe Spiel case, which concerned the application of the VAT regime to gaming machines. The machines contained two compartments. Coins inserted to play on the machine went into one compartment (the reserve), unless the reserve was full, in which case they went into the cash box. Coins paid out as winnings all came from the reserve. Coins which entered the cash box were retained by the operator for its own benefit. The machines were set up so that on average they paid out as winnings a pre determined proportion of the money inserted. The CJEU held that in these circumstances the taxable amount did not include the winnings paid out to players. To apply this principle to bingo, it is common ground that it is necessary to divide the fees charged by the promoter to customers into two components. One component is referred to as the stake. This is the contribution which each customer is treated as making towards the cash prizes paid out to the winners of games of bingo. The stake is outside the scope of the VAT regime. The other component is the participation fee. This is calculated by deducting the stake from the total fee received and is treated as the consideration obtained by the promoter in return for the supply to the customer of the right to play bingo for cash prizes. At all material times, VAT was payable on this component. The change in HMRCs guidance The background to the present dispute is a change in the guidance given by HMRC about how the participation fees on which VAT was payable should be calculated. Until 2007, leaflets and notices published by HMRC stated that bingo promoters should calculate the participation fees separately for each game in a session. This is referred to as the game by game basis of calculation. In 2007, the guidance changed. In February 2007, HMRC issued Business Brief 07/07 (the business brief), which stated that the participation fees treated as taxable turnover should instead be calculated on a session by session basis. The difference of approach matters for this reason. As mentioned, some bingo games are played for fixed prizes advertised or guaranteed in advance. If too few customers pay to attend a session, the proportion of the fee paid by each customer which is attributed to such a game may not be enough to fund the guaranteed cash prize. In that event the promoter will have to top up the prize money for that game from other funds. If participation fees are calculated on a game by game basis, the funds used to top up the prize money for any game will not reduce the taxable turnover for the session. If, on the other hand, participation fees are calculated on a session by session basis, then amounts used to top up the prize money for any game will reduce the taxable turnover for the session (unless and to the extent that the total prize money paid out in the session exceeds the total fees received). Accordingly, if the game by game basis of calculation is used, the taxable consideration will potentially be higher than where the session by session basis is used. This is because, on the game by game approach, part of the prize money given out (that part which, for any individual game, is funded by participation fees attributable to other games in the session) is subject to VAT, whereas on the session by session approach this part of the prize money is not subject to VAT. The business brief As mentioned, the change of approach by HMRC was announced in the business brief, published in 2007, which aimed to clarify HMRCs policy on how to calculate for VAT purposes participation fees paid by cash bingo players. The key parts of the business brief said this: Calculating the VAT due When a player pays to participate in all or part of a bingo session, the supply made by the promoter is the right to participate in the number of games during that session for which they have received payment. As a player cannot participate in further sessions unless they make further payment, the supply to the player is completed when the session ends. In these circumstances the amount of VAT due on participation and session charges should properly be calculated on a session by session basis by deducting the stake money arising in each individual session from the total amount (less any admission fees) paid by players to participate in that same session. Where money from other sources is added to the stake money received in the session in order to meet guaranteed prizes, that additional money cannot be used to reduce the value for VAT of the participation and session charges paid for taking part in that session. Making claims or adjustments Bingo promoters that have calculated the VAT due on participation and session charges on a game by game basis, and who now find that they have done so incorrectly, may make a claim to HMRC for a repayment of any resulting overdeclaration, subject to the conditions set out in Notice 700/45 How to correct VAT errors or make adjustments or claims. In particular, businesses should note that: where the total of previous errors does not exceed 2,000 net tax, an adjustment may be made to your current VAT return; but where the total of previous errors exceeds 2,000 net tax a separate claim should be submitted to HMRC (in these cases the errors must not be corrected through your VAT returns). HMRC may reject all or part of a claim if repayment would unjustly enrich the claimant. Notice 700/45, to which cross reference was made in the business brief, gives general guidance on how to correct errors and make other adjustments to VAT returns and how to claim refunds of any VAT paid that was not due. At the relevant time the notice stated that any such claim or adjustment was subject to a time limit of three years. The legislative basis for the guidance in Notice 700/45 on claiming a refund of VAT paid that was not due was section 80 of the VAT Act. The version of section 80 in force at the relevant time (as amended by section 3 of the Finance (No 2) Act 1995) stated: Subsections (1A) and (1B) made further provision for the crediting and repayment of amounts that were not due. Section 80 continued: (1) Where a person (a) has accounted to the Commissioners for VAT for a prescribed accounting period (whenever ended), and (b) in doing so, has brought into account as output tax an amount that was not output tax due, the Commissioners shall be liable to credit the person with that amount. (2) The Commissioners shall only be liable to credit or repay an amount under this section on a claim being made for the purpose. (3) It shall be a defence, in relation to a claim under this section by virtue of subsection (1) or (1A) above, that the crediting of an amount would unjustly enrich the claimant. (4) The Commissioners shall not be liable on a claim under this section (a) (1) or (1A) above, or (b) (1B) above, to repay an amount to a person under subsection to credit an amount to a person under subsection if the claim is made more than three years after the relevant date. (4ZA) The relevant date is (a) in the case of a claim by virtue of subsection (1) above, the end of the prescribed accounting period mentioned in that subsection (7) Except as provided by this section, the Commissioners shall not be liable to credit or repay any amount accounted for or paid to them by way of VAT that was not VAT due to them. The taxpayers claims for repayment Until 2007, the taxpayer accounted for VAT on its bingo operations on a game by game basis in accordance with HMRCs published guidance. After the business brief was issued, the taxpayer made a claim under section 80 of the VAT Act for repayment of tax that would not have been payable had it calculated its taxable turnover on a session by session basis rather than a game by game basis. Because of the time limit in section 80(4), this claim was limited to output tax paid in the previous three years. The taxpayer was repaid the amount of tax that was not due in those years applying the session by session basis. In 2011 a First tier Tribunal (Tax Chamber) heard an appeal by another bingo club operator which had made a claim to be repaid output tax going back to 1996. As with the taxpayer in this case, that operator had calculated its taxable turnover on a game by game basis until HMRC published the business brief. The argument advanced in support of its claim was afterwards adopted by the taxpayer in the present case and I will consider it in more detail soon. In short, it was said that the change to a session by session basis of calculation had brought about a decrease in the taxable consideration received by the operator during the relevant period and that the operator was entitled to make an adjustment to its VAT return to reflect this reduction which was not subject to any time limit. The First tier Tribunal accepted this argument and allowed the appeal: see Carlton Clubs plc v Revenue and Customs Comrs [2011] UKFTT 542 (TC); [2011] SFTD 1209. In the light of this decision, the taxpayer in the present case made an adjustment of output tax in its VAT return for the period ending December 2012 in a sum of 460,630.36 by way of a credit to offset output tax brought into account in the years 1996 to 2004. The credit represented the amount of output tax that would not have been brought into account in those years if the session by session basis rather than the game by game basis of calculation had been used. The taxpayer explained its reasons for making this adjustment in a letter to HMRC dated 29 January 2013. On 21 March 2013 HMRC issued a decision declining to accept the adjustment and assessing the taxpayer for what it considered to be undeclared output tax in a corresponding amount. The proceedings below The taxpayer appealed against HMRCs decision and assessment to the First tier Tribunal (Tax Chamber), which allowed the taxpayers appeal, substantially adopting the reasoning of the tribunal in the Carlton Clubs case [2016] UKFTT 508 (TC). HMRC appealed to the Upper Tribunal (Tax and Chancery Chamber), which refused the appeal [2017] STC 1895; but its further appeal to the Inner House of the Court of Session was allowed by the First Division (Lord Carloway, Lord President, Lord Drummond Young and Lord Tyre) for reasons given in an opinion dated 13 December 2018: [2018] CSIH 78; [2019] STC 368. The Inner House accordingly reinstated HMRCs assessment of VAT. However, it granted the taxpayer permission to appeal to this court, noting that there are some 14 other cases pending which raise similar or related issues and are said to have a total value in the region of 30 to 40m. The taxpayers case The taxpayers case, presented with dexterity by Mr Roderick Cordara QC, has exhibited a somewhat protean quality but can, I think, be captured in the following contentions: i) The game by game and session by session methods were both lawful and correct methods of calculating output tax due on fees charged by the taxpayer for the right to play bingo for cash prizes and, as such, the taxpayers claim is not a claim for repayment of tax paid that was not due (which would be time barred under section 80 of the VAT Act). ii) Instead, the taxpayer has made an adjustment to its VAT return (to which no time limit applies) to reflect a decrease in consideration for the relevant supplies of services which has resulted from the change in the method of calculation. iii) The taxpayer is entitled to make such an adjustment as it was required or invited to do so by HMRC in the business brief. The statutory time limit The first and fundamental obstacle which the taxpayers claim faces is the time limit imposed by section 80 of the VAT Act. It is not disputed that the UK is entitled to set a time limit for making any claim to be credited or repaid tax that has been overpaid and that the time limit imposed by section 80 is valid and effective for this purpose. Hence it is not in dispute that, if the taxpayers claim for repayment of VAT accounted for between 1996 and 2004 falls within section 80, the claim is time barred. The taxpayer is therefore in the position of having to show, in order to succeed, that the output tax for which it accounted to HMRC on a game by game basis in those years was indeed due to HMRC. That is because if the amount which the taxpayer is claiming was not VAT due to [HMRC], then pursuant to section 80(4) and (7), HMRC is not liable to credit or repay that amount. This confronts the taxpayer with a dilemma. Clearly it does not wish to argue and does not argue that the approach set out by HMRC in the business brief was wrong and that the correct basis of calculation is the game by game basis and not the session by session basis. Such a contention, if correct, would defeat the taxpayers claim for repayment as it would mean that, for the years covered by the claim, tax has been correctly accounted for on the game by game basis. Worse than that, it would also mean that, by using the session by session basis of calculation for periods after 2004, the taxpayer has underpaid VAT and therefore owes money to HMRC. On the other hand, if the taxpayer accepts that, as stated in the business brief, VAT should properly be calculated on the session by session basis and not the game by game basis, then the taxpayer is in principle entitled to be repaid the amounts of output tax that were overdeclared in past years as a result of using the game by game method of calculation on the ground that such amounts were not due to HMRC. The taxpayer has indeed made a successful claim on this basis for the years 2005 to 2007. However, if this is the correct view, then the present claim relating to earlier years is time barred. The way in which the taxpayer seeks to escape this dilemma is by arguing that both methods of calculation are, in principle, correct and consistent with the applicable legislation. Accordingly, when the taxpayer was using the game by game method, it was paying output tax that was due; but it was also complying with the legislation and paying output tax that was due when it adopted the session by session method of calculation. To develop this argument, Mr Cordara QC drew a contrast between the normal case in which ascertaining a traders taxable turnover is a straightforward question of fact and a class of cases in which evaluative judgment is required. In the normal case the consideration obtained for a supply of goods or services is ascertained by identifying what, as a matter of fact, the customer agreed to pay for the supply. Sometimes, however, a single price is charged by a supplier which comprises a taxable element and a non taxable element (or element subject to a different rate of tax). This might be, for example, because a single price covers the supply of a service which is subject to VAT and another service which is exempt. In such cases some method of apportionment is needed to determine what part of the price paid by the customer is attributable to each element. This is often not an exact process. There may be no single right method of apportionment but two or more methods each of which is reasonable and legitimate. The present case falls into the category where the amount which the customer has agreed to pay needs to be split into two separate elements, one of which is taxable and the other not. The split is not one which has been agreed between the customer and the supplier. It requires an apportionment to be made based on an enquiry into the internal financial position of the suppliers business. Mr Cordara submitted that whether to take as the accounting unit for this purpose individual games of bingo, or bingo sessions, or all the games or sessions held in a week, or in a month, or in some other period, is a question to which there may be no one right answer. In relation to the taxpayers business, he argued, both the game by game basis and the session by session basis were reasonable and valid methods to adopt. It therefore cannot be said that, by accounting for VAT using the game by game method in line with HMRCs guidance at the time, the taxpayer brought into account as output tax any amount that was not due and which it is now seeking to claim back. In their written case counsel for HMRC did not appear to dispute that there was more than one lawful method of apportionment available to the taxpayer in this case. In oral argument Mr Thomson QC clarified HMRCs position as being that, while this may be so in principle, it was not true on the agreed facts of this case. For my part I think it clear that there can be only one correct method of calculating the taxable element of fees charged to customers for playing cash bingo and that, on the facts of the present case, this was the session by session method and not the game by game method. The correct method of calculation Counsel for the taxpayer was concerned to emphasise that deciding how to apportion a unitary price charged by a supplier into two elements for the purpose of calculating VAT can involve an exercise of evaluative judgment, as to which differences of view can exist within a spectrum of what is reasonable. This is undoubtedly true. But it does not follow that there must be more than one method of apportionment which the supplier may lawfully use. Although that is a possible conclusion for a court or tribunal to reach, in most cases where such a question is raised the court or tribunal can be expected to exercise its own judgment as to which method should be used. There is good reason for this. In matters of taxation consistency of approach is of critical importance. If the same exercise of apportionment may lawfully be carried out in more than one way, the result is likely to be that different taxpayers whose situations are identical will lawfully pay different amounts of tax. That offends the principle of equal treatment. It is also capable of distorting competition between businesses. In the case of a pan European system of taxation such as VAT, there is an additional consideration that recognising more than one method of apportionment as lawful could result in inequality in competition between businesses situated in different member states. This was a matter emphasised by the CJEU in MyTravel plc v Customs and Excise Comrs (Case C 291/03) [2005] STC 1617. That case concerned the apportionment for VAT purposes of a single price charged by a tour operator to customers for a package holiday which comprised services bought in from third parties (for example, hotel owners) and services provided by the tour operator itself (for example, where it used its own airline). In an earlier decision, Customs and Excise Comrs v Madgett and Baldwin (trading as Howden Court Hotel) (Joined Cases C 308/96 and C 94/97) [1998] STC 1189, the CJEU had considered two possible methods of making such an apportionment. One method treated the consideration attributable to each component as proportional to what it cost the operator to supply the service. The other method was based on the market value of each component, if sold separately. Both methods involved assumptions which were to some extent arbitrary. The court had ruled (at para 46 of the judgment) that: a trader may not be required to calculate the part of the package corresponding to the in house services by the actual cost method where it is possible to identify that part of the package on the basis of the market value of services similar to those which form part of the package. This could be read as giving the trader, where the market value of the in house services can be established, a choice of which method to use. In the MyTravel case, however, the CJEU held that this is not the position. The court ruled that a trader may not use the market value method at its own discretion according to whether this produces a lower tax liability than would result from using the actual cost method. Rather, the trader must use the market value method whenever possible unless the trader proves that the criterion of actual costs reflects the actual structure of the package (para 35 of the judgment). The reasons given (at paras 32 33 of the judgment) for not according traders the right to choose which method to use bear quotation: 32 The grant to taxable persons of such a right could have the consequence of allowing them to increase artificially the taxable amount subject to the lowest rate and of thus creating an inequality in competition between businesses, in favour of those which have established their business or have a fixed establishment in a member state which taxes certain transactions at very low rates or even zero rates them, as in the United Kingdom in relation to passenger transport. Such an interpretation could, therefore, run counter to the principle of neutrality of VAT. 33 As is apparent from the ninth recital in the preamble to the Sixth Directive, the Community legislature wished the taxable base to be harmonised so that the application of the Community rate to taxable transactions leads to comparable results in all the member states. This harmonisation is thus intended to ensure that situations similar from an economic or commercial point of view are treated identically as regards application of the VAT system. The harmonisation thus helps to ensure the neutrality of that system. The same aim of seeking to achieve harmonisation and a uniform basis of assessment such as will eliminate, as far as possible, factors which may distort competition is reflected in the fourth, seventh and eight recitals to the Principal VAT Directive. The only case cited on this appeal which proceeded on the basis that a taxable person had a right to choose between different lawful methods of apportionment is Victoria & Albert Museum Trustees v Customs and Excise Comrs [1996] STC 1016. In that case the trustees of a museum needed to apportion input tax on goods and services purchased for use in both their business and non business activities. Guidance published by HMRC stated that for this purpose there is no special method of apportionment and that any method could be used, provided that it produced a fair result and was used with the prior agreement of the local VAT office. Having used one method of apportionment for several years, the trustees obtained the agreement of their local VAT office to use a different method which was more advantageous to them. They then claimed a refund of the tax that would have been saved if the more favourable method had been used in earlier years, relying on a regulation which allowed an error in accounting for tax or in any return to be corrected. Turner J affirmed the finding of a tribunal that the trustees had not made an error when all that had happened was that they had chosen a method of assessment which did not provide the most favourable outcome. Whether or in what circumstances it is compatible with EU law to allow taxpayers a choice between methods of apportionment when calculating VAT was not a question considered in the Victoria & Albert Museum case, nor is it necessary to explore that question further here. The argument in the Victoria & Albert Museum case proceeded on the assumption that there was more than one lawful method of apportionment in accordance with the HMRC guidance applicable in that case. What the decision shows is that, if that is the position, it does not lead to the conclusion desired by the taxpayer. Where a lawful method has been adopted, the fact that another method could lawfully have been used does not in itself provide any basis for subsequently claiming a refund of tax that would have been saved if the alternative method had been used instead. In any event the facts of this case bear no relevant similarity to those of the Victoria & Albert Museum case. It has never been suggested in guidance issued by HMRC that bingo promoters had a discretion to choose between different methods of apportionment. Furthermore, contrary to what has been urged on the taxpayers behalf, the apportionment between taxable and non taxable elements of fees charged by bingo promoters to customers does not require an evaluative judgment. It is simply a matter of arithmetic and involves no exercise of judgment at all. Before a composite or package price is apportioned between taxable and non taxable elements, it is first necessary to identify the service or services in return for which the price is being charged. On the agreed facts of the present case, there can be no doubt about this. It is an agreed fact that what a customer who wishes to play bingo at one of the taxpayers clubs receives in return for payment of the fee charged is the right to participate in a session of bingo. That is reflected in the book of cards supplied to the customer at the time of payment. Whether customers choose to use all the cards they receive and play each game included in the session is up to them: there is no suggestion that any refund is available if a customer does not take part in a game; nor are cards sold separately for the individual games in a session. I recognise that the fact that a single composite price is charged is not decisive and there may be cases in which it better reflects commercial reality to regard customers who pay a single price as intending to purchase two or more distinct services: see Card Protection Plan Ltd v Customs and Excise Comrs (Case C 349/96) [1999] 2 AC 601, paras 29 31. However, in the present case I can see no reason and none has been advanced for going behind the pricing policy adopted by the taxpayer and treating the fee charged to participate in a session of bingo as if it were a bundle of separate fees charged for the rights to play separate games. On the contrary, such a division would fail to reflect the commercial reality that what a customer purchases and intends to purchase is the right to play all or any of the games which make up the session as he or she chooses. Once the relevant supply has been identified as the right to participate in a session, the apportionment of the fee charged to the customer into the separate components referred to as the stake and the participation fee does not involve any exercise of judgment. It is a simple arithmetical calculation. All that is required is to add up the total fees received for each session and deduct the total cash value of the prizes paid out in that session to arrive at the taxable consideration. That is an exercise which can yield only one correct answer. I therefore think it clear that on the agreed facts of this case the session by session basis was the only correct method of calculating taxable turnover. The game by game basis was an incorrect method to use because it wrongly treated customers as if they were paying separate fees to participate in individual games when in fact they were not. It follows that, in so far as the taxpayer accounted for more output tax and paid more VAT between 1996 and 2007 as a result of using the game by game basis of calculation than it would have done if the session by session basis had been used, the taxpayer accounted for and paid to HMRC tax that was not due. This should be a satisfactory conclusion for the taxpayer, as it means that the taxpayer was entitled under section 80 of the VAT Act to the refund of VAT for periods after September 2004 which it claimed. But the conclusion is not as munificent as the taxpayer would like, as it also means because of the time limit in section 80(4) that the taxpayer is not entitled to any refund of tax accounted for or paid to HMRC in any earlier period. That is a complete answer to taxpayers claim in these proceedings, but I will also address the further steps in the taxpayers argument. Alleged decrease in consideration The legislative provision on which the taxpayer has sought to found a claim for repayment of VAT without falling within section 80 of the VAT Act is article 90 of the Principal VAT Directive. This states: In the case of cancellation, refusal or total or partial non payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions which shall be determined by the member states. Although a contrary opinion was expressed by Lord Drummond Young in the Inner House, it is common ground on this appeal that there is no difference in meaning between the term price in article 90 and the term consideration used in article 73: see eg Finanzamt Bingen Alzey v Boehringer Ingelheim Pharma GmbH & Co KG (Case C 462/16) EU:C:2017:1006, para 45. The mechanism in UK national law for claiming repayment of VAT in cases covered by article 90 is contained in regulation 38 of the 1995 Regulations. Regulation 38 applies where there is an increase or a decrease in consideration for a supply which includes an amount of VAT, and the increase or decrease occurs after the end of the prescribed accounting period in which the original supply took place. In such circumstances the taxable person is required to adjust his VAT account in accordance with the regulation. Unlike where a claim for repayment of tax is made under section 80, there is no time limit for making an adjustment under regulation 38. The taxpayer argues that, where there has been a change from one method of calculating its tax liability (the game by game basis) to another method (the session by session basis) which produces a lower taxable amount, the adoption of the new method at any rate where it takes place in response to a relevant communication from HMRC involves a decrease in consideration (or reduction in the price) occurring after the accounting period in which the original supply took place. This accordingly requires an adjustment to be made under article 90 of the Principal VAT Directive and regulation 38 of the 1995 Regulations to reduce the amount of tax payable. I do not consider this a tenable interpretation of the legislation, essentially for reasons given by the Inner House. As the CJEU has observed on several occasions, the provision which is now article 90 of the Principal VAT Directive embodies one of the fundamental principles of the directive, according to which the basis of assessment is the consideration actually received by the taxable person. In accordance with that principle, the provision: requires the member states to reduce the taxable amount whenever, after a transaction has been concluded, part or all of the consideration has not been received by the taxable person. See Goldsmiths (Jewellers) Ltd v Customs and Excise Comrs (Case C 330/95) [1997] ECR 1 3801; [1997] STC 1073, paras 15 16; Freemans plc v Customs and Excise Comrs (Case C 86/99) [2001] 1 WLR 1713, para 33; Grattan plc v Revenue and Customs Comrs (Case C 310/11) [2013] STC 502, para 35. This may occur because part or all of the price is not in the event paid or because some form of rebate or refund is made by the supplier which reduces the consideration received after the supply has taken place. What is required, however, is a change in the consideration actually received by the supplier. No case has been cited in which it has been held that a change in the method used to calculate the taxable proportion of the consideration received falls within the scope of article 90. It is plain, in my view, that it does not. In such a case nothing has happened since the time of the supply to reduce the consideration actually received at that time. All that has happened is that the taxpayer has had second thoughts about how the consideration received at the time of the supply should be analysed for tax purposes. The position was well summarised by Lord Drummond Young in the Inner House, when he said (at para 61 of the judgment) that what is involved when a retrospective shift is made by a bingo promoter from a game by game to a session by session basis of calculation is not a decrease in consideration in the real world, as between a supplier and its customer, but is rather a re attribution of tax liability within the taxpayers internal accounts. I agree. A case heavily relied on by the taxpayer is Elida Gibbs Ltd v Customs and Excise Comrs (Case C 317/94) [1997] QB 499. This concerned coupon schemes operated by a manufacturer of toiletries under which consumers who presented a coupon (either cut out from a newspaper or magazine or distributed by the retailer) when buying a product in a shop received a discount off the purchase price. The prices charged by the manufacturer to wholesalers, and by wholesalers to retailers, were not affected by the coupon schemes. But retailers who accepted coupons from consumers could get the value of the coupons refunded to them directly by the manufacturer. The CJEU held that in calculating its taxable turnover the manufacturer could deduct the sums which it refunded, even though there was no direct contractual relationship between the manufacturer and the retailers to whom the sums were paid. The taxpayer emphasised that the CJEU in its judgment treated the predecessor provisions to articles 73 and 90 as expressions of the same underlying principle (of neutrality) and did not make it clear, or apparently think it necessary to specify, under which of those provisions the taxable amount was to be reduced. The taxpayer further emphasised that the reduction in the taxable amount recognised in the Elida Gibbs case did not involve any amendment of the contract or refund of money between the manufacturer and its customer (the wholesaler). This was said to show that in the present case there could likewise be a reduction in the taxable amount, and hence in the amount of VAT payable by the taxpayer, without any contractual amendment or refund of money to its customers. In my opinion, the decision in the Elida Gibbs case provides no assistance to the taxpayer. Although the CJEU was not asked to and did not decide in that case whether (the predecessor to) article 73 or article 90 was the applicable provision, it is clear from later decisions that it was the latter provision which applied and that the correct analysis is that the original taxable amount (ascertained when the goods were supplied by the manufacturer to its wholesaler customer) was subsequently reduced when coupons were accepted and refunds claimed and paid: see Freemans plc v Customs and Excise Comrs (Case C 86/99) [2001] 1 WLR 1713, paras 31 33 and 36; Finanzamt Bingen Alzey v Boehringer Ingelheim Pharma GmbH & Co KG (Case C 462/16) EU:C:2017:1006, paras 37 42. The fact that the refunds were paid, not to the manufacturers own customer but to a party further down the supply chain, was held not to matter. But it was fundamental to the courts reasoning in the Elida Gibbs case that the original taxable amount was not actually received by the manufacturer because part of that amount was subsequently repaid albeit directly to retailers rather than to its own customer. In the present case the supply chain does not extend beyond the taxpayers bingo playing customers and so the possibility of refunding part of the price to someone further down the supply chain does not arise. That feature of the Elida Gibbs case is therefore of no relevance. The essential point is that, unlike in the Elida Gibbs case, there has been no refund made to anyone by the taxpayer and accordingly article 90 is not engaged. It is worth noting in this context the reason why there is no time limit for making an adjustment under regulation 38 and the fact that this reason does not justify exempting from any time limit a claim of the present kind. Until it was revoked in 2009, regulation 38 used to contain a provision which said that it did not apply to any increase or decrease in consideration which occurs more than three years after the end of the prescribed accounting period in which the original supply took place. In General Motors Acceptance Corpn (UK) plc v Revenue and Customs Comrs (2003) VAT decision 17990 a tribunal held that this provision was ineffective because it was incompatible with the predecessor to article 90 of the Principal VAT Directive the reason being that imposing a limitation period has the effect of ousting the taxable persons basic right to be taxed on the consideration received by him and no more (see para 65). This is clearly right. It is right because no adjustment can be made under regulation 38 unless and until an event occurs, however long after the original supply was made, which reduces the consideration actually received by the taxable person. It would be contrary to principle if the taxable person was barred from making the necessary adjustment to its tax liability to take account of such an event by a time limit which had expired before the event occurred and the adjustment was capable of being made. That rationale, however, has no application in a case of the present kind where what is said to constitute a decrease in consideration does not depend on any event which has occurred since the supply of services was made. All that has happened is that the taxpayer has subsequently altered the way in which it has calculated its VAT liability. All the matters, however, on which the calculation of its liability is based (the amount of fees received from customers and the amount of the prize money paid out) were established when the original supply was made indeed even before each bingo session began. Nothing has happened since then which needs to be brought into account and which the taxpayer might have been prevented from bringing into account if there were a time limit. This is consistent with the fact that regulation 38 and article 90 are concerned with actual payments or changes in the liability to make payments which occur after a supply of goods or services has taken place and not with a mere subsequent change of accounting method. The effect of the business brief It would undermine the orderly management of the tax system and subvert the policy embodied in section 80 of the VAT Act if a taxable person could insist on adjusting its tax liability for all past years, without any limit in time, simply by deciding to adopt a different method of calculating the taxable element of the price charged to its customers. I noted earlier that, even if it had been true that the game by game method and the session by session method of calculating taxable turnover were both valid and lawful methods, the fact that the taxpayer switched after 2007 from one lawful method to another would not of itself give the taxpayer any right to recover the tax that it would have saved if it had previously used the session by session method. The basis on which the taxpayer has sought to found such a right is the publication by HMRC of the business brief. That document is said to have required or invited bingo promoters in the position of the taxpayer to make a retrospective adjustment to their VAT account by re calculating their output tax for all past years (without limit in time) using the session by session basis instead of the game by game basis of calculation. The way in which the taxpayers case was put before the tribunals and the Inner House was to argue that, although both methods of calculation were consistent with the applicable legislation, the taxpayer was required to use the method set out in the guidance published by HMRC at any given time. This guidance was said to contain directions as to the method of calculation to be used. Thus, it was said that initially directions given by HMRC required the taxpayer to calculate its taxable turnover on a game by game basis. But then, when the guidance changed, the taxpayer was required to calculate its taxable turnover using the session by session basis of calculation not only going forward but also retrospectively for all past periods. It is, however, a misconception to characterise guidance of the kind issued by HMRC in this case as capable of giving directions with which taxpayers are obliged to comply. As Lewison LJ explained in Leeds City Council v Revenue and Customs Comrs [2015] EWCA Civ 1293; [2016] STC 2256, para 4: The administration and collection of VAT in this country is under the management of HMRC (formerly the Commissioners for Customs and Excise). There are many problems of interpretation arising out of the VAT code and HMRC provide the public with their own interpretation of points of difficulty; and information about the practice they adopt in various areas. These are variously contained in notices, business briefs and the VAT manual. They are not law: they are no more than HMRCs interpretation of the law. HMRC are not of course infallible, and so Parliament has legislated for a system of tribunals to decide contested points. As and when cases are decided against HMRC they will often revise their opinion and inform the public accordingly. Sometimes, of course, HMRC disagree with a tribunal decision, in which event they may choose to appeal. The fundamental point that an administrative agency, such as HMRC, has no power (in the absence of specific statutory authority) to issue guidance which has legally binding force is qualified by the doctrine which protects legitimate expectations created by such a public body. There is no doubt that guidance formally published by HMRC is capable in some circumstances of generating an expectation on the part of a taxpayer that a particular policy or practice or course of action will be followed which the law will protect by preventing HMRC from acting in a way which will frustrate that expectation: see eg R (Davies) v Revenue and Customs Comrs [2011] UKSC 47; [2011] 1 WLR 2625, paras 25 29. It is not necessary on this appeal, however, to examine the precise contours of this doctrine, as it is clear that it has no relevance to the facts of this case. The taxpayer is not seeking to prevent HMRC from frustrating an expectation said to have been created by guidance published before 2007 that the game by game method could properly be used to calculate the amount of VAT payable. Such an argument might have been advanced if the game by game method had been more favourable to the taxpayer than another method which HMRC was now contending ought to be used. But the factual situation in this case is the direct opposite of that. The taxpayer is seeking to argue that the game by game method should not be used to calculate the tax that was payable in periods before 2007. Any legitimate expectation that the taxpayer is entitled to rely on the accuracy of pre 2007 guidance does not assist that argument. Accordingly, to suggest that the business brief required bingo promoters to use the session by session basis of calculation ascribes to guidance published by HMRC a status which it does not have. Such guidance is not capable of imposing on taxpayers an obligation to calculate tax in a particular way. It represents only HMRCs view or interpretation of the law and, if a taxpayer disagrees with HMRCs view, it can appeal from a decision or assessment based on that view to a tribunal whose function it is to give authoritative interpretations of the law (subject to any further appeal). In any case it is quite impossible to read the language of the business brief as instructing bingo promoters to make retrospective adjustments to their VAT returns. The section of the business brief (quoted at para 15 above) headed Making claims or adjustments says that bingo promoters who fall into the category described may make a claim for a repayment, not that they must to do so. In oral argument on this appeal Mr Cordara for the taxpayer accepted that the business brief merely invited and did not require bingo promoters who had in past periods calculated VAT on a game by game basis to seek a repayment. His submission was that this could be done as the heading of the relevant section of the business brief indicated in either of two ways: by making a claim or by making an adjustment. If a bingo promoter made a claim for repayment on the basis that it had paid tax which was not due, this would be governed by section 80 of the VAT Act, with its time limit on recovery. If on the other hand the promoter elected to make an adjustment under regulation 38 on the basis that there had been a decrease in consideration for the supply, then (as already mentioned) such an adjustment is not subject to any time limit. Having originally availed itself only of the first option, it is the latter invitation which the taxpayer has now chosen to accept. I have explained why, as a matter of law, the only basis on which a repayment of tax could properly be claimed or made in the circumstances of the present case is that the tax was not due because it was calculated on a game by game basis when it should have been calculated on a session by session basis, and that there is no legal basis on which an adjustment under regulation 38 could properly be made. Had HMRC invited bingo promoters to make such adjustments and offered to repay tax which it was not liable to repay, it seems to me that it would have been acting outside its powers. But, in any case, the business brief cannot reasonably be read as making such an invitation or offer. The only invitation made in the business brief was to bingo promoters who have calculated VAT on a game by game basis, and who now find that they have done so incorrectly, to make a claim to HMRC for a repayment of any resulting overdeclaration. Such a claim can only reasonably be understood as a claim under section 80 the VAT Act, made on the footing that the promoter had overpaid tax because it had used the game by game method of calculation when, as advised in the business brief, the amount of VAT due should properly be calculated on a session by session basis. The sole peg on which the taxpayer seeks to hang its contention that adjustments under regulation 38 were invited is the reference to adjustments in the section heading and in the cross reference to Notice 700/45. It is true that the subject matter of Notice 700/45 included adjustments under regulation 38 (although, unhelpfully for the taxpayers case, such adjustments were said in the notice to be subject to a time limit of three years). However, the notice provided entirely general guidance about how to correct VAT errors and make adjustments or claims and was not specifically concerned with bingo. The fact that it included an explanation of how to make an adjustment under regulation 38 therefore does not mean that HMRC in the business brief were inviting bingo promoters who had previously used a game by game basis of calculation to make an adjustment under regulation 38. There was no suggestion that everything covered by the notice was relevant to the claims for repayment which bingo promoters were invited to make. Nor does the fact that the heading refers to making claims or adjustments support such an inference. The reference to adjustments in the body of the section, to which this must relate, is in the first bullet point, which states that where the total of previous errors does not exceed 2,000 net tax, an adjustment may be made to your current VAT return. This kind of adjustment to correct small errors was provided for in regulation 34 of the 1995 Regulations (and was also explained in Notice 700/45). It was quite different from the kind of adjustment to reflect a decrease in consideration provided for in regulation 38. Moreover, as the second bullet point explained, where the total of previous errors exceeds 2,000 net tax a separate claim should be submitted to HMRC. This could only be a claim under section 80 of the VAT Act for repayment of tax paid in error when it was not due. That was yet further confirmed by the statement that HMRC may reject all or part of a claim if repayment would unjustly enrich the claimant. A defence of unjust enrichment is provided by section 80(3) in relation to claims under section 80 of the VAT Act. I therefore consider that the language of the business brief is entirely inconsistent with the taxpayers case and can only reasonably be read in the way that it was originally read by the taxpayer, as inviting (only) claims from bingo promoters for repayment of VAT which had been calculated incorrectly by using the game by game basis of calculation when the session by session basis ought to have been used, subject to the statutory time limit for such claims of three years. Conclusion For these reasons I can find no merit in the taxpayers arguments and would dismiss the appeal.

UK-Abs

The Appellant (the taxpayer) operates bingo clubs. Customers pay a fee, which entitles them to play in a number of bingo games (collectively, a session). There is no obligation to play every game in a session. Prizes are paid to those who win games. VAT is charged on the supply of goods or services. Council Directive (EC) 2006/112 of 28 November 2006 (the Principal VAT Directive), which currently still applies in the UK, establishes a common system of VAT for member states of the European Union. The main UK national legislation is the Value Added Tax Act 1994 (the VAT Act) and the Value Added Tax Regulations 1995 (the 1995 Regulations). VAT is normally charged on the full amount paid by the customer. However, exceptionally in the case of commercial gambling the taxable amount is the net sum retained by the organiser after deducting the winnings paid out. For bingo, the fees charged must therefore be divided into two components: the stake, which is the contribution each customer makes towards the cash prizes, and the participation fee, which is the total fee received minus the stake. At all relevant times VAT was payable on the participation fee and not the stake. The present dispute arises from a change in guidance given by HMRC about how participation fees should be calculated. Until 2007, the guidance stated that bingo promoters should calculate the participation fees separately for each game. In February 2007, HMRC issued Business Brief 07/07 (the business brief), which stated that participation fees should be calculated on a session by session basis. This is more favourable to the promoter than the game by game basis as it tends to produce a lower taxable amount. The business brief stated that Bingo promoters that have calculated the VAT due on participation and session charges on a game by game basis, and who now find that they have done so incorrectly, may make a claim to HMRC for a repayment of any resulting overdeclaration, subject to the conditions set out in Notice 700/45. Notice 700/45 gave general guidance and stated that a claim was subject to a time limit of three years. This time limit had a legislative basis in section 80 of the VAT Act. The taxpayer accounted for VAT on a game by game basis until 2007. After the business brief was issued, the taxpayer made a claim under section 80 of the VAT Act for repayment of sums overpaid as a result of having used this basis of calculation; because of the time limit in section 80, the taxpayer claimed and was repaid for the previous three years only. In 2011, the First tier Tribunal (Tax Chamber) heard an appeal by another bingo club operator, which argued that it was entitled to make an adjustment without any time limitation. The First tier Tribunal agreed: Carlton Clubs plc v Revenue and Customs Comrs [2011] UKFTT 542 (TC); [2011] SFTD 1209. In light of that case, the taxpayer in the current dispute sought to make an adjustment for the years 1996 HMRC declined to accept that. The taxpayer appealed. The question for the Supreme Court was whether the taxpayer was entitled to make such an adjustment. The Supreme Court unanimously dismisses the appeal. Lord Leggatt gives the sole judgment. The first obstacle facing the taxpayer was the time limit in section 80 of the VAT Act, which applied to recovery of money paid that was not VAT due to HMRC. To avoid the time limit, the taxpayer therefore had to argue that all the tax paid on a game by game basis in the years 1996 2004 was due to HMRC [24]. The taxpayer argued that both the session by session and game by game methods were legitimate methods of calculation. As such, when using the game by game method, it was paying tax that was due and therefore section 80 of the VAT Act, and its time limit, did not apply [27]. Lord Leggatt disagreed; there was only one correct method of calculating the taxable element which was the session by session method [30]. In the present case, it was an agreed fact that a customer purchased a right to participate in a session of bingo [38]. No reason was advanced for going behind the pricing policy adopted by the taxpayer [39]. It followed that if, as a result of using the game by game basis, the taxpayer had paid more VAT to HMRC between 1996 and 2007 than if it had used the session by session method, then the taxpayer had paid tax that was not due. This means that section 80 with its three year time limit applied, so that VAT paid before 2004 cannot be recovered [41]. This was sufficient to dispose of the appeal. However, Lord Leggatt went on to address the rest of the taxpayers argument. The taxpayer sought repayment by relying on article 90 of the Principal VAT Directive, which states In the case of cancellation, refusal or total or partial non payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions which shall be determined by the member states. The mechanism for adjustments under article 90 is found in regulation 38 of the 1995 Regulations, which applies where there is an increase or a decrease in consideration for a supply. There is no time limit for making such adjustments [45]. The taxpayer argued that where the method of calculation changes and produces a lower amount, there is a reduction in the price / decrease in consideration for a supply for which an adjustment can be made under regulation 38 [46]. Lord Leggatt rejected that argument [47]. Article 90 and regulation 38 apply only where there has been a change in the consideration actually received by the taxpayer, not where all that has changed is the method used to calculate the taxable amount [48]. It would subvert section 80 of the VAT Act if the taxable person could, by adopting a different method of calculation, adjust its liability for all past years. The taxpayer further argued that the business brief required or invited bingo promoters to change the calculation method and make retrospective adjustments accordingly [57]. This was also not accepted. HMRC does not generally have the power to issue binding guidance [59] and the business brief was merely HMRCs view of the law; if the taxpayer disagreed, the position would need to be resolved by a tribunal [60]. In any case, the business brief could only reasonably be read as inviting bingo promoters who found that they had incorrectly calculated VAT on a game by game basis to make a claim for repayment under section 80 [64]. It could not be read as inviting promoters to make adjustments under regulation 38 [65]. The business brief was therefore inconsistent with the taxpayers case [67].

This appeal concerns the procedure for collective proceedings introduced by amendment to the Competition Act 1998 (the Act) for the purpose of enabling small businesses and consumers more easily to bring claims for what may loosely be described as anti competitive conduct in breach of the provisions of the Act. Where the harmful impact of such conduct affects consumers, it may typically cause damage to very large classes of claimants. Proof of breach, causation and loss is likely to involve very difficult and expensive forensic work, both in terms of the assembly of evidence and the analysis of its economic effect. Viewed from the perspective of an individual consumer, the likely disparity between the cost and effort involved in bringing such a claim and the monetary amount of the consumers individual loss, coupled with the much greater litigation resources likely to be available to the alleged wrongdoer, means that it will rarely, if ever, be a wise or proportionate use of limited resources for the consumer to litigate alone. The procedure for collective proceedings introduced by the Act applies to claims by two or more persons for damages, money or an injunction in respect of a breach of specified provisions of statutory competition law: see sections 47A(2) and 47B(1) of the Act. It enables whole classes of consumers to vindicate their rights to compensation and the large cost of the necessary litigation to be funded, before an expert tribunal, the Competition Appeal Tribunal (CAT), which is given exclusive jurisdiction over collective proceedings. The prospect that the rights of consumers can be vindicated in that way also serves to act as a disincentive to unlawful anti competitive behaviour of a type likely to harm consumers generally. But collective proceedings may not proceed beyond the issue and service of a claim form without the permission of the CAT in the form of certification by a Collective Proceedings Order (CPO) under section 47B of the Act. At issue in the appeal are the legal requirements for certification. There are (at least for present purposes) three key features of collective proceedings. The first is that claims by any number of claimants may be pursued on their behalf by a single representative who may, but need not, be a member of the class. The claims need not be identical, and they need not all be against all the defendants, but they must all raise the same, similar or related issues of fact or law. Secondly, the remedy sought may, but need not always, be the award of what are called aggregate damages. This type of damages provides just compensation for the loss suffered by the claimant class as a whole, but the amount need not be computed by reference to an assessment of the amount of damages recoverable by each member of the class individually. Thirdly, the CAT has a discretion as to how aggregate damages (if recovered) are to be distributed among members of the class. Any unclaimed residue of an aggregate award is to be given to a charity specified by the Lord Chancellor, or used to meet the litigation costs and expenses of the representative. The CAT is given an important screening or gatekeeping role over the pursuit of collective proceedings. First, collective proceedings may not be pursued beyond the issue and service of a claim form without the CATs permission, in the form of a CPO, for which the representative must apply. The obtaining of a CPO is called certification. Secondly, collective proceedings may be terminated by the CAT at any stage by the revocation of that CPO. Thirdly, the CAT may accede to an application by one or more defendants to strike out collective proceedings if they disclose no reasonable cause of action (or are otherwise abusive) or to an application for defendants summary judgment, just as in any ordinary civil proceedings. The process of certification requires the CAT to be satisfied as to two main criteria, in relation to any particular collective proceedings. First, it must be just and reasonable for the person seeking to act as representative to be authorised to do so. Secondly, the claims must be eligible for inclusion in collective proceedings. This means that they must all raise the same, similar or related issues of fact or law and be suitable to be brought in collective proceedings. In the present case the CAT decided that the claims were not suitable to be brought in collective proceedings and therefore refused a CPO. The representative, Mr Walter Merricks, appealed successfully to the Court of Appeal. The defendants, companies in the Mastercard group, appeal to this court, seeking to reinstate the decision of the CAT. This is the first collective proceedings case of this kind to reach this court, or the Court of Appeal, and it raises important questions about the legal framework within which the CAT should exercise its undoubted expertise in granting or refusing certification. The Facts The appellant defendants (collectively Mastercard) are three members of the Mastercard group of companies, the first two of which are registered in Delaware, USA, and the third in Belgium. At the relevant time Mastercard operated the well known Mastercard payment card scheme, by the use of which consumers with banking facilities are able to purchase goods and services from retailers otherwise than by the use of cash or cheques. The scheme includes both credit and debit cards and operates as a four party scheme in accordance with the diagram shown below. The consumer is the card holder. The retailer is called the merchant. The consumers bank issues the card used by the consumer to make payment and is therefore called the issuer. The retailers bank is called the acquirer. The scheme rules, laid down by Mastercard, require both the issuer and the acquirer to pay fees to Mastercard for being licensed to use the scheme. But the rules also provide for an interchange fee (IF) to be paid by the acquirer to the issuer for each transaction paid by the use of a Mastercard, which is debited from the payment made by the issuer to the acquirer on the card holders behalf. The acquirer then credits the net amount, less its own fee, to the account of the merchant. The combined deduction of the IF and the acquirers own fee is called the merchant service charge (MSC). Thus it is common ground that the acquirer passes on the whole of the IF to the merchant. This may be illustrated by a notional sale of goods (or services) by the merchant to the card holder for 100, where the IF is 1% and the MSC is 1.2% (ie the IF of 1% and the acquirers own fee of 0.2%). The card holder pays 100, which the issuer deducts from his account. The issuer pays 99 to the Acquirer and the acquirer pays 98.80 to the merchant. The IF may be bilaterally agreed between the issuer and the acquirer, or they may both be the same bank. But otherwise the IF is paid at a default rate set by the scheme rules, known as the multilateral interchange fee (MIF). There are various different rates of MIF, depending on the type of card used (eg debit or credit) and the places where respectively the card is issued and the merchant carries on business. Thus there was a domestic UK MIF where the card was issued in the UK and the merchant carried on business there. There was also an Intra EEA MIF where the two respective places were in different member states of the EEA. Following an investigation, the European Commission decided in December 2007 that the default level set by Mastercard since May 1992 for its Intra EEA MIF amounted to a restriction of competition by effect, contrary to article 81 EC (now article 101 TFEU) and article 53 of the EEA Agreement. It is common ground that this was a form of unlawful anti competitive behaviour sounding in damages for breach of statutory duty under section 47A of the Act. The Intra EEA MIF applied to a large number of purchase transactions by UK card holders, using cards issued in the UK to make purchases from merchants in other EEA states, and to purchases from UK merchants where the card holders were using cards issued in other EEA states. A very much larger series of transactions by UK card holders during the same period attracted the domestic UK MIF. It is alleged in the present proceedings, but it is not common ground, that the level of the UK MIF was affected by the level of the infringing Intra EEA MIF, so that the loss said to result from the UK MIF was therefore caused by the infringement. The Commissions decision (the EC Decision) stated at recital 411 that: A further consequence of this restriction of price competition is that customers making purchases at merchants who accept payment cards are likely to have to bear some part of the cost of Mastercards MIF irrespective of the form of payment the customers use. This is because depending on the competitive situation merchants may increase the price for all goods sold by a small margin rather than internalising the cost imposed on them by a MIF. Mastercard challenged the Commissions decision in the European courts, but without success, and now accepts that it is bound by the finding of breach, for the whole of the period from May 1992 until December 2007 (the Infringement Period). The Proceedings In September 2016 the respondent Mr Walter Merricks CBE issued a collective proceedings claim form against Mastercard, seeking to represent claims by all UK resident adult consumers of goods and services purchased in the UK during the almost 16 year Infringement Period from merchants accepting Mastercard. The size of the represented class was estimated in the claim form to be 46.2m people. It was not a condition of class membership that members either had owned or used a Mastercard for their purchases. It was alleged that any price increases by which merchants passed on the cost of the MIF was applied to all purchasers, not just purchasers using cards. Business customers of merchants using the Mastercard scheme are not included in the claimant class. The essential structure of the claim was as follows: a. The infringing Intra EEA MIF set an unlawfully high minimum level of IF. But for the infringement identified by the EC Decision, IFs both for cross border and domestic transactions would have been charged at a lower level, the difference between that lower level and both the Intra EEA MIF and the domestic UK MIF representing an unlawful element of overcharge. b. That unlawful overcharge was passed on by acquirers to their merchants in full, via the MSC. c. All or a substantial part of the unlawful overcharge was then passed on by merchants operating the Mastercard scheme to their consumer customers, by way of higher prices than would otherwise have been charged for goods and services, thereby causing loss to consumers as a class, equivalent to the amount of the unlawful overcharge passed on. This is a follow on claim which is sought to be brought on an opt out basis. A follow on claim is one which is based upon an existing decision establishing breach, here the EC Decision, which is binding on the domestic tribunal: see section 58A of the Act. Section 47B of the Act makes provision for collective proceedings to be brought on an opt in or opt out basis. Leaving aside non domiciled claimants, an opt out basis means that the proceedings are brought on behalf of every person within the class definition who does not opt out from membership of the class: see section 47B(11). Mr Merricks seeks an award of aggregate damages under section 47C of the Act and proposes that the proceeds of any award should be distributed broadly equally among members of the class on a per capita basis for each separate year of the Infringement Period. He justifies this on the ground that any attempt to differentiate between members on the basis of individual loss would be disproportionate having regard to the modest amounts at stake for each individual, and the forensic difficulties in any reliable basis for discrimination, after the passage of time, within such a huge class. Save that Mastercard admits, as it must, the breach of statutory duty identified by the EC Decision in relation to the Intra EEA MIF and accepts that the whole of any relevant MIF was passed on in full by acquirers to merchants, Mastercard challenges every aspect of the claim. It denies that its excessive Intra EEA MIF caused any unlawful increase in domestic UK MIFs (which dominated the relevant transactions during the Infringement Period), or that IFs would have been any lower than in fact they were, but for the infringement. Thus it denies unlawful overcharge: (the overcharge issue). More importantly for present purposes Mastercard does not accept that merchants passed on all or any part of any overcharge to their customers: (the merchant pass on issue). I use the phrase does not accept rather than deny advisedly. There are now pending some hundreds of claims by merchants against Mastercard, alleging loss by reason of having incurred the cost of the overcharge as part of the MSC passed on by their acquirer banks, without having passed it, or at least all of it, on to their customers. In at least some of those cases Mastercard has sought to defend by alleging that the merchants did pass on all or part of any overcharge to their customers, and therefore, or at least to that extent, suffered no loss. Mr Merricks sought to support his case that the claims were eligible for collective proceedings by describing both the overcharge issue and the merchant pass on issue as common issues affecting all the claims. Mastercard persuaded the CAT that the merchant pass on issue was not a common issue. But the Court of Appeal held that it was, and their conclusion has not been challenged in this court. The potential quantum of the claims, on the basis of full success on the main issues, was provisionally estimated in written evidence by Mr Merricks expert team at more than 14 billion for the class as a whole. But the likely average individual recovery after a distribution on the basis proposed has been very roughly estimated at only 300 each, even on a full success basis. It became reasonably clear during the hearing before the CAT that the aggregate damages figure was very likely to prove to be a considerable over estimate, with the consequence that the likely individual recoveries would also be reduced. On any view however the proceedings involve a disparity in size between collective and individual recovery on a scale which is, in the current experience of the UK courts and tribunals, completely unique. Mastercard objected to certification on both the main criteria, submitting that Mr Merricks could show neither that it was reasonable for him to be authorised to act as representative nor that the claims were eligible for collective proceedings. The CAT rejected the first of those objections, but upheld the second, and Mastercard did not pursue its objection to Mr Merricks as representative in the Court of Appeal. The result is that this appeal concerns solely the legal requirements for eligibility. Before considering the CATs analysis and the Court of Appeals reasons for finding that it was wrong in law, it is convenient to set out the relevant provisions in the Act, the relevant rules and the CATs published guidance. The statutory framework for certification The structure for collective proceedings of this type is an entirely statutory creation. Its relative novelty means that it has yet to attract a body of authoritative UK case law about its operation, although there is significant Canadian jurisprudence about pre existing similar (although not identical) statutory schemes there which has been much relied upon in these proceedings. As will appear it will be necessary to set the bones of the statutory structure in its context as a part (albeit specialised) of the UKs civil and tribunal procedure. Although now forming part of the Competition Act 1998, the statutory part of the structure for collective proceedings was introduced, by amendment, in two stages. The first was in the Enterprise Act 2002, but it only permitted opt in proceedings and was unsuccessful. The second was in the Consumer Rights Act 2015. This followed a public consultation by the Department for Business, Innovation and Skills. In its paper published in April 2012, it was announced that the government wished to bring forward proposals to improve the regime for bringing private actions for redress for anti competitive behaviour. At paragraph 3.6 under the heading Aims the paper stated: The aim of these proposals is therefore two fold: Increase growth, by empowering small businesses to tackle anti competitive behaviour that is stifling their business. Promote fairness, by enabling consumers and businesses who have suffered loss due to anti competitive behaviour to obtain redress. Under the heading Why is reform needed? the paper recognised, at paragraph 3.11, the widespread view that private actions were the least satisfactory aspect of the competition regime, so that there was wide recognition of the need to improve access to redress and dispute resolution. At paragraph 3.12 it stated: Currently it is rare for consumers and SMEs to obtain redress from those who have breached competition law, and it can be difficult and expensive for them to go to court to halt anti competitive behaviour. At paragraph 3.13 it continued: A further difficulty is that competition cases may involve large sums but be divided across many businesses or consumers, each of whom has lost only a small amount. This means that a major case, with aggregate losses in the millions or tens of millions of pounds, can nevertheless lack any one individual for whom pursuing costs makes economic sense. Paragraph 3.14 contained a brief review of the shortcomings of the then current procedural frameworks, including the representative action under the English and Welsh Civil Procedural Rules. Under the heading Proposals the paper proposed both the establishment of the CAT as a major venue for competition actions across the UK and to: Introduce an opt out collective actions regime for competition law to allow consumers and businesses to collectively bring a case to obtain redress for their losses. Section 47A of the Act (introduced by the Enterprise Act 2002 and amended by the Consumer Rights Act 2015) identifies the types of claim which, under section 47B(1), may now be brought as collective proceedings. The present claims are included at section 47A(2) and (6)(c), because they are based upon a decision of the Commission that there has been an infringement of the prohibition in article 101(1). But collective proceedings are not the only type of proceedings which may be brought, even before the CAT, and the CAT does not have exclusive jurisdiction for claims falling within section 47A. As section 47A(2) recognises, such claims may in theory at least be brought by means of any available type of civil proceedings within the UK. Collective proceedings are however within the exclusive jurisdiction of the CAT, and subject to the Competition Appeal Tribunal Rules 2015 (SI 2015/1648) (the Rules). Section 47B provides as follows: (1) Subject to the provisions of this Act and Tribunal rules, proceedings may be brought before the Tribunal combining two or more claims to which section 47A applies (collective proceedings). (2) Collective proceedings must be commenced by a person who proposes to be the representative in those proceedings. (3) The following points apply in relation to claims in collective proceedings (a) it is not a requirement that all of the claims should be against all of the defendants to the proceedings, (b) the proceedings may combine claims which have been made in proceedings under section 47A and claims which have not, and (c) a claim which has been made in proceedings under section 47A may be continued in collective proceedings only with the consent of the person who made that claim. (4) Collective proceedings may be continued only if the Tribunal makes a collective proceedings order. (5) The Tribunal may make a collective proceedings order only (a) if it considers that the person who brought the proceedings is a person who, if the order were made, the Tribunal could authorise to act as the representative in those proceedings in accordance with subsection (8), and (b) inclusion in collective proceedings. in respect of claims which are eligible for (6) Claims are eligible for inclusion in collective proceedings only if the Tribunal considers that they raise the same, similar or related issues of fact or law and are suitable to be brought in collective proceedings. (7) A collective proceedings order must include the following matters (a) authorisation of the person who brought the proceedings to act as the representative in those proceedings, (b) description of a class of persons whose claims are eligible for inclusion in the proceedings, and (c) specification of the proceedings as opt in collective proceedings or opt out collective proceedings (see subsections (10) and (11)). (8) The Tribunal may authorise a person to act as the representative in collective proceedings (a) whether or not that person is a person falling within the class of persons described in the collective proceedings order for those proceedings (a class member), but (b) only if the Tribunal considers that it is just and reasonable for that person to act as a representative in those proceedings. (9) The Tribunal may vary or revoke a collective proceedings order at any time. (10) Opt in collective proceedings are collective proceedings which are brought on behalf of each class member who opts in by notifying the representative, in a manner and by a time specified, that the claim should be included in the collective proceedings. (11) Opt out collective proceedings are collective proceedings which are brought on behalf of each class member except any class member who opts out by notifying the (a) representative, in a manner and by a time specified, that the claim should not be included in the collective proceedings, and (b) any class member who Section 47C deals with damages and costs in collective proceedings. It provides, so far as is relevant: is not domiciled in the United Kingdom at (i) a time specified, and (ii) does not, in a manner and by a time specified, opt in by notifying the representative that the claim should be included in the collective proceedings. (12) Where the Tribunal gives a judgment or makes an order in collective proceedings, the judgment or order is binding on all represented persons, except as otherwise specified. (13) The right to make a claim in collective proceedings does not affect the right to bring any other proceedings in respect of the claim. (14) In this section and in section 47C, specified means specified in a direction made by the Tribunal. (2) The Tribunal may make an award of damages in collective proceedings without undertaking an assessment of the amount of damages recoverable in respect of the claim of each represented person. (3) Where the Tribunal makes an award of damages in opt out collective proceedings, the Tribunal must make an order providing for the damages to be paid on behalf of the represented persons to the representative, or such person other than a represented person as (a) (b) the Tribunal thinks fit. (4) Where the Tribunal makes an award of damages in opt in collective proceedings, the Tribunal may make an order as described in subsection (3). Subsections (5) and following provide for the distribution of unclaimed collective damages to charity or to meet the representatives costs and expenses, as already mentioned. Section 49 makes provision for appeals from the CAT in relation to (inter alia) collective proceedings. It is common ground in this court that an appeal from a certification decision of the CAT lies only on a point of law. Section 47B(1) expressly makes the right to bring collective proceedings subject to the Rules. They provide, at rule 2(2), that the Rules are to be applied and interpreted in accordance with the governing principles in rule 4. Rule 4(1) (2) states that cases are to be decided justly and at proportionate cost. This is a modified version of the well known overriding objective enshrined in the Civil Procedure Rules of England and Wales and with parallels in most modern codes of civil procedure both in the UK and around the common law world, including Canada. Rules 41 and 43 provide for the CAT, on the application of a party or of its own initiative, to have power to strike out all or part of a claim or to give summary judgment in relation to a claim or an issue in a claim against a claimant or defendant. These powers are fully applicable to collective proceedings, both generally and at the time of the hearing of an application for a CPO: see rule 79(4). They enable the CAT to prevent collective proceedings going to a (probably very expensive) trial in cases where they, or parts of them, disclose no reasonable cause of action, are abusive or do not raise triable issues. In short, they enable the CAT to exercise a merits based control over collective proceedings on lines similar to those available in civil proceedings generally. Rules 75 to 81 make detailed provision for the commencement and certification of collective proceedings. For present purposes rule 77, headed Determination of the application for a collective proceedings order and rule 79, headed Certification of the claims as eligible for inclusion in collective proceedings, are of primary importance. They provide as follows: 77(1) The Tribunal may make a collective proceedings order, after hearing the parties, only (a) if it considers that the proposed class representative is a person who, if the order were made, the Tribunal could authorise to act as the class representative in those proceedings in accordance with rule 78; and (b) in respect of claims or specified parts of claims which are eligible for inclusion in collective proceedings in accordance with rule 79. (2) If the Tribunal makes a collective proceedings order it may attach such conditions to the order or give such directions as it thinks fit, including (a) directions for filing and service of the order, pleadings and any other document in relation to the collective proceedings; and (b) directions regarding any class member who is a child or person who lacks capacity. 79(1) The Tribunal may certify claims as eligible for inclusion in collective proceedings where, having regard to all the circumstances, it is satisfied by the proposed class representative that the claims sought to be included in the collective proceedings are brought on behalf of an identifiable class of raise common issues; and are suitable to be brought in collective (a) persons; (b) (c) proceedings. In determining whether the claims are suitable to be (2) brought in collective proceedings for the purposes of paragraph (1)(c), the Tribunal shall take into account all matters it thinks fit, including the costs and the benefits of continuing the (a) whether collective proceedings are an appropriate means for the fair and efficient resolution of the common issues; (b) collective proceedings; (c) whether any separate proceedings making claims of the same or a similar nature have already been commenced by members of the class; (d) the size and the nature of the class; (e) whether it is possible to determine in respect of any person whether that person is or is not a member of the class; (f) whether the claims are suitable for an aggregate award of damages; and the availability of alternative dispute resolution (g) and any other means of resolving the dispute, including the availability of redress through voluntary schemes whether approved by the CMA under section 49C of the 1998 Act or otherwise. In determining whether collective proceedings should (3) be opt in or opt out proceedings, the Tribunal may take into account all matters it thinks fit, including the following matters additional to those set out in paragraph (2) the strength of the claims; and (a) (b) whether it is practicable for the proceedings to be brought as opt in collective proceedings, having regard to all the circumstances, including the estimated amount of damages that individual class members may recover. (4) At the hearing of the application for a collective proceedings order, the Tribunal may hear any application by the defendant (a) under rule 41(1), to strike out in whole or part any or all of the claims sought to be included in the collective proceedings; or (b) under rule 43(1), for summary judgment. (5) Any member of the proposed class may apply to make submissions either in writing or orally at the hearing of the application for a collective proceedings order. A CPO is not either the beginning or the end of the measures whereby the CAT may case manage collective proceedings. Under rule 76(9) the CAT must convene a case management conference for the management of the application for a CPO. Rule 85 contains wide powers for the CAT to stay collective proceedings or to vary or revoke a CPO, including power to add, remove or substitute parties and power to order the amendment of the claim form. Rule 88 confers wide powers of case management, exercisable at any time, while rule 89 confers power to order disclosure, in the widest possible form. Finally, rule 115(3) empowers the president of the CAT to issue practice directions. The current Guidance (published by the CAT in 2015) has the force of a practice direction. Paragraph 6.13 provides that: The proposed class representative should send with the collective proceedings claim form any evidence relied on in support of the application for a CPO. That may include, for example, a witness statement by or on behalf of the proposed class representative addressing the considerations raised by rules 78 and 79; and an experts report regarding the way in which the common issues identified in the claim form may suitably be determined on a collective basis. Paragraph 6.39 deals with the requirement in rule 79(3)(a) to consider the strength of the claims when deciding whether collective proceedings should be opt in or opt out. It provides: Strength of the claims (rule 79(3)(a)) Given the greater complexity, cost and risks of opt out proceedings, the Tribunal will usually expect the strength of the claims to be more immediately perceptible in an opt out than an opt in case, since in the latter case, the class members have chosen to be part of the proceedings and may be presumed to have conducted their own assessment of the strength of their claim. However, the reference to the strength of the claims does not require the Tribunal to conduct a full merits assessment, and the Tribunal does not expect the parties to make detailed submissions as if that were the case. Rather, the Tribunal will form a high level view of the strength of the claims based on the collective proceedings claim form. For example, where the claims seek damages for the consequence of an infringement which is covered by a decision of a competition authority (follow on claims), they will generally be of sufficient strength for the purpose of this criterion. Paragraph 6.43 of the Guidance provides that defendants applications to strike out or for summary judgment made before the certification hearing will generally be dealt with at that hearing, together with any application for security for costs. The decision of the CAT to refuse certification In a reserved judgment the CAT refused Mr Merricks a CPO upon two distinct but related grounds, both relating to the eligibility criterion under section 47B(5)(b) and (6) of the Act: [2017] CAT 16; [2018] Comp AR 1. This was not because the claims failed to raise the same, similar or related issues, even though the CAT held that the merchant pass on issue was not a common issue in that sense. The overcharge issue was a common issue, so their conclusion that the merchant pass on issue was not common was not fatal to the application. Rather the refusal of a CPO was because the claims were not suitable to be brought in collective proceedings. The first reason was that the claims were not suitable for an aggregate award of damages, within rule 79(2)(f). This was sufficient on its own to require refusal of a CPO. The second reason was that Mr Merricks proposals for distribution of any aggregate award did not respond in any way to the compensatory principle which the CAT regarded, on common law principles, as an essential requirement of any distributive scheme. This was not a requirement mentioned in the Act, the Rules or the Guidance, but it was regarded by the CAT as a relevant matter under rule 79(2), also sufficient on its own to require a CPO to be refused. The first reason requires some unpacking. Mr Merricks supported his application by an expert report from Dr Veljanovski, an economist, and Mr Dearman, a forensic accountant, which sought to explain (inter alia) the methodology by which it was proposed to support an award of aggregate damages for the losses cumulatively suffered by an enormous class over the Infringement Period. That methodology included dividing the retail goods and services market into some 11 sectors, seeking to establish the degree of merchant pass on in each and then deriving a weighted average across the retail market as a whole. Expressed as a fraction or percentage, that average could be used to estimate the amount of the overcharge (separately identified) passed on to consumers, and therefore the amount of the overcharge which represented the aggregate loss of the consumers, as opposed to the merchants, as a separate class. After a hearing which included questioning of the experts by the members of the CAT and some cross examination by counsel for Mastercard, the CAT concluded that the experts had not demonstrated a sufficient likelihood of there being available at trial sufficient data for all those sectors across the whole of the Infringement Period to enable that methodology to generate a sufficiently reliable result. The CAT did not by this conclusion mean that they regarded it as impossible, or even unlikely, for Mr Merricks to be able to prove at trial that the class had suffered some loss. Rather, their concern was as to the probable unreliability of the quantification of that loss, on a class wide basis as permitted by the procedure for an award of aggregate damages. Their conclusion is encapsulated in this extract from para 78 of the judgment: . we are unpersuaded on the material before us that there is sufficient data available for this methodology to be applied on a sufficiently sound basis. It follows that we are not satisfied, and indeed very much doubt, that the claims are suitable for an aggregate award of damages: see rule 79(2)(f). The CATs second reason is, in a sense, self explanatory. When a class is constituted by all consumers who, during a 16 year period, purchased goods and services from one or more of the half million or so merchants which operated the Mastercard scheme, it is obvious that there will be wide divergences in the impact of any overcharge upon each one of them, viewed individually, even if all of them will probably have suffered some loss, because of the virtual impossibility of a consumer entirely avoiding a merchant operating Mastercards scheme for any of their purchases. These divergences will only be partly mitigated by adoption of the proposed annual basis of per capita distribution. Even within a single year, the effect of an overcharge upon individual consumers will depend upon sectoral variations in merchant pass on, the particular focus of the consumers spending, and the relative wealth of each consumer. The CAT regarded it as axiomatic, in accordance with the basic common law principle that damages had to be compensation for loss, that if an estimation of aggregate damages was adopted which was not itself based in any way upon an assessment of individual loss, then: Such an approach can only be permissible, in our view, if there is then a reasonable and practicable means of getting back to the calculation of individual compensation. (para 79) In the CATs view, a per capita per annum basis of distribution of aggregate damages entirely failed to satisfy that requirement. At para 84 they said: The problem in the present case is that there is no plausible way of reaching even a very rough and ready approximation of the loss suffered by each individual claimant from the aggregate loss calculated according to the applicants proposed method. At para 88 the CAT concluded that a method of distribution which did not serve the compensatory principle could not be a reasonable basis for the distribution of aggregate damages. The Court of Appeal On Mr Merricks appeal the Court of Appeal (Patten, Hamblen and Coulson LJJ) concluded, in a judgment of the court, that the CATs decision to refuse a CPO had been vitiated by five errors of law: [2019] EWCA Civ 674; [2019] Bus LR 3025. First, as already noted, the CAT had wrongly regarded the merchant pass on issue as not being a common issue. Secondly, the CAT had in its approach to the issue as to the likely availability of data for the quantification of merchant pass on set an illegitimately high merits threshold at the certification stage. Thirdly, for that purpose the CAT conducted in effect a mini trial, involving the cross examination of experts, whereas they should have confined themselves to the question whether, on the documents, the claim form disclosed a real prospect of success. Fourthly the CAT had been wrong to conclude that aggregate damages could not be distributed by a method which paid no regard to differing levels of individual loss. Finally, it had been premature for the CAT to reach a final, and adverse, conclusion about the proposed method of distribution at the certification stage, and to use that conclusion as a self standing reason for refusing certification at all. Both the CAT and the Court of Appeal treated as highly persuasive some dicta in the leading Canadian case on certification, Pro Sys Consultants Ltd v Microsoft Corpn [2013] SCC 57. The CAT purported to rely upon them as the basis for their conclusion that the claims were unsuitable for aggregate damages. The Court of Appeal treated the same (and other) Canadian dicta as the foundation for their decision that the merits threshold for certification was lower than the hurdle which the CAT had applied. It is convenient at this stage to summarise the Canadian jurisprudence, and to set it in its own statutory and procedural context. The Canadian Jurisprudence on Certification of Collective Proceedings Many Canadian provinces and territories developed a statutory structure for collective proceedings (there called class proceedings) both earlier, and comprehending a more general range of potential claims, than in the UK. For present purposes it is sufficient to consider the regime enacted in British Columbia. By its Class Proceedings Act 1996 (the CPA) opt out class proceedings for civil claims generally were introduced subject to a certification procedure, with provision for the award of aggregate damages. Ontario had adopted a similar structure in 1992. The Canadian structures were regarded by the UK government as the best model for the collective proceedings regime introduced in 2015 (see para 194 of the Departments Final Impact Assessment published in January 2013, following the consultation referred to above). There are many similarities and some differences between the Canadian and UK statutory structures. Both operate within a civil procedural framework based upon common law principles and which is guided by a similar form of overriding objective: see eg rule 1 3 of British Columbias Supreme Court Civil Rules, BC Regulation 168/2009. Both may be said to serve broadly the same statutory purpose of providing effective access to justice for claimants for whom the pursuit of individual claims would be impracticable or disproportionate. In Hollick v Toronto (City) 2001 SCC 68; [2001] 3 SCR 158, Chief Justice McLachlin described the beneficial purposes of class action procedure in these terms, at para 15, speaking of the Ontario Class Proceedings Act 1992: The Act reflects an increasing recognition of the important advantages that the class action offers as a procedural tool class actions provide three important advantages over a multiplicity of individual suits. First, by aggregating similar individual actions, class actions serve judicial economy by avoiding unnecessary duplication in fact finding and legal analysis. Second, by distributing fixed litigation costs amongst a large number of class members, class actions improve access to justice by making economical the prosecution of claims that any one class member would find too costly to prosecute on his or her own. Third, class actions serve efficiency and justice by ensuring that actual and potential wrongdoers modify their behaviour to take full account of the harm they are causing, or might cause, to the public. In proposing that Ontario adopt class action legislation, the Ontario Law Reform Commission identified each of these advantages In my view, it is essential therefore that courts not take an overly restrictive approach to the legislation, but rather interpret the Act in a way that gives full effect to the benefits foreseen by the drafters. Section 4(1) of the British Columbia CPA requires the court to certify claims as class proceedings where all the following requirements are met: a. The pleadings disclose a cause of action, b. There is an identifiable class, c. The claims raise common issues, d. A class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues, and e. There is a suitable representative plaintiff. Section 4(2) requires the court to address the question whether a class proceeding would be preferable by reference to all relevant matters, including a list of five which are loosely similar to those in the CATs rule 79(2). Power to award aggregate damages in class proceedings is conferred by section 29, but the suitability of the case for an award of aggregate damages is not one of the relevant factors listed in section 4(2). The leading case on the certification of class proceedings in Canada is the decision of the Canadian Supreme Court in Pro Sys Consultants Ltd v Microsoft Corpn [2013] SCC 57 in 2013, on appeal from British Columbia. The Supreme Court restored an order for the certification of class proceedings made at first instance, which had been set aside by the BC Court of Appeal. The claims were brought on behalf of the ultimate consumers of computer software after an alleged unlawful overcharge by Microsoft which it was claimed had been passed on by the intermediate merchants. For present purposes there were two relevant conclusions. The first was that the threshold test for establishing that the pleadings disclosed a cause of action was the equivalent of the strike out test in English civil procedure. The second was that the threshold for the establishment of the other conditions for certification was that there should be some basis in fact for a conclusion that the requirement was met. This low threshold, derived from the Supreme Courts earlier decision in the Hollick case, was not a merits test, applied to the claim itself. Rather the question was whether the applicant could show that there was some factual basis for thinking that the procedural requirements for a class action were satisfied, so that the action was not doomed to failure at the merits stage by reason of a failure of one or more of those requirements: see per Rothstein J at paras 99 to 105. The standard of proof at the certification stage came nowhere near a balance of probabilities. One of the many issues in the Microsoft case was whether the requirement for common issues was satisfied. In a passage which has come to assume a central place in the submissions in this case, at all levels, Rothstein J said this, at para 118, about the expert methodology put forward in support of the claim: In my view, the expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement. This means that the methodology must offer a realistic prospect of establishing loss on a class wide basis so that, if the overcharge is eventually established at the trial of the common issues, there is a means by which to demonstrate that it is common to the class (ie that passing on has occurred). The methodology cannot be purely theoretical or hypothetical but must be grounded in the facts of the particular case in question. There must be some evidence of the availability of the data to which the methodology is to be applied. Subsequent reported decisions in Canada have fortified this low threshold approach to meeting the conditions for certification. In Ewert v Nippon Yusen Kabushiki Kaisha [2019] BCCA 187, paras 105 to 109 the BC Court of Appeal warned against imposing an excessive burden on the provision of expert evidence about the likely availability of data at the certification stage, in particular because it necessarily preceded the processes of disclosure which would become available after certification. The some basis in fact test required only a minimum evidentiary basis and was not an onerous one. As recently as September 2019 the Supreme Court of Canada affirmed the approach taken to certification in the Microsoft case, in Pioneer Corpn v Godfrey [2019] SCC 42, paras 106 to 108. I regard the Canadian jurisprudence as persuasive in the UK not only because of the greater experience of their courts in the conduct of class actions but also because of the substantial similarity of purpose underlying both their legislation and ours. Nonetheless in the analysis which follows I base myself firmly on the true construction of the UK legislation, set against the background of the common law and civil procedure against which it falls to be construed. The Parties Submissions The main submissions of counsel for Mastercard were that the CATs judgment disclosed no error of law, that its treatment of the issue as to the suitability of the claims for aggregate damages was both expressly and in substance based upon the Microsoft criteria, and that the CAT was entitled to take into account at the certification stage the fact that Mr Merricks distribution method did nothing to implement the compensatory principle in its application to individual consumers. In particular the CAT was entitled to identify each of the two particular factors (suitability for aggregate damages and distribution method) as sufficient on its own to require certification to be refused. Further the CAT was entitled to ask questions of Mr Merricks experts and to permit limited cross examination for the purpose of clarifying their proposed methodology in this very large and complex case. For their part counsel for Mr Merricks broadly supported the criticisms made of the CATs judgment by the Court of Appeal. In addition they sought to rely upon supplementary expert evidence, served after the hearing before the CAT, which the Court of Appeal had found it unnecessary to consider. This court looked at the material de bene esse but I have not found it necessary to consider it either. Analysis An appreciation of the legal requirements of the certification process, and in particular their level of severity, needs to be derived from setting the express statutory provisions of the Act and the Rules in their context as a special part of UK civil procedure, with due regard paid to their purpose. Collective proceedings are a special form of civil procedure for the vindication of private rights, designed to provide access to justice for that purpose where the ordinary forms of individual civil claim have proved inadequate for the purpose. The claims which are enabled to be pursued collectively could all, at least in theory, be individually pursued by ordinary claim, in England and Wales under the CPR, under the protection of the Overriding Objective. It follows that it should not lightly be assumed that the collective process imposes restrictions upon claimants as a class which the law and rules of procedure for individual claims would not impose. The issues which gave rise to the forensic difficulties which led to the CATs refusal of certification in the present case all relate to the quantification of damages, both at the class level (where the claims were held to be unsuitable for aggregate damages) and at the individual level (where the method of distribution was found to pay insufficient respect to the compensatory principle). In this follow on claim Mr Merricks and the class he seeks to represent already have a finding of breach of statutory duty in their favour. All they would need as individual claimants to establish a cause of action would be to prove that the breach caused them some more than purely nominal loss. In order to be entitled to a trial of that claim they would (again individually) need only to be able to pass the strike out and (if necessary) summary judgment test: ie to show that the claim as pleaded raises a triable issue that they have suffered some loss from the breach of duty. Where in ordinary civil proceedings a claimant establishes an entitlement to trial in that sense, the court does not then deprive the claimant of a trial merely because of forensic difficulties in quantifying damages, once there is a sufficient basis to demonstrate a triable issue whether some more than nominal loss has been suffered. Once that hurdle is passed, the claimant is entitled to have the court quantify their loss, almost ex debito justitiae. There are cases where the court has to do the best it can upon the basis of exiguous evidence. There are cases, such as general damages for pain and suffering in personal injury claims, where quantification defies scientific analysis, where the court has to apply general tariffs developed over many years by the common law, and now enshrined in the Judicial College Guidelines for the Assessment of General Damages in Personal Injury. In many cases the court unashamedly resorts to an element of guesswork: see generally McGregor on Damages, 20th ed (2017), paras 10 001 to 10 007. A resort to informed guesswork rather than (or in aid of) scientific calculation is of particular importance when (as here) the court has to proceed by reference to a hypothetical or counterfactual state of affairs. The loss may have to be measured by reference to what the court thinks a claimant would have done if the defendant had not committed the wrong complained of. Sometimes the quantification depends upon what a third party would have done, and the court has to evaluate the claimants loss of a chance. Chaplin v Hicks [1911] 2 KB 786 is a famous example. At p 792 Vaughan Williams LJ said this: In early days when it was necessary to assess damages, no rules were laid down by the courts to guide juries in the assessment of damages for breach of contract; it was left to the jury absolutely. But in course of time judges began to give advice to juries; as the stress of commerce increased, let us say between the reigns of Queen Elizabeth and Queen Victoria, rule after rule was suggested by way of advice to juries by the judges when damages for breach of contract had to be assessed. But from first to last there were, as there are now, many cases in which it was difficult to apply definite rules. In the case of a breach of a contract for the delivery of goods the damages are usually supplied by the fact of there being a market in which similar goods can be immediately bought, and the difference between the contract price and the price given for the substituted goods in the open market is the measure of damages; that rule has been always recognized. Sometimes, however, there is no market for the particular class of goods; but no one has ever suggested that, because there is no market, there are no damages. In such a case the jury must do the best they can, and it may be that the amount of their verdict will really be a matter of guesswork. But the fact that damages cannot be assessed with certainty does not relieve the wrong doer of the necessity of paying damages for his breach of contract Fletcher Moulton LJ emphasised the entitlement of the claimant to an assessment, at p 796: The present case is a typical one. From a body of 6,000, who sent in their photographs, a smaller body of 50 was formed, of which the plaintiff was one, and among that smaller body 12 prizes were allotted for distribution; by reason of the defendants breach of contract she has lost all the advantage of being in the limited competition, and she is entitled to have her loss estimated. I cannot lay down any rule as to the measure of damages in such a case; this must be left to the good sense of the jury. This principle of entitlement to quantification notwithstanding forensic difficulty has stood the test of time and outlasted the involvement of civil juries in the assessment of damages. In Davies v Taylor [1974] AC 207, 212, Lord Reid said: There can be no question of proving as a fact that she would have received a certain amount of benefit. No one can know what might have happened had he not been killed. But the value of the prospect, chance or probability of support can be estimated by taking all significant factors into account. But, perhaps on an application of the de minimis principle, speculative possibilities would be ignored. I think that must apply equally whether the contention is that for some reason or reasons the support might have increased, decreased or ceased altogether. The court or jury must do its best to evaluate all the chances large or small, favourable or unfavourable. For a practical example of the application of this principle in the context of infringement of intellectual property rights see Experience Hendrix LLC v Times Newspapers Ltd [2010] EWHC 1986 (Ch), paras 204 205 per Blackburne J. This unavoidable requirement for quantification in order to do justice is not limited to damages. There are occasions where the court has to quantify or value some right or species of property and does not allow itself to be put off by forensic difficulties, however severe. For example a rateable value may have to be assessed in relation to property, such as a stately home, where there are no real comparables at all, and it has never been let. Or a market rent may have to be assessed as at a date when there are no remotely contemporaneous comparables. Assisted by experts, the court makes use of the best evidence available, often by making quite broad assumptions about market movements over a long period of time. See generally Dennard v PricewaterhouseCoopers [2010] EWHC 812 (Ch), para 182 per Vos J and Capita Alternative Fund Services (Guernsey) Ltd v Drivers Jonas (A Firm) [2012] EWCA Civ 1417, para 43 per Gross LJ. Sometimes the court has to determine the beneficial shares of cohabitees in co owned residential property, where there is no reliable evidence of the parties intentions. In such cases the court now broadly applies the maxim that equality is equity: see Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432. In none of these cases does the court throw up its hands and bring the proceedings to an end before trial because the necessary evidence is exiguous, difficult to interpret or of questionable reliability. In relation to damages, this fundamental requirement of justice that the court must do its best on the evidence available is often labelled the broad axe or broad brush principle: see Watson Laidlaw & Co Ltd v Pott Cassels & Williamson (A Firm) 1914 SC (HL) 18, 29 30 per Lord Shaw. It is fully applicable in competition cases. ASDA Stores Ltd v Mastercard Inc [2017] EWHC 93 (Comm) was a claim by an individual merchant arising out of (inter alia) the same breach as in these proceedings. After citing the Watson Laidlaw case Popplewell J said, at para 306: The broad axe metaphor appears to originate in Scotland in the 19th century. The more creative painting metaphor of a broad brush is sometimes used. In either event the sense is clear. The court will not allow an unreasonable insistence on precision to defeat the justice of compensating a claimant for infringement of his rights. There is European guidance to the same effect. In a Commission Staff Working Document entitled Practical Guide on Quantifying Harm in Actions for Damages based on articles 101 and 102, C (2013) 3440, the Commission said: 16. It is impossible to know with certainty how a market would have exactly evolved in the absence of the infringement of article 101 or 102 TFEU. Prices, sales volumes, and profit margins depend on a range of factors and complex, often strategic interactions between market participants that are not easily estimated. Estimation of the hypothetical non infringement scenario will thus by definition rely on a number of assumptions. In practice, the unavailability or inaccessibility of data will often add to this intrinsic limitation. 17. For these reasons, quantification of harm in competition cases is, by its very nature, subject to considerable limits as to the degree of certainty and precision that can be expected. There cannot be a single true value of the harm suffered that could be determined, but only best estimates relying on assumptions and approximations. Applicable national legal rules and their interpretation should reflect these inherent limits in the quantification of harm in damages actions for breaches of articles 101 and 102 TFEU in accordance with the EU law principle of effectiveness so that the exercise of the right to damages guaranteed by the Treaty is not made practically impossible or excessively difficult. There is an unresolved question, when there remains uncertainty which cannot be fully resolved, whether the benefit of the doubt should be given to the claimant or to the defendant. It is unnecessary to deal with it on this appeal, and the court did not seek, or have, the parties submissions on it. But it is clear from the above citations that justice requires that the damages be quantified for the twin reasons of vindicating the claimants rights and exacting appropriate payment by the defendant to reflect the wrong done. In the present context that second reason is fortified by the perception that anti competitive conduct may never be effectively restrained in the future if wrongdoers cannot be brought to book by the masses of individual consumers who may bear the ultimate loss from misconduct which has already occurred. There is nothing in the statutory scheme for collective proceedings which suggests, expressly or by implication, that this principle of justice, that claimants who have suffered more than nominal loss by reason of the defendants breach should have their damages quantified by the court doing the best it can on the available evidence, is in any way watered down in collective proceedings. Nor that the gatekeeping function of the CAT at the certification stage should be an occasion when a case which has not failed the strike out or summary judgment tests should nonetheless not go to trial because of difficulties in the quantification of damages. On the contrary, as the Court of Appeal observed at para 59, a refusal of certification of a case like the present is likely to make it certain that the rights of consumers arising out of a proven infringement will never be vindicated, because individual claims are likely to be a practical impossibility. The evident purpose of the statutory scheme was to facilitate rather than to impede the vindication of those rights. As Mr Paul Harris QC for Mr Merricks submitted, it is useful to ask whether the forensic difficulties which the CAT considered made the class claim unsuitable for aggregate damages, would have been any easier for an individual claimant to surmount. His answer, with which I would agree, was they would not be. The particular difficulties identified by the CAT lay in establishing the overall proportion of any overcharge passed on by merchants to consumers, by means of a weighted average of merchant pass on in each sector of the retail market for goods or services, due to the probable dearth of relevant data for some sectors of the market. That overall amount is equivalent to the loss suffered by consumers as a class. But an individual consumer would still have to address the same issue, at least for the years in which he or she was making purchases from merchants, in every sector of the retail market in which that consumer was active. If that is right why, one asks, should a forensic difficulty in quantifying loss which would not stop an individual consumers claim going to trial (assuming it disclosed a triable issue) stop a class claim at the certification stage? The answer depends to some extent upon the meaning of suitable as descriptive of claims both generally under section 47B in the phrase suitable to be brought in collective proceedings and under rule 79(2)(f) in the phrase suitable for an aggregate award of damages. It might mean (i) suitable in the abstract, or (ii) suitable in a relative sense: ie suitable to be brought in collective proceedings rather than individual proceedings, and suitable for an award of aggregate rather than individual damages. The British Columbia CPA solves this conundrum by using the word preferable instead of suitable, a word plainly asking the question preferable to what?. The different words used, as between BC and the UK, are at first sight striking. But a reflection upon the central purpose of the collective proceedings structure, which has substantially the same purpose in the UK as in BC, suggests that suitable to be brought in collective proceedings has the second of those two meanings. This is because collective proceedings have been made available as an alternative to individual claims, where their procedure may be supposed to deal adequately with, or replace, aspects of the individual claim procedure which have been shown to make it unsuitable for the obtaining of redress at the individual consumer level for unlawful anti competitive behaviour. The same analysis leads to the same conclusion about the meaning of suitable for an award of aggregate damages under rule 79(2)(f). The pursuit of a multitude of individually assessed claims for damages, which is all that is possible in individual claims under the ordinary civil procedure, is both burdensome for the court and usually disproportionate for the parties. Individually assessed damages may also be pursued in collective proceedings, but the alternative aggregate basis radically dissolves those disadvantages, both for the court and for all the parties. In general, although there may be exceptions, defendants are only interested in the quantification of their overall (ie aggregate) liability. For the claimants the choice between individual or aggregate assessment will usually be a question of proportionality. Another basic feature of the law and procedure for the determination of civil claims for damages is of course the compensatory principle, as the CAT recognised. It is another important element of the background against which the statutory scheme for collective proceedings and aggregate awards of damages has to be understood. But in sharp contrast with the principle that justice requires the court to do what it can with the evidence when quantifying damages, which is unaffected by the new structure, the compensatory principle is expressly, and radically, modified. Where aggregate damages are to be awarded, section 47C of the Act removes the ordinary requirement for the separate assessment of each claimants loss in the plainest terms. Nothing in the provisions of the Act or the Rules in relation to the distribution of a collective award among the class puts it back again. The only requirement, implied because distribution is judicially supervised, is that it should be just, in the sense of being fair and reasonable. Moving away from the general background of the law and procedure for civil claims, the following points need emphasis about the statutory structure itself. First, the Act and Rules make it clear that, subject to two exceptions, the certification process is not about, and does not involve, a merits test. This is because the power of the CAT, on application by a party or of its own motion, to strike out or grant summary judgment is dealt with separately from certification. The Rules make separate provision for strike out and summary judgment in rules 41 and 43 respectively, which applies to collective proceedings as to other proceedings before the CAT. There is no requirement at the certification stage for the CAT to assess whether the collective claim form, or the underlying claims, would pass any other merits test, or survive a strike out or summary judgment application, save that the CAT may, as a matter of discretion, hear such an application at the same time as it hears the application for a CPO: see rule 89(4). This is the first exception, but inapplicable in the present case because no such application was made. The second exception is that rule 79(3)(a) makes express reference to the strength of the claims, but only in the context of the choice between opt in and opt out proceedings. It does so in terms which, by the use of the words the following matters additional to the matters set out in paragraph (2), confirm that the factors relevant to whether the claims are suitable to be brought in collective proceedings do not include a review of the merits. By contrast with the conditions for certification in British Columbia, which do require that the pleadings disclose a cause of action, not even this basic merits threshold is prescribed in the UK by the Act or the Rules. Secondly, the listing of a number of factors potentially relevant to the question whether the claims are suitable to be brought in collective proceedings in rule 79(2), within the general rubric all matters it thinks fit shows that the CAT is expected to conduct a value judgment about suitability in which the listed and other factors are weighed in the balance. The listed factors are not separate suitability hurdles, each of which the applicant for a CPO must surmount. The hurdles (ie preconditions to eligibility under section 47B(5)(b) and (6)) are only that the claims are brought on behalf of an identifiable class, that they raise common issues and that they are suitable to be brought in collective proceedings: see also rule 79(1). In particular it is not a condition that the claims are suitable for an award of aggregate damages. That is only one of many relevant factors in the suitability assessment under rule 79(2). Thirdly, although the existence of common issues is a hurdle under section 47B(6) and rule 79(1)(b), in the sense that if none is raised the CAT may not make a CPO, it is also a factor relevant to suitability under rule 79(2). There the question is not whether there are common issues but whether collective proceedings are an appropriate means for the fair and efficient resolution of such common issues as are identified. At first sight this second inclusion of the common issues question under rule 79(2)(a) seems a little odd. It may contemplate a situation where a common issue may more fairly and economically be resolved by a procedure other than collective proceedings, perhaps by an individual test case. But it may also be a potential plus factor in the balance, where a common issue is ideal for determination in collective proceedings, or where all the big issues in a particular dispute are common issues. However that may be, it must certainly require the CAT first to determine, as it tried to do, what are the main issues in a particular case, and whether or not they are common issues. Unfortunately, the CAT got the common issue question wrong in relation to one of the two main issues in the present dispute, namely the merchant pass on issue, finding that it was not a common issue at all. That was the very issue about which the forensic difficulties identified by the CAT led it to refuse certification. Thus, both the two main issues in the present dispute are common issues, whereas the CAT considered that only one of them was. Error of law With the assistance of that analysis I turn to the question whether the refusal of a CPO in the present case by the CAT was vitiated by an error of law. I do so bearing well in mind that the CAT has unique expertise in making sophisticated economic analysis of a wide variety of data in competition cases, that it is an expert tribunal constituted for that purpose, with economists as well as lawyers on its panels of judges, and that it is the tribunal to which Parliament has entrusted both the exclusive jurisdiction over collective proceedings and, in particular, the conduct of the task of certification, with wide discretionary power for that purpose. In my judgment the CATs decision was vitiated by error of law. My reasons largely but not entirely concur with those of the Court of Appeal, but it is appropriate that I set out my own reasoning in full. I will do so mainly by separate treatment of the CATs two reasons for refusing certification (aggregate damages and distribution method), but I regard the question of certification as involving a single, albeit multi factorial, balancing exercise in which too much compartmentalisation may obscure the true task. In summary: a. The CAT got the common issue question wrong in relation to the merchant pass on issue, and therefore inevitably failed to include, as an important plus factor in the balance, the fact that this issue, and indeed both the main issues in the case, were common issues. That was an issue of law. b. The CAT treated the suitability of the claims for aggregate damages as if it were a hurdle rather than merely a factor to be weighed in the balance. That was wrong in law, because it misconstrued rule 79(2). c. In any event the CAT failed to construe suitability (in both of the respects in which it played a part in the process) in the relative sense, and thereby failed to take into account the need to consider whether individual proceedings were a relevant alternative, which they plainly were not, and whether the same difficulties as affected quantification in a collective claim would in any event afflict an individual claimant. d. The CAT did not take into account the general principle that the court must do what it can with the evidence available when quantifying damages, and therefore allowed undoubted forensic difficulties and shortcomings in the likely availability of data to lead it to a conclusion that claimants with a real prospect of (some) success should be denied a trial by the only procedure available to them in practice. e. The CAT was wrong in law to regard respect for the compensatory principle as an essential element in the distribution of aggregate damages. f. By contrast I would not criticise the CAT, as did the Court of Appeal, for having conducted a trial within a trial at the certification stage. g. Nor do I regard it as inevitably premature for the CAT to have regard to a proposed distribution method at the certification stage. Common Issues Having decided that the merchant pass on issue was not a common issue, the CAT continued, at para 67: However, that in itself does not mean that this case is unsuitable for a CPO. There is no requirement that all the significant issues in the claims should be common issues, or indeed and by contrast with the position under the Federal Rules of Civil Procedure in the United States that the common issues should predominate over the individual issues. What is required, in the words of section 47(6) CA, is that the claims are nonetheless suitable to be brought in collective proceedings. Here, the applicant seeks to address the problem of pass through by submitting that the Tribunal can arrive at an aggregate award of damages, which would then be distributed to the class members. At the beginning of this passage the CAT correctly addresses the common issues requirement as a certification hurdle (under section 47B(6)). It had already correctly concluded that there was nonetheless another common issue (the overcharge issue), sufficient to surmount the common issues hurdle. But it then treated the assertion (which it later rejected) that the case was suitable for aggregate damages as a sort of substitute for Mr Merricks failure to show that the merchant pass on issue was a common issue. Had the CAT concluded (as the Court of Appeal held and which is not appealed) that the merchant pass on issue was a common issue, then this would, or should, have been a powerful factor in favour of certification, under rule 79(2)(a). As already noted it meant that both the main issues in the case were common issues. In my view the remainder of the balancing exercise conducted by the CAT never recovered from a starting point in which, far from being treated as a major plus factor, the presence of common issues was regarded as being at the low level sufficient only to surmount the eligibility hurdle. On any view, it was a sufficiently important error to require the assessment of suitability to be carried out again. Suitability for Aggregate Damages Not a Hurdle The CAT concluded its review of the suitability of the case for aggregate damages at para 78. There follows a section on Distribution on which Mr Merricks also failed (paras 79 to 91) and a section on Authorisation of the Class Representative on which he succeeded (paras 92 to 104). There is then the stark conclusion at para 141(a) that certification should be refused. There is no express balancing of factors for or against certification, and the reader is, as the parties both agreed, left to assume that the CAT regarded both the unsuitability of the case for aggregate damages and the failure of the distribution proposal to accord with the compensatory principle as each being, separately, enough to require certification to be refused. Mr Mark Hoskins QC for Mastercard submitted, correctly, that a tribunal charged with a multi factorial balancing exercise may perfectly properly regard one factor among many as sufficient to compel a particular outcome. But in such a case, and in particular where some factors are statutory hurdles and others are not, I consider it incumbent upon a tribunal which regards a factor which is not a statutory hurdle but is nonetheless decisive to make that clear in express terms. Suitability of a case for aggregate damages is plainly not a hurdle. It is just one of many factors relevant to suitability of the claims for collective proceedings under rule 79(2). It may well be that it was the CATs failure to recognise that the merchant pass on issue was a common issue that led to it treating the aggregate damages question as being of decisive importance. The two factors are closely linked because it was the forensic difficulties attending the resolution of the extent of merchant pass on which led the CAT to the conclusion that the case was unsuitable for aggregate damages. Relative Suitability I have set out at length why I regard the suitability test as being best understood in a relative rather than abstract sense. It is clear that the CAT did not make any comparison between collective and individual proceedings when assessing the forensic difficulties lying in the path of the resolution of the merchant pass on issue. In my view it is clear that they would have been equally formidable to a typical individual claimant, seeking compensation for increased retail prices over the sectors of the market in which he or she was accustomed to make purchases. That was Mr Harriss submission, and Mr Hoskins had no cogent answer to it. If those difficulties would have been insufficient to deny a trial to an individual claimant who could show an arguable case to have suffered some loss, they should not, in principle, have been sufficient to lead to a denial of certification for collective proceedings. Quantifying Damages the Tribunal must do what it can with the available evidence I regard the CATs failure to give effect to this basic principle of civil procedure as the most serious of the errors of law discernible in its judgment. I start by acknowledging the expertise of the CATs factual review of the difficulties. At the risk of over simplification it may be summarised in this way. Mr Merricks expert team proposed to deal with the merchant pass on issue by deriving a weighted average pass on percentage from a review of each relevant market sector during the whole of the Infringement Period. For that purpose they proposed to divide the retail market into some 11 sectors. But the CAT reviewed a report from RBB Economics entitled Cost pass through: theory, measurement, and potential policy implications prepared for the Office of Fair Trading in 2014, which concluded that, although in some sectors there was reliable data, in many others the data was incomplete and difficult to interpret. Further, although it might be that litigation between retailers and Mastercard might yield further data by way of disclosure in these proceedings, that would be unlikely to cover the earlier part of the Infringement Period and would involve a very burdensome and hugely expensive exercise. But the CATs assessment fell well short of suggesting that Mr Merricks would be unable at trial to deploy data sufficient to have a reasonable prospect of showing that the represented class had suffered any significant loss. The fact that data is likely to turn out to be incomplete and difficult to interpret, and that its assembly may involve burdensome and expensive processes of disclosure are not good reasons for a court or tribunal refusing a trial to an individual or to a large class who have a reasonable prospect of showing they have suffered some loss from an already established breach of statutory duty. In the context of suitability for collective proceedings or aggregate damages, it is no answer to say that members of the class can bring individual claims. They would face the same forensic difficulties in establishing merchant pass on, and insuperable funding obstacles on their own, litigating for small sums for which the cost of recovery would be disproportionately large. The incompleteness of data and the difficulties of interpreting what survives are frequent problems with which the civil courts and tribunals wrestle on a daily basis. The likely cost and burden of disclosure may well require skilled case management. But neither justifies the denial of practicable access to justice to a litigant or class of litigants who have a triable cause of action, merely because it will make quantification of their loss very difficult and expensive. The present case may well present difficulties of those kinds on a grand scale, but they are difficulties which the CAT is probably uniquely qualified to surmount. It may be that gaps in the data will in some instances be able to be bridged by techniques of extrapolation or interpolation, and that some gaps will be unbridgeable, so that nothing is recovered in relation to particular market sectors or for parts of the Infringement Period. Nonetheless it is a task which the CAT owes a duty to the represented class to carry out, as best it can with the evidence that eventually proves to be available. Nor can it be ignored that ADR may help, either in relation to narrowing the issues, or towards an overall settlement. The Court of Appeal responded to the same aspect of the CATs reasoning by concluding that it amounted to the imposition of an inappropriately high merits threshold at the certification stage. While I would agree that such a merits threshold should not be applied, beyond the strike out or summary judgment levels, I would prefer to regard this part of the CATs analysis as more directed to the issue about suitability for collective proceedings. But the boundary between issues as to the likely availability of data at trial and issues as to the merits is by no means easy to define, or to identify in practice. That is why I have described my reasons for concluding that the CAT erred in law as closely allied with those of the Court of Appeal. Compensatory principle not essential in distribution of aggregate damages I have already noted that section 47C of the Act radically alters the established common law compensatory principle by removing the requirement to assess individual loss in an aggregate damages case, and that nothing in the Act or the Rules puts it back again, for the purposes of distribution. The CAT took the opposite view. At para 79 it said that in a case where the quantification of aggregate damages takes no account of individual loss, then the process of distribution must, in some way, put it back. Speaking of aggregate damages determined in that way, the CAT said: Such an approach can only be permissible, in our view, if there is then a reasonable and practicable means of getting back to the calculation of individual compensation. At para 88 the CAT continued: . even if it were possible to determine with some broad degree of accuracy the weighted average for pass through and thus to estimate the aggregate loss for the class each year, it is the significance of the individual issues remaining which mean that it is impossible in this case to see how the payments to individuals could be determined on any reasonable basis. this application for over 46m claims to be pursued by collective proceedings would not result in damages being paid to those claimants in accordance with that governing principle at all. For reasons already given, I consider that this approach discloses a clear error in law. A central purpose of the power to award aggregate damages in collective proceedings is to avoid the need for individual assessment of loss. While there may be many cases in which some approximation towards individual loss may be achieved by a proposed distribution method, there will be some where the mechanics will be likely to be so difficult and disproportionate, eg because of the modest amounts likely to be recovered by individuals in a large class, that some other method may be more reasonable, fair and therefore more just. For that purpose the statutory scheme provides scope for members within the class to be heard about the proposed distribution method. In many cases the selection of the fairest method will best be left until the size of the class and the amount of the aggregate damages are known. Trial within a trial The Court of Appeal regarded the questioning and cross examination of Mr Merricks experts at the certification hearing as an inappropriate trial within a trial, indicative of the imposition of an overly high merits threshold. I would not criticise the CAT on that account. The CATs own questioning of the experts achieved both greater clarity and a considerable improvement in the quantification methodology then being proposed on Mr Merricks behalf, in a case of unprecedented size and complexity. It was by no means hostile or adversarial, and the limited cross examination by counsel for Mastercard was closely supervised by the CAT. It may well be that questioning and cross examination of experts both should and will be a rare occurrence at certification hearings. But the present case is in my view one where an exception was justified. Prematurity Finally, the Court of Appeal regarded any consideration of distribution proposals at, and for the purposes of, the certification stage as premature. I agree that this will generally be true, not least because issues about distribution mainly engage the interests of the represented class inter se, rather than those of the proposed defendant. But there may be cases where the issues as to suitability of the claims for collective proceedings will be better addressed when the whole of the representatives proposed scheme, including distribution proposals, are looked at in the round. In the present case there was nothing in the proposals for distribution I would therefore dismiss the appeal. I agree with the Court of Appeal that which militated against certification, and an inappropriate element in the distribution proposals would normally be better dealt with at a later stage. Disposition the application for a CPO should be remitted to the CAT. Lord Kerr presided at the hearing of this appeal, participated fully in the deliberations which followed the hearing and oversaw the preparation and discussion of the judgments. He agreed that the appeal should be dismissed for the reasons set out in this judgment prior to his retirement on 30 September 2020. There was a delay between the completion of the judgments and their being handed down to allow, in accordance with the Courts practice, the law reporters and counsel an opportunity to check the judgments for typographical errors and minor inaccuracies, and to enable a press summary of the judgments to be prepared. The judgments were accordingly circulated in draft to the parties legal advisers, with Lord Kerr and Lord Thomas recorded as agreeing with this judgment, and a consequent majority of three to two in favour of dismissing the appeal. After those administrative steps had been completed, and three days before judgment was due to be handed down, Lord Kerr sadly died. Following his death Lord Reed as President of the Supreme Court directed under section 43(4) of the Constitutional Reform Act 2005 that the panel for this appeal be re constituted as consisting of myself, Lord Sales, Lord Leggatt and Lord Thomas. Lord Sales and Lord Leggatt explain in their joint judgment why they agree that, in these circumstances, this appeal should be dismissed, notwithstanding their disagreement with the reasoning in this judgment. LORD SALES AND LORD LEGGATT: The Competition Appeal Tribunal (CAT) declined to certify these proceedings as a class action (or collective proceedings, in the language of the applicable legislation) for two distinct reasons: first, because in the CATs assessment the class of claims was not suitable for an aggregate award of damages and in those circumstances not suitable to be brought in collective proceedings; and second, because the class representative, Mr Merricks, did not propose to distribute any damages awarded in a way which would reflect the individual losses suffered by the members of the class. We agree with Lord Briggs and the Court of Appeal that the CATs second reason was unsound. However, in our view its first reason was legitimate. We consider that the CATs assessment that the claims were not suitable for an aggregate award of damages, and on that account not suitable to be brought in collective proceedings, was lawful and the Court of Appeal should not have interfered with it. We recognise, however, that ours is the minority view. Lord Kerr, well before his untimely death on 1 December 2020, had expressed his agreement with the final version of the judgment of Lord Briggs and would have been recorded as agreeing with it. Were the result of his death now to be that the court is left evenly divided, the case would have to be re argued before a different constitution. As well as being hugely wasteful of resources, this would not be a just outcome. It would be a consequence simply of the happenstance of Lord Kerrs death occurring during the interval between the completion of the judgments and the date when they were formally handed down: a circumstance which has no bearing on the just decision of this appeal. We therefore agree that the appeal should be dismissed. We nevertheless explain the reasons why, had our view been shared by the other members of the court, we would have allowed Mastercards appeal. Class actions A new class action regime was introduced in the United Kingdom in 2015 as part of a wider set of reforms of private actions for breaches of competition law. The central rationale for any class action regime is that it enables claimants to benefit from the same economies of scale as are already naturally enjoyed by the defendant as a single litigant. It does so by allowing numerous individual claims to be combined into a single claim brought on behalf of a class of persons. Such a procedural device is especially valuable where a defendants wrongful conduct has caused harm to many people but each individual claim is too small to justify the expense of a separate lawsuit. Without such a device what may in aggregate be very substantial harm is likely to go unredressed. As Judge Posner put it in Carnegie v Household International Inc (2004) 376 F 3d 656, 661, a decision of the US Seventh Circuit Court of Appeals: The realistic alternative to a class action is not 17m individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30. This problem has historically impeded the bringing of private actions to seek redress for breaches of competition law in the UK. As the Government observed in explaining its decision to introduce a class action regime in this field: Breaches of competition law, such as price fixing, often involve very large numbers of people each losing a small amount, meaning it is not cost effective for any individual to bring a case to court. Allowing actions to be brought collectively would overcome this problem, allowing consumers and businesses to get back the money that is rightfully theirs as well as acting as a further deterrent to anyone thinking of breaking the law. See Private Actions in Competition Law: A consultation on options for reform government response (January 2013), p 6, para 2. Experience in other jurisdictions, however, has also shown that a class action regime presents risks. In particular, there is a risk that speculative actions may be brought claiming large amounts of damages even where there is no realistic prospect of recovering such damages, but where the size of the claims and the heavy costs of defending the action may be used as a threat to induce defendants to settle. In introducing the new regime in the UK, the Government was alert to this risk. Immediately after the passage quoted above, its response to the consultation on options for reform continued: Recognising the concerns raised that this could lead to frivolous or unmeritorious litigation, the Government is introducing a set of strong safeguards These strong safeguards were said to include strict judicial certification of cases so that only meritorious cases are taken forward. This appeal concerns the proper test for such certification and the nature and degree of the scrutiny which it is permissible for the CAT to undertake in operating this safeguard in the collective proceedings regime. Key features of the collective proceedings regime The regime was established by the Consumer Rights Act 2015, which made amendments to the Competition Act 1998 (the Act), and by new rules applicable to proceedings before the CAT: the Competition Appeal Tribunal Rules 2015 (SI 2015/1648). The amendments to the Act and the new rules (the CAT Rules) came into force at the same time on 1 October 2015. The regime is limited in scope to claims to which section 47A of the Act applies. These are, broadly speaking, claims for redress for loss or damage caused by an infringement or alleged infringement of competition law. Section 47B makes provision for collective proceedings whereby two or more such claims may be combined in one action brought before the CAT. Although claims to which section 47A applies can be brought in the CAT or in the courts, collective proceedings can only be brought in the CAT. It is clear from the terms of the Act and the CAT Rules that Parliament intended that the CAT should have a substantive role to play in deciding whether claims seeking redress for breaches of competition law may be pursued as collective proceedings and in actively managing such claims. The CAT is a specialist tribunal which is particularly well suited for this role. Each panel includes an economist and its legal members have extensive experience in the field. The CAT has considerable experience and expertise in assessing matters such as evidence from expert economists, economic data and the likely impact and practical workability of economic theories in addressing claims alleging anti competitive conduct. Group actions which enable a (potentially large) number of claimants to litigate common issues together, allowing them to share costs and obtain one judgment which is binding in relation to all their claims, have long been possible in England and Wales. Collective proceedings brought under section 47B of the Act, however, have two notable potential advantages for claimants compared to such group actions. They allow the legal rights of a class of people to be determined without the express consent of the members of the class; and they enable liability to be established and damages recovered without the need to prove that individual members of the class have suffered loss it being sufficient to show that loss has been suffered by the class viewed as a whole. Each of these features requires some amplification. Opt out collective proceedings Generally, legal proceedings may only be brought with the authority of the persons whose rights are sought to be enforced. Proceedings brought without such authority may be struck out and the person responsible for commencing them held liable to the defendant in damages. A significant innovation of the collective proceedings regime is the provision in section 47B(11) of the Act for opt out collective proceedings. These are proceedings brought by a representative on behalf of all the members of a class except any member who opts out by notifying the representative, in a manner and by a time specified, that his or her claim should not be included in the collective proceedings. This means that a person may become a claimant in collective proceedings without taking any affirmative step and, potentially, without even knowing of the existence of the proceedings and the fact that he or she is a claimant in them. This arrangement (which applies only to class members domiciled in the UK) is designed to facilitate access to legal redress for those who lack the awareness, capability or resolve required to take the positive step of opting in to legal proceedings. Aggregate damages A second major innovation (in terms of UK law) is effected by section 47C(2) of the Act, which provides: The tribunal may make an award of damages in collective proceedings without undertaking an assessment of the amount of damages recoverable in respect of the claim of each represented person. Such an award of damages is referred to in the CAT Rules as an aggregate award of damages: see rule 73(2). As pointed out by Professor Rachel Mulheron in an illuminating discussion of the present proceedings, there are two functions which a provision allowing damages to be awarded on an aggregate basis may in principle fulfil: see R Mulheron, Revisiting the Class Action Certification Matrix in Merricks v Mastercard Inc (2019) 30 Kings LJ 396, 412 417. The first concerns the quantification of loss. Where the liability of the defendant to the members of a class has been established, such a provision enables damages to be assessed by quantifying the loss suffered by the class as a whole, without the need to determine what loss each individual member of the class has suffered. This involves a departure from the normal compensatory principle, whereby the object of an award of damages for a civil wrong is to put the claimant (as an individual) in the same financial position as if the wrong had not occurred. It is clear that section 47C(2) is intended to serve this purpose. A provision for aggregate damages may, however, go further and serve an additional purpose. It may also permit liability to be established on a class wide basis without the need for individual members of the class to prove that they have suffered loss, even though this would otherwise be an essential element of their claim. As Professor Mulheron notes, the nature of a claim for a breach of competition law is that it constitutes a claim in tort for a breach of statutory duty. Under the general law such a claim is not actionable without proof of loss. In other words, a defendant commits no wrong and incurs no liability towards a claimant unless its anti competitive behaviour causes that claimant to suffer financial harm. An aggregate damages provision may dispense with this requirement by permitting liability towards all the members of a class to be established by proof that the class as a whole has suffered loss without the need to show that any individual member of the class has done so. The Canadian legislation referred to by Lord Briggs has not been interpreted as allowing liability, as well as the quantum of loss, to be established on a class wide basis. The British Columbia Class Proceedings Act 1996, section 29(1), provides that a court may make an aggregate monetary award if (amongst other requirements) no questions of fact or law other than those relating to the assessment of monetary relief remain to be determined . In Pro Sys Consultants Ltd v Microsoft Corpn [2013] SCC 57 (Microsoft), paras 128 134, the Supreme Court of Canada held that this provision could not be used to establish proof of loss where this is an essential element of proving liability. Rothstein J said (at para 133): The [British Columbia legislation] was not intended to allow a group to prove a claim that no individual could. Rather, an important objective of the [legislation] is to allow individuals who have provable individual claims to band together to make it more feasible to pursue their claims. The UK legislation is not limited in this way. Section 47C(2) of the Act contains no wording comparable to that of section 29(1)(b) of the British Columbia Class Proceedings Act, quoted above. Section 47C(2) is phrased in broad terms and is properly read as dispensing with the requirement to undertake an assessment of the amount of damages recoverable in respect of the claim of each represented person for all purposes antecedent to an award of damages, including proof of liability as well as the quantification of loss. Such an interpretation better accords both with the language used and with the statutory objective of facilitating the recovery of loss caused to consumers by anti competitive behaviour. Certification A class action procedure which has these features provides a potent means of achieving access to justice for consumers. But it is also capable of being misused. The ability to bring proceedings on behalf of what may be a very large class of persons without obtaining their active consent and to recover damages without the need to show individual loss presents risks of the kind already mentioned, as well as giving rise to substantial administrative burdens and litigation costs. The risk that the enormous leveraging effect which such a class action device creates may be used oppressively or unfairly is exacerbated by the opportunities that it provides for profit. As the Court of Appeal observed in the present case, the power to bring collective proceedings was obviously intended to facilitate a means of redress which could attract and be facilitated by litigation funding: [2019] EWCA Civ 674; [2019] Bus LR 3025, para 60. Those who fund litigation are, for the most part, commercial investors whose dominant interest is naturally to make money on their investment from the fruits of the litigation. As noted earlier, to ensure that the substantive legal advantages afforded by the collective proceedings regime are conferred only in appropriate cases, the regime contains a control mechanism of requiring collective proceedings to be certified by the CAT. Collective proceedings cannot be brought as of right and the CAT is given a broad discretion in deciding whether, and if so in what form, collective proceedings may be pursued. Thus, section 47B(4) of the Act provides that collective proceedings may be continued only if the CAT makes a collective proceedings order (CPO). Section 47B(5) lays down two necessary conditions for making a CPO: (i) the person who brings the proceedings must be a person who could be authorised by the CAT to act as the representative claimant in those proceedings, and (ii) the CPO is in respect of claims which are eligible for inclusion in collective proceedings. Pursuant to section 47B(6), claims are eligible for inclusion in collective proceedings only if two conditions are fulfilled. These are that the CAT considers that the claims (i) raise the same, similar or related issues of fact or law (the common issues requirement), and (ii) are suitable to be brought in collective proceedings (the suitability requirement). The meaning and scope of the suitability requirement is central to this appeal. The CAT rules Section 47B(1) provides that collective proceedings may be brought [s]ubject to the provisions of this Act and Tribunal rules. Rule 2(2) of the CAT Rules requires that the rules to be applied by the CAT are interpreted in accordance with the governing principles set out in rule 4. Rule 4 is in similar terms to Part 1 of the Civil Procedure Rules 1998, which requires courts to seek to give effect to the overriding objective of dealing with cases justly and at proportionate cost and also requires the active management of cases. Rule 4(2) provides that dealing with a case justly and at proportionate cost includes, so far as is practicable: ensuring that it is dealt with expeditiously and fairly; (d) (e) allotting to it an appropriate share of the Tribunals resources, while taking into account the need to allot resources to other cases; By virtue of section 47B(1) and the co ordinated introduction of the CAT Rules in tandem with the collective proceedings provisions in the Act, it is clear that the provisions in the Act and the rules are to be read together and as subject to the same general principles. In applying and exercising its powers under the collective proceedings provisions in the Act, the CAT must therefore seek to ensure that claims are dealt with justly and at proportionate cost, reading that objective in the light of the particular reforms effected by the primary legislation to which we have referred. Part 5 of the CAT Rules is concerned specifically with collective proceedings and collective settlements. Rule 75 deals with the contents of a collective proceedings claim form and provides that it shall contain, among other things, a summary of the basis on which it is contended that the criteria for certification and approval in rule 79 are satisfied (rule 75(3)(e)) and a statement of the relief sought including where applicable, an estimate of the amount claimed in damages, including whether an aggregate award of damages is sought, supported by an explanation of how that amount has been calculated (rule 75(3)(i)(i)). Rule 76(9) provides that as soon as practicable the CAT will hold a case management conference to give directions in relation to the application for a CPO. This recognises that collective proceedings are an unusual form of litigation which are likely to require careful management by the CAT and indicates that the CAT has a substantive role above and beyond being a mere rubber stamp for the issuing of collective proceedings. This is also recognised by the requirement in rule 77(1) to hear the parties before a CPO may be made. Rule 77(1) tracks section 47B(5) of the Act in specifying the two conditions which must be satisfied before the CAT may make a CPO the first being that the CAT considers that the proposed class representative is a person who could be authorised to act in that capacity in accordance with rule 78, and the second that the order is in respect of claims or parts of claims which are eligible for inclusion in collective proceedings in accordance with rule 79. Authorisation of the class representative Rule 78 deals with authorisation of the class representative. An applicant may be authorised to act as the class representative only if the CAT considers this to be just and reasonable (rule 78(1)). This is to be assessed by reference to a number of factors, including whether that person would fairly and adequately act in the interests of the class members (rule 78(2)(a)); if there is more than one applicant seeking authorisation to act as class representative, which of them would be the most suitable (rule 78(2)(c)); and whether the applicant will be able to pay the defendants recoverable costs if ordered to do so (rule 78(2)(d)). In determining whether the applicant would act fairly and adequately in the interests of the class members, the CAT is required to take into account all the circumstances, including whether the proposed class representative is a member of the class, and if so, its suitability to manage the proceedings (rule 78(3)(a)). It is clear that in these sub rules, the word suitable or suitability means suitable to fulfil the purpose which a class representative is intended to fulfil in the context of the collective proceedings regime. This is consistent with the meaning of the suitability requirement in rule 79, to which we now come. Eligibility of claims Rule 79 deals with the certification of claims as eligible for inclusion in collective proceedings. Lord Briggs has set out the full text. For present purposes, the following parts of it are relevant. Rule 79(1) states that the CAT may certify claims as eligible for inclusion in collective proceedings where, having regard to all the circumstances, it is satisfied that three conditions are fulfilled, namely that the proceedings are (a) brought on behalf of an identifiable class of persons; (b) raise common issues; and (c) are suitable to be brought in collective proceedings. Three points arise from this. First, the rule makes clear that the question of suitability is distinct from the question whether the claims raise common issues. Second, by using the phrase where it is satisfied rather than simply stating the three conditions, the rule emphasises that deciding whether the conditions are fulfilled is a matter for the judgment of the CAT. Third, the rule requires the CAT in making that decision to adopt a very wide frame of reference, in that it is to have regard to all the circumstances. Rule 79(2) reinforces these points. It is central to this appeal. It provides as follows: (2) In determining whether the claims are suitable to be brought in collective proceedings for the purposes of paragraph (1)(c), the Tribunal shall take into account all matters it thinks fit, including (a) whether collective proceedings are an appropriate means for the fair and efficient resolution of the common issues; (b) collective proceedings; the costs and the benefits of continuing the (c) whether any separate proceedings making claims of the same or a similar nature have already been commenced by members of the class; the size and the nature of the class; (d) (e) whether it is possible to determine in respect of any person whether that person is or is not a member of the class; (f) whether the claims are suitable for an aggregate award of damages; and (g) the availability of alternative dispute resolution and any other means of resolving the dispute, including the availability of redress through voluntary schemes whether approved by the [Competition and Markets Authority] under section 49C of the 1998 Act or otherwise. This provision focuses on the suitability requirement as a distinct condition for the making of a CPO. It again emphasises the substantive rather than merely checking role for the CAT in making the relevant judgment whether claims are suitable to be brought in collective proceedings and again emphasises the wide frame of reference to be adopted, by saying that the CAT shall take into account all matters it thinks fit, and providing a non exhaustive list of matters which the CAT might think fit to consider and place weight upon. The width of the frame of reference in itself shows that the CATs judgment as to suitability is central, since the very wide range of matters to which the CAT might have regard, the disparity in their nature and their incommensurability means that there may often be wide scope for reasonable differences of view about what relevance or weight should be given to what factors and what overall conclusion should be drawn on the suitability issue. The Act and the CAT Rules identify the CAT as the body whose judgment matters for this purpose. Rule 79(3) identifies additional factors to those set out in rule 79(2) which the CAT may take into account if it thinks fit in deciding whether collective proceedings should be opt in or opt out proceedings, including the strength of the claims. This indicates that the strength of the claims is likely to be a matter of particular significance in determining whether proceedings are suitable to be brought as opt out proceedings, but it does not give rise to an inference that the strength of the claims can never be relevant for the purposes of rule 79(2). The explicit language used in rule 79(2) that the CAT should take into account all matters it thinks fit allows it to do so in an appropriate case. Clearly, if the CAT thinks it relevant when deciding on suitability to have regard in any way to the strength of the claims, it has to bear in mind that it would be wholly inappropriate at the preliminary stage of deciding whether claims may proceed by way of collective proceedings to hold a mini trial. Furthermore, since the object of the collective proceedings regime is to facilitate access to justice for those with small but potentially meritorious claims, it would also be wrong in principle to make any consideration of the merits of the claims at the CPO stage excessively demanding, thereby preventing claimants from having enhanced access to the judicial process under the collective proceedings regime without a sufficiently good reason. This point is further underlined by rule 79(4), which provides that a strike out application under rule 41 or a summary judgment application under rule 43 may be heard at the hearing of an application for a CPO. The CAT has the usual powers to strike out a claim, including if it considers that there are no reasonable grounds for making it (rule 41), and to give summary judgment for a claimant or a defendant if it considers that either of them has no real prospect of success (rule 43). Given these powers, the suitability requirement should not be interpreted as involving a test of the substantive merits of the claims which is comparable to but higher than the test that would be applicable under these rules. The suitability requirement A critical issue on this appeal is: what is the suitability requirement concerned with? What makes claims suitable to be brought in collective proceedings, over and above the fact that they raise common issues? In our view, the word suitable in this context means suitable to be grouped together and determined collectively in accordance with the regime established by the Act and the CAT Rules. Applying this criterion requires the tribunal to focus on the special features of this regime and the objects which collective proceedings under the regime are intended to fulfil. This includes consideration of whether collective proceedings offer a reasonable prospect of achieving a just outcome. It also calls for an assessment of proportionality: is combining these claims and determining them collectively in accordance with the collective proceedings regime likely to achieve the fair determination of the claims at proportionate cost? If other forms of proceeding are in contemplation, either by way of a group action or some different collective proceeding, it may be relevant to assess which form of proceeding is better suited to securing justice at proportionate cost when deciding whether, overall, the proceedings for which certification is sought are suitable. We cannot agree with Lord Briggs, however, that the suitability requirement is relative and solely a question of whether claims are suitable to be brought in collective proceedings rather than individual proceedings. First of all, this is not what the Act says. If the intention had been to make the test inherently comparative, it would have been easy to do so by using language such as that used in the British Columbia Class Proceedings Act, section 4(1)(d), which imposes a test of whether a class proceeding would be the preferable procedure. As Lord Briggs observes, the use of that term implicitly poses the question preferable to what?. By contrast, the UK legislature has not chosen to formulate the criterion as one of comparative merit or suitability. Second, it does not follow that, because collective proceedings are an alternative to conventional proceedings brought by or on behalf of individuals, they are intended to be available in any case where they would be less unsatisfactory than such individual proceedings. As we have noted, collective proceedings confer substantial legal advantages on claimants and burdens on defendants which are capable of being exploited opportunistically. In the absence of wording which says so, we cannot accept that demonstrating that the members of the proposed class would face greater difficulties pursuing their claims individually must be regarded as sufficient to justify allowing their claims to be brought as a collective proceeding, with the advantages that this confers. Such an approach would very significantly diminish the role and utility of the certification safeguard. Third, in so far as comparisons are relevant, the choice is not in any case a binary one. The question is not whether some form of collective proceeding is preferable to individual proceedings; it is whether the claims sought to be included in the collective proceedings which the tribunal is asked to certify are suitable to be combined in such proceedings. Answering that question in the negative does not mean that there is no other class of claims which is suitable to be brought as collective proceedings. There may well be. Suitability for aggregate damages In determining whether the claims sought to be combined in collective proceedings are suitable to be brought in such proceedings, one of the matters specifically identified in rule 79(2) is whether the claims are suitable for an aggregate award of damages. In some cases this is likely to be a critical consideration. As we noted earlier, the potential for an aggregate award of damages is a major innovative feature of the collective proceedings regime which, in cases where it is available, has substantive legal effects. Such an award dispenses not only with the legal requirement to calculate damages on an individual basis but also with the legal requirement for a claimant to prove individual loss in order to establish liability. Contrary to the position spelled out by Rothstein J in the Microsoft case (quoted earlier), it allows a group to prove a claim even though individuals within the group might well not be able to do so. In our view, suitable has a similar meaning in considering whether the claims are suitable for an aggregate award of damages to its meaning in considering the more general question of whether the claims are suitable to be brought in collective proceedings. In determining whether a class of claims is suitable for an aggregate award of damages, the focus is on whether the claims are suitable to be grouped together as a unit for the purpose of proving and assessing loss, justly and at proportionate cost. This calls for an assessment of whether there is, or is likely to be if the proceedings are authorised to continue as collective proceedings, a method available which can be used to assess loss suffered by the class as a whole with a reasonable degree of accuracy. In making this judgment, the CAT will naturally have in mind the broad axe principle emphasised by Lord Briggs. The common law recognises that, even where the loss suffered by a claimant is purely financial and is in principle a precise sum of money, determining this sum accurately may be practically impossible or achievable only at disproportionate cost. The law does not require unreasonable precision from the claimant: see eg Sainsburys Supermarkets Ltd v Visa Europe Services Llc [2020] UKSC 24; [2020] Bus LR 1196, paras 217 223. At the same time, justice to a defendant requires that it should not be ordered to pay damages which are not based on a reasonable estimate of loss (all the more so if what may be a very large sum of damages is being awarded without requiring the proof of individual loss which is normally a condition of liability). The object at the certification stage is not of course to quantify the loss suffered by the proposed class. But in order to be satisfied that the proposed class of claims is suitable for an aggregate award of damages, the CAT is entitled to require the class representative to demonstrate that there is a method which is capable of establishing loss in a reasonable and just way, and at proportionate cost, on a class wide basis. Again, we do not accept that the test of suitability is relative. Showing that claims would be difficult or impossible to prove or quantify if pursued individually does not by itself make them suitable for an award of aggregate damages, let alone establish whether the class of claims for which certification is sought is suitable for such an award. These proceedings The number of claims sought to be included in these proceedings is by any standard vast. Mr Merricks (the applicant) applied to the CAT to make a CPO in respect of the following class: Individuals who between 22 May 1992 and 21 June 2008 purchased goods and/or services from businesses selling in the UK that accepted Mastercard cards, at a time at which those individuals were both (1) resident in the UK for a continuous period of at least three months, and (2) aged 16 years or over. It is to be noted that the class is not limited to individuals who, at any time during the specified 16 year period, possessed or used a Mastercard credit or debit card: it includes anyone (resident in the UK for at least three months and aged 16 or over at any relevant time) who purchased any goods or services from any business selling in the UK that accepted Mastercard cards during this entire period. The number of such businesses rose from about 500,000 at the start of the period to about 800,000 at the end. These businesses (the merchants) spanned the whole of the UK economy and operated in very disparate markets. In consequence, the class in respect of which the CPO was sought was, in substance, the whole of the adult consumer population of the UK during the 16 year claim period, which was about 46.2m people. As described in more detail by Lord Briggs, the proposed claim relies on a decision of the European Commission in December 2007 as a basis for contending that the merchant service charge paid on transactions by the merchants who participated in the Mastercard payment card scheme was, throughout the claim period, higher than it should have been as a result of a breach by Mastercard of competition law. The breach involved fixing a default fee called the multilateral interchange fee (MIF) charged (unless otherwise agreed) by the cardholders bank to the merchants bank on payments made using the card. This fee was included in the merchant service charge deducted from payments by the merchants bank. It typically accounted for the vast majority of the service charge (eg 1% out of a total charge of 1.3% of a credit card payment). The allegation made by the applicant was that the merchants had passed on the element of unlawful overcharge included in the merchant service charge to all their customers (whether those customers used a Mastercard card or not) by charging higher prices for goods or services than they would otherwise have done. The present proceedings were brought on an opt out basis and claimed (as the only relief sought) an aggregate award of damages in a sum estimated in the collective proceedings claim form at around 14 billion. The proposed method of establishing loss At the hearing of the application for a CPO, the applicant adduced expert evidence to explain the basis for the class action and how he proposed to establish that the class as a whole had suffered loss and the amount of such loss if the action was allowed to proceed. The experts methodology involved three steps. The first step was to calculate the total value of payments made by customers using Mastercard cards in the UK in each year of the claim period. This has been referred to as the volume of commerce. It should be possible to calculate the volume of commerce using Mastercards own records. The second step would be to estimate the amount by which the merchant service charge paid by merchants on the volume of commerce was higher than it would otherwise have been because of the overcharge resulting from the MIF. There were in fact a number of different MIFs and these changed over the 16 years of the claim period. It was not in dispute, however, that the amount of the overcharge was capable of assessment, as the MIFs which applied at different times were known and it was common ground that 100% of the MIFs was passed on to the merchants through the merchant service charge. The third step in the experts proposed method was to estimate the extent to which the overcharge was passed on by merchants to their customers in the form of increased retail prices. It was in relation to this step that problems arose. The extent to which merchants might have passed on the overcharge to their customers rather than absorbing it themselves will depend on the markets in which they operated and on their own business strategies: see Sainsburys Supermarkets Ltd v Visa Europe Services Llc; Sainsburys Supermarkets Ltd v Mastercard Inc [2020] UKSC 24; [2020] Bus LR 1196, para 205. Thus, the experts instructed by the applicant recognised that there will not have been one common rate of pass on which was applied by merchants across the board. Their proposed approach was to arrive at a global figure by calculating weighted average rates of pass on over time for different sectors of the economy. They produced a table which broke down the UK economy into 11 broad sectors: food and drink, mixed business, clothing, household, other retailers, motoring, entertainment, hotels, travel, financial and other services. As the experts accepted, however, when questioned by the tribunal, and as the CAT found, within each of these broad sectors there is a wide variety of businesses which may have had quite different rates of pass on. For example, the motoring sector covered fuel, new vehicle sales, car rental, and garage repair. In food and drink, the extent of pass on by major supermarket chains may be significantly different from the rate for local greengrocers, butchers etc. It was also accepted that rates of pass on may have varied geographically across the UK, as well as over time during the 16 year claim period. The antiquity of the claim period beginning over 25 years ago and ending in 2008 exacerbated the difficulties, particularly in relation to the availability of data. The CATs decision At para 57 of its judgment the CAT correctly observed that an application for a CPO is not a mini trial and that the applicant does not have to establish his case in anything like the way he would at trial. However, it noted that the applicant had to do more than show that he had an arguable case on the pleadings, meaning that he had also to satisfy the requirement that the claims of all the enormous class of persons whom the applicant was seeking to represent were suitable to be brought as a collective proceeding. The CAT observed that, although collective proceedings on an opt out basis can bring great benefits for the class members which could not otherwise be achieved, like other substantial competition damages claims such proceedings can be very burdensome and expensive for defendants and under section 47B(6) it is the CATs role to scrutinise an application for a CPO to ensure that only appropriate cases proceed. In considering the expert evidence relied on by the applicant to seek to satisfy the CAT that the claims were suitable for determination in collective proceedings, the CAT decided that the approach it should adopt could appropriately be drawn from the following passage in the judgment of Rothstein J in the Supreme Court of Canada in the Microsoft case (at para 118): the expert methodology must be sufficiently credible or plausible to establish some basis in fact for the commonality requirement. This means that the methodology must offer a realistic prospect of establishing loss on a class wide basis so that, if the overcharge is eventually established at the trial of the common issues, there is a means by which to demonstrate that it is common to the class (ie that passing on has occurred). The methodology cannot be purely theoretical or hypothetical, but must be grounded in the facts of the particular case in question. There must be some evidence of the availability of the data to which the methodology is to be applied. Neither party sought to argue before the CAT that this was not an appropriate approach for the CAT to adopt (see paras 58 59 of the CATs judgment). It was not in dispute that the methodology identified by the applicants experts was a valid theoretical approach to estimating loss on a class wide basis for the class of over 46m people represented by the applicant. The argument before the CAT turned on the availability of the data which would be required to enable the methodology to be applied in practice. As mentioned, the method proposed by the experts relied on being able to estimate a weighted average rate of pass on of the relevant overcharge by merchants to their customers for each sector of the economy during each of the 16 years of the claim period. The experts expressed the view that it should be possible to acquire the data necessary for this analysis from a combination of three sources: (a) information derived from claims which have been brought against Mastercard by retailers in a variety of sectors; (b) disclosure from third parties; and (c) publicly available data. The CAT considered each of these proposed sources and found that they could not realistically be expected to yield sufficient data to enable the claimants methodology to be applied on a sufficiently sound basis to calculate the loss sustained by the class as a whole (paras 69 78). The first potential source of data was information derived from claims brought by retailers against Mastercard. However, these claims relate to periods commencing in 2006, so there is minimal overlap with the claim period in the present proceedings. The CAT found that [i]t would be impossible to extrapolate back from any findings or expert analyses of pass through in around 2006 to derive meaningful figures for much of the claims period in the present action (para 73). The CAT was clearly entitled to make this assessment on the evidence before it. We would add that still less could it be thought that such information could provide a basis for extrapolation to allow any meaningful or reliable assessment to be made regarding the rate of pass on in the many sectors and sub sectors of the UK economy which are not represented in the retailer claims brought against Mastercard. As regards the second potential source, the CAT noted that in theory requests could be made for disclosure of evidence from third party retailers in the various different sectors of the economy to gather data to calculate their various rates of pass on at relevant times. But it observed that in view of the number of markets to be considered, the long period involved, and the wide range of data required to arrive at a meaningful estimate, this would be a very burdensome and hugely expensive exercise; merchants could be expected to resist providing such information; the costs budget filed with the application for the CPO made no provision for the cost of this exercise; and in sum, in the CATs view, such extensive third party disclosure is wholly impractical as a way forward (para 74). Again, the CAT was clearly entitled to make this assessment on the evidence before it. As to published data, a report by RBB Economics relied on by the experts itself made clear that the publicly available data were incomplete and difficult to interpret. Apart from that report, the CAT noted that no real attempt appears to have been made to consider what data are available for each of the broad sectors over the relevant period (para 75). Again, on the material before it, the CAT was clearly entitled to conclude that it was not satisfied that there were sufficient publicly available data to allow the proposed methodology to be implemented. The CAT stated its conclusion on the question whether the claims were suitable for an award of aggregate damages at paras 77 78 of its judgment: 77. We accept that in theory calculation of global loss through a weighted average pass through, as explained in the evidence and as summarised above, is methodologically sound. But making every allowance for the need to estimate, extrapolate and adopt reasonable assumptions, to apply that method across virtually the entire UK retail sector over a period of 16 years is a hugely complex exercise requiring access to a wide range of data. We certainly would not expect that analysis to be carried out for the purpose of a CPO application, but a proper effort would have had to be made to determine whether it is practicable by ascertaining what data is reasonably available. Given the massive size of the claim, a difference of even 10% in the average pass through rate makes a very substantial difference in financial terms. 78. Accordingly, applying the Microsoft test we are unpersuaded on the material before us that there is sufficient data available for this methodology to be applied on a sufficiently sound basis. It follows that we are not satisfied, and indeed very much doubt, that the claims are suitable for an aggregate award of damages: see rule 79(2)(f). The CAT also gave a second and separate reason for concluding that the claims were not suitable to be brought in collective proceedings. This was that, even if the total loss to the whole class was capable of calculation in the manner proposed, there was no reasonable and practicable means of estimating the loss suffered by each individual claimant. The experts accepted that this was so. The method put forward by the applicant for distributing any award of aggregate damages was to divide any damages awarded in respect of each year of the claim period equally between each member of the class for that year. The CAT did not consider this approach acceptable, stating (at para 88): The governing principle of damages for breach of competition law is restoration of the claimants to the position they would have been in but for the breach. The restoration will often be imprecise and may have to be based on broad estimates. But this application for over 46m claims to be pursued by collective proceedings would not result in damages being paid to those claimants in accordance with that governing principle at all. The CAT went on to consider whether the applicant met the requirements for authorisation to act as the class representative and concluded that he did. However, since, in the CATs view, the claims were not suitable to be brought in collective proceedings, the application for a CPO was dismissed. The Court of Appeals decision When the applicant sought to appeal from the CATs decision, a preliminary issue arose as to whether the Court of Appeal had jurisdiction to entertain an appeal. Under section 49(1A)(a) of the Act an appeal lies on a point of law from a decision of the CAT in collective proceedings as to the award of damages. The Court of Appeal held that the decision of the CAT to refuse to make a CPO fell within this provision because it had the effect of barring the claim to an award of aggregate damages under section 47C(2), which was the only type of relief sought in the collective proceedings and is a unique remedy not otherwise obtainable: see [2018] EWCA Civ 2527; [2019] Bus LR 1287, paras 20, 27, 28. On the substantive appeal, the Court of Appeal decided that both reasons given by the CAT for refusing to make a CPO involved errors of law. On the question whether the claims were suitable to be brought in collective proceedings (and, in particular, for an aggregate award of damages), the Court of Appeal considered that the approach taken by the CAT to the expert evidence was based on a misdirection as to the correct test to be applied. In the Court of Appeals view, in assessing the availability of data to establish a claim for aggregate damages, the CAT had demanded too much of the applicant at the certification stage: [2019] EWCA Civ 674; [2019] Bus LR 3025, paras 48 54. On the question of distribution, the Court of Appeal considered both that it was premature for the CAT to take account of the proposed method of distributing any aggregate award of damages at all at the certification stage and that the CAT was wrong to regard it as a requirement that any award must be distributed in a way which corresponds, even if only approximately, to individual loss: see paras 56 62. Mastercard on this further appeal contests the conclusion reached by the Court of Appeal on each of these two issues. The distribution issue It is convenient to deal with the distribution issue first. We can do so briefly, as we agree with Lord Briggs on this issue. The dispute is a narrow one, as Mastercard accepts that there is no legal requirement that an award of aggregate damages must be distributed to class members in a way which attempts to compensate them for their individual losses; and the applicant accepts that the CAT is entitled to treat the way in which it is proposed that an award of aggregate damages should be distributed as a relevant factor when considering whether the suitability requirement is satisfied in order for a CPO to be made. But the applicant objects that the CAT went further than this and treated the existence of a significant degree of correspondence between the proposed distribution and losses suffered by individuals as a mandatory legal requirement which must be met before a CPO can be made. In our view, Mastercard was right to accept the first point. We think it clear that, under the legislative scheme, where an aggregate award of damages is made, that award is the means by which compensation is achieved: that is to say, by providing compensation for loss suffered by the class of represented persons as a whole. As discussed earlier, section 47C of the Act dispenses with the requirement that would ordinarily apply to undertake an assessment of the losses suffered by individual members of the class. How such an award of damages is distributed is a further and separate question. There is no necessity at that stage to try to estimate loss: only to adopt a method of distribution which is fair. Other things being equal, a fair method will no doubt be one which gives a larger share of the award of damages to someone who can be shown to have suffered a greater individual loss. But it may be impractical or disproportionate to adopt such a method of distribution, particularly where the size of the class is large and the amount of damages awarded small, considered on a per capita basis. We can see nothing wrong in principle with a conclusion that the fairest method of distribution is, in the circumstances of a particular case, an equal division among all the members of the class (or, as proposed by the applicant in this case, an equal division among all the relevant class members of the damages referable to each year of the claim period). Like Lord Briggs, we do not think it is necessarily premature to have regard at the certification stage to any proposal made by the applicant provisional though it would necessarily be as to how an aggregate award of damages would be distributed among the class of persons represented. However, the fact that it is not practicable and reasonable, and therefore not proposed, to adopt a method of distribution which reflects individual loss is not a reason which requires the CAT to refuse to make a CPO as a matter of law. Contrary to Mastercards submission, we think it clear that the CAT did consider that it is only permissible to make an award of aggregate damages if there is a reasonable and practicable means of distributing the damages to the members of the class in a way which seeks to compensate them for their individual losses. That was an error of law on the part of the CAT. There was nothing legally objectionable about the approach to the distribution of damages proposed by the applicant. This ground of the CATs decision to decline to make a CPO therefore cannot be sustained. That error does not, however, affect the separate reason given by the CAT for its decision: namely, that it was not satisfied that the claims sought to be included in the proceedings were suitable for an aggregate award of damages. In relation to that conclusion, two questions arise: (i) did the CAT err in law in reaching that conclusion; and (ii) if not, was the CAT entitled on that basis to decide that the claims were not suitable to be brought in collective proceedings? Suitability for aggregate damages As noted, in determining whether the class of claims sought to be brought in these proceedings is suitable for an award of aggregate damages, the CAT adopted a test articulated by the Supreme Court of Canada in the Microsoft case (quoted at para 135 above). In the relevant passage (at para 118 of the judgment) Rothstein J was not addressing the question of the suitability of claims for an aggregate award of damages (which is not a criterion under the applicable Canadian legislation), but whether the issue of loss was capable of being resolved on a common basis and was therefore appropriate for certification as a common issue. For this purpose, it was not necessary for the class representative at the certification stage to quantify the damages in question; it was sufficient to demonstrate that there was a method capable of doing so on a class wide basis. What this requirement meant was elaborated in para 118 of the judgment. Although it was formulated in a different legislative context, the CAT was in our view entitled to treat the Microsoft test as providing an appropriate standard to apply for the purpose of determining the suitability of a class of claims for an aggregate award of damages under section 47C(2) of the Act. Not only did the Court of Appeal endorse that approach (at para 40), but it has been common ground between the parties at all levels in the CAT, in the Court of Appeal and in this court that it was appropriate for the CAT to apply this test. In any event, it seems to us to provide sensible guidance as to how to approach the question whether a class of claims is suitable to be grouped together for the purpose of estimating loss. The approach stated by Rothstein J reflects the broad axe principle, and adoption of it in the present context gives appropriate recognition to that principle in the context of the collective proceedings regime in the Act. The principle cannot be invoked as a way of circumventing the suitability requirement in the Act and the CAT Rules. If the applicant could not show that there was a realistic prospect that his experts proposed methodology would be capable of application in a reasonable and fair manner across the whole width of the proposed class, then (i) there would be a significant risk that a claim of this magnitude could unfairly be held over Mastercards head in terrorem to extract a substantial settlement payment without a proper basis for it; (ii) there would be a significant risk that, if carried forward towards trial, the collective proceeding, as framed by the CPO obtained at the outset, would at some stage run into the sand and be found not to be viable, so that it would have given rise to a great waste of expense and resources for no good effect; (iii) the risk referred to in (ii) would not just relate to potential waste of the resources of the defendant, but also to waste of the resources of the CAT, which could be better allocated elsewhere (see rule 4(2)(e)); and (iv) there would be a significant risk that, if the methodology were applied to the class at trial on the basis of inadequate data and unjustified extrapolations from available data sets, the outcome would be unjust and one in which one could have no confidence, because of the margin for error in calculating pass through rates for all sectors of the economy over a 16 year period and the potentially very substantial effects of such errors being made, by reason of the large sums being claimed (the point made in para 77 of the CATs judgment). We accordingly consider that the Court of Appeal, in agreement with the parties and the CAT, was correct to hold that what the applicant in this case had to do was to satisfy the CAT that the expert methodology was capable of assessing the level of pass on to the represented class and that there was, or was likely to be, data available to operate that methodology (para 44). The Court of Appeals criticisms We disagree, however, with the Court of Appeals view that the CAT did not in fact apply this test. There seem to us in the Court of Appeals judgment to be three particular criticisms made of the CATs approach. One is that the CAT wrongly required the applicant to establish more than a reasonably arguable case (para 52) or to be satisfied that the collective claim has more than a real prospect of success (paras 44 and 54). In our view, this criticism is misplaced in that it treats the assessment of whether the claims in question are suitable for an aggregate award of damages as if it were an assessment of whether the claims are of sufficient merit to survive a strike out application. However, as we have emphasised (and understand to be common ground between the parties on this appeal), the eligibility requirements including the question of suitability for aggregate damages are directed to ascertaining whether it is appropriate to combine individual claims into collective proceedings and not to the question whether the claims are sufficiently arguable as a matter of their substantive merits to be allowed to proceed. In particular, in relation to aggregate damages, the question for the CAT was not whether the claims had a real prospect of success; it was whether the proposed methodology offered a realistic prospect of establishing loss on a class wide basis. This turned, in the context of this case, on whether there was, or was likely to be, data available to operate that methodology (as the Court of Appeal had itself recognised at para 44). That was the question which the CAT addressed. We therefore think it clear that the CAT asked itself, and answered, the correct question and that the CAT was right to say (at para 57 of its judgment) that the applicant had to do more than simply show that he has an arguable case on the pleadings, as if, for example, he was facing an application to strike out. The second criticism made by the Court of Appeal was that the CAT had, in effect, carried out a form of mini trial, which involved cross examination of the applicants experts at a pre disclosure stage in the proceedings about their ability to prove the claim at trial by reference to sources of evidence which they had identified but had not yet been able fully to analyse or assess (para 52). It was said that the certification hearing therefore exposed the claim to a more vigorous process of examination than would have taken place at a strike out application (para 53). We have already explained why we consider the comparison with a strike out application to have been misplaced. We nevertheless agree with the Court of Appeal that an application for a CPO should not involve a mini trial. The CAT expressly recognised this at para 57 of its judgment and we do not accept that it failed to follow the direction that it expressly gave itself. In particular, we can see nothing wrong in principle, where the credibility or capability of expert methodology is of importance as it was here, with asking questions of the experts in order to clarify and better understand their proposed approach. That does not amount to anything approaching a mini trial. That is what occurred at the hearing before the CAT in this case. The consideration of the experts evidence by the CAT was not adversarial. The questioning was led by the tribunal, not Mastercard. To the extent that counsel for Mastercard was permitted to ask questions, it was only by way of clarification rather than by way of challenge to their evidence. Mastercard did not submit any expert evidence. The CAT was not engaged in weighing up competing expert evidence nor in seeking to resolve any disputed points of fact or expert opinion; it merely sought to understand and clarify the methodology proposed by the experts and the availability of the data necessary to apply that methodology. The tribunals questions gave the experts the opportunity to explain and expand on their proposed method. Providing this opportunity was an advantage, not a disadvantage, to the applicant, as is apparent from para 76 of the CATs judgment where the CAT observed that the methodology put forward by the experts in their oral evidence, in response to the tribunals questioning, is considerably more sophisticated and nuanced than that set out, rather briefly, in their experts report. Indeed, for the purposes of his submissions before the CAT, the Court of Appeal and in this court, the applicant positively sought to rely on the contents of the evidence given by his experts as amplified by their oral explanations in answers given at the hearing before the CAT. There was in these circumstances no procedural impropriety or error of law in the CATs approach. The third criticism made by the Court of Appeal was that the CAT demanded too much in terms of the availability of data at what was still an early stage of the proceedings. It is said that the experts had identified expected sources of data and it was not appropriate at the certification stage to require the proposed representative and his experts to specify in detail what data would be available for each of the relevant retail sectors in respect of the infringement period (para 51). In our view, this criticism is also misplaced. The CAT did not require the applicant or his experts to specify in detail what data would be available for each of the relevant retail sectors in respect of the infringement period. It applied an appropriately low threshold of whether there was evidence that data were available which could offer a realistic prospect of the applicant being able to apply his proposed economic methodology across the whole range, or substantially the whole range, of the class claim. On the evidence before it, the CAT was entitled to make the assessment at paras 69 75 of its judgment that the applicant had failed to show that appropriate data were or were likely to be available across that range such as would mean that his proposed methodology could be applied in a meaningful or reasonable way to make an aggregate award of damages assessed on a class wide basis: see paras 138 141 above. The Court of Appeal also suggested that, if it later transpired that the applicant was unable to access sufficient data to enable the experts method of calculating the rate of pass on to be performed, the CPO could be revoked; and that a decision of that kind is much more appropriate to be taken once the pleadings, disclosure and expert evidence are complete and the court is dealing with reality rather than conjecture (para 53). We do not consider this a permissible approach. The fact that there is a power to vary or revoke a CPO at any time under section 47B(9) of the Act does not relieve the CAT of the obligation only to make a CPO if it considers that the statutory conditions are satisfied and not otherwise. The CAT may not make a CPO on a speculative basis, in the hope that the claims might later become suitable to be brought as collective proceedings but that, if they do not, the order can be revoked, no doubt after a great deal of resources have been expended on the litigation. The applicant applied in this court for permission to adduce additional evidence regarding the availability of data to that adduced before the CAT. We would refuse that application. Any such evidence is not capable of disclosing a legal error on the part of the CAT, which was obliged to make its decision on the basis of the evidence before it. In any case, having looked at the additional material as we were invited to do by Mr Harris QC on behalf of the applicant, we are not persuaded that it shows a realistic possibility of filling the large gaps in the available data that were identified by the CAT. In our view, the CATs decision that it was not satisfied that the claims sought to be brought as collective proceedings were suitable for an aggregate award of damages cannot be impugned as unlawful. Suitability for collective proceedings If, as we consider, that decision was not wrong in law, then, in the circumstances of this case, it follows that the CAT was also entitled to conclude that the claims were not suitable to be brought in collective proceedings. As mentioned earlier, an aggregate award of damages under section 47C(2) of the Act was the only type of relief sought in these proceedings. The applicant has not suggested that it would be feasible or practicable to estimate the losses suffered by members of the proposed class individually. Indeed, the proposed method of distributing any damages recovered was founded on the premise that there is no reasonable or practicable means of establishing loss on an individual basis (see eg para 91 of the CATs judgment). In these circumstances, if the claims are not suitable for an aggregate award of damages, it is common ground that they are not suitable for any award of damages (or other relief). There is accordingly no basis on which the proceedings as they have been framed could properly be continued. Lord Briggs has emphasised that whether the claims are suitable for an aggregate award of damages is only one factor in the list of matters identified in rule 79(2) as potentially relevant to the issue of overall suitability. He criticises the CAT for treating this particular factor as if it were a hurdle rather than merely one factor to be weighed in the balance along with others in determining whether the claims are suitable to be brought in collective proceedings. This is not an argument which the applicant has made and we are not able to agree with it. It was not incumbent on the CAT to treat the factors in rule 79(2) (or for that matter the factors in rule 4) as a check list which it had to work through and address one by one. The position is the same as where a court makes a procedural decision under the Civil Procedure Rules and has to comply with the overriding objective in CPR Part 1: see Khrapunov v JSC BTA Bank [2018] EWCA Civ 819, para 46. Furthermore, while the structure of rule 79 makes it clear that satisfying the CAT that the claims are suitable for an aggregate award of damages is not a separate hurdle or pre condition for certifying claims as eligible for inclusion in collective proceedings, that does not prevent this factor from being in practice decisive in the circumstances of a particular case, given the way in which the proceedings have been framed. For the reasons indicated, that was the case here. For the same reasons, the CATs error (as we agree that it was) in failing to recognise that whether or to what extent merchants passed on the MIFs to their customers was a common issue did not affect its analysis of suitability. The reasons given by the CAT for remaining unpersuaded that the claims of the proposed class members were suitable for an aggregate award of damages did not depend in any way on whether the extent of merchant pass on is regarded as a common issue. Since an aggregate award of damages was the only relief sought by the applicant and said by the applicant to be appropriate, it followed from the conclusion that the claims were not suitable for such relief that the claims were not suitable to be brought in collective proceedings. Whether the extent of merchant pass on is a common issue has no bearing on that. Mr Harris for the applicant emphasised that the difficulties in establishing the extent of any merchant pass on would have been equally formidable for a typical individual claimant, seeking compensation for increased retail prices over the sectors of the market in which he or she was accustomed to make purchases. He submitted that, if those difficulties would have been insufficient to deny a trial to an individual claimant, they should not, in principle, have been sufficient to lead to a denial of certification for collective proceedings. This argument seems to us to make the error already discussed of confusing the requirements for certification of claims as eligible for inclusion in collective proceedings with a summary judgment or strike out test. Whether an individual claimant has a claim that is sufficiently strong to go to trial is a different question, involving a different test, from whether a class of claims is eligible to be brought as a collective proceeding. It does not follow that, just because claims are capable of being pursued individually without being struck out, they must also be suitable to be brought in collective proceedings. Nor does it follow that, because a group of claimants would have greater difficulties (practical or legal) in pursuing their claims individually than they would if the claims are brought in collective proceedings, that of itself makes the claims suitable to be brought in collective proceedings. For the reasons stated earlier, the suitability requirement is not relative in this way. Conclusion For the reasons given, the CAT was in our opinion entitled to take the view that the claims which the applicant was seeking to bring as a class action were not suitable to be brought in collective proceedings when the CAT was not satisfied that there was a realistic prospect of the applicant being able to apply its proposed economic methodology across the whole width, or substantially the whole width, of the proposed class. This is not to say that none of the claims which the applicant was seeking to combine had a real prospect of success. The CAT was right to treat the issue of suitability as distinct from the question whether the class action might be struck out on the merits under rule 41 or rule 43. We think it would not have been possible for the CAT to strike out or give summary judgment on the claims covered by the proposed CPO because some of them are very likely to have merit. But it was a separate question whether it was suitable for them to proceed as a collective proceeding, with the substantive legal advantages that this would give to the claimants, where the applicant could not show that data existed or were likely to exist which would make the action viable across the whole width of the class. Finally, it should be emphasised that the CATs approach does not undermine the efficacy of the collective proceedings regime. The test which the CAT applied in looking to see whether the relevant data were or might become available was a low one. It was open to the applicant to seek a CPO in relation to a class of claims which was framed less ambitiously for example, in relation to particular sectors of the economy where the relevant data needed to make the applicants economic methodology workable in a meaningful and fair way could be shown to be available or likely to be available. However, the applicant did not put forward any alternative proposal. The only application made was to certify as suitable to be brought in collective proceedings a massive class of claims brought on behalf of more than 46m people everyone domiciled in the UK who when over the age of 16 had been resident in the UK for more than three months at any time during a 16 year period between 1992 and 2008. The fact that this gargantuan class action was found unsuitable to proceed did not rule out the possibility of pursuing in collective proceedings a more focused class of claims.

UK-Abs

This appeal concerns the procedure for collective proceedings in competition damages claims. This is the first collective proceedings case of this kind to reach the Supreme Court. It addresses important questions about the correct legal requirements for certification of a claim. Mr Merricks claim arises out of the European Commissions decision in December 2007 that the appellants (Mastercard) breached competition law by fixing a default interchange fee as part of their payment card schemes between May 1992 and December 2007 (the Commission Decision). These payment card schemes allow consumers to purchase goods and services from retailers by card. The details of the scheme are at [6 8] and they were also considered by the Supreme Court earlier this year ([2020] UKSC 24). Mr Merricks issued a collective proceedings claim form against Mastercard under section 47B(1) of the Competition Act 1998 as amended (the Act). In the claim form, Mr Merricks argues that the difference between the interchange fee banks would have paid but for Mastercards breach of competition law, and the interchange fee that they did in fact pay, is an overcharge which retailers paid to their banks and crucially, which retailers then passed onto their customers. As a result, he argues that consumers paid higher prices for goods and services than they would otherwise have done. Mr Merricks seeks to bring the collective proceedings as the class representative on behalf of all UK resident adult consumers of goods and services purchased in the UK during the infringement period from retailers accepting Mastercard, unless the consumer opts out (the class). He seeks an award of damages for the whole class (an aggregate award), rather than damages for the claim of each class member [11 13]. To proceed with his collective proceedings claim, Mr Merricks needs the Competition Appeal Tribunal (the CAT) to certify the claim by making a Collective Proceedings Order (CPO) under section 47B of the Act. To certify a claim, the CAT must be satisfied that two main criteria have been met. First, that it is just and reasonable for Mr Merricks to act as the class representative (sections 47B(5)(a) of the Act). Second, that the claims are eligible for inclusion in collective proceedings (section 47B(5)(b) of the Act), which means that the claims all raise common issues of fact or law and are suitable to be brought in collective proceedings (section 47B(6) of the Act). The CAT refused to make a CPO as the claims failed this second requirement because: (1) the claims were not suitable for an aggregate award of damages per rule 79(2)(f) of the Competition Appeal Tribunal Rules 2015 (the CAT Rules) (the suitability for aggregate damages issue); and (2) Mr Merricks proposed distribution of any award did not satisfy the compensatory principle in common law, which the CAT considered relevant under rule 79(2) of the CAT Rules (the distribution issue). The Court of Appeal allowed Mr Merricks appeal, finding that the CAT had made five errors of law. Mastercard appealed to the Supreme Court. The Supreme Court dismisses Mastercards appeal. It agrees with the Court of Appeal that the CATs decision is undermined by error of law and sends Mr Merricks application for a CPO back to the CAT. Lord Briggs gives the main judgment, with which Lord Thomas agrees. Lord Kerr had agreed that the appeal should be dismissed for the reasons set out in Lord Briggs judgment prior to his retirement on 30 September 2020. Three days before the judgment was initially due to be handed down, Lord Kerr sadly died. The President of the Supreme Court re constituted the panel under section 43(4) of the Constitutional Reform Act 2005 to consist of Lord Briggs, Lord Sales, Lord Leggatt and Lord Thomas. Lord Sales and Lord Leggatt give a combined separate judgment in which they disagree with Lord Briggs reasoning in part. They do not dissent as they recognise that they were in the minority and the pure happenstance that Lord Kerr died after completion of the judgments, but just before they could be handed down, should not mean that the case has to be re heard due to an evenly divided panel [82 83]. Collective proceedings are a special form of civil procedure. They are designed to provide access to justice and ensure the vindication of private rights where an ordinary individual civil claim would be inadequate for that purpose. This purpose helps interpret the legal requirements of the certification process [45]. An important element of the background to collective proceedings is that courts frequently have to deal with difficult issues in calculating damages. Courts do not deprive an individual claimant of a trial merely because of these quantification issues, provided there is a triable issue that the claimant has suffered more than nominal loss [46 47]. If these issues would not have prevented an individual consumers claim from proceeding to trial, the CAT should not have stopped the collective proceedings claim at the certification phase [56]. This fundamental requirement of justice that the court must do its best on the available evidence in relation to damages is the broad axe principle and it applies to competition cases [51]. Justice requires that damages be quantified in order to vindicate a claimants rights and to ensure that a defendant pays to reflect the wrong done, especially where anti competitive conduct may never otherwise be restrained if individual consumers are unable to bring claims [53 54]. Another important element is to understand the meaning of suitable, both under section 47B(6) of the Act which requires the claims to be suitable to be brought in collective proceedings, and in rule 79(2)(f) which says that they must be suitable for an aggregate award of damages. Suitable means suitable relative to individual proceedings. Therefore, the CAT should have asked itself whether the claims were suitable to be brought in collective proceedings as compared to individual proceedings, and suitable for an award of aggregate damages as compared to individual damages [56 57]. Against this background, the Supreme Court finds that the CAT made five errors of law [64]. First, it failed to recognise that in addition to overcharge, the merchant pass on issue was also a common issue (as the Court of Appeal had found and which was not appealed to the Supreme Court). This should have been a powerful factor in favour of certification (rule 79(2)(a) of the CAT Rules) [66]. Second, the CAT placed great weight on its decision that the case was not suitable for aggregate damages. This is a relevant factor for certification, but it is not a condition [61, 67 69]. Third, the CAT should have applied a test of relative suitability. If the forensic difficulties would have been insufficient to deny a trial to an individual claimant, they should not have been sufficient to deny certification for collective proceedings [70 71]. Fourth (the most serious error), the CAT was wrong to consider that difficulties with incomplete data and interpreting the data are a good reason to refuse certification. Civil courts and tribunals frequently face problems with quantifying loss and the CAT owes a duty to the class to carry out the task in a case of proven breach of statutory duty coupled with a realistically arguable case that some loss was suffered [72 74]. Fifth, the CAT was wrong to require Mr Merricks proposed method of distributing aggregate damages to take account of the loss suffered by each class member. A central purpose of the power to award aggregate damages in collective proceedings is to avoid the need for individual assessment of loss and the Act expressly modifies the ordinary requirement for the separate assessment of each claimants loss [58, 77]. Lord Sales and Lord Leggatt agree with Lord Briggs that the CAT was wrong to refuse certification on the distribution issue [148 150]. However, they disagree on the suitability for aggregate damages issue. They consider that the CAT applied the test to determine the suitability of a class of claims for an aggregate award of damages under section 47C(2) of the Act correctly and thus the CAT was entitled to conclude that the claims were not suitable to be brought in collective proceedings [167 169]. Their key reasons are at [111, 116 119, 121, 124, 153, 156 166].

This appeal arises out of the inquest held into the death of Mr James Maughan. It concerns the standard of proof, or degree of conclusivity, required for the determination of the result of an inquest into a death where the question is whether the deceased committed suicide. The result of an inquest may be given in a single short form conclusion (using simply the word suicide) and/or in a brief narrative statement (a narrative conclusion). This appeal has to consider whether the degree of conclusivity is the same in both cases, and what it is. There is nothing in the relevant primary legislation, which is the Coroners and Justice 2009 Act (the 2009 Act), about this. However, Note (iii) to the form for recording the results of an inquest prescribed by the Coroners (Inquests) Rules 2013 (SI 2013/1616) (the 2013 Rules) states the standard of proof for narrative conclusions is on a balance of probabilities, which is the rule (the civil rule) for civil proceedings, and for short form conclusions of suicide and unlawful killing it is the criminal standard, so the coroner or jury must be sure, and that means that they are satisfied beyond reasonable doubt. The civil rule applies in civil proceedings even if the issue is whether someone committed a criminal offence. A coroners inquest is not a criminal proceeding. At the time of the 2013 Rules, the common law was understood to be as stated in Note (iii). As I shall explain, there were at one time links between inquests and criminal proceedings. The 2013 Rules concretised the differential standard for short form and narrative conclusions in Note (iii). One of the issues on this appeal is whether that approach correctly reflects the common law, either historically or currently. Two elements must be established before suicide can be found: it must be shown that the deceased took his own life and that he intended to kill himself (or another): see Jervis on Coroners, 14th ed (2019), para 13.67 and Kennys Outlines of Criminal Law, 17th ed (1958), p 163. It may happen in one and the same inquest that the narrative conclusions find facts which in law mean that the deceased committed suicide and yet that conclusion cannot be recorded as a short form conclusion. The Divisional Court saw the logical difficulty in a situation where there might be narrative findings showing that the two elements of suicide were satisfied and yet no short form conclusion of suicide: [2018] EWHC 1955 (Admin); [2019] 1 All ER 561. It held: A narrative conclusion to the effect that on the balance of probabilities the deceased did a deliberate act which caused his own death intending the outcome to be fatal clearly amounts to a conclusion that the deceased committed suicide whether or not the word suicide is used. It is sophistry to say that such a conclusion is not one of suicide because the required standard of proof has not been met. The standard of proof even if referred to in the record of inquest, as it was in this case, is not itself part of the substantive conclusion adopted by the coroner or jury. It is simply a statement of the evidential test which must be met in order to reach a particular conclusion. If the standard of proof required to determine that the deceased committed suicide is the criminal standard and the necessary facts have been proved only on the balance of probabilities, this does not mean that a conclusion which records those facts is not one of suicide. It means that the coroner or jury cannot lawfully reach that conclusion. (para 25) Death of Mr James Maughan Tragically, early on 11 July 2016, the appellants brother, Mr James Maughan, was found in his prison cell hanging by a ligature from his bedframe. He was pronounced dead. He had had a history of mental health issues and was agitated on the previous evening and threatened self harm. At the inquest into the circumstances of Mr James Maughans death, the coroner, the Senior Coroner for Oxfordshire, applying the Chief Coroners Guidance No 17: Conclusions: Short Form and Narrative (referred to below as Guidance No 17 issued by the Chief Coroner), decided that the jury could not safely reach a short form conclusion of suicide on the basis of the criminal standard of proof, that is, on the basis that the jury was sure that Mr James Maughan had committed suicide. Nonetheless, the coroner considered that the jury should have the opportunity to make a narrative statement of the circumstances of Mr James Maughans death on a balance of probabilities. The jury answered the questions put to them by saying that the deceased had a history of mental health issues and that on a balance of probabilities the deceased intended fatally to hang himself and that increased vigilance would not have prevented his death. There was no short form conclusion of suicide. The appellant submits that this course was not open in law on the legal requirements as to standard of proof. If those standards were correctly applied, no issue is taken on the findings themselves. Parties to this appeal The first respondent to this appeal is Senior Coroner for Oxfordshire, who conducted the inquest and who understandably makes no submissions on this appeal. The first intervener is Chief Coroner of England and Wales, for whom Mr Jonathan Hough QC appears. INQUEST, a charity with expertise in relation to state related deaths and their investigation, with the permission of the court, intervene in this appeal (as they had done in the Court of Appeal) and Mr Adam Straw made submissions on their behalf. Changes in inquests and the introduction of narrative conclusions Longer, more judgemental narrative conclusions, as used by the coroners jury in this case, are relatively new. They result from the recent transformation of many inquests from the traditional inquiry into a suspicious death into an investigation which is to elicit the facts about what happened, and in appropriate cases identify lessons to be learnt for the future. This is the position in inquests which the state is now required to carry out because of the European Convention on Human Rights (enforceable in the domestic law of England and Wales since 2 October 2000). Article 2 of the Convention protects the right to life. One of the consequences of this is that there must generally be an effective investigation of deaths which occur while a person is in the custody of the state (state related deaths), and one of the ways in which this obligation may be discharged is by holding a coroners inquest, in which the next of kin of the deceased can participate. The relevant principles of domestic law have been established by decisions of the courts, including, in particular, the decision of the House of Lords in R (Middleton) v West Somerset Coroner [2004] UKHL 10; [2004] 2 AC 182 (Middleton). In his written submissions, the Chief Coroner states that an article 2 inquest: opens up the field for conclusions about underlying or contributory causes, such as failures to prevent suicide in prison. It may require a coroner to deliver (or elicit from a jury) a more extensive and judgmental form of narrative conclusion. The manner of eliciting such a conclusion in a jury case is for the coroners discretion but it is often done by means of questions (as in this case). (para 19) This is confirmed by the case of Scholes v Secretary of State for the Home Department [2006] EWCA Civ 1343; [2006] HRLR 44, which came before Pill LJ and myself in the Court of Appeal. It concerned a vulnerable 16 year old boy, Joseph Scholes, who was sent to a young offender institution instead of a secure home for boys of his age and who shortly thereafter hanged himself. The inquest revealed a worrying situation with regard to the detention of young offenders and the Secretary of State was required to take steps to improve the situation. There had to be an increase in the number of places available in secure homes for such individuals. Even though his mothers attempt to obtain a further inquiry failed, several improvements in the system resulted from the findings at the inquest. This case illustrates a point also made by the Chief Coroner that the family of the deceased often want findings to be made at an inquest so that steps can be taken to ensure that the same tragedy does not occur again. I need only refer to the consequences of the article 2 obligation that are relevant to this appeal. I will assume that, as in this case, the coroner sits with a jury. The purpose of the inquest is to determine how, when and where the deceased came by his death (2009 Act, section 5(1)). Where article 2 is engaged, how, when and where includes in what circumstances the deceased came by his or her death (2009 Act, section 5(2)). The inquest will generally hear evidence on these matters. After the evidence is given, the jury must make their determination as to how, when and where the deceased died (2009 Act, section 10). The Convention does not require any particular standard of proof or degree of conclusivity for these findings. The coroner will determine which facts in issue are at the centre of the case. A narrative statement of facts will often be necessary to express the findings of the jury on these facts (Middleton, para 36, and Guidance No 17 issued by the Chief Coroner). The coroner may formulate some questions to help the jury, and their answers will form the narrative conclusions recorded at the end of the inquest. The conclusion in such a narrative is of a factual nature (Middleton, para 37). That is reinforced by section 10(2) of the 2009 Act, which provides that a determination may not be framed so as to appear to determine any question of any question of criminal responsibility on the part of any named person or any civil liability. The conclusions of the inquest must be recorded in the Record of Inquest. Form 2 in the Schedule to the 2013 Rules is the mandatory prescribed form for this. The conclusion may be a short form conclusion which should be from the list provided in Form 2, such as suicide, accident or unlawful killing, but it may be or be also a narrative statement. Guidance No 17 issued by the Chief Coroner sets out a three stage process for arriving at a conclusion, namely: (a) that the facts should be found (on the evidence); (b) that the manner in which the deceased came by his death should then be distilled from the narrative findings; and, (c) the conclusion flowing from (a) and (b) should then be recorded. As explained, the 2009 Act did not provide for the standard of proof for conclusions at the end of an inquest, but section 45 of that Act provides for coroners rules for regulating the practice and procedure at or in connection with inquests. Section 45 gives specific examples of the matters to which the coroners rules might relate including, for example, provisions about evidence. That is the enabling power under which the 2013 Rules were made. It is to those Rules that I must first turn. Statement of the standard of proof in the 2013 Rules The 2013 Rules cover many procedural aspects of a coroners inquest. For the first time, use of the prescribed form to record the result of the inquest, Form 2, was made mandatory: see rule 34, which provides: A coroner or in the case of an inquest heard with a jury, the jury, must make a determination and any findings required under section 10 using Form 2. Form 2 is as follows: Form 2 Record of an inquest The following is the record of the inquest (including the statutory determination and, where required, findings) 1. Name of the deceased (if known): 2. Medical cause of death: 3. How, when and where, and for investigations where section 5(2) of the Coroners and Justice Act 2009 applies, in what circumstances the deceased came by his or her death (see note (ii)): 4. Conclusion of the coroner/jury as to the death: (see notes (i) and (ii): 5: Further particulars required by the Births and Deaths Registration Act 1953 to be registered concerning the death: 3 Sex 1 Date and place of death 2 Name and surname of deceased 5 Date and place of birth 6 Occupation and usual address 4 Maiden surname of woman who has married Signature of coroner (and Jurors): NOTES: (i) One of the following short form conclusions may be adopted: I. Accident or misadventure II. Alcohol/drug related III. Industrial disease IV. Lawful/unlawful killing V. Natural causes VI. Open VII. Road traffic collision VIII. Stillbirth IX. Suicide (ii) As an alternative, or in addition to one of the short form conclusions listed above under NOTE (i), the coroner or where applicable the jury, may make a brief narrative conclusion. (iii) The standard of proof required for the short form conclusions of unlawful killing and suicide is the criminal standard of proof. For all other short form conclusions and a narrative statement the standard of proof is the civil standard of proof. (Italics added) Note (ii) expressly contemplates that both short form and narrative conclusions may be used in the same inquest. Note (iii) uses very precise language, but the first question is whether it simply declares the common law position in a convenient form or whether it goes further and codifies the common law rules and makes them mandatory in this form so as to remove them from the reach of the courts when considering the true state of the common law. For that question, I must turn to consider the legal basis for Note (iii). Before I do that, I will refer to the guidance issued by the Chief Coroner, so far as relevant. One of the functions of the Chief Coroner is to give guidance to coroners. In discharge of this function he has issued Guidance to Coroners and a Bench Book. The 2009 Act does not attach particular status to these. The provisions relevant to the standard of proof are set out in the judgments below. Without in any way detracting from the importance of the Chief Coroners Guidance or the Coroners Bench Book, I do not repeat those passages in this judgment, save one, namely para 62 of the Chief Coroners Guidance, which advises on the possible explanation a coroner sitting without a jury might give where the coroner considers that suicide is not established to the criminal standard. Para 62 states: Looking at the two elements which must be proved to the higher standard of proof before a conclusion of suicide can be recorded, I am satisfied that [the deceased] took his own life, but I am not satisfied that he intended to do so. I cannot be sure about it. It is in my judgment more likely than not that he had that intention, but on the evidence looked at as a whole I cannot rule out that this was a terrible accident. For those reasons my conclusion is not suicide or accident but an open conclusion. Legal basis for the statement of the standard of proof in Note (iii) The issue here is: if Note (iii) constitutes a statutory statement of the standard of proof, does it constitute a matter of practice or procedure for the purposes of section 45 of the 2009 Act? In McKerr v Armagh Coroner [1990] 1 WLR 649, which concerned the question whether coroners rules could restrict a coroners right to compel witnesses, Lord Goff made some introductory points which are helpful here. He held that what is meant by practice and procedure must depend to some extent on the context in which the expression is used; that the distinction drawn for the purposes of civil proceedings between the mode of proceeding by which a legal right is enforced and the law which gives or defines the right (per Lush LJ in Poyser v Minors (1881) 7 QBD 329, 333) is not apt in relation to coronial proceedings, which are not concerned with the enforcement of a legal right. Nonetheless rules which regulate the mode of proceeding are rules which regulate the practice and procedure at an inquest. Lord Goff held that there was no real distinction between practice and procedure in coronial or civil proceedings (p 657). A question as to the meaning of procedure in a statute came before the Court of Appeal in R (LG) v Independent Appeal Panel for Tom Hood School [2010] EWCA Civ 142; [2010] PTSR 1462, paras 41 to 44 per Wilson LJ (as he then was). The issue was whether a statutory power to make rules for the procedure on appeals of a schools independent appeal panel included power to make a rule that a decision to exclude a pupil should be taken on a balance of probabilities. Wilson LJ, as he then was, gave the leading judgment. He held that the power was wide enough to cover the question of the standard of proof to be applied by the tribunal. I agree with this. As Wilson LJ sets out, the word procedure should be given a wide, purposive meaning to enable it to cover all the steps in the proceedings: The procedure on appeals is synonymous with the processing of appeals; and, when the panel takes the step (or reaches the stage) at which it determines a question whether a fact is established, a necessary part of its processing of that part of the appeal is to apply a particular standard of proof in reaching an answer to the question. A regulation about the inadmissibility of evidence of a specified character would in my view clearly fall within the rubric of procedure on appeal and there is in my view no material difference between a requirement that the panel should exclude evidence of a specified character and a requirement that it should apply a specified standard of proof to its appraisal of such evidence as is properly before it. (para 43) The expression of practice and procedure must have been intended to cover all the matters on which rules would be required for the efficient management of the inquests and so I see no reason therefore why the expression should not include the standard of proof to be required. The standard of proof is after all a necessary part of the process of making a determination and it is sometimes called the evidential standard, thus engaging the express provision in section 45(2)(a) authorising coroners rules to make provision about evidence. So far so good. But the fact that a note to a form as to the standard of proof can constitute a matter of procedure of the question is not the end of the matter on this appeal for several reasons, which I will explain in the succeeding paragraphs. Section 45 requires that the rules should be made for, that is, for the purpose of, regulating the practice and procedure at or in connection with inquests. That is the purpose of the power and the decision maker must not use it for any other extraneous purpose. Such purpose may include the provision of a new regulation for a matter which is already regulated by some other means. I will return to this particular point later. To begin, it is necessary to examine the background to the relevant part of the 2013 Rules. They were preceded by a public consultation conducted by the Ministry of Justice (MoJ) on the draft 2013 Rules: Implementing the coroner reforms in part one of the Coroners and Justice Act 2009 consultation on rules, regulations, coroner areas and statutory guidance CP 2/2013, 1 March 2013. This annexed Form 2 in draft, including Note (iii), but the body of the consultation document did not refer to the evidential standard. One of the consultation questions was: Question 18: Are you content with the draft rule and form on conclusions, determinations and findings? If not, how could they be improved? Do you agree with the addition of the new short form conclusions drink/drug related and road traffic collision? Please give your reasons. There was no question about whether the existing rules on standard of proof should be changed. Some of the consultees in their responses sought to raise the issue whether the standard of proof for the short form conclusion of suicide should be the civil standard, others sought to have the criminal standard applied. In the subsequently published analysis of responses, Implementing the coroner reforms in Part 1 of the Coroners and Justice Act 2009 Response to consultation on rules, regulations, coroner areas and statutory guidance 4 July 2013 the MoJ recorded: Suicide standard of proof We also received comments on the most appropriate standard of proof needed for a coroner or jury to give a suicide conclusion at an inquest. Under current practice (common law precedence), coroners may return a verdict of suicide only where the criminal standard of proof has been established, ie that it was beyond reasonable doubt that the deceased intended to take their own life. Some respondents expressed strong views on whether the current criminal standard should be replaced by the civil standard. (internal p 37) The MoJ response made it clear that the Government proposed to retain the standard established by case law: As the requirement to use the criminal standard of proof when returning a suicide verdict is established under case law rather than coroner legislation we cannot take forward a change in the law through secondary legislation flowing from the 2009 Act. However the Chief Coroner and the MoJ are considering the views expressed on this issue. (internal p 38) The decision therefore was that the 2013 Rules could not make a change in the law (we cannot take forward a change in the [case] law through secondary legislation), not that the criminal standard should be established in the 2013 Rules. Mr Straw submits that a mere consultation document and response would not be admissible on statutory interpretation in the same way that explanatory notes on an Act would be. But this is not so. The courts will look beyond explanatory notes (which are a comparatively recent innovation) in their endeavour to find the true intention of Parliament. In my judgment, the consultation documents and the response documents are documents which show the mischief to which Note (iii) was directed and their contents are therefore admissible when the courts seek to interpret Note (iii): see Bennion on Statutory Interpretation, 7th ed (2017), section 24.3 (External aids to construction may be used for a variety of different purposes. For example, they may be used to provide evidence as to the intended meaning of the words used ). Moreover, the consultation document and the response document were made available to Parliament, which is of some weight when deciding whether they should be admissible on interpretation. What is clear from these documents is that the mischief to which Note (iii) was directed was not any dissatisfaction with the case law or policy objective of altering it. The Note was simply part and parcel of an exercise of updating the forms in the light of the 2009 Act. Criticism of the standard of proof for suicide was not new in 2013 and would not have taken the MoJ by surprise. The Report of a Fundamental Review 2003 into Death Certification and Investigation in England, Wales and Northern Ireland (Cm 5831) referred to the criminal standard for suicide and considered that its justification was the need to find outcomes on issues of legal liability to higher evidential standards. Such an approach was not, however, considered to be appropriate: Present practice is that most short form inquest verdicts should be established to the civil standard of proof the balance of probabilities test. But for verdicts of suicide and unlawful killing it is the higher criminal standard of proof beyond reasonable doubt which is applied. The justification for this appears to lie in the need for outcomes which determine, or appear to determine, legal liability (albeit not that of a named individual) to be reached on the basis of standards which are properly applicable in the appropriate civil or criminal court. It is not feasible, however, for such standards to be systematically applied in an inquisitorial process whose role is to determine what may be a set of complex and interrelated facts. (para 30) The Report did not recommend altering the standard of proof for suicide. It may be that this was in part because the Report also recommended a substantial change in short form conclusions in any event (para 37). We are told that these recommendations of the 2003 Review were not accepted by the government. The standard of proof for suicide was also the subject of cogent criticism by Professor Paul Matthews (subsequently Judge Paul Matthews) in two valuable articles: The Coroner and the Quantum of Proof (1993) 12 (July) CJQ 279 and The Coroner and the Quantum of Proof a postscript (1994) 13 (October) CJQ 309. These articles drew attention to the differential evidential standards for the conclusion of suicide, perhaps for the first time in UK scholarly literature. They also drew attention to a body of Commonwealth authority applying the civil standard. They also made the point that, if narrative findings could be made but the standard of proof for a short form conclusion precluded a short form conclusion of suicide, and no other short form conclusion was appropriate, the coroner would have to enter an open conclusion. The point to be deduced from the response document is that, there being a common law rule in place to regulate the standard of proof for the conclusion of suicide, it would be outside the enabling power in section 45 to make a rule to substitute for a common law rule which was in place and represented the law of the land. In those circumstances the power to make rules could understandably not be used to state some new rule. A new rule stating the position at common law was unnecessary and a new rule altering the common law would not be a rule for regulating coronial practice and procedure. It would be for achieving a change in an existing rule of law. So the carefully worded response of the MoJ was: we cannot take forward a change in the [case] law through secondary legislation. So there was no point in even opening a dialogue on the point and it could not hold up placing the draft rules before Parliament. But the fact that this exchange took place in public documents is a valuable aid to interpretation of the 2013 Rules and enables the courts more clearly to see the meaning which Parliament intended Note (iii) to have. I would not assume that the drafter mistakenly thought that the notes were of no legislative force. It is true that in R v HM Coroner for North Humberside and Scunthorpe, Ex p Jamieson [1995] QB 1, 25, the Court of Appeal (Sir Thomas Bingham MR, McCowan and Hirst LJJ) held that the notes on the then current form 22 scheduled to the Coroners Rules 1984 (which covered different matters) were not binding. However, while no reason was given for this observation, the observation is readily distinguishable because the use of form 22 as opposed to Form 2 was not mandatory (see the Coroners Rules 1984 (SI 1984/552), rule 60). The Divisional Court (Leggatt LJ as he then was and Nicol J) considered this question of the meaning of Note (iii) briefly, and concluded that it was within the scope of the enabling power for the 2013 Rules but was simply stating, for the assistance of those using the form, what the law with regard to the standard of proof is understood to be, and not legislating what the law shall be (para 47). In the Court of Appeal, Davis LJ, with whom Underhill and Nicola Davies LJJ agreed, came to the same conclusion, [2019] EWCA Civ 809; [2019] QB 1218: If it was desired by the Coroners rules to make provision for the standard of proof (and it was common ground before us that section 45 of the 2009 Act would have so permitted) then the obvious place to do so would have been in the body of the Coroners rules themselves. The notes appended to the prescribed form cannot, in my view, be given the substantive status of rules. They simply set out, for the convenience of coroners, an understanding of the law. (para 76) The point made in the first sentence is a powerful one, and I agree with it. However, neither court referred to the consultation document or the consultation response document referred to in paras 25 to 27 above. I therefore turn to the interpretation of Note (iii) with the consultation document and response available to me. Meaning of Note (iii) The first point to make is that Note (iii) forms part of an enactment and must be interpreted in the same manner as any other enactment and as part of that enactment. As Brett MR held in Attorney General v Lamplugh (1878) 3 Ex D 214, 229: [A] schedule in an Act of Parliament is as much a part of the statute, and is as much an enactment as any other part. Moreover, all parts of a statute have operative effect and provisions are not to be treated simply as for the avoidance of doubt or guidance. Very occasionally, however, the contrary may be stated or the contrary may occur. Parliament may, for instance, occasionally provide examples which are not necessarily intended to be used as aids to restrict the interpretation of the principal provision. The same applies to footnotes to a schedule to an enactment. The principal authority on this is Hunt v RM Douglas (Roofing) Ltd [1990] 1 AC 398, to which the President of the Supreme Court, Lord Reed, drew counsels attention. The House of Lords there held that Parliament could change the law, in that case by harmonising different rules of procedure, by means of enacting a footnote to a form in a schedule to rules of procedure. The competing statutory provisions in that case were complex. The case concerned the start date for the accrual of interest on costs awarded by order of the court and it turned on a note to a prescribed form and the effect of its deletion. The appellant argued that under section 17 of the Judgments Act 1838 interest on costs ran from the date of judgment. The practice between the common law and the chancery courts between 1839 and 1875 differed in that the former took the date of the judgment and the latter the date of the certificate of taxation (there was no similar practice at common law). Eminent judges held different views as to which was the fairer rule. The Rules of Court 1875 enacted by section 16 of the Supreme Court of Judicature Act 1875 annexed a writ of execution (known as a writ of fi fa) for use in relation to judgments of the High Court and Court of Appeal adopting by way of a footnote the chancery practice. However, a new form of writ of execution was required to be used by new rules enacted in 1883. A footnote to this form provided that interest ran from the date of judgment. This footnote was not attached to the form when it appeared in the Rules of the Supreme Court 1965. The House analysed the issue of the date from which interest on costs should run as one of statutory interpretation. The footnote to the form of writ of execution in the 1883 Rules had swept away the chancery practice, as had been held by Field J in Pyman & Co v Burt, Boulton [1884] WN 100 and by a unanimous Court of Appeal in Boswell v Coaks (1887) 57 LJ (NS) Ch 101 (Cotton, Lindley and Lopes LJJ). The latter case was particularly striking as the effect of the change was directly in issue and the judgments were informative as to the contemporary practice: Lord Ackner, with whom the other members of the House agreed, referred to it several times. In Boswell v Coaks, judgment at trial had been given before the 1883 Rules were commenced but by the time the costs were assessed the 1883 Rules were in force. The 1883 Rules applied because the proceedings were still in progress until the assessment of costs and enforcement were completed and there was no vested right in a rule of practice. Lindley LJ in particular explained how the 1883 Rules had struck out the old rules and made one code applicable to all divisions of the Court (p 105). The House therefore overruled the earlier decision of the Court of Appeal in K v K (Divorce Costs: Interest) [1977] Fam 39, which held that the court was therefore able to choose which rule to adopt and adopted the old rule of the chancery courts. By implication, the House in Hunt v RM Douglas (Roofing) Ltd did not consider that the deletion of the footnote by the Rules of the Supreme Court 1965 resuscitated the old chancery rule which had been abolished in 1883. There is no doubt that Note (iii) in the present case expresses the common law as it was perceived to be but the question is whether Note (iii) is also to be interpreted as codifying the law and taking away the power of the courts to develop or elucidate or correct the common law. In my judgment, that is where the statement in the response to consultation by the MoJ comes in. Given that, as a result of the response to consultation published by the MoJ, neither Parliament nor the public had notice of any intention to change the common law rule, as would be the inevitable result of codifying it without reservation, it seems to me that the proper course is for the court to interpret Note (iii) as having an interpretation that accords with that position, stating the common law rule for short form conclusions as the (current) common law rule. I reach this conclusion as a matter of interpretation and my conclusion should not in any way be read as departing from the strong presumption that every provision of an enactment has legislative force. It turns on the very special background applying to Note (iii) informing the court in its interpretative role as to the presumed intention of Parliament. The footnote to the statutory form in Hunt v RM Douglas (Roofing) Ltd served an entirely different purpose, namely that of laying to rest a debate between two divisions of the High Court whose practice it was desired to harmonise. It will be recalled that shortly before 1883 the courts of common law and equity had been fundamentally reorganised by the Judicature Acts 1873 to 1875 so that there would in future be only one Supreme Court of Judicature in England and Wales in which the courts administered both law and equity, so harmony was essential and consistent with legislative policy. In relation to interest on costs, that legislative policy could not be achieved unless the common law and chancery rules were harmonised. The judgments in Boswell v Coaks, described in para 39 above, show that the debate was well known. The Court of Appeal interpreted the note against the background of the prior differences in practice. There was no equivalent debate in the case law in this case as to the correctness of the common law rule reflected in Note (iii) prior to its enactment. It would, moreover, be contrary to drafting conventions for a schedule to the Rules to be used to make what would clearly be a change of some consequence in the law. Lord Thring, the first Head of the Office of Parliamentary Counsel, states in his Practical Legislation (1877) that: As to Schedules Great care should be taken in the preparation of schedules. It is desirable to include in a schedule matters of detail; it is improper to put in a schedule matters of principle. The drawing [of] the proper line of demarcation between the two classes of matters is often difficult. All that can be said is that nothing should be placed in a schedule to which the attention of Parliament should be particularly directed; for example, the constitution of an electoral or financial body of persons should be found in the body of the Act; but the mode of conducting the election of the electoral body, and the rules as to proceedings at meetings of the financial body, may not improperly be placed in a schedule. (pp 100 101, reprint (1902)) As I see it, to construe Note (iii) as having the effect of transforming a common law rule into a statutory one without any provision in the body of the Rules themselves would contravene at least two of the matters stated in this passage. Codification would reduce the role of the courts in keeping the common law up to date and in harmony, and that is not a matter of detail. Moreover, the change that would be effected by Note (iii) was a matter to which the attention of Parliament (not to mention, consultees) should have been drawn and there is nothing to suggest that this was done. The 2013 Rules were considered by the Joint Committee on Statutory Instruments with further explanation. The conventions observed by legislative drafters as described by Lord Thring in the passage I have set out make admirable good sense. Those conventions are part of the unwritten principles on which the British constitution depends, and the courts ought to proceed on the presumption that high standards of drafting have been observed. There is no reason to think that the principle behind the passage that I have quoted from Lord Thring is not equally valid today. The appellant submit that the view expressed by the MoJ in the Governments response to the 2013 consultation was wrong and that the effect of Note (iii) was to codify the common law. I do not agree for the reasons given above. The apparent width of section 45 of the 2009 Act is nothing to the point. The one place where the users might naturally expect to find guidance in this context on what the relevant law is, as opposed to some new operative provision, is in the notes to a prescribed form and Note (iii) provides that guidance for so long as the common law remains the same. But Note (iii) does not take away the role of the courts in reviewing the common law. As Davis LJ observed in the passage I have already cited, that Parliament was not intending to transform a common law rule into a statutory one is consistent with the fact that there is no rule in the 2013 Rules setting out the standard of proof and with the choice of wording in Note (iii) itself. That point cannot be universally true because there was no rule abolishing the chancery rule as to the commencement date for interest on costs in Hunt v RM Douglas (Roofing) Ltd, but as I have explained the context in which the footnote had to be interpreted was entirely different in that case. There is no equivalent or compelling legislative policy made known to the court here. Moreover, Note (iii) is completely silent on the provenance of the standard of proof for the short form conclusion of suicide or unlawful killing. If the source was the 2013 Rules, then the only relevant provision was Note (iii). It is hard to see how this could be because the word required is logically referring to a source of law which pre existed the 2013 Rules. That could be the 2009 Act, but that made no such provision. By a process of elimination, the provenance of that standard of proof could only be the common law. The word required is not used in the second sentence of Note (iii). I venture to suggest that it was not used there because the drafter could not point to any source for the statement outside the 2013 Rules and was merely making a statement based on his or her understanding of the effect of common law principles in this case. The courts had not had the opportunity of considering the standard of proof for narrative statements at that point. The drafter was merely making a deduction from the general principle that, in civil proceedings, the civil standard of proof applies. Another important feature of the drafting of Note (iii) is that it is in the present tense. It does not use the future tense. In my judgment, that means that the provision does not have the effect of ruling out any further change in the common law. The correct interpretation in the light of the background material is that Note (iii) was merely speaking as to the state of the law as at the date on which the 2013 Rules came into effect. Starting from the position that the standard of proof is set by the common law, the word is means has been held to be and is, and not is to be or shall be. If it had been intended to be mandatory for the future, it would have used the words shall be especially as these forms were to be seen and used not just by coroners but by jurors and other non lawyers. Finally, it is not without significance that under section 45 of the 2009 Act these Rules were made by the Lord Chief Justice of England and Wales in consultation with the Lord Chancellor. That reflects the constitutional principle that it is primarily a judicial function to lay down rules which govern the conduct of judicial hearings. It is the principle on which much of Schedule 4 to the Constitutional Reform Act 2005 on the division of functions between the Lord Chancellor and the Lord Chief Justice of England and Wales is based. Given that there was no statutory provision dealing with the standard of proof in inquests, and that it was governed by the common law, it would be very strange if the effect of the rules was to prevent the courts developing the common law in the future. The identity of the Lord Chief Justice as the person who was to make the rules (in consultation with the Lord Chancellor) would seem in any event to run counter to the notion that in that capacity he had power to make rules bringing about a substantial change, especially one that was controversial. Another factor relevant to interpretation is that Note (iii) produces the possibility of differential standards of proof in the same inquest, for which it must have appeared likely, even in 2013, that there might have to be some reconsideration in the future. Finally, there is a presumption in statutory interpretation that Parliament did not intend to make a casual change in the common law. As Bennion on Statutory Interpretation explains: (1) It is a principle of legal policy that law should be altered deliberately rather than casually, and that Parliament should not change either common law or statute law by a sidewind, but only by measured and considered provisions. In the case of common law, or Acts embodying common law, the principle is somewhat stronger than in other cases. It is also stronger the more fundamental the change is. (section 26.8) In all the circumstances, to hold that Parliament had set down the standard of proof in Note (iii) would in my judgment be inconsistent with this presumption. I therefore reject the appellants submission that Note (iii) has codified the law. All that has happened is that Note (iii) has set out the common law as at the date of the 2013 Coroners Rules and did not exclude the power of the courts to develop the common law. As I have said, Davis LJ made a powerful point when he held that, had that been the intention, there would have to have been a direct statement to that effect. of proof applying to short form conclusions at inquests. Case law in England and Wales on the criminal standard of proof in cases where there are grounds for a conclusion of suicide The real focus of the judgment of the Divisional Court was on the legal basis for what was essentially common ground before that court, namely that a conclusion of suicide had to be reached on the criminal standard of proof. Having examined the case law, their conclusion was: I turn next to consider the case law on the question of the criminal standard We consider the true position to be that the standard of proof required for a conclusion of suicide, whether recorded in short form or as a narrative statement, is the balance of probabilities, bearing in mind that such a conclusion should only be reached if there is sufficient evidence to justify it. (para 75) The Court of Appeal also examined the case law with great care and they also reached this conclusion. Their conclusion is to be found in para 88 of the judgment of Davis LJ: 88. The upshot is, in my judgment, that the decision in Ex p Evans is to be overruled. The reasoning in Ex p Gray (in so far as it relates to suicide) and the dictum of Woolf LJ in Ex p McCurbin with regard to suicide are not to be followed. The standard of proof to be applied at an inquest where an issue of suicide arises is in all respects, and whether for the purposes of a short form conclusion or for the purposes of a narrative conclusion, the civil standard of proof: that is to say, by reference to the balance of probabilities. There are many cases in which the Divisional Court or the Court of Appeal has in the past held that the criminal standard applies to suicide verdicts in a coroners inquest. In R v HM Coroner for Dyfed, Ex p Evans, (unreported) Divisional Court, 24 May 1984, Watkins LJ, with whom Forbes J agreed, held that it was not permissible for a coroners jury to bring in a verdict of suicide on a balance of probabilities. In R v West London Coroner, Ex p Gray [1988] 1 QB 467 Watkins LJ, with whom Roch J agreed, held that it was unthinkable that anything less than proof on the criminal standard would do. In R v Coroner for North Northumberland, Ex p Armstrong (1987) 151 JP 773, Woolf LJ and McCullough J held that the criminal standard applied. In R v Inner South London Coroner, Ex p Kendall [1988] 1 WLR 1186, Parker LJ and Simon Brown J held that the criminal standard applied. The criminal standard was assumed to be the correct standard in R v HM Coroner for Newbury, Ex p John (1991) 156 JP 456. It was held to apply in R v HM Coroner for Solihull, Ex p Nutt [1993] COD 449, R (Lagos) v City of London Coroner [2013] EWHC 423 (Admin), and Jenkins v HM Coroner for Bridgend and Glamorgan Valleys [2012] EWHC 3175 (Admin); [2012] Inquest LR 97. The Court of Appeal came to the same conclusion in R v Wolverhampton Coroner, Ex p McCurbin [1990] 1 WLR 719 and in R (Sreedharan) v HM Coroner for the County of Greater Manchester [2013] EWCA Civ 181; [2013] Med LR 89. The critical case in the analysis of both the Divisional Court and the Court of Appeal was Ex p Gray. The Court of Appeal held that the only one of the cases that held that the evidential standard for a conclusion of suicide in a coroners inquest was the criminal standard was Ex p Gray but that the holding was both obiter and per incuriam, since the court had not taken into account the decision in Hornal v Neuberger Products Ltd [1957] 1 QB 247, in which the Divisional Court held that where in civil proceedings it was in issue whether a criminal act had been committed, the evidential standard was the civil standard, not the criminal one. Accordingly, Davis LJ held that the Court of Appeal was not bound by it. I see no reason to doubt the conclusions of either the Divisional Court or the Court of Appeal on the effect of the existing case law. There is considerable authority for the proposition that suicide is not to be presumed and must be affirmatively proved by some evidence (see, for example, In re Davis, decd [1968] 1 QB 72, 82, per Sellers LJ). It must be proved, and it is not permissible to fill in gaps in the evidence. It is not sufficient to say that, if all other causes of death are ruled out, it must have been a suicide. We are not concerned with this branch of jurisprudence on this appeal. Should the standard of proof for short form conclusions of suicide and narrative conclusions of suicide be the same? Both courts below answered this question in the affirmative. The Divisional Court took what the Court of Appeal held was a bold course and held that, insofar as earlier authorities had held that the jury had to reach a verdict of suicide on the criminal standard, those authorities were wrong and should not be followed. Ms Karon Monaghan QC, for the appellant, submits that the lower courts were wrong not to follow the earlier decisions. The conclusion of suicide is a very serious one for the family of the deceased, as this case shows, and the family appearing at the inquest may be disadvantaged by the inquisitorial nature of the proceedings. It would not violate article 2 of the Convention to require the criminal standard. There was little assistance to be derived from the Commonwealth cases cited by the Divisional Court. Ms Monaghan also submits that the criminal standard for suicide should be maintained because of its implications for the family, who have a limited role in the inquest. The proceedings being inquisitorial, there are no parties. There is a statutory definition of interested persons which is wide enough to include the family but there are restrictions on the part that they can play in the proceedings. For instance, they can examine witnesses, but the coroner may disallow their questions. There are no closing submissions on the facts after the evidence has been led. There is no automatic disclosure of documents. In this case, Mr James Maughans widow was legally represented at the inquest and his family participated in the inquest, but there are considerable restrictions on public funding for representation of the family at an inquest. Ms Monaghan submits that, as (on their case) the criminal standard applies, the jury should not be invited to consider questions which enable them to make findings which effectively undermine the restriction on finding a conclusion of suicide on a balance of probabilities and enable them to avoid that restriction. There would on this basis be no narrative findings as to the elements of suicide if the suicide conclusion could not be reached on the criminal standard. That would, she submits, be a way of avoiding the strange situation in which a jury is able to make narrative findings on the elements of suicide but not make the short form conclusion itself. Ms Monaghan submits that there was a close affinity between suicide and a criminal offence. She pointed to the continuing application of the offence of encouraging or assisting in a suicide, which is a serious matter. The fact that coronial proceedings are said to be civil proceedings is not a deciding factor. My conclusions on this issue I fully accept that it may be an anxious cause of concern to the family of the deceased if the evidential standard for the short form conclusion of suicide is not the criminal standard but the lower civil standard. However, the issue of the correct standard of proof for a short form conclusion of suicide has to be decided on the basis of legal principle. The position is that to hold that a criminal standard applies is out of line not only with narrative conclusions but also with the principle applying to civil proceedings generally. I see no reason why the normal legal principles should not apply. On the contrary there are good reasons why they should apply. Short form conclusions on the basis of the civil standard may for instance enhance the recording of suicides and assist research for the future. In my judgment the arguments for doing so are compelling. I explain my reasons for so concluding below. (1) On legal principle, the civil standard should apply, and the common law does not demonstrate any cogent reason for not applying that principle The principle is clear and it is that in civil proceedings the civil standard of proof should apply. There may be cases where it does not so apply, for example, contempt and forfeiture, but they are rare. These particular situations involve risk to liberty and loss of property, both keenly protected by the common law. None of the many cases on dealing with the standard of proof for suicide cited here or below is binding on us. I have considered them for the assistance which they can give to this court today in deciding what standard of proof the law requires. The assistance is somewhat limited. In, for example, R v West London Coroner, Ex p Gray, [1988] QB 467, the Divisional Court was not bound by any earlier decision for the reasons which the Divisional Court in this case gave (para 59). So the Divisional Court in Gray had to articulate their own reasoning but they did not do so, perhaps because they had been misled into thinking that the earlier case of R v City of London Coroner, Ex p Barber [1975] 1 WLR 310 was decisive of the issue. The Divisional Court simply came to the view that it was unthinkable that any lesser standard should apply (see para 60 of the Divisional Courts judgment in this case). It is as if the common law had accepted that the criminal standard applied because of the links between coronial proceedings and criminal proceedings, the serious consequences of suicide (which at one time led to the denial of normal burial rites and the barbaric practice of burial on the highway impaled by a stake), and the then generally prevailing societal norms attaching stigma to suicide. There are rare occasions when the reason for a rule has disappeared but the rule remains. This would appear to be one of those situations. The rule cannot be left as it is. As the Divisional Court first pointed out, if the appellant is right and the criminal standard is applied to the findings which pertain to the elements of suicide, then some conclusions will be reached on one basis and some on another within a single inquest. A system of fact finding on this basis is internally inconsistent and unprincipled and does not meet the standards of a modern, principled legal system. It is quite different from the situation which Woolf LJ (as he then was) (with whom Lord Donaldson MR and Stocker LJ agreed) considered and found satisfactory in McCurbin. In that case, Woolf LJ saw no difficulty in the jury considering unlawful killing on the basis of the criminal standard and if not sure, misadventure on the civil standard: I am quite satisfied that, in a case where it is open to a jury, as a result of a coroners inquest, to come to a verdict of unlawful killing, the appropriate direction which the coroner should give to the jury is the simple one that they should be satisfied beyond all reasonable doubt or, as sometimes said, satisfied so that they are sure. That provides clear guidance to the coroners jury which they will be able to follow, and it is not necessary for them to be involved with sliding scales which are more appropriate for a judge than a jury. It is true that, in many cases where it is open to a coroners jury to find a verdict of unlawful killing, they may also have to consider the question of death by misadventure. However, in my view, this does not and should not give rise to problems. The coroner should indicate to the jury that they should approach, initially, the question as to whether or not they are satisfied so that they are sure that this is unlawful killing. If they come to the conclusion that it is unlawful killing, there is no need for them to go on to consider death by misadventure. But, if they come to the conclusion that it is not unlawful killing, they are not satisfied so that they are sure that that verdict is appropriate, then they will consider the question of misadventure and, in so doing, they do not need to bear in mind the heavy standard of proof which is required for unlawful killing. They can approach the matter on the basis of the balance of probabilities. The situation is that, just as it is important that a jury should not bring in a verdict of suicide unless they are sure, likewise they should not bring in a verdict of unlawful killing unless they are sure. (p 728) Finally, on this point, the civil standard still results in safeguarding the interests of those adversely affected by the conclusion. As the Divisional Court pointed out (para 56), a conclusion on the balance of probabilities still involves showing that it is more likely than not that the deceased took his own life and intended so to do. It is not enough for the coroner or the jury to think that because certain possibilities (for example, unlawful killing by a person unknown) can be discounted, that suicide must have occurred. (2) The criminal standard may lead to suicides being under recorded and to lessons not being learnt The retention of the criminal standard for the short form conclusion of suicide is likely to lead to the assessment of when, where and in what circumstances did the deceased meet his death being left in a partially complete and incoherent way, which may give an inaccurate understanding of the position. The reasons for suicide are often complex. It is important not to adopt a stereotypical attitude here as elsewhere. Society needs to understand the causes and to try and prevent suicides occurring. Statistics are the means whereby this can be done. If a criminal burden of proof is required, suicide is likely to be under recorded. This is especially worrying in the case of state related deaths. If there is an open verdict because the criminal standard of proof cannot be achieved, the circumstances of the case have to be analysed before it can be included in any statistics to show the true number of suicides. There is a considerable public interest in accurate suicide statistics as they may reveal a need for social and medical care in areas not previously regarded as significant. Each suicide determination can help others by revealing how suicide risks may be managed in future. I accept that to some extent policy makers and researchers can seek to mitigate the under recording of cases by examining cases of open conclusions but they may not be able to do so accurately and lowering the standard of proof would be a more satisfactory way of getting accurate figures. (3) The changing role of inquests and changing societal attitudes and expectations confirm the need to review the standard of proof I have answered the question on this appeal in terms of legal principle but it may be asked why the standard of proof should now be challenged and why it is thought that a different and lower standard should now apply. In answer I should like to record some significant changes in the legislative background and in societal attitudes and expectations that have occurred in recent years. As to legislative background, suicide used to be a crime, but it ceased to be such in 1961. Section 1 of the Suicide Act 1961 enacts that: The rule of law whereby it is a crime for a person to commit suicide is hereby abrogated. Although the offence has been abolished, it is still a crime to encourage or assist a person to commit suicide (Suicide Act 1961, section 2). There has been an unmistakeable change in societys understanding and attitude to suicide. This change is charted by Lloyd LJ in Kirkham v Chief Constable of the Greater Manchester Police [1990] 2 QB 283. In that case, the court was faced with the argument that there was a defence to a claim for damages against a prison authority where a person had committed suicide in circumstances where it was alleged that the prison authorities had been negligent, on the basis of the defence of ex turpi causa, namely that it was contrary to public policy for a person who had committed suicide to recover damages. Lloyd LJ rejected that defence, holding: It is apparent from these authorities that the ex turpi causa defence is not confined to criminal conduct. So we cannot adopt the simple approach favoured by the judge. We have to ask ourselves the much more difficult question whether to afford relief in such a case as this, arising, as it does, directly out of a mans suicide, would affront the public conscience, or, as I would prefer to say, shock the ordinary citizen. I have come to the conclusion that the answer should be in the negative. I would give two reasons. In the first place the Suicide Act 1961 does more than abolish the crime of suicide. It is symptomatic of a change in the public attitude to suicide generally. It is no longer regarded with the same abhorrence as it once was. It is, or course, impossible for us to say how far the change in the public attitude has gone. But that there has been a change is beyond doubt. The fact that aiding and abetting suicide remains a crime under section 2 of the Suicide Act 1961 does not diminish the force of the argument. The second reason is that in at least two decided cases courts have awarded damages following a suicide or attempted suicide. In Selfe v Ilford and District Hospital Management Committee, The Times, 26 November 1970, Hinchcliffe J awarded the plaintiff damages against a hospital for failing to take proper precautions when they knew that the plaintiff was a suicide risk. In Pigney v Pointers Transport Services Ltd [1957] 1 WLR 1121, to which I have already referred, Pilcher J. awarded damages to the dependants of a suicide under the Fatal Accidents Act 1846. Moreover, in Hyde v Tameside Area Health Authority, Court of Appeal (Civil Division) Transcript No 130 of 1981 another hospital case, the judge awarded 200,000 damages in respect of an unsuccessful suicide attempt. The Court of Appeal allowed the defendants appeal, on the ground that there had been no negligence on the part of the hospital, but not on the ground that the plaintiffs cause of action arose ex turpi causa. Selfe and Pigney are not binding on us. But they are important for this reason. They show, or appear to show, that the public conscience was not affronted. It did not occur to anyone to argue in either case that the granting of a remedy would shock the ordinary citizen; nor did it occur to the court. For the above reason I would hold that the defence of ex turpi causa is not available in these cases, at any rate where, as here, there is medical evidence that the suicide is not in full possession of his mind. To entertain the plaintiffs claim in such a case as the present would not, in my view, affront the public conscience, or shock the ordinary citizen. (p 291) Farquharson LJ and Sir Denys Buckley gave concurring judgments to the same effect. However, it must be pointed out that there are those who consider that suicide is a mortal sin, and suicide will constitute a stigma for the deceased and also for his family. In the more recent case of Braganza v BP Shipping Ltd [2015] UKSC 17; [2015] 1 WLR 1661, this court had to consider the application of the civil standard of proof where an employer alleged that the death of an employee, a chief engineer on a ship, who was lost overboard in the Atlantic, was suicide. The deceased was a Roman Catholic and considered that suicide was a mortal sin (per Lady Hale at para 41). If he had committed suicide, he would be disqualified from receiving a death in service benefit. In determining his entitlement, the employer had to take into account in forming its view the improbability of suicide having occurred. The deceaseds view of suicide must be recognised but it could not any more be described as a generally prevailing social attitude. Braganza illustrates that others may oppose suicide verdicts for a different reason: it may lead to the loss of employee and other benefits, such as the proceeds of life insurance. The role of inquests has also changed (see paras 8 to 10 above). Inquests are concerned today not with criminal justice but with the investigation of deaths. They take a new and different purpose in a case such as this. (4) Leading Commonwealth jurisdictions have taken this course As the Chief Coroner explains, courts in Canada, New Zealand and Australia have sought to align the evidential standard in inquests to that applying in civil litigation: see In re Beckon (1992) 93 DLR 4th 161, 176b f (Ontario Court of Appeal), Anderson v Blashki [1993] 2 VR 89 (Supreme Court of Victoria) (unlawful killing: These being civil proceedings, the assault allegation is required to be proved on the lesser standard on the balance of probabilities despite the criminal nature of the allegation.) and In re Sutherland (deceased) [1994] 2 NZLR 242, 251 (which cites with approval the first article of Professor Matthews). That leads to the further question about unlawful killing considered by the Court of Appeal, to which I now turn. Should the criminal standard be retained for unlawful killing? The Court of Appeal considered this question at the request of Mr Hough. The Court of Appeal considered that, if the civil standard applied to unlawful killing cases as well as suicide, that would promote consistency of approach within the proceedings, be consistent with principle and remove the internal inconsistency caused by having different rules for short form and narrative conclusions in this area too. However, the Court of Appeal rejected the view that the civil standard also applied to unlawful killing. While under section 10(2) of the 2009 Act, a finding of unlawful killing could not name the person thought to be responsible, criminal law concepts applied: see, for example, R (Duggan) v North London Assistant Deputy Coroner [2017] EWCA Civ 142; [2017] 1 WLR 2199. Moreover, the Court of Appeal was bound by the decision in McCurbin to hold that the criminal standard applied. Davis LJ also held that section 10(2) of the 2009 Act contemplated that the criminal standard would be available. Section 10(2) provides that the determination of the result of the inquest may not be framed in such a way as to appear to determine any question of criminal liability on the part of a named person I do not take Davis LJ to say that this provision means that the criminal standard must be applied in unlawful killing cases, as it is well established that the commission of an offence can be determined in civil proceedings on the civil standard. Davis LJ was rightly concerned about the protection for a person implicated in any conclusion of unlawful killing. Such conclusion might make it more likely that a criminal prosecution is brought. In practice, despite the provisions of section 10(2) of the 2009 Act (see para 12 above), the name of that person may be more likely to be identified if the standard of proof for unlawful killing is the civil standard, because that standard may be more easily met. That person might thus be less able to enjoy the protection that section 10(2) conferred on him. The Chief Coroners primary concern on this appeal is to place arguments before this court both ways, and the court is grateful to him for doing that. The Chief Coroner explains that the application of the criminal standard in unlawful killing cases derives from the fact that coronial proceedings used to be a means for finding criminal liability. It used to be the duty of the coroners jury where they found that the death was murder, manslaughter or infanticide, to state in the verdict the name of the person considered to have committed the offence or of being an accessory before the fact. However, section 56 of the Criminal Law Act 1977 provided that a coroners verdict shall not make any finding that any person is guilty of murder, manslaughter or infanticide or charge any person with any of these offences. On that basis, the criminal standard for unlawful killing has lost at least some of its historical purpose. The able and concise submissions of Mr Straw are principally directed to the question of the appropriate standard of proof for a verdict of unlawful killing. He submits that the civil standard should apply in all non criminal cases, unless there is some good reason to the contrary. There is no principled basis for distinguishing suicide and unlawful killing in this regard. He points out, as did Professor Matthews in his articles, that one unfortunate result of the criminal standard is that an open conclusion has to be entered and the family will be denied the determination of the jury on issues as to how the deceased came by his death and what could have been done in his case, or what could be done in the future, to prevent a recurrence. The person implicated in an unlawful killing is at no greater risk of prosecution than he would be if findings of fact had been made against him in civil proceedings. Mr Straw further submits that the identity of the person whom the jury considered was responsible for the death may be obvious to persons familiar with the facts, and he is at no greater risk than he would be in a civil trial. Ms Monaghan submits that the criminal standard of proof should be maintained for both unlawful killing and suicide. On her submission, it is additionally desirable to uphold that standard for unlawful killing as the person responsible for the death will often in practice be identifiable. In my judgment, the short form conclusions of unlawful killing and suicide cannot satisfactorily be distinguished with respect to the standard of proof. As Davis LJ accepted, both such decisions contrast with the standard applying to narrative statements and different standards of proof may therefore confusingly apply to different conclusions within the same inquest. It is said that it would not promote public confidence in the legal system if a conclusion of unlawful killing is reached in an inquest on the civil standard, and a prosecution is mounted as a result which then fails. But that can happen in any event, even if the existing criminal standard is maintained, and it is at least as likely that public confidence in the legal system will be diminished if the evidence at the inquest cannot lead to clear findings on a balance of probabilities. It would appear to the public as if the system has conspired to prevent the truth from being available to them. It seems to me that the public are likely to understand that there is difference between a finding at an inquest and one at a criminal trial where the accused has well established rights to participate actively in the process. Moreover, if there appears to be a risk that criminal proceedings will be brought before an inquest has been completed, the inquest can be adjourned, and in some circumstances must be adjourned (see the 2009 Act, Schedule 1). In that way the person who is at risk of prosecution is protected against a short form conclusion reached on a civil standard which is unfavourable to him. The person implicated in the conclusion of unlawful killing is equally liable to suffer prejudice from the findings by way of narrative statement, which can be found on a balance of probabilities. They may equally point a finger at him. In addition, as Mr Straw points out, the accused would be in the same position in an inquest as he already is if civil proceedings are brought against him. In summary, a common standard applying to both unlawful killing and suicide is more consistent with principle and removes an inherent inconsistency in the determinations made at an inquest. It reflects the general rule for the standard of proof in civil proceedings. In short, it seems to me that the arguments in favour of applying the rule that in most civil proceedings the civil standard will apply are stronger than those against, and that this Court should take the opportunity of so deciding. Conclusion conclusions at an inquest is the balance of probabilities. LORD CARNWATH: I am grateful for Lady Ardens comprehensive exposition of the factual, legal and policy background to this difficult case. Like her I agree with the conclusion of the courts below in respect of suicide, and would extend it to unlawful killing (not a course open to the courts below because of binding authority to the contrary). Since I understand there to be disagreement within this court, I will add a brief statement of my own reasons, which for the most part accord with hers. I would dismiss this appeal. The standard of proof for all short form As indicated by Lady Arden and the courts below, the previous case law is of no great help. The 2009 Act should in my view be approached as a new statute intended to restate the law in modern form, without undue regard to the history, but against the background of the current view of standards of proof in civil cases. The modern approach to that issue in respect of alleged suicide is usefully exemplified by the judgments of this court in Braganza (cited by Lady Arden at para 79). As was there recognised, earlier decisions, such as Ex p Gray, had been in effect overtaken by the approach authoritatively established in In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563 and In re B (Children) (Care Proceedings: Standard of Proof) [2008] UKHL 35; [2009] AC 11, which made clear that in civil cases there is only one standard of proof, viz the balance of probabilities: Those cases make it clear that there is not a sliding scale of probability to be applied, commensurate with the seriousness of the subject matter or the consequences of the decision. The only question is whether something is more likely than not to have happened. (Braganza v BP Shipping Ltd [2015] 1 WLR 1661, para 34, per Lady Hale) I can find nothing in the 2009 Act to support a more restricted approach. I note in particular: Section 1(1) imposes a duty on the coroner to conduct an i) investigation into the relevant death; ii) Section 5(1) indicates that the purpose of the investigation is to ascertain certain matters including who the deceased was, how, when and where he died, and (in an article 2 case) in what circumstances he came by his death; iii) Section 10 requires a determination as to the questions in section 5(1), but not framed in such a way as to appear to determine any question of criminal liability on the part of a named person; iv) Section 45 allows rules for regulating the practice and procedure, including provision about evidence. The emphasis on investigation and ascertainment of the relevant facts is consistent with leading authorities on the purpose of the inquest, which make clear that the primary purpose is to find facts, not apportion guilt. As Lord Lane CJ said in R v South London Coroner, Ex p Thompson (1982) 126 SJ 625; The Times, 9 July 1982: it should not be forgotten that an inquest is a fact finding exercise and not a method of apportioning guilt. The procedure and rules of evidence which are suitable for one are unsuitable for the other. In an inquest it should never be forgotten that there are no parties, there is no indictment, there is no prosecution, there is no defence, there is no trial, simply an attempt to establish facts. It is an inquisitorial process, a process of investigation quite unlike a criminal trial where the prosecutor accuses and the accused defends, the judge holding the balance or the ring, whichever metaphor one chooses to use. This is also consistent with the fact finding purposes of an article 2 inquiry, as described in R (Amin) v Secretary of State for the Home Department [2003] UKHL 51; [2004] 1 AC 653, para 31 per Lord Bingham: to ensure so far as possible that the full facts are brought to light; that culpable and discreditable conduct is exposed and brought to public notice; that suspicion of deliberate wrongdoing (if unjustified) is allayed; that dangerous practices and procedures are rectified; and that those who have lost their relative may at least have the satisfaction of knowing that lessons learned from his death may save the lives of others. See also the recent discussion of effectiveness in the context of an article 2 investigation, in In re Finucane [2019] UKSC 7; [2019] 3 All ER 191, para 126ff per Lord Kerr. There is nothing in the Act to suggest that a different, or more restricted, approach to handling the evidence or fact finding is appropriate, or even permissible, in particular categories of case, such as where there may be a finding of suicide or unlawful killing. Reading the statute in the light of the contemporary understanding of the law, I see no reason to do other than treat all cases and all issues alike: that is, in accordance with the ordinary standard for civil proceedings. Must this view of the statutory scheme be modified to take account of footnote (iii)? The statutory material has been set out by Lady Arden. The footnote states simply: The standard of proof required for the short form conclusion of unlawful killing and suicide is the criminal standard of proof. For all other short form conclusions and a narrative statement the standard of proof is the civil standard of proof. It is not in dispute that a statutory footnote may be an operative part of the statute. Whether it is so, and its effect in any particular case, must depend on the true construction of the footnote in its context, taking account of the statutory framework and its policy background. Rule 33 requires the coroner to direct the jury as to the law. Rule 34 (Record of inquest) by contrast is not about the law or the decision making process, but as its title suggests about recording the decision. It requires the determination and any findings required under section 10 to be made using Form 2. The rule contains no specific reference to the notes as such, nor anything to suggest that the notes are intended to prescribe a standard of proof, or anything else. In the form itself, item 4 (Conclusion as to the death) specifically incorporates a reference to notes (i) and (ii). The purpose is to indicate the possible short form conclusions and the possibility of a brief narrative conclusion as an alternative or in addition. There is no equivalent reference in the body of the form to note (iii), which is most naturally read as guidance as to what is understood to be the existing state of the law, rather than as prescribing a particular standard. The Divisional Court said: We accept that the power under section 45 of the 2009 Act to make coroners rules is sufficiently broad to enable a rule to be made stipulating the standard of proof to be applied in coroners proceedings. But if the intention had been to make such a rule, the appropriate place to do so would be in the body of the rules, and not in a prescribed form. Form 2, as is clear from its subject matter, is simply a form which must be used to record the determination which the coroner or jury has made. Its function is not to enact rules about how evidence given at an inquest must be approached. In our view, the reasonable interpretation of note (iii) is simply as stating, for the assistance of those using the form, what the law with regard to the standard of proof is understood to be, and not as legislating what the law shall be. (para 47) I agree. Although I have reached this view without needing to rely on the preparatory materials cited by Lady Arden, they provide useful confirmation. Like Lady Arden, and for the reasons given by her, I would apply the same approach to unlawful killing. LORD KERR: (dissenting) (with whom Lord Reed agrees) Section 45(1) of the Coroners and Justice Act 2009 provides that: Rules may be made in accordance with Part 1 of Schedule 1 to the Constitutional Reform Act 2005 (c4) (a) for regulating the practice and procedure at or in connection with inquests. Subsection (2) states that rules may make provision as to various matters, including: (a) provision about evidence This power was used to make the Coroners (Inquests) Rules 2013. Rule 34 of the 2013 Rules deals with the record of the inquest. It states that [a] coroner, or in the case of an inquest heard with a jury, the jury must make a determination using Form 2 (emphasis added). This is a straightforward provision. It connotes that the provisions of form 2 have to be followed. Form 2 contains a range of sundry instructions. The record must contain the name of the deceased (if known); the medical cause of death; how, when and where the death came about; and further particulars required by the Births and Deaths Registration Act 1953. There is nothing to indicate that compliance with these instructions is other than mandatory. Note (i) of the Notes to Form 2, by contrast, comprises a list of possible short form conclusions which may be adopted. These include at IV lawful/unlawful killing and at IX suicide. Plainly, it is not compulsory that any of the short form conclusions be reached. Note (ii) likewise contains a permissive provision. It states that [as] an alternative, or in addition to one of the short form conclusions listed under NOTE (i), the coroner or where applicable the jury, may make a brief narrative conclusion. Again, it is clear that arriving at a narrative conclusion is not obligatory. The critical note, for the purposes of this appeal is Note (iii). It provides: The standard of proof required for the short form conclusions of unlawful killing and suicide is the criminal standard of proof. For all other short form conclusions and a narrative statement the standard of proof is the civil standard of proof. The meaning of Note (iii) general considerations Two features of this note are significant. First, from the nine possible short form conclusions outlined in Note (i) (traditionally known as verdicts) only unlawful killing and suicide are identified as those to which the criminal standard applies. Secondly, the use of the word is clearly denotes that if a verdict of suicide or unlawful killing is to be reached, that may only occur where the coroner or the jury has been brought to a point of conviction beyond reasonable doubt that such a verdict is warranted. In my view, the framing of the note in this way was deliberate. The rendering of a short form conclusion is not obligatory but if one is expressed, then in the case of two specifically chosen verdicts, the criminal standard of proof must be applied. The reasons for this are not difficult to divine. A short form conclusion that the deceased died from, say, accident or misadventure; or natural causes; or a road traffic accident will, in the general run of cases, not be as significant as finding that they were unlawfully killed or committed suicide. The latter verdicts denote a solemn pronouncement and they have clear resonances beyond those of other short form conclusions. I do not find any incongruity in the circumstance that a narrative statement in respect of any of the verdicts listed in Note (i), including unlawful killing and suicide, should be on the basis of the civil standard of proof. The clear distinction (in cases of unlawful killing and suicide) between a short form conclusion (verdict) and a narrative statement (recital of the relevant testimony and transitory conclusions) should be recognised. A narrative statement recounts the salient evidence and circumstances. In the case of unlawful killing and suicide it should not purport to constitute a final conclusion on that evidence unless the coroner or the jury has become convinced beyond reasonable doubt that it is justified. The meaning of Note (iii) a textual approach In R (LG) v Independent Panel for the Tom Hood School [2010] EWCA Civ 142; [2010] PTSR 1462, section 52(3)(d) of the Education Act 2002 was considered. It stated that regulations shall make provision as to the procedure on appeals from orders excluding pupils from school. The relevant regulations made provision as to the standard of proof to be applied. Wilson LJ held that the procedure on appeals covered the issue as to the particular standard of proof that was applicable in reaching an answer to a question. At para 43 he said: The procedure on appeals is synonymous with the processing of appeals; and, when the panel takes the step (or reaches the stage) at which it determines a question whether a fact is established, a necessary part of its processing of that part of the appeal is to apply a particular standard of proof in reaching an answer to the question. A regulation about the inadmissibility of evidence of a specified character would in my view clearly fall within the rubric of procedure on appeal and there is in my view no material difference between a requirement that the panel should exclude evidence of a specified character and a requirement that it should apply a specified standard of proof to its appraisal of such evidence as is properly before it. Section 45(2) of the Coroners and Justice Act 2009 is, if anything, more explicit than section 52(3)(d) of the Education Act. Whereas the latter refers only to procedure on appeals, the Coroners and Justice Act 2009 expressly provides that the rules may make provision about evidence. And what is a stipulation about the standard of proof to be applied if it is not a provision about evidence? In para 35 of her judgment, Lady Arden says that Note (iii) to Form 2 of the rules forms part of an enactment and must be interpreted in the same manner as any other enactment and as part of that enactment. I agree. It is no less binding than a provision contained in a section of the Act itself. Its meaning and force should be considered as if it was prominent in the opening provision of the legislation. As Bennion states, If material is put into the form of a footnote it is still fully part of the Act and must be construed accordingly. And in Hunt v RM Douglas (Roofing) Ltd [1990] 1 AC 398 it was held that inclusion of rules in a footnote to a form that must be used has the effect of creating binding law. What then does Note (iii) mean? Lady Ardens approach to its interpretation is that the word required in the first sentence of the note is logically referring to a source of law which pre existed the 2013 Rules para 49 of her judgment. But why should this be so? In my view, the verb required in this context has a straightforward meaning. It is that the standard of proof which must be observed is the criminal standard. To construe it as referring to some form of provenance or earlier prescription of the standard to be applied is, in my respectful opinion, contrived. In its natural and ordinary meaning the note is simply saying that this is the standard that is needed before a verdict of suicide or unlawful killing may be returned. For the same reason, I find it impossible to attach any significance to the omission of the word, required from the second sentence of Note (iii) (para 50 of Lady Ardens judgment). I cannot agree with the (admittedly speculative) suggestion that this was because the drafter could not point to any source for the statement outside the 2013 Rules and was merely making a statement based on his or her understanding of the effect of common law principles in this case. In my view, there was no occasion for the drafter to look for a source for the statement. He or she was merely stating what the law was to be. Underpinning Lady Ardens analysis is the premise that the drafting of Note (iii) was linked to and dependent on the common law. On this basis, the meaning of the note would shift and change to reflect future developments in the common law. That would be, to say the least, an unusual way to proceed and one which would surely require express articulation in the provision itself. Again, therefore, I find myself in regretful disagreement with the suggestion that the use of the present tense in the note supports this conclusion and cannot see any warrant for investing the word is with the quite different connotation from the normal understanding of the word suggested in para 51 of Lady Ardens judgment. In fact, of course, her discussion of the use of the present tense requires that the note be interpreted as if the word is meant not only, as she suggests, has been held to be and is but has been held to be and is until future change in the common law. I cannot believe that such an unnatural meaning is justified when the text of the note is susceptible to a simple, straightforward construction viz that this is the standard to be applied so long as the statutory provision remains in force. The public consultation Lady Arden was influenced to her choice of interpretation of Note (iii) by what she considered to be the outcome of the consultation exercise conducted by the Ministry of Justice on the 2013 Rules when they were in draft form. Her consideration of this matter is at paras 24 to 31 of her judgment. I need not repeat details of the consultation document and the responses received. These have been fully set out in Lady Ardens judgment. Part of the Ministrys response to the consultation (set out by Lady Arden at para 26) does bear repetition, however: As the requirement to use the criminal standard of proof when returning a suicide verdict is established under case law rather than coroner legislation we cannot take forward a change in the law through secondary legislation flowing from the 2009 Act. However the Chief Coroner and the MoJ are considering the views expressed on this issue. This statement was made in reaction to the strong views expressed by some respondents to the consultation document on whether the criminal standard of proof for suicide should be replaced by the civil standard. Lady Arden has interpreted the Ministrys response as meaning that it had been decided that the 2013 Rules could not make a change in the law. I agree that this is an interpretation which may be placed on the Ministrys response. But I do not agree that it was outside the enabling power in section 45 to make a rule for coronial proceedings which replaced a common law rule para 31 of Lady Ardens judgment. It is trite that a common law rule can be amended, modified or even abolished by legislation. And, since, as Lady Arden says in para 35, Note (iii) forms part of an enactment and, as was said in Hunt v RM Douglas (Roofing) Ltd (see para 119 above) Rules in a footnote to a form that must be used have the effect of creating binding law, it would have been possible to effect a change in the law by the use of a note in a form provided for in the Rules. Of course, the note did not purport to change the law. But it confirmed the existing law. And the plain effect of that, in my opinion, was to give statutory expression to the common law rule. Once the 2013 Rules were enacted, therefore, the common law rule that proof to the criminal standard was required for a verdict of suicide or unlawful killing, was given statutory force. It became a statutory rule. And it could only cease to have force and effect by the enactment of a statutory provision amending or abolishing it. Conclusion on the proper interpretation of Note (iii) I have decided therefore that Note (iii) of Form 2 admits of no interpretation other than that the prescribed short form conclusion in inquests involving questions of unlawful killing or suicide can only be reached by applying the criminal standard of proof. In light of that view, it is not strictly necessary to consider case law relating to three associated issues: (i) the standard of proof in civil proceedings where a criminal offence is alleged; and (ii) how the verdict of suicide has been traditionally regarded; and (iii) the nature of proceedings in an inquest. Since the first (and to some extent the second) of these played a significant part in the decisions of the Divisional Court and the Court of Appeal, it is appropriate to say something of the issues, albeit briefly. The standard of proof required to establish a criminal offence in civil proceedings It is accepted (rightly) by the appellant that in civil proceedings generally the standard of proof applicable in relation to findings of fact is the balance of probabilities. It is also accepted (again rightly) that whereas it was previously considered that the standard of proof in civil proceedings could be adjusted according to the gravity of the allegation (Hornal v Neuberger Products Ltd [1957] 247, 266; R v Secretary of State for the Home Department, Ex p Khawaja [1984] AC 74, at 112 114), it is now established that there is a single standard to be applied in proceedings which are properly to be regarded as civil. In In re H (Minors) (Sexual Abuse: Standard of Proof) [1996] AC 563, 586C Lord Nicholls said: Where the matters in issue are facts the standard of proof required in non criminal proceedings is the preponderance of probability, usually referred to as the balance of probability. This is the established general principle. Lord Nicholls recognised that there could be exceptions to this general rule and subsequent cases have confirmed his caveat. In In re D (Secretary of State for Northern Ireland intervening) [2008] UKHL 33; [2008] 1 WLR 1499, while the balance of probabilities standard was applied to findings in parole proceedings, Lord Carswell at para 23 accepted that the criminal standard of proof could apply in some civil proceedings. At para 49, Lord Brown observed that the criminal standard of proof might apply in quasi criminal cases. In In re B (Children) (Care Proceedings: Standard of Proof) [2008] UKHL 35; [2009] 1 AC 11, while the House of Lords held that the civil standard of proof applied in care proceedings, Lady Hale, at para 69, stated that there were some proceedings, although civil in form, which were of such a nature as to make it appropriate that the criminal standard of proof be applied. Examples of quasi criminal cases justifying the application of the criminal standard of proof or something akin to it are to be found in a number of decisions between 2001 and 2009. The first of these was B v Chief Constable of Avon and Somerset Constabulary [2001] 1 WLR 340 concerning the making of sex offenders orders. Lord Bingham CJ applied a standard of proof that was for all practical purposes indistinguishable from the criminal standard in view of the seriousness and implications of the matters to be proved para 41(a). In Gough v Chief Constable of the Derbyshire Constabulary [2002] QB 1213, Lord Phillips MR applied an exacting standard of proof in practice hard to distinguish from the criminal standard because of the consequences that would follow if a football banning order was made. In R (McCann) v Crown Court at Manchester [2002] UKHL 39; [2003] 1 AC 787, a case on the making of anti social behaviour orders, Lord Steyn suggested a standard of proof that was virtually indistinguishable from the criminal standard given the seriousness of matters involved para 37. Significantly, at paras 56 and 82 83, Lord Hope stated that it was not an invariable rule that the lower standard of proof must be applied in civil proceedings. In some cases, he said, the interests of fairness, the criminal or quasi criminal nature of an allegation, or the serious consequences of a finding could require the criminal standard. The other members of the Appellate Committee agreed with Lord Steyn and Lord Hope. In Birmingham City Council v Shafi [2008] EWCA Civ 1186; [2009] 1 WLR 1961, the Court of Appeal followed the reasoning in McCann to apply the criminal standard in applications for an injunction in circumstances where the relief was identical or almost identical to an anti social behaviour order. What these cases illustrate is that the characterisation of proceedings as criminal or civil will not automatically predetermine the standard of proof to be applied. If the proposition which is sought to be established is sufficiently grave or carries significant consequences for those whom it will affect, the criminal standard of proof may be deemed to be appropriate. How a finding of suicide has traditionally been regarded As the appellant submitted, the verdict of suicide has traditionally been regarded as one which carries serious legal and social consequences. Consideration of whether the verdict should be returned is one of the utmost seriousness and potential complexity, not least because it involves consideration of whether the deceased intended to kill himself or herself. Until the introduction of the Suicide Act 1961, a finding of suicide was also a finding of guilt of a criminal offence. Encouraging or assisting the suicide or attempted suicide of another still constitutes a criminal offence: section 2 of the 1961 Act. In R v West London Coroner, Ex p Gray [1988] QB 467, 477, Watkins LJ said that a suicide conclusion was a drastic action which often leaves in its wake serious social, economic and other consequences. In R v HM Coroner for Dyfed, Ex p Evans (unreported 24 May 1984) it was stated that an overly ready verdict of suicide oppresses the living and demeans the dead. A verdict of suicide causes stigma to the memory of the deceased in circumstances in which there is a clearly established policy of avoiding so far as possible any unnecessary stigma per Simon Brown J in R v Inner South London Coroner, Ex p Kendall [1988] 1 WLR 1186, 1192. Most recently, in this court, there was unanimous agreement as to the seriousness of a conclusion that a death was due to suicide (although there was disagreement as to the outcome of the appeal). In Braganza v BP Shipping Ltd [2015] UKSC 17; [2015] 1 WLR 1661, Lady Hale said at para 36 that such a finding had serious consequences for the family of the deceased and at para 41 that for many religions suicide was a mortal sin. At para 61 Lord Hodge stated that a finding that an employee had committed suicide carried a stigma for his spouse. Lord Neuberger acknowledged (at para 107) that, having suffered the blow of losing her husband, the finding of an inquiry that he had killed himself would involve additional blows. There can be no doubt, therefore, of the gravity of a finding of suicide or of the need to distinguish it from other causes of death in terms of the level of proof required to establish it. There are, of course, contrary views as to whether the criminal standard should be applied. Some of these have been referred to in the judgment of Lady Arden. But none suggests that a verdict of suicide is other than a very serious matter. There is nothing in the least untoward, therefore, in placing suicide (and unlawful killing) in a special category requiring proof of those verdicts to the criminal standard. Note (iii) expressly does so and, for the reasons given at para 116 above, there is nothing incongruous in the circumstance that a short form conclusion requires that heightened level of proof, whereas the narrative version does not. Even if such an incongruity existed, that would not warrant a refusal to apply the plain effect of the language of Note (iii), constituting as it does a direct statutory provision that a short form conclusion as to suicide and unlawful killing may only be made where there is proof beyond reasonable doubt to sustain it. Whatever anomaly might be said to arise, it is not open to the courts to disapply what is unambiguous statutory language. True it may be, as Lady Arden says in para 27 of her judgment, that the Ministry of Justice decided that it could not make a change in the law by the 2013 Rules. And it may also be true, as she says in the same para, that the criminal standard was not established by those rules, for it had its origins in the common law. But what the 2013 Rules unquestionably established was a statutory basis for the application of the criminal standard of proof for verdicts (or short form conclusions) in cases of suicide and unlawful killing and that statutory imperative cannot be displaced by judicial pronouncement. It has full force and effect until amended or abolished by subsequent statutory provision. The nature of proceedings in an inquest As submitted by the appellant, inquests are not civil or criminal proceedings. They are sui generis proceedings with rules of procedure of their own. In R v South London Coroner, Ex p Thompson (1982) 126 SJ 625; The Times, 9 July 1982, Lord Lane CJ said: it should not be forgotten that an inquest is a fact finding exercise and not a method of apportioning guilt. The procedure and rules of evidence which are suitable for one are unsuitable for the other. In an inquest it should never be forgotten that there are no parties, there is no indictment, there is no prosecution, there is no defence, there is no trial, simply an attempt to establish facts. It is an inquisitorial process, a process of investigation quite unlike a criminal trial where the prosecutor accuses and the accused defends, the judge holding the balance or the ring, whichever metaphor one chooses to use. It is unwise, therefore, to categorise inquests as civil proceedings simply because they do not fit the criminal model. It is even less appropriate to consider that the civil standard of proof should apply to all matters which fall to be decided in an inquest. Given the unique nature of inquests, it is not surprising that some issues should be susceptible to differing standards of proof. Overall conclusion It would be ironic, to say the least, that Note (iii) which, on its face, decrees that verdicts of suicide and unlawful killing should only be returned if proof of them measures up to the criminal standard, proved to be the instrument of the abolition of this traditional rule. The inference that this is its effect is based on what is perceived to be the anomaly that a narrative conclusion effectively permits a verdict of suicide on the basis of the balance of probabilities, whereas a short form conclusion requires proof beyond reasonable doubt. For the reasons that I have sought to explain, there is, in truth, no incongruousness between the two. In my view, on a proper understanding of the effect of Note (iii), the present state of the law is that there must be proof beyond reasonable doubt before a verdict of suicide or unlawful killing may be returned. I would allow the appeal.

UK-Abs

Lady Arden explains that neither the Coroners and Justice Act 2009 (the Act) nor the European Convention on Human Rights requires any particular standard of proof for conclusions at an inquest [2,12]. There was case law to the effect that conclusions of suicide and unlawful killing should be reached on the criminal standard [60, 70]. A coroners inquest is not, however, a criminal proceeding [2]. The Coroners (Inquests) Rules 2013 (the Rules) contain a form which must be used to record the result of an inquest [15]. Note (iii) to this form explains that the standard of proof for short form conclusions of suicide and unlawful killing is the criminal standard and that for other conclusions the civil standard applies [16]. Adopting Wilson LJs reasoning in R (LG) v Independent Appeal Panel for Tom Hood School [2010] EWCA Civ 142; [2010] PTSR 1462 Lady Arden holds that the Rules could prescribe standard of proof. The issue is whether the effect of Note (iii) is to require a particular standard. The Ministry of Justice (the MoJ) consulted on the Rules in draft [24]. The MoJs response document explained that case law had established the standard of proof and the Rules could not change the law [26 27]. Lady Arden holds that that response is relevant to interpreting Note (iii) and shows that Parliament did not intend to change or codify the law as it understood it to be [42]. A footnote can lay down a new legal rule (Hunt v R M Douglas (Roofing) [1990] 1 AC 398) but the circumstances of that case were very different [43]. The contrary result in this case would contravene the drafting conventions on which our unwritten constitution depends [44]. On its true interpretation, Note (iii) did not take away the power of the courts to develop the common law [56]. Lady Arden concludes that, consistently with legal principle, the civil standard of proof applies to short form conclusions of suicide [68]. The previous case law is not binding on the Supreme Court and does not identify a good reason against applying the civil standard [70]. To apply different standards of proof for short form and narrative conclusions leads to an internally inconsistent system of fact finding [71]. If a criminal standard of proof is required, suicide is likely to be under recorded [73 74]. Societal attitudes to suicide have changed and the role of inquests has developed to be concerned with the investigation of deaths, not criminal justice [75 81]. Also, certain Commonwealth jurisdictions have aligned the standard of proof applicable in inquests with the standard applicable in civil proceedings [82]. Lady Arden holds that the civil standard of proof also applies to determinations of unlawful killing [93],[96]. There is then consistency between the determinations made at an inquest [96]. In his concurring judgment, Lord Carnwath considers that the Act does not indicate that the civil standard of proof cannot apply a conclusion of suicide [100]. In his view, Note (iii) does not have that effect. The public consultation materials confirm that position [107]. Lord Kerr in his dissenting judgment holds that the criminal standard of proof applies to short form conclusions of suicide and unlawful killing [143]. There is no inconsistency caused by a short form and narrative conclusion having different standards of proof [116]. There is nothing untoward in putting suicide and unlawful killing in a special category of verdicts that require proof to the criminal standard [139]. Note (iii) to the form did not attempt to change the law, but confirmed what the existing law was. As a result, the common law rule became a statutory rule [125]. It can only cease to have effect if Parliament enacts a statutory provision to amend or abolish it [126]. The Rules unquestionably established a statutory basis for the application of the criminal standard of proof for short form conclusions of suicide and unlawful killing [132]. Lord Reed agrees with Lord Kerr.

A father applies under the Hague Convention on the Civil Aspects of International Child Abduction 1980 (the Convention), set out in Schedule 1 to the Child Abduction and Custody Act 1985 (the 1985 Act), for a summary order for the return of his young daughter from England to Israel. The mother opposes the application but a High Court judge grants it. On the mothers appeal the Court of Appeal rules that it had not been open to the judge to make an order under the Convention. So it sets his order aside. But the Court of Appeal then proceeds to invoke the inherent jurisdiction of the High Court (the inherent jurisdiction) and, pursuant to it, the court makes a summary order analogous to that made by the judge, namely for the immediate return of the child to Israel, in substitution for his order under the Convention. The overall question raised before us by the mothers further appeal has been whether the Court of Appeal was entitled to make the summary order for the childs return to Israel under the inherent jurisdiction. But the question has been broken down into two parts. First, was the inherent jurisdiction in principle available to be exercised in the making of a summary order for the childs return? Second, if so, was the Court of Appeals approach to the exercise of the jurisdiction flawed? This court has already answered the overall question. It heard the appeal on 18 July 2019 and received the last of the parents further written submissions on 1 August. It was conscious of the urgency of the decision. The aspiration set out in Practice Direction 3.4.5(c), annexed to the Supreme Court Rules 2009, is for the result of an appeal in a Convention case to be given within two weeks of the end of the hearing; and the court considered that the aspiration should apply equally to the instant appeal. On 14 August 2019 it therefore made its order, which was that the mothers appeal be allowed and that the Court of Appeals order under the inherent jurisdiction be set aside. By todays judgments, the court will explain its reasons for having made that order. In doing so it will explain why its answer to both parts of the overall question is yes. The mother and father are Israeli nationals, aged 31 and 29 respectively. They married in 2013 and have only the one child to whom I have referred. She is now aged almost three. They lived in Israel with the fathers parents. The father worked as a police officer. The marriage ran into difficulties and, partly as a result of them, the parties decided to move, with the child, to England. The move took place on 25 November 2018. They rented a flat in North London. The father found employment as a waiter and the child started to attend nursery school. Although both parents regarded it as possible that, were the marriage to break down, they would return to live separately in Israel, there was no agreement that they would necessarily do so. In London the marriage quickly broke down. On 10 January 2019 the father told the mother that he intended to return to live in Israel; and he sought to insist that, with the child, the mother should also return there, where issues between them could be resolved. While accepting that the marriage had broken down, the mother replied that she proposed to remain with the child in London. On 14 January 2019 the mother called the police and alleged to them that the father intended to kidnap the child. The police advised the father to leave the flat. He thereupon returned to Israel, where he continues to live. The mother continues to live with the child in London. Acting by lawyers, the father quickly issued proceedings for divorce and custody of the child in the Rabbinical Court of Jerusalem, which remained pending at the date of the hearing before the judge. Judgment at First Instance The factual allegation which formed the basis of the fathers application under the Convention was that, on the day when the marriage finally broke down, namely 10 January 2019, the mother had wrongfully retained the child in England and Wales. The first of the mothers three contentions by way of defence was that the child had become habitually resident in England and Wales by 10 January 2019. By his written judgment handed down on 17 April 2019, [2019] EWHC 1310 (Fam), [2019] 3 FCR 82, following a hearing on 15 April, the judge (MacDonald J) rejected this contention and the Court of Appeal refused to permit the mother to appeal against his rejection of it. For present purposes it is therefore an established fact that, at any rate until 10 January 2019, the child remained habitually resident in Israel. The second of the mothers contentions was that her retention of the child on 10 January 2019 had not been wrongful. She linked this contention with an assertion pursuant to article 13(a) of the Convention that the father had given a relevant consent. Although in earlier presentations of her case she had alleged that he had consented both to the childs removal from Israel on 25 November 2018 and to the retention of her in England on 10 January 2019, her case of consent became properly focussed in the position statement laid on her behalf before the judge: it was simply that he had consented to her retention of the child on 10 January. For the fathers consent to the childs removal from Israel on 25 November was irrelevant to his claim of wrongful retention. As the Court of Appeal was later to hold, the proper focus of the mothers case of consent for some reason became lost during the hearing before the judge. Her case was taken to be that the father had consented to the childs removal from Israel on 25 November. In relation to that point, the judge received brief oral evidence from the mother, from a male friend of hers and from the father; and it is important to note that the judge received no oral evidence on any other aspect of the case. In the event he held that the fathers consent had been operative at the time of the childs removal from Israel; that the mother had therefore established a defence under article 13(a) of the Convention; and that the defence yielded to him a discretion not to order the childs return to Israel. The third of the mothers contentions, made pursuant to article 13(b) of the Convention, was that there was a grave risk that a return to Israel would expose the child to physical or psychological harm or would otherwise place her in an intolerable situation. In this regard the mother, in her written evidence, made what appeared to be serious allegations of domestic abuse against the father. She alleged that his work as an Israeli policeman had in effect brutalised him; that during the marriage he had pushed or hit her every two or three weeks; that he had once held a gun to her head and had frequently demonstrated how he could crush her skull with his hands; and that once in Israel and again on an underground train in London he had even assaulted the child. The judge weighed the mothers allegations of domestic abuse against the fathers written denials and, in particular, against other material which on any view raised substantial concern about her credibility in that respect. For, in text messages sent to the mother on 13 January 2019, the male friend who gave oral evidence on her behalf had suggested that, in any approach on her part to the Rabbinical Court in London, she should play the game; should dress modestly; should pretend that she was religious; and should express fear that the father would kidnap the child. He had also suggested that she should offer the father greater contact with the child than she genuinely intended to afford to him in order to induce him to give her a Jewish get. Indeed it was on the day following her receipt of these messages that the mother had alleged to the police that the father intended to kidnap the child. The judge was fully entitled to observe that, in the light of the above material, he should approach the mothers allegations of domestic abuse with caution. He then evaluated them in accordance with the approach recommended for Convention cases in In re E (Children) (Abduction: Custody Appeal) [2011] UKSC 27, [2012] 1 AC 144. He therefore heard no oral evidence in relation to them and made no findings about them. Instead he sought to make a reasonable assumption about the maximum level of risk to the child in the light of all the available evidence. On this basis his assumption was of some risk to the mother, but not directly to the child, of physical and verbal abuse on the part of the father. The judge then addressed a series of undertakings offered to him by the father, including not to molest the mother in Israel, not to remove the child from her care in Israel without an order of the Israeli court and to provide reasonable financial support for both of them there until that court might otherwise order. The judges conclusion was that, in the light of the undertakings, the risk to the child, if returned to Israel, did not reach the level of gravity required by article 13(b). So that defence failed. The judge did not consider, because he was not asked to consider, whether the undertakings would be enforceable against the father in Israel. The Court of Appeals view, however, was that the judge would have been unlikely to have overlooked the well recognised concern about the enforceability in a foreign state of undertakings given to the English court. Then the judge turned to the discretion whether to order the childs return to Israel, to which his finding that the father had consented to her removal from Israel appeared to him to have given rise. In this regard he reminded himself that he was entitled to have regard to the policy aims of the Convention. He regarded them as based on the recognition that it is of manifest benefit to a child to have decisions regarding their welfare taken in the jurisdiction of their habitual residence. It was by those steps that the judges order for the childs return to Israel was The judge surveyed the multitude of features which connected the child to Israel and, by contrast, her connection with the UK for less than five months prior to the hearing; and he concluded that he should not exercise his discretion to decline to order her return to Israel. made under the Convention. But then the judge added a postscript. It was based on passing observations which he had made earlier. He had there reminded himself that, under article 18 of the Convention, its provisions for the return of children did not limit the domestic powers of a contracting state to order their return at any time; and he had referred to the decision of this court in In re L (A Child) (Custody: Habitual Residence) [2013] UKSC 75, [2014] AC 1017 (the L case), as for which see para 43 below. His postscript was: As I have made clear above, I am satisfied that had I concluded that [the child] was habitually resident in this country, I would have reached the same decision under the inherent jurisdiction The father had issued no application for an order for the childs return to Israel to be made under the inherent jurisdiction. Indeed no reference had been made to that jurisdiction in the course of the hearing, whether by counsel for either party in the course of their written or oral submissions to the court or by the judge himself. No doubt many judges (at any rate I speak for myself) have occasionally been guilty of including in judgments ill considered, off the cuff, remarks which later prove highly unfortunate. The counterfactual hypothesis of the judges postscript was that the child had been habitually resident in England on 10 January 2019, with the result that the Convention would, for that reason alone, not have applied to a retention on that date. But, apart from the wider principles applicable to the making of an order under the inherent jurisdiction addressed below, the hypothesis of the childs habitual residence in England should by itself have generated substantial questions, never addressed by the judge, about the propriety of such an order. One question would of course have surrounded recognition of the fact that (to use the judges own words quoted in para 13 above) it is of manifest benefit to a child to have decisions regarding their welfare taken in the jurisdiction of their habitual residence. Judgment of the Court of Appeal On 18 June 2019 the Court of Appeal (Flaux, Moylan and Haddon Cave LJJ) not only heard the mothers appeal but determined it, by a judgment delivered by Moylan LJ with which the other members of the court agreed: [2019] EWCA Civ 1065, [2019] 3 FCR 49. The courts order is however dated 24 June 2019. There is no need to consider in detail the courts reasons for setting aside the judges order under the Convention. They will already be apparent in any event. In summary the court held that there had been no focus in the judgment on the fathers foundational assertion that there had been a wrongful retention of the child by the mother on 10 January 2019; and it held that, once the judge had found that there was no agreement between the parties to return to Israel if the marriage broke down, there was no ground for concluding that the mothers retention of the child in England on and after that date had been wrongful. Therefore the Convention had not been engaged. There is, by contrast, every need to consider in detail the courts reasons for substituting an order for the childs return to Israel under the inherent jurisdiction. In this regard the court in para 63 identified the following two issues: (i) whether the mother was prejudiced by the absence of any application [for the exercise of the inherent jurisdiction] and by the other matters relied on by her so as to make the judges determination unfair; and (ii) whether the judge was in a position to make a sufficient welfare assessment necessary to the proper exercise of the inherent jurisdiction. (Emphasis supplied) It is worthwhile to note the courts use of the word determination in its formulation of the first issue. In at least six places in the judgment the court referred to the judges determination or decision to make an order under the inherent jurisdiction. The court well knew that he had made no such determination or decision but it clearly regarded it as appropriate to deem him to have done so. In what follows, however, it is as well to remember that the order under the inherent jurisdiction was made not by the judge on 17 April 2019 but by the Court of Appeal on 18 June 2019. This leads to the second issue identified by that court. If the Court of Appeal, always invested with the powers of the judge against whose judgment an appeal is brought and thus in this case invested with his inherent jurisdiction, was considering whether to make a fresh order on a different basis, it had to survey the relevant evidence for itself; indeed, as is agreed between the parties, it had to satisfy itself that the evidence was sufficiently up to date to form the basis of an order which could be made that day by reference to circumstances which then existed. On the contrary, however, in its formulation of the second issue, the court asked whether the judge had been in a position to make the requisite welfare assessment. Central to the mothers objections in the Court of Appeal to the making of any order under the inherent jurisdiction was a contention that the courts exercise of that jurisdiction had to be conducted by reference to an overarching consideration, namely the paramountcy of the childs welfare, entirely different from the considerations by reference to which the jurisdiction under the Convention would fall to be exercised. The Court of Appeals answer was to rely on the judges analysis of the discretion not to make an order under the Convention which, however mistakenly, he had considered to have arisen from the fathers consent to the childs removal from Israel. In the judgment the Court of Appeal reasoned as follows: 65. there were no additional matters of substance which would not be relevant to the exercise of that discretion but would be relevant to the discretion under the inherent jurisdiction. 66. it could be argued that the inherent jurisdiction has a wider canvas based, as it is, on welfare being the courts paramount consideration but, when the court is deciding whether to exercise its discretion to make a return order under the 1980 Convention once a ground for opposing the return has been established, the court will consider the wider canvas, in particular when the ground is other than grave harm. The Court of Appeals resolution of the two issues set out in para 22 above was therefore as follows, at para 68: the mother was not significantly prejudiced in this case (i) so as to make the judges determination unfair; and (ii) assessment. (Emphasis supplied) the judge was in a position to make a sufficient welfare Their resolution led to the courts overall conclusion as follows, at para 73(c): The judge was entitled to make an order for [the childs] return under the courts inherent jurisdiction and his summary welfare decision to do so is fully supported by the reasons he gave. (Emphasis supplied) Inherent Jurisdiction Available The first basis of the mothers assault on the Court of Appeals summary order for the childs return to Israel under the inherent jurisdiction is that it was not open to that court, and would not have been open to the trial judge, to deploy the inherent jurisdiction in that way. Her case is that a summary order for the childs return outside the Convention could have been made only as a specific issue order under the Children Act 1989 (the 1989 Act). Section 10 of the 1989 Act empowers the court to make the orders specified in section 8(1). They include a specific issue order, there defined as an order giving directions for the purpose of determining a specific question which has arisen in connection with any aspect of parental responsibility for a child. An order for the return of a child to a foreign state falls within that definition; and a specific issue order to that effect can be made not only after a full inquiry into the merits of the case but also on a summary basis; see paras 34 and 35 below. Had it been otherwise appropriate for the Court of Appeal to make a summary order in the circumstances of the present case, it could have been made as a specific issue order. There would have been jurisdiction to make such an order in relation to this child. For, had the child remained habitually resident in Israel on the date when, in the absence of an application, the court was considering whether to make the order (18 June 2019), her presence in England and Wales, coupled with the absence of her habitual residence in any part of the United Kingdom, would have endowed the court with jurisdiction to make it: sections 2(1)(b)(ii) and 3(1)(b) of the Family Law Act 1986 (the 1986 Act). If, alternatively, the child had become habitually resident in England by that date, article 8(1) of Council Regulation (EC) No 2201/2003 (Regulation B2R), which applies even when the other possible jurisdiction is not a member state as there defined, would, as confirmed by section 2(1)(a) of the 1986 Act, have endowed the court with jurisdiction to make it. But could a summary order for the childs return to Israel also have been made under the inherent jurisdiction? In principle the inherent jurisdiction was as fully available in relation to this child as was the jurisdiction to make a specific issue order. For, had she remained habitually resident in Israel on 18 June 2019, a summary order for the childs return there under the inherent jurisdiction, not being an order which gives care of a child to any person, would have fallen neither within section 1(1)(d) of the 1986 Act nor otherwise within Part 1 of it; and the result would have been the application of the bases of jurisdiction under common law, including that of the childs presence in England. If, alternatively, she had become habitually resident in England by that date, article 8(1) of Regulation B2R would, as in the case of a specific issue order, have endowed the court with jurisdiction to deploy the inherent jurisdiction in relation to her. The mother accepts that, prior to the advent of the 1989 Act, a summary order for the return of a child abroad could be made by the High Court in the exercise of its inherent jurisdiction. She reminds the court of the classic exposition of Buckley LJ in In re L (Minors) (Wardship: Jurisdiction) [1974] 1 WLR 250. It is easy to forget that, before ordering the return of the child to Germany in that case, the High Court judge had conducted a full merits based inquiry into what the childs welfare required. Strictly speaking, the remarks of Buckley LJ at pp 264 265 were therefore only passing observations. Nevertheless he there convincingly explained why an order under the inherent jurisdiction for a prompt return of children wrongly taken from a foreign state, in order that the courts there might determine their future, might well be in their best interests at that stage; and that a full investigation of the merits of the parental dispute in the English courts might be incompatible with them. These remarks formed the basis of a number of decisions in the following decade, beginning with that of In re C (Minors) (Wardship: Jurisdiction) [1978] Fam 105. On 1 August 1986 the 1985 Act, to which the Convention was scheduled, came into force. It is a fair working assumption that application of the Convention will generally identify the circumstances in which it is, and is not, in the interests of a child to be the subject of a summary order for return to another contracting state. The court should look critically at any application for a summary order, whether as a specific issue order or as an order under the inherent jurisdiction, for the return to a contracting state of a child who as in the present case has been held not to be susceptible, or who would probably be held not to be susceptible, to the making of an order under the Convention. In her judgment in the Irish High Court in KW v PW [2016] IEHC 513, OHanlon J went further: 57. This Court finds that the inherent jurisdiction is not applicable in this case. The inherent jurisdiction exists to fill a lacuna in the law and there is no lacuna here. To use the inherent jurisdiction to make an order returning these children to Australia after holding that they are habitually resident in Ireland would be to circumnavigate the content and the principles of the Hague Convention. One has considerable sympathy for the judges approach; but I respectfully suggest that it would be better for our approach in England and Wales to be less categorical. For, as I will explain in para 53 below, the principles of the Convention are not constructed by reference to the paramountcy of the childs welfare and so we must recognise, as being at any rate a possibility, that a childs welfare will require a summary order for his return to a contracting state even when the Convention does not so operate as to require it. On 14 October 1991 sections 8 and 10 of the 1989 Act came into force. It was, according to the mother, at this moment, which marked the advent of the specific issue order, that it became impermissible for a summary order for the childs return abroad to be made instead under the inherent jurisdiction. The mother cites the decision of the appellate committee of the House of Lords in Richards v Richards [1984] AC 174. It held that, following an enactment in 1967 which conferred specific jurisdiction to order a spouse to leave the home, a court could no longer make such an order pursuant to its general jurisdiction to grant an injunction. Lord Hailsham of St Marylebone, Lord Chancellor, said at pp 199, 200: where, as here, Parliament has spelt out in considerable detail what must be done in a particular class of case it is not open to litigants to bypass the special Act, nor to the courts to disregard its provisions by resorting to the earlier procedure, and thus choose to apply a different jurisprudence from that which the Act prescribes. Lord Brandon of Oakbrook spoke at p 221 to similar effect. The mother also relies heavily on the decision of the appellate committee in In re J (A Child) (Custody Rights: Jurisdiction) [2005] UKHL 40, [2006] 1 AC 80. The issue was whether, as his father contended, there should be a summary order for the return of a five year old boy to Saudi Arabia, which was not (and is not) a contracting state under the Convention. The committee set aside the summary order made by the Court of Appeal and restored the order by which the judge had refused to make it. Baroness Hale of Richmond made the only substantive speech. She observed at para 5 that, had the Convention applied, the mothers retention of the boy in England would probably have been categorised as wrongful. She said at para 28: It is plain, therefore, that there is always a choice to be made. Summary return should not be the automatic reaction to any and every unauthorised taking or keeping a child from his home country. On the other hand, summary return may very well be in the best interests of the individual child. In concluding that the Court of Appeal had not been entitled to interfere with the judges order, Baroness Hale referred at paras 39, 40 and 46 not only to the relevance of the effect of an order for the childs return on his primary carer but also to the occasional relevance of differences in the criteria applied by the rival courts to resolution of the substantive issues in relation to the child and, in particular, to any absence of a power in the foreign court to authorise the primary carer to relocate with the child back to England. The decision in In re J was, says the mother, impeccable. And her point is this: the application by the father under consideration in all three courts was for a specific issue order for the childs return to Saudi Arabia, not for an order to that effect under the inherent jurisdiction. It was thus in relation to a specific issue order that, for example, Baroness Hale stressed the facility in principle for an order for return to be made summarily. We now reach the high point of the mothers case that the inherent jurisdiction is no longer available for the making of a summary order for a childs return abroad. It is Practice Direction 12D, which supplements Chapter 5 of Part 12 of the Family Procedure Rules 2010 (the 2010 Rules) and which is entitled Inherent Jurisdiction Proceedings. Paragraph 1.2 emphasises the width of the jurisdiction: The court may under its inherent jurisdiction, in addition to all of the orders which can be made in family proceedings, make a wide range of injunctions for the childs protection of which the following are the most common (e) orders for the return of children to and from another state. For the purpose of the 2010 Rules, the phrase family proceedings has the broad meaning ascribed to it by section 75(3) of the Courts Act 2003 (the 2003 Act). But the mothers case focusses on para 1.1 of the Practice Direction which provides: It is the duty of the court under its inherent jurisdiction to ensure that a child who is the subject of proceedings is protected and properly taken care of. The court may in exercising its inherent jurisdiction make any order or determine any issue in respect of a child unless limited by case law or statute. Such proceedings should not be commenced unless it is clear that the issues concerning the child cannot be resolved under the Children Act 1989. (Emphasis supplied) An application for a specific issue order for the return of a child to a foreign state cannot be issued in the High Court. It has to be issued in the Family Court: rule 5.4(1) of the 2010 Rules. It can then, however, be allocated to be heard by a judge of High Court level sitting as a judge of the Family Court or it can indeed be transferred to the High Court. There are strong reasons of policy, applied to all areas of civil justice, to confine claims to the lowest court which has jurisdiction to hear them in order to preserve the ability of the higher courts, in particular the High Court, to address only the claims strictly identified as deserving their attention. Is the italicised instruction in para 1.1 of the Practice Direction nevertheless too categorical? Does it have to be clear that the issues cannot be resolved under the 1989 Act before the inherent jurisdiction can be invoked? The 2010 Rules are made pursuant to section 75(1) of the 2003 Act and so have legislative force. But practice directions, even including those which are stated to supplement the 2010 Rules, are not made pursuant to that or any other statutory authority. As Brooke LJ said in U v Liverpool City Council (Practice Note) [2005] EWCA Civ 475, [2005] 1 WLR 2657, at para 48: a practice direction has no legislative force. Practice directions provide invaluable guidance to matters of practice in the civil courts, but in so far as they contain statements of the law which are wrong they carry no authority at all. The question therefore is whether the categorical instruction in para 1.1 of Practice Direction 12D is wrong. One of the major achievements of the 1989 Act was to streamline the procedure for ordering a child to be placed in the care of a local authority. One of the former procedures for doing so had been by way of exercise by the High Court of its inherent jurisdiction. Section 100 of the 1989 Act provides: (2) No court shall exercise the High Courts inherent jurisdiction with respect to children (a) so as to require a child to be placed in the care of a local authority; What is significant is that, in making the 1989 Act, Parliament, by contrast, nowhere sought to preclude exercise of the inherent jurisdiction so as to make orders equivalent to those for which sections 8 and 10 of it provide, including specific issue orders. In the absence of any statutory provision which the instruction in para 1.1 of Practice Direction 12D could be said to reflect, the court should turn to consider case law. In A v A (Children: Habitual Residence) [2013] UKSC 60, [2014] AC 1, the trial judge had invoked the inherent jurisdiction to make a summary order of the obverse kind, namely for the return of four children from abroad, specifically from Pakistan, to England and Wales. By the time of the arrival of the case in the Supreme Court, the issue surrounded only the order in relation to the youngest child, who was a British national but who had been born in Pakistan and, unlike his siblings, had never lived or even been present in England. The majority of this court expressed doubt as to whether in these circumstances the trial judge had been right to ascribe to him habitual residence in England. But it perceived a different basis for the possible exercise of the inherent jurisdiction in relation to him, namely the basis at common law of his British nationality; and it remitted the case to the judge to determine whether it was appropriate to exercise it. In that a specific issue order cannot be made on the basis only of nationality, it could be said that the decision in the A case does not carry the present inquiry much further. It is however worthwhile to note that, at para 26 of her judgment, Baroness Hale rejected the submission that the judges order, based on the childs perceived habitual residence, had been a specific issue order and observed that there were many orders relating to children which could be made either under the 1989 Act or under the inherent jurisdiction. In the L case, cited in para 15 above, the mother brought a boy, then aged seven, from Texas to England with the permission of a federal court. A year later a federal appeal court reversed the trial courts ruling; and the latter then made a revised order for the mother to return the boy to Texas. The father thereupon applied to the High Court for an order under the Convention and alternatively under the inherent jurisdiction for the boys return to Texas. On appeal this court held that the trial judge had been entitled to find that, by the time of the revised order made by the trial court, the boy had acquired habitual residence in England; and that therefore the mothers retention of him had not been wrongful and that the application under the Convention failed. Nevertheless this court proceeded to hold that in all the circumstances the boys welfare required a summary order to be made under the inherent jurisdiction for his return to Texas. In that the child was habitually resident in England, there is no doubt that his return to Texas could equally have been made the subject of a specific issue order. But it was not made the subject of such an order; and it was never suggested that it should have been so made. The instruction in para 1.1 of Practice Direction 12D goes too far. There is no law which precludes the commencement of an application under the inherent jurisdiction unless the issue cannot be resolved under the 1989 Act. Some applications, such as for a summary order for the return of a child to a foreign state, can be commenced in the High Court as an application for the exercise of the inherent jurisdiction. But then, if the issue could have been determined under the 1989 Act as, for example, an application for a specific issue order, the policy reasons to which I have referred will need to be addressed. At the first hearing for directions the judge will need to be persuaded that, exceptionally, it was reasonable for the applicant to attempt to invoke the inherent jurisdiction. It may be that, for example, for reasons of urgency, of complexity or of the need for particular judicial expertise in the determination of a cross border issue, the judge may be persuaded that the attempted invocation of the inherent jurisdiction was reasonable and that the application should proceed. Sometimes, however, she or he will decline to hear the application on the basis that the issue could satisfactorily be determined under the 1989 Act. Why has the mother been so concerned to argue that the Court of Appeals consideration of the making of a summary order for the childs return to Israel needed to take place within the framework of a specific issue order? The answer is that, although the childs welfare is the paramount consideration in the making of such an order whether made under the inherent jurisdiction or as a specific issue order, the mother considers that a specific issue order could be made only following a more extensive inquiry into the childs welfare. Where an application for the same order can be made in two different proceedings and falls to be determined by reference to the same overarching principle of the childs welfare, it would be wrong for the substantive inquiry to be conducted in a significantly different way in each of the proceedings. Of course, when in each of the proceedings it is considering whether to make a summary order, the court will initially examine whether the childs welfare requires it to conduct the extensive inquiry into certain matters which it would ordinarily conduct. Again, however, it would be wrong for that initial decision to be reached in a significantly different way in each of them. The mother refers to the list of seven specific aspects of a childs welfare, known as the welfare check list, to which a court is required by section 1(3) of the 1989 Act to have particular regard. She points out, however, that, by subsections (3) and (4), the check list expressly applies only to the making of certain orders under the 1989 Act, including a specific issue order, as is confirmed by the seventh specific aspect, namely the range of powers under that Act. The first six specified aspects of a childs welfare are therefore not expressly applicable to the making of an order under the inherent jurisdiction. But their utility in any analysis of a childs welfare has been recognised for nearly 30 years. In its determination of an application under the inherent jurisdiction governed by consideration of a childs welfare, the court is likely to find it appropriate to consider the first six aspects of welfare specified in section 1(3) (see In re S (A Child) (Abduction: Hearing the Child) [2014] EWCA Civ 1557, [2015] Fam 263, at para 22(iv), Ryder LJ); and, if it is considering whether to make a summary order, it will initially examine whether, in order sufficiently to identify what the childs welfare requires, it should conduct an inquiry into any or all of those aspects and, if so, how extensive that inquiry should be. The mother also refers to Practice Direction 12J, which supplements Part 12 of the 2010 Rules and which is entitled Child Arrangements and Contact Orders: Domestic Abuse and Harm. By para 4, the Practice Direction explains that harm is suffered not only by children who are the direct victims of domestic abuse but also by children who live in a home in which it is perpetrated. When disputed allegations of domestic abuse are made, the Practice Direction makes detailed requirements of the court, in particular to consider whether to conduct a fact finding hearing in relation to them (para 16), whether to direct the preparation of a report by a CAFCASS officer (para 21) and whether to order a child to be made a party and be separately represented (para 24). The mother points out, however, that, by para 1, the Practice Direction applies only to proceedings under the relevant parts of the 1989 Act (which would include an application for a specific issue order) or of the Adoption and Children Act 2002. Therefore it does not expressly apply to the determination of any application under the inherent jurisdiction, including of an application governed by consideration of a childs welfare in which disputed allegations of domestic abuse are made. Nevertheless, as in relation to the welfare check list, a court which determines such an application is likely to find it helpful to consider the requirements of the Practice Direction; and if it is considering whether to make a summary order, it will initially examine whether, in order sufficiently to identify what the childs welfare requires, it should, in the light of the Practice Direction, conduct an inquiry into the allegations and, if so, how extensive that inquiry should be. Exercise of Inherent Jurisdiction Flawed The Court of Appeal did not conduct for itself an inquiry into whether the welfare of the child required her to be the subject of a summary order for return to Israel. It considered that the judge had conducted such an inquiry and had determined that her welfare did so require; and it held that his perceived determination was not wrong. With great respect, I find it impossible to agree that the judge had conducted any such inquiry or had made any such determination. The judge had not purported to make any determination at all under the inherent jurisdiction; and he had not conducted any inquiry in relation to which the childs welfare was the paramount consideration; still less had he conducted what was commended by the Court of Appeal as a sufficient welfare assessment. The Court of Appeal held that, in determining not to exercise the discretion so as to decline to order the childs return to Israel, which he perceived to have arisen under the Convention, the judge had considered the wider canvas based on welfare being the courts paramount consideration. But the discretion which arises under the Convention lacks that basis. It has been best explained by Baroness Hale in In re M (Children) (Abduction: Rights of Custody) [2007] UKHL 55, [2008] AC 1288 as follows: 42. In Convention cases, however, there are general policy considerations which may be weighed against the interests of the child in the individual case. These policy considerations include, not only the swift return of abducted children, but also comity between the contracting states and respect for one anothers judicial processes. Furthermore, the Convention is there, not only to secure the prompt return of abducted children, but also to deter abduction in the first place. The message should go out to potential abductors that there are no safe havens among the contracting states. 43. My Lords, in cases where a discretion arises from the terms of the Convention itself, it seems to me that the discretion is at large. The court is entitled to take into account the various aspects of the Convention policy, alongside the circumstances which gave the court a discretion in the first place and the wider considerations of the childs rights and welfare. The judges determination not to exercise the discretion perceived to have arisen under the Convention cannot stand as a determination that the childs welfare required her return to Israel. The initial question for the Court of Appeal was whether the mother had had sufficient notice of its intention to make a summary order under the inherent jurisdiction. The fact that the father had not applied for an order under the inherent jurisdiction did not, of itself, inhibit the Court of Appeal from making the order; and, had the judge made such an order, the absence of an application would not, of itself, have inhibited him from doing so. Section 10(1)(b) of the 1989 Act provides that a specific issue order can be made even though no application for it has been made; and there is no reason to doubt that an order under the inherent jurisdiction, the flexibility of which is a key feature of it, can also be made of the courts own motion. But in such circumstances a heavy duty lies upon a court to ask whether the effective respondent has had notice of the courts intention sufficient to afford to her (or him) a reasonable opportunity to mount opposition to it. In the present case the Court of Appeal did address this initial question; and it answered it affirmatively. It is correct that, upon her receipt of the fathers skeleton argument three weeks prior to the hearing in the Court of Appeal, the mother became aware that, in the event of the success of her appeal against the order under the Convention, the father aspired to persuade that court to make an order under the inherent jurisdiction; and respect must be given to the Court of Appeals observation that Mr Twomey QC, on behalf of the mother, had at its hearing (unlike at ours) struggled to identify any additional evidence which he might have adduced, or submission which he might have made, had such notice been given to him prior to the conclusion of the hearing before the judge. But, since it was the Court of Appeal which made the order, the real question was whether the mother had had sufficient notice of the intention of that court to do so. It is sufficient to record significant doubt whether the mother could reasonably have anticipated that, in the event of the success of her appeal, an appellate court, instead of, at most, remitting to the judge consideration of the exercise of the inherent jurisdiction, would itself exercise it even in the absence of material with which to analyse what the childs welfare required. I respectfully suggest, however, that, before making a summary order under the inherent jurisdiction for this child to be returned to Israel, the Court of Appeal should have given (but did not give) at least some consideration to eight further, linked, questions. First, the court, which was sitting on 18 June 2019, should have considered whether the evidence before it was sufficiently up to date to enable it then to make the summary order. The mothers statement in answer to the claim under the Convention was dated 29 March 2019. In it she had devoted seven out of 67 paragraphs to assertions of the childs habitual residence in England and of particular circumstances said to demonstrate how happy and settled she had become. In his statement in reply dated 11 April the father had joined issue with the mothers assertions. The oral evidence given by the parties to the judge on 15 April had been limited to the issue of consent to the childs removal from Israel and so had not addressed these matters. Second, the court should have considered whether the judge had made, or whether it could make, findings sufficient to justify the summary order. The only relevant finding made by the judge had been that on 10 January 2019, only seven weeks after her arrival in England, the child had retained habitual residence in Israel. Was that sufficient to justify the making of a summary order five months later? In the light of the policy in favour of the making of substantive welfare determinations by the courts of habitual residence, did there need to be inquiry into the childs habitual residence at the relevant date, which, in the absence of an application, was in this case the date of the proposed order? Third, the court should have considered whether, in order sufficiently to identify what the childs welfare required for the purposes of a summary order, an inquiry should be conducted into any or all of the aspects of welfare specified in section 1(3) of the 1989 Act and, if so, how extensive that inquiry should be: see para 49 above. It might in particular have considered that the third of those aspects, namely the likely effect on [the child] of any change in [her] circumstances, merited inquiry. Fourth, the court should have considered whether in the light of Practice Direction 12J, an inquiry should be conducted into the disputed allegations made by the mother of domestic abuse and, if so, how extensive that inquiry should be: see para 50 above. The judge had made no findings about them. Instead, in accordance with the E case cited in para 12 above, he had, for the purposes of the claim under the Convention, made a reasonable assumption in relation to the maximum level of risk to the child arising out of any domestic abuse to be perpetrated by the father and had considered that such risk would be contained within acceptable limits by undertakings offered by the father, the enforceability of which in Israel the judge had not explored. Consideration should therefore have been given to whether, in a determination to be governed by the childs welfare, the judges approach to the mothers allegations remained sufficient. Fifth, the court should have considered whether, without identification in evidence of any arrangements for the child in Israel, in particular of where she and the mother would live, it would be appropriate to conclude that her welfare required her to return there. Sixth, the court should have considered whether, in the light of its consideration of the five matters identified above, any oral evidence should be given by the parties and, if so, upon what aspects and to what extent. Seventh, the court should have considered whether, in the light of its consideration of the same matters, a CAFCASS officer should be directed to prepare a report and, if so, upon what aspects and to what extent. It is noteworthy that in the L case discussed in para 43 above, a CAFCASS report had been prepared. It had been designed to ascertain the boys wishes and feelings and so was apparently made as if pursuant to section 1(3)(a) of the 1989 Act: see para 14 of Baroness Hales judgment. In her careful weighing, in paras 34 to 37 of her judgment, of the welfare considerations which militated both in favour of, and against, the boys return to Texas, Baroness Hale relied to a significant extent upon the content of the CAFCASS report. Eighth, the court should have considered whether it needed to compare the relative abilities of the Rabbinical Court in Jerusalem and the Family Court in London to reach a swift resolution of the substantive issues between the parents in relation to the child and to satisfy itself that the Rabbinical Court had power to authorise the mother to relocate with the child back to England: see para 34 above. The effect of the above is not to submerge efficient exercise of the inherent jurisdiction to make a summary order within an ocean of onerous judicial obligations. The linked obligations are obligations only to consider the eight specified matters. There is no need for us to contemplate what the proper outcome of the Court of Appeals consideration of them might have been. It is the fact that it failed even to consider them which yields the conclusion that it conducted no defensible analysis of the childs welfare prior to its determination to make the summary order and which led this court to uphold the mothers appeal.

UK-Abs

This appeal concerns a fathers application for an order for the immediate return of his daughter from England and Wales to Israel. The issue raised is whether the Court of Appeal, having determined that such an order could not be granted under the Hague Convention on the Civil Aspects of International Child Abduction 1980 (the Convention), was nonetheless entitled to grant it under the inherent jurisdiction of the High Court to make orders in relation to children (the inherent jurisdiction). The childs parents are Israeli nationals who married in 2013. She is their only child and is now aged almost three. Her parents lived at first in Israel but moved to London in November 2018. There the marriage broke down. The father returned to Israel, but the mother refused to do so, and remained in London with the child. The father applied under the Convention, which is set out in Schedule 1 to the Child Abduction and Custody Act 1985 (1985 Act), for a summary order for the childs immediate return to Israel. The allegation underpinning his application was that, on 10 January 2019, when the marriage broke down, the mother had wrongfully retained the child in England. The High Court granted the fathers application. On appeal, the Court of Appeal ruled that it had not been open to the judge to make an order under the Convention and set his order aside. It held that there had been no grounds for concluding that the mothers retention of the child in England had been wrongful, and so the Convention had not been engaged. However, it then referred to passing observations made by the High Court judge to the effect that, if he had found that the child had been habitually resident in England, he would have reached the same decision to order the childs immediate return under the inherent jurisdiction as he had under the Convention. Relying on those observations, the Court of Appeal made a summary order for the childs return under the inherent jurisdiction. The mother appealed to the Supreme Court. On 14 August 2019, the Supreme Court unanimously allowed the appeal and set aside the Court of Appeals order. Owing to the urgency of the decision, a judgment giving reasons was not issued at that time. Lord Wilson now gives the unanimous judgment of the court setting out its reasons. The appeal raises two questions. First, was the inherent jurisdiction available to the Court of Appeal in principle? Second, if so, was the exercise of it flawed? The answer to both questions is yes [2 3]. Inherent Jurisdiction Available The mother argued that the inherent jurisdiction had not been available to the Court of Appeal on the grounds that a summary order (i.e. an order made without a full, conventional, investigation) for the childs return outside the Convention could only have been made as a specific issue order under the Children Act 1989 (the 1989 Act) [26]. A specific issue order is an order made to decide a question connected with any aspect of parental responsibility for a child: had it been appropriate on the facts to make such an order here, it would have been open to the Court of Appeal to do so [27 28]. Before the introduction by the 1989 Act of specific issue orders, summary orders for the return of a child abroad could be made under the inherent jurisdiction [29 30]. Such orders continued to exist alongside orders under the Convention after it was introduced into domestic law by the 1985 Act, since differences between the inherent jurisdiction and the Convention mean that an order for a childs return may, in some circumstances, be required under the former, but not the latter, legal framework [31]. But did the 1989 Act do away with the inherent jurisdiction to order a childs return [32]? The mother argued that para 1.1 of Practice Direction 12D, supplementing the Family Procedure Rules 2010, showed that the 1989 Act did have that effect: for it instructs that the inherent jurisdiction should only be invoked where the issues cannot be resolved under the 1989 Act [33 36]. However, practice directions have no legal authority to the extent that they state the law incorrectly [37 38]. There is no statutory basis for the instruction in para 1.1, and the case law indicates that an order can be made under the inherent jurisdiction even where a specific issue order would also have been available [39 43]. Therefore the instruction in para 1.1 goes too far. However, if an order is available by both routes and a party chooses to invoke the inherent jurisdiction, the judge will need to be persuaded early in the proceedings that that choice was reasonable [44]. Nor does the court accept the mothers argument that an application for a summary specific issue order requires a different inquiry from an analogous application under the inherent jurisdiction. The same approach is required under both frameworks, as both are based on the principle that the childs welfare is paramount [45 50]. Exercise of Inherent Jurisdiction Flawed The Court of Appeal did not inquire into whether the childs welfare required a summary order for her return, as it considered that the High Court had made that determination and had not erred in doing so [51]. Yet the judge had not made a determination under the inherent jurisdiction [52]. Nor could his determination under the Convention stand as one under the inherent jurisdiction: for the Convention, unlike the inherent jurisdiction, is not based on the paramountcy of the childs welfare [53]. The fact that the father had not invoked the inherent jurisdiction did not prevent the Court of Appeal from making an order under it. But it did place a duty on the Court of Appeal to ask whether the mother had had sufficient notice of its intention to use the inherent jurisdiction to allow her to seek to oppose it [54]. The Court of Appeal should also have considered eight further questions before making its order under the inherent jurisdiction, including whether the evidence before it was sufficiently up to date, and whether the High Court judge had made findings sufficient to justify the order [55 63]. Its failure to consider any of these questions is what led the Supreme Court to uphold the appeal [64].

This case concerns the circumstances in which under EU law a finding in a judicial decision by an EU court is binding in later judicial proceedings. The EU principle of res judicata, which applies directly in a domestic court of a member state when dealing with a dispute falling within the scope of EU law, has a number of strands. One is known as relative res judicata and applies where a second action is brought between the same parties, dealing with the same subject matter and based on the same grounds as an earlier action. However, this case concerns a distinct strand known as absolute res judicata or, to use its full Latin tag, res judicata erga omnes. This is intended to convey that, where the principle applies, a judicial decision is given dispositive effect which is binding not simply on the parties to the decision but on all the world. It is a principle of EU law which has been developed by the EU courts in recent decades in a specific context for a specific purpose which relates to the effective judicial control of EU institutions and the maintenance of the EU legal order. It concerns the binding scope of a judgment of the General Court of the European Union (the General Court) or the Court of Justice of the European Union (CJEU) annulling a measure adopted by an EU institution. In addressing its scope and applicability it is therefore necessary to set to one side distinct notions of res judicata, issue estoppel and abuse of process as understood in common law jurisdictions. The factual background The appellants (referred to collectively as Servier), who are defendants in each of the proceedings giving rise to this appeal, developed and manufactured the medicinal product perindopril erbumine (Perindopril), which is used in the treatment of cardiovascular diseases including the treatment of high blood pressure. They marketed Perindopril under the trade name Coversyl. Perindopril falls within the class of medicines known as angiotensin converting enzyme inhibitors (ACE inhibitors). Servier obtained a number of patents for Perindopril during the course of its development. The respondents to this appeal (referred to collectively as the claimants), are the national health authorities of England, Wales, and Scotland and Northern Ireland. They are the claimants in the national proceedings. The High Court has directed that the three sets of proceedings be jointly managed and be tried on the same occasion (Order of Henderson J dated 26 February 2016). The present appeal is against the order of the Court of Appeal dated 27 June 2019 that followed a one day hearing on 18 June 2019 ([2019] EWCA Civ 1096; [2020] Ch 193). That order dismissed Serviers appeal from the order of Roth J at first instance dated 17 April 2019, following a two day hearing on 6 7 March 2019 ([2019] EWHC 1004 (Ch); [2019] 5 CMLR 6). The national proceedings The national proceedings were commenced by the claimants between May 2011 and September 2012. In those proceedings, each of the claimants alleged: (1) breaches by Servier of article 101 of the Treaty on the Functioning of the European Union (TFEU) and/or the Chapter 1 prohibition under the Competition Act 1998 (the 1998 Act), consisting in the conclusion of anticompetitive agreements between Servier and potential manufacturers and/or suppliers of generic Perindopril, under which the generic manufacturers/suppliers would stay out of the market in return for financial consideration; and (2) an abuse of a dominant position by Servier contrary to article 102 TFEU and/or the Chapter 2 prohibition under the 1998 Act consisting in: (a) the obtaining, defending and enforcing of an invalid patent through the provision of misleading information to patent authorities and/or courts; and (b) the adoption of an exclusionary strategy, designed to keep competitors off the market, by entering into anticompetitive agreements with generic manufacturers and/or suppliers (as above), and by purchasing rights to an alternative means of manufacturing Perindopril developed by a company known as Azad. In addition, the English claimants alone pleaded a further claim for the tort of causing loss by unlawful means, based on largely the same facts as the alleged patent abuse. Following the striking out of that claim ([2019] EWCA Civ 1160; [2019] 3 WLR 938), the claims are essentially identical across all three sets of proceedings. The English claimants appeal against the decision of the Court of Appeal to uphold the strike out of that cause of action is pending before the Supreme Court. The claimants allege that by reason of Serviers unlawful conduct, the entry of generic Perindopril onto the UK market was delayed, which caused the price of Perindopril to be higher than it otherwise would have been. The claimants allege that as a result they have suffered substantial financial loss through the higher prices they have paid for Serviers Perindopril product. In October 2016, Servier was granted permission by Henderson J to amend its pleadings to include defences to the effect that if liability and causation are established then the claimants damages should be reduced or extinguished (i) because the claimants failed to mitigate their losses, (ii) for contributory negligence or (iii) because the losses claimed are too remote: [2016] EWHC 2381 (Ch); [2016] 5 CMLR 25. These defences are described collectively and for convenience as the prescribing argument. The Commission proceedings In 2009 the European Commission (the Commission) commenced an investigation in case COMP/39.612 into whether Serviers conduct relating to Perindopril had the object or effect of hindering generic entry of Perindopril on European Economic Area (EEA) markets. The Commission granted interested party status to the English claimants for the purpose of the administrative stage of the proceedings. This entailed: (i) access to a confidential 16 page summary of the Statement of Objections but not access to any of the evidence, submissions or other documents on the Commissions file (after the Commission proceedings had concluded, access was granted to relevant documents from the Commissions file in the disclosure exercise in the national proceedings); (ii) the opportunity, which was taken, to make submissions in writing; and (iii) the opportunity, which was taken, to attend the oral hearing and make 30 minutes oral submissions. The other claimants did not request to be and were not interested parties in the proceedings before the Commission. On 9 July 2014, the Commission issued a decision finding that Servier contravened articles 101 and 102 TFEU and imposing fines (the Commission Decision). Those aspects of the Commission Decision concerning article 102 are most relevant to the present appeal. In particular, in determining that Servier held a dominant position in a relevant market (an element of the finding of breach of article 102 TFEU), the Commission defined the relevant market as comprising only Perindopril and it rejected Serviers argument that it comprised, at least, all ACE inhibitors. After obtaining disclosure of the Commission Decision on 9 March 2015, the claimants in all three sets of proceedings introduced amendments to their particulars of claim to rely on the Commission Decision, including in relation to the definition of the relevant market. Serviers Appeal against the Commission Decision and the General Court Judgment On 21 September 2014, Servier applied to the General Court in Case T 691/14 seeking the annulment of the Commission Decision. Servier relied on 17 pleas in support of its application, including the 14th plea which was summarised as follows: the Commission wrongly and artificially restricted the relevant market for finished products to the single molecule of perindopril, by excluding the 15 other enzyme conversion inhibitors available on the market. The claimants did not apply to intervene and they were not involved in the General Court proceedings. The General Court gave its judgment on 12 December 2018 (Case T 691/14) EU:T:2018:922 (the General Court Judgment). In it, the General Court: (1) annulled one of the findings of infringement of article 101 TFEU (in relation to the settlement agreement between Krka (Krka Tovarna Zdravil dd is a Slovenian pharmaceutical company which had, with a number of other pharmaceutical companies, filed opposition proceedings before the European Patent Office against one of Serviers patents) and Servier), but upheld the remainder of the Commissions findings of infringement of article 101 TFEU; and (2) annulled the finding of infringement of article 102 TFEU in its entirety, on the grounds that the relevant market at the relevant time extended beyond Perindopril and Servier did not have a dominant position in that wider market. Both the Commission and Servier have now appealed from the General Court Judgment to the CJEU: see pending cases C 201/19P and C 176/19P. The UK Government has been granted permission to intervene in those appeals. The Commission is challenging (i) the General Courts approach to market definition including the General Courts analysis of the considerations of therapeutic substitutability and (ii) the determination that the Krka Agreement was not in breach of article 101 TFEU. There are significant overlaps between the allegations of infringement in the national proceedings and the infringements investigated and found by the Commission. As a result, it is common ground that the domestic proceedings cannot proceed to a final trial until the Commission proceedings and appeals therefrom have been finally resolved at EU level. The prescribing argument The prescribing argument relies (inter alia) on factual contentions that (a) ACE inhibitors exert a class effect (meaning that all drugs in the class work in essentially the same way and produce essentially the same effects) and (b) that there was no clinical difference between Perindopril and alternative ACE inhibitors that should have been material to NHS prescribers choice between ACE inhibitors, or to the claimants decision as to whether to encourage switching to other ACE inhibitors already available in generic form. On the basis of those factual contentions, Servier pleads further that NHS prescribers could therefore prescribe these ACE inhibitors as an alternative to Perindopril and the claimants should therefore have taken all reasonable steps to encourage switching from the prescription of Perindopril to the prescription of cheaper alternative ACE inhibitors in generic form. Paragraph 83C of Serviers re re amended defence to the English claimants claim sets out the particular steps which Servier contends the claimants should have taken to encourage prescribers to prescribe cheaper alternative ACE inhibitors that, unlike Perindopril, were already available in generic form during the relevant period. On 31 January 2018, Roth J ordered that there should be a nine day trial of a set of preliminary issues in relation to the prescribing argument. The early determination of these issues was intended to be useful because it could eliminate or substantially reduce the costs of a disclosure exercise relating to the prescribing argument. On 8 November 2018, the trial estimate for the preliminary issues was extended to 22 days and the trial was relisted for October 2019. Roth J indicated that the preliminary issues trial should not take place before the General Court had issued its judgment, which it had not yet done at that time. The preliminary issues ordered to be tried, as subsequently amended, were: (1) Would it have been reasonable or appropriate in the period between 2003 and 2009 for a clinician to prescribe another ACE inhibitor instead of Perindopril in all circumstances, except where the patient was allergic to or intolerant of all alternative ACE inhibitors? (2) inappropriate? If not, in what circumstances would that have been unreasonable or (3) Was it unreasonable for the claimants to fail to take any (and if so, which) of the steps set out in paragraph 83C of Serviers re re amended defence to the English claimants claim or identified in Serviers Further Information dated 29 September 2017? The General Court having delivered its judgment on 12 December 2018, Servier indicated that its position was that certain findings made by the General Court (in particular as to the substitutability of Perindopril with other ACE inhibitors) would be binding on the High Court in the trial of the preliminary issues. On 18 January 2019, Roth J directed the parties to serve pleadings on the question of the extent to which findings of fact made in the General Court Judgment that also arise for determination in the preliminary issue trial of the prescribing argument are binding in that trial. On 1 February 2019, Servier served its pleading setting out eight propositions of fact derived from the General Court Judgment on which it intended to rely as binding in the trial of the preliminary issues. These propositions were: (1) There was no significant difference between Perindopril and other ACE inhibitors in therapeutic terms, including in terms of efficacy and side effects, mode of action, main indications and contra indications (General Court Judgment paras 1425, 1429, 1481, 1519, 1589). (2) ACE inhibitors were widely perceived as substitutable by prescribers and there were many medications considered by physicians as therapeutic equivalents to Perindopril (General Court Judgment paras 1481, 1489). (3) There were no reasons why physicians should not have prescribed ACE inhibitors other than Perindopril for new patients (General Court Judgment para 1489). (4) Switching between ACE inhibitors for existing patients did not raise particular fears on the part of physicians (General Court Judgment para 1519). (5) The prescribing behaviour of physicians was not characterised by a high degree of inertia and treatment changes in patients undergoing continuous treatment were significant (General Court Judgment para 1544). (6) At least some Primary Care Trusts (PCTs) considered, as from 2005, that Perindopril was no more effective than any other ACE inhibitor and recommended, for cost reasons, the use of other ACE inhibitors than Perindopril, or even the substitution of another ACE inhibitor for Perindopril, in particular lisinopril or ramipril (General Court Judgment para 1464). (7) At least some PCT policies had a real negative effect on Perindopril sales at local level (General Court Judgment para 1534). (8) Serviers promotional activities did not sufficiently differentiate Perindopril from other ACE inhibitors for it to be recognised for particular therapeutic qualities by physicians (General Court Judgment paras 1472, 1473). Servier contended that in so far as those propositions were findings made in the General Court Judgment, they were binding in the preliminary trial for two reasons: (1) the EU law principle of res judicata renders findings of fact and law constituting the ratio of an annulling judgment of the General Court binding erga omnes with absolute effect; and (2) in all of the circumstances of the case, including the claimants ability to participate in the EU proceedings (through the UK state) and their own positive reliance on the Commissions findings in relation to the prescribing argument, it would be an abuse of process for the claimants to require Servier to relitigate those factual issues in the mitigation trial. The claimants admitted as facts the propositions stated at (6) and (7) in para 19 above, so the question of whether those findings were binding did not arise for consideration by Roth J. The claimants denied, however, that the principle of res judicata confers binding effect in respect of the other findings of fact relied on by Servier in these proceedings, and denied that there would be an abuse of process as alleged or at all. In his judgment Roth J addressed (at para 51) the question of whether the six disputed propositions were actually found as facts in the General Court Judgment. He concluded that: (1) propositions (1) to (3) were findings made in the General Court Judgment; (2) proposition (5) was only made in modified form, to the effect that the Commission had not established that the prescribing behaviour of physicians was characterised by a high degree of inertia, and treatment changes in patients undergoing continuous treatment were significant; and (3) propositions (4) and (8) were not findings made in the General Court Judgment. In his judgment, Roth J held that none of the findings of fact constituted res judicata for the purposes of the preliminary issues trial, and that it was not an abuse of process for the claimants to advance arguments and adduce evidence at the preliminary issues trial contrary to the propositions set out by Servier. Roth J granted permission to appeal in respect of Serviers res judicata pleading on the grounds that the question of how the EU principle of res judicata applies in this context had not been decided before and raised an important issue on which Servier had a reasonable prospect of success. In addition, Servier sought permission first from Roth J, and then from the Court of Appeal, on the questions of (i) whether propositions (4), (5) and (8) had been found as facts in the General Court Judgment, and (ii) on the question of abuse of process. Permission to appeal was refused on these further grounds. On 18 June 2019, the Court of Appeal heard the expedited appeal from Roth J in relation to the issue of res judicata. On 27 June 2019 the Court of Appeal delivered its judgment ([2020] Ch 193), in which it held that none of the findings of fact relied on by Servier constituted res judicata for the purposes of the preliminary issues hearing. It refused permission to appeal to the Supreme Court. On 25 July 2019, the Supreme Court granted Servier permission to appeal on the issue of res judicata, solely on the basis that the application involved a point of law which is arguably not acte clair. On 26 July 2019, at the pre trial review in relation to the preliminary issues hearing, with the consent of the parties, Roth J vacated the October 2019 preliminary issues hearing pending determination of this appeal to the Supreme Court. Issues on this appeal On this appeal, the Supreme Court is asked to determine whether the following findings of fact made by the General Court are binding on the national court in a trial of preliminary issues under the EU principle of res judicata: the finding that there was no significant difference between (1) Perindopril and other ACE inhibitors in therapeutic terms, including in terms of efficacy and side effects, mode of action, main indications and contra indications (paras 1425, 1429, 1481, 1519 and 1589 of the General Court Judgment); the finding that ACE inhibitors were widely perceived as substitutable (2) by prescribers and there were many medications considered by physicians as therapeutic equivalents to Perindopril: (paras 1481 and 1489 of the General Court Judgment); (3) the finding that there was no element that limited the discretion available to physicians to prescribe ACE inhibitors other than Perindopril for new patients (para 1489 of the General Court Judgment); and the findings: (i) that the Commission had not established that the (4) prescribing behaviour of physicians was characterised by a high degree of inertia; and (ii) treatment changes in patients undergoing continuous treatment were significant (paras 1540 and 1544 of the General Court Judgment). Servier contends that the appeal raises a point of EU law that cannot be characterised as acte clair against Servier. By contrast, the claimants contend that the point of law is acte clair and that the High Court and Court of Appeal reached the right conclusion. If the Supreme Court agrees with Servier that this issue is not acte clair against it, the Supreme Court is asked to refer the question to the CJEU pursuant to article 267 TFEU and, upon a preliminary ruling being received from the CJEU, to determine the issue. Preliminary reference to the CJEU On this appeal Servier seeks a preliminary reference to the CJEU. Ms Kelyn Bacon QC for Servier submits that the limitations imposed by the Court of Appeal on the absolute res judicata principle have no basis in the EU jurisprudence. However, recognising that the application of the principle in domestic proceedings has never previously been considered by the EU courts, she submits that the appropriate way forward is for this court to make a reference to the CJEU under article 267 TFEU. She accordingly submits that the CJEU should be asked directly whether the findings of fact identified by Servier in the judgment of the General Court are binding in the national proceedings in relation to the quantification of the claimants loss. That, she submits, is a question of law the answer to which is essential to the pending national proceedings and which cannot be said to be acte clair against Servier. I consider that the fact that the Commission has appealed against the judgment of the General Court to the CJEU where that appeal is pending constitutes an insuperable obstacle to this court making a preliminary reference at this time. It is clearly established in the case law of the European courts that the principle of absolute res judicata applies only to judicial decisions which have become definitive after all rights of appeal have been exhausted, or after expiry of the time limits provided to exercise those rights. It is only in such circumstances that the principle operates so as to prevent a judicial decision from being called into question (P&O European Ferries (Vizcaya) SA v Commission of the European Communities (Joined Cases C 442/03P and C 471/03P) [2006] ECR I 4845 (P&O European Ferries CJEC), para 47; Artegodan GmbH v European Commission (Case C 221/10P) EU:C:2012:216 (Artegodan), paras 86 78, 92 93). Indeed, on the hearing of the appeal before us, this was common ground between the parties. The Commissions appeal to the CJEU attacks the decision of the General Court on the definition of the relevant product market. There can be no definitive judicial ruling on that issue until the judgment of the CJEU is handed down. That court may come to a different conclusion on this issue from that of the General Court. At that time, it would be necessary to analyse the decision and reasoning of the CJEU and to consider the possible application of the absolute res judicata principle to that judgment. As matters presently stand, it cannot be said, in accordance with article 267 TFEU, that answers to the questions which Servier proposes we should refer to the CJEU are necessary in order to enable the national courts to give judgment. Those questions ask, in particular, whether specific findings in the General Court Judgment are binding on the national courts. Those findings may well be reversed or rendered redundant by the judgment of the CJEU on the appeal. For the same reasons, the hearing of this appeal may be considered premature. This court has been addressed on the findings of the General Court in relation to the relevant product market and invited to rule on whether under the principle of absolute res judicata they are binding on the parties in the national proceedings. The short answer is that they are not because, as matters stand, the findings are not definitive and they may never become definitive because they may be overturned by the CJEU on appeal. Nevertheless, the underlying issues of law before us are of considerable general importance and have been addressed in detail in the judgment of the Court of Appeal and in the submissions of counsel to this court. As the members of this court have come to a clear and unanimous view on the underlying legal issues, it is appropriate for this court to set out its views in the hope that they might assist in later stages of the national proceedings. The principle of absolute res judicata The leading authority on the EU principle of absolute res judicata is P&O European Ferries CJEC. It is necessary to refer to the history of the litigation in some detail. In July 1992 P&O Ferries entered into an agreement (the original agreement) with the Ministry of Trade and Tourism of the Basque Government (the Ministry) and the Provincial Council of Biscay (the Diputacin) relating to the establishment of a ferry service between Bilbao and Portsmouth, under which the Ministry and the Diputacin agreed to purchase over a period of three years 26,000 travel vouchers for use on that ferry route at a price higher than the commercial rate. Brittany Ferries (BAI), which operated a service between Plymouth and Santander, complained to the Commission alleging that this amounted to state aid. The Commission took the initial view that the agreement was not a normal commercial transaction and initiated a procedure to investigate whether the agreement was a state aid incompatible with the common market. Implementation of the original agreement was later suspended and on 7 March 1995, P&O Ferries entered into a new agreement (the new agreement) with the Diputacin but not with the Ministry, under which the Diputacin agreed to buy 46,500 travel vouchers for use on the same route over a three year period with the price per ticket set at a discounted rate to reflect the Diputacins long term purchasing commitment. The new agreement was notified to the Commission in accordance with state aid rules. On 7 June 1995 the Commission adopted a decision terminating the procedure that it had initiated to investigate the original agreement. The Commission stated that the new agreement introduced significant modifications which met its earlier concerns and that, accordingly, it did not constitute state aid. That decision was challenged by BAI before the Court of First Instance. P&O Ferries and the Kingdom of Spain intervened in support of the Commission but the Diputacin did not intervene. By its judgment of 28 January 1999 in Bretagne Angleterre Irlande (BAI) v Commission of the European Communities (Case T 14/96) [1999] ECR II 139 (BAI v Commission), the Court of First Instance annulled the decision of 7 June 1995 on the ground that the Commission had founded its decision that the new agreement did not constitute state aid on a misinterpretation of the state aid rules. In May 1999 the Commission accordingly decided to initiate a state aid procedure to investigate the new agreement. On 29 November 2000 it adopted a decision in which it declared that the new agreement did constitute state aid and that the aid was incompatible with the common market. The Kingdom of Spain was ordered to recover the sums already paid. P&O Ferries and the Diputacin challenged that decision in the Court of First Instance, the Diputacin challenging the whole decision but P&O merely challenging the order for recovery of aid already paid. In its judgment of 5 August 2003 in P&O European Ferries (Vizcaya) SA v Commission of the European Communities (Joined Cases T 116/01 and T 118/01) [2003] ECR II 2957 (P&O Ferries GF1) the Court of First Instance rejected a plea by the Commission that the challenge was inadmissible because of the force of res judicata arising from the judgment in BAI v Commission. The Court of First Instance held (at paras 77 80) that the force of res judicata attaching to a judgment could constitute a bar to the admissibility of an action only if the action which gave rise to the judgment was between the same parties, had the same subject matter and was founded on the same grounds. Accordingly, res judicata could not be pleaded where the actions did not relate to the same measure, since the measure whose annulment was sought was an essential element of the subject matter of an action. In its view, since the action was directed against the Commissions decision of 29 November 2000 while the BAI v Commission judgment concerned the Commissions decision of 7 June 1995 the two actions could not be considered to have the same subject matter. Furthermore, the action was not between the same parties as those in the BAI case. Res judicata did not prevent the action from being brought. However, on addressing the merits, the Court of First Instance concluded, in summary, that the changes made in the new agreement did not affect the substance of the aid instituted by the original agreement and that the two agreements constituted a single grant of aid. The challenge to the Commissions infringement decision was therefore dismissed. P&O Ferries and the Diputacin appealed against this judgment to the Court of Justice of the European Communities (CJEC). On the appeal the Commission did not revive its objection on grounds of res judicata but the CJEC took the point of its own motion on the basis that observance of the principle was a matter of public policy and a fundamental principle of the Community legal order. On this issue, Advocate General Tizzano (at paras 60 79 of his Opinion EU:C:2006:91) came to the same conclusion as the Court of First Instance but for different reasons. He was not sure that the fact that the parties to the two sets of proceedings were different was decisive. What mattered, in his view, was whether the cases dealt with the same subject matter. This did not require that two claims should be entirely identical but that they related to the points of law before the court. He considered that the point of law at issue in both cases was the same, namely the assessment that the Commission had made of the measure at issue in determining whether or not the new agreement constituted state aid. However, since after the BAI v Commission judgment the Commission had instituted a new procedure, during which the interested parties had submitted further observations and information, he could not ignore the possibility that the replacement Commission decision of 29 November 2000 had been based on new material. On this basis he considered that there was no res judicata. The CJEC, however, rejected both the General Courts view and the Advocate Generals view of the scope of the force of res judicata attaching to the BAI v Commission judgment: 41. Contrary to the view taken by the Court of First Instance, the BAI v Commission judgment did not only have relative authority preventing merely new actions from being brought with the same subject matter, between the same parties and based on the same grounds. That judgment was invested with the force of res judicata with absolute effect and prevented legal questions which it had already settled from being referred to the Court of First Instance for re examination. In the BAI v Commission judgment the Court of First 42. Instance annulled the decision of 7 June 1995 in which the Commission held that the new agreement did not constitute state aid and consequently decided to terminate the review procedure which had been initiated in respect of the aid granted to Ferries Golfo de Vizcaya. 43. That annulment led retroactively to the disappearance of the decision of 7 June 1995 with regard to all persons. An annulling judgment of that nature thus has authority erga omnes, which gives it the force of res judicata with absolute effect (see, in particular, France v High Authority (Case 1/54) [1954] ECR 1, or p 17, 34; Italy v High Authority (Case 2/54) [1954] ECR 37, at p 55; Assider v High Authority (Case 3/54) [1955] ECR 63; and Commission v AssiDomn Kraft Products (Case C 310/97P) [1999] ECR I 5363, para 54). 44. That authority is not attached only to the operative part of the BAI v Commission judgment. It is also attached to the ratio decidendi of that judgment which is inseparable from it (see, to that effect, Asteris v Commission (Joined Cases 97/86, 193/86, 99/86 and 215/86) [1988] ECR 2181, para 27, and Commission v AssiDomn Kraft Products, para 54). 45. In addition, the question of the force of res judicata with absolute effect is a matter of public policy, which must, consequently, be raised by the court of its own motion. The CJEC then applied those principles to the case before it (at paras 46 52). In order to annul the decision of 7 June 1995 the Court of First Instance based itself on the conclusion that the new agreement was not a normal commercial transaction and on the fact that the cultural and social aims pursued by the Spanish authorities played no part in the characterisation of the new agreement in the light of the Treaty provisions. Furthermore, the Court of First Instance had found that the Commissions conclusion that the new agreement did not constitute state aid was based on a misinterpretation of the Treaty provisions. There had been no appeal against the judgment in BAI v Commission and its operative part and ratio decidendi had therefore become final. In the view of the CJEC, it was clear from the grounds of that judgment that the Commission should have classified the aid at issue as state aid and that, following the annulment, it would have to reopen the review procedure in respect of that aid. In order to comply with that judgment, the Commission, as it was required to do, reopened the review procedure on the compatibility of the aid in dispute with the Treaty. In the contested decision it had confirmed the classification as state aid acknowledged by the Court of First Instance in the BAI v Commission judgment and had considered that the aid in dispute was incompatible with the Treaty. The Commission therefore gave its decision on the same measures as those which were classified as state aid in the BAI v Commission judgment. The CJEC continued: 50. In those circumstances, when the Diputacin brought its application against the contested decision before the Court of First Instance that court could not re examine the pleas alleging that the aid at issue did not amount to state aid without disregarding the scope of the BAI v Commission judgment. Consequently, in finding as it did, the Court of First Instance failed to have regard to the force of res judicata with absolute effect of its previous judgment. 51. Thus, the judgment under appeal is vitiated by an error of law in so far as it examined the plea alleging infringement of article 87(1) EC (now article 107 TFEU) which, in its three parts, sought to challenge the classification of the aid in dispute as state aid. That error does not, however, mean that the operative part of the judgment under appeal should be called into question. 52. It follows from the above considerations that the Diputacins first three grounds of appeal cannot, in the light of the force of res judicata of the BAI v Commission judgment, be examined by the Court of Justice. Those grounds of appeal are irrelevant and must be dismissed. In seeking to define the scope and applicability of the principle of absolute res judicata it is essential to have regard to its purpose. This is firmly rooted in the annulment by the EU courts of acts of EU institutions. Article 263 TFEU provides for the judicial review of the legality of certain acts of specified EU institutions and, for this purpose, it confers jurisdiction in actions on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaties or of any rule of law relating to their application, or misuse of powers. Pursuant to article 266 TFEU, an institution whose act has been annulled is required to take the necessary measures to comply with the annulling judgment. As the CJEC explained in P&O Ferries, where a Commission decision has been annulled on substantive as opposed to procedural grounds the judgment itself has the force of res judicata; what becomes binding is the substance of the judgment and not simply the conclusion that the Commission has failed to adduce sufficient evidence to support the decision. Furthermore, the annulment of the act which has been challenged leads retroactively (ex tunc) to the disappearance of the act in question with regard to all persons (P&O European Ferries CJEC at para 43). An annulling judgment of that nature accordingly has authority erga omnes, which gives it the force of res judicata with absolute effect. This is necessary in order to ensure stability of legal relations, in particular by securing that legal matters which have been definitively settled by judicial decision cannot be referred once again to the EU courts for reconsideration (P&O Ferries CJEC at para 41; Artegodan at para 86). It also serves to define with certainty what is required in order to comply with the annulling decision and, thereby, to assist the institution concerned to achieve compliance. If, however, subsequent proceedings do not call into question an issue that has already been settled by the EU courts, the principle of absolute res judicata can have no application. The principle of absolute res judicata gives dispositive effect to the judgment itself. It is the usual practice of EU courts to express the outcome of the action in a brief final paragraph of the judgment referred to as the operative part. While this will have binding effect, it will be necessary to look within the judgment beyond the operative part in order to ascertain its basis, referred to as the ratio decidendi. (EU law has no system of stare decisis or binding precedent comparable to that in common law jurisdictions and this EU concept of ratio decidendi is, once again, distinct from the concept bearing the same name in the common law.) It will be essential to look beyond the operative part in this way in order to identify the reason for the decision and in order that the institution whose act has been annulled should know what steps it must take to remedy the situation. In a case where the principle of absolute res judicata applies, it will extend to findings that are the necessary support for the operative part of the annulling judgment. This has been expressed very clearly by the CJEC in a series of cases. In Asteris AE v Commission of the European Communities (Joined Cases 97/86, 193/86, 99/86 and 215/86) [1988] ECR 2181; [1988] 3 CMLR 493 (Asteris) it observed at para 27: In order to comply with the judgment and to implement it fully, the institution is required to have regard not only to the operative part of the judgment but also to the grounds which led to the judgment and constitute its essential basis, in so far as they are necessary to determine the exact meaning of what is stated in the operative part. It is those grounds which, on the one hand, identify the precise provision held to be illegal and, on the other, indicate the specific reasons which underlie the finding of illegality contained in the operative part and which the institution concerned must take into account when replacing the annulled measure. Similarly, in Commission of the European Communities v AssiDomn Kraft Products AB (Case C 310/97P) [1999] ECR I 5363 (AssiDomn) the CJEC observed at para 55: The only purpose of considering the grounds of the judgment which set out the precise reasons for the illegality found by the Community Court is to determine the exact meaning of the ruling made in the operative part of the judgment. These authorities were referred to by the CJEC in P&O European Ferries CJEC (at para 44, cited at para 36 above) where it observed that the authority erga omnes of an annulling judgment is not attached only to the operative part of the BAI v Commission judgment but is also attached to the ratio decidendi of that judgment which is inseparable from it. Similarly, in Artegodan (at para 87) the CJEU observed: In that regard, the court has held, firstly, that res judicata extends only to the matters of fact and law actually or necessarily settled by the judicial decision in question and, secondly, that the force of res judicata attaches not only to the operative part of that decision, but also to the ratio decidendi of that decision which is inseparable from it In the present case, Servier submits that the four findings of the General Court on which it seeks to rely (see para 28 above) are binding for all purposes in the claimants damages actions. While accepting that the ultimate question before the General Court was whether other ACE inhibitors were substitutable for Perindopril at the relevant time, Servier maintains that the court needed to make each of the key findings on which they now seek to rely and that, accordingly, they form part of the ratio decidendi which is binding. The claimants, on the other hand, while denying that the four findings of the General Court on which Servier seeks to rely are essential to or inseparable from the General Courts final conclusion that the Commission erred in its definition of the relevant product market, raise the more fundamental objection that the principle of absolute res judicata is limited to preventing an annulment judgment from being called into question in subsequent proceedings. The purpose of the principle of absolute res judicata provides the key to identifying which parts of an annulling decision are binding erga omnes. They can have that effect only if it is necessary to respect them in order to prevent the courts conclusions from being undermined or, in the context of an EU institution charged with complying with the terms of the judgment, in order to prevent contradiction of the courts decision as to what needs to be done to secure compliance with EU law. Considered in the light of its purpose, it is clear that the notion of ratio decidendi comprises the grounds which form the essential basis of the judgment, the precise reasons for the illegality. It is for this reason that it is inseparable from the authority erga omnes of an annulling judgment. As the claimants put it in their written case, only those aspects of the grounds of the judgment which explain the meaning of the annulment decision form part of the ratio decidendi because those are the aspects which must be respected in order to fulfil the purpose of preventing the annulment judgment from being called into question in subsequent proceedings. Contrary to the submission on behalf of Servier, the judgment of the General Court in Shoe Branding Europe BVBA v European Union Intellectual Property Office (EUIPO) (adidas AG intervening) (Case T 629/16) EU:T:2018:108 (Shoe Branding) is not inconsistent with this analysis. In an earlier case (adidas AG v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) (Shoe Branding Europe BVBA intervening) (Case T 145/14) [2015] ETMR 33 (adidas)) the General Court annulled a decision of the Board of Appeal of OHIM that a trademark registered by Shoe Branding consisting of two diagonal stripes on a shoe was sufficiently different from adidass three stripe mark to be regarded as dissimilar and not likely to give rise to consumer confusion. Before the General Court adidas had alleged several errors of assessment by the Board in assessing the likelihood of consumer confusion within article 8(1)(b) of Council Regulation (EC) No 207/2009. The General Court undertook an assessment of all factors relevant to the case and concluded that the Board of Appeal had made several errors in assessing the competing marks. One element of the General Courts reasoning (at paras 31 35, 40 42) was that, as a matter of fact, the shoe purchasing public is made up of average consumers, whose degree of attention is only average. The General Court recalled that the average consumer normally perceives a mark as a whole and does not analyse its various details. On this basis the General Court concluded (at para 43) that the combined effect of the errors meant that the Board of Appeal had been wrong to conclude that the marks were visually dissimilar and (at paras 49 50) that this vitiated its finding that there was no likelihood of confusion. The General Court (at para 53) upheld on the same basis a further plea of adidas relating to infringement of article 8(5) of Regulation 207/2009 which applies where a mark would take unfair advantage of, or be detrimental to, the distinctive character or reputation of a similar earlier trademark. The Board of Appeal of OHIM then reconsidered the matter. In its fresh decision it applied the General Courts reasoning to conclude that there was visual similarity between the marks and it went on to find that the use of the new mark by Shoe Branding would take unfair advantage of the reputation of adidass mark. Shoe Branding then appealed to the General Court (Shoe Branding (Case T 629/16)) challenging, inter alia, the Boards assessment of the existence of damage to the reputation or distinctive character of adidass mark. The General Court rejected Shoe Brandings complaint of a misapplication of the average consumer test on the basis that it concerned matters that were res judicata with absolute effect as a result of the adidas judgment. In particular, it held (at paras 103 105) that the General Courts findings in adidas relating to the degree of attention of the relevant public constitute the necessary support for the operative part of that judgment and therefore themselves have the authority of res judicata with absolute effect. As the Board had fully complied with those grounds of the annulling judgment it was not open to Shoe Branding to challenge the Boards assessment regarding the degree of attention of the relevant public. Furthermore, with regard to Shoe Brandings complaint concerning the failure of the Board to perform a global assessment of the degree of similarity, the court concluded (at paras 111 112) that the General Court in adidas had definitively settled the issue of similarity by considering the similarities and differences in the marks for itself. The General Court observed (at paras 113 115) that the courts conclusions on the similarity of the marks in adidas constituted the necessary support for the operative part of that judgment, that it had not been open to the Board to depart from the courts assessment of similarity in adidas and that it was therefore not open to Shoe Branding to challenge the Boards adoption of that conclusion. Ms Bacon is correct in her submission on behalf of Servier that the General Courts findings in relation to the degree of attention of the relevant public were not the ultimate conclusion on the legal issue in the adidas case. They were findings of fact that fed into the courts multifactorial assessment of the similarity between the two marks which in turn led to the courts ultimate conclusion on risk of confusion under article 8(1)(b) of Regulation 207/2009 and detriment to reputation under article 8(5). The finding in the adidas case as to the degree of attention paid by purchasers was inseparable from the courts ultimate conclusion in that appeal and, as a result, it was part of the ratio decidendi. However, as Rose LJ explained in her insightful judgment in the Court of Appeal in the present case (at para 69), in the challenge brought by Shoe Branding the debate was not about whether or not buyers of sports shoes pay average or lower than average attention to buying shoes but about whether Shoe Branding was entitled to try to overturn the Board of Appeals finding that the marks were similar on the grounds that buyers paid higher than average attention. The ruling was that Shoe Branding could not rely on that or on any other ground for the purpose of challenging the decision that the marks were similar. It was in that context, and that context alone, that the previous decision as to the degree of attention paid by purchasers was binding. Turning to the judgment of the General Court in the present case (Case T 691/14) EU:T:2018:922, the operative part of the judgment simply annuls the finding that there has been an infringement of article 102 TFEU and is uninformative as to the basis for doing so. An examination of the judgment reveals that the specific reason it came to that conclusion was that the Commission erred in concluding that the relevant product market was limited solely to originator and generic Perindopril as opposed to all ACE inhibitors. In coming to that conclusion, the General Court (at paras 1589 1591) considered that the Commission made a series of errors in the analysis of the definition of the relevant market. In this regard, the General Court made a number of findings of fact, including the four findings on which Servier now seeks to rely. The issue of the scope and extent of the General Courts ratio decidendi only arises in a context where the General Courts assessment of Serviers conduct under article 102 is sought to be re examined. Assuming for present purposes that the ruling of the General Court were to become definitive, if there were such a challenge it would be necessary to ask which parts of the judgment would need to be respected in order to prevent the judgment from being undermined. If and to the extent that it could be shown that each of the four findings of fact on which Servier now seeks to rely was an essential basis of the General Courts ruling as to what was the relevant product market, those findings would form part of the ratio decidendi and it would not be possible to challenge them for the purpose of challenging the General Courts conclusion as to what was the relevant product market within article 102. In the present case, however, Servier seeks to rely on the four findings of fact of the General Court in an entirely different context. Ms Bacon submits that the EU principle of absolute res judicata applies to render the four findings of the General Court binding in the national proceedings in relation to issues of causation, remoteness and mitigation of loss. She submits that the General Court has found that all ACE inhibitors were substitutable and were perceived by prescribers as being substitutable, that in practice there were no obstacles to switching between any of them and that these specific findings were the necessary support or essential basis or specific reasons for the General Courts annulment of the Commission Decision. She says that those findings therefore carry the authority of res judicata erga omnes with absolute effect in any proceedings that fall within the scope of EU law in which those same factual issues arise. In making this submission, Servier seeks to detach those findings from the authority erga omnes of the annulling judgment which alone can make them part of the ratio decidendi. Although the proceedings before the national court originally included a claim for damages founded on an infringement of article 102 TFEU, the claimants have confirmed, following the General Courts judgment annulling the Commission Decision, that if that judgment is upheld in the further appeal to the CJEU that claim will no longer be pursued. As presently constituted, the claim in the national proceedings is a claim for breach of statutory duty founded on alleged infringements of article 101 TFEU. No question arises in the proceedings before the national court as to the relevant product market for the purposes of article 102 or the applicability of article 102. As a result, the ratio decidendi of the annulling judgment is simply not engaged. The findings on which Servier relies have no significance independent of the annulling judgment. It is not necessary to treat those findings as binding in any other legal context in order to preserve the authority of the annulling judgment. Furthermore, the broad view of absolute res judicata for which Servier contends is not supported by the case law of the EU courts. This is not surprising, as to apply the principle in a context detached from the annulling judgment would be entirely inconsistent with the purpose of that principle, which is to prevent the annulling judgment from being called into question in subsequent proceedings. AssiDomn has its origin in a Commission infringement decision against 43 producers finding unlawful collusion in the international wood pulp market, in particular by concerting on prices for bleached sulphate wood pulp. Subsequently, 26 of the producers, not including AssiDomn or any of the other Swedish producers, applied successfully to annul that decision (Ahlstrm Osakeyhti v Commission of the European Communities (Joined Cases C 89, 104, 114, 116 117 and 125 129/85) [1988] ECR 5193 (Wood Pulp)). Later, and after the expiry of the time limit for challenging the Commissions decision, the Swedish producers asked the Commission to reconsider their legal position in the light of the Wood Pulp judgment and to refund to each of them the fines which they had paid, to the extent that they exceeded the sum upheld by the CJEC in relation to certain applicants for findings of infringement which it had not annulled. They contended in particular that they were in the same position as the other producers in relation to the operative part of the Wood Pulp judgment and that the annulment by the CJEC of the Commissions finding that addressees of the Commission decision had concerted on prices should also have been applied to them, even though they were not party to the proceedings in Wood Pulp. The Commission refused their request and the Swedish producers brought proceedings challenging that refusal. That challenge succeeded before the Court of First Instance (AssiDomn Kraft Products AB v Commission of the European Communities (Case T 227/95) [1997] ECR II 1185; [1997] 5 CMLR 364) but failed on appeal by the Commission to the CJEC (Case C 310/97P) [1999] ECR I 5363; [1999] All ER (EC) 737. In their action for annulment of the Commissions refusal decision the Swedish producers advanced two grounds. First, they contended that the Commission infringed the principle of EU law according to which a judgment annulling a measure has the effect of rendering the contested measure null and void, erga omnes and ex tunc. Secondly, they contended that the Commission had infringed the first paragraph of what is now article 266 TFEU. A Grand Chamber of the CJEC considered that the Commissions original infringement decision had to be regarded as a bundle of individual decisions against each producer. It considered ([1999] ECR I 5363, paras 50 53) that what is now article 266 TFEU requires an institution which adopted an annulled measure only to take the necessary measures to comply with the judgment annulling its measure and that if an addressee of a decision decides to bring an action for annulment, the matter to be tried relates only to those aspects of the decision which concern that addressee. It continued: [54] Furthermore, although the authority erga omnes exerted by an annulling judgment of a court of the Community judicature attaches to both the operative part and the ratio decidendi of the judgment, it cannot entail annulment of an act not challenged before the Community judicature but alleged to be vitiated by the same illegality. [55] The only purpose of considering the grounds of the judgment which set out the precise reasons for the illegality found by the Community Court is to determine the exact meaning of the ruling made in the operative part of the judgment. The authority of a ground of a judgment annulling a measure cannot apply to the situation of persons who were not parties to the proceedings and with regard to whom the judgment cannot therefore have decided anything whatever. Servier submits that AssiDomn is a case where the applicants sought to rely on findings of fact about the conduct of the non Swedish producers to prove similar but distinct factual propositions about the Swedish producers. In their submission, because the findings of fact in the earlier Wood Pulp decision were different there was no scope for the application of the principle of absolute res judicata. This is, however, a misreading of the CJEC decision in AssiDomn. The plea of the Swedish producers related to findings as to the wood pulp market made in the earlier decision and which applied directly to the Swedish producers. Thus the Court of First Instance in AssiDomn expressly stated (at para 75) that the decision had been annulled on the basis of considerations which apply generally to the Commissions analysis of the wood pulp market and are not founded on any examination of conduct or practices on the part of individual addressees of the Wood Pulp decision and (at para 82) that the relevant findings related generally to the validity of the Commissions economic and legal assessment of parallel conduct observed on the market. Similarly, on appeal to the CJEC, Advocate General Ruiz Jarabo Colomer (at para 71) expressly endorsed the former statement of the Court of First Instance. Accordingly, the point of distinction identified by the CJEC was not, as Servier submits, the scope of the findings of fact in Wood Pulp but, rather, the ambit of the operative part of the annulling judgment. The reasoning of the CJEC was that the principle of absolute res judicata did not apply because the legal context was materially different. AssiDomn therefore provides compelling support for the claimants submission that the grounds of an EU judgment annulling a measure cannot be considered to have binding effect when transplanted into a context divorced from the annulling judgment. European Commission v Tomkins plc (In re Copper Fittings Cartel) (Case C 286/11P) [2013] Bus LR 999 (Tomkins) does not support Serviers reading of AssiDomn. In Tomkins an operating subsidiary company and its parent company were penalised by the Commission for infringement of the EU competition rules. The liability of the parent was wholly derived from the subsidiarys participation in the cartel and the Commission imposed a fine jointly and severally on the parent and subsidiary. They each brought separate actions before the General Court challenging the Commissions decision. The subsidiarys appeal succeeded in obtaining an annulment of the decision in relation to a period of the infringement that the parent had not challenged in its appeal. The General Court ((Case T 382/06) [2011] ECR II 1157), nevertheless, annulled the Commissions decision in relation to the parent companys involvement during that period, because its liability was wholly derived from that of the subsidiary. The Commission appealed to the CJEU, arguing that in reducing the duration of the infringement for the parent, without any express claim to that end having been made by the parent, the General Court had ruled ultra petita, thereby infringing the courts case law, in particular the judgments in AssiDomn and ArcelorMittal Luxembourg SA v Commission of the European Communities (Joined Cases C 201/09P and C 216/09P) [2011] ECR I 2239. In rejecting that submission, the Grand Chamber held that where the liability of a parent was derived exclusively from that of its subsidiary and where both have brought parallel actions having the same object, the General Court was entitled, without ruling ultra petita, to take account of the outcome of the action brought by the subsidiary and to annul the contested decision in respect of the relevant period also in so far as the parent was concerned. Contrary to Serviers submission, Tomkins casts no light on the true effect of AssiDomn. In Prez Daz v Commission of the European Communities (Case T 156/03) EU:T:2006:153 Mr Prez Daz applied in a competition for inclusion in a reserve list of Commission staff. The 60 best candidates were to be appointed. Mr Prez Daz was rejected and he challenged this decision. The Court of First Instance annulled the decision on the ground that the examining panel had an insufficient knowledge of Spanish, when it was required to assess Mr Prez Dazs proficiency in that language. Two other unsuccessful candidates, Sabbag and Bachotet, had also successfully challenged the process on the ground that the composition of the assessment panel had fluctuated. The Commission then held a further oral test for Mr Prez Daz before a reconstituted panel which rescored him and compared his new score with the original score of the lowest successful candidate. He was informed that his results in the new test were insufficient and that he could not be included in the reserve list. Mr Prez Daz then brought a further challenge, maintaining that it was wrong to compare his score with a score reached through the original process during which the composition of the panel had fluctuated. Although Mr Prez Daz had not criticised the fluctuation of the composition of the panel in his original challenge, the Court of First Instance held that he could rely on the effects of the annulling judgments in the challenges brought by Sabbag and Bachotet. It held (at para 60) that the organisation of Mr Prez Dazs new oral test disregarded the res judicata arising from the grounds constituting the necessary support for the operative parts of the judgments in the actions brought by Sabbag and Bachotet against the Commission. Servier submits that Prez Daz demonstrates that the question whether a res judicata can be relied on in a second set of proceedings depends on a close analysis of the reasons for the annulment in the first decision and whether those same reasons have any application in the second proceedings as opposed to any formal analysis of who the parties were or whether findings are being borrowed from one context to another. However, the judgment shows that the case turns on the scope of the annulling judgments and the Commissions obligations under article 266 TFEU to take the necessary measures to comply with them. The Court of First Instance explained (at paras 46 48, 57, 60) that in complying with the annulling judgment resulting from Mr Prez Dazs first challenge the Commission was required to act in accordance with EU law and was therefore required to remedy the breach of equal treatment arising from the fluctuation of the composition of the panel, identified in the challenges of the other unsuccessful candidates, which had vitiated the examination of all the candidates including Mr Prez Daz. The Commission could not legally, in remedying the annulment decisions in accordance with article 266, re open the selection procedure for the benefit of the excluded candidates by reproducing the conditions of the conduct of the initial oral test. The Commissions remedial obligation resulting from the judgments in the Sabbag and Bachotet challenges extended to according equal treatment to Mr Prez Daz. In simply comparing his result on the second assessment with the results of the original flawed process, the Commission had failed to discharge that obligation. This is not, therefore, a case where a factual finding was transposed with binding effect from its context in an annulling judgment to the distinct context of different litigation. The finding had no legal force independent of the annulment declaration. Prez Daz exemplifies a feature of the principle of absolute res judicata which the CJEC described in Asteris. Having explained (at para 27, cited at para 40 above) that the obligation of an EU institution to comply with an annulling judgment requires it to have regard not only to the operative part but also to the grounds which led to the judgment and constitute its essential basis, in so far as they are necessary to determine the exact meaning of what is stated in the operative part, the CJEC continued (at para 28): However, although a finding of illegality in the grounds of a judgment annulling a measure primarily requires the institution which adopted the measure to eliminate that illegality in the measure intended to replace the annulled measure, it may also, in so far as it relates to a provision with specific scope in a given area, give rise to other consequences for that institution. In Asteris the CJEC had, in an action brought by Greece, annulled Commission Regulation No 1615/83 fixing the coefficients to be applied to the production aid for tomato concentrates for the 1983/84 marketing year. The Regulation was annulled to the extent to which the coefficients resulted in inequality of treatment as between Greek producers and those in other member states. In its annulling judgment the CJEC stated that it was the duty of the Commission to fix new coefficients for Greece or to devise some other system of compensation taking account of the fact that the aid scheme differentiated between Greece and the other member states. The Commission adopted a new Regulation in respect of the 1983/84 year but refused to adopt new regulations in respect of the years before or after 1983/84. Of the Regulations which the Commission refused to amend, the Regulations in respect of the years 1981/82 and 1982/83 were adopted before the annulled Regulation and the Regulation in respect of the years 1984/85 to 1986/87 was adopted after the annulled Regulation. Greece challenged the Commissions refusal to take the necessary consequential measures with respect to the previous and subsequent years, covered by regulations identical to the annulled Regulation but which were not challenged within the prescribed time limits. The CJEC noted that those Regulations related to situations different from those governed by the annulled Regulation. Having set out (at paras 26 and 27, cited above) the obligations which an annulling judgment entails for the institution concerned, the CJEC held (at paras 29 31) that where, as in that case, the effect of the annulled Regulation was limited to a clearly defined period (ie the year 1983/84) the institution which adopted the measure (ie the Commission) was, first, under an obligation to ensure that the new legislation adopted following the annulling judgment and governing the marketing years subsequent to that judgment contains no provisions having the same effect as the provisions held to be illegal. However, by virtue of the retroactive effect of annulling judgments, the finding of illegality took effect from the date on which the annulled measure entered into force. Accordingly, the Commission was also under an obligation to eliminate from the Regulations already adopted when the annulling judgment was delivered and governing years after 1983/84 any provisions with the same effect as the provision held to be illegal. Consequently, the finding that the coefficients to be applied to the amount of aid for Greek producers were illegally fixed was binding with respect not only to the year 1983/84 covered by the annulled Regulation, but also to all subsequent marketing years. By contrast, that finding could not apply to the marketing years covered by the Regulation adopted before the year 1983/84. The grant of relief in Asteris in respect of the later years was not the result of the transposition with binding effect of an essential finding to a different legal context. Rather, it provides a further example of the further consequences which may be required to flow from an annulling judgment. (See further in this regard Socit Nouvelle des Usines de Pontlieue Aciries du Temple (SNUPAT) v High Authority (Joined Cases 42 and 49/59) [1961] ECR 53, considered in AssiDomn [1999] ECR I 5363, paras 64 68.) The refusal of relief in Asteris in respect of the earlier years where the Commissions acts had been vitiated by precisely the same illegality, is, however, particularly significant for present purposes because it is entirely inconsistent with Serviers submission as to the transferability of a binding res judicata from one legal context to another. In support of its case, Servier also relies by way of analogy on the status of Commission decisions before national courts of member states and in particular on the recent judgment of the Competition Appeal Tribunal in Royal Mail Group Ltd v DAF Trucks Ltd [2020] CAT 7; [2020] Bus LR 1795 (Trucks). Following a settlement decision of the Commission in 2016 finding that five major European truck manufacturing groups had operated a cartel between 1997 and 2011, a number of purchasers brought in the Competition Appeal Tribunal follow on claims for damages against those manufacturers. The Tribunal observed (at para 129) that detailed factual findings made in infringement decisions about the operation of a cartel can be relied upon to quantify the loss caused by that cartel in follow on national proceedings. Servier accordingly submits that findings of fact that are essential to the operative part of an infringement decision are binding for the purposes of the damages claim, without any further limitation on the use that the parties can make of those findings in the proceedings. The difficulty with this submission is that the two situations are not analogous. First, the status of Commission infringement decisions before the courts of member states is governed by specific EU legislation, Council Regulation (EC) No 1/2003, which modernised the system for enforcement of rules of EU competition law and which conferred on national courts the power to apply those rules in parallel with the Commission. The legislation emphasises (recital (22)) the importance of avoiding conflicting decisions, in order to ensure compliance with the principles of legal certainty and the uniform application of the EU competition rules in a system of parallel powers. Accordingly, article 16 of Council Regulation (EC) No 1/2003 provides that when national courts rule on agreements, decisions or practices under articles 101 or 102 TFEU which are already the subject of a Commission decision, they cannot take decisions running counter to the decision adopted by the Commission. Secondly, under the law as it existed prior to the coming into effect of Council Regulation (EC) No 1/2003, (see Masterfoods Ltd v HB Ice Cream Ltd (Case C 344/98) [2000] ECR I 11369), a national court was not bound to apply any of the underlying findings of fact that were previously reached by the Commission where the subject matter of the case before the national court was different (Crehan v Inntrepreneur Pub Co (CPC) (Office of Fair Trading intervening) [2007] 1 AC 333 per Lord Bingham at para 11; per Lord Hoffmann at para 69). Thirdly, I note that in Trucks itself the Tribunal observed (at para 33), correctly in my view, that the principle of res judicata is not engaged where the issue concerns a decision of the Commission (as opposed to a decision of the EU courts) and that the determination of what findings in a Commission decision are binding involves different considerations. I agree with the observations of Rose LJ (at paras 72 and 73 of her judgment in the Court of Appeal [2020] Ch 193) that the approach for which Servier contends raises a host of practical difficulties and that it is wide ranging and unstable with no workable defined limits. She identifies three practical difficulties in particular. The first is ascertaining the degree of granularity of the factual findings made that fall within the scope of what is res judicata. Secondly, there will frequently be a number of facts found by the General Court to support a particular conclusion. National courts are likely to experience difficulty in deciding which are essential to or inseparable from or sufficiently proximate to or a pillar of the ratio decidendi. There is here, moreover, considerable scope for different national courts to come to different conclusions as to which findings are binding. Thirdly, factual findings will often point in different directions, requiring the General Court to undertake a multi factorial assessment in order to arrive at its ultimate conclusion. Moreover, if only some of the General Courts factual findings are res judicata, this could lead to a very unbalanced factual analysis in any subsequent national proceedings. More generally, it seems to me that confined to the context of the consequences of an annulling judgment, the principle of absolute res judicata performs a useful function in promoting legal certainty, the effective judicial control of EU institutions and the maintenance of the EU legal order. However, once freed from that restriction it could operate in an arbitrary and unjust manner, binding strangers to the original dispute in a wholly different legal context in a manner which could not be reconciled with principles of a fair trial. (See, by analogy, the Opinion of Advocate General Trstenjak in Nemzeti Fogyasztvdelmi Hatsg v Invitel Tvkzlsi Zrt (Case C 472/10) [2012] 3 CMLR 1, para 60.) Serviers attempt to rely in the present case upon the principle of absolute res judicata is, therefore, misplaced. Servier seeks to borrow findings of fact from the annulling judgment of the General Court made in the context of abuse of dominant position under article 102 TFEU and to deploy them in an entirely different context which concerns mitigation of loss flowing from alleged anti competitive agreements under article 101 TFEU and which has nothing to do with article 102 or with the consequences of the annulling judgment. The claims by the claimants in the national proceedings do not call into question or undermine in any way the conclusion of the General Court in its annulling judgment or the consequences of that judgment, nor do they contradict the General Courts decision as to what needs to be done to secure compliance with EU law. For these reasons I am satisfied to the standard of acte clair that the principle of absolute res judicata has no application to the present case. I would dismiss the appeal.

UK-Abs

In this appeal, the Supreme Court is asked to decide whether findings of fact made by the General Court of the European Union (the General Court) are binding in subsequent domestic proceedings, under the EU principle of absolute res judicata. The appellants (collectively known as Servier), developed and manufactured the drug Perindopril, which is used to treat cardiovascular diseases including high blood pressure. Perindopril falls within the class of medicines known as angiotensin converting enzyme inhibitors (ACE inhibitors). The respondents, who are the claimants in the domestic proceedings, are the national health authorities of England, Wales, Scotland and Northern Ireland. Between May 2011 and September 2012, the claimants issued proceedings in England and Wales which alleged that Servier had: (i) breached article 101 of the Treaty on the Functioning of the European Union (TFEU) and/or Chapter 1 of the Competition Act 1998 (the 1998 Act) by entering into anticompetitive agreements with potential generic manufacturers and/or suppliers; and (ii) abused its dominant position in the market contrary to article 102 TFEU and/or Chapter 2 of the 1998 Act. The claimants contend that this allegedly unlawful conduct has delayed the entry of cheaper generic versions of Perindopril onto the UK market, which has, in turn, caused the claimants to suffer substantial financial loss. Serviers conduct relating to Perindopril was investigated by the European Commission (the Commission). On 9 July 2014, the Commission issued a decision which found that Servier had infringed articles 101 and 102 TFEU. Servier appealed to the General Court seeking the annulment of the Commissions decision. The General Court judgment upheld all but one of the Commissions findings of infringement of article 101 TFEU, but found that Servier had not infringed article 102 TFEU. This was because the relevant product market was not limited to Perindopril but extended to ACE inhibitors generally, and Servier did not have a dominant position in that wider market. Both the Commission and Servier have appealed to the Court of Justice of the European Union (CJEU). As there are significant overlaps, the domestic proceedings cannot proceed to a final trial until the EU proceedings have been resolved. However, in October 2016, Servier was granted permission to plead that the claimants failed to take reasonable steps to encourage switching from the prescription of Perindopril to cheaper generic ACE inhibitors. Servier asserts that, even if liability and causation are established, the claimants damages should be reduced or extinguished: (i) because the claimants failed to mitigate their loss; (ii) for contributory negligence; and (iii) because the losses claimed are too remote. It was determined that there should be a trial of preliminary issues relating to this argument. Servier argued that certain findings in the General Court judgment in particular concerning the extent to which Perindopril can be substituted for other ACE inhibitors are binding on the domestic courts in the preliminary issues trial. However, both the High Court and the Court of Appeal held that none of the findings relied on by Servier constituted res judicata for these purposes. Servier appealed to the Supreme Court. It claimed that the point of law is uncertain, not acte clair, and that the Supreme Court should therefore refer the question to the CJEU under article 267 TFEU. The Supreme Court unanimously dismisses Serviers appeal. It holds that the General Court findings Servier relies on are not binding in the domestic proceedings, and declines to make a reference to the CJEU. Lord Lloyd Jones gives the judgment, with which all members of the Court agree. The EU principle of absolute res judicata only applies to judicial decisions which have become definitive, either after all rights of appeal have been exhausted or after the time limits for exercising those appeal rights have expired. The General Courts findings are not yet definitive, and may never become definitive, because they may be reversed or rendered redundant in the appeal pending before the CJEU. The findings are not, therefore, binding in the domestic proceedings under the EU principle of absolute res judicata. A reference to the CJEU is unnecessary to decide the issues in this case [31 32]. The Court nevertheless sets out its views on the underlying issues of law, in the hope that they might assist at later stages of the domestic proceedings [32]. The leading authority on the EU principle of absolute res judicata is P&O European Ferries (Vizcaya) SA and Diputacin Foral de Vizcaya v Commission (Joined Cases C 442/03P and C 471/03P) [2006] ECR I 4845 [33 37]. This explains that, where the EU courts have annulled a Commission decision on substantive as opposed to procedural grounds, the substance of that judgment becomes binding on all the world, not just on the parties. This ensures stability of legal relations, because it means that a matter which has been definitely settled by judicial decision cannot be referred to the courts by different parties for reconsideration [38]. The purpose of the EU principle of absolute res judicata is to prevent the annulling judgment from being called into question in subsequent proceedings. This purpose provides the key to the principles scope and applicability [38, 42]. Absolute res judicata gives dispositive effect to the judgment itself. It therefore extends to the essential reasons for the judgment (or ratio decidendi), not just to the outcome set out in the operative part [39 40]. Only those aspects of the judgment which explain why the Commission decision has been annulled form part of the ratio decidendi, because those are the aspects which must be respected to prevent the annulling judgment from being called into question later on [42]. The General Court judgment annuls the Commissions finding that Servier had infringed article 102 TFEU, on the basis that the Commission was wrong to conclude that the relevant product market was limited to Perindopril, as opposed to all ACE inhibitors. The General Court made a number of findings of fact in this regard, including those Servier relies on. Accordingly, if the General Court judgment becomes definitive and it can be shown that the relevant findings were an essential basis of that judgment, it would not be possible to challenge those findings in later proceedings which sought to contradict the General Courts conclusions on the relevant product market within article 102 TFEU [46]. It is not necessary to treat the General Courts findings as binding in any other legal context. If the CJEU upholds the General Court judgment that Servier did not infringe article 102 TFEU, the claimants will no longer pursue their article 102 claim. In any case, at present, the domestic proceedings do not concern the relevant product market for the purposes of that article. Instead, Servier relies on the General Courts findings to support its defence based on mitigation of loss flowing from alleged anti competitive agreements contrary to article 101 TFEU. The General Courts findings cannot be detached from the authority of the annulling judgment and deployed in this wholly different context [48]. Servier contends that the General Courts findings are binding in any EU law proceedings which raise the same factual issues [47]. The Supreme Court rejects this argument because it is not supported by the EU or domestic case law [49 60]. This is not surprising, because it would be inconsistent with the purpose of the principle of absolute res judicata [49]. Serviers proposed approach also raises practical difficulties because it has no workable defined limits. More generally, if it is confined to the context of the consequences of an annulling judgment, the principle of absolute res judicata promotes legal certainty, the effective judicial control of EU institutions and the maintenance of the EU legal order. However, once freed from this restriction, it could operate in way that is arbitrary and unjust, binding persons not party to the original dispute in a wholly different legal context in a way which would be inconsistent with the principles of a fair trial [61]. The claimants claims in the domestic proceedings do not call into question or undermine the General Court judgment or its consequences in any way, nor do they contradict the General Courts decision as to what needs to be done to comply with EU law. The Supreme Court is therefore satisfied to the standard of acte clair that the EU principle of absolute res judicata does not apply [62].

This appeal is sensitive and important. I regret that I have failed to contain this judgment within fewer than 78 paragraphs, plus 25 paragraphs of a schedule to it. The Court of Appeal has made a rare finding that the judges conduct of the trial was unfair towards one of the parties. When made in respect of the conduct of any judge, however senior or junior, such a finding carries profound sensitivity. Our duty is to appraise it with the utmost care; and, were we to uphold it, we would need to address the order made by the Court of Appeal in consequence of it. But there is a second dimension to the appeal to this court. For the Court of Appeal also based its decision upon its understanding of the effect of section 4 of the Defamation Act 2013 (the Act), entitled Publication on matter of public interest; and energetic criticisms are made to us in relation to its exposition of the effect of the section. For reasons which will become apparent, our own analysis of the section will not form part of our decision; but it is intended to be helpful nevertheless. It will be convenient to describe the appellants as the defendants; and the respondent as the claimant. The first defendant, Mr Malkiewicz, is the editor in chief of a Polish newspaper, entitled Nowy Czas (which means New Time) and owned by the second defendant, Czas Publishers Ltd. The third defendant, Mrs Bazarnik Malkiewicz, is an editor of the paper, a director of the second defendant and the wife of the first defendant. At the relevant time the paper was published eight times a year, both in hard copy and online, and it addresses issues of interest to the substantial Polish community in the UK, particularly in London. The claimant, Mr Serafin, now aged about 68, was born in Poland but has lived in England since 1984. The claimant sued the defendants for libel in respect of an article which they published about him in the newspaper in October 2015. Over seven days in October and November 2017 Mr Justice Jay (the judge), sitting in the Queens Bench Division of the High Court, heard the claim. The claimant appeared in person before him, supported by a McKenzie friend. Simon Burn Solicitors had been acting for him but came off the record shortly before the hearing. It appears, however, that, outside court, a degree of legal assistance was continuing to be provided to the claimant during the hearing, in particular in relation to the compilation of his closing submissions. But ranged against the claimant in court was Mr Metzer QC, by then instructed directly by the defendants rather than by the solicitors who had acted for them until shortly before the hearing. By a reserved judgment dated 24 November 2017, the judge explained why he had decided to dismiss the claim: [2017] EWHC 2992 (QB). On 8 December 2017 he made an order to that effect. The claimant appealed against it to the Court of Appeal. On 5 March 2019 Lewison, McCombe and Haddon Cave LJJ heard the appeal. By a judgment of the whole court dated 17 May 2019, they explained why they had decided to allow the appeal: [2019] EWCA Civ 852. On 21 June 2019 they made an order to that effect. They remitted the task of quantifying the claimants damages in respect of part or all of his claim to a judge of the Media and Communications List other than the judge. The defendants now appeal to this court against that order. B. The Background Following his arrival in England, the claimant set up business as a builder. In about 1989 he joined POSK, a substantial Polish social and cultural association, established as a charity, with premises in Hammersmith. For about 15 years until 2012 he sat on the General Council of POSK and between about 2003 and 2007 he was a senior member of its House Committee, which was responsible for all building work done at the premises. During his membership of it there was refurbishment both of the entrance hall and of the basement, where a bar and caf, together called The Jazz Caf, were created. Between 2007 and 2012 the claimant was joint manager of The Jazz Caf and often served behind the bar. In 2008 the claimant set up a company, Polfood (UK) Ltd, with a view to its importing Polish foodstuffs and selling them wholesale to Polish groceries in England. The company needed working capital and the claimant persuaded Polish friends and acquaintances to buy shares in it or to lend money either to it or to him for transmission to it. But Polfood soon became insolvent. In 2011 the claimant was declared bankrupt. In 2012 he was discharged but only in consideration of his entry into a Bankruptcy Restrictions Undertaking, which was to endure for five years. He thereby apparently undertook not to be a director of a company without the courts permission, not to borrow more than 500 without disclosing the restriction and not to be a trustee of a charity. Kolbe House is the name of a charity which runs a substantial care home in Ealing. It provides care for elderly Polish people. While it was trading, Polfood supplied bread and other foodstuffs to Kolbe House. In 2012 the claimant began again to supply it with bread. In 2013 he became the maintenance man and general factotum at Kolbe House; and he invoiced it for works of renovation done by him there. The Meanings of the Article The article, written of course in the Polish language, is entitled Bankruptcy need not be painful. At its foot is the name of the first defendant, whom the judge described as a Polish intellectual in the old school. The judge described the article as satirical, witty, allusive and intellectually sophisticated in style and tone. The claimant alleged that the words of the article had in effect 13 defamatory meanings (or, to use the word in the Act, imputations). The defendants responded that the words bore a common sting, which was that the claimant was a bankrupt and a serially untrustworthy man who, in order to satisfy his ambition and financially benefit himself and his family in Poland, took improper advantage of a number of people, including women. The judge disagreed that the words bore this common sting and held that he was therefore required to address whether the defendants were liable for each of the 13 meanings which, insofar as they admitted them, were as alleged by the claimant and which, insofar as they disputed those alleged by the claimant, were those which he found the article to have carried. The first meaning (M1) was that the claimant abused his position as house manager of POSK in order to award himself or his company profitable contracts for maintenance work at POSK, avoiding the proper procedure for obtaining approval for tenders for such contracts. The defendants appear to have contended that, if the article bore this meaning, it was not defamatory by reason of section 1(1) of the Act, which provides as follows: A statement is not defamatory unless its publication has caused or is likely to cause serious harm to the reputation of the claimant. The judge rejected the defendants contention. He proceeded, however, to consider an alternative contention of the defendants, namely that they had a defence under section 2(1) of the Act, which provides as follows: It is a defence to an action for defamation for the defendant to show that the imputation conveyed by the statement complained of is substantially true. The judge found that M1 had been shown to be substantially true. The second meaning (M2) was that the claimant purchased memberships of POSK for those whom he could rely upon to support his electoral aspirations. The judge found that, even if, which he doubted, the publication of a statement to this effect crossed the threshold of serious harm to reputation set by section 1 of the Act, M2 had been shown to be substantially true. The third meaning (M3) was that the claimant was not really single at all, or at the very least his personal circumstances in Poland were mysterious and that he exploited his supposed availability as a means of bringing him closer to women, over whom he exercised his charm. As in relation to the second meaning, the judge found that even if, which he doubted, the publication of a statement to this effect crossed the threshold of serious harm set by section 1 of the Act, M3 had been shown to be substantially true. The fourth meaning (M4) was that the claimant in the course of supplying alcohol for retail sale in POSKs Jazz Caf, dishonestly ensured that money taken from sales would by pass the cash register, in order to obtain unlawful and fraudulent profit from those sales. The judge found that the statement to this effect had been shown to be substantially true. The fifth meaning (M5) was that the claimant conned a number of women into investing their life savings into his food business by leading each woman to believe she was the only one and with promises of a good life together with him. The judge found that the statement to this effect had been shown to be substantially true. The sixth meaning (M6) was that the claimant having dishonestly persuaded investors in his food business to part with their life savings, stole their money for himself and transferred it to Poland to support a family construction project in Poland and to support his family there. The judge found that the statement to this effect had been shown to be substantially true. The seventh meaning (M7) was that the claimant defrauded his creditors and dishonestly circumvented the normal consequences of bankruptcy in order to retain for himself personal wealth, in the form of a BMW X5 car and real property that he pretended to sell, that should have been made available to satisfy the claims of his creditors. The judge found that the statement to this effect had been shown to be substantially true. The eighth meaning (M8) was that the claimant had profited or attempted to profit by selling out of date food to Kolbe House, a residential care home for elderly and vulnerable people, including those suffering from dementia. The judge found that the defendants had failed to show that the statement to this effect was substantially true. The ninth meaning (M9) was that the claimant by means of exploiting his charm and sway over the female manager of Kolbe House, inveigled himself into the highest levels of management at the home to the extent that he treated it as if it were his own personal property, including accessing at will the highly confidential records of the vulnerable residents despite having no legitimate reason to do so. The judge found that the defendants had failed to show that the statement to this effect was substantially true. The tenth meaning (M10) was that the claimant abused his position of trust at Kolbe House and callously diverted to himself funds that were needed for the care of the homes elderly and sick residents by securing for himself a contract for the major renovation of the bathrooms at the home, even though these renovations were completely unnecessary. The judge found that the defendants had failed to show that the statement to this effect was substantially true. There is inconsistency in the judges judgment about what he found to be the 11th meaning (M11). But it appears to have been that the claimant supplied to Kolbe House frozen milk and bread which was close to its sell by date from a source which he did not disclose. The judge found that the statement to this effect failed to cross the threshold of serious harm to reputation set by section 1 of the Act. The 12th meaning (M12) was that the claimant dishonestly concealed from the manager and trustees of Kolbe House his current status as an undischarged bankrupt in order to win their trust and also to obtain a building contract for the extension of the managers home. The judge rejected the assertion of the defendants that the statement to this effect failed to cross the threshold of serious harm to reputation set by section 1 of the Act and he proceeded to find that they had also failed to show that it was substantially true. The 13th meaning (M13) was that the claimant concealed his bankrupt status from Ealing Council [in relation to a planning application] in circumstances where he was obliged to reveal it. The judge found that the defendants had failed to show that the statement to this effect was substantially true. It follows that, by this stage of the judges judgment, the claimants cause of action had been rejected in relation to all the meanings apart from M8, M9, M10, M12 and M13. These five meanings all related, directly or indirectly, to Kolbe House. Then, however, the judge turned to address a further defence raised by the defendants in relation to all 13 meanings, thus relevantly including the five meanings which had until that stage of his judgment survived as actionable. This was the defence under section 4 of the Act. D. Public Interest Section 4, entitled Publication on matter of public interest, is more conveniently set out in para 52 below. Much of the argument before the judge in relation to section 4 surrounded subsection (1)(b), namely whether the defendants could show, particularly in circumstances in which they had not invited the claimant to comment prior to publication on their intended allegations against him, that it was reasonable for them to have believed that publishing the statements was in the public interest. In the event the judge found that the defendants had indeed established a defence under section 4 in relation to all the allegations and thus, relevantly, to the five meanings of them which had until that stage survived as actionable. The judge added, however, that, even if the defence under section 4 had not been established, he would not have awarded damages (other, presumably, than nominal damages) in respect of those five meanings. For, so he explained, the claimants reputation had been sufficiently shot to pieces by the other statements in the article which had been shown to be substantially true. So the judge dismissed the claim. The Appeal to the Court of Appeal For his appeal the claimant re instructed Simon Burn Solicitors. The claimants grounds of appeal were (a) that the judge had been wrong to uphold the defence under section 4; (b) that there was no evidence on which he could have found that M4 was substantially true and that, without reference to that finding, he could not have found that the claimants reputation had been shot to pieces by reference only to the other imputations shown to have been substantially true; and that the judges conduct of the hearing had been unfair to the claimant. (c) Before the Court of Appeal Ms Marzec appeared for the claimant and, as before, Mr Metzer appeared for the defendants. The court chose to address the grounds of appeal in the order set out by the claimant. It held, first, at para 84 that the judge had been wrong to uphold the defence under section 4. It held, second, at para 99 that on the evidence before him he had not been entitled to find that M4 was substantially true and so it set that finding aside. Then, suggesting that M4 had been the most serious imputation made against him, it proceeded at para 101 to uphold the claimants contention that it would not have been open to the judge to find that his reputation had been shot to pieces by reference only to the other imputations shown to have been substantially true. At that stage of the judgment and (as it said) on this basis, the Court of Appeal explained at para 102 that the claimant was entitled to damages in respect not only of M8, M9, M10, M12 and M13 but therefore also of M4. The Court of Appeal then addressed the claimants third ground of appeal, namely that the judges conduct of the hearing had been unfair to him. The court was furnished with substantial parts of the transcripts of the first four days of the hearing and with 16 short excerpts from them on which Ms Marzec particularly relied. The court concluded at para 114 that on numerous occasions the judge had appeared to descend into the arena, to cast off the mantle of impartiality, to take up the cudgels of cross examination and to use language which was threatening and bullying; and that its impression was of a judge who, if not partisan, had developed an animus towards the claimant. It observed at para 117 that it found his conduct all the more surprising in light of the fact that the claimant was appearing in person and that, although he spoke it well, English was not his first language. It added at para 118 that it was highly troubled by the judges criticisms of the claimants disclosure of particular documents in circumstances in which the defendants had at no time sought an order for their disclosure. The court concluded as follows at para 119: In our view, the judge not only seriously transgressed the core principle that a judge remains neutral during the evidence, but he also acted in a manner which was, at times, manifestly unfair and hostile to the claimant [W]e are driven to the conclusion that the nature, tenor and frequency of the judges interventions were such as to render this libel trial unfair. We, therefore, uphold [this] ground of appeal. The Court of Appeals Order F. The problem is that the Court of Appeal did not in its judgment proceed to address the consequences that should flow from its conclusion that the trial had been unfair. In particular it did not consider whether that conclusion should in any way displace its earlier conclusion, set out in para 31 above, about the relief to which the claimant was entitled. At the end of its judgment the court said only that the appeal should be allowed; and, apparently by email, it invited the parties to file written submissions in respect of the appropriate order to be made in the light of its judgment. The transcript of the hearing before the Court of Appeal shows that both parties had then reluctantly accepted, as apparently had the court, that, were it to conclude that the trial had been unfair, it would have no option but to order a retrial of the claim. The written submissions of the parties to the court following distribution of its judgment show only limited departure from that position. Thus the claimants basic contention was that the judgment no longer stands because the trial was unfair and that the claim should be remitted for determination by another judge. But the claimant qualified his contention by reference to two points: he argued that, in the light of the courts judgment, the pleas in the Defence under section 4 of the Act and, in relation to M4, that it was substantially true should both be struck out of it. The defendants agreed with the claimants basic contention that there should be a retrial; they argued that all issues that were alive on the statements of case at the trial should remain alive at the retrial save to the extent that the judgment of the Court of Appeal had finally determined them. In this latter regard they conceded, no doubt subject to their proposed appeal to our court, that the judgment had finally rejected their defence in relation to public interest and that it should be struck out of their Defence; but they disputed that the judgment had finally rejected their contention that M4 was substantially true. the following order: In the event, however, the Court of Appeal, without giving reasons, issued 1. There be judgment for the appellant. 2. The orders of Mr Justice Jay . be set aside. 5. The matter shall be remitted for an assessment of the quantum of the claimants damages only, by a Judge of the Media and Communications List [other than Jay J]. It follows that the Court of Appeal did not order a retrial. It ordered a remittal limited to the assessment of damages. At the hearing before us we asked counsel on both sides what each understood the courts order to mean. Did it mean, particularly in the light of the order for judgment for the claimant, that the liability of the defendants was established in relation to all the meanings encompassed within his claim? If so, why should the defendants be deprived of a retrial in respect of liability for those meanings which neither the judge nor the Court of Appeal had held to be actionable? Or did the order mean that damages should be assessed only in respect of M8, M9, M10, M12, M13 and also of M4? If so, why should the claimant be deprived of a retrial in respect of liability for the other meanings held not to be actionable in the course of a trial which had been unfair to him? No counsel seemed able to answer our question with confidence but they seemed to be of the view that the order probably meant the latter. G. Unfair Trial: The Principles There was no express reference to bias in the judgment of the Court of Appeal. It did observe, at para 114: One is left with the regrettable impression of a judge who, if not partisan, developed an animus toward the claimant. Its observation may come close to a suggestion of apparent bias on the judges part towards the claimant. But the clear focus of the court was on whether the trial had been unfair. In M & P Enterprises (London) Ltd v Norfolk Square (Northern Section) Ltd [2018] EWHC 2665 (Ch) the ultimately unsuccessful appellant company alleged both that the trial had been unfair and that the judge had given the appearance of bias against it. In para 31 of his judgment Hildyard J quoted the definition of bias given by Leggatt LJ in Bubbles & Wine Ltd v Lusha [2018] EWCA Civ 468, para 17, as follows: Bias means a prejudice against one party or its case for reasons unconnected with the legal or factual merits of the case In paras 32 to 42 Hildyard J proceeded to analyse the interplay between the two allegations before him. He observed that, although they overlapped, they were distinct. He added that they required appraisal from different perspectives for, while the fairness of a trial required objective judicial assessment, the appearance of bias fell to be judged through the eyes of the fair minded and informed observer; and, in the protracted analysis of the trial judges questionable performance which Hildyard J proceeded to undertake, he studiously paused at every point to ask (and, at the end, he considered in the round) whether it either rendered the trial unfair or would generate an appearance of bias in the eyes of that observer. I have no doubt that the Court of Appeal in the present case was correct to treat the claimants allegation as being that the trial had been unfair. We have not been addressed on the meaning of bias so it would be wise here only to assume, rather than to decide, that the quite narrow definition of it offered by Leggatt LJ and quoted by Hildyard J is correct. On that assumption it is far from clear that the observer would consider that the judge had given an appearance of bias. A painstaking reading of the full transcripts of the evidence given over four and a half days strongly suggests that, insofar as the judge evinced prejudice against the claimant, it was the product of his almost immediate conclusion that the claim was hopeless and that the hearing of it represented a disgraceful waste of judicial resources. The leading authority on inquiry into the unfairness of a trial remains the judgment of the Court of Appeal, delivered on its behalf by Denning LJ, in Jones v National Coal Board [1957] 2 QB 55. There, unusually, both sides complained that the extent of the judges interventions had prevented them from properly putting their cases. The court upheld their complaints. At p 65 it stressed in particular that interventions should be as infrequent as possible when the witness is under cross examination because the very gist of cross examination lies in the unbroken sequence of question and answer and because the cross examiner is at a grave disadvantage if he is prevented from following a preconceived line of inquiry. In London Borough of Southwark v Kofi Adu [2006] EWCA Civ 281, Jonathan Parker LJ, giving the judgment of the Court of Appeal, suggested at paras 145 and 146 that trial judges nowadays tended to be much more proactive and interventionist than when the Jones case was decided and that the observations of Denning LJ should be read in that context; but that their interventions during oral evidence (as opposed to during final submissions) continued to generate a risk of their descent into the arena, which should be assessed not by whether it gave rise to an appearance of bias in the eyes of the fair minded observer but by whether it rendered the trial unfair. In Michel v The Queen [2009] UKPC 41, [2010] 1 WLR 879, it was a criminal conviction which had to be set aside because, by his numerous interventions, a commissioner in Jersey had himself cross examined the witnesses and made obvious his profound disbelief in the validity of the defence case. Lord Brown of Eaton under Heywood, delivering the judgment of the Privy Council, observed at para 31: The core principle, that under the adversarial system the judge remains aloof from the fray and neutral during the elicitation of the evidence, applies no less to civil litigation than to criminal trials. The distinction, drawn expressly or impliedly in all three of the cases last cited, between interventions during the evidence and those during final submissions was stressed by Hildyard J in para 223 of his judgment in the M & P Enterprises (London) Ltd case, cited in para 38 above. He suggested at para 225 that, upon entry into final submissions, the trial had in effect entered the adjudication stage. In In re G (Child) [2015] EWCA Civ 834 counsel for the father, who was responding to the mothers contention that the conduct of the trial had been unfair, sought to rely on the judges reserved judgment, which he suggested was balanced and had in no way represented a wholesale acceptance of his case. So too, before us, the defendants commend the quality of the judges reserved judgment. It is on any view a remarkable document. The judge distributed it to the parties only 16 days after the end of the hearing. It runs to 355 paragraphs spread over 70 pages. It is intricately constructed and beautifully written. In it, as will already be clear, the judge in no way accepted all the defendants arguments although his acceptance of their defence of public interest ultimately swept the claim into overall dismissal. Following a reading of this judgment, but of nothing else, many might ask how could that trial have been unfair? As it happens, Miss Page QC on behalf of the claimant does question whether the judgment, even on its face, is fair. In particular she criticises the alleged poverty of the reasoning in support of the judges conclusion, pursuant to section 4(1)(b) of the Act, that the defendants reasonably believed that publication of the article was in the public interest. But this part of the inquiry does not relate to the judges judgment and it is not affected by its ostensible quality. For, as Black LJ said in the G case, at para 52: the careful and cogently written judgment cannot redeem a hearing in which the judge had intervened to the extent of prejudicing the exploration of the evidence. In the G case Black LJ also observed, at para 53: the one person from whom this court has not heard is the judge, who would no doubt have had much that she could valuably have contributed to the evaluation of the process. The observation precipitated a discussion at the hearing before us about the merits or otherwise of an invitation by an appellate court to the trial judge to comment on an allegation such as the present. In relation to a hearing which has not been recorded and so cannot be made the subject of a transcript, such as a hearing before the Immigration and Asylum Chamber of the First tier Tribunal, it may well be appropriate to invite the judge to comment in writing and perhaps to provide his or her own note of the hearing: Sarabjeet Singh v Secretary of State for the Home Department [2016] EWCA Civ 492, [2016] 4 WLR 183, para 53. But where, as in the present case, there is a full transcript of the relevant part of the proceedings, it is less likely to be appropriate to invite the judge to comment. On the one hand, as I know from personal experience, the anxiety of a trial judge may be profound if he considers that what he perceives to be the baselessness of criticisms of him in a forthcoming appeal is likely to go unexposed. On the other hand, unlike a disciplinary inquiry into his conduct, the focus of the appeal is not directly upon him. It is upon the alleged breach of the appellants right to a fair trial both at common law and under article 6 of the European Convention. Most appeals involve criticism of trial judges in one way or another and no doubt most judges would welcome an opportunity to respond to it. Where would the line be drawn and, if the appellant were to take issue with the judges responses, would resolution of the appeal be even more problematical? The observation of Black LJ in the G case therefore raises a difficult issue. All that need here be said is that, where a transcript exists, it is not the present practice of appellate courts to invite the judge to comment; but that the absence of his ability to comment places upon them a requirement to analyse the evidence punctiliously. In the present case we should draw confidence from the fact that it was Mr Metzer, counsel for the defendants at the trial and therefore intimately acquainted with the course that it took, who was able to place before us a detailed and energetic response to the contention that the trial had been unfair. No authority has been cited to us in which the conduct of the trial was alleged to have been unfair towards a litigant in person. The appearance of a litigant in person presents the court with well known challenges. When, at an early stage of his judgment, the judge said that, for a number of reasons, conduct of the trial had been difficult, his first reason was that the claimant had appeared in person. The appearance of the defendants by leading counsel will no doubt in one sense have assisted the judge but in another sense will have made his task even more difficult. For Mr Metzers appearance made the imbalance of forensic resources all the more stark. Every judge will have experienced difficulty at trial in divining the line between helping the litigant in person to the extent necessary for the adequate articulation of his case, on the one hand, and becoming his advocate, on the other. The Judicial College, charged with providing training for the judges of England and Wales, has issued an Equal Treatment Bench Book. In chapter one of the edition issued in February 2018 and revised in March 2020, the college advises the judges as follows: 8. Litigants in person may be stressed and worried: they are operating in an alien environment in what is for them effectively a foreign language. They are trying to grasp concepts of law and procedure about which they may have no knowledge. They may well be experiencing feelings of fear, ignorance, frustration, anger, bewilderment and disadvantage, especially if appearing against a represented party. 59. The judge is a facilitator of justice and may need to assist the litigant in person in ways that would not be appropriate for a party who has employed skilled legal advisers and an experienced advocate. This may include: Not interrupting, engaging in dialogue, indicating a preliminary view or cutting short an argument in the same way that might be done with a qualified lawyer. Training and experience will generally have equipped the professional advocate to withstand a degree of judicial pressure and, undaunted, to continue within reason to put the case. The judge must not forget that the litigant in person is likely to have no such equipment and that, if the trial is to be fair, he must temper his conduct accordingly. H. Unfair Trial: The Facts Any inclusion within the body of this judgment of the requisite factual analysis of the conduct of the trial would have unbalanced it. The analysis is better set out in the schedule to this judgment, to which the reader should now turn. This court, unlike the Court of Appeal, has been provided with full transcripts of the first four and half days of the hearing, during which almost all the oral evidence was given. I have read all of them and, also deriving some assistance from a schedule provided on behalf of the claimant, I have chosen to place 25 excerpts from them into the schedule. In order to keep the schedule within manageable bounds it has been necessary for the 25 excerpts to be set out together. But it is important to remember that those passages were separated by long stretches of evidence in respect of which no criticism of the judge can be made. Ellipses within the excerpts also indicate the omission from them of words which add nothing either to the claimants complaint about the trial or to the defendants response to it. Some of the excerpts, if taken alone, would not merit significant criticism. Nor should we forget that the transcripts enable us to read but neither to hear nor to see. But, when one considers the barrage of hostility towards the claimants case, and towards the claimant himself acting in person, fired by the judge in immoderate, ill tempered and at times offensive language at many different points during the long hearing, one is driven, with profound regret, to uphold the Court of Appeals conclusion that he did not allow the claim to be properly presented; that therefore he could not fairly appraise it; and, that, in short, the trial was unfair. Instead of making allowance for the claimants appearance in person, the judge harassed and intimidated him in ways which surely would never have occurred if the claimant had been represented. It was ridiculous for the defendants to submit to us that, when placed in context, the judges interventions were wholly justifiable. What order should flow from a conclusion that a trial was unfair? In logic the order has to be for a complete retrial. As Denning LJ said in the Jones case, cited in para 40 above, at p 67, No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it. Lord Reed observed during the hearing that a judgment which results from an unfair trial is written in water. An appellate court cannot seize even on parts of it and erect legal conclusions upon them. That is why, whatever its precise meaning, it is so hard to understand the Court of Appeals unexplained order that all issues of liability had, in one way or another, been concluded. Had the Court of Appeal first addressed the issue of whether the trial had been unfair, it would have been more likely to recognise that the only proper order was for a retrial. It is no doubt highly desirable that, prior to any retrial, the parties should seek to limit the issues. It is possible that, in the light of what has transpired in the litigation to date, the claimant will agree to narrow the ambit of his claim and/or that the defendants will agree to narrow the ambit of their defences. But that is a matter for them. Conscious of how the justice system has failed both sides, this court, with deep regret, must order a full retrial. Subject to any agreed narrowing of the issues, the new judge will, among many other things, decide whether the defendants have shown the substantial truth of the (admitted) meaning of M4. This is not to show disrespect for the conclusion of the Court of Appeal that the defendants had failed to do so. Its conclusion was founded upon the evidence given to the original judge. But the new judge will reach a conclusion founded upon the evidence given to him or her. Of course it is rare for the Court of Appeal not just to set aside but even to reverse a finding of fact made by a trial judge who had all the well known advantages. But the court may have been justified in doing so. There is no need for us to look into it. Subject again to any agreed narrowing of the issues, the new judge will also, among other things, decide whether to uphold the defendants overall defence under section 4 of the Act. The Court of Appeals conclusion that the defence failed was based on fact finding which is likely to differ, at least to some extent, from that to be conducted by the new judge. But the Court of Appeals analysis of the defence of public interest under section 4 included abstract statements of principle which the defendants and the Media Lawyers Association, which intervenes in the appeal, criticise and which even the claimant concedes to be in various places at least unfortunate. We must proceed to address these criticisms and, insofar as they are valid, so declare since otherwise the Court of Appeals statements of principle would remain authoritative both for the new judge and generally. The Public Interest Defence The Act provides as follows: 4. Publication on matter of public interest (1) defendant to show that It is a defence to an action for defamation for the the statement complained of was, or formed part (a) of, a statement on a matter of public interest; and (b) that reasonably believed publishing the statement complained of was in the public interest. the defendant (2) Subject to subsections (3) and (4), in determining whether the defendant has shown the matters mentioned in subsection (1), the court must have regard to all the circumstances of the case. (3) If the statement complained of was, or formed part of, an accurate and impartial account of a dispute to which the claimant was a party, the court must in determining whether it was reasonable for the defendant to believe that publishing the statement was in the public interest disregard any omission of the defendant to take steps to verify the truth of the imputation conveyed by it. (4) In determining whether it was reasonable for the defendant to believe that publishing the statement complained of was in the public interest, the court must make such allowance for editorial judgement as it considers appropriate. (5) For the avoidance of doubt, the defence under this section may be relied upon irrespective of whether the statement complained of is a statement of fact or a statement of opinion. (6) The common law defence known as the Reynolds defence is abolished. The origin of the defence lies in the common law. Any study of how in the common law one principle emerges, stage by stage, from another until it achieves independence of it, like a butterfly shedding a chrysalis and taking wing, would do well to address first the decision in Reynolds v Times Newspapers Ltd [2001] 2 AC 127, then the decision in Jameel (Mohammed) v Wall Street Journal Sprl [2006] UKHL 44, [2007] 1 AC 359, and finally the decision in Flood v Times Newspapers Ltd [2012] UKSC 11, [2012] 2 AC 273. In the Reynolds case the defendants published an article which included a statement taken to mean that, when he had been the Taoiseach, the claimant had deliberately misled the Irish parliament. At a trial the jury found that the statement was not substantially true but it in effect awarded him only nominal damages. Before the appellate committee of the House of Lords there was no challenge to the Court of Appeals order that the claimants action should be retried. The issue was whether it should be open to the defendants at the retrial to assert a defence of qualified privilege. By a majority the committee ruled that it should not be open to them to do so but, in its journey towards that ruling, the committee considered the nature of the suggested defence in the context of the statement at issue. Lord Nicholls of Birkenhead gave the leading speech, with which Lord Cooke of Thorndon and Lord Hobhouse of Woodborough agreed. Lord Nicholls noted at p 194 that privilege had been held to exist where a person making a statement had a duty to make it and where its recipient had an interest in receiving it; suggested at p 197 that it was preferable to describe the duty interest test as a right to know test; explained at p 195 that the privilege had particular relevance to a statement on a matter of public interest; held at p 201 that, in relation to publication of a defamatory statement of fact on a matter of public interest, the claimants traditional ability to defeat a claim to privilege by proof of malice was insufficient protection for him; concluded at p 202 that the solution of the common law was to have regard to all the circumstances in deciding whether, because of its value to the public, the publication was privileged and that the requisite standard was that of responsible journalism; identified at p 205 ten factors which might fall to be taken into account in that regard, including, at seven, whether (which was, so Lord Nicholls confirmed, not always necessary) comment had been sought from the claimant prior to publication; there observed that the list was not exhaustive and that the weight to be given to any relevant factor would vary from case to case; and there also stressed the need to remember that journalists act without the benefit of the clear light of hindsight. I interpolate a reference to Bonnick v Morris [2002] UKPC 31, [2003] 1 AC 300, because there, in delivering the advice of the Privy Council upon an appeal from Jamaica, Lord Nicholls offered a useful epitome of the decision in relation to which he had played the leading role three years earlier. On the boards behalf he said: 23. Stated shortly, the Reynolds privilege is concerned to provide a proper degree of protection for responsible journalism when reporting matters of public concern. Responsible journalism is the point at which a fair balance is held between freedom of expression on matters of public concern and the reputations of individuals. Maintenance of this standard is in the public interest and in the interests of those whose reputations are involved. It can be regarded as the price journalists pay in return for the privilege. If they are to have the benefit of the privilege journalists must exercise due professional skill and care. In the Jameel case, cited in para 53 above, the defendant published an article which asserted that bank accounts held by the claimants, namely Mr Jameel and his company, were among those which the Saudi central bank was monitoring in case they were being used, wittingly or unwittingly, for channelling funds to terrorists. Prior to publication the defendant had not given Mr Jameel an adequate opportunity to comment on the intended assertion. The appellate committee reversed the decision of the Court of Appeal, which had been to uphold the decision of the trial judge that the Reynolds defence was not available to the defendant. Lord Hoffmann gave a speech of seminal importance, with which Lord Scott of Foscote and Baroness Hale of Richmond agreed. Lord Hoffmann observed at paras 43 and 46 that, although the reference to Reynolds privilege was historically accurate, it might be misleading and that the better description was Reynolds public interest defence; also at para 46 that there was no need to consider the concept of malice because the propriety of the defendants conduct was built into the conditions under which the material was privileged; at para 50 that it was unhelpful to inquire into the existence of duty and interest because, as a result of the decision in the Reynolds case, the duty and the interest were in law to be taken to exist in a publication in the public interest; at para 56 (echoing what Lord Bingham of Cornhill had said at para 33) that the ten factors identified by Lord Nicholls were not ten tests all of which the publication had to pass; at para 62 that the elements of the defence were the public interest of the material and the conduct of the journalist at the time and that, if the statement was not true, the defendant nevertheless had usually to establish that the journalist honestly and reasonably believed that it was true; and at paras 84 and 85 that in the circumstances the failure to afford to Mr Jameel an adequate opportunity to comment prior to publication did not preclude establishment of the defence. On 15 March 2011 the government put proposals for reform of the law of defamation out for public consultation. In a foreword the Lord Chancellor referred to mounting recent concern that the law was failing to strike the right balance and was having a chilling effect on freedom of speech. The proposals took the form of a draft Bill and of a consultation paper. Clause 2 of the Bill was entitled Responsible publication on matter of public interest. Subclause (1) was as follows: It is a defence to an action for defamation for the defendant to show that (a) a statement on a matter of public interest; and (b) statement complained of. the defendant acted responsibly in publishing the the statement complained of is, or forms part of, Subclause (2) listed eight matters to which, among others, the court might have regard in determining whether a defendant acted responsibly in publishing the statement. In substance the eight listed matters were, in the words of the consultation paper, broadly based on the ten factors identified by Lord Nicholls in the Reynolds case. In the paper the government explained that concerns had been expressed about the complexity of the Reynolds defence and about its application outside the context of mainstream journalism; that on balance it considered that there should be a statutory defence aimed at meeting these concerns; and that the drafting of subclause (2) was intended to make clear that the listed matters should not be interpreted as a checklist or set of hurdles for defendants to overcome. On 10 May 2012 the Defamation Bill was introduced in the House of Commons. In relation to the public interest defence, there were only minor changes from the draft which had been put out for consultation in 2011. The defence had been moved from clause 2 to clause 4. There were now nine, rather than eight, matters listed in subclause (2) and there were changes in their phraseology. There were now further subclauses, including, at (6), that The common law defence known as the Reynolds defence is abolished. Accompanying the Bill were Explanatory Notes, which included the following: 29. [Clause 4] creates a new defence to an action for defamation of responsible publication on a matter of public interest. It is based on the existing common law defence established in Reynolds v Times Newspapers and is intended to reflect the principles established in that case and in subsequent case law. 37. Subsection (6) abolishes the common law defence known as the Reynolds defence. This is because the statutory defence is intended essentially to codify the common law defence. While abolishing the common law defence means that the courts would be required to apply the words used in the statute, the current case law would constitute a helpful (albeit not binding) guide to interpreting how the new statutory defence should be applied. As the Bill progressed through its stages in both Houses, concerns were expressed about clause 4. One of them was that it failed to take into account the effect of the decision in the Flood case, which this court had decided on 21 March 2012, thus less than two months prior to introduction of the Bill in the House of Commons. In the Flood case, cited in para 53 above, the defendant published an article taken to mean that there were reasonable grounds to suspect that the claimant, a police officer, had corruptly taken bribes. The allegation was false. This court held that the defendant nevertheless had a valid defence of public interest. Lord Phillips of Worth Matravers, the President of the court, said at para 26 that in that case analysis of the defence required particular reference to two questions, namely public interest and verification; at para 27 that it was misleading to describe the defence as privilege; at para 78, building on what Lord Hoffmann had said in the Jameel case at para 62, that the defence normally arose only if the publisher had taken reasonable steps to satisfy himself that the allegation was true; and at para 79 that verification involved both a subjective and an objective element in that the journalist had to believe in the truth of the allegation but it also had to be reasonable for him to have held the belief. Lord Brown at para 113 chose to encapsulate the defence in a single question. Could, he asked, whoever published the defamation, given whatever they knew (and did not know) and whatever they had done (and had not done) to guard so far as possible against the publication of untrue defamatory material, properly have considered the publication in question to be in the public interest?. Lord Mance at para 137, echoing what Lord Nicholls had said in the Reynolds case at p 205, stressed the importance of giving respect, within reason, to editorial judgement in relation not only to the steps to be taken by way of verification prior to publication but also to what it would be in the public interest to publish; and at para 138 Lord Mance explained that the public interest defence had been developed under the influence of the principles laid down in the European Court of Human Rights (the ECtHR). On 19 December 2012 the House of Lords in Grand Committee considered three substantial amendments to the Defamation Bill moved by the government. Although it arguably represented a less significant development than the decision in the Jameel case, the recent decision in the Flood case had clearly influenced the governments thinking. Before the committee, Lord McNally, Minister of State for Justice, moved the amendments. He prefaced his remarks by saying that clause 4 was, as he had been told, at the heart of the Bill. The first proposed amendment was to subclause (1)(b), set out in para 57 above. Instead of providing that the defendant should have acted responsibly in publishing the statement complained of, the form of words now proposed was that the defendant should have reasonably believed that publishing the statement complained of was in the public interest. Lord McNally explained the proposed change in interesting terms, as follows (Hansard, (HL Debates) 19 December 2012, col GC 534): Consideration of whether a publication was responsible involved both subjective and objective elements. Reasonable belief also does this, but we believe that it brings out more clearly the subjective element in the test what the defendant believed at the time rather than what a judge believes some weeks or months later while retaining the objective element of whether the belief was a reasonable one for the defendant to hold. The second proposed amendment was to delete subclause (2) of the Bill, which had listed the nine matters to which, among others, the court might have regard in determining the question identified in subclause (1)(b). Lord McNally explained the proposed change in similarly interesting terms, as follows (col GC 534): Although we do not believe that the courts would apply the list of factors, based on those in Reynolds, as a checklist, we have responded to strongly expressed concerns that the use of a list may be likely to lead in practice to litigants and practitioners adopting a risk averse approach and gathering detailed evidence on all the factors listed, in case the court were ultimately to consider them relevant on balance, we consider that it is preferable for there to be greater flexibility than a statutory list might provide. The third proposed amendment was to add a subclause that in determining whether it was reasonable for the defendant to believe that publishing the statement complained of was in the public interest, the court must make such allowance for editorial judgement as it considers appropriate. In this respect Lord McNally referred (col GC 535/6) to the decision in the Flood case and no doubt he had in mind in particular para 137 of the judgment of Lord Mance. The Grand Committee accepted all three of the proposed amendments and, as the reader will have realised, each was ultimately carried into the Act. Later, prior to enactment, the government moved a further amendment. It was to add into clause 4 a subclause to the effect that, in determining whether the defendant had shown the matters mentioned in subclause (1), the court should have regard to all the circumstances of the case. On 5 February 2013, at the Report stage in the House of Lords, Lord McNally (col 198) moved the amendment. He noted a concern that, following the removal of the list of nine matters potentially relevant to the question at subclause (1)(b), the courts would invent a new check list of potentially relevant matters. He suggested that the proposed subclause, albeit not strictly necessary, would send a signal to the courts and practitioners to make clear the wish of Parliament that the new defence should be applied in as flexible a way as possible in light of the circumstances. He concluded by saying that he believed that, were this further amendment to be agreed, the final version of the Bill would in particular reflect the question posed by Lord Brown in the Flood case. This further amendment was agreed and ultimately found its way into subclause (2). On 25 April 2013 the Bill received Royal Assent. The Explanatory Notes which accompanied the Act were necessarily changed from the Explanatory Notes which had accompanied the Bill. Thus while in para 29 the first two sentences of the later Notes were in effect identical to those of the earlier Notes set out in para 58 above, the rest of the paragraph was now changed so as to set out the new terms of subsection (1) and to explain that the intention behind it was to reflect the common law as recently set out in the Flood case and in particular the subjective and objective elements of the requirement now both contained in subsection (1)(b). But para 37 of the Notes to the Bill, also set out in para 58 above, was reproduced, word for word, in para 35 of the Notes to the Act. It therefore continued to say that the reason for the abolition in subsection (6) of the common law defence known as the Reynolds defence was that the statutory defence is intended essentially to codify the common law defence. The failure to change this sentence was unfortunate. Codify is a strong word. One could scarcely say that the terms of the section ultimately enacted went so far as to codify the law even as set out in the Jameel and Flood cases, let alone as set out in the Reynolds case. Since the enactment of section 4, the primary authority in relation to its interpretation has been, so we are told, the case of Economou v De Freitas decided by Warby J at [2016] EWHC 1853 (QB), [2017] EMLR 4, and by the Court of Appeal (in a judgment of Sharp LJ with which Lewison and Ryder LJJ agreed) at [2018] EWCA Civ 2591, [2019] EMLR 7. The claimant had a relationship with the defendants daughter. Following its breakdown the daughter accused the claimant of rape. He was arrested but not charged. He launched a private prosecution against her, later continued by the Crown Prosecution Service, on the ground that she had falsely accused him of rape with intent to pervert the course of justice. Days before her trial she committed suicide. The defendant made statements in writing and in interviews which were published by the press and by the BBC. In summary their meaning was that there were reasonable grounds to suspect that the claimant had raped his daughter and thus that the basis of his prosecution of her had been false. A central issue in both courts was whether the defendants defence under section 4 of the Act should be upheld. Warby J upheld it and dismissed the claim; and the Court of Appeal dismissed the claimants appeal. Section 4(1)(b) requires that the defendants belief that publication was in the public interest should have been reasonable; and a major part of the discussion in both courts addressed the effect of that requirement in relation to a defendant who, not being a professional journalist, had been a contributor, albeit the central one, to the publication. Warby J introduced his discussion with the following statement: 241. I would consider a belief to be reasonable for the purposes of section 4 only if it is one arrived at after conducting such enquiries and checks as it is reasonable to expect of the particular defendant in all the circumstances of the case. Sharp LJ at para 101 quoted the judges statement with approval. Before us, however, the defendants criticise it as incompatible with the section. I can discern no basis for that criticism. It is almost impossible to expand in the abstract on the meaning of the word reasonable but, so far as it goes, the judges statement is no doubt helpful. Two passages in the judgment of Sharp LJ in the Economou case have been the subject of particular focus. The first is as follows: 86. The statutory formulation in section 4(1) obviously directs attention to the publishers belief that publishing the statement complained of is in the public interest, whereas the Reynolds defence focussed on the responsibility of the publishers conduct. Nevertheless . it could not sensibly be suggested that the rationale for the Reynolds defence and for the public interest defence are materially different, or that the principles that underpinned the Reynolds defence, which sought to hold a fair balance between freedom of expression on matters of public interest and the reputation of individuals, are not also relevant when interpreting the public interest defence. It could be said that the contrast drawn in the first sentence of the passage is misconceived. For, in addressing the subsection, Sharp LJ has there omitted reference to its requirement that the publishers belief should be reasonable; and it is that requirement which falls to be compared with the focus in the Reynolds defence on the responsibility of his conduct. But the second sentence, if carefully read, is clearly correct: the rationale for each of the defences is indeed not materially different and the principles which underpinned the Reynolds defence are indeed relevant to the interpretation of the statutory defence. The second passage in the judgment of Sharp LJ in the Economou case is as follows: 110. Section 4 requires the court to have regard to all the circumstances of the case when determining the all important question arising under section 4(1)(b) The statute could have made reference to the Reynolds factors in this connection, but it did not do so. That is not to say however, that the matters identified in the non exhaustive checklist may not be relevant to the outcome of a public interest defence or that, on the facts of the individual case, the failure to comply with one or some of the factors, may not tell decisively against a defendant. However, even under the Reynolds regime the weight to be given to those factors, and any other relevant factors, would vary from case to case. In the light of the analysis of the passage of the Bill through Parliament in paras 58 to 65 above, it is possible to add to what Sharp LJ there said. For the Bill, as introduced, did in effect make reference to the Reynolds factors but later they were deliberately omitted. Subject to what some may regard as only a quibble, the observations of Sharp LJ are valid. The quibble, if such it be, relates to her use of the word checklist. I suggest that a check list is a list of factors to which reference ought to be made, in particular in order to check whether a preliminary conclusion should be confirmed. Even in its pre legislative consultation the government had expressed concern that the matters then proposed to be listed in the Bill should not be interpreted as a checklist: see para 57 above. But, in removing the listed matters from the Bill and in proceeding to substitute a reference to all the circumstances, Parliament made clear its intention that the Reynolds factors, upon which the list had been based, were not to be used as a check list. Even if, at the time of the decision in the Reynolds case, it was appropriate to describe the factors identified by Lord Nicholls as a check list, it is clearly inappropriate so to regard them in the context of the statutory defence. But, as Sharp LJ proceeded to explain, that is not to deny that one or more of them may well be relevant to whether the defendants belief was reasonable within the meaning of subsection (1)(b). The Court of Appeals Analysis of the Defence Good manners require immediate acknowledgement both of the fuller submissions on the statutory defence made to us than were made to the Court of Appeal and, following the hearings, of the greater opportunity for reflection upon the defence available to us than was available to it. In para 36 of its judgment the Court of Appeal said: In Reynolds, Lord Nicholls set out a well known check list for use when determining whether the defendant reasonably believed that publishing the statement complained of was in the public interest. But the inquiry which the Court of Appeal there described is the inquiry mandated by section 4(1)(b) rather than that suggested in the Reynolds case. In para 41 of its judgment the Court of Appeal said: The Reynolds public interest defence has been replaced by the section 4 public interest defence. The recent Court of Appeal decision in Economou has confirmed that the two tests are not materially different. But what the Court of Appeal said in the Economou case was that the rationale for each of the tests was not materially different: see para 68 above. It is wrong to consider that the elements of the statutory defence can be equiparated with those of the Reynolds defence. In para 44 of its judgment the Court of Appeal said: The defence is a form of qualified privilege. The origins of the statutory defence lie in the Reynolds defence which, at birth, arose out of the concept of qualified privilege. But even in 2006, long before the enactment of section 4, Lord Hoffmann in the Jameel case explained that it was unhelpful to regard the defence as a form of privilege: see para 56 above. Indeed in the Flood case Lord Phillips said likewise: see para 60 above. The concept of qualified privilege is laden with baggage which, on any view, does not burden the statutory defence. In para 47 of its judgment the Court of Appeal said: When determining the issue whether defamatory material is published in the public interest under section 4, the public interest in publication is to be balanced with the fact that an individuals article 8 right to reputation will be breached by the publication of unproven allegations without a remedy. (The CJEU has long recognised that a persons reputation is encompassed by the article 8 right: see eg Einarsson v Iceland, App no 24713/15, at para 33.) The section 4 defence needs to be confined to the circumstances necessary to protect article 10 rights. The first question is to ask whether the court was there addressing (a) or (b) of section 4(1). The answer, agreed by counsel, is that, had it been addressing (b), it would have referred to reasonable belief so that it must have been addressing (a). The requirement at (a) is, however, not whether the statement is published in the public interest but whether it is on a matter of public interest; and, with respect, it is important to adhere to the statutory wording. The court then proceeded to refer to human rights under the European Convention: its reference to the CJEU, like an earlier reference in para 34 of its judgment, is a slip of its pen and should be to the ECtHR. At present I cannot envisage how, as the Court of Appeal reiterated in para 57, the objective evaluation whether a statement is on a matter of public interest might be affected by consideration of rights under article 8. But there is a wider point: for just as the common law defence was developed under the influence of Convention principles (see para 60 above), so was the statutory defence. Its three requirements that the statement should have been on a matter of public interest, that the defendant should have believed that publication of it was in the public interest and that the belief should have been reasonable, all of which have to be established by the defendant, are intended, and may generally be assumed, to ensure that operation of the section generates no violation either of the claimants right under article 8, or of the defendants right under article 10. To the extent that a court is persuaded to consult Convention jurisprudence in the course of a determination under section 4, it is likely to find that the word reasonably in subsection (1)(b) is sufficiently elastic to enable the section to be given effect in a way which is compatible with Convention rights. In para 48 of its judgment the Court of Appeal said: When considering whether or not an article is in the public interest, the court needs to consider not merely the bare subject matter, but also the context, timing, tone, seriousness and all other relevant factors. In this respect Lord Nicholls check list in the Reynolds case remains relevant not only to the issue of whether the journalist acted responsibly, but also the issue of the existence of public interest in the article. But, with respect, the question is not whether the article is in the public interest but whether it is on a matter of public interest. I suggest that reference to a check list is now inappropriate for the reasons given in para 69 above and that reference to acting responsibly is now also best avoided. For, acting upon the reasons given by Lord McNally to the Grand Committee on 19 December 2012, Parliament deliberately removed the reference to acting responsibly from the Bill and substituted the words in section 4(1)(b): see para 62 above. In para 66 of its judgment the Court of Appeal said: It is a basic requirement of fairness and responsible journalism that a person who is going to publish a story without being required to show that it is true should give the person who is the subject of the story the opportunity to put his side of the story. Gatley [Gatley on Libel and Slander, 12th ed (2013)] refers to this as the core Reynolds factor A failure to invite comment from the claimant prior to publication will no doubt always at least be the subject of consideration under subsection (1)(b) and may contribute to, perhaps even form the basis of, a conclusion that the defendant has not established that element of the defence. But it is, with respect, too strong to describe the prior invitation to comment as a requirement. It was never a requirement of the common law defence: see the Jameel case, cited at para 53 above; and so to describe it would be to put a gloss on subsections (1)(b) and (2) of the section. In para 83 of its judgment the Court of Appeal said: Finally, by way of a checklist, it is useful to consider the Reynolds factors seriatim: The Court of Appeals exercise in then proceeding to set out Lord Nicholls ten factors and to apply them to the present case is not what Parliament intended it to do: see para 69 above. In the light of the above I am driven, with a degree of embarrassment in Key Judge: J Claimant: C First Defendant: D1 Third Defendant: D3 The Defendants: Ds M Mr Metzer QC: DAY ONE A1. M cross examines C. Mr Paczesny. I do not want a speech. M: Do you deny saying you were still married? C: Starting with Mrs Paczesny, okay? I was friends with J: Comment: J stifles Cs explanation prematurely. A2. M cross examines C about a civil claim against him. J: You said this was an internet claim? C: Yes. J: Well, it cannot be because (a) it does not look as if it is an C: Let me tell you how it was. J: Do not keep on interrupting me. C: J: You interrupt counsel and now you are interrupting me. Comment: J takes over cross examination, shows irritation. internet claim Im sorry. A3. M cross examines C about a debt owed by Polfood. J: There is always a lack of clarity with your evidence which I am finding irritating. Comment: J makes no secret of irritation. A4. M ends cross examination for the day. J to C (about to rise): It is not very ethical behaviour, this, but we will see where the weight of the evidence is leading. Because if I conclude that you are acting unethically as a businessman, I am not sure [that] the precise terms of the defamations are going to matter to you much. Do you understand that? You will lose, but there is a lot more evidence yet. Comment: Strong indication, albeit subject to further evidence, that C will lose. See para 59 of Bench Book, set out in para 46 above. DAY TWO A5. M cross examines C about his alleged investment in Polfood. J: Where are the documents to show your investment of 385,000? Ill try to find that in a second, but C: J: Well, it should not take you a second. It should take you a nanosecond, because it is obvious that this point would be raised. I want to see them at one minute past two, the page. If you do J: not show them to me, I will draw inferences. Do you understand what that means? C: Yes I do. Comment: Severe treatment of perceived failure to disclose documents in anticipation of cross examination. A6. M cross examines C about repayment of a creditor of Polfood. The company did not pay. It came out of the proceeds of your J: house? C: Yes. J: Did you tell the Official Receiver this? C: Yes. J: Right, you can show me the page after lunch. Just It looks like a fraudulent preference of sorts. respectfully suggest. M: J: M: Yes at the very least, highly questionable, My Lord, I would Comment: Further demand for documents and a suggestion of fraudulent preference not made by M. A7. M cross examines C about his assertion that Polfoods remittances to Poland went to suppliers to it of Polish food. J: And they are all for deliveries, are they? C: Yes. [After 13 further questions from J and others from M] J: . what is being suggested is that you are funnelling money out of the company, probably to go to your family in Poland. C: No, thats not true. J: I am not going to take your word for it, ok? I need you to prove it to me. A bunch of assertions is not going to cut any ice. I need proof. Strictly speaking, the burden of proof is on the defendant to prove that under the Defamation Act, but it is not going to work like that in the sense that I will draw inferences. So, you can get it over lunch. You can prove to me where these monies went. Comment: Advance notice that, unless supported by documents, Cs evidence will be rejected. A8. M cross examines C about Polfoods accounts. C: The first years accounts, they are there Ive got them in the file. Is this going to be more work over lunch, finding these J: accounts? C: Yes. J: But why do you not have them at your fingertips? C: [No audible reply] J: Also I want proof that they were filed at Companies House, documented proof. C: Ill try to find out. Im not quite sure that theres anything about it in the documents that they were filed. inference again. J: Well, it is up to you. If you fail to provide it, I can draw an Comment: Further demand for documents, including to satisfy a new requirement introduced by J that the accounts had been filed at Companies House. J: A9. M cross examines C about whether, as he had told Polfood investors, a loan was to him personally or whether, as he now claimed, it was to Polfood. This does not look great, frankly, because either you were lying to the investors or you are lying to me. If you are lying to me, the consequences can be really awful, because you understand, I do not like being lied to. Which is it? Who were you lying to? Were you telling the truth to the investors and therefore lying to me, or were you lying to the investors and telling the truth to me? C: Thats accurate, I was lying to the investors. Because the document that she lended the company, I dont cant dispute that. J: But do you understand what this is about, Mr Serafin? That you are bringing proceedings in the High Court . taking ten days, and however long it takes for me to write the judgment. It will take some considerable time, seeking to uphold your reputation. But your reputation is already beginning to fall to pieces, because you are a liar, and you do treat women in a frankly disgraceful way, on your own admission. Comment: J applies heavy pressure and uses intemperate language. A10. M cross examines C about his completion of an application form. M: Youre saying this is for a parking permit? C: Yeah. M: This is not this is a vehicle registration certificate J: No, no, no, Mr Metzer. He is giving a false address in order to M: Oh, I see, Im sorry Is His Lordship right? Its me being J: C: Yeah, yeah. J: entitle himself to a parking permit slow and I apologise for that. That is right, is it not? That is what you were doing? Thoroughly dishonest, but it is what you were doing. Comment: J refocuses Ms cross examination and reiterates Cs dishonesty. A11. M cross examines C about his repayment of a debt out of alleged earnings. I am sure you declared all this to the Revenue, did you? J: C: Yeah, Ive done every year. J: Honestly and fully, so that your statement in your tax return for the relevant year will give a true picture? C: Yes. J: why do you not do that by tomorrow morning? Because if I do not think there is a true picture, I will take action to include sending your papers off to the Revenue for you to be investigated. So, I would like to see your personal tax returns for 2010 onwards, first thing tomorrow morning. Comment: J introduces demand for production of six years tax returns within 24 hours and threatens C with HMRC investigation. A12. M cross examines C about his disclosure of a creditors email to him and asks him to compare it with a different version of the email which, unchallenged by J, he, M, suddenly produces. December, and you have manipulated the email M: This is the real email that came from [her] to you on 22 C: No, I never manipulated anything. M: Now, Im going to suggest to you that you have manipulated that email to add in things that were simply never said by [her], and Ill show you how youve done that. M: Please just read those last three lines J: You are still not in the right place: Sorry, Mr Metzer, can you just find it for him? M: Of course. I wonder if his assistant can J: He is either being obtuse, or he is playing for time, and I cannot decide which. Im sorry, but Im somehow confused. C: J: Or he is getting flustered. J: Well, I think this is so important that we should make available the electronic copy, because you understand what the consequences are. If I think that you are lying, I will send the papers to the Director of Public Prosecutions, and if you are found guilty by a jury, of perjury, you will go to prison. Do you understand? C: Yes, I do. J: Which paragraph are you referring to which you say is omitted? . C: Its the paragraph, what is clear is you put a question mark after how J: You see what you are doing is you are not answering my question, and what you are doing is trying to obfuscate, and I am going to sit here until I pin you down on this. Which paragraph do you say is missing? Just read it out before I lose my temper. C: Ok. J: Comment: An offensive and inappropriate aside to M about whether C is being obtuse or playing for time. Threat of imprisonment and statement that C is deliberately not giving a clear answer. A13. In re examination of himself C seeks to adduce photographs of a cash register in The Jazz Caf. C: If you allow me to present those pictures that are very clear, and they are dated now, then J: Well, I have refused you that because you should have produced those before Comment: DAY THREE A14. C cross examines D1 about his research for the article, as set out in his witness statement. In context, a harsh ruling. [inaudible] as a prominent member of POSK. C: What for you is a prominent member? You describe Mr J: A prominent member, it speaks for itself, If you are suggesting that he was not a prominent member, that the witness statement is untrue, put it to the witness. But otherwise you are wasting my time. In article was mentioned that I overcharged a lot of people and C: in your witness statement, number 31, is that I behaved very badly towards [inaudible]. J: But again, you see, it does not matter because it is not in the article. You see, if I were a jury it would be important, because it might poison my mind. But I am not a jury. I do not care about this. In peremptory terms J prevents C from cross examining Comment: D1 on allegations in D1s witness statement. A15. C cross examines D1 about alleged confusion in Poland as to his (Cs) marital status. J: You are not going to get very far asking this witness question. You should keep your questions far more focussed to the narrow question which is this: did he publish this recklessly without caring that it was true, or did he carry out proper research and enquiries? Just keep to that point and you might, you might get somewhere or at least you might learn some useful evidence. Otherwise you are completely wasting my time. I am not interested in what the witness says more generally as to the truth or otherwise of what is contained in his piece. Comment: A fair direction but cast in offensive terms. DAY FOUR A16. C cross examines D1 about letters in response to the article published in the following issue. C: Yeah, but that was rather criticisms for you and not D1: Exactly. J: Comment: J introduces a note of sarcasm. congratulations, isnt it? That was not [a] brilliant question, was it? . A17. C cross examines D1 about his alleged failure to have established whether C had repaid his creditors. C: Did you contact [Mr Ligeza] for any reason asking if he was repaid or start to be repaid? J: Well, that is not [inaudible] point because he has only been repaid small amounts. Move on you were on better ground with Mrs Howard. Comment: J stops a relevant question. A18. C seeks to cross examine D1 about a document. This is the report the committee report. J: C: Yes, its my report to the annual board of POSK. C: Would it be fair that the word we could have been used as a universal term for [inaudible] Polish community? J: Apart from the fact that you say twice here I would like to thank That is you I know you are trying to distance yourself from this document, but your fingerprints are all over it. C: Yeah, Im not questioning that I wrote this. J: Yes. And you, therefore, were part of the process that selected Antec Builder, the dormant company. So this is a hopeless line of questioning. The more you try and distance yourself from this, the worse it gets from your perspective. Is there a question you want to ask? C: No, I think, thank you very much. Comment: J appears to misunderstand Cs case and prevents cross examination on the report. A19. After D1s evidence, M expresses the hope that C will now concede that some of the challenged parts of the article are substantially true. M: quite a lot of the factual material may have fallen by the wayside and I will be asking, and it may assist My Lord also, which parts of the article the claimant still maintains are false because, evidentially, one would hope that the issues have been narrowed. I would not even bother, Mr Metzer. I think we have got to J: assume every point is lies. Comment: C wrongly submits that here J means that every point that he was making was a lie. But J almost certainly means only that we (he and Mr Metzer as a unit together) had to assume that Cs case remained that every point made in the article was a lie. Nevertheless the tone of his comment is offensive. A20. J asks M about the terms of Cs Bankruptcy Restrictions Undertaking. M: And we probably should have pushed for this. I dont think the Annex setting out the restrictions was disclosed. J: Yes. Where is it, Mr Serafin? Why have we not got the terms of the restriction? C: I will try to find out by tomorrow morning, because I dont know where it is J: You have not given proper disclosure in this case. You are under an obligation under the rules to give disclosure of all relevant documents . Your failure to disclose them will give rise to an adverse inference. Do you know what that means? I will hold things against you It is only fair. C: no. J: It was unfair because, as M conceded, Ds lawyers were Comment: well aware of the undertaking and had never asked C to disclose it and because from Cs perspective it was not foreseeably relevant. A21. In cross examination of one of Ds witnesses, C seeks to invite comment about potentially contrary evidence given by Ms Stenzel, a previous witness. C: Well, you dont know Maria Stenzel but I just want to something what she say in her testimony yesterday . She state that she never prepared payment cheques for A Serafin, which would be Anna Serafin or Anna Serafin Project Company. So that was That is not a proper question. J: C: But, My Lord, I J: Do not waste everybodys time, particularly this witness time C: Because J: Do not use it as a [?] to make a speech. C: Because he dont asking the wrong sort of questions. I think I finished because he dont know her. go there. Is there any re examination, Mr Metzer? J: You were doing quite well until you insisted on ruining it by C: J: He does not know anything about Ms Stenzel so do not even C: Theres no point. J: Comment: Cs proposed question was legitimate yet rudely disallowed. A22. C cross examines one of Ds witnesses about occupation of her flat in Poland. C: Whos living in the flat? M: I really do fail to understand the relevance of this, My Lord. Its fairly relevant, I assure you. C: J: Well, it had better be relevant, this, otherwise I shall get very annoyed with you. Comment: Warning of increased irritation. A23. M objects to Cs cross examination of the same witness, with whom C had had a sexual relationship. M: I think this is, unfortunately, an unnecessary area of cross examination this is not an area of dispute. Its accepted that essentially he is a womaniser and sleeps with more than one woman at the same time. C: Thats not accepted, My Lord. It is not accepted by you but it is true, is it not? You certainly J: were running two women at the same time. C: [inaudible] Why Im asking J: It happened to you. It just sort of came upon you as some sort of passive alien (?) Comment: Further sarcasm A24. C continues to cross examine the same witness, who had lent him money. J: You have not made any proposals, by the way, to repay this money, have you? C: no. J: You seem pretty craven about that. I think you need to get on with this because it is just making it worse, ok? Just speed up and come to a conclusion. It is not the best part of your case. C: I know. J: You know? Well then why aggravate it even more? You have acted completely in the wrong and you were with at least one other woman at the time, part of the time, when the money was lent to you? C: Yes, I accept it. It was deplorable behaviour and I am going to say so in my J: judgment. C: Yes, I know. J: Well, are you going to stop asking questions or not? Comment: finding will be. In hostile terms J reveals during the evidence what his DAY FIVE A25. C cross examines an investor in Polfood who lost money and seeks to ask her about Polfoods accounts. It is all grossly unfair because you have never provided the accounts. J: C: Yeah, this is [file] number three J: Yes, well, you will not find proper accounts in this. You will find management accounts for nine months, and you will find abbreviated accounts. I am going to ask you one last time, do you have, at least for the first year of trading, the full audited accounts of the company ? C: No, we never had audited accounts. J: Well, I am not going to allow you to ask any more questions on this theme without the documents being made available. In any event, those are questions that lead nowhere. C: Ok. J: Can you ask questions on a more fruitful line please? C: There will be questions regarding the second director. says he was moving to. It has everything to do with it. am going to get even more irritated. M: My Lord, this has nothing to do with the point that Mr Serafin C: J: Well, you had better bring this to a head quickly, otherwise I Comment: Unfair refusal to allow C (who rightly or wrongly denied that there were audited accounts) to cross examine by reference to the unaudited accounts. Further expression of irritation. relation to respected colleagues, to suggest that the new judge should determine the availability of the public interest defence without reference to the reasoning which led the Court of Appeal to conclude that the defendants had met the requirements neither of section 4(1)(a) nor of section 4(1)(b) of the Act. Schedule

UK-Abs

The respondent (the claimant) sued the appellants (the defendants) for libel in respect of an article which they published about him in Nowy Czas, a newspaper addressing issues of interest to the Polish community in the UK. The Court of Appeal found that the conduct of the trial by Mr Justice Jay (the judge) in the High Court had been unfair towards the claimant. The defendants appeal against that finding. They also challenge the Court of Appeals analysis of the effect of section 4 of the Defamation Act 2013 (the Act), which sets out the public interest defence to a defamation claim. The claimant was born in Poland but has lived in England since 1984. In about 1989 he joined POSK, a Polish social and cultural association and charity. He became joint manager of The Jazz Caf, a bar and caf at POSKs Hammersmith premises. He also worked at Kolbe House, a charity which runs a care home in Ealing. The article was published in October 2015. The claimant asserted that it had 13 separate defamatory meanings, including that he had abused his position at POSK to award himself or his company contracts for maintenance work there; had dishonestly obtained unlawful and fraudulent profit from sales at The Jazz Caf (this meaning is referred to as M4); and had diverted to himself funds needed for the care of Kolbe Houses residents by securing for himself a contract for unnecessary renovations. The claimant represented himself at the hearing before the judge. The judge found that all the articles meanings other than the five relating to Kolbe House were substantially true or, in one instance, had caused no serious harm to the claimants reputation. But he found that in relation to all 13 meanings the defendants had established a defence to the claim under section 4 of the Act: for, in his opinion, each of them was on a matter of public interest, and it was reasonable for the defendants to have believed that publishing them was in the public interest. So the judge dismissed the claim. The Court of Appeal allowed the claimants appeal. It held that the judge had been wrong to uphold the defence under section 4; that he had not been entitled to find that M4, which it described as the most serious of the allegations, was substantially true; and that the claimant was entitled to damages in respect of M4 and the meanings relating to Kolbe House. Lastly, after reviewing transcripts of the hearing, it held that the nature, tenor and frequency of the judges interventions were such as to render [the trial] unfair. It ordered that the quantification of damages be remitted to a judge other than Mr Justice Jay but did not order a full retrial. The defendants now appeal to the Supreme Court. The Supreme Court unanimously dismisses the appeal. But, in place of the Court of Appeals order that only the assessment of damages be remitted, the Court orders that the case be remitted for a full retrial. Lord Wilson gives the only judgment, with which the other Justices agree. Unfair trial The Court of Appeal was correct to treat the claimants allegation as being that the trial had been unfair, not that the judge had given the appearance of bias against him. For it is far from clear that an informed and fair minded observer would consider that the judge had given that appearance [39]. The authorities on an inquiry into the unfairness of a trial establish the following principles: a judges interventions should be as infrequent as possible during cross examination of witnesses, and he must remain above the fray and neutral while evidence is being elicited; the quality of the written judgment cannot render a trial fair in circumstances where the judges interventions at the hearing prejudiced the exploration of evidence; and where a transcript exists, it is not the present practice of higher courts to invite the judge to comment on the allegations, but the fact that he is unable to comment requires those courts to analyse the evidence with great care [40 45]. Unrepresented litigants are unlikely to be equipped to withstand judicial pressure and so the judge must temper his conduct accordingly [46]. The factual analysis of the conduct of the trial is set out in the schedule to Lord Wilsons judgment [47]. It is important to remember (among other things) that the excerpts from the transcript which are reproduced there were separated by long stretches of evidence in respect of which no criticism of the judge can be made. But the transcripts do nevertheless show that the judge directed a barrage of hostility towards the claimants case and towards the claimant himself acting in person. In doing so the judge used immoderate, ill tempered and at times offensive language. The Court is driven to uphold the Court of Appeals conclusion that the judge did not allow the claim to be properly presented; that therefore he could not fairly appraise it; and that the trial was unfair. Instead of making allowance for the claimants being unrepresented, the judge harassed and intimidated him [48]. The logical consequence of a conclusion that a trial was unfair is an order for a complete retrial. So it is hard to understand the Court of Appeals order that all the issues relating to the determination of whether the defendants were liable to the claimant had been concluded. Conscious that the justice system has failed both sides, the Court, with deep regret, must order a full retrial [49]. Public interest defence The House of Lords decision in Reynolds v Times Newspapers Ltd [2001] 2 AC 127 established the existence at common law of a specific defence to a claim for defamation brought in relation to publication of a statement on a matter of public interest. Where the defamatory material concerned such a matter, the defendant had to show that it had met the standard of responsible journalism, measured by reference to a list of ten factors [53 56]. Section 4 of the Act replaced the Reynolds defence with a new defence which, on any view, draws on the principles in Reynolds and later cases [58, 68 69]. The section 4 defence is available where the defendant reasonably believed that publishing the statement complained of was in the public interest (s.4(1)(b)) [52, 62]. In assessing reasonableness, the Court must (among other things) have regard to all the circumstances of the case (s.4(2)) [52, 65]. factors was deliberately omitted from the section [62, 69]. The Court of Appeal was wrong to state that the Reynolds defence and the section 4 defence are not materially different: for the elements of the two cannot be equated [68, 72]. It was also inappropriate for the Court of Appeal to regard the Reynolds factors as a check list in the context of section 4 [69, 77]. For these and other reasons, the new judge should determine whether the public interest defence is available to the defendants without reference to the Court of Appeals reasoning on section 4 [78].

This appeal is concerned with the obligations under the Equality Act 2010 of a charity which has been set up to provide housing in Stamford Hill in Hackney for a disadvantaged group, the observant Orthodox Jewish community comprising, in particular, the Haredi community. The charity is the second respondent, Agudas Israel Housing Association Ltd (AIHA). Its charitable objective is to make social housing available primarily for members of the Orthodox Jewish community. Such is the surplus of demand for social housing from the members of that community, as compared with the properties which AIHA has available, that in practice all of AIHAs properties are allocated to members of the Orthodox Jewish community. The first respondent is a local housing authority, Hackney London Borough Council (the Council). AIHA makes properties available to the Council, as they become vacant, to house persons who have applied to the Council for social housing and who have been identified by the Council as having a priority need for such housing. The properties provided by AIHA constitute about 1% of the stock of social housing available to the Council. In relation to the Council, there is a large surplus of demand for social housing as compared with the supply available, so applicants for social housing can spend long periods waiting for suitable properties to become available. The Council does not have any right to compel AIHA to take tenants who do not fall within the scope of AIHAs charitable objective and its selection criteria. The Council therefore nominates applicants for social housing with AIHA who fall within those criteria. In practice, this means that the Council only nominates members of the Orthodox Jewish community to be housed in property owned by AIHA. The principal appellant (the appellant) is a single mother with four small children: twin daughters and two sons, both of whom have autism and one of whom is also a party to the proceedings. She was on the Councils list for social housing and had been identified by the Council as having priority need to be housed in a larger property. She is not from the Orthodox Jewish community and so has been unable to gain access to the properties let by AIHA. While the appellant was waiting to be allocated a suitable property by the Council, large properties owned by AIHA which would have been suitable for her became vacant and were allocated by AIHA to families from the Orthodox Jewish community who had also been identified by the Council as having priority needs. The appellant had to wait longer than them to be allocated a suitable property by the Council from its other social housing resources, as they became available. The appellant commenced proceedings against the Council and AIHA in 2018 complaining that this involved unlawful conduct on their part in various respects. In particular, she complains that there has been unlawful direct discrimination against her on grounds of her religion and on grounds of her race. Her claim was dismissed by the Divisional Court (Lindblom LJ and Sir Kenneth Parker) in a judgment dated 4 February 2019: [2019] EWHC 139 (Admin); [2019] PTSR 985. Her appeal was dismissed by the Court of Appeal (Lewison and King LJJ and Sir Stephen Richards) in a judgment dated 27 June 2019: [2019] EWCA Civ 1099; [2019] PTSR 2272. In the course of the proceedings, the appellants claims have been somewhat refined. For the purposes of the appeal to this court, the issues to be decided relate to the lawfulness of the conduct of AIHA. The Council accepts that if AIHA engaged in unlawful discrimination against the appellant by its allocation policy, then the Council cannot lawfully maintain its nomination arrangements with AIHA. But there is no distinct legal claim against the Council which does not turn upon the underlying substantive question of whether AIHA acted lawfully or not. Accordingly, in what follows, the focus is entirely on the claims against AIHA. The relevant claims brought by the appellant against AIHA were based on the prohibition of direct discrimination on grounds of race or religion by any person in the provision of services, as contained in the Equality Act 2010 (the 2010 Act). AIHA relied on defences set out in section 158 and section 193 of the 2010 Act. Section 158 provides for an exemption from unlawfulness for positive action to address needs or disadvantages experienced by persons which are connected to a protected characteristic. Section 193 provides an exemption for the activities of charities under defined conditions. AIHA accepts that it distinguishes between applicants for its housing on the grounds of religion and that, subject to the statutory defences, this would constitute unlawful direct discrimination contrary to the relevant provisions of the 2010 Act. AIHA denies that it discriminates between applicants on grounds of their race. Mr Ian Wise QC, for the appellant, in his skeleton argument for the hearing in the Divisional Court, indicated to the court that since discrimination on grounds of religion was admitted by AIHA, it might be unnecessary to decide if AIHA discriminated on grounds of race. The Divisional Court took Mr Wise at his word and focused its analysis on the appellants claim of unlawful discrimination on grounds of religion. It made no finding as to whether there was discrimination on grounds of race. (This is subject to one narrow point which the Divisional Court did deal with, which is no longer a live issue between the parties: the court dealt with a submission on the part of the appellant to the effect that AIHA was not entitled to rely on a defence under section 193 of the 2010 Act by reason of section 194(2) of that Act. Section 194(2) provides that a charity may not avail itself of a defence under section 193 if it discriminates on grounds of race, in the sense of colour. The Divisional Court found that AIHA does not discriminate between applicants for housing on grounds of colour and by the time of the hearings in the Court of Appeal and in this court this was common ground.) Although the Divisional Court had been invited by Mr Wise not to deal with the allegation of discrimination on grounds of race if it was unnecessary to do so and hence did not make findings about that part of the case, on the appellants appeal to the Court of Appeal this was made into a point of criticism. Further, for the first time in his reply skeleton argument in the Court of Appeal, Mr Wise referred to Council Directive 2000/43/EC of 29 June 2000 implementing the principle of equal treatment between persons irrespective of racial or ethnic origin (the Race Directive). At that stage, the Race Directive was relied on as a potential aid to interpretation of section 193 of the 2010 Act. This was not on the footing that the appellant had rights under it as against AIHA on the findings made by the Divisional Court (which involved only discrimination on grounds of religion, which does not fall within the scope of the Race Directive), but on the basis that others might have rights under the Directive where there was discrimination on grounds of race and that these rights ought to be reflected in the interpretation of section 193, by virtue of the principle of sympathetic construction of national legislation articulated by the European Court of Justice (now the Court of Justice of the European Union: I will refer to it as the CJEU in both phases of its existence) in Marleasing SA v La Comercial Internacional De Alimentacion SA (Case C 106/89) [1990] ECR I 4135; [1992] 1 CMLR 305 (Marleasing). The Court of Appeal rejected this argument (para 54). Since the appellant could not show that she had suffered discrimination on grounds of race within the scope of the Race Directive, she could not benefit from the special interpretive obligation arising from the Marleasing case. Similarly, since the appellant had not shown that her case fell within the scope of EU law, she could not rely on the right against discrimination set out in article 21 of the Charter of Fundamental Rights of the European Union (the CFR). On the appeal to this court, the appellants position shifted again. At the hearing, Mr Wise applied to the court for permission to introduce a new argument for the appellant. According to this argument, Mr Wise invites the court to find that the appellant was in fact affected by direct discrimination by AIHA on grounds of race or ethnic origin, contrary to the Race Directive. He submits that the appellant was subject to direct discrimination on grounds of ethnic origin which was the same as that found by this court, by a majority, to have occurred in R (E) v Governing Body of JFS (United Synagogue intervening) [2009] UKSC 15; [2010] 2 AC 728 (JFS) in the context of the application of domestic anti discrimination legislation, and that this means that she must be taken to have been subjected to direct discrimination on grounds of race or ethnic origin for the purposes of the Race Directive. On that basis, Mr Wise submits that either section 193 must be read so as to be compatible with the appellants rights under the Race Directive in accordance with the Marleasing principle of sympathetic construction or, if that cannot be done, it should be disapplied altogether by virtue of the principle of direct effect of EU law. It is very unusual for this court to grant permission for a wholly new argument to be introduced at this stage. Moreover, since it is a new argument based on a legal instrument (the Race Directive) which was not pleaded by the appellant in her grounds of claim, Mr Wise should have made an application to amend those grounds, which (if allowed) would also have led to AIHA and the Council having the right to amend their grounds of defence to meet the new claim. As it is, the court was not presented by Mr Wise with any formal or clear statement of the new claim which he wished to introduce. This was highly unsatisfactory. It only emerged from the answer given by Mr Wise to a question by the court during his submissions in reply that this new case for the appellant did not involve any complaint of indirect discrimination by AIHA on grounds of race or ethnic origin. Also, the court did not have the benefit of a formally pleaded defence to the appellants new claim based on the Race Directive, which meant that possible defences had to be explored in submissions without a clear and proper focus. Also, to state the obvious, the court did not have the benefit of an examination of the new claim and those defences by the lower courts. Furthermore, the appellant should have made a formal application for permission to amend her grounds of claim and to raise the new argument in this court well in advance, rather than leaving it to be raised at the hearing, thereby taking up time which was set aside for the substantive arguments on the appeal. Despite these points, however, Mr Sam Grodzinski QC for AIHA made no strong objection to the introduction of this new case for the appellant at this late stage. He was confident that he was in a position to meet it without difficulty. Mr Matt Hutchings QC for the Council likewise made no strong objection. Having regard to their position, the court gave provisional permission at the hearing for Mr Wise to develop the new case for the appellant. The court reserved its position as to the possibility of refusing permission if, after hearing how the argument was developed, it considered that it had been advanced in a way which was unfair to AIHA or the Council. In the event, given the narrow basis on which Mr Wise sought to develop the new claim based on the Race Directive, the court considers that it is appropriate to confirm the permission given provisionally at the hearing. I will, therefore, address the appellants new claim based on the Race Directive along with her claim based on the 2010 Act. Two final matters should be mentioned in this introduction. Although at an early stage in the proceedings AIHA disputed that it carries out functions which have a sufficient public element to make it amenable to judicial review, it now accepts that it does. But AIHA does not accept that it is a public authority by virtue of carrying out functions of a public nature within the meaning of section 6(3)(b) of the Human Rights Act 1998 (the HRA). Accordingly, AIHA does not accept that it has any obligation arising under section 6(1) of the HRA to act compatibly with Convention rights of the appellant or other applicants for housing. In her pleaded case and in her submissions in the Divisional Court and in the Court of Appeal, the appellant did not assert any claim against AIHA under section 6(1) of the HRA on the basis that it was a public authority within the meaning of that Act, and no such issue was included in the agreed Statement of Facts and Issues for the appeal. In his printed case for the appeal in this court, Mr Wise did include an argument to that effect. However, in the event he did not make any application for permission to introduce it, so it is not necessary to say anything about it. The EU legislative context The Race Directive enshrines the principle of equal treatment, described in article 2 as meaning that there shall be no direct or indirect discrimination based on racial or ethnic origin. Article 3 provides that the Directive applies to to all persons, as regards both the public and private sectors in relation to a number of matters, including at article 3(1)(h): access to and supply of goods and services which are available to the public, including housing. Recital (17) to the Race Directive states: The prohibition of discrimination should be without prejudice to the maintenance or adoption of measures intended to prevent or compensate for disadvantages suffered by a group of persons of a particular racial or ethnic origin, and such measures may permit organisations of persons of a particular racial or ethnic origin where their main object is the promotion of the special needs of those persons. Article 5 makes provision to allow for the objective set out in recital (17), as follows: With a view to ensuring full equality in practice, the principle of equal treatment shall not prevent any member state from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to racial or ethnic origin. Article 21 of the CFR prohibits any discrimination based on a number of grounds, including race, colour, ethnic or social origin and religion or belief. Article 51 of the CFR states that it applies to member states only when they are implementing Union law. The domestic legislative context The 2010 Act makes various forms of discrimination unlawful. Direct discrimination is defined by section 13(1) of the Act: A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others. The relevant protected characteristics are set out in section 4. They include race and religion or belief. The meaning of these concepts is explained in sections 9 and 10, respectively. Race includes colour, nationality and ethnic or national origins. By contrast with the position in relation to indirect discrimination (defined in section 19 of the 2010 Act), there is no general defence of justification in relation to direct discrimination on the basis of these protected characteristics; but so far as is relevant for present purposes, particular defences are set out in sections 158 and 193. Service providers and persons exercising public functions are prohibited from discriminating, whether directly or indirectly: section 29. Section 158 is headed Positive action: general. So far as relevant, it provides: (1) This section applies if a person (P) reasonably thinks that (a) persons who share a protected characteristic suffer a disadvantage connected to the characteristic, (b) persons who share a protected characteristic have needs that are different from the needs of persons who do not share it, or (c) participation in an activity by persons who share a protected characteristic is disproportionately low. (2) This Act does not prohibit P from taking any action which is a proportionate means of achieving the aim of (a) enabling or encouraging persons who share the protected characteristic to overcome or minimise that disadvantage, (b) meeting those needs, or (c) enabling or encouraging persons who share the protected characteristic to participate in that activity. (4) This section does not apply to (a) action within section 159(3) Section 159 is headed Positive action: recruitment and promotion. It provides a defence where action is taken on the grounds of a protected characteristic to overcome disadvantages a person with that characteristic may face in obtaining employment or promotion. Section 159(3) provides: That action is treating a person (A) more favourably in connection with recruitment or promotion than another person (B) because A has the protected characteristic but B does not. Section 193 provides: (1) A person does not contravene this Act only by restricting the provision of benefits to persons who share a protected characteristic if the person acts in pursuance of a charitable (a) instrument, and the provision of the benefits is within subsection (b) (2). (2) The provision of benefits is within this subsection if it is a proportionate means of achieving a legitimate (a) aim, or (b) for a disadvantage characteristic. for the purpose of preventing or compensating the protected linked The Equality and Human Rights Commission (EHRC) has the power to issue codes of guidance. The court must take any such code into account in any way in which it appears to the court to be relevant: section 15(4)(b) of the Equality Act 2006. Section 3(1) of the HRA states that [s]o far as it is possible to do so, primary legislation must be read and given effect in a way which is compatible with the Convention rights. The Convention rights are those set out in the European Convention on Human Rights (the ECHR), as contained in Schedule 1 to the HRA. They include article 8 (right to respect for private and family life and the home), article 9 (freedom of thought, conscience and religion) and article 14 (prohibition of discrimination). Article 14 provides: The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. In this case, AIHA relies on defences under section 158, section 193(2)(a) and section 193(2)(b) of the 2010 Act. Success on any of these will mean that the appellants claim fails. Factual background The Council is a local housing authority with statutory functions in relation to the allocation of social housing. As well as allocating its own stock of social housing, it also discharges its functions by nominating applicants for social housing to properties owned by independent housing associations such as AIHA. The Council assesses applications for social housing using a points based system which is based on need. AIHA is a charitable housing association, established in 1986. In order to qualify as a charity, its activities must be for the public benefit: see section 4 of the Charities Act 2011 (the Charities Act). It is registered with the Regulator of Social Housing of England as a private registered provider of social housing under Part 2 of the Housing and Regeneration Act 2008. It owns property in Hackney, principally in parts of the borough which are inhabited by members of the Orthodox Jewish community. AIHAs charitable objects are set out in its rules, which state: A2 The Association is formed for the benefit of the community. Its object shall be to carry on for the benefit of the community (and primarily for the benefit of the Orthodox Jewish Community): A2.1 the business of providing housing, accommodation, and assistance to help house people and associated facilities and amenities for poor people or for the relief of the aged, disabled, handicapped (whether physically or mentally) or chronically sick people. A2.2 any other charitable object that can be carried out by an Industrial and Provident Society registered as a social landlord with the Corporation. AIHA has its own Allocations and Lettings Manual separate from the Councils allocation scheme. The manual states that AIHAs primary aim is to house members of the Orthodox Jewish Community. AIHA operates its own waiting list for its properties, but pursuant to an agreement with the Council the Council has nomination rights in respect of a significant proportion of properties owned by AIHA which become available for occupation. AIHAs criteria for selection are similar to those used by the Council, and are likewise based on need. AIHA owns 470 properties in Hackney. They amount to 1% of the overall number of 47,000 units of general social needs housing in the Councils area. AIHAs lettings each year are on average less than 1% of social housing lettings arranged by the Council. The Orthodox Jewish community tend to have large families and so have a greater need, as a community, for larger properties, including those with four bedrooms. AIHAs stock of social housing has been developed with that in mind, so it has a proportionately greater share of the stock of larger properties available for social housing in Hackney. Applicants nominated by the Council for a property owned by AIHA also have to satisfy AIHAs own selection criteria. Properties available for social housing are advertised on a portal on the Councils website. The advertisements on the portal in respect of properties owned by AIHA reflect AIHAs selection criteria under current market conditions and state: Consideration only to the Orthodox Jewish community. The appellants two sons with autism, now aged nine and five, display very challenging behaviour. In July 2018, the appellant gave birth to twin girls. The appellant is not a member of the Orthodox Jewish community. She grew up and lives in Hackney and embraces the diversity of the local community. The family were assessed by the Council as falling within the group having the highest need for re housing under its scheme for the allocation of social housing in the borough. In 2017 the appellant brought judicial review proceedings against the Council, in which she claimed that she and her sons were housed in inadequate accommodation. In consequence, the appellant and her sons were re housed in better temporary accommodation. The proceedings were settled in October 2017 on terms which included the Council agreeing to offer the appellant its next available unit of suitable social housing. Following the birth of her daughters, the appellant was moved to the offer list for a four bedroom property. Despite the Councils recognition of the familys need for suitable social housing, no offer of a suitable property was made by the time the case came before the Divisional Court. During the same period, at least six four bedroom properties owned by AIHA became available and were advertised by the Council. However, because of AIHAs practice of only letting its properties to members of the Orthodox Jewish community, the Council did not put the appellant forward for consideration; nor did the appellant apply directly to AIHA. Fortunately, between the hearing in the Divisional Court and the hearing in the Court of Appeal another four bedroom property became available to the Council and was allocated to the appellant. Accordingly, the appellant and her family are now housed in suitable accommodation. Extensive evidence about the problems faced by the Orthodox Jewish community in Hackney, and the need for it to gather together in Stamford Hill, was reviewed by the Divisional Court. It made a number of important findings relevant for the discussion below which are not challenged on this appeal: (1) Social housing is under severe pressure in the Councils area, with demand far exceeding supply (para 19). (2) Although the Jewish population in the United Kingdom is contracting and the average age is increasing, the strictly Orthodox Jewish Haredi community is growing at 4% per year, with 34% of Jews in Hackney aged 14 or under. Strictly Orthodox Jews are more likely to experience poverty and deprivation than other mainstream Jewish families. Jewish households in Hackney (which are comprised mainly of Haredi Jews) are much more likely to be in socially rented accommodation (35%) than the general Jewish population (9%). 25% of them live in overcrowded conditions, compared to 8% of the general Jewish population. Most of the Haredi community are unwilling to live outside Stamford Hill, where AIHAs properties are located, and so tend not to bid for social housing elsewhere in the Councils area. Nearly all of the Haredi community in social housing within Hackney are tenants of AIHA. Roughly 2% of applicants for social housing in Hackney self identify as Orthodox Jews (para 31). (3) The Orthodox Jewish community has a particular need for larger properties because of their large family sizes. Self identifying Orthodox Jews represent an increasing proportion of housing applicants as the number of bedrooms increases. Although they are only a small proportion of the families seeking one , two or three bedroom properties, in May 2018 they were 66 out of 459 families wanting four bedrooms, 32 out of 64 wanting five bedrooms, and 29 out of 35 wanting six bedrooms (para 32). (4) Witnesses emphasised the fact that Orthodox Judaism is not a lifestyle but a way of life, and that living as a community is a central part of this. Members of the Orthodox Jewish community need to remain proximate to that community, even if it means foregoing improved living conditions, bigger houses, or proper housing at all (para 34). The Divisional Court made these comments about the community (para 64): there are very high levels of poverty and deprivation, with associated low levels of home ownership. On the evidence before us, we are satisfied that there is a strong correlation between the evidenced poverty and deprivation and the religion. This is explained in part by the way of life, especially affecting educational and employment opportunities, which is characteristic of the Orthodox Jewish community. (5) The Orthodox Jewish community is subjected to anti Semitism, including racially aggravated harassment and assaults, criminal damage to property and verbal abuse (para 33). Volunteer security patrols in Stamford Hill, known as the Shomrim, provide physical reassurance and help to deter anti Semitic incidents, thereby fostering a sense of security within the community. The Divisional Court referred to widespread and increasing overt anti Semitism in society and an increase in reported anti Semitic crime; and to the way in which the traditional Orthodox Jewish clothing worn by the Haredi community heightens the exposure to anti Semitism and to related criminality (para 66). The court found that the community had a need to live together in relatively close proximity with a view to reducing apprehension and anxiety regarding personal security, anti Semitic abuse and crime (para 67). (6) The Orthodox Jewish community face prejudice when trying to rent properties in the private sector, on account of their appearance, language and religion (para 66). (7) The properties owned by AIHA are designed specifically for Orthodox Jewish religious needs whereby the tenants are able to follow the tenets of their faith and the rules relating to the Sabbath. AIHA provides facilities such as kosher kitchens, an absence of television aerials, Shabbos locks on the estate, and mezuzahs on communal doors. The Divisional Court acknowledged that these features are normative, rather than essential. At para 69 the court said, we would accept that, standing alone, they would be unlikely to be sufficient to justify the challenged discrimination. However, we do not believe that they should be entirely discounted. (8) The Orthodox Jewish community has a particular need to live close to community facilities, such as schools, synagogues and suitable shops (paras 34 and 68). (9) The Orthodox Jewish community in Hackney faces particular problems of overcrowding. The Divisional Court said (para 70): there was evidence in data from 2015 which showed that the average number of occupants of Orthodox Jewish households in Stamford Hill was 6.3, in contrast to the average for the whole of Hackney of 2.43, and for the UK of 2.38. In our view, this evidence demonstrates a particular need in the Orthodox Jewish community for property, which is likely to be in very short supply, that would accommodate substantially larger families, and that would significantly reduce the particular and intensified risk to such families of eviction from overcrowded accommodation. The evidence shows that, if a situation arose in which AIHA had a surplus of properties as against the needs of the Orthodox Jewish community for social housing, it would allocate the surplus properties to families from outside that community. It is in this sense that AIHA has as its charitable objective and the purpose of its allocation policy the aim of primarily meeting the needs of the Orthodox Jewish community. However, there is no surplus of supply of properties as against the needs of that community at present, nor is there likely to be one in the foreseeable future. As regards the question whether AIHA discriminates on grounds of race, although the Divisional Court made no relevant finding for present purposes, in the context of its discussion of section 194(2) of the 2010 Act (at para 86) it accepted the evidence of the principal witness for AIHA, as follows: In her evidence Mrs Cymerman Symons MBE stated that AIHA did not discriminate according to ethnic background. AIHAs housing applicants come from a variety of ethnic backgrounds. She continued at para 28 of her second witness statement: Our sole criterion is that the applicants are of the Orthodox Jewish faith. This is certainly not an issue of race; it is purely about religious observance. We respond to people from many ethnic backgrounds. The common factor is a commitment to the Orthodox Jewish way of life. This evidence has not been challenged. It is corroborated by the relevant documents produced by AIHA. The application form used by AIHA simply asks, in a box marked Personal circumstances, Would you describe yourself as Orthodox Jewish, strictly observant of Shabbath and Kashrut? and for details of which synagogue is attended and the school attended by children of the family. The application pack also includes a section for provision of details of ethnic origin which is stated to be solely for monitoring purposes, as is common form, and to assist AIHA in the development of its equal opportunities policy. The judgment of the Divisional Court The Divisional Court considered section 158 and section 193 of the 2010 Act in turn, in the light of the findings it had made. As to section 158, the court reasoned in a series of steps which are not now disputed, as follows: (i) The disadvantages faced by Orthodox Jews are real and substantial; (ii) Those disadvantages are connected with the religion of Orthodox Judaism; (iii) The needs of members of the Orthodox Jewish community are different from those who are not members of it. They have a relevant need to live relatively close to each other, with a view to reducing apprehension and anxiety regarding personal security, anti Semitic abuse and crime. They also have a need for community facilities, including schools, synagogues and shops, as well as special features of accommodation. They also have a need for property that will accommodate substantially larger families; and (iv) AIHAs arrangements for allocating housing, which place Orthodox Jews in a primary position, enable them both to avoid the disadvantages and to meet the needs referred to. The remaining question in relation to section 158 was whether AIHAs arrangements for allocating housing enabled members of the Orthodox Jewish community to avoid the identified disadvantages and meet the identified needs in a proportionate manner. On this, the Divisional Court directed itself by reference to the guidance given by Baroness Hale of Richmond in Aster Communities Ltd (formerly Flourish Homes Ltd) v Akerman Livingstone [2015] UKSC 15; [2015] AC 1399, at para 28. The case concerned a complaint of discrimination on grounds of disability, contrary to section 15 of the 2010 Act. Under section 15(1)(b), a person does not act unlawfully if he can show that the treatment in question is a proportionate means of achieving a legitimate aim: this is similar to the defence in section 158(2) and identical to the defence in section 193(2)(a) of the 2010 Act, which are at issue in the present appeal. Baroness Hale explained that the concept of proportionality as used in domestic anti discrimination law is derived from EU law. It requires application of a structured approach in relation to the measure in question, involving four stages: First, is the objective sufficiently important to justify limiting a fundamental right? Secondly, is the measure rationally connected to the objective? Thirdly, are the means chosen no more than is necessary to accomplish the objective? And, fourth: As the Court of Justice of the European Communities put it in R v Minister for Agriculture, Fisheries and Food, Ex p Fedesa (Case C 331/88) [1990] ECR 1 4023, para 13, the disadvantages caused must not be disproportionate to the aims pursued: or as Lord Reed JSC put it in the Bank Mellat case [Bank Mellat v HM Treasury (No 2)] [2014] AC 700, 791, para 74, In essence, the question at step four is whether the impact of the rights infringement is disproportionate to the likely benefit of the impugned measure. The Divisional Court observed that this approach to the question of proportionality in section 158 was reinforced by the explanatory notes for that provision and the relevant guidance given in the statutory code of practice promulgated by the EHRC (the EHRC code of practice). The explanatory notes to section 158 state (paragraph 512): The extent to which it is proportionate to take positive action measures which may result in people not having the relevant characteristic being treated less favourably will depend, among other things, on the seriousness of the relevant disadvantage, the extremity of need or under representation and the availability of other means of countering them. This provision will need to be interpreted in accordance with European law which limits the extent to which the kind of action it permits will be allowed. Paragraph 10.22 of the EHRC code of practice states: The seriousness of the relevant disadvantage, the degree to which the need is different and the extent of the low participation in the particular activity will need to be balanced against the impact of the action on other protected groups, and the relative disadvantage, need or participation of these groups. At paragraph 5.32, the EHRC code of practice also refers to the derivation in EU law of the concept of proportionality in section 158. Applying this approach, the Divisional Court held that the allocation policy of AIHA was a proportionate means to achieve aims falling within section 158(2)(a) and (b). At para 73 the court rejected the submission of Mr Wise that AIHAs allocation policy was to be regarded as an illegitimate and disproportionate blanket prohibition against letting properties to persons from outside the Orthodox Jewish community. The court referred to the fact that the policy allowed for allocation to persons from outside the community, should circumstances permit. It said: AIHAs charitable objectives permit and oblige it to accord primary benefit to members of the Orthodox Jewish community. There is no unqualified restriction of benefits to members of that community, nor absolute exclusion of non members. AIHA currently has over 700 applicants on its waiting list. It has a total housing stock of 470 homes in Hackney, but the crucial consideration in this context is that, over the seven year period from 2011 to 2018, only 89 general needs properties became available for allocation, a marginal availability of only about 12 to 13 properties each year, with a huge imbalance between supply and demand. There is no evidence that that imbalance is likely to decrease markedly in the foreseeable future. At the same time there is an acute imbalance between supply and demand for social housing in Hackney generally. About 13,000 households are currently registered under [the Councils] scheme for the allocation of social housing. In 2016, [the Council] allocated only 1,229 properties for social housing. Again, there is no evidence that the imbalance is likely to decrease markedly in the foreseeable future. The Divisional Court found (para 74) that the reason why, in practice, AIHA allocated its properties to members of the Orthodox Jewish community was clear. Given the limited availability to, and pressing demand from, that community, if AIHA were to allocate any of its properties to non members, it would seriously dilute the number of properties available to Orthodox Jews, and would fundamentally undermine its charitable objective of giving primary position, in a meaningful, as distinct from formalistic, sense to Orthodox Jews. At para 75 the Divisional Court said: We also conclude that AIHAs arrangements are justified as proportionate under section 158. For the reasons we have already given, the disadvantages and needs of the Orthodox Jewish community are many and compelling. They are also in many instances very closely related to the matter of housing accommodation. We recognise the needs of other applicants for social housing, but, in the particular market conditions to which we have referred, AIHAs arrangements are proportionate in addressing the needs and disadvantages of the Orthodox Jewish community, notwithstanding the fact that in those market conditions, a non member cannot realistically expect AIHA to allocate to him or her any property that becomes available. At para 76 the court referred back to its finding that members of the Orthodox Jewish community in Hackney have a particular need for larger accommodation and observed that given the acute scarcity of such accommodation, it is readily understandable, and proportionate, that such properties are allocated to members of the Orthodox Jewish community who have need of the accommodation. At para 77 the court rejected a further submission by Mr Wise, that AIHAs allocation policy constituted unlawful positive discrimination rather than legitimate positive action falling within section 158. For this distinction, Mr Wise referred to paragraph 10.7 of the EHRC code of practice. The court pointed out that the EHRC code of practice stated that positive action in favour of a preferred group might well cause disadvantage to persons outside that group, but that the advantages to the preferred group might well outweigh the disadvantages, and thus be proportionate. The court added: In this case it is self evident that the allocation of particular accommodation to a member of the Orthodox Jewish community may well disadvantage an individual non member who may have a priority need for such accommodation. However, the relevant question, which we have dealt with above, is whether the arrangements, viewed as a whole and in the light of relevant market circumstances, address the disadvantages and needs of the Orthodox Jewish community in a manner that outweighs the disadvantage to non members of that community. The Divisional Court emphasised, at para 78, that its conclusion was reached in the context of AIHA being a small provider of social housing with only 1% of the general needs housing in the Councils area and its lettings running at less than 1% of social housing lettings in the Councils area each year (see para 29 above). The court said that it could not be assumed that the same conclusion would be reached in the case of a service provider with a large share of the available properties. At paras 79 to 83 the court addressed a further argument of Mr Wise, in which he sought to draw an analogy with the judgment of the CJEU in Briheche v Ministre de lIntrieur (Case C 319/03) [2004] ECR I 8807; [2005] 1 CMLR 4 (Briheche). That case was concerned with application of Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions (the Equal Treatment Directive). Article 2(4) of that Directive allows a member state to engage in forms of positive discrimination in the area of employment in relation to recruitment and promotion, but in Briheche and other authorities the CJEU laid down restrictive conditions for the application of that provision. I discuss Briheche and the Equal Treatment Directive below. Here it suffices to say that the Divisional Court held (para 83) that the text, context and object of article 2(4) of that Directive were different from section 158 of the 2010 Act and that Briheche does not provide relevant guidance in relation to the application of section 158 or section 193 of the 2010 Act. As regards section 193 of the 2010 Act, the Divisional Court reasoned as follows: (1) AIHA did not discriminate on the ground of colour (hence section 194(2) of the 2010 Act had no application); (2) The specific protected characteristic, on the basis of which AIHA discriminated, was the religion of Orthodox Judaism; (3) AIHAs arrangements for allocating housing were authorised by or in line with its charitable instrument; and were therefore made in pursuance of it within the meaning of section 193(1)(a) (paras 93 to 101). This is now common ground; (4) For the same reasons as underpinned its conclusion in relation to section 158, AIHAs arrangements were a proportionate means of achieving a legitimate aim (section 193(2)(a)) and were for the purpose of preventing or compensating for disadvantages linked to the protected characteristic (section 193(2)(b)) (paras 103 and 104). The judgment of the Court of Appeal In the Court of Appeal, Mr Wise for the appellant submitted that the Divisional Court had erred in its proportionality assessment under section 158 and section 193 of the 2010 Act. Since, as was then common ground, the express requirements of section 193(2)(b) were satisfied and that provision is capable of providing a complete defence for AIHA and does not in terms depend upon a proportionality assessment, a new question arose for debate which had not been considered by the Divisional Court, namely whether section 193(2)(b) contained any requirement of proportionality. Mr Wise submitted that it did, for three reasons: (i) in the present context, article 14 of the ECHR, read with article 8 or article 9 of the ECHR, means that any positive action which involves discrimination has to be justified as being proportionate to some legitimate aim, and section 3(1) of the HRA means that section 193(2)(b) must be read and given effect in a way which is compatible with the appellants rights and those of her family under article 14; (ii) in some cases covered by section 193(2)(b) the Race Directive would apply; in those cases a proportionality requirement would be applicable as a matter of general EU law; and as a result of the interpretive obligation set out in Marleasing, section 193(2)(b) should be construed as containing such a requirement; and (iii) to interpret section 193(2)(b) as not containing a proportionality requirement would produce absurd consequences. Lewison LJ gave the substantive judgment, with which King LJ and Sir Stephen Richards agreed. Lewison LJ summarised the findings and analysis of the Divisional Court. At paras 34 to 62 he rejected Mr Wises submissions for the implication of a proportionality test into section 193(2)(b). This meant that the appellants appeal could not succeed. As to Mr Wises submission (i), Lewison LJ held by reference to domestic authority including, in particular, R (H) v Ealing London Borough Council [2017] EWCA Civ 1127; [2018] PTSR 541, that AIHAs allocation policy did not fall within the ambit of article 8 of the ECHR, nor did it fall within the ambit of article 9, so article 14 had no application (paras 44 52). Even if article 14 did apply, it was not possible to read a proportionality requirement into section 193(2)(b) by virtue of section 3(1) of the HRA. Section 193(2)(b) had to be read in the context of the scheme of the 2010 Act and in light of its juxtaposition with section 193(2)(a). To read a proportionality requirement into sub paragraph (b) of section 193(2) would make it redundant and hence, in effect, would disapply it, which would not be permissible under section 3(1) of the HRA. This was explained at para 53, where Lewison LJ said: The reason is a simple one. Section 193(2)(a) permits discrimination where it is a proportionate means of achieving a legitimate aim. Section 193(2)(b) does not contain the proportionality assessment required under section 193(2)(a). It is a necessary part of Mr Wises argument in support of the imposition of a proportionality requirement in section 193(2)(b) that preventing or compensating for a disadvantage linked to a protected characteristic might not be a legitimate aim. If it were a legitimate aim, it would already be covered by section 193(2)(a). So section 193(2)(b), read as Mr Wise proposes, would be entirely redundant. In the course of the argument Mr Wise accepted this; and also agreed that preventing or compensating for a disadvantage linked to a protected characteristic would be a legitimate aim. So he accepted that his interpretation made section 193(2)(b) redundant. That, to my mind, is a powerful reason why that interpretation cannot be right. As regards Mr Wises submission (ii), Lewison LJ held (para 54) that since the case had proceeded on the footing that AIHA had discriminated against the appellant on grounds of religion, which did not fall within the Race Directive, the appellant was not able to show that the Marleasing principle of sympathetic construction was applicable to allow or require any change to the ordinary meaning of section 193(2)(b). It was not open to the appellant to say that in some case other than her own there might be a conflict between section 193(2)(b) and rights under the Race Directive, where EU law might trump the domestic provision (either in the sense of requiring a conforming interpretation to be adopted pursuant to the Marleasing principle or in the sense of requiring the disapplication of the domestic provision by giving direct effect to rights under the Directive), and then indirectly to seek to take the benefit of EU law in her case, although no relevant rights of hers under EU law were in issue. Lewison LJ also rejected Mr Wises submission (iii) (paras 55 61). There was no absurdity in construing section 193(2)(b) as bearing its ordinary meaning, with no proportionality requirement. It could not be said to be absurd that section 193(1), read with section 193(2)(b), provided a defence for a charitable institution in fulfilling its charitable objects which, ex hypothesi (by virtue of the Charities Act), must be for the public benefit. The contrast between section 193(2)(a) (which incorporates a proportionality test) and section 193(2)(b) (which does not) is striking and deliberate. Where the 2010 Act requires a proportionality requirement, as it does in a number of provisions, it says so in terms. The absence of such a requirement from section 193(2)(b) must be taken to be a deliberate policy choice by Parliament, and was well within the legislatures margin of appreciation. The explanatory notes for the 2010 Act and the EHRC code of practice supported this conclusion. Lewison LJ also held (para 52) that even if section 193(2)(b) were interpreted as importing a proportionality requirement, then for reasons given later in his judgment in relation to section 158 and section 193(2)(a) of the 2010 Act, that requirement was satisfied. In relation to all these provisions, the Divisional Court was entitled to find that AIHAs allocation policy was a proportionate means of achieving a legitimate aim. Although by reason of his conclusion regarding the interpretation of section 193(2)(b) Lewison LJ held that the appeal should be dismissed, he also went on to consider Mr Wises submission that AIHAs allocation policy could not be regarded as proportionate for the purposes of sections 158 and 193 of the 2010 Act. At paras 63 68 Lewison LJ referred to the leading authorities on the role of an appeal court in considering a proportionality assessment by a lower court. This passage merits quotation in full: 63. In In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 WLR 1911, the Supreme Court considered the role of an appeal court in an appeal which involves a challenge to a lower courts appraisal of proportionality. Lord Neuberger of Abbotsbury said at para 88: If, after reviewing the judges judgment and any relevant evidence, the appellate court considers that the judge approached the question of proportionality correctly as a matter of law and reached a decision which he was entitled to reach, then the appellate court will not interfere. If, on the other hand, after such a review, the appellate court considers that the judge made a significant error of principle in reaching his conclusion or reached a conclusion he should not have reached, then, and only then, will the appellate court reconsider the issue for itself if it can properly do so (as remitting the issue results in expense and delay, and is often pointless). 64. He added that an appeal court should only interfere where the lower courts assessment of proportionality was wrong; and then went on to explain what he meant by that. Lord Wilson and Lord Clarke of Stone cum Ebony agreed with Lord Neuberger. 65. In R (R) v Chief Constable of Greater Manchester Police [2018] UKSC 47; [2018] 1 WLR 4079, the Supreme Court added a qualification to this approach. Lord Carnwath (with whom the other Justices agreed) said at para 64: In conclusion, the references cited above show clearly in my view that to limit intervention to a significant error of principle is too narrow an approach, at least if it is taken as implying that the appellate court has to point to a specific principle whether of law, policy or practice which has been infringed by the judgment of the court below. The decision may be wrong, not because of some specific error of principle in that narrow sense, but because of an identifiable flaw in the judges reasoning, such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion. However, it is equally clear that, for the decision to be wrong under CPR rule 52.11(3), it is not enough that the appellate court might have arrived at a different evaluation. As Elias LJ said in R (C) v Secretary of State for Work and Pensions [2016] PTSR 1344, para 34: the appeal court does not second guess the first instance judge. It does not carry out the balancing task afresh as though it were rehearing the case but must adopt a traditional function of review, asking whether the decision of the judge below was wrong 66. It is not enough simply to demonstrate an error or flaw in reasoning. It must be such as to undermine the cogency of the conclusion. Accordingly, if there is no such error or flaw, the appeal court should not make its own assessment of proportionality. 67. There are two further points that I should make, in view of some of Mr Wises criticisms of the Divisional Court. First, an appeal court is bound, unless there is compelling reason to the contrary, to assume that the lower court has taken the whole of the evidence into its consideration: Henderson v Foxworth Investments Ltd [2014] UKSC 41; [2014] 1 WLR 2600, para 48; ACLBDD Holdings Ltd v Staechelin [2019] EWCA Civ 817; [2019] 3 All ER 429, para 31. Second, an appeal court should be reluctant to interfere with a lower courts findings of fact, even where those findings are based on written rather than oral evidence. Having referred to earlier cases dealing with findings of fact made at trial after hearing oral evidence, Lord Kerr of Tonaghmore explained in In re DBs Application for Judicial Review [2017] UKSC 7; [2017] NI 301, para 80: The statements in all of these cases and, of course, in McGraddie itself [McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477, paras 1 3 per Lord Reed] were made in relation to trials where oral evidence had been given. On one view, the situation is different where factual findings and the inferences drawn from them are made on the basis of affidavit evidence and consideration of contemporaneous documents. But the vivid expression in Anderson [Anderson v City of Bessemer (1985) 470 US 564, 574 575] that the first instance trial should be seen as the main event rather than a try out on the road has resonance even for a case which does not involve oral testimony. A first instance judgment provides a template on which criticisms are focused and the assessment of factual issues by an appellate court can be a very different exercise in the appeal setting than during the trial. Impressions formed by a judge approaching the matter for the first time may be more reliable than a concentration on the inevitable attack on the validity of conclusions that he or she has reached which is a feature of an appeal founded on a challenge to factual findings. The case for reticence on the part of the appellate court, while perhaps not as strong in a case where no oral evidence has been given, remains cogent. In the present appeal, I consider that the Court of Appeal should have evinced a greater reluctance in reversing the judges findings than they appear to have done. 68. Those observations have particular force in the present case, where the Divisional Court were presented with a mass of demographic and sociological evidence from multiple reputable sources. In the following section of his judgment (paras 69 88), Lewison LJ followed this approach. He rejected Mr Wises submissions that the Divisional Court had failed to conduct a proper balancing exercise, comparing the detriments of AIHAs allocations policy for non members of the Orthodox Jewish community with the benefits sought to be achieved for that community. The Divisional Court had correctly directed itself by reference to the judgment of Baroness Hale in the Akerman Livingstone case. It analysed the position in accordance with propositions to be drawn from the judgment of Baroness Hale in R (Coll) v Secretary of State for Justice [2017] UKSC 40; [2017] 1 WLR 2093, at para 42, by assessing whether there was a disadvantage for non members of the Orthodox Jewish community, considering how significant that disadvantage was and considering what might be done to meet that disadvantage. At para 87 Lewison LJ summarised the analysis of the Divisional Court: (i) The disadvantage to non members of the Orthodox Jewish community was the withdrawal of 1% of the potentially available units of accommodation. (ii) The scale of that disadvantage was minuscule. (iii) The needs of the Orthodox Jewish community linked to the relevant protected characteristic were many and compelling. (iv) The allocation of properties to non members of the Orthodox Jewish community would fundamentally undermine AIHAs charitable objectives. Thus there was no more limited way of achieving the legitimate aim. (v) Weighing these factors together, AIHAs allocation policy was proportionate. In Lewison LJs judgment, there was no flaw in this analysis which would entitle an appeal court to intervene. Accordingly, the appeal in relation to AIHA was dismissed for these reasons as well. The issues on the appeal to this court The parties identified the following issues for determination on the appeal: In order for AIHA to be able to rely on section 193(2)(b) of the 2010 (1) Act, does it have to show that its arrangements are proportionate, whether pursuant to EU law or the HRA? (2) In so far as is relevant to issue (1) above, is the allocation of social housing a matter that falls within the ambit of article 8 of the ECHR for the purposes of a discrimination claim under article 14 of the ECHR? (3) Do AIHAs arrangements amount to impermissible positive discrimination as opposed to permissible positive action for the purposes of section 158 and/or section 193 of the 2010 Act? (4) Were the courts below entitled to conclude that AIHAs arrangements are a proportionate means of achieving the aims referred to in either section 158(2) or section 193(2) of the 2010 Act? To these must now be added a fifth issue: (5) Did AIHAs allocation policy involve direct discrimination on grounds of race or ethnic origin, contrary to the Race Directive? This may have implications for issue (1) above. Mr Wise also submits that the appellant has rights under the Race Directive which would require that section 193(2)(b) of the 2010 Act should be disapplied if it conflicts with the requirements of that Directive. Since the outcome of the appeal depends on whether the Divisional Courts holding regarding the proportionality of AIHAs allocation policy for the purposes of sections 158 and 193(2)(a) of the 2010 Act should be overruled, I will consider issues (3) and (4) first. Issue (3) is a dimension of the general question of proportionality raised in issue (4), so I will address them together. Then it is convenient to address issue (5). Finally, I will turn to issues (1) and (2). Issues (3) and (4): the proportionality of AIHAs allocation policy Mr Wise submits that, as explained in the Akerman Livingstone case, the relevant test of proportionality is that to be found in EU law and says that the Divisional Court erred in discounting the Briheche judgment as relevant guidance. On this appeal, Mr Wise relies on Briheche and a number of other judgments of the CJEU which he submits show that positive discrimination is only permissible under EU law if its object is equality of opportunity for a disadvantaged group rather than equality of outcome; where a disadvantaged person is given priority only in circumstances where an objective assessment has been carried out to compare their position with that of a person who does not share the relevant characteristic and the positions are found to be equivalent, so that the relevant characteristic is taken into account only as a tie break at the end of that process; and where the policy in question has a safety valve to allow priority in exceptional cases for a person who does not share the relevant characteristic. In this case, however, the Divisional Court did not assess proportionality in this way. Mr Wise submits that AIHAs policy on allocation cannot be regarded as proportionate according to this standard. It is concerned with equality of outcome rather than equality of opportunity; AIHA does not conduct assessments of the needs of non members of the Orthodox Jewish community who might apply for social housing to compare them with the needs of members of that community; AIHA does not treat membership of the Orthodox Jewish community as a final tie break, where an assessment of the needs of an applicant for social housing who is not a member of the community as compared with those of an applicant who is a member shows that they are broadly equivalent; and AIHAs policy does not include a safety valve to allow a property to be allocated to a non member of the Orthodox Jewish community in preference to members of the community in exceptional circumstances. The judgments of the CJEU relied on by Mr Wise are those in Kalanke v Freie Hansestadt Bremen (Case C 450/93) [1996] All ER (EC) 66 (Kalanke); Marschall v Land Nordrhein Westfalen (Case C 409/95) [1997] All ER (EC) 865 (Marschall); In re Badeck (Case C 158/97) [2000] All ER (EC) 289 (Badeck); Abrahamsson v Fogelqvist (Case C 407/98) [2002] ICR 932 (Abrahamsson); Lommers v Minister van Landbouw, Natuurbeheer en Visserij (Case C 476/99) [2004] 2 CMLR 49 (Lommers); Briheche; and Cresco Investigation GmbH v Achatzi (Case C 193/17) [2019] 2 CMLR 20, Grand Chamber (Cresco). He also relies on the judgment of the EFTA Court in EFTA Surveillance Authority v Norway (Case E 1/02) [2003] 1 CMLR 23 (the EFTA Surveillance case). I do not accept Mr Wises submission based on these cases. There is no general doctrine of positive discrimination in EU law, which is subject to the limitations for which Mr Wise contends. The judgments in these cases addressed the specific requirements arising under legislative instruments which are not applicable in the present case, in particular the Equal Treatment Directive. Article 2(1) of the Equal Treatment Directive states that the principle of equal treatment means that there shall be no discrimination whatsoever on grounds of sex either directly or indirectly. Article 2(4) provides that the Directive: shall be without prejudice to measures to promote equal opportunity for men and women, in particular by removing existing inequalities which affect women's opportunities. In Kalanke the CJEU held that German legislation which provided for the automatic promotion of a woman who had the same qualifications as a man, where there was under representation of women, was incompatible with the Equal Treatment Directive. National rules which guaranteed women absolute and unconditional priority for appointment or promotion go beyond promoting equal opportunities and fall outside what is permitted by article 2(4): para 22. This was confirmed by the CJEU in Marschall (para 32), but the court held there that such a national rule which contained a saving clause which guaranteed that male candidates would be the subject of an objective assessment which would take account of all relevant criteria and would override the priority accorded to female candidates where the assessment indicated the male candidate was better would be acceptable under article 2(4): paras 33 and 35. The under represented sex could thus only be given priority by a national rule where there was an objective assessment of the respective relevant qualities of male and female candidates and the rule operated as a tie breaker where that assessment showed that they were equally qualified to do the job: see also Badeck, paras 15 23; Abrahamsson, paras 60 62; Lommers, paras 38 39; Briheche, para 23; and the EFTA Surveillance case, para 45. As the CJEU pointed out in Briheche at para 24 (reiterating a point made in Lommers, para 39): Those conditions are guided by the fact that, in determining the scope of any derogation from an individual right such as the equal treatment of men and women laid down by the Directive, due regard must be had to the principle of proportionality, which requires that derogations must remain within the limits of what is appropriate and necessary in order to achieve the aim in view and that the principle of equal treatment be reconciled as far as possible with the requirements of the aim thus pursued. This is a conventional approach to the proportionality principle. As the statement of the principle in Akerman Livingstone makes clear, proportionality analysis requires identification of a legitimate aim and then an assessment whether a measure taken to promote that aim is proportionate in its effects in pursuing it, having regard to other interests at stake. For present purposes, what is significant about the Equal Treatment Directive is that article 2(4) identifies the aim which is to be regarded as a legitimate basis for departing from the general obligation of equal treatment imposed by article 2(1), namely promotion of equality of opportunity in employment rather than equality of outcome. In the judgments referred to, rules of national law were held to be compatible with the Directive if limited to securing equality of opportunity but were held to be incompatible if they went beyond promotion of equality of opportunity and sought to achieve equality of outcome in terms of equal representation of men and women in the workforce. This tells one nothing of any significance about the proper approach to proportionality in the context of section 158 and section 193(2)(a) of the 2010 Act. In fact, separate provision is made in the 2010 Act, in section 159, governing positive action in relation to employment. In each of section 158 and section 193(2)(a), the range of permissible legitimate aims is wider than the legitimate aim specified in article 2(4) of the Equal Treatment Directive and includes seeking to achieve particular outcomes, ie enabling persons who share the protected characteristic to overcome or minimise disadvantages they suffer which are connected to the characteristic or to meet needs particular to persons with the protected characteristic, in the case of section 158; or any legitimate aim in the case of section 193(2)(a) (which includes aims recognised as legitimate under section 158). Accordingly, the correct question, as the Divisional Court and the Court of Appeal rightly appreciated, is whether AIHAs allocation policy is a measure which is proportionate to promoting such aims in relation to ameliorating the position of members of the Orthodox Jewish community. Those aims relate to improving outcomes for that community, not merely equality of opportunity of the more limited kind discussed in the cases on the Equal Treatment Directive. The judgment of the Grand Chamber of the CJEU in Cresco is more relevant. That addressed the application of article 21 of the CFR and Directive 2000/78 establishing a general framework for equal treatment in employment and occupation (the Framework Directive). Article 2 of the Framework Directive states that the principle of equal treatment shall mean that there shall be no direct or indirect discrimination as regards employment and occupation on a range of grounds referred to in article 1, including religion or belief. Article 7, headed Positive action, provides in para 1: With a view to ensuring full equality in practice, the principle of equal treatment shall not prevent any member state from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to any of the grounds referred to in article 1. The terms of article 7(1) are materially different from those of article 2(4) of the Equal Treatment Directive, and are closer to section 158 and section 193 of the 2010 Act. Cresco concerned Austrian legislation which provided that for members of specified Christian churches Good Friday was a public holiday, with the result that if they worked on that day they should be paid a supplement. Non Christians were not entitled to treat Good Friday as a day of holiday and were not entitled to any supplement for working that day; nor were any religious days of other religions treated as public holidays for them. A non Christian who worked for a private company complained that this was incompatible with article 21 of the CFR and with the Framework Directive. At paras 62 68 the Grand Chamber dealt with an argument by the Austrian Government that the law treating Good Friday as a public holiday for members of Christian churches was justified pursuant to article 7(1) of the Framework Directive, and rejected it. The Grand Chamber observed (para 63) that, in light of article 7(1), the principle of equal treatment in the Directive does not prevent a member state from retaining or adopting, in order to ensure full equality in practice, specific measures to prevent or compensate for disadvantages linked to any of the grounds referred to in article 1. The Grand Chamber also noted (para 64) that article 7(1) is designed to authorise measures which, although discriminatory in appearance, are in fact intended to eliminate or reduce actual instances of inequality which may exist in society. The objectives of ensuring full equality in practice and the elimination or reduction of instances of inequality are very different from the more limited objective of securing equality of opportunity referred to in article 2(4) of the Equal Treatment Directive. They are objectives which can include efforts to achieve equality of outcomes as well as equality of opportunity, to use the distinction urged on us by Mr Wise. At para 65, the Grand Chamber affirmed that a conventional proportionality analysis applies in relation to such aims (referring in that regard to Lommers, para 39): in determining the scope of any derogation from an individual right such as equal treatment, due regard must be had to the principle of proportionality, which requires that derogations remain within the limits of what is appropriate and necessary in order to achieve the aim in view and that the principle of equal treatment be reconciled as far as possible with the requirements of the aim thus pursued Applying the principle of proportionality, the Grand Chamber held (paras 66 68) that since there was no corresponding designation of important festivals of other religions as public holidays the law in issue went further than was necessary to compensate for the alleged disadvantage suffered by employees who are members of Christian churches and subject to a religious duty not to work on Good Friday. Accordingly, the Grand Chamber in Cresco confirmed at para 65 the point made above about the conventional operation of the proportionality principle in the context of anti discrimination legislation. The guidance in Cresco is relevant in relation to the analogous provisions in section 158 and section 193 of the 2010 Act. It confirms that the conventional approach adopted by the Divisional Court and the Court of Appeal on the question of proportionality was correct. The Divisional Court directed itself correctly as to the proportionality test to be applied. It made appropriate findings on the evidence before it regarding the needs of the Orthodox Jewish community connected to their religion and the disadvantages to which they were subject on grounds of their religion. It found that the AIHA allocation policy was a legitimate and proportionate means of meeting those needs and of seeking to correct for those disadvantages. I would endorse the observations of Lewison LJ at paras 63 68 (quoted at para 56 above) about the proper approach for an appellate court when reviewing a finding of proportionality or disproportionality of a measure such as AIHAs allocation policy. Mr Wise did not suggest this approach was wrong. Since the Divisional Court gave itself a correct self direction as to the test to be applied, its conclusion that AIHAs allocation policy is a proportionate means of pursuing the legitimate aims identified can only be set aside if the appeal court comes to the view that its conclusion was wrong in the relevant sense. It is not sufficient that an appellate court might think it would have arrived at a different conclusion had it been considering the matter for the first time. Although the word wrong is taken from what is now CPR Part 52.21, which is concerned with the powers of the Court of Appeal and certain other appellate courts, but not the Supreme Court, the arguments for a limited role for an appellate court are of general application and the same approach applies at this level. It would be a recipe for confusion if this court applied a different standard of review on appeal than that applied by the Court of Appeal. It is for that reason that I have dealt with the Divisional Courts judgment on the question of proportionality at some length. I agree with Lewison LJs assessment at paras 69 88 (see para 57 above) that there is no proper basis on which an appellate court could interfere with the Divisional Courts conclusion that AIHAs allocation policy is a measure which is proportionate to legitimate aims. Not only was that a conclusion which the Divisional Court was entitled to reach, I agree with it. Two particular points should be mentioned. First, AIHAs allocation policy operates as a direct counter to discrimination suffered by the Orthodox Jewish community in seeking to obtain housing in the private sector. The Divisional Court properly weighed up the effect of the policy in addressing needs of the Orthodox Jewish community connected with their religion and in correcting for disadvantages suffered by that community. Lewison LJ forcefully made this point at para 79 when rejecting criticisms made by Mr Wise: It is, with respect, obvious why discrimination against the Orthodox Jewish community in accessing private sector housing is ameliorated by a housing association that gives members of that community preference. The extent of the amelioration may be impossible to assess with any precision, but that does not cast doubt on the fact that amelioration there is. Nor do I accept the criticism that the Divisional Court failed to assess the disadvantage occasioned to other groups who did not share the relevant protected characteristic. On the basis of the Divisional Courts findings, the effect of AIHAs allocation policy (taken at its most restrictive) is to withdraw from the pool of potentially available properties for letting 1% of units. The remaining 99% are potentially available to persons who do not share the relevant protected characteristic. Thus the disadvantage to those persons is minuscule. Even if one concentrates on larger units, where AIHA has a larger share of units, Orthodox Jews are disproportionately represented among applicants for such units. As far as the smaller units are concerned, the evidence is that many of them are also used to house large families. I do not regard this criticism as well founded. Secondly, Lewison LJ rightly rejected (at paras 84 85) a further criticism made by Mr Wise, that the Divisional Court was wrong to dismiss his argument that AIHAs allocation policy was an illegitimate blanket policy. There is some flexibility in the policy as it is formulated, in that it allows for AIHA to allocate properties to non members of the Orthodox Jewish community if AIHA has properties surplus to the demand from that community. However, in circumstances in which demand from that community far exceeds supply, allocation to non members is not a realistic prospect in the foreseeable future. As Lewison LJ pointed out, the market circumstances are such that AIHAs allocation policy (in combination with the limited number of properties AIHA owns) does not achieve the aim of meeting the needs of the Orthodox Jewish community in Hackney, but only goes some way towards achieving that aim. There are still many Orthodox Jews in Hackney whom AIHA cannot accommodate and who still suffer the disadvantages associated with the relevant protected characteristic. Unless and until the aim of elimination of such disadvantages is achieved, it would be proportionate for AIHA to operate a simple blanket policy to allocate its properties to members of the Orthodox Jewish community as a means of promoting that legitimate aim. So even though market circumstances give AIHAs policy, in practice, a blanket effect, that does not show that it is a measure which is disproportionate to that aim. Mr Wise criticised the Divisional Court and the Court of Appeal for their focus on the minuscule impact of AIHAs allocation policy. He said that the impact on the appellant could not be so described, since she had had to wait almost 18 months for a suitable property while at least six four bedroom properties owned by AIHA became available and were advertised by the Council for members of the Orthodox Jewish community. In my view, there is nothing in this criticism. The Divisional Court and the Court of Appeal rightly took account of the small impact of AIHAs allocation policy on the group of persons outside the Orthodox Jewish community when assessing its proportionality with reference to its aim. It was proportionate for AIHA to adopt an allocation policy which aimed to meet the particular needs and alleviate the particular disadvantages experienced by members of the Orthodox Jewish community, as a group, in connection with their religion. In assessing the proportionality of the policy in the light of that aim, the courts below were entitled to weigh the benefits for that community as a group as compared with the disadvantages experienced by other groups as a result, rather than by comparing the benefits for that community with the disadvantage suffered by one person drawn from those other groups falling outside the policy. Positive action pursuant to section 158 has to address needs or disadvantages experienced in connection with a protected characteristic, and so contemplates that a group based approach may be adopted, defined by reference to one of the protected characteristics as shared with others (such as gender, disability or religion). Similarly, in the context of section 193, charities typically focus the benefits they aim to provide on defined groups. Charitable status is a way of recruiting private benevolence for the public good (subject to the public benefit test in the Charities Act), and charities focus on providing for particular groups since that is what motivates private individuals to give money, where they feel a particular link to or concern for the groups in question. It is for the public benefit that private benevolence should be encouraged for projects which supplement welfare and other benefits provided by the state, even though those projects do not confer benefits across the board. Accordingly, Parliament contemplated that the proportionality of measures falling within section 158 and section 193 should be assessed on a group basis, by comparing the advantages for groups covered by the measure in question with the disadvantages for groups falling outside it. This point is reinforced by the guidance on the question of proportionality under section 158 of the 2010 Act contained in the EHRC code of practice at para 10.22: The seriousness of the relevant disadvantage, the degree to which the need is different and the extent of the low participation in the particular activity will need to be balanced against the impact of the action on other protected groups, and the relative disadvantage, need or participation of these groups. In this context, the proportionality assessment would be distorted by simply taking the worst affected individual who is not covered by the measure and comparing her with the most favourably affected individual who is covered by it. That is in effect what Mr Wise seeks to do by comparing the appellant with a member of the Orthodox Jewish community, out of the many in need, who happened to be fortunate in having one of AIHAs properties assigned to them in the relevant period. The House of Lords in R (Ahmad) v Newham London Borough Council [2009] UKHL 14; [2009] PTSR 632 considered a broadly analogous context when assessing whether a local housing authoritys scheme made under section 167(2) of the Housing Act 1996 (as amended) for determining priority for allocation of social housing based on placing individuals within broad need based categories rather than on individualised, fine grained comparative assessment of needs was irrational, and held that it was not. Baroness Hale and Lord Neuberger of Abbotsbury, who gave the principal speeches, emphasised the dangers of distorting the analysis by seeking to compare the situation and needs of the claimant with those of a general category, in circumstances where it was legitimate for the authority to adopt a group based approach to allocation of housing: see paras 15 (Baroness Hale) and 46 48 and 60 62 (Lord Neuberger). In R (XC) v Southwark London Borough Council [2017] EWHC 736 (Admin); [2017] HLR 24 Garnham J relied on these observations in deciding that a particular category based feature of a local housing authoritys housing priority scheme (to award additional points to persons in working households or who provide community services) was a proportionate means of achieving legitimate objectives (the creation of sustainable and balanced communities and encouraging residents to make a contribution to the local community), so as to provide a defence to a claim of indirect discrimination under section 19 of the 2010 Act. The claimant suffered from disabilities which meant that she could not work. Having regard to the observations in Ahmad, Garnham J held that the priority scheme in issue was the least intrusive measure which could be used without unacceptably compromising the chosen objectives and that it struck a fair balance between securing the objectives and its effects on the claimants rights: paras 85 99. As he pointed out (para 92): Determining those matters in the context of housing allocation schemes is especially difficult. Every tweak to the scheme to benefit one individual or one class of applicant is likely to have an adverse effect on another; every exception to the operation At para 98 he said: of a preference may damage the achievement of the objective. The court inevitably concentrates on the circumstances of the claimant in front of it and it is easy to recognise the disadvantage that a claimant may suffer. But the local authority has to consider the position of all applicants and the court can have only the most attenuated understanding of their position. I can see no measure less intrusive, less likely to be detrimental to the claimant, which would not undermine the legitimate objective identified by the council and to which I have referred above. To extend the class of volunteers to include all those who, like the claimant, provide some measure of care for others living in other accommodation would inevitably reduce the ability of the council to cater for those who benefit from the reasonable preferences provided for by the scheme. To extend the class of working households to include those who cannot work because of the type of disabilities suffered by the claimant would inevitably conflict with the legitimate preference to be given to those in work. The wider the class the less valuable the benefit of being within it. So also in the present case, if AIHA changed its allocation policy to bring in people who are not members of the Orthodox Jewish community, that would inevitably dilute the impact it could have on addressing the needs and disadvantages experienced by that community in connection with their faith. In light of the unmet need for social housing for that community and the small impact on other groups, the Divisional Court was entitled to conclude that it was proportionate for AIHA to focus its efforts on that community without diluting its beneficial impact for that community in the way for which Mr Wise contends. In the context of state provision of social welfare benefits, it is well established that it is generally a legitimate approach and in accordance with the principle of proportionality for the state to use bright line criteria to govern their availability: see eg R (RJM) v Secretary of State for Work and Pensions (Equality and Human Rights Commission intervening) [2008] UKHL 63; [2009] 1 AC 311; Carson v United Kingdom (2010) 51 EHRR 13, para 62; and R (Tigere) v Secretary of State for Business, Innovation and Skills (Just for Kids Law intervening) [2015] UKSC 57; [2015] 1 WLR 3820. That is to say, the state is entitled to focus provision of social welfare benefits on a particular group, and hence exclude other groups, even though there may be little or no difference at the margins in terms of need between some particular individual in the first group and another particular individual in the excluded groups. Use of bright line criteria in this way is justified because it minimises the costs of administration of a social welfare scheme; it may be the best way of ensuring that resources are efficiently directed to the group which, overall, needs them most; it can reduce delay in the provision of benefits; and it provides clear and transparent rules which can be applied accurately and consistently, thereby eliminating the need for invidious comparisons of individual cases in all their variety, with the risk of arbitrariness in outcomes which that may involve. Lord Sumption and Lord Reed explained these points in Tigere, which concerned a challenge to the proportionality of rules which restricted the availability of student loans in the case of non nationals to those who had settled immigration status, in a general discussion of proportionality and bright line rules at paras 88 91 (albeit in their conclusion on the facts of that case they were in a minority): 88. Those who criticise rules of general application commonly refer to them as blanket rules as if that were self evidently bad. However, all rules of general application to some prescribed category are blanket rules as applied to that category. The question is whether the categorisation is justifiable. If, as we think clear, it is legitimate to discriminate between those who do and those who do not have a sufficient connection with the United Kingdom, it may be not only justifiable but necessary to make the distinction by reference to a rule of general application, notwithstanding that this will leave little or no room for the consideration of individual cases. In a case involving the distribution of state benefits, there are generally two main reasons for this. 89. One is a purely practical one. In some contexts, including this one, the circumstances in which people may have a claim on the resources of the state are too varied to be accommodated by a set of rules. There is therefore no realistic half way house between selecting on the basis of general rules and categories, and doing so on the basis of a case by case discretion. The case law of the Strasbourg court [the European Court of Human Rights] is sensitive to considerations of practicality, especially in a case where the Convention [the ECHR] confers no right to financial support and the question turns simply on the justification for discrimination. In Carson v United Kingdom (2010) 51 EHRR 369 [51 EHRR 13], which concerned discrimination in the provision of pensions according to the pensioners country of residence, the Grand Chamber observed, at para 62: as with all complaints of alleged discrimination in a welfare or pensions system, it is concerned with the compatibility with article 14 of the system, not with the individual facts or circumstances of the particular applicants or of others who are or might be affected by the legislation. Much is made in the applicants submissions and in those of the third party intervener of the extreme financial hardship which may result from the policy. However, the court is not in a position to make an assessment of the effects, if any, on the many thousands in the same position as the applicants and nor should it try to do so. Any welfare system, to be workable, may have to use broad categorisations to distinguish between different groups in need the courts role is to determine the question of principle, namely whether the legislation as such unlawfully discriminates between persons who are in an analogous situation. This important statement of principle has since been applied by the European Court of Human Rights to an allegation of discrimination in the distribution of other welfare benefits such as social housing: Bah v United Kingdom [(2011) 54 EHRR 21] at para 49. And by this court to an allegation of discrimination in the formulation of rules governing the benefit cap: R (SG) v Secretary of State for Work and Pensions (Child Poverty Action Group intervening) [2015] 1 WLR 1449, para 15 (Lord Reed JSC). 90. The second reason for proceeding by way of general rules is the principle of legality. There is no single principle for determining when the principle of legality justifies resort to rules of general application and when discretionary exceptions are required. But the case law of the Strasbourg court has always recognised that the certainty associated with rules of general application is in many cases an advantage and may be a decisive one. It serves to promote legal certainty and to avoid the problems of arbitrariness and inconsistency inherent in weighing, on a case by case basis: Evans v United Kingdom (2007) 46 EHRR 728, at para 89. The Court of Justice of the European Union has for many years adopted the same approach to discrimination cases, and has more than once held that where a residence test is appropriate as a test of eligibility for state financial benefits, it must be clear and its application must be capable of being predicted by those affected: Collins v Secretary of State for Work and Pensions (Case C 138/02) [2005] QB 145, para 72, Frster v Hoofddirectie van de Informatie Beheer Groep (Case C 158/07) [2009] All ER (EC) 399, para 56. As Advocate General Geelhoed acknowledged in considering these very Regulations in Bidar [R (Bidar) v Ealing London Borough Council (Case C 209/03) [2005] QB 812], para 61: Obviously a member state must for reasons of legal certainty and transparency lay down formal criteria for determining eligibility for maintenance assistance and to ensure that such assistance is provided to persons proving to have a genuine connection with the national educational system and national society. In that respect, and as the court recognised in Collins, a residence requirement must, in principle, be accepted as being an appropriate way to establish that connection. 91. The advantages of a clear rule in a case like this are significant. It can be applied accurately and consistently, and without the element of arbitrariness inherent in the discretionary decision of individual cases. By simplifying administration it enables speedy decisions to be made and a larger proportion of the available resources to be applied to supporting students. These points apply a fortiori in relation to a proportionality assessment in respect of a measure taken by a charity, such as AIHAs allocation policy. A charity is a private body which does not have the same responsibility as the state for ensuring equal treatment of citizens, so if the state is entitled to use bright line criteria for distribution of social welfare benefits still more will that be true for a charity. Moreover, charities do not have the same resources as the state, so if the state is entitled to use bright line criteria for distribution of benefits, still more will that be true for a charity. It is in the public interest that charities should be able to minimise their costs of administration. That is in order to ensure that maximum resources are made available to address the problems which charities seek to alleviate and since otherwise charitable giving may be deterred, if donors feel excessive amounts of what they give will be spent on administration rather than actually helping people in need. The aims of minimising wastage of resources on administration and encouraging charitable giving are themselves legitimate objectives to be brought into account in the assessment of proportionality. Mr Wise maintained that there are examples of other faith or ethnicity based housing associations (he cited three) having allocation policies which do not require them to provide housing exclusively to members of the relevant religious or ethnic community, and that there is no evidence that the aims or essential nature of these housing associations, which are presumably operating in similarly demanding market conditions to AIHA, have been unacceptably compromised thereby. However, there was no evidence about how these housing associations manage the tension between their faith or ethnicity based focus for provision of social housing and provision for other groups, no evidence that these three examples were in any way representative of the sector as a whole, and no evidence that the problems faced by the groups they seek to help or the market conditions in their areas are equivalent to those which AIHA has to address. Therefore, I did not find Mr Wises attempt to rely on these examples at all persuasive. Each case must depend on its own facts. The Divisional Court was entitled to make the assessment that if AIHA relaxed its allocation criteria it would dilute its ability to address the problems faced by the Orthodox Jewish community to an unacceptable degree. Mr Wise made vague references to the possibility that AIHA could allocate more properties to non members of that community whilst still maintaining assistance for the community, but he did not propose any concrete solution, let alone a viable one, to resolve that dilemma. In my judgment, for the reasons given above, the appellants grounds of appeal in relation to issues (3) and (4) fail. The consequence is that her appeal as a whole should be dismissed. Issue (5): The Race Directive The Race Directive requires discrimination on grounds of race or ethnic origin to be made unlawful, including in particular in relation to housing. Mr Wise submits that the JFS case shows that AIHAs allocation policy involved direct discrimination on grounds of ethnic origin. Mr Grodzinski has a short response to this new claim by the appellant: AIHAs allocation policy involves differentiation on grounds of religious observance, which is not prohibited by the Race Directive; it does not involve discrimination on grounds of race or ethnic origin; the facts in the JFS case were materially different. In my view, Mr Grodzinski is right about this. The JFS case concerned a complaint that the admissions criteria adopted by the Jewish Free School involved unlawful direct discrimination on grounds of ethnic origin contrary to the Race Relations Act 1976, one of the pieces of anti discrimination legislation which was replaced by the 2010 Act. Only children who were recognised as Jewish according to the Office of the Chief Rabbi could be admitted, such recognition being based on matrilineal descent from a Jewish mother or one who had been converted in accordance with the tenets of Orthodox Judaism. There was no requirement of practice of the Jewish faith. The school refused to accept a child whose mother had undergone conversion to non Orthodox Judaism, which was not recognised by the Office of the Chief Rabbi. By a majority, this court held that the test of matrilineal descent applied by the school was a test of ethnic origin and that therefore the schools policy involved direct discrimination on racial grounds contrary to the 1976 Act, which defined such grounds to include ethnic or national origins. As Lord Phillips of Worth Matravers explained at para 13, [i]n deciding what were the grounds for discrimination it is necessary to address simply the question of the factual criteria that determined the decision made by the discriminator. The motive of the discriminator for the discrimination in issue is irrelevant. In JFS the court considered and affirmed the guidance given by Lord Fraser of Tullybelton in Mandla (Sewa Singh) v Dowell Lee [1983] 2 AC 548, 562 regarding the meaning of an ethnic group in this context, as set out by Lord Phillips at para 28. The criteria set out by Lord Fraser include two essential conditions (that the group should have a long shared history and a cultural tradition of its own) and a number of other relevant factors; and he stated, [p]rovided a person who joins the group feels himself or herself to be a member of it, and is accepted by other members, then he is, for the purposes of [the 1976 Act], a member. In JFS this court recognised that one could define Jews as an ethnic group by reference to these general criteria without reference to matrilineal descent, but it was concerned with the particular question whether the matrilineal test applied by the school involved discrimination on grounds of ethnic origins, including as against persons who regarded themselves as Jews (as the mother and father of the child did): see, eg, paras 30 31, 33, and 43 46, where Lord Phillips, in the majority, distinguishes the criterion of matrilineal ethnic origin at issue in the case from whether someone is a member of what he describes as a Mandla Jewish ethnic group. Lord Phillips and the majority held that the application of that criterion by the school (as distinct from a criterion by reference to a Mandla Jewish ethnic group) involved direct discrimination on grounds of ethnic origin. Baroness Hale, also in the majority, emphasised at para 66 that the child was not excluded from the school by reason of his religious beliefs, but by reason of his ethnic origins, because his mother was not recognised as Jewish by the Office of the Chief Rabbi. For the new claim based on the Race Directive, Mr Wise submits that the JFS decision establishes that the criterion used by AIHA that an applicant for its properties should be a member of the Orthodox Jewish community involves discrimination on grounds of ethnic origin, and that this holds true for the concept of ethnic origin in the Race Directive itself. In my view, however, this submission cannot be sustained on the facts of this case. Unlike in the JFS case, AIHA did not make its selection on the grounds of a persons Jewish matrilineal descent, but on the grounds of whether they engage in Orthodox Jewish religious observance: see paras 37 38 above. Discrimination on grounds of religious belief or religious observance is not prohibited by the Race Directive. Since the new claim was introduced so late in the day, there has been no evidence put forward and no examination by the courts below regarding whether persons who engage in Orthodox Jewish religious observance might, by virtue of that, be regarded as part of some wider and differently constituted Mandla Jewish ethnic group according to Lord Frasers guidelines. It is possible that they might, but the question is not a straightforward one. Evidence would be required in relation to it, for instance to explore the extent that such persons would be accepted by other Jews (Orthodox or non Orthodox) to be part of their ethnic group or might be perceived as such by non Jews. Mr Wise was not given permission to introduce such a case. A range of legal issues would arise if an attempt were made to present such a case in future. These would include whether the concept of ethnic origin in the Race Directive is the same as in the 1976 Act and, now, the 2010 Act; whether a defence existed under article 5 of the Race Directive which, by contrast with the more limited positive discrimination provision in the Equal Treatment Directive, is in similar wide terms to the positive discrimination provision in the Framework Directive considered in Cresco and discussed above (and, for the reasons given above, it is likely that AIHA would have a good defence under article 5); whether the Race Directive can have horizontal effect in relation to a private body like AIHA (see Cresco, paras 72 73); whether it is possible to interpret provisions of domestic legislation compatibly with the Directive pursuant to the Marleasing interpretive obligation (see Cresco, para 74); and whether article 21 of the CFR might create rights on which a claimant could rely (see Cresco, paras 75 78). It is not appropriate to say anything further about these issues in this judgment. Issues (1) and (2): interpretation of section 193(2)(b) and the ambit of article 8 As mentioned above, it is common ground that in applying its allocation policy AIHA acts in pursuance of its charitable instrument, so that section 193(1)(a) of the 2010 Act is satisfied, and also that it provides benefits to persons who shared a protected characteristic (ie religion) for the purpose of preventing or compensating for a disadvantage linked to the protected characteristic, in the language of section 193(2)(b). The Court of Appeal held that there is no implied additional requirement in section 193(2)(b) that a charity should have to persuade a court that the measures it takes within section 193(2)(b) are proportionate. Although it is my view that the appeal should be dismissed for the reasons given above in relation to issues (3) (5), we should also address the interpretation of section 193(2)(b), which was the main ground on which the Court of Appeal dismissed the appellants appeal. In my opinion, this does not require us to reach a concluded view on the ambit of article 8 of the ECHR in the present context, for the purposes of application of article 14. That is because, even if article 14 is applicable, I consider that the Court of Appeal was right to construe section 193(2)(b) in the way it did, as not being dependent on a proportionality assessment to be conducted by the court. There are two reasons for this. For the purposes of analysis, I will make the assumption that AIHAs allocation policy falls within the ambit of article 8 so that article 14 is applicable. First, I accept Mr Grodzinskis submission that by section 193(1) read with section 193(2)(b), Parliament has itself established a regime which is proportionate and compatible with article 14. Secondly, even if that is not the case, I agree with Lewison LJ that it is not possible under section 3(1) of the HRA to read an additional proportionality requirement into section 193(2)(b). In relation to both arguments it is relevant to trace the legislative history. Charities have been subject to legal regulation for a very long time. In particular, charitable status is limited to bodies which provide public benefits of specified kinds. By virtue of section 2(1) of the Charities Act, to be charitable a purpose has to fall within section 3(1) of the Act and has to be for the public benefit, as set out in section 4 of the Act. Charitable purposes include the prevention or relief of poverty, the advancement of religion and the relief of those in need because of youth, age, ill health, disability, financial hardship or other disadvantage: sub paragraphs (a), (c) and (j) of section 3(1), respectively. The Charity Commission exercises regulatory oversight in relation to the activities of charities, to ensure, among other things, that the public benefit requirement is satisfied: see the discussion in R (Independent Schools Council) v Charity Commission for England and Wales [2011] UKUT 421 (TCC); [2012] Ch 214. The public benefit requirement will not be satisfied if a charitys activities have unduly detrimental wider effects in society: see the Independent Schools Council case, in particular at paras 64 and 105 106. The Sex Discrimination Act 1975 made forms of discrimination on grounds of sex unlawful, but section 43(1) set out an exemption for charities in relation to an act which was done to give effect to a provision in a charitable instrument for conferring benefits on persons of one sex only. The Race Relations Act 1976, which made forms of discrimination on grounds of race unlawful, contained a similar exemption. In 2008, section 43 of the 1975 Act was amended by the Sex Discrimination (Amendment of Legislation) Regulations 2008 (SI 2008/963) by the addition of subsection (2A), which provided that subsection (1) should not apply to specified types of discrimination unless the conferral of benefits is (a) a proportionate means of achieving a legitimate aim, or (b) for the purpose of preventing or compensating for a disadvantage linked to sex. This was the forerunner of what became section 193(2) of the 2010 Act. The Explanatory Memorandum for the Regulations stated that this provision was introduced to give effect in domestic law to Council Directive 2004/113/EC, implementing the principle of equal treatment between men and women in the access to and supply of goods and services (the Gender Directive). The amendment was introduced while consultation on the terms of what became the 2010 Act was in progress. Recital (16) to the Gender Directive states: Differences in treatment may be accepted only if they are justified by a legitimate aim. A legitimate aim may, for example, be the protection of victims of sex related violence (in cases such as the establishment of single sex shelters), reasons of privacy and decency (in cases such as the provision of accommodation by a person in a part of that persons home), the promotion of gender equality or of the interests of men or women (for example single sex voluntary bodies), the freedom of association (in cases of membership of single sex private clubs), and the organisation of sporting activities (for example single sex sports events). Any limitation should nevertheless be appropriate and necessary in accordance with the criteria derived from case law of the Court of Justice of the European Communities. In terms similar to those of article 7 of the Framework Directive and article 5 of the Race Directive, article 6 of the Gender Directive provides: With a view to ensuring full equality in practice between men and women, the principle of equal treatment shall not prevent any member state from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to sex. While the 2010 Act was a Bill, Parliaments Joint Committee on Human Rights sent a letter to the Government dated 2 June 2009 raising a number of queries about the Bill, including about the clause which became section 193. The Governments response by letter dated 19 June 2009 explained that the exemptions from anti discrimination law for charities were to be tightened up in the new provision in line with the model already adopted in relation to sex discrimination, so that it would no longer be sufficient for them to discriminate if their charitable instrument allowed for this; now a charity would also need to show that it was justified in discriminating. This would be achieved if it could show that such discrimination is objectively justified (ie under section 193(2)(a)) or is intended to prevent or compensate for disadvantage linked to the protected characteristic in question (ie under section 193(2)(b)). It is clear from this that in proposing the provision in section 193(2) the government intended sub paragraphs (a) and (b) to serve as distinct conditions for the operation of the charitable exemption and that it considered that satisfaction of either of them would constitute justification for discrimination which would meet the requirements of EU law under the Race Directive and the Gender Directive. Under the Race Directive (see recital (17) and article 5) and the Gender Directive (see recital (16) and article 6) it is contemplated that positive action to help disadvantaged sections of the population may be taken by bodies created for that purpose. In the English context, these obviously include charities. The general regime for regulation of charities in English law limits charitable status by reference to defined public goods as set out in section 3 of the Charities Act and, by application of the public benefit test in section 4, ensures that the benefits to be provided by a charity are balanced against any detriment from its activities. Thus, as a result of this regulatory regime, the requirement in section 193(1)(a) of the 2010 Act that the person seeking to benefit from the exemption in section 193 has to act in pursuance of a charitable instrument imposes substantive requirements that the acts in question promote the public interest. This point is emphasised in the guidance on section 193 in the EHRC code of practice, at para 13.35: The public benefit test that all charities must satisfy to gain charitable status may assist, but it will not guarantee that any such restriction meets either of the tests specified in the Act. The Charity Commission for England and Wales and the Scottish Charity Regulator will consider the likely impact of any restriction on beneficiaries in the charitable instrument, and whether such restriction can be justified, in assessing whether the aims of a charity meet the public benefit test. The effect of subsection (2)(b) is to ensure in addition that, in order to be exempt, the provision of benefits is for the purpose of preventing or compensating for a disadvantage linked to the relevant protected characteristic. In the context of general anti discrimination legislation as contained in the 2010 Act, it was abundantly obvious that issues would arise under both EU law and article 14 of the ECHR in relation to activities falling within section 193. Parliament, acting with the benefit of the explanation from the government referred to above, must be taken to have made the assessment that by this combination of conditions the regime it enacted in the 2010 Act satisfied the requirement of proportionality for the purposes of EU law. It must equally be taken to have considered that the regime satisfied the requirement of proportionality for the purposes of the ECHR, in particular as it arises under article 14. This has the benefit for charities that, where they rely on the section 193(2)(b) limb of the exemption, they do not have to produce a separate proportionality justification of their own if challenged. This means that their resources will not have to be used up in this way in meeting challenges which might be brought against them, and since section 193(2)(b) provides a defence with bright line characteristics it is likely to protect them from challenges being brought which can be seen will not succeed. In this way, this limb of the exemption in section 193, as framed, helps to ensure that the scarce resources of charities are channelled through to those who need them, rather than being diverted to meet costs of administration, legal proceedings and threats of legal proceedings. It is also relevant that this is achieved against the background that it is the states, not charities, responsibility to provide essential welfare benefits for all who need them. It is easier to say that Parliament has struck a fair and proportionate balance between the needs of charities (and, more particularly, those who benefit from their activities) and the general interests of the sections of the public who do not so benefit, where those general interests are met out of state resources where there is pressing need. The margin of appreciation to be afforded to Parliament when it has sought to strike a balance between competing interests varies depending on context. Where, as here, Parliament has had its attention directed to the competing interests and to the need for the regime it enacts to strike a balance which is fair and proportionate and has plainly legislated with a view to satisfying that requirement, the margin of appreciation will tend to be wider. A court should accord weight to the judgment made by the democratic legislature on a subject where different views regarding what constitutes a fair balance can reasonably be entertained. The context here is provision of social benefits of various kinds, to be provided by charities out of the scarce resources available to them. When the state provides social welfare benefits, the margin of appreciation afforded to Parliament is wide. Its judgment will be respected in relation to general measures of economic or social strategy unless manifestly without reasonable foundation: see eg Humphreys v Revenue and Customs Comrs [2012] UKSC 18; [2012] 1 WLR 1545, para 19 (Baroness Hale); R (SG) v Secretary of State for Work and Pensions (Child Poverty Action Group and Another intervening) [2015] UKSC 16; [2015] 1 WLR 1449, para 11 (Lord Reed); Gilham v Ministry of Justice [2019] UKSC 44; [2019] 1 WLR 5905, para 34 (Baroness Hale). I accept Mr Grodzinskis submission that this is also the relevant margin of appreciation to be applied in the context of the exemption for charities from the general anti discrimination rules in the 2010 Act. The underlying issue, of allocation of scarce resources to meet a range of needs, is similar to that which is relevant in the context of welfare benefits provided by the state. Allowing the state a wide margin of appreciation in the latter context recognises the legitimacy of such decisions of social and economic policy being taken by a body which has democratic authority and the responsibility for raising taxes and deciding how they are spent. It is also a matter of social and economic policy for Parliament to decide how best to stimulate private benevolence which will allow charities to supplement state provision of welfare benefits. The degree to which charities are given freedom to pursue objectives which their donors regard as important affects the extent to which donors will provide private resources to supplement provision by the state. If donors are not given reasonable assurance that what they give will reach the persons they intend to benefit, they will not give at all. It was a legitimate policy choice by Parliament to fashion the exemption for charities under the section 193(2)(b) limb of section 193 in the way it did, as a relatively bright line rule which would give that assurance to donors. In my judgment, having regard to the relevant margin of appreciation, the fact that charitable provision supplements basic social welfare provision by the state, the general regulation of charities to ensure they provide public benefits, the desirability of ensuring that the resources of charities are not diverted from being used to meet social needs and the way in which Parliament has carefully and deliberately framed the section 193(2)(b) limb of the exemption to meet the proportionality tests in EU law and under the ECHR, that limb of the exemption satisfies the proportionality requirement across the range of cases in which it applies. There is, therefore, clearly no basis on which it would be appropriate for the court to seek to imply into that provision an additional requirement that proportionality should be demonstrated separately by a charity in every, or any, case falling within it. Even if I were wrong in that conclusion, I agree with Lewison LJ (para 53) that it is not possible, as that term is used in section 3(1) of the HRA, to read and give effect to section 193(2)(b) by implying into it an additional proportionality requirement. To do so would make section 193(2)(b) redundant, since then a charity could always in a case covered by that provision rely on the section 193(2)(a) limb of the exemption. The point made by Lewison LJ is strongly reinforced by consideration of the legislative history, set out above. It is clear from the terms of section 193(2) and from that history that Parliament intended the two limbs to be separate and distinct, and that there should be no additional proportionality requirement in section 193(2)(b). To import such a requirement would undermine a fundamental feature of that provision and would go against the grain of what Parliament intended; therefore, section 3(1) of the HRA does not allow section 193(2)(b) to be read and given effect in this way: see Ghaidan v Godin Mendoza [2004] UKHL 30; [2004] 2 AC 557, in particular at para 33 (Lord Nicholls of Birkenhead) and paras 113 114 and 121 124 (Lord Rodger of Earlsferry). This point is reinforced by the fact that where Parliament intended a proportionality requirement to apply in any provision of the 2010 Act it clearly said so: see also the express provisions setting out a proportionality requirement in sections 13(2), 19(2), 158(2) and 159. The omission of such a requirement from section 193(2)(b) was a deliberate choice by Parliament which constituted a fundamental feature of the legislation. The same reasoning prevents the court from interpreting section 193(2)(b) as including a proportionality requirement by reason of the Marleasing interpretive obligation in EU law. As with section 3(1) of the HRA, that obligation only requires and permits a sympathetic construction of national legislation to be adopted so as to produce compatibility with EU law when it is possible for the national legislation to be interpreted in that way. The analogy with section 3(1) of the HRA is a close one and the boundaries of the interpretive obligation are essentially the same: see Ghaidan v Godin Mendoza, paras 45 (Lord Steyn), 122 (Lord Rodger) and 145 (Baroness Hale). In any event, to the extent that Mr Wise sought to rely on the Race Directive and the Marleasing interpretive obligation, his submission fails for the reasons alluded to by Lewison LJ at para 54. No right of the appellant was engaged under the Race Directive, as I have also concluded under issue (5) above. It is true that, as Lewison LJ noted, other people in other circumstances might have rights under that Directive which are affected by a charitys actions taken in reliance on section 193(2)(b); but that does not assist the appellant in her case. The proper approach to construction is that legislation should be read and given effect in a particular case according to its ordinary meaning, unless the person who is affected by it can show that this would be incompatible with their Convention rights under the HRA or some provision of EU law as applied to their case. Only then do the special interpretive obligations under section 3(1) of the HRA or under the Marleasing principle come into play to authorise the court to search for a conforming interpretation at variance with the ordinary meaning of the legislation. This means that the same legislative provision might be given a different interpretation in different cases, depending on whether Convention rights or EU law are applicable in the case or not. Although at first glance this might seem odd, in fact it is not. It simply reflects the fact that in the one case circumstances are such that an additional interpretive obligation has to be taken into account, but in the other case no such obligation is in play: see R (Hurst) v London Northern District Coroner [2007] UKHL 13; [2007] 2 AC 189, para 1 (Lord Bingham of Cornhill), paras 9 and 12 15 (Lord Rodger) and para 52 (Lord Brown of Eaton under Heywood); and Gingi v Secretary of State for Work and Pensions [2001] EWCA Civ 1685; [2002] 1 CMLR 20, paras 41 47 per Arden LJ (as she then was). If the position were otherwise, Convention rights and rights under EU law would be given disproportionate effect in domestic law, and statutory interpretation would become an exercise in the imaginative construction of theoretical cases in which such rights might be in issue in order to change the interpretation of legislation in cases where they are not. Like Lewison LJ, I have no hesitation in rejecting Mr Wises further argument that it is necessary to imply a proportionality requirement into section 193(2)(b) to avoid absurdity. As explained above, there is nothing absurd about the way in which Parliament has framed the section 193(2)(b) limb of the exemption for charities. Having reached the conclusion that the interpretation of section 193(2)(b) is clear whether or not article 14 of the ECHR is applicable, it is not necessary to reach a view on issue (2) (whether the current circumstances fall within the ambit of article 8). It has often been observed that the question of what falls within the ambit of article 8 and other Convention rights so as to bring article 14 into operation is a difficult and rather opaque area: see the review of the authorities in R (Joint Council for the Welfare of Immigrants) v Secretary of State for the Home Department [2020] EWCA Civ 542, paras 97 111 (Hickinbottom LJ). I think this question should be left to be decided in another case where it may be determinative. We were not taken to all the relevant authorities and there was little debate before us on this issue, so I do not think we should venture to try to make any definitive statement about it. However, this should not be taken as endorsement of the conclusion of the Court of Appeal that the present case falls outside the ambit of article 8. A number of factors might be relevant in relation to that issue. The fact that the appellant and her children were already housed, on which the Court of Appeal placed weight, is one. But I have reservations whether that factor is necessarily determinative in circumstances where the adequacy of the living accommodation available to them as a family, as compared with others, is in issue. On the other hand, it is also potentially relevant that AIHA is not part of the state and that no case has been made out that it is a public authority within the meaning of section 6 of the HRA, so that what is in issue is the ambit of article 8 so far as concerns positive obligations of the state under that provision to intervene in relationships between private persons. It might be argued that this makes the connection with article 8 more tenuous, and that such a tenuous connection is not sufficient. I think that we should leave the point open in this case. Conclusion For the reasons given above, I would dismiss the appeal. In summary, the judgment of the Divisional Court on the issue of proportionality, in so far as it is relevant to the statutory defences in sections 158 and 193 of the 2010 Act, cannot be faulted. Accordingly, those defences have rightly been found to apply in relation to AIHA. Further and in any event, the Court of Appeal was right to conclude that, on its proper interpretation, the statutory defence based on section 193(2)(b) of the 2010 Act does not include an implied requirement of proportionality. Accordingly, the Court of Appeal was right to conclude that AIHA benefited from that defence, whatever the position on the issue of proportionality. The appellants new claim based on the Race Directive fails. LADY ARDEN: The Court of Appeal in this case was careful to hold that in relation to the issue as to the proportionality of AIHAs allocation policy the Divisional Court was entitled to make its evaluation of the relevant factors and that there was no basis on which its evaluation could be set aside (per Lewison LJ at paras 63 to 68) for the reasons which Lewison LJ gave. Lord Sales, giving the first judgment in this case, endorses that conclusion, as do I. Lord Sales then sets out the reasons why he agrees with the Divisional Court at paras 76 to 88. What falls from my Lord is illuminating and valuable, but it does not in my judgment diminish the importance of the point made by Lewison LJ that the evaluation made by the Divisional Court was one which they were entitled to make and could not be set aside on appeal. The point made by Lewison LJ is not changed by the fact that the appellate court might have reached some other conclusion, nor yet by the fact that the appellate court would have reached the same conclusion. The function of the appellate court is simply one of review. It follows that it is not necessary for this court to express its own view, nor can its view alter the conclusion arrived at by the Divisional Court. Indeed, I would at least in the generality of cases, agree with Lewison LJ at para 66 of his judgment that if the court at first instance makes no error and there is no flaw in its judgment, the appellate court should not make its own assessment of proportionality. There may be exceptional circumstances when it is necessary to do so but for my part it has not been suggested that this case was one of them. On that basis, I agree with the judgment of Lord Sales.

UK-Abs

This appeal is about the application of anti discrimination law to charities, where they are established to provide benefits (in this case, social housing) for particular groups which are the subject of their charitable objectives. The relevant anti discrimination laws are contained in the Equality Act 2010 and Council Directive 2000/43/EC of 29 June 2000 (the Race Directive). The charitable objective of Agudas Israel Housing Association Ltd (the Housing Charity) is to make social housing available primarily for members of the Orthodox Jewish community in Hackney, in particular the Haredi community. It makes properties available via an online portal operated by Hackney London Borough Council (the Council), which is open to applicants for social housing whom the Council has identified as having a priority need. The Council cannot compel the Housing Charity to take tenants who do not fall within scope of its charitable objective and its selection criteria. This, combined with a significant surplus of need for social housing on the part of the Orthodox Jewish community, means that in practice the Council only nominates and the Housing Charity only accepts members of that community for the Housing Charitys properties. The social housing provided by the Housing Charity makes up less than 1% of the social housing available in Hackney. The principal appellant (the appellant) is a single mother with four small children, two of whom have autism. The Council identified the appellant as having a priority need for social housing in a larger property, and she has now been housed by the Council in such a property. However, she had to wait longer to be allocated suitable housing as she is not a member of the Orthodox Jewish community and so larger properties owned by the Housing Charity which became vacant were not available to her. She issued proceedings against the Council and the Housing Charity, alleging that she had thereby suffered unlawful direct discrimination on grounds of race or religion contrary to the Equality Act 2010. The Divisional Court dismissed the claim and the Court of Appeal dismissed her appeal. The appellant now appeals to this Court. She was given permission to add to her claim based on the Equality Act 2010 a new claim that the allocation policy of the Housing Charity contravened the Race Directive by unlawfully discriminating against her on the grounds of race or ethnic origin. The appeal turns on whether the Housing Charity acted unlawfully or not in restricting access to its stock of social housing. The Supreme Court unanimously dismisses the appeal. Lord Sales gives the main judgment (with which Lord Reed, Lord Kerr and Lord Kitchen agree). Lady Arden gives a concurring judgment. Equality Act 2010 The Equality Act 2010 makes it unlawful to discriminate directly against any person on the basis of certain characteristics, known as protected characteristics. These include race and religion or belief [17] [18]. However, the Act sets out exemptions where certain actions will not be considered as unlawful direct discrimination. Section 158 provides one such exemption where positive action addresses in a proportionate manner needs or disadvantages connected to a protected characteristic [19]. Section 193 sets out two further exemptions. Section 193(2)(a) permits charities to restrict benefits to those with a protected characteristic if that restriction is a proportionate means of achieving a legitimate aim and section 193(2)(b) permits charities to restrict benefits to those who share a protected characteristic if the restriction seeks to prevent or compensate for a disadvantage linked to the characteristic [21]. Lord Sales upholds the lower courts findings that the Housing Charitys allocation policy is proportionate and lawful under sections 158 and 193(2)(a) of the Equality Act 2010. A proportionality assessment first requires the identification of a legitimate aim and, secondly, consideration of whether the measures taken to promote that aim are proportionate, having regard to other interests at stake [65]. The dispute in this case centres on what constitutes a legitimate aim [60] [72]. As found by the Divisional Court and the Court of Appeal, the legitimate aims here include the minimisation of disadvantages which are connected to the Haredi communitys religious identity and counteracting discrimination which they suffer, including in the private housing market, and the fulfilment of relevant needs which are particular to that community [66]. The Housing Charity was entitled to adopt a clear and strict rule about who could and could not apply for its social housing, which meant that it was made available just for members of the Orthodox Jewish community, to ensure that its charitable activities were focused on that community, so that its activities did in fact fulfil its charitable objective to alleviate the problems of that community [76] [87]. Lord Sales holds that the Divisional Court correctly considered the Housing Charitys allocation policy in the light of the applicable legal framework and, accordingly, was entitled to find it to be proportionate and lawful under these statutory exemptions. Lord Sales makes his own assessment of proportionality [76] [87], which is in agreement with that of the Divisional Court [73]. Lord Sales holds that, in any event, the Court of Appeal was right to say that the Divisional Courts finding of proportionality could only be set aside if it had misdirected itself or reached a decision which was wrong. Applying this approach, he holds that the Divisional Court had been entitled to make this finding, with the result that its decision should be upheld on appeal [74] [75]. In her concurring judgment, Lady Arden emphasises that an appellate court should generally not make its own assessment of proportionality in such circumstances [120], and with this caveat she agrees with the judgment of Lord Sales [121]. As regards the exemption in section 193(2)(b), the Court dismisses the argument for the appellants that the provision is subject to an implied proportionality requirement. There is no sound basis on which such a requirement could be read into the provision [97]. First, even on the assumption that the case is within the ambit of Article 8 of the European Convention on Human Rights (the ECHR), on the right to respect for private and family life, so that Article 14 of the ECHR (non discrimination) is applicable, any proportionality requirement inherent in that provision is satisfied by the structure of section 193 itself; Parliament was entitled to create a clear rule applicable to charities in the interests of conserving their resources for use in fulfilling their charitable objectives, having regard, among other things, to the regulation of charities under the Charities Act 2011 to ensure they operate in the public interest and the wide margin of appreciation accorded to Parliament, as the body with democratic authority, in setting social and economic policy, including encouragement for giving to charity [97] [110]. Secondly, on the same assumption that the case falls within the ambit of Article 8 of the ECHR, even if the structure of section 193 itself did not satisfy any relevant proportionality standard, the drafting of the provision and the policy underlying it are so clear that it would not be possible to read into it an additional proportionality requirement [111] [115]. In the circumstances, therefore, it is not necessary to resolve the question whether the case falls within the ambit of Article 8 of the ECHR and the Court prefers to leave that issue open [96, 116]. Section 193(2)(b) should be applied according to its express terms. It is common ground that, on this basis, the requirements of section 193(2)(b) are satisfied in this case [50]. Even if a proportionality requirement could be read into the provision, it follows from the decision regarding proportionality in relation to section 158 and section 193(2)(a) that it would have been satisfied [55, 88]. The Race Directive The Race Directive provides that discrimination on grounds of race or ethnic origin must be unlawful, particularly in relation to housing [89]. The Court finds that the Housing Charity is not in contravention of this directive for the simple reason that its allocation policy differentiates on the basis of religious observance and not race or ethnic origin [89] [90].

This case concerns the use in a criminal trial of evidence obtained by members of the public acting as so called paedophile hunter (PH) groups, and whether this is compatible with the accused persons rights under article 8 of the European Convention on Human Rights (the ECHR). PH groups impersonate children online to lure persons into making inappropriate or sexualised communications with them over the internet, and then provide the material generated by such contact to the police. Article 8 provides: 1. Everyone has the right to respect for his private and family life, his home and his correspondence. 2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others. An adult member of a PH group, acting as a decoy, created a fake profile on the Grindr dating application using a photograph of a boy aged about 13 years old as a lure to attract communications from persons with a sexual interest in children. The appellant entered into communication with the decoy, who stated in the course of exchanges first on Grindr and continued on the WhatsApp messaging platform that he was 13 years old. In the belief that the decoy was a child, the appellant sent him a picture of his erect penis. The appellant also sent him messages to arrange a meeting. When the appellant arrived for the meeting, he was confronted by members of the decoys PH group who remained with him until the police arrived. Copies of the appellants communications with the decoy were provided to the police. The respondent, as public prosecutor, charged the appellant with offences related to sexually motivated communications with a child: (i) an offence of attempting to cause an older child (ie a child who has attained the age of 13 years, but has not yet attained the age of 16 years) to look at a sexual image, for the purposes of obtaining sexual gratification (contrary to section 33 of the Sexual Offences (Scotland) Act 2009 the 2009 Act); (ii) an offence of attempting to communicate indecently with an older child (contrary to section 34 of the 2009 Act); and (iii) an offence of attempting to meet with a child for the purpose of engaging in unlawful sexual activity (contrary to section 1 of the Protection of Children and the Prevention of Sexual Offences (Scotland) Act 2005 the 2005 Act). I will refer to these together as the charges. In each case, the charge was put in terms of an attempt to commit the offence, because the appellant believed the decoy was a child whereas he was in fact an adult. After indictment on the charges in Glasgow Sheriff Court, the appellant lodged a preliminary minute objecting to the admissibility of the evidence sought to be relied upon by the respondent on the basis that it had been obtained by covert means without authorisation under the Regulation of Investigatory Powers (Scotland) Act 2000 (RIPSA). The appellant also lodged a minute objecting to the admissibility of the evidence provided by the PH group on the basis that it was obtained covertly without authorisation or reasonable suspicion of criminality in violation of his rights under article 8. By a ruling dated 30 July 2018, after a hearing conducted on the basis of agreed facts (as set out below), the Sheriff repelled the appellants objections to the admissibility of the evidence provided by the PH group. Later, at a trial on 29 and 30 August 2018, the respondent led evidence from the decoy and two police officers. The appellant did not lead any evidence. He was convicted on each of the charges. At a later hearing, the appellant was sentenced to 12 months imprisonment on each charge, to be served consecutively. He was also made subject to the notification requirements of section 92(2) of the Sexual Offences Act 2003 for a period of ten years. The appellant appealed against his conviction to the High Court of Justiciary (the High Court). He contended that the Sheriff should have found that the evidence provided by the PH group was obtained in breach of the requirements of RIPSA, that his rights under article 8 in relation to respect for his private life and correspondence were violated by admission of that evidence and that the Sheriff should have excluded it. The appellants appeal was heard in conjunction with the appeal in another case, which is not relevant for present purposes. By an interlocutor dated 20 September 2019 the High Court (the Lord Justice General, Lord Brodie and Lord Malcolm) refused both appeals. It granted the appellant permission to appeal to this court in relation to certain compatibility issues. The appeal on the compatibility issues Article 8 is a Convention right for the purposes of the Human Rights Act 1998 (the HRA). Section 6(1) of the HRA provides that [i]t is unlawful for a public authority to act in a way which is incompatible with a Convention right (this is subject to certain exceptions which are not relevant in this case). A prosecuting authority is a public authority. A court also is a public authority for these purposes: section 6(3)(a) of the HRA. The case comes before this court by way of an appeal on compatibility issues pursuant to section 288AA of the Criminal Procedure (Scotland) Act 1995. So far as is relevant for present purposes, a compatibility issue means a question, arising in criminal proceedings, as to whether a public authority has acted in a way which is made unlawful by section 6(1) of the HRA: see section 288AA(4), read with section 288ZA(2). On an appeal under section 288AA, the powers of the Supreme Court are exercisable only for the purpose of determining the compatibility issue (subsection (2)(a)); when it has determined the compatibility issue the Supreme Court must remit the proceedings to the High Court (subsection (3)). An appeal under section 288AA may be brought only with permission given by the High Court or by the Supreme Court (subsection (5)). In this case, the High Court has granted permission to appeal in relation to its determination in the criminal proceedings against the appellant of two compatibility issues, as follows: 1. whether, in respect of the type of communications used by the appellant and the PH group, article 8 rights may be interfered with by their use as evidence in a public prosecution of the appellant for a relevant offence; and 2. the extent to which the obligation on the state, to provide adequate protection for article 8 rights, is incompatible with the use by a public prosecutor of material supplied by PH groups in investigating and prosecuting crime. As should be clear, this is not a full appeal, but an appeal limited to these compatibility issues. Factual background and the judgment of the High Court In his ruling on 30 July 2018 the Sheriff set out the agreed facts as follows: 2. The Crown witness, Paul Devine, is a volunteer with Groom Resisters Scotland, an organisation which aims to protect children by catching online predators. The organisation consists of decoys and hunters. Decoys create fake online personas with a general appearance of being under the age of 16. They remain in character as someone aged less than 16 in all communications with the public. In the event of a member of the public having apparently engaged in a sexual conversation with a decoy, a face to face meeting will be arranged at which a hunter or hunters will be present, who will then record and film the member of the public, while confronting them regarding the persons prior communication with the decoy persona. This recording may also be made available on the internet live, so that interested parties can see the confrontation take place. The video will also be uploaded onto various websites in order that it may be viewed by others. The organisation makes contact with the police at or after the time of the confrontation. The sexual communications between the decoy and the member of the public concerned, as well as the recording/film, of that persons confrontation with the hunters or extracts therefrom, are disclosed to the police for investigation. 3. Groom Resisters Scotland is one of several organisations deploying similar operating methods which operate in Scotland and other parts of the United Kingdom. The police are aware that there are a number of hunter organisations operating in Scotland and across the United Kingdom, and evidence obtained from those organisations has led to a number of criminal investigations and prosecutions. In the present case the crown witness Devine, acted as a 4. decoy. Groom Resisters Scotland provided him with photographs of a boy aged approximately 13 years old and he created an online profile on an App named Grindr, a forum through which males apparently can arrange to meet one another, inter alia, for sexual purposes. The terms and conditions of that App specify that users must be aged 18 or over. There was communication between the witness Devine, as the decoy and the minuter [the appellant], wherein sexual images and sexual written communications were sent by the minuter to the decoy. The decoy shared fake personal details with the minuter, staying in character as a 13 year old boy. During the course of communications with the minuter, the decoys Grindr account was blocked and could no longer be used. There was further communication between the decoy and the minuter on WhatsApp and ultimately, arrangements were made between the minuter and the decoy for them to meet in person. The decoy advised two of the hunters in Groom Resisters Scotland, namely Crown witnesses Carling and Constable of these arrangements. The Witnesses Carling and Constable then attended the meeting place at the arranged time and confronted the minuter, broadcasting the confrontation live on Facebook. Film of the confrontation has since been posted onto social media. During the confrontation the police were contacted by Groom Resisters Scotland. Police officers attended during the ongoing confrontation between the minuter and the hunters and Groom Resisters Scotland subsequently provided the police with extracts of the communications between the minuter and the decoy and the minuter and the hunters. The High Court, in its judgment, referred to exchanges taking place in online chat rooms; but the parties agree that this was a slip. All the relevant exchanges took place in communications between the appellant and the decoy which were not shared with others. The exchanges using the WhatsApp messaging platform were protected by end to end encryption. The evidence led at trial confirmed the account given above. The appellant initially contacted the decoy on Grindr on 18 January 2018. The record of the communications between them provided by the PH group showed that from the initial point of contact by the appellant, sexually explicit questions and statements were sent by the appellant to the decoy, as were sexually explicit photographs, including, at the outset, a photograph of the appellant holding his erect penis, to which the decoy responded stating that he was 13. Over the period to 31 January, when the meeting which was arranged by the appellant took place, sexual communications continued to be sent by the appellant to the decoy. During that period the decoy remained in character as a 13 year old boy. All sexual communications came from the appellant. The decoy responded to the appellants messages, including answering questions posed of him about his sexuality. The appellant asked the decoy to delete the messages which the decoy agreed to do. After some time, the appellant asked the decoy to move the conversation to WhatsApp and they swapped telephone numbers to enable this to happen. Entrapment was not in issue in the case, so no examination of the law in relation to that topic is needed. The appellant complained that the circumstances of the case were such that authorisation was required to be obtained under RIPSA for the decoy to act as a covert human intelligence source within the meaning of that Act; that no such authorisation had been obtained; and that as a result the evidence of the decoy had been obtained unlawfully. However, the Sheriff and the High Court held that RIPSA had no application in the circumstances of this case, since the decoy acted on his own initiative and not at the instigation of the police (paras 52 53 of the High Courts judgment). This part of the High Courts judgment is not a matter which affects the compatibility issues which this court has to decide. The Dean of Faculty, Mr Gordon Jackson QC, for the appellant, sought to raise the RIPSA issue at the hearing before us in order to develop an argument that the acquisition and use of the evidence of the communications between the appellant and the decoy were not in accordance with the law, as is required by article 8(2) where there is an interference with rights under article 8(1). However, the compatibility issues to which the appeal relates do not turn on the application of article 8(2), but on the prior question of the extent and effect of the rights conferred by article 8(1). There was also some debate at the hearing in this court as to whether the appellant thought that the decoy was a child at the time he sent his first message to him. The Dean of Faculty claimed that the appellant only learned this later in the course of their exchanges. He emphasised that according to Grindrs terms a person can only have a profile on the site if they are 18 or over, and observed that people putting up profiles on dating sites do not always use true photographs of themselves. The Solicitor General for Scotland, Ms Alison Di Rollo QC, for the respondent, did not accept the Dean of Facultys claim. She pointed out that the profile photograph used by the decoy appeared to be of a child, that the standard terms of dating websites regarding age are not always observed by persons using those sites, and that the appellant was told by the decoy that he was 13 years old very early in the exchanges and expressed no surprise and was in no way deterred from continuing to send sexualized messages. This court is not in a position to resolve this issue of fact and it is not necessary to do so for the purposes of this appeal. The charges in the indictment related to communications across the period from 18 to 31 January 2018, without dividing up the communications more precisely in respect of their timing. The trial was conducted on that basis, without any need for findings to be made as to the appellants precise state of belief as to the age of the person with whom he was communicating at the outset of that period. The appellant did not give evidence about that. Nor did he make any submissions in the Sheriff Court or the High Court about this point, or suggest that it was a significant matter in relation to what are now the compatibility issues before this court. Accordingly, it is appropriate to proceed on the footing that throughout the whole or substantially the whole of the course of the relevant communications between the appellant and the decoy, the appellant believed the decoy to be a child aged 13. The High Court noted that the ECHR, and article 8 in particular, is primarily concerned with the protection of the rights of individuals from interference by the state. However, the High Court also observed (para 47) that, in addition to its prohibitive aspect, article 8 imposes a positive obligation on the state to provide a suitable framework within which an individuals article 8(1) rights are protected from interference by other private individuals, including employers, citing Kpke v Germany (2011) 53 EHRR SE 26 (p 249), para 41, and the judgment of the Third Section of the ECtHR in Ribalda v Spain CE:ECHR:2018:0109JUD000187413, para 54 (there is now a Grand Chamber judgment in this case, dated 17 October 2019, to which I refer below). The High Court held (para 48) that since the decoy acted on his own behalf as a private citizen and not at the instigation of the police or any other public authority, the gathering of the evidence of the communications by him was not a case of interference by the state with the appellants correspondence. The appellant had sent his messages to the decoy, who had received them and passed them on to the police: There was no surveillance or interception (AD v The Netherlands, European Commission on Human Rights [CE:ECHR:1994:0111DEC002196293] THE LAW at para 2 citing G, S and M v Austria (App no 9614/81), unreported, European Commission on Human Rights, 12 October 1983). [The appellant was] fully participating in the communications and [was] aware that they were reaching the intended recipient []. The messages had reached their destination and in due course they were handed to the police for the purposes of prosecuting a crime. As regards the appellants private life, the High Court was prepared to accept (para 49) that, at a general level, a persons internet chats fall within the broad ambit of article 8(1) (Garamukanwa v United Kingdom [2019] IRLR 853, ECtHR, para 22), but went on to say that given the lack of any longstanding pre existing relationship between the appellant and the person with whom he thought he was communicating, he had no reasonable expectation that the communications would remain confidential or private (Halford v United Kingdom (1997) 24 EHRR 523, para 45; Ribalda v Spain, judgment of the Third Section, para 57; Garamukanwa v United Kingdom, para 23). The appellant had voluntarily engaged in his communications on Grindr and WhatsApp with a person he believed to be a child, for sexual purposes. By the time the police were informed, the criminal activity had already been carried out. The court said (para 50) that even if there had been a reasonable expectation of privacy or confidentiality on the part of the appellant, the interference with the appellants right to respect for his private life would have been justified under article 8(2). There was no involvement of the state prior to the evidence of the communications being obtained; the evidence was delivered to the police for the purposes of prosecuting significant criminal activities; and the admission of the evidence of the communications to proof at trial would be subject to the common law rules of fairness. The activities of the decoy were subject to general legal constraints applicable to him as a private individual at common law and under the criminal law, and his actions were justifiable as being for legitimate purposes of the prevention of crime and the protection of the rights and freedoms of others. The court further observed (para 51) that even if there had been a violation of the appellants article 8 right to private life, it would not necessarily follow that the evidence of the communications provided by the decoy should have been excluded from admission to proof at trial. The question of exclusion or not of evidence gathered in breach of a persons rights under article 8 would depend upon whether it was possible to have a fair trial, on application of article 6 of the ECHR (right to a fair trial) and domestic law rules to safeguard the fairness of criminal proceedings. In the courts view, given the protections available under both these regimes, there was no unfairness in the criminal proceedings against the appellant arising from the admission of the evidence provided by the decoy. Discussion Issue (1): were article 8 rights interfered with by the use of the communications provided by the PH group as evidence in the public prosecution of the appellant? This issue is directed to consideration of the rights of the appellant under article 8(1) which are said to be relevant in the context of the circumstances of this case. In line with the submissions made on behalf of the appellant in the courts below, the Dean of Faculty submits that there was an interference with the appellants rights to respect for his private life and for his correspondence under article 8(1). On the basis that there was an interference with those rights, the High Court should have held that the respondent was required to show that such interference was justified under article 8(2). In general terms, article 8 reflects two fundamental values. These were summarised by Baroness Hale of Richmond in R (Countryside Alliance) v Attorney General [2007] UKHL 52; [2008] 1 AC 719, para 116, as the inviolability of the home and personal communications from official snooping, entry and interference without a very good reason and the inviolability of the personal and psychological space within which each individual develops his or her own sense of self and relationships with other people. The right to respect for private life and correspondence in article 8(1) may be engaged with reference to the first of these values even where the conduct engaged in by an individual is not in itself worthy of respect in accordance with the scheme of the ECHR: see, eg, Benedik v Slovenia, CE:ECHR:2018:0424JUD006235714, in which the ECtHR found there was an interference with the right of respect for private life in relation to a police investigation into the downloading and copying of child pornography by the applicant via the internet. In light of the history and objects of the ECHR, state surveillance of private communications is a matter of special concern and state authorities have a particular responsibility to respect a persons private life and correspondence. In the present case, however, as the High Court emphasised, the evidence of the communications between the appellant and the decoy was gathered by a private individual acting on his own behalf, and not by means of surveillance by state authorities, nor by a private individual acting on behalf of or at the instigation of a public authority (the type of situation addressed in MM v The Netherlands (2004) 39 EHRR 19). Therefore, it is not necessary to say more in this judgment about the first value referred to by Baroness Hale in Countryside Alliance. For reasons which reflect those given by the High Court, in the circumstances of this case I do not accept the Dean of Facultys submission that there was any interference with the appellants rights under article 8(1). In my view, there was no interference with those rights at any stage, whether by reason of (a) the actions of the decoy in attracting then recording and passing on evidence of the relevant communications; (b) the actions of the police in taking investigative action based on that evidence and passing it on to the respondent; (c) the actions of the respondent in presenting charges against the appellant based on that evidence and then relying upon it at trial; or (d) the actions of the Sheriff Court in admitting the evidence at trial and convicting the appellant on the basis of it. The compatibility issue on this appeal relates particularly to (c). However, it is relevant to keep in mind the other stages as well, as they are connected with each other in the sense that they are all relevant to bringing the appellants conduct to the attention of the public authorities with responsibility for ensuring that the criminal justice system was brought into proper operation in relation to that conduct. The position is essentially the same in this case in relation to both the right to respect for private life and the right to respect for correspondence under article 8(1), so they can be considered together. In my judgment, there are two reasons why the appellants rights under article 8(1) in relation to respect for private life and respect for his correspondence were not interfered with in the circumstances of this case: (i) the nature of the communications from the appellant to the decoy, whom he believed to be a child, was not such as was capable of making them worthy of respect for the purposes of the application of the ECHR; and (ii) the appellant had no reasonable expectation of privacy in relation to the communications, with the result that he enjoyed no relevant protection under article 8(1) as regards their disclosure to and use by the respondent and the other public authorities referred to above. I develop these points below. (i) The nature of the communications by the appellant An individuals rights under article 8(1), so far as relevant here, are to respect for his private life and his correspondence. In my view, it is implicit in this formulation that the features of his private life and his correspondence for which protection is claimed under article 8(1) should be capable of respect within the scheme of values which the ECHR exists to protect and promote. Part of that scheme is the second fundamental value protected by article 8 identified by Baroness Hale in Countryside Alliance, referred to above. In relation to that aspect of article 8, states party to the ECHR have a special responsibility to protect children against sexual exploitation by adults. In X and Y v The Netherlands (1986) 8 EHRR 235, a mentally handicapped girl aged 16, Miss Y, was forced into sexual intercourse by an adult. This behaviour did not constitute a criminal offence under Dutch law at the time. The European Court of Human Rights (ECtHR) held that by reason of this lacuna in the criminal law, the Netherlands had violated the right of Miss Y to respect for her private life under article 8(1); this was stated to be a concept which covers the physical and moral integrity of the person, including his or her sexual life (para 22). At para 23, the ECtHR recalled, with reference to the case of Airey v Ireland (1979 1980) 2 EHRR 305, para 32, that: although the object of article 8 is essentially that of protecting the individual against arbitrary interference by the public authorities, it does not merely compel the state to abstain from such interference: in addition to this primarily negative undertaking, there may be positive obligations inherent in an effective respect for private or family life. These obligations may involve the adoption of measures designed to secure respect for private life even in the sphere of the relations of individuals between themselves. At para 24 the ECtHR observed that the choice of the means calculated to secure compliance with article 8 in the sphere of the relations of individuals between themselves is in principle a matter that falls within the contracting states margin of appreciation; and there are different ways of ensuring respect for private life, and the nature of the states obligation will depend on the particular aspect of private life that is at issue. However, although recourse to the criminal law was not necessarily the only answer in every case, and Miss Y had relevant rights under civil law to claim damages or injunctive relief, the ECtHR said this at para 27: The court finds that the protection afforded by the civil law in the case of wrongdoing of the kind inflicted on Miss Y is insufficient. This is a case where fundamental values and essential aspects of private life are at stake. Effective deterrence is indispensable in this area and it can be achieved only by criminal law provisions; indeed, it is by such provisions that the matter is normally regulated. The Dutch criminal code failed to provide Miss Y with practical and effective protection (para 30), with the result that her rights under article 8 had been violated. See also MC v Bulgaria (2005) 40 EHRR 20, para 150: the positive obligations on the state inherent in the right to effective respect for private life under article 8 include that effective deterrence against grave acts such as rape, where fundamental values and essential aspects of private life are at stake, requires efficient criminal law provisions. Children and other vulnerable individuals, in particular, are entitled to effective protection. In KU v Finland (2009) 48 EHRR 52 an unknown person placed an advert of a sexual nature on an internet dating site, ostensibly on behalf of the applicant, a 12 year old boy, without his knowledge or consent, which suggested that he was looking for an intimate relationship with a boy of his own age or older. The applicant was contacted by an older man. The applicants father requested that the police take action to identify the person who had placed the advert, but the internet service provider refused to provide details to identify him and the Finnish courts, applying national privacy laws, refused to order it to do so. The ECtHR held that in these circumstances there had been a violation of the applicants right to respect for his private life under article 8, by reason of the lack of effective criminal sanctions against the perpetrator. The ECtHR again highlighted, at para 41, that the concept of private life in article 8(1) covers the physical and moral integrity of the person, and in that regard referred to the potential threat to the applicants physical and mental welfare brought about by the impugned situation and to his vulnerability in view of his young age. At paras 42 43 the ECtHR reiterated that there may be positive obligations inherent in an effective respect for private life, and that while the choice of means to comply with such obligations will generally be a matter falling within a contracting states margin of appreciation, effective deterrence against grave acts, where fundamental values and essential aspects of private life are at stake, requires efficient criminal law provisions. At paras 45 46 and 49, the ECtHR said this (omitting footnotes): 45. The Court considers that, while this case might not attain the seriousness of [X and Y v The Netherlands (1986) 8 EHRR 235], where a breach of article 8 arose from the lack of an effective criminal sanction for the rape of a handicapped girl, it cannot be treated as trivial. The act was criminal, involved a minor and made him a target for approaches by paedophiles. 46. The Government conceded that at the time the operator of the server could not be ordered to provide information identifying the offender. It argued that protection was provided by the mere existence of the criminal offence of calumny and by the possibility of bringing criminal charges or an action for damages against the server operator. As to the former, the court notes that the existence of an offence has limited deterrent effects if there is no means to identify the actual offender and to bring him to justice. Here, the court notes that it has not excluded the possibility that the states positive obligations under article 8 to safeguard the individuals physical or moral integrity may extend to questions relating to the effectiveness of a criminal investigation even where the criminal liability of agents of the state is not at issue. For the court, states have a positive obligation inherent in article 8 of the Convention to criminalise offences against the person including attempts and to reinforce the deterrent effect of criminalisation by applying criminal law provisions in practice through effective investigation and prosecution. Where the physical and moral welfare of a child is threatened such injunction assumes even greater importance. The court recalls in this connection that sexual abuse is unquestionably an abhorrent type of wrongdoing, with debilitating effects on its victims. Children and other vulnerable individuals are entitled to state protection, in the form of effective deterrence, from such grave types of interference with essential aspects of their private lives. 49. The court considers that practical and effective protection of the applicant required that effective steps be taken to identify and prosecute the perpetrator, that is, the person who placed the advertisement. In the instant case such protection was not afforded. An effective investigation could never be launched because of an overriding requirement of confidentiality. Although freedom of expression and confidentiality of communications are primary considerations and users of telecommunications and internet services must have a guarantee that their own privacy and freedom of expression will be respected, such guarantee cannot be absolute and must yield on occasion to other legitimate imperatives, such as the prevention of disorder or crime or the protection of the rights and freedoms of others. Without prejudice to the question whether the conduct of the person who placed the offending advertisement on the internet can attract the protection of articles 8 and 10, having regard to its reprehensible nature, it is nonetheless the task of the legislator to provide the framework for reconciling the various claims which compete for protection in this context. Such framework was not however in place at the material time, with the result that Finlands positive obligation with respect to the applicant could not be discharged. In the present case, it is an open question whether the United Kingdom had a positive obligation under article 8 which required it to legislate in the way it did in sections 33 and 34 of the 2009 Act and in section 1 of the 2005 Act, or whether it could, under its margin of appreciation, have chosen not to criminalise the conduct set out in those provisions. In the absence of legislation to create those particular offences, there would still have been other criminal offences which offered a measure of protection for the moral and physical integrity of children against the predations of paedophiles. However, it is clear that these provisions in the 2009 Act and the 2005 Act were enacted to enhance the protection for children in relation to grave types of interference with essential aspects of their private lives (to use the language of the ECtHR in KU v Finland). The assessment of the Scottish Parliament is that having such offences on the statute book is a necessary element in the fabric of protection afforded to children. Whilst, as in KU v Finland, the conduct which is criminalised by these provisions is not as serious as that in X and Y v The Netherlands, in each case it involves direct sexualised communication with a child, including (in the case of section 1 of the 2005 Act) as a prelude to sexual contact between a paedophile and a child. The offences in question provide protection for children against conduct involving them directly, by contrast with the more indirect form of protection at issue in KU v Finland, and they are at least as important as the provisions of criminal law in that case. In my view, the Scottish Parliament having enacted such protection for children by way of the criminal law, it is an aspect of the positive obligation of the state under article 8 to ensure that there can be effective enforcement of the law as contained in these provisions, in much the same way as in KU v Finland. In KU v Finland, the ECtHR, at para 49, put to one side the question whether the conduct of the person who placed the offending advertisement on the internet could attract the protection of article 8 (and also the right to freedom of expression under article 10 of the ECHR), having regard to its reprehensible nature. In the present case, however, as noted above, the conduct which is made the subject of the criminal offences that are in issue involves direct, sexually motivated contact between a paedophile and a child. In my view, in the absence of any question of state surveillance or interception of communications, and where all that is in issue is the balance of the interests of a person engaging in such conduct and of the children who are the recipients (or intended recipients) of the relevant communications, the reprehensible nature of the communications is such that they do not attract protection under article 8(1). They do not involve the expression of an aspect of private life or an aspect of correspondence which is capable of respect within the scheme of values inherent in the ECHR. This view is supported by three matters. First, the conduct in question involves contact between a paedophile and a child which is criminal in nature and is capable of affecting the child more immediately and in a more directly damaging way than the conduct in issue in KU v Finland. Secondly, as observed above, the state has a positive obligation under article 8, owed to children, to enforce these provisions of the criminal law effectively. That obligation reflects the protection which article 8 requires to be accorded to fundamental values and essential aspects of private life in relation to children, who are recognised to be vulnerable individuals. Accordingly it is clear that, under the scheme of the ECHR and for the purposes of article 8, the interests of children in this field have priority over any interest a paedophile could have in being allowed to engage in the conduct which has been criminalised by these provisions. Thirdly, article 17 of the ECHR (prohibition of abuse of rights) supports the conclusion that the criminal conduct at issue in this case is not such as is capable of respect for the purposes of article 8(1). Article 17 is included in Schedule 1 to the HRA. It provides: Nothing in this Convention may be interpreted as implying for any state, group or person any right to engage in any activity or perform any act aimed at the destruction of any of the rights and freedoms set forth herein or at their limitation to a greater extent than is provided for in the Convention. The actions of the appellant were aimed at the destruction or limitation of the rights and freedoms of a child under article 8 which are the subject of positive obligations owed to children by the state under that provision, in a context in which those positive obligations outweighed any legitimate interest the appellant could have under article 8(1) to protection for his actions. In R v G (Secretary of State for the Home Department intervening) [2008] UKHL 37; [2009] AC 92, a boy of 15 had sexual intercourse with a girl of 12. He was charged with an offence of rape of a child under 13, contrary to section 5 of the Sexual Offences Act 2003. The girls initial complaint had been that the intercourse had not been consensual. After the charge was brought, the boy indicated that he was willing to plead guilty on the basis that the girl had told him that she too was aged 15 and the intercourse had in fact been consensual. The prosecution was prepared to proceed on that basis. Section 5 is an offence of strict liability, in the sense that the consent of the girl provides no defence and there is no defence of reasonable belief that the girl is aged 13 years or above. The boy pleaded guilty to the offence and was sentenced. Later, in addition to a complaint based on article 6, he complained that in light of the basis of plea accepted by the prosecution, the charge against him should have been changed to a lesser charge of unlawful sexual intercourse with a girl under 13, contrary to section 13 of the 2003 Act, and that it had been a breach of his rights under article 8 for the prosecution to proceed against him with the charge of rape under section 5. The boys appeal based on article 6 was dismissed unanimously by the House of Lords and his appeal based on article 8 was dismissed by a majority of three to two. In the majority, Lord Hoffmann considered that the decision to proceed under section 5 rather than section 13 gave rise to no interference with rights under article 8 (paras 7 10); Lord Mance considered that the decision to proceed under section 5 could not be regarded as unjustified or disproportionate (para 72; ie, by implication, under article 8(2)); and Baroness Hale considered that the decision to proceed under section 5 involved no interference with the boys rights under article 8(1) (para 54), but even if it did it was justified under article 8(2) (para 55). In the minority, Lord Hope of Craighead (with whom Lord Carswell agreed) considered that there was an interference with the boys right to respect for his private life under article 8(1), which could not be justified as a proportionate interference under article 8(2) (paras 37 39). Lord Hope emphasised at para 37 that, as set out in the basis of plea, the sexual intercourse was consensual intercourse between children (and, it may be added, in circumstances where the boy believed the girl to be 15, the same age as himself and just one year below the age of consent). rights under article 8(1), Baroness Hale said this at para 54: In addressing the question whether there was an interference with the boys In effect, the real complaint is that the defendant has been convicted of an offence bearing the label rape. Parliament has very recently decided that this is the correct label to apply to this activity. In my view this does not engage the article 8 rights of the defendant at all, but if it does, it is entirely justified. The concept of private life covers the physical and moral integrity of the person, including his or her sexual life: X and Y v The Netherlands 8 EHRR 235, para 22. This does not mean that every sexual relationship, however brief or unsymmetrical, is worthy of respect, nor is every sexual act which a person wishes to perform. It does mean that the physical and moral integrity of the complainant, vulnerable by reason of her age if nothing else, was worthy of respect. The state would have been open to criticism if it did not provide her with adequate protection. This it attempts to do by a clear rule that children under 13 are incapable of giving any sort of consent to sexual activity and treating penile penetration as a most serious form of such activity. This does not in my view amount to a lack of respect for the private life of the penetrating male. In my view, this statement by Baroness Hale accurately reflects the position that, for the purposes of considering whether there is an interference with the rights of an individual to respect for his private life (and, in the present case, for his correspondence) under article 8(1), it is necessary that the activity of the individual should be capable of respect within the scheme of values which the ECHR exists to protect and promote. See also In re JR38 [2015] UKSC 42; [2016] AC 1131, para 100: it is relevant to understand the nature of the activity in which the appellant was involved in considering whether the scope of article 8 extends to his claim, and it did not extend to protect the claimant in relation to police publication of photographs of him participating in a riot (per Lord Toulson, with whom Lord Hodge agreed; see also para 98: the publication of a photograph of a young person acting in a criminal manner for the purpose of enabling the police to discover his identity may not fall within the scope of the protection of personal autonomy which is the purpose of article 8 ); and para 112 (Lord Clarke of Stone Cum Ebony, with whom Lord Hodge also agreed): on the facts here the criminal nature of what the appellant was doing was not an aspect of his private life that he was entitled to keep private. The judgment of the ECtHR in Benedik v Slovenia illustrates the same analytical approach to article 8. At paras 107 110 the court examined the nature of the applicants interest involved in the case, concluding at para 110 that since the case involved investigations by public authorities it concerned privacy issues capable of engaging the protection of article 8 of the Convention; then at paras 115 118 the court examined the question whether the applicant had a reasonable expectation of privacy in relation to his use of the internet, and concluded that he did (see further below). As a result of the examination of these two matters the ECtHR concluded that there had been an interference with the applicants right to respect for his privacy under article 8(1), so that it was necessary to consider whether that interference was justified under article 8(2). The appellant in R v G made an application to the ECtHR, relying on his rights under article 6 and article 8. The ECtHR dismissed his application at the admissibility stage: (2011) 53 EHRR SE25. It held that the complaint based on article 8 was manifestly without foundation. However, in doing so the ECtHR made this observation at para 35 of its decision: The court notes that at the time of the events in question, the applicant was 15 years old and the complainant was 12. The applicant was convicted and sentenced on the basis that both parties had consented to sexual intercourse and that the applicant had reasonably believed the complainant to be the same age as him. In these circumstances, the court is prepared to accept that the sexual activities at issue fell within the meaning of private life (see, mutatis mutandis, SL v Austria (2003) 37 EHRR 39). The court therefore concludes that the criminal proceedings against the applicant, which resulted in his conviction and sentence, constituted an interference by a public authority with his right to respect for private life. [In the case of SL v Austria, a violation of the rights of a 15 year old homosexual boy under article 14 of the ECHR, read with article 8, was found in relation to a law which criminalised consensual homosexual relations between the applicant and men aged 19 and above, but not relations with other adolescents in the 14 to 18 age bracket.] The ECtHR in G v United Kingdom considered that, even on the basis that there had been an interference with the boys right to respect for his private life under article 8(1), the interference was justified under article 8(2). The Dean of Faculty sought to rely on para 35 of the decision in G v United Kingdom in support of his submission that there was an interference with the appellants rights to respect for his private life and correspondence in the present case. However, I do not consider that it assists him. That case was concerned with precocious sexual activity between children, between a boy aged 15 and a girl believed to be 15. This involved an aspect of the boys own personal development and experimentation in relation to intimate relationships at a stage of his own life which attracts particular protective concern under the scheme of the ECHR. The present case is very different. The appellant is an adult, not a child or adolescent at a developmental stage. Indeed, I think that the emphasis in the observations of the ECtHR upon the particular facts of the case in G v United Kingdom serves to support the view that in the appellants case there was no interference with his rights under article 8(1). The appellant had no legitimate interest under the scheme of the ECHR, as against the decoy, to assert or maintain privacy in the communications he sent the decoy. The sending of those communications constituted criminal offences, and the decoy was entitled to provide to the police evidence about them which he had in his knowledge and in his possession. That action by the decoy involved no interference with the appellants rights under article 8(1). Once the decoy had provided information to the police, they had in their possession evidence of the commission of criminal offences and the appellant had no legitimate interest under the scheme of the ECHR to prevent the police from acting on that evidence, or to prevent the police from passing it on to the respondent with a view to its use in a prosecution of the appellant. Likewise, once the police passed the evidence to the respondent, the appellant had no legitimate interest under the scheme of the ECHR to prevent the respondent from making use of that evidence in criminal proceedings against him. The police and the respondent, as relevant public authorities, had a responsibility, under the scheme of values in the ECHR, to take effective action to protect children, to the extent that the information provided by the decoy indicated that the appellant represented a risk to them. (ii) No reasonable expectation of privacy According to the Strasbourg case law, an important indication whether the right to respect for private life and correspondence is engaged in relation to an individuals communications is whether the individual had a reasonable expectation of privacy in relation to them: see eg Halford v United Kingdom (1997) 24 EHRR 523, para 45; Garamukanwa v United Kingdom, paras 22 and 29; Benedik v Slovenia, paras 98, 101 and 115 116; and Ribalda v Spain, CE:ECHR:2019: 1017JUD000187413, GC, paras 89 90 and 93. In Campbell v MGN Ltd [2004] UKHL 22; [2004] 2 AC 457, para 21, Lord Nicholls of Birkenhead observed that essentially the touchstone of private life is whether in respect of the disclosed facts the person in question had a reasonable expectation of privacy. This observation was the subject of debate in this court in In re JR38 [2015] UKSC 42; [2016] AC 1131. In that case, with a view to identifying persons who had participated in a riot, the police released photographs showing the claimant, a boy of 14, participating in the violence. The claimant complained that in doing so, the police had breached his right under article 8 to respect for his private life. This court held, by a majority, that there had been no interference with the claimants right under article 8(1) and affirmed that the touchstone for the engagement of article 8(1) is whether, on the facts, the individual had a reasonable expectation of privacy in relation to the subject matter of his complaint: see paras 87 98 (Lord Toulson, with whom Lord Hodge agreed), and 107 and 110 112 (Lord Clarke, with whom Lord Hodge agreed). The court was unanimous that, if article 8(1) was engaged, the interference with the claimants rights would have been justified under article 8(2). However, dissenting on the question of the application of article 8(1), Lord Kerr of Tonaghmore (with whom Lord Wilson agreed) said that, although whether there is a reasonable expectation of privacy will often be a factor of considerable weight, it is not necessarily decisive and has to be weighed alongside other factors relating to the context, including in particular in that case the age of the claimant: paras 56 and 59. principles to be derived from its case law, saying this at paras 100 101: 100. The Court reiterates that private life is a broad term not susceptible to exhaustive definition. Article 8 protects, inter alia, the right to identity and personal development, and the right to establish and develop relationships with other human beings and the outside world. There is, therefore, a zone of interaction of a person with others, even in a public context, which may fall within the scope of private life (see Uzun v Germany [CE:ECHR:2010:0902JUD003562305], para 43). 101. There are a number of elements relevant to the consideration of whether a persons private life is concerned by measures affected outside his or her home or private premises. In order to ascertain whether the notions of private life and correspondence are applicable, the Court has on several occasions examined whether individuals had a reasonable expectation that their privacy would be respected and protected (see Brbulescu v Romania [[2017] IRLR 2032, GC], para 73, and Copland v United Kingdom, [(2007) 45 EHRR 37], paras 41 42). In that context, it has stated that a reasonable In Benedik v Slovenia, at paras 100 106 the ECtHR recapitulated the relevant expectation of privacy is a significant though not necessarily conclusive factor (see Brbulescu, cited above, para 73). At para 106, the ECtHR referred to the judgment of the Grand Chamber in Delfi AS v Estonia (2016) 62 EHRR 6, at para 148, in which it was noted that different degrees of anonymity are possible on the internet: an internet user may be anonymous to the wider public, while their identity is known to their internet service provider. The ECtHR held that the applicant in the Benedik case had a reasonable expectation of privacy, notwithstanding that he used a computer connected to the internet via an internet service provider which had details of the identity of the subscriber (in that case, the applicants father): paras 115 118. On that basis, the ECtHR found that there had been an interference with the applicants right to respect for his privacy under article 8(1) and held that it was not justified under article 8(2). That was because the legal regime governing the circumstances in which the police could obtain details of the identity of the subscriber and hence could learn the identity of the applicant was not clear, so the interference was not in accordance with the law for the purposes of article 8(2). As the phraseology indicates, whether a reasonable expectation of privacy exists in relation to a particular matter is an objective question: Benedik v Slovenia, para 116; In re JR38, paras 98 (Lord Toulson) and 109 (Lord Clarke). In the present case, by contrast with the situation in Benedik v Slovenia, the appellants communications were sent directly to the decoy, a private individual believed by the appellant to be a child of 13. Their contents were not a matter in relation to which the recipient could be thought to owe the appellant any obligation of confidentiality. There was no prior relationship between the appellant and the recipient from which an expectation of privacy might be said to arise between them (contrast the position in Ribalda v Spain, in which the applicants had a reasonable expectation that they would not be subjected to covert video surveillance by their employer; and contrast the position which might arise in relation to intimate letters sent in the course of an established romantic relationship between adults). The appellants contact with the decoy came out of the blue and exhortations by the appellant in messages sent to the decoy that he should keep their communications private did not establish a relationship of confidentiality. Furthermore, the appellant believed that he was communicating with a 13 year old, a child of an age in relation to whom it was foreseeable that he might well share any worrying communications he received with an adult. The present case is, therefore, analogous to the situation posited by Lord Toulson in In re JR38 at para 100, where he said: When the authorities speak of a protected zone of interaction between a person and others, they are not referring to interaction in the form of public riot. That is not the kind of activity which article 8 exists to protect. In this respect the case is on all fours with Kinloch v HM Advocate [2013] 2 AC 93. Lord Hope DPSCs words, at para 21, are equally applicable to the appellant: The criminal nature of what he was doing, if that was what it was found to be, was not an aspect of his private life that he was entitled to keep private. If, for example, members of the public gave descriptions of a rioter from which an artist prepared an identikit, would its use by the police for the purpose of his identification be an infringement of his right to privacy? I consider not. In the present case, the decoy was a member of the public who provided the police with evidence in his possession pertaining to the commission of criminal offences by the appellant. As the ECtHR observed in Delfi AS v Estonia, at para 148, and Benedik v Slovenia, at para 106, there may be different expectations of confidentiality in relation to use of the internet, depending on the person with respect to whom the question is asked. In the present context, the appellant may have enjoyed a reasonable expectation of privacy in relation to his communications for the purposes of article 8(1) so far as concerned the possibility of police surveillance or intrusion by the wider public, but he had no reasonable expectation of privacy in relation to the recipient of his messages. He could not reasonably expect that, where his messages constituted evidence of criminal conduct on his part, the recipient would not pass them on to the police. Once evidence of the messages had been passed to the police by the decoy, the appellant had no reasonable expectation that the police should treat them as confidential, so that they should not make use of that evidence to investigate whether a crime had been committed. Under the scheme of the ECHR, they were bound to do so in order to safeguard children. Nor did the appellant have any reasonable expectation that the respondent should treat the messages as confidential, so that they should not make use of that evidence in bringing a prosecution in respect of his criminal activity. Again, under the scheme of the ECHR, the possibility of effective prosecution of serious crimes committed in relation to children is part of the regime of deterrence which a state is required to have in place to protect them. Open justice is an important principle in domestic law and under the ECHR, so a defendant in the position of the appellant can have no reasonable expectation that a prosecution in which reliance is placed on material of this kind will take place in anything other than a public forum. There is also an area of overlap between the issue of reasonable expectation of privacy and the issue of the nature of the communications by the appellant, addressed above. The majority judgments in In re JR38 indicate that the nature of the information in question is relevant as part of the context in which an assessment whether a reasonable expectation of privacy exists is to be made. As Lord Toulson said at para 97: In considering whether, in a particular set of circumstances, a person had a reasonable expectation of privacy (or legitimate expectation of protection), it is necessary to focus both on the circumstances and on the underlying value or collection of values which article 8 is designed to protect. See also para 112 (Lord Clarke). I have found it helpful in this case to separate out these issues and subject them to distinct examination, as the ECtHR did in Benedik v Slovenia. However, it can also be said that the discussion above regarding the nature of the communications provides further reasons why, for the purposes of article 8(1), the appellant could have no reasonable expectation of privacy in relation to them. Even on the approach of Lord Kerr in In re JR38, there has been no interference with the appellants rights under article 8(1). Unlike the claimant in that case, there is no special feature of the appellants circumstances, such as his being a child deserving of protection under the scheme of the ECHR, which could support a conclusion that his rights under article 8(1) were interfered with, in the absence of his having a reasonable expectation of privacy. Conclusion on compatibility issue (1) For the reasons set out above, I consider that the High Court was right to hold that there was no interference with the appellants rights under article 8(1) in the circumstances of this case. Issue (2): the extent to which the obligation on the state, to provide adequate protection for article 8 rights, is incompatible with the use by a public prosecutor of material supplied by PH groups in investigating and prosecuting crime. I can be short in addressing this issue, focusing on the circumstances of the appellants case. I have already concluded in relation to the first compatibility issue that there was no interference with the appellants rights under article 8(1) associated with the collection by the decoy of evidence about the communications or with the use of that evidence by the relevant public authorities. Clearly, therefore, in this case the state had no supervening positive obligation arising from article 8 to protect the appellants interests which would impede the respondent in any way in making use of the evidence about his communications with the decoy to investigate or prosecute in respect of the crimes he was alleged to have committed. On the contrary, in so far as positive obligations under article 8 were engaged, the relevant positive obligation on the respondent, as a public authority, was to ensure that the criminal law could be applied effectively so as to deter sexual offences against children. Contrary to the appellants argument, article 8 has the effect that the respondent should be entitled to, and indeed might be obliged to, make use of the evidence of the communications with the decoy in bringing a prosecution against him. In Ribalda v Spain, the employer of the applicants, a private company, gathered evidence by covert video surveillance of their behaviour at work on which it relied to dismiss the applicants for theft. The national courts held that the dismissals were justified and lawful. The applicants complained to the ECtHR that the Spanish state had interfered with their right to respect for private life under article 8 by reason of the national courts accepting and relying on the evidence derived from the covert surveillance by the employer. The Grand Chamber of the ECtHR held, first, that the applicants had a sufficient reasonable expectation of privacy such that article 8 was applicable (paras 92 95). The Grand Chamber then addressed compliance with article 8, summarising the applicable principles regarding positive obligations at paras 109 116 of its judgment, including the following: 109. The court observes that, in the present case, the video surveillance measure complained of by the applicants was imposed by their employer, a private company, and cannot therefore be analysed as an interference, by a state authority, with the exercise of Convention rights. The applicants nevertheless took the view that, by confirming their dismissals on the basis of that video surveillance, the domestic courts had not effectively protected their right to respect for their private life. 110. The court reiterates that although the object of article 8 is essentially that of protecting the individual against arbitrary interference by the public authorities, it does not merely compel the state to abstain from such interference: in addition to this primarily negative undertaking, there may be positive obligations inherent in effective respect for private or family life. These obligations may necessitate the adoption of measures designed to secure respect for private life even in the sphere of the relations of individuals between themselves (see Sderman v Sweden [CE:ECHR:2013:1112JUD000578608, GC], para 78 and Von Hannover v Germany (No 2) [ECHR:2012:0207JUD004066008, GC], para 98). The responsibility of the state may thus be engaged if the facts complained of stemmed from a failure on its part to secure to those concerned the enjoyment of a right enshrined in article 8 of the Convention (see Brbulescu v Romania [[2017] IRLR 1032, GC], para 110, and Schth v Germany [CE:ECHR:2010: 0923JUD000162003], paras 54 and 57). 111. Accordingly, in line with the approach it has followed in similar cases, the court takes the view that the complaint should be examined from the standpoint of the states positive obligations under article 8 of the Convention (see Brbulescu, cited above, para 110; Kpke [v Germany (2010) 53 EHRR SE 26]; and De La Flor Cabrera [v Spain CE:ECHR:2014:0527 JUD001076409], para 32). While the boundaries between the states positive and negative obligations under the Convention do not lend themselves to precise definition, the applicable principles are nonetheless similar. In both contexts regard must be had in particular to the fair balance that has to be struck between the competing private and public interests, subject in any event to the margin of appreciation enjoyed by the state (see Palomo Snchez v Spain [CE:ECHR:2011:0912JUD 002895506, GC], para 62, and Brbulescu, cited above, para 112). The margin of appreciation goes hand in hand with European supervision, embracing both the legislation and the decisions applying it, even those given by independent courts. In exercising its supervisory function, the court does not have to take the place of the national courts but to review, in the light of the case as a whole, whether their decisions were compatible with the provisions of the Convention relied upon (see Peck [v United Kingdom, CE:ECHR:2003:0128JUD004464798], para 77, and Von Hannover (No 2), cited above, para 105). Applying these principles, having regard to the states margin of appreciation and the fair balance to be maintained between the interests of the applicants and their employer, the Grand Chamber held that there had been no violation of any positive obligations owed to the applicants under article 8. As is evident from this recent judgment of the Grand Chamber, positive obligations under article 8 only arise where article 8 is applicable in a claimants case in the first place. In the present case, however, as set out above, article 8 is not applicable in relation to the appellants complaint. Further, even where article 8 is applicable, a contracting state has a margin of appreciation as to how to strike a fair balance between the competing interests which are in issue. Since, in the present context, the state has a positive obligation to operate an effective criminal law regime to deter and punish persons who threaten to harm young children, there is no doubt that the use by the respondent of the evidence provided by the decoy for the purposes of the prosecution of the appellant under that regime involved no breach of any positive obligation owed to the appellant. In that regard, it is relevant that the appellant rightly accepts that the offences with which he was charged under the 2009 Act and the 2005 Act were, in themselves, compatible with article 8. In SXH v Crown Prosecution Service (United Nations High Commissioner for Refugees intervening) [2017] UKSC 30; [2017] 1 WLR 1401, this court addressed the question whether the rights of an individual under article 8(1) were interfered with when the prosecution service in England and Wales decided to bring a prosecution for an offence under a statutory provision which, as here, was agreed to be compatible with the rights of the accused under article 8. Lord Toulson (with whose judgment Lord Mance, Lord Reed and Lord Hughes agreed) observed (para 34) that it was difficult to envisage circumstances in which the initiation of a prosecution against a person reasonably suspected of committing such a criminal offence could itself be an interference with that persons rights under article 8(1). There might be rare and exceptional circumstances in which that could happen: see para 23, setting out the view of the Court of Appeal to that effect, with which Lord Toulson agreed at para 35; and the members of the appellate committee in R v G, apart from Lord Hoffmann, contemplated that there might be such a case. However, there are no exceptional circumstances which apply in the present case. The Scottish Parliament has enacted the criminal law provisions in sections 33 and 34 of the 2009 Act and section 1 of the 2005 Act to protect the rights of children, and it was clearly within the states margin of appreciation under article 8 and that of the respondent as the prosecuting authority to deploy the evidence provided by the decoy in support of a prosecution brought under those provisions. Other issues in the High Court In light of the way in which the compatibility issues have been framed by the High Court, other aspects of the High Courts judgment do not arise for consideration in this court. However, I think it is appropriate to observe that, even if the appellant had been able to show that there had been an interference with his rights under article 8(1), he would still have faced fundamental difficulties in challenging the overall conclusion of the High Court that his appeal against his conviction should be refused. First, the High Court concluded that, even if there had been an interference with the appellants rights under article 8(1) arising from the use of the evidence provided by the decoy in the police investigation and prosecution of the appellant, it would have been justified under article 8(2) as being in accordance with the law and necessary in a democratic society, as a measure proportionate to promoting the legitimate objectives of the prevention of disorder or crime and the protection of the rights and freedoms of others. Although the issue of justification under article 8(2) does not arise under the compatibility issues before this court, I can see no reason to think that the High Court was in error in this part of its judgment. Secondly, even if the appellant had been able to establish that there had been a breach of his rights under article 8 by reason of the use of the evidence provided by the decoy in the investigation and in the prosecution, it would not follow that his conviction should be quashed, as the High Court rightly pointed out. Generally, evidence obtained in breach of article 8 may be relied on in criminal proceedings, provided that there is no violation of the right under article 6 of the ECHR to have a fair trial and no breach of any rules of domestic law regarding the fairness of criminal proceedings: see eg Kinloch v HM Advocate [2012] UKSC 62; [2013] 2 AC 93, paras 15 17 (Lord Hope of Craighead). The High Court considered that there was no unfairness in the proceedings against the appellant (para 51). Again, I see no reason to disagree with their assessment. Conclusion For the reasons given above, I would dismiss the appeal. In relation to the first compatibility issue, I would answer that in this case there was no interference with the appellants right to respect for his private life and correspondence under article 8(1) by reason of the use by the respondent of the evidence obtained from the decoy in the public prosecution of the appellant. In relation to the second compatibility issue, I would answer that there was no incompatibility between the obligation on the state to protect rights arising under article 8 and the use by the respondent in this case of the evidence provided by the decoy in support of the prosecution of the appellant.

UK-Abs

This appeal concerns the compatibility of the use in a criminal trial of evidence obtained by a so called paedophile hunter (PH) group with the accused persons rights under article 8 of the European Convention on Human Rights (the ECHR). Article 8 provides that everyone has the right to respect for his or her private life and correspondence. PH groups impersonate children online to lure persons into inappropriate communications and provide the resulting material to the police. An adult member of a PH group, acting as a decoy, created a fake profile on a dating application using a photograph of a boy aged approximately 13 years old. The appellant entered into communication with the decoy, who stated that he was 13 years old. The appellant sent the decoy a sexual image and also arranged a meeting. At the meeting, the appellant was confronted by members of the PH group who remained with him until the police arrived. Copies of the appellants communications with the decoy were provided to the police. The respondent, as public prosecutor, charged the appellant with attempts to commit: (i) the offence of attempting to cause an older child (i.e. a child between 13 and 16 years old) to look at a sexual image, for the purposes of obtaining sexual gratification, contrary to section 33 of the Sexual Offences (Scotland) Act 2009 (the 2009 Act); (ii) the offence of attempting to communicate indecently with an older child, contrary to section 34 of the 2009 Act; and (iii) the offence of attempting to meet with a child for the purpose of engaging in unlawful sexual activity, contrary to section 1 of the Protection of Children and the Prevention of Sexual Offences (Scotland) Act 2005 (together, the charges). The appellant objected to the admissibility of the evidence sought to be relied upon by the respondent on the basis that it was obtained covertly without authorisation under the Regulation of Investigatory Powers (Scotland) Act 2000 and without authorisation or reasonable suspicion of criminality in violation of his rights under article 8. These objections were dismissed and the appellant was convicted of the charges. The appellant appealed against his conviction to the High Court of Justiciary, which refused the appeal and granted the appellant permission to appeal to the Supreme Court on two compatibility issues, which arise in criminal proceedings over whether a public authority has acted in a way that is unlawful under section 6(1) of the Human Rights Act 1998. The Supreme Court unanimously dismisses the appeal. Lord Sales gives the judgment, with which all members of the Court agree. The appellant appeals on two issues: (1) whether, in respect of the type of communications used by the appellant and the PH group, article 8 rights may be interfered with by their use as evidence in a public prosecution of the appellant for a relevant offence; and (2) the extent to which the obligation on the state, to provide adequate protection for article 8 rights, is incompatible with the use by a public prosecutor of material supplied by PH groups in investigating and prosecuting crime [11]. On the first issue, the appellant submits that there was an interference with the appellants rights to respect for his private life and his correspondence under article 8(1), which required the respondent to show that such interference was justified under article 8(2) [26]. The court holds that there was no interference with those rights at any stage because: (i) the nature of the communications rendered them incapable of being worthy of respect under article 8; and (ii) the appellant had no reasonable expectation of privacy in relation to the communications [29] [31]. It is implicit in article 8(1) that the protected features of private life and correspondence must be capable of respect within the scheme of values the ECHR exists to protect and promote. States party to the ECHR have a special responsibility to protect children against sexual exploitation by adults [32] [33]. Here, in the absence of any state surveillance, and where the issue is the balance of the interests of a person engaging in such conduct and the children who are the recipients of the relevant communications, the reprehensible nature of the communications means they do not attract protection under article 8(1) [40]. The interests of children have priority over any interest a paedophile could have in being allowed to engage in criminal conduct. Further, the prohibition of the abuse of rights in article 17 of the ECHR supports the conclusion that the criminal conduct at issue in this case is not capable of respect for the purposes of article 8(1) [41] [43]. An important indication of whether the right to respect for private life and correspondence is engaged is whether the individual had a reasonable expectation of privacy in relation to those communications, which is an objective question [51] [55]. The appellants communications were sent directly to the decoy. There was no prior relationship between the appellant and recipient from which an expectation of privacy might be said to arise. Requests made by the appellant to the decoy to keep the communications private did not establish a relationship of confidentiality. Furthermore, the appellant believed he was communicating with a 13 year old child, who it was foreseeable might share any worrying communications with an adult [56]. The appellant may have enjoyed a reasonable expectation of privacy so far as the possibility of police surveillance or intrusion by the wider public are concerned, but not in relation to the recipient [58]. Once the evidence had been passed on to the police, the appellant had no reasonable expectation that either the police or the respondent should treat them as confidential. Again, under the scheme of the ECHR, the effective prosecution of serious crimes committed in relation to children is part of the regime of deterrence a state must have in place [59]. On the second issue, the state had no supervening positive obligation to protect the appellants interests that would prevent the respondent making use of the evidence to investigate or prosecute the crime. On the contrary, the relevant positive obligation on the respondent was to ensure that the criminal law could be applied effectively to deter sexual offences against children. Article 8 has the effect that the respondent should be entitled to, and might indeed be obliged to, make use of the evidence in bringing a prosecution against him [64].

Where an international commercial contract contains an agreement to resolve disputes by arbitration, at least three systems of national law are engaged when a dispute occurs. They are: the law governing the substance of the dispute; the law governing the agreement to arbitrate; and the law governing the arbitration process. The law governing the substance of the dispute is generally the law applicable to the contract from which the dispute has arisen. The law governing the arbitration process (sometimes referred to as the curial law) is generally the law of the seat of the arbitration, which is usually the place chosen for the arbitration in the arbitration agreement. These two systems of law may differ from each other. Each may also differ from the law which governs the validity and scope of the arbitration agreement. The central issue on this appeal concerns which system of national law governs the validity and scope of the arbitration agreement when the law applicable to the contract containing it differs from the law of the seat of the arbitration. This is an issue which has long divided courts and commentators, both in this country and internationally. On one side there are those who say that the law that governs a contract should generally also govern an arbitration agreement which, though separable, forms part of that contract. On the other side there are those who say that the law of the chosen seat of the arbitration should also generally govern the arbitration agreement. There have been Court of Appeal decisions falling on either side of this divide: Sulamrica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638; [2013] 1 WLR 102 and C v D [2007] EWCA Civ 1282; [2008] Bus LR 843. In its judgment in the present case [2020] EWCA Civ 574, the Court of Appeal considered that the time has come to seek to impose some order and clarity on this area of the law (para 89) and held that, unless there has been an express choice of the law that is to govern the arbitration agreement, the general rule should be that the arbitration agreement is governed by the law of the seat, as a matter of implied choice, subject only to any particular features of the case demonstrating powerful reasons to the contrary (para 91). On this appeal the appellant argues that this conclusion is heterodox and wrong and that the correct approach is that, in the absence of strong indications to the contrary, a choice of law for the contract is a choice of that law to govern the arbitration agreement. The appellant contends that in the present case the parties have chosen Russian law to govern the construction contract between them and that the implication that they intended the arbitration agreement included in that contract to be governed by Russian law is not displaced by their choice of London as the seat of arbitration. If that issue is decided in its favour, the appellant goes on to argue that the Court of Appeal was wrong to grant an injunction to restrain it from pursuing proceedings in Russia in alleged breach of the arbitration agreement. The appellants case is that, because the arbitration agreement is governed by Russian law, the Russian courts are best placed to decide whether or not the arbitration agreement applies to the claim which the appellant has brought against the respondent in Russia and that, as a matter of comity or discretion, the English courts ought not to interfere with those proceedings by granting an anti suit injunction. II. Factual background (i) The construction contract On 1 February 2016 a power plant situated at Berezovskaya in Russia was severely damaged by fire. The appellant (Chubb Russia) is a Russian insurance company which had insured the owner of the power plant, a company now named PJSC Unipro (Unipro), against such damage. Chubb Russia is part of the Chubb Group, which is the worlds largest publicly traded property and casualty insurer. The company responsible for the design and construction of the power plant under a contract made with Unipro in May 2011 was a Russian company called CJSC Energoproekt. The respondent (Enka) was engaged by Energoproekt as one of many sub contractors involved in the construction project. Enka is a global engineering and construction company incorporated and based in Turkey with a substantial presence and history of operations in Russia, amongst other countries. The contract between Energoproekt and Enka dated 27 June 2012 (the construction contract) is a substantial document running to 97 pages, with around 400 pages of attachments. It was executed in parallel Russian and English versions (though it provides that the Russian language version has precedence). The construction contract contains, in article 50, a dispute resolution clause in these terms: Resolution of disputes 50.1. The Parties undertake to make in good faith every reasonable effort to resolve any dispute or disagreement arising from or in connection with this Agreement (including disputes regarding validity of this agreement and the fact of its conclusion (hereinafter Dispute) by means of negotiations between themselves. In the event of the failure to resolve any Dispute pursuant to this article within 10 (ten) days from the date that either Party sends a Notification to the opposite Party containing an indication of the given Dispute (the given period may be extended by mutual consent of the Parties) any Party may, by giving written notice, cause the matter to be referred to a meeting between the senior managements of the Contractor and Customer (in the case of the Contractor senior management shall be understood as a member of the executive board or above, in the case of Customer, senior management shall be understood as general directors of their respective companies). The parties may invite the End Customer to such Senior Management Meeting. Such meeting shall be held within fourteen (14) calendar days following the giving of a notice. If the matter is not resolved within twenty (20) calendar days after the date of the notice referring the matter to appropriate higher management or such later date as may be unanimously agreed upon, the Dispute shall be referred to international arbitration as follows: the Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce, appointed in accordance with these Rules, language, and the Dispute shall be settled by three arbitrators the arbitration shall be conducted in the English the place of arbitration shall be London, England. in 50.2. Unless otherwise explicitly stipulated this Agreement, the existence of any Dispute shall not give the Contractor the right to suspend Work. 50.3. Not used. 50.4. Not used. 50.5. All other documentation such as financial documentation and cover documents for it must be presented in Russian. On 21 May 2014 Energoproekt transferred its rights and obligations under the construction contract to Unipro pursuant to an assignment agreement made between Energoproekt, Unipro and Enka. By clause 7.5 of that agreement, the parties agreed that disputes between Unipro and Enka were to be finally and exclusively resolved by arbitration in accordance with the provisions of article 50.1 of the construction contract. After the fire in February 2016 Chubb Russia paid 26.1 billion roubles (approximately US$400m) to Unipro under its property insurance policy and thereby became subrogated to any rights of Unipro to claim compensation from third parties for the damage caused by the fire. (ii) The Russian proceedings On 25 May 2019 Chubb Russia filed a claim in the Moscow Arbitrazh (ie commercial) Court against Enka and ten other defendants whom it claimed were jointly liable for the damage caused by the fire. Chubb Russia was required by the Moscow court to provide further details of its claims, following which the claims were accepted by the court on 3 September 2019. On 17 September 2019 Enka filed a motion in the Russian proceedings to have Chubb Russias claim against it dismissed (or left without consideration) pursuant to article 148(5) of the Arbitrazh Procedure Code, which is intended to give effect to Russias obligations under article II(3) of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (the New York Convention) to refer to arbitration parties who have agreed to submit to arbitration a dispute of which a court of a contracting state is seized. Enka argued that the claim against it fell within the scope of the arbitration agreement contained in article 50.1 of the construction contract and ought therefore to be resolved, not by the Russian courts, but by an arbitration conducted in accordance with that provision in London. The Moscow court decided to deal with Enkas motion at the same time as the merits of Chubb Russias claims at a hearing fixed for 22 January 2020. Following that hearing, which continued on two later dates, on 18 March 2020 the judge in the Russian proceedings announced her decisions (a) not to grant Enkas motion to refer the claim against it to arbitration and (b) to dismiss Chubb Russias claims against all the defendants on the merits. The reasons for those decisions were given in a written judgment handed down on 6 May 2020. Chubb Russia and Enka have both filed appeals in the Russian proceedings (in relation to the decision on the merits and the decision to refuse Enkas application, respectively). (iii) The English proceedings Meanwhile, Enka had on 16 September 2019 brought an arbitration claim in the Commercial Court in London seeking an anti suit injunction to restrain Chubb Russia from further pursuing the Russian proceedings against Enka on the ground that this was a breach of the arbitration agreement in article 50.1 of the construction contract. Enka also sought injunctions against other members of the Chubb Group said to be caught up in Chubb Russias breach of the arbitration agreement, namely Chubb UK Ltd, Chubb European Group SE (Chubb Europe) and the ultimate parent company of the Chubb Group which is incorporated in Switzerland. On 15 October 2019 Carr J declined to grant an interim anti suit injunction but gave directions for an expedited trial. The trial took place on 11 and 12 December 2019 before Andrew Baker J. He gave judgment on 20 December 2019, dismissing Enkas claims against all the defendants. His primary reason for doing so was that he considered the appropriate forum to decide whether Chubb Russias claim against Enka falls within the arbitration agreement to be the Moscow Arbitrazh Court and not the English Commercial Court. Enka applied to the Court of Appeal for permission to appeal from this decision as it applied to Chubb Russia (alone). The application was granted on 6 February 2020 and the appeal was heard on 7 and 8 April 2020. On 29 April 2020 the Court of Appeal (Flaux, Males and Popplewell LJJ) allowed Enkas appeal and issued an anti suit injunction restraining Chubb Russia from continuing the Russian proceedings. (iv) The arbitration proceedings On 10 January 2020 Enka gave notice to Chubb Russia and Chubb Europe of a Dispute under article 50 of the construction contract. This was followed on 11 March 2020 by a request for arbitration filed with the International Chamber of Commerce (ICC) in which Enka sought a declaration that Chubb Russias claims in the Russian court fall within the scope of the arbitration agreement and damages. On 22 May 2020 Chubb Russia and Chubb Europe filed their answer to the request for arbitration in which they challenged the jurisdiction of the arbitrators and denied that Enka is entitled to any of the relief claimed. On 12 June 2020 the ICC notified the parties of the appointment of Mr Michael Brindle QC as president of the arbitral tribunal. The other members of the tribunal are Lord Hoffmann, nominated by Enka, and Lord Mance, nominated by Chubb Russia and Chubb Europe (without prejudice to their objections to the jurisdiction of the tribunal). (v) This appeal On 26 May 2020 Chubb Russia applied to the Supreme Court for permission to appeal from the decision of the Court of Appeal. On 5 June 2020 this court granted permission to appeal and also stayed the anti suit injunction upon Chubb Russia giving suitable undertakings to protect Enkas position pending the outcome of the appeal. The appeal was expedited and heard over two days on 27 and 28 July 2020. It is a striking feature of the English proceedings that the trial, the appeal to the Court of Appeal and the appeal to the Supreme Court have all been heard in just over seven months. This is a vivid demonstration of the speed with which the English courts can act when the urgency of a matter requires it. III. The English conflict of laws rules (i) The Rome I Regulation Where a court of England and Wales has to decide which system of national law governs a contract, the court must normally apply the provisions of the Rome I Regulation (a shorthand for Regulation (EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations). By article 1(1), the Rome I Regulation applies, in situations involving a conflict of laws, to contractual obligations in civil and commercial matters. Article 1(2)(e), however, excludes from its scope arbitration agreements and agreements on the choice of court. Pursuant to article 3, a contract to which the Rome I Regulation applies is governed by the law chosen by the parties, where the choice is made expressly or clearly demonstrated by the terms of the contract or the circumstances of the case. In determining whether the parties have made a choice of law, the court should adopt a broad Regulation based approach, not constrained by national rules of contractual interpretation: see eg Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), para 32 048. Article 4 contains rules for determining the law applicable to the contract to the extent that no such choice has been made. Article 4(1) sets out presumptions or prima facie rules that apply in relation to particular types of contract. However, where it is clear from the circumstances of the case that the contract is manifestly more closely connected with another country, or where none of the prima facie rules applies, articles 4(3) and 4(4) respectively provide for the contract to be governed by the law of the country with which it is most closely connected. (ii) The common law rules Because the Rome I Regulation does not apply to arbitration agreements, an English court which has to decide which system of law governs the validity, scope or interpretation of an arbitration agreement must apply the rules developed by the common law for determining the law governing contractual obligations. Those rules are that a contract (or relevant part of it) is governed by: (i) the law expressly or impliedly chosen by the parties; or (ii) in the absence of such choice, the law with which it is most closely connected: see eg Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), rule 64(1). In view of the similarity between the common law rules and the rules provided by the Rome I Regulation, cases in which the two regimes would yield different results are likely to be rare. But in principle, where an English court has to determine which law governs an arbitration agreement incorporated in a contract, it is the common law rules alone which because of the exclusion of arbitration agreements from the scope of the Rome I Regulation by article 1(2)(e) the court must apply. (iii) Party choice The starting point at common law (as under the Rome I Regulation) is that contracting parties are free to choose the system of law which is to govern their contract, provided only that their choice is not contrary to public policy. The court must therefore construe the contract to see whether the parties have agreed on a choice of law to govern it. As Lord Diplock explained in Cie Tunisienne de Navigation SA v Cie dArmement Maritime SA [1971] AC 572, 603: The first stage, therefore, when any question arises between parties to a contract as to the proper law applicable to it, is to determine whether the parties intended by their contract to exercise any choice at all and, if they did, to determine what was the system of law which they selected. In determining this the English court applies the ordinary rules of English law relating to the construction of contracts. The exclusion of arbitration agreements from the scope of the Rome I Regulation by article 1(2)(e) does not prevent an arbitration clause from being taken into consideration for the purposes of article 3 in determining whether there has been a choice of the law applicable to other parts of the contract, as noted in Giuliano and Lagarde, Council Report on the Convention on the law applicable to contractual obligations (OJ EU No C 282 1) at p 12. By the same token, the fact that other parts of the contract are within the scope of the Rome I Regulation does not prevent them from being taken into consideration in determining in accordance with the English common law rules of construction whether the parties have agreed on a choice of law to govern the arbitration clause. Like any question of contractual interpretation, this is a unitary exercise which requires the court to construe the contract, including the arbitration clause, as a whole. (iv) Law of the forum Where an English court has to decide whether a contract which is said to be governed by a foreign system of law is valid, the court applies the putative applicable law, in other words the law which would govern the contract if it were validly concluded. At the prior stage, however, of determining what is the applicable law or putative applicable law of the contract, all the leading authorities proceed on the basis that it is English rules of law which apply, as stated by Lord Diplock in the passage quoted above. In the Tunisienne case, for example, a contract for the transport of oil in several shipments contained a provision (clause 13) that the contract shall be governed by the laws of the flag of the vessels carrying the goods . The first question which the House of Lords had to decide was whether, in the circumstances of the case which included the fact that vessels flying different flags were used to ship the oil, this clause conveyed a choice of French law to govern the contract, as the shipowners argued. To answer that question the House did not apply the rules of French law governing the interpretation of contracts, but (only) those of English law. The same approach was adopted in Whitworth Street Estates (Manchester) Ltd v James Miller & Partners Ltd [1970] AC 583, where the House of Lords held that subsequent conduct of the parties could not be looked at to construe a contract in order to decide whether it was intended to be governed by English (rather than Scottish) law. The exclusion of subsequent conduct as an aid to interpretation is a consequence of the objective principle of interpretation in English law, which searches not for what the parties subjectively thought or intended the effect of their contract to be but for what reasonable people in their position would be understood to have meant by the language used. Although in the Whitworth Street Estates case English law was one putative applicable law of the contract, there is no suggestion in the speeches that this was the basis for applying English principles of contractual interpretation. In our view, it is both consistent with authority and sound in principle to apply English law as the law of the forum to ascertain whether the parties have agreed on the law which is to govern their contract (and, if not, what law governs it in the absence of agreement). To apply any other law for this purpose would introduce an additional layer of complexity into the conflict of laws analysis without any clear justification and could produce odd or inconsistent results. As the authors of Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012) observe, at para 32 036, by reference to a case in which subsequent conduct was taken into account to construe a contract found to be governed by Chilean law because it was admissible under that law: But it would be very odd if when a question arose as to whether a contract was governed by English law or Chilean law, subsequent conduct would not be taken into account in determining whether a choice of English law could be inferred, but it could be taken into account in determining whether Chilean law applied. The Court of Appeal in the present case asserted (although without explanation) that, in construing the contract to determine whether a choice of governing law applies to an arbitration agreement within it, the court should apply the principles of construction of the main contract law if different from English law (see paras 90 and 105(2) of the judgment). We do not consider this to be correct. As we have indicated, the proper approach in determining whether there has been a choice of law is to apply English law as the law of the forum. Where the question is whether there has been a choice of the law applicable to an arbitration clause, the relevant English law rules are the common law rules which require the court to interpret the contract as a whole applying the ordinary English rules of contractual interpretation. The main contract law, if different, has no part to play in the analysis. (v) Express or implied choice Many of the cases applying the common law rules distinguish between a choice of law which is express or implied. Article 3 of the Rome I Regulation draws a similar distinction in referring to a choice which is made expressly or clearly demonstrated. The terminology is useful in reflecting the fact that an agreement on a choice of law to govern a contract, like any contractual term, may be explicitly articulated or may be a matter of necessary implication or inference from other terms of the contract and the surrounding circumstances. The distinction, however, is not a sharp one: language may be more or less explicit and the extent to which a contractual term is spelt out in so many words or requires a process of inference to identify it is a matter of degree. Determining whether the parties have agreed on a choice of law to govern their contract is in every case a question of interpretation. It is also important to keep in mind that whether a choice is described as express or implied is not a distinction on which any legal consequence turns. An implied choice is still a choice which is just as effective as a choice made expressly. (vi) The default rule Where a choice of law cannot be identified by interpreting the contract, the approach of the common law was at one time to presume that the parties must nevertheless have intended their contract to be governed by some particular system of national law and to impute a relevant intention to them. This is reflected, for example, in the first edition of Diceys treatise on the conflict of laws, which defined the law governing a contract as the law or laws to which the parties intended, or may fairly be presumed to have intended, to submit themselves: Dicey, A Digest on the Law of England with reference to the Conflict of Laws, 1st ed (1896), rule 143. In the second half of the 20th century, however, the test of presumed intention came gradually to be superseded by an acknowledgement that at this stage of the analysis the court is no longer concerned with intention at all and is applying a positive rule of law, with the rule being that the contract is governed by the system of law with which it has its closest and most real connection: see Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), paras 32 006 32 007; Hellenic Steel Co v Svolamar Shipping Co Ltd (The Komninos S) [1991] 1 Lloyds Rep 370, 374 (Bingham LJ). Lord Diplock stated the modern position clearly in the Tunisienne case, at pp 603 604: If, applying these rules [sc the ordinary rules of English law relating to the construction of contracts], the court reaches the conclusion that the parties did not intend to exercise any choice of proper law, or is unable to identify what their choice was, it becomes necessary for the court to proceed to the second stage, of determining itself what is the proper law applicable. In doing so, the court applies the English rule of the conflict of laws that the proper law is that system of law with which the transaction has its closest and most real connection: Bonython v Commonwealth of Australia [1951] AC 201, 219. My Lords, this is applied as a positive rule of English law. It is applied not because it is the choice of the parties themselves but because they never intended to exercise their liberty to make a choice or, if they did, they have failed to make their choice clear. Whether the parties have agreed on a choice of law is a matter which inevitably may sometimes give rise to differences of opinion. In the Tunisienne case three members of the House of Lords appellate committee (Lord Morris of Borth y Gest, Viscount Dilhorne and Lord Diplock) held that clause 13 (quoted earlier) was in its context to be construed as an agreement that French law was to govern the contract. The other two members of the committee (Lord Reid and Lord Wilberforce) did not consider that the clause could be so construed but still concluded at the second stage of the analysis that French law was the governing law. In Amin Rasheed Shipping Corpn v Kuwait Insurance Co (The Al Wahab) [1984] AC 50, Lord Diplock (with whose speech three of the other law lords agreed) applied the principles he had identified in the Tunisienne case to determine whether an insurance contract was governed by English law or the law of Kuwait. He concluded (at p 62) that on their proper construction the provisions of the contract, taken as a whole, by necessary implication point ineluctably to the conclusion that the intention of the parties was that their mutual rights and obligations under it should be determined in accordance with the English law of marine insurance. Lord Wilberforce reached the same result on the basis that English law was the system of law with which the contract had the closest and most real connection. (vii) Splitting the contract English common law (along with other legal systems) recognises the possibility that different parts of a contract may be governed by different laws a concept known in conflict of laws theory as dpeage. This is also expressly provided for in the Rome I Regulation. Article 3(1) includes the statement: By their choice the parties can select the law applicable to the whole or to part only of the contract. There are many English cases in which courts have contemplated that different obligations in the same contract may be governed by different laws. The earliest such case to which we were referred was the decision of the Court of Appeal in Jacobs, Marcus & Co v Crdit Lyonnais (1884) 12 QBD 589. There appear to be few cases, however, in which such a situation has been found to exist (although one such case is Libyan Arab Foreign Bank v Bankers Trust [1989] QB 728, 746 747). No doubt this is because, as Lord MacDermott said in Kahler v Midland Bank Ltd [1950] AC 24 at 42, the courts of this country will not split the contract in this sense readily or without good reason. It is generally reasonable to assume that parties would intend or expect their contract to be governed by a single system of law. To apply different systems of law to different parts of a contract has the potential to give rise to inconsistency and uncertainty. This is particularly so where questions about the validity or enforceability of contractual obligations arise. As observed in Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012) at para 32 026: Even if different parts of a contract are said to be governed by different laws, it would be highly inconvenient and contrary to principle for such issues as whether the contract is discharged by frustration, or whether the innocent party may terminate or withhold performance on account of the other partys breach, not to be governed by a single law. The assumption that, unless there is good reason to conclude otherwise, all the terms of a contract are governed by the same law applies to an arbitration clause, as it does to any other clause of a contract. As Mustill J said in Black Clawson International Ltd v Papierwerke Waldhof Aschaffenburg AG [1981] 2 Lloyds Rep 446, 456: In the ordinary way, this [sc the law of the arbitration agreement] would be likely to follow the law of the substantive contract. An arbitration clause may, however, more readily than other clauses be governed by a different law. One reason for this is that an arbitration clause has a different subject matter and purpose from the rest of the contract. It is concerned not with establishing substantive rights and obligations of the parties but with providing a mechanism by which a dispute about such rights and obligations will be resolved. A second reason flows from the principle of separability of the arbitration agreement. This is a cardinal principle of arbitration law, codified in section 7 of the Arbitration Act 1996. Section 7 provides that, unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement shall not be regarded as invalid, non existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement. As counsel for Chubb Russia emphasised, the principle of separability is not a principle that an arbitration agreement is to be treated as a distinct agreement for all purposes but only that it is to be so treated for the purpose of determining its validity or enforceability. That is clear from the words for that purpose in section 7 of the 1996 Act. Thus, the separability principle does not require that an arbitration agreement should be treated as a separate agreement for the purpose of determining its governing law. Nevertheless, the principle is relevant to the conflict of laws analysis because it alleviates the difficulty identified by Dicey, Morris & Collins in the passage quoted at para 39 above in treating different parts of a contract as governed by different laws. Where the separability principle is recognised by the putative applicable law of the arbitration agreement, no inconsistency will arise from treating issues such as whether the contract is discharged by frustration, or whether the innocent party may terminate or withhold performance on account of the other partys breach, or whether the contract has been rescinded for misrepresentation, as governed by a different law from the law of the arbitration agreement, as the resolution of those issues will not affect the validity or enforceability of the arbitration agreement. The possibility that an arbitration agreement may be governed by a different system of law from the contract of which it forms part is also implicitly recognised by the exclusion of arbitration agreements from the scope of the Rome I Regulation, with the consequence that the law applicable to an arbitration agreement and the law applicable to the rest of the contract must be determined independently by different conflict of laws regimes. IV. Choice of law for the whole contract Significance of a governing law clause (i) It is rare for the law governing an arbitration clause to be specifically identified (either in the arbitration clause itself or elsewhere in the contract). It is common, however, in a contract which has connections with more than one country (or territory with its own legal system) to find a clause specifying the law which is to govern the contract. A typical clause of this kind states: This Agreement shall be governed by and construed in accordance with the laws of [name of legal system]. Where the contract also contains an arbitration clause, it is natural to interpret such a governing law clause, in the absence of good reason to the contrary, as applying to the arbitration clause for the simple reason that the arbitration clause is part of the contract which the parties have agreed is to be governed by the specified system of law. As stated in Redfern and Hunter: Law and Practice of International Commercial Arbitration, 6th ed (2015) at para 3.12: Since the arbitration clause is only one of many clauses in a contract, it might seem reasonable to assume that the law chosen by the parties to govern the contract will also govern the arbitration clause. If the parties expressly choose a particular law to govern their agreement, why should some other law which the parties have not chosen be applied to only one of the clauses in the agreement, simply because it happens to be the arbitration clause? This approach is supported by other leading commentaries. For example, Merkin on Arbitration Law, Issue 84 (2020), para 7.12, states that: even if there is no express contractual statement to that effect, a choice of law clause for the entire agreement is likely to be construed as extending to the arbitration clause. There are numerous decisions to this effect However, that presumption may be ousted in appropriate circumstances See also Dicey, Morris & Collins on The Conflicts of Laws, 15th ed (2012) at para 16 017: If there is an express choice of law to govern the contract as a whole, the arbitration agreement may also be governed by that law. (ii) Domestic case law There is a considerable body of English case law which proceeds on the assumption that a choice of law for the contract will normally apply to an arbitration clause in the contract. The approach was summarised by Colman J in Sonatrach Petroleum Corpn (BVI) v Ferrell International Ltd [2002] 1 All ER (Comm) 627 at para 32: Where the substantive contract contains an express choice of law, but the agreement to arbitrate contains no separate express choice of law, the latter agreement will normally be governed by the body of law expressly chosen to govern the substantive contract. It has not generally been considered to make any difference in this regard that the arbitration clause provides for arbitration to take place in a different country from the country whose law has been chosen to govern the contract. Examples of decisions in which a choice of law clause in the contract has been treated as applying to the arbitration agreement despite the seat of arbitration being in a different jurisdiction include: Cia Maritima Zorroza SA v Sesostris SAE (The Marques De Bolarque) [1984] 1 Lloyds Rep 652, 653; Union of India v McDonnell Douglas Corpn [1993] 2 Lloyds Rep 48, 49 50; Sumitomo Heavy Industries Ltd v Oil and Natural Gas Commission [1994] 1 Lloyds Rep 45, 57; Deutz AG v General Electric Co (Thomas J, 14 April 2000) at p 17; Peterson Farms Inc v C&M Farming Ltd [2004] EWHC 121 (Comm); [2004] 1 Lloyds Rep 603, paras 43 46; Leibinger v Stryker Trauma GmbH [2005] EWHC 690 (Comm), para 38; and Svenska Petroleum Exploration AB v Government of the Republic of Lithuania [2005] EWHC 2437 (Comm); [2006] 1 All ER (Comm) 731, paras 76 77. A different view was expressed in XL Insurance Ltd v Owens Corning [2001] 1 All ER (Comm) 530, a case concerning a policy of insurance on Bermuda form terms which provide for New York law to govern the policy but for disputes to be determined by arbitration in London. The English court granted an injunction to restrain the insured from pursuing a claim against the insurers in the courts of Delaware. The insured argued that the choice of New York law to govern the policy included the arbitration agreement and that this agreement was invalid under the Federal Arbitration Act which formed part of New York law. Toulson J rejected that argument and concluded that, by stipulating for arbitration in London under the provisions of the 1996 Act, the parties had impliedly chosen English law to govern the arbitration agreement (see p 543b). We will consider his reasoning later in this judgment. In C v D [2007] EWCA Civ 1282; [2008] Bus LR 843, another case concerning a Bermuda form insurance policy, the Court of Appeal likewise expressed the view (obiter) that the arbitration agreement was governed by English law. In C v D, however, Longmore LJ (with whom the other members of the court agreed) reached this conclusion, not on the basis of implied choice, but on the basis that there was no choice of law for the arbitration agreement so that it was necessary to identify the law with which it was most closely connected. He considered this to be the law of the place where the parties had chosen to arbitrate rather than the law of the insurance contract (paras 25 26). Many commentaries and authorities, including XL Insurance and C v D, were considered by the Court of Appeal in Sulamrica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638; [2013] 1 WLR 102. In a judgment with which the other members of the court agreed, Moore Bick LJ said (at para 11): It is common for parties to make an express choice of law to govern their contract, but unusual for them to make an express choice of the law to govern any arbitration agreement contained within it; and where they have not done so, the natural inference is that they intended the proper law chosen to govern the substantive contract also to govern the agreement to arbitrate. Moore Bick LJ expressed reservations about the dicta of Longmore LJ in C v D, noting that the court in that case did not have the benefit of full citation of authority and that a rule that an arbitration agreement is governed by the law of the seat even where there is a choice of law clause in the contract cannot easily be reconciled with the earlier authorities or with the established principles for determining the proper law (para 24). His conclusion (at para 26) was in the following terms: In the absence of any indication to the contrary, an express choice of law governing the substantive contract is a strong indication of the parties intention in relation to the agreement to arbitrate. A search for an implied choice of proper law to govern the arbitration agreement is therefore likely (as the dicta in the earlier cases indicate) to lead to the conclusion that the parties intended the arbitration agreement to be governed by the same system of law as the substantive contract, unless there are other factors present which point to a different conclusion. These may include the terms of the arbitration agreement itself or the consequences for its effectiveness of choosing the proper law of the substantive contract This approach was followed in Arsanovia Ltd v Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm); [2013] 2 All ER (Comm) 1. In that case a contract contained clauses providing that it was to be governed by the laws of India and that disputes were to be settled by arbitration in London. It was held that, as a matter of construction, the parties had chosen Indian law to govern the arbitration agreement. Recently, in Kabab Ji SAL (Lebanon) v Kout Food Group (Kuwait) [2020] EWCA Civ 6; [2020] 1 Lloyds Rep 269 the Court of Appeal similarly construed a clause in a contract which stated This Agreement shall be governed by and construed in accordance with the laws of England as meaning that all the terms of the contract were governed by English law including an arbitration clause which provided for arbitration in France. This conclusion was reinforced by the fact that the contract included a clause which stated that This Agreement consists of the terms of agreement set forth herein below . (iii) Considerations of principle A number of further considerations confirm the reasonableness of, as a general rule, construing a choice of law to govern the contract as applying to an arbitration agreement set out in a clause of the contract, even where the law chosen to govern the contract differs from that of the place chosen as the seat of the arbitration: i) This approach provides a degree of certainty. The parties can be assured that an agreement as to the governing law will generally be an effective choice in relation to all of their contractual rights and obligations and to all of their disputes. ii) It achieves consistency. The same system of law governs all the parties rights and obligations. It can be unsatisfactory for potentially closely related issues such as the identity of the contracting parties or the proper approach to the interpretation of their bargain to be governed by different systems of law, depending on whether it relates to the main contract or the arbitration agreement. iii) It avoids complexities and uncertainties. As soon as the relationship between the parties is subject to two systems of law, problems can arise as to where and how to draw the boundaries between them. This is exemplified by the increasing prevalence of multi tier dispute resolution clauses. If the arbitration agreement is governed by a different system of law from the main body of the contract, provisions that require negotiation and/or mediation and/or expert determination in advance of arbitration raise potentially difficult questions as to whether they are governed by the law applicable to the arbitration agreement or by the law generally applicable to the contract, and indeed as to whether those questions should be answered by applying the common law rules or the Rome I Regulation. Article 50.1 of the construction contract is an example of such a clause. Although we explain later how these difficulties may be addressed, if there is only one system of law then no such difficulties arise. iv) It avoids artificiality. The principle that an arbitration agreement is separable from the contract containing it is an important part of arbitration law but it is a legal doctrine and one which is likely to be much better known to arbitration lawyers than to commercial parties. For them a contract is a contract; not a contract with an ancillary or collateral or interior arbitration agreement. They would therefore reasonably expect a choice of law to apply to the whole of that contract. v) It ensures coherence. It is consistent with the treatment of other types of clauses whose validity is also insulated from challenges to the contract, such as choice of law or choice of court clauses. Such clauses are generally presumed to be governed by the law of the contract of which they form part: see Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012) at paras 12 103 and 12 109. As a matter of principle and authority there are therefore strong reasons why an agreement on a choice of law to govern a contract should generally be construed as applying to an arbitration agreement set out or otherwise incorporated in the contract. (iv) The international perspective As to the international perspective, although there is no uniformity, there are many commentators on international arbitration who support such an approach, at least where there is an express choice of governing law for the contract. Examples to which we were referred include: Bantekas, The Proper Law of the Arbitration Clause: A Challenge to the Prevailing Orthodoxy (2010) 27 Journal of International Arbitration 1, 1 2; Born, International Commercial Arbitration, 2nd ed (2014), p 592; Grover, Dilemma of the Proper Law of the Arbitration Agreement: An Approach Towards Unification of Applicable Laws (2014) 32 Sing L Rev 227, 255; Choi, Choice of Law Rules Applicable for International Arbitration Agreements (2015) 11 Asian International Arbitration Journal 105, 108 109; Khatchadourian, Fortifying the Arbitration Clause in Ziad (ed), Festschrift Ahmed Sadek El Kosheri (2015), pp 53 56; and Miles and Goh, A Principled Approach Towards the Law Governing Arbitration Agreements in Kaplan and Moser (eds), Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber Amicorum Michael Pryles (2018) Chapter 24, p 393. This is also said to be the approach generally adopted by ICC arbitrators (see Lew, The Law Applicable to the Form and Substance of the Arbitration Clause: 40 Years of Application of the New York Convention in van den Berg (ed), Improving the Efficiency of Arbitration Agreements and Awards, (1998) ICCA Congress Series Vol 9, pp 143 144). It would appear that the same approach has been adopted in a number of common law and civil law jurisdictions. These include Singapore, India, Pakistan, Germany and Austria. According to Chubb Russia they also include Hong Kong, Australia and Switzerland, although this was questioned by Enka. Singapore provides an instructive example. In FirstLink Investments Corpn Ltd v GT Payment Pte Ltd [2014] SGHCR 12 it was held that the law of the seat should generally apply to the arbitration agreement. In BCY v BCZ [2016] SGHC 249; [2016] 2 Lloyds Rep 583 Steven Chong J disagreed and held that the approach in Sulamrica should be followed as it is supported by the weight of authority and is, in any event, preferable as a matter of principle (para 49). Having set out detailed reasons why that was so, he concluded that, as the arbitration agreement in that case was contained in a contract expressly governed by New York law, the presumption was that New York law governed the arbitration agreement and this presumption was not displaced by the choice of Singapore as the seat of arbitration. BCY v BCZ has been approved by the Singapore Court of Appeal see BNA v BNB [2020] 1 Lloyds Rep 55, para 44, where it was accepted by both parties as a correct statement of the law. The approach of the Court of Appeal (i) The Court of Appeals judgment The Court of Appeal reached a contrary conclusion in the present case. Leaving aside cases in which, exceptionally, a choice of the law governing the arbitration agreement is specified in the arbitration agreement itself, Popplewell LJ (with whom Flaux and Males LJJ agreed) was prepared to accept that an express choice of the law applicable to the contract containing the arbitration agreement may sometimes, as a matter of construction, amount to an express choice of the law applicable to the arbitration agreement (para 90). But he considered that this conclusion would follow only in a minority of cases and that in all other cases there is a strong presumption that the parties have impliedly chosen the law of the seat of the arbitration to govern the arbitration agreement. This was said to be the general rule, subject only to any particular features of the case demonstrating powerful reasons to the contrary (para 91). (ii) Separability Our first difficulty with this proposed general rule is that we do not agree that it is only in a minority of cases that an express choice of law to govern the contract should properly be construed as being a choice of law to govern an arbitration agreement included in the contract. As we have discussed, a clause such as This Agreement is to be governed by and construed in accordance with the laws of [a named country] is naturally and sensibly understood to mean that the law of that country should govern and determine the meaning and effect of all the clauses in the contract which the parties signed including the arbitration clause. It is unclear to us why more should be needed or what more on the Court of Appeals approach is required to make it clear that a phrase such as This Agreement means the whole agreement and not just part of it. The Court of Appeal justified its approach on the ground that a choice of law to govern the contract has little if anything to say about the [arbitration agreement] law choice because it is directed to a different and separate agreement (para 92). This was said to follow from the doctrine that an arbitration agreement is separable from the rest of the contract. In our view, this puts the principle of separability of the arbitration agreement too high. For reasons given earlier, the requirement that an arbitration clause is to be treated as a distinct agreement for the purpose of determining its validity, existence and effectiveness makes it more amenable than other parts of a contract to the application of a different law. The rationale underlying the separability principle is also relevant, as we will mention later, in cases where applying the governing law of the contract to the arbitration clause would render the arbitration agreement invalid or ineffective. But it does not follow from the separability principle that an arbitration agreement is generally to be regarded as a different and separate agreement from the rest of the contract or that a choice of governing law for the contract should not generally be interpreted as applying to an arbitration clause. Descriptions of an arbitration clause as, for example, collateral to the main contract in which it is incorporated (Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal (The Hannah Blumenthal) [1983] 1 AC 854, 917, per Lord Diplock) or a separate contract, ancillary to the main contract (Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corpn Ltd [1981] AC 909, 998, per Lord Scarman) need to be seen in their context as ways of expressing the doctrine that the discharge by frustration (or for other reasons) of the substantive obligations created by the contract will not discharge the parties agreement to arbitrate. The arbitration clause is nonetheless part of the bundle of rights and obligations recorded in the contractual document. So, for example, an assignment of the contract will include an arbitration clause without the need for any separate or additional assignment: see Schiffahrtsgesellschaft Detlev von Appen GmbH v Voest Alpine Intertrading GmbH (The Jay Bola) [1997] 2 Lloyds Rep 279, 285; Shayler v Woolf [1946] Ch 320; and Cockett Marine Oil DMCC v ING Bank NV (The M/V Ziemia Ciesznska) [2019] EWHC 1533 (Comm); [2019] 2 Lloyds Rep 541. As Colman J put it in construing the words any clause of this Agreement as including an arbitration clause in JSC Zestafoni G Nikoladze Ferroalloy Plant v Ronly Holdings Ltd [2004] EWHC 245 (Comm); [2004] 2 Lloyds Rep 335, para 31: There is nothing in the intrinsic character of an arbitration agreement as having an attribute of separability which prevents it from being included in that phrase. Moore Bick LJ summed up the position clearly when he said in the Sulamrica case at para 26: The concept of separability itself, however, simply reflects the parties presumed intention that their agreed procedure for resolving disputes should remain effective in circumstances that would render the substantive contract ineffective. Its purpose is to give legal effect to that intention, not to insulate the arbitration agreement from the substantive contract for all purposes. In his lead judgment in the Court of Appeal Popplewell LJ quoted this passage (at para 93) and appeared there to recognise that it is wrong to characterise an arbitration clause generally as a separate agreement. He went on, however, to make a more specific point that one of the purposes for which an arbitration agreement is treated as separate and severable is that of applying the curial law which, where the parties have chosen a different arbitration seat and hence curial law from the law applicable to their contract, is distinct from the latter system of law. The rhetorical question was posed, at para 94: Why then should [the law applicable to the contract] have anything to say about the closely related aspect of the very same arbitration agreement, namely the [law which governs it] (absent express language to that effect so as to give rise to an express choice of [the arbitration agreement] law)? Leaving aside what should count as express language in this regard, this argument rests on the premise that the curial law which governs the arbitration process is so closely related to the law governing the arbitration agreement that a choice of law to govern the contract should generally be presumed not to apply to an arbitration clause when the parties have chosen a different curial law. It is to this argument, which was central to the Court of Appeals reasoning, that we therefore turn. (iii) The overlap argument This argument, which we will call the overlap argument, seems to have made its first appearance in XL Insurance Ltd v Owens Corning [2001] 1 All ER (Comm) 530, mentioned earlier, where Toulson J considered that, by stipulating for arbitration in London under the provisions of the Arbitration Act 1996, the parties had impliedly chosen English law to govern the validity of the arbitration agreement despite the choice of New York law as the governing law of the policy (see p 543b). His essential reasoning (at p 541e) was that the substance and process of arbitration are closely intertwined and that the 1996 Act contains various provisions which could not readily be separated into boxes labelled substantive arbitration law or procedural law, because that would be an artificial division. The Court of Appeal in the present case endorsed and elaborated on this reasoning, concluding that the overlap between the scope of the curial law and that of the [arbitration agreement] law strongly suggests that they should be the same (para 96). They further considered that, given this overlap and the fact that the curial law which regulates the arbitration process is a matter of choice which comes with an express choice of seat, it seems natural to regard a choice of seat as an implied choice of the law applicable to the arbitration agreement (para 101). On this basis they held that there is a strong presumption that a choice of seat is an implied choice of the law which is to govern the arbitration agreement (para 105(3)). (iv) Choice of curial law On this appeal Chubb Russia disputed the initial premise that a choice of seat for an arbitration involves any choice of law at all, procedural or substantive. Counsel for Chubb Russia submitted that the application of the curial law of the seat is something that follows automatically from a choice of place of arbitration rather than being itself a matter of choice. They cited as an analogy a hypothetical case postulated by Redfern and Hunter: Law and Practice of International Commercial Arbitration, 6th ed (2015), para 3.63, of an English motorist who takes her car to France. Redfern and Hunter comment that: it would be an odd use of language to say that this notional motorist had opted for French traffic law; rather, she has chosen to go to France and the applicability of French law then follows automatically. It is not a matter of choice. We agree that it would be inapt to describe the tourist in this example as having made a choice to be regulated by French traffic law. But as Mr Dicker QC for Enka submitted, it is difficult to conceive that a persons decision to visit France might be informed by a desire to be governed by French traffic law. By contrast, the nature and scope of the jurisdiction exercised by the courts of a country over an arbitration which has its seat there is a highly material consideration in choosing a seat for the arbitration. That is reinforced by the fact that the seat of an arbitration is a legal concept rather than a physical one. A choice of place as the seat does not dictate that hearings must be held, or that any award must actually be issued, in that place. As the Court of Appeal observed (at para 46), it is perfectly possible to conduct an arbitration with an English seat at any convenient location, anywhere in the world. Furthermore, under section 53 of the Arbitration Act 1996, unless otherwise agreed by the parties, where the seat of an arbitration is in England and Wales, any award in the proceedings shall be treated as made there, regardless of where it was signed, despatched or delivered to any of the parties (see also article 31(3) of the UNCITRAL Model Law on International Commercial Arbitration adopted by the United Nations Commission on International Trade Law on 21 June 1985). The point of agreeing a seat is to agree that the law and courts of a particular country will exercise control over an arbitration which has its seat in that country to the extent provided for by that countrys law. A choice of seat can in these circumstances aptly be regarded as a choice of the curial law. As noted at the beginning of this judgment, however, the curial law which applies to the arbitration process is conceptually distinct from the law which governs the validity and scope of the arbitration agreement. Whether a choice of the curial law carries any implication that the parties intended the same system of law to govern the arbitration agreement and, if so, the strength of any such implication must depend on the content of the relevant curial law. (v) Relationship between curial law and arbitration agreement law In Carpatsky Petroleum Corpn v PJSC Ukrnafta [2020] EWHC 769 (Comm); [2020] Bus LR 1284, the claimant applied to enforce in England and Wales an arbitration award made in Sweden. Enforcement was resisted on the ground (among others) that there was no valid arbitration agreement in the contract between the parties. This argument depended on the assumption that the validity of the arbitration agreement was governed by the law of Ukraine. The contract provided for the law of substance of Ukraine to apply on examination of disputes. Butcher J held (at paras 67 71) that this was not a choice of Ukrainian law to govern the arbitration agreement and that, in the circumstances, the choice of Stockholm as the seat for any arbitration demonstrated an implied choice that the validity and interpretation of the arbitration agreement should be governed by Swedish law. His reasons were that: (1) it was reasonable to infer that the parties had deliberately chosen a neutral forum to resolve their disputes and hence intended the law of that jurisdiction to determine issues as to the validity and ambit of that choice; and (2) by choosing Sweden as the seat for the arbitration, the parties agreed to the application of the Swedish Arbitration Act, including section 48 which provides that, in the absence of agreement on a choice of law to govern an arbitration agreement with an international connection, the arbitration agreement shall be governed by the law of the country in which, by virtue of that agreement, the arbitration proceedings have taken place or will take place. It follows that, by providing for a Swedish seat, the parties were impliedly agreeing that Swedish law should govern the arbitration agreement. A similar inference could also be drawn where a contract contains an agreement for arbitration in Scotland. Section 6 of the Arbitration (Scotland) Act 2010 provides: Where (a) the parties to an arbitration agreement agree that an arbitration under that agreement is to be seated in Scotland, but (b) law which is to govern it, the arbitration agreement does not specify the then, unless the parties otherwise agree, the arbitration agreement is to be governed by Scots law. There is, however, no similar provision in the Arbitration Act 1996. The argument made by Enka, and accepted by the Court of Appeal, is that the 1996 Act contains provisions which are substantive as well as provisions which are procedural in nature, and that there is no clear division between the two. In these circumstances it is argued that, by choosing an English seat in the knowledge that the Arbitration Act 1996 will apply where the seat of the arbitration is in England, the parties are by implication choosing English law to govern at least some aspects of their substantive rights under the arbitration agreement. Furthermore, as suggested by Toulson J in the XL Insurance case, the provisions which affect substantive rights are intertwined with, and cannot readily be separated from, procedural provisions of the Act. The natural inference is said to be that the parties intended all their rights under the arbitration agreement to be governed by English law. (vi) Section 4(5) of the 1996 Act We agree that there is a close relationship between provisions of the Arbitration Act concerned with the arbitration agreement and provisions of the Act concerned with the arbitration process and that the distinction between them is not always clear or easy to draw. But we do not accept that this justifies the conclusion that a choice of an English seat of arbitration is an implied choice that the arbitration agreement will be governed by English law. In our view, a conclusive answer to that argument lies in a point raised by Chubb Russia on this appeal which was not fully developed in the Court of Appeal. The point in short is that almost all the provisions of the 1996 Act relied on to support the overlap argument are non mandatory and, where the arbitration agreement is governed a foreign law, by reason of section 4(5) the non mandatory provisions of the Act which concern arbitration agreements do not apply to it. As the legislation contemplates and specifically provides for a situation in which the arbitration agreement will be governed by a foreign law even though English law governs the arbitration process, no necessary inference can be drawn that, by choosing an English seat and with it English law as the curial law, parties are also impliedly choosing English law to govern their arbitration agreement. Section 4(5) of the 1996 Act states: The choice of a law other than the law of England and Wales or Northern Ireland as the applicable law in respect of a matter provided for by a non mandatory provision of this Part is equivalent to an agreement making provision about that matter. For this purpose an applicable law determined in accordance with the parties agreement, or which is objectively determined in the absence of any express or implied choice, shall be treated as chosen by the parties. The clear meaning and effect of this provision is that, where a foreign law is applicable to an arbitration agreement (whether by choice or as determined in the absence of choice by the closest connection test), that fact alone is enough to disapply any non mandatory provision of the Act in so far as it would otherwise affect a matter governed by the law applicable to the arbitration agreement. This is because the applicability of a foreign law is treated as equivalent to an agreement to make contrary provision about a matter. It is not necessary to inquire whether or not the foreign law does in fact make such contrary provision. Even if there were otherwise considered to be any ambiguity in the meaning of section 4(5), it is dispelled by the Supplementary Report on the Arbitration Act 1996, dated January 1997, produced by the Departmental Advisory Committee on Arbitration (the DAC), which explains the genesis of the provision. As originally drafted, clause 2 of the Bill provided: (1) The provisions of this Part apply where the law of England and Wales or Northern Ireland is applicable, or the powers of the court are exercisable, in accordance with the rules of the conflict of laws. (2) They apply, in particular (a) to matters relating to or governed by the arbitration agreement, where the applicable law is the law of England and Wales or Northern Ireland; and (b) to matters governed by the law applicable to the arbitral proceedings, where the seat of the arbitration is in England and Wales or Northern Ireland. The DAC Supplementary Report, at para 7(ii), observed that the purpose of clause 2(2) was to avoid the danger that all the provisions of Part I of the Act would be imported if English law was found to govern one particular aspect of an arbitration. For example: an arbitration may have a French seat, with French law governing the procedure, but English law governing the arbitration agreement. In such a situation, only those provisions of the Act which concern arbitration agreements should apply. It would be quite wrong to apply provisions of the Act which concern arbitral procedure, as this would be governed by French law. Plainly, this reasoning applies equally in reverse to an arbitration with an English seat and English law governing the procedure, but French law governing the arbitration agreement. In such a situation, only those provisions of the Act which concern arbitral procedure should apply and not those which concern the arbitration agreement, as this would be governed by French law. The clause as drafted, however, was considered unworkable in practice (although sound in principle) one reason being that, to apply clause 2(2), it would have been necessary individually to characterise and separate all those provisions of the Act which concerned the arbitration agreement, as distinct from all those that concerned the arbitral procedure (see para 9(ii) of the DAC Supplementary Report). It was noted that the attempt to do this had proved an extremely difficult and complex exercise. Furthermore: Many provisions concern both arbitration agreements and arbitral procedure, and there appeared to be a divergence of view with respect to many others. In the light of these difficulties, the DAC decided to recommend recasting the whole provision so as to establish in section 2(1) the basic rule that Part I of the Act applies to arbitrations which have their seat in England and Wales or Northern Ireland (see paras 10 11 of the DAC Supplementary Report). In such a case, however, as explained in para 12: If a foreign law has been chosen to govern any particular aspect of the arbitration, such as the arbitral procedure or the arbitration agreement, or is otherwise applicable to any such aspect, this is catered for by section 4(5). Therefore, reference may be made to this Act in the first instance, and then back to another law with respect to a specific issue. Whilst a process of characterisation may still have to be done, the combination of section 2 and section 4(5) avoids the dangers that: a choice of English law with respect to one part of an arbitration will import other parts of the Act that concern other aspects of the arbitration; a choice of England as the seat of the arbitration will necessarily entail the imposition of every provision of the Act. We observe that the recasting carried out on the recommendation of the DAC did not remove the need individually to characterise the provisions of the Act as substantive or procedural (or partly substantive and partly procedural) whenever the applicable law is in issue an exercise described by the DAC as extremely difficult and complex. Nevertheless, the legislative history confirms that sections 2 and 4(5) of the 1996 Act as enacted were intended to have the effect that, where England is chosen as the seat of an arbitration but the arbitration agreement is governed by a foreign law, the non mandatory provisions of the Act do not apply to any matter concerning the parties substantive rights and obligations under the arbitration agreement. The fact that the Act contains some provisions which are substantive, or partly substantive, cannot therefore where those provisions are non mandatory support an inference that, by choosing an English seat of arbitration, parties must be taken to have contemplated and intended that the validity and scope of their arbitration agreement should be governed by English law. The only mandatory provisions of the 1996 Act are sections 12, 13 and 66 to 68. Section 12 gives the court power to extend time for beginning an arbitration where there is a contractual time limit. This could only have any bearing on the law applicable to the arbitration agreement if the arbitration agreement includes a contractual time limit (which the relevant clause in this case does not). Section 13 applies the Limitation Acts to arbitrations. As these Acts include the Foreign Limitation Periods Act 1984, which applies foreign limitation law to any substantive obligation governed by foreign law, this cannot support an inference that the arbitration agreement is governed by English law. Sections 66 to 68 are concerned with enforcement of the award and applications to the court to challenge an award. They are procedural in nature and cannot be said to determine the law applicable to the arbitration agreement. The provisions of the Arbitration Act 1996 therefore do not justify any general inference that parties who choose an English seat of arbitration thereby intend their arbitration agreement to be governed by English law. (vii) Enkas case on section 4(5) Enka put forward three responses to this reasoning, none of which we have found persuasive. First, counsel for Enka submitted that section 4(5) is concerned only with a choice of foreign law as the curial law for the arbitration process, and not with a choice of foreign law to govern the arbitration agreement. This, however, is not a tenable reading of section 4(5), which is manifestly not limited in this way and expressly applies whenever a foreign law is applicable in respect of a matter provided for by a non mandatory provision of the Act. As emphasised on Enkas own case, the matters provided for by non mandatory provisions of the Act include some matters which concern the substance of the arbitration agreement as well as matters of procedure. Nor does section 4(4) support a different interpretation, as suggested in Enkas written case. Section 4(4) provides that it is immaterial whether or not the law applicable to the parties agreement is the law of England and Wales . This makes it clear that, if the parties have made arrangements by agreement in place of any non mandatory provision of the Act, it is irrelevant whether or not that agreement is governed by English law. There is no inconsistency between that provision and the rule established by section 4(5) that a choice of foreign law in respect of a matter is equivalent to an agreement making provision about that matter. The second argument advanced by Enka is that, if as we think clear section 4(5) is not confined to a choice of curial law and also covers cases where a foreign law is applicable to the arbitration agreement, section 4(5) nevertheless applies only where the arbitration agreement makes specific reference to the matter provided for by a non mandatory provision of the Act. As authority for this restrictive interpretation, Enka relied on a dictum of Lord Steyn in Lesotho Highlands Development Authority v Impregilo SpA [2005] UKHL 43; [2006] 1 AC 221. That case involved an attempted challenge under section 68 of the 1996 Act to a decision by an arbitral tribunal to award interest under section 49(3) on principal sums awarded. The challenge failed because the House of Lords held that substantial injustice had not been established, as required to invoke section 68. However, Lord Steyn, who gave the leading speech, went on to point out that the challenge had also faced other formidable difficulties. In particular, the power under section 49(3) to award interest was prima facie available: the only question was whether there had been an agreement to the contrary for the purpose of section 49(2). In that context Lord Steyn noted (at para 37) that the judge at first instance had appeared to take the view that the law of Lesotho, as the law applicable to the construction contract under which the claim arose, might be relevant presumably on the basis that it constituted an agreement to the contrary. In relation to this, Lord Steyn remarked: Ignoring for the moment the fact that one does not know what the law of Lesotho is, this view comes up against the difficulty that only an agreement in writing as defined in the Act can qualify as an agreement to the contrary under section 49: section 5(1). The law of Lesotho is not an agreement to the contrary in writing. Lord Steyn made no mention of section 4(5) of the Act: the point that he made was based on section 5(1), which states that an agreement between the parties as to any matter is effective for the purposes of this Part only if in writing. Nevertheless, in C v D, at para 19, Longmore LJ treated Lord Steyns dictum as supporting the view that section 4(5) requires a choice of law with regard to the specific provision of the [1996] Act which the parties agree is not to apply. This statement was in turn relied on by Burton J in National Iranian Oil Co v Crescent Petroleum Co International Ltd [2016] EWHC 510 (Comm); [2016] 2 Lloyds Rep 146, paras 12 17, to conclude that a choice of Iranian law to govern an arbitration agreement was not sufficient to disapply section 7 of the 1996 Act, which codifies the principle of separability of the arbitration agreement, and that nothing less than an agreement expressly disapplying section 7 or the English law governing separability would have sufficed for that purpose. The notion that section 4(5) applies only where parties have specifically excluded a non mandatory provision of the Act by the terms of their arbitration agreement cannot, in our view, be accepted. It is not consistent with the language of section 4(5). The words in respect of a matter provided for by a non mandatory provision require only that the matter governed by the foreign law should be a matter provided for by a non mandatory provision of the Act. They cannot reasonably be read as requiring the parties specific agreement that the foreign law and not the non mandatory provision will govern the matter. Apart from anything else, the second paragraph of section 4(5) makes it explicitly clear that no choice or agreement of the parties at all is required for section 4(5) to apply. The interpretation contended for by Enka is also inconsistent with the legislative intent, as explained in the DAC Supplementary Report. Furthermore, as the late Mr VV Veeder QC observed, if correct, it would make a practical nonsense of the 1996 Act by requiring parties choosing a foreign law to govern an agreement for arbitration in England to analyse and identify individually in their agreement each of the 35 or so non mandatory provisions of the 1996 Act which they wish to disapply. We agree with Mr Veeders comment that the absurd consequences of such an interpretation speak for themselves: see Kaplan and Moser (eds), Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber Amicorum Michael Pryles (2018), Chapter 23, p 382. We do not think it credible that Lord Steyn in the Lesotho case intended to endorse such an interpretation of section 4(5), and to do so without giving any reasons or even mentioning that provision of the Act at all. The likely reason why no reference was made to section 4(5) is that it was not relevant to the power to award interest. The Court of Appeal in the Lesotho case characterised the power to award interest under section 49(3) of the 1996 Act as discretionary and procedural a characterisation which Lord Steyn seems to have endorsed when referring to the reasoning of the Court of Appeal in para 38 of his speech. The fact that section 49(3) was treated by both the Court of Appeal and the House of Lords in the Lesotho case as procedural in nature was later relied on by the Court of Appeal in Maher v Groupama Grand Est [2009] EWCA Civ 1191; [2010] 1 WLR 1564, para 38, to support a similar characterisation of the power of a court to award interest under section 35A of the Senior Courts Act 1981. Because section 49(3) is procedural, the choice of the law of Lesotho to govern substantive contractual rights was not in respect of a matter provided for by section 49(3) and therefore did not engage section 4(5). As it was not in doubt that the curial law governing the arbitration process was English law, to disapply section 49(3) would accordingly have required a specific agreement (in writing), as Lord Steyn observed. Whether or not Lesotho law contained any equivalent procedural power was in these circumstances not relevant. Even if it did, the law of Lesotho concerning that matter could not amount to an agreement to the contrary. This is, we think, how Lord Steyns dictum should be understood. But whether this was what was meant or not, we are satisfied that section 4(5) does not require a specific agreement to disapply a non mandatory provision of the Act. It follows that Longmore LJs statement to that effect in C v D was erroneous and that the National Iranian Oil Co case was wrongly decided on this point. The third response of Enka was to contend that the consequences of giving section 4(5) what we consider to be its unambiguous meaning would be as far reaching as they are surprising because it would cause numerous non mandatory provisions, which parties to a London arbitration are unlikely to have intended to exclude, nonetheless to be excluded. To support this contention, Enka relied as examples on sections 5, 7, 30 and 58 of the 1996 Act. Of these provisions, only section 7 which codifies the principle of separability concerns the validity or scope of the arbitration agreement. Section 5, which states that Part I of the Act applies only where the arbitration agreement is in writing, is not concerned with the validity or scope of the arbitration agreement but with the circumstances in which the provisions of the Act will apply. If the requirement of writing is not met, Part I of the Act will not apply to the arbitration agreement but it will be regulated by, and will still be valid at, common law (see section 81). Section 30, which empowers the arbitral tribunal to rule on its own jurisdiction, is procedural. It does not deal with the parties substantive rights under the arbitration agreement but with the competence of the tribunal to determine the validity and scope of those rights. Section 58, which provides for the finality of an arbitral award, is also procedural in nature. (For that reason, the insurers argument in C v D that, as a result of section 4(5), section 58 was disapplied by a choice of New York law to govern the arbitration agreement was misconceived.) These and other procedural non mandatory provisions will only be excluded in the unusual event that the parties have chosen a foreign procedural law for an English seated arbitration: see Dubai Islamic Bank PJSC v Paymentech Merchant Services Inc [2001] 1 All ER (Comm) 514, para 31; C v D [2007] EWHC 1541 (Comm); [2007] 2 All ER (Comm) 557, paras 25 26 (Cooke J); Sterling v Rand [2019] EWHC 2560 (Ch); [2019] 2 Lloyds Rep 577, para 58. As observed in the DAC Supplementary Report, para 7(ii) (quoted at para 77 above), in such a case it would be wrong to apply non mandatory provisions of the Act which concern arbitral procedure, as this would be governed by foreign law. We accept that characterising individual provisions of that Act as procedural or substantive can, as recognised by the DAC, be a difficult and complex exercise. But we are satisfied that giving section 4(5) its plain meaning does not lead to surprising or untoward consequences and is inconsistent with the contention that choosing English law as the curial law of an arbitration involves an implied choice of English law as the law applicable to the arbitration agreement. For these reasons, we do not consider the overlap argument as accepted by the Court of Appeal to be well founded. While a choice of seat and curial law is capable in some cases (based on the content of the relevant curial law) of supporting an inference that the parties were choosing the law of that place to govern the arbitration agreement, the content of the Arbitration Act 1996 does not support such a general inference where the arbitration has its seat in England and Wales. VI. Avoiding invalidity (i) The validation principle It is a well established principle of contractual interpretation in English law, which dates back at least to the time of Sir Edward Coke (see Coke upon Littleton (1628) 42a), that an interpretation which upholds the validity of a transaction is to be preferred to one which would render it invalid or ineffective. In the days when Latin was commonly used in the courts, it was expressed by the maxim verba ita sunt intelligenda ut res magis valeat quam pereat translated by Staughton LJ in Lancashire County Council v Municipal Mutual Insurance Ltd [1997] QB 897, 910, as the contract should be interpreted so that it is valid rather than ineffective. This principle may apply if, in determining whether the parties have agreed on a choice of governing law, a putative governing law would render all or a part of the contract ineffective. For example, in In re Missouri Steamship Co (1889) 42 Ch D 321 a contract for the carriage of cattle by sea from Boston to England contained a clause that the carrier should not be liable for the negligence of the master or crew of the ship. The clause was valid under English law but void under the law of Massachusetts as being against public policy. The cattle were lost by the negligence of the master and crew, and the shipper claimed against the carrier for the loss. In concluding that the parties intended the contract to be governed by English law, the judge and the Court of Appeal placed reliance on the presumption that, in the words of Fry LJ at p 341, the law which would make the contract valid in all particulars was the law [intended] to regulate the conduct of the parties. In that case the potential invalidity of a significant clause in a contract was relied on as indicating the law intended to govern the entire contract. Where the clause in question is an arbitration clause, because of its severable character its putative invalidity may support an inference that it was intended to be governed by a different law from the other provisions of the contract or may at least negate an inference that the law generally applicable to the contract was intended to apply to the arbitration clause. (ii) Hamlyn v Talisker An early but authoritative instance of such reasoning is the decision of the House of Lords in Hamlyn & Co v Talisker Distillery [1894] AC 202. A contract between an English company and a Scottish company, to be performed in Scotland, contained the following provision: Should any dispute arise out of this contract, the same to be settled by arbitration by two members of the London Corn Exchange, or their umpire, in the usual way. It was common ground that this arbitration clause was valid according to English law but invalid according to the law of Scotland because the arbitrators were not named. The Court of Session held that the contract was governed by Scottish law as the law of the place of performance of the contract and that, in consequence, the arbitration clause was invalid. The House of Lords unanimously reversed that decision. As Lord Wilberforce subsequently noted in the Tunisienne case (at p 596), the only question decided by the House of Lords was whether the arbitration clause was governed by Scottish law or by English law. The members of the appellate committee were careful to limit their opinions to that question and to express no view on which law governed the other provisions of the contract. Two reasons were given for concluding that the arbitration clause was governed by English law. One reason, most fully expressed by Lord Watson (at pp 212 213), was that the language of the arbitration clause showed that the parties were contracting with reference to English law, as the clause required the arbitrators to be members of a commercial body in London and to decide disputes in the usual way in other words, in the manner customary in London. This reasoning did not, however, as it seems to us, justify treating the arbitration clause itself as governed by English law irrespective of which law governed the rest of the contract. It was a reason for inferring that the parties intended the arbitrators to apply English law in deciding any dispute under the contract and therefore for regarding the parties substantive contractual obligations as governed by English law. The question whether the arbitration clause was valid determined whether the arbitrators had jurisdiction, which was not at that time a matter that the arbitrators themselves were seen as competent to decide. This reasoning is therefore an early example of an approach we will consider shortly which treats a choice of seat of arbitration as an implied choice of law to govern the contract as a whole. The principal enduring significance of Hamlyn v Talisker lies in the second reason given for the decision, which was clearly articulated by Lord Herschell LC and Lord Ashbourne. It was this reason which justified treating the arbitration clause as potentially governed by a different law from rest of the contract. In Lord Herschells words (at p 208): the contract with reference to arbitration would have been absolutely null and void if it were to be governed by the law of Scotland. That cannot have been the intention of the parties; it is not reasonable to attribute that intention to them if the contract may be otherwise construed; Lord Ashbourne made the same point, stating graphically (at p 215) that the arbitration clause becomes mere waste paper if it is held that the parties were contracting on the basis of the application of the law of Scotland, which would at once refuse to acknowledge the full efficacy of a clause so framed. He continued: It is more reasonable to hold that the parties contracted with the common intention of giving entire effect to every clause, rather than of mutilating or destroying one of the most important provisions. (iii) The decision in Sulamrica It was this reasoning which led the Court of Appeal in the Sulamrica case to conclude that the arbitration clause in that case was governed by English law despite, as discussed earlier, starting from the position that an express choice of law to govern the contract is normally intended to apply to the arbitration clause. In the Sulamrica case claims were made by Brazilian companies involved in a construction project in Brazil under two insurance policies. Each policy contained an express choice of Brazilian law to govern the policy and a clause conferring exclusive jurisdiction on the courts of Brazil, but also mediation and arbitration clauses. These provided that any dispute should be referred to mediation and that, if the parties failed to agree the amount to be paid under the policy through mediation, the dispute should then be referred to arbitration in London. The insurers commenced arbitration proceedings in London and applied successfully to the English court for an interim injunction to restrain the insured from pursuing proceedings in the courts of Brazil. An appeal by the insured was dismissed by the Court of Appeal. The insureds case was that the contract, including the arbitration agreement, was governed by Brazilian law and that under Brazilian law the arbitration agreement was not enforceable against them without their consent. As noted earlier, Moore Bick LJ (with whom Hallett LJ and Lord Neuberger MR agreed) accepted that the choice of Brazilian law to govern the contract was a strong indication that the parties intended that system of law to govern the arbitration agreement. However, Moore Bick LJ identified two factors pointing the other way. The first was the overlap argument which we have just discussed: that by choosing London as the seat of arbitration, the parties must have foreseen and intended that the provisions of the Arbitration Act 1996 should apply to any arbitration, including those provisions which are more substantive than procedural in nature (para 29). For the reasons already given, we do not think that this argument is sound, as it overlooks the fact that, if the arbitration agreement was governed by Brazilian law, the non mandatory substantive provisions of the Act would be excluded by section 4(5). It was the second factor, however, which the Court of Appeal regarded as decisive. This was the possible existence of a rule of Brazilian law which would render the arbitration agreement enforceable only with the insureds consent (para 30). Moore Bick LJ reasoned that, given the terms of the mediation and arbitration clauses, the parties could not have intended to choose a system of law that either would, or might well, have that effect (para 31). As he also put it, Brazilian law could not have been intended to govern the arbitration agreement when there is at least a serious risk that a choice of Brazilian law would significantly undermine that agreement. In these circumstances it was necessary to identify the system of law with which the arbitration agreement was most closely connected. On this point Moore Bick LJ said (at para 32) that: an agreement to resolve disputes by arbitration in London, and therefore in accordance with English arbitral law, does not have a close juridical connection with the system of law governing the policy of insurance, whose purpose is unrelated to that of dispute resolution; rather, it has its closest and most real connection with the law of the place where the arbitration is to be held and which will exercise the supporting and supervisory jurisdiction necessary to ensure that the procedure is effective. On this basis he concluded that the arbitration agreement was governed by English law. Although reasoning of this kind was not relied on in the XL Insurance case where, as discussed earlier, Toulson J relied on the overlap argument it provides in our view a better justification for the result reached in that case. The fact that the arbitration clause would arguably have been invalid under New York law was itself a strong reason for interpreting the choice of New York law to govern the insurance policy as not extending to the arbitration agreement. (iv) Commercial purpose of an arbitration clause The principle that contracting parties could not reasonably have intended a significant clause in their contract, such as an arbitration clause, to be invalid is a form of purposive interpretation, which seeks to interpret the language of the contract, so far as possible, in a way which will give effect to rather than defeat an aim or purpose which the parties can be taken to have had in view. The strength of the inference that an interpretation of the contract would defeat an aim of the parties is, however, a matter of degree. An interpretation which would without doubt mean that an arbitration clause is void and of no legal effect at all gives rise to a very powerful inference that such a meaning could not rationally have been intended. That was the position in Hamlyn v Talisker, where it was common ground that, if the arbitration clause were governed by Scottish law, it would have been (in Lord Herschells words [1894] AC 202, 208) absolutely null and void. In the Sulamrica case the inference was weaker. There was a serious risk but not a certainty that, if Brazilian law applied to the arbitration clause, it would render the agreement to arbitrate enforceable only with the insureds consent. That would not have meant that the arbitration clause was of no effect at all. As Moore Bick LJ acknowledged, although most arbitration agreements permit either party to refer disputes to arbitration, some provide for arbitration only at the option of one or other party. He did not think it reasonable, however, to attribute to the parties in that case an intention to enter into a one sided arrangement of that kind (para 30). In Fiona Trust & Holding Corpn v Privalov [2007] UKHL 40; [2007] Bus LR 1719, the House of Lords affirmed the principle that the construction of an arbitration clause should start from the assumption that the parties, as rational businessmen, are likely to have intended any dispute arising out of the relationship into which they have entered or purported to enter to be decided by the same tribunal (see para 13, per Lord Hoffmann). Contrary to a submission made on behalf of Chubb Russia, this is not a parochial approach but one which, as the House of Lords noted in the Fiona Trust case, has been recognised by (amongst other foreign courts) the German Federal Supreme Court (Bundesgerichtshof), the Federal Court of Australia and the United States Supreme Court and, as stated by Lord Hope at para 31, is now firmly embedded as part of the law of international commerce. In his monumental work on International Commercial Arbitration, 2nd ed (2014), p 1403 Gary Born summarises the position as follows: In a substantial majority of all jurisdictions, national law provides that international arbitration agreements should be interpreted in light of a pro arbitration presumption. Derived from the policies of leading international arbitration conventions and national arbitration legislation, and from the parties likely objectives, this type of presumption provides that a valid arbitration clause should generally be interpreted expansively and, in cases of doubt, extended to encompass disputed claims. That is particularly true where an arbitration clause encompasses some of the parties disputes and the question is whether it also applies to related disputes, so that all such controversies can be resolved in a single proceeding (rather than in multiple proceedings in different forums). To the extent that a putative applicable law fails to recognise this presumption that arbitration has been chosen as a one stop method of dispute resolution, it is inherently less likely that reasonable commercial parties would have intended that law to determine the validity and scope of their agreement to arbitrate (rather than litigate) disputes. What degree of impairment to the commercial purpose of an arbitration agreement will be enough to negate the assumption that a choice of law to govern the contract is intended to apply to the arbitration agreement is not a question which can be answered in the abstract. As with any question of construction, it will be necessary to have regard to the particular words used in the contract and the surrounding circumstances, as well as the nature and extent of the risk that the purpose of the arbitration agreement would be undermined if its validity and scope were governed by the relevant system of law. We cannot improve on the formulation of Moore Bick LJ in the Sulamrica case, para 31, that commercial parties are generally unlikely to have intended a choice of governing law for the contract to apply to an arbitration agreement if there is at least a serious risk that a choice of that law would significantly undermine that agreement. Relevance of the arbitration seat to the main contract law During the 20th century a line of authority developed which treated a choice of place of arbitration, where there was no express choice of governing law clause in the contract, as a strong indication that the parties intended the contract to be governed by the law of that place. This inference hardened into a rule of law and reached its high water mark in Tzortzis v Monark Line A/B [1968] 1 WLR 406, where the Court of Appeal held that a London arbitration clause gave rise to an implication that the parties intended English law to govern their contract which could only be rebutted by an express provision to the contrary. In the Tunisienne case the House of Lords held that this put the strength of the implication too high and that the implication stemming from a choice of arbitral forum could be overridden by contrary indications derived from the express provisions of the contract or relevant surrounding circumstances. Nevertheless, Lord Wilberforce (at p 596B) described the inference that the parties intended the law of the place of arbitration to govern their contract as a sound general rule. Lord Diplock went further and said (at p 609E) that he did not wish to throw any doubt upon the proposition that an arbitration clause is generally intended by the parties to operate as a choice of the proper law of the contract as well as the curial law and should be so construed unless there are compelling indications to the contrary . As is apparent from, for example, the submissions of Robert Goff QC in defence of this approach in the Tunisienne case (at p 579D), its rationale was that contracting parties, by agreeing to arbitration in a particular place, must normally be taken to have expected the arbitrators to be resident in that place and to apply the law with which they are familiar. Lord Wilberforce expressed some reservation about this reasoning, observing (at p 596C): I venture to think that in commercial matters, at the present time, this may give insufficient recognition to the international character of the City of London as a commercial centre the reason, rather than any preference for English rules, for which arbitration in London is selected. In the half century since the Tunisienne case was decided international arbitration has undergone major evolution and exponential growth. This has been accompanied by the development of international arbitral institutions such as the ICCs International Court of Arbitration, the International Centre for Dispute Resolution established by the American Arbitration Association and the London Court of International Arbitration. The primary reason for selecting London as a place of arbitration is no longer the international character of London as a commercial centre but its attractiveness specifically as a forum in which to arbitrate international disputes. In some cases where the parties have chosen English law as the governing law of their contract, the ready availability of expert English lawyers may be a relevant factor in choosing London as the arbitration venue. But even in the kinds of arbitration where the members of the arbitral tribunal are chosen for their legal expertise (rather than solely or mainly for their commercial experience), there is nothing to prevent the appointment of lawyers qualified in other jurisdictions to act as arbitrators in a London seated arbitration, or English lawyers to act as arbitrators in a foreign seated arbitration, and such appointments are frequently made. Furthermore, experienced international arbitrators qualified as lawyers in England and Wales or in other jurisdictions are perfectly familiar with applying systems of law other than their own. There can in these circumstances be no general implication that a choice of London (or any other major arbitration centre) as the seat of arbitration demonstrates an intention that the parties contractual obligations will be governed by the law of that place. This is equally so whether the question of implied choice is governed by article 3 of the Rome I Regulation (in relation to the main body of the contract) or the common law conflict rules (in relation to the arbitration agreement). There are still cases in which an arbitration clause providing for arbitration in London by, for example, English maritime arbitrators, or by London brokers, or by a local association or exchange, may in combination with other factors be regarded as conveying an implied choice of law. An example is Egon Oldendorff v Libera Corpn (No 2) [1996] 1 Lloyds Rep 380, where an arbitration clause in a charterparty made between Japanese owners and German charterers provided for arbitration in London by arbitrators appointed by the London Maritime Arbitrators Association. Also relevant to Clarke Js decision that the parties intended English law to govern the charterparty were: (1) the fact that it was made on a well known standard form containing clauses with well known meanings in English law; and (2) that having agreed a neutral forum, the parties intended that forum to apply a neutral law, namely English law and not German or Japanese law. In such cases that implied choice of law will equally apply to the arbitration agreement: see Habas Sinai Ve Tibbi Gazlar Istihsal v VSC Steel Co Ltd [2013] EWHC 4071 (Comm); [2014] 1 Lloyds Rep 479, para 102. Such a situation may be contrasted with one in which the arbitration clause, although it specifies a place of arbitration, does not provide for a method of identifying the arbitrators except through appointment by an international arbitral body such as the ICC. As Andrew Baker J observed in his judgment in this case (at para 62), the ICC is a quintessentially and deliberately supranational institution, with its own internal, and so again supranational, supervisory apparatus of the International Court of Arbitration and its Secretary General and Secretariat. In a case of this kind the parties could not reasonably assume that the selection of London as the seat of arbitration, even where it is a neutral forum, points ineluctably by necessary implication to a choice of English law to govern the contract so as to make the express designation of a governing law unnecessary. Enka did not seek to argue on this appeal that the choice of London as the seat of arbitration in this case implies that the parties intended the construction contract as a whole to be governed by English law. But counsel for Enka submitted that, even though such an inference cannot be drawn in relation to the law intended to govern the parties substantive contractual obligations, it can nevertheless be drawn in relation to the arbitration agreement itself. We do not accept this. Where there is insufficient reason to infer that the parties chose London as the seat of arbitration because they wanted the arbitrators to be versed in English law, that applies as much to any issues concerning the validity or scope of the arbitration agreement which the arbitrators might be asked to decide as it does to the substance of any dispute. Nor can any necessary implication be drawn from the possibility that issues concerning the validity or scope of the arbitration agreement might have to be decided by the English courts in the exercise of their supervisory jurisdiction. Questions of foreign law are dealt with in the English Commercial Court on a daily basis the trial of the present case being an example and, as Steyn LJ said in Star Shipping AS v China Shipping Foreign Trade Transportation Corpn (The Star Texas) [1993] 2 Lloyds Rep 445, 451 452, even an express choice of jurisdiction does not by itself give rise to an implied choice of law. We therefore do not consider that a choice of the seat of arbitration can by itself be construed as an implied choice of the law applicable to the arbitration agreement. VIII Applying the closest connection test So far we have been considering the question whether the parties to a contract have chosen the law applicable to the arbitration agreement, either specifically or by choosing a system of law to govern the contract as a whole including the arbitration agreement. We now turn to the situation in which no such choice has been made. As discussed earlier (see para 36 above), the court must in these circumstances determine, objectively and irrespective of the parties intention, with which system of law the arbitration agreement has its closest connection. This exercise is different in nature from the attempt to identify a choice (whether express or implied), as it involves the application of a rule of law and not a process of contractual interpretation. Even where the parties have not agreed what law is to govern their contract, it is reasonable to start from an assumption for reasons given earlier that all the terms of the contract, including an arbitration clause, are governed by the same system of law. Where, however, the parties have selected a place for the arbitration of disputes, there is authority for, as a general rule, regarding the law with which the arbitration agreement is most closely connected as the law of the seat of arbitration. As we have seen, this was the approach adopted by the Court of Appeal in the Sulamrica case (see para 104 above). It was also endorsed by the Court of Appeal in C v D (see para 48 above), albeit that in that case insufficient reason was given, in our opinion, for rejecting the inference that the law chosen to govern the insurance contract was intended to apply to the arbitration clause. Among commentators, this rule notably has the support of Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), rule 64(1)(b) and para 16 016; see also Russell on Arbitration, 24th ed, (2015) at para 2 121. There are a number of reasons of principle and policy which in our opinion justify as a general rule regarding the law of the place chosen as the seat of arbitration as the law most closely connected with the arbitration agreement which in the absence of choice will apply by default. (i) The place of performance The starting point is that the seat of arbitration is the place where (legally, even if not physically) the arbitration agreement is to be performed. In identifying the system of law with which a contract (or relevant part of it) has its closest and most real connection, the place where the transaction is to be performed is the connecting factor to which the common law has long attached the greatest weight (since the place where the contract was concluded ceased to be seen as significant): see eg Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), para 32 073. This is justified by the fact that states have an interest in regulating transactions taking place within their territory and by the consequent natural assumption that the law of the territory in which a transaction is taking place will govern it in the absence of a contrary indication. By agreeing to a seat of arbitration the parties submit themselves to the jurisdiction of the courts of that place and to its law and coercive powers for the purposes of deciding any issue relating to the validity or enforceability of their arbitration agreement. Thus, as we discuss later in this judgment (see Part XI below), the courts of the seat have jurisdiction to grant an injunction to restrain proceedings brought in breach of the agreement to arbitrate. The parties also by their choice of seat impliedly agree to bring any claim for a remedy relating to the existence or scope of the arbitrators jurisdiction (including any issue as to the validity or scope or the arbitration agreement), and any challenge to an arbitral award, in the courts of that place: see C v D [2007] EWHC 1541 (Comm); [2007] 2 All ER (Comm) 557, paras 29 34 (Cooke J); C v D [2007] EWCA Civ 1282; [2008] Bus LR 843, para 17 (CA); Minister of Finance (Inc) v International Petroleum Investment Co [2019] EWCA Civ 2080; [2020] Bus LR 45, paras 36 49; Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), para 16 036. The seat of arbitration is in these circumstances the place to whose system of law the arbitration agreement is most closely attached. By contrast, there is no reason to regard the place of performance of the substantive obligations created by the contract as a significant connection for the purpose of determining the law applicable to the arbitration agreement (as opposed to for the purpose of determining what law the arbitrators should apply in deciding a dispute). This is because (as noted at para 40 above) the subject matter and purpose of an arbitration agreement are different from those of the contract in which it is incorporated. The irrelevance of the place of performance of the main contract is illustrated by the fact that seats of arbitration are frequently chosen which have no connection with where the parties substantive obligations are to be performed (or otherwise with the contract) and sometimes precisely because they have no such connection. Other factors connecting the main contract to a country or its laws are equally irrelevant in regard to the arbitration agreement. For example, article 4 of the Rome I Regulation adopts a presumption that the contract is most closely connected with the country where the party required to effect the characteristic performance of the contract has his habitual residence. There is no reason to regard this as a factor which should have any bearing on the law applicable to the arbitration agreement. We therefore agree with the view of Moore Bick LJ in the Sulamrica case quoted at para 104 above and also with statement of Longmore LJ in C v D [2007] EWCA Civ 1282; [2008] Bus LR 843, para 26, that: an agreement to arbitrate will normally have a closer and more real connection with the place where the parties have chosen to arbitrate than with the place of the law of the underlying contract in cases where the parties have deliberately chosen to arbitrate in one place disputes which have arisen under a contract governed by the law of another place. We do not consider that the importance of the connection between the law governing the arbitration agreement and the law of the seat is undermined by the fact that some national laws, such as the Arbitration Act 1996 in England and Wales, allow the parties a wide degree of freedom to make their own arrangements, either by choosing another system of law to govern their arbitration agreement or arbitral procedure (see section 4(5) of the 1996 Act, discussed earlier) or by agreeing to the application of institutional rules made by an arbitral body such as the ICC (see section 4(3) of the 1996 Act). The extent to which the parties are free to make such arrangements is itself a matter for the law of the seat. Furthermore, any national law is likely to include mandatory provisions, described in section 1(b) of the 1996 Act as such safeguards as are necessary in the public interest, which have effect notwithstanding any agreement to the contrary. As noted earlier, in the 1996 Act these include sections 66 to 68, which govern any challenge to an award made in England including any challenge to the substantive jurisdiction of the arbitrators on grounds that the arbitration agreement is invalid or unenforceable or does not cover the dispute referred to arbitration. Such provisions of themselves establish a close nexus between the law determining the validity and scope of the arbitration agreement and the law of the seat of arbitration. (ii) Consistency with international law and legislative policy A second, and in our view compelling, reason for treating an arbitration agreement as governed by the law of the seat of arbitration in the absence of choice is that such a rule accords with international law as embodied in the 1958 New York Convention and other international instruments, as well as with the national law which gives effect to the New York Convention in England and Wales. The New York Convention, to which the United Kingdom became a party in 1975 and which more than 160 states have now signed, has been described as the single most important pillar on which the edifice of international arbitration rests, and as perhaps the most effective instance of international legislation in the entire history of commercial law: see Redfern and Hunter: Law and Practice of International Commercial Arbitration, 6th ed (2015), para 2.11, quoting Wetter, The present status of the International Court of Arbitration of the ICC: An appraisal (1990) 1 Am Rev Intl Arb 91, p 93, and Mustill, Arbitration: History and background (1989) 6 J Intl Arb 43, p 49. The essential aim of the Convention was to establish a single uniform set of international legal standards for the recognition and enforcement of arbitration agreements and awards. Its success is reflected in the fact that, according to Born, International Commercial Arbitration, 2nd ed (2014), p 113, the New York Convention has been implemented through national legislation in virtually all contracting states. Article V(1)(a) of the Convention specifies, among the limited circumstances in which recognition or enforcement by the courts of a Convention state of an award made in another Convention state may be refused, proof that the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made. As stated in Dicey, Morris & Collins on The Conflict of Laws, 15th ed (2012), para 16 014: In the light of the pervasive reach of the New York Convention in modern times, this rule, although not itself prescribing a choice of law rule of general application, nevertheless provides a strong indication of one Article V(1)(a) enacted into English law by section 103(2)(b) of the Arbitration Act 1996 has two limbs, which are intended to be treated as uniform international conflict of laws rules: see Dallah Real Estate and Tourism Holding Co v Ministry of Religious Affairs of the Government of Pakistan [2008] EWHC 1901 (Comm); [2009] 1 All ER (Comm) 505, para 78 (Aikens J); and [2010] UKSC 46; [2011] 1 AC 763, para 123 (Lord Collins). The first, and primary, rule is that the validity of the arbitration agreement is governed by the law to which the parties [have] subjected it in other words the law chosen by the parties. The second, default rule, which applies where no choice has been indicated is that the applicable law is that of the country where the award was made. Where the parties have chosen the seat of arbitration, this will be (or be deemed to be) the law of the seat. In English law this is expressly provided by section 100(2)(b) of the 1996 Act. There is a division of opinion among commentators over whether the first limb of article V(1)(a) applies only where there is an express choice of law to govern the arbitration agreement or whether it also encompasses a choice that is implied for example from a choice of law to govern the contract in general: compare van den Berg, The New York Arbitration Convention of 1958 (1981), p 293 and Born, International Commercial Arbitration, 2nd ed (2014), pp 564 565. We think the latter is the better view. As discussed earlier, a choice of law for the arbitration agreement may be clearly indicated by a choice of law for the contract of which it forms part and a choice conveyed impliedly is just as much a choice entitled to respect in accordance with the principle of party autonomy as a choice stated expressly. Furthermore, the broader interpretation is supported by the language of article V(1)(a), which applies the default rule only failing any indication of the law to which the parties have subjected the arbitration agreement. Where proceedings are brought in a court of a contracting state in respect of a matter covered by an arbitration agreement to which the New York Convention applies, article II(3) of the Convention requires the court, at the request of one of the parties, to refer the parties to arbitration, unless the agreement is null and void, inoperative or incapable of being performed. Article II does not itself specify rules for identifying the law by which the validity of the arbitration agreement is to be determined. There is, however, a strong and widely accepted argument that the Convention is to be interpreted as requiring the same conflict rules to be applied in relation to article II(3) as are specifically required at the stage of enforcement by article V(1)(a). Thus, Professor van den Berg, a leading authority on the New York Convention, has written: A systematic interpretation of the Convention, in principle, permits the application by analogy of the conflict rules of article V(1)(a) to the enforcement of the agreement. It would appear inconsistent at the time of the enforcement of the award to apply the Conventions uniform conflict rules and at the time of the enforcement of the agreement to apply possibly different conflict rules of the forum. It could lead to the undesirable situation of the same arbitration agreement being held to be governed by two different laws: one law determined according to the conflict rules of the forum at the time of the enforcement of the agreement, and the other determined according to article V(1)(a) at the time of enforcement of the award. van den Berg, The New York Arbitration Convention of 1958 (1981), p 126 7; and see Born, International Commercial Arbitration, 2nd ed (2014), pp 494, 495 499; Lew & Mistelis, Comparative International Commercial Arbitration (2003), para 6 55; Schramm, Geisinger & Pinsolle, Article II in Kronke, Nacimiento et al (eds), Recognition and Enforcement of Foreign Arbitral Awards: A Global Commentary on the New York Convention (2010), p 55. This approach is also supported by other international instruments. The 1961 European Convention on International Commercial Arbitration adopts the conflict rules set out in article V(1)(a) of the New York Convention and, by article VI(2), provides for those rules to be applied at any stage when a court of a contracting state is required to rule on the existence or validity of an arbitration agreement in other words, whether the question arises pre or post award. Article 36 of the Model Law adopted by the United Nations Commission on International Trade Law (UNCITRAL) on 21 June 1985 parallels article V of the New York Convention in its list of grounds (set out in article 36) on which recognition or enforcement of an arbitral award may be refused. The Model Law takes this a step further in article 34 by restricting any challenge to an arbitral award to an application brought in the state in which the award was made and by limiting the grounds on which an award may be set aside to those on which recognition or enforcement of a foreign award may be refused. The primary reason for the exclusion of arbitration agreements from the Rome I Regulation was that such agreements were already adequately regulated by international conventions: see McParland, The Rome I Regulation on the Law Applicable to Contractual Obligations (2015), paras 7 126 7 127. The exclusion can accordingly be seen as a recognition of the fact that arbitration agreements are already subject to international uniform conflict rules derived, in particular, from the 1958 New York Convention and the 1961 European Convention. Although the United Kingdom has not signed the 1961 European Convention and has not in all respects adopted the UNCITRAL Model Law, the rules laid down in article V of the New York Convention (and article 36 of the Model Law) relating to the recognition or enforcement of awards have been directly incorporated into English law by section 103 of the 1996 Act. Thus, under section 103(2)(b) the grounds on which recognition or enforcement of an award made in another Convention state may be refused include proof that: the arbitration agreement was not valid under the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made; While this provision only applies directly in proceedings brought to enforce an award made in another Convention state, it would be illogical to apply different conflict rules to determine which law governs the validity of the arbitration agreement where the arbitration is seated (and the award therefore treated as made) in England. Thus, in cases where the parties have not chosen the law of the arbitration agreement but have chosen the seat of arbitration, it would be illogical if the English courts were to treat the validity of the arbitration agreement as governed by the law of the seat if the parties have chosen a foreign seat but by the law of the main contract if they have been chosen an English seat of arbitration. Such an approach would be all the more incoherent given that, if proceedings were brought in another Convention state to enforce an award made in England, the foreign court would apply the law of the seat (and not the law of the main contract, if different) to determine the validity of the award as required by article V(1)(a) of the Convention. As pointed out by Professor van den Berg in the passage quoted at para 130 above, it would be equally illogical if the law governing the validity of the arbitration agreement were to differ depending on whether the question of validity is raised before or after an award has been made. To ensure consistency and coherence in the law, the same law should be applied to answer the question in either case. Again, the incoherence that would result if English common law were to adopt a different conflict rule from the New York Conventions uniform rule would be compounded when the international perspective is considered. As one commentator has observed: It is fair to say that today, the conflict rule contained in article V(1)(a) New York Convention has developed into a truly transnational conflict rule for the determination of the law governing the substantive validity of the arbitration agreement. This rule has been applied in numerous international arbitral awards, is favoured by international arbitral doctrine and has been accepted by domestic courts. See Berger, Re examining the Arbitration Agreement: Applicable Law Consensus or Confusion?, in Van den Berg (ed), (2006) ICCA Congress Series Vol 13, 301, pp 316 317. It is not desirable that, when a question about the enforceability of the same arbitration agreement arises in different national courts, different conflict rules should be applied to determine the governing law. This point is well made by Gary Born in his work on International Commercial Arbitration, 2nd ed (2014), p 498: The international arbitral process aspires towards a maximally uniform approach by national courts presented with disputes about the substantive validity of a particular international arbitration agreement. A lack of uniformity on this issue would result in some courts referring parties to arbitration, and others refusing to do so, under the same arbitration agreement; that makes no sense and results in unnecessary litigation, forum shopping and uncertainty. Rather, insofar as possible, it is much more desirable for all national courts to reach the same conclusion as to the validity (or invalidity) of a particular arbitration agreement. Exactly the same points apply to the approach taken by national courts to the scope of an international arbitration agreement. As with questions of validity, issues about whether a dispute falls within the scope of the arbitration agreement may arise at any stage from when a party wishes to refer a dispute to arbitration to the stage of seeking to enforce an award. Article V(1)(c) of New York Convention provides that recognition and enforcement may be refused if [t]he award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration . Section 103(2)(d) of the 1996 Act contains an almost identical provision, as does article 36(i)(a)(iii) of the UNCITRAL Model Law and article IX(1)(c) of the European Convention. The general approach in the conflict of laws, adopted by both the common law and the Rome I Regulation, is to treat the validity and scope of a contract (as well as other issues such as the consequences of breach and ways of extinguishing obligations) as governed by the same applicable law. This makes good sense, not least because the boundary between issues of validity and scope is not always clear. Thus, it is logical to apply the law identified by the conflict rules prescribed by article V(1)(a) of the New York Convention and section 103(2)(b) of the 1996 Act to questions about the scope or interpretation of the arbitration agreement as well as disputes about its validity. This also accords with the approach taken by the American Law Institute in the final draft of the Restatement (Third) of the US Law of International Commercial and Investor State Arbitration (24 April 2019). Section 2.14 of the draft Restatement recommends a rule that a court should determine whether an international arbitration agreement is null and void in accordance with: (1) the law to which the parties have subjected the arbitration agreement; or (2) in the absence of such a choice of law, the law of the seat of arbitration. This approach is consistent with article V(1)(a) of the New York Convention. The comment on the applicable law explains: On balance, the present section favors ensuring symmetry between pre arbitration and post award standards for determining the validity of an arbitration agreement. There is no reason in principle why a court should answer that question differently depending on the stage of the proceedings, and doing so would inject unnecessary uncertainty and complexity into the analysis. Section 2.15 of the draft Restatement adopts the same rule for the purpose of determining whether a matter falls within the scope of an arbitration agreement, taking the position that the law applicable to determining the scope of an agreement to arbitrate should parallel the law applicable to determining whether the agreement is valid. Accordingly, whatever merit there might be, if one were designing a system of law from scratch, in a conflicts rule which treated the law of the main contract as applicable to the arbitration agreement in the absence of choice, it would in our view be wrong for the English common law to adopt a rule out of step with both the legislative policy of the 1996 Act and the underlying uniform rule established by the New York Convention. The court should apply the same conflict rules to identify the governing law irrespective of whether the arbitration has a domestic or foreign seat and irrespective of the stage at which an issue about the validity or scope of the arbitration agreement is raised. Internal coherence of English law, as well as harmony with international law and practice, is achieved by treating the applicable law in all cases, in the absence of a choice by the parties, as the law of the seat of arbitration. (iii) Giving effect to commercial purpose A third reason for applying the law of the seat as a default rule is that it is likely to uphold the reasonable expectations of contracting parties who have chosen to settle their disputes by arbitration in a specified place but made no choice of law for their contract. This is particularly so where, as is often the case in contracts made between parties of different nationalities, a popular seat of international arbitration has been chosen as a neutral forum with which neither party is connected. In such circumstances, if the parties had been required to make a common choice of law to govern their arbitration agreement at the time of contracting, it is inherently unlikely that they would have agreed on either of their national systems of law and much more likely that they would have settled on the law of the place which they had chosen as the seat of arbitration. Not only does this provide a neutral choice of law but it is already the law of that place which in countries which have implemented the Model Law or are parties to the New York Convention will determine the validity of an award if an application is made to set it aside or if its enforcement in the other partys home state is resisted. Countries frequently chosen as neutral seats of arbitration can also be expected to have legal regimes which are supportive of arbitration and which seek to give effect to the parties intention that they do not wish to have their disputes decided by a court. That is the case for all the most preferred seats of international arbitration which, according to the most recent 2018 international arbitration survey conducted by the School of International Arbitration at Queen Mary University of London, are London, Paris, Singapore, Hong Kong and Geneva. As discussed earlier, it is reasonable to assume that parties who have chosen to settle their disputes by international arbitration want an arbitration that resolves all (and not only some) disputes through an award that is binding and enforceable and which is immune from collateral attacks, particularly in the home country of one of the parties. As a general rule, applying the law of the chosen seat of arbitration is calculated to achieve that purpose. (iv) Legal certainty Finally, there is merit is recognising a clear default rule in the interests of legal certainty. Applying a general rule that, in the absence of choice, an arbitration agreement is governed by the law of the seat of arbitration (where a seat has been designated) enables the parties to predict easily and with little room for argument which law the court will apply by default. The benefits of certainty are further enhanced if the same law is applied irrespective of the country in which the proceedings are brought and whether the question of the validity or scope of the arbitration agreement is raised before or after an award has been made. Certainty might not be a sufficient reason to recognise a clear and uniform rule if the rule interfered with party choice. But here there is no risk of such interference because we are concerned with the situation in which the parties have not exercised their freedom to choose the law to be applied so that the court must make the selection for them. It is desirable that parties should be able to know with certainty what law a court will apply in this situation. If they do not like the default option, they can always choose a system of law that they prefer. (v) Conclusion on the default rule Chubb Russia did not argue against the contention that the law most closely connected with the arbitration agreement, which in the absence of choice will apply by default, will in general be the law of the seat of the arbitration. Indeed, leading counsel for Chubb Russia at one point in oral argument volunteered the suggestion that an appropriate default rule would be that the arbitration agreement is governed by the law of the seat. He noted that such a rule would have the advantages of certainty and consistency with article V(1)(a) of the New York Convention. Counsel later withdrew that suggestion and in reaching our conclusion on this issue we have placed no reliance on the fact it was made. But it was in our view no more than a realistic acknowledgement of the overwhelming case for recognising such a general rule. A case can be made for recognising an exception to the ordinary default rule where the arbitration agreement would be invalid under the law of the seat but not under the law governing the rest of the contract: see eg Merkin & Flannery on The Arbitration Act 1996, 6th ed (2019), para 46.10.5 and Born, International Commercial Arbitration, 2nd ed (2014), pp 542 549; for a contrary view, see Glick and Venkatesan, Choosing the Law Governing the Arbitration Agreement in Kaplan and Moser (eds), Jurisdiction, Admissibility and Choice of Law in International Arbitration: Liber Amicorum Michael Pryles (2018), Chapter 9, pp 148 149. Since the issue does not arise in the present case, it is not necessary to decide whether such an exception should be recognised. Even if there be no such exception, where the law of the seat is English law an arbitration agreement will only be invalid in limited circumstances and for good reason. Where the law of the seat is not English law, an award made under an arbitration agreement invalid under that law is liable in any event to be set aside by the courts of the seat, whose decision would normally be followed by the English courts: see the discussion by Lord Mance in Arbitration a law unto itself? (2016) 32 Arbitration International 223. There can also be cases where no seat has been designated, where it may be appropriate to apply the law applicable to the rest of the contract. But such exceptional cases apart, we consider that the law of the seat will apply by default. IX The law applicable to the arbitration agreement in article 50.1 Applying the principles discussed above to the present case, it is common ground that the parties have not chosen a system of law specifically to govern the arbitration agreement contained in article 50.1 of the construction contract. Chubb Russia, however, contends that the parties have chosen Russian law to govern the contract as a whole including the arbitration agreement. Enka disputes this. Enka accepts that the main body of the construction contract is governed by Russian law but maintains that this is so only because of the connections between the construction contract and the law of Russia and not as a matter of choice. (i) No choice of law The first thing to note is that the construction contract does not contain a choice of governing law clause. Amongst almost 100 pages of primary text and another 400 pages of appendices, there is no provision which says that the contract shall be governed by or interpreted in accordance with a specified system of law. In a detailed and professionally drafted commercial contract made between substantial organisations based in different countries, such a clause is an entirely standard clause, almost invariably included along with a clause specifying the forum in which any dispute is to be resolved. It is difficult to conceive that the omission of such a clause in this case despite the inclusion of a detailed provision dealing with the resolution of disputes was accidental. We agree with counsel for Enka that an obvious explanation for its absence is that the parties were not able to agree on a choice of the governing law. Chubb Russia contends that a choice of Russian law can nonetheless be discerned from the use in the construction contract of the term Applicable Law, taken together with the definition of that term in Attachment 17 as: Law of the Russian Federation, including legislation of the Russian Federation, all regulatory legal acts of the State Authority Federal Bodies, State Authorities of the constituent entities of the Russian Federation, legislation of the constituent entities of the Russian Federation, regulatory legal acts by Local Authorities and any other applicable regulatory legal acts. There are numerous references throughout the body of the contract to the Applicable Law, as well as other references to the law or laws of the Russian Federation. Counsel for Chubb Russia submitted that, read as a whole, the language of the construction contract makes it clear that the parties were contracting by reference to Russian law and chose Russian law as the law applicable to their agreement. Had it been the parties choice, however, that the construction contract should be governed by the Applicable Law as defined in Attachment 17, it would have been simple to say so. Yet, as noted, there is no clause which states this. Rather, the term Applicable Law is used in specific provisions of the contract which impose obligations on the contractor to comply with laws and regulations applicable in the country where the construction work was to take place. As the Court of Appeal observed (at para 107), it is a common technique in international construction contracts to define such an applicable law or laws and to impose an obligation to comply with them separately from any choice of the law that is to govern the validity and interpretation of the parties contractual rights and obligations. As evidence of this practice, the Court of Appeal cited a leading text on the widely used standard forms of international construction contract issued by the International Federation of Consulting Engineers (FIDIC): see Baker Mellors Chalmers and Lavers on FIDIC Contracts: Law and Practice, 5th ed (2009), paras 2.126, 2.140 and 2.145. Counsel for Chubb Russia pointed out that the contract in this case was not made on a FIDIC standard form and, unlike contracts made on FIDIC forms, does not contain a governing law clause. They observed that the technique employed in drafting FIDIC contracts is to select a governing law and then to apply a different law (usually the local law) expressly to certain provisions in such a way that the contractor will be obliged to comply with that law. That was not done here, where the only law specified was the Applicable Law. The drafting technique to which the Court of Appeal referred is not, however, peculiar to FIDIC standard forms. Authoritative texts cited by counsel for Enka confirm that other standard forms of international construction contract also typically include provisions which require the contractor to comply with applicable laws or with laws of the country where the works are carried out: see Huse, Understanding and Negotiating Turnkey and EPC Contracts, 4th ed (2020), paras 4 110 4 112; Bailey, Construction Law, 2nd ed (2016), para 18.11. The clear purpose of such provisions is to protect the employer against the risk of incurring liability through failure by the contractor to comply with local laws such as building regulations, health and safety and environmental laws, tax laws and other applicable regulatory requirements. The rationale for including such provisions is not affected by the presence or absence of a governing law clause in the contract. There is no necessary inference that the validity and interpretation of a contractual obligation requiring compliance with a law or laws of a particular country is itself to be determined by applying the contract law of that country. This is underlined by the point which Chubb Russia itself makes that the law chosen to govern a contract made on a FIDIC standard form (or, we would add, other forms of international construction contract) may and often does differ from the applicable law with which the contractor is required to comply in performing the contract. In any case the contractual obligations of Enka were not limited to compliance with the Applicable Law. Article 4.1 of the construction contract provides: The Contractor shall ensure performance of the Work in accordance with: a) The requirements of this Agreement (including references to the non mandatory rules of Applicable Law but to the extent the provisions of the Agreement are not at variance with mandatory rules of Applicable Law); b) Applicable Law (including the Mandatory Technical Rules constituting a part of such Applicable Law); c) An Implied Covenant of Good Faith and Fair Dealing. The definition in Attachment 17 of the phrase Implied Covenant of Good Faith and Fair Dealing imports standards applied by experienced international contractor organisations engaged in similar projects. As well as such standards, the construction contract and its attachments set out many specific requirements for the work which do not form part of the Applicable Law. Quite apart from this, there are numerous rights and obligations established by the construction contract which make no reference to the Applicable Law (or to laws of the Russian Federation). Examples are clauses dealing with the consequences of delay (article 26), force majeure (article 31), payment of the price (article 33) and termination (article 43). In these circumstances, it cannot be said that the parties have in the construction contract expressly selected a system of law to govern the validity and interpretation of their contractual obligations nor that the terms of the contract construed in their context point ineluctably to the conclusion that the parties intended Russian law to apply. To the contrary, the obvious inference from the fact that the parties have not anywhere in the contract stated what system of law is to govern any of their contractual obligations as opposed to creating obligations to comply with applicable laws is that they have not agreed (for whatever reason) on a choice of governing law. This inference applies to the arbitration agreement as much as to the rest of the contract. (ii) Closest connection In the absence of any choice of the law that is to govern the arbitration agreement, it is necessary to fall back on the default rule and identify the system of law with which the arbitration agreement is most closely connected. In accordance with our earlier analysis, this will generally be the law of the seat chosen by the parties, which in this case is London. As already mentioned, Chubb Russia did not actively oppose this conclusion if it is necessary to identify the law with which the arbitration agreement is most closely connected. Chubb Russias case has been put solely on the basis that the parties chose Russian law as the law governing the contract including the arbitration agreement. No alternative argument has been advanced that, if this is wrong, Russian law nevertheless applies as the law most closely connected with the arbitration agreement. Chubb Russia has put forward an argument, however, about the proper interpretation of particular terms of the construction contract which it remains relevant to consider. This argument is that the agreement to arbitrate disputes is embedded in a clause of the contract (article 50) dealing with dispute resolution which contains other obligations in addition to the obligation to arbitrate and which itself is, as Mr Bailey QC put it, buried deep inside the contract and inextricably connected to other provisions of it. It is said that in these circumstances the parties must have intended all the obligations in article 50, including the arbitration agreement, to be governed by the same system of law as each other and as the rest of the contract. For the purpose of this argument, it is necessary to determine the law applicable to the main body of the construction contract. As discussed earlier, for that purpose the court must apply the Rome I Regulation. (iii) The law applicable to the main contract Although it would be a mistake to interpret the Rome I Regulation through the prism of the common law, there does not appear to be any substantial difference (save possibly in relation to the admissibility of subsequent conduct) between the approach of the common law to determining whether there has been an express or implied choice of law and the approach to be followed in deciding whether a choice has been made expressly or clearly demonstrated for the purpose of article 3 of the Rome I Regulation. Thus, in Lawlor v Sandvik Mining and Construction Mobile Crushers and Screens Ltd [2013] EWCA Civ 365; [2013] 2 Lloyds Rep 98, para 33, the Court of Appeal held that the test of whether a choice has been clearly demonstrated is objective and is equivalent to Lord Diplocks formulation of the common law test, requiring the court to be satisfied that the only reasonable conclusion to be drawn from the circumstances is that the parties should be taken to have intended the putative law to apply. For the reasons already given when considering the position at common law, the parties have not in this case expressly made or clearly demonstrated a choice of law to govern the construction contract but are, as it seems to us, reasonably to be understood as having not agreed on a choice of law. The governing law is therefore to be determined by applying article 4 of the Rome I Regulation. Under the construction contract Enka was engaged to install a boiler and auxiliary equipment, with the equipment and materials (except for consumable materials) to be supplied by Energoproekt as customer. The contract was therefore, at least predominantly, a contract for the provision of services by Enka. Article 4(1)(b) of the Rome I Regulation establishes a prima facie rule that, to the extent that the law applicable to it has not been chosen in accordance with article 3, a contract for the provision of services shall be governed by the law of the country where service provider has his habitual residence. This rule points towards the law of Turkey as the country where the contractor, Enka, had its place of central administration and therefore habitual residence (see article 19(1)). However, the other party to the contract, Energoproekt, was a Russian company, as was the End Customer, Unipro. The contract was for the performance of construction work in Russia and required compliance with Russian laws and regulations. It is written in the Russian language (as the authoritative version); notifications under it were likewise required to be written in Russian and English but with the Russian version taking precedence and, when sent to the contractor, were to be sent to its Moscow office. The price for the work, although calculated in US dollars, was to be paid in roubles to a Russian bank account. The fact that the dispute resolution clause provides for arbitration in London is not a sufficient connection to indicate that English law should govern the contractual obligations of the parties. It is clear from all the circumstances of the case that the main body of the construction contract is manifestly more closely connected with Russia than with any other country. Pursuant to article 4(3) of the Rome I Regulation, it is therefore governed by Russian law. (iv) The dispute resolution clause Chubb Russias argument that the arbitration agreement cannot reasonably be detached from the rest of the contract in terms of its governing law has two aspects. The first is that article 50.1, which contains the arbitration agreement, must be governed by a single law. The second is that it makes no sense for that law to differ from the law applicable to the rest of the construction contract. Article 50.1 sets outs a series of procedures of increasing formality which the parties have agreed to follow for resolving any dispute, with arbitration being the last resort. Thus, where a Dispute as defined in the first sentence of article 50.1 arises, the parties are first of all obliged to make in good faith every reasonable effort to resolve it by negotiations. If the Dispute is not resolved within ten days of either party sending a Notification (a term defined in article 51.2 of the contract) to the opposite party containing an indication of the Dispute, either party may then give a written notice causing it to be referred to a meeting between the parties senior managements. It is only if the matter is not resolved within a further 20 calendar days that the obligation arises to refer the Dispute to international arbitration. Enka accepts that article 50.1 can only reasonably be interpreted as governed by a single system of law, as it is clearly intended to establish a single, staged dispute resolution process and it would make no sense for the meaning or scope of a Dispute as defined in the earlier part the clause to be determined by applying a different system of law from the law governing the validity and scope of the obligation to arbitrate. But it is Enkas case that the implication in terms of governing law flows in the opposite direction from that contended for by Chubb Russia, and that it follows from the identification of English law as the law which (on Enkas case) governs the arbitration agreement that English law applies to the whole of article 50.1. That conclusion should be reached, Enka contends, either by applying the common law rules to the whole of article 50.1 on the basis that the whole of that clause constitutes an arbitration agreement within the meaning of article 1(2)(e) of the Rome I Regulation or by applying the principle of dpeage and treating article 50.1 as a severable part of the contract for the purpose of the Rome I Regulation. Mr Bailey QC for Chubb Russia drew attention to connections between article 50.1 and other parts of the contract: in particular the use of capitalised terms such as Notification which are defined elsewhere. He also pointed out that article 42.2 of the contract includes provision for referring disputes arising out of the operation of the change control procedure to arbitration pursuant to article 50. He submitted that the dispute resolution clause is not hermetically sealed from the rest of the contract but is inextricably bound up with it, and that this points strongly to the conclusion that the arbitration agreement and the other obligations contained within the contract must all be governed by the same system of law. This contention could be formulated on the basis of implied choice or by reference to the closest connection test. As to the former, no doubt parties could in principle agree that the whole of their contract, including an arbitration agreement within it, should be governed by a single system of law even though they have not agreed on what that law should be. But this does not seem to us an inherently likely agreement for contracting parties to make. To establish such an agreement a clearer demonstration of intent would be necessary than the mere fact that the arbitration agreement forms part of a wider dispute resolution clause which is referred to elsewhere and uses terms defined elsewhere in the contract. In terms of connections, we agree with both parties that article 50.1 makes sense only as an integrated whole governed by one system of law. But we do not regard the connections to which Chubb Russia drew attention between article 50.1 and the rest of the contract as particularly strong or sufficient to require the application of the same law in circumstances where no choice of law has been made by the parties. There is no difficulty in principle in using within a contract or clause of a contract governed by a particular system of law a term defined in another part of the contract or in a separate instrument governed by a different system of law. In such a case the term will carry its defined meaning by agreement. The reference in article 50.1 to a Notification can readily operate in this way. Likewise, the cross reference in article 42.2 of the construction contract to the dispute resolution clause does not require both clauses to be governed by the same system of law. It has become increasingly common for commercial parties to include in their contracts provisions which require other forms of dispute resolution, such as good faith negotiation or mediation, to be undertaken without success before a dispute is referred to arbitration. We find it difficult to see how, as a matter of principle or policy, the fact that such an approach is adopted can justify the application of a different law to determine the validity or scope of the arbitration agreement. All the reasons that we have identified for, as a general rule, regarding the law governing the arbitration agreement in the absence of choice as the law of the seat of arbitration apply equally and with equal force where the arbitration agreement is contained in a wider dispute resolution clause (or integrated set of clauses) as where it is self contained. We do not think that reasonable commercial parties would expect the law applied to determine the validity and scope of their arbitration agreement to depend on which form of dispute resolution procedure is chosen. Rather, it is reasonable to expect that, where a multi tiered procedure is chosen, the law which determines the validity and scope of the arbitration agreement will determine the validity and scope of the whole dispute resolution agreement. The fact that two conflict of laws regimes are potentially in play complicates the analysis but provides no reason to alter the result. Where, as in this case, an obligation to arbitrate disputes is embedded in a single dispute resolution agreement which provides for other steps to be undertaken before the obligation to arbitrate arises, we do not think it unreasonable to regard the whole dispute resolution agreement as an arbitration agreement for the purpose of article 1(2)(e) of the Rome I Regulation. On this basis, applying the common law conflict of laws rules, article 50.1 of the construction contract is governed by English law. X Conclusions on applicable law It may be useful to summarise the principles which in our judgment govern the determination of the law applicable to the arbitration agreement in cases of this kind: i) Where a contract contains an agreement to resolve disputes arising from it by arbitration, the law applicable to the arbitration agreement may not be the same as the law applicable to the other parts of the contract and is to be determined by applying English common law rules for resolving conflicts of laws rather than the provisions of the Rome I Regulation. ii) According to these rules, the law applicable to the arbitration agreement will be (a) the law chosen by the parties to govern it or (b) in the absence of such a choice, the system of law with which the arbitration agreement is most closely connected. iii) Whether the parties have agreed on a choice of law to govern the arbitration agreement is ascertained by construing the arbitration agreement and the contract containing it, as a whole, applying the rules of contractual interpretation of English law as the law of the forum. iv) Where the law applicable to the arbitration agreement is not specified, a choice of governing law for the contract will generally apply to an arbitration agreement which forms part of the contract. v) The choice of a different country as the seat of the arbitration is not, without more, sufficient to negate an inference that a choice of law to govern the contract was intended to apply to the arbitration agreement. vi) Additional factors which may, however, negate such an inference and may in some cases imply that the arbitration agreement was intended to be governed by the law of the seat are: (a) any provision of the law of the seat which indicates that, where an arbitration is subject to that law, the arbitration will also be treated as governed by that countrys law; or (b) the existence of a serious risk that, if governed by the same law as the main contract, the arbitration agreement would be ineffective. Either factor may be reinforced by circumstances indicating that the seat was deliberately chosen as a neutral forum for the arbitration. vii) Where there is no express choice of law to govern the contract, a clause providing for arbitration in a particular place will not by itself justify an inference that the contract (or the arbitration agreement) is intended to be governed by the law of that place. viii) In the absence of any choice of law to govern the arbitration agreement, the arbitration agreement is governed by the law with which it is most closely connected. Where the parties have chosen a seat of arbitration, this will generally be the law of the seat, even if this differs from the law applicable to the parties substantive contractual obligations. ix) The fact that the contract requires the parties to attempt to resolve a dispute through good faith negotiation, mediation or any other procedure before referring it to arbitration will not generally provide a reason to displace the law of the seat of arbitration as the law applicable to the arbitration agreement by default in the absence of a choice of law to govern it. Applying these principles, we have concluded that the contract from which a dispute has arisen in this case contains no choice of the law that is intended to govern the contract or the arbitration agreement within it. In these circumstances the validity and scope of the arbitration agreement (and in our opinion the rest of the dispute resolution clause containing that agreement) is governed by the law of the chosen seat of arbitration, as the law with which the dispute resolution clause is most closely connected. We would therefore affirm albeit for different reasons the Court of Appeals conclusion that the law applicable to the arbitration agreement is English law. We have not found it necessary to consider arguments made by Enka that, if the arbitration agreement were governed by the law of Russia as the place of performance of the construction project and country with which the parties substantive contractual obligations have their closest connection, there would be a serious risk that the parties intention of having their disputes finally settled by arbitration in a neutral forum would be defeated. This was disputed by Chubb Russia, but in the light of the conclusion we have reached there is no need to resolve this further issue. XI The anti suit injunction If, as we have held, the arbitration agreement is governed by English law, Chubb Russia does not dispute that it was legitimate for the Court of Appeal to exercise its discretion whether to grant an anti suit injunction afresh and does not contend that it erred in so doing. Its challenge to the order made by the Court of Appeal rests on the assumption that the arbitration agreement is governed by Russian law. Chubb Russia contends that the English courts ought in these circumstances to defer to the decision of the Russian courts on whether their dispute must be referred to arbitration or may be resolved by litigation in the Russian courts. On Chubb Russias case the English courts approach to the grant of anti suit injunctions should differ according to whether the arbitration agreement is governed by English law or a foreign law. As we have held that the arbitration agreement is governed by English and not Russian law, it is not necessary to address this further ground of appeal. Nevertheless, given that it has been fully argued and the importance of the issues raised, we shall briefly address it. As already noted, by choosing a seat of arbitration the parties are choosing to submit themselves to the supervisory and supporting jurisdiction of the courts of that seat over the arbitration. A well established and well recognised feature of the supervisory and supporting jurisdiction of the English courts is the grant of injunctive relief to restrain a party from breaching its obligations under the arbitration agreement by bringing claims which fall within that agreement in court proceedings rather than, as agreed, in arbitration. A promise to arbitrate is also a promise not to litigate. As explained by Lord Hoffmann in West Tankers Inc v RAS Riunione Adriatica di Sicurt SpA (The Front Comor) [2007] UKHL 4; [2007] 1 Lloyds Rep 391, at paras 20 22: 20. Of course arbitration cannot be self sustaining. It needs the support of the courts Different national systems give support in different ways and an important aspect of the autonomy of the parties is the right to choose the governing law and seat of the arbitration according to what they consider will best serve their interests. 21. The Courts of the United Kingdom have for many years exercised the jurisdiction to restrain foreign court proceedings as Colman J did in this case: see Pena Copper Mines Ltd v Rio Tinto Co Ltd (1911) 105 LT 846. It is generally regarded as an important and valuable weapon in the hands of a court exercising supervisory jurisdiction over the arbitration. It promotes legal certainty and reduces the possibility of conflict between the arbitration award and the judgment of a national court. it saves a party to an arbitration agreement from having to keep a watchful eye upon parallel court proceedings in another jurisdiction, trying to steer a course between so much involvement as will amount to a submission to the jurisdiction and so little as to lead to a default judgment. That is just the kind of thing that the parties meant to avoid by having an arbitration agreement. 22. Whether the parties should submit themselves to such a jurisdiction by choosing this country as the seat of their arbitration is, in my opinion, entirely a matter for them. The courts are there to serve the business community rather than the other way round. No one is obliged to choose London. The existence of the jurisdiction to restrain proceedings in breach of an arbitration agreement clearly does not deter parties to commercial agreements. On the contrary, it may be regarded as one of the advantages which the chosen seat of arbitration has to offer. In the same case Lord Mance stated at paras 31 32: The purpose of arbitration (enshrined in most modern arbitration legislation) is that disputes should be resolved by a consensual mechanism outside any court structure, subject to no more than limited supervision by the courts of the place of arbitration. Experience as a commercial judge shows that, once a dispute has arisen within the scope of an arbitration clause, it is not uncommon for persons bound by the clause to seek to avoid its application. Anti suit injunctions issued by the courts of the place of arbitration represent a carefully developed and, I would emphasise, carefully applied tool which has proved a highly efficient means to give speedy effect to clearly applicable arbitration agreements. 32. It is in practice no or little comfort or use for a person entitled to the benefit of a London arbitration clause to be told that (where a binding arbitration clause is being however clearly disregarded) the only remedy is to become engaged in the foreign litigation pursued in disregard of the clause. Engagement in the foreign litigation is precisely what the person pursuing such litigation wishes to draw the other party into, but is precisely what the latter party aimed and bargained to avoid. In granting an anti suit injunction the English courts are seeking to uphold and enforce the parties contractual bargain as set out in the arbitration agreement. In principle it should make no difference whether that agreement is governed by English law or by a foreign law. In both cases the enquiry is whether there has been a breach of the arbitration agreement and whether it is just and convenient to restrain that breach by the grant of an anti suit injunction. The detail of the enquiry may differ, but its nature is the same. Chubb Russia contends that as a matter of discretion the considerations to be taken into account are different where the arbitration agreement is governed by foreign law. It submits that issues of scope and breach of the arbitration agreement are generally best left to the foreign court which has the requisite expertise in the applicable foreign law. The judges view was that different considerations arise where the arbitration agreement is governed by foreign law by reason of the doctrine of forum conveniens. We agree with the Court of Appeal that forum conveniens, which is a matter that goes to the courts jurisdiction, is not relevant. By agreeing to arbitrate in London the parties were agreeing to submit to the supervisory and supporting jurisdiction of the English courts, including its jurisdiction to grant anti suit injunctions. Chubb Russias principal argument is that considerations of comity nevertheless make it appropriate to defer to the foreign court as a matter of discretion. Comity, however, has little if any role to play where anti suit injunctive relief is sought on the grounds of breach of contract. As Millett LJ stated in Aggeliki Charis Cia Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyds Rep 87, 96: in my judgment there is no good reason for diffidence in granting an injunction to restrain foreign proceedings on the clear and simple ground that the defendant has promised not to bring them. The courts in countries party to the New York Convention, are accustomed to the concept that they may be under a duty to decline jurisdiction in a particular case because of the existence of an arbitration clause. I cannot accept the proposition that any court would be offended by the grant of an injunction to restrain a party from invoking a jurisdiction which he had promised not to invoke and which it was its own duty to decline. Although The Angelic Grace concerned an arbitration agreement governed by English law, that was not material to the reasoning of the Court of Appeal. The rationale for the courts approach was the fact of the promise made, not the law by which it was governed. That accords with principle. Nor does article II(3) of the New York Convention make any difference. As noted earlier, under this article a court of a Convention state is required to refer the parties to arbitration when it is seized of a matter which the parties have agreed to arbitrate (unless the arbitration agreement is null and void, inoperative or incapable of being performed). The New York Convention is concerned with recognition and enforcement of arbitration agreements and awards, not jurisdiction see, for example, Shashoua v Sharma [2009] EWHC 957 (Comm); [2009] 2 All ER (Comm) 477, paras 36 38. If a court is seized of jurisdiction under its own law or rules, article II(3) obliges it to exercise that jurisdiction to enforce arbitration agreements. It does not purport to nor does it confer any primacy over the jurisdiction of the courts of the seat. The grant of an anti suit injunction is always a matter of discretion. There may be circumstances in which it would be appropriate to await a decision of a foreign court. If, for example, the scope of the arbitration agreement was about to be determined by the highest court in the country of the governing law in unrelated proceedings, then it might be sensible for the English court to await that decision. Where, however, the issue arises in proceedings brought in alleged breach of the arbitration agreement, deference to the foreign court should generally give way to the importance of upholding the parties bargain and restraining a party to an arbitration agreement from doing something it has promised not to do. We therefore agree with the Court of Appeal that the principles governing the grant of an anti suit injunction in support of an arbitration agreement with an English seat do not differ according to whether the arbitration agreement is governed by English law or foreign law. Forum conveniens considerations are irrelevant and comity has little if any role to play. The courts concern will be to uphold the parties bargain, absent strong reason to the contrary, and the courts readiness to do so is itself an important reason for choosing an English seat of arbitration. It follows that if the agreement to arbitrate disputes contained in article 50.1 of the construction contract had been governed by Russian law, it would have been necessary for the English court to determine whether under the law of Russia the agreement is valid and the claim which Chubb Russia is seeking to pursue in Russia falls within its scope. If those questions were answered in the affirmative, it would in any event have been appropriate to grant an anti suit injunction. XII Overall conclusion Although our approach to the determination of the law applicable to the arbitration agreement differs from that taken by the Court of Appeal, we have similarly concluded that the arbitration agreement in this case is governed by English law. It is common ground that in these circumstances the arbitration agreement is valid, the dispute between the parties falls within it and that the injunction granted by the Court of Appeal to restrain Chubb Russia from proceeding against Enka in Russia was properly granted. It follows that we would dismiss the appeal. Introduction LORD BURROWS: (dissenting) (with whom Lord Sales agrees) 1. In this case, we are presented with an intriguing question of law which courts and commentators have been grappling with for many years. What is the proper law (in the English common law conflicts of law) of an arbitration agreement where there is no express choice of law clause in the arbitration agreement? In particular, should the proper law of the arbitration agreement be the law of the main contract in which the arbitration agreement is contained or should it be the law of the seat of arbitration? In shorthand, should one determine the proper law of the arbitration agreement by the main contract approach or the seat approach? In this case, the seat of the arbitration is England but the proper law of the main construction contract, in which the arbitration agreement is contained, is Russian law (although there is a dispute as to the precise reason for that). Although the ultimate question for this court is whether to issue an anti suit injunction to stop proceedings in Russia it is first helpful, and arguably essential, to determine the proper law of the arbitration agreement. That proper law issue is of wide public importance and this (dissenting) judgment is almost entirely devoted to it. A bare outline of the facts will here be sufficient. The claimant and respondent to this appeal (Enka) is a Turkish engineering company that had been engaged as a subcontractor in construction work at a power plant in Russia. The head contractor (CJSC Energoproekt) assigned its rights against Enka to the owner and developer (PJSC Unipro). There was an arbitration agreement (in article 50.1) in the construction contract (the main contract) between Enka and the head contractor that disputes would be determined by way of International Chamber of Commerce (ICC) arbitration with London seat. Following a massive fire at the power plant, the Russian first defendant insurer and the appellant in this appeal, OOO Insurance Company Chubb (which I shall refer to throughout as Chubb Russia), paid an insurance claim made by the owner and was subrogated to any rights the owner had against Enka. Chubb Russia brought a claim against Enka (and others) in Russia. Enka contended that those proceedings were in breach of the arbitration agreement and applied to the Russian court to dismiss Chubb Russias claim. It also brought a claim in England for an anti suit injunction against the defendants, all members of the Chubb group of companies. At first instance, Andrew Baker J declined to reach a decision on the proper law of the arbitration agreement but dismissed Enkas claim for an anti suit injunction on the ground of forum non conveniens: [2019] EWHC 3568 (Comm). Subsequently Enkas claim in Russia to dismiss the Russian proceedings, as being in breach of the arbitration agreement, failed although Chubb Russias claim on the merits against Enka also failed. Both Enka and Chubb Russia are appealing that decision to the Russian appeal court (and the appeal is set for late October 2020). Meanwhile the Court of Appeal here (Flaux, Males and Popplewell LJJ) ([2020] EWCA Civ 574) allowed Enkas appeal against Andrew Baker Js decision. It held that the proper law of the arbitration agreement was English and granted Enka an anti suit injunction to stop any Russian appeal going ahead as being in breach of the arbitration agreement. Chubb Russia applied to the Supreme Court for permission to appeal from the decision of the Court of Appeal. This court granted permission to appeal and also stayed the anti suit injunction upon Chubb Russia giving suitable undertakings to protect Enkas position pending the outcome of this expedited appeal. It will be helpful to set out immediately the arbitration agreement. This appears within article 50.1 of the main construction contract in the following terms: Resolution of disputes 50.1. The Parties undertake to make in good faith every reasonable effort to resolve any dispute or disagreement arising from or in connection with this Agreement (including disputes regarding validity of this agreement and the fact of its conclusion (hereinafter Dispute) by means of negotiations between themselves. In the event of the failure to resolve any Dispute pursuant to this article within 10 (ten) days from the date that either Party sends a Notification to the opposite Party containing an indication of the given Dispute (the given period may be extended by mutual consent of the Parties) any Party may, by giving written notice, cause the matter to be referred to a meeting between the senior managements of the Contractor and Customer (in the case of the Contractor senior management shall be understood as a member of the executive board or above, in the case of Customer, senior management shall be understood as general directors of their respective companies). The parties may invite the End Customer to such Senior Management Meeting. Such meeting shall be held within fourteen (14) calendar days following the giving of a notice. If the matter is not resolved within twenty (20) calendar days after the date of the notice referring the matter to appropriate higher management or such later date as may be unanimously agreed upon, the Dispute shall be referred to international arbitration as follows: the Dispute shall be settled by three arbitrators the Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce, appointed in accordance with these Rules, language, and the arbitration shall be conducted in the English in the place of arbitration shall be London, England. 50.2. Unless otherwise explicitly stipulated this Agreement, the existence of any Dispute shall not give the Contractor the right to suspend Work. 50.3. Not used. 50.4. Not used. financial 50.5. All other documentation such as documentation and cover documents for it must be presented in Russian. This judgment builds up to answering the question as to the proper law of the arbitration agreement by initially clearing the ground in three sections. The first sets out some clear or undisputed points of law, the second explains that the issue in this case concerns interpretation not invalidity, and the third clarifies why the proper law of the main contract is Russian. There is then an overview of the case law on the proper law of the arbitration agreement before I come to the central sections of the judgment on determining the proper law of the arbitration agreement in this case and generally. The analysis enables me to provide a statement of the common law on the proper law of an arbitration agreement that is principled, straightforward, clear and easy to apply. Clear or undisputed points of law A number of important matters of law relevant to deciding the proper law of the arbitration agreement are not in dispute (or are clear) and are worth setting out immediately. They are: (i) The seat of the arbitration is England as set out in article 50.1. (ii) The proper (or applicable) law of the main construction contract, which is determined by applying the Rome I Regulation (EC) No 593/2008 (laying down the EU and therefore English conflict of law rules to determine the proper law for contractual obligations), is Russian law. But there is a dispute as to how that conclusion is reached. The relevant provisions of the Rome I Regulation are as follows: Article 3 Freedom of choice 1. A contract shall be governed by the law chosen by the parties. The choice shall be made expressly or clearly demonstrated by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or to part only of the contract. Article 4 Applicable law in the absence of choice 1. To the extent that the law applicable to the contract has not been chosen in accordance with article 3 , the law governing the contract shall be determined as follows: (b) a contract for the provision of services shall be governed by the law of the country where the service provider has his habitual residence; 2. Where the contract is not covered by paragraph 1 or where the elements of the contract would be covered by more than one of points (a) to (h) of paragraph 1, the contract shall be governed by the law of the country where the party required to effect the characteristic performance of the contract has his habitual residence. 3. Where it is clear from all the circumstances of the case that the contract is manifestly more closely connected with a country other than that indicated in paragraphs 1 or 2, the law of that other country shall apply. 4. Where the law applicable cannot be determined pursuant to paragraphs 1 or 2, the contract shall be governed by the law of the country with which it is most closely connected. David Bailey QC, for Chubb Russia, submitted that the proper law of the main contract is Russian because, applying article 3(1) of Rome I, the choice of Russian law has been made expressly or clearly demonstrated. Robin Dicker QC, for Enka, denied that there has been an express or implied (ie clearly demonstrated) choice of Russian law. Mr Dicker accepted that Russian law is the proper law by reason of article 4 of Rome I but he did not pinpoint why that was so (but because Enka, as the service provider, is Turkish this must presumably be because Russia is the country with which the contract is manifestly more closely connected than Turkey). (iii) Although there is no bar to having different proper laws applying to different clauses of the same contract (the so called concept of dpeage), the general position taken at common law (not least on grounds of practical convenience) is that a contract has a single proper law. See, for example, Kahler v Midland Bank [1950] AC 24, 42 (per Lord MacDermott); Libyan Arab Foreign Bank v Bankers Trust Co [1989] QB 728, 747 (per Staughton J); Dicey, Morris & Collins, The Conflict of Laws, 15th ed (2012), para 32 026. It is worth stressing that the arbitration agreement here is contained in the main contract. We are not concerned with a free standing arbitration agreement (see para 230 below). (iv) The Rome I Regulation does not apply (directly) to an arbitration agreement because of an exclusion from the Regulation of arbitration agreements and agreements on the choice of court in article 1(2)(e) of the Regulation. The proper law of the arbitration agreement must therefore (in an English court) be determined by applying English common law conflict of laws rules. They require a court to look for (applying English law) an express choice, an implied choice or, if neither of those applies, the system of law with which the arbitration agreement has its closest and most real connection: Bonython v Commonwealth of Australia [1951] AC 201, 219; Sulamrica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638; [2013] 1 WLR 102, paras 9 and 25. The first two of those stages are both concerned with ascertaining the parties objective intentions. One can regard the exercise as being one of interpretation of the main contract and the arbitration agreement. There is no express choice of law clause in the arbitration agreement in this case, ie there is no mention of choice of law in article 50.1 of the contract. (v) Mr Bailey at one stage in oral argument appeared to concede that, if the proper law of the arbitration agreement was not Russian by reason of an express or implied choice, it must be English because, as the seat of the arbitration was England, one could not decide that the arbitration agreement had its closest and most real connection to Russia. But he later withdrew that concession. I consider that he was correct to do so (I return to this in para 256 below). (vi) What is commonly referred to as the curial law is, according to Mustill and Boyd, Commercial Arbitration, 2nd ed (1989), pp 60 62, 64 68, the law dealing with the manner in which the parties and the arbitrator are required to conduct the reference of a particular dispute (p 60) and includes the procedural powers and duties of the arbitrator (p 62). The curial law is (almost) invariably the law of the seat of the arbitration. As the law of the seat is England, the curial law here is English. Inextricably linked to this is what may be referred to as the curial or supervisory jurisdiction of the courts. This is concerned with the courts jurisdiction to support and enforce the arbitration. It includes, for example, the power to remove or replace an arbitrator, to enforce or set aside an arbitral award, and to grant injunctions to support the arbitration including anti suit injunctions. Like the curial law, the curial or supervisory jurisdiction of the courts is (almost) invariably determined by the seat of the arbitration. Here, therefore, it is not in doubt that the English courts have curial or supervisory jurisdiction in relation to the arbitration and this includes the jurisdiction to grant an anti suit injunction in this case to restrain the Russian proceedings. In summary, as Popplewell LJ expressed it in the Court of Appeal at para 46, The significance of the choice of a seat is a legal one as to the curial law and the curial court. (vii) If the proper law of the arbitration agreement is determined to be English, the anti suit injunction ordered by the Court of Appeal is appropriate. This was conceded by Mr Bailey. The dispute as to whether an anti suit injunction should be ordered therefore arises only if the proper law of the arbitration agreement is determined to be Russian. 3. A preliminary important point: the dispute concerns the interpretation (or scope) of the arbitration agreement not its validity The reason why the parties respectively favour Russian or English law as the proper law of the arbitration agreement is because English law may take a wider interpretation of the arbitration agreement in this case than Russian law. The precise basis for this is not entirely clear. The most obvious basis is that English law regards tort as well as contractual claims between the parties to be included within the scope of the disputes covered by the arbitration agreement (see Aggeliki Charis Cia Maritima SA v Pagnan SpA (The Angelic Grace) [1995] 1 Lloyds Rep 87), whereas Russian law may interpret disputes as applying only to contractual disputes between the parties. However, it may be that the true basis is slightly more complex than that and involves Russian law tending to interpret the arbitration agreement as not covering joint tortious liability whereas English law appears to include that. Whatever the precise basis for respectively favouring Russian or English law, the important point is that the issue between the parties is as to the scope or interpretation of the arbitration agreement. It is not about the validity of the arbitration agreement. Andrew Baker J recognised this in his judgment at paras 11 12 (and also at para 88). He said: 11. [I]t is common ground that there exists between Enka and Chubb Russia a valid and binding arbitration agreement. That is so even though Chubb Russia is suing in Moscow, and is therefore sued here, as subrogated insurer of Enkas original contractual counterparty. Whether Russian law or English law governs that question, it is common ground that such an insurer is bound by its insureds applicable arbitration agreement. The dispute between the parties, then, again as it was in The Angelic Grace, is whether the claim being pursued in the target proceedings is a claim in tort that falls outside the scope of the agreement to arbitrate. 12. The detail is more complex than it was in The Angelic Grace, however, because in that case there was no dispute but that the claim as brought in Italy was a claim in tort, and it was common ground that the question whether it fell within the scope of the arbitration agreement was governed by English law. Here the law applicable to the question of the scope of the arbitration agreement is disputed; and it is also contentious between the parties whether the claim as brought under Russian law in the Moscow Claim is a claim in tort, or, more strictly, whether it is viable as such. Furthermore, it is effectively common ground that if the question of the scope of the arbitration agreement is governed by English law, then that claim, however it is to be characterised under Russian law, is within that scope. The defendants argument that the claim, if rightly characterised as a claim in tort, falls outwith the scope of the arbitration agreement, only arises at all if they are right that scope is a matter of Russian law. That interpretation or scope, not validity, is in issue is borne out by the decision of the Russian court on 6 May 2020 which decided a preliminary question as to whether, applying Russian law, the court proceedings should go ahead despite the arbitration clause. The Russian court made clear that the issue was as to the interpretation or scope of the arbitration agreement and not the validity of the arbitration agreement. The Courts short judgment on this preliminary question was as follows: So it is article 965 of the Russian Federation Civil Code that establishes the right of the claimant to file against the persons liable for the losses, regardless of what served as the grounds for their occurrence. Therefore, the arbitration clause to which Enka refers does not encompass this dispute and does not extend to it, as the participants are not Enka alone, but also the other ten co defendants who did not enter into an arbitration clause, and the subject of the dispute is the general obligation of all 11 co defendants to indemnify the losses caused. On the basis of the above, the arbitral clause set out in point 50.1 of the contract is not applicable and because of this the motion declared by defendant 11 that the claim should be left on file should not be granted. (Emphasis added) However, Mr Dicker has now submitted that there is also an issue about the validity of the arbitration agreement under Russian law that does not arise under English law. He referred to a Russian decision on 8 February 2018 (in an unrelated matter) on enforcement of an arbitral award under this type of arbitration agreement. The decision was that the arbitration agreement was too uncertain to be enforceable under Russian law apparently because of uncertainty about whether there should have been a reference in the arbitration agreement to the International Court of Arbitration. It was submitted by Mr Bailey in Chubb Russias written case (at para 22) that there is no question of the arbitration agreement being invalid under Russian law; and, as we have seen in the last paragraph, such an argument about invalidity played no part in the reasoning of the Russian court in the 6 May 2020 decision. In any event, our attention was drawn to a note on the website of Debevoise & Plimpton LLP, dated 7 January 2019, indicating that the February 2018 decision in Russia is inconsistent with the usual approach of the Russian Supreme Court and is not a binding authority. Although Mr Dicker submitted that, in the light of that case, there is a serious risk (to use the language in Sulamrica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638; [2013] 1 WLR 102, para 31: see below para 217) that the arbitration agreement would be struck down as invalid under Russian law, that is not a submission that I can accept without having been provided with proper evidence as to the Russian law on the point. One can accept that there may be a triable issue as to whether there is a serious risk of invalidity in this case by reason of that 2018 case. However, we must decide the issue before us as to the proper law of the arbitration agreement on the evidence presented and on the matters pleaded (which do not include this invalidity point). In any event, the arbitration agreement in question in this case was entered into in 2012 and it would seem that, for the purpose of determining the proper law of the arbitration agreement, we must assess the parties intentions and all other relevant factors as at that point in time unaffected by subsequent legal developments in 2018. Why is it an important point that the dispute concerns the interpretation or scope of the arbitration agreement not its validity? There are two linked reasons. First, it is a general principle within the English conflict of laws that, as between two possible proper laws, the courts should favour the proper law that would uphold the validity of an agreement rather than one that would invalidate it (see, for example, In re Missouri Steamship Co (1889) 42 Ch D 321, 341; South African Breweries Ltd v King [1899] 2 Ch 173, 181; Coast Lines Ltd v Hudig and Veder Chartering NV [1972] 2 QB 34, 44 (per Lord Denning MR), 48 (per Megaw LJ); Chitty on Contracts, 33rd ed (2018), para 30 12). Mr Bailey referred to this (in reliance on the work of Gary Born, International Commercial Arbitration, 2nd ed (2014), pp 542 549, and Robert Merkin and Louis Flannery, The Arbitration Act 1996, 6th ed (2019), para 46.10.5) as the validation principle. It rests on the rational assumption that parties would prefer to have an agreement upheld than not. But if it is correct that there is no dispute about the validity of the arbitration agreement in this case, the validation principle is not a reason here for favouring English law over Russian law as the proper law of the arbitration agreement. Secondly, Mr Dicker submitted that, even if the dispute goes to the interpretation of the arbitration agreement and not its validity, the rational assumption is that parties would prefer to have all their disputes referred to arbitration rather than just some ie that rational businessmen are likely to have intended (using Lord Hoffmanns words in Fiona Trust & Holding Corpn v Privalov [2007] UKHL 40; [2007] Bus LR 1719, para 13) that a wider rather than a narrower interpretation of disputes which should be arbitrated was intended. However, there is an important difference between, on the one hand, upholding as valid an undisputed agreement which the parties have reached and, on the other hand, determining the correct interpretation or scope of the agreement where the very question at issue is what is it that the parties have agreed. Without empirical evidence about what rational businessmen, one Russian and one Turkish, concluding a contract for work to be carried out in Russia, would be likely to have intended, I am reluctant to place weight on the idea that these parties would have intended a wider rather than a narrower interpretation of their arbitration agreement. The rational assumption is that the parties intended their agreement to be interpreted in such a way that matches what they agreed. Rationally they do not want to be held to have agreed something which is outside their agreement. And one cannot say that, just because English law may adopt a wider rather than a narrower approach to interpretation of an arbitration agreement than Russian law, that will ensure the correct interpretation of the arbitration agreement. I therefore agree with Mr Baileys written submission on this point where he said: [T]here is no suggestion of invalidity in this case, so as to engage the validation principle. The argument is simply that English law should be taken to apply because it construes AAs [ie arbitration agreements] more liberally. That point only has to be articulated to reveal its parochialism. It is impossible to say that just because Russian law takes a narrower view of AAs than English law does that the parties must have intended English law to apply. That is results based reasoning that ignores the fact that there are legitimate reasons for adopting a narrower approach (such as, in this very case, that a broad interpretation of AAs can lead to an undesirable fragmentation of disputes and proceedings where many different parties are involved). 4. Why is the proper law of the main contract Russian? As I have explained in para 193(ii), while it is not in dispute that the proper law of the main construction contract is Russian, the route to that conclusion through the Rome I Regulation is disputed. This matter is of central importance because it has a significant impact on determining the proper law of the arbitration agreement. As we have seen in para 193(ii), the Rome I Regulation provides in article 3.1 that the governing law is that chosen by the parties where a choice is made expressly or is clearly demonstrated by the terms of the contract or the circumstances of the case. In the absence of such choice article 4 provides that in a contract for the provision of services the governing law is prima facie that of the habitual residence of the service provider but that the law of another country applies where it is clear from all the circumstances of the case that the contract is manifestly more closely connected with [that] country. Mr Bailey submitted that Russian law had been expressly chosen as the proper law. He relied on the definition of Applicable Law in Attachment 17 to the contract which reads: Law of the Russian Federation, including legislation of the Russian Federation, all regulatory legal acts of the State Authority Federal Bodies, State Authorities of the constituent entities of the Russian Federation, legislation of the constituent entities of the Russian Federation, regulatory legal acts by Local Authorities and any other applicable regulatory legal acts. Although this was not a classic choice of law clause of the type This Agreement is governed by Russian law Mr Bailey submitted that it had the same effect. I am not persuaded by that. The applicable law article (Attachment 17) does not say This Agreement is governed by the Applicable law. Rather article 1 of the contract provides that The terms used in this Agreement shall have the definitions set forth in Attachment No 17 to this Agreement. Admittedly, the term Applicable Law is used in a large number of specific provisions. But Mr Dicker submitted that one is here talking about an incorporation by reference of relevant legislative provisions and that that is how the phrase Applicable law is used in international construction contracts (and he here referred us to a major practitioner work on standard contracts issued by the International Federation of Consulting Engineers (FIDIC): Baker Mellors Chalmers and Lavers on FIDIC Contracts, Law and Practice at paras 2.126, 2.140, 2.145). Mr Dicker took as a typical article in the main contract, article 4.1(b) which provides that Enka shall ensure performance of the work in accordance with the Applicable Law. This ensures that, incorporated into the contract, are local laws and regulations, such as those governing planning, health and safety, labour laws, taxes and customs. Admittedly the main contract was not a FIDIC contract. And it may be thought odd to incorporate, where specified, all the relevant law of the Russian Federation (as the first phrase of Attachment 17 requires) including presumably the Russian law of contract in the Russian Civil Code, if all one is concerned with are particular mandatory regulations. My view is that, although there is some ambiguity about the role of the Applicable Law definition, Mr Dicker is correct that Attachment 17 does not constitute an express choice of law clause. However, Attachment 17 is not alone. There are many other additional references to Russian law in the contract. So, for example, at article 24.2 there is reference to the provisions of the Russian Civil Code, there is reference to RF law in article 4.15, and there are numerous references (eg at articles 4.5, 4.26, 19.2 and 36.1) to law which, in the context, are clearly references to Russian law. It is helpful here to refer to Title II, article 3, para 3 of the Giuliano Lagarde Report on the Convention on the law applicable to contractual obligations which was the report that lay behind the Rome Convention which was the predecessor of the Rome I Regulation (and had the same wording as article 3.1 except that the formulation was The choice must be expressed or demonstrated with reasonable certainty rather than The choice shall be made expressly or clearly demonstrated): The choice of law by the parties will often be express but the Convention recognizes the possibility that the court may, in the light of all the facts, find that the parties have made a real choice of law although this is not expressly stated in the contract. For example . references in a contract to specific articles of the French Civil Code may leave the court in no doubt that the parties have deliberately chosen French law, although there is no expressly stated choice of law. (OJ C282/17) One can add to those express words in the contract, several other circumstances. The head contractor in the contract with Enka was Energoproekt, a Russian company and the owner and end customer, Unipro, was also Russian. The place of performance was Russian. The effects of any breach would be suffered in Russia. The primary language of the contract was Russian. And the price for the work was to be paid in Russian currency to a Russian bank account. Indeed, the only non Russian elements of the contract are that Enka is a Turkish company and that the seat of the arbitration is England. My conclusion, therefore, is that, applying article 3.1 of the Rome I Regulation, Russian law is the proper law of the main contract chosen by the parties because, even though not expressly chosen, that choice has been clearly demonstrated by the terms of the contract or the circumstances of the case. The most powerful argument to the contrary is that the parties could easily have inserted a choice of law clause into the contract and yet failed to do so. Mr Dicker submitted that, in the context of a professionally drafted, detailed, and long contract, the most obvious explanation for that was that the parties could not agree on which law should be the governing law. But we have seen no evidence as to the circumstances in which this contract was drawn up and it seems to me more plausible as an objective interpretation of the parties intentions that, given that there was some ambiguity over the role of the Applicable Law definition, the parties thought it was clear, and did not need to be further stated, that Russian law was the proper law. Although there may be marginal differences as between article 3.1 of the Rome I Regulation and the first two stages (express or implied choice) of the common law test for the proper law, they are very closely aligned: see Lawlor v Sandvik Mining and Construction Mobile Crushers and Screens Ltd [2013] EWCA Civ 365; [2013] 2 Lloyds Rep 98. In my view, English common law, which I here refer to by analogy, would in this case regard there as having been an implied choice of Russian law. Even though there was no express term to that effect, the correct objective interpretation of the contract is that Russian law has been chosen by the parties. I should stress that the lower courts did not decide this question as to why Russian law was the proper law of the main contract. Andrew Baker J, at paras 91 93, simply said that whether there was a choice of Russian law as the proper law is far from clear in Enkas favour (ie it was not clear that no choice had been made). The Court of Appeal decided that there was no express choice of proper law but appeared to leave open whether there had nevertheless been a clearly demonstrated choice under article 3(1) of the Rome I Regulation. The case law on the proper law of the arbitration agreement In the Court of Appeal in this case, Popplewell LJ said, at para 89, In my view the time has come to seek to impose some order and clarity on this area of the law, in particular as to the relative significance to be attached to the main contract law on the one hand, and the curial law of the arbitration agreement on the other, in seeking to determine the AA law. The current state of the authorities does no credit to English commercial law which seeks to serve the business community by providing certainty. As this passage suggests, the English cases on this question, which appear to have been proliferating in recent years, do not speak with one voice. Certainly in seeking to provide the clarity which Popplewell LJ was rightly seeking, one cannot simply examine the relevant cases and hope to find in them a definitive answer to our question. With reasoning and decisions going both ways, the major purpose of looking at past cases is rather to put the task facing us in context and to ensure that all relevant considerations have been borne in mind. But ultimately, and without any authority binding this court, the way forward rests on a re examination of principle. It also follows that no attempt is here being made to cover all relevant cases. Rather I shall focus on the most important cases to which we were referred by counsel. The earliest case we were referred to was the House of Lords decision in Hamlyn & Co v Talisker Distillery [1894] AC 202. This concerned a contract between an English and Scots firm, made in London but to be performed in Scotland, with an arbitration clause for arbitration by two members of the London Corn Exchange, or their umpire, in the usual way. It was held that the interpretation of the arbitration clause was governed by English law (ie in modern terminology, the proper law of the arbitration agreement was English). But in determining the respective weights of the proper law of the main contract and the proper law of the seat of the arbitration, the case does not take one very far for two reasons. First, the proper law of the main contract was not clarified and indeed it seemed to be assumed that the proper law of the arbitration agreement would also be the proper law of the main contract. In the words of Lord Herschell LC, at p 209: I see no difficulty whatever in construing the language used as an indication that the contract, or that term of it [ie the arbitration agreement], was to be governed and regulated by the law of England. Secondly, it was regarded as an important consideration that the arbitration clause was invalid in Scotland because the arbitrators were not named but valid in England. It was for this reason that Mr Bailey submitted that this case was an example of the application of the validation principle. In Cie Tunisienne de Navigation SA v Cie dArmement Maritime SA [1971] AC 572, the House of Lords was deciding on the proper law of the main contract (a contract for the carriage of goods by sea) in a context where that proper law was specified as being governed by the laws of the flag of the vessel carrying the goods. There was an arbitration clause with London as the seat. It was held that the proper law of the main contract was French. The majority (Lords Morris, Dilhorne and Diplock) reasoned that this was because there was a choice of French law as the proper law (because, on the true construction of the choice of law clause, the relevant flag was French). Lords Reid and Wilberforce reasoned that, although there was no operative choice of law clause (because the dispute could not be related to a specific vessel or shipment), the rest of the contract and the relevant surrounding facts meant that the contract had the closest connection with France (the majority preferred to treat this as an alternative reason for their decision). Their Lordships placed considerable weight on the seat of the arbitration as a strong indication of the proper law of the main contract (and implicitly the proper law of the arbitration agreement) but held that that strong indication was here negatived by the choice of law clause (per the majority) or by the other factors linking the contract most closely to French law (per Lords Reid and Wilberforce). Lord Diplocks analysis of the curial law is particularly helpful. He said the following at p 604: My Lords, it is possible for parties to a contract to choose one system of law as the proper law of their contract and a different system of law as the curial law. Although they may want their mutual rights and obligations under the contract to be ascertained by reference to the system of law of a country with which the transaction has some close and real connection, they may nonetheless consider that the arbitral procedure adopted in some other country, or the high reputation and commercial expertise of arbitrators available there, make the curial law of that country preferable to the curial law of the country whose system of law they have chosen as the proper law. It is not now open to question that if parties to a commercial contract have agreed expressly upon the system of law of one country as the proper law of their contract and have selected a different curial law by providing expressly that disputes under the contract shall be submitted to arbitration in another country, the arbitrators must apply as the proper law of the contract that system of law upon which the parties have expressly agreed. But the cases which have given rise to difficulty are those where the parties have made a choice of curial law by a clause of their contract expressly agreeing to arbitration in a particular country but have made no express provision as to the proper law applicable to the contract. We were then referred to two judgments of Lord Mustill, who was the co author, with Stewart Boyd QC, of Commercial Arbitration (the first edition of which appeared in 1982 with a second edition in 1989). In Black Clawson International Ltd v Papierwerke Waldhof Aschaffenburg AG [1981] 2 Lloyds Rep 446 Mustill J as he then was said, at p 455: Where the laws diverge at all, one will find in most instances that the law governing the continuous agreement [sc the arbitration agreement] is the same as the substantive law of the contract in which it is embodied And at p 456: In the ordinary way, this [sc the proper law of the arbitration agreement] would be likely to follow the law of the substantive contract. These statements offer support to the proper law of the arbitration agreement being the same law as the main contract rather than being the law of the seat. This is consistent with the approach favoured in Mustill and Boyd, Commercial Arbitration, 2nd ed (1989), at p 63: The starting point is to determine the proper law of the contract in which the arbitration is embodied. As a general rule the arbitration agreement will be governed by the same law, since it is part of the substance of the underlying contract. However, in the Black Clawson case itself, the force of Mustill Js support for the main contract approach is somewhat diminished because he went on to treat the parties choice of Zurich as the place of arbitration as indicating an intention that the law governing the arbitration agreement should be the law of Zurich. Subsequently, we see Lord Mustill favouring the main contract approach in the House of Lords in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334. At p 357, Lord Mustill said: It is by now firmly established that more than one national system of law may bear upon an international arbitration. Thus, there is the proper law which regulates the substantive rights and duties of the parties to the contract from which the dispute has arisen. Exceptionally, this may differ from the national law governing the interpretation of the agreement to submit the dispute to arbitration. Less exceptionally it may also differ from the national law which the parties have expressly or by implication selected to govern the relationship between themselves and the arbitrator in the conduct of the arbitration: the curial law of the arbitration, as it is often called. (Emphasis added) In XL Insurance Ltd v Owens Corning [2001] 1 All ER (Comm) 530 Toulson J was concerned with an insurance policy which (to simplify slightly) had a New York governing law clause and an arbitration clause with a London seat which included reference to the Arbitration Act 1996. It was alleged that the arbitration agreement was unenforceable because it was not in the correct written form under New York law. It was held, inter alia, that the enforceability of the arbitration agreement should be governed by English law as the law of the seat. Although Toulson Js reasoning is open to various possible interpretations and certainly his reasoning lends support to hiving off arbitration from the rest of the main contract as dealing with a particular method of resolving disputes (at 541e) one interpretation is that, as he was satisfied that the parties had made an arbitration agreement, the validation principle was being applied so as to ensure that that arbitration agreement was upheld. The primary importance of C v D [2007] EWCA Civ 1282; [2008] Bus LR 843 is obiter dicta of Longmore LJ supporting the seat approach. The case dealt with an insurance contract governed by New York law with an English arbitration clause (ie an English seat). The question was which law, New York or English, governed challenges to the arbitral award. It was held that English law applied to determine that question. That seems straightforward because that question was one of curial law and curial jurisdiction and the seat of arbitration (here England) almost invariably determines that law. The proper law of the arbitration agreement and the proper law of main contract were irrelevant in this case. However, Longmore LJ went on, in obiter dicta, to look at the proper law of the arbitration agreement and said this, at para 22: The question then arises whether, if there is no express law of the arbitration agreement, the law with which that agreement has its closest and most real connection is the law of the underlying contract or the law of the seat of arbitration. It seems to me that if (contrary to what I have said above) this is a relevant question, the answer is more likely to be the law of the seat of arbitration than the law of the underlying contract. It is worth interjecting here that, in line with Longmore LJs obiter dicta, the 15th edition of Dicey, Morris & Collins, The Conflict of Laws, published in 2012 has the following main rule (rule 64(1)): the law expressly or impliedly chosen by the The material validity, scope and interpretation of an arbitration agreement are governed by its applicable law, namely: (a) parties; or, (b) in the absence of such choice, the law which is most closely connected with the arbitration agreement, which will in general be the law of the seat of the arbitration. We then come to what can probably be regarded as the leading case: Sulamrica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638; [2013] 1 WLR 102. Moore Bick LJs leading judgment (with which Hallett LJ and Lord Neuberger MR agreed) was cited by both Mr Bailey and Mr Dicker in support of their submissions. Claims were brought by Brazilian companies under two insurance policies covering construction work in Brazil. The insurers denied liability on the basis of an exclusion clause and material non disclosure. There was an express choice of Brazilian law as the governing law in the insurance contracts and an exclusive jurisdiction clause in favour of Brazilian courts. However, the arbitration clause specified England as the seat. In the insurers application for an anti suit injunction, the central question was what was the proper law of the arbitration agreement. Under Brazilian law, there was a serious risk (per Moore Bick LJ at para 31) that the insured was not bound by the arbitration clause as the insured may not have specifically consented to its enforcement. The Court of Appeal held that English law was the proper law of the arbitration agreement. But it is not easy to determine whether Moore Bick LJs judgment supports the main contract or seat approach. The following passage, at para 26, supports the main contract approach provided there is an express choice of law clause in the main contract: where the arbitration agreement forms part of a substantive contract an express choice of proper law to govern that contract is an important factor to be taken into account. In the absence of any indication to the contrary, an express choice of law governing the substantive contract is a strong indication of the parties intention in relation to the agreement to arbitrate. A search for an implied choice of proper law to govern the arbitration agreement is therefore likely to lead to the conclusion that the parties intended the arbitration agreement to be governed by the same system of law as the substantive contract, unless there are other factors present which point to a different conclusion. These may include the terms of the arbitration agreement itself or the consequences for its effectiveness of choosing the proper law of the substantive contract. Moore Bick LJ went on to decide that there were two conflicting indications (para 31) that meant that the parties had not impliedly chosen Brazilian law as the proper law of the arbitration agreement. The first was that England was the seat, which inevitably imported English law, and hence the provisions of the Arbitration Act 1996, relating to the conduct and supervision of the arbitration (ie the curial law was English and the English courts had supervisory jurisdiction). The second was the serious risk that the arbitration agreement might not be binding, as against the insured, under Brazilian law. He then turned to the third stage of the common law approach and, in a passage which supports the seat approach he said this at para 32: One then has to consider with what system of law the agreement has the closest and most real connection. Although [counsel for the appellant] submitted that the agreement has a close and real connection with the law of Brazil, being the law governing the substantive contract in which the arbitration agreement itself is embedded, I think his argument fails adequately to distinguish between the substantive contract and the system of law by which it is governed. No doubt the arbitration agreement has a close and real connection with the contract of which it forms part, but its nature and purpose are very different. In my view an agreement to resolve disputes by arbitration in London, and therefore in accordance with English arbitral law, does not have a close juridical connection with the system of law governing the policy of insurance, whose purpose is unrelated to that of dispute resolution; rather, it has its closest and most real connection with the law of the place where the arbitration is to be held and which will exercise the supporting and supervisory jurisdiction necessary to ensure that the procedure is effective. Its closest and most real connection is with English law. I therefore agree with the judge that the arbitration agreement is governed by English law. Subsequent to Sulamrica, there have been two significant first instance decisions. In Arsanovia Ltd v Cruz City 1 Mauritius Holdings [2012] EWHC 3702 (Comm); [2013] 2 All ER (Comm) 1, Andrew Smith J was faced with an express choice of Indian law in the main contract and an arbitration agreement with a London seat. Distinguishing Sulamrica, because there were no indications conflicting with the express choice of law, he held that the proper law of the arbitration agreement was Indian law. Then we come to the valiant attempt by Hamblen J (as he then was) in Habas Sinai Ve Tibbi Gazlar Istihsal Endustrisi AS v VSC Steel Co Ltd [2013] EWHC 4071 (Comm); [2014] 1 Lloyds Rep 479, to set out, as clearly as possible, the relevant principles to be derived from the cases in this tangled area. In relation to the question of the proper law of the arbitration agreement it was assumed that there was no choice of law in the main contract but that it was governed by Turkish law as the law with which it was most closely connected. The parties had agreed (as found by Hamblen J) a London arbitration clause. It was held that the proper law of the arbitration agreement was English. At para 101, Hamblen J said: 101. The leading authority is the recent Court of Appeal decision in Sul Amrica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] 1 Lloyds Rep 671. Moore Bick LJ (with whom Hallett LJ and Lord Neuberger MR agreed), summarised the test for determining the law applicable to arbitration agreements at paras 26 32. The Court of Appeals decision was considered but distinguished by Andrew Smith J in Arsanovia Ltd v Cruz City 1 Mauritius Holdings [2013] 1 Lloyds Rep 235. The guidance provided by these authorities may be summarised as follows: (1) Even if an arbitration agreement forms part of a matrix contract (as is commonly the case), its proper law may not be the same as that of the matrix contract. (2) The proper law is to be determined by undertaking a three stage enquiry into: (i) express choice; (ii) implied choice; and (iii) the system of law with which the arbitration agreement has the closest and most real connection. (3) Where the matrix contract does not contain an express governing law clause, the significance of the choice of seat of the arbitration is likely to be overwhelming. That is because the system of law of the country seat will usually be that with which the arbitration agreement has its closest and most real connection. (4) Where the matrix contract contains an express choice of law, this is a strong indication or pointer in relation to the parties intention as to the governing law of the agreement to arbitrate, in the absence of any indication to the contrary. (5) The choice of a different country for the seat of the arbitration is a factor pointing the other way. However, it may not in itself be sufficient to displace the indication of choice implicit in the express choice of law to govern the matrix contract. (6) Where there are sufficient factors pointing the other way to negate the implied choice derived from the express choice of law in the matrix contract the arbitration agreement will be governed by the law with which it has the closest and most real connection. That is likely to be the law of the country of seat, being the place where the arbitration is to be held and which will exercise the supporting and supervisory jurisdiction necessary to ensure that the procedure is effective. 102. In relation to point (3), I would add that the terms of the arbitration clause may themselves connote an implied choice of law. It is recognised that they may operate as an implied choice of law for the matrix contract itself see, for example, Cie Tunisienne de Navigation SA v Cie dArmement Maritime SA [1971] AC 572, Lord Wilberforce at p 596 and Lord Diplock at pp 604 605; In such cases they must surely equally operate as an implied choice of law for the arbitration agreement. 103. The present case is one where there is no express choice of law in the matrix contract. In such a case the Sul Amrica decision is clear authority that the applicable law will be that of the country of seat. This was acknowledged by Habas who reserved the right to challenge the decision should this case go further. The reference to overwhelming in point (3) appears to refer to the words of Moore Bick LJ in the Sulamrica case, at para 26, but it should be noted that Moore Bick LJ was using that description in the context of a free standing agreement to arbitrate not an arbitration agreement contained in a main contract. Hamblen Js summary represents clear support for the seat approach: unless there is an express choice of law clause in the main contract, the seat will very likely determine the proper law of the arbitration agreement; and even where there is such an express choice of law clause, there may be sufficient factors pointing towards the seat determining the arbitration agreements proper law. I interject at this point that there was a careful analysis of these issues by Steven Chong J (as he then was) in BCY v BCZ [2016] SGHC 249; [2016] 2 Lloyds Rep 583 in the High Court of Singapore. In a judgment which favoured the main contract approach, he said at para 65: where the arbitration agreement is part of the main contract, I would hold, adopting Sul Amrica, that the governing law of the main contract is a strong indicator of the governing law of the arbitration agreement unless there are indications to the contrary. The choice of a seat different from the law of the governing contract would not in itself be sufficient to displace that starting point. The approach in the BCY case was subsequently assumed to be the correct law in Singapore by the Singaporean Court of Appeal (Sundaresh Menon CJ, Judith Prakash JA, and Steven Chong JA), and by the parties, in BNA v BNB [2019] SGCA 84; [2020] 1 Lloyds Rep 55, paras 44 95. Popplewell LJs approach in the Court of Appeal in the present case may be regarded as somewhat similar to that of Hamblen Js in the Habas case. At para 91, Popplewell LJ said that, subject to an express choice of law in the main contract, the general rule should be that the arbitration agreement law is the curial law, as a matter of implied choice, subject only to any particular features of the case demonstrating powerful reasons to the contrary. And at para 105, he said the following: I would therefore summarise the principles applicable to determining the proper law of an arbitration agreement, what I have called the AA law, when found in an agreement governed by a different system of law, as follows: (1) The AA law is to be determined by applying the three stage test required by English common law conflict of laws rules, namely (i) is there an express choice of law? (ii) if not, is there an implied choice of law? (iii) if not, with what system of law does the arbitration agreement have its closest and most real connection? (2) Where there is an express choice of law in the main contract it may amount to an express choice of the AA law. Whether it does so will be a matter of construction of the whole contract, including the arbitration agreement (3) In all other cases there is a strong presumption that the parties have impliedly chosen the curial law as the AA law. This is the general rule, but may yield to another system of law governing the arbitration agreement where there are powerful countervailing factors in the relationship between the parties or the circumstances of the case. 6. What is the proper law of the arbitration agreement? (1) The proper law of the arbitration agreement is Russian law by reason of an implied choice We are now in a position to decide what is the proper law of the arbitration agreement. As I have said at para 193(iv) above, this is to be resolved by the common law choice of law rules ie one is looking for an express choice, an implied choice or, if neither of those applies, the system of law with which the arbitration agreement has its closest and most real connection. In this case, the three most important factors in deciding this issue are: (i) There is no express choice of law clause in the arbitration agreement here ie there is no mention of choice of law in article 50.1 of the main construction contract. (ii) The seat of the arbitration, as laid down in the arbitration agreement, is England. (iii) The proper law of the main construction contract, as we have established at paras 200 208 above, is Russian law by reason of the implied choice of the parties. It is my view that that combination of factors leads to the conclusion that, under English common law, the proper law of the arbitration agreement is, by reason of an implied choice, Russian law. As the parties have impliedly chosen Russian law for the main contract it is natural, rational and realistic to regard that choice for the main contract as encompassing, or carrying across to, the arbitration agreement. That implied choice is simply the correct objective interpretation of the parties main contract and arbitration agreement. Although the decision as to the proper law of the arbitration agreement turns on the interpretation of the main contract and the arbitration agreement, there are a number of general reasons (ie reasons that do not turn on the interpretation of these particular contracts) which support the view that, absent an express choice of law in the arbitration agreement, there is a presumption (or general rule) that the proper law of the main contract is also the proper law of the arbitration agreement; and there is no such presumption (or general rule) that the law of the seat is the proper law of the arbitration agreement. In short, these are reasons for favouring the main contract rather than the seat approach. I should make clear at the outset that, everything that is here said, relates to an arbitration agreement that is contained in a main contract. While a free standing arbitration agreement entered into at the same time would not be treated differently, a free standing arbitration agreement entered into at a different time and under different circumstances would require a different analysis. (2) Reasons why, absent an express choice of law in the arbitration agreement, there is a presumption (or general rule) that the proper law of the main contract is also the proper law of the arbitration agreement (i) Dpeage is the exception not the rule If one were to treat the arbitration agreement in the same way as all the other clauses in the main contract, the general rule would be that the same proper law would apply throughout. Dpeage is the exception not the rule. See para 193(iii) above. (ii) The rationale of the separability doctrine Under the separability doctrine, an arbitration agreement is viewed for certain purposes, both at common law and under section 7 of the Arbitration Act 1996, as a separate contract from the main contract. The reason for that is in order to ensure that the arbitration agreement is effective despite the non existence, invalidity, termination or rescission of the main contract. In other words, it stops the argument that the parties have not agreed to arbitration to deal with disputes about the non existence, invalidity or initial ineffectiveness of the main contract; and it also stops the argument that the arbitration agreement cannot deal with disputes once the main contract has been terminated or rescinded. This explains the wording of section 7 of the Arbitration Act 1996: Separability of arbitration agreement Unless otherwise agreed by the parties, an arbitration agreement which forms or was intended to form part of another agreement (whether or not in writing) shall not be regarded as invalid, non existent or ineffective because that other agreement is invalid, or did not come into existence or has become ineffective, and it shall for that purpose be treated as a distinct agreement. (Emphasis added) This statutory wording makes clear that the separability doctrine has been devised for a particular purpose. For that purpose, it treats (one might say somewhat fictionally) the arbitration agreement as a separate agreement when, in reality, it is not a free standing agreement but is merely part of the main contract. However, that purpose does not extend to working out the conflict of laws rules applicable to an arbitration agreement. It follows that in deciding on the proper law of the arbitration agreement, the arbitration agreement should be regarded as part of the main contract. I therefore agree with the characteristically clear and helpful exposition by Adrian Briggs, Private International Law in English Courts (2014), paras 14.37 14.38: If the agreement to arbitrate is a term of a larger contract, the law which governs the contract as a whole will generally determine the scope of the terms of that contract. For even though the arbitration agreement is for some important purposes notionally severable from the substantive contract, those purposes do not include the need for its governing law to be separate or different from that of the substantive contract in which the arbitration agreement is contained. It would be perverse to deduce from the principle of severability a rule that the law governing the agreement to arbitrate should be identified without reference to the substantive contract in which the parties included it as a term. The autonomy of the arbitration agreement is one thing; its hermetic isolation would be quite another. To put the point yet another way: the agreement to arbitrate is severable, but that does not mean it is separate. Prior to any severance it will have been governed by the law which governs the contract; after severance, it must remain governed by the same law, for otherwise it is not being severed; something else is instead being created. The result is that if the law which governs the substantive contract is identified by the Rome I Regulation, that law is very likely to govern the agreement to arbitrate, and will therefore also be used by the court to determine the validity, meaning and scope of the arbitration agreement. The fact that the Rome I Regulation makes no claim to identify the applicable law for arbitration agreements does not prevent the common law rules of private international law applying their own solution to the question, which is that the agreement to arbitrate is generally governed by the law of the contract of which it is a term if it is a term of a substantive contract. (footnotes omitted) (iii) Dividing the arbitration agreement from the rest of the contract be problematic There may sometimes be practical problems in drawing the line for proper law purposes between the arbitration agreement and the rest of the main contract. This case provides an excellent example. This is because the arbitration agreement is itself part of a wider dispute resolution clause, ie article 50.1 (set out at para 191 above) includes an obligation to resolve the dispute in good faith and for there to be a meeting of senior management and only after that should the dispute, if still unresolved, be referred to international arbitration. It would be very odd and inconvenient to apply one proper law to interpret the earlier sentences in article 50.1 and a different proper law to interpret the later sentences. Moreover, the terms notification and written notice are used in article 50.1 and therefore impact on the time when the matter can be referred to arbitration and the meaning of those terms is set out in article 51.4 of the main contract. It might be said that the whole of article 50.1 should be separated off from the main contract for the purposes of deciding the proper law. But while that would avoid the difficulty of different proper laws applying within the same dispute resolution clause, it creates the problem of how to ensure consistency with other terms of the main contract, such as article 51.4 (or another example, article 51.2 which is an entire agreement clause). To have a different proper law applying to the definitional article 51.4 than applies to article 50.1 would be problematic. All these difficulties would be avoided if the proper law of the arbitration agreement were the same as the proper law of the main contract. Let us further assume that, instead of putting the arbitration agreement in a dispute resolution clause, the contract, as is often the case, had two separate clauses: a dispute resolution clause operative prior to arbitration and an arbitration agreement. Surely using two clauses instead of one cannot make all the difference to the proper law issue. Yet on the face of it that is what the seat approach would require. One can envisage other examples of the difficulties that this division of the proper law would cause. Take, for example, the English law rule of interpretation that pre contractual negotiations are not to be taken into account. Let us assume (as appears to be the case) that that is different from the law on interpretation in New York. Then, let us assume, that there is a main contract governed by New York law which includes an arbitration agreement with London as the seat. There may be pre contractual negotiations that are relevant to understanding the contract including the arbitration agreement. It would be most odd to take those negotiations into account in interpreting the main contract (governed by New York law) but to exclude them when interpreting the arbitration agreement (governed by English law). Again that problem is avoided if the same proper law applies across the board. Another problematic example arises because of different possible approaches to a no oral modification clause. Such a clause is effective to prevent subsequent oral variations of a contract in English law (as laid down in MWB Business Exchange Centres Ltd v Rock Advertising Ltd [2018] UKSC 24; [2019] AC 119). Let us assume, as appears to be the case, that the contrary position is taken under New York law. Let us then assume that there is a contract containing a no oral modification clause and an arbitration agreement. The main contract is governed by New York law but London is the seat of the arbitration. If one applies different proper laws to the main contract and to the arbitration agreement, that would appear to produce the odd result that a subsequent oral variation, which might affect the arbitration agreement, would be effective in relation to the main contract but would be ineffective in relation to the arbitration agreement. Again there would be no such problem if the proper law that applied to the main contract applied also to the arbitration agreement. No doubt one can envisage many other such practical problems arising from the division required by the seat approach. They indicate the underlying truth that, in contrast to the main contract approach, the seat approach cuts across a principled way forward. (iv) arbitration In past cases excessive weight has been given to the seat of It is not easy to pinpoint why, in several past cases (as we have seen in paras 209 226 above) the seat of arbitration has been thought to be of such major importance in determining the proper law of the arbitration agreement. True it is that the seat of arbitration (almost) invariably carries with it the curial law and the courts curial or supervisory jurisdiction (see para 193(vi) above). So in this case it is not in dispute that the curial law of the arbitration agreement here is England and that the English courts have curial or supervisory jurisdiction. It may be, therefore, that in the past there has sometimes been a failure to distinguish between, on the one hand, the curial law and the curial/supervisory jurisdiction of the courts which are (almost) invariably determined by the law of the seat and, on the other hand, the proper law of the arbitration agreement. As Adrian Briggs has written in Private International Law in English Courts (2014), para 14.41: [T]he identification of the seat is a reliable indicator of the law which was intended or expected by the parties to apply to the proceedings before the arbitral tribunal, to their support, supervision, and control, but it is not a statement of the law which will govern the initial validity and scope of the agreement to arbitrate. The parties may say that they wish to have arbitration in London, and it may well be true that they expect the Arbitration Act 1996 to provide the template for the procedure which will be followed once the arbitration is underway. But it does not follow, or does not need to follow, that the validity of the contract by means of which that agreement was or [was] not made must also be understood to be governed by English law, for that is another question entirely. Another possible explanation for the weight given to the seat in older cases is that this has rested on the now outdated assumption (given the way modern international arbitration works) that arbitrators at the seat would only be comfortable applying their own law. In Cie Tunisienne de Navigation SA v Cie dArmement Maritime SA [1971] AC 572, the House of Lords reasoned that the choice of seat in an arbitration clause was an indicator as to the proper law of the main contract. A submission put forward in support of that was that a reason for choosing an English seat was because English arbitrators would be most familiar with English law. Lord Wilberforce rejected that submission. He said, at 596, I venture to think that in commercial matters, at the present time, this may give insufficient recognition to the international character of the City of London as a commercial centre the reason, rather than any preference for English rules, for which arbitration in London is selected. In this case the arbitrators had no difficulty in finding for French law and I do not suppose they would find ascertainment of the French law as to damages any more difficult than the English law of anticipatory breach. And as Popplewell LJ said in the Court of Appeal in this case, at para 72: I doubt that [that submission] would now be accorded significant weight in the context of most international arbitration in England, in which English arbitrators are often asked to decide questions under a foreign governing law and are regarded as equipped to do so. A fortiori it is inapplicable to a case such as the present involving arbitration under the ICC Rules which commonly involves appointment of foreign arbitrators from different legal traditions and disciplines notwithstanding that the seat of the arbitration is in London. Mr Dicker submitted that the seat might often be chosen to ensure neutrality. However, the desire for neutrality is surely normally concerned with the quality and integrity of the decision makers and rarely has anything to do with the proper law to be applied (ie the relevant neutrality is referring to the decision maker not the proper law to be applied by that decision maker). There may have been an implication in Mr Dickers submission that the parties in this case precisely chose England as the seat because they did not trust the Russian courts. Certainly one can readily accept that neutrality away from home courts may be a reason why parties choose international arbitration, and that the curial or supervisory jurisdiction of the courts at the seat may be significant. But the desire for neutrality does not explain why the parties would choose the law of the seat rather than the law of the main contract as the proper law of the arbitration agreement. Moreover, in this case if the parties really did not trust the Russian courts, one would have expected there to have been an exclusive jurisdiction clause (requiring any litigation to come before the English courts) in the main contract. In any event, we were supplied with no evidence to support any suggestion that the parties in the present case did not trust the Russian courts. Clearly they preferred to resolve the matter by arbitration rather than litigation but that is a different point. In past cases insufficient weight has traditionally been given to the (v) implied choice of the parties Although it is very difficult to rationalise all past cases, the apparent rationalisation given by the Court of Appeal in this case (mirroring other judicial attempts), in seeking to put the law on a sound footing, with respect places insufficient weight on the implied choice of the parties. That approach was to say that, in general, the proper law of the arbitration agreement was dictated by the seat chosen for the arbitration unless there was an express choice of proper law in the main contract (see Popplewell LJs judgment at paras 90 91 and 105 and above para 226). But why should only an express choice of proper law in the main contract have this effect? As Mr Bailey persuasively submitted, in his written case, it is the fact that the parties have made a choice which matters, not the way in which that choice was manifested. In other words, it makes no rational sense to place heavy weight on an express choice in the main contract while placing little weight on an implied choice in the main contract. (vi) The curial law and curial jurisdiction can be separated out from the proper law of the arbitration agreement A central submission of Mr Dicker, in line with the views of Popplewell LJ in the Court of Appeal at paras 96 to 99, is that one cannot properly separate out the curial law of the arbitration from the proper law of the arbitration agreement. They are intertwined. It follows, so the submission goes, that the parties are unlikely to have intended the proper law of the arbitration agreement to be different from the curial law (and we know that the latter is English by reason of the choice of seat). While in general terms, the curial law may be said to be dealing with arbitral procedure, and the proper law of the arbitration agreement with the substance of the parties arbitration agreement (its existence, validity and scope), one cannot in this context neatly divide procedure and substance. This is illustrated, so the submission goes, by the provisions of the Arbitration Act 1996. If the seat is England, the provisions of that Act apply whatever the proper law of the arbitration agreement; and many of these provisions (for example, sections 5, 7, 12, 28(1), 58, 60, 71(4), 79 and 82(2)) are substantive not procedural. Looked at in the overall context of the English rules on the conflict of laws, this may be thought a surprising submission. This is because it has long been recognised that, while there may be issues at the margins in drawing the distinction, there is an important difference between matters of procedure that are governed by the law of the forum and matters of substance that are governed by the particular proper law; and in modern times it would not be suggested that the forum chosen, governing procedure, would be a decisive, or even an important, factor in deciding on the proper law determining the substantive rights of the parties. It should also be noted that one would face the same issue of separating out the curial law from the proper law of the arbitration agreement if there were an express choice of law clause in the main contract specifying a different proper law than the curial law. Yet there is wide acceptance that an express choice of law clause in the main contract would override the choice of seat in determining the proper law of the arbitration agreement. Moreover, as regards the Arbitration Act 1996, I accept the submissions of Chubb Russia, put forward so persuasively on this matter by Toby Landau QC, that Mr Dickers submissions (and the reasoning of Popplewell LJ on this) are incorrect for the following two reasons: (i) Almost all the provisions of the Arbitration Act 1996 being referred to as substantive not procedural are non mandatory. And in relation to such non mandatory provisions, section 4(5) of the 1996 Act lays down (as one would expect in any event) that a foreign proper law for the arbitration agreement means that the non mandatory provisions of the 1996 Act do not apply. This provision was not relied on by Chubb Russia in the Court of Appeal and was not mentioned in the Court of Appeals judgment. Section 4 reads as follows: Mandatory and non mandatory provisions (1) The mandatory provisions of this Part are listed in Schedule 1 and have effect notwithstanding any agreement to the contrary. (2) The other provisions of this Part (the non mandatory provisions) allow the parties to make their own arrangements by agreement but provide rules which apply in the absence of such agreement. (3) The parties may make such arrangements by agreeing to the application of institutional rules or providing any other means by which a matter may be decided. (5) The choice of a law other than the law of England and Wales or Northern Ireland as the applicable law in respect of a matter provided for by a non mandatory provision of this Part is equivalent to an agreement making provision about that matter. For this purpose an applicable law determined in accordance with the parties agreement, or which is objectively determined in the absence of any express or implied choice, shall be treated as chosen by the parties. As the Supplemental Report of the Departments Advisory Committee on Arbitration Law (DAC) said, at para 12, section 4(5) avoids the dangers that a choice of England as the seat of the arbitration will necessarily entail the imposition of every provision of the Act. (ii) The remaining provisions of the 1996 Act relied on by Mr Dicker (sections 12 13 and 66 68) appear to be procedural not substantive (they are concerned with extending time limits for beginning arbitration proceedings, limitation periods, and the enforcement and setting aside of an award). But even if one regards them as substantive (see Popplewell LJ at para 96) it is clear that, in themselves, they cannot be regarded as having any bearing on the proper law of the arbitration agreement. (vii) Section 103(2)(b) of the Arbitration Act 1996 (codifying article V(1)(a) of the 1958 New York Convention) is neutral Mr Dicker sought to pray in aid article V(1)(a) of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which has been codified in what is now section 103(2)(b) of the Arbitration Act 1996. This statutory provision (which is materially identical to article V(1)(a) of the 1958 New York Convention) reads as follows: 103. Refusal of recognition or enforcement. (1) Recognition or enforcement of a New York Convention award shall not be refused except in the following cases. (2) Recognition or enforcement of the award may be refused if the person against whom it is invoked proves (a) that a party to the arbitration agreement was (under the law applicable to him) under some incapacity; that the arbitration agreement was not valid under (b) the law to which the parties subjected it or, failing any indication thereon, under the law of the country where the award was made; This statutory provision therefore deals with the refusal of recognition or enforcement of a non domestic arbitral award (ie an award made in a territory outside the UK in a state which is a party to the New York Convention: Arbitration Act 1996 section 100(1)) where an arbitration agreement is invalid under the law to which the parties subjected it or, failing any indication thereon, under the law of the seat. True it is that that constitutes legislative acceptance of the relevance of the law of the seat. But this provision is only directly concerned with the enforcement or recognition of arbitral awards. It is not directly concerned with the validity of an arbitration agreement prior to any question as to its enforcement or recognition although Mr Dicker submitted (relying on Albert van den Berg, The New York Convention of 1958 (1981), pp 126 128) that what is relevant at the end should also be relevant at the start. Mr Baileys response was that, even if one were to regard this provision as having relevance at the pre enforcement stage, the provision tended to support his case because the relevance of the law of the seat is only at the default level: where the parties have chosen the proper law of the arbitration agreement, including impliedly, the law of the seat does not apply. In other words, his submission was that this statutory provision was simply irrelevant where there has been an implied choice (as on the facts of this case). I agree with that. However, it is important to add that the statutory provision is irrelevant to this case for a wider reason: as I have made clear at paras 194 199 above, this case is concerned with the interpretation of an arbitration agreement and not with its validity. It should also be stressed that the award in this case, because the seat is England, would be a domestic award to which section 103(2)(b) does not apply. Nevertheless, I am here concerned to articulate reasons that apply generally to favour the main contract as opposed to seat approach. On the face of it, the statutory provision (and article V(1)(a) of the New York Convention) does offer support in relation to the validity of the arbitration agreement and, at least at the enforcement and recognition stage, for applying the law of the seat where there has been no choice of law, express or implied, made by the parties. One may say that it represents a legislative policy, and a policy of international arbitration, which the common law should respect. However, in so far as one might apply this provision so as to make a practical difference to the determination of the proper law of the arbitration agreement (ie where one would be applying, as the proper law of the arbitration agreement, at the pre enforcement stage, the law of the seat rather than the law of the main contract) there is a difficulty with reconciling that provision with the validation principle. We have explained in para 198 above that that principle is the general principle whereby the courts favour the proper law that would uphold an arbitration agreement rather than one that would invalidate it; and this can be seen to rest on the assumption that rational parties would prefer to have an agreement upheld than not. It follows that, unless one is to accept the unfortunate conclusion that the legislative provision may (sometimes) override the validation principle (of course sometimes it will be consistent with it), one will need to interpret the provision in such a way that, where the arbitration agreement would be invalid under the law of the seat but valid under the law of the main contract, the law of the seat will give way to the law of the main contract. The most obvious way of achieving this is to recognise that the provision confers a discretion. The relevant statutory words are that recognition or enforcement of the award may be refused. Assuming there is such a discretion, it should be exercised to accommodate the validation principle. The consequence would be that any practical difference, as to validity, between the proper law of the seat and the proper law of the main contract would be nullified. Ardavan Arzandeh and Jonathan Hill, Ascertaining the Proper Law of an Arbitration Clause under English Law (2009) Journal of Private International Law 425, 442, stress, correctly in my view, that, while superficially attractive, it is problematic to decide the proper law of the arbitration agreement by reading across from article V(1)(a) of the New York Convention (and hence from section 103(2)(b) of the 1996 Act): Although international harmonisation of choice of law rules on the basis of the rules enshrined in article V(1)(a) of the New York Convention is superficially attractive, it is not wholly unproblematical. If a national court may, in the exercise of discretion, order enforcement of an award notwithstanding the fact that the underlying arbitration clause is invalid according to the law specified by article V(l)(a), it is legitimate to question whether it would be logical or sensible to treat the choice of law rules endorsed by article V(l)(a), as interpreted by van den Berg, as being automatically applicable in contexts other than the enforcement of arbitral awards, contexts in which the element of discretion is absent. The overall position, therefore, is that not only does section 103(2)(b) have no direct relevance to the facts of this case (because we are concerned with interpretation not validity and the award would be a domestic award), it also has no direct relevance to our general enquiry because we are not concerned with the enforcement or recognition of an award. This is in line with the view of Robert Merkin, Arbitration Law (Issue 84, 2020) para 7.15 that the provision has a more limited effect than may at first sight appear. In any event, it would appear that the provisions support for the seat approach can, and should, be limited so as to adhere to the validation principle (thereby nullifying any practical difference, as to validity, between the proper law of the seat and the proper law of the main contract). For all these reasons, it seems reasonable to regard section 103(2)(b) of the Arbitration Act 1996 as an essentially neutral consideration that should not be regarded as inconsistent with, or as standing in the way of, a principled solution. (viii) The analogy to an exclusive jurisdiction clause In deciding on a principled approach to the proper law of an arbitration agreement, it is helpful to think of the analogy between an arbitration agreement and an exclusive jurisdiction clause. Say one has a contract governed by Russian law but with a jurisdiction clause giving the English courts exclusive jurisdiction. What is the proper law of the exclusive jurisdiction agreement? Although Mr Dicker submitted that that clause would be governed (presumptively) by English law as the courts (and place) chosen by the parties he was not able to support that submission with any convincing references. It would be surprising if, at least normally, the proper law of the jurisdiction clause is anything other than the same as the proper law of the main contract. Certainly that is the position favoured by Dicey, Morris & Collins, The Conflict of Laws, 15th ed (2012), para 12.103: [A]s a matter of common law, normally a jurisdiction agreement (like arbitration agreements, which are also excluded by article 1(2)(e) from the application of the Rome I Regulation) is governed by the law applicable to the contract of which it forms a part. Accordingly, and as a matter of the common law principles of the conflict of laws, the law which governs the contract will also generally govern the jurisdiction agreement. This means that this law governs the construction and interpretation of the agreement (ix) Conclusion Taken together, these reasons provide a convincing case for favouring the main contract as opposed to seat approach to determining the proper law of the arbitration agreement. They should be viewed as supporting a presumption (or general rule) that the proper law of the main contract is also the proper law of the arbitration agreement. In this case, they support the conclusion that the proper law of the arbitration agreement is Russian law by reason of an implied choice. (3) The proper law of the arbitration agreement is Russian law even if there has been no implied choice I would arrive at the same conclusion that the proper law of the arbitration agreement is Russian law for the reasons that have been set out in paras 231 255 above, even if the proper law of the main contract was Russian under article 4, rather than under article 3(1), of Rome I Regulation at least if the reason for that was that Russia is the country with which the contract is most closely connected. That would then carry across to the third stage of the common law approach and would mean that, despite the seat for the arbitration being England, the arbitration agreement also has the closest and most real connection with Russia. That one arrives at the same result at common law whether applying the implied choice or the default rule is unsurprising. It has long been recognised that there is a thin distinction between those two stages: they represent the distinction between implied and imputed intention. In Amin Rasheed Shipping Corpn v Kuwait Insurance Co [1984] AC 50 the majority, led by Lord Diplock, decided that English law was the proper law by necessary implication whereas Lord Wilberforce came to the same conclusion applying the closest and most real connection test while recognising, at p 69, that the two merge into each other. But although, in general terms, it is important to recognise that one would arrive at the same conclusion if one applied the third stage of the common law approach, this case can be decided without going beyond the choice of the parties. The proper law of the arbitration agreement is Russian because that is the law which they have impliedly chosen. (4) Stating the common law on the proper law of an arbitration agreement The reasoning above enables me to state the common law on the proper law of an arbitration agreement (contained in a main contract) in the following straightforward and principled way which (had this view found favour) would have been easy to apply and would have been one way of providing the clarity that Popplewell LJ was rightly seeking: (i) The proper law of the arbitration agreement is to be determined by applying the three stage common law test. Is there an express choice of law? If not, is there an implied choice of law? If not, with what system of law does the arbitration agreement have its closest and most real connection? (ii) Where there is an express proper law clause in the arbitration agreement (which is rare) that will be determinative. (iii) Where there is no such clause, there is a presumption or general rule that the proper law of the main contract is also the proper law of the arbitration agreement. That presumption or general rule can assist the enquiry at any of the three stages of the common law approach. (It is most appropriate to use the language of a presumption where one is considering the parties choice at the first two stages of the enquiry ie it is a presumption of the parties intentions and to use the language of a general rule where one is considering the third stage of the closest and most real connection.) (iv) That presumption may most obviously be rebutted, or there is an exception to that general rule, where the standard validation principle (of the English conflict of laws) applies ie where the law of the seat (or another relevant jurisdiction) would treat the arbitration agreement as valid whereas the proper law of the main contract would treat the arbitration agreement as invalid (or, as in the Sulamrica case, not binding on one of the parties). In very rare cases that presumption would also be rebutted where it is clear that the parties have chosen the law of the seat as the proper law of the arbitration agreement even though there is no express proper law clause in the arbitration agreement. The above statement of the common law on the proper law of an arbitration agreement does not undermine the well established and uncontroversial position that the curial law and curial jurisdiction are (almost) invariably determined by the seat chosen for the arbitration. Concluding remarks on the proper law of an arbitration agreement We were referred to the writings of many commentators on this issue. Several (for example, Gary Born, International Commercial Arbitration, 2nd ed (2014), Chapter 4; and Julian Lew, The Law Applicable to the Form and Substance of the Arbitration Clause in Albert van den Berg (ed) Improving the Efficiency of Arbitration Agreements and Awards: 40 Years of Application of the New York Convention, (1998) ICCA Congress Series Vol 9, 114, 114 145) refer to the international context and I have been very conscious throughout that it would be inappropriate to lay down an approach for the English common law that would be inconsistent with accepted principles of international arbitration law. Although the commentators, as with the judges, do not speak with one voice on the issue facing us, I have found illuminating most of the writings to which we were referred. I have derived particular help from the work I have earlier mentioned of Lord Mustill and Stewart Boyd, Gary Born, Robert Merkin and Louis Flannery, Albert van den Berg, Adrian Briggs, and Ardavan Arzandeh and Jonathan Hill. In addition, I have been helped by an excellent case note on the Court of Appeal decision in this case by Edwin Peel, The Proper Law of an Arbitration Agreement (2020) 136 LQR 534. It will be clear from all that I have said above that, while there are large measures of agreement between us (for example, that (at least in general) an express or implied choice of the proper law for the main contract carries across to be the proper law of the arbitration agreement, irrespective of the specified seat of arbitration) I cannot agree, with great respect, with the overall approach or conclusion in this case of my colleagues, Lords Hamblen and Leggatt (with whom Lord Kerr agrees). In their view, the proper law of the arbitration agreement is here English law because there has been no choice of law for the arbitration agreement, express or implied, and the arbitration agreement has the closest and most real connection to England as the seat of the arbitration. Their decision would have been different had the proper law of the main contract been Russian law by reason of an express or implied choice. But because the proper law of the main contract is, in their view, Russian law, only because it has the closest and most real connection to Russia, that means that the proper law of the arbitration agreement is English law. That is to rest crucially different consequences on a divide between the choice and default stages of the Rome I Regulation and between the second and third stages of the common law approach in a way that, with respect, I do not believe to be justified in principle. I also consider that that approach produces undesirable practical and unprincipled consequences (especially by forcing a division of the proper laws) such as those set out in paras 235 239 above. I also have misgivings about the idea that the English common law should depart from a principled solution on the basis of a supposed but in my view unproven consensus as to international arbitration policy favouring the seat approach (in the absence of choice). My view is that the proper law of the arbitration agreement is Russian. That is because the proper law of the main contract is Russian by implied choice and that implied choice encompasses, or carries across to constitute, an implied choice of Russian law for the arbitration agreement. Even if my reasoning on the proper law of the main contract is wrong and the proper law of the main contract is Russian by reason of Russia having the closest and most real connection rather than by implied choice I would still regard the proper law of the arbitration agreement as being Russian law by reason of the arbitration agreement having the closest and most real connection with Russian law. This is to apply the general rule, to which there is here no exception, that the proper law of the main contract is also the proper law of the arbitration agreement. The anti suit injunction Had my conclusion on the proper law of the arbitration agreement prevailed that the proper law of the arbitration agreement is Russian the following question would have arisen. Should this matter be remitted to the English Commercial Court to decide if an anti suit injunction should be granted or, as Mr Bailey submitted, should the matter be left to the Russian courts by refusing an anti suit injunction (overturning the Court of Appeal)? It is not in dispute that the English courts, because England is the seat of the arbitration, have curial or supervisory jurisdiction to support and enforce the arbitration agreement (see para 193(vi) above). It is also clear that the English Commercial Court has the means and experience, relying on expert evidence on Russian law, to decide on the correct interpretation of the arbitration agreement applying Russian law. I consider that, in these circumstances, had my view on the proper law of the arbitration agreement been the majority view, the appropriate course would have been for the question as to whether an anti suit injunction should be ordered to be remitted to the English Commercial Court which would have been required to determine whether, applying Russian law to interpret the arbitration agreement, the proceedings in Russia constituted a breach of the arbitration agreement. That court would also have been required to determine, if Enka had been given permission to plead the point, whether, applying Russian law, there was a serious risk of the arbitration agreement being held invalid under Russian law as at the time this arbitration agreement was entered into (see para 197 above). Had my view on the proper law prevailed, the stay of execution of the anti suit injunction would not therefore have been lifted and the undertakings given by the parties, pending the outcome of this appeal, would have had to be extended to protect Enkas position. 9. Conclusion Contrary to the joint judgment of Lord Hamblen and Lord Leggatt (with whom Lord Kerr agrees), it is therefore my view that, on the main issue in the case, Chubb Russia is correct that the proper law of the arbitration agreement is Russian, not English, law; and, on that basis, I would have remitted the question, whether an anti suit injunction should be ordered, to the English Commercial Court. LORD SALES: I agree with the judgment of Lord Burrows. In relation to determining the proper law of an arbitration agreement contained in a main contract my view is that the main contract approach should be preferred to the seat approach. I add a short judgment of my own to explain my position in relation to the points on which there is a difference of view within the court and to indicate the areas where I am in agreement with the judgment of Lord Hamblen and Lord Leggatt. The court is taking this opportunity to clarify the position regarding the approach to determining the proper law of an arbitration agreement which is a provision within a main contract. The main contract may or may not contain a provision stating the proper law of the contract. Where the main contract contains such a provision, it is not usual for the parties also to include a distinct term to state the proper law of the arbitration agreement embedded in the main contract. According to English conflict of laws rules, the proper law of the main contract will usually be determined by application of the Rome I Regulation, but that does not apply in relation to the arbitration agreement. In relation to the arbitration agreement, the proper law is determined by reference to the conflict of laws rules of the common law: the proper law is that chosen by the parties (i) expressly or (ii) by implication, according to the terms of any agreement between them, and (iii) in the absence of such choice is the law of the jurisdiction with which the arbitration agreement has the closest and most real connection. Choice of the parties Where the main contract includes a provision stating the proper law of that contract, I agree with Lord Hamblen and Lord Leggatt that the ordinary effect of the provision is that this indicates that the parties have chosen the same proper law for the arbitration agreement. I further agree with Lord Hamblen and Lord Leggatt that for these purposes there is not necessarily a sharp division between an express choice of law and an implied choice of law. The point can be illustrated by the decision in Sulamrica Cia Nacional de Seguros SA v Enesa Engenharia SA [2012] EWCA Civ 638; [2013] 1 WLR 102 (Sulamrica). That case concerned an arbitration agreement contained in a main contract which included a term stating that the proper law of the contract was Brazilian. In his judgment, Moore Bick LJ assumed that what was in issue was whether the parties had thereby made an implied choice of law in relation to the arbitration agreement, and held that by virtue of the application of the validation principle the choice of law term could not be interpreted as having that effect: paras 25 26 and 31. However, one might analyse the effect of the proper law provision in the main contract by asking whether on the true construction of its express terms the statement that the proper law of the contract was Brazilian law extended to cover the arbitration agreement which was part of that contract. Again, application of the validation principle would indicate that in the particular circumstances of the case the parties did not intend that statement to extend so far. Stages (i) and (ii) of the common law rule are aligned with the test in article 3(1) of the Rome I Regulation. The first main point of difference between the judgment of Lord Burrows and the judgment of Lord Hamblen and Lord Leggatt is whether in the circumstances of the present case the parties impliedly chose Russian law as the law governing the main contract, including the arbitration agreement. On that question, I agree with Lord Burrows that they did. Although the parties did not include an express choice of law statement in the main contract, they included many references in the main contract to make it clear that they intended that Russian law should govern their relationship. In the circumstances of the case, and given the nature of the task to be performed by Enka, it would have been bizarre for them to assume that any other law was to apply. The guidance in the report by Giuliano and Lagarde on the Rome Convention which later became the Rome I Regulation (para 203 above) is strong support for this view. Unlike in Sulamrica, there was no good countervailing reason to indicate that the parties intended that the choice of law they had made for their contract should not extend to the arbitration agreement which was part of it. Where the parties to a main contract include an arbitration agreement as part of that contract, then in general terms there are strong grounds to infer that they intend their choice of the law to govern that contract to cover the arbitration agreement as well, as Lord Hamblen and Lord Leggatt point out: para 53 above. There is a presumption that in ordinary circumstances a contract has a single proper law since otherwise a serious element of uncertainty would be introduced into mercantile agreements: Jacobs, Marcus & Co v Credit Lyonnais (1884) 12 QBD 589, 602 603 per Bowen LJ; see also Kahler v Midland Bank [1950] AC 24, 42 (Lord MacDermott). A contract contains a unified package of rights and obligations, created in the same set of circumstances, so the usual and natural inference is that the parties intend, on an objective basis, that the same proper law should apply in relation to it. An arbitration agreement contained in the main contract imposes an obligation to take disputes to arbitration in certain circumstances, as part of the package of rights and obligations created by and set out in the main contract. In usual circumstances, I can see no good reason to infer that the parties to the main contract intended the interpretation of the obligation to arbitrate to be governed by any different system of law than the system of law which governs the interpretation of all the other obligations in their contract. Applying the same system of law to govern the construction of the whole of the contract the parties have made ensures simplicity and coherence in its interpretation. It avoids the uncertainty associated with subjecting different parts of the contract to interpretation according to different systems of law. Any national system of law may be expected to have internal coherence, which will not be the case when two national systems of law are set side by side or are overlaid. Each will have an internal logic and in dealing with particular matters which is at variance from the internal logic of the other. Each may have different solutions to practical problems which are coherent within that system, but are opposed to the solutions given by the other system according to what is coherent within that other system. The presumption that a contract has a single proper law thus reflects the usual expectations of the parties to a contract, since it is a reasonable inference that they prefer certainty, coherence and simplicity in working out the practical implications of their agreement. In my view, these points underlie the observation by Lord Mustill in Channel Tunnel Group Ltd v Balfour Beatty Construction Ltd [1993] AC 334, 357 358, that it would be exceptional for the proper law of the arbitration agreement to be different from the proper law of the main contract. Lord Mustills opinion in this area carries great weight. He also pointed out that it is less unusual for the curial law in relation to an arbitration to be different from the proper law of the main contract (and the proper law of an arbitration agreement contained in the main contract). The explanation for this is that the curial law follows the choice of seat. When the parties choose a particular seat, their reasons for doing so include the relationship stipulated by the law of the jurisdiction of the seat as to the grounds on which the courts of that jurisdiction may interfere with the arbitral process or its outcome and the extent to which those courts may take action positively to support the arbitral process and uphold the agreement to arbitrate, including by the grant of injunctive relief. These reasons apply whatever the proper law of the main contract or the arbitration agreement may be. Hence I do not consider that ordinarily the choice of the seat provides any sound basis to infer what the parties intended or might have expected the proper law of the main contract or the arbitration agreement to be. Two comments may be made about this. First, many decades ago it was understood that when the parties stipulated that the seat for their arbitration would be in a particular jurisdiction their intention was that the arbitrators would be local lawyers chosen for their expertise in the law of that jurisdiction, so that the inference could be drawn that the parties intended that they would apply that law in determining issues in dispute, including as to the proper interpretation of the arbitration agreement and the main contract. But changes in the way international arbitration was conducted meant that such an inference was already suspect by 1970, as Lord Wilberforce explained in Cie Tunisienne de Navigation SA v Cie dArmement Maritime SA [1971] AC 572, 596. Under modern conditions of international arbitration, in which arbitrators may be drawn from different jurisdictions and are regularly expected to receive evidence about and to apply foreign law, it is now no longer a plausible inference. Secondly, parties may sometimes choose arbitration for resolution of their disputes with a seat in a neutral jurisdiction because one or other of them does not have complete trust in the impartiality of the courts of the state of the other. But a preference for a neutral seat does not support any inference as to the parties intentions as to the law which the arbitrators should apply when interpreting the main contract or the arbitration agreement. Arbitrators can be expected to apply any relevant law, of whichever legal system is appropriate, in an impartial way and the courts of the neutral jurisdiction will be impartial in applying the curial law. If an inference is sought to be drawn as to the proper law of the main contract or the arbitration agreement, something more is required: an indication that the parties wished the law to be applied to govern the interpretation of their contract to be neutral in the sense that it is not aligned with the home jurisdiction of either of them. Exceptionally, the circumstances may support such an inference: see eg Egon Oldendorff v Libera Corpn [1995] 2 Lloyds Law Rep 64, 69 and see para 114 above. However, the circumstances of the present case show that no such inference can be drawn here. The parties have stipulated that Enkas obligations under the main contract should incorporate norms of Russian law. Accordingly, it is my view that Lord Hamblen and Lord Leggatt overstate the significance of the choice of the seat in this case. The choice of curial law associated with the choice of the seat is directed to a different subject matter (regulation of the relationship between the courts of place of the seat and the arbitral process) than the rules directed to determining the proper law of a contract for the purpose of interpreting it, so it is not appropriate to use the former as a basis for establishing what the latter should be. The inference that the parties who made the contract in the present case intended that the interpretation of the whole of it should be governed by Russian law is especially strong, since the arbitration agreement is contained in a complex main contract with many interacting parts which have to live together in a coherent relationship. In particular, the parties intention, judged objectively, is that the obligation to arbitrate set out in the arbitration agreement contained in article 50.1 of the main contract should be interpreted in a way which makes it coherent with the other obligations in the same provision to seek to negotiate in good faith to find a resolution for disputes. I can see no reason why the interpretation of the latter set of obligations is not governed by Russian law, like all the other obligations in the main contract. The obligation to arbitrate in article 50.1 is likewise just another obligation set out in the main contract and it is so closely related to the other dispute resolution obligations in the main contract that the obvious inference is that the parties intended the interpretation of the whole of the provision to be governed by the same law, ie Russian law. The separability principle which exists in relation to an arbitration agreement contained within a main contract does not alter this analysis. That principle has limited significance. As reflected in section 7 of the Arbitration Act 1996, it allows for the survival of an arbitration agreement contained in a main contract if the validity, existence or effectiveness of the main contract is called in question, so that the arbitrators can rule on such matters. This tells one nothing about the legal system which the parties intended or might reasonably have expected to govern the interpretation of the arbitration agreement as part of the main contract. By contrast, the validation principle, as illustrated by Hamlyn & Co v Talisker Distillery [1894] AC 202 and Sulamrica, does allow one to draw an inference as to the system of law which the parties intended should govern the interpretation of the arbitration agreement. The principle can provide a basis for distinguishing the proper law of the arbitration agreement from that of the main contract or, where the proper law of the main contract is uncertain, it may provide a basis for an inference also to be drawn that the proper law of the main contract is intended to follow the choice of proper law for the arbitration agreement (in Hamlyn v Talisker Lord Herschell LC referred to this possibility at p 209). In my view, the validation principle is an aspect of the general objective approach to determining the intention of the parties to a contract ut res magis valeat quam pereat (so that the main object of the agreement is upheld and not destroyed). Where the main contract contains an arbitration agreement, it will be clear that the parties intend that the obligation to arbitrate as set out in the arbitration agreement should be valid and effective. The parties are presumed to know the state of the law at the time they contract. If it appears that according to the law which governs the main contract the arbitration agreement would be invalid, then it can be inferred that the parties intended that a different law should govern the arbitration agreement in order to uphold its validity and effect. The same is true if it appears that according to the law which governs the main contract the arbitration agreement would be subject to a serious risk of being found to be invalid or that its binding force would be destroyed (as in Sulamrica), since the inference is that the parties would choose certainty rather than uncertainty in upholding the effectiveness of this part of their contract. Usually, since the legal system which governs the main contract is ruled out by this reasoning, the obvious conclusion is that the parties intended the law of the jurisdiction of the seat which they have stipulated to apply instead. The terms of the arbitration agreement, set against the background of the state of the law in the two candidate jurisdictions, show that the parties intended the law of the jurisdiction of the seat to apply in this sort of case. This reasoning does not apply where what is in issue is the choice of the proper law to determine the scope of the arbitration agreement rather than whether it would be invalid or would not impose a binding obligation to go to arbitration if one system of law were applied rather than another. In Sulamrica, Moore Bick LJ rightly held that the validation principle applied so as to negative any choice of Brazilian law as the proper law of the arbitration agreement. He seems to have drawn the conclusion that this meant that the parties had formed no intention regarding what was to be the proper law of the arbitration agreement (see para 31) and so proceeded to analyse the position by reference to the common law default rule at stage (iii), in order to conclude that English rather than Brazilian law governed the arbitration agreement contained in the main contract. However, in my opinion, following the reasoning above, the better view is that the validation principle showed that the parties intended that English law should govern the arbitration agreement. This conclusion should have been reached at stage (i)/stage (ii) of the common law analysis. In the present case, subject to one argument introduced by Enka for the first time on the appeal to this court (see para 197 above), the validation principle has no application. Up to the hearing in this court, it has been common ground that under Russian law the arbitration agreement in article 50.1 is valid and binding in its effect; the issue that has divided the parties is the effect that application of Russian law would have regarding the interpretation of its scope. As to Enkas new argument that the validation principle does in fact apply, I agree with Lord Burrows that if our view regarding the proper law of the arbitration agreement had prevailed the case should have been remitted to the Commercial Court and that it would have been for that court to consider whether the new argument could be introduced and, if it were, then to rule upon it alongside the other issue of Russian law which is in dispute between the parties, namely whether the interpretation of article 50.1 according to Russian law would be narrower or the same as that given by English law. The second main area of disagreement appearing from the judgment of Lord Burrows and the judgment of Lord Hamblen and Lord Leggatt relates to the operation of the common law default rule at stage (iii), if the parties have made no choice at stage (i) or stage (ii). On the analysis of Lord Burrows, with which I agree, the parties to the main contract impliedly intended that the interpretation of the AA in that contract should be governed by Russian law, at stage (ii). If that were right, stage (iii) would not be reached. However, the majority do not agree about this. On their analysis it is necessary to consider the position on the footing that the parties have made no choice at stage (i) or stage (ii). The default rule In the early formulation of the common law rule by Dicey in 1896 (para 36 above), the difference between stage (i)/stage (ii) and stage (iii) was described as one between what the parties (actually) intended and what they may fairly be presumed to have intended. Obviously, imputed choice is something different from actual choice. Later, the common law default rule at stage (iii) was formulated in terms of the system of law with which the contract has its closest and most real connection. But this does not mark a radical change. Rather, focusing on the closest and most real connection serves the same underlying policy, which is to seek to reflect the likely expectations of the parties as businesspeople, by producing an outcome which is reasonable and coherent in its own terms and does not place excessive emphasis on the boundary between stage (ii) and stage (iii). If, on analysis, the parties have not made a choice of proper law themselves perhaps because they did not think about it or they chose to leave matters unclear in the interests of arriving at an agreement without having to argue about it and in the hope that a dispute might never arise which required a determination of the issue the policy of the common law, as expressed in the default rule at stage (iii), is to produce the answer which it is plausible to think businesspeople in the position of the parties, acting reasonably, would have been likely to have chosen for themselves if they had to confront the issue. Many of the factors relevant to an argument that an implied choice of proper law can be identified at stage (ii) will also be relevant to the alternative argument based on the default rule at stage (iii). In broad terms, businesspeople would expect them to be likely to produce similar outcomes. That has certainly been the judicial approach until fairly recently, as illustrated by the decision of the House of Lords in Amin Rasheed Shipping Corpn v Kuwait Insurance Co [1984] AC 50. In that case, the majority of the Appellate Committee determined the proper law of the contract by reference to stage (ii), while Lord Wilberforce reached the same conclusion by reference to the test at stage (iii), for closely similar reasons. Similarly, in the Cie Tunisienne case all members of the Appellate Committee arrived at the same conclusion regarding the proper law of the contract, but they did so by different routes; some found that the parties had made a choice, others that the default rule in stage (iii) applied. In the leading authorities referred to in the Cie Tunisienne case, Bonython v Commonwealth of Australia [1951] AC 201, and In re United Railways of Havana and Regla Warehouses Ltd [1961] AC 1007, the test applied to determine the proper law of the contract was that stated by Lord Simonds in Bonython, at p 219: the system of law by reference to which the contract was made or that with which the transaction has its closest and most real connexion, which elides the question of party choice and the default rule, and deliberately so. The close alignment of the approach under stage (ii) and that under stage (iii) was traced by Toulson LJ in Lawlor v Sandvik Mining and Construction Mobile Crushers and Screens Ltd [2013] 2 Lloyds Law Rep 98, paras 20 27. Since the boundary between stage (ii) and stage (iii) is by no means crystal clear and there is scope for eminent judges to reach different views about which stage of the common law analysis supplies the answer in any given case, it would risk the appearance of arbitrariness to adopt a default rule at stage (iii) which was radically at variance in the results it produced by comparison with stage (i) and stage (ii). Further, if the common law adopted a radically divergent default rule, so that significant differences in outcome turned on this, that would be an incentive for parties to litigate the question of whether a case was to be analysed as falling within stage (i)/ stage (ii) or within stage (iii). This would be contrary to the interest of businesspeople to avoid expensive litigation to resolve disputes, so far as possible. If the parties appreciate that all roads lead to Rome, so to speak, the need for litigation to decide which road should be taken is avoided. This analysis prompts a further comment on Sulamrica. Having held (contrary to my view at para 278 above) that the application of the validation principle meant that the parties had made no choice as to the proper law of the arbitration agreement within the main contract, Moore Bick LJ proceeded to apply the default rule at stage (iii) (para 32). However, in doing so he took the view that the arbitration agreement had its closest and most real connection with the law of the place of the seat (England); and this despite the fact that, subject to the application of the validation principle, he thought that at stage (ii) the parties impliedly intended that the proper law of the main contract (Brazilian law) would also apply to the arbitration agreement (paras 26 27). I think it is evident that Moore Bick LJs analysis at both stage (ii) and stage (iii) was rightly designed to give effect to the validation principle and to uphold the effective binding force of the arbitration agreement in that case in line with the parties intention. But unfortunately in doing so he proposed a solution which, if taken at face value and generalised, would give rise to the kind of radical divergence of outcome between stage (i)/stage (ii) and stage (iii) which the common law default rule in fact seeks to avoid, and which does not reflect the previous authorities referred to above. The court in Sulamrica did not need to take the step of saying that the arbitration agreement had its closest and most real connection with the law of the place of the seat in order to produce the appropriate result, which was to uphold the binding effect of the arbitration agreement in line with the parties intention by application of the validation principle: see para 278 above. One might also say that the validation principle is capable of operating at stage (iii) as well as at stage (i)/stage (ii), as an aspect of the common law default rule, as an expression of the policy of the common law to uphold the validity and binding effect of an arbitration agreement which the parties have chosen to enter into. But again, that would mean that the law of the place of the seat (England) was applicable as the proper law of the arbitration agreement as the only remaining candidate once Brazilian law had been eliminated as a candidate by application of the validation principle. At the end of this process of analysis, it could be said that the arbitration agreement had its closest and most real connection with the law of the place of the seat; but that is only in the very limited sense that this was the only system of law with which the arbitration agreement could be said to have any connection, if the validation principle was to be given effect. However, the way in which Moore Bick LJ explains his reasoning at para 32 makes it sound as though the general starting point, if the analysis at stage (i)/stage (ii) does not give a result, is always that the arbitration agreement contained in the main contract has as its proper law the law of the place of the seat rather than generally following the proper law of the main contract. In my respectful opinion, that approach is erroneous and contrary to principle and authority. In my view, the powerful points which Lord Hamblen and Lord Leggatt make at para 53 of their judgment regarding the expectations of businesspeople to the effect that their contractual arrangements should have internal coherence (so that if the parties have chosen the proper law of the main contract they would ordinarily expect the same proper law to apply in relation to an arbitration agreement contained within it) also apply in relation to the operation of the default rule at stage (iii) where the circumstances mean that it is clear what the proper law of the main contract is, even when that is not as a result of the exercise of choice within the meaning of article 3(1) of the Rome I Regulation. The main contract carries with it the legal system which governs its interpretation and application. Accordingly, the need for and expectation that there will be coherence between the main contract and the arbitration agreement contained within it means that the arbitration agreement has its closest and most real connection with the legal system which constitutes the proper law of the main contract in which it is contained. By contrast, it is my opinion that the argument for a connection between the arbitration agreement and the law of the place of the seat is much weaker. The parties obtain the benefits of the curial law of the place of the seat in any event, whatever the proper law of the arbitration agreement: see para 271 above. Therefore the choice of seat does not point to any particular connection with the arbitration agreement in terms of providing guidance as to its proper law. To the extent that the courts of the place of the seat exercise a supervisory function in relation to the arbitration, for example to ensure that the arbitrators act within the scope of the arbitration agreement according to its true construction, they can readily do that by reference to evidence about any foreign law which is identified as the proper law of the arbitration agreement. In the present case, Enka disputes that there has been a choice of proper law within article 3(1) of the Rome I Regulation for the main contract but accepts that article 4, as the default rule set out in the Regulation, has the effect that the proper law of the main contract is Russian. This concession must be based on an acceptance that it is clear from all the circumstances that the main contract is manifestly more connected with Russia than with any other country (including the country where Enka is habitually resident, Turkey): see article 4(3). The assessment under article 4(3) involves inquiring into the country with which the contract taken as a whole has its closest connection. Where, in this case, following this path of analysis, the main contract taken as a whole manifestly has its closest connection with Russia so that Russian law is taken to be its proper law, it seems to me that the reasoning above indicates that the arbitration agreement contained in the main contract similarly has its closest and most real connection with Russian law. There is no good reason to conclude that the law of the seat is more closely connected or provides a better guide for the purposes of application of a rule designed to identify the law which is to govern the interpretation of the arbitration agreement. In their judgment, in relation to stage (iii) of the common law rule Lord Hamblen and Lord Leggatt rely on article V(1)(a) of the New York Convention and section 103(2)(b) of the Arbitration Act 1996 in support of their view that at that stage the arbitration agreement in the main contract has its closest and most real connection with the law of the seat (England) rather than with the law which governs the main contract. In my opinion, this is to give those provisions excessive weight in analysing the application of the common law rule. As I have sought to show, the policy of the common law as reflected in the default rule at stage (iii) is to align that rule with the likely result the parties would have wished to achieve to produce reasonable coherence across their whole contractual relationship. Application of article V(1)(a) would defeat that policy, because it would produce a radical divergence between the effect of stage (i)/stage (ii) and stage (iii) of the common law rule. Another way of putting this is to say that the points made by Lord Hamblen and Lord Leggatt at para 53 of their judgment do not drop out of the analysis for the purposes of the common law at stage (iii), but continue to have validity and force at that stage as well. By contrast, when one is applying article V(1)(a) those points do drop out of the picture and have no force, precisely because the New York Convention legislates for a rule which excludes them from being relevant. Moreover, article V(1)(a) does not provide a good guide as to the application of the common law rule. Article V(1)(a) sets out a default rule within the scheme of the Convention which is different from the default rule under the common law and which, if applied, would undermine the validation principle when it is applied by the common law as an aspect of stage (iii) (see para 285 above). The provision states that, in the absence of a choice by the parties, recognition of an arbitral award may be refused if the arbitration agreement is not valid under the law of the country where the award was made. That seems to say that recognition may be refused if the arbitration agreement is invalid according to the law of the place of the seat; but under the common law in such a case the validation principle would apply and the court would identify another system of law as the proper law of the arbitration agreement in order to uphold and give effect to the arbitration agreement. Article V(1)(a) thus sets out what can fairly be described as a very simple and inflexible default rule for the purposes of the Convention regime which is different from the more flexible and nuanced common law default rule of closest and most real connection and should not be taken to displace that rule. Within the Convention regime, the rationale for the choice of a simple test is not difficult to understand. It is a clear rule by reference to which it is reasonably easy to judge whether the actions of states party to the Convention comply with it or not. By contrast, the common law default rule has been established for a very long period of time, well before international policy arguably came to crystallise in line with article V(1)(a) of the New York Convention, and it reflects different policy objectives, as set out above. So far as choice of proper law for an arbitration agreement is concerned (as distinct from regulation of the recognition of foreign arbitral awards, which is governed by section 103(2)(b) of the 1996 Act), article V(1)(a) of the New York Convention is part of an unincorporated treaty and it is unclear by what process of legal reasoning it could be taken to have displaced the well established common law default rule. None of the leading common law authorities give any weight to article V(1)(a) in the formulation or application of the common law rule. For present purposes, it is not necessary to determine the position where it is not article 4(3) but one of the other more mechanical rules in article 4 which determines the proper law of the main contract. It suffices to say that I think there is force in the argument that the analysis above tends to indicate that also in that sort of case the proper law of the main contract will usually provide the best indication of the proper law of an arbitration agreement contained within it, at stage (iii) of the common law rule. Again, the points made by Lord Hamblen and Lord Leggatt at para 53 of their judgment should not drop out of the picture here. This approach would reflect how the parties are likely to have approached matters themselves, by starting with their agreement on the substantive aspects of the main contract and then adding the arbitration agreement into that framework, with the general intention and expectation that the main contract and the arbitration agreement would form a coherent whole. It would also have the merit of making the analysis in any case as simple and clear as possible. One would start by identifying the proper law of the main contract according to the choice of the parties pursuant to article 3 of the Rome I Regulation and, in default of any choice, by reference to the rules in article 4 of the Regulation, and then the presumption would be that the proper law of the arbitration agreement is the same. The anti suit injunction Finally, if the interpretation of article 50.1 were governed by Russian law, as Lord Burrows and I think it is, and a Russian court is about to pronounce on the interpretation of that provision according to Russian law in the parallel proceedings between the parties in Russia, the question arises whether this makes it inappropriate for the English court to issue an anti suit injunction in favour of Enka, whether on grounds of forum non conveniens, comity or otherwise. On that issue, I agree with section IX of the judgment of Lord Hamblen and Lord Leggatt, which is in line with Lord Burrows judgment. The English court, as the court of the place of the seat of the arbitration chosen by the parties, has a particular responsibility to ensure that the arbitration agreement is upheld and applied in accordance with its terms. On the basis of expert evidence of foreign law adduced in the usual way, the English court could determine the meaning of article 50.1 according to Russian law. If article 50.1, so construed, imposes an obligation on Chubb Russia to proceed by way of arbitration rather than by litigation, the English court could and should enforce that obligation by way of an anti suit injunction.

UK-Abs

The central issue on this appeal is how the governing law of an arbitration agreement is to be determined when the law applicable to the contract containing it differs from the law of the seat of the arbitration, the place chosen for the arbitration in the arbitration agreement. On 1 February 2016, a power plant in Russia was severely damaged by fire. The appellant Russian company (Chubb Russia) had insured the owner of the power plant (the owner) against such damage. The owner had entered into a contract with another company (the head contractor), in relation to construction work to be carried out at the plant. In turn, the head contractor engaged the respondent (Enka), a Turkish engineering company, as a sub contractor in the construction project. The contract made between the head contractor and Enka included an agreement that disputes would be determined through arbitration proceedings in London. In May 2014, the head contractor transferred its rights and obligations under the contract to the owner. After the fire in February 2016, Chubb Russia paid an insurance claim by the owner and, by doing so, assumed any rights of the owner to claim compensation from third parties, including Enka, for damage caused be the fire. In May 2019, Chubb Russia brought a claim against Enka in Russia. In response, in September 2019 Enka brought an arbitration claim in the High Court in London arguing that, by proceeding in the Russian court, Chubb Russia was in breach of the arbitration agreement and seeking an anti suit injunction to restrain Chubb Russia from pursuing the Russian claim. At first instance, the High Court dismissed Enkas claim on the primary ground that the appropriate forum to determine to scope of the arbitration agreement was the Russian court. On appeal, the Court of Appeal overturned the judges decision. It held that, unless there has been an express choice of the law that is to govern the arbitration agreement, the general rule should be that the arbitration agreement is governed by the law of the seat, as a matter of implied choice; that there was no express choice of law in this case and that the arbitration agreement was therefore governed by English law; and that it was appropriate to grant an anti suit injunction to restrain Chubb Russia from pursuing the Russian claim. Chubb Russia appeals to the Supreme Court. By a majority the Supreme Court dismisses the appeal. The judgment is given by Lord Hamblen and Lord Leggatt with whom Lord Kerr agrees. Lord Burrows delivers a dissenting judgment, with which Lord Sales agrees. Lord Sales also gives his own judgment. Where an English court must decide which system of law governs an arbitration agreement, it should apply the English common law rules for resolving conflicts of laws rather that the provisions of the Rome I Regulation, as the latter excludes arbitration agreements from its scope [25] [28]. According to the common law rules, the law applicable to the arbitration agreement will be: (i) the law expressly or impliedly chosen by the parties; or (ii) in the absence of such choice, the system of law most closely connected to the arbitration agreement [27]. In determining whether the parties have made a choice of law, the court should construe the arbitration agreement and the contract containing it by applying rules of contractual interpretation of English law as the law of the forum [29] [34]. Where the parties have not specified the law applicable to the arbitration agreement, but they have chosen the law to govern the contract containing the arbitration agreement, this choice will generally apply to the arbitration agreement [43] [52]. This general rule encourages legal certainty, consistency and coherence while avoiding complexity and artificiality [53]. The Court of Appeal was wrong to find that there is a strong presumption that the parties have, by implication, chosen the law of the seat of the arbitration to govern the arbitration agreement [59] [64]. Any overlap between the law of the seat and that of the arbitration does not justify such a presumption [64] [94]. While a choice of seat can lead to such an inference in some cases, the content of the Arbitration Act 1996, particularly section 4(5), does not support such a general inference [73] [82]. Where there is no express choice of law to govern the contract, a choice of the seat of the arbitration does not by itself justify an inference that the contract (or the arbitration agreement) is intended to be governed by the law of the seat [110] [117]. Where the parties have made no choice of law to govern the arbitration agreement, either specifically or by choosing the law which is to govern the contract as a whole, the court must determine the law with which the arbitration agreement is most closely connected. In general, the arbitration agreement will be most closely connected with the law of the seat of arbitration. [118] [119]. This default rule is supported by the following considerations: (i) the seat is where the arbitration is to be performed (legally, if not physically) [121] [124]; (ii) this approach maintains consistency with international law and legislative policy [125] [141]; (iii) this rule is likely to uphold the reasonable expectations of contracting parties who specify a location for the arbitration without choosing the law to govern the contract [142] [143]; and (iv) this approach provides legal certainty, allowing parties to predict easily which law the court will apply in the absence of choice [144]. The majority holds that the contract in this case contains no choice of the law that is intended to govern the contract or the arbitration agreement within it. In these circumstances the validity and scope of the arbitration agreement is governed by the law of the chosen seat of arbitration, as the law with which the dispute resolution clause is most closely connected [171]. The seat of the arbitration is London. Therefore, the majority upholds the Court of Appeals conclusion that English law governs the arbitration agreement, albeit for different reasons [171]. Chubb Russia does not dispute that, if the arbitration agreement is governed by English law, it was legitimate for the Court of Appeal to grant an anti suit injunction in this case. [173]. The Supreme Court, however, affirms the Court of Appeals decision that, in principle, it makes no difference whether the arbitration agreement is governed by English or foreign law, as the inquiry in both cases remains the same: whether there been a breach of the agreement and, if so, whether it is just and convenient to grant an injunction to restrain that breach [178] [182]. While there may be circumstances in which it would be appropriate to await a decision of a foreign court before granting an injunction, deference to foreign courts should generally give way to upholding the importance of the parties bargain [183]. Lord Burrows and Lord Sales agree with the majority that, if the parties have expressly or impliedly chosen the law of the contract, this choice applies to the arbitration agreement [266]. They dissent on what the default position should be in the absence of such choice. They consider that it should be that the law with which the main contract is most closely connected governs the arbitration agreement, as this is the law with which in their view the arbitration agreement is also most closely connected [257]. They also dissent on whether the parties have in this case chosen the law that is to govern the contract. In their view, the parties impliedly chose Russian law to govern the construction contract and also, therefore, the arbitration agreement [228]. They agree with the majority that whether it is appropriate to grant an anti suit injunction does not depend on what law governs the arbitration agreement but only on whether pursuing the foreign proceedings is a breach of that agreement. As they conclude that Russian law governs the arbitration agreement, they would remit the question of whether there has been a breach of the arbitration agreement so as to justify the grant of an anti suit injunction to the Commercial Court.

one lakshminarayana iyer a hindu brahmin who owned considerable properties in the tirunelveli district died on 13th december 1924 leaving him surviving a widow ranganayaki and a married daughter ramalakshmi. ramalakshmi had married the plaintiff and had a number of children from him. they were all alive in december 1924 when lakshminarayana died. before his death he executed a will on 16th november 1924 the construction of which is in controversy in this appeal. by this will he gave the following directions after my lifetime you the aforesaid ranganayaki amminal my wife shall till your lifetime enjoy the aforesaid entire properties the outstandings due to me the debts payable by me and the chit amounts payable by me. after your lifetime ramalakshmi ammal our daughter and wife of rama ayyar avergal of melagaram village and her heirs shall enjoy them with absolute rights and powers of alienation such as gift exchange and sale from son to grandson and so on for generations. as regards the payment of maintenance to be made to chinnanmal alias lakshmi ammal wife of my late son hariharamayyan my wife ranganayaki ammal shall pay the same as she pleases and obtain a release deed. ranganayaki entered into possession of the properties on the death of her husband. on 21st february 1928 she settled the maintenance claim of lakshmi ammal and obtained a deed of release from her by paying her a sum of rs 3350 in cash and by executing in her favour an agreement stipulating to pay her a sum of rs 240 per annum. ramalakshmi died on 25th april 1938 during the lifetime of the widow. none of her children survived her. on the 24th july 1945 the widow describing herself as an absolute owner of the properties of her husband sold one of the items of the property to the 2nd defendant for rs 500. on the 18th september 1945 the suit out of which this appeal arises was instituted by the plaintiff the husband and the sole heir of ramalakshmi for a declaration that the said sale would not be binding on him beyond the lifetime of the widow. a prayer was made that the widow be restrained from alienating the other properties in her possession. on the 19th september 1945 an ad interim injunction was issued by the high court restraining the widow from alienating the properties in her possession and forming part of her husband 's estate inspite of this injunction on the 27th september 1945 she executed two deeds of settlement in favour of the other defendants comprising a number of properties. the plaintiff was allowed to amend his plaint and include therein a prayer for a declaration in respect of the invalidity of these alienations as well. it was averred in the plaint that ramalakshmi obtained a vested interest in the suit properties under the will of her father and plaintiff was thus entitled to maintain the suit. the defendants pleaded that the plaintiff had no title to maintain the suit that the widow was entitled under the will to an absolute estate or at least to an estate analogous to and not less than a widow 's estate that the estate given to ramalakshmi under the will was but a contingent one and she having predeceased the widow no interest in the suit properties devolved on the plaintiff. the main issue in the suit was whether the widow took under the will an absolute estate or an estate like the hindu widow 's estate and whether the daughter 's interest therein was in the nature of a contingent remainder or whether she got in the properties a vested interest. the subordinate judge held that the widow took under the will a limited life interest and not an absolute estate or even a widow 's estate under hindu law and that the daughter got there under a vested interest in the properties to which the plaintiff succeeded on her death. in view of this finding he granted the plaintiff a declaratory decree to the effect that the first defendant had only an estate for life in the suit properties and that the alienations made by her would not endure beyond her lifetime. the question as to the validity of the alienations was left undetermined. the unsuccessful defendants preferred an appeal against this decree to the high court of judicature at madras. during the pendency of the appeal the widow died on 14th february 1948. the high court by its judgment under appeal affirmed the decision of the trial judge and maintained his view on the construction of the will. leave to appeal to the supreme court was granted and the appeal was admitted on the 27th november 1951. the substantial question to decide in the appeal is whether the estate granted by the testator to his widow was a fall woman 's estate under hindu law or merely a limited life estate in the english sense of that expression. it was not contested before us that a hindu can by will create a life estate or successive life estates or any other estate for a limited term provided the donee or the persons taking under it are capable of taking under a deed or will. the decision of the appeal thus turns upon the question whether the testator 's intention was to give to his widow ail ordinary life estate or an estate analogous to that of a hindu widow. at one time it was a moot point whether a hindu widow 's estate could be created by will it being an estate created by law but it is now settled that a hindu can confer by means of a will oil his widow the same estate which she would get by inheritance. the widow in such a case takes as a demise and not as an heir. the court 's primary duty in such cases is to ascertain from the language employed by the testator what were his intentions keeping in view the surrounding circumstances his ordinary notions as a hindu in respect to devolution of his property his family relationships etc. in other words to ascertain his wishes by putting itself so to say in his armchair. considering the will in the light of these principles it seems to us that lakshminarayan iyer intended by his will to direct that his entire properties should be enjoyed by his widow during her lifetime but her interest in these properties should come to an end on her death that all these properties in their entirety should thereafter be enjoyed as absolute owners by his daughter and her heirs with powers of alienation gift exchange and sale from generation to generation. he wished to make his daughter a fresh stock of descent so that her issue male or female may have the benefit of his property. they were the real persons whom he earmarked with certainty as the ultimate recipients of his bounty. in express terms he conferred on his daughter powers of alienation byway of gift exchange sale but in sharp contrast to this on his widow he conferred no such powers. the direction to her was that she should enjoy the entire properties including the outstandings etc. and these shall thereafter pass to her daughters. though no restraint in express terms was put on her powers of alienation in case of necessity even that limited power was not given to her in express terms. if the testator had before his mind 's eye his daughter and her heirs as the ultimate beneficiaries of his bounty that intention could only be achieved by giving to the widow a limited estate because by conferring a full hindu widow 's estate on her the daughter will only have a mere spes successions under the hindu law which may or may not mature and under the will her interest would only be a contingent one in what was left indisposed of by the widow. it is significant that the testator did not say in the will that the daughter will enjoy only the properties left indisposed of by the widow. the extent of the grant so far as the properties mentioned in the schedule are concerned to the daughter and the widow is the same. just as the widow was directed to enjoy tile entire properties mentioned in the schedule during her lifetime in like manner the daughter and her heirs were also directed to enjoy the same properties with absolute rights from generation to generation. they could not enjoy the same properties in the manner directed if the widow had a full hindu widow 's estate and had the power for any purpose to dispose of them and did so. if that was the intention the testator would clearly have said that the daughter would only take the properties remaining after the death of the widow. the widow can not be held to have been given a full hindu widow 's estate under the will unless it can be said that under its terms she was given the power of alienation for necessary purposes whether in express terms or by necessary implication. as above pointed out admittedly power of alienation in express terms was not conferred on her. it was argued that such a power was implicit within the acts she was authorized to do that is to say when she was directed to pay the debts and settle the maintenance of ramalakshmi it was implicit within these directions that for these purposes if necessity arose she could alienate the properties. this suggestion in the surrounding circumstances attending the execution of this will can not be sustained. the properties disposed of by the will and mentioned in the schedule were considerable in extent and it seems that they fetched sufficient income to enable the widow to fulfil the obligations under the will. indeed we find that within four years of the death of the testator the widow was able to pay a lump sum of rs 3350 in cash to the daughter in law without alienating any part of the immovable properties and presumably by this time she had discharged all the debts. it is not shown that she alienated a single item of immovable property till the year 1945 a period of over 21 years after the death of her husband excepting one which she alienated in the year 1937 to raise a sum of rs 1000 in order to buy some land. by this transaction she substituted one property by another. for the purpose of her maintenance for payment of debts etc and for settling the claim of the daughter in law she does not appear to have felt any necessity to make any alienation of any part of the estate mentioned in the schedule and the testator in all likelihood knew that she could fulfil these obligations without having recourse to alienations and hence he did not give her any power to do so. in this situation the inference that the testator must have of necessity intended to confer on the widow power of alienation for those limited purposes can not be raised. in our opinion even if that suggestion is accepted that for the limited purposes mentioned in the will the widow could alienate this power would fall far short of the powers that a hindu widow enjoys under hindu law. under that law she has the power to alienate the estate for the benefit of the soul of the husband for pilgrimage and for the benefit of the estate and for other authorized purposes. it can not be said that a hindu widow can only alienate her husband 's estate for payment of debts to meet maintenance charges and for her own maintenance. she represents the estate in all respects and enjoys very wide power except that she can not alienate except for necessity and her necessities have to be judged on a variety of considerations. we therefore hold that the estate conferred on ranganayaki ammal was more like the limited estate in the english sense of the term than like a full hindu widow 's estate in spite of the directions above mentioned. she had complete control over the income of the property during her lifetime. but she had no power to deal with the corpus of the estate. and it had to be kept intact for the enjoyment of the daughter. though the daughter was not entitled to immediate possession of the property it was indicated with certainty that she should get the entire estate at the proper time. and she thus got an interest in it on the testator 's death. she was given a present right of future enjoyment in the property. according to jarman jarman on wills the law leans in favour of vesting of estates and the property disposed of belongs to the object of the gift when the will takes effect and we think the daughter got under this will a vested interest in the testator 's properties on his death. it was strenuously argued by mr k section krishnaswami iyengar that lakshminarayana iyer was a brahmin gentleman presumably versed in the sastras living in a village in the southernmost part of the madras state that his idea of a restricted estate was more likely to be one analogous to a hindu woman 's estate than a life estate a understood in english law wherein the estate is measured by use and not by duration and that if this will was construed in the light of the notions of lakshminarayana iyer it should be held that the widow got under it a hindu widow 's estate and the daughter got under it a contingent remainder in the nature of spes and on her death there was nothing which could devolve on the plaintiff and he thus had no locus standi to question the alienations made by the widow. the learned counsel in support of his contention drew our attention to a number of decisions of different high courts and contended that the words of this will should be construed in the manner as more or less similar words were construed by the courts in the wills dealt with in those decisions. this rule of construction by analogy is a dangerous one to follow in construing wills differently worded and executed in different surroundings. vide sasiman v shib narain 491. a 2 5. however out of respect for learned counsel on both sides who adopted the same method of approach we proceed to examine some of the important cases referred to by them. mr krishnaswami iyengar sought to derive the greatest support for his contention from the decision in ram bahadur v jager. nath prasad 3 pat. l j 199. the will there recited that if a daughter or son was born to the testator during his lifetime such son or daughter would be the owner of all his properties but if there was no son or daughter his niece section would get a bequest of a lakh of rupees and the rest of the movable and immovable properties would remain in possession of his wife until her death and after her these would remain in possession of his niece. the remainder was disposed of in the following words if on the death of my wife and my niece there be living a son and a daughter born of the womb of my said brother 's daughter then two thirds of the movable property will belong to the son and one third to the daughter. but as regards the immovable property none shall have the lest right of alienation. they will of course be entitled to enjoy the balance left after payment of rent. this will was construed as conveying an absolute estate to the son and the daughter of the niece. it was remarked that in spite of an express restriction against alienation the estate taken by section the niece was an estate such as a woman ordinarily acquires by inheritance under the hindu law which she holds in a completely representative character but is unable to alienate except in case of legal necessity and that such a construction was in accordance with the ordinary notions that a hindu has in regard to devolution of his property. the provisions contained in this will bear no analogy to those we have to construe. the restraint against alienation was repugnant to both a life estate and a widow estate and was not therefore taken into account. but there were other indications in that will showing that a widow 's estate had been given. the fact that the gift over was a contingent bequest was by itself taken as a sure indication that the preceding bequest was that of a widow 's estate. there is no such indication in the will before us. reliance was next placed on the decision in pavani subbamma v ammala rama naidu 1937. 1 m l j 268. 1936 indlaw mad 236. under the will there dealt with the widow s was to enjoy the properties and after her lifetime the properties were to be taken in the ratio of three to five by the son 's daughter and the daughter 's son respectively. a suit was instituted by the son 's daughter for the recovery of possession of her share in one item of property forming part of the estate which had been sold by section the question for decision in that case was whether section was at all entitled to sell anything more than her life interest even for purposes of meeting a necessity binding upon the estate. varadachari j held that since in the will the gift over to the grand children was of the entire properties and not a mere gift by way of defeasance it had to be held that it indicated that the prior gift in favour of the widow was only of a limited interest. this decision therefore goes against the contention of the learned counsel but he placed reliance on the observations made in the judgment when the learned judge proceeded to say in deference to the view taken in maharaja of kolhapur v sundaram iyer 1925 i l r 48 mad 1 it may be possible to create an interest analogous to a woman 's estate in hindu law notwithstanding the addition of a gift over and that the estate taken by section need not necessarily be only a life estate in the english law sense of the term. we do not understand how such passing observations can be helpful in deciding the present case. assuming that it is possible to create a hindu woman 's estate not with standing the addition of a gift over the question nevertheless whether that had been done in a given case must depend on the terms of the particular instrument under consideration. the following remarks in the privy council decision in nathu ram mahajan v gangayabai 1938. 2 m l j 562 were next cited as the will gave her the right to enjoy the income of the estate during her lifetime it was evidently contemplated that she should as provided by the hindu law in the case of a widow be in possession of the estate. such casual observation made in respect of a will couched in entirely different terms can not afford much assistance in the decision of the case. in vasantharao ammannamma v venkata kodanda rao pantalu 1939. indlaw mad 621 1940. m l j 188 the next case cited a hindu testator who was a retired subordinate judge provided by his will as follows out of the aforestated ancestral lands the oneninth share to which i am entitled shall be enjoyed after my death by my wife till her death and after her death it shall pass to section son of my second elder brother deceased. my self acquired properties shall on my death be enjoyed by my wife till her death and after her death they shall pass to my daughter. thereafter they shall pass to my grandson through my daughter. the will was construed as giving the self acquired properties ultimately to the grandsons and the estate of the daughter was likened to an estate which she would take under the law of inheritance that is a limited estate analogous to a widow 's estate. at page 193 of the report it was observed as follows the question therefore arises did he intend to confer only a life estate or a daughter 's estate. it seems to us that he meant to give a daughter 's estate rather than a life estate. he omits the words during her life with reference to the disposition in favour of the daughter. the words pass to my daughter would rather indicate that in the ordinary course of devolution the estate should pass to her that is the daughter and then to the grandsons. the words used in favour of the grandsons seem to indicate that the estate conferred on the daughter was not a life estate because there is no direct gift in favour of the grandsons but on the other hand what he says is that through his daughter the estate shall pass to his grandsons. either he must have intended that the daughter should convey the property either by will or inter vivos to the grandsons or she having taken the estate through her it should pass to the grandsons in the ordinary course of devolution. if it was the daughter 's estate that was intended to be conferred there can be no question that the estate taken by the grandsons is not a vested interest. this line of reasoning which appealed to the learned judges is not of much he to us here as the language hi this will is quite different. if the same line of reasoning is adopted here the decision of the case would go against the client of mr k section k iyengar because in the will in this case the widow 's estate is delimited by the words till your lifetime. reliance was next placed on maharaja of kolhapur v sundaram iyer 1925 i l r 48 mad. that was a case of a government grant on the special terms set out therein and the question arose as to the nature of the grant. there it was said that the widows of sivaji raja got the gift of a life estate very much resembling the ordinary estate of a hindu widow and with all the incidents of a widow 's estate except the liability to be divested but nevertheless a life estate rather than an estate of inheritance. these remarks do not throw much light on the point before us. the last decision referred to was the decision of the privy council in mahomed shumsool v shewukram 1874 indlaw pc 12 1874 75 2 i a 7 there a hindu inhabitant of bihar by a document of a testamentary character declared his daughter who had two daughters as his heir and after her two daughters together with their children were declared heirs and malik. one daughter of the daughter predeceased the testator without issue and the other daughter died after the death of the testator leaving an only son the respondent in that case. in a suit by the respondent against his grandmother the daughter of the testator for a declaratory order preserving unmolested his future right and title to the said lands it was held that the daughter took an estate subject to her daughters succeeding her. in this judgment the following observations were emphasized as relevant to this enquiry it has been contended that these latter expressions qualify the generality of the former expressions and that the will taken as a whole must be construed as intimating the intention of the testator that mst. rani dhun kaur should not take an absolute estate but that she should be succeeded in her estate by her two daughters. in other words that she should take an estate very much like the ordinary estate of a hindu widow. in construing the will of a hindu it is not improper to take into consideration what are known to be the ordinary notions and wishes of hindus with respect to the devolution of property. it may be assumed that a hindu generally desires that an estate especially an ancestral estate shall be retained in his family and it may be assumed that a hindu knows that as a general rule at all events women do not take absolute estates of inheritance which they are enabled to alienate. these observations are unexceptionable but it may also be pointed out that it is open to a hindu to confer a limited life estate on his widow or even a larger estate than a widow takes as an heir and that in every case he may not confer upon her by will a hindu widow 's estate which she would otherwise get by inheritance. generally speaking there will be no point in making a will if what is to be given to a widow is what she would get on intestacy and cases do arise where a hindu wishes to give to his widow a more restricted estate than she would get on intestacy or a much larger estate than that. the question in every case can not be determined merely on the theory that every hindu thinks only about a hindu widow 's estate and no more. what is given must be gathered from the language of the will in the light of the surrounding circumstances. the learned counsel for the respondent followed the line adopted by mr krishnaswami iyengar. he also on the analogy of other wills and the decisions given on their terms wanted a decision on the construction of this will in his favour. in the first instance he placed reliance on a decision of the madras high court in ratna chetty v narayana swami chetty 19i4 26 m l j 616. there the testator made a will in favour of his wife providing inter alia. all my properties shall after my death be in possession of my wife herself and she herself should be heir to everything and mutha arunachala chetty nephew and my wife should live together amicably as of one family. if the two could not agree and live together amicably my wife would pay rs 4000 and separate him. and then my wife would enjoy all the remaining properties with absolute rights. if both of them would live together amicably muthu arunachala chetty himself would enjoy the properties which remain after the death of the widow. it was held upon the construction of the will that the nephew who lived amicably with the widow till his death had a vested interest at testator 's death which could not be defeated by a testamentary disposition by the widow in favour of a stranger. this decision only decides that case and is not very relevant in this enquiry. reference was also made to the decision of their lordships of the privy council in mst. bhagwati devi v chowdry bholonath thakur 1874 75 2 i a 256. this was a case of a gift inter vivos. the gift to mst. chunderbutti his wife was in these terms the remaining milkiut and minhai estates together with the amount of ready money articles slaves and all household furniture i have placed in the possession of mst. chunderbutti thakurain my wife to be enjoyed during her lifetime in order that she may hold possession of all the properties and milkiut possessed by me the declarant during her lifetime and by the payment of government revenue appropriate the profits derived therefrom but that she should not by any means transfer the milkiut estates and the slaves that after the death of my aforesaid wife the milkiut and household furniture shall devolve on girdhari thakur my karta adopted son. the subordinate judge held that chunderbutti got an estate for life with the power to appropriate profits and girdhari got a vested remainder on her death. the high court took a different view and held that chunderbutti took the estate in her character as a hindu widow. the privy council on this will held as follows their lordships do not feel justified upon mere conjecture of what might probably have been intended in so interpreting it as materially to change the nature of the estate taken by chunderbutti. if she took the estate only of a hindu widow one consequence no doubt would be that she would be unable to alienate the profits or that at all events whatever she purchased out of them would be an increment to her husband 's estate and the plaintiffs would be entitled to recover possession of all such property real and personal. but on the other hand she would have certain rights as a hindu widow for example she would have the right under certain circumstances if the estate were insufficient to defray the funeral expenses or her maintenance to alienate it altogether. she certainly would have the power of selling her own estate and it would further follow that girdhari would not be possessed in any sense of a vested remainder but merely of a contingent one. it would also follow that she would completely represent the estate and under certain circumstances the statute of limitations might run against the heirs to the estate whoever they might be. their lordships see no sufficient reason for importing into this document words which would carry with them all these consequences and they agree with the subordinate judge in construing it according to its plain meaning. these observations have to a certain extent relevance to the present case but on the facts this case is also distinguishable. this will was couched in different language than the will in the present case. there was a clear prohibition forbidding the widow to make any transfers of the milkiuit estates and the slaves. reference was also made to a decision of the bombay high court in lallu v jagmohan 1898 i l r 22 bom. the will there ran as follows. when i die my wife named suraj is owner of that property. and my wife has powers to do in the same way as i have absolute powers to do when i am present and in case of my wife 's death my daughter mahalaxmi is owner of the said property after that. it was held that suraj took only a life estate under the will with remainder over to mahalaxmi after her death and the bequest to mahalaxmi was not contingent on her surviving suraj but that she took a vested remainder which upon her death passed to her heirs. after considering the rival contentions of the parties we are of the opinion that no sufficient grounds have been made out for disturbing the unanimous opinion of the two courts below on the construction of this will. both the learned counsel eventually conceded that the language used in the will was consistent with the testator 's intention of conferring a life estate in the english sense as well as with the intention of conferring a hindu widow 's estate. it was however urged by mr rajah iyer that as no express or implied power of alienation for purposes of all legal necessities was conferred on the widow that circumstance negatived the view that the testator intended to confer upon his widow a hindu widow 's estate as she would get in case of intestacy. he also emphasized that the words of the gift over to the daughter as supporting his construction which was further reinforced by the words of the will limiting the widow 's estate till your lifetime and of the omission from therein of words such as nialik etc while describing the widow 's estate. mr krisbnaswami lyengar on the other hand contended that the absence of any words in the will restricting her powers of alienation and putting a restraint on them suggested a contrary intention and that the daughter 's estate was described as coming into being after the estate of the widow and was not conferred on her simultaneously with the widow and this connoted according to the notions of hindus a full hindu widow 's estate. in our judgment there is force in the contention of mr rajah iyer for reasons already stated and in the result therefore we dismiss this appeal with costs. appeal dismissed.

IN-Ext

FACTS lakshminarayana iyer, a hindu brahmin in the tirunelveli district, died leaving him a surviving widow ranganayaki, and a married daughter ramalakshmi. ramalakshmi had married the plaintiff and had a number of children from him. they were all alive in december, 1924, when lakshminarayana died. by this will he gave the following directions "after my lifetime, you, the aforesaid ranganayaki amminal, my wife, shall till your lifetime, enjoy the aforesaid entire properties , enjoy the aforesaid entire properties, the outstandings due to me, the debts payable by me, and the chit amounts payable by me. after your lifetime ramalakshmi ammal, our daughter and wife of rama ayyar avergal of melagaram village, and her heirs shall enjoy them with absolute rights and powers of alienation such as gift, exchange, and sale from son to grandson and so on for generations. as regards the payment of maintenance to be made to chinnanmal alias lakshmi ammal, wife of my late son hariharamayyan, my wife ranganayaki ammal shall pay the same as she pleases, and obtain a release deed". ranganayaki entered into possession of the properties on the death of her husband. she settled the maintenance claim of lakshmi ammal and obtained a deed of release from her. ramalakshmi died during the lifetime of the widow. the widow describing herself as an absolute owner of the properties of her husband sold one of the items of the property to the 2nd defendant. on the 18th september, 1945, the suit out of which this appeal arises was instituted by the plaintiff, the husband and the sole heir of ramalakshmi, for a declaration that the said sale would not be binding on him beyond the lifetime of the widow. a prayer was made that the widow be restrained from alienating the other properties in her possession. an ad interim injunction was issued by the high court restraining the widow from alienating the properties in her possession and forming part of her husband's estate. inspite of this injunction, she executed two deeds of settlement in favour of the other defendants comprising a number of properties. the main issue in the suit was whether the widow took under the will an absolute estate or an estate like the hindu widow's estate and whether the daughter's interest therein was in the nature of a contingent remainder, or whether she got in the properties a vested interest. ARGUMENT it was urged by mr. rajah iyer that as no express or implied power of alienation for purposes of all legal necessities was conferred on the widow, that circumstance negatived the view that the testator intended to confer upon his widow a hindu widow's estate as she would get in case of intestacy. he also emphasized that the words of the gift over to the daughter as supporting his construction which was further reinforced by the words of the will limiting the widow's estate " till your lifetime " and of the omission from therein of words such as nialik etc., while describing the widow's estate. mr. krisbnaswami lyengar, on the other hand, contended that the absence of any words in the will restricting her powers of alienation and putting a restraint on them, suggested a contrary intention and that the daughter's estate was described as coming into being after the estate of the widow and was not conferred on her simultaneously with the widow, and this connoted according to the notions of hindus a full hindu widow's estate. ISSUE the construction of will is in controversy in this appeal. the substantial question to decide in the appeal is whether the estate granted by the testator to his widow was a fall woman's estate under hindu law or merely a limited life estate in the english sense of that expression ANALYSIS the decision of the appeal turns upon the question whether the testator's intention was to give to his widow ail ordinary life, estate or an estate analogous to that of a hindu widow. at one time it was a moot point whether a hindu widow's estate could be created by will, it being an estate created by law, but it is now settled that a hindu can confer by means of a will oil his widow the same estate which she would get by inheritance. the court's primary duty in such cases is to ascertain from the language employed by the testator "what were his intentions", keeping in view the surrounding circumstances, his ordinary notions as a hindu in respect to devolution of his property, his family relationships etc. considering the will in the light of these principles, it seems that lakshminarayan iyer intended by his will to direct that his entire properties should be enjoyed by his widow during her lifetime but her interest in these properties should come to an end on her death, that all these properties in their entirety should thereafter be enjoyed as absolute owners by his daughter and her heirs with powers of alienation, gift, exchange and sale from generation to generation. he wished to make his daughter a fresh stock of descent so that her issue, male or female, may have the benefit of his property. they were the real persons whom he earmarked with certainty as the ultimate recipients of his bounty. if not, the testator would clearly have said that the daughter would only take the properties remaining after the death of the widow. the widow cannot be held to have been given a full hindu widow's estate under the will unless power of alienation in express terms was not conferred on her. the properties disposed of by the will and mentioned in the schedule were considerable in extent and it seems that they fetched sufficient income to enable the widow to fulfil the obligations under the will. she represents the estate in all respects and enjoys very wide power except that she cannot alienate except for necessity and her necessities have to be judged on a variety of considerations. though the daughter was not entitled to immediate possession of the property it was indicated with certainty that she should get the entire estate at the proper time and she thus got an interest in it on the testator's death in ram bahadur v. jager nath prasad 3 pat. l. j. 199., will was construed as conveying an absolute estate to the son and the daughter of the niece. it was remarked that in spite of an express restriction against alienation, the estate taken by s. (the niece) was an estate such as a woman ordinarily acquires by inheritance under the hindu law which she holds in a completely representative character but is unable to alienate except in case of legal necessity and that such a construction was in accordance with the ordinary notions that a hindu has in regard to devolution of his property. in pavani subbamma v. ammala rama naidu (1937) 1 m.l.j. 268. 1936 ind law mad 236 the question for decision in that case was whether widow was at all entitled to sell anything more than her life interest even for purposes of meeting a necessity binding upon the estate. varadachari j. held that since in the will the gift over to the grand-children was of the entire properties, and not a mere gift by way of defeasance, it had to be held that it indicated that the prior gift in favour of the widow was only of a limited interest. generally speaking, there will be no point in making a will if what is to be given to a widow is what she would get on intestacy and cases do arise where a hindu wishes to give to his widow a more restricted estate than she would get on intestacy or a much larger estate than that. what is given must be gathered from the language of the will in the light of the surrounding circumstances. the language used in the will was consistent with the testator's intention of conferring a life estate in the english sense as well as with the intention of conferring a hindu widow's estate.

this is an appeal on a certificate article 1331 of theconstitution from a judgment and decree passed by the appellate bench of the high court of calcutta. modifying on appeal the judgment and decree passed by mr justice bose on the original side of that court. one dwarka nath ghose was the owner of considerable moveable and immoveable properties. on the 10th june 1891 he made and published his last will and testament whereby he dedicated to this family idol. shree shree iswar sridhar jew his two immoveable properties to wit. premises. No 41 and No 401. grey street in the city of calcutta. he appointed his two sons rajendra and jogendra executors of ms will and provided that his second wife golap sundari and the two sons rajendra and jogendra should perform the seva of the deity and on their death their heirs and successors would be entitled to perform the seva. dwarka nath died on the 16th march 1892 leaving him surviving his widow golap sundari and his two sons rajendra and jogendra. on the 19th july 1899 rajendra made and published his last will and testament whereby he confirmed the dedication made by dwarka nath with regard to premises nos. 41 and 401 grey street and appointed his brother jogendra the sole executor thereof. he died on the 31st january1900 and jogendra obtained on the 24th april 1900. probate of his said will. probate of the will of dwarka nath was also obtained by jogendra on the 31st august 1909. on the 4th september 1909 bhupendra jnanendra. and nagendra then a minor the three sons of rajendra filed a suit being suit No 969 of 1909on. the original side of the high court at calcutta against jogendra golap sundari and padma dassi the widow of sidheswar another son of rajendra for the construction of the wills of dwarka nath and rajendra for partition and other reliefs. the idol was not made a party to this suit. the said suit was compromised and on the 24th november 1910 a consent decree was passed whereby jogendra and golap sundari gave up their rights to the sevayatship and bhupendra jnanendra and nagendra became the sevaits of the idol a portion of the premises. 41 grey street was allotted to the branch of rajendra and the remaining portion was allotted to jogendra absolutely and in consideration of a sum of rs 6500 to be paid to the plaintiffs jogendra was declared entitled absolutely to the premises. No 401. grey street. the portions allotted to jogendra were subsequently numbered 402 a grey street and the portion of the premises. 41 grey street allotted to the branch of rajendra was subsequently numbered 41 a grey street. jogendra died on the 5th august 1911 leaving a will whereby he appointed his widow sushilabala the executrix thereof. she obtained probate of the will on the 6th august 1912. disputes arose between bhupendra jnanendra and nagendra the sons of rajendra and one kedar nath ghosh was appointed arbitrator to settle those disputes. the arbitrator made his award dated the 12th october 1920 whereby he allotted premises No 41 a grey street exclusively to nagendra as his share of the family properties. nagendra thereafter executed several mortgages of the said premises. the first mortgage was created by him in favour of snehalata dutt on the 19th may 1926. the second mortgage was executed on the 4th june 1926 and the third mortgage on the 22nd february 1927. on the 23rd february 1927 nagendra executed a deed of settlement of the said premises by which he appointed his wife labanyalata and his wife 's brother samarendra nath mitter trustees to carry out the directions therein contained and in pursuance of the deed of settlement he gave up possession of the said premises in favour of the trustees. snehalata dutt filed in the year 1929 a suit being suit No 1042 of 1929 against nagendra the trustees under the said deed of settlement and the puisne mortgagees for realisation of the mortgage security. a consent decree was passed in the said suit on the 9th september 1929. nagendra died in june 1931 and the said premises were ultimately put up for sale in execution of the mortgage decree and were purchased on the 9th december 1936 by hari charan dutt. hari pada. dutt and durga charan dutt for a sum of rs 19000. a petition made by the purchasers on the 12th january 1937 for setting aside the sale was rejected by the court on the 15th march 1937. haripada dutt died on the 3rd june 1941 leaving him surviving his three sons pashupati nath dutt shambhunath dutt and kashinath dutt the appellants before us. haricharan dutt conveyed ms one third share in the premises to them on the 4th march1944 and durga charan dutt conveyed his one third share to them on the 3rd may 1946. they thus became entitled to the whole of the premises which had been purchased at the auction sale held on the 9th december 1936. on the 19th july 1948 the family idol of dwarka nath sree sree iswar sridhar jew by its next friend debabrata ghosh the son of nagendra filed the suit out of which the present appeal arises against the appellants as also against susilabala and the two sons of jogendra by her amongst others for a declaration that the premises nos. 41 a and 402 a grey street were its absolute properties and for possession thereof for a declaration that the consent decree dated the 24th november 1910 in suit No 969 of 1909 and the award dated the 12th october 1920 and the dealings made by the heirs of jogendra. andor rajendra relating to the said premises or any of them purporting to affect its rights in the said premises were invalid and inoperative in law and not binding on it for an account of the dealings with the said premises for a scheme of management of the debutter properties and for its worship for discovery receiver injunction and costs. written statements were filed by the appellants and by susilabala and the two sons of jogendra denying the claims of the idol and contending inter alia that there was no valid or absolute dedication of the suit properties i to the idol and that the said premises had been respectively acquired by them by adverse possession and that the title of the idol thereto had been extinguished. the said suit was heard by mr justice bose who declared the premises. No 41 a. grey street to be the absolute property of the idol and made the other declarations in favour of the idol as prayed for. the idol was declared entitled to possession of the said premises with mesne profits for three years prior to the institution of the suit till delivery of possession but was ordered to pay as a condition for recovery of possession of the said premises a sum of rs 19000 to the appellants with interest thereon at the rate of 6 per cent. per annum from the 19th july 1945 till payment or till the said sum was deposited in court to the credit of the suit. the learned judge however dismissed the suit of the idol in regard to the premises. No 402 a grey street as in his opinion sushilabala as executrix to her husband 's estate and her two sons had acquired title to the said premises by adverse possession and the title of the idol thereto had been extinguished. the appellants filed on the 18th august 1950 an appeal against this judgment being appeal No 118 of 1950. the idol filed on the 20th november 1950 cross objections against the decree for rs 19000 and interest thereon as also the dismissal of the suit in regard to the premises. the appeal and the cross objections came on for hearing before harries c j and section n banerjee j who delivered judgment on the 5th march 1951 dismissing the said appeal and allowing the cross objection in regard to rs 19000 filed by the idol against the appellants. in regard however to the cross objection relating to premises. grey street which was directed against sushilabala and the two sons of jogendra the learned judges held that the cross objection against the co respondents was not maintainable and dismissed the same with costs. the appellants filed on the 31st may 1951 an application for leave to prefer an appeal to this court against the said judgment and decree of the high court at calcutta. a certificate article 1331 of theconstitution was granted on the 4th june 1951 and the high court admitted the appeal finally on the 6th august 1951. on the 22nd november 1951 the idol applied to the high court for leave to file cross objections against that part of the judgment and decree of the high court which dismissed its claims with regard to the premises no 402 a grey street. the high court rejected the said application stating that there was no rule allowing cross objections in the supreme court. the said cross objections were however printed as additional record. by an order made by this court on the 24th may 1953 the petition of the idol for filing cross objections in this court was allowed to be treated as a petition for special leave to appeal against that part of the decree which was against it subject to any question as to limitation. the appeal as also the petition for special leave to appeal mentioned above came on for hearing and final disposal before us. the appeal was argued but so far as the petition for special leave to appeal was concerned the parties came to an agreement whereby the idol asked for leave to withdraw the petition on certain terms recorded between the parties. the petition for special leave was therefore allowed to be withdrawn and no objection now survives in regard to the decree passed by the trial court dismissing the idol 's claim to the premises No 402 a. the appeal is concerned only with the premises. it was contended on behalf of the appellants that the dedication of the premises. 41 grey street made by dwarka nath under the terms of his will was a partial dedication and that his sons rajendra and jogendra and his widow golap sundari who were appointed sevayats of the idol were competent to deal with premises. No 41. grey street after making the due provision for the idol as they purported to do by the terms of settlement dated the 24th november 1910. it was further contended that nagendra by virtue of the award dated the 12th october 1920 claimed to be absolutely entitled to the premises. grey street and that his possession of the said premises thereafter became adverse which adverse possession continued for upwards of 12 years extinguishing the right of the idol to the said premises. the first contention of the appellants is clearly untenable on the very language of the will of dwarka nath. 3 of the said will provided with a view to provide a permanent habitation for the said deity i do by means of this will dedicate the aforesaid immovable property the said house. No 41 grey street together with land thereunder to the said sri sri issur sridhar jew. with a view to provide for the expenses of his daily and periodical sheba and festivals etc. the 3 12 cattahs three and half cattahs of rent free land more or less that i have on that very. grey street No 401. his also i dedicate to the sheba of the said sri sri sridhar jew salagram sila thakur. on my demise none of my heirs and representatives shall ever be competent to take the income of the said land No 401 and spend the samefor household expenses. if there be any surplus left after defraying the debsheba expenses the same shall be credited to the said sridhar jew thakur 's fund and with the amount so deposited repairs etc from time to time will be effected to the said house. No 41 with a view to preserve it and the taxes etc. in respect of the said two properties will be paid for the purpose of the carrying on the daily and periodical sheba and the festivals etc of the said sri issur sridhar jew salagram sila thakur my said second wife srimati golap moni dasi and 1st sriman rajendara nath and 2nd sriman jogendra nath ghose born of the womb of my first wife on living in the said house. No 41 grey street dedicated by me shall properly and agreeably to each other perform the sheba. of the said sri sri issur sridhar jew salagram sila thakur and on the death of my said two sons their representatives successors and heirs shall successively perform the sheba in the aforesaid manner and the executors appointed by this will of mine having got the said two properties registered in the calcutta municipality in the name of the said sri sri issur sridhar jew thakur shall pay the municipal taxes etc. and shall take the municipal bills in his name. none of my representatives heirs successors executors administrators or assigns shall have any manner of interest in or right to the said two debutter properties and no one shall ever be competent to give away or effect sale mortgage or in respect of the said two properties nor shall the said two properties be sold on account of the debts of any one. t is quite true that a dedication may be either absolute or partial. the property may be given out and out to the idol or it may be subjected to a charge in favour of the idol. the question whether the idol itself shall be considered the true beneficiary subject to a charge in favour of the heirs or specified relatives of the testator for their upkeep or that on the other hand these heirs shall be considered the true beneficiaries of the property subject to a charge for the upkeep worship and expenses of the idol is a question which can only be settled by a conspectus of the entire provisions of the will pande har narayan v surja kunwari 1921 l r 48 i a 143 145 146 1921 indlaw pc 56. what we find here in cl. 3 of the will is an absolute dedication of the premises. grey street to the idol as its permanent habitation with only the right given to the sevayats to reside in the said premises for the purposes of carrying on the daily and periodical seva and the festivals etc. of the deity. the said premises are expressly declared as dedicated to the deity. they are to be registered in the municipal records in the name of the deity the municipal bills have got to be taken also in his name and none of the testator 's representatives heirs successors executors administrators or assigns is to have any manner of interest in or right to the said premises or is to be competent to give away or effect sale mortgage etc. of the said premises. there is thus a clear indication of the intention of the testator to absolutely dedicate the said premises to the deity and it is impossible to urge that there was a partial dedication of the premises to the deity. the only thing which was urged by shri n c chatterjee in support of his contention was that the right to reside in the premises was given to the sevayats and that according to him detracted from the absolute character of the dedication. this argument however can not avail the appellants. it was observed by lord buckmaster in delivering the judgment of the privy council in gnanendra nath das v surendra nath das 1920 24 c w n 1926 at p 1030. in that case it is provided that the shebait for the time being shall be entitled to reside with his family in the said dwelling house but the dwelling house itself is the place specially set apart for the family idols to which specific reference is made in the will and in their lordships opinion the gift is only a perfectly reasonable arrangement to secure that the man in whose hands the supervision of the whole estate is vested should have associated with his duties the right to reside in this named dwelling place. the first contention of the appellants therefore fails and we hold that the dedication of the premises. 41 grey street to the idol was an absolute dedication. regards the second contention viz the adverse possession of nagendra it is to be noted that under the terms of cl 3 of the will of dwarka nath the representatives successors and heirs of his two sons rajendra and jogendra were successively to perform the seva in the manner therein mentioned and nagendra was one of the heirs and legal representatives of rajendra. he was no doubt a minor on the 24th november 1910 when the terms of settlement were arrived at between the parties to the suit 1909. his two elder brothers jnanendra and bhupendra were declared to be the then sevayats but a right was reserved to nagendra to join with them as a sevayat on his attaining majority. so far as nagendra is concerned there is a clear finding of fact recorded by mr justice bose on a specific issue raised in that behalf viz did nagendra act as shebait of the plaintiff deity under the wills of dwarka nath ghosh and rajendra nath ghosh. that he did act as such shebait and that his possession of the premises. No 41a grey street was referable to possession on behalf of the idol 30 this finding was not challenged in the appeal court and it is too late to challenge the same before us. if nagendra was thus a sevayat of the idol it could not be urged that his possession could in any manner whatever be adverse to the idol and his dealings with the said premises in the manner he purported to do after the 12th october 1920 could not be evidence of any adverse possession against the idol. he position of the sevayat and the effect of his dealings with the property dedicated to the idol has been expounded by rankin c j in surendrakrishna ray v shree shree ishwar bhubaneshwari thakuran 1933. cal 54 1932 indlaw cal 59. but in the present case we have to see whether the possession of two joint shebaits becomes adverse to the idol when they openly claim to divide the property between them. the fact of their possession is in accordance with the idol 's title and the question is whether the change made by them in the intention with which they hold evidenced by an application of the rents and profits to their own purposes and other acts extinguishes the idol 's right. i am quite unable to hold that it does because such a change of intention can only be brought home to the idol by means of the shebait 's knowledge and the idol can only react to it by the shebait. adverse possession in such circumstances is a notion almost void of content. true any heir or perhaps any descendant of the founder can bring a suit. against the shebaits on the idol 's behalf and in the present case it may be said that the acts of the shebaits must have i been notorious in the family. but such persons have no legal duty to protect the endowment and until the shebait is removed or controlled by the court he alone can act for the idol. we are in perfect accord with the observations made by rankin c j if a shebait by acting contrary to the terms of his appointment or in breach of his duty as such shebait could claim adverse possession of the dedicated property against the idol it would be putting a premium on dishonesty and breach of duty on his part and no property which is dedicated to an idol would ever be safe. the shebait for the time being is the only person competent to safeguard the interests of the idol his possession of the dedicated property is the possession of the idol whose sevait he is and no dealing of his with the property dedicated to the idol could afford the basis of a claim by him for adverse possession of the property against the idol. no shebait can so long as he continues to be the sevait ever claim adverse possession against the idol. neither nagendra nor the appellants who derive their title from the auction sale held on the 9th december 1936 could therefore claim to have perfected their title to the premises. grey street by adverse possession. the second contention of the appellants also therefore fails. the further contention urged on behalf of the appellants in regard to the disallowance of the sum of rs 19000 by the appeal court could not be and was not seriously pressed before us and does not require any consideration. he result therefore is that the appeal fails and must stand dismissed with costs. appeal dismissed.

IN-Ext

FACTS one dwarka nath was the owner of considerable moveable and immoveable properties. he made and published his last will and testament whereby he dedicated to this family idol his two immoveable properties. he appointed his two sons rajendra & jogendra as executors of his will and provided that his second wife and the two sons should perform the seva of the deity and on their death their heirs and successors would be entitled to perform the seva. dwarka nath died on leaving him surviving his widow and his two sons. in 1899, rajendra made and published his last will and testament whereby he confirmed the dedication made by dwarka nath and appointed his brother jogendra the sole executor thereof. he died on the 31st january,1900, and jogendra obtained on the 24th april, 1900,. probate of his said will. probate of the will of dwarka nath was also obtained by jogendra on the 31st august, 1909. bhupendra, jnanendra. and nagendra, then a minor, the three sons of rajendra filed a suit, on the high court at calcutta against jogendra, golap sundari and some others for the construction of the wills of dwarka nath and rajendra, for partition and other reliefs. the said suit was compromised and on the 24th november, 1910, a consent decree was passed, whereby jogendra and golap sundari gave up their rights to the sevayatship and bhupendra, jnanendra and nagendra became the sevaits of the idol, a portion of the premises no. 41 grey street was allotted to the branch of rajendra and the remaining portion was allotted to jogendra. disputes arose between bhupendra, jnanendra and nagendra, the sons of rajendra, and one kedar nath was appointed arbitrator to settle those disputes. the arbitrator made his award whereby he allotted premises no. 41-a grey street, exclusively to nagendra as his share of the family properties. nagendra thereafter executed several mortgages of the said premises. nagendra executed a deed of settlement of the said premises by which he appointed his wife and his wife's brother as trustees to carry out the directions therein contained and in pursuance of the deed of settlement he gave up possession of the said premises in favour of the trustees. snehalata dutt filed in the year 1929 a suit, against nagendra, the trustees under the said deed of settlement and the puisne mortgagees, for realisation of the mortgage security. the said premises were ultimately put up for sale in execution of the mortgage decree and were purchased on the 9th december, 1936, by hari charan dutt, hari pada dutt and durga charan dutt. on the 19th july, 1948, the family idol of dwarka nath, sree sree iswar sridhar jew, by its next friend debabrata ghosh, the son of nagendra, filed the suit, out of which the present appeal arises. ARGUMENT the only thing which was urged by shri n. c. chatterjee in support of his contention was that the right to reside in the premises was given to the sevayats and that according to him detracted from the absolute character of the dedication. ISSUE the appeal is concerned only with the premises no. 41-a grey street. ANALYSIS it is quite true that a dedication may be either absolute or partial. what we find here in cl. 3 of the will is an absolute dedication of the premises no. 41 grey street to the idol as its permanent habitation with only the right given to the sevayats to reside in the said premises for the purposes of carrying on the daily and periodical seva and the festivals, etc., of the deity. they are to be registered in the municipal records in the name of the deity. there is thus a clear indication of the intention of the testator to absolutely dedicate the said premises to the deity and it is impossible to urge that there was a partial dedication of the premises to the deity. if nagendra was thus a sevayat of the idol it could not be urged that his possession could in any manner whatever be adverse to the idol and his dealings with the said premises in the manner he purported to do after the 12th october, 1920, could not be evidence of any adverse possession against the idol.

this appeal with special leave is directed against the judgment and order of the labour appellate tribunal of india in a dispute regarding the workers claim for bonus. during the year 1948 the appellant made a profit of rs 1197648 11 9. it paid 24 3 per cent. dividend on ordinary shares being the maximum that could be paid under the public companies limitation of dividend ordinance of 1948 and also paid to the workers their full share of bonus at annas 4 in a rupee of their basic earnings. during the year 1949 the selling rates for cloth and yarn were controlled by the government and were approximately 4 per cent. below those obtained in 1948. the basic wages were increased from the 1st december 1948 by order of the government of uttar pradesh and the total wages paid were therefore higher than those in the previous year. there was moreover indiscipline amongst the workers and production suffered. there was a strike in the month of october and the mills were closed for nearly a month. further the management were unable to secure cotton which resulted in the curtailment of the working hours. as a result of all these circumstances the appellant suffered a trading loss of rs 502563 1 10. a sum of rs 250000 being the excess reserve for taxation was written back and a sum of rs 1001871 13 5 being the amount of reserve transferred from the investment account was also brought in. an aggregate sum of rs 1251871 13 5 was thus brought into the balance sheet by these two transfers. the trading loss was deducted from this amount leaving a credit balance of rs 749308 11 7 and that amount was shown as the profit for the year 1949 in the balance sheet for that year. the balance which had been brought forward from the previous year was added thereto and a dividend of 2434 per cent. was paid to the ordinary shareholders. the appellant also paid ex gratia to the workmen bonus at the rate of annas 2 per rupee of their basic earnings making it clear by their notification dated the 7th april 1950 that the directors had sanctioned the payment at that rate in spite of the appellant having suffered a trading loss for the year that it was being paid entirely at the discretion of the appellant and was not related to or connected with any contract of employment of any worker. on the 4th may 1950 the secretary of the respondent union petitioned to the provincial conciliation officer textile that there was more production in 1949 than in 1948 that there was no reason to hold that the profit in 1949 was less than in the previous year and that the rate of bonus was wrongly reduced and asked that bonus for 1949 should also be paid at the rate of annas 4 per rupee. the industrial dispute which thus arose was referred for enquiry and recording of an award to the regional conciliation board textile kanpur. the conciliation board by a majority decision repelled the contention of the appellant and awarded the payment of bonus at annas 4 per rupee. on an appeal taken by the appellant to the industrial court textiles and hosiery kanpur the industrial court accepted the contention of the appellant allowed the appeal and set aside the award. the respondent thereupon appealed to the labour appellate tribunal which substantially agreed with the industrial court on questions of fact as well as the general position in law but imported considerations of social justice and treating this as a special case where social justice would demand that labour should have bonus for the year where for that very year capital had not only a reasonable return but much in excess of that allowed the appeal and directed the appellant to pay to the workmen bonus at the rate of annas 4 per rupee within six weeks of their decision. the appellant filed this appeal against that decision after obtaining special leave from this court. both the industrial court as well as the labour appellate tribunal found as a fact that there was a trading loss of rs 502563 1 10 during the year 1949 and also. that the dividend of 2434 per cent. to the ordinary shareholders was distributed after transferring the aggregate sum of rs 1251871 13 5 from the reserves. the question which therefore arises for our consideration is mainly whether the workers are entitled to the payment of a bonus in spite of the employer having worked at a loss during the year and incidentally whether the workers have any right title or interest in the reserves and the undistributed profits of the previous years. the primary meaning of the word bonus according to the definition given in the new english dictionary is a boon or gift over and above what is nominally due as remuneration to the receiver and which is therefore something wholly to the good. this definition was adopted by stirling j in in re eddystone marine insurance co l r i894 w n 30 webster 's international dictionary defines bonus as something given in addition to what is ordinarily received by or strictly due to the recipient. the oxford concise dictionary defines it as something to the good into the bargain and as an example gratuity to workmen beyond their wages. corpus juris secundum volume xi at page 515 ascribes the following meanings to the word bonus an allowance in addition to what is usual current or stipulated a sum given or paid beyond what is legally required to be paid to the recipient something given in addition to what is ordinarily received by or strictly due to the recipient and adds it has been said to carry the idea of something uncertain and indefinite something which may or may not be paid depending on varying circumstances and under particular conditions has been said to imply a benefit accruing to him who offers it and an inducement to the offeree. this imports the conception of a boon a gift or a gratuity otherwise described as an ex gratia payment. the word bonus has however acquired a secondary meaning in the sphere of industrial relations. it is classified amongst the methods of wage payment. it has been used especially in the united states of america to designate an award in addition to the contractual wage. it is usually intended as a stimulus to extra effort but sometimes represents the desire of the employer to share with his workers the fruits of their common enterprise. vide encyclopaedia britannica volume iii page 856. the pocket part of the corpus juris secundum volume xi under the heading as compensation for services quotes the following passage from attorney general v city of woburn 317 mass 465 the word bonus is commonly used to denote an increase in salary or wages in contracts of employment. the offer of a bonus is the means frequently adopted to secure continuous service from an employee to enhance his efficiency and to augment his loyalty to his employer and the employee 's acceptance of the offer by performing the things called for by the offer binds employer to pay the bonus so called. it also gives another meaning of the word bonus viz increased compensation for services already rendered gratuitously or for a prescribed compensation where there is neither express or implied understanding that additional compensation may be granted. this imports the conception that even though the payment be not strictly due to the recipient nor legally enforceable by him a claim to the same may be laid by the employee under certain conditions and if such claim is entertained either by an agreement with the employer or by adjudication before a properly constituted tribunal as on an industrial dispute arising. the same would ripen into a legally enforceable claim. this position was recognised in sutton v attorney general 1923. t l r 294 297 where the earl of birkenhead observed the term bonus may of course be properly used to describe payments made of grace and not as of right. but it nevertheless may also include as here payments made because legally due but which the parties contemplate will not continue indefinitely and in national association of local government officers v bolton corporation 1943. a c 166 i87 this payment if made can not properly in my opinion be regarded as a mere gratuity. though there is an element of bounty in it the bounty if granted is given for good reasons of national policy. i do not see why this does not fall within the definition of trade dispute just as much as a dispute as to the rate of wages or salary. to a similar effect are the observations in kenicott v supervisors of wayne county 1873 83 u s 452 21 l ed. but second the meaning of the word bonus is not given to it by the objection. it is thus defined by webster. a premium given for a loan or a charter or other privilege granted to a company as the bank paid a bonus for its charter a sum paid in addition to a stated compensation. it is not a gift or gratuity but a sum paid for services or upon a consideration in addition to or in excess of that which would ordinarily be given 12. and also in great western garment co ltd v minister of national revenue 1948. d l r 25 233. a bonus may be a mere gift or gratuity as a gesture of goodwill and not enforceable or it may be something which an employee is entitled to on the happening of a condition precedent and is enforceable when the condition is fulfilled. but in both cases it is something in addition to or in excess of that which is ordinarily received. the textile labour inquiry committee defined bonus as follows the term bonus is applied to a cash payment made in addition to wages. it generally represents the cash incentive given conditionally on certain standards of attendance and efficiency being attained. there are however two conditions which have to be satisfied before a demand for bonus can be justified and they are 1 when wages fall short of the living standard and 2 the industry makes huge profits part of which are due to the contribution which the workmen make in increasing production. the demand for bonus becomes an industrial claim when either or both these conditions are satisfied. the principles for the grant of bonus were discussed and a formula was evolved by the full bench of the labour appellate tribunal in millowners association bombay v rashtreeya mill mazdoor sangh bombay 1950. 2 l l j 247as. both labour and capital contribute to the earnings of the industrial concern it is fair that labour should derive some benefit if there is a surplus after meeting prior or necessary charges and the following were prescribed as the first charges on gross profits viz 1 provision for depreciation 2 reserves for rehabilitation 3 a return at 6 per cent. on the paid up capital. a return on the working capital at a lesser rate than the return on paid up capital. the surplus that remained after meeting the aforesaid deductions would be available for distribution as bonus. it is therefore clear that the claim for bonus can be made by the employees only if as a result of the joint contribution of capital and labour the industrial concern has earned profits. if in any particular year the working of the industrial concern has resulted in loss there is no basis nor justification for a demand for bonus. bonus is not a deferred wage. because if it were so it would necessarily rank for precedence before dividends the dividends can only be paid out of profits and unless and until profits are made no occasion or question can also arise for distribution of any sum as bonus amongst the employees. if the industrial concern has resulted in a trading loss there would be no profits of the particular year available for distribution of dividends much less could the employees claim the distribution of bonus during that year. this has been clearly recognised even in the various decisions of the labour appellate tribunal e g nizam sugar factory ltd hyderabad v their workmen 1952. i l l j 386 textile mills madhya pradesh v their workmen 1952 2 l l j 625and famous cine laboratory v their workmen 1953. i l l j 466this was also the basis of the demand of the respondent in the case before us its case being that the appellant had reaped substantial profits during the year 1949. this case was negatived by the industrial court as well as the labour appellate tribunal both of whom held that the working of the appellant during the year 1949 had resulted in a loss. whereas the industrial court declined to grant the respondent any relief because the working of the appellant during the year had resulted in a loss the labour appellate tribunal made a special case for the respondent in spite of its concurrence with that finding of the industrial court. it is significant to observe that this principle was accepted by the labour appellate tribunal itself. as at present advised a claim for bonus which had been rested on profits earned should ordinarily be determined on the basis of the profits earned in the year under claim and that the scale of bonus should be determined on the quantum of profits earned in the year. so it would follow that if there is trading loss in the year under claim bonus should not ordinarily be awarded. it however observed but in our opinion that should not be the universal rule. considerations of social justice can not be disregarded altogether in relations between capital and labour. there may be special cases and we consider the case before us to be one where social justice would demand that labour should have bonus for the year where for that very year capital had not only a reasonable return but much in excess of that. the labour appellate tribunal did not accept the contention of the respondent that bonus should be linked to dividends nor did it rest its decision on the respondent having a right title and interest in the reserves and the undistributed profits of the appellant. linking of bonus to dividend would obviously create difficulties. because if that theory was accepted a company would not declare any dividends but accumulate the profits build up reserves and distribute those profits in the shape of bonus shares or reduce the capital in which event the workers would not be entitled to claim anything as and by way of bonus. the workers not being members of the company would also not have any right title and interest in the reserves or the undistributed profits which would form part of the assets of the company. even on a winding up of a company the property of the company would be applied in satisfaction of its liabilities pari passu and unless the articles of association of the company otherwise provided in distribution amongst the members according to their rights and interest in the company. the employees would in no event be entitled to any share or interest in the assets and the capital of the company. a transfer of moneys from these reserves or the undistributed profits would therefore not enure for the benefit of the workers. the shareholders only would be entitled to such benefit and the mere fact that dividends were declared and paid to the shareholders out of such reserves and undistributed profits would not entitle the workers to demand bonus when in fact the working of the industrial concern during the particular year had showed a loss. it has also got to be remembered that the labour force employed in an industrial concern is a fluctuating body and it can not be predicated of the labour force in a particular year that it represents the past and the present workers so that it can claim to demand bonus out of the reserves or undistributed profits of the previous years. on the accounts of each year being made up and the profits of the industrial concern being ascertained the workers during the particular year have their demand for bonus fully satisfied out of the surplus profits and the balance of profits is allocated and carried over in the accounts. no further claimed payment of bonus out of those reserves or undistributed profits can therefore survive. to admit the claim for bonus out of the reserves transferred to the profit and loss account would tantamount to allowing a second bonus on the same profits in respect of which the workers had already received their full bonus in the previous year. the labour force which earns the profits of a particular year by collaborating with the employers is distinct from the one which contributed to the profits of the previous years and there is no continuity between the labour forces which are employed in the industrial concern during the several years. the ratio which applies in the case of the shareholders who acquire the right title and interest of their predecessorsin interest does not apply to the labour force and the fact that the shareholders get a dividend by transfer of funds from the reserves and undistributed profits of the previous years would not entitle the workers to demand bonus out of those funds if the working of the industrial concern during the particular year has resulted in a trading loss. the considerations of social justice imported by the labour appellate tribunal in arriving at the decision in favour of the respondent were not only irrelevant but untenable. social justice is a very vague and indeterminate expression and no clear cut definition can be laid down which will cover all the situations. mr isaacs the learned counsel for the respondent. attempted to give a definition in the following terms social justice connotes the balance of adjustments of the various interests concerned in the social and economic structure of the state in order to promote harmony upon an ethical and economic basis and he stated that there were three parties concerned here viz the employers the labour and the state itself and the conception of social justice had to be worked out in this context. without embarking upon a discussion as to the exact connotation of the expression social justice we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation. indeed the full bench of the labour appellate tribunal evolved the abovequoted formula with a view to dispensing social justice between the various parties concerned. it adopted the following method of approach at page 1258 of that judgment our approach to this problem is motivated by the requirement that we should ensure and achieve industrial peace which is essential for the development and expansion of industry. this can be achieved by having a contented labour force on the one hand and on the other hand an investing public who would be attracted to the industry by a steady and progressive return on capital which the industry may be able to offer. this formula was reiterated in textile mills m p their workmen 1952 2 l l j 625 and famous cine laboratory v their workmen 1953 1 l l j 466 and in the latter case it deprecated the idea of adjudicators importing considerations of social justice which were not comprised in that formula and what is social justice. social justice is not the fancy of any individual adjudicator if it were so then ideas of social justice might vary from adjudicator to adjudicator over all parts of india. in our full bench decision see 1950 2 l l j 1247 we carefully considered the question of social justice in relation to bonus and there we equated the rights and liabilities of employers and workmen with a view to achieving a just formula for the computation of bonus. that full bench decision stands and this tribunal and all other tribunals are bound by it. without committing ourselves to the acceptance of the above formula in its entirety we may point out that the labour appellate tribunal did not apply its own formula to the facts of the present case. it is also significant to note that even while importing considerations of social justice the labour appellate tribunal was oblivious of the fact that it was by their own acts of indiscipline and strike that the workers of the appellant company themselves contributed to the trading losses incurred by the appellant and it hardly lay in their mouth then to contend that they were none the less entitled to a payment of bonus commensurate with the dividend paid to the shareholders out of the undistributed profits of the previous years. the labour appellate tribunal also overlooked the fact that but for the public companies limitation of dividend. ordinance of 1948 the whole of the profits of 1948 could have been distributed after paying the workers bonus in that year of four annas in the rupee. we may before concluding refer to an argument which was addressed to us by mr isaacs the learned counsel for the respondent that this court under article 136 should not interfere with the decisions of the tribunals set up by the industrial disputes act 1947. this contention can be shortly answered by referring to our decision in bharat bank ltd delhi v employees of the bharat bank ltd delhi 1950 s c r 459 1950 indlaw sc 48 where we held that the industrial tribunals were tribunals within the meaning of article 136 and further that article 136 has vested in this court exceptional and overriding power to interfere where it reaches the conclusion that a person has been dealt with arbitrarily or that a court or tribunal within the territory of india has not given a fair deal to a litigant. vide dhakeswari cotton mills ltd v commissioner of income tax west bengal 1954 indlaw sc 213. the result therefore is that the decision of the labour appellate tribunal appealed against must be reversed and that of the industrial court textiles and hosiery kanpur restored. the appeal will accordingly be allowed with costs. appeal allowed.

IN-Ext

FACTS this appeal with special leave is directed against the judgment and order of the labour appellate tribunal of india in a dispute regarding the workers' claim for bonus. during the year 1948 the appellant made a profit of rs. 11,97,648-11-9. it paid 24 3 per cent. dividend on ordinary shares, being the maximum that could be paid under the public companies (limitation of dividend) ordinance of 1948 and also paid to the workers their full share of bonus at annas 4 in a rupee of their basic earnings. during the year 1949 the selling rates for cloth and yarn were controlled by the government and were approximately 4 per cent. below those obtained in 1948. the basic wages were increased from the 1st december, 1948, by order of the government of uttar pradesh and the total wages paid were therefore higher than those in the previous year. there was moreover indiscipline amongst the workers and production suffered. there was a strike in the month of october and the mills were closed for nearly a month. further the management were unable to secure cotton which resulted in the curtailment of the working hours. as a result of all these circumstances the appellant suffered a huge trading loss. the appellant also paid ex gratia to the workmen bonus at the rate of annas 2 per rupee of their basic earnings making it clear by their notification dated the 7th april, 1950, that the directors had sanctioned the payment at that rate in spite of the appellant having suffered a trading loss for the year, that it was being paid entirely at the discretion of the appellant and was not related to or connected with any contract of employment of any worker. the secretary of the respondent union petitioned to the provincial conciliation officer (textile) that there was more production in 1949 than in 1948, that there was no reason to hold that the profit in 1949 was less than in the previous year and that the rate of bonus was wrongly reduced and asked that bonus for 1949 should also be paid at the rate of annas 4 per rupee. the industrial dispute which thus arose was referred for enquiry and recording of an award to the regional conciliation board (textile), kanpur. the conciliation board by a majority decision repelled the contention of the appellant and awarded the payment of bonus at annas 4 per rupee. on an appeal taken by the appellant to the industrial court (textiles and hosiery), kanpur, the industrial court accepted the contention of the appellant, allowed the appeal and set aside the award. the respondent thereupon appealed to the labour appellate tribunal which substantially agreed with the industrial court on questions of fact as well as the general position in law but imported considerations of social justice and treating this as a special case " where social justice would demand that labour should have bonus for the year where for that very year capital had not only a reasonable return but much in excess of that ", allowed the appeal and directed the appellant to pay to the workmen bonus at the rate of annas 4 per rupee within six weeks of their decision. the appellant filed this appeal against that decision after obtaining special leave from this court. ARGUMENT the learned counsel for the respondent. attempted to give a definition in the following terms : "social justice connotes the balance of adjustments of the various interests concerned in the social and economic structure of the state, in order to promote harmony upon an ethical and economic basis" and he stated that there were three parties concerned here, viz. the employers, the labour and the state itself, and the conception of social justice had to be worked out in this context. without embarking upon a discussion as to the exact connotation of the expression "social justice" we may only observe that the concept of social justice does not emanate from the fanciful notions of any particular adjudicator but must be founded on a more solid foundation. ISSUE the question which arises for our consideration is mainly whether the workers are entitled to the payment of a bonus in spite of the employer having worked at a loss during the year and incidentally whether the workers have any right, title or interest in the reserves and the undistributed profits of the previous years. ANALYSIS the primary meaning of the word " bonus " imports the conception of a boon, a gift or a gratuity otherwise described as an ex gratia payment. the word 'bonus' has however acquired a secondary meaning in the sphere of industrial relations. it is classified amongst the methods of wage payment. in sutton v. attorney-general , (1923) 39 t.l.r. 294, 297; where "the term 'bonus' may of course be properly used to describe payments made of grace and not as of right. but it nevertheless may also include, as here, payments made because legally due but which the parties contemplate will not continue indefinitely" there are however two conditions which have to be satisfied before a demand for bonus can be justified and they are, (1) when wages fall short of the living standard and (2) the industry makes huge profits part of which are due to the contribution which the workmen make in increasing production. the demand for bonus becomes an industrial claim when either or both these conditions are satisfied. the surplus that remained after meeting the aforesaid deductions would be available for distribution as bonus. it is therefore clear that the claim for bonus can be made by the employees only if as a result of the joint contribution of capital and labour the industrial concern has earned profits. if in any particular year the working of the industrial concern has resulted in loss there is no basis nor justification for a demand for bonus. the dividends can only be paid out of profits and unless and until profits are made no occasion or question can also arise for distribution of any sum as bonus amongst the employees. this has been clearly recognised even in the various decisions of the labour appellate tribunal, e.g., nizam sugar factory ltd., hyderabad v. their workmen, (1952) i l.l.j. 386; textile mills, madhya pradesh v. their workmen, (1952) 2 l.l.j. 625;and famous cine laboratory v. their workmen, (1953) i l.l.j. 466; this was also the basis of the demand of the respondent in the case before us, its case being that the appellant had reaped substantial profits during the year 1949. on the accounts of each year being made up and the profits of the industrial concern being ascertained the workers during the particular year have their demand for bonus fully satisfied out of the surplus profits and the balance of profits is allocated and carried over in the accounts. no further claimed payment of bonus out of those reserves or undistributed profits can therefore survive. it is also significant to note that even while importing considerations of social justice the labour appellate tribunal was oblivious of the fact that it was by their own acts of indiscipline and strike that the workers of the appellant company themselves contributed, to the trading losses incurred by the appellant and it hardly lay in their mouth then to contend that they were none the less entitled to a payment of bonus commensurate with the dividend paid to the shareholders out of the undistributed profits of the previous years. the labour appellate tribunal also overlooked the fact that but for the public companies (limitation of dividend) ordinance of 1948 the whole of the profits of 1948 could have been distributed after paying the workers bonus in that year of four annas in the rupee.

the respondent No. i was tried before the court of sessions visakhapatnam for offences under section 120 b indian penal code section 409 section 477 a and section 471 read with section 467 i p c while respondent No 2 was tried for an offence under section 120 b and for offences under sections 409 read with section 109 477 a and 471 read with section 467 i p c each of the respondents was convicted of the first two offences but. the respondent No i alone was convicted of the other two offences. various sentences were passed against them by the additional sessions judge visakhapatnam who presided over the court. the respondents preferred appeals before the high court challenging their convictions and sentences. the state on the other hand preferred an application for revision under section 439 cr. p c for the enhancement of the sentences passed on the respondents. the high court allowed the two appeals acquitted the respondents and dismissed the application for revision preferred by the state. the state of andhra pradesh has come up before this court in appeal by obtaining special leave under article 136 of the constitution. the prosecution case in so far as it is material for the decision of this appeal is as follows. in the year 1929 the andhra engineering co which was originally a partnership firm formed by one d l n raju was converted into a private limited company with its headquarters at visakhapatnam. we shall refer to this company throughout as the aeco. it obtained licences from the government under the electricity act for supply of electrical energy to visakhapatnam anakapalli and some other places. as the aeco did not have the necessary capital to undertake the work raju floated in the year 1933 a public limited company called visakhapatnam electric supply corporation ltd and another in the year 1936 called the anakapalli electric supply corporation ltd the aeco transferred its licences for the supply of electrical energy to the consumers of visakhapatnam to vesco and similarly transferred to aeco the licence to supply electrical energy to consumers at anakapalli. the aeco was appointed managing agent for each of these corporations under separate agreements. some time later other industrial concerns the andhra cements ltd vi jayawada and the east coast ceremics. rajahmurthy were started apparently by raju himself and the aeco was appointed the managing agent of each of these concerns. the original managing agency agreement in favour of aeco with respect to vesco was for a period of 15 years i e from 1933 to 1948 and was later renewed for the remaining term of the currency of the licence granted by the government under the electricity act. a mention may be made of the fact that in june 1952 the vesco undertaking was acquired by the government under the provisions of the electricity undertaking acquisition act but nothing turns on it. the vesco had its own board of directors while the aeco had also its own separate board of directors. the vesco had no managing director but at each meeting of its board of directors one of the directors used to be elected chairman. the same practice was followed at the meeting of the general body of the shareholders. the aeco on the other band always had a managing director first of whom was d l n raju. he died in the year 1939 and was succeeded by r k n g raju an advocate of rajahmundry. this person however did not shift to visakhapatnam on his becoming the managing director but continued to stay most of the time at rajahmundry. according to the prosecution both these concerns were running smoothly and efficiently during the lifetime of d l n raju because he was personally attending to their affairs. his successor however apart from the fact that be continued to be staying mostly at rajahmundry was also interested in several other ventures including a sugar factory at dewas in central india. eventually many of those ventures failed. according to the prosecution the second raju was not bestowing sufficient care and attention on the affairs of vesco. the aeco as managing agents of vesco had appointed in the year 1939 one d v appala raju a trusted employee as its representative and as the secretary of vesco. in 1944 this person resigned from his appointments and started his own business in radio and electrical goods in the name of d brothers. he was succeeded by t visweswara rao p w 6 an employee of the aeco. the respondent No 1. ganeswara rao was also an old employee of aeco having been appointed a stenotypist in the year 1923 on an initial salary of rs p m eventually he became the head clerk therein. he pressed his claim for appointment as secretary of vesco and representative of the managing agents at visakhapatnam and r h g raju appointed him to that post. all this is not disputed. the respondent No 1 even after his appointment on two posts connected with vesco continued to work with the aeco also whose business had by then been confined only to that of managing agents of the four companies floated by d l n raju. it is the prosecution case that as secretary of vesco and the resident representative of the managing agents the respondent No i was attending to the day to day affairs of vesco which included the receiving of all sums of money due to vesco spending money for the purpose of vesco attending to the appointment supervision and control of the staff of vesco purchasing materials required for the purpose of vesco and supervising over the accounts of vesco. he was thus all important with respect to the every day affairs of vesco. his dual capacity enabled the respondent No i to earn the confidence not only of the directors of aeco but also of those of vesco. the accounts maintained by the vesco used to be explained by him not only to the directors but also to the shareholders. the knowledge of the financial position of vesco obtained by them used to be derived essentially from the respondent No 1. as secretary of vesco it was his duty to convene the meetings of the board of directors to present before them the periodical statement of receipts and expenditure of vesco to convene meetings of the general body to prepare the managing agents report and the director 's report as also to see to the presentation of auditors report and the statement of accounts. the explanations of the managing agents and the directors of vesco with respect to the items mentioned in the orders of the board used also to be placed by him before the shareholders. it was also his duty to have the accounts of vesco audited by the auditors elected by the general body and to produce before the auditors the relevant accounts vouchers bank statements and so on. there were no complaints about the management of the affairs of vesco or the aeco till the end of 1946 or the beginning of 1947. one significant fact however which occurred prior to 1946 is referred to by the prosecution. till the year 1945 messrs c p rao co a firm of chartered accountants were the auditors of vesco but after the respondent No i became secretary. one b rajan was elected auditor not only for vesco but for all the other four concerns including aeco. this person was auditor for greenlands hotel at visakhapatnam. of which the respondent No i was a director. r k n g raju took till towards the end of 1947 and died at madras in april 1948. according to the prosecution the respondent No i wanted to take advantage of this fact and conceived of a scheme for misappropriating as much money belonging to vesco as possible before the managing agency agreement of aeco came to an end in october 1948. i secured the promotion of the approver k v ramana who was originally accounts clerk to the post of senior accountant. similarly k v gopala raju was transferred from the post of stores clerk to the general department and k s n murty the discharged accused was appointed stores clerk in his place. later however murty was also got transferred to the general section and replaced by p w 18. srinivasa rao originally a stores boy. the approver who was originally an accounts clerk with the aeco was it may be mentioned appointed a cashier in vesco in 1946 at the instance of the respondent No i and was thus beholden to him. he was later promoted as senior accountant and in his place the respondent No 2. laksbminarayana rao was appointed the cashier. according to the prosecution the respondent No i took both the approver and lakshminarayana rao in his confidence as also some other persons known and unknown for carrying out his nefarious purpose namely the misappropriation of the funds of vesco during the subsistence of aeco 's managing agency of vesco. the conspiracy is said to have been hatched in the year 1947 and falsification of accounts and misappropriation of funds of vesco went on till the end of the accounting year. the term of the managing agency was renewed in 1943 and aeco con tinued to be managing agents until the vesco was taken over by the government in 1952. i continued to be the secretary of vesco and resident representative of the managing agents throughout the period of conspiracy. after the death of r k n g raju it was discovered that the aeco was indebted to many concerns which were under its managing agency the liability being shown either as that of aeco or that of r k n g raju personally. again the vesco was shown as indebted to the andhra cement to the extent of rs 42 000. this amount was however paid by the aeco from the funds of vesco. i and some of his friends were in search of a rich and substantial man who would be amenable to them to fill the post of managing director of aeco. eventually their choice fell on g v subba raju p w 25 a resident of manchili who held a large number of shares in the aeco and who was besides related to r k n g raju by marriage. it is said that this person has not received much education and knows only bow to sign his name in english. he was assured that by consenting to become the managing director be would not be required to discharge onerous duties and that the respondent No i would look to all the affairs of vesco. he was also told that apart from signing important papers which may be sent to him by the respondent No i from time to time to manchili or wherever be might be would have no work to do. he agreed and was elected managing director of aeco in the middle of 1948. upon this understanding he accepted the position offered to him. the vesco used to receive large amounts of money from high tension power consumers such as the railways k g hospital the port administration the andhra university etc. by cheques. but domestic consumers usually paid their bills in cash to the bill collectors who used to hand over their collections to the respondent No 2. the respondent No 2 was asked by the respondent No i to maintain a private note book. in that book payments which used to be made by respondent No 2 on the basis of slips issued by the respondent No i used to be noted and the amount totalled up at the end of the day. this amount was posted in vesco 's cash handover book as by safe indicating that this amount was kept in the safe though in fact it was not. on the basis of the entries in the handover book the final accounts were written up. i opened four personal accounts in different banks including the imperial bank of india. when the respondent No i had to issue a personal cheque on any of these banks he used to ask the second respondent to send an equivalent amount to the bank concerned for being credited to his account. these amounts also used to be noted in the private note book and entered. another thing which the respondent No i initiated was opening a heading in the ledger called advance purchase of materials. amounts which had been misappropriated used to be posted therein though in fact no orders were placed for any material. it may be mentioned that subba raju used to visit visakhapatnam twice a month and check up the account books. at that time it used to be represented to him that the amounts which were shown to be in the safe and not found therein had been sent to the bank for being deposited. apparently subba raju was fully satisfied with this and other explanations and therefore he appointed one c section raju who was the manager of andhra cements to supervise over the affairs of vesco apparently because of this a new method of misappropriation was adopted by the respondents by starting in the vesco account books an account called suspense account. a lakh of rupees passed through that account. amounts which were misappropriated used to find their way in this account. a new cash book was also said to have been prepared by the conspirators with the object of covering up the misappropriations which had been made. subba raju was not satisfied with the nature of supervision exercised by c section raju over the affairs of vesco because he used to look only at the cash book entries of the days on which he paid visits to vesco 's office to which he used to go with previous intimation. besides that c section raju 's management of andhra cements had landed it into a loss of rs 30 000. because of all these things he had c section raju replaced towards the end of the year 1951 by one subbaramayya a retired finance officer from the madras electricity board both as a director of andhra cements and as a supervisor over the accounts of vesco. subbaramayya took his work seriously and called for information on a number of points from the respondent No 1. he however was unable to obtain any information. in january 1952 he therefore brought one section g krishna aiyar who had vast experience in the maintenance of accounts of electrical undertaking 's having been chief accountant of the south madras electric supply corporation to undertake an investigation and then to act as financial adviser. in the meantime on november 29 1951 there was a meeting of the general body at which the accounts were among other things to be considered. there was a considerable uproar at that meeting because the respondent No 1 said that the auditor 's report had not been received. the shareholders felt that the report had been received but was being suppressed or deliberately withheld. however the meeting was postponed and eventually held on december 9 1951. on that date the respondent No 1 produced the auditor 's report. according to the prosecution the report is a forged document. that was also the feeling of a number of shareholders who wanted to see the original but one dutt who was chairman of the meeting after seeing exhibit p 234 said that the report seemed to be a genuine one. section g krishna aiyar after his appointment in january 1952 made close enquiry and submitted an interim report. that report showed that during the period 1948 49 rs 33 271 10 0 shown as paid to the andhra power system were in fact not paid. the respondent No 1 on being asked to explain said that he would give his explanation to the managing director. the interim report showed that there was a shortage of about rs 90 000 for this period. on february 12 1952 the respondent No i wrote to the managing director admitting his responsibility and agreed to make good the amounts found short or such other amounts as would be found short up to the end of march 1952. further scrutiny of the accounts was being carried out by krishna aiyar and in his subsequent report he pointed out that rs 2 38 000 which were shown as having been paid to the andhra power system had actually not been paid. in fact in april 1952 the collector attached vesco properties for realising this amount. on april 30 1952 the respondent No 1 by selling some of his property himself paid rs 50 000 to the andhra power system towards the sum due to it from vesco and had promised to pay the balance shortly thereafter. he was given time for doing so but he failed to pay it. the directors of vesco thereafter authorised k section dutt one of the directors to lodge a complaint with the police which he accordingly lodged on may 19 1952. on the next day the police placed an armed guard around the office of the respondent No i and seized a number of papers. as a result of investigation they found that there was a total misappropriation of rs 3 40 000. on may 13 1954 a chargesheet was filed against the two respondents as well as murti and the approver ramana. od september 13 1954 ramana offered to make a full confession to the additional district magistrate independent who was empowered to grant pardon under section 337 of i he code of criminal procedure. he however directed ramana to make his confession before a submagistrate. the latter accordingly made a confession on november 15 1954 and on november 17 1954 the additional district magistrate independent granted him pardon and that is how he came to be examined as a witness in this case. as already stated the additional sessions judge convicted both the respondents the respondent No i in respect of each head of the offences with which he was charged and the respondent No 2 in respect only of the offences of conspiracy and misappropriation. the high court set aside the conviction of the respondents on a number of grounds. in the first place according to the high court joint trial of two or more persons in respect of different offences cornmitted by each of them is illegal and that here as they were charged with having committed offences under section 120 b section 409 section 477 a and section 476467 i p c they could not be tried jointly. according to it the provisions of section 239 were of no avail. next according to the high court even if section 239 is applicable its provisions are subject to those of section 234 and as such the trial being for more than three offences was impermissible. then according to the high court offences under. section 409 and section 471467 are of different kinds and are not capable of joint commission. therefore they could not be jointly tried. further according to the high court where a conspiracy has yielded its fruits the conspirators can be charged with the actual offences committed and not with conspiracy to commit those offences. charge of conspiracy according to the high court can be validly made only when the prosecution establishes that every conspirator expected to receive a personal benefit from it and that the prosecution has not been able to establish that the respondent No 2 or the approver evidently had any such expectations since they did not in fact receive any corresponding benefit. in so far as the respondent No 2 is concerned the high court has held that since he was charged with a specific offence under s 409 i p c he could not be convicted of mere abetment of an offence. the approver 's evidence was held by the high court to be inadmissible because the pardon granted to him was illegal. the high court has also held that his evidence is unreliable and further that the additional sessions judge was in error in allowing him to refresh his memory by referring to various documents in a manner not permitted by section 159 of the evidence act. the high court has further stated that inadmissible evidence was taken on record by the additional sessions judge namely account books of billimoria brothers maintained in gujrati and further that the additional sessions judge was in error in allowing the prosecution to use those account books for establishing absence of entries with regard to certain payments alleged in the vesco books to have been made to them. finally the high court held that the examination of the respondent under section 342 of the code was unfair for a number of reasons and that the additional sessions judge had failed to perform an important duty in that he did not call the attention of the respondents to the provisions of section 342 which enable an accused person to give evidence in his own behalf. mr bhimasankaram appearing for the two respondents however has not sought to support the judgment of the high court on all these points. the points which he urged are briefly these 1 that there was a misjoinder of charges and persons in that the various provisions of section 239 were clubbed together and an omnibus charge of conspiracy was framed which on its face was one likely to embarrass the respondents and make their task of defending themselves difficult. the procedure adopted in the investiga tion and committal stages was irregular. 3 irrelevant evidence was introduced and some evidence was introduced in a manner not authorised by the evidence act. 4 that the court abused its powers under s 342 cr. p c while conducting the examination of the respondents. the evidence of the approver was inadmissible because the pardon granted to him was illegal that in any case it is unreliable was so found even by the sessions judge and must therefore be rejected. if the evidence of the approver is left out the remaining evidence would be inadequate to sustain the prosecution case. we shall deal with mr bhimasankaram 's contentions in the order in which we have set them out. the first question for consideration is whether there was a misjoinder of parties and of persons. the first charge is in respect of the conspiracy alleged to have been entered into by the two respondents k v ramana the approver and others known and unknown to commit criminal breach of trust of the funds of vesco and in order to screen its detection to falsify the accounts of vesco and to use forged documents as genuine. on the face of it this is a valid charge. but certain objections have been taken to it with which we will deal at the appropriate place. the second charge is for an offence of criminal breach of trust punishable under section 409 and the accusation therein is that the two respondents along with ramana misappropriated 69 items aggregating to a little over rs 3 20 000. it is clear from the charge that some of the amounts were misappropriated between april 1947 and march 1950 some between april 1947 and march 1949 some between april 1947 and march 1951 and quite a large number between september 1947 and march 1950 and a still large number between april 1951 and march 1952. it is thus apparent that offences committed within a space of 12 months were tried along with offences committed beyond that period. unless therefore the provisions of section 239 are applicable it would follow that there was a misjoinder of charges. the third charge is that the two respondents along with the approver. ramana made false entries on seven different dates in the account books between september 19 1947 and march 18 1952 and thus committed an offence under section 477 a i p c the fourth charge is that the two respondents along with the approver. ramana forged six documents on different dates between march 28 1949 and november 12 1951 and thus committed an offence under section 471 read with section 467 i p c as we have pointed out earlier the respondent No i alone was convicted by the additional sessions judge in respect of the third and fourth charges. mr bhimasankaram supports the reason given by the high court for coming to the conclusion that there was a misjoinder of charges. the main reasons upon which the conclusion of the high court is based are firstly that there could be no clubbing together of the provisions of the various clauses of section 239 and secondly that the respondents were charged with more than three offences of the same kind and that this was in contravention of section 239 c. in coming to the conclusion that the provisions of various clauses of section 239 can not be applied cumulatively the high court has relied upon the decision in re vankavalapati gopala rao 1956 airandhra 21. there the learned judges have held thus these clauses are mutually exclusive and they can not be simultaneously applied and to construe them as supplementing each other would be enlarging the scope of the exceptions. each clause is an exception to the general rule enacted in section 233 cr. if such a combination is permissible all persons accused of offences described in cls. a to g can be tried together in one case which certainly involves a bewildering multiplicity of charges and which would obviously set at naught the salutary principle contained in section 233. the chapter is split up into two sub heads form of chargesand joinder of charges. 221 to 232 are comprised under the first sub head and sections 233 to 240 in the second. 221 to 223 deal with the framing and content of charge. section 224 deals with the interpretation of the language of the charge and section 225 with the effect of errors in the charge. 226 to 231 deal with the power of the court with regard to framing and altering charges and the procedure to be adopted at the trial where a charge is found to be defective or there is no charge or where a new charge is to be framed. section 232 deals with the power of the appellate court or the high court when it discovers that there is material error in the charge. then we come to the other sub head of this chapter. section 233 provides that for every distinct offence of which any person is accused there shall be a separate charge. it thus lays down the normal rule to be followed in every case. but it also provides that this will be subject to the exceptions contained in sections. 234 235 236 and 239. the first three provisions relate to the framing of charges against a single accused person. section 234. 1 deals with the trial of a person for offences of the same kind not exceeding three committed within the space of 12 months from the first to the last of such offences and section 231 2 what is meant by the expression offences of the same kind. this provision lifts partially the ban on the trial of a person for more than one offence at the same trial. section 2351 however goes a step further and permits the trial of a person for more offences than one if they are so connected together as to form the same transaction. thus under this provision if the connection between the various offences is established the limitations placed by section 2341 both as regards the number and the period during which the offences are alleged to have been committed will not apply. full effect can not possibly be given to this provision if we hold that it is subject to the limitation of s 2341. sub s 2 of section 235 deals with a case where an offence falls within two definitions and sub s 3 deals with a case in which a number of acts are alleged against an accused person different com binations of which may constitute different offences. then we come to section 236 which provides that if a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute the accused may be charged with having committed all or any of such offences and further provides that any number of such charges may be tried together. it also permits that charges could be framed against an accused person in the alternative if the court thinks fit. thus this is a special provision available in case of doubt and is neither subject to the limitations prescribed by section 233 nor those of the other preceding provisions. now if the respondent No 1 were alone tried upon the second third and the fourth charges the provisions of section 2351 could have been pressed in aid if the allegations were that the offences were so connected together as to form one and the same transaction and the validity of the trial would not have been open to any attack. similarly if the second respondent were alone tried on the second charge his trial would not have been open to any objection if the allegation were that the offences were so connected together as to form the same transaction. here however we have a case where the prosecution alleges that there was additionally a conspiracy to which apart from the two respondents the approver and some other persons were parties and where in both the respondents were tried together. a conspiracy must be regarded as one transaction and there fore a single individual charged with it could be tried with the aid of section 2351 for all the acts committed by him in furtherance or in pursuance of the conspiracy without the limitations imposed by s 2341. for where all the acts are referable to the same conspiracy their connection with one another is obvious. the only provision in the code which permits the joint trial of more than one person is section 239 and what we have to see is whether under that provision the two respondents could have been jointly tried for the offences with which they were charged. let us therefore examine closely the provisions of section 239. it will be useful to set out the provisions of that section which run thus this first thing to be noticed is that section 239 does not read as if its various clauses can be applied only alternatively. on the other hand at the end of cl. f there is a conjunction and. if the intention of the legislature was that the provisions of these clauses should be available only alternatively it would have used the word or and not and which has the opposite effect. grammatically therefore it would appear that the provisions of the various clauses are capable of being applied cumulatively. the opening words of the section show that it is an enabling provision and therefore the court has a discretion to avail itself cumulatively of two or more clauses. of course a court has the power to depart from the grammatical construction if it finds that strict adherence to the grammatical construction will defeat the object the legislature had in view. the concluding portion of section 239 shows that the provisions contained in the former part of chapter xix shall as far as may be apply to the charges framed with the aid of section 239. does this mean that the provisions of section 233 234 235 and 236 must also be complied with. obviously section 233 does not override the provisions of section 239. section 234 can not also be regarded as an overriding provision because reading it that way will lead to the clear result that whereas several accused persons can be charged at the same trial with any number of different offences committed by them in the course of the same transaction they can not be tried also for offences of the same kind exceeding three in number and committed beyond a space of 12 months from the first to the last. it could not have been the intention of the legislature to create such a situation. again as already stated section 2341 does not override the provisions of section 2351 which permits trial of a person for more offences than one committed during any period provided they are so connected together as to form one transaction. unless we read section 2341 as not enacting a fetter on section 2351 it may not be possible to give full effect to the latter. now since section 2341 can not be properly read a overriding section 2351 there is no valid reason for construing it as overriding the provisions of section 239 either. there are also other reasons which point to this conclusion which we will set out while considering the argument advanced by mr bhimasankaram. bhimasankaram contended that s 239 must be read at least subject to sections 2341 and 2351 on the ground. that if there are certain restrictions with respect to the trial of a single accused there is no reason why those restrictions will disappear if an accused person is tried along with several other persons. thus he points out that where several persons are accused of more offences than one of the same kind committed by them jointly within a period of 12 months the number of offences for which they could be tried can not exceed three. in this connection he relied upon the words within the meaning of section 224 occurring in cl. c of section 239. these words he contended clearly show that cl. c of section 239 is subject to the provisions of section 234. in our opinion the words within the meaning of section 234 indicate that what was meant by the words offence of the same kind persons accused of more offences than one of the same kind not exceeding three in numberor may have used the words person accused of more than one offence of the same kind to the extent permissible under section 234. therefore even if the expression same transaction alone had been used in section 2351 it would have meant a transaction consisting either of a single act or of a series of connec ted acts. the expression same transaction occurring in cls. a c and d of section 239 as well as that occurring in section 2351 ought to be given the same meaning according to the normal rule of construction of statutes. looking at the matter in that way it is pointless to inquire further whether the provisions of section 239 are subject to those of section 2361. the provisions of sub s 2 and 3 of section 235 are enabling provisions and quite plainly can have no overriding effect. but it would be open to the court to resort to those provisions even in the case of a joint trial of several persons permissible under section 239 s 236. is also an enabling provision to be availed of in case of doubt and it is meaningless to say that section 239 is subject to section 236. bearing in mind the fact that the provisions in the former part of chapter xix are applicable to charges made with the aid of section 239 only so far as may be it would not be right to construe section 239 as being subject to the provisions of sections 233 to 236. it was contended by mr chari that the expression former part would apply to the first sub division of chapter xix which deals with the form and content of the charges and the powers of the court with regard to the absence of charge and alteration of charge. we can not however give the expression such a restricted meaning. for even in the absence of those words the earlier provisions could not have been ignored. for it is a rule of construction that all the provisions of a statute are to be read together and given effect to and that it is therefore the duty of the court to construe a statute harmoniously. thus while it is clear that the sections preceding section 239 have no overriding effect on that section the courts are not to ignore them but apply such of them as can be applied without detracting from the provisions of s 239. indeed the very expression so far as may be empha sises the fact that while the earlier provisions have to be borne in mind by the court while applying section 239 it is not those provisions but the latter which is to have an overriding effect. apart from this the question whether the provisions of sections 233 to 236 have or have no overriding effect on section 239. is not strictly germane to the question considered by the high court that is clubbing together all the provisions of the various clauses of section 239. whether they can or can not be read cumulatively must be determined by consideration of the language used in those clauses. we have already indicated how those clauses may be grammatically read. on a plain construction of the provisions of section 239 therefore it is open to the court to avail itself cumulatively of the provisions of the different clauses of section 239 for the purpose of framing charges and charges so framed by it will not be in violation of the law the provisions of sections 233 234 and 235 notwithstanding. the decision of the allahabad high court in t r mukherji 's case il is directly in point and is clearly to the effect that the different clauses of section 239 are mutually exclusive in the sense that it is not possible to combine the provisions of two or more clauses in any one case and to try jointly several persons partly by applying the provisions of one clause and partly by applying those of another or other clauses. a large number of decisions of the different high courts and one of the privy council have been considered in this case. no doubt as has been rightly pointed out in this case separate trial is the normal rule and joint trial is an exception. but while this principle is easy to appreciate and follow where one person alone is the accused and the interaction or intervention of the acts of more persons than one does not come in it would where the same act is committed by several persons be not only inconvenient but injudicious to try all the several persons separately. this would lead to unnecessary multiplicity of trials involving avoidable inconvenience to the witnesses and avoidable expenditure of public time and money. no corresponding advantage can be gained by the accused persons by following the procedure of separate trials. where however several offences are alleged to have been committed by several accused persons it may be more reasonable to follow the normal rule of separate trials. but here again if those offences are alleged not to be wholly unconnected but as forming part of the same transaction the only consideration that will justify separate trials would be the embarrassment or difficulty caused to the accused persons in defending themselves. we entirely agree with the high court that joint trial should be founded on some principle. but we find it difficult to appreciate what seems to be the view of the high court that because each clause of section 239 enunciates a separate principle those principles are so to speak mutually exclusive and can not be cumulatively resorted to for trying several persons jointly in respect of several offences even though they form part of the same transaction. the high court has propounded that the connection described in each of the various clauses is mutually exclusive that no two of them can exist simulta neously in any case and that one can not therefore have in any case persons connected with one another in two or more ways. in other words as the high court puts it persons included in two or more of the groups can not all be tried together and that since there is absolutely nothing to connect one group with any other the persons of one group can not be tried with those of any other. no reason has been stated in support of this view. let us consider whether there is anything intrinsically incompatible in combining two clauses of section 239. take cls. a and b. a says that persons accused of the same offence committed in the course of the same transaction may be charged and tried together. b says that persons accused of an offence and persons accused of abetment or of an attempt to commit such offence may also be charged and tried together. now if persons a b and c are tried for an offence of murder what intrinsic difficulty would there be in trying x y and z of abetment of the same offence. the transaction in which all of them have participated is the same and the abetment by x y and z of the offence committed by a b and c would itself establish the connection of their acts with those of x y and z next let us take cls. a and c c provides that persons accused of more than one offence of the same kind within the meaning of section 234 committed by them jointly within the period of twelve months could also be charged and tried together. let us consider these clauses along with another illustration. two persons a and b enter a house at night and first together commit the murder of a man sleeping there and then also his wife. each of them has committed two offences and each of them participated in the same offence. why can they not be tried jointly for both murders and why should there be two trials for the two murders. the offences are of the same kind and must be deemed to have been committed in the course of the same transaction because of association and mutual connection. now supposing in the illustration given a killed the man and b killed his wife. under cl. c they could be tried together because the offences are of the same kind. it would be ridiculous to say that they can not be tried together for jointly committing the murder of the man and the wife because cl. a and c can not be combined. for without combining these two clauses their joint trial for the two offences in each of which both have participated would be impermissible. then take section a and d d persons accused of different offences committed in the course of the same transaction can be tried together. let us suppose that a group of persons are accused of having been members of an unlawful assembly the common object of which was to overawe by sheer force another group of persons and take forcible possession of a piece of land. some of the members of the unlawful assembly carried axes with them while some others carried lathis and attacked the other group. during the course of the attack one person from the second group was killed as a rest of blows with an axe inflicted by the aggressors a b and c two persons of the second group sustained grievous hurt as a result of lathi blows and one person sustained simple hurt. let us say that the grievous hurt was caused as a result of lathi blows given by x and y simple hurt was caused by lathi blows given by z here the offences committed were those under sections 147 302 325 and 323 i p c the offences being different and the persons commiting the offences being different they could not be tried jointly only with the help of cl. a of section 239. nor again could they be tried jointly only with the help of cl. d yet the transaction in which the offences were committed is the same and there is a close association amongst the persons who have committed the different offences. what intrinsic difficulty is there in trying them all together simultaneously availing of cls. a and d of section 239. these are enabling provisions which circumstance implies that the court may avail itself of one or more of these provisions unless doing so would amount to an infringement of any of the provisions of the code. all these persons can be jointly tried for offences under section 147 by recourse to cl. a so also a b and c could be jointly tried together for an offences under section 302. x and y can be charged not only with offences under sections 147 and 325 i p c but also under section 302 read with section 149. similarly z can be charged with offence 's under sections 147 323 and offences under section 302. read with section 149 and section 325. read with section 149. the same offence committed by all of them is that under section 147 and all of them can be tried jointly in respect of that offence under cl. similarly if we take cl. d by itself all of them can be tried jointly for the different offences committed by each of them in the course of the same transaction and if cl. a is unavailable they could not be tried for the offence under section 147 at the same trial. this means that the trial for an offence under section 147 will have to be separated from the trial for the different offences committed by them. it is difficult to appreciate what purpose would be served by separating the trial for the same offence from the trial for different offences. to repeat the object of the legislature in enacting section 239 cr. p c clearly was to prevent multiplicity of trials and not only would that object be defeated but an extraordinary result will ensue if the various clauses of section 239 are read disjunctively. the reasons given by the allahabad high court therefore do not merit acceptance. the decision in singarachariar 's case 1934 indlaw mad 352 c has really no bearing upon the point before us. what was held there was that sections 235 1 and section 236 are mutually exclusive and if a case is covered by one of them it can not be covered by the other. in that case the question was whether a person who was first tried for an offence under section 380 i p c for stealing a blank second class railway ticket from the booking office tried for it and acquitted could not be tried subsequently for the offence of forgery by making entries in that ticket and using it. the acquittal in the previous case was urged as a bar under section 4031 of the code to the trial for an offence under section 467 i p c the contention apparently was that this was a case which fell under section 236 cr. p c and that if he had been tried alternatively for both the offences at the same trial the court could have dealt with him under section 237 cr. the high court however held that to be a kind of case which fell under section 2351 of the code and that since that was so the provisions of section 236 were excluded. it is difficult to appreciate how this case assists the conclusion arrived at by the high court. in d k chandra 's case 1951 indlaw mum 117 f b it was held that the provisions of sections 234 235 and 236. being exceptions to section 233 must be strictly construed and that if joinder of charges did not fall under any of them it would be illegal and contrary to law. the precise point which we have to consider here did not fall for consideration in that case i e whether the provisions of the various clauses of section 239 could be used together or not. this decision is therefore of little assistance. on the other band there is the decision of this court in the state of andhra pradesh v kandinmlla subbaiah which is to the effect that where several persons had committed offences in the course of the same transactions they could jointly be tried in respect of all those offences under section 239 of the code of criminal procedure and the limitation placed by section 234 of the code could not come into operation. there nine persons were jointly tried for an offence under section 5 1 c and d of the prevention of corruption act 1947 and section 109 i p c read with s 420 section 466 and section 467 i p c and all except one for offences under sections 420 467471 i p c some of them were also charged with separate offences under some of these provisions. two of the accused persons preferred a revision application before the high court of andhra pradesh in which they challenged the charges framed against them. the high court allowed the revision application. but on appeal by the state of andhra pradesh to this court this court held that there was no misjoinder of charges that the introduction of a large number of charges spread over a long period was a question of propriety and that it should be left to the judge or the magistrate trying the case to adopt the course which he thought to be appropriate in the facts and circumstances of the case. in so far as some of the charges were concerned this court pointed out that the special judge who was to try the case should consider splitting them up so that the accused persons would not be prejudiced in answering the charges and defending themselves. it is true that the question of reading the various clauses cumulatively did not specifically arise for decision in that case but the high court had held that the first charge was an omnibus charge containing as many as 203 offences and that it was in direct violation of sections 234 235 and 239 of the code of criminal procedure. dealing with this matter this court held at p 200 no doubt sub s 1 of section 234 provides that not more than three offences of the same kind committed by an accused person within the space of 12 months can be tried at the same trial. but then section 235 1 provides that if in any one series of acts so connected together as to form the same transaction more offences than one are committed by the same person he may be charged with and tried at one trial for every such offence. therefore where the alleged offences have been committed in the course of the same transaction the limitation placed by section 234 1 can not operate. no doubt the offence mentioned in charge No i is alleged to have been committed not by just one person but by all the accused and the question is whether all these persons can be jointly tried in respect of all these offences. to this kind of charges. 239 would apply. this section provides that the following persons may be charged and tried together namely 1 persons accused of the same offence committed in the course of the same transaction 2 persons accused of abetment or an attempt to commit such an offence 3 persons accused of different offences committed in the course of the same transaction. clearly therefore all the accused persons could be tried together in respect of all the offences now comprised in charge No 1. this court has thus clearly read the provisions of the various clauses cumulatively and we see no reason to read them differently. there remains the decision of this court in k v krishna murthy iyer v the state of madras in on which mr bhimasankaram strongly relied. in that case this court upheld the order of the high court of madras in quashing the charges in the exercise of its inherent powers even before the conclusion of the trial. it is true that there the charges were 67 in number and spread over a long period of time. that again was a matter which came before the high court before conviction and not after the trial was over. when an objection is taken at an early stage there is time enough to rectify an error. but in the case before us no objection was taken to multiplicity or misjoinder of charges before the learned additional sessions judge and it was only in the high court that the point was raised. in such circumstances what the court has to consider is whether prejudice has in fact been caused to the accused by reason of the multiplicity of charges or misjoinder if any of the charges. this is quite clear from the provisions of section 537 of the code as amended by act 26 of 1955. in willie william slaney v the state of madhya pradesh all the learned judges were in agreement on the point that this section and section 535 cover every case in which there is departure from the rules set out in ch. xix ranging from error omissions and irregularities in charges that are framed down to charges that might have been framed and were not and include a total omission to frame a charge at all at any stage of the trial. the whole question has again been examined by this court recently in birichh bhuian v the state of bihar subba rao j who delivered the judgment of the court has stated the position thus even if we were to assume that there has been a misjoinder of charges in violation of the provisions of sections 233 to 239 of the code the high court was incompetent to set aside the conviction of the respondents without coming to the definite conclusion that misjoinder had occasioned failure of justice. this decision completely meets the argument based upon dawson 's case. merely because the accused persons are charged with a large number of offences and convicted at the trial the conviction can not be set aside by the appellate court unless it in fact came to the conclusion that the accused persons were embarrassed in their defence with the result that there was a failure of injustice. for all these reasons we can not accept the argument of learned counsel on the ground of misjoinder of charges and multiplicity of charges. bhimasankaram supporting the view taken by the high court then contends that it is not permissible to frame a charge of conspiracy when the matter has proceeded beyond the stage of conspiracy and that in pursuance of it offences have actually been committed. a similar view was expressed by the same high court in the case which was reversed by this court in the state of andhra pradesh v kandinalla subbaiah 1962 2 scr 194 and it was held that conspiracy to commit an offence being itself an offence a person can be separately charged with respect to such a conspiracy. then this court has observed. this decision is sufficient to dispose of the point under consideration. in swamirathnam 's case 1 which is a decision of this court certain persons were tried for the offence of the conspiracy to cheat the members of the public and for specific offences of cheating in pursuance of that conspiracy. it was urged before this court that there was misjoinder of charges and persons. negativing the contention. this court held that the charge as framed disclosed a single conspiracy although spread over several years that there was one object of the conspiracy and that was to cheat the members of the public that the fact that in the course of years other joined the conspiracy or that several incidents of cheating took place in pursuance of the conspiracy did not have the effect of splitting the conspiracy into several conspiracies. that the several instances of cheating being alleged to be in pursuance of that conspiracy were parts of the same transaction and therefore the joint trial of the accused persons for the different offences was not vitiated. no doubt there is no discussion there as to the question whether the various clauses of section 239 could be combined or as to the impact of the provisions of section 233 to 236 on those of section 239. the actual decision of the case is however directly opposed to the contention now put forward before us. this decision has been followed in natwarlal sakarlal. mody v the state of bombay. a No iii of 1959 decided on january 19 1961. in that case the impact of section 120 b i p c on sections 233 and 239 of the code of criminal procedure was considered by this court and this court observed. here again the question of clubbing together of the various provisions of cls. a to d of section 239 was not raised expressly in the argument before the court. but the ultimate decision of the case would negative such argument. mr bhimasankaram then relying upon the decision in r v dawson 1960 2 w l r 435 contended that in any event it was not desirable to try the respondents at the same trial for as many as 83 offences and pointed out that these observations had received the approval of this court in the state of andhra pradesh v kandimalla subbaiah 1962 2 b c r 194. in the first place there the trial had not actually begun. again what was said by this court was that it is undesirable to complicate a trial by introducing a large number of charges spread over a long period but even so this was a question of propriety which should be left to the discretion of the judge or magistrate trying the case. objection was taken very seriously by mr bhimasankaram to the charge of conspiracy framed in this case. that charge reads thus adverting to the portion which we have bracketed his first objection was that the charge comprises within it not merely the conspiracy but also what was in fact done in pursuance of the conspiracy. his next objection was that it brought within its purview all the various offences which were alleged to have been committed by the respondents. the third objection was that no charge of conspiracy could have been framed after the conspiracy had borne its fruits. the last objection was that the charge of conspiracy was added to the charge sheet very late. we shall first deal with the third point. the offence of conspiracy is an entirely independent offence and though other offences are committed in pursuance of the conspiracy the liability of the conspirators for the conspiracy itself can not disappear. in the indian penal code as originally enacted conspiracy was not an offence. section 120 b which makes criminal conspiracy punishable was added by the indian criminal law amendment act 1913 8 of 1913 along with section 120 a section 120 a defines conspiracy and section 120 b provides for the punishment for the offence of conspiracy. criminal conspiracy as defined in section 120 a and consists of an agreement to do an illegal act or an agreement to do an act which is not illegal by illegal means. section 120 b provides that whoever is a party to a criminal conspiracy to commit an offence punishable with death imprisonment for life or rigorous imprisonment for a term of two years or upwards shall be punishable in the same manner as if he has abetted such offence unless there was an express provision in the code for the punishment of such conspiracy. criminal conspiracy was however not an unknown thing before the amendment of the indian penal code in 1913. but what the amendment did was to make that conspiracy itself punishable. the idea was to prevent the commission of crimes by so to speak nipping them in the bud. but it does not follow that where crimes have been committed the liability to punishment already incurred under section 120 b by having entered into a criminal conspiracy is thereby wiped away. no doubt as already stated where offences for committing which a conspiracy was entered into have actually been committed it may not in the particular circumstances of a case be desirable to charge the offender both with the conspiracy and the offences committed in pursuance of that conspiracy. but that would be a matter ultimately within the discretion of the court before which the trial takes place. in so far as the fourth point is concerned that would have a bearing not on the form of the charge but on the credibility of the evidence bearing on the point of conspiracy. as we are remanding the appeal to the high court for a fresh decision after full consideration of the evidence adduced in the case it would be open to it to consider this matter particularly while judging the credibility of the evidence of the approver. in so far as the portion included in the bracket is concerned we agree with the learned counsel that it should not have found place there. the ideas however of the committing magistrate in stating all that is said there appears to have been merely to describe the conspiracy and do nothing more. we do not think that either that or the other objection raised that is that the charge embraces within it all the offences said to have been committed by the respondents can properly. be said to vitiate the charge. the object in saying what has been set out in the first charge was only to give notice to the respondents as to the ambit of the conspiracy to which they will have to answer and nothing more. even assuming for a moment that this charge is cumbersome in the absence of any objection by the respondents at the proper time and in the absence of any material from which we could infer prejudice they are precluded by the provisions of section 225 from complaining about it at any rate after their conviction by the trial court. coming to the next point of mr bhimsankaram regarding the abuse of powers under section 342 his first contention was that long and involved questions were put to the respondents. his second contention was that reference was made to a number of documents in some of these questions and those documents were not made available to the respondents for answering those questions. the third contention was that the questions were involved confusing and bordered on cross examination. finally he said that the court did not perform its duty under section 342 4 of the code as amended as it failed to bring to the notice of the respondents that they may if they chose give evidence in their defence. in support of his first contention he referred to questions nos 4 8 9 10 and 20 put to the respondent No i and question No 12 put to the respondent No 2 and tried to show that those questions rolled up a large number of separate questions and that it could not have been possible for the respondents to give any rational answers to those questions. we have read the questions and so also the answers. while we are disposed to agree with learned counsel that the questions embrace a number of matters and that it would have been better if those matters had been made the subjects of separate questions the answers given by the respondents clearly show that they understood the questions and wherever possible they have given complete answers to those questions. that is to say they have given their explantion regarding the circumstances appearing in the evidence set out in the questions and wherever that was not feasible they have said that they would do so in their written statements. in fact written statements have been filed by each of them in which every point left over has been fully answered. we are informed that the questions had been prepared before hand by the learned additional sessions judge copies thereof were made available to each of the respondents and it was with reference to those copies that they gave their answers in the court. a pointed reference was made to question. No 20 put to respondent. No i which contains as many as 22 sub heads and it is said that it was an extremely unfair and embarrassing question. what the learned additional sessions judge has done is to err on the side of over cautiousness by putting every circumstance appearing in the evidence to the respondents for eliciting their explanations. his object was to obviate the possibility of a complaint before the appellate court that they were denied the opportunity of explaining the circumstances appearing in evidence against them because of defective questions. nor again do we think that there is any substance in the complaint made that the respondents had no opportunity of referring to the documents to which reference has been made in certain questions. no objection was taken on their behalf before the learned additional sessions judge and from the manner in which they have answered the questions there is no doubt that they must have had opportunity to look at the relevant documents and answer the questions. we are also satisfied that there is no substance in the complaint that the questioning bordered on cross examination. undoubtedly the learned additional sessions judge has questioned the respondents very fully and elaborately but to say that this bordered on cross examination is wholly unjustifiable. the object of the learned additional sessions judge quite clearly was as already stated to leave no loophole for a complaint to be made before the appellate court of incomplete or insufficient examination under section 342 finally we are clear that it was not the duty of the court to draw the pointed attention of the respondents to the provisions of sub s 4 of section 342 and tell them that they may if they chose enter the witness box. it is true that by introducing this provision the disability placed on an accused person in respect of giving evidence on oath in his own defence has been removed and to that extent such person is placed on par with an accused person under the english law. the new provision however does no more than lift the ban and does not impose a duty on the court to draw the attention of an accused person to its contents. apart from that the respondents were represented by counsel at the trial who knew very well what the law was. no complaint was made by the respondents even in appeal that they were ignorant of their right that had they known about it they would have given evidence on oath in their defence and that because of this they have been prejudiced. in the circumstances this point must also be rejected as being without substance. the irrelevant evidence to which mr bhimasankaram referred was certain account books. the entries in the account books of vesco show that certain sums of money were paid to various parties crompton engineering co lumin electric co d brothers radio and electrical madras vizagapatam municipality p v ramanayya bros and andhra power system. they also show payment case was that the payments which were entered in the account of vesco do not find a place in the account books of the corresponding firms or authorities because they were never made by vesco. the high court has pointed out that the main evidence on which the prosecution rests its case that the amount represented by the entries against these various firms were in. fact misappropriated by the respondents in the circumstance that there are no corresponding entries in the account books of those firms. the argument before the high court was and before us is that the absence of an entry can not of electricity duty to government. the prosecution be established by reference to section 34 of the indian evidence act which reads thus. what it does is to make entries in books of account regularly kept in the course of business relevant in all proceedings in a court of law. these entries are however not by themselves sufficient to charge any person with liability. therefore when a sues b for a sum of money it is open to him to put his account books in evidence provided they are regularly kept in the course of business and show by reference to them that the amount claimed by him is debited against b the entry though made by a in his own account books and though it is in his own favour is a piece of evidence which the court may take into consideration for the purpose of determining whether the amount referred to therein was in fact paid by a to b the entry by itself is of no help to a in his claim against b but it can be considered by the court along with the evidence of a for drawing the conclusion that the amount was paid by a to b to this limited extent entries in the account books are relevant and can be proved. section 34 does not go beyond that. it says nothing about non existence of entries in account books. we therefore agree with the high court that the account books of the various concerns to whom payments are said to have been made by the respondents are not by themselves evidence of the fact that no payments were received by them. the decision in queen empress v grees chunder banerjee 1884 i l r 10. cal 1024 upon which reliance is placed by the high court in support of its view is also to that effect. similarly in ram prashad singh v lakhpati koer 1902 i l r 30. cal 231 247. lord robertson during the course of the hearing has observed that no inference can be drawn from the absence of any entry relating to any particular matter which observation supports the view taken in queen empress v girish chander banerjee 1884 i l r 10 c l 1024. that however is not the only provision to be considered. there is section ii of the evidence act which provides that facts not otherwise relevant are relevant if they are inconsistent with any fact in issue or relevant fact. some of the facts in issue in this case are whether payments of certain sums of money were made to crompton engineering co and other firms or authorities. these are relevant facts. absence of entries in their account books would be inconsistent with the receipt of the accounts and would thus be a relevant fact which can be proved under section 11. the fact that no payments were received by those firms has been deposed to by persons connected with those firms and whose duty it was to receive and acknowledge amounts received by the firms or who were in charge of the accounts of these firms. for the purpose of showing that no amounts were received by the firms their account books would thus be as relevant as the vesco account books for the purpose of showing the contrary. similarly there is section 5 of the evidence act which reads thus it is the case of the prosecution that the alleged payments were never made by vesco to the various firms. it is also their case that these firms maintain their accounts in the regular course of business and it is their practice to enter in those accounts all payments received by them. both the sets of facts are relevant that is non receipt of the amounts by the firms and non existence of entries in their account books pertaining to those amounts. it is permissible therefore for the prosecution to lead evidence to drove both these facts. the best evidence to prove the latter set of facts consists of the account books of the firms themselves. it is under these provisions that the account books of the firms must be held to be relevant. what value to attach to them is another matter and would be for the court of fact to consider. it may further be mentioned that the account books of vesco show certain payments made to billimoria co of kharagpur. papers seized by the police include receipts purporting to have been signed by one j j billimoria on behalf of the firm. the prosecution case is that these receipts are forged documents and the entries in the account books of vesco are false. one of the partners of the firm was examined by the prosecution as a witness in the case and he produced the account books of the firm. those account books are in gujrati and he stated in his evidence that the accounts were regularly kept and that there were no entries in them corresponding to the entries in the vesco accounts. the high court held that since the account books were not translated they are not admissible in evidence. the high court was clearly wrong in so holding. in coming to this conclusion it has relied upon the provisions of section 356 2a of the code of criminal procedure. that section reads thus this provision relates only to the oral evidence adduced in a case and not to documentary evidence. mr bhimasankaram therefore very rightly did not support the view of the high court. in the circumstances we wish to say nothing further on the point. we may however point out that billimoria himself gave his evidence in english. another point urged by mr bhimasankaram was that as many as 2 000 documents were dumped by the prosecution in this case out of which 1600 documents were not sought to be proved by it. further 64 documents were missing from the records when they came to the high court and that this has caused serious prejudice to the respondent. no objection however was taken in the courts below on this score and in the absence of any prejudice to the respondents. we do not think that we should take notice of the complaint made by mr bhimasankaram. the third point stressed by him was that the approver was allowed to refresh his memory while deposing in the case by referring extensively to the account books and various documents produced in the case. this according to him was an absue of the provisions of section 159 of the evidence act. now section 159 expressly enables a witness while under examination to refresh his memory by referring to any writing made by himself at the time of the transaction concerning which he is being questioned or soon afterwards or to a writing made similarly by another person and read by the witness immediately or soon after the writing was made. section 160 provides that a witness may also testify to the facts mentioned in any such document as is mentioned in section 159. the complaint of mr bhimasankaram is that the approver should have been questioned about the various facts which were sought to be established through his evidence and it was only if and when he was in a difficulty that he should have been allowed to refer to the account books. instead of doing that what he was permitted to do was just to prove the various documents or read those documents and then depose with reference to them. in our opinion where a witness has to depose to a large number of transactions and those transactions referred to are or mentioned either in the account books or in other documents there is nothing wrong in allowing the witness to refer to the account books and the documents while answering the questions put to him in his examination. he can not be expected to remember every transaction in all its details and section 160 specifically permits a witness to testify the facts mentioned in the documents referred to in section 159 although he has no recollection of the facts themselves if he is sure that the facts were correctly recorded in the document. that is precisely what happened in this case and we do not think that the additional sessions judge adopted a procedure which was either a violation of law or was an abuse of the power of the court. the next point is a formidable one. according to mr bhimasankaram the pardon tendered to the approver was illegal and if the pardon is illegal his evidence is wholly inadmissible. further according to him the evidence of the approver was found by the additional sessions judge to be unreliable and therefore the first condition referred to in sarwan singh v the state of punjab was not satisfied. for all these reasons the evidence of the approver must be left out of account. if it is left out of account he contends there is nothing left in the prose cution case because as pointed out by the additional sessions judge himself the evidence of the approver is the pivot of the prosecution case. the pardon is stated to be illegal for two reasons. the first reason is that none of the offences alleged to have been committed falls within section 337 of the code of criminal procedure and the second reason is that the pardon was granted by an authority not empowered to grant it. section 337 1 as it stood before its amendment by act 26 of 1955 read thus. his contention is that where none of the offences is exclusively triable by the high court or the court of sessions pardon could be granted only if the offences are punishable with imprisonment which could extend to ten years but not if a higher punishment were provided for them. here one of the offences alleged against the respondents is criminal breach of trust punishable under section 409 i p c it is not exclusively triable by a court of sessions and the punishment as set out in the 7th column of schedule ii cr. p c was transportation for life or imprisonment of either description for ten years and fine. he contends that since the offence is punishable with transportation for life section 337 1 could not be availed of for granting pardon to the approver. it seems to us that it would not be correct to read section 337 1 in the way sought by learned counsel. the very object of this provision is to allow pardon to be tendered in cases where a grave offence is alleged to have been committed by several persons so that with the aid of the evidence of the person pardoned the offence could be brought home to the rest. the gravity is of course to be determined with reference to the sentence awardable with respect to that offence. on the strength of these considerations mr chari for the state contends that if the words any offence punishable with imprisonment which may extend to 10 years were interpreted to mean offences which were punishable with imprinsonment of less than 10 years grave offences which are not exclusively triable by a court of sessions will be completely out of section 337 1. he suggests that this provision can also be reasonably interpreted to mean that where the offences are punishable with imprisonment exceeding 10 years pardon may be granted to the approver. no doubt if this interpretation is accepted the object of the section that is to embrace within it the graver offences would be fulfilled but we wish to express no opinion on it. for the pardon granted in this case can be regarded as being within the ambit of section 337 1 for another reason. it will be noticed that transportation for life was not the only punishment provided for an offence under section 409 of the indian penal code even before the amendment made to the indian penal code by section 117 of the act 26 of 1955 the other alternative being imprisonment up to 10 years. therefore since the offence under section 409 was not merely punishable with transportation for life but alternately also punishable with imprisonment which could extend to 10 years section 337 1 would apply. this section does not expressly say that the only punishment provided for the offence should be imprisonment not exceeding 10 years. the reason why two alternative maximum sentences are given in col 7 that is transportation for life now imprisonment for life and imprisonment not exceeding 10 years appears to be that the offence is not exclusively triable by a court of session and could also be tried by a magistrate who except when empowered under section 30 would be incompetent to try offences punishable with transportation for life now imprisonment for life and the further reason that it should be open to the court of session instead of awarding the sentence of transportation for life to a convicted person to award him imprisonment in a jail in india itself for a period not execeeding 10 years. now of course by the amendment made by section 117 of act 26 of 1955 for the words transportation for life the words imprisonment for life have been substituted but the original structure of all the sections now amended continues. that is why they read rather queer but even so they serve the purpose of allowing certain offences triable by a court of session to be triable also by magistrates of the first class. be that as it may there is no substance in the first ground. what we have said about pardon in respect of an offence under section 409 would apply equally to that for one under section 120 b because the punishment for it is the same as that for the offence under section 409. the offence under section 467 read with section 471 is punishable with imprisonment for life or imprisonment of either description for a period of 10 years but it is exclusively triable by a court of session and therefore in so far as such offence is concerned the argument of mr bhimasankaram would not even have been available. as regards the offence under section 477 a it is one of those sections which are specifically enumerated in section 337 1 and the argument advanced before us and which we have rejected would not even be available with regard to the pardon in respect of that offence. it is true that the respondent No i alone was convicted by the additional sessions judge of this offence and the offence under section 467 read with section 471 but the validity of a pardon is to be determined with reference to the offence alleged against the approver alone and not with reference to the offence or offences for which his associates were ultimately convicted. coming to the next ground of attack on the validity of pardon the argument of mr bhimasankaram is that whereas section 337 1 speaks of pardon being granted by a district magistrate or presidency magistrate a sub divisional magistrate or any magistrate of first class except in cases where an enquiry or trial was pending before another magis tratc the pardon here was granted by the additional district magistrate in a case where an enquiry was pending before the district magistrate and is therefore illegal and of no avail. he contends that section 337 1 speaks of the district magistrate which expression does not include an additional district magistrate. mr bhimasankaram 's argument on the point may be summarised thus such a power can not be conferred upon an additional district magistrate because section 337 1 does not contemplate grant of pardon by an additional district magistrate and that the additional district magistrate would have no status other than that of a magistrate first class. no doubt under entry 9 a in part iii of sch. iii to the code a magistrate first class has the power to grant pardon under section 337 but it is limited by the proviso thereto to certain classes of cases. a case under enquiry or trial before another magistrate does not fall in any of these classes. therefore a pardon granted by him in such a case would be illegal. the magistrate before whom the enquiry or trial is proceeding or the district magistrate would be the only authorities competent to grant a pardon in such a case. alternatively the state government has not made any directions under sub s 2 of section 10 specifying the powers of the district magistrate which would lie exercisable by the additional district magistrate concerned. in order to appreciate and consider the argument it is desirable to bear in mind the changes in the magisterial set up in the former province of madras which comprised within it the district of visakhapatnam. by government order No 3106 dated september 9 1949 the government of the province of madras issued certain instructions to the magistrates in pursuance of the separation of the judiciary from the executive. it divided the magistrates into two groups judicial magistrates and executive magistrates. the latter category comprises of the executive officers of the revenue department on whom the responsibility for the maintenance of law and order was to continue to rest. para 4 of the instructions provides. para 5 provides that as officers of the revenue department those magistrates would be under the control of the government through the board of revenue. the additional district magistrates independent would also be under the control of the government through the board of revenue. the category of judicial magistrates was constituted of the following 1 district magistrate 2 sub divisional magistrates 3 additional first class magistrates and 4 second class magistrates sub magistrates. the district magistrate was constituted as the principal magistrate of the district and as such was entrusted with the duty of general administration and superintendence and control over the other judicial magis trates in the district. in addition to his general supervisory functions and the special powers under the code of hearing revision petitions transfer petitions appeals from second class magistrates and the like the district magistrate was also to be assigned a specific area the cases arising from which would be disposed of normally by himself. this body of magistrates was made subordinate to the high court. till the separation between the judiciary and the executive was effected the collector as the head of the revenue department was also the district magistrate. consequent on the separation. he became only an additional district magistrate. part iv of the government order deals with the allocation of powers between the judicial and executive magistrates. para 193 occurring in this part deals with allocation of powers under the provisions of the code otherwise than these referred to in the earlier paragraphs. it specifically provides that the power to tender pardon udder section 337 shall be exercised by executive magistrates except in cases referred to in the proviso to sub s 1 of that section in which case a judicial magistrate may exercise that power. in spite of the government order all magistrates who have under sch. iii to the code of criminal procedure the power to grant pardon will continue to have that power and therefore a pardon granted by a judicial magistrate in contravention of the government order will not be rendered invalid. however that is not the point which is relevant while considering the argument of mr bhimasankaram. his point is that the proviso to section 3371 confers the power on the district magistrate to grant pardon in a case pending before another magistrate and not on a district magistrate and therefore his power to grant pardon in such cases can not be conferred under sub s 2 of section 10 on an additional district magistrate. according to him under that section only the powers of a district magistrate meaning thereby only the powers under entry 7 a in part v of sch. as distinguished from the power under the proviso to section 337 1 can be conferred upon an additional district magistrate. secondly according to him no direction has in fact been shown to have been made by the state government conferring upon an additional district magistrate the power of the district magistrate to grant pardon. in our opinion there is no subtance in the contention. the power conferred by sub s 1 of section 337 on the different clauses of magistrates is of the same character. the power to grant pardon in a case pending before another magistrate is no doubt conferred by the proviso only on the district magistrate. but entry 7 a in part v of sch. iii when it refers to the power of a district magistrate under section 337 1 does not exclude the power under the proviso. there is therefore no warrant for drawing a distinction between the powers of the district magistrate and the powers of a district magistrate. the power of a district magistrate to grant pardon has been specifically conferred on additional district magistrates as would appear from section No 37 of sch. iii of the government order which reads thus. mr chari for the state advanced a further argument before us in case his main argument that the pardon was valid failed and said that the approver even if we ignore the pardon was a competent witness. in support of his contention he strongly relied upon the decision in kandaswamy gounder. in re the appellant i l r 1957 mad 715 and the cases referred to therein in particular the decision in winson v queen 1866 l r i q b what has been held in all these cases is that where the trial of a person who was charged with having committed an offence or offences jointly with several persons is separated from the trial of those persons he would be a competent witness against them though of course there will always be the question as to what weight should be attached to his evidence. mr chari then referred to section 133 of the evidence act and pointed out that this section clearly makes an accomplice evidence admissible in a case and that an approver whose pardon is found to be invalid does not cease to be an accomplice and contends that he is therefore as competent a witness as he would have been if he had not been granted pardon at all and not been put on trial. learned counsel further pointed out that the decisions show that however undesirable it may be to adduce the evidence of a person jointly accused of having committed an offence along with others his evidence is competent and admissible except when it is given in a case in which he is being actually tried. this legal position does not according to him offend the guarantee against testimonial compulsion and he points out that that is the reason why an accused person is not to be administered an oath when the court examines him under section 342 1 for enabling him to explain the circumstances appearing in evidence against him. if pardon is tendered to an accused person and eventually it is found that the pardon is illegal such person is pushed back into the rank of an accused person and being no more than an accomplice would be a competent witness. the question raised is an important one and requires a serious consideration. mr chari in support of his contention has cited a large number of cases indian as well as english and certain passages from halsbury 's laws of england. but in the view we take about the legal validity of the pardon tendered we do not wish to pronounce one way or the other on this very interesting question. now as regards the reliability of the approver. it is no doubt true that an approver has always been regarded as an infamous witness who on his own showing has participated in a crime or crimes and later to save his own skin turned against his former associates and agreed to give evidence against them in the hope that he will be pardoned for the offence committed by him. the high court seems to think that before reliance could be placed upon the evidence of the approver it must appear that he is a penitent witness. that in our opinion is not the correct legal position. the section itself shows that the motivating factor for an approver to turn what in england is called king 's evidence is the hope of pardon and not any noble sentiment like contrition at the evil in which he has participated. whether the evidence of the approver should in any given case be accepted or not will have to be determined by applying the usual tests such as the probability of the truth of what he has deposed to the circumstances in which he has come to give evidence whether he has made a full and complete disclosure whether his evidence is merely self exculpatory and so on and so forth. the court has in addition to ascertain whether his evidence has been corroborated sufficiently in material particulars. what is necessary to consider is whether applying all these tests we should act upon the evidence of the approver should be acted upon. we however find that certain documents upon which mr chari wants to rely are not included in the paper book. it would take considerable time if we were to adjourn this matter now and give an opportunity to the parties to include those documents on record. the better course would be for us to set aside the acquittal of the respondents and send back the appeal to the high court or being decided on merits. the high court will of course be bound by the finding which we have given on the questions of law agitated before us. what it must now do is to consider the entire evidence and decide for itself whether it is sufficient to bring home all or any of the offences to the respondents. we may mention that the high court 's observation that the approver 's evidence was treated as unreliable by the learned additional sessions judge is not correct. of course the view taken by the additional sessions judge is not binding on the high court. but it should remove from its mind the misconception that the additional sessions judge has not believed him. there is another thing which we would like to make clear. the decision in sarwan singh v the state of punjab 1957 b c r 953 on which reliance has been placed by the high court has been explained by this court in the case of maj e g barsay v the state of bombay. this court has pointed out in the latter decision that while it must be shown that the approver is a witness of truth the evidence adduced in a case can not be considered in compartments and that even for judging the credibility of the approver the evidence led to corroborate him in material particulars would be relevant for consideration. the high court should bear this in mind for deciding whether the evidence of the approver should be acted upon or not. then again it would not be sufficient for the high court to deal with the evidence in a general way. it would be necessary for it to consider for itself the evidence adduced by the prosecution on the specific charges and then to conclude whether those charges have been established or not. the prosecution would be well advised if instead of placing the evidence on each and every one of those large number of charges against the respondents it chooses to select a few charges under each head other than the head of conspiracy and concentrates on establishing those charges this would save public time and also serve the purpose of the prosecution. with these observations we set aside the acquittal of the respondents and remit the appeal to the high court for decision on merits in the light of our observations. appeal allowed. case remanded.

IN-Ext

FACTS in 1929 the andhra engineering co.(aeco) which was originally a partnership firm formed by one d.l.n. raju was converted into a private limited, company with its headquarters at visakhapatnam. it obtained licences from the government under the electricity act for supply of electrical energy to visakhapatnam, anakapalli and some other places. as the aeco did not have the necessary capital to undertake the work, raju floated in 1933 a public limited company called visakhapatnam electric supply corporation ltd., and another in 1936 called the anakapalli electric supply corporation ltd. the aeco transferred its licences for the supply of electrical energy to the consumers of visakhapatnam to vesco and similarly transferred to aeco the licence to supply electrical energy to consumers at anakapalli. the aeco was appointed managing agent for each of these corporations under separate agreements. sometime later other industrial concerns, the andhra cements ltd., vijayawada and the east coast ceremics, rajahmurthy were started apparently by raju himself- and the aeco was appointed the managing agent of each of these concerns. the original managing agency agreement in favour of aeco with respect to vesco was for a period of 15 years the vesco had its own board of directors while the aeco had also its own separate board of directors. the vesco had no managing director but at each meeting of its board of directors one of the directors used to be elected chairman. the same practice was followed at the meeting of the general body of the shareholders. the aeco on the other hand always had a managing director, first of whom was d.l.n. raju. he died in the year 1939 and was succeeded by r.k.n.g. raju, an advocate of rajahmundry. this person, however, did not shift to visakhapatnam on his becoming the managing director but continued to stay most of the time at rajahmundry. the aeco as managing agents of vesco had appointed in 1939 one d.v. appala raju, a trusted employee, as its representative and as the secretary of vesco. in 1944 this person resigned from his appointments and started his own business in radio and electrical goods in the name of d. brothers. he was succeeded by t. visweswara rao, an employee of the aeco. eventually their choice fell on g. v. subba raju, resident of manchili, who held a large number of shares in the aeco and who was, besides, related to r.k.n.g. raju by marriage. he was assured that by consenting to become the managing director be would not be required to discharge onerous duties and that the respondent no. i would look to all the affairs of vesco. he agreed and was elected managing director of aeco in the middle of 1948. upon this understanding he accepted the position offered to him. the vesco used to receive large amounts of money from high tension power consumers such as the railways, k. g. hospital, the port administration, the andhra university etc., by cheques. but domestic consumers usually paid their bills in cash to the bill collectors who used to hand over their collections to the respondent no. 2. the amount totalled up at the end of the day was posted in vesco's cash handover book as "'by safe" indicating that this amount was kept in the safe, though in fact it was not. on the basis of the entries in the handover book the final accounts were written up. the respondent no. i opened four personal accounts in different banks, including the imperial bank of india . when the respondent no. i had to issue a personal cheque on any of these banks he used to ask the second respondent to send an equivalent amount to the bank concerned for being credited to his account. these amounts also used to be noted in the private note book and entered. another thing which the respondent no. i initiated was opening a heading in the ledger called "advance purchase of materials." amounts which had been misappropriated used to be posted therein though in fact no orders were placed for any material. it may be mentioned that subba raju used to visit visakhapatnam twice a month and check up the account books. at that time it used to be represented to him that the amounts which were shown to be in the safe and not found therein had been sent to the bank for being deposited. apparently subba raju was fully satisfied with this and other explanations and, therefore, he appointed one c. s. raju, who was the manager of andhra cements to supervise over the affairs of vesco. apparently because of this a new method of misappropriation was adopted by the respondents by starting in the vesco account books, an account called "suspense account". a lakh of rupees passed through that account. amounts which were misappropriated used to find their way in this account. a new cash book was also said to have been prepared by the conspirators with the object of covering up the misappropriations which had been made. besides that, c. s. raju's management of andhra cements had landed it into a loss of rs. 30, 000/-`. because of all these things he had c. s. raju replaced towards the end of 1951 by one subbaramayya, a retired finance officer from the madras electricity board both as a director of andhra cements and as a supervisor over the accounts of vesco. he, however, was unable to obtain any information. in january, 1952 he therefore brought one s. g. krishna aiyar who had vast experience in the maintenance of accounts of electrical undertaking's having been chief accountant of the south madras electric supply corporation, to undertake an investigation and then to act as financial adviser. krishna aiyar after his appointment made close enquiry and submitted an interim report. that report showed that during the period 1948-49 rs. 33, 271-10-0 shown as paid to the andhra power system were in fact not paid. the interim report showed that there was a shortage of about rs. 90, 000/- for this period. in april, 1952 the collector attached vesco properties for realising this amount. on april 30, 1952 the respondent no. 1, by selling some of his property, himself paid rs. 50, 000/- to the andhra power system towards the sum due to it from vesco and had promised to pay the balance shortly thereafter. he was given time for doing so but he failed to pay it. the directors of vesco thereafter authorised k. s. dutt, one of the directors to lodge a complaint with the police which he accordingly lodged on may 19, 1952. on the next day the police placed an armed guard around the office of the respondent no. i and seized a number of papers. as a result of investigation they found that there was a total misappropriation of rs. 3, 40, 000/-. on september 13, 1954 ramana offered to make a full confession to the additional district magistrate (independent) who was empowered to grant pardon under s. 337 of the code of criminal procedure. he, however, directed ramana to make his confession before a submagistrate. the latter accordingly made a confession on november 15, 1954 and on november 17, 1954 the additional district magistrate granted him pardon and that is how he came to be examined as a witness in this case. the additional sessions judge convicted both the respondents, the respondent no. i in respect of each head of the offences with which he was charged and the respondent no. 2 in respect only of the offences of conspiracy and misappropriation. in the first place according to the high court, joint trial of two or more persons in respect of different offences committed by each of them is illegal and that here as they were charged with having committed offences under s. 120-b, s. 409, s. 477-a and s. 476/467, i.p.c. they could not be tried jointly. ARGUMENT the points which he urged are briefly these: (1) that there was a misjoinder of charges and persons in that the various provisions of s. 239 were clubbed together and an omnibus charge of conspiracy was framed which on its face was one likely to embarrass the respondents and make their task of defending themselves difficult. (2) the procedure adopted in the investigation and committal stages was irregular. (3) irrelevant evidence was introduced and some evidence was introduced in a manner not authorised by the evidence act. (4) that the court abused its powers under s.342, cr. p.c. while conducting the examination of the respondents. (5) the evidence of the approver was inadmissible because the pardon granted to him was illegal, that, in any case, it is unreliable, was so found even by the sessions judge and must, therefore, be rejected. if the evidence of the approver is left out the remaining evidence would be inadequate to sustain the prosecution case. as many as 2, 000 documents were "dumped" by the prosecution in this case out of which 1600 documents were not sought to be proved by it. further, 64 documents were missing from the records when they came to the high court and that this has caused serious prejudice to the respondent. ISSUE whether there was a misjoinder of parties and of persons. ANALYSIS s. 120 b provides that whoever is a party to a criminal conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards shall be punishable in the same manner as if he has abetted such offence unless there was an express provision in the code for the punishment of such conspiracy. the first charge is in respect of the conspiracy alleged to have been entered into by the two respondents, k. v. ramana, the approver, and others "known and unknown" to commit criminal breach of trust of the funds of vesco and, in order to screen its detection, to falsify the accounts of vesco and to use forged documents as genuine. on the face of it this is a valid charge. but certain objections have been taken to it with which the court will deal at the appropriate place. the second charge is for an offence of criminal breach of trust punishable under s. 409 and the accusation therein is that the two respondents along with ramana, misappropriated 69 items aggregating to a little over rs. 3, 20, 000/-. it is clear from the charge that some of the amounts were misappropriated between april, 1947 and march, 1950, some between april, 1947 and march, 1949, some between april, 1947 and march, 1951 and quite a large number between september, 1947 and march, 1950 and a still large number between april, 1951 and march, 1952. it is thus apparent that offences committed within a space of 12 months were tried along with offences committed beyond that period. unless, therefore, the provisions of s. 239 are applicable it would follow that there was a misjoinder of charges. the third charge is that the two respondents, along with the approver ramana made false entries on seven different dates in the account books between september 19, 1947 and march 18, 1952 and thus committed an offence under s. 477-a, i.p.c. the fourth charge is that the two respondents, along with the approver ramana forged six documents on different dates between march 28, 1949 and november 12, 1951 and thus committed an offence under s. 471 read with s. 467, i.p.c. there the learned judges have held that these clauses are mutually exclusive and they cannot be simultaneously applied and to construe them as supplementing each other would be enlarging the scope of the exceptions. each clause is an exception to the general rule enacted in s. 233, cr. p.c. if such a combination is permissible, all persons accused of offences described in cls. (a) to (g) can be tried together in one case which certainly involves a bewildering multiplicity of charges and which would obviously set at naught the salutary principle contained in s. 233. s 236 is a special provision available in case of doubt and is neither subject to the limitations prescribed by s. 233 nor those of the other preceding provisions. now, if the respondent no. 1 were alone tried upon the second, third and the fourth charges the provisions of s. 235(1) could have been pressed in aid if the allegations were that the offences were so connected together as to form one and the same transaction and the validity of the trial would not have been open to any attack. similarly if the second respondent were alone tried on the second charge his trial would not have been open to any objection if the allegation were that the offences were so connected together as to form the same transaction. here, however, the court a case where the prosecution alleges that there was additionally a conspiracy to which apart from the two respondents the approver and some other persons were parties and where in both the respondents were tried together. a conspiracy must be regarded as one transaction and, therefore, a single individual charged with it could be tried with the aid of s. 235(1) for all the acts committed by him in furtherance or in pursuance of the conspiracy without the limitations imposed by s.234(1). the only provision in the code which permits the joint trial of more than one person is s. 239 and what the court to see is whether under that provision the two respondents could have been jointly tried for the offences with which they were charged. on the other hand at the end of cl. (f) there is a conjunction 'and'. now, since s. 234(1) cannot be properly read overriding s. 235(1) there is no valid reason for construing it as overriding the provisions of s. 239 either. s, 239 must be read at least subject to ss. 234(1) and 235(1) on the ground that if there are certain restrictions with respect to the trial of a single accused there is no reason why those restrictions will disappear if an accused person is tried along with several other persons. thus where several persons are accused of more offences than one of the same kind committed by them jointly within a period of 12 months, the number of offences for which they could be tried cannot exceed three. in this connection he relied upon the words "within the meaning of s. 224" occurring in cl. (c) of s. 239. these words clearly show that cl. (c) of s. 239 is subject to the provisions of s. 234. in the court’s opinion the words "within the meaning of s. 234" indicate that what was meant by the words offence of the same kind" "'persons accused of more offences than one of the same kind not exceeding three in number"or may have used the words" person accused of more than one offence of the same kind to the extent permissible under s. 234. therefore, even if the expression "'same transaction" alone had been used in s. 235(1) it would have meant a transaction consisting either of a single act or of a series of connected acts. the expression "same transaction" occurring in cls. (a), (c) and (d) of s. 239 as well as that occurring in s. 235(1) ought to be given the same meaning according to the normal rule of construction of statutes. looking at the matter in that way, it is pointless to inquire further whether the provisions of s. 239 are subject to those of s. 236(1). the provisions of sub-s. (2) and (3) of s. 235 are enabling provisions and quite plainly can have no overriding effect. but it would be open to the court to resort to those provisions even in the case of a joint trial of several persons permissible under s. 239.s. 236 is also an enabling provision to be availed of in case of doubt and it is meaningless to say that s. 239 is subject to s. 236. bearing in mind the fact that the provisions in the "former part" of chapter xix are applicable to charges made with the aid of s. 239 only "so far as may be" it would not be right to construe s. 239 as being subject to the provisions of ss. 233 to 236. the court could not, however, give the expression such a restricted meaning. for, even in the absence of those words, the earlier provisions could not have been ignored. for, it is a rule of construction that all the provisions of a statute are to be read together and given effect to and that it is, therefore, the duty of the court to construe a statute harmoniously. thus, while it is clear that the sections preceding s. 239 have no overriding effect on that section, , the courts are not to ignore them but apply such of them as can be applied without detracting from the provisions of s.239. indeed, the very expression 'so far as may be' emphasises the fact that while the earlier provisions have to be borne in mind by the court while applying s. 239 it is not those provisions but the latter which is to have an overriding effect. criminal conspiracy as defined in s. 120-a and consists of an agreement to do an illegal act or an agreement to do an act which is not illegal by illegal means. criminal conspiracy was, however, not an unknown thing before the amendment of the indian penal code in 1913. but what the amendment did was to make that conspiracy itself punishable. the idea was to prevent the commission of crimes by, so to , speak, nipping them in the bud. but it does not follow that where crimes have been committed the liability to punishment already incurred under s. 120-b by having entered into a criminal conspiracy is thereby wiped away. no doubt, as already stated, where offences for committing which a conspiracy was entered into have actually been committed it may not, in the particular circumstances of a case, be desirable to charge the offender both with the conspiracy and the offences committed in pursuance of that conspiracy. but that would be a matter ultimately within the discretion of the court before which the trial takes place. in so far as the fourth point is concerned, that would have a bearing not on the form of the charge but on the credibility of the evidence bearing on the point of conspiracy. the prosecution be established by reference to s. 34 of the indian evidence act which reads thus as what it does is to make entries in books of account regularly kept in the course of business relevant in all proceedings in a court of law. these entries are, however, not by themselves sufficient to charge any person with liability. therefore, when a sues b for a sum of money it is open to him to put his account books' in evidence provided they are regularly kept in the course of business and show by reference to them that the amount claimed by him is debited against b. the entry though made by a in his own account books, and though it is in his own favour is a piece of evidence which the court may take into consideration for the purpose of determining whether the amount referred to therein was in fact paid by a to b. the entry by itself is of no help to a in his claim against b but it can be considered by the court along with the evidence of a for drawing the conclusion that the amount was paid by a to b. to this limited extent entries -in the account books are relevant and can be proved. s. 34 does not go beyond that. it says nothing about non-existence of entries in account books. the court, therefore, agree with the high court that the account books of the various concerns to whom payments are said to have been made by the respondents are not by themselves evidence of the fact that no payments were received by them. the decision in queen empress v. grees chunder banerjee ((1884) i. l. r. 10 cal 1024.), upon which reliance is placed by the high court in support of its view is also to that effect. similarly in ram prashad singh v. lakhpati koer ((1902) i. l. r. 30 cal 231, 247). lord robertson during the course of the hearing has observed that no inference can be drawn from the absence of any entry relating to any particular matter which observation supports the view taken in queen empress v. girish chander banerjee ( (1884) i.l.r. 10 c.l 1024. ). there is s. ii of the evidence act which provides that facts not otherwise relevant are relevant if they are inconsistent with any fact in issue or relevant fact. some of the facts in issue in this case are whether payments of certain sums of money were made to crompton engineering co., and other firms or authorities. absence of entries in their account books would be inconsistent with the receipt of the accounts and would thus be a relevant fact which can be proved under s. 11. the fact that no payments were received by those firms has been deposed to by persons connected with those firms and whose duty it was to receive and acknowledge amounts received by the firms or who were in charge of the accounts of these firms. for the purpose of showing that no amounts were received by the firms, their account books would thus be as relevant as the vesco account books for the purpose of showing the contrary. there is s. 5 of the evidence act which reads thus as it is the case of the prosecution that the alleged payments were never made by vesco to the various firms. the offence under s. 467 read with s. 471 is punishable with imprisonment for life or imprisonment of either description for a period of 10 years but it is exclusively triable by a court of session . as regards the offence under s. 477-a, it is one of those sections which are specifically enumerated in s. 337 (1) and the argument advanced before the court and which the court rejected would not even be available with regard to the pardon in respect of that offence. it is true that the respondent no. i alone was convicted by the additional sessions judge of this offence and the offence under s. 467 read with s. 471 but the validity of a pardon is to be determined with reference to the offence alleged against the approver alone and not with reference to the offence or offences for which his associates were ultimately convicted. the decision in sarwan singh v. the state of punjab ([1957] b. c. r. 953.), on which reliance has been placed by the high court has been explained by this court in the case of maj. e. g. barsay v. the state of bombay . this court has pointed out in the latter decision that while it must be shown that the approver is a witness of truth, the evidence adduced in a case cannot be considered in compartments and that even for judging the credibility of, the approver the evidence led to corroborate him in material particulars would be relevant for consideration. the high court should bear this in mind for deciding whether the evidence of the approver should be acted upon or not. then again it would not be sufficient for the high court to deal with the evidence in a general way. it would be necessary for it to consider for itself the evidence adduced by the prosecution on the specific charges and then to conclude whether those charges have been established or not. the prosecution would be well, advised if, instead of placing the evidence on each and every one of those large number of charges against the respondents, it chooses to select a few charges under each head other than the head of conspiracy and concentrates on establishing those charges, this would save public time and also serve the purpose of the prosecution. the court set aside the acquittal of the respondents and remit the appeal to the high court for decision on merits in the light of our observations. STATUTE ss. 221 to 232 of ipc are comprised under the first sub-head and ss. 233 to 240 in the second. ss. 221 to 223 deal with the framing and content of charge. s. 224 deals with the interpretation of the language of the charge and s. 225 with the effect of errors in the charge. ss. 226 to 231 deal with the power of the court with regard to framing and altering charges and the procedure to be adopted at the trial where a charge is found to be defective or there is no charge or where a new charge is to be framed. s. 232 deals with the power of the appellate court or the high court when it discovers that there is material error in the charge. s. 233 provides that for every distinct offence of which any person is accused there shall be a. separate charge. but it also provides that this will be subject to the exceptions contained in ss. 234, 235, 236 and 239. the first three provisions relate to the framing of charges against a single accused person. s. 234 (1) deals with the trial of a person for offences of the same kind not exceeding three committed within the space of 12 months from the first to the last of such offences and s. 231 (2) what is meant by the expression 'offences of' the same kind'. this provision lifts partially the ban on the trial of a person for more than one offence at the same trial. s. 235(1), however, goes a step further and permits the trial of a person for more offences than one if they are so connected together as to form the same transaction. thus under this provision if the connection between the various offences is established the limitations placed by s. 234(1) both as regards the number and the period during which the offences are alleged to have been committed will not apply. sub-s. (2) of s. 235 deals with a case where an offence falls within two definitions and sub-s.(3) deals with a case in which a number of acts are alleged against an accused person, different combinations of which may constitute different offences. s. 236 which provides that if a single act or series of acts is of such a nature that it is doubtful which of several offences the facts which can be proved will constitute, the accused may be charged with having committed all or any of such offences and further provides that any number of such charges may be tried together. it also permits that charges could be framed against an accused person in the alternative if the court thinks fit. s. 239 cls. (a) and (b)- cl. (a) says that persons accused of the same offence committed in the course of the same transaction may be charged and tried together. this first thing to be noticed is that s. 239 does not read as if its various clauses can be applied only alternatively. cl. (b) says that persons accused of an offence and persons accused of abetment, or, of an attempt to commit such offence may also be charged and tried together. the opening words of the section show that it is an enabling provision and, therefore, the court has a discretion to avail itself cumulatively of two or more clauses. the concluding portion of s. 239 shows that the provisions contained in the former part of chapter xix shall, as far as may be, apply to the charges framed with the aid of s. 239. does this mean that the provisions of s. 233, 234, 235, and 236 must also be complied with? obviously, s. 233 does not override the provisions of s. 239. s. 234 cannot also be regarded as an overriding provision because reading it that way will lead to the clear result that whereas several accused persons can be charged at the same trial with any number of different offences committed by them in the course of the same transaction they cannot be tried also for -offences of the same kind exceeding three in number and committed beyond a space of 12 months from the first to the last. it could not have been the intention of the legislature to create such a situation. again, as already stated, s. 234(1) does not override the provisions of s. 235(1) which permits trial of a person for more offences than one committed during any period provided they are so connected together as to form one transaction. unless the court read s. 234(1) as not enacting a fetter on s. 235(1), it may not be possible to give full effect to the latter. it is under these provisions that the account books of the firms must be held to be relevant. what value to attach to them is another matter and would be for the court of fact to consider.

this appeal is by special leave against the judgment of the high court of punjab and haryana confirming the conviction of the accused under section 51c of the prevention of corruption act 1947 as also the sentence awarded by the sessions judge of one year 's rigorous imprisonment and a fine of rs 2500 in default six months rigorous imprisonment. the facts of the case in brief are that in view of the chinese invasion air field at sirsa required to be extended for which purpose the ministry of defence govt. of india took steps to acquire some lands of agriculturists pursuant to which a notification dated november 27 1962 was issued under section 4 of the land acquisition act 1894 for acquiring 51 79 acres of land situated in the state of ahmedpur. on the next day another notification was issued under section 6 of the land acquisition act on november 28 1962 and in view of the emergency action under section 17 was taken for obtaining possession of the land with a view to its development. the lands which were acquired belonged to several land holders including moti ram and p w 12 kewal chand. the collector gave his award on 26 2 63 in respect of these lands which actually measured 49 47 acres at rs 1350 per acre amounting to rs 66784 50 np. apart from this amount compensation was also awarded for standing crop amounting to rs 11073 13. before the land was actually acquired the appellant who was a major in the military engineering service was working as a garrison engineer and was inching of the extension. he had in anticipation of acquisition and execution of the work appointed a b ranadive p w 14 as assistant garrison engineer who was to be responsible for all the matters connected with the acquisition of land demarcation of boundaries as an engineer inching for execution of the contract and responsible for the maintenance of the air field. the work of the extension of aerodynamic was entrusted to one telu ram p w 8 contractor with whom the trusted to m e s department entered into an agreement on december 3 1962. this agreement was signed both by the appellant and p w 14. the work according to that agreement was to be done in 2 phases first phase was to commence on 10th january 1963 and was to be completed by 9th october 1963. after the completion of the first phase the second phase was to start on 10th october 1963 and completed by 9th may 1964. pursuant to this agreement it is said that symbolic possession of the land which was acquired was taken over by the tehsildar on 1st february 1963 after which at any rate it appears from exhibit p 24 that actual possession of this land was handed over by the said tehsildar on 13th. february 1963 to the appellant. the receipt ex. 24 bears the signature of n l handa the tehsildar and of sukhchain lal jain p w 11 on behalf of the military estate officer and the appellant. from this receipt it is evident that possession of 50 12 acres was handed over by the tehsildar and taken over by the appellant and the military estate officer sukhchain lal jain. the case of the prosecution initially was that after the land so acquired with the standing crop was taken possession of by the appellant. he sold the crop to moti ram and kewal chand for rs 2500 and facilitated the cutting and taking away of the crop by postponing the handing over of the possession to the contractor till the 5th april 1963 and misappropriated the money. in respect of this allegation the first information report exhibit p 29 was issued on 14 1 64 in which the following statement is relevant. it is alleged that major som nath accused who is a garrison engineer sirsa air field subsequently sometime in the months of march and april 1963 permitted the removal of the standing crop valued at rs 11073 13 by shri moti ram and kewal chand etc. after accepting illegal gratification of rs 3000 from them. major som nath did not account for this amount in the govt. revenues. he thus. abused his position as a public servant and caused pecuniary advantage to said shri moti ram and kewal chand by giving them standing crops worth rs 13000 for a consideration of. rs 3000 only which amount he accepted for his personal use and thereby also abused his official position and obtained pecuniary advantage for himself in a sum of rs. the facts disclose the commission of the offence of criminal misconduct as defined in section 51d read with section 52 of the prevention of corruption act 1947 by major som nath accused. a regular case is therefore registered and entrusted to inspector baldev rai handa for investigation. after this f i r certain statements were recorded by the military authorities being da to de dm dm 1 dn dl of mani gain mulkh raj ganpat ram telu ram kewal chand and sukhchain lal jain. a chargesheet was filed against the appellant under section 5 1 c and 5 1 d read with 5 2 of the prevention of corruption act on 5 8 1966 after obtaining sanction from the govt. of india ministry of home affairs on llth april 1966 as per exhibit p 23. the special judge acquitted the appellant of the second charge namely that being a public servant he had by corrupt or illegal means or by otherwise abusing his position as a public servant obtained for himself a sum of rs 2500 from moti ram of sirsa for cutting the crops and thereby committed offence under section 51d punishable under section 52. the accused was however convicted under the first charge for an offence under section 51c in that he being a garrison engineer incharge of the air field. sirsa and in that capacity entrusted with standing crops of sarson gram and lusan on 30 acres of land a part of 49 acres of land acquired by the govt. and which had been valued at rs 11073 13 by the revenue authorities dishonestly or fraudulently allowed moti ram of sirsa to misappropriate the said standing crop and thereby contravened section 51c of the prevention of corruption act punishable with section 52 of that act. against that conviction and sentence he appealed to the high court which maintained the conviction and sentence. the learned advocate for the appellant has meticulously taken us through the entire documentary and oral evidence and commented at length upon the various contradictions and incongruities in the case of the prosecution with a view to establishing that when the appellant took possession of the land there was no crop standing on it that tile possession of the land was in fact delivered to telu ram contractor on 10 1 1963 that the said contractor had admitted that possession of the entire land was received by him that he carried on the construction work in extending the aerodrome that 200250 donkeys were also used for doing the work by reason of which the crop was damaged before tehsildar had put the appellant in possession of the land and as a matter of fact there was no crop thereon when he got the possession of the land. it was also contended that the high court had not considered the contradictions in the earlier statement made by some of the witnesses to the military authorities and that it relied on many of the documents for affirming the conviction of the appellant without their actually being put to him under section 342. before we consider these contentions it is necessary to determine another submission of the learned advocate for the appellant which goes to the root of the jurisdiction of the court to try the offence under section 51c. if this contention is valid then the conviction of the accused can not stand and therefore it is necessary to deal with this matter first. it may be mentioned that though a complaint was made in the application for a certificate for leave to appeal to this court that the learned single judge of the high court should have acquitted the appellant on the sole ground that there was no proper sanction for the prosecution of the appellant under section 51 c of the prevention of the corruption act this question does not seem to have been urged before the high court. in any case we do not think that there is any validity in the submission. that the sanction given by the govt. of india does not cover the trial of the charge under section 51c of the prevention of corruption act. for a sanction to be valid it must be established that the sanction was given in respect of the facts constituting the offence with which the accused is proposed to be charged. though it is desirable that the facts should be referred to in the sanction itself nonetheless if they do not appear on the face of it the prosecution must establish aliunde by evidence that those facts were placed before the sanctioning authorities. it is therefore necessary to first examine the order of sanction to ascertain on what facts it has been accorded. the sanction that has been accorded is in the following terms 11th april 1966. whereas it is alleged that major som nath while functioning as garrison engineer m e s air field at sirsa from 13 2 63 to 54 1963 by corrupt or illegal means or by otherwise abusing his position as such public servant obtained pecuniary advantage of rs 2500 for allowing the standing crops to be cut from the land acquired for the extension of air field. sirsa and or he dishonestly or fraudulently realised and misappropriated rs 2500 during the aforesaid period as the value of the crops cut from the land acquired for the extension of air field. sirsa which crops had been entrusted to him as a public servant and he instead of depositing the said sale price into the govt. treasury converted it to his own use and whereas the said acts of major som nath constituted offences punishable under section 52 of the prevention of corruption act read with section 5 1 c and d act No 11 of 1947 of the said act and section 409 of the i p c and whereas the central govt. after fully and carefully examining the materials before it in regard to the said allegations and circumstances of the case consider that major som nath should be prosecuted in a court of law for the said offences. now therefore the central govt both hereby accord sanction under section 197 code of criminal procedure act No 5 of 1898 and section 61a of the prevention of corruption act 1947 act ii of 1947 for the prosecution of maj. som nath for the said offences and for any other offences punishable under the provision of law in respect of the aforesaid acts by the court of competent jurisdiction. by order and in the name of the president. sd a p veera raghavan. deputy secretary to the govt of india. from the above order it is apparent that the facts which the central govt. considered for the purposes of according sanction were a that the appellant as a public servant was entrusted with crops situated on the land acquired for the extension of air field sirsa b that by abusing his position as a public servant he allowed the standing crops to be cut from the said land. c that by corrupt or illegal means and by abusing his position as a public servant he obtained pecuniary advantage of rs 2500 as the value of the crops to be cut from the land andor he dishonestly or fraudulently misappropriated that sum by converting it into his own use instead of depositing the said sale price in the govt. treasury. on these facts and after applying its mind as spoken to by p w 10 kalra the government accorded its sanction for prosecution of the offences punishable under section 52 read with section 51c and 51d. the question therefore would be whether these facts were sufficient to sustain the sanction under 51c even if the charge under 51d had failed. this question in turnwill depend upon what are the ingredients of the offences under 51c and d read with section 52. under 51c a public servant is said to commit the offence of misconduct in the discharge of his duty if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do and under d if he by corrupt or illegal means or by otherwise abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage. it would be seen therefore that under section 51c a public servant will be said to commit the offence of misconduct in hi duties if he dishonestly allows any other persons to convert to his own use property which is entrusted to the said public servant the facts which have been set out in the order granting the sanction certainly are sufficient to indicate that the authorities granting the sanction had the offence under section 51c also in their contemplation. in fact the order specifically mentions thisprovision while granting sanction. we should have thought this was an obvious conclusion but the learned advocate for the appellant strenuously contended that the charge against the appellant was of a motiveless offenceand in any case the facts as disclosed show that not only at thetime when the first information report was given but even at the time when sanction was accorded that the prosecution wag merely concerned with the charge that the appellant bad allowed the crops to be cut on the condition that rs 2500 will be paid and received the money and misappropriated or converted it tohis own use by not paying it into the govt. treasury. there is therefore no basis for sanction for a charge under section 51c. it is further contended that the stand taken by the prosecution was that the persons who we re permitted to cut the crops bad not committed any offence. if so a charge under section 51c would implicate those persons also in the commission of an offence which certainly would not have been in the contemplation of the authorities granting the sanction. in support of this contention three decisions have been cited before us namely bhagat ram v state of punjab 1954 indlaw sc 188 madan mohan singh v state of u p privy council 82. and gokulchand dwarkadas mordrka v the king 1948 indlaw pc 39. bhagat ram 's case was not concerned with the sanction but only with the question whether the offence could be altered to one of abetment of an offence of section 409 i p c from one under section 409 simpliciter. it was held that an alteration of the appellant 's conviction under section 409 i p c into one of abetment thereof would imply a definite finding against the subordinate judge who is not before the court and as such it would be unfair to make such an alteration. we do not see how this case can assist the appellant because in the first ace there is no question of an alteration of the charge and secondly the circumstance that someone who is not a public servant abetted the appellant is hardly relevant. but even so the offence with which the appellant is charged under section 51c does not necessarily involve an abetment with the person whom he had dishonestly allowed to cut and take away the crop. for instance it is quite possible that the person whom he allowed to cut the crop may be his own relation or friend in whom he may be interested and who may however not know that the accused was doing something dishonest in permitting him to cut the crop. in any case the facts which have been stated in the sanction clearly indicate that the appellant has dishonestly allowed the crops to be cut so that there is no question of any inference or implication that the persons cutting the crops were abetting him in the offence. even if it were so the sanction can not be held to be had on that account. gokulchand dwarkadas 's case also is of no assistance to the appellant because in that case the sanction did not disclose the facts on which it was given but merely sanctioned the prosecution for a breach of certain provisions sir john beamont delivering the judgement of the judicial committee observed at page 84 but if the facts constituting the offence charged are not shown on the face of the sanction the prosecution must prove by extraneous evidence that those facts were placed before the sanctioning authority. nor in their lordships view is a sanction given without reference to the facts constituting the offence a compliance with the actual terms of cl. under that clause sanction has to be given to a prosecution for the contravention of any of the provision of the order. a person could not be charged merely with the breach of a particular provision of the order he must be charged with the commission of certain acts which constitute a breach and it is to that prosecution that is for having done acts which constitution breach of the order that the sanction is required. in the present case there is nothing on the face of the sanction and no extraneous evidence to show that the sanctioning authority knew the facts alleged to constitute a breach of the order and the sanction is invalid. the case of jaswant singh v the state of puniab. 1957 indlaw sc 59 was also cited by the respondent 's advocate in support of the contention that the trial of two offences requiring sanction was not valid. in that case sanction was given under section 6 of the prevention of corruption act 47 for the prosecution of the appellant for having received illegal gratification from one pal singh. he was charged with and tried for two offences under section 51 a of the act for habitually accepting or obtaining illegal gratification and under section 51d for receiving illegal gratification from pal singh. the session judge had found that both charges were proved. while in appeal the high court held that the appellant could neither be tried nor convicted of the offence under 51a as no sanction had been given in respect of it but upheld the conviction under section 51d for which sanction had been given. a perusal of the sanction would show that the sanctioning authority had applied their mind to only one instance but the prosecution were seeking to make the sanction cover the offence of a habitual bribe taker which clearly implies that the sanctioning authorities must consider the number of instances when the accused took bribes and on what occasions as would justify a charge of his being a habitual bribe taker. sinha j as he then was while dismissing the appeal observed at page 766. in the present case the sanction strictly construed indicates the consideration by the sanctioning authority of the facts relating to the receiving of the illegal gratification from pal singh and therefore the appellant could only be validly tried for that offence. the contention that a trial for two offences requiring sanction is wholly void where the sanction is granted for one offence and not for the other is in our opinion unsustainable. section 61 of the act bars the jurisdiction of the court to take cognizance of an offence for which previous sanction is required and has not been given. the prosecution for offence under section 51d therefore is not barred because the proceedings are not without previous sanction which was validly given for the offence of receiving a bribe from pal singh but the offence of habitually receiving illegal gratification could not be taken cognizance of and the prosecution and trial for that offence was void for want of sanction which is a condition precedent for the courts taking cognizance of the offence alleged to be committed and therefore the high court has rightly set aside the conviction for that offence. these cases instead of supporting the contention of the learned advocate amply demonstrate that the facts which formed the basis of the sanction and which was accorded after the sanctioning authority had fully applied its mind to them should be correlated to the particular offence or offences with which the accused is charged or convicted. in our view there is no justification for holding that the conviction under section 51c read with 52 is bad for want of the requisite sanction. now on the merits of the case as we said earlier the learned advocate for the appellant has referred to the evidence in meticulous detail and has commented thereon at length but this court ordinarily does not reappropriation the evidence with a view to arriving at its own finding as if it was a court of fact and does not ordinarily upset the findings of the high court which has on an evaluation of the evidence affirmed the trial court 's conviction and sentence. it has been contended firstly that the high court was in error in relying on certain evidence for convicting the accused which was not put to him. secondly the evidence that was necessary to unfold the story of the prosecution has not been produced by the prosecution but the trial court and the high court ignored this lacunas in the prosecution case. thirdly the judgments show that there was utter confusion in respect of the date on which possession of the acquired land was given to the appellant and the date on which it was given to the contractor for carrying on the work as also in respect of the fact whether there was any crop standing when the appellant took possession of the land and at what period of time the crop was cut and the work commenced. before we deal with the contentions urged on behalf of the appellant it is necessary to have a clear picture of certain broad features of the case. the air strip which was being extended is in one straight line with taxi ways. p w 14 ranadive tells us that if one were to go from the entrance of air field to the acquired land one would have to pass through rd 4500 to 1200. the acquired land extended from rd 1200 to rd 00. according to p w 8 telu ram he acquired possession of the land of the length from rd 4500 to rd 1200 on 10th january 1963 and that tile possession of the acquired land was not delivered to him as it had not been acquired by that time. exhibit do review report which is headed technical administration contract shows that the date of review was 9th february 1963. in this document the date of the conclusion of the contract is given as 3rd december62 and date of commencement of work as 10th january63 date of completion of 1st phase 9th october 63 and second phase 9th may 1964. to the question have all sites been handed over on due date the answer shown was an affirmative yes. there is however nothing in this document to show what is the site of which possession was handed over to and taken by telu ram on 10th january 63. it is not the case of the appellant that acquisition of the land on which the crop was standing had taken place nor could possession of it been handed over to him because he denies that there was any crop on the land when the possession of the land was handed over to him. that there was crop on the land is amply born out by a letter of the appellant dated 12th february 1963 addressed to mr g l nagpal sub divisional magistrate sirsa. in this letter he says 12th feb 1963. my dear mr nagpal i am writing to you with regard to. acquisition of land for sirsa airfield. as you know. the additional deputy commissioner hissar will be visiting his location on 13th feb 1963. the military estates officer delhi mr k k gamkhar will also be here on 13th morning. it is desirable that entire proceedings with regard to acquisition of land and determining compensation for standing crops for the total area of 39 58 acres in mirpur and ahmadpur villages tire finalised an this date. as i have told you personally we are keen to finalise the proceedings for the total area to be acquired by us and not by phses. this is interest of the project. i therefore request you to issue suitable instructions to your staff so that all the relevant papers may be suitably prepared. even if exhibit dq gave a correct picture it could be in relation to the airstrip already in existence as this would be necessary for a contractor who is charged with duty to carry out extension work to go on the site collect materials and get everything ready to execute his contract. in fact as we have noticed earlier this is what telu ram says in his evidence namely that on loan january63 no delivery of possession of the remaining land other than rd 4500 to 1200 the land in which there is the existing run way was given. it was then that he wrote on 23 1 1963 as per exhibit 8 to the assistant garrison engineer complaining that the possession of the whole of the land had not been delivered to him. a copy of this letter was sent to the garrison engineer the appellant. this letter shows two things a that complete site 4500 to 0 ft has not yet been handed over as it was presumed that the possession of the land could not be had so for and b that as levels have not been given the final excavation of the foundation can not be done and all subsequent operations are therefore withheld. this letter clearly indicates that some excavation was being done as otherwise there is no meaning in saying that final excavation can not be done. this is also consistent with the other evidence that some work was in progress which gain is in accord with the evidence of telu ram p w 8 that he got the possession of rd 4500 to rd 1200. the extension of the airstrip would mean that the existing airstrip is being extended so that the initial work can be started and continued on the existing airstrip. it is not as if the existing airstrip ends at the boundary of rd 4500 to rd 1200 so that the work of extension can go on in the existing airstrip even before possession of the acquired land was given. this is further confirmed by a perusal of the letter written by the appellant to telu ram p w 8 in reply to his letter dated 28th february63 not produced that necessary possession of the runway and taxi track has already been given to you. you are therefore requested to set out the work and get the same approved by the engineerin charge before starting the work. this shows that no work had in fact been undertaken on the land acquired and also that possession of the existing runway and track had already been given. nothing is specifically mentioned about possession of the acquired land being given to him on that date. the work on that land is only at the stage of getting approval. now the next question is when was the possession of the acquired land obtained by the appellant and when did he deliver it to p w 8. p w 14 says that symbolic possession was delivered to him in respect of the acquired land on the 1st february63. it would however appear from exh. p 24 that actual possession was delivered to the appellant on 13th february 63 as per the delivery receipt executed by him the tehsildar and p w 11 a representative of the military estate office and that even according to his letter already referred to exhibit p 13 there wag standing crop on the land. as otherwise there is no meaning in the appellant saying therein that it is desirable that entire proceedings with regard to acquisition of land and determining compensation for standing crops for the total area of 39 58 acres are finalised on the 13th february. there is also credible evidence that possession of the acquired land was not handed over to the contractor till late in march 63 though it was handed over to and taken over by the appellant on 13 2 63. the khasra girdawari exhibit p 3 would show that there was a crop of sargon mustard gram and lusan at any rate on 20th march 63 at a time when the land has been shown therein to have been in possession of the military authorities. p 2 is a certified copy by the tehsildar dated 18 9 63 which shows that as per the girdawari on 20 3 63 crops were standing on the lands in the village ahmedpur acquired by the military authorities for sirsa 3 airfield construction the details of which were that the total land acquired for airfield 49 acres the land on which crops were standing in good condition 23 acres and the land on which crops were standing in damaged condition 7 acres and uncultivated land 19 acres. mani ram patwari had stated that by the 20th march 1963 some ground had been cleared. sukhchain lal jain p w 11 who had also come to obtain possession on behalf of the military estate officer had said that he had seen some part of the crops had been cut by 13 2 1963 but was not aware who had cut them. this evidence however does not assist the accused. at the most it shows that a small portion of the crops were cut but it is apparent that that has not been taken into account by the collector in assessing the value of the crop because it is on that day that crops were inspected for that purpose and subsequently the agricultural officer also had in his letter dated 18 2 63 which has been cited in the award exhibit p 26 intimated that on inspection the crops were found to be very good. he had also given the approximate yield and the rate at which the crop can be valued with which the collector agreed and awarded compensation. it is therefore clear that in estimating the crop the small portion of the land where crops were stated to have been cut by the 13 2 63 even if true could not have been taken into account. it may also be stated that the contractor had written to the garrison engineer on 28 2 63 requesting him to hand over immediately the possession of the remaining portion of the land so that excavation work is not held up. he also inform in that letter that the excavation in all available portions of the taxi track and runway has been completed. this again does not specifically refer to the land which is being acquired. at any rate on the 23rd march 1963 p w 8 has again written to the garrison engineer namely the appellant that the excavation of the taxi track could not be proceeded with for want of alignment to be given which was pending for want because of standing crops in the land the possession of which has not been given so far. thereafter the following pertinent statement appears namely now today i find that the crops have been completely cut and as such it is requested that further necessary action in the matter of giving the alignment and possession of land may please be taken at your end. on the 6th april 1963 he has again written to the garrison engineer saying as follows. you have verbally asked me now to take the site after the crop is cut and the necessary marking of the alignment has been taken in hand but this handing over has not been shown on the site order book by the a g e b r despite my request. he may please be asked to complete this formality without any loss of time. in reply the appellant states in his letter exhibit p 12 dated the 10th april. the matter has already been discussed with you and finalised. no further action is required to be taken. it can be seen from the above that the appellant is reluctant to reply in writing as to what he is asking the contractor to do under verbal orders while the contractor for safeguarding his position is insisting on having it in writing. the trial court as well as the high court are in our view justified in holding that crops of sarson gram and lusan were standing on the land acquired by the military for extension of the aerodrome. it will also justify the conclusion that they were there at any rate till the 20th march 1963 and according to the letter of the contractor p w 8 on 23 3 63 they were completely cut. in so far as handing over of the possession of the land to the contractor p w 8 is concerned the trial court and the high court are equally justified in coming to the conclusion that the accused had not delivered the possession of the land to the contractor till quite late as would appear from the letter of p w 8 dated the 5th april 1963. we are aware of the argument addressed before us that some of the witnesses had said that the water channels had been closed in february 1963 and therefore no crop could thereafter have been standing on the land and must have been destroyed. there is also the further argument that some of the statements recorded by the military authorities were not taken into account as the high court had thought that since the deponents denied the contents the officers who recorded the statement might have been called to show that they were properly recorded. the learned advocate for the respondent also tried to support the stand taken by the high court. it 1is true that when a witness has admitted having signed his previous statements that is enough to prove that some statement of his was recorded and he had appended his signature thereto. the only question is what use can be made of such statements even where the witness admits having signed the statements made before the military authorities. they can at best be used to contradict in the cross examination of such a witness when he gives evidence at the trial court of the accused in the manner provided under section 145 of the evidence act. if it is intended to contradict the witness by the writing the attention of the witness should be called before the writing can be proved to those parts of it which are to be used for the purpose of contradicting him. if this is not done the evidence of the witnesses can not be assailed in respect of those statements by merely proving that the witness had signed the document. when the witnesses are contradicted by their previous statements in the manner aforesaid then that part of the statements which has been put to the witness will be considered along with the evidence to assess the worth of the witness in determining his veracity. the whole of the previous statement however can not be treated as substantive evidence. we do not find that the assessment of the evidence by the trial court and the high court even in the light of such of those previous statements that have been put to the witnesses in the manner stated above is in any way unjustified. it is said that some of the documents i e exhibit 8 10 and 11 have not been put to the witnesses even though the court relied upon them. as already noticed is the letter of telu ram jain to the assistant garrison engineer and p 10 is the letter of telu ram jain to the garrison engineer. both these related to possession of the acquired land not being given to him. in the examination of the accused under section 342 the special judge in our view did put all the circumstances against the accused which formed the basis of the conviction. he was asked about the symbolic delivery of possession the handing over of the actual possession of the land on 13 2 63 and the existence of crops on the date when possession was delivered on 16 2 63. he was asked about telu ram 's evidence and also that he had given possession of the land rd 1200 to rd 00 to the contractor after the crop had been cut. the letter exhibit p 13 was also put to him and he was asked about the existence of the crops. it can not therefore be said that circumstances appearing against the accused which have formed the basis of the conviction had not been put to him. the appellant has denied that there was any standing crop on the land acquired on any date after 13 2 63. on the other hand he emphatically asserted that at the time when the possession was delivered to him on 13 2 63 there was also no crops standing on the acquired land. this statement is clearly false as it is against credible documentary evidence at a time when there was no possibility of any charge being levied against the appellant. it is also incorrect because the contractor did not work on the acquired land since 1 2 63 that position is reflected in the review report initiated by the a g e on 9 2 63 vide exhibit dq. the appellant 's statement is therefore belied by the documentary evidence which shows unmistakably that there was on 13 2 63 bumper crops of different varieties standing on the land which was valued thereafter and compensation assessed. we do not therefore think that there is any justification in the criticism that circumstances appearing in the several documents have not been put to him. it is lastly contended that certain witnesses who would be necessary to unfold the prosecution story have not been called and in spite of the court directing the production of the usufruct register it was not produced. these omissions it is submitted by the learned advocate has prejudiced the accused. as the learned advocate for the respondent rightly pointed out with reference to each one of the persons who it was claimed should have been called that there was already evidence relating to the particular matter about which the person specified was sought to be called. for instance it is said that gamkhar military estate officer was not produced to prove the receipt exhibit p 24. but this was not necessary because gamkhar was not present nor did he sign the receipt. the person who had signed the receipt is sukhchain lal jain and he was examined as p w 11. similarly it is said that the tehsildar n l handa has not been produced. but when the prosecution relies upon the proof of exhibit p 24 as also to establish that there was standing crops on the land when the possession was delivered on 13 2 63 on certain witnesses who were present on the respective occasions. the nonexamination of other witnesses without anything more can not be treated as defect in the prosecution. before the high court also this grievance was aired but that court also likewise found no justification in it. we are therefore not impressed with this argument. on a careful consideration of the evidence both oral and documentary it is established that the appellant who was in charge of the expansion work on the air strip was given possession of the land acquired for that purpose on 13 2 63 that there was standing thereon a bumper crop of sarson gram and lusan on that day that he was therefore entrusted with this crop that he postponed giving delivery of the land to the contractor till at any rate after the 23rd march 1963 and before the 6th april 1963 and that he allowed the crop to be cut and taken away without in any way accounting for it which shows that it was done dishonestly and raudulently. the fact that otwithstanding overwhelming evidence particularly of his own admission at the time he denies that there were ever any crops when delivery of possession of the land acquired was taken by him further reinforces the conclusion that he allowed the crops to be cut away with dishonest or fraudulent motive. we do not think in these circumstances there is any justification whatever for interfering with the concurrent findings of the trial court and the high court that the appellant is guilty of an offence under section 51c read with section 52 of the prevention of corruption act and consequently the appeal is dismissed. appeal dismissed.

IN-Ext

FACTS this appeal is by special leave against the judgment of the high court of punjab and haryana confirming the conviction of the accused. the facts of the case in brief are that in view of the chinese invasion air field at sirsa required to be extended for which purpose the ministry of defence, govt. of india took steps to acquire some lands of agriculturists pursuant to which a notification dated november 27, 1962 was issued under section 4 of the land acquisition act 1894 for acquiring 51.79 acres of land situated in the state of ahmedpur. on the next day another notification was issued under section 6 of the land acquisition act on november 28, 1962 and in view of the emergency action under section 17 was taken for obtaining possession of the land with a view to its development. the lands which were acquired belonged to several land holders including moti ram and p.w. 12 kewal chand. the collector gave his award on 26-2-63 in respect of these lands, which actually measured 49.47 acres, at rs. 1350 per acre amounting to rs. 66,784.50 np. apart from this amount compensation was also awarded for standing crop amounting to rs. 11,073.13 np. the case of the prosecution initially was that after the land so acquired with the standing crop was taken possession of by the appellant. he sold the crop to moti ram and kewal chand for rs. 2500 and facilitated the cutting and taking away of the crop by postponing the handing over of the possession to the contractor. a chargesheet was filed against the appellant under section 5 (1) (c) and 5 (1) (d) read with 5 (2) of the prevention of corruption act on 5-8-1966 after obtaining sanction from the govt. of india, ministry of home affairs. ARGUMENT the learned advocate for the appellant has meticulously taken us through the entire documentary and oral evidence and commented at length upon the various contradictions and incongruities in the case of the prosecution with a view to establishing that when the appellant took possession of the land there was no crop standing on it-that tile possession of the land 'was in fact delivered to telu ram, contractor on 10-1-1963; that the said contractor had admitted 'that possession of the entire land was received by him; that he carried on the construction work in extending the aerodrome; that 200/250 donkeys were also used for doing the work by reason of which the crop was damaged before tehsildar had put the appellant in possession of the land and as a matter of fact there was no crop thereon when he got the possession of the land. it was also contended that the high court had not considered the contradictions in the earlier statement made by some of the witnesses to the military authorities and that it relied on many of the documents for affirming the conviction of the appellant without their actually being put to, him under section 342. it is further contended that the stand taken by the prosecution was that 'the persons who we're permitted to cut the crops bad' not committed any offence. ISSUE whether the facts were sufficient to sustain the sanction under 5(1)(c) even if the charge under 5(1)(d) had failed. this question in turnwill depend upon what are the ingredients of the offences under 5(1)(c) and (d) read with section 5(2). there was utter confusion in respect of the date on which possession of the acquired land was given to the appellant and the date on which it was given to the contractor for carrying on the work, as also in respect of the fact whether there was any crop standing when the appellant took possession of the land and at what period of time the crop was cut and the work commenced. ANALYSIS though it is desirable that the facts should be referred to in the sanction itself, nonetheless if they do not appear on the face of it, the prosecution must establish aliunde by evidence that those facts were placed before the sanctioning authorities. it is therefore necessary to first examine the order of sanction to ascertain on what facts it has been accorded. it is apparent that the facts which the central govt. considered for the purposes of according sanction were (a) that the appellant as a public servant was entrusted with crops situated on the land acquired for the extension of air field, sirsa ; (b) that by abusing his position as a public servant he allowed the standing crops to be cut from the said land. c. that by corrupt or illegal means and by abusing his position as a public servant he obtained pecuniary advantage of rs. 2500 as the value of the crops to be cut from the land and/or he dishonestly or fraudulently misappropriated that sum by converting it into his own use instead of depositing the said sale price in the govt. treasury. it would be seen therefore that under section 5(1)(c) a public servant will be said to commit the offence of misconduct in hi&; duties if he dishonestly allows any other persons to convert to his own use property which is entrusted to the said public servant the facts which have been set out in the order granting the sanction certainly are sufficient to indicate that the authorities granting the sanction had the offence under section 5(1)(c) also in their contemplation. no work had in fact been undertaken on the land acquired and also that possession of the existing runway and track had already been given. nothing is specifically mentioned about possession of the acquired land being given to him on that date. re no basis for sanction for a charge under section 5(1)(c. a person could not be charged merely with the breach of a particular provision of the order; he must be charged with the commission of certain acts which constitute a breach, and it is to that prosecution that is for having done acts which constitution breach of the order-that the sanction 'is required. in the present case -there is nothing on the face ,of the sanction, and no extraneous evidence, to show that the sanctioning authority knew the facts alleged to constitute a breach of the order, and the sanction is invalid. the case of jaswant singh v. the state of puniab. 1957 indlaw sc 59 was also cited by the respondent's advocate in support of the contention that the trial of two offences requiring sanction was not valid. STATUTE the facts disclose the commission of the offence of criminal misconduct as defined in section 5(1)(d) read with section 5(2) of the prevention of corruption act 1947 by major som nath accused. under 5(1)(c)-a public servant is said to commit the offence of misconduct in the discharge of his duty if he dishonestly or fraudulently misappropriates or otherwise converts for' his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, and under (d) if he by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.

this appeal is by special leave against the judgment and decree of the high court of kerala which dismissed an appeal against the judgment and decree of the subordinate court of havelikkara. the appellant had filed a suit on october 24 1942 for the recovery of rs 2 lakhs and interest thereon from the date of suit and for costs originally against the state of travancore now the state of kerala the respondent and three others who however were not made parties in the appeal before the high court. it has alleged in the plaint that the plaintiff appellant was wrongfully dispossessed from 160 acres of land along with the improvements which had been effected by him and as the state had appropriated those improvements without any right or title thereto he claimed the value of those improvements. it was the appellant 's case that he had been in occupation of the said 160 acres of cherikkal land unregistered dry lands in hilly tracts about which and the adjoining lands there was a dispute as to whether the same belonged to a jenmi family known as koodalvalli illom hereinafter called the illom or to the government of the erstwhile travancore state. the appellant 's father and the appellant had occupied these lands made improvement thereon by planting coconut trees arecanut palms peppervines rubber trees jack trees other trees and by constructing bungalow huts wells etc. in the bona fide belief that the lands belonged to the illom. it was stated that according to the practice prevailing in the erstwhile state of travancore the cultivators could enter into unoccupied waste lands belonging to the janmies with the object of cultivating and improving them and as they held the lands under them by paying rent the consent of the jemies to such occupation was implied. this practice it seems was also current in respect of lands belonging to the government before the travancore land conservancy act 4 of 1091 24 7 1916 hereinafter called the act. it is the case of the appellant that even after the act was passed unauthorised occupants of land belonging to the government who had made improvements therein had under the rules made both under the act and the land assignment act a preferential claim over others for getting kuthakapattom or assignment of the property in their possession. it may be mentioned that in respect of the 160 acres of land of the illom which were occupied by the appellant 's father and the appellant there was a dispute between the illom and the travancore state from about 1848. while this dispute was pending it appears the appellant applied to the conservator of forests for registration of the lands in his name but the application was rejected on june 14 1919 stating that the land applied for can not be registered ext. a while the application for registration was pending the dispute between the illom and the state of travancore had reached a stage when the illom had to institute a suit o section No. 126 of 1096. january 1918 in the district court at quilon for a declaration of its title to those properties. in that suit the appellant after his application for registration was rejected sought to get himself impleaded but that application also was rejected. thereafter the suit filed by the illom was dismissed on 28 6 1109 february 10 1934. an appeal against it was dismissed on september 27 1943. it may here be mentioned that while the suit of the illom i e o s No 126 of 1096 m e was pending in the district court quilon the government of travancore had initiated proceedings in ejectment against the appellant by l c case. 112 of 1100 1925 a d as the suit of the illom had been finally disposed of and the title of the illom to the lands was not established the appellant apprehending that he might be ejected in the above l c case filed a suit. o s 156 of 1103 m e 1927 28 a d in the district court at quilon against the respondent to establish his right and title to the said 160 acres and in the adjoining cherikkal lands in his possession. in that suit an injunction was prayed for in respect of 100 acres of the property involved in the suit but the prayer was rejected. against that order a civil miscellaneous appeal No 206 of 1110 m e 1934 35 a d was filed in the high court of travancore. the high court issued a commission for inspecting the properties and the commissioner in his report part 13 of ext. cc set out the improvements made by the appellant on the lands which comprised of a bungalow in which the appellant was residing a number of small houses. a rubbers state and a large number of other valuable trees like jack trees mango trees coconut trees etc. it appears that as there was no injunction restraining his dispossession in l c case. 112 of 11 00 m e an order was passed for dispossessing the appellant on july 24 1939 ext. the appellant pursuant to this order was dispossessed from the lands and possession of these lands was given to the second defendant nair service society ltd in august 1939. thereafter the suit out of which this appeal arises was filed against the government on october 24 1942. the respondent state contended that the appellant encroached on the suit lands that proceedings were taken against him in l c case. 112 of 11 00 m e and he was evicted in due course that the trespass by the appellant was of recent origin that the allegation that the entry was made in the belief that the land belonged to the illom was false that the revenue and forest departments did not harass the appellant but they took steps for dispossessing him only in accordance with the law that the commissioner 's report was not correct in that all the improvements noted by the commissioner were not made by the appellant but by other independent squatters that after due notice an order of forfeiture had been passed in l c case. 112 of 1100 m e and the appellant was therefore not entitled to claim any value for improvements as it was his duty to remove any building before he was evicted. the respondent also averred that it had not taken possession of any crops or movables as stated in the plaint and that the movables found in the building were attached for the realisation of arrears of fine etc. there were other allegations also but it is unnecessary for purposes of this appeal to refer to them. several issues were framed but it is not necessary to refer to them except to say that the suit was decreed only for rs 3000 being the value of the appellant 's bungalow taken possession of by the respondent. the rest of the claim was dismissed. it was observed by the trial court that though there is no specific evidence to show when exactly the possession of the appellant had commenced the evidence however indicated that it must have started close to the year i 100 m e and that in any case the claim of the appellant that possession was from 1030 m e was not true inasmuch as from the year 1067 m e when the act was passed possession without permission was penal and it could not be imagined that the appellant was left in peace for all these long years. the trial court also held that all through these long years there had been a dispute as to the title between the illom and the state and after the suit of the illom was dismissed and the illom 's title was not sustained the allegation that the improvements were effected can not be stated to be bona fide. it pointed out that the plaintiff appellant had applied to get himself impleaded on 0 s No 126 of 1096 m e but his application was rejected and after that suit was dismissed the appellant again applied for registry but that was also rejected. all this according to the trial court would show that the appellant was aware that he was remaining on government lands without title. it was further held that the greater part of the improvements were affected by the appellant after the proceedings in the l c case No 112 of 1100 m e were stayed as such it can not be said that these improvements could have been effected in good faith. with respect to the allegation that an order of forfeiture was not served on the appellant under section 9 of the act the court observed that though the state had in its written statement contended that such an order had been passed no order was produced in evidence and consequently it was conceded by the government pleader that no such order was passed. in the circumstances the question that had to be considered was whether without an order of forfeiture being passed the respondent could forfeit the improvements. on this issue it was held that no notice of forfeiture of trees. need be given under section 9 of the act and therefore no compensation or damages were payable in respect thereof. the high court accepted the finding of the trial court on issue. it observed that the evidence in the case indicated that the possession of the father of the appellant must have commenced close to the year 1100 m e and consequently the claim of the appellant that lie was in possession from 1030 m e can not be true. it then said if the possession commenced only about the year 1100 it certainly can not be under any bona fide claim of title for even on. 12 6 1094 the petitioner knew that the land was government land and had then applied for assignment of the land. accordingly the high court found that at no time the occupation of the land by the appellant was under a bona fide claim of title. the contention of the appellant that the trees which are the subject matter of the appeal should have been forfeited by an order passed under section 9 of the act and in the absence of such. an order his right to the value of those trees had to be adjudged and paid. to him was also negatived as the court held that the words any crop or other product raised on the land occurring in section 9 of the act would not include trees. in its view these words take in what is familiarly known in law as emblements which according to black 's. law dictionary mean such products of the soil as are annually planted served and saved by manual labour as cereals vegetables grass maturing for harvest or harvested etc but not grass on lands used for pasturage. in this view it held that compensation for trees which are to be dealt with under the general law can not be decreed in favour of a mere trespasser who had no rights therein. it was also of the view that the claim for compensation for trees which has to be dealt with under the general law under which a mere trespasser would have no rights to the payment of compensation nor could be. appellant be allowed to remove them after his dispossession. another reason for disallowing the compensation for trees given by the high court was that the position of a trespasser whether he be a mere trespasser or a trespasser under a bona fide claim of title cannot be better than that of a tenant and that if this is correct then the appeal has to be dismissed on the short ground that there is no principle of law or equity which requires the payment of compensation in respect of trees the ownership of which was all along or at any rate from the dale of the trespasser 's dispossession vested in the state. the learned advocate for the appellant has reiterated the submissions made before the trial court and the high court and contends that there is no order forfeiting the improvements as required under section 9 of the act and if section 9 does not apply and there is no right of forfeiture as contemplated under section 9 then the appellant is entitled to compensation under the general law. apart from this contention towards the end of his argument the learned advocate for the appellant sought to make out a fresh case namely that as the appellant was not served with a notice to quit as required under section 9 of the act but was forcibly evicted without giving him an opportunity of cutting and taking away the trees etc. from the lands from which he was evicted he would be entitled to claim compensation for the improvements made by him. it may be stated that the finding that the possession of the appellant commenced after his application for registration was rejected in 1919 and the improvements if any must have been effected only thereafter with full knowledge that the title to the lands was in dispute between the illom and the government is unassailable. we have earlier adverted to ext. a and also to the fact that after the application for registration was rejected the appellant tried to get himself impleaded in the suit filed by the illom against the state which application was also rejected and so the claim that his possession was bona fide or that he was a bona fide trespasser has no validity. this finding is fortified by section 5 of the act which provides that from and after the commencement of the act it shall not be lawful for any person to occupy land which is the property of the government whether poramboke or not without the permission from the government or such officer of the government as may be empowered in that behalf. in view of this specific provision the contravention of which is punishable under section 6 thereof his conduct in applying for registration and for getting himself impleaded in the suit of the illom against the government would show that he knew that the land was government land or land in which the government had a claim. in these circumstances he can not be said to be a bona fide trespasser particularly after he had applied to the government for obtaining a. registration in his name on the basis that it was government land. it is however urged before us that the high court was in error in thinking that the appellant did not occupy the lands as a trespasser with a bona fide claim of title because it was his case that he trespassed upon the land with a bona fide intention to improve the land and as such he can still be considered as a bona fide trespasser entitled to improvements under the general law. before dealing with this aspect we will first consider the question whether trees are included within the meaning of section 9 so as to entitle the appellant to a notice of forfeiture there under. section 9 of the act is in the following terms any person unauthorised occupying any land for which he is liable to pay a fine under section 6 and an assessment or prohibitory assessment under section 7 may be summarily evicted by the division peishkar and any crop or other product raised on the land shall be liable to forfeiture and any building or other structure erected or anything deposited thereon shall also if not removed by him after such written notice as the division peishkar may deem reasonable be liable to forfeiture. forfeiture under this section shall be disposed of as the division peishkar may direct. an eviction under this section shall be made in the following manner namely by serving a notice on a person reported to be in occupation or his agent requir ing him within such time as the division peishkar may deem reasonable after receipt of the said notice to vacate the land and if such notice is not obeyed by removing or deputing a subordinate to remove any person who may refuse to vacate the same and if the officer removing any such person shall be resisted or obstructed by any person the division peishkar shall hold a summary enquiry into the facts of the case and if satisfied that the resistance or obstruction still continues may issue a warrant for the arrest of the said person and on his appearance may send him with a warrant in the form of the schedule for imprisonment in the civil jail of the district for such period not exceeding 30 days as may be necessary to prevent the continuance of such obstruction or resistance provided that no person so committed or imprisoned under this section shall be liable to be prosecuted under sections 176 179 and 181 of the travancore penal code in respect of the same facts. this section provides for two notices to be given one notice is to be given to the person who is in unauthorised occupation of government land to vacate the land within a reasonable time and the other notice is to forfeit any crop or other product raised on the land or to remove any building or other structure erected or anything deposited therein within a reasonable time as may be stated in the notice. it was conceded before the trial court and no attempt was made to establish anything to the contrary before the high court that no notice of forfeiture as required under section 9 was given to the appellant. in these circumstances the question that would arise for determination is whether the trees come within the description of other product raised on the land. it is stated before us that at the time when the appellant was evicted the transfer of property act was not in force. but this is not relevant as what has to be considered is whether trees can be said to be other product raised on the land. the words raised on the land qualify both the crop and other product so the words other product have to be read in the context of the word crop which precedes it. it was pointed out by the learned advocate that the high court was in error in equating other product raised on the land with emblements because the definition of crop in black 's law dictionary does include emblements as such the words other product can not also be treated as emblements and must therefore be given a different meaning which according to him would include trees. no doubt one of the meanings given in the black 's law dictionary does say that in a more restricted sense the word is synonymous with fructus industrials. but the meaning to be ascribed to that word is that it connotes in its larger signification products of the soil that are grown and raised yearly and are gathered during a single season. in this sense the term includes fructus industrials and having regard to the etymology of the word it has been held to mean only products after they have been severed from the soil. the same dictionary gives the meaning of the word product as follows product with reference to property proceeds. yield income receipts return. the products of a farm may include the increase of cattle on the premises. even under this definition product can not mean anything which is attached to the land like trees. it may however include the fruit of the trees. this view of ours is supported by the case of clark and another v gaskarth 8 taunt 431. that was a case of a trespass for breaking and entering the closes of the plaintiffs and tearing up digging up cutting down and carrying away the plaintiff 's trees plants roots and seeds growing on the closes. notice of this trespass was given to the defendant. at the time of the distress the sum of pound 281 6 section was due from the plaintiffs to the defendant for rent in respect of the nursery ground. the question before the court was whether the plaintiffs were entitled to recover against the defendant damages caused to them by cutting down and carrying away the plaintiffs trees. it was contended that the defendant 's action was justified under the statute ii g 2 c 19 section 8 which after enumerating certain crops empowered the landlord to seize as a distress any other product whatsoever which shall be growing on any part of the estate demised and therefore the trees and shrubs in question came within that description. the court rejected the contention that the trees and shrubs could be detrained and held that the word product in the eighth section of the statute did not extend to trees and shrubs growing in a nurseryman 's ground but that it was confined to products of a similar nature. with those specified in that section to all of which the process of becoming ripe and of being cut gathered made and laid up when ripe was incidental. in our view therefore trees are not included within the meaning of other products raised on the land in section 9 of the act and there is therefore no obligation on the government to give notice of forfeiture under that section. it is then contended that even if trees are not included in section 9 and no notice of forfeiture is necessary under the general law even a trespasser on the land whether bona fide or not is entitled to compensation or damages for the improvements made by him on the land. we have already agreed with the trial court and the high court that the appellant was not a bona fide trespasser. but the learned advocate for the appellant submits that it was not his case nor is it under the general law necessary for a person who trespassed on the land to trespass with a claim of bona fide title. according to his submission a person is nevertheless a bona fide trespasser if he enters upon the land with a bona fide intention of improving the land. no authority has been cited for this novel proposition and if accepted it would give validity to a dangerous principle which will condone all acts of deliberate and wrongful trespass because any person desparate enough to trespass on other mans land without any claim of title can always plead that he had a bona fide intention of improving the land whether the owner of that land wants that improvement or not. this vicarious and altruistic exhibition of good intention may even cause damage to the land of an owner who may not want improvements of such a kind as tree plantation. it is true that the maxim of the english law quicquid plantatur solo solo cedit i e whatever is affixed to the soil belongs to the soil is. not applicable in india but that is not to say that a wrongful trespasser can plant trees on someone else 's land and claim a right to those trees after he is evicted. the case of vallabdas narainji v development officer bandra a i r 1929. p c 163 1929 indlaw pc 11 which was cited by the learned counsel for the appellant does not assist him for the privy council did not think it necessary to give a decision on what it termed to be a far reaching contention. that was a case in which the government had taken possession of the lands and had erected certain building on the land before a decision under section 6 of the land acquisition act was made as to the appellant 's property arid it was contended that the appellant should be allowed the value of the land in the state in which it then was i e with buildings on it. it appears that the government had resolved to acquire the land in question and other lands and by arrangement with certain of the sutidars it took possession of such land including a portion which was in the occupation of the appellant. upon such land including a portion in the possession of the appellant they proceeded to erect buildings without the necessary notification under section 6 of the land acquisition act which was not served until november 4 1920. on these findings it was observed that the government were in a position by law at any rate to regularize their possession by such a notification a fact which becomes material when it has to be considered what the nature of the trespass is. both the assistant judge and the high court negatived the claim of the appellant. before the privy council it was contended on behalf of the appellant that in the various cases relied upon there was at least some genuine claim or belief in the party erecting the buildings that he had a title to do so even though he was eventually held to be a trespasser and it was urged that no such claim or belief existed in that case in which it was said the government without any pretence of a right tortuously invaded the appellant 's property and proceeded to deal with it as their own. it is in this context that the respondent 's contention that even if the appellants were considered to be mere trespassers they would still be entitled to the value of the improvements and contest the claim of the appellant was described as already stated as a far reaching contention. the board however agreed with what was apparently the view of both courts in india that under the circumstances of this case as already set forth by the law of india which they appear to have correctly interpreted the government officials were in possession not as mere trespassers but under such a colour of title that the buildings erected by them on the land ought not to be included in the valuation as having become the property of the landowner. this case does not support the contention that a mere trespasser who has deliberately and wrongfully contrary to the provisions of section 5 of the act entered upon another 's land which makes such an act even punishable under section 6 thereof is entitled to compensation for the trees planted by him on the land. in any case as the high court rightly observed the position of a trespasser can not be better than that of a lawful tenant who having lost his possession can not claim compensation or damages for anything erected on the land or any improvements made therein. the appellant 's claim after he was evicted can not on the same parity of reasoning be held to be valid. once the appellant 's counsel was confronted i with this proposition he tried to raise an entirely new point namely that no notice of eviction was given to the appellant and if such a notice had been given to him under section 9 he would have cut the trees and taken them away within the time allowed for him to vacate the lands. in support of this contention he has referred us to the leadings contained in paragraph 3 of the plaint in which it is stated the improvements effected by the plaintiff have a value of rs 2 lakhs as per the accounts shown below. in his helplessness the plaintiff had even applied to government to give him the land in which he had effected improvements on kuthakapattom. but out of the said land 160 acres were taken out of my possession and given to the 2nd defendant even without giving me the opportunity to remove the movable improvements such as cultivation cattle machines utensils houses stocked crops ripe crops etc belonging to me. these averments in the above paragraph do not clearly allege that he was not evicted without notice nor has any allegation been made that he was forcibly evicted from the lands with the help of the police etc. as it has now been contended before us. on the other hand what the plaintiff appellant stated shows that no opportunity was given to him to remove the movable improvements such as cultivation cattle machines utensils houses stocked crops ripe crops etc. which belonged to him. there is nothing stated by him that he had no opportunity to cut trees and take them away. even in paragraph 4 of the plaint where he complains that no notice of forfeiture was given to him he mentions only the items referred to in paragraph 3. it is in this connection he says that no legal procedure had been followed by government for taking them into possession which only implies that it is in respect of the items mentioned in paragraph 3. it is again stated in paragraph 4 that it was irregular on the part of government to take possession of the above items. the respondent did not understand the averments in the plaint as alleging that no notice to quit was given to him is evident from the written statement of the respondent in paragraph where it is stated thus. this defendant submits that after due notice an order of forfeiture has been passed in poramboke case 112 of 11 00 and the plaintiff is therefore not entitled to claim any value of improvements or value of any building. the issues that had been famed by the trial court also do not refer to this aspect. no doubt in the evidence of the plaintiff p w 1 states that he was evicted from the lands without giving him an opportunity to remove the improvements and in cross examination he was asked whether he was not given any notice prior to the dispossession and he said that certainly no notice was received. p w 4 the manager was asked in cross examination whether he had been given any priorinformation or notice about eviction and this witness also said that there was no prior information or notice. while these passages might show that no notice of eviction was given even at that stage there was no application for an issue being framed nor has such an application been made in the appeal before the high court nor even before this court. in it has been held that the appellant was not a mere trespasser and had deliberately entered upon the lands knowing full well that he had no right claim or title to the lands or had in any manner a right to enter the land and has been rightly evicted as a trespasser he can not now be permitted to raise this contention before us. in the view we have taken the appeal has no substance and is accordingly dismissed with no order as to costs but the court fee will be recovered from the appellant. appeal dismissed.

IN-Ext

FACTS it was the appellant's case that he had been in occupation of the said 160 acres of cherikkal land about which and the adjoining lands there was a dispute as to whether the same belonged to a jenmi family known as koodalvalli illom--hereinafter called 'the illom or to the government of the erstwhile travancore state. the appellant's father and the appellant had occupied these lands, made improvement thereon by planting coconut trees, arecanut palms, peppervines, rubber-trees, jack trees, other trees, and by constructing bungalow, huts, wells etc. in the bona fide belief that the lands belonged to the illom. it was stated that according to the practice prevailing in the erstwhile state of travancore the cultivators could enter into unoccupied waste lands belonging to the janmies with the object of cultivating and improving them, and as they held the lands under them by paying rent, the consent of the jemies to such occupation was implied. in respect of the 160 acres of land of' the illom which were occupied by the appellant's father and the appellant, there was a dispute between the illom and the travancore state from about 1848. while this dispute was pending it appears the appellant applied to the conservator of forests for registration of the lands in his name, but the application was rejected in 1919 stating that the land applied for cannot be registered. while the application for registration was pending, the dispute between the illom and the state of travancore had reached a stage when the illom had to institute a suit in the district court at quilon for a declaration of its title to those properties. an appeal against it was dismissed. against an appeal was filed in the high court of travancore. the high court issued a commission for inspecting the properties and the commissioner in his report set out the improvements made by the appellant on the lands which comprised of a bungalow in which the appellant was residing, a number of small houses. a rubbers state, and a large number of other valuable trees like jack trees, mango trees, coconut trees etc. it appears that as there was no injunction restraining his dispossession. the appellant, pursuant to this order, was dispossessed from the lands and possession of these lands was given to the second defendant nair service society ltd. in august 1939. thereafter the suit out of which this appeal arises was filed against the government. ARGUMENT there is no order forfeiting the improvements as required under s. 9 of the act, and if s. 9 does not apply and there is no right of forfeiture as contemplated under s. 9, then the appellant is entitled to compensation under the general law. as the appellant was not served with a notice to quit as required under s. 9 of the act but was forcibly evicted without giving him an opportunity of cutting and taking away the trees etc. from the lands from which he was evicted, he would be entitled to claim compensation for the improvements made by him. the appellant did not occupy the lands as a trespasser with a bona fide claim of title because it was his case that he trespassed upon the land with a bona fide intention to improve the land, and as such he can still be considered as a bona fide trespasser entitled to improvements under the general law. even if trees are not included in s. 9 and no notice of forfeiture is necessary, under the general law even a trespasser on the land, whether bona fide or not, is entitled to compensation or damages for the improvements made by him on the land. it was not his case nor is it under the general law necessary for a person who trespassed on the land to trespass with a claim of bona fide title. ISSUE it is the case of the appellant that even, after the act was passed, unauthorised occupants of land belonging to the government who had made improvements therein had, under the rules made both under the act and the land assignment act a preferential claim over others for getting kuthakapattom or assignment of the property in their possession. several issues were framed, but it is not necessary to refer to: them except to say that the suit was decreed only for rs. 3000/being the value of the appellant's bungalow taken possession of by the respondent. ANALYSIS the possession of the appellant ,commenced after his application for registration was rejected in 1919, and the improvements, if any must have been effected only thereafter with full knowledge that the title to the lands was in dispute between the illom and the government, is unassailable. the court had earlier adverted the fact that after the application for registration was ,rejected the appellant tried to get himself impleaded in the suit filed by the illom against the state which application was also rejected and so the claim that his possession was bona fide or that he was a bona fide trespasser has no validity. this finding is fortified by s. 5 of the act which provides that from and after the commencement of the act it shall not be lawful for any person to occupy land which is the property of the government whether poramboke or not without the permission from the government or such officer of the government as may be ,empowered in that behalf. in view of this specific provision the contravention of which is punishable under s. 6 thereof, his conduct in applying for registration and for getting himself impleaded in the suit of the illom against the government, would show that he knew that the land was government land or land in which the government had a claim. the case of clark and another v. gaskarth, 8 taunt 431. trees are not included within the meaning of 'other products raised on the, land' in s. 9 of the act and there is, therefore, no obligation on the government to give notice of forfeiture under that section. the appellant was not a mere trespasser and had deliberately entered upon the lands knowing full well that he had no right, claim or title to the lands or had in any manner a right to enter the land and has been rightly evicted as a trespasser. STATUTE section 9 of the travancore land conservancy act 4 of 109 is in the following terms. any person unauthorised occupying any land for which he is liable to pay a fine under section 6 and an assessment or prohibitory assessment under section 7, may be summarily evicted by the division peishkar, and any crop or other product raised on the land shall be liable to forfeiture and any building or other structure erected or anything deposited thereon shall also, if not removed by him after such written notice as the division peishkar may deem reasonable, be liable to forfeiture. 'forfeiture under this section shall be disposed of as the division peishkar may direct. an eviction under this section shall be made in the following manner, namely, by serving a notice on a person reported to be in occupation or his agent, requiring him, within such time as the division peishkar may deem reasonable after receipt of the said notice to vacate the land, and if such notice is not obeyed, by removing or deputing a subordinate to remove any person who may refuse to vacate the same, and, if the officer removing any such person shall be resisted or obstructed by any person, the division peishkar shall hold a summary enquiry into the, facts of the case and, if satisfied that the resistance or obstruction still continues, may issue a warrant for the arrest of the said person, and on his appearance may send him with a warrant in the form of the schedule for imprisonment in the civil jail of the district for such period not exceeding 30 days as may be necessary to prevent the continuance of such obstruction or resistance. provided that no person so committed or imprisoned under this section shall be liable to be prosecuted under sections 176, 179 and 181 of the travancore penal code in respect of the same facts.

three civil appeals stemming from three revision petitions to the high court of orissa under the orissa estates abolition act 1951 orissa act i of 1952 for short the act have reached this court thanks to special leave granted to the appellant who is common in all the cases. the high court after deciding various issues remanded the cases to the compensation officer under the act after over ruling most of the contentions pressed before it by the appellant. shri achutananda purohit appellant was the intermediary in respect of vast forests and other lands comprised in the estate of jujumura in the district of sambalpur. this estate vested in the state on april 1 1960 by force of the act and the crucial question agitated before us consequentially turns on the quantum of compensation awardable under chapter v of the act. the appellant has received around rs 300000 but much more according to him is due and this controversy can be settled by examining his specific points. shri purohit appellant is an advocate by profession and is 83 years old. he has argued in person and with passion. we have listened with patience to all his submissions good bad and indifferent. if we may anticipate ourselves none of the nine submissions has appealed to us save to the extent the high court has upheld. even so a minimal narration of the facts and a brief consideration of each argument is necessary and we proceed to do so. while his arguments did not impress us we were touched by his concluding words that he had been born and had grown in an adivasi village in the only brahmin family and in his evening years of life proposed to give a substantial part of the compensation the state would give him for adivasi welfare. although he waxed sentimentally on this note he did not convince us on his contentions. with these prefatory observations we proceed to formulate the many points urged and give our findings and reasons one after the other. we are directly concerned with the issue of compensation which is dealt with as earlier stated in chapter v of the act. the compensation officer is charged with fixing the quantum in the prescribed manner. a compensation assessment roll containing the gross asset and net income of each estate together with the compensation payable in respect of such estate has to be prepared by him. of course when there is joint ownership section 24 stipulates that the compensation shall be determined for the estate as a whole and not separately for each of the shares therein. section 26 has great relevance as it lays down the method of arriving at the gross asset and section 27 has like significance as it focuses on the manner in which the net income from an estate shall be computed by deducting certain items from the gross asset of the estate. section 28 states how the amount of compensation is to be determined and the methodology of payment. there are a few other s s in chapter vi which deal with payment of compensation. the act also provides for appeal second appeal and revision the last being to the high court and the earlier ones being to the collector and a board constituted under section 22. the rule making power is vested in the government under section 47 and there is a routine removal of difficulties clause contained in section 50. these furnish in bare outline the provisions with which we are directly concerned. against the background of law just projected we may set out shri purohit 's points which if we may say so are substantially the same as have been argued by him in revision before the high court with partial success. for convenience of reference we may extract the statement by the high court of the contentions urged before it and repeated before us by the appellant. the provisions of section 373 read with section 262. b v of the act make it clear that the date of vesting is the last date by which the calculation of compensation should have been made. as admittedly compensation had not been calculated by the date of vesting the compensation officer lost his statutory jurisdiction to do so. it is this court which by its order dated 10 4 1969 in civil revisions 201 202 and 203 of 1968 conferred new jurisdiction on the compensation officer to deal freshly with the case and therefore notwithstanding anything contained in the act the compensation has to be calculated according to the directions given by the court 2 the court was fully aware of the statutory provision in section 262. b v of the act but in spite of it the direction was that the divisional forest officer should make the appraisement. there was no direction that this report of the d f o should be further subject to the approval of the chief conservator of forests. the calculation made by the chief conservator of forests therefore has no statutory force but could be just a piece of evidence. but as the court directed that no further evidence on behalf of the state should be received ext. a1 is inadmissible in evidence. 3 assuming that in spite of the directions of the court the compensation offi cer is entitled to follow the procedure laid down in section 262bv the expression subject to the approval of the chief conservator of forests does not refer to the appraisement made by the d f o but refers to his appointment. 4 assuming that section 262 b v would have full force what it contemplates is that the appraisement must be made by the d f o and it is subject to the approval by the chief conservator of forests. but what has happened here is that the chief conservator himself made the appraisement without referring to the appraisement made by the d f o and as such the appraisement made by the chief conservator is invalid. the report of the chief conservator of forests is also invalid because of the fact that the appraisement is made only with reference to the area of the disputed forests without taking into consideration the density of growth therein. 6 unlike in case of fisheries etc. where the actual income is to be included in the gross assets in the case of forests the assumed income and not the actual income is to be included. during the agricultural year immediately preceding the abolition the petitioners had not actually derived any income from the forests and as such they were under no obligation to pay any income tax on such income. therefore deduction of income tax from the gross assets is illegal and unwarranted. the slab system of calculation of compensation in the act providing smaller multiples for estates yielding larger income is unconstitutional. 8 compensation money should be so calculated that the purchasing power of the amount of compensation to be paid on the date of actual payment will not be less than its purchasing power on the date of vesting and 9 interest should be calculated at not less than 12 per annum from the date of vesting till payment. the meat of the matter the primary question agitated in the appeal lopping off the fringe issues of lesser import consists in the statutory methodology and functionaries prescribed by the act for quantifying the compensation and the compliance therewith by the statutory machinery in the case of the appellant. but before examining this essential issue we may dispose of the minor points pressed so that the deck may be cleared for dealing with what deserves to be dealt with. point No 9 in the catalogue already given relates to the claim for 12 interest on the amount of compensation as against the statutory rate of 2 12. the policy of the law of agrarian reform postulates the extinguishment of ancient privileges and cornering of land resources and the socioeconomic yardstick is different from what applies to ordinary purchases of real estate and this is manifest in the special provisions contained in article 31a and article 31b of the constitution. a similar principle applies to the award of interest which may sometimes be notional when feudal interests are puffed out. we can not import the notion of prevailing bank rates in such situations. the dynamic rule of law with a social mission makes a meaningful distinction between rights steeped in the old system and compensation for deprivation of those interests on the one hand and the ordinary commercial transactions or regulation of rights untinged by social transformation urges on the other. this gives rationality to the seeming disparity. holmes once commented it is revolting to have no better reason for a rule of law than that. so it was laid down in the time of henry iv. here there is good reason to depart from the old rule of full compensation and it perhaps legitimates the reduced rate of recompense. moreover the high court has rightly pointed out that the validity of section 373 of the act which fixes a small rate of interest on the compensation amount has been upheld by the supreme court in gajapati narayan 's case. point No 8 has only to be stated to be rejected. the contention is that on the date of vesting which was well over two decades ago the purchasing power of the rupee was much higher than its present value. it is more or less a world phenomenon that the erosi on in value of the unit of currency has been taking place but this invisible devaluation owing to the inflationary spiral does not affect the quantum of monetary compensation prescribed by statute. for the purposes of the law the rupee of long ago is the same as the rupee of today although for the purposes of the market place and cost of living the housewife 's answer may be different. law is sometimes blind. the next point in the reverse order is equally unsubstantial and may be disposed of right away. the appellant challenges the slab system of compensation provided in the act which awards smaller multiples for estates yielding larger incomes on the score of violation of the fundamental rights under the constitution. the short answer is that article 313 read with article 312 bars any challenge to the amount of compensation on acquisition by the state subject to compliance with the prescriptions in the said sub articles on the ground that the amount so fixed or determined is not adequate. presidential assent has been accorded to this state act and so the ban operates. moreover article 31a repels the applicability of articles 14 19 and 31 to the acquisition by the state of any estate or of any rights therein etc. this provision directly demolishes the contention of the appellant. point No 6 in the list of contentions earlier reproduced is also bereft of force and we may make short shrift of it. the argument is that for certain reasons the appellant could not derive and actual income from the forests taken over by the state from him and therefore there was no income tax payable on any agricultural income from these forests. the contention is that therefore in arriving at the next income the deduction of income tax is not permissible. here again the flaw in the submission consists in mis reading section 27 of the act which expressly states that the net income from an estate shall be computed by deducting from the gross assets of such estate any sum which was payable by the intermediary as income tax in respect of any income derived from such estate for the previous agricultural year. no income therefore no income tax and therefore no deduction is the syllogism of shri purohit. he forgets that in the case of forests it is the assumed income and not the actual income that forms the basis of calculation of compensation. indeed if the actual income were to be the foundation for computation of compensation on the premise that not actual income has accrued the compensation might be zero. on the other hand statutory compensation is provided for on the formula of assumed income in the previous year. similarly an assumed income tax also has to be worked out and deducted. if a notional income on the assumed basis can be used for fixing compensation a notional income tax can be calculated and deducted. the confusion that vitiates the argument is prompted by a circular letter of government regarding non deductibility of income tax due to the state from the amount of compensation lying to the credit of estate holders. we have examined the circular letter and are satisfied that it has no relevance to a situation like the present and it deals with a totally different matter. in short section 27 properly construed can not lend itself to the meaning imputed to it by the appellant. the serious question that survives for consideration is covered by the remaining points which more or less overlap. the statutory scheme of compensation for forest lands consists of machinery for assessment of the net income which is multiplied on a sliding scale and the method of challenge to the determination by the aggrieved owner of state. section 262. b v is relevant here and may be set out 262. gross asset when used with reference to an estate means the aggregate of the rents including all cesses which were payable in respect of the estate for the previous agricultural year b by the raiyats or any other persons cultivating the land other than the land settled with the intermediary or intermediaries under sub s 1 of section 7 and includes. v gross income from forests calculated on the basis of the appraisement made of annual yield of the forests on the date of vesting by a forest officer subject to the approval of the chief conservator of forests such forest officer being not below the rank of a divisional forest officer to be appointed in this behalf by the state government. the expression forest officer used here has been explained in section 26. so the first step is for the government to appoint forest officers from out of d f os in the forest department for the purposes of the act. those officers ascertain the income from the forest concerned and the figure so fixed is subject to the approval of the c c f chief conservator of forests presumably the top expert in the department. the power to approve implies the power to disapprove or modify but not to report or arrive at an income de hors the forest officer 's report altogether. the section is clear that the gross income from forests must be calculated on the basis of appraisal of the annual yield on the date of vesting firstly by a forest officer and secondly by the chief conservator of forests screening it and approving it. indeed preliminary to the appraisal operation the intermediary receives a notice in form 'd rule 13 and he is expected to furnish a return of the relevant particulars and supporting information to enable correct appraisement. in the present case the appellant did submit the 'd return to the compensation officer and adduced some evidence to substantiate it. the compensation officer passed an order adverse to the appellant where upon he filed an appeal to the collector which was rejected. a second appeal followed before the board of revenue which was dismissed. later revision petition were filed before the high court and g k misra j set aside the order disallowing the inclusion of the income from forests for ascertainment of compensation and directed a remand to the compensation officer. the said order the relevant portion of which we are concerned runs thus he would immediately call upon the divisional forest officer to make appraisement within three months from the receipt of the record. the appraisement can be scientifically done by looking to the age of the trees as they stand now. it is open to the petitioners to give evidence that after the date of vesting many of the trees and forest produce have been removed. besides the evidence already on record would be taken into consideration. the divisional forest officer who would make the appraisement will be examined as a witness for the compensation officer and would be subjected to cross examination. no other evidence would be permissible as the state has not chosen to give any other evidence. under rule 131 c of the orissa estates abolition rules 1952 the compensation officer may rely upon such other materials as may otherwise be ascertained by him. but in such a case the materials must be brought to the notice of the petitioners who would be entitled to cross examine the witnesses connected therewith and may give rebutting evidence. the compensation case is to be disposed of by the compensation officer within six months from today 104 1969 with intimation to this court. strictly speaking the statutory requirement is for initial appraisal of the annual income by the forest officer. the use of the expression divisional forest officers is erroneous although forest officers are appointed from among divisional forest officers. equally clearly a slight error has crept into the judge 's order because he does not make any reference specifically to the statutory requirement of approval of the chief conservator of forests of the appraisement made by the forest officer. however what followed is interesting though erroneous. the district forest officer who incidentally happens to be a forest officer under the act having been appointed as required thereunder made his appraisal of the annual income and submitted to the chief conservator who altered the annual yield and reduced it substantially. but he pointed out that the forest officer had omitted to include the income from kendu leaves and added that sum to the income from forests. even so the total figure was less than what the divisional forest officer had recommended. the compensation officer accepted the report of the chief conservator and made the statutory calculation on that date. both the state and the appellant filed appeals to the collector which were dismissed. a second appeal was filed by the appellant before the board of revenue without success. then followed three revision petitions to the high court which led to the order of remand now attacked before us in the present appeals. from this narrative what follows is that the chief conservator had substituted his appraisement which was accepted by the statutory tribunal. indeed there was a fundamental difference in the basis adopted by the forest officer and the chief conservator in the matter of assessing the income of the forests in question. we need not go into this detail except for the purpose of noticing that what the chief conservator did was not to approve wholly or in a modified form what the forest officer did but to make his own appraisal independently and without reference to the report of the statutory functionary viz the forest officer. this was wrong and contrary to section 26 as was contended by the appellant and in a way accepted by the high court. we are in agreement with the course adopted by the high court and the reasoning which has prevailed with it. the direction given by the learned judge in the remand order is correct although it may require a little clarification. having heard the appellant at some length we see no flaw in the high court 's order on this aspect of the matter. it is astonishing that anyone should urge as the appellant did that the date of vesting is the last date by which the calculation of compensation should have been made and since that had not been done the compensation officer had become functus officio in awarding compensation. before the date of vesting the state never can nor does fix the compensation through the compensation officer in any of the agrarian reform laws and these compensation operations are post statutory exercises. therefore there is no substance in the functus officio argument. if the officer had no jurisdiction the land would be gone because of the vesting provision and no compensation would be forthcoming for want of jurisdiction a consequence the appellant never wants. technicality can be frightened away by technicality. nor is it right to contend as the appellant did that the compensation officer 's jurisdiction was created by the order of remand by the high court. no it was created by the statute and canalised by the order of remand. it follows that after the present second remand the re appraisal of the annual net income can not be done solely by the forest officer without securing the approval of the chief conservator. nor can the compensation officer by pass the chief conservator on the misunderstood strength of the high court 's first order of remand. the true legal drill is. and this holds good after the second remand order that the forest officer will do the appraisement of the annual income forward his report to the chief conservator of forests who will take the said report into consideration and if necessary make modifications therein or approve it with such changes as he deems fit. certainly the chief conservator can not be ignored by the compensation officer nor can the chief conservator ignore the assessment made by the forest officer and go through an independent exercise. the integrated process has already been explained by us and will be followed in the proceedings to ensue on remand. we may make it clear that now that a forest officer has made an appraisement the chief conservator of forests will apply his mind to it and approve it as a whole or with such modifications as he thinks necessary and forward it to the compensation officer. this will among other things save time. thereafter the appropriate statutory course will follow. substantially this is what has been done by the learned judge when allowing the revisions and remitting the case back to the compensation officer. the take over of the forests of the appellant was effected as early as 1960 and 16 years have passed without the intermediary being out of the litigative woods. the high court has stated that a large part of the delay has been due to laches committed from time to time by the officers who have been charged with the duty to calculate the compensation. it is again due to mistakes committed by the authorities concerned that the matter is being remitted back to the compensation officer for disposal. the force of these observations constrains us to direct that the proceedings before the compensation officer shall be completed within six months from today. in this context it is perhaps not irrelevant to remember that the appellant a freedom fighter is an 83 year old man and at this stage of his life the state should show commisseration not merely in quickly disposing of the proceedings but also in not being cantankerous in awarding and disbursing the balance compensation. with these directions and observations we affirm the orders under appeal but while dismissing the appeals direct the parties to bear their costs in this court.

IN-Ext

FACTS three civil appeals, stemming from three revision petitions to the high court of orissa under the orissa estates abolition act, 1951. the high court, after deciding various issues, remanded the cases to the compensation officer under the act, after over-ruling most of the contentions pressed before it by the appellant. shri achutananda purohit, appellant, was the intermediary in respect of vast forests and other lands comprised in the estate of jujumura in the district of sambalpur. the appellant has received around rs. 3,00,000/- but much more, according to him, is due. ARGUMENT the argument is that for certain reasons the appellant could not derive actual income from the forests taken over by the state from him and therefore there was no income-tax payable on any agricultural income from these forests. the contention is that therefore in arriving at the next income the deduction of income-tax is not permissible. ISSUE the estate vested in the state on april 1, 1960 by force of the act and the crucial question consequentially turns on the quantum of compensation awardable under chapter v of the orissa estates abolition act, 1951. the meat of the matter, the primary question agitated in the appeal, lopping off the fringe issues of lesser import, consists in the statutory methodology and functionaries prescribed by the act for quantifying the compensation and the compliance therewith by the statutory machinery in the case of the appellant. ANALYSIS the compensation officer is charged with fixing the quantum in the prescribed manner. a compensation assessment roll containing the gross asset and net income of each estate, together with the compensation payable in respect of such estate, has to be prepared by him. the dynamic rule of law, with a social mission, makes a meaningful distinction between rights steeped in the old system and compensation for deprivation of those interests, on the one hand, and the ordinary commercial transactions or regulation of rights untinged by social transformation urges, on the other. this gives rationality to the seeming disparity. moreover, the high court has rightly pointed out that the validity of s. 37(3) of the act which fixes a small rate of interest on the compensation amount has been upheld by the supreme court in gajapati narayan's case. for the purposes of the law, the rupee of long ago is the same as the rupee of today, although for the purposes of the market place and cost-of living, the housewife's answer may be different. art. 31(3) read with art. 31(2) bars any challenge to the amount of compensation on acquisition by the state subject to compliance with the prescriptions in the said sub-articles, on the ground that the amount so fixed or determined is not adequate. presidential assent has been accorded to this state act and so the ban operates. moreover, art. 31a repels the applicability of arts. 14, 19 and 31 to the acquisition by the state of any estate or of any rights therein etc. in the case of forests it is the assumed income and not the actual income that forms the basis of calculation of compensation. on the other hand, statutory compensation is provided for on the formula of assumed income in the previous year. similarly, an assumed income- tax also has to be worked out and deducted. the statutory scheme of compensation for forest lands consists of machinery for assessment of the net income which is multiplied on a sliding scale and the method of challenge to the determination by the aggrieved owner of state. so the first step is for the government to appoint forest officers from out of d.f.os. in the forest department, for the purposes of the act. those officers ascertain the income from the forest concerned and the figure so fixed is subject to the approval of the c.c.f. (chief conservator of forests). the power to approve implies the power to disapprove or modify but not to report or arrive at an income de hors the forest officer's report altogether. indeed, there was a fundamental difference in the basis adopted by the forest officer and the chief conservator in the matter of assessing the income of the forests in question. this was wrong and contrary to s. 26. it is astonishing that anyone should urge, as the appellant did, that the date of vesting is the last date by which the calculation of compensation should have been made and since that had not been done, the compensation officer had become functus officio in awarding compensation. in this context, it is perhaps not irrelevant to remember that the appellant, a freedom-fighter, is an 83-year-old man and, at this stage of his life, the state should show ommiseration not merely in quickly disposing of the proceedings but also in not being cantankerous in awarding and disbursing the balance compensation. STATUTE s. 24 of the orissa estates abolition act, 1951 stipulates that the compensation shall be determined for the estate as a whole and not separately for each of the shares therein. s. 26 has great relevance as it lays down the method of arriving at the gross asset and s. 27 has like significance as it focuses on the manner in which the net income from an estate shall be computed by deducting certain items from the gross asset of the estate. s. 28 states how the amount of compensation is to be determined and the methodology of payment. there are a few other s.s in chapter vi which deal with payment of compensation. the act also provides for appeal, second appeal and revision, the last being to the high court and the earlier ones being to the collector and a board constituted under s. 22. the rule-making power is vested in the government under s. 47 and there is a routine 'removal of difficulties' clause contained in s. 50. the policy of the law of agrarian reform postulates the extinguishment of ancient privileges and cornering of land resources, and the socioeconomic yardstick is different from what applies to ordinary purchases of real estate and this is manifest in the special provisions contained in art. 31a and art. 31b of the constitution.

this appeal by special leave which is directed against the judgment and order dated april 241974 of the letters patent bench of the high court of judicature at madras reversing the judgment and order dated april 191971 of the single judge of that court passed in writ petition no 3822 of 1969 presented u art 226 of the constitution raises a complex but an interesting question relating to the construction of the phrases maternity benefit for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day occurring in s 51 of the maternity benefits act1961. act liii of 1961 hereinafter referred to as the act which in view of s 21 of the act is the law applicable even to women workers employed in plantations. it appears that in october1967subbammal respondent no 2 herein who is a woman worker employed in mount stuart estate hereinafter referred to as the establishmentwhich is carrying on plantation industry was allowed leave of absence by the establishment on the basis of a notice given by her of her expected delivery which actually took place on december 161967 after her delivery the respondent was paid by her employers on account of maternity benefit an amount equivalent to what she would have earned on the basis of her average daily wage in 72 working days falling within twelve week 's of the maternity period. while calculating the aforesaid amount of maternity benefit the establishment admittedly excluded twelve sundays being wageless holidays which fell during the period of the respondent 's actual absence immediately preceding and including the day of her delivery and the six weeks immediately following that day. dissatisfied with this computation the respondent made a representation to her employers claiming maternity benefit for the entire period of twelve weeks under the act i e for 84 days on the plea that a week consisted of seven days. as her demand did not evoke a favourable response the respondent applied to the labour court coimbatore under section 33c2 of the industrial disputes act for redress of her grievance. the claim preferred by the respondent was resisted by the appellant herein who contended that the respondent was admittedly working and was being paid only for six days in a week and that a pregnant woman worker is entitled to maternity benefit for 72 days which are the normal working days in twelve weeks and not for 84 days as no wage is payable for the seventh day of the week i e sunday which is a nonworking wageless holiday. by its order dated february 261969the labour court allowed the claim of the respondent. thereupon the establishment moved the high court at madras u art 226 of the constitution challenging the decision of the labour court. contending that the claim made by the respondent was untenable as normally a worker works only for six days in a week and the maternity benefit had to be computed only for 72 days. as against this the respondent pleaded that the computation had to be made not with reference to the actual number of working days but with reference to total number of days covered by twelve weeks i e 84 days. the single judge of the high court to whom the case was assigned allowed the petition holding that twelve weeks for which maternity benefit is provided for in subs 3 of s 5 of the act must be taken to mean twelve weeks of work and the computation of the benefit had to be made with reference to the actual days on which the woman would have worked but for her inability. aggrieved by this decision the respondent filed an appeal u cl 15 of the letters patent which as already stated was allowed by the letters patent bench of the high court observing that the maternity benefit which the respondent was entitled to receive was for the period of her absence before delivery including the day of delivery and also six weeks thereafter each week consisting of seven days including sundays. dissatisfied with this decision the establishment has already stated come up in appeal to this court by special leave. we have heard mr pai learned counsel for the appellant as also mr bhatt who in view of the default in appearance of respondent no 2 and the importance of the point involved in the case was appointed as amicus cruaie. we place on record our deep appreciation of the valuable assistance rendered to us by both of them. assailing the judgment and order under appeal mr pai has urged that since legislative intent as revealed from the scheme of s 51 of the act is to compensate the woman worker who expects delivery for the loss that her forced absence from work on account of pregnancy and confinement may entail the liability which has to be imposed on her employer can not exceed the amount that she would have earned if she had not been compelled to avail of the maternity leave and since sunday is a non working wageless day the employer can not be made to pay for that day. he has further urged that since u s 5 1 of the act the maternity benefit has to be computed with reference to the period of the workers actual absence thereby meaning absence on days on which there was work excluding sundays and the term week in the context of sub ss 1 and 3 of s 5 of the act is to be under stood as a week of work consisting of six days and in the instant case respondent no 2 was working and earning wages for six days in a week the seventh day being a wageless holiday her claim can not be sustained. in support of his contention. mr pai has referred us to the full bench decision of the kerala high court in malayalam plantations ltd. cochin v. inspector of plantation mundakayam. 1975. i c 848 a i r 1975. ker 86 1974 indlaw ker 91and to convention no 103 concerning maternity protection convention revised1952 adopted by the general conference of the international labour organisation. bhatt has on the other hand urged that the scheme of s 5 of the act clearly indicates that a woman worker who expects delivery had to be paid maternity benefit for all the seven days of the week including sundays falling within the ante natal and post natal periods specified in the section. for a proper determination of the question involved in the appeal it would we think be useful to refer to certain provisions of the act which have a bearing on the subject matter of the controversy before us. s 21 of the act makes the act applicable to every establishment being a factory mine or plantation including any such establishment belonging to government and to every establishment wherein persons are employed for the exhibition of equastrain acrobatic and other performance. sub s 2 of s 2 of the act specifically excludes the applicability of the provisions of the act to any factory or other establishment to which the provisions of the employees state insurance act1948 apply for the time being s 3n of the act defines wages as under 3n wages means all remuneration paid or payable in cash to a woman if the terms of the contract of employment express or implied were fulfilled and includes 1 such cash allowances including dearness allowance and house rent allowance as a woman is for the time being entitled to. 2 incentive bonus and 3 the money value of the concessional supply of food grains and other articles but does not include. i any bonus other than incentive bonus ii over time earnings and any deduction or payment on account of fines iii any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the woman under any law for the time being in force and iv any gratuity payable on the termination of service. the above definition it would be noted does not restrict the meaning of the term wages to contractual wages but gives the term a composite meaning covering all remunerations in the nature of cash allowances incentive bonus and the money value of the concessional supply of foodgrains and other articles. s 4 of the act which prohibits the employment of or work by woman during certain period lays down 4 employment of or work by woman prohibited during certain period 1 no employer shall knowingly employ a woman in any establishment during the six weeks immediately following the day of her delivery or her mis carriage. no woman shall work in any establishment during the six weeks immediately following the day of her delivery or miscarriage. 3 without prejudice to the provisions of section 6no pregnant woman shall on a request being made by her in this behalf be required by her employer to do during the period specified in sub s 4 any which is of an arduous nature or which involves long hours of standing or which in any way is likely to interfere with her pregnancy or the normal development of the foetus or is likely to cause her miscarriage or otherwise to adversely affect her health. the period referred to in sub s 3 shall be a the period of one month immediately preceding the period of six weeks before the date of her expected delivery b any period during the said period of six weeks for which the pregnant woman does not avail of leave of absence under section 6. s 5 of the act which confers right to payment of maternity benefit on a woman worker provisions. 5 right to payment of maternity. benefit 1subject to the provisions of this act every woman shall be entitled to and her employer shall be liable for the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day. explanation. for the purpose of this sub section the average daily wage means the average of the woman 's wages payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity or one rupee a day whichever is higher. no woman shall be entitled to maternity benefit unless she has actually worked in an establishment of the employer from whom she claims maternity benefit for a period of not less than one hundred and sixty days in the twelve months immediately preceding the date of her expected delivery. provided that the qualifying period of one hundred and sixty days aforesaid shall not apply to a woman who has immigrated into the state of assam and was pregnant at the time of the immigration. for the purpose of calculating under this sub section the days on which a woman has actually worked in the establishment the days for which she has been laid off during the period of twelve months immediately preceding the date of her expected delivery shall be taken into account. the maximum period for which any woman shall be entitled to maternity benefit shall be twelve weeks that is to say six weeks up to and including the day of her delivery and six weeks immediately following that day. provided that where a woman dies during this period the maternity benefit shall be payable only for the days up to and including the day of her death. provided further that where a woman having delivered of a child dies during her delivery or during the period of six weeks immediately following the date of her delivery leaving behind in either case the child the employer shall be liable for the maternity benefit for the entire period of six weeks immediately following the day of her delivery but if the child also dies during the said period then for the days upto and including the day of the death of the child. s 6 of the act which deals with notice of claim for maternity benefit and payment thereof is to the following effect 6 notice of claim for maternity benefit and payment thereof. any woman employed in an establishment and entitled to maternity benefit under the provisions of this act may give notice in writing in such form as may be prescribed to her employer stating that her maternity benefit and any other amount to which she may be entitled under this act may be paid to her or to such person as she may nominate in the notice and that she will not work in any establishment during the period for which she receives maternity benefit. in the case of a woman who is pregnant such notice shall state the date from which she will be absent from work not being a date earlier than six weeks from the date of her expected delivery. 3 any woman who has not given the notice when she was pregnant may give such notice as soon as possible after the delivery. on receipt of the notice the employer shall permit such woman to absent herself from the establishment until the expiry of six weeks after the day of her delivery. the amount of maternity benefit for the period preceding the date of her expected delivery shall be paid in advance by the employer to the woman on production of such proof as may be prescribed that the woman is pregnant and the amount due for the subsequent period shall be paid by the employer to the woman within forty eight hours of production of such proof as may be prescribed that the woman has been delivered of a child. 6 the failure to give notice under this section s not disentitle a woman to maternity benefit or any other amount under this act if she is otherwise entitled to such benefit or amount and in any such case an inspector may either of his own motion or on an application made to him by the woman order the payment of such benefit of amount within such period as may be specified in the order. the provisions of s 5 of the act quoted above make it clear that a woman worker who expects a child is entitled to maternity benefit for a maximum period of twelve weeks which is split up into two periods viz prenatal and post natal. the first one i e prenatal or ante natal period is limited to the period of woman 's actual absence extending upto six weeks immediately preceding and including the day on which her delivery occurs and the second one which is postnatal compulsory period consists of six weeks immediately following the day of delivery. the benefit has to be calculated for the aforesaid two periods on the basis of the average daily wage. according to the explanation appended to s 51 of the act the average daily wage has to be computed taking into consideration the average of the woman 's wager payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity or one rupee a day whichever is higher. for fixing the average daily wage it has therefore first to be ascertained whether the wages with were paid or were payable to the woman was for time work or for piece work. it has next to be ascertained as to what were the cash wages paid or payable to her in terms of the definition contained in s 3 n of the act for the days on which she worked during the period of three calendar months immediately preceding the date of delivery reckoned according to the british calendar month. the total wages thus worked out are to be divided by the number of days in the aforesaid three calendar months in order to arrive at the average daily wage. after thus finding out the average daily wage the liability of the employer in respect of the maternity benefit has to be calculated in terms of s 5 of the act for both ore natal and post natal period indicated above. the real though difficult question that calls for determination by us is as to what is the connotation of the term week occurring in sub ss 1 and 3 of s 5 of the act and whether the computation of the maternity benefit prescribed by the act for the a foresaid two periods has to be made taking a week as signifying a cycle of seven days including a sunday or a cycle of seven days minus a sunday which is said to be a wageless day as the act does not contain any definition of the word weekit has to be understood in its ordinary dictionary sense. in the shorter oxford english dictionary third editionthe word week has been described as meaning the cycle of seven days recognized in the calendar of the jews and thence adopted in the calendars of christian mohammedan and various other peoples. a space of seven days irrespective of the time from which it is reckoned. seven days as a term for periodical payments of wagerrent or the likeor as a unit of reckoning for time of work or service. in webster 's new world dictionary 1962 editionthe meaning of the word week is given as a period of seven days especially one beginning with sunday and ending with saturday the hours or days of work in a seven day period. in stroud 's judicial dictionary third editionit is stated that 1 though a week usually means any consecutive seven days it will sometimes be interpreted to mean the ordinary notion of a week reckoning from sunday to sunday and 2 probably a week usually means seven clear days. a week according to halsbury 's laws of england. third edi tion volume 37 at p 84 is strictly the time between midnight on saturday and the same hour on the next succeeding saturday but the term is also applied to any period of seven successive days. bearing in mind the above mentioned dictionary or popular meaning of the term. weekwe think that in the context of sub ss 1 and 3 of s 5 of the act the term has to be taken to signify a cycle of seven days including sundays. the language in which the aforesaid sub s s are couched also shows that the legislature intended that computation of maternity benefit is to be made for the entire period of the woman worker 's actual absence i e for all the days including sundays which may be wageless holidays falling within that period and not only for intermittent periods of six days thereby excluding sundays falling within that period for if it were not so the legislature instead of using the words for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day would have used the words for the working days falling within the period of her actual absence immediately preceding and including the day of her delivery and the six weeks immediately following that day but excluding the wageless days. again the word period occurring in s 51 of the act is a strong word. it seems to emphasize in our judgment the continuous running of time and recurrence of the cycle of seven days. it has also to be borne in mind in this connection that in interpreting provisions of beneficial pieces of legislation like the one in hand which is intended to achieve the object of doing social justice to women workers employed in the plantations and which squarely fall within the purview of art 42 of the constitution the beneficent rule of construction which would enable the woman worker not only to subsist but also to make up her dissipated energy nurse her child preserve her efficiency as a worker and maintain the level of her previous efficiency and output has to be adopted by the court. the interpretation placed by us on the phraseology of sub ss 1 and 3 of s 5 of the act appears to us to be in conformity not only with the legislative intendment but also with paragraphs 1 and 2 of art 4 of convention no 103 concerning maternity protection convention. revised1952 adopted by the general conference of the international labour organisation which are extracted below for facility of reference art 4. 1 while absent from work on maternity leave in accordance with the provisions of art 3the woman shall be entitled to receive cash and medical benefits. 2 the rates of cash benefit shall be fixed by national laws or regulations so as to ensure benefit sufficient for the full and healthy maintenance of herself and her child in according with a suitable standard of living. thus we are of opinion that computation of maternity benefit has to be made for all the days including sundays and rest days which may be wageless holidays comprised in the actual period of absence of the woman extending upto six weeks preceding and including the day of delivery as also for all the days falling within the six weeks immediately following the day of delivery thereby ensuring that the woman worker gets for the said period not only the amount equalling 100 per cent of the wages which she was previously earning in terms of s 3 n of the act but also the benefit of the wages for all the sundays and rest days falling within the aforesaid two periods which would ultimately be conducive to the interests of both the woman worker and her employer. in view of what we have stated above we can not uphold the view of the law expressed by the full bench of kerala high court in malayalam plantations ltd inspector of plantations mundakayam ors 1974 indlaw ker 91 supra. in the result the appeal fails and is hereby dismissed. although costs have to be paid by appellant to respondent no 2 in terms of the court 's order dated october 301975yet in view of the fact that the said respondent has not chosen to appear at the hearing of the case and mr k n bhat has assisted the court as amicus curiae we direct the appellant to pay rs 1000 to mr bhat as his fee. appeal dismissed.

IN-Ext

FACTS the respondent is a woman worker employed in mount stuart estate ('the establishment'),which is carrying on plantation industry, was allowed leave of absence by the establishment on the basis of a notice given by her of her expected delivery. after her delivery,the respondent was paid by her employers on account of maternity benefit an amount equivalent to what she would have earned on the basis of her average daily wage in 72 working days falling within twelve week's of the maternity period. while calculating the aforesaid amount of maternity benefit,the establishment admittedly excluded twelve sundays being wageless holidays,which fell during the period of the respondent's actual absence immediately preceding and including the day of her delivery and the six weeks immediately following that day. dissatisfied with this computation,the respondent made a representation to her employers claiming maternity benefit for the entire period of twelve weeks under the act.i.e.for 84 days on the plea that a week consisted of seven days. as her demand did not evoke a favourable response,the respondent applied to the labour court,coimbatore,u/s 33c(2) of the industrial disputes act for redress of her grievance. the claim preferred by the respondent was resisted by the appellant herein who contended that the respondent was admittedly working and was being paid only for six days in a week and that a pregnant woman worker is entitled to maternity benefit for 72 days which are the normal working days in twelve weeks and not for 84 days,as no wage is payable for the seventh day of the week i.e.sunday,which is a nonworking wageless holiday. the labour court allowed the claim of the respondent. thereupon the establishment moved the high court at madras u/art.226 of the constitution challenging the,decision of the labour court contending that the claim made by the respondent was untenable as normally a worker works only for six days in a week and the maternity benefit had to be computed only for 72 days. the high court allowed the petition holding that twelve weeks for which maternity benefit is provided for in subs.(3) of s.5 of the act must be taken to mean twelve weeks of work and the computation of the benefit had to be made with reference to the actual days on which the woman would have worked but for her inability. aggrieved by this decision,the respondent filed an appeal to this court. ARGUMENT since u/s.5 (1) of the act,the maternity benefit has to be computed with reference to the period of the workers' actual absence thereby meaning absence on days on which there was work excluding sundays and the term 'week" in the context of 'sub-ss.(1) and (3) of s.5 of the act is to be under stood as a week of work consisting of six days and in the instant case,respondent no.2 was working and earning wages for six days in a week,the seventh day being a wageless holiday,her claim cannot be sustained. in support of his contention.mr.pai has referred us to the full bench decision of the kerala high court in malayalam plantations ltd.cochin v.inspector of plantation mundakayam & ors.,(1975) lab.i.c.848=a.i.r.1975 ker.86 1974 indlaw ker 91,and to convention no.103 concerning maternity protection convention (revised),1952 adopted by the general conference of the international labour organisation. the scheme of s.5 of the act clearly indicates that a woman worker who expects delivery had to be paid maternity benefit for all the seven days of the week including sundays falling within the ante-natal and post-natal periods specified in the section. ISSUE the real question is as to what is the connotation of the term "week" occurring in sub-ss.(1) and (3) of s.5 of the maternity benefits act, 1961 and whether the computation of the maternity benefit prescribed by the act for the a foresaid two periods has to be made taking a "week" as signifying a cycle of seven days including a sunday or a cycle of seven days minus a sunday which is said to be a wageless day, as the act does not contain any definition of the word "week". ANALYSIS the provisions of s.5 of the act quoted above make it clear that a woman worker who expects a child is entitled to maternity benefit for a maximum period of twelve weeks which is split up into two periods viz.prenatal and post-natal. the first one i.e.prenatal or ante-natal period is limited to the period of woman's actual absence extending upto six weeks immediately preceding and including the day on which her delivery occurs and the second one which is postnatal compulsory period consists of six weeks immediately following the day of delivery. the benefit has to be calculated for the aforesaid two periods on the basis of the average daily wage. according to the explanation appended to s.5(1) of the act,the average daily wage has to be computed taking into consideration the average of the woman's wager, payable to her for the days on which she has worked during the period of three calendar months immediately preceding the date from which she absents herself on account of maternity,or one rupee a day,whichever is higher. for fixing the average daily wage,it has therefore first to be ascertained whether the wages with were paid or were payable to the woman was for 'time work' or for 'piece work'. it has next to be ascertained as to what were the cash wages paid or payable to her in terms of the definition contained in s.3 (n) of the act for the days on which she worked during the period of three-calendar months immediately preceding the date of delivery,reckoned according to the british calendar month. the total wages thus worked out are to be divided by the number of days in the aforesaid three calendar months in order to arrive at the average daily wage. after thus finding out the average daily wage,the liability of the employer in respect of the maternity benefit has to be calculated in terms of s.5 of the act for both ore-natal and post-natal period indicated above. STATUTE s.2(1) of the maternity benefit act is applicable to every establishment being a factory, mine or plantation . section 2(2) of the act specifically excludes the applicability of the provisions of the act to any factory or other establishment to which the provisions of the employees state insurance act,1948 apply for the time being. s.3(n) of the act defines "wages" as under :- "3(n).--wages means all remuneration paid or payable in cash to a woman,if the terms of the contract of employment,express or implied,were fulfilled and includes- (1) such cash allowances (including dearness allowance and house rent allowance) as a woman is for the time being entitled to; (2) incentive bonus; and (3) the money value of the concessional supply of food-grains and other articles,but does not include- (i) any bonus other than incentive bonus; (ii) over-time earnings and any deduction or payment on account of fines; (iii) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit of the woman under any law for the time being in force; and (iv) any gratuity payable on the termination of service". s.5 of the act:-right to payment of maternity benefit.-(1)subject to the provisions of this act,every woman shall be entitled to,and her employer shall be liable for,the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day. s.6 of the act- notice of claim for maternity benefit and payment thereof.

the main question raised in this appeal by special leave at the instance of state of gujarat and the collector of sabarkantha against the gujarat high court 's judgment and order dated january 30311975 allowing the writ petition of the respondent is whether once the competent authority under s 24 i of the bombay merged territories and areas jagirs abolition. act1953 bombay act. no xxxix of 1954 declares that a particular jagir is a proprietary one a further inquiry under s 37 2 of the bombay land revenue code bombay act. No v of 1879 with a view to determining whether the jagirdar had any rights to mines or mineral products in his jagir granted or recognised under any contract grant or law for the time being in force or by custom or usage is competent. the facts giving rise to the said question are these by hajur order no 116 dated october 271933the respondent maharaj shri amar singji himatsingji was granted daljitgarh jagir comprising of 10 villages mentioned in the said order in jivarak for maintenance by the then ruler of idar by another hajur order no 807 dated january 121934the respondent was given a further grant in jivarak of 3 villages mentioned in that order with effect from october 11933 by yet another hajur order no 964 dated november 21194714 villages including kapoda and isarwada were granted in jivarak to the respondent by the ruler of idar in substitution of the villages mentioned in the previous two orders. according to the respondent by these grants parvanas read together he was given full proprietary rights in the soil of the said villages that is to say it was a proprietary jagir that was granted to him by the then ruler. admittedly on the coming into force of the bombay merged territories and areas jagirs abolition act1953 hereinafter referred to as the act i e with effect from respondent 's daljitgarh jagir stood abolished and all his rights in the jagir villages save as expressly provided by or under the act were extinguished and the respondent became entitled to compensation under s 11 of the act. it appears that for the purpose of implementing the provisions of the act the competent authority collector of district sabarkantha held an inquiry into the question whether the respondent 's jigir was proprietary involving any right or interest in the soil or non proprietary involving mere assignment of land revenue or rent due to government under s 2 4 i of the act and having regard to the documentary and other evidence led before it the competent authority by its order dated september 81959held that the daljitgarh jagir of the respondent was a proprietary jagir. it further appears that pursuant to an order dated november 241959passed by the mamlatdar idar an entry was made on june 181963in the relevant revenue records village form no 6 of one of the villages kapoda comprised in the jagir to the effect that the respondent 's right to take out gravel and stones was recognised but the right relating to excavation of mica had been reserved and retained by the government this entry was only certified on march 301965 according to the respondent since the entries made in the revenue records in respect of his rights to mines and mineral products were not sufficient and proper and though the mamlatdar 's order dated november 241959 was in respect of two villages namely kapoda and isarwada the relevant entry in respect of greval and stones had been made only in regard to village kapoda he by his application dated october 111968requested the collector sabarkantha to issue necessary orders to the mamlatdar idar to make appropriate entries regarding his rights in the minerals in village isarwada. a similar application containing similar request was also made by the respondent to the mamlatdar taluka idar on october 41971 thereupon a notice under s 372 of the bombay land revenue code for the purpose of holding an inquiry into the rights of the respondent to mines and mineral products of the said villages claimed by the respondent wag served upon him but the respondent raised a preliminary objection that such inquiry wag misconceived and incompetent in view of the determination made under s 2 4 i of the act and having regard to the provisions of s 10 of the act his rights to mines and mineral products were expressly saved the collector of sabarkantha appellant no 2 overruled the preliminary objection and by order dated february 231973directed that the inquiry shall proceed and the respondent was directed to produce his evidence in support of his claim on a date that would be fixed and intimated to him. aggrieved by this order passed by the collector on february 231973the respondent preferred a writ petition special civil application no 1224 of 1973 under art 227 of the constitution to the gujarat high court and writ of certiorari quashing the order dated february 231973 and a direction restraining the collector from further proceeding with the inquiry under s 372 of the land revenue code were sought. these reliefs sought by the respondent were resisted by the state of gujarat and the collector the appellants before us principally on the ground that the inquiry under s 372 of the land revenue code into the rights to mines and mineral products in the said villages claimed by the respondent was necessary and proper and could not be said to be concluded by the determination made under s 2 4 1 of the act by the competent authority. the high court negatived the contentions urged by the appellants and took the view that in the determination by the competent authority under s 2 4 i of the act that the respondent 's jagir was a proprietary one there was implicit decision that the respondent was a grantee of the soil which included sub soil entitling him to mines and mineral products and as such a further inquiry by the collector under s 372 of the bombay land revenue code was incompetent and without jurisdiction and therefore the collector 's order dated february 231973 was liable to be quashed. accordingly the high court set aside the collector 's order and further issued an injunction permanently restraining the state of gujarat and the collector from initiating any inquiry under s 372 in respect of the respondents rights to mines and mineral products in the said villages. the appellants seek to challenge the said judgment and order of the gujarat high court in this appeal. learned counsel for the appellants has contended that the high court has adopted an erroneous view of the scope and ambit of the inquiry contemplated under s 24i of the act by the competent authority in as much as under the said provision the competent authority had power merely to decide the question whether the respondents jagir was a proprietary or a non proprietary jagir and had no dower or jurisdiction to determine whether on the appointed date that is on august 11954 when the act came into force the respondent had subsisting rights to mines and minerals products in the jagir villages so as to be saved under s 10 of the act. he urged that it would be for the collector acting under s 372 of the bombay land revenue code to decide the latter question in an inquiry initiated under that provision. according to learned counsel the mere circumstance that the respondent 's jagir was found under s 24. i to be proprietary was not tantamount to the establishment by the respondent of his rights to mines and mineral products in the villages of his jagir for which there must be an actual grant or contract or law or custom or usage recognising such rights and this could only be determined by the collector by holding an inquiry under s 372 of the bombay land revenue code and therefore the high court was clearly in error in coming to the conclusion that the inquiry initiated by the second appellant under s 372 of the bombay land revenue code was incompetent or without jurisdiction. on the other hand learned counsel for the respondent contended that a determination under s 2 4 i of the act that a particular jagir was a proprietary one necessarily implied that the grant was of soil and the grantee was entitled to mines and mineral products which were expressly saved under s 10 of the act and in any event on the facts obtaining in the instant case the competent authority acting under s 2 4 i of the act while coming to the conclusion that the respondent 's jagir was proprietary one bad relied upon the unqualified nature of the grant and also considered the evidence led before it touching upon the several rights such as right to sell fire wood babul trees saltrees timru trees right to sell agriculture land and house sites right to sell stones and gravel right to sell or allow use of land for manufacture of bricks enjoyed by the respondent since the time the grant had been made in his favour by the then ruler and it was on the basis of such evidence that tile competent authority had come to the conclusion that the respondent 's jagir was a proprietary one. he urged that having regard to such determination that was made by the competent authority under s 2 4 i of the act it would be clear that a further inquiry into the respondent 's rights to mines and mineral products particularly gravel and stones under s 372 of the code would be misconceived and incompetent. he pointed out that presumably pursuant to this determination the mamlatdar idar had passed an order on november 241959that the respondent 's right to stones and gravel in the two villages of kapoda and isarwada though not to mica had been recognised by the government and accordingly the necessary entry pertaining to respondent 's right to stones and gravel had been made in the relevant revenue records at least in the case of village kapoda and had been duly certified. he further urged that the two letters addressed by the respondent one to the collector on october 111968 and the other to the mamlatdar on october 41971merely contained a request to make appropriate entries in the revenue records based on the mamlatdar 's order dated november 241959 and therefore the collector could not pronounce upon those letters as containing a claim put forward by the respondent for the first time to mines and mineral products in the said jagir villages to initiate an inquiry under s 372 of the bombay land revenue de. according to the learned counsel for the respondent unless a claim to property or rights over property was made either by the state against any person or by any person against the state there could be no occasion for the collector to held an inquiry contemplated by s 372 of the code. he therefore urged that the high court was right in quashing the collector 's order dated february 231973. having regard to the rival contentions of the parties summarised above it will appear clear that really two questions one general and the other specific in the light of the facts obtaining in the instant case arise for our determination in this appeal. the general question is whether once the competent authority under s 2 4 i of the act declares that the particular jagir is a proprietary one a further inquiry under s 372 of the land revenue code with a view to determining whether the jagirdar had rights to mines and mineral products in such jagir subsisting on the appointed date is competent. the other specific question is whether in the facts of the case and having regard to the nature of evidence considered and the specific finding made by the competent authority while determining the question under s 24. ithe further inquiry initiated by the collector under s 372 was misconceived and uncalled for. dealing with the first question which is of a general character it is clear that the answer thereto depends upon the true scope and ambit of the inquiry under s 2 4 i of the act and to determine the same it will be necessary to consider the scheme and object of the act and in particular the purpose of the said inquiry. the enactment as its preamble will show has been put on the statute book with a view to abolishing 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. s 2 contains the definitions of various expressions some of which are material s 2vi defines the expression jagir as meaning the grant by or recognition as a grant by the ruling authority for the time being before the merger of a village whether such grant is of the soil or an assignment of land revenue or both there is also an inclusive part of definition with which we are not concerned. s 2vii defines jagirdar as meaning a holder of a jagir village and includes his co sharer. s 2xv defines nonproprietary jagir as meaning a jagir which consists of a right in the jagirdar to appropriate as incident of the jagir land revenue or rent due to government from persons holding land in a jagir village but which does not consist of any right or interest in the soil. s 2xviii defines proprietary jagir as meaning a jagir in respect of which the jagirdar under the terms of a grant or agreement or by custom or usage is entitled to any rights or interest in the soil. s 24though it forms part of a definition section contains a substantive provision which is material for our purposes and it runs thus 24. if any question arises. i whether a jagir is proprietary or non proprietary iiwhether any land is ghatked or jiwai or iiiwhetherany person is a permanent holder. the state government shall decide the question and such decision shall be final. provided that the state government may authorise any officer to decide questions arising under any of the subclausesiii and iii and subject to an appeal to the state government his decision shall be final. section 3which contains the main provision dealing with abolition of jagirs provides that 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 which under s 2 1 i is a date on which the act comes into force which is august 11954all jagirs shall be deemed to have been abolished and 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 or 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. as a consequence of the abolition of jagirs under s 3 all jagir villages became unalienated villages and therefore under s 4 it has been provided that all jagir villages shall be liable to the payment of land revenue in accordance with the provisions of the code and the rules made thereunder and the provisions of the code and the rules relating to unalienated land shall apply to such villages. ss 5 and 6 make provision as to what persons upon abolition of jagirs and conversion of jagir land into unalienated land would be occupants who shall be primarily liable to the state government for payment of land revenue. s 8 declares that all public roads lands paths bridges titches dikes and fences on or besides the same the bed of the sea and of harbours creeks below high water mark and of rivers streams nalaps lakes wells and tanks and all canals and water courses etc situated in jagir village shall vest in the state government and shall be deemed to be the property of the state government and all rights held by such jagirdars in such property shall be deemed to have been extinguished s 10 contains an express saving provision relating to rights to mines and mineral products and it provides that nothing in this act or any other law for the time being in force shall be deemed to affect the rights of any jagirdar subsisting on the appointed date to mines or mineral products in a jagir village granted or recognised under any contract. grant or law for the time being in force or by custom or usage. s 11 1 provides for the quantum of compensation payable to a non proprietary jagirdar on account of abolition of his jagir and extinguishment of his rights while s 112 makes similar provision for quantum of compensation to a proprietary jagirdar on account of the abolition of his jagir and extinguishment of his rights. ss 13 and 14 provide for methods of awarding compensations to jagirdars by the collector and against the awards of the collector under either of these provisions a appeal has been provided at the instance of the aggrieved party to the revenue tribunal under s 16 s 17 provides the procedure for disposal of appeals by the revenue tribunal while s 18 prescribes a period of limitation for preferring such appeals and s 20 gives finality to the award made by the collector subject to appeal to the revenue tribunal. the rest of the sections are if formal character and not material for our purposes. the aforesaid survey of the material provisions of the act will bring out two or three aspects very clearly. in the first place the preamble and s 3 of the act clearly show that the object of the enactment is to abolish jagirs of all kinds in the merged territories and merged areas in the state of bombay and to convert all jagir villages into unalienated villages liable to the payment of land revenue in accordance with the provisions of the bombay land revenue code. secondly compensation is made payable under s 11 of the act to jagirdars whose jagirs and other incidental rights have been extinguished but it will be pertinent to note that no provision has been made for payment of compensation in respect of rights to mines and mineral products in a jagir village obviously because if by the grant in question the jagirdar has not been given any rights to mines and mineral products no compensation would be payable and if there be a grant of mines and mineral products the same have been saved to the jagirdar under s 10 of the act. thirdly the quantum of compensation payable for abolition of jagir and extinguishment of his other rights depends upon what kind of jagir has been abolished whether it is proprietary or non proprietary in other words it is clear that the inquiry into the nature of the jagir under s 2 4 i is for the purpose of determining the quantum of compensation payable to a jagirdar inasmuch as in the case of a non proprietary jagir the jagirdar is entitled to compensation at the rate of three times the amount of land revenue received by or due to him as an incident of jagir during the five years immediately before the appointed date under s 11 1while in the case of a proprietary jagir in respect of land held by a permanent holder the jagirdar is entitled to compensation equivalent to three multiples of the assessment fixed for such land s 113 provides for compensation and computation thereof to a jagirdar having any right or interest in any property referred to in s 8 in such an inquiry ordinarily no determination of any rights of the jagirdar to mines or mineral products in a jagir village will be undertaken for no compensation is payable in respect of any rights to mines and mineral products in a jagir village. there is yet one more aspect emerging from the definition of the expression proprietary jagir which leads to the same inference. proprietary jagir has been defined in s 2xviii to mean a jagir in respect of which the jagirdar under the terms of a grant or agreement or by custom or usage is entitled to any rights or interest in the soil. in other words the competent authority holding an inquiry under s 24 i can come to the conclusion that a particular jagir is proprietary if it finds that the jagirdar under the terms of a grant or agreement is entitled to some rights or interest in the soil other than mines or mineral products. these aspects bring out true scope and ambit of the inquiry under sec 24i and clearly show that the determination of the question whether a jagir is proprietary or nonproprietary does not necessarily involve the determination of the question whether the jagirdar had any rights to mines and mineral products on the appointed date it is true that prima facie the owner of the surface of the land would be entitled to everything beneath the land and ordinarily mines and mineral products would pass with the right to the surface but this would be so in the absence of any reservations made in the grant if there be reservations or qualifications in regard to mines or mineral products in the grant then these would not pass. in this case also notwithstanding the alleged unqualified grant in favour of the respondent the mamladar 's order dated november 241959on which the respondent strongly relies has held that the rights to excavate mica were retained by the state and not granted to the respondent though the material or basis on which it is so held is not available on the record. it is therefore not possible to accept the contention of learned counsel for the respondents that a determination under s 2 4 i of the act to the effect that a particular jagir is a proprietary one necessarily implies that the grantee is entitled to mines and mineral products in the villages comprised in the grant especially when having regard to the definition given in s 2xviii a jagir could be proprietary without a right to mines and mineral products. in other words our answer to the general question raised above would be that even after the competent authority has declared a particular jagir to be a proprietary one under s 24. i of the act a further inquiry under s 372 of the bombay land revenue code into the question whether a jagirdar had any subsisting rights to mines and mineral products in the jagir villages on the appointed date would be competent unless the grant of a right to mines and mineral products or the actual enjoyment thereof in keeping with the grant happens to be the basis of the determination under s 2 4 1 of the act. turning to the other specific question raised by counsel for the respondent before us we are clearly of the view that in the facts and circumstances of the case the inquiry initiated by the collector under s 374 of the bombay land revenue code will have to be regarded as incompetent misconceived and uncalled for. the main valid objection to the said inquiry is that the condition precedent the existence of which canlead to the initiation of such inquiry is absent here. s 371 of the code contains the well known declaratory provision where under all public roads lanes and paths the bridges ditches dikes beds of the sea harbours and creeks below high water mark and of rivers streams nallas lakes and tanks etc and all lands wherever situated which are not the property of individuals are declared to be with all rights in or over the same or appertaining thereto the property of the crown then follows sub s 2 which is material and it runs thus 372. where any property or any right in or over any property is claimed by or on behalf of the crown or by any person as against the crown it shall be lawful for the collector or a survey officer after formal inquiry of which due notice has been given to pass an order deciding the claim. under sub s 3the decision of the collector under sub s 2 is rendered final subject to the result of a suit that is required to be instituted in a civil court within one year of the said. decision on a reading of sub s 2which we have quoted above it will appear clear that laying a claim to a property or any right in or over the property either by the state against an individual or by the individual against the state is a condition precedent to the collector 's power to hold an inquiry contemplated by that provision. in other words before the collector can initiate an inquiry under that provision either the state or the individual must put forward a claim to a property or any right in or over the property and it is such claim that is to be inquired into by the collector whose decision subject to a civil suit filed within one year is rendered final. the question in the instant case is whether the respondent by making the two applications one dated october 111968 to the collector of sabarkantha and the other dated october 41971to the mamlatdar taluka idar could be said to have put forward or laid a claim to a right to excavate gravel and stone a particular mineral product so as to afford an occasion for the collector to initiate the inquiry. the material on record clearly shows that the respondent could not be said to have done so. admittedly by his previous order dated november 241959the mamlatdar of talukadar had declared that the respondent had been granted all the rights particularly the right to quarry and remove gravel and stones in isarwada and kapoda villages in the year 1947 by the idar stale and that thereafter in the years 1952 and 1953 the jagirdar had taken the produce of stone and that therefore the government could not stop him from taking out gravel and stones but that the rights to excavating mica had been retained by the state further pursuant to this order the appropriate entry had been made in the relevant village records form no 6 of village kapoda on june 181963recognising the respondents right to take out gravel and stones which entry was verified and confirmed on march 301965it was in this situation that the respondent made the aforesaid two applications one to the collector sabarkantha and the other to the mamladar taluka idar whereby relying upon the previous order of the mamlatdar dated november 241959he requested that appropriate entries pertaining to his right to gravel and stones should be similarly made in respect of village isarwada. it is thus clear that by these two applications the respondent had not put forward any claim as such to excavating gravel and stones for the first time but had merely requested the making of appropriate entry with regard to his said right which had already been recognised by the state government previously. that being the position there was no occasion for the collector to initiate the inquiry under s 372 of the code in fact he had no jurisdiction to do so the condition precedent not being satisfied. moreover having regard to the statement made by counsel for the respondent before us it would be unfair to subject the respondent to the further inquiry under s 372 of the code. we may state that counsel for the respondent categorically stated before the court that his client was confining his right to excavating only one type of mineral product namely gravel and stones and that too from only two villages namely kapoda and isarwada comprised in his jagir in regard to which the mamlatdar 's order dated november 241959was quite clear and therefore he urged that the further inquiry under s 372 of the code into that very right was misconceived and uncalled for. we find considerable force in this contention. besides while determining the proprietary nature of the grant under s 241 of the act the competent authority had on evidence led before it alluded among others to the respondent 's right to excavate and sell gravel and stones and enjoyment thereof by the respondent. in these circumstances it would be fair and proper that the respondent is not subjected to a further inquiry under s 372 of the code so far as his right to excavating gravel and stones from the two villages of kapoda and isarwada is concerned. if and when he prefers a claim to this particular mineral productfrom other villages comprised in his grant or to the other mines ormineral products in all the villages including isarwada and kapodaan inquiry into such claim under s 372 could be held but even the decision at such inquiry would be subject to adjudication by a civil court in appropriate proceedings for the final pronouncement on such rights must as is clear from the scheme of the bombay land revenue code always rest with the civil court. in this view of the matter we feel that the high court was right in its final conclusion whereby it has quashed the inquiry initiated by the collecor under s 372 of the code and issued the necessary injunction prayed for by the respondent. the appeal is therefore dismissed with costs. appeal dismissed.

IN-Ext

FACTS by hajur order the respondent was granted daljitgarh jagir comprising of 10 villages by the then ruler of idar; by another hajur order the respondent was given a further grant in jivarak of 3 villages, by yet another hajur order ,villages were granted in jivarak to the respondent by the ruler of idar in substitution of the villages mentioned in the previous two orders. according to the respondent by these grants read together he was given full proprietary rights in the soil of the said villages. admittedly,on the coming into force of the bombay merged territories and areas (jagirs abolition) act,1953 (hereinafter referred to as "the act") i.e.with effect from respondent's daljitgarh jagir stood abolished and all his rights in the jagir villages,save as expressly provided by or under the act,were extinguished and the respondent became entitled to compensation under s.11 of the act. according to the respondent since the entries made in the revenue records in respect of his rights to mines and mineral products were not sufficient and proper ,he by his application requested the collector to issue necessary orders to the,idar,to make appropriate entries regarding his rights in the minerals in village isarwada. thereupon a notice under s.37(2) of the bombay land revenue code for the purpose of holding an inquiry into the rights of the respondent to mines and mineral products of the said villages claimed by the respondent wag served upon him but the respondent raised a preliminary objection that such inquiry wag misconceived and incompetent in view of the determination made under s.2 (4) (i) of the act and having regard to the provisions of s.10 of the act-his rights,to mines and mineral products were expressly saved. the collector overruled the preliminary objection and directed that the inquiry shall proceed and the respondent was directed to produce his evidence in support of his claim on a fixed date. aggrieved by this order passed by the collector the respondent preferred a writ petition under art.227 of the constitution to the,gujarat high court and writ of certiorari quashing the order and a direction restraining the collector from further proceeding with the inquiry under s.37(2) of the land revenue code were sought. these reliefs sought by the respondent were resisted by the state of gujarat and the collector principally on the ground that the inquiry under s.37(2) of the land revenue code into the rights to mines and mineral products in the said villages claimed by the respondent was necessary and proper and could not be said to-be concluded by the determination made under s.2 (4) (1) of the act by the competent authority. the high court set aside the collector's order and further issued an injunction permanently restraining the state of gujarat and the collector from initiating any inquiry under s.37(2) in respect of the respondents rights to mines and mineral products in the said villages. the appellants seek to challenge the said judgment and order of the gujarat high court in this appeal. ARGUMENT learned counsel for the appellants has contended that the high court has adopted an erroneous view of the scope and ambit of the inquiry contemplated under s.2(4)(i) of the act by the competent authority. according to learned counsel the mere circumstance that the respondent's jagir was found under s.2(4. i) to be proprietary was not tantamount to the establishment by the respondent of his rights to mines and mineral products in the villages of his jagir for which there must be an actual grant or contract or law or custom or usage recognising such rights and this could only be determined by the collector by holding an inquiry under s.37(2) of the bombay land revenue code,and,therefore the high court was clearly in error in coming to the conclusion that the inquiry initiated by the second appellant under s.37(2) of the bombay land revenue code,was incompetent or without jurisdiction. on the other hand,learned counsel for the respondent contended that a determination under s.2 (4) (i) of the act that a particular jagir 'was a proprietary one necessarily implied that the grant was of soil and the grantee was entitled to mines and mineral products which were expressly saved under s.10 of the act and in any event on the facts obtaining in the instant case the competent authority acting under s.2 (4) (i) of the act,while coming to the conclusion that the respondent's jagir was proprietary one,bad relied upon the unqualified nature of the grant and also considered the evidence led before it touching upon the several rights. according to the learned counsel for the respondent unless a claim to property or rights over property was made either by the state against any person or by any person against the state,there could be no occasion for the collector to held an inquiry contemplated by s.37(2) of the code. he,therefore,urged that the high court was right in quashing the collector's order ISSUE the main question raised in this appeal by special leave at the instance of state,of gujarat and the collector against the gujarat high court's judgment allowing the writ petition of the respondent is whether once the competent authority under s.2(4) (i) of the bombay merged territories and areas (jagirs abolition. act,1953 declares that a particular jagir is a proprietary one, a further inquiry under s.37 (2) of the bombay land revenue code with a view to determining whether the jagirdar had any rights to mines or mineral products in his jagir granted or recognised under any contract,grant or law for the time being in force or by custom or usage is competent. the general question is whether once the competent authority under s.2 (4) (i) of the act declares that the particular jagir is a proprietary one a further inquiry under s.37(2) of the land revenue code with a view to determining whether the jagirdar had rights to mines and mineral products in such jagir subsisting on the appointed date is competent. the other specific question is whether in the facts of the case and having regard to the nature of evidence considered and the specific finding made by the competent authority while determining the question under s.2(4. i),the further inquiry initiated by the collector under s.37(2) was misconceived and uncalled for. ANALYSIS dealing with the first question which is of a general character,it is clear that the answer thereto depends upon the true scope and ambit of the inquiry under s.2 (4) (i) of the act and to determine the same it will be necessary to consider the scheme and object of the act and.in particular the purpose of the said inquiry. in the first place the,preamble and s.3 of the act clearly show that the object of the enactment is to abolish jagirs of all kinds in the merged territories and merged areas in the state of bombay and to convert all jagir villages into unalienated villages liable to the payment of land revenue in accordance with the provisions of the bombay land revenue code. secondly,compensation is made payable under s.11 of the act to jagirdars whose jagirs and other incidental rights have been extinguished but it will be pertinent to note that no provision has been made for payment of compensation in respect of rights to mines and mineral products in a jagir village,obviously because if by the grant in question the jagirdar has not been given any rights to mines and mineral products no compensation would be payable and if there be a grant of mines and mineral products the same have been saved "to the jagirdar under s.10 of the act. thirdly,the quantum of compensation payable for abolition of jagir and extinguishment of his other rights depends upon what kind of jagir has been abolished,whether it is proprietary or non-proprietary; in other words it is clear that the inquiry into the nature of the jagir under s.2 (4) (i) is for the purpose of determining the quantum of compensation payable to a jagirdar inasmuch as in the case of.a non-proprietary jagir the jagirdar is entitled to compensation at the rate of three times the amount of land revenue received by or due to him as an incident of jagir during the five years immediately before the appointed date under s.11 (1),while in the case of a proprietary jagir in respect of land held by a permanent holder the jagirdar is entitled to compensation equivalent to three multiples of the assessment fixed for such land; s.11(3) provides for compensation and computation thereof to a jagirdar having any right or interest in any property referred to in s.8.in such an inquiry ordinarily no determination of any rights of the jagirdar to mines or mineral products in a jagir village will be undertaken for' no compensation is payable in respect of any rights to mines and mineral products in a jagir village. there is yet one more aspect emerging from the definition of the expression "proprietary jagir" which leads to the same inference. "proprietary jagir" has been defined in s.2(xviii) to mean a jagir in respect of which the jagirdar under the terms of a grant or agreement or by custom or usage is entitled to any rights or interest in the soil. in other words,the competent authority holding an inquiry under s.2(4) (i) can come to the conclusion that a particular jagir is proprietary if it finds that the jagirdar under the terms of a grant or agreement is entitled to some rights or interest in the soil other than mines or mineral products. these aspects bring out true scope and ambit of the inquiry under sec.2(4)(i) and clearly show that the determination of the question whether a jagir is proprietary or nonproprietary does not necessarily involve the determination of the question whether the jagirdar had any rights to mines and mineral products on the appointed date. it is true that prima facie the owner of the surface of the land would be entitled to everything beneath the land and ordinarily mines and mineral products would pass with the right to the surface but this would be so in the absence of any reservations made in the grant; if there be reservations or qualifications in regard to mines or mineral products,in the grant,then these would not pass. in other words,before the collector can initiate an inquiry under that provision,either the state or the individual must put forward a claim to a property or any right in or over the property and it is such claim that is to be inquired into by the collector whose decision,subject to a civil suit filed within one year,is rendered final. it is thus clear that by these two applications the respondent had not put forward any claim as such to excavating gravel and stones for the first time' but,had merely requested the making of appropriate entry with regard to his said right which had already been recognised by the state government previously. that being the position,there was no occasion for the collector to initiate the inquiry under s.37(2) of the code-in fact,he had no jurisdiction to do so,the condition precedent not being satisfied. . besides,while determining the proprietary nature of the grant under s.2(4)(1) of the act the competent authority had,on evidence led before it,alluded among others to the respondent's right to excavate and sell gravel and stones and enjoyment thereof by the respondent. in these circumstances it would be fair and proper that the respondent is not subjected to a further inquiry under.s.37(2) of the code STATUTE s.2 of the bombay merged territories and areas (jagirs abolition. act,1953 contains the definitions of various expressions some of which are material. as a consequence of the,abolition of jagirs under s.3 all jagir villages became unalienated villages and,therefore,under s.4 it has been provided that all jagir villages shall be liable to the payment of land revenue in accordance with the provisions of the code. s.5 and 6 make provision as to what persons,upon abolition of jagirs and conversion of jagir land into unalienated land would be occupants,who shall be primarily liable to the state government for payment of land revenue. s.10 contains an express saving provision relating to rights to mines and mineral products

this appeal by special leave has been preferred by tata consultancy engineers against an award dated 20th december1978 of the industrial tribunal maharashtra bombay revising the wage scales of certain categories of employees and granting various other benefits. tata consultant engineers at its inception was a partnership firm but subsequently the partnership was dissolved and in 1974 the undertaking became one of the divisions of tata sons limited. it functions as a consulting organisation and a service industry and does not manufacture any product or carry on trade. its work force consists of engineers and supervisors and different categories of workmen. out of 665 employees at bombay the draftsmen and the administrative staff number 306 these workmen are members of the tata consultant employees union. they served a charter of demands in july1974on the appellant and as their demands were not accepted and conciliation proceedings proved fruitless the state government made a reference of the dispute under s 101 dindustrial tribunal maharashtra for adjudication. the reference was numbered i t no 292 of 1975. the union filed a statement before the tribunal claiming an upward revision of the wage scales and dearness allowance and an increase from fifteen years to twenty years in the span for earning annual increments. it was urged that the efficiency bar as a feature of the wage scales should be removed. the dearness allowance it was claimed should be granted on a slab system. the claim of the union was resisted by the appellant who maintained that the existing wage scales were fair and reasonable on a region cum industry basis and that it would not be possible for the appellant to bear the additional financial burden if the demands of the union were accepted. reference was made to the political uncertainty in iran which had placed an appreciable part of the appellant 's business in jeopardy and to various other factors peculiar to an engineering consultancy business beyond the appellant 's control. there was fierce competition also it was asserted from other similar organisations. the appellant had introduced various pay scales in 1973 and some time later they were revised. there was no separate dearness allowance until january1977 when it was introduced for the first time. house rent allowance was also paid. dearness allowance became payable at 10 of the basic wage subject to a minimum of rs 50 and house rent allowance at 30 of the basic salary. nothing those facts the tribunal observed that compared with the increased paying capacity of the appellant an inference drawn from the prosperity enjoyed by the appellant over the years there was definite need for revising the wage scales. it was pointed out that the dearness allowance and house rent allowance granted by the appellant made little impact in neutralising the cost of living. the need for revising the wage scales was not disputed by the appellant. in proceeding to revise the wage structure the tribunal took into account the two principles involved in the process the financial capacity of the industry to bear the burden of an increased wage bill and the prevailing wage structure on an industry cum region basis. wage scale statements were filed by the parties before the tribunal pertaining to several engineering consultancy organisations but. in the absence of pertinent information concerning the strength of their labour force the extent of their business the financial position for some years the capital invested the precise nature of the business the position regarding reserves dividends declared and future prospects of the company the tribunal found that it was unable to rely on them as comparable concerns. holding it impossible in the circumstances to apply the principle of industry cum region basis the tribunal turned to a consideration of the financial capacity of the company to bear an additional burden in this connection it proceeded on the footing that the appellant was a separate and independent division of tata sons limited and had no functional integrality with the other divisions. having regard to the net profits earned by the appellant from 1968 to 1977 it found that the acceptance of the demands of the union would result in an increased burden of rs 7 crores a burden which would dry up the appellant 's resources and would be impossible for it to bear. the union modified its demands but even the modified terms according to the tribunal appeared to be on the high side inasmuch as the resulting total burden of rs 1 70 crores was much higher than the average profits could sustain. the particular character of the appellant that it was a service industry and not a manufacturing concern was taken into account and it was observed that unlike a manufacturing business there was little scope for diversification in the case of an engineering consultancy. nonetheless the tribunal observed there was every reason to expect that the appellant would be able to earn sound profits in the future and the instability in its business activities occasioned by the turbulent political situation in iran would be it was expected compensated by contracts secured in different developing countries. for the purpose of determining the financial capacity of the appellant the tribunal followed unichem laboratories v their workmen 1972 indlaw sc 181 where it was held that the gross profits should be computed without making deductions on account of taxation development rebate and depreciation. it decided also that there was no ground for deducting the notional value of gratuity. revising the figures on that basis it computed the annual gross profits for the years 1968 to 1977 and determined the annual average at rs 26 69 lakhs. the tribunal took note of the elaborate scales of wages already existing in the wage structure of the appellant and decided to modify the existing structure of the scales with flat increases in each category. it also observed that the category of draughtsmen needed a special increase. but it rejected the demand of the union for dearness allowance on the basis of a slab system because that would have imposed an unacceptable burden on the appellant 's financial capacity and there was no reason why the existing scheme of dearness allowance should be disturbed when a substantial increase was being made in the level of the basic wage. taking into account the circumstance that besides the staff of 306 workmen represented by the union there were several other employees who would also have to be paid the tribunal considered it fair in paragraph 23 of the award to give a flat increase of rs 150 in the category of draughtsmen and rs 100 in the case of other categories. it rejected the demand of the union for abolishing the efficiency bar but the span of 15 years for earning increment was expanded in some grades to 20 years and some adjustments were also made in specific grades. the tribunal also noted that after the salaries of the employees had been fixed in the respective scales senior employees would have to be given some more increments in the new scales according to their completed years of service. taking all these factors into consideration it made an award dated 20th december1978 prescribing the following revision in the existing scales of wages. the tribunal maintained the existing schemes of dearness allowance and house rent allowance and observed that in view of the revised basic wages there would be a resultant increase in the dearness allowance and house rent allowance. the revised wage scales the tribunal directed should take effect retrospectively from 1st january1976 it also laid down the principle enabling the actual fitment of the workmen in their respective wage scales as on that date and also provided for the number of increments to which they would be entitled having regard to the period of completed service. two days after the award was made an application was made by the union stating in the said award your honour has observed at the end of para 22in view of the increase that is being allowed in the basic pay i do not propose to revise the existing scheme of dearness allowance. further it appears that the tribunal intended to grant the increase of rs 150 to each draughtsman and rs 100 to all other workmen in their basic pay. however this is not clearly mentioned anywhere in the award due to accidental slip or omission. the union prayed that the position may be clarified and the award corrected accordingly. on the same date the tribunal disposed of the application by the following order there can be no doubt that a flat increase of rs 150 to each of the employees in the category of draftsmen and of rs 100 to each employee in the other categories has been granted under my award. the same has been made clear in paragraph. no 23but it appears that the words to each employee after the figure rs 150 were omitted. similarly the same words to each employee after the figure 100 were omitted. when the award is sent for publication a necessary corrigendum be made in the award and the aforesaid words after the figures rs 150 and rs 100 be added. it may be mentioned that only from that point of view viz to grant flat increase of rs 150 and of rs 100 to the employees in the category of draftsmen and the other categories respectively that a burden statement was called for from the company and the same was submitted vide exhibit c 51 the fitment has also to be done only after the flat increase is added to the present basic salary of each employee. i do not think that any problem would arise for interpretation of the award. since the award has been already signed i do not think anything further can be added to this award. sd k n wani industrial tribunal. in this appeal the learned counsel for the appellant had covered a wide field but in the end he states that the appellant is aggrieved by two matters only. one is the retrospectivity attached to the revised wage scales and the other is the flat increase given to each employee of rs 150 in the category of draughtsmen and rs 100 in other categories resulting from the order dated 22nd december1978. the workmen have filed an appeal by special leave civil appeal no 2300 of 1979in which they have challenged the rejection by the tribunal of their claim in respect of dearness allowance which they contend should be pegged to the cost of living index and should not be a fixed amount. considering the appeal of tata consulting engineers first the contention of learned counsel for the appellant is that having regard to the financial capacity of the appellant the tribunal erred in making the wage scales retrospective and in any event in ranging the retrospectivity back to 1st january1976. we have been taken through some of the material on the record in the attempt to support the contention but after giving careful thought to the matter i think there is ample justification for what the tribunal did. it must be remembered that although the wage scales were introduced as long ago as 1973 they were maintained at that level except for a slight revision some time thereafter. no dearness allowance was paid until the beginning of 1977 and the house rent allowance also was introduced about that time. the cost of living had gone on increasing from 1972 onwards and as the tribunal has found the dearness allowance and house rent allowance made no appreciable impact in neutralising the increasing cost. during all these years the appellant had continued to enjoy increasing profits nonetheless the emoluments received by the workmen did not receive the impress of the appellant 's growing prosperity. the charter of demands was presented by the union in july1974 and when conciliation proceedings failed the state government made the reference to the industrial tribunal in 1975 the tribunal has referred to various considerations which prevailed with it in giving retrospectivity to the revised pay scales. they are considerations which can not be ignored. accordingly the contention raised on behalf of the appellant against retrospectivity of the wage scales must be rejected. the challenge embodied in the second contention against the amendment of the award is more serious. it is urged that the amendment results in the inclusion of a flat increase of rs 150 to each workman in the case of draughtsman and rs 100 to each workman in the case of other categories a result wholly unwarranted it is said by the intent of the original award and therefore falling beyond the jurisdiction of the tribunal. in making the application of 22nd. december1978the union invoked the jurisdiction of the. tribunal under rule 31 of the industrial disputes bombay rules1957 rule 31 provides the labour court tribunal or arbitrator may correct any clerical mistake or error arising from an accidental slip or omission in any award it or he issues. the jurisdiction given to the tribunal by rule 31 is closely circumscribed. it is only a clerical mistake or error which can be corrected and the clerical mistake or error must arise from an accidental slip or omission in the award. an accidental slip or omission implies that something was intended and contrary to that intention what should not have been included has been included or what should have been included has been omitted. it must be a mistake or error amenable to clerical correction only. it must not be a mistake or error which calls for rectification by modification of the conscious adjudication on the issues involved. is the instant case one where the amendment made by the tribunal in the original award can be said to correct a mere clerical mistake or error arising from an accidental slip or omission. to answer the question it is necessary to examine the basis of the award and the intent which flows from that basis. the terms of reference in the state government 's order required the tribunal to revise the scales of pay and dearness allowance and there was no mention of giving any ad hoc increase in the basic pay of individual workman. it would do well to recall that the claim of the union filed before the tribunal also centered on the need to revise the wage scales. that was the main issue between the parties. it is to the task of revising the pay scales that the tribunal addressed itself and throughout the material part of the award it is that task which held its focussed attention. the financial capacity of the appellant and the related study of its annual profits from 1968 to 1977were examined from that view point. the sufficiency of the existing pay scales was considered in detail and regard was had to their original structure and the accretions made subsequently by way of dearness allowance and house rent allowance. for the purpose of restructuring the pay scales the tribunal ruled on the paying capacity of the appellant both with reference to the profits of the preceding year as well as the prospects of the future. the financial capacity as the tribunal observed constituted one of the principles which are required to be followed in the fixation of the wage structure. a clear statement of its intention is found in paragraph 22 of the award where the tribunal stated i only propose to modify the existing structures of the scales with flat increases in each category. no ad hoc increase to the pay of each individual workman was intended. and that is confirmed by what was stated in paragraph 23 of the award considering this outgoing the flat increase of rs 150 in the category of draughtsman and rs 100 in the case of the other categories would be fair. it will be noted that the pay scales of different categories were being restructured and the flat increase envisaged there related to an increase in the general pay scales of different categories. individual workmen were not present to the mind of the tribunal. that the increase was pertinent to the general pay scales in the revised wage structure is patently clear from a comparison of the existing pay scales and the revised pay scales. the comparative table of existing pay scales and the revised pay scales has been reproduced earlier. the revised pay scales of all categories except the category of draughtsmen shows an increase of rs 100 in the initial pay fixed in each scale the increase in the case of the category of draughtsmen being rs 150 there was only one increase contemplated in the award in paragraph 23 of award and it is more than plain that the increase was the one incorporated in the revised pay scales pertaining to different categories. no second flat increase was envisaged at all. the amendment made by the tribunal has the effect of providing a second increase this time to each individual workmen. if as the tribunal has stated in the amendment order the increase in paragraph 23 was intended to apply to each individual workmen there is nothing in the body of the award to form the foundation on which the actual figures in the restructured pay scales can be made to rest. there will be no explanation why the initial start of the revised pay scales has been increased by rs 150 in the case of the category of draughtsmen and rs 100 in the case of other categories. considering the fitment of the workman in the revised scales it was stated in the award that a workman found drawing a salary less than the beginning of the grade would be stepped up to the beginning of the grade and if his pay fell between two steps in the reclassified pay scales the basic pay was to be fixed at the step higher in the revised scale. conspicuous by its absence is any reference to a flat increase in the pay of an individual workmen. even when considering the range of permissible retrospectivity the tribunal stated in the award in view of the revision of the wage scales there would be consequent increase in the dearness allowance and the house rent allowance. and the clinching circumstances of all is that the award was made on the basis that the overall financial load according to paragraph 33 of the award would be to the tune of about rs 5 lakhs. it was that figure which the tribunal had in mind against the backdrop of the gross annual figures when it made the revised pay scales retrospective from 1st. january1976 this liability taken with the liability accruing on the need to increase the salaries of the other staff determined the tribunal 's deliberations in regard to the several features of the award including the grant of increments related to completed periods of service the expansion of the span from 15 years to 20 years for earning increments and other benefits. it can not be the case of the union that the figure of rs 5 lakhs mentioned in paragraph 33 of the award represented the result of adding a flat increase to the pay of each workman in addition to the benefits conferred by the revised pay scales and other awarded reliefs. in its order of 22nd. december1978the tribunal has referred to the statement exhibit c 51 filed by the appellant when called upon to indicate the increased financial burden apprehended by it. the tribunal has relied on this statement as evidence showing that the appellant knew that a flat increase of rs 150 and rs 100 was intended to each of the employees in the category of draughtsmen and the other categories. in so construing the statement exhibit c 51the tribunal has grievously erred. it seems from a perusal of the document exhibit c 51that it is a statement giving trial figures of the increased financial load on different bases. on the basis that a sum of rs 150 per month was added to the pay of each draughtsman and a sum of rs 100 was added to the pay of every other workman who belonged to the union staff the financial load would increase to rs 922032 likewise if a flat increase of rs 100 was given to individual workmen of all categories including draughtsmen the increased financial load would total rs 764256 the statement then goes on to indicate that if a flat increase of rs 75 per month were given to individual workmen of all categories the total increase would be rs 578220 again if the flat increase is rs 65 per month to the individual workmen of all categories the additional load would total rs 497772 finally on the basis that the individual draughtsman would be given an increase of rs 75 per month and the individual workmen of other categories rs 50 per month the additional load was calculated at rs 463092 it will be noted that the statement exhibit c 51was prepared on the basis of the employees strength as in december1971 a similar statement was prepared on the basis of the employees strength as in september1978 these statements can not be regarded as evidence that the appellant was cognizant of the intention of the tribunal to provide a flat increase to the pay of each workman. the statement afforded an indication merely of what the additional financial load would be if a flat increase was given to the individual workman on the alternative basis set forth therein. none of the alternatives was actually adopted by the tribunal because when the award was made the tribunal proceeded instead to restructure the wage scales by the addition of rs 150 in the case of the category of draughtsmen and rs 100 in the case of other categories to the initial pay in the wage scales pertaining to those categories. the addition was integrated as a feature of the wage scales it was not regarded as an addition to the pay of each individual workman. it seems that the tribunal was betrayed by a curious confusion in accepting the plea of the union that a flat increase to the pay of each workman was intended in the original wage and consequently it fell into the error of amending the award. the evidence contained in the award throughout provides incontrovertible proof that this flat increase was never originally intended in the award. the amendment has resulted in the tribunal making as it were a supplementary award whereby a further relief is being granted beyond that granted in the original award. the original award was completed and signed by the tribunal and it can not be reopened now except for the limited purpose of rule 31 in travelling outside and beyond the terms of the original award the tribunal has committed a jurisdictional error. our attention has been drawn to what purports to be an endorsement by counsel for the appellant on the application dated 22nd december1978 filed by the union before the tribunal to the effect that the appellant would submit to whatever the tribunal decided and it is urged that the appellant is bound by the order made on the application. it is an accepted principle that consent by a party can not confer jurisdiction on a court. what is without jurisdiction will remain so. in the circumstances the order of 22nd december1978 is invalid so far as it amends paragraph 23 of the original award. the corrigendum amending the award in consequence is liable to be quashed. the second contention of the appellant is entitled to succeed. i shall now consider civil appeal no 2300 of 1979 filed by the workmen. the only contention of the workmen is that the tribunal should have fixed the dearness allowance in communion with the cost of living index. it is wrong in principle it is said to provide a fixed dearness allowance. reliance was placed on the hindustan times ltd new delhi v their workmen 1964 1 scr 234 1962 indlaw sc 436247 where it was observed by this court that dearness allowance should not remain fixed at any figure but should be on a sliding scale in order to neutralise a portion of the increase in the cost of living. reference was also made to bengal chemical pharmaceutical works limited v its workmen. 2 scr 113 1968 indlaw sc 183 now it is not a universal rule that the dearness allowance should in all cases be correlated with the cost of living index. the tribunal in the present case considered the matter and found it sufficient and in accord with justice that the wage scales should be restructured with suitable increments provided therein. it noted that dearness allowance was being granted by the appellant at 10 of the salary subject to a minimum of rs 50 and house rent allowance at 30 of the basic salary. having regard to the not inconsiderable improvement in the level of the basic wage it observed that there would be a consequent increase in the dearness allowance and house rent allowance. in view of the increase so secured the tribunal rejected the suggestion that a slab system should be introduced in the dearness allowance or that there should be any other modification of the principle on which dearness allowance was being presently granted. it declared that the cumulative effect of an improved wage structure together with dearness allowance operating on a slab system would throw an impossible burden of about rs 1 crore on the financial capacity of the appellant. it was open to the tribunal to adopt the position which it did. if the dearness allowance is linked with the cost of living index the whole award will have to be reopened and the entire basis on which it has been made will have to be reconsidered. the award is a composite document in which the several elements of increased wage scales larger increments longer span of 20 years for earning increments dearness allowance at 10 of the basic wage besides several other benefits have been integrated into a balanced arrangement in keeping with what the tribunal has found to be the financial capacity of the appellant. it is not possible to maintain one part of the award and supersede another. accordingly the appeal filed by the workmen must fail. in the result civil appeal no 2299 of 1979 is allowed in part insofar that the order dated 22nd december1978 of the industrial tribunal maharashtra bombay is quashed to the extent that it modifies the original award dated 20th december1978and the corrigendum made consequent thereto is also quashed. civil appeal no 2300 of 1979 is dismissed. there is no order as to costs. chinnappa reddy j we have had the advantage of perusing the judgment prepared by our learned brother pathak j we agree with him that civil appeal no 2300 of 1979 should be dismissed. we also agree with him that civil appeal no 2299 of 1979 should also be dismissed in so far as it relates to the award dated december 201978 however we do not agree with our learned brother that civil appeal no 2299 of 1979 should be allowed in so far as it relates to the order dated december 221978 of the industrial tribunal which purports to correct the award dated december 201978 in our opinion civil appeal no 2299 of 1979 should be dismissed in its entirety. we do not propose to give our reasons to the extent we are in agreement with pathak j and we propose to state our reasons for the disagreement only. it is needless to recapitulate all the basic facts which have been set out in the judgment of pathak j the award of the industrial tribunal was made on december 201978 on december 221978 that is to say two days after the award was made and when everything must have been fresh to the minds of the tribunal the respective parties and their advocates the employees union made an application under rule 31 of the industrial disputes bombay rules1957 seeking a correction of an error which it was claimed had crept into the award. the application was as follows in the above reference your honour was pleased to pass an award on 20th december1978. in the said award your honour has observed at the end of para 22in view of the increase that is being allowed in the basic pay i do not propose to revise the existing scheme of dearness allowance. further it appears that the tribunal intended to grant the increase of rs 150 to each draughtsman and rs 100 to all other workmen in their basic pay. the union therefore prays the honourable tribunal to clarify the position and correct the award accordingly. on this application the advocate for the employer company made the following endorsement submitted to whatever this honourable tribunal desires to do. thereafter the tribunal made an order on the same day in the following terms there can be no doubt that a flat increase of rs 150 to each of the employees in the category of draftsmen and of rs 100 to each employee in the other categories has been granted under my award. this order was made in the presence of shri manak gagrat advocate for the company and shri n p mehta advocate for the workmen. the endorsement made on the application by the advocate for the company does not indicate that the company had any objection to the award being corrected as sought by the employees union. on the other hand the endorsement reads as if there was tacit agreement on the part of the company to the correction sought by the union. the order dated december 221978 of the tribunal also does not reveal that there was any opposition by the company to the application for correcting the award. even so we propose to examine whether the correction sought by the employees union was within the bounds of the authority of the tribunal or whether it was in effect a fresh award. the primary and basic question considered by the industrial tribunal in making the award dated december 201978 was the question of revision of the wage scales. implicit and intrinsically connected with the question of revision of the wage scales were the questions of fitment of employees into the wage scales and flat or ad hoc increase of salaries of workmen wherever considered necessary. it can not possibly be doubted that an industrial tribunal deciding upon the wage scales of the employees of an establishment would have full liberty to propose ad hoc increase of salaries as part of the revision of wages. nor can it be doubted that fitment into the revised pay scales is certainly a part of the revision of pay scales. this in our opinion is elementary and fundamental to the jurisdiction of the industrial tribunal in revising wage scales. in the present case the industrial tribunal on a consideration of the material placed before it came to the conclusion that the company was in an undoubted position to bear the additional financial burden. at the end of paragraph 15 of the award the tribunal stated but there can be no doubt that the company can very well bear the additional burden. the question is what should be the extent of such burden. at the end of paragraph 18 of the award the tribunal said a mere reading of exhibit u 15 will immediately dispel the misgivings about the future of the present company. for some years to come this is likely to be one of the few consulting engineers who will be securing major contracts. again in paragraph 19 it was said i have no doubt that the present company would be able to bear the additional burden for the years to come. this is further borne out from the trading results of the company for the year 1968 69 to 1977 the profits have increased all along. the copy of the letter dated july 231973alongwith. the annexures from the company to the director general posts telegraphs delhi ex. c 27 indicates the important projects the company was handling in india and abroad and the amount of foreign exchange earned and repatriated. i will therefore proceed on the ground that the present company can bear the additional financial burden. finally at the end of paragraph 21. the tribunal said in view of this position the company can easily bear some burden that might fall as a result of the upward revision of the wage scales. the question is to what extent the relief should be given to the employees. after expressing himself in categoric terms about the capacity of the company to bear the additional financial burden the tribunal went on to say i only propose to modify the existing structure of the scales with flat increases in each category. the tribunal then considered the question whether draftsmen should get a higher flat increase and the question whether the existing scheme of dearness allowance should be revised. the tribunal then observed the flat increase of rs 150 in the category of draftsmen and rs 100 in the case of the other categories would be fair. thereafter various other matters were considered and finally the tribunal revised the wage scales in the manner already mentioned by my brother pathak j the question of fitment was then considered in the following manner fitment if as on 1st january1976an employee is drawing a salary less than the beginning of the respective grade he should be first stepped up to the beginning of the grade. if the pay of an employee does not coincide with any step in the revised pay scale and falls between two steps in the reclassified pay scales the basic pay of that employee shall be fixed at the step higher in the revised scale. after fixing the salary of the employees in the scales as above the employees should be given increments in the new scales as noted below i employees who have completed 5 years or more as on 1st january19763 increments. ii employees who have completed 4 years of service as on 1st january19762 increments. all other employees with more than one year 's service shall be given one increment. now if without any flat or ad hoc increase of salary the workmen were to be fitted into the revised scales of pay it would obviously result in serious anomalous situations. in the case of several senior employees the revised scale would yield but a very small and almost a token increase in the size of the pay packet whereas the junior employees would get a large benefit. while workmen raising industrial disputes for revision of wage scales are certainly minded about their future prospects in the matter of wages they surely would be more concerned with the immediate benefits according to them. that was why the industrial tribunal thought that an all round flat increase of rs 150 in the case of draftsmen and rs 100 in the case of other workmen was called for. it was clearly so intended by the tribunal as is evident from the reference to flat increase of rs 150 in the category of draftsmen and rs 100 in the case of the other categories. since there was to be a flat increase of rs 150 and rs 100 in the case of draftsmen and other workmen respectively the revised wage scale had necessarily to commence with figures rs 150 and rs 100 above the existing wage scales. immediately after the award was pronounced while the iron was still hot as it were the employees apparently realised that the employer might take advantage of the circumstance that it was not clearly mentioned in the award that all the employees were to get additional pay of rs 150 and rs 100 respectively and might contend that the tribunal had only revised the wage scales by increasing the salary on entry into the service and restructuring the scale of pay and never granted any ad hoc increase of salary to all employees. therefore they filed an application before the tribunal for correcting the award so as to bring out what was intended. as it has now turned out what the employees apparently suspected the employer might contend is precisely what the employer is not contending though the employer did not choose to so contend before the industrial tribunal itself when the employees filed the application for rectification. the application before the tribunal was filed under rule 31 of the bombay industrial disputes rules 1957which is as follows. a board court labour court tribunal or arbitrator may at any time suo moto or on an application made by any of the parties concerned may correct any clerical mistake or error arising from an accidental slip or omission in any proceedings report award or as the case may be decision. the omission of the words to each employee first after the figure rs 150 and again after the figure rs 100 was clearly an accidental slip or omission which the tribunal was entitled to correct. we are unable to see how it can be held to be otherwise. we are not impressed with the submission of the learned counsel for the company that the corrigendum was in effect a fresh award. we therefore see no ground for quashing the order dated december 221978 of the tribunal. the result of the foregoing discussion is that civil appeal no 2299 of 1979 has to be dismissed in its entirety. we have already indicated that we agree with our brother pathak j that the appeal civil appeal no 2300 of 1979 filed by the workmen should also be dismissed. while we find lot of force in the submission of shri v m tarkunde learned counsel for the workmen that dearness allowance linked to cost of living index is ordinarily the best and the most scientific method of computing dearness allowance it can not always be said that an illegality warranting interference under article 136 is committed if some other method is adopted. the tribunal has given satisfactory reason for adopting a different mode and we are not disposed to interfere with the award of the tribunal. in the result both the appeals are dismissed without any order as to costs. the order of the court was as follows. in view of the opinion of the majority both the appeals are dismissed and there is no order as to costs.

IN-Ext

FACTS tata consultant engineers,was a partnership firm but subsequently the partnership was dissolved and in 1974 the undertaking became one of the divisions of tata sons limited. it functions as a consulting organisation and a service industry,and does not manufacture any product or carry on trade.its work force consists of engineers and supervisors and different categories of workmen. the tata consultant employees union served a charter of demands in july,1974,on the appellant,and as their demands were not accepted and conciliation proceedings proved fruitless,the state government made a reference of the dispute under s.10(1)(d),industrial tribunal,maharashtra for adjudication. the union filed a statement before the tribunal claiming an upward revision of the wage scales and dearness allowance and an increase from fifteen years to twenty years in the span for earning annual increments. it was urged that the efficiency bar,as a feature of the wage scales,should be removed. the dearness allowance,it was claimed,should be granted on a slab system. the claim of the union was resisted by the appellant,who maintained that the existing wage scales were fair and reasonable on a region-cum-industry basis and that it would not be possible for the appellant to bear the additional financial burden if the demands of the union were accepted. the appellant had introduced various pay scales in 1973 and some time later they were revised. there was no separate dearness allowance until january,1977 when it was introduced for the first time. house rent allowance was also paid. dearness allowance became payable at 10% of the basic wage subject to a minimum of rs.50/ and house rent allowance at 30% of the basic salary. the tribunal observed that compared with the increased paying capacity of the appellant,an inference drawn from the prosperity enjoyed by the appellant over the years,there was definite need for revising the wage scales. it also laid down the principle enabling the actual fitment of the workmen in their respective wage scales as on that date and also provided for the number of increments to which they would be entitled having regard to the period of completed service. two days after the award was made,an application was made by the union stating: "in the said award,your honour has observed,at the end of para 22,in view of the increase that is being allowed in the basic pay,i do not propose to revise the existing scheme of dearness allowance." the workmen have filed an appeal by special leave, in which they have challenged the rejection by the tribunal of their claim in respect of dearness allowance which,they contend,should be pegged to the cost of living index and should not be a fixed amount. ARGUMENT considering the appeal of tata consulting engineers first,the contention of learned counsel for the appellant is that having regard to the financial capacity of the appellant the tribunal erred in making the wage scales retrospective and,in any event,in ranging the retrospectivity back to 1st january,1976. the learned counsel for the appellant had covered a wide field,but in the end he states that the appellant is aggrieved by two matters only. one is the retrospectivity attached to the revised wage scales,and the other is the flat increase given to each employee of rs.150/-in the category of draughtsmen and rs.100/-in other categories resulting from the order dated 22nd december,1978. it is urged that the amendment results in the inclusion of a flat increase of rs.150/-to each workman in the case of draughtsman and rs.100/-to each workman in the case of other categories,a result wholly unwarranted,it is said,by the intent of the original award and,therefore,falling beyond the jurisdiction of the tribunal. the only contention of the workmen is that the tribunal should have fixed the dearness allowance in communion with the cost of living index. ISSUE the primary and basic question considered by the industrial tribunal,in making the award dated december 20,1978 was the question of revision of the wage-scales. implicit and intrinsically connected with the question of revision of the wage-scales were the questions of fitment of employees into the wage-scales and flat or ad-hoc increase of salaries of workmen wherever considered necessary. ANALYSIS it must be remembered that although the wage scales were introduced as long ago as 1973 they were maintained at that level except for a slight revision some time thereafter. no dearness allowance was paid until the beginning of 1977 and the house rent allowance also was introduced about that time. the cost of living had gone on increasing from 1972 onwards and,as the tribunal has found,the dearness allowance and house rent allowance made no appreciable impact in neutralising the increasing cost. during all these years,the appellant had continued to enjoy increasing profits; nonetheless the emoluments received by the workmen did not receive the impress of the appellant's growing prosperity. the charter of demands was presented by the union in july,1974 and when conciliation proceedings failed the state government made the reference to the industrial tribunal in 1975. they are considerations which cannot be ignored. accordingly,the contention raised on behalf of the appellant against retrospectivity of the wage scales must be rejected. the financial capacity of the appellant,and the related study of its annual profits from 1968 to 1977,were examined from that view point. the sufficiency of the existing pay scales was considered in detail,and regard was had to their original structure and the accretions made subsequently by way of dearness allowance and house rent allowance. for the purpose of restructuring the pay scales the tribunal ruled on the paying capacity of the appellant,both with reference to the profits of the preceding year as well as the prospects of the future. the financial capacity,as the tribunal observed,constituted one of "the principles which are required to be followed in the fixation of the wage structure." no ad hoc increase to the pay of each individual workman was intended. the jurisdiction given to the tribunal by rule 31 is closely circumscribed. it is only a clerical mistake or error which can be corrected,and the clerical mistake or error must arise from an accidental slip or omission in the award. an accidental slip or omission implies that something was intended and contrary to that intention what should not have been included has been included or what should have been included has been omitted. it must be a mistake or error amenable to clerical correction only. it must not be a mistake or error which calls for rectification by modification of the conscious adjudication on the issues involved. the omission of the words to each employee first after the figure rs.150/-and again after the figure rs.100/-was clearly an accidental slip or omission which the tribunal was entitled to correct. it will be noted that the pay scales of different categories were being restructured,and the flat increase envisaged there related to an increase in the general pay scales of different categories. individual workmen were not present to the mind of the tribunal. that the increase was pertinent to the general pay scales in the revised wage structure is patently clear from a comparison of the existing pay scales and the revised pay scales. the comparative table of existing pay scales and the revised pay scales has been reproduced earlier. the revised pay scales of all categories,except the category of draughtsmen,shows an increase of rs.100/-in the initial pay fixed in each scale,the increase in the case of the category of draughtsmen being rs.150/. the amendment made by the tribunal has the effect of providing a second increase,this time to each individual workmen. if,as the tribunal has stated in the amendment order,the increase in paragraph 23 was intended to apply to each individual workmen,there is nothing in the body of the award to form the foundation on which the actual figures in the restructured pay scales can be made to rest. there will be no explanation why the initial start of the revised pay scales has been increased by rs.150/-in the case of the category of draughtsmen and rs.100/-in the case of other categories. considering the fitment of the workman in the revised scales,it was stated in the award that a workman found drawing a salary less than the beginning of the grade would be stepped up to the beginning of the grade and if his pay fell between two steps in the reclassified pay scales the basic pay was to be fixed at the step higher in the revised scale. reliance was placed on the hindustan times ltd.,new delhi v.their workmen [1964] 1 scr 234 1962 indlaw sc 436,247 where it was observed by this court that dearness allowance should not remain fixed at any figure but should be on a sliding scale in order to neutralise a portion of the increase in the cost of living. now,it is not a universal rule that the dearness allowance should in all cases be correlated with the cost of living index. it was open to the tribunal to adopt the position which it did. if the dearness allowance is linked with the cost of living index the whole award will have to be reopened and the entire basis on which it has been made will have to be reconsidered. the award is a composite document in which the several elements of increased wage scales,larger increments,longer span of 20 years for earning increments,dearness allowance at 10% of the basic wage,besides several other benefits,have been integrated into a balanced arrangement in keeping with what the tribunal has found to be the financial capacity of the appellant. it is not possible to maintain one part of the award and supersede another. conspicuous by its absence is any reference to a flat increase in the pay of an individual workmen. we are not impressed with the submission that the corrigendum was in effect a fresh award. we,therefore,see no ground for quashing the of the tribunal. dearness allowance linked to cost of living index is ordinarily the best and the most scientific method of computing dearness allowance,it cannot always be said that an illegality warranting interference under article 136 is committed if some other method is adopted. the tribunal has given satisfactory reason for adopting a different mode and we are not disposed to interfere with the award of the tribunal. STATUTE in making the application of 22nd december,1978,the union invoked the jurisdiction of the tribunal under rule 31 of the industrial disputes (bombay) rules,1957. rule 31 provides: the labour court,tribunal or arbitrator may correct any clerical mistake or error arising from an accidental slip or omission in any award it or he issues. the application before the tribunal was filed under rule 31 of the bombay industrial disputes rules 1957,which is as follows: "a board,court,labour court,tribunal or arbitrator may,at any time,suo moto or on an application made by any of the parties concerned,may correct any clerical mistake or error arising from an accidental slip or omission in any proceedings,report,award or as the case may be".

it was just the other day that our brothers ranganath misra and m m dutt jj had to give directions in a case vincent panikurbangara v union of india where a public spirited litigant had complained about the unscrupulous exploitation of the indian drug and pharmaceutical market by multinational corporations by putting in circulation low quality and even deleterious drugs. in this group of cases we are faced with a different problem of alleged exploitation by big manufacturers of bulk drugs. the problem is that of high prices bearing it is said little relation to the cost of production to the manufacturers. by way of illustration we may straightaway mention a glaring instance of such high pricing which was brought to our notice at the very commencement of the hearing. barlagan ketone a bulk drug was not treated as an essential bulk drug under the drugs prices control. order 1970 and was not included in the schedule to that order. a manufacturer was under the provisions of that order free to continue to sell the drug at the price reported by him to the central government at the time of the commencement of the order but was under an obligation not to increase the price without the prior approval of the central government. the price which the manufacturer of barlagan kotone reported to the central government in 1971 was rs 24735 68 per kg. after the 1979 drugs prices control. order came into force the distinction between essential and non essential bulk drugs was abolished and a maximum price had to be fixed for barlagan ketone also like other bulk drugs. the manufacturer applied for fixation of price at rs 8500 per kg. the government however fixed the price at rs 1810 per kg. for the moment ignoring the price fixed by the government we see that the price of rs 24735 per kg. at which the manufacturer was previously selling the drug and at which he continues to market the drug to this day because of the quashing of the order fixing the price by the high court is so unconsciously high even compared with the price claimed by himself that it appears to justify the charge that some manufacturers do indulge in profiteering. profiteering by itself is evil. profiteering in the scarce resources of the community much needed life sustaining food stuffs and lifesaving drugs is diabolic. it is a menance which had to be lettered and curbed. one of the principal objectives of the essential commodities act 1955 is precisely that. t must be remembered that article 39b enjoins a duty on 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. the essential commodities act is a legislation towards that end. section 31 of the essential commodities act enables the central government if it 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 price to provide for regulating or prohibiting by order the production supply and distribution thereof and trade and commerce therein. in particular section 32c enables the central government to make an order providing for controlling the price at which any essential commodity may be bought or sold. it is in pursuance of the powers granted to the central government by the essential commodities act that first the drugs prices control. order 1970 and later the drugs prices control. order 1979 were made. armed with authority under the drugs prices control. order 1979 the central government issued notifications fixing the maximum prices at which various indigenously manufactured bulk drugs may be sold by the manufacturers. these notifications were questioned on several grounds by the manufacturers and they have been quashed by the delhi high court on the ground of failure to observe the principles of natural justice. since prices of formulations are primarily dependent on prices of buli drugs the notifications fixing the retail prices of formulations were also quashed. the manufacturers had also filed review petitions before the government under paragraph 27 of the 1979 order. the review petitions could not survive after the notifications sought to be reviewed had themselves been quashed. nevertheless the high court gave detailed directions regarding the manner of disposal of the review petitions by the high court. the union of india has preferred these appeals by special leave of this court against the judgment of the high court. the case for the union of india was presented to us ably by shri g ramaswami the learned additional solicitor general and the manufacturers were represented equally ably by shri anil diwan. before we turn to the terms of the drugs prices control. order 1979 we would like to make certain general observations and explain the legal position in regard to them. we start with the observation price fixation is neither the function nor the forte of the court. we concern ourselves neither with the policy nor with the rates. but we do not totally deny ourselves the jurisdiction to enquire into the question in appropriate proceedings whether relevant considerations have gone in and irrelevant considerations kept out of the determination of the price. for example if the legislature has decreed the pricing policy and prescribed the factors which should guide the determination of the price we will if necessary enquire into the question whether the policy and the factors are present to the mind of the authorities specifying the price. but our examination will stop there. we will go no further. we will not deluge ourselves with more facts and figures. the assembling of the raw materials and the mechanics of price fixation are the concern of the executive and we leave it to them. and we will not revaluate the considerations even if the prices are demonstrably injurious to some manufacturers or producers. the court will of course examine if there is any hostile discrimination. that is a different cup of tea altogether. the second observation we wish to make is legislative action plenary or subordinate is not subject to rules of natural justice. in the case of parliamentary legislation the proposition is self evident. in the case of subordinate legislation it may happen that parliament may itself provide for a notice and for a hearing there are several instances of the legislature requiring the subordinate legislating authority to give public notice and a public hearing before say for example levying a municipal rate in which case the substantial non observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. the right here given to rate payers or others is in the nature of a concession which is not to detract from the character of the activity as legislative and not quasijudicial. but where the legislature has not chosen to provide for any notice or hearing no one can insist upon it and it will not be permissible to read natural justice into such legislative activity. occasionally the legislature directs the subordinate legislating body to make such enquiry as it thinks fit before making the subordinate legislation. in such a situation while such enquiry by the subordinate legislating body as it deems fit is a condition precedent to the subordinate legislation the nature and the extent of the enquiry is in the discretion of the subordinate legislating body and the subordinate legislation is not open to question on the ground that the enquiry was not as full as it might have been. the provision for such enquiry as it thinks fit is generally an enabling provision intended to facilitate the subordinate legislating body to obtain relevant information from all and whatever source and not intended to vest any right in any one other than the subordinate legislating body. it is the sort of enquiry which the legislature itself may cause to be made before legislating an enquiry which will not confer any right on anyone. the third observation we wish to make is price fixation is more in the nature of a legislative activity than any other. it is true that with the proliferation of delegated legislation there is a tendency for the line between legislation and administration to vanish into an illusion. administrative quasi judicial decisions tend to merge in legislative activity and conversely legislative activity tends to fade into and present an appearance of an administrative or quasi judicial activity. any attempt to draw a distinct line between legislative and administrative functions it has been said is difficult in theory and impossible in practice. though difficult it is necessary that the line must sometimes be drawn as different legal fights and consequences may ensue. the distinction between the two has usually been expressed as one between the general and the particular. a legislative act is the creation and promulgation of a general rule of conduct without reference to particular cases an administrative act is the making and issue of a specific direction or the application of a general rule to a particular case in accordance with the requirements of policy. legislation is the process of formulating a general rule of conduct without reference to particular cases and usually operating in future administration is the process of performing particular acts of issuing particular orders or of making decisions which apply general rules to particular cases. it has also been said rule making is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class while an adjudication on the other hand applies to specific individuals or situations. but this is only a bread distinction not necessarily always true. administration and administrative adjudication may also be of general application and there may be legislation of particular application only. that is not ruled out. again adjudication determines past and present facts and declares rights and liabilities while legislation indicates the future course of action. adjudication is determinative of the past and the present while legislation is indicative of the future. the object of the rule the reach of its application the rights and obligations arising out of it its intended effect on past present and future events its form the manner of its promulgation are some factors which may help in drawing the line between legislative and non legislative acts. a price fixation measure does not concern itself with the interests of an individual manufacturer or producer. it is generally in relation to a particular commodity or class of commodities or transactions. it is a direction of a general character not directed against a particular situation. it is intended to operate in the future. it is conceived in the interests of the general consumer public. the right of the citizen to obtain essential articles at fair prices and the duty of the state to so provide them are transformed into the power of the state to fix prices and the obligation of the producer to charge n6 more than the price fixed. viewed from whatever angle the angle of general application the prospectivity of its effect the public interest served and the rights and obligations flowing therefrom there can be no question that price fixation is ordinarily a legislative activity. pricefixation may occasionally assume an administrative or quasi judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals. such situations may arise when the owner of property or goods is compelled to sell his property or goods to the government or its nominee and the price to be paid is directed by the legislature to be determined according to the statutory guidelines laid down by it. in such situations the determination of price may acquire aquasi judicial character. otherwise price fixation is generally a legislative activity. we also wish to clear a misapprehension which appears to prevail in certain circles that price fixation affects the manufacturer or producer primarily and therefore fairness requires that he be given an opportunity and that fair opportunity to the manufacturer or producer must be read into the procedure for price fixation. we do not agree with the basic premise that price fixation primarily affects manufacturers and producers. those who are most vitally affected are the consumer public. it is for their protection that price fixation is resorted to and any increase in price affects them as seriously as any decrease does a manufacturer if not more. the three observations made by us are well settled and wellfounded on authority. the cases to which we shall now refer will perhaps elucidate what we have tried unfelicitously to express. in shree meenakshi mills ltd v union of india 1974. 1 scc 468 1973 indlaw sc 291 a notification fixing the ex factory price of certain counts of cotton yarn was questioned on the ground that the price had been arbitrarily fixed. after referring to hari shanker bagla v state of madhya pradesh 1955 1 scr 380 1954 indlaw sc 135 union of india v bhanamal gulzarimal 1960 2 scr 627 1959 indlaw sc 127 sri krishna rice mills v joint director food 1965 indlaw sc 93 unreported state of rajasthan v nathmal and mithamal 1954 scr 982 1954 indlaw sc 66 narendra kumar v union of india 1960 2 scr 375 1959 indlaw sc 61 panipat co operative sugar mills v union of india 1973 1 scc 129 1972 indlaw sc 155 anakapalle co operative agricultural industrial society ltd v union of india. 1973 3 scc 435 1972 indlaw sc 334 and premier automobiles ltd v union of india 1972. 2 scr 526 1971 indlaw sc 291 a constitution bench of the court observed that the dominant object and the purpose of the legislation was the equitable distribution and availability of commodities at fair price and if profit and the producer 's return were to be kept in the forefront it would result in losing sight of the object and the purpose of the legislation. if the prices of yarn or cloth were fixed in such a way to enable the manufacturer or producer recover his cost of production and secure a reasonable margin of profit no aspect of infringement of any fundamental right could be said to arise. it was to be remembered that the mere fact that some of those were engaged in the industry trade or commerce allegedthat they were incurring loss would not render the law stipulating the price unreasonable. it was observed the control of prices may have effect either on maintaining or increasing supply of commodity or securing equitable distribution and availability at fair prices. the controlled price has to retain this equilibrium in the supply and demand of the commodity. the cost of production a reasonable return to the producer of the commodity are to be taken into account. the producer must have an incentive to produce. the fair price must be fair not only from the point of view of the consumer but also from the point of view of the producer. in fixing the prices a price line has to be held in order to give preference or pre dominant consideration to the interest of the consumer 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. the producer should not be driven out of his producing business. he may have to bear loss in the same way as he does when he suffers losses on account of economic forces operating in the business. if an essential commodity is in short supply or there is hoarding concerning or there is unusual demand there is abnormal increase in price. if price increases it becomes injurious to the consumer. there is no justification that the producer should be given the benefit of price increase attributable to hoarding or cornering or artificial short supply. in such a case if an escalation in price is contemplated at intervals the object of controlled price may be stultified. the controlled price will enable both the consumer and the producer to tide over difficulties. therefore any restriction in excess of what would be necessary in the interest of general public or to remedy the evil has to be very carefully considered so that the producer does not perish and the consumer is not crippled. the cases of panipat sugar mills and anakapalle co operative agricultural society were distinguished on the ground that they were governed by sub section 3c of sec. 3 of the essential commodities act and therefore had no relevance to the case before the constitution bench. the case of premier automobiles was distinguished on the ground that the decision was rendered by invitation and on the agreement of the parties irrespective of technical and legal questions. the court quoted with approval a passage from secretary of agriculture v central reig refining company 330 us 604 stating suffice it to say that since congress fixed the quotas on a historical basis it is not for this court to reweigh the relevant factors and per chance substitute its notion of expediency and fairness for that of congress. this is so even though the quota thus fixed may demonstrably be disadvantageous to certain areas or persons. this court is not a tribunal for relief from the crudities and inequities of complicated experimental economic legislation. in saraswati industrial syndicate ltd v union of india 1974 2 scc 630 1974 indlaw sc 134 the court observed price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material. it could not therefore give rise to a complaint that a rule of natural justice has not been followed in fixing the price. nevertheless the criterion adopted must be reasonable. reasonableness for purposes of judging whether there was an excess of power or an arbitrary exercise of it is really the demonstration of a reasonable nexus between the matters which are taken into account in exercising a power and the purposes of exercise of that power. it was also reiterated that the decision in shree meenakshi mills case was based on a special agreement between the parties and therefore had no relevance to the question before them. in prag ice oil mills v union of india 1978 3 scc 459 1978 indlaw sc 472 a constitution bench of seven judges of this court had to consider the validity of the mustard oil price control. order 1977 an order made in exercise of the powers conferred upon central government by the essential commodities act. chandrachud j speaking for the court approved the observation of beg cj. in saraswati industrial syndicate. that it was enough compliance with the constitutional mandate if the basis adopted for price fixation was not shown to be so patently unreasonable as to be in excess of the power to fix the price. he observed in the ultimate analysis the mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostiled discrimination against a class of operators the processual basis of price fixation has to be accepted in the generality of cases as valid. referring to shri meenakshi mills the learned cj reaffirmed the approval accorded to the statement in secretary of agriculture v central reig refining company supra that courts of law could not be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation. panipat sugar and anakappalle society were again referred to and it was pointed out that those cases turned on the language of section 33c of the essential commodities act. premier automobiles was considered and it was affirmed that the judgment in that case could not be treated as precedent and could not afford any appreciable assistance in the decision of price fixation cases as it proceeded partly on agreement between the parties and partly on concessions made at the bar. beg cj. who delivered a separate opinion for himself and for desai j agreed that the judgment in premier automobiles was not to provide a precedent in price fixation case. he also reaffirmed the proposition that price fixation was in the nature of a legislative measure and could not give rise to a complaint that natural justice was not observed. he indicated the indicia which led him to the conclusion that price fixation was a legislative measure. he observed we think that unless by the terms of a particular statute or order price fixation is made a quasi judicial function for specified purposes or cases it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation. a legislative measure does not concern itself with the facts of an individual case. it is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class. in the case before us the control order applies to sales of mustard oil anywhere in india by any dealer. its validity does not depend on the observance of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity. the test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed or in other words by reasonableness judged by possible or probable consequences. in new india sugar works v state of uttar pradesh 1981 2 scc 293 1981 indlaw sc 217 there was an indication though it was not expressly so stated that the question of observing natural justice did not arise in cases of price fixation. in laxmi khandsari v state of uttar pradesh 1981 2 scc 600 1981 indlaw sc 558 it was held that the sugar cane control order 1966 was a legislative measure and therefore rules of natural justice were not attracted. in rameshchandra kachardas porwal v state of maharashtra 1981 2 scc 722 1981 indlaw sc 423 it was observed that legislative activity did not invite natural justice and that making of a declaration that a certain place shall be a principal market yard for a market area under the relevant agricultural produce markets acts was an act legislative in character. the observation of magarry j in bates v lord hailsha of st marylebone 1972. 1 wlr 1973 that the rules of natural justice do not run in the sphere of legislation primary or delegated was cited with approval and two well known text books writers paul kackson and wades h w r were also quoted. the former had said there is no doubt that a minister or any other body in making legislation for example by statutory instrument or by law is not subject to the rules of natural justice bates v lord hailsham of st marylebone supra any more than is parliament itself edinburgh and dalkeith rv v wauchope per lord brougham 1842 8 cl f 700 720 british railways board v pickin 1974 1. all er 609. the latter had said there is no right to be heard before the making of legislation whether primary or delegated unless it is provided by statutes. in sarkari sasta anaj vikreta sangh v state of madhya pradesh 1981 4 scc 471 1981 indlaw sc 607 it was pointed out that the amendment of the madhya pradesh food stuffs distribution control order was a legislative function and there was therefore no question of affording an opportunity to those who were to be affected by it. in welcom hotel v state of andhra pradesh 1983 4 scc 575 1983 indlaw sc 128 the observations of chandrachud cj. in prag ice and oil mills were quoted with approval in connection with the fixation of prices of food stuffs served in restaurants. in tharoe mal v puranchand 1978 1 scc 102 1977 indlaw sc 122 one of the questions was regarding the nature of the hearing to be given before imposing municipal taxes under the uttar pradesh municipalities act 1916. it was held. the procedure for the imposition of the tax is legislative and not quasijudicial. the right to object however seems to be given at the stage of proposals of the tax only as a concession to requirements of fairness even though the procedure is legislative and not quasi judicial. we mentioned that the panipat and the anakapalle eases were distinguished in shree meenakshi and prag ice. panipat and anakapalle were both cases where the question was regarding the price payable to a person who was required to sell to the government a certain percentage of the quantity of sugar produced in his mill. the order requiring him to sell the sugar to the government was made under section 32f of the essential commodities act under which the central government was enabled to make an order requiring any person engaged in the production of any essential commodity to sell the whole or specified part of the quantity produced by him to the government or its nominee. it will straight away be seen that an order under section 32f if a specific order directed to a particular individual for the purpose of enabling the central government to purchase a certain quantity of the commodity from the person holding it. it is an order for a compulsory sale. when such a compulsory sale is required to be made under section 32f the question naturally arises what is the price to be paid for the commodity purchased. section 33c provides for the ascertainment of the price. it provides that in calculating the amount to be paid for the commodity required to be sold regard is to be had to a the minimum price if any fixed for sugarcane by the central government under this section b the manufacturing cost of sugar c the duty or tax if any paid or payable thereon and d the securing of a reasonable return on the capital employed in the business of manufacturing sugar. it is further prescribed that different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar. it is to be noticed here that the payment to be made under section 33c is not necessarily the same as the controlled price which may be fixed under section 32c of the act. section 32c of the act we have already seen enables the central government to make an order controlling the price at which any essential commodity may be bought or sold 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 in securing their equitable distribution and availability at fair prices. section 33c provides for the determination of the price to be paid to a person who has been directed by the central government by an order made under section 32c to sell a certain quantity of an essential commodity to the government or its nominee. while section 32c contemplates an order of a general nature section 33c contemplates a specific transaction. if the provisions of section 32c under which the price of an essential commodity may be controlled are contrasted with section 33c under which payment is to be made for a commodity require to be sold by an individual to the government the distinction between a legislative act and a non legislative act will at once become clear. the order made under section 32c which is not in respect of a single transaction nor directed to particular individual is clearly a legislative act while an order made under section 33c which is in respect of a particular transaction of compulsory sale from a specific individual is a non legislative act. the order made under section 32c controlling the price of an essential commodity may itself prescribe the manner in which price is to be fixed but that will not make the fixation of price a non legislative activity when the activity is not directed towards a single individual or transaction but is of a general nature covering all individuals and all transactions. the legislative character of the activity is not shed and an administrative or quasi judicial character acquired merely because guidelines prescribed by the statutory order have to be taken into account. we may refer at this juncture to some illuminating passages from schwrtz 's book on administrative law. he said if a particular function is termed legislative or rulemaking rather than judicial or adjudication it may have substantial effects upon the parties concerned. if the function is treated as legislative in nature there is no right to notice and hearing unless a statute expressly requires them. if a hearing is held in accordance with a statutory requirement it normally need not be a formal one governed by the requirements discussed in chapters 6 and 7. the characterization of an administrative act as legislative instead of judicial is thus of great significance. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx x as a federal court has recently pointed out there is no bright line between rule making and adjudication. the most famous pre apa attempt to explain the difference between legislative and judicial functions was made by justice holmes in prentis v atlantic coast line co a judicial inquiry said he investigates declares and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. that is its purpose and end. legislation on the other hand looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power. the key factor in the holmes analysis is time a rule prescribes future patterns of conduct a decision determines liabilities upon the basis of present or past facts. the element of applicability has been emphasized by others as the key in differentiating legislative from judicial functions. according to chief justice burger rulemaking is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class. an adjudication on the other hand applies to specific individuals or situations. rulemaking affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely affected adjudication operates conceretly upon individuals in their individual x x capacity. we may now turn our attention to the two drugs prices control order of 1970 and 1979 both of which were made by the central government in exercise of its powers under section 3 of the essential commodities act. the drugs prices control order 1970 defined bulk drugs as follows bulk drugs means any unprecessed phamaceutical chemical biological and plant product or medicinal gas conforming to pharmacopocial or other standards accepted which is used as such or after being processed into formulations and includes an essential bulk drug. bulk drugs were divided into essential bulk drugs which were included in the schedule and bulk drugs which were not so included. in the case of essential bulk drugs paragraph 4 of the order enabled the central government to fix the maximum price at which such essential bulk drugs should be sold. in the case of bulk drugs which were not included in the schedule a manufacturer was entitled to continue to market the product at the same price at which he was marketing the products at the time of the commencement of the order. he was required to report this price to the central government within two weeks of the commencement of the order and was further prohibited from increasing the price without obtaining the approval of the central government. a committee on drugs and pharmaceutical industry popularly known as the hathi committee was appointed by the government of india to enquire into the various facets of the drug industry in india. one of the terms of reference was to examine the measures taken so far to reduce prices of drugs for the consumer and to recommend such further measures as may be necessary to rationalise the prices of basic drugs and formulations. the hathi committee noticed that in a country like india where general poverty and the wide disparities in levels of income between different sections existed it was particularly important to emphasise the social utility of the industry and the urgent need for extending as rapidly as possible certain minimum facilities in terms of preventive and curative medicines to the large mass of people both urban and rural. it was said the concern about drug prices therefore really arises from the fact that many of them are essential to the health and welfare of the community and that there is no justification for the drug industry charging prices and having a production pattern which is based not upon the needs of the community but on aggressive marketing tactices and created demand. the government of india accepted the report of the hathi committee and announced in parliament the statement on drug policy pursuant to which the drugs prices control order 1970 was repealed and the drugs prices control. order 1979 was made. paragraph 44 of the statement on drug policy in 1978 dealt with pricing policy and it may be usefully extracted here. it was as follows. the hathi committee had recommended that a return post tax between 12 to 14 on equity that is paid up capital plus reserves may be adopted as the basis for price fixation depending on the importance and complexity of the bulk drug. in the case of formulations the hathi committee felt that the principle of selectivity could be introduced in terms of a the size of the units b selection of items and c controlling the prices only of market leaders in particular of products for which price control is contemplated. the hathi committee considered that units other than mrtp units having only turnover of less than rs 1 crore may be exempted from price control. alternatively all formulations other than those marketed under generic names which have an annual sale in the country in excess of rs 15 lakhs inclusive of excise duty may be subjected to price control irrespective of whether or not the total annual turnover of the unit is in excess of rs 1 crore. the ceiling price will be determined taking into account the production costs and a reasonable return for the units which are the market leaders. yet another variant of a selectivity according to the hathi committee would be to identify product groups which individually are important and which collectively constitute the bulk of the output of the industry. in respect of each item of this list it would be possible to identify the leading producers who account for about 60 of the sales between them. on the basis of cost analysis in respect of those units maximum prices may be prescribed and all other units may be free to fix their prices within this ceiling. on balance the hathi committee was of the view that this particular variant selectivity may be administratively simpler. the drugs prices control order 1979 was made pursuant to this statement of policy. paragraph 2a of the drugs. prices control. order 1979 defines bulk drug to mean any substance including pharmaceutical chemical biological or plant product or medicinal gas conforming to pharmacological or other standards accepted under the drugs and cosmetics act 1940 which is used as such or as in ingredient in any formulations. formulation is defined as follows formulation means a medicine processed out of or containing one or more bulk drugs 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 i any bona fide ayurvedic including sidha or unani tibb systems of medicine ii any medicine included in the homoeopathic system of medicine 865 iii any substance to which the provisions of the drugs and cosmetics act 1940 xxiii of 1940 do not apply. the expressions free reserve leader price net worth now bulk drug pooled price pre tax return retention price are defined in the following manner free reserve means a reserve created by appropriation of profits but does not include reserves provided for contingent liability disputed claims goodwill revaluation and other similar reserves. leader price means a price fixed by the government for formulations specified in category i category ii or category iii of the third schedule in accordance with the provisions of paras. 10 and 11 keeping in view the cost of or efficiency or both of major manufacturers of such formulations. net worth means the share capital of a company plus free reserve if any. new bulk drug means a bulk drug manufactured within the country for the first time after the commencement of this order. pooled price in relation to a bulk drug means the price fixed under para 7. pre tax return means profits before payment of incometax and sur tax and includes such other expenses as do not form part of the cost of formulations. retention price in relation to a bulk drug means the price fixed under paras 4 and 7 for individual manufacturers or importers or distributors or such bulk drugs. the distinction between an essential bulk drug included in the schedule and a bulk drug not so included in the schedule which was made in 1970 drugs prices control. order was abandoned in the 1979 order. bulk drugs were however broadly divided into indigenously manufactured bulk drugs imported bulk drugs and hulk drugs which were both manufactured indigenously as also imported. paragraph 3 of the 1979 order enables the government with a view to regulating the equitable distribution of any indigenously manufactured bulk drug specified in the first or the second schedule and making it available at a fair price and after making such enquiry as it deems fit to fix from time to time by notification in the official gazette the maximum price at which the bulk drug shall be sold. cl 2 of paragraph 3 provides that while so fixing the price of a bulk drug the government may take into account the average cost of production of such bulk drug manufactured by an efficient manufacturer and allow a reasonable return on net worth. by way of an explanation efficient manufacturer is defined to mean a manufacturer i. whose production of such bulk drug 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. we have already noticed that net worth is defined to mean the share capital of a company plus free reserve if any. free reserve itself is separately defined. it is then prescribed by clause 3 no person shall sell a bulk drug at a price exceeding the price notified under sub paragraph 1 plus local taxes if any payable provided that until the price of bulk drug is so notified the price of such bulk drug shall be the price which prevailed immediately before the commencement of this order and the manufacture of such bulk drug at a price exceeding the price which prevailed as aforesaid. this means that until the maximum sale price of an indigenously manufactured bulk drug is fixed under paragraph 3 of the 1979 order the price fixed under paragraph 4 of the 1970 order or the price permitted under paragraph 5 of the 1970 order was to be maximum sale price. paragraph 34a requires a manufacturer commencing production of the bulk drug specified in the first or second schedule the price of which has already been notified by the government not to sell the bulk drug at a price exceeding the notified price. paragraph 34b provides that where the price of a bulk drug has not been notified by the government the manufacturer shall within 14 days of the commencement of the the production of such bulk drug make an application to the government in form i and intimate the government the price at which he intends to sell the bulk drug and the government may after making such an enquiry as it thinks fit by order fix a provisional price at which such bulk drug shall be sold. paragraph 4 of the 1979 order provides that notwithstanding anything contained in paragraph 3 the government may if it considers necessary or expedient so to do for increasing the production of an indigenously manufactured bulk drug specified in the first or second schedule by order fix a a retention price of such bulk drug b a common sale price for such bulk drug taking into account the weighted average of the retention price fixed under clause. paragraph 4 is thus in the nature of an exception to paragraph 3. it is meant to provide a fillip to individual manufacturers of bulk drugs whose production it is necessary to increase. retention price by its very definition pertains to individual manufacturers. common sale price we take it is the price at which manufacturers whose retentions are fixed may sell the bulk drug despite the maximum sale price fixed under paragraph 3. paragraph 5 deals with the power of the government to fix maximum sale price of new bulk drugs. paragraph 6 enables the government to fix the maximum sale price of imported bulk drugs specified in first and second schedules. paragraph 7 deals with the power of the government to fix retention price and pooled price for the sale of bulk drugs specified in the first and second schedules which are both indigenously manufactured and imported. paragraph 9 empowers the government to direct manufacturers of bulk drugs to sell bulk drugs to manufacturers of formulations. paragraph 10 prescribes a formula for calculating the retail price of formulations. the formula is r p m c c c p m p c x 1mu e d 100 r p means retail price. m c means material cost and includes the cost of drugs and other pharmaceutical aids used including 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 the 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 gazettee 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 notifi cation 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 make up referred to in para. e d means excise duty. paragraph 11 explains what mark up means. paragraph 12 empowers the government to fix leader prices of formulations of categories. i and ii specified in the third schedule. paragraph 13 empowers the government to fix retail price of formulations specified in category iii of third schedule. paragraph 14 contains some general provisions regardingprices of formulations. paragraph 15 empowers the government to revise prices of formulations. paragraph 16 provides that where any manufacturer importer or distributor of any bulk drug or formulation fails to furnish information as required under the order within the time specified therein the government may on the basis of such information as may be available with it by order fix a price in respect of such bulk drug or formulation as the case may be. paragraph 17 requires the government to maintain the drugs prices equalization account to which shall be credited by the manufacturer among other items the excess of the common selling price or as the case may be pooled price over his retention price. it is provided that the amount credited to the drugs prices equalization account shall be spent for paying to the manufacturer the shortfall between his retention price and the common selling price or as the case may be the pooled price. paragraph 27 enables any person aggrieved by any notification or order under paragraphs 3 4 5 6 7 9 12 13 14 15 or 16 to apply to the government for a review of the notification or order within fifteen days of the date of the publication of the notification in the official gazette or as the case may be the receipt of the order by him. bulk drugs constituting categories. i and ii are enumerated in the first schedule. bulk drugs constituting category iii are enumerated in the second schedule. formulations constituting categories i ii and iii are enumerated in the third schedule. the fourth schedule prescribes the various forms referred to in the different paragraphs of the drugs prices control order. form No 1 which is referred to in paragraphs 34 5 and 81 is titled form of application for fixation or revision of prices of bulk drug. the several columns of the form provide for various particulars to be furnished and item 18 requires the applicant to furnish the cost of production of the bulk drug as per proforma attached duly certified by a practising cost chartered accountant. the proforma requires particulars of costdata such as raw materials utilities conversion cost total cost of production interest on borrowings minimum bonus packing selling expenses transport charges transit insurance charges total cost of sales selling price existing price or notional or declared prices etc. to be furnished. a note at the end of the proforma requires the exclusion from cost certain items of expenses such as bonus in excess of statutory minimum bad debts and provisions donations and charities loss gain on sale of assets brokerage and commission expenses not recognised by income tax authorities and adjustments relating to previous years. shri g ramaswamy learned additional solicitor general on behalf of the union of india submitted that the fixation of maximum price under paragraph 3 of the drugs prices control. order was a legislative activity and therefore not subject to any principle of natural justice. he urged that relevant information was required to be furnished and was indeed furnished by all the manufacturers in the prescribed form as required by paragraph 34 of the drugs prices control order. this information obtained from the various manufacturers was taken into account and a report was then obtained from the bureau of industrial costs and prices a high powered expert body specially constituted to undertake the study of industrial cost structures and pricing problems and to advise the government. it was only thereafter that notifications fixing the prices were issued. he further submitted that paragraph 27 of the central order gave a remedy to the manufacturers to seek a review of the order fixing the maximum price under paragraph 3. the review contemplated by paragraph 27 in so far as it related to the notification under paragraph 3 it was submitted by the learned additional solicitor general did not partake the character of a judicial or quasi judicial proceeding. he urged that the manufacturers had invoked the remedy by way of review but before the applications for review could be dealt with they rushed to the court with the writ petitions out of which the appeal and the special leave petitions arise. he urged that the government had always been ready and wilting to give a proper hearing to the parties and in fact gave them a heating in connection with their review applications. the grievance of the manufacturers in the writ petitions that they were not furnished the details of the basis of the price fixation was not correct since full information was furnished at the time of the hearing of the review applications when the matter underwent thorough and detailed discussion between the parties and the government as well as the bureau of industrial costs and prices. the submission of shri anil diwan learned counsel for the respondents was that unlike other price control legislations the drugs prices control order was designed to induce better production by providing for a fair return to the manufacturer. reference was made to the hathi committee report which had recommended a return of 12 to 14 post tax return on equity that is paid up capital plus reserves and the statement on drug policy which mentioned that ceiling prices may be determined by taking into account production costs and a reasonable return. great emphasis was laid on the second clause of paragraph 3 of the 1979 order which provides that in fixing the price of a bulk drug the government may take into account the average cost of production of such bulk drug manufactured by an efficient manufacturer and allow a reasonable return on networth. it was submitted that the provision for an enquiry preceding the determination of the price of a bulk drug the prescription in paragraph 3 cl 2 that the average cost of production of the drug manufactured by an efficient manufacturer should be taken into account and that a reasonable return on networth should be allowed and the provision for a review of the order determining the price established that price fixation under the drugs prices control. order 2979 was a quasijudicial activity obliging the observance of the rules of natural justice. the suggestion of the learned counsel was that the nature of the review under paragraph 27 was so apparently quasi judicial and that the need to know the reasons for the order sought to be reviewed was so real if the manufacturer was effectively to exercise his right to seek the quasijudicial remedy of review that by necessary implication it became obvious that the order fixing the maximum price must be considered to be quasijudicial and not legislative in character. the provision for enquiry in the first clause of paragraph 3 and the prescription of the matters to be taken into account in the second clause of paragraph 3 further strengthened the implication according to the learned counsel. it was contended that in any case whatever be the nature of the enquiry and the order contemplated by paragraph 3 the review for which provision made by paragraph 27 was certainly of a quasijudicial character and therefore it was necessary that the manufacturers should be informed of the basis for the fixation of the price and furnished with details of the same in order that they may truly and effectively avail themselves of the remedy of review. if that was not done the remedy would become illusory. it was argued with reference to various facts and figures that the price had been fixed in an arbitrary manner and the government was not willing to disclose the basis on which the prices were fixed on the pretext that it may involve disclosure of matters of confidential nature. it was stated that the applications of the manufacturers for review of the notifications fixing the prices had not been disposed of for years though time was really of the very essence of the matter. the prices of formulations were dependent on the prices of drugs and it was not right that prices of formulations should have been fixed even before the applications for review against the notifications fixing the price of bulk drugs were disposed of. it was suggested that the delay in disposing of the review applications had the effect of rendering the original notifications fixing the prices unreal and out of date and liable to be struck down on that ground alone. we are unable to agree with the submissions of the learned counsel for the respondents either with regard to the applicability of the principles of natural justice or with regard to the nature and the scope of the enquiry and review contemplated by paragraphs 3 and 27 while making our preliminary observations we pointed out that price fixation is essentially a legislative activity though in rare circumstances as in the case of a compulsory sale to the government or its nominee it may assume the character of an administrative or quasijudicial activity. nothing in the scheme of the drugs prices control. order induces us to hold that price fixation under the drugs prices control. order is not a legislative activity but a quasi judicial activity which would attract the observance of the principles of natural justice. nor is there anything in the scheme or the provisions of the drugs prices control order which otherwise contemplates the observance of any principle of natural justice or kindred rule the non observance of which would give rise to a cause of action to a suitor. what the order does contemplate however is such enquiry by the government as it thinks fit. a provision for such enquiry as it thinks fit by a subordinate legislating body we have explained earlier is generally an enabling provision to facilitate the subordinate legislating body to obtain relevant information from any source and it is not intended to vest any right in any body other than the subordinate legislating body. in the present case the enquiry contemplated by paragraph 3 of drugs prices control. order is to be made for the purposes of fixing the maximum price at which a bulk drug may be sold with a view to regulating its equitable distribution and making it available at a fair price. the primary object of the enquiry is to secure the bulk drug at a fair price for the benefit of the ultimate consumer an object designed to fulfil the mandate of article 39b of the constitution. it is primarily from the consumer public 's point of view that the government is expected to make its enquiry. the need of the consumer public is to be ascertained and making the drug available to them at a fair price is what it is all about. the enquiry is to be made from that angle and directed towards that end. so information may be gathered from whatever source considered desirable by the government. the enquiry obviously is not to be confined to obtaining information from the manufacturers only and indeed must go beyond. however the interests of the manufacturers are not to be ignored. in fixing the price of a bulk drug the government is expressly required by the order to take into account the average cost of production of such bulk drug manufactured by an efficient manufacturer and allow a reasonable return on net worth. for this purpose too the government may gather information from any source including the manufacturers. here again the enquiry by the government need not be restricted to an efficient manufacturer or some manufacturers nor need it be extended to all manufacturers. what is necessary is that the average cost of production by an efficient manufacturer must be ascertained and a reasonable return allowed on net worth. such enquiry as it thinks fit is an enquiry in which information is sought from whatever source considered necessary by the enquiring body and is different from an enquiry in which an opportunity is required to be given to persons likely to be affected. the former is an enquiry leading to a legislative activity while the latter is an enquiry which ends in an administrative or quasi judicial decision. the enquiry contemplated by paragraph 3 of the drug prices control. order is an enquiry of the former character. the legislative activity being a subordinate or delegated legislative activity it must necessarily comply with the statutory conditions if any no more and no less and no implications of natural justice can be read into it unless it is a statutory condition. notwithstanding that the price fixation is a legislative activity the subordinate legislation had taken care here to provide for a review. the review provided by paragraph 27 of the order is akin to a post decisional hearing which is sometimes afforded after the making of some administrative orders but not truly so. it is a curious amalgam of a hearing which occasionally precedes a subordinate legislative activity such as the fixing of municipal rates etc. that we mentioned earlier and a post decision hearing after the making of an administrative or quasi judicial order. it is a hearing which follows a subordinate legislative activity intended to provide an opportunity to affected persons such as the manufacturers the industry and the consumer public to bring to the notice of the subordinate legislating body the difficulties or problems experienced or likely to be experienced by them consequent on the price fixation whereupon the government may make appropriate orders. any decision taken by the government can not be confined to the individual manufacturer seeking review but must necessarily affect all manufacturers of the bulk drug as well as the consumer public. since the maximum price of a bulk drug is required by paragraph 3 to be notified any fresh decision taken in the proceeding for review by way of modification of the maximum price has to be made by a fresh notification fixing the new maximum price of the bulk drug. in other words the review if it is fruitful must result in fresh subordinate legislative activity. the true nature of the review provided by paragraph 27 in so far as it relates to the fixation of maximum price of bulk drugs under paragraph 3 leader price and prices of formulations under paragraphs 12 and 13 is hard to define. it is difficult to give it a label and to fit it into a pigeon hole legislative administrative or quasi judicial. nor is it desirable to seek analogies and look to distant cousins for guidance. from the scheme of the control order and the context and content of paragraph 27 the review in so far as it concerns the orders under paragraph 3 12 and 13 appears to be in the nature of a legislative review of legislation or more precisely a review of subordinate legislation by a subordinate legislating body at the instance of an aggrieved person. once we have ascertained the nature and character of the review the further question regarding the scope and extent of the review is not very difficult to answer. the reviewing authority has the fullest freedom and discretion to prescribe its own procedure and consider the matter brought before it so long as it does not travel beyond the parameters prescribed by paragraph 3 in the case of a review against an order under paragraph 3 and the respective other paragraphs in the case of other orders. but whatever procedure is adopted it must be a procedure tuned to the situation. manufacturers of any bulk drug are either one or a few in number and generally they may be presumed to be well informed persons well able to take care of themselves who have the assistance of accountants advocates and experts to advise and espouse their cause. in the context of the drug industry with which we are concerned and in regard to which the control order is made we must proceed on the basis that the manufacturers of bulk drugs are generally persons who know all that is to be known about the price fixed by the government. from the legislative nature of the activity of the government it is clear that the government is under no obligation to make any disclosure of any information received and considered by it in making the order but in order to render effective the right to seek a review given to an aggrieved person we think that the government if so requested by the aggrieved manufacturer is under an obligation to disclose any relevant information which may reasonably be disclosed pertaining to the average cost of production of the bulk drug manufactured by an efficient manufacturer and the reasonable return on net worth. for example the manufacturer may require the government to give information regarding the particulars detailed in form No 1 of the fourth schedule which have been taken into account and those which have been excluded. the manufacturer may also require to be informed the elements which were taken into account and those which were excluded in assessing the free reserves entering into the calculation of net worth. these particulars which he may seek from the government are mentioned by us only by way of illustration. he may seek any other relevant information which the government shall not unreasonably deny. that we think is the nature and scope of the review contemplated by paragraph 27 in relation to orders made under paragraphs 3 12 and 13. on the question of the scope of a review the learned counsel for the respondents invited our attention to vrajlal manilal co v union of india anr 1964 7 scr 97 1964 indlaw sc 194 shivaji nathubhai v union of india ors 1960 2 scr 775 1960 indlaw sc 430 maneka gandhi 1978 2 scr 621 1978 indlaw sc 212 swadeshi cotton mills 1981 2 scr 533 1981 indlaw sc 349 and liberty oil mills. 1984 3 scr 676 1984 indlaw sc 326. we are afraid none of these cases is of any assistance to the correspondence since the court was not concerned in any of those cases with a review of subordinate legislation by the subordinate legislating body. in vrajlal manilal co v union of india anr 1964 indlaw sc 194 supra the court held that the union of india when disposing of an application for review under rule 59 of the mines concession rules functioned as a quasi judicial authority and was bound to observe the principles of natural justice. the decision rendered without disclosing the report of the state government and without affording reasonable opportunity to the appellants to present their case was contrary to natural justice was therefore void. in shivaii nathubhai v union of india ors 1960 indlaw sc 430 supra it was decided by the court that the power of review granted to the central government under rule 54 of the mineral concession rules required the authority to act judicially and its decision would be a quasi judicial act and the fact that rule 54 gave power to the central government to pass such order as it may deem just and proper did not negative the duty to act judicially. in maneka gandhi 's case where bhagwati j while expounding on natural justice pointed out that in appropriate cases where a pre decisional hearing was impossible there must atleast be a post decisional hearing so as to meet the requirement of the rule audi alteram partem. in swadeshi cotton mills it was observed that in cases where owing to the compulsion of the fact situation or the necessity of taking speedy action no pre decisional hearing is given but the action is followed soon by a full post decisional hearing to the person affected there is in reality no exclusion of the audi alteram partem rule. it is no adaptation of the rule to meet the situational urgency. in liberty oil mills v union of india 1984 indlaw sc 326 supra the question arose whether clause 8b of the import control order which empowered the central government or the chief controller to keep in abeyance applications for licences or allotment of imported goods where any investigation is pending into an imported goods where any investigation is pending into an allegation mentioned in cl. 8 excluded the application of the principles of natural justice. the court pointed out that it would be impermissible to interpret a statutory instrument to exclude natural justice unless the language of the instrument left no option to the court. as we said these cases have no application to a review of subordinate legislation by the subordinate legislating body at the instance of a party. we mentioned that the price fixed by the government may be questioned on the ground that the considerations stipulated by the order as relevant were not taken into account. it may also be questioned on any ground on which a subordinate legislation may be questioned such as being contrary to constitutional or other statutory provisions. it may be questioned on the ground of a denial of the right guaranteed by article 14 if it is arbitrary that is if either the guidelines prescribed for the determination are arbitrary or if even though the guidelines are not arbitrary the guidelines are worked in an arbitrary fashion. there is no question before us that paragraph 3 prescribes any arbitrary guideline. it was however submitted that the guidelines were not adhered to and that facts and figures were arbitrarily assumed. we do not propose to delve into the question whether there has been any such arbitrary assumption of facts and figures. we think that if there is any grievance on that score the proper thing for the manufacturers to do is bring it to the notice of the government in their applications for review. the learned counsel argued that they were unable to bring these facts to the notice of the government as they were not furnished the basis on which the prices were fixed. on the other hand it has been pointed out in the counter affidavits filed on behalf of the government that all necessary and required information was furnished in the course of the hearing of the review applications and. there was no justification for the grievance that particulars were not furnished. we are satisfied that the procedure followed by the government in furnishing the requisite particulars at the time of the hearing of the review applications is sufficient compliance with the demands of fair play in the case of the class of persons claiming to be affected by the fixation of maximum price under the drugs prices control order. as already stated by us manufacturers of bulk drugs who claim to be affected by the drugs prices control. order belong to a class of persons who are well and fully informed of every intricate detail and particular which is required to be taken into account in determining the price. in most cases they are the sale manufacturers of the bulk drug and even if they are not the sole manufacturers they belong to the very select few who manufacture the bulk drug. it is impossible to conceive that they can not sit across the table and discuss item by item with the reviewing authority unless they are furnished in advance full details and particulars. the affidavits filed on behalf of the union of india show that the procedure which is adopted in hearing the review applications is to discuss across the table the various items that have been taken into account. we do not consider that there is anything unfair in the procedure adopted by the government. if necessary it is always open to the manufacturers to seek a short adjournment of the hearing of the review application to enable them to muster more facts and figures on their side. indeed we find that the hearing given to the manufacturers is often protected. as we said we do not propose to examine this question as we do not want to constitute ourselves into a court of appeal over the government in the matter of price fixation. he learned counsel argued that there were several patent errors which came to light during the course of the hearing in the high court. he said that obsolete quantitative usages had been taken into consideration proximate cost data had been ignored and the data relating to the year ending november 1976 had been adopted as the basis. it was submitted that there were errors in totalling errors in the calculation of prices of utilities errors in the calculation of net worth and many other similar errors. as we pointed out earlier these are all matters which should legitimately be raised in the review application if there is any substance in them. these are not matters for investigation in a petition under article 226 of the constitution or under article 32 of the constitution. despite the pressing invitation of shri diwan to go into facts and figures and his elaborate submissions based on facts and figures we have carefully and studiously refrained from making any reference to such facts and figures as we consider it outside our province to do so and we do not want to set any precedent as was supposed to have been done in premier automobiles though it was not so done and therefore needed explanation in later cases. one of the submissions of shri diwan was that in calculating net worth the cost of new works in progress and the amount invested outside the business were excluded from free reserves and that such exclusion could not be justified on any known principle of accountancy. we think that the question has to be decided with reference to the definition of free reserve in paragraph 2g of the control order and not on any assumed principle of accountancy. this is also a question which may be raised before the government in the review application. referring to the proforma attached to form No 1 of the fourth schedule in which are set out several items which have to be taken into account in assessing the cost of production the learned counsel attacks the notes at the end of item No 14 which mentions the various items of expenses to be excluded in ascertaining the cost. the notes is as follows notes i items of expenses to be excluded from costs a bonus in excess of statutory minimum. b bad debts and provisions. c donations and charities. d loss gain on sale of assets. e brokerage and commission. f expenses not recognized by income tax authorities salary prequisities advertisements etc. g adjustments relating to previous years. in particular he argued that item a bonus in excess of statutory minimum should not have been excluded so also items of expenditure coming under the other heads b to g which had been allowed by income tax authorities as legitimate expenses. his submission was that where bonus in excess of statutory minimum was payable under the provisions of the bonus act there was no option left to the manufacturer not to pay the excess bonus. similarly where expenses have been legitimately incurred and allowed by income tax authorities there was no justification for excluding those items of expenditure from the cost. we do not agree with the submission. it was open to the subordinate legislating body to prescribe and adopt its own mode of ascertaining the cost of production and the items to be included and excluded in so doing. the subordinate legislating body was under no obligation to adopt the method adopted by the income tax authorities in allowing expenses for the purpose of ascertaining income and assessing it. there may be many items of business expenditure which may be allowed by income tax authorities as legitimate expenses but which can never enter the cost of production. so long as the method prescribed and adopted by the subordinate legislating body is not arbitrary and opposed to the principal statutory provisions it can not be legitimately questioned. another submission of the learned counsel relating to the norms for conversion costs packing charges and process loss of raw materials and packing materials required to the notified for the purpose of calculating retail prices of formulations. the argument for example was that there should be a more scientific formula in regard to conversion cost and not as was done so many rupees and paise per thousand capsules or one litre of liquid. it is open to the subordinate legislating authority to adopt a rough and ready but otherwise not unreasonable formula rather than a needlessly intricate so called scientific formula. we are unable to say that the subordinate legislating authority acted unreasonably in prescribing the norms in the manner it has done. while on the question on formulations we would like to refer to the oration of dr n h antia at the 24th annual convocation of the national academy of medical sciences where he posed the question why do we produce 60000 formulations of drugs worth rs 2500 crores which reach only 20 of the population when who recommends only 258 drugs and rs 750 crores worth would suffice for all our people if used in an ethical manner. a general submission of the learned counsel was that the price of formulations should not have been prescribed until the review application filed by the manufacturer in regard to the patent bulk drugs was disposed of. he submitted that the price of a formulation was dependant on the price of the bulk drug and it was therefore not right to fix the price of formulation when the price of bulk drug was in question in the review application and there was a prospect of the price of the bulk drug being increased. we do not see any force in the submission. we think that it is the necessary duty of the government to proceed to fix the retail price of a formulation as soon as the price of the parent bulk drug is fixed. price fixation of a formulation is no doubt dependant on the price of the bulk drug but it is not to await the result of a review application which in the end may turn out to be entirely without substance. if a review application is allowed and the price of the bulk drug is raised and if in the meanwhile the formulation had been ordered to be sold at a low price it may result in considerable loss to the manufacturer. but on the other hand if the review application turns out to be entirely without substance and has to be rejected and if in the meanwhile the formulation is allowed to be sold at a higher price the consumer public suffers. hus the ups and downs of commerce are inevitable and it is not possible to devise a fool proof system to take care of every possible defect and objection. it is certainly not a matter at which the court could take a hand. all that the court may do is to direct the government to dispose of the review application expeditiously according to a time bound programme. all that the government may do is to dispose of the review application with the utmost expedition. but as we perceive the public interest it is necessary that the price of formulation should be fixed close on the heels of the fixation of bulk drug price. another submission of shri diwan was that there was considerable delay in the disposal of the review applications by the government and that even now no orders had been passed in several cases. accordingly to the learned counsel the very delay in the disposal of review applications was sufficient to vitiate the entire proceeding and scheme of price fixation. according to the learned counsel the price of a bulk drug is dependant on many variable factors which keep changing very fast. if time is allowed to lapse whatever price is fixed it soon becomes out of date. if review applications are not disposed of expeditiously the notifications fixing the prices must be struck down as having become obsolete. it is difficult to agree with these propositions. it is true that the price of a bulk drug is dependent on innumerable variables. but it does not follow that the notification fixing the maximum price must necessarily be struck down as obsolete by the mere passage of time. we agree that applications for review must be dealt with expeditiously and whenever they are not so dealt with the aggrieved person may seek a mandamus from the court to direct the government to deal with the review application within a time framework. we notice that in all these matters the high court granted stay of implementation of the notifications fixing the maximum prices of bulk drugs and the retail prices of formulations. we think that in matter of this nature where prices of essential commodities are fixed in order to maintain or increase supply of the commodities or for securing the equitable distribution and availability at fair prices of the commodity it is not right that the court should make any interim order staying the implementation of the notification fixing the prices. we consider that such orders are against the public interest and ought not to be made by a court unless the court is satisfied that no public interest is going to be served. in the present case on ex parte interim order was made on april 20 1981 in the following terms in the meanwhile on the petitioners giving an undertakings to maintain prices both for bulk and formulation as were prevailing prior to the impugned notification we stay implementation of the impugned bulk drug prices as well as formulation prices. thereafter on november 25 1981 a further order was made to the following effect after hearing learned counsel and with their consent and arrangement has been worked out as on interim measure. we therefore confirm till further orders the interim order made by us on april 20 1981. the terms of the said order that is on the undertaking given on behalf of the petitioners to maintain status quo on the prices prevailing prior to the issue of the impugned notification the petitioners through their counsel further given an undertaking to this court that in case the petition is dismissed and the rule is discharged the petitioners shall within eight weeks of the dismissal of the petition by this court deposit in this court the difference in the prices of the formulations in question for being equalization account. the petitioners through their counsel further given an undertaking that in this court the petitioners would not contend or challenge the said amount if deposited is not liable to be deposited under any law whatsoever. it is made clear that the undertaking is without prejudice to the petitioners right to take appropriate directions from the supreme court if so advised in this regard. no doubt the order as made on november 25 1981 has the manufacturers on terms but the consumer public has been left high and dry. their interests have in no way been taken care of. in matters of fixation of price it is the interest of the consumer public that must come first and any interim order must take care of that interest. it was argued by the learned counsel that the undertaking given by the parties lapsed with the disposal of the writ petition by the high court and that it could no longer be enforced. we do not agree with this submission. apart from the fact that an appeal is ordinarily considered to be a continuation of the original proceeding in the present case we notice that further orders of the supreme court were also in contemplation and such further orders could only be if appeals were preferred to the supreme court. we do not think that there was any doubt in anyone 's mind that the matter would be taken up in appeal to the supreme court whichever way the writ petitions were decided. we are of the view that the undertakings given by the parties in the present cases were intended to and do continue to subsist. on the conclusions arrived at by us we have no doubt that the appeal must be allowed and the writ petition in the high court dismissed. however we think that it is necessary to give a direction to the government to dispose of the review applications after giving a notice of hearing to the manufacturer. the hearing may be given within two months from today and the review application disposed of within two weeks after the conclusion of the hearing. any information sought by the manufacturer may be given to him at the hearing in terms of what we have said in the judgment. the union of india is entitled to the costs of the appeal and the writ petition in the high court. it appears that although several writ petitions filed by different manufacturers were disposed of by the high court by a common judgment the union of india filed an appeal within the prescribed period of limitation against one of the manufacturers cynamide india limited only. this was apparently done under some misapprehension that it would be enough if a single appeal was filed. later when it was realized that separate appeals were necessary the union of india filed petitions for special leave to appeal against the other manufacturers also. as these petitions were filed beyond the prescribed period of limitation petitions for condoning the delay in filing the petitions for special leave to appeal had to be and were filed. these applications are strenuously opposed by the manufacturers who contend the ordinary rule which is enforced in cases of delay namely that everyday 's delay must be properly explained should also be rigorously enforced against the government. it is contended that the government is a well verse litigant as compared with private litigants and even if there is justification of adopting a liberal approach in condoning delay in the case of private litigants there was no need to adopt such approach in the case of the government. in cases like the present where parties have acted on the assumption that no appeals had been filed against them and have proceeded to arrange their affairs accordingly it would be unjust to condone the delay in filing the appeals at the instance of the government. though we see considerable force in the submission of shri diwan we think that the circumstances of the instant cases do justify the exercise of our discretion to condone the delay. two important features have weighed with us in condoning the delay. one is that all the writ petitions were disposed of by a common judgment and an appeal had been filed in the principal case. the other is that it is a matter of serious concern to the public interest. we therefore condone the delay grant special leave in all the petitions for special leave and direct the appeals to be listed for hearing on may 1 1987. order accordingly.

IN-Ext

FACTS the price which the manufacturer of barlagan kotone, reported to the central government in 1971 was rs.24,735.68 per kg. after the 1979 drugs (prices control. order came into force, the distinction between essential and non-essential bulk drugs was abolished and a maximum price had to be fixed for barlagan ketone also like other bulk drugs. the manufacturer applied for fixation of price at rs.8,500 per kg. armed with authority under the drugs (prices control. order, 1979 the central government issued notifications fixing the maximum prices at which various indigenously manufactured bulk drugs may be sold by the manufacturers. these notifications were questioned on several grounds by the manufacturers and they have been quashed by the delhi high court on the ground of failure to observe the principles of natural justice. ARGUMENT shri g. ramaswamy, learned additional solicitor general on behalf of the union of india, submitted that the fixation of maximum price under paragraph 3 of the drugs (prices control. order was a legislative activity and, therefore, not subject to any principle of natural justice. he urged that relevant information was required to be furnished and was indeed furnished by all the manufacturers in the prescribed form as required by paragraph 3(4) of the drugs (prices control) order. he urged that the government had always been ready and wilting to give a proper hearing to the parties and in fact gave them a heating in connection with their review applications. the learned counsel argued that there were several patent errors which came to light during the course of the hearing in the high court. one of the submissions of shri diwan was that in calculating "net-worth" the cost of new works in progress and the amount invested outside the business were excluded from 'free reserves' and that such exclusion could not be justified on any known principle of accountancy. another submission of the learned counsel relating to the norms for conversion costs, packing charges and process loss of raw materials and packing materials required to the notified for the purpose of calculating retail prices of formulations. a general submission of the learned counsel was that the price of formulations should not have been prescribed until the review application filed by the manufacturer in regard to the patent bulk drugs was disposed of. he submitted that the price of a formulation was dependant on the price of the bulk drug and it was, therefore, not right to fix the price of formulation when the price of bulk drug was in question in the review application and there was a prospect of the price of the bulk drug being increased. ISSUE the problem is that of high prices, bearing, it is said, little relation to the cost of production to the manufacturers. ANALYSIS 'price-fixation is neither the function nor the forte of the court. the second observation made is, legislative action, plenary or subordinate, is not subject to rules of natural justice. in the case of parliamentary legislation, the proposition is self-evident. in the case of subordinate 'legislation, it may happen that parliament may itself provide for a notice and for a hearing-there are several instances of the legislature requiring the subordinate legislating authority to give public notice and a public hearing before say, for example, levying a municipal rate--,in which case the substantial non-observance of the statutorily prescribed mode of observing natural justice may have the effect of invalidating the subordinate legislation. any attempt to draw a distinct line between legislative and administrative functions, it has been said, is 'difficult in theory and impossible in practice. a price fixation measure does not concern itself with the interests of an individual manufacturer or producer. it is generally in relation to a particular commodity or class of commodities or transactions. it is a direction of a general character, not directed against a particular situation. it is intended to operate in the future. it is conceived in the interests of the general consumer public. the right of the citizen to obtain essential articles at fair prices and the duty of the state to so provide them are transformed into the power of the state to fix prices and the obligation of the producer to charge n6 more than the price fixed. viewed from whatever angle, the angle of general application the prospectivity of its effect, the public interest served, and the rights and obligations flowing therefrom, there can be no question that price fixation is ordinarily a legislative activity. pricefixation may occasionally assume an administrative or quasi-judicial character when it relates to acquisition or requisition of goods or property from individuals and it becomes necessary to fix the price separately in relation to such individuals. in shree meenakshi mills ltd. v. union of india, [1974. 1 scc 468 1973 indlaw sc 291 a notification fixing the ex-factory price of certain counts of cotton yarn was questioned on the ground that the price had been arbitrarily fixed. if the prices of yarn or cloth were fixed in such a way to enable the manufacturer or producer recover his cost of production and secure a reasonable margin of profit, no aspect of infringement of any fundamental right could be said to arise. it was to be remembered that the mere fact that some of those were engaged in the industry, trade or commerce alleged'that they were incurring loss would not render the law stipulating the price unreasonable. in laxmi khandsari v. state of uttar pradesh, [1981] 2 scc 600 1981 indlaw sc 558 it was held that the sugar cane control order, 1966 was a legislative measure and therefore, rules of natural justice were not attracted. in rameshchandra kachardas porwal v. state of maharashtra, [1981] 2 scc 722 1981 indlaw sc 423 it was observed that legislative activity did not invite natural justice and that making of a declaration that a certain place shall be a principal market yard for a market area under the relevant agricultural produce markets acts was an act legislative in character. the observation of magarry, j. in bates v. lord hailsha, of st. marylebone [1972. 1 wlr 1973 that the rules of natural justice do not run in the sphere of legislation, primary or delegated, was cited with approval and two well known text books writers paul kackson and wades h.w.r. were also quoted. it is further prescribed that different prices may be determined, from time to time, for different areas or for different factories or for different kinds of sugar. it is to be noticed here that the payment to be made under s. 3(3c) is not necessarily the same as the controlled price which may be fixed under s. 3(2)(c) of the act. a committee on drugs and pharmaceutical industry, popularly known as the hathi committee was appointed by the government of india to enquire into the various facets, of the drug industry in india. one of the terms of reference was 'to examine the measures taken so far to reduce prices of drugs for the consumer, and to recommend such further measures as may be necessary to rationalise the prices of basic drugs and formulations. the hathi committee noticed that 'in a country like india where general poverty and the wide disparities in levels of income between different sections existed' it was particularly important to emphasise 'the social utility of the industry and the urgent need for extending as rapidly as possible certain minimum facilities in terms of preventive and curative medicines to the large mass of people both urban and rural. the distinction between an essential bulk drug included in the schedule and a bulk drug not so included in the schedule, which was made in 1970 drugs (prices control. order was abandoned in the 1979 order. bulk drugs were, however, broadly divided into indigenously manufactured bulk drugs, imported bulk drugs and hulk drugs which were both manufactured indigenously as also imported. nothing in the scheme of the drugs (prices control. order induces us to hold that price fixation under the drugs (prices control. order is not a legislative activity, but a quasi-judicial activity which would attract the observance of the principles of natural justice. nor is there anything in the scheme or the provisions of the drugs (prices control) order which otherwise contemplates the observance of any principle of natural justice or kindred rule, the non-observance of which would give rise to a cause of action to a suitor. what the order does contemplate however is 'such enquiry' by the government 'as it thinks fit. the primary object of the enquiry is to secure the bulk drug at a fair price for the benefit of the ultimate consumer an object designed to fulfil the mandate of art. 39(b) of the constitution it is primarily from the consumer public's point of view that the government is expected to make its enquiry. the need of the consumer public is to be ascertained and making the drug available to them at a fair price is what it is all about. the enquiry is to be made from that angle and directed towards that end. so, information may be gathered from whatever source considered desirable by the government. the price fixed by the government may be questioned on the ground that the considerations stipulated by the order as relevant were not taken into account. it may also be questioned on any ground on which a subordinate legislation may be questioned, such as, being contrary to constitutional or other statutory provisions. it may be questioned on the ground of a denial of the right guaranteed by art. 14 if it is arbitrary, that is, if either the guidelines prescribed for the determination are arbitrary or if, even though the guidelines are not arbitrary, the guidelines are worked in an arbitrary fashion. these are all matters which should legitimately be raised in the review application, if there is any substance in them. these are not matters for investigation in a petition under art. 226 of the constitution or under art. 32 of the constitution. despite the pressing invitation of shri diwan to go into facts and figures and his elaborate submissions based on facts and figures, we have carefully and studiously refrained from making any reference to such facts and figures as we consider it outside our province to do so and we do not want to set any precedent as was supposed to have been done in premier automobiles though it was not so done and, therefore, needed explanation in later cases. the question has to be decided with reference to the definition of 'free reserve' in paragraph 2(g) of the control order and not on any assumed principle of accountancy. this is also a question which may be raised before the government in the review application. it was open to the subordinate legislating body to prescribe and adopt its own mode of ascertaining the cost of production and the items to be included and excluded in so doing. the subordinate legislating body was under no obligation to adopt the method adopted by the income-tax authorities in allowing expenses for the purpose of ascertaining income and assessing it. there may be many items of business expenditure which may be allowed by income-tax authorities as legitimate expenses but which can never enter the cost of production. so long as the method prescribed and adopted by the subordinate legislating body is not arbitrary and opposed to the principal statutory provisions, it cannot be legitimately questioned. any information sought by the manufacturer may be given to him at the hearing in terms of what we have said in the judgment. STATUTE it must be remembered that art. 39(b) of the essential commodities act enjoins a duty on 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. the essential commodities act is a legislation towards that end. s. 3(1) of the essential commodities act enables the central government, if it 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 price', to 'provide for regulating or prohibiting by order, the production, supply and distribution thereof and trade and commerce therein. in particular, s. 3(2)(c) enables the central government, to make an order providing for controlling the price at which any essential commodity may be bought or sold. it is in pursuance of the powers granted to the central government by the essential commodities act that first the drugs (prices control. order, 1970 and later the drugs (prices control. order, 1979 were made. s. 3(3c) provides for the ascertainment of the price. it provides that in calculating the amount to be paid for the commodity required to be sold regard is to be had to--(a) the minimum price, if any, fixed for sugarcane by the central government under this section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the securing of a reasonable return on the capital employed in the business of manufacturing sugar. s. 3(2)(c) of the act, we have already seen, enables the central government to make an order controlling the price at which any essential commodity may be bought or sold, 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 in securing their equitable distribution and availability at fair prices. s. 3(3c) provides for the determination of the price to be paid to a person who has been directed by the central government by an order made under s. 3(2)(c) to sell a certain quantity of an essential commodity to the government or its nominee. the drugs (prices control) order, 1970 defined 'bulk drugs' as follows: "bulk drugs" means "any unprecessed phamaceutical, chemical, biological and plant product or medicinal gas conforming to pharmacopocial or other standards accepted which is used as such or after being processed into formulations and includes an essential bulk drug.

this appeal by special leave is from the judgment and order of the high court of andhra pradesh dated 15th april1986. on or about th of april 1948 sail nawaz jung the then ruler of mukkalla state south yeman in arabia settled some of the properties with which the appeal is concerned by a registered tamleeknama in favour of his son sultan awaz and his grandson galib bin awaz. in 1954there was wakfnama by the said sail nawaz jung. on or about 23rd of august1963. the military estate officer secunderabad of. andhra pradesh requested for the requisition of the property named as sail gulshan with a vast extent of land and palaces with roads and surrounded by a compound wail measuring 19 acres and 10 guntas situated in the heart of hyderabad city near sarojini devi hospital. the property in question was taken possession of on or about 12th of september1963. in this appeal we are concerned with the claim for compensation for the said acquisition by one abdul khader who was a flower picker. he had claimed rights as a tenant during the requisition. his claim for compensation for requisition was settled by sharing the rent in or about 1969 the appellant is one of the owners of the property in question deriving their title and right from the said sail nawaz jung. on or about 3rd february1970 the collector issued notice for acquisition of the property u s 71 of the requisitioning and acquisition of immovable property act1952 being act 30 of 1952. hereinafter called the central act the gazette notification for the acquisition was issued on 12th march1970 the controversy in this case relates to the question whether abdul khader was a protected tenant under the andhra pradesh telangana area. tenancy and agricultural lands act1950 being. act no xxi of 1950. hereinafter called the andhra pradesh act. the purpose of the said act as the preamble states was inter alia to enable the land holders to prevent the excessive sub division of agricultural holdings and empower government to assume in certain circumstances the management of agricultural lands to provide for the registration of co operative farms and to make further provision for matters incidental thereto. s 2r states that the expression protected means a person who is deemed to be a protected tenant under the provisions of the said act. chapter iv of the andhra pradesh act deals with protected tenants and s 34 of the said act provides who is to be considered as a protected tenant and uses the expression that a person shall subject to the provisions of sub ss 2 and 3be deemed to be a protected tenant in respect of the land if he has fulfilled the conditions mentioned in clauses a and b of sub s 1 of s 34 of the said act. sub s 2 of s 34 of the said act also deals with to be deemed to be a protected tenant in respect of any landfor certain purposes. s 35 of the said act deals with decision on claims and stipulates by sub s 1 of s 35 of the said act that if any question arises whether any person and if so what person is deemed under s 34 to be a protected tenant in respect of any land the landholder or any person claiming to be so deemed may within one year from the commencement of the act apply in the prescribed form to the tahsildar for the decision of the question and the tahsildar shall after enquiring into the claim or claims in the manner prescribed declare what person is entitled to be deemed to be protected tenant or as the case may be that no person is so entitled. sub s 2 of s 35 stipulates that a declaration by the tahsildar that the person is deemed to be a protected tenant or in the event of an appeal from the tahsildar 's decision such declaration by the collector on first appeal or by the board of revenue on second appeal shall be conclusive that such person is a protected tenant and his rights as such shall be recorded in the record of right of where there is no record of rights in such village record as may be prescribed. s 36 of the said act deals with the recovery of possession by protected tenant. s 37 deals with persons not entitled under s 34 to be deemed in certain circumstances as protected tenants. s 38 of the said act deals with right of protected tenant to purchase land. s 39 deals with right of protected tenants to exchange lands. s 40 of the said act makes rights of protected tenant heritable. sub s 2 of s 40 of the said act indicates who are the heirs who would be entitled to hold the tenancy on the death of the protected tenant and on what terms. sub s 3 of s 40 of the said act provides that if a protected tenant dies without leaving any heirs all his rights shall be so extinguished. the explanation to sub s 3 of s 40 of the said act provides who should be deemed to be the heirs of a protected tenant. subs 4 of s 40 stipulates that the interest of a protected tenant in the land held by him as a protected tenant shall form sixty per cent. it is necessary also to note the provisions of s 99 of the act. it is as follows 99 bar of jurisdiction 1. save as provided in this act. no civil court shall have jurisdiction to settle decide or deal with any question which is by or under this act required to be settled decided or dealt with by the tahsildar tribunal or collector or by the board of revenue or government. no order of the tahsildar tribunal or collector or of the board of revenue or government made under this act shall be questioned in any civil or criminal court. s 102 of the said act stipulates that the act shall not apply to certain lands and areas and provides inter alia as follows 102 nothing in this act shall apply to lands leased granted alienated or acquired in favour of or by the central government or the state government a local authority or a cooperative society. it is relevant at this stage to refer to certain provisions of the central act to consider the controversy involved in this appeal the central act was enacted giving power for requisitioning and acquisition of immovable property for union purposes. s 3 of the said act gave power to requisition immovable property. s 4 of the said act empowers taking possession of requisitioned property. s 5 deals with rights over requisitioned property. s 6 deals with the power of release from the requisitioning. s 7 authorises the central government where it is of the opinion that it is necessary to do so to acquire requisitioned property. s 8 deals with principles and method of determining compensation either for requisitioning or acquisition of the property and inter alia provides for appointment of an arbitrator in certain contingencies in case there was no agreement for determining compensation. s 9 deals with the payment of compensation and provides that the amount of compensation payable under an award shall subject to any rules made under that act be paid by a competent authority to the person or persons entitled thereto in such manner and within such time as may be specified in the award. suspecting that the entry in the protected tenancy register might not be genuine on or about 24th of october1970 the tahsildar passed an order cancelling that entry. the main question centres around the right of abdul khader respondent no 1 herein to the compensation awarded by the arbitrator it is therefore necessary to refer to the relevant portion of the said order which inter alia stated as follows by perusal of the tenancy register of 1958 it is evident that sri mohd abdul khader is not a genuine protected tenant. the entries of this particular so called tenant is doubtful. i suspect that somebody has tampered the register and entered the name of sri mohd abdul khader. separate enquiry in this connection is going on in this office to know under what circumstances such entry has been made and copy also issued without knowledge of the tahsildar. hence i suspect the entry and order to cancel the copy of the tenancy issued in favour of sri modh. sd tahsildar. hyderabad west taluk. this order of cancellation was challenged by abdul khadar by filing a writ petition in the high court of andhra pradesh being w p no 1786 of 197 1 and by judgment and order passed on 27th august197. 1the learned single judge vaidya j held inter alia as follows whether the petitioner abdul khader is a protected tenant or whether he has any prima facie interest in the suit property are matters entirely within the sole jurisdiction of the arbitrator who has to be appointed under s 8 of the central act. in the appeal of abdul khader the proceedings of revenue divisional officer while questioning entry of the name of abdul khader in the register is a genuine one or net and while it is stated that it was entered in the register in such suspicious way by giving serial no 1 a between serial nos 1 and 2 of register being exhibit a 106 and exhibit a 107it ultimately held that abdul khader was a protected tenant under section 37a of the andhra pradesh act. on or about 19th of april1972. the order was passed by the district revenue officer who held that abdul khader was not a protected tenant. he held further that khasra pahani which is the basic record of occupancy period after spot inspections does not find the name of abdul khader and further held that all entries except this entry in the protected tenancy register prepared under section 37a of the andhra pradesh act was supported by an enquiry. it was in those circumstances held by him that the entry was a spurious one. in civil revision petition no 1006 of 1972 which was filed by abdul khader as against others justice r ramachandra raju of the andhra pradesh high court on or about 19th august1974 held that abdul khader was not a protected tenant and directed deletion of entry made in the final record of tenancies as a spurious one. the learned judge observed inter alia as follows i am told by the counsel for both the parties that the lands in question were already acquired for military purpose under the requisition and acquisition of immovable property act1952 and that sri m s sharma the additional chief judge city civil court hyderabad has already been appointed as arbitrator under the act for determining the compensation and the persons entitled to it. not only that in the writ petition filed by the present petitioner in this court it was held that it is not necessary to go into the question whether the petitioner is a protected tenant or whether he has any prima facie interest in the property because they are the matters entirely within the sole jurisdiction of the arbitrator who has to be appointed under s 8 of the act. now as the arbitrator has already been appointed he will go into the matter as to whether the petitioner was a protected tenant of the lands or not and if he was the protected tenant to what share in the compensation amount he would be entitled to. under these circumstances the c r p is dismissed with a direction that the entry made in the final record of tenancies that the petitioner was the protected tenant for the lands in question which is spurious as found by both the revenue divisional officer and the district revenue officer should be deleted. the matter was brought to this court by a special leave application and this court in special leave petition civil no 10 of 1975 on or about 30th january 1975 held that since the question whether the petitioner in that case namely abdul khader was a protected tenant had been left open by the high court to be decided by the arbitrator u s 8 of the central act special leave petition was rejected with those observations. thereafter there was an order appointing arbitrator on 29th of march1975. u s 81b of the central act. claim petition was filed by the appellant before the arbitrator claim petition was also filed by abdul khader claiming 60 of compensation as a protected tenant. there was an award by the arbitrator holding that as this court had left it open to decide whether abdul khader was a protected tenant. despite the objection exercising the jurisdiction of the arbitrator to go into the question of protected tenant the arbitrator held that abdul khader was a protected tenant. aggrieved by the aforesaid award the appellant claiming as one of the owners of the property filed a statutory appeal to the high court. in the meantime abdul khader filed an application on or about 21st of october1984 for adducing additional evidence to mark kaulnama dated 2nd of december1950 for the first time and oubuliatnama dated 2nd december1950 as exhibits in deciding the protected tenancy rights. the appellant objected to that application but the high court on 1st april1985. appointed advocate commissioner to record additional evidence. on or about 22nd of april1985. the appellant filed the objection reserving the right of raising the jurisdiction of the arbitrator to go into the question whether abdul khader was a protected tenant in the light of the act 21 of 1950 three civil appeals were filed before this court against the order of the high court on 15th may1985 this court passed the order on 19th august1985 the said order is important and reads as follows special leave are granted. the appeal is heard. dr chitale learned counsel for the appellants submitted that the high court should be directed to consider the issues relating to the jurisdiction of the arbitrator appointed and functioning under the requisitioning and acquisition of immovable property act195 i to decide whether a person is protected tenant of an agricultural land or not in the light of ss 99 and 102 of the andhra pradesh telangana area. tenancy and agricultural land act1950 we have heard the learned counsel for the respondents on the above question. after giving our due consideration to the question we are of the view that the high court should determine this question. the high court shall decide the question of jurisdiction referred to above in light of the submissions to be made by both the parties. shri subba rao learned counsel for the respondents submits that the appellants should not be permitted to withdraw from the authorities concerned more than 40 per cent of the total compensation awarded in respect of the lands in question pending disposal of the appeal before the high court. we agree with his submission. we direct that the appellants shall withdraw not more than 40 per cent of the compensation pending disposal of the appeal before the high court. the remaining 60 per cent shall be disbursed in accordance with the directions to be given by the high court after hearing all the parties concerned. the appeals were disposed of accordingly. other c m ps were filed for clarification of the second part of the order dated 19th august1985 and this court on 29th november1985 in cmps. nos 4692 to 4694 of 1985 clarified and ob served that there was no need for further clarification. it was observed that the high court was at liberty to consider the claims to be made by both the parties and pass any fresh order with regard to the disbursement of the remaining 60 of the compensation. the judgment under appeal was passed on 15th of april1986 this appeal arises out of the said judgment. in the judgment under appeal which is directed against the award made by the arbitrator formulated the following four issues 1 what is the value of the land 2 who are entitled to the compensation amount 3 whether abdul khader is a protected tenant of sail gulshan of the area 19 02 guntas excluding the land of buildings wells etc and 4 what share is to be apportioned to successors of sail nawaz jung. it has to be borne in mind that in the award the arbitrator after exhaustively discussing the evidence on record held that abdul khader was a protected tenant and as such further held that he was entitled to 60 of the compensation money payable for the acquisition of the land excluding the land of buildings wells etc. in this appeal we are concerned with the question whether the high court was right in upholding the award of the arbitrator so far as it has held in favour of abdul khader and his rights to get 60 of the compensation. the high court dealt with the value of the land. we are not concerned with the challenge to this aspect in this appeal. the high court further modified a portion of the order in view of the decision of this court in bhag singh v union territory of chandigarh. a i r 1985 s c 1576 1985 indlaw sc 246 on the question of solarium and interest on the amount awarded. the judgment also dealt with the question as to who were the successors of nawaz jung. we are also not concerned with this aspect of the matter inasmuch as the same is the subject matter of another appeal being civil appeal no 4406 of 1986. we are concerned in this appeal with the right of abdul khader. the high court discussed 18 documents out of which two are challans and other depositions. kowlnama executed in favour of shaik hussain was not filed. the kowlnama executed in favour of the son mohd. abdul khader on december 31950 was filed and was marked as exhibit c 1 the document recited permitted to utilise garden fruits flowers and mango. fruits. the tenant was permitted to raise flower trees at his own expenses. the high court took into consideration the judgment in suit no 131 of 195 1 52 by the tenant. the high court on consideration of these documents was of the view that these documents showed unequivocally that the tenancy was in favour of shaik hussain from 1935 after his death mohd abdul khader was recognised as the tenant. the land was taken possession of under a panchanama dated 12th of september1963 according to the high court the documents discussed in the judgment indicated that shaik hussain was a tenant from 1935 after his death on july 181949his son mohd abdul khader became a tenant. in this background the court addressed itself to the question whether abdul khader was a protected tenant or not entitled to 60 of the compensation. no document was filed to show that abdul khader was declared by the revenue courts as a protected tenant. the high court was of the view that there was surfeit of evidence prior to the commencement of the andhra pradesh act that shaik hussain was a tenant of the land. the question was whether on enforcement of the said act abdul khader respondent herein was a protected tenant. the high court thereafter discussed the facts mentioned hereinbefore about the order of the district revenue officer and the orders of this court referred to hereinbefore. the high court noticed the position that under the said andhra pradesh act it was for the revenue authorities to order whether a tenant is a protected tenant under section 34s 37 and section 37a of the said act. section 37a was enacted on 12th of march1956 the high court was however of the view that it can not be said that it was for the revenue authorities alone to decide the issue because the arbitrator was ordered to decide the issue by the high court on 19th august1974 and by this court on 30th of january1975 the high court also referred to the directions of this court dated 19th august1985 mentioned hereinbefore. the high court was of the view that the arbitrator was to decide that question and the arbitrator was not in error in deciding the issue in the manner it did. the court reiterated that there was surfeit of evidence to declare that abdul khader was a tenant. if he was a tenant the high court observed he was a protected tenant under s 34 read with s 37 or under section 37 a of the andhra pradesh act. the high court on reciting the facts came to the conclusions inter alia. a that abdul khader because he was a tenant between january1942 to january1948 for six years therefore was a protected tenant under sub cl ii of cl 1 of s 34 of the andhra pradesh act b that abdul khader held the land from october1943 to october1949therefore was a protected tenant of sail gulshan under sub cl iii of cl 1 of s 34 of act 21 of 1950 in these circumstances the high court held that adbul khader was entitled to 60 of the compensation paid. aggrieved by the aforesaid decision the appellants being the successor of the owner of the land in question is in appeal before us. shri shanker ghosh learned counsel for the appellant urged that under the said andhra pradesh act it was mandatory under s 99 read with s 102 of the said act in conjunction with the definition of s 2r of the act for the revenue authorities to decide whether abdul khader was a protected tenant or not. there being no such finding by the revenue officer on the other hand there being a finding mat abdul khader was not a protected tenant by the revenue authorities it was not open to the arbitrator to decide the question of protected tenancy. the arbitrator therefore exceeded his jurisdiction and the high court was in error. shri a k sen on behalf of the respondents on the other hand contended that the compensation payable in respect of the requisitioning and acquisition must be determined under the central act and the arbitrator was the authority to decide that question. the question of abdul khader 's right to compensation had to be decided in accordance with law. he had claimed rights of a protected tenant. he had sought to establish his rights which must be found within the four corners of the andhra pradesh act along with other documents because u s 404 of the andhra pradesh act the interest of a protected tenant in the land held by him as a protected tenant formed 60 the rights of the protected tenants have been defined in the andhra pradesh act and relevant provisions of that act namely sections 343737a and 40 in conjunction with the definition under s 2r have to be taken into consideration in the background of the facts and circumstances of the case. the two orders of this court as we have mentioned hereinbefore dated 30th of january1975 and 19th of august 1985 reiterated the position that it was for the arbitrator to decide the question and he should decide the question in the light of ss 99 and 102 of the andhra pradesh act as set out hereinbefore. on behalf of the appellant it was submitted that there was a complete bar for any civil court to go into the question whether abdul khader was a protected tenant and as such the arbitrator and the high court had no jurisdiction to decide this question. for this reliance was placed on s 102 of the andhra pradesh act which lays down that the act will not apply to lands leased granted alienated or acquired in favour of or by the central government or the state government etc and on s 99 of the act which bars the jurisdiction of civil courts to deal with any question which is under the andhra pradesh act required to be settled to be decided or dealt with by the tahsildar tribunal or collector. according to the appellant inasmuch as whether abdul khader was a protected tenant had not to be settled by the collector or the tribunal the arbitrator and the high court were in error in going to that question. we are unable to accept this submission. by the scheme of the central act compensation was payable to persons who had interest in the land acquired. who are the persons who have interest in the land had to be decided in accordance with the law and the evidence. determination by the revenue authorities and non determination is not conclusive or decisive. it is clear that s 102 of the andhra pradesh act mentions that after acquisition the act was not to apply in respect of certain land. therefore it was submitted by the respondents that s 99 of the andhra pradesh act which made the determination by the tahsildar to be final and debarred other courts from going into the question did not apply in case of compensation payable. in the background of the totality of circumstances as manifest in the different orders it appeared to the arbitrator and the court that the entry which was made in favour of abdul khader as the protected tenant was of doubtful validity. we are of the opinion that the high court was not in error in so holding. it was the observation of the revenue authorities that it was spurious. that in any event what was the interest of abdul khader had to be determined in determining the question of payment of compensation to him and in so determining the facts and circumstances and the proceedings before the revenue authorities and entries and subsequent deletions had to be taken into consideration by the arbitrator. the arbitrator has done so. he had jurisdiction to do so. the high court has so held. this court by the two orders referred to hereinbefore had also affirmed this position. in that view of the matter we are unable to accept the challenge to the award. furthermore under s 99 of the andhra pradesh act the bar was not against the arbitrator but against a civil court. in determining the amount of compensation payable to abdul khader under the central act his interests in the property had to be determined. in another context the high court of andhra pradesh enunciated the position that it was necessary to determine the interest of the persons claiming compensation. reference may be made to the decision in the case of archi appalareddi and another v special tahsildar land acquisition visakhapatnam municipality and mother1979 andhra weekly reporter vol 1 p 101where the court observed in the context of the land acquisition act that a tenant was a person interested as defined in clause b of s 3 of the land acquisition act. he has a right to object to the acquisition andor the quantum of compensation. the land acquisition officer or the court as the case may be had to ascertain the value of a claimant 's right in the property acquired and compensate him in that behalf. we may mention that in the two orders of this court dated 30th of january1975 and 19th of august1985 referred to herein before this court had left it open to the high court and to the arbitrator to decide whether he is a protected tenant or not the arbitrator has decided that question and the high court found over whelming evidence in support of it. in that view of the matter we must uphold that decision however unsatisfactory. it might appear that a fruit pucker gets 60 of the compensation while the owners get only if that is the law. let it be. in the aforesaid view of the matter this appeal must fail and is accordingly dismissed with costs. appeal dismissed.

IN-Ext

FACTS sail nawaz jung,the then ruler of mukkalla state,south yeman in arabia settled some of the properties with which the appeal is concerned by a registered tamleeknama in favour of his son sultan awaz and his grandson galib bin awaz. in 1954,there was wakfnama by the said sail nawaz jung. on or about 23rd of august,1963 the military estate officer,secunderabad of.andhra pradesh requested for the requisition of the property named as "sail gulshan" with a vast extent of land and palaces with roads and surrounded by a compound wail measuring 19 acres and 10 guntas situated in the heart of hyderabad city near sarojini devi hospital. the property in question was taken possession of on or about 12th of september,1963. the appeal concerned with the claim for compensation for the said acquisition by one abdul khader who was a flower picker. he had claimed rights as a tenant during the requisition. his claim for compensation for requisition was settled by sharing the rent in or about 1969. the appellant is one of the owners of the property in question deriving their title and right from the said sail nawaz jung. on or about 3rd february,1970 the collector issued notice for acquisition of the property u/s.7(1) of the requisitioning and acquisition of immovable property act,1952 being act 30 of 1952 (hereinafter called the central act). the gazette notification for the acquisition was issued on 12th march,1970. the controversy in this case relates to the question whether abdul khader was 'a protected tenant' under the andhra pradesh (telangana area) tenancy and agricultural lands act,1950. ARGUMENT under the said andhra pradesh act it was mandatory under s.99 read with s.102 of the said act in conjunction with the definition of s.2(r) of the act for the revenue authorities to decide whether abdul khader was a protected tenant or not. abdul khader was a protected tenant had not to be settled by the collector or the tribunal,the arbitrator and the high court were in error in going to that question. ISSUE whether the high court was right in upholding the award of the arbitrator so far as it has held in favour of abdul khader and his rights to get 60% of the compensation. ANALYSIS no document was filed to show that abdul khader was declared by the revenue courts as a protected tenant. there being no such finding by the revenue officer,on the other hand there being a finding mat abdul khader was not a protected tenant by the revenue authorities it was not open to the arbitrator to decide the question of protected tenancy. in determining the amount of compensation payable to abdul khader under the central act,his interests in the property had to be determined. reference may be made to the decision in the case of archi appalareddi and another v.special tahsildar,land acquisition,visakhapatnam municipality and mother,where the court observed in the context of the land acquisition act that a tenant was a 'person interested' as defined in clause (b) of s.3 of the land acquisition act. he has a right to object to the acquisition and/or the quantum of compensation. the land acquisition officer or the court,as the case may be,had to ascertain the value of a claimant's right in the property acquired and compensate him in that behalf. by the scheme of the central act compensation was payable to persons who had interest in the land acquired. who are the persons who have interest in the land had to be decided in accordance with the law and the evidence. determination by the revenue authorities and non-determination is not conclusive or decisive. it is clear that s.102 of the andhra pradesh act mentions that after acquisition the act was not to apply in respect of certain land. therefore,it was submitted by the respondents that s.99 of the andhra pradesh act.which made the determination by the tahsildar to be final and debarred other courts from going into the question did not apply in case of compensation payable. in the background of the totality of circumstances as manifest in the different orders it appeared to the arbitrator and the court that the entry which was made in favour of abdul khader as the protected tenant was of doubtful validity. we may mention that in the two orders of this court dated 30th of january,1975 and 19th of august,1985 referred to herein before,this court had left it open to the high court and to the arbitrator to decide whether he is a protected tenant or not. STATUTE s.2(r) of the andhra pradesh act states that the expression 'protected' means a person who is deemed to be a protected tenant under the provisions of the said act. chapter iv of the andhra pradesh act deals with protected tenants and s.34 of the said act provides who is to be considered as a protected tenant and uses the expression that a person shall,subject to the provisions of sub-ss.(2) and (3),be deemed to be a protected tenant in respect of the land if he has fulfilled the conditions mentioned in clauses (a) and (b) of sub-s.(1) of s.34 of the said act. sub-s.(2) of s.34 of the said act also deals with "to be deemed to be a protected tenant in respect of any land",for certain purposes. s.35 of the said act deals with decision on claims and stipulates by sub-s.(1) of s.35 of the said act that if any question arises whether any person,and if so what person,is deemed under s.34 to be a protected tenant in respect of any land,the landholder,or any person claiming to be so deemed,may,within one year from the commencement of the act apply in the prescribed form to the tahsildar for the decision of the question and the tahsildar shall after enquiring into the claim or claims in the manner prescribed,declare what person is entitled to be deemed to be protected tenant or as the case may be,that no person is so entitled. sub-s.(2) of s.35 stipulates that a declaration by the tahsildar that the person is deemed to be a protected tenant or,in the event of an appeal from the tahsildar's decision such declaration by the collector on first appeal or by the board of revenue on second appeal,shall be conclusive that such person is a protected tenant and his rights as such shall be recorded in the record of right of where there is no record of rights in such village record as may be prescribed. s.36 of the said act deals with the recovery of possession by protected tenant. s.37 deals with persons not entitled under s.34 to be deemed in certain circumstances as protected tenants. s.38 of the said act deals with right of protected tenant to purchase land. s.39 deals with right of protected tenants to exchange lands. s.40 of the said act makes rights of protected tenant heritable. sub-s.(2) of s.40 of the said act indicates who are the heirs who would be entitled to hold the tenancy on the death of the protected tenant and on what terms. sub-s.(3) of s.40 of the said act provides that if a protected tenant dies without leaving any heirs all his rights shall be so extinguished. the explanation to sub-s.(3) of s.40 of the said act provides who should be 'deemed to be the heirs' of a protected tenant. subs.(4) of s.40 stipulates that the interest of a protected tenant in the land held by him as a protected tenant shall form sixty per cent. section 99-bar of jurisdiction:-(1) save as provided in this act no civil court shall have jurisdiction to settle,decide or deal with any question which is by or under this act required to be settled,decided or dealt with by the tahsildar,tribunal or collector or by the board of revenue or government. (2) no order of the tahsildar,tribunal or collector or of the board of revenue or government made under this act,shall be questioned in any civil or criminal court." s.102 of the said act stipulates that the act shall not apply to certain lands and areas and provides inter alia as follows: 102.nothing in this act shall apply-- to lands leased,granted,alienated or acquired in favour of or by the central government or the state government,a local authority or a cooperative society. s.3 of the said act gave power to requisition immovable property. s.4 of the said act empowers taking possession of requisitioned property. s.5 deals with rights over requisitioned property. s.6 deals with the power of release from the requisitioning. s.7 authorises the central government where it is of the opinion that it is necessary to do so to acquire requisitioned property. s.8 deals with 'principles and method of determining compensation either for requisitioning or acquisition of the property and,inter alia,provides for appointment of an arbitrator in certain contingencies in case there was no agreement for determining compensation. s.9 deals with the payment of compensation and provides that the amount of compensation payable under an award shall,subject to any rules made under that act,be paid by a competent authority to the person or persons entitled thereto in such manner and within such time as may be specified in the award.

whether the appellant herein and his father had sublet the premises in question in or about 1960 in terms of section 131e of the bombay rents hotel and lodging house rates control act1947. hereinafter called the rent act is the question involved in this appeal by special leave from the judgment and order of the high court of gujarat dated 21st of august1979. in order to decide this question it is necessary to decide the scope and ambit of section 292 of the rent act. to decide this facts must be referred to. the appellant claimed to be the tenant in respect of the two premises which are quite adjacent to each other one of which is involved in this appeal. the respondent is the landlord of the two premises and these were situated at raikhad ward ahmedabad. the respondent had alleged in the two suits that the appellant was his tenant in the suit premises which were leased out to him and before him his father for conducting the business in the name of ahmedabad fine. weaving works and according to the terms of tenancy suit premises were leased for manufacturing cloth in the name of ahmedabad fine. weaving works. the respondent had further alleged that the appellant no 1 had closed the business and he was not using the said premises for the purpose for which it was let to him. it was the case of the appellant that in respect of the suit premises he was carrying on his business with respondents. nos 24 and 5 in the name of respondent no 2m s. bharat neon signs hereinafter referred to as respondent no 2. we are concerned in this appeal with only one of the premises which was involved in suit no 553 of 1969 it is not in dispute and it never was that the premises was being used by bharat neon signs firm being the defendant no 2 in the original suit. at the time of the institution of the suit the defendants nos 2 to 5 were admittedly the partners. the present appellant who was the original defendant no 1 claimed to be a partner. the main controversy was whether the appellant had sublet the premises to defendant no 2bharat neon signs or whether he being a partner of the said firm had permitted the said firm to use the premises in question. it is clear from the evidence on record that the partnership firm had undergone metamorphosis from time to time and again ever since the year 1960 the firm bharat neon signs first originated on 4th of october1960 as many as six persons were named in the partnership firm on or about 4th of october1960 and they had executed a deed of partnership on 13th of october1960 which is exhibit 114 on the record. the said partnership deed records six persons who were to run the business in manufacturing and selling bharat neon signs tubes. however the document is silent as to where the business was started. on or about 24th of october1960. another partnership deed being exhibit 69 came to be executed among the six persons and the father of the appellant girdharlal. the document is exhibit 69 and is signed by the father of the appellant and the appellant himself also. it may be mentioned that the partnership deed exhibit 114 was executed by six persons and at that stage the appellant or his father were not partners in the firm. but thereafter when the partnership deed exhibit 69 was executed the appellant and his father joined the firm with an agreement to share profits only and their share was fixed at 0 03 paise in a rupee. there is a third partnership deed exhibit 70 which showed that the deceased tenant girdharlal had died on 1st of february1961 and so by the remaining seven partners with same terms and conditions a new partnership deed being exhibit 70 was executed on 22nd. september1961 at this time the share of the appellant was fixed at 0 03 paise in a rupee to share the profits only. in 1965 some partners retired and the remaining four partners executed a fresh partnership deed exhibit 117 on 1st. april1965 this last partnership deed was executed by the appellant and original defendants. nos 34 and 5. the main question in issue in this appeal as well as before the high court in revision was whether there was a genuine partnership at the appellant was a partner. it is true that since after 4th of october1960 the partnership firm was carrying on business in the premises in question. it is well settled that if there was such a partnership firm of which the appellant was a partner as a tenant the same would not amount to subletting leading to the forfeiture of the tenancy. for this proposition see the decision of the gujarat high court in the case of mehta jagjivan vanechand v doshi vanechand harakhchand and others. a i r 1972 gujarat 6 1970 indlaw guj 68 thakkar j of the gujarat high court as the learned judge then was held that the mere fact that a tenant entered into a partnership and allowed the premises being used for the benefit of partnership does not constitute assignment or subletting in favour of the partnership firm entitling a landlord to recover possession. this view is now concluded by the decision of this court in madras bangalore transport co west v inder singh and others1986 3 s c c 62 1986. indlaw sc 748. the trial court in the instant appeal held that there was subletting. it accordingly decreed the suit for possession instituted by the landlord. the suit inter alia was filed by the landlord on the ground of subletting. there was an appeal before the court of small causes bombay and by judgment and order delivered by the court of small causes bombay on 18th of august1977it was held that the learned trial judge had erred in passing a decree for possession on the ground of subletting change of user and breach of terms of tenancy. in the premises the appeal was allowed. it may be mentioned that the respondent no 1 is the landlord of two premises which were quite adjacent as mentioned before. the respondent plaintiff had alleged in both the suits that the appellant was his tenant in the suit premises which were leased to him for conducting his business in the name of ahmedabad fine. weaving works and according to the terms of tenancy suit the suit premises were leased for manufacturing cloth in the name of ahmedabad fine weaving works. the landlord had alleged that the appellant had closed that business and he was not using the premises in question for the purpose for which it was let to him. it was further alleged by the landlord that the appellant had unlawfully sublet the major part of the premises in question of both the suits to defendant nos 2 to 5 in the original suit and these defendants were running business in partnership for manufacturing of neon signs in the name of bharat neon signs. it was further alleged that the appellant had also unlawfully sublet one room of the suit premises to defendant no 6 in suit no 553 of 1969 who was residing in that room. for the purpose of the suit no 553 of 1969 with which the appeal is concerned it is relevant to state that the appellant had raised the contention that ahmedabad fine weaving works was not the tenant of the suit premies but the suit premises was tenanted by the father of the appellant girdharlal chimalal in 1938 and he was the original tenant of the premises and appellant subsequently joined the business of his father as a partner and the name of the partnership firm was ahmedabad fine weaving works. he has stated further that the suit premises were to be used for business and he could use it for any business and he joined in partnership with defendants nos 2 to 5 somewhere in 1961 to prepare neon signs and the defendants nos 2 to 5 were his partners and doing business in the suit premises. he contended further that the suit premises was with him and the defendants nos 2 to 5 had not acquired any tenancy rights in the suit premises. it is further stated that he had filed a civil suit to dissolve the partnership and to take account and his suit was pending in city civil court. it may be mentioned that by the time the revision petition came to be decided by the high court the suit had been decreed in his favour directing a dissolution of the said partnership and directing taking of the accounts. there was an appeal filed from that decree and that appeal was also dismissed and disposed of affirming the decree for the dissolution of the partnership inter se between the parties being the partners of the said firm. these facts were accepted that there was a partnership. as mentioned hereinbefore the learned trial judge consolidated both the suits and in the instant suit being no 553 of 1969 with which this appeal is concerned it was held by the learned trial judge that there was unlawful subletting. there was a decree for possession. this was set aside in appeal. the appellate court so far as the material for the present appeal is concerned held that there was no subletting and there was only carrying on of the business in partnership with defendants nos 2 to 5 in the name of bharat neon signs. therefore the first question that had to be decided by the appellate court being the court of small causes bombay and if a revision lay before the high court was whether there was any genuine partnership. the partnership deeds were there the appellant was not to share in the losses. the court of small causes came to the conclusion on an analysis of the evidence before it and the terms of the three partnership deeds referred to hereinbefore that there was a genuine partnership in law which was acted upon. the high court in revision reversed that finding. the first question therefore is whether the high court could do so in the facts of this case and secondly whether the high court was right in so doing. whether there was a partnership or not may in certain cases be a mixed question of law and fact in the sense that whether the ingredients of partnership as embodied in the law of partnership were there in a particular case or not must be judged in the light of the principles applicable to partnership. the first question therefore is what is a partnership. that has to be found in section 4 of the indian partnership act1932it says partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all emphasis supplied. section 6 of the said act reiterates that in determining whether a group of persons is or is not a firm or whether a person is or is not a partner in a firm regard shall be had to the real relation between the parties as shown by all relevant facts taken together. the following important elements must be there in order to establish partnership1 there must be an agreement entered into by all parties concerned2. the agreement must be to share profits of business and 3 the business must be carried on by all or any of the persons concerned acting for all. the partnership deeds were there entitling the petitioner to share in the partnership. it is true that in the partnership deeds the bank accounts were not to be operated by the appellant and further that irrespective of the profit. the clause of the partnership deed provided that there should be a fixed percentage of profit to be given to the partner appellant no 1 the appellant was not to share the losses. but there is nothing illegal about it. the appellant was to bring his asset being the tenancy of the premises in question for the user of the partnership. all these tests were borne in mind by the court of small causes bombay in the appeal from the decision of the learned trial judge. the appellate court had considered the partnership deeds. one point was emphasised by mr mehta learned counsel appearing for the respondents that the original first partnership deed did not mention the appellant or his father as a partner. it was in the second partnership deed that the appellant and his father joined the firm. the firm started as emphasised by mr mehta on 4th of october1960 and it was only on the 24th of october1960 the second partnership deed was executed. therefore it was emphasised that there was a gap of time when there was user by the partnership firm of the premises in question when the appellant was not a member of the firm. it was emphasised that this aspect was not considered by the court of small causes and the high court therefore was justified in interfering with the findings of the court of small causes. we are unable to agree. these deeds were there the partners were crossexamined there was no specific evidence as to from what date the firm started functioning from the particular premises in question. secondly it was emphasised by mr mehta that the partnership deed was a camouflage. it is evident from the sales tax registration and other registration certificates and licences under the shops and establishments act that the partnership was registered in the name of the appellant and the appellant was also indicated as a partner. it was so in the income tax returns and assessments. therefore it was submitted that the court of small causes committed an error of law resulting in miscarriage of justice. it was submitted by mr mehta that once it was accepted that the partnership deed was a mere camouflage the other subsequent acts and conducts were merely ancillary and were put in a formal way. but the question is from the three deeds itself which were examined in detail by the court of small causes and which were re examined by the high court could it be said unequivocally that there was no partnership. the deeds gave the appellant the right to share the profits and made him agent for certain limited purposes of the firm and there was evidence that the partnership deeds were acted upon. there was evidence of suit of dissolution of the partnership where none of the partners took the plea that it was a false or a fictitious document. though the decree in the dissolution suit was not binding in these proceedings inter se between the parties as partners it is a piece of evidence which can not be wholly ignored. all these factors were present before the court of small causes. these were reappraised by the high court. mehta. that in the partnership deed which is not necessary to recite the terms the petitioner was completely excluded in operating the bank accounts etc. there is nothing inherently illegal or improbable making a provision of such a type. in the eye of law such a clause is really non sequitur or neutral proving neither the existence nor non existence of a genuine firm. the first partnership deed which is exhibit 114 is dated 13th october1960 it recited that the partnership firm should be presently started at ahmedabad and the same should later be started in another city. in this the appellant was not a partner. exhibit 69 at page 136 of volume ii of the paper book is a partnership deed wherein girdharlal the father of the appellant no 1 and the appellant no 1 joined as partners. it recited that the partnership started from 4th of october1960 at ahmedabad. it was registered in the name of 7th and 8th partners girdharlal who was the appellant and his father. it was recited that the work of the partnership would be done by the parties of the fourth fifth sixth seventh and eighth as per advice and instructions of the first second and third. all the work had been done by some of the partners of which appellants were not parties and that they had to do the said work as per instructions of the other partners. clauses 6 and 7 of the said partnership deed recited inter alia as follows 6 the year of accounts of our partnership shall be aso vadi 30th day i e diwali and the first account year is decided to be the aso vadi 30th day of samvat year 2017 while settling accounts at the close of the year33 amount from the sum which may remain as net profit after deducting all expenditures viz interest discount rent of the shop rent of the godown insurance brokerage travelling telegrams postage salaries of employees etc shall be carried to reserve fund and thereafter in the sum that remains as net profit the shares of us the partners have been fixed as under 7 while settling accounts at the close of the year if the sum less than rs 1500 falls to the 0 03 shares of the partners of the seventh and eighth parts the amount falling short has to be debited towards the head of expenditure and rs 1500 fifteen hundred only have to be paid in full to each of them two and in those circumstances or if there be loss the parties of the seventh or eighth parts have not been held liable therefore and in the year or losses it has been decided to pay rs 1500 fifteen hundred only to each of them after debiting the same towards the head of expenditure and in the year of losses nothing has to be carried to the reserve fund and the loss has to be borne by us to parties first to sixth parts in the following proportion 8 clause 8 empowered the operating of the bank accounts by partners other than the appellant and his father. we find intrinsically nothing improbable. it is embodied in the deeds the functioning of the partnership. the third partnership which is dated 22nd of september1961 also indicates as parties of sixth part the name of the appellant. the relevant portion of the partnership deed reads as follows to wit the parties of the first to sixth parts out of us deceased khristi girdharbhai chimanlal and shah virchand keshavji had jointly started the business of manufacturing and selling neon signs tubes in partnership in ahmedabad from 4 10 1960in the name and style of bharat neon signs. however on account of the death of khristi girdharbhai chimanlal on 1 2 61 and other reasons the said partnership was dissolved from 8 9 61 thereafter we the parties from the first to seventh part have after purchasing at its cost price all the debts and dues goods stock etc together with goodwill of the dissolved partnership started manufacturing and selling of neon signs tubes in partnership from 9 9 61 we the parties of all the seven parts execute the deed of the said partnership to day. i e 22 9 61 the terms and conditions. thereof are as under. 1 the entire work of our partnership has to be carried out in the name of bharat neon signs. 2 the work to be carried out by our partnership is of manufacturing and selling neon signs tubes and of obtaining orders therefore. 3 whatever moneys that may be required to be invested in our partnership are to be invested by the parties of the first second third fourth and seventh parts out of us and the interest at the rate of 712 per cent per annum has to be paid for the moneys that may be invested in this partnership. we are of the opinion that these were evidence that these terms were acted upon. there was nothing intrinsically wrong in law in constituting a partnership in the manner it was done. it was contended by mr mehta that there was no agency reading the partnership deeds as we have read that conclusion does not emanate from position appearing debiting the fixed amount payable to the appellant in the expenses account which also is not inconsistent with partnership. this is also not inconsistent with treating the rent of the firm in the context of the total expenditure of the firm. in any event all these factors were considered by the court of small causes bearing in mind the correct legal principles. the high court on a reappraisal of these very evidence came to the conclusion that the partnerships were camouflages and were not acted upon and in fact and in reality the partnership firm was a sub tenant of the appellant herein. the question is can the high court do so in law. the power of the high court to revise the order is contained in section 292 of the bombay rent act as applicable at the relevant time to gujarat the said provision reads as follows 292. no further appeal shall lie against any decision in appeal under sub section 1 but the high court may for the purpose of satisfying itself that any such decision in appeal was according to law call for the case in which such decision was taken and pass such order with respect thereto as it thinks fit. the ambit and power of revision generally and in particular with respect to the provisions with which we are concerned have from time to time come up for consideration by this court. this court in hari shankar v rao girdhari lal chowdhury1962 1 suppl. scr 933 1961 indlaw sc 157 had to consider section 351 of the delhi ajmer rent corntrol act1952. the said section reads as follows 351. the high court may at any time call for the record of any case under this act for the purpose of satisfying itself that a decision made therein is according to law and may pass such order in relation thereto as it thinks fit. it was held in the majority judgment by hidayatuiiah j as the learned chief justice then was that though section 35 of the delhi and ajmer rent control act was worded in general terms but it did not create a right to have the case re heard. this court emphasised that the distinction between an appeal and revision is a real one. a right to appeal carries with it right of re heating on law as well as fact. unless the statute conferring the right to appeal limits the re hearing in some way. the power to hear a revision is generally given to a superior court so that it may satisfy itself that a particular case is decided according to law. the expression according to law in section 35 of the said act referred to the decision as a whole and was not to be equated to errors of law or of fact simpliciter. this court was of the view that what the high court could see is that there has been no miscarriage of justice and that the decision was according to law in the sense mentioned. kapur j who delivered a separate judgment however observed that the power under section 351 of the said act of interference by the high court is not restricted to a proper trial according to law or error in regard to onus of proof or proper opportunity of being heard. it is very much wider than that when in the opinion of the high court the decision is erroneous on the question of law which affects the merits of the case or decision was manifestly unjust the high court is entitled to interfere. the revisional authority could ensure that there was no miscarriage of justice and the principles of law have been correctly borne in mind the facts had been properly comprehended in that light. if that was done in a particular case then the fact that the revisional authority or the high court might have arrived to a different conclusion is irrelevant. this view had also been expressed in the decision of this court in puranchand v motilal1963. supp 2 s c r 906 1962 indlaw sc 455. this principle was reiterated in krishnawati v hans raj1974 2 s c r 524 1973 indlaw sc 208 which was dealing with section 392 of the delhi rent control act1958 in second appeal. it was observed that under section 392 of the said act the high court could interfere in second appeal only if there was a substantial question of law. in that case the question whether the appellant was legally married no finding was necessary in the eviction suit. it was sufficient for the rent court to proceed on the finding that the appellant and s were living together as husband and wife whether they were legally married or not. it was further held that whether there was subletting was not a mixed question of law and fact. in phiroze bamanji desai v chandrakant m patel ors 1974 3 scr 267 1974 indlaw sc 282 the question involved was whether there was reasonable and bona fide requirement of premises for personal use and occupation as also the question of greater hardship under the bombay rent act and the ambit and scope of the power of section 293 of the said act with which we are concerned came up for consideration. bhagwati j as. the learned chief justice then was referred with approval the observations of hidayatullah j referred to hereinbefore in hari shankar 's case. 1961 indlaw sc 157 supra bhagwati j observed that the ambit of section 351 of the delhi ajmer rent control act which fell for consideration in hari shanker 's case 1961 indlaw sc 157 supra was the same as section 293 of the bombay rent act and therefore he expressed the opinion that the high court could interfere only if there was miscarriage of justice due to mistake of law. we must take note of a decision in the case of m s kasturbhai ramchand panchal brothers and others v firm of mohanlal nathubhai and others air 1969 gujarat 110 1967 indlaw guj 57upon which the high court had placed great reliance in the judgment under appeal. there the learned judge relying on section 292 of the said act held that the revisional power with which the high court was vested under section 292 was not merely in the nature of jurisdictional control. it extended to corrections of all errors which would make the decision contrary to law. the legislature the learned judge felt further empowered high court in its revisional jurisdiction to pass such order with respect thereto as it thought fit. the power according to the learned judge was of the widest amplitude to pass such orders as the court thought fit in order to do complete justice. he dealt with the human problem under section 132 of bombay rent act considering the relative hardships of the landlord and the tenant and to arrive at a just solution he was of the opinion that the court should have such wide field. the jurisdiction of high court is to correct all errors of law going to the root of the decision which would in such cases include even perverse findings of facts perverse in the sense that no reasonable person acting judicially and properly instructed in the relevant law could arrive at such a finding on the evidence on the record. in this view in our opinion the ambit of the power was expressed in rather wide amplitude. as we read the power the high court must ensure that the principles of law have been correctly borne in mind. secondly the facts have been properly appreciated and a decision arrived at taking all material and relevant facts in mind. it must be such a decision which no reasonable man could have arrived at. lastly such a decision does not lead to a miscarriage of justice. we must however guard ourselves against permitting in the guise of revision substitution of one view where two views are possible and the court of small causes has taken a particular view. if a possible view has been taken the high court would be exceeding its jurisdiction to substitute its own view with that the courts below because it considers it to be a better view. the fact that the high court would have taken a different view is wholly irrelevant. judged by that standard we are of the opinion that the high court in this case had exceeded its jurisdiction. in the case of punamchandra revashankar joshi v ramjibhai maganlal gujarat law reporter. 1966the gujarat high court after dealing with the gujarat amendment act xviii of 1965 observed that the legislature has not intended to equate the ambit of the power with the one exercised in an appeal. the authority vested in the high court under the amendment still remained only in the domain of the jurisdiction and power of revision and no further. the amending provision therefore only related to procedure and not to any rights of the parties. this court in the case of bhai chand ratanshi v laxmishanker tribhavan1982 1 rent control journal 2421981. indlaw sc 244 observed that where lower courts applied their minds properly in deciding a matter under section 132 of the bombay rent act the high court could not substitute its own finding for the one reached by the courts below on a reappraisal of evidence under section 292 of the act as substituted by the gujarat act 18 of 1965 this court reiterated that although the high court had wider power than that which could be exercised under section 115 of c p c yet its revisional power could only be exercised for a limited purpose with a view to satisfying itself that the decision was according to law. the high court could not substitute its own finding for the one reached by the courts below on a reappraisal of evidence. in the instant case the basic question is whether keeping in background the partnership deeds referred to hereinbefore and the facts that came to light was there partnership or not. sharing of profits and contributing to losses were not the only elements in a partnership existence of agency was essential and whether there was a partnership or not is a mixed question of law and fact depending upon the varying circumstances in different cases. this view was reiterated by chief justice beaumont in chimanram motilal and another v jayantilal chhaganlal and another a i r 1939 bombay 410 1939 indlaw mum 155 ramaswami j in mohammed musa sahib dead and others v n k mohammed ghouse sahib and another a i r 1959. madras 379 1958 indlaw mad 820 observed that whether the relation of partnership between two or more persons does or does not exit must depend on the real intention and contract of the parties and not merely on their expressed intention. he also referred to section 4 of the partnership act about the principles of partnership namely1 there must be agreement entered into by all the persons concerned 2 the agreement must be to share the profits of a business and 3 the business must be carried on by all or any of the persons concerned acting for all. in the instant case judged by the aforesaid principles it is possible to hold that there was a partnership of which the appellant was a partner. the court of small causes considered these principles evaluated the evidence and held that there was in fact and in law a partnership. such a view was not an impossible one or a perverse one. if that was so there was nothing that could be clone about such a view within the ambit and scope of the power of section 292 of the rent act. we may mention that in gundalapalli rangamannar chetty v desu rangiah and others a i r 1954. madras 182subba rao j as the learned chief justice then was held that there can not be a subletting unless the lessee parted with legal possession. the mere fact that another is allowed to use the premises while the lessee retains the legal possession is not enough to create a sub lease. in the light of the aforesaid principles and the facts that have emerged we are of the opinion that the high court exceeded its jurisdiction under section 292 of the rent act. we are further of the opinion that the court of small causes was right in the view it took. and it was a possible view to take. in the result the appeal is allowed and the judgment and order of the gujarat high court dated 21st of august1979 are set aside. the order and judgment of the court of small causes ahmedabad dated 18th of august1977 are restored. the suit for possession is accordingly dismissed. the appellant herein is entitled to the costs throughout. appeal allowed. appeal allowed.

IN-Ext

FACTS the appellant claimed to be the tenant in respect of the two premises which are quite adjacent to each other,one of which is involved in this appeal. the respondent who is the landlord of the two premises leased out to the appelllant and father, for conducting the business in the name of ahmedabad fine. the appellant no.1 had closed the business and he was not using the said premises for the purpose for which it was let to him. it was the case of the appellant that in respect of the suit premises he was carrying on his business with respondents. nos.2,4 and 5 in the name of respondent no.2,m/s. bharat neon signs. the main controversy was whether the appellant had sublet the premises to defendant no.2,bharat neon signs or whether he being a partner of the said firm had permitted the said firm to use the premises in question. partnership deed records six persons who were to run the business in manufacturing and selling bharat neon signs tubes. on or about 24th of october,1960. another partnership deed being exhibit-69 came to be executed among the six persons and the father of the appellant girdharlal ARGUMENT he has stated further that the suit premises were to be used for business and he could use it for any business and he joined in partnership with defendants nos.2 to 5 somewhere in 1961 to prepare neon signs and the defendants nos.2 to 5 were his partners and doing business in the suit premises. he contended further that the suit premises was with him and the defendants nos.2 to 5 had not acquired any tenancy rights in the suit premises. it is further stated that he had filed a civil suit to dissolve the partnership and to take account and his suit was pending in city civil court. it was contended by mr. mehta that there was no agency; reading the partnership deeds as we have read that conclusion does not emanate from position appearing debiting the fixed amount payable to the appellant in the expenses account which also is not inconsistent with partnership. ISSUE whether the appellant herein and his father had sublet the premises in question in or about 1960 in terms of section 13(1)(e) of the bombay rents,hotel and lodging house rates control act,1947. hereinafter called the 'rent act') is' the question involved in this appeal by special leave from the judgment and order of the high court of gujarat dated 21st of august,1979. the main question in issue in this appeal as well as before the high court in revision was whether there was a genuine partnership at the appellant was a partner. ANALYSIS the partnership deed exhibit-114 was executed by six persons and at that stage the appellant or his father were not partners in the firm. but thereafter when the partnership deed exhibit-69 was executed the appellant and his father joined the firm with an agreement to share profits only and their share was fixed at 0.03 paise in a rupee. there is a third partnership deed exhibit-70 which showed that the deceased tenant girdharlal had died on 1st of february,1961 and so by the remaining seven partners with same terms and conditions,a new partnership deed being exhibit-70 was executed on 22nd. september,1961.at this time the share of the appellant was fixed at 0.03 paise in a rupee to share the profits only. it is well settled that if there was such a partnership firm of which the appellant was a partner as a tenant the same would not amount to subletting leading to the forfeiture of the tenancy. for this proposition see the decision of the gujarat high court in the case of mehta jagjivan vanechand v. doshi vanechand harakhchand and others. a.i.r.1972 gujarat 6 1970 indlaw guj 68. section 4 of the indian partnership act,1932,it says "partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all" the terms and conditions in the partnership deed are as under. 1) the entire work of our partnership has to be carried out in the name of "bharat neon signs. 2) the work to be carried out by our partnership is of manufacturing and selling neon signs tubes and of obtaining orders therefore. 3) whatever moneys that may be required to be invested in our partnership,are to be invested by the parties of the first,second,third,fourth and seventh parts out of us and the interest at the rate of 71/2 per cent per annum has to be paid for the moneys that may be invested in this partnership. we are of the opinion that these were evidence that these terms were acted upon. there was nothing intrinsically wrong in law in constituting a partnership in the manner it was done. a right to appeal carries with it right of re-heating on law as well as fact. unless the statute conferring the right to appeal limits the re-hearing in some way. the power to hear a revision is generally given to a superior court so that it may satisfy itself that a particular case is decided according to law. the jurisdiction of high court is to correct all errors of law going to the root of the decision which would,in such cases,include even perverse findings of facts,perverse in the sense that no reasonable person,acting judicially and properly instructed in the relevant law could arrive at such a finding on the evidence on the record. in this view in our opinion the ambit of the power was expressed in rather wide amplitude. as we read the power,the high court must ensure that the principles of law have been correctly borne in mind. secondly,the facts have been properly appreciated and a decision arrived at taking all material and relevant facts in mind. it must be such a decision which no reasonable man could have arrived at. lastly,such a decision does not lead to a miscarriage of justice. we must,however,guard ourselves against permitting in the guise of revision substitution of one view where two views are possible and the court of small causes has taken a particular view. if a possible view has been taken,the high court would be exceeding its jurisdiction to substitute its own view with that the courts below because it considers it to be a better view. the fact that the high court would have taken a different view is wholly irrelevant. the authority vested in the high court under the amendment still remained only in the domain of the jurisdiction and power of revision and no further. the amending provision,therefore,only related to procedure and not to any rights of the parties. sharing of profits and contributing to losses were not the only elements in a partnership,existence of agency was essential and whether there was a partnership or not is a mixed question of law and fact,depending upon the varying circumstances in different cases. this view was reiterated by chief justice beaumont,in chimanram motilal and another v. jayantilal chhaganlal and another,a.i.r.1939 bombay 410 1939 indlaw mum 155.ramaswami,j.in mohammed musa sahib (dead) and others v. n.k.mohammed ghouse sahib and another,a.i.r.1959. madras 379 1958 indlaw mad 820 observed that whether the relation of partnership between two or more persons does or does not exit must depend on the real intention and contract of the parties and not merely on their expressed intention in the instant case judged by the aforesaid principles of section 4 of partnership act,it is possible to hold that there was a partnership of which the appellant was a partner. the court of small causes considered these principles,evaluated the evidence and held that there was in fact and in law a partnership. such a view was not an impossible one or a perverse one. if that was so,there was nothing that could be clone about such a view,within the ambit and scope of the power of section 29(2) of the rent act. STATUTE the power of the high court to revise the order is contained in section 29(2) of the bombay rent act as applicable at the relevant time to gujarat

this appeal is directed against the judgment and order of the high court of gujarat dated 28 2 1986 allowing the respondent 's writ petition and quashing order of discharge from service and directing his reinstatement in service. the respondent joined service as technical assistant with the gujarat state electricity board hereinafter refined to as the board he was promoted to the post of deputy engineer. while he was posted at surat as deputy engineer he was transferred to ukai subdivision under the order of the superintending engineer dated 29th march1974 pursuant to the order of transfer he was relieved from his duties at surat on 30th march1974 to enable him to join at ukai. he made representation to the additional chief engineer for cancelling his transfer order on the ground that his mother aged 70 years was ailing and it would cause great inconvenience to him if he was required to join at ukai. his representation was rejected and he was directed to join at ukai but he did not do so instead he filed a civil suit at baroda challenging validity of the order of transfer. meanwhile the chief engineer by his order dated 27th may1974 discharged the respondent from service with effect from 31st march1974 in accordance with service regulation no 113 the respondent challenged the validity of the order of his discharge from service by means of a writ petition under article 226 of the constitution before the high court of gujarat. a learned single judge of the high court quashed the order of termination on the findings that the order of discharge was issued m violation of the basic principles of natural justice as no opportunity was afforded to the respondent before discharging him from services under regulation no 113. the learned single judge granted a declaration in respondent 's favour holding the order void and illegal but having regard to recalcitrant attitude of the appellant and his continued conduct of disobedience of the orders of his superior authorities he refused to grant consequential reliefs regarding reinstatement or payment of back wages. the respondent as well as the appellant board both preferred letters patent appeals against the order of learned single judge. a division bench of the high court dismissed the appeal preferred by the appellants but it allowed the respondent 's appeal. the division bench upheld the order of the learned single judge holding the order of discharge illegal and void but it set aside the order of the learned single judge refusing to grant consequential relief instead it directed the appellants to reinstate the respondent and to treat him in service without any break in service and to grant him benefits of increments seniority and promotion to which he may be entitled under the rules. the bench however did not grant full back wages to the respondent instead it directed the board to pay him 50 per cent of back wages. aggrieved the appellant has preferred the instant appeal after obtaining special leave of this court. this appeal came up for hearing before us on 28th january1988 and on that day. sh b k mehta advocate appearing for the appellants and sh. vimal dave advocate appearing for the respondent were fully heard. after hearing learned counsel for the parties we were satisfied that the learned single judge as well as the division bench both had committed error in allowing the writ petition and granting relief to the respondent. we expressed our view in the court and suggested to mr vimal dave counsel for the respondent that if he agreed the original writ petition of the respondent could be dismissed without directing him to refund the amount which he had already been paid by the appellants in pursuance to the orders of the high court and of this court as during the pendency of the appeal. the appellants were directed by means of interim order of this court to continue to pay salary to the respondent which was being paid to him regularly. the hearing was adjourned to enable sh. vimal dave to obtain instructions from the respondent. the appeal came up for hearing before us on 16 2 1988 when another counsel appeared to argue the appeal on behalf of the respondent on merits. we refused to hear the counsel as we had already completed hearing. thereupon the respondent himself appeared in person and sought permission to make his submissions personally. we refused to accede to his request as oral heating had already been completed and the matter had been adjourned only to enable the respondent 's counsel to obtain instructions. however in the interest of justice we permitted the respondent to file written submissions if any in support of his case. thereafter the case was listed several times but no written submissions were filed instead the respondent adopted an unusual course by sending an application by post expressing his no confidence in us with a prayer to transfer the case to some other bench. since this was unusual uncalled for and unjustified request we ignored the same and reserved the order. we are constrained to note that instead of utilizing the opportunity granted to him for filing written submissions the respondent has misused adjournments for the purposes of raising frivolous objections for getting the case transferred to some other bench. no party is entitled to get a case transferred from one bench to the other unless the bench is biased or there are some reasonable grounds for the same but no right to get a case transferred to any other bench can legitimately be claimed merely because the judges express opinion on the merits of the case on the conclusion of hearing. in the instant case on the conclusion of the oral hearing we had expressed our opinion on 28 1 1988 in the open court that we were inclined to allow the appeal and set aside the order of the high court and dismiss the writ petition but taking a sympathetic view we requested sh. vimal dave learned counsel appearing for the respondent to obtain instructions as aforesaid. the opportunity granted to the respondent has however been misused by raising mischievous and frivolous objections instead of filing written submissions. the respondent 's prayer is accordingly rejected and since oral hearing has already been completed and in spite of several adjournments respondent failed to appear before the court or to file the written submissions we proceed to decide the case on merits. transfer of a government servant appointed to a particular cadre of transferable posts from one place to the other is an incident of service. no government servant or employee of public undertaking has legal tight for being posted at any particular place. transfer from one place to other is generally a condition of service and the employee has no choice in the matter. transfer from one place to other is necessary in public interest and efficiency in the public administration. whenever a public servant is transferred he must comply with the order but if there be any genuine difficulty in proceeding on transfer it is open to him to make representation to the competent authority for stay modification or cancellation of the transfer order. if the order of transfer is not stayed modified or cancelled the concerned public servant must carry out the order of transfer. in the absence of any stay of the transfer order a public servant has no justification to avoid or evade the transfer order merely on the ground of having made a representation or on the ground of his difficulty in moving from one place to the other. if he fails to proceed on transfer in compliance to the transfer order he would expose himself to disciplinary action under the relevant rules as has happened in the instant case. the respondent lost his service as he refused to comply with the order of his transfer from one place to the other. there is no dispute that the respondent was holding a transferable post and under the conditions of service applicable to him he was liable to be transferred and posted at any place within the state of gujarat. the respondent had no legal or statutory right to insist for being posted at one particular place. in fact during the tenure of his service in the board the respondent had been transferred from one place to another place several times. in march1974 he was transferred from surat to ukai. the distance between the two places as was stated before us during the hearing of the case is less than 50 kms. he was relieved from his duties at surat on 30th march1974. but he did not join at ukai till the impugned order of discharge was issued on may 271974 the. chief engineer who discharged the respondent 's services exercised his power under service regulation no 113which runs as under 113 the continued absence from duty or overstay m spite of warning to return to duty shall render the employee liable to summarily discharge from service without the necessity of proceedings under the gujarat electricity board conduct discipline and appeal procedure. the above rule provides that if an employee of the gujarat electricity board continues to remain absent from duty or overstays the period of sanctioned leave and in spite of warning he fails to return to duty he renders himself liable to be discharged summarily from service without complying with the procedure prescribed for taking disciplinary action under the gujarat electricity board conduct discipline and appeal procedure. regulation 113 confers wide powers on the authorities to summarily discharge an employee from service if he continues to be absent from duty in an unauthorised manner and refuses to join his duty even after warning. under the disciplinary rules detailed procedure is required to be followed for removing an employee from service but regulation 113 provides for summary discharge from service. before this power is exercised two conditions must be satisfied firstly the employee must be found to be absent from duty without leave or overstaying the period of sanctioned leave and secondly he failed to join his duty even after a warning. the object and purpose of giving warning is to remind the delinquent employee that if he continues to be absent from duty he would be liable to action under regulation 113 and to afford him an opportunity to make amends by joining his duty. if even thereafter he fails to join duty his services are liable to be terminated by an order of discharge. it is noteworthy that the validity of regulation 113 was not challenged before the high court and the parties proceeded on the assumption that regulation 113 was valid and applicable to the respondent 's service. the chief engineer discharged the respondent from service as he had continued to remain absent from duty w e f. march 301974 to may 271974. the division bench of the high court held that no warning as contemplated by service regulation no 113 had been issued to the respondent nor he had been afforded any opportunity of showing cause before the impugned order of discharge was passed and consequently the order of discharge was null and void being contrary to service regulation no 113 itself. on perusal of the material on record we are of the opinion that the view taken by the high court is not sustainable as there is sufficient material on record which shows that warning had been issued to the respondent before the order of discharge was issued. in determining the question whether any warning was given to the respondent it is necessary to refer to the sequence of events and the correspondence which ensued between the appellants and the respondent. on march 291974 the superintending engineer of the board issued the order transferring the respondent from surat to ukai on 30 3 1974 the respondent was relieved from surat and directed to join his duty at ukai but the respondent did not join his duty at the new place of posting. instead he made a representation to the additional chief engineer on 8 4 1974 after the transfer order. the transfer order was not stayed and as the respondent did not join his duties he continued to be absent without sanction of any leave. in this situation the superintending engineer by his letter dated 18th april1974 directed the respondent to show cause as to why action should not be taken against him for disobeying the order of transfer and also for unauthorised absence from duty in breach of service regulation. no 113 the letter is as under gujarat electricity board o m division nana varchha road surat. dated 18th april1974. to shri a s pohani junior engineer ukai 37gurunagar society near jakat naka surat 3. sub transfer from surat to ukai. you have been relieved on 30 3 1974 a n on account of your transfer from surat to ukai but you have not reported to ukai till today and remained on unauthorised absence on relief which is breach of s r no 112 and 113 please submit your explanation as to why action should not be taken against you for disobeying order of superior and breach of s r no 112 and 113 within 7 days from receipt of this letter. sd execut. i ve engineer o m surat copy f w c s to. superintending engineer geb utran. there is no dispute that the respondent received the aforesaid letter as he sent a reply to the superintending engineer on april 201974a copy of which was annexed as annexure j by the petitioner to his petition before the high court. by that letter respondent stated that he was waiting for the decision of his representation made for reconsideration of his transfer from surat to ukai and therefore the question of his remaining on unauthorised leave was misconceived. since the respondent had not obtained any sanctioned leave for his absence his absence from duty was unauthorised. no government servant or employee of any public undertaking has a right to be absent from duty without sanction of leave merely on account of pendency of representation against the order of transfer. since the respondent continued to be absent from duty the superintending engineer by a registered post acknowledgment due letter dated april 241974 informed the respondent that his request to postpone his transfer was rejected and he was directed to join his duty at ukai and on his failure to do so disciplinary action would be taken against him. the establishment officer p of the board also informed the respondent by his letter dated may 61974 that his representation against the order of transfer was not accepted and he was directed to obey the order of transfer. a copy of the letter filed by the petitioner himself as annexure k to the writ petition in the high court. but even thereafter the respondent did not join his duties. ultimately the chief engineer of the board took action against the respondent and discharged him from service with effect from 31 3 1974 by his letter dated may 271974. the sequence of events and the correspondence which ensued between the officers of the board and the respondent clearly show that the respondent disobeyed the order of transfer and he remained absent from duty in an unauthorised manner without obtaining sanction of leave. the aforesaid documents leave no room for any doubt that the respondent was reminded of his failure to join his duties at ukai and he was further reminded that his unauthorised absence had exposed him to disciplinary action. in fact the superintending engineer had by his letter dated 18th april1974 clearly reminded the respondent that his unauthorised absence was in breach of service regulation no 113 and called upon to show cause why action should not be taken against him but in spite of these letters the respondent failed to join his duties. the division bench of the high court has held that since no warning was issued to the respondent action taken under service regulation no 113 was not in accordance with law. this finding is wholly misconceived. a warning need not be in any particular form. the object and purpose of the warning as contemplated by the regulation is to remind the delinquent employee that his continued unauthorised absence from duties was liable to result in discharge of his service. the substance of the superintending engineer 's letter dated 18th april1974 which was admittedly served on the respondent contained warning to the respondent which fully met the requirement of regulation no 113. before the high court a controversy was raised as to whether the registered letter dated 24 4 1974 addressed by the superintending engineer to the respondent was received by him or not. the registered cover containing the letter dated 24 4 1974 was returned back by the postal authorities with an endorsement that the addressee refused to accept the same. the respondent 's case was that no such registered letter was tendered to him by the postman nor he ever refused to accept the same. the division bench held that letter dated 24 4 1974 which contained a warning had not been served on the respondent and since the board had failed to raise the question before the learned single judge it could not do so in the letters patent appeal. the division bench further held that since the letter dated 24 4 1974 was not served on the respondent there was no material to show that any warning had been issued to the respondent before he was discharged from service. we do not agree with the view taken by the division bench. firstly even if the letter dated 24 4 1974 was not served on the respondent there is no dispute that the superintending engineer 's letter dated 18th april1974 had been served on him. by that letter warning as contemplated by regulation no 113 had been issued to the respondent. therefore even if the letter dated 24 4 1974 was not served on the respondent the order of discharge as contemplated by regulation no 113 is sustainable in law. but even otherwise the division bench committed error in holding that the board had raised the question of service of the letter dated 24 4 1974 for the first time before the division bench in the letters patent appeal. perusal of the averments made in paragraphs 171823 and 25 2ii of the counter affidavit filed in reply to the petitioner 's writ petition before the learned single judge shows that the board had categorically pleaded that the respondent was informed by letter dated 24 4 1974 that his representation to postpone his transfer was rejected and he should obey the order of transfer. it was further pleaded that the respondent had refused to accept the registered letter and the same had been returned back by the postal authorities with an endorsement that the addressee refused to accept the same. in his rejoinder affidavit the respondent denied the aforesaid allegations and asserted that the letter was not tendered to him and he never refused to accept the registered cover and the postal endorsement was wrong and incorrect. apart from denying the postal endorsement the respondent placed no material before the court in support of his pleading. in this view we are of the opinion that the division bench was totally wrong in holding that no opportunity was afforded to the respondent to meet the case set up by the board that the letter dated 24 4 1974 was served on the respondent. no new plea had been raised by the board before the division bench instead the plea relating to service of the aforesaid letter had already been before the learned single judge. there is presumption of service of a letter sent under registered cover if the same is returned back with a postal endorsement that the addressee refused to accept the same. no doubt the presumption is rebuttable and it is open to the party concerned to place evidence before the court to rebut the presumption by showing that the address mentioned on the cover was incorrect or that the postal authorities never tendered the registered letter to him or that there was no occasion for him to refuse the same. the burden to rebut the presumption lies on the party challenging the factum of service. in the instant case the respondent failed to discharge this burden as he failed to place material before the court to show that the endorsement made by the postal authorities was wrong and incorrect. mere denial made by the respondent in the circumstances of the case was not sufficient to rebut the presumption relating to service of the registered cover. we are therefore of the opinion that the letter dated 24 4 1974 was served on the respondent and he refused to accept the same. consequently the service was complete and the view taken by the high court is incorrect. in view of the above discussion we therefore hold that the respondent 's failure to join his duties at ukai resulted in unauthorised absence and his failure to join his duties in spite of the repeated reminders and letters issued to him constituted sufficient valid ground for taking action under regulation no 113 we further hold that before issuing the order of discharge the respondent was not only warned but he was also afforded an opportunity to explain as to why disciplinary action should not be taken against him. the respondent acted in an irresponsible manner in not complying with the order of transfer which led to his discharge from service in accordance with the service regulation. no 113 the learned single judge as well as the division bench both erred in law in setting aside the order of discharge. we accordingly allow the appeal set aside the order of the single judge as well as division bench and dismiss the respondent 's petition. there would be no order as to costs. the respondent has been paid a sum of rs 104170 towards salary under the interim orders of this court. now since the order of discharge is held to be valid the amount paid to the respondent is liable to be recovered from him but having regard to the facts and circumstances of the case and the hardship which could be caused to the respondent we direct the appellant not to recover the amount already paid to the respondent. appeal allowed.

IN-Ext

FACTS the respondent joined service as technical assistant with the gujarat state electricity board. while he was posted at surat as deputy engineer he was transferred to ukai subdivision under the order of the superintending engineer. pursuant to the order of transfer he was relieved from his duties at surat on 30th march,1974 to enable him to join at ukai. he made representation to the additional chief engineer for cancelling his transfer order on the ground that his mother aged 70 years was ailing and it would cause great inconvenience to him if he was required to join at ukai. his representation was rejected and he was directed to join at ukai but he did not do so instead he filed a civil suit at baroda challenging validity of the order of transfer. meanwhile,the chief engineer by his order dated 27th may,1974 discharged the respondent from service with effect from 31st march,1974 in accordance with service regulation no.113. the respondent challenged the validity of the order of his discharge from service by means of a writ petition under article 226 of the constitution before the high court of gujarat. a learned single judge of the high court quashed the order of termination on the findings that the order of discharge was issued in violation of the basic principles of natural justice as no opportunity was afforded to the respondent before discharging him from services under regulation no.113. ISSUE the appeal is directed against the judgment and order of the high court of gujarat dated 28.2.1986 allowing the respondent's writ petition and quashing order of discharge from service and directing his reinstatement in service. ANALYSIS no government servant or employee of public undertaking has legal tight for being posted at any particular place. transfer from one place to other is generally a condition of service and the employee has no choice in the matter. transfer from one place to other is necessary in public interest and efficiency in the public administration. whenever,a public servant is transferred he must comply with the order but if there be any genuine difficulty in proceeding on transfer it is open to him to make representation to the competent authority for stay,modification or cancellation of the transfer order. if the order of transfer is not stayed,modified or cancelled the concerned public servant must carry out the order of transfer. in the absence of any stay of the transfer order a public servant has no justification to avoid or evade the transfer order merely on the ground of having made a representation,or on the ground of his difficulty in moving from one place to the other. if he fails to proceed on transfer in compliance to the transfer order,he would expose himself to disciplinary action under the relevant rules,as has happened in the instant case. the respondent lost his service as he refused to comply with the order of his transfer from one place to the other. there is no dispute that the respondent was holding a transferable post and under the conditions of service applicable to him he was liable to be transferred and posted at any place within the state of gujarat. the respondent had no legal or statutory right to insist for being posted at one particular place. in fact,during the tenure of his service in the board the respondent had been transferred from one place to another place several times. in march,1974 he was transferred .from surat to ukai. the distance between the two places as was stated before us during the hearing of the case is less than 50 kms. the above rule provides that if an employee of the gujarat electricity board continues to remain absent from duty or overstays the period of sanctioned leave and in spite of warning,he fails to return to duty,he renders himself liable to be discharged summarily from service without complying with the procedure prescribed for taking disciplinary action,under the gujarat electricity board,conduct,discipline and appeal procedure. regulation 113 confers wide powers on the authorities to summarily discharge an employee from service,if he continues to be absent from duty in an unauthorised manner and refuses to join his duty even after warning. the object and purpose of giving warning is to remind the delinquent employee that if he continues to be absent from duty he would be liable to action under regulation 113 and to afford him an opportunity to make amends by joining his duty. if even thereafter he fails to join duty,his services are liable to be terminated by an order of discharge. the sequence of events and the correspondence which ensued between the officers of the board and the respondent clearly show that the respondent disobeyed the order of transfer and he remained absent from duty in an unauthorised manner without obtaining sanction of leave. the aforesaid documents leave no room for any doubt that the respondent was reminded of his failure to join his duties at ukai and he was further reminded that his unauthorised absence had exposed him to disciplinary action. in fact,the superintending engineer had by his letter dated 18th april,1974 clearly reminded the respondent that his unauthorised absence was in breach of service regulation no.113 and called upon to show cause why action should not be taken against him but in spite of these letters the respondent failed to join his duties. the respondent acted in an irresponsible manner in not complying with the order of transfer which led to his discharge from service in accordance with the service regulation no.113.

this civil appeal by special leave is directed against the judgment and decree dated 29th november1977 rendered by a single judge of the gujarat high court in second appeal no 348 of 1973which arose out of regular civil suit no 921 of 1966 filed in the court of joint civil judge baroda civil court by the appellant herein as plaintiff against respondents 1 and 2 herein. defendants 1 and 2 for redemption of suit properties which were mortgaged as security for certain monies borrowed by the plaintiff from defendant l under two deeds of mortgage executed in the year 1961. plaintiff filed the suit for redemption of the said mortgages in the year 1966 defendant 2brother of defendanti had been joined in that suit on the allegation that the latter was put in possession of mortgage properties by the former subsequent to the coming into existence of the mortgages. that suit was resisted by the defendants each of them having filed separate written statements which in sub stance did not differ from each other. the defence in those written statements was that defendant l and his family members had become tenants of the suit properties in the year 1959 1960 and had continued to be such tenants at the time of mortgage deeds executed in respect of those properties in the year 1961 and thereafter. it was also claimed therein that they had become owners of the said properties when the plaintiff in the year 1962 sold those properties to defendant 1 by receiving a sum of rs 4400 as consideration for the sale. even if the sale of said properties in favour of defendant l it was asserted therein was not proved they continued to be tenants of the said properties on the date of suit as they were tenants even before the date of coming into existence of the mortgages. the issue relating to their claim that they were tenants of the said properties the agricultural lands as urged therein had to be referred by the civil court to the mamlatdar under section 85 a of the bombay tenancy and agricultural lands act1948 the bt al act for recording his finding thereon and the suit had to be stayed pending receipt of the finding thereon so that the suit may be finally disposed of on the basis of such finding. the civil court notwithstanding the defence of the defendants taken in their written statements that the suit had to be stayed for obtaining the finding on their claim of tenancy under the bt al act framed the issues in the suit on the basis of the pleadings of the parties and after trial recorded its findings thereon. such findings were firstly that the defendants had failed to prove that the suit properties were sold in favour of defendant l subsequent to the giving of security of those properties in his favour under the mortgage deeds secondly that the defendants had failed to prove the past tenancy of the suit properties on its view that what was pleaded by them in the written statements was tenancy prior to the date of filing of the suit and thirdly that the mortgages of the suit properties were mortgages by conditional sale. on the basis of findings so recorded by the civil. court it also made a preliminary decree in favour of the plaintiff for redemption of the suit properties. though the defendants filed an appeal in the court of the district judge baroda against the said preliminary decree that appeal came to be dismissed on august 171972 affirming the judgment and decree of the civil court. however the defendants questioned the judgments and decrees of the trial court and the appellate court by filing a second appeal against the same in the high court of gujarat. a learned single judge of the high court who heard the second appeal while upheld the concurrent findings of the courts below that the deeds of mortgage executed by the plaintiff in respect of the suit properties in favour of defendant l were mortgages by conditional sale and the defendants had failed to prove that there was sale of the suit properties in their favour subsequent to the coming into existence of the said mortgages found that the defendants had raised in their written statements the plea that they were tenants not only prior to the date of suit but also at the time of the filing of the suit and having regard to that plea the suit ought to have been stayed by the civil court and the issue of tenancy should have been referred to the mamlatdar for obtaining a finding from him thereon both under section 85 a of the bt. al act as it stood before its amendment at the time of filing of the suit and as it stood after its amendment after the filing of the suit. consequently the learned single judge set aside the judgments and decrees of the trial court and the appellate court relating to the issue of tenancy raised by the defendants in the suit and remanded the case to the civil court trial court directing it to refer the issue of such tenancy to the mamlatdar baroda for his determination and to stay all further proceedings in the suit till he got the finding from the mamlatdar on that tenancy issue and thereafter to proceed to dispose of that suit in the light of that finding and the other findings recorded by the appellate court district judge. it is the judgment and order of the learned single judge of the high court by which he allowed the second appeal and remanded the suit which is appealed against in this civil appeal of the plaintiff as is stated at the outset. no controversy is raised in this appeal as regards the findings of the civil court that the deeds of mortgage executed by the plaintiff in respect of the suit properties were mortgages by conditional sale. specific case pleaded by the plaintiff in the plaint as regards possession of the suit properties held by tenants was that their possession which was with the plaintiff was given to defendant l on the execution of the deeds of mortgage by conditional sale in his favour. in any event it was not the case of the plaintiff that defendant l was a tenant of the suit properties and hc surrendered his possession of the suit properties either expressly or impliedly and the possession so obtained by the plaintiff was re delivered to defendant l in pursuance of the mortgages by conditional sale executed in his favour. however the arguments addressed before us on behalf of the plaintiff appellant in support of the appeal by learned senior counsel mr s k dholakia were these that defendant l respondent l although was in possession of the suit properties. agricultural lands at the time of execution of the deeds of mortgage by conditional sale in his favour because of the coming into existence of such mortgages there occurred merger of lease hold rights of defendant l in suit properties when he obtained those properties as mortgage security under the said mortgages and as a consequence he became a mortgagee in possession of those properties. according 10 him a mortgagee in possession being a person who can not be deemed to be a tenant under section 4 of the bt al act it was not open to the defendants to claim that they were the tenants of suit properties and if that be so question of raising issue of tenancy by the civil court in the suit before it did not arise at all nor was it necessary to refer such issue to the mamlatdar under section 85 a of the bt al act and stay the suit till receipt of the finding on such issue as was directed by the high court in its judgment under appeal. in support thereof he sought to place reliance on the decisions of this court in shah mathuradas maganlal and co v. nagappa shankarappa malaga and others 1976 indlaw sc 400 and gambangi appalaswamy naldu and others v behara venkataramanayya patro. even otherwise it was argued by him that the civil court before whom the plaintiff had filed the suit for redemption of the suit properties could not have driven the plaintiff to the forum of mamlatdar merely because the defendants had raised the plea that they were tenants of the suit properties agricultural lands. according to him when the plaintiff had not admitted that the defendants were tenants of the suit properties it was not open to the defendants to force the plaintiff who had a right to choose his forum to file a suit to go before another forum on the plea that jurisdiction lay before another forum that is mamlatdar. in this regard support was sought from the decision of this court in raizada topandas and another v m s gorakhram gokalchand 1963 indlaw sc. 379 he therefore urged that the high court was not justified in upsetting the concurrent finding of the trial court and the appellate court that the defendants failed to prove their tenancy and remanding the case to the trial court directing it to refer the issue of tenancy to the mamlatdar and stay the suit till the receipt of the finding in that regard from the mamlatdar and then dispose of the suit. hence the judgment and order of the high court according to him was liable to be interfered with and set aside. however learned counsel appearing for the defendants respondents sought to refute the arguments advanced on half of the plaintiff appellant. questions which arise for our consideration and decision in the light of the aforesaid arguments of learned counsel for the contesting parties admit of their formulations thus 1 does the lease hold of a tenant lessee in a property merge in mortgage security if the same property is given by the landlord lessor to the tenant lessee as a mortgage security under a mortgage by conditional sale as would debar the tenant from desisting the suit of the landlord mortgagor for recovery of possession of such property by obtaining a decree for redemption of the mortgage. 2 when a plea of tenancy is raised with regard to suit property an agricultural land by a defendant who claims to be a tenant of such property under the bt al act and seeks a reference of that issue by the civil court to the mamlatdar under that act for obtaining a finding thereon can the civil court decide such issue by itself and proceed to decide the suit on the basis of the finding thereon. as the said questions could be dealt with appropriately with reference to the statutory provisions which bear upon them it would be convenient to advert to such statutory provisions here. the transfer of property act1882 tp act 111 a lease of immoveable property determines a b c d in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right. bombay tenancy and agricultural lands act1948bombay tenancy and agricultural lands act1948. this act unless there is anything repugnant in the subject or context18 tenant means a person who holds land on lease and include a a person who is deemed to be tenant trader section 4 b a person who is a protected tenant and c a person who is a permanent tenant and the word landlord shall be construed accordingly. 4 a person lawfully cultivating any land belonging to another person shall be deemed to be a tenant if such land is not cultivated personally by the owner and if such person is not a a member of the owner 's family or b a servant on wages payable in cash or kind but not in crop share or a hired labourer cultivating the land under the personal supervision of the owner or any member of the owner 's family or c a mortgagee in possession. 70 for the purposes of this act the following shall be the duties and functions to be performed by the mamlatdar a to decide whether a person is an agriculturist b to decide whether a person is a tenant or a protected tenant or a permanent tenant c to decide such other matters as may be referred to him by or under this 85 1 no civil court shall have jurisdiction to settle decide or deal with any question which is by or under this act required to be settled decided or dealt with by the mamlatdar or tribunal a manager the collector or the maharashtra revenue tribunal in appeal or revision or the state government in exercise of their powers of control. 2 no order of the mamlatdar the tribunal the collector or the maharashtra revenue tribunal or the state government made under this act shall be questioned in any civil or criminal court. section 85a as it stood before the amendment of this act by gujarat act no 5 of 1973 w e f 3rd march1973. 85a 1 if any suit instituted in any civil court involves any issues which are required to be settled decided or dealt with by any authority competent to settle decide or deal with such issues under this act hereinafter referred to as the competent authority. the civil court shall stay the suit and refer such issues to such competent authority for determination. 2 on receipt of such reference from the civil court the competent authority shall deal with and decide such issues in accordance with the provisions of this act and shall communicate its decision to the civil court and such court shall thereupon dispose of the suit in accordance with the procedure applicable thereto. section 85a as it came into force after it was amended by gujarat act no 5 of 1973 w e f 3rd march1973. 85a i. if any suit instituted whether before or after the specified date in any civil court involves any issues which are required to be settled decided or dealt with by any authority competent to settle decide or deal with such issues under this act hereinafter referred to as the competent authority. we shall now proceed to deal with the aforesaid questions. question 1. interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right because of section 11 ld of the t p act. what is enunciated in section 111 d of the t p act can not be doubted is the doctrine of merger. merger takes place when a lesser estate is merged or drowned in a greater estate. lease hold held by a tenant or a lessee being a lesser estate and the right of reversion of the landlord lessor being a higher estate the lessee 's lease hold right in respect of the property merges in reversion when that right of reversion i e. the landlord 's lessor 's right of reversion comes to the tenant or lessee which happens when the landlord having a right to sell his reversion to the tenant holding the lease hold sells the whole of it to the tenant lessee but in view of the arguments advanced on behalf of the plaintiff appellant what has to be seen is if the landlord of a property the lease hold of which is already with the tenant gives that very property as mortgage security to the tenant lessee by executing a mortgage by a conditional sale for the amount borrowed by him from the latter does merger of lease hold right in that mortgage security occur. when the landlord mortgages the lease hold property of the tenant to the tenant himself he does not part with the right of reversion which he has in respect of that property. if that be so merger of lease hold estate in reversion can not arise inasmuch as there can not be any inconsistency or incompatibility in one person being the tenant and also the mortgagee of the same property for in that event instead of the tenant paying rent to the landlord he may adjust it against the amount claimable by him as a mortgagee from the landlord. moreover if a lessee of a property takes a mortgage of the sum property from the landlord it would be unreasonable to attribute to a tenant the intention to surrender the tenancy and to invoke the sophisticated doctrine of implied surrender as has been held by the gujarat high court in patel atmaram nathudas v babubhai keshavlal 1974 indlaw guj 88. in the present case as has already been pointed out by us the plaintiff appellant did not claim that the defendants or any of them were in possession of the suit properties as tenants and there was a surrender by them of the possession either expressly or impliedly as would make the court to come to the conclusion that the possession of the suit properties with the defendants was surrendered by them pursuant to the mortgage by conditional sale executed in their favour. if that be the position there can be no bar for the defendants to claim the right to continue in possession of the suit properties as tenants under the bt. al act even if the plaintiff could obtain a decree for redemption of the suit properties which relief was sought in the suit. the decision of this court in shah mathuradas case 1976 indlaw sc 400 supra and g appalaswamy case 1984 indlaw sc 314 supra sought to be relied upon by learned counsel for the appellant plaintiff in support of his arguments that there was a merger of the leasehold right of the tenant in the suit properties when he took mortgages of those properties from the landlord as would deny him the right to continue in possession of those properties as a tenant instead of supporting his argument would go against it as we shall presently point out. shah mathuradas case 1976 indlaw sc 400 supra was that where the respondent had executed a mortgage in favour of the appellant respecting a premises of which he was a tenant. it was agreed under the terms of the mortgage deed that no interest need be paid by the respondent since the premises the possession of which was given to the tenant pursuant to the mortgage was to be enjoyed in lieu of interest payable on the mortgage. when suit for redemption of the premises was filed by the respondent the appellant claimed that after redemption he was entitled to remain in possession of the premises because of the subsistence of his previous tenancy right. this court held that the mortgage deed established beyond doubt that there was no subsistence or continuation of lease in that there was delivery of possession by the tenant to the landlord immediately before the mortgage and redelivery of possession to the tenant of the premises made by the landlord was pursuant to the mortgage as a mortgagee and not as a tenant. secondly this court held that the appellant was not entitled to retain after redemption possession of the mortgage property by reason of his previous right to be in its possession as a tenant. in the present case as we have pointed out earlier when no surrender of possession of the suit properties had taken place before the coming into existence of mortgages in favour of the lessor mortgagor when no redelivery of possession had been given pursuant to the mortgage to the tenant the decision under consideration can be of no assistance to the appellant. since the following observations in the said case confirm the view we have taken on non merger they can be excerpted for a merger to arise it is necessary that a lesser estate and a higher estate should merge in one person at one and the same time and in the same right and no interest in the property should remain outside. in the case of a lease the estate that is in the lessor is a reversion. in the case of a mortgage the estate that is outstanding is the equity of redemption of the mortgagor. therefore there can not be a merger of lease and mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. coming to g appalaswamy case 1984 indlaw sc 314 supra which considered the question whether a sitting tenant who took property by a possessory or usufructuary mortgage in his favour was liable to deliver physical possession upon redemption to the mortgagor. former lessor this court dealing with the said question said that all depends upon whether there was an implied surrender of the lessee 's rights when the usufructuary mortgage was executed in his favour by the lessor mortgagor and only if an implied surrender of lossee 's rights could be inferred then the mortgagor would be entitled to have delivery of physical possession upon redemption but not otherwise. dealing with the question of non merger this court approved the ratio of the decision in shah mathuradas 1976 indlaw sc 400 supra thus in our view there can be no merger of a lease and a mortgage even where the two transactions are in respect of the same property. it is well settled that for a merger to arise it is necessary that lesser estate and a higher estate should merge in one person at one and the same time and in the same right and no interest in the property should remain outstanding. in the case of a lease the estate that is outstanding in the lessor is the reversion in the case of a mortgage the estate that is outstanding is the equity of redemption of the mortgagor. accordingly there can not be a merger of a lease and a mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. even if the rights of the lessee and the rights of the mortgagee in respect of a property were to be united in one person the reversion in regard to the lease and the equity of redemption in regard to the mortgage would be outstanding in the owner of the property and accordingly there would not be a complete fusion of all the rights of ownership in one person. hence the lease hold of a tenant lessee in a property does not merge in mortgage security of that property even if it is given to. him by the landlord lessor on a mortgage by conditional sale as would debar the tenant from desisting the suit of the landlord mortgagor for recovery of possession of such property by obtaining decree for redemption of the mortgage. question 2. the argument which was strenuously advanced on behalf of the appellant plaintiff was that in a suit for redemption filed by the mortgagor in a civil court in respect of property notwithstanding the plea of the defendants claim that they were tenants of that property under the bt al act and under the provisions of that act the issue of tenancy had to be referred by the civil court to the mamlatdar for recording a finding thereon and the civil court can proceed to dispose 0. the suit only on the basis of the finding received from the mamlatdar the civil court itself can record its finding on the issue of tenancy and if the finding to be recorded had to go against the claim of tenancy it would be permissible for the civil court to grant the decree for redemption sought by the plaintiff in the said suit. support was sought for the argument from the decision of this court in topandas case 1963 indlaw sc 379 supra. we find it difficult to accept the said argument and the aforesaid decision of this court relied upon in support thereof can render no assistance. the only question which arose for decision in topandas case 1963 indlaw sc 379 supra was whether on a proper interpretation of section 28 of the bombay rents hotel and lodging house rates control. act1947. the rents control actthe court of small causes. bombay had exclusive jurisdiction in dealing with the suit out of which the appeal had arisen. there the respondent a partnership firm was in possession as a tenant of a shop at mulji jetha market bombay. it instituted a suit in the bombay city civil court not the court of small causes bombay praying for a declaration that it was in lawful possession of the shop and the appellants had no right to enter into or remain in possession of the shop and for grant of an injunction restraining the appellants from interfering with the respondent 's possession. the plaint averments were that appellant 1 defendant 1 had appointed the respondent as his commission agent for the sale of the appellants cloth in the shop in question. the agreement was to remain in force for a period of four years. pursuant to the said agreement the respondent had allowed the appellants their family members servants and agents to visit the shop only for the purpose of looking after the business of commission agency. the appellants despite being asked not to visit the shop after the expiry of the period in the concerned agreement they continued to visit the shop and were preventing the respondent from having access to its various articles such as stock in trade books of account furniture fixtures etc. thus according to the plaint the appellants who were merely licensees had no right to enter into the shop after the expiry of the period of licence envisaged in the agreement. the defence of the appellants defendants in substance was that the agreement on which reliance was placed by the respondents in their suit was a sham agreement and that the appellants in reality were the tenants of the shop and the relationship between the respondents and appellants was that of the landlord and tenant. the further plea taken in the written statement by the appellants was that as the question involved in the suit related to the possession of premises as between a landlord and his tenant the court of small causes bombay alone had jurisdiction to try the suit. the appeal in this court had arisen out of the finding recorded on that issue and in dealing with that matter this court had to consider the true effect of sub section 1 of section 28 of the rents control act to find whether it means that a defendant if raises a claim or question as to the existence of relationship of landlord and tenant between him and plaintiff the jurisdiction of the civil court is ousted even though the plaintiff pleaded that there is only exclusive jurisdiction to decide the case with the court of small causes bombay. dealing with the matter this court referred to the general principle which covers the question of jurisdiction at the inception of suits which was not disputed thus the plaintiff chooses his forum and files his suit. if he establishes the correctness of his facts he will get his relief from the forum chosen. if he frames his suit in a manner not warranted by the facts and goes for his relief to a court which can not grant him relief on the true facts he will have his suit dismissed. then there will be no question of returning the plaint for presentation to the proper court for the plaint as framed would not justify the other kind of court to grant him the relief. if it is found on a trial on the merits so far as this issue of jurisdiction goes that the facts alleged by the plaintiff are not true and the facts alleged by the defendants are true and that the case is not cognizable by the court there will be two kinds of orders to be passed. if the jurisdiction is only one relating to territorial limits or pecuniary limits the plaint will be ordered to be returned for presentation to the proper court. if on the other hand it is found that having regard to the nature of the suit it is not cognizable by the class of court to which the court belongs the plaintiff 's suit will have to be dismissed in its entirety. by referring to the material portion of section 28 of the rents control act the argument made on behalf of the appellants was found by this court to be untenable by stating thus we do not think that the section says or intends to say that the plea of the defendant will determine or change the forum. it proceeds on the basis that exclusive jurisdiction is conferred on certain courts to decide all questions or claims under the act as to parties between whom there is or was a relationship of landlord and tenant. it does not invest those courts with exclusive power to try questions of title such as questions as between the rightful owner and a trespasser or a licensee for such questions do not arise under the act. if therefore the plaintiff in his plaint does not admit a relation which would attract any of the provisions of the act on which the exclusive jurisdiction given under s 28 depends we do not think that the defendant by his plea can force the plaintiff to go to a forum where on his averments he can not go. the interpretation canvassed for by the appellants will give rise to anomalous results for example the defendant may in every case force the plaintiff to go to the court of small causes and secondly if the court of small causes finds against the defendant 's plea the plaint may have to be returned for presentation to the proper court for a second time when one has regard to the provisions in part ii it seems reasonably clear that the exclusive jurisdiction conferred by s 28 is really dependent on an existing or previous relationship of landlord and tenant and on claims arising under the act as between such parties. as seen from the above observations this court has held that it did not think that the section concerned says or intends to say that the plea of the defendant will determine or change the forum. but if the provisions of the bt al act which bear on the question of matters to be decided by the mamlatdar are seen they give no room for one even to think that those matters could be decided by a civil court when a question is raised in that behalf even by a defendant in a suit. section 70 of the bt al act to which we have adverted already imposes a duty on the mamlatdar to decide whether a person is an agriculturist or a tenant or a protected tenant or a permanent tenant when such person claims to be so under that act. further section 85 of the bt al act to which also we have already adverted in unequivocal terms says that in deciding any issue which is required to be decided by the mamlatdar under the bt al act no civil court has jurisdiction to decide it. furthermore section 85a as it stood prior to its amendment by gujarat amendment act no 5 in the year 1973 and as stands thereafter requires that if any suit instituted in civil court involves the question of tenancy of present or pastas the case may be the same being required to be decided or dealt with by an authority competent under the bt al act the civil court has to stay the suit and refer the issue to such competent authority for determination and after receiving the decision thereon to dispose of the suit in accordance with such decision. thus the provisions in the bt al act give no scope or room to think that the plea of tenancy if raised by the defendants in a suit in a civil court the same could be decided by the civil court. thus we are constrained to answer the question in the negative by agreeing with the view expressed by the single judge of the high court in this regard in his judgment and order under appeal. consequently the judgment and order under appeal does not call for our interference. in the result we dismiss this appeal with costs. appeal dismissed.

IN-Ext

FACTS the civil appeal by special leave is directed against the judgment and decree rendered by a single judge of the gujarat high court. plaintiff filed the suit for redemption of the said mortgages in the year 1966. defendant-2,brother of defendant i had been joined in that suit on the allegation that the latter was put in possession of mortgage properties by the former subsequent to the coming into existence of the mortgages. that suit was resisted by the defendants,each of them having filed separate written statements which in sub-stance did not differ from each other. the defence in those written statements was that defendant-l and his family members had become tenants of the suit properties in the year 1959-1960 and had continued to be such tenants at the time of mortgage deeds executed in respect of those properties in the year 1961 and thereafter. it was also claimed therein that they had become owners of the said properties when the plaintiff in the year 1962 sold those properties to defendant-1 by receiving a sum of rs.4,400/-as consideration for the sale. the civil court notwithstanding the defence of the defendants recorded its findings. such findings were firstly,that the defendants had failed to prove that the suit properties were sold in favour of defendant-l subsequent to the giving of security of those properties in his favour under the mortgage deeds; secondly,that the defendants had failed to prove the past tenancy of the suit properties on its view that what was pleaded by them in the written statements was tenancy prior to the date of filing of the suit; and thirdly,that the mortgages of the suit properties were mortgages by 'conditional sale. the defendants questioned the judgments and decrees of the trial court and the appellate court by filing a second appeal against the same in the high court of gujarat. the high court,who heard the second appeal, upheld the concurrent findings of the lower court. ARGUMENT arguments addressed behalf of the plaintiff- were these: that defendant-l. respondent-l although was in possession of the suit properties. agricultural lands at the time of execution of the deeds of mortgage by conditional sale in his favour because of the coming into existence of such mortgages there occurred merger of lease-hold rights of defendant-l in suit properties when he obtained those properties as mortgage security under the said mortgages and as a consequence he became a mortgagee in possession of those properties. according to him a mortgagee in possession being a person who cannot be deemed to be a tenant under section 4 of the bt &; al act it was not open to the defendants to claim that they were the tenants of suit properties and if that be so question of raising issue of tenancy by the civil court in the suit before it did not arise at all nor was it necessary to refer such issue to the mamlatdar under section 85-a of the bt &; al act and stay the suit till receipt of the finding on such issue as was directed by the high court in its judgment under appeal. the argument which was strenuously advanced on behalf of the appellant -plaintiff was that in a suit for redemption filed by the mortgagor in a civil court in respect of property notwithstanding the plea of the defendants' claim that they were tenants of that property under the bt &; al act and under the provisions of that act the issue of tenancy had to be referred by the civil court to the mamlatdar for recording a finding thereon and the civil court can proceed to dispose of the suit only on the basis of the finding received from the mamlatdar,the civil court itself can record its finding on the issue of tenancy and if the finding to be recorded had to go against the claim of tenancy,it would be permissible for the civil court to grant the decree for redemption sought by the plaintiff in the said suit. support was sought for the argument from the decision of this court in topandas case 1963 indlaw sc 379 ISSUE (1).does the lease-hold of a tenant (lessee) in a property merge in mortgage security if the same property is given by the landlord (lessor) to the tenant (lessee) as a mortgage security under a mortgage by conditional sale,as would debar the tenant from desisting the suit of the landlord -mortgagor for recovery of possession of such property by obtaining a decree for redemption of the mortgage. 2).when a plea of tenancy is raised with regard to suit property,an agricultural land,by a defendant who claims to be a tenant of such property under the bt &; al act and seeks a reference of that issue by the civil court to the mamlatdar under that act for obtaining a finding thereon,can the civil court decide such issue by itself and proceed to decide the suit on the basis of the finding thereon. the appeal in the court had arisen out of the finding recorded on that issue and in dealing with that matter this court had.to consider the true effect of sub-section (1) of section 28 of the rents control act to find whether it means that a defendant if raises a claim or question as to the existence of relationship of landlord and tenant between him and plaintiff the jurisdiction of the civil court is ousted even though the plaintiff pleaded that there is only exclusive jurisdiction to decide the case with the court of small causes,bombay. ANALYSIS no controversy is raised in the appeal as regards the findings of the civil court that the deeds of mortgage executed by the plaintiff in respect of the suit properties were mortgages by conditional sale. in any event,it was not the case of the plaintiff that defendant-l was a tenant of the suit properties and hc surrendered his possession of the suit properties either expressly or impliedly and the possession so obtained by the plaintiff was re-delivered to defendant-l in pursuance of the mortgages by conditional sale executed in his favour. learned counsel appearing for the defendants -respondents sought to refute the arguments advanced on half of the plaintiff-appellant. what is enunciated in section 111 (d) of the t.p.act cannot be doubted is the doctrine of merger. lease-hold held by a tenant or a lessee being a lesser estate and the right of reversion of the landlord (lessor) being a higher estate,the lessee's lease-hold right in respect of the property merges in reversion when that right of reversion,i.e.,the landlord's (lessor's) right of reversion comes to the tenant or lessee which happens when the landlord having a right to sell his reversion to the tenant holding the lease-hold sells the whole of it to the tenant (lessee). when the landlord mortgages the lease-hold property of the tenant to the tenant himself,he does not part with the right of reversion which he has in respect of that property. if that be so,merger of lease-hold estate in reversion cannot arise,inasmuch as,there cannot be any inconsistency or incompatibility in one person being the tenant and also the mortgagee of the same property,for in that event instead of the tenant paying rent to the landlord he may adjust it against the amount claimable by him as a mortgagee from the landlord. moreover,if a lessee of a property takes a mortgage of the sum property from the landlord,it would be unreasonable to attribute to a tenant the intention to surrender the tenancy and to invoke the sophisticated doctrine of implied surrender as has been held by the gujarat high court in patel atmaram nathudas v. babubhai keshavlal.1974 indlaw guj 88. in the case of a mortgage the estate that is outstanding is the equity of redemption of the mortgagor. therefore,there cannot be a merger of lease and mortgage in respect of the same property since neither of them is a higher or lesser estate than the other. g.appalaswamy case 1984 indlaw sc 314 (supra) which considered the question whether a sitting tenant who took property by a possessory or usufructuary mortgage in his favour was liable to deliver physical possession upon redemption to the mortgagor. former lessor). the court dealing with the said question said that all depends upon whether there was an implied surrender of the lessee's rights when the usufructuary mortgage was executed in his favour by the lessor-mortgagor and only if an implied surrender of lossee's rights could be inferred then the mortgagor would be entitled to have delivery of physical possession upon redemption but not otherwise. hence,the lease-hold of a tenant (lessee) in a property does not merge in mortgage security of that property,even if it is given .to. him by the landlord (lessor) on a mortgage by conditional sale as would debar the tenant from desisting the suit of the landlord mortgagor for recovery of possession of such property by obtaining decree for redemption of the mortgage. section 70 of the bt &; al act to which we have adverted already imposes a duty on the mamlatdar to decide whether a person is an agriculturist or a tenant or a protected tenant or a permanent tenant when such person claims to be so under that act. further,section 85 of the bt &; al act to which also we have already adverted,in unequivocal terms says that in deciding any issue which is required to be decided by the mamlatdar under the bt &; al act no civil court has jurisdiction to decide it. furthermore,section 85a,as it stood prior to its amendment by gujarat amendment act no.5 in the year 1973 and as stands thereafter,requires that if any suit instituted in civil court involves the question of tenancy of 'present' or 'past',as the case may be,the same being required to be decided or dealt with by an authority competent under the bt &; al act,the civil court has to stay the suit and refer the issue to such competent authority for determination and after receiving the decision thereon to dispose of the suit in accordance with such decision. thus,the provisions in the bt &; al act give no scope or room to think that the plea of tenancy if raised by the defendants in a suit in a civil court,the same could be decided by the civil court STATUTE the transfer of property act,1882 (tp act) "111.a lease of immoveable property determines - (a. b. c. d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right. bombay tenancy and agricultural lands act,1948(bombay tenancy and agricultural lands act,1948. section 85a,as it came into force after it was amended by gujarat act no.5 of 1973 w.e.f 3rd march,1973. 85a.(i. if any suit instituted,whether before or after the specified date,in any civil' court involves any issues which are required to be settled,decided or dealt with by any authority competent to settle,decide or deal with such issues

the order of the court was as follows. in these matters relating to admission to professional courses in medicine engineering pharmacy nursing etc in educational institutions which are claimed to be minority educational institutions the petitioners have questioned the applicability of the scheme framed by this court in j p unni krishnan v state of a p 1993. 1 scc 645 1993 indlaw sc 1056. i as well as the applicability of the rules and orders made by several state governments on the basis of the said decision. by order dated october 71993 passed by the constitution bench three questions were referred for consideration by a larger bench. in pursuance of the said order this bench has been constituted. when the matters were taken up on march 161994the court felt that it was necessary to reframe the first two questions. the hearing of the matters was therefore adjourned to march 181994on which date the questions requiring consideration by this bench have been reframed to highlight the several aspects of the claims put forward by the petitioners. the claim of being a minority whether based on religion or language and the claim of being a minority educational institution put forward by the petitioners can not be pronounced upon without first ascertaining what the said expressions connote and signify. having regard to the importance of the questions involved we consider it appropriate to issue notice to the attorney general of india as well as the advocates general for the states. it would therefore not be feasible to take up the hearing of these matters before the court closes for the long vacation. since the process of selection of candidates for admission for the next academic session is to commence soon it is necessary to pass an interim order governing admission to the professional courses in minority educational institutions for the next academic session. for admission in the last academic session 1993 94an interim order in the following terms was made by a bench comprising honourable the chief justice and one of us justice b p jeevan reddy on may 141993 in writ petition nos 350 and 355 of 1993. we have heard shri soli j sorabjee learned senior counsel for the petitioners in these two writ petitions. issue rule. there will be an interim order in the following terms i fifty per cent of the total intake in the petitioners educational institutions shall be permitted to be filled up by candidates selected by the agencies of the state government on the basis of a competitive examination test. the candidates so selected and admitted shall pay scales of fee as applicable to this class of students as determined by the state government from time to time. the remaining fifty per cent of the intake may be regulated by the petitioners to admit candidates belonging to the particular religious or linguistic minority. however the selection shall be made strictly on the basis of merit among the candidates seeking admission to the institutions. such merit shall be determined oh the basis of the academic performance at the qualifying examination or on the basis of any objective test that the institution might itself apply to determine such relative and competing merits or on the basis of performance of the results of the selection tests that the state government may itself hold for selecting candidates for admission to technical colleges in the state. it is optional for the petitioners to adopt any one of these three modes and apply it uniformally. candidates so selected on the basis of merit amongst the minorities shall however abide by such condition in the matter of payment of tuition and other fee as may be permitted by the state government. it is made clear that this order is made on the assumption that the petitioners are minority institutions. it is open to the respondents to question this status claimed by the petitioners. this order shall however not estop the petitioners from urging all other contentions raised in the writ petitions as indeed this interim interlocutory order is made on the consent of the petitioners and without prejudice to all the contentions. thereafter the matter was considered by the constitution bench in its order dated august 1819932 in that order the writ petitions placed before the bench were categorised into five categories namely1 unaided minority educational institutions2. minority educational institutions which are in receipt of state funds by way of aid3 minority educational institutions in respect of which it is not clear from the averments in the writ petitions whether they are aided or unaided institutions4. writ petitions challenging the correctness and applicability of unni krishnan filed by educational institutions which do not claim to be minority educational institutions5 writ petitions which do not fall in any of the above categories. it was directed that the order dated may 141993would not apply to educational institutions falling in categories 4 and 5 and the institutions referred to in paragraph 18 of the order dated august 181993 the order dated may 141993was made applicable to the institutions falling in categories 12 and 3 with the modification that following were added in continuation of the said order in continuation it is made further clear that whether any of the petitioner institutions is a mei or not is a matter for the government to verify and determine. we do not more particularly at this stage make any pronouncement in that behalf. this order shall be shahal h musaliar v state of kerala1993 4 scc. 112 1993 indlaw sc 575 applicable only to those institutions which are found to be meis on verification by the government and not to those who are not found to be meis on such verification. the 50 seats to be filled up by candidates selected by the agencies of the state government on the basis of a competitive examination test as well as the remaining 50 seats to be filled in accordance with cl of the said order shall be equally distributed between free seats and payment seats. in other words out of the 50 seats to be filled up by government half will be payment seats and half will be free seats. similarly out of the 50 of the seats to be filled up by the management in accordance of the said order half shall be payment seats and the other half free seats. the nris if any admitted to an extent not exceeding 5 of the total seats shall be out of the payment seats to be filled under after completing the admissions each of the colleges shall submit to the competent authority to the university to which it is affiliated and to the government concerned statements containing full particulars of the students admitted under cl ii of para 2 of this order. such statements shall contain as full a particulars as possible. the authorities to which the statements are submitted shall verify the correctness of the statements and if they find any irregularity they shall call upon the college concerned to rectify the same. they shall also bring any such violation to the notice of this court by way of any interlocutory application. any such irregularity if proved may entail serious consequences. separate directions were however given in respect of institutions referred to in writ petitions nos 284 and 482 of 1993 with regard to writ petition no 284 of 1993 it was observed that in the said writ petition the petitioner has claimed that no capitation fee is charged from any student and the fee charged is not more than in some cases less than. the fees charged in the government colleges and that the admission to these institutions is made on the basis of an all india common entrance test separately conducted by the petitioner and admissions are made on the basis of merit as determined in the said test and further that in view of the reputation of these institutions thousands of students apply for and appear in the entrance test every year. it was also observed that this fact was not disputed by the learned advocate general for the state of karnataka. similarly as regards writ petition no 482 of 1993it was observed that according to the petitioner in that case the medical college run by it at vellore in the state of tamil nadu is a well reputed institution admission to which is made on the basis of all india entrance test conducted by the petitioner and that the admissions are made on the basis of merit and the fee charged by it is not more than the fees chargeable in similar governmental institutions and that there has never been any complaint about the working of this institution and it was observed that this fact was not disputed by shri seetharaman learned counsel for the state of tamil nadu. in the order dated august 181993the following directions were given in respect of the institutions covered by the aforesaid writ petitions nos 284 of 1993 and 482 of 19932 having regard to the above circumstances we permit the petitioners. in the above two writ petitions to admit students to their colleges on the basis of entrance test conducted by them and on the same basis on which admissions were made by them in the said colleges in the previous academic year. after completing the admissions the petitioners shall furnish full particulars of the students admitted the categories if any whereunder they were admitted and all other particulars relating to their admission. this information should be furnished to the competent authority to the university to which the said colleges are affiliated and to the secretary education department government of karnataka tamil nadu. the said authorities shall verify whether the admissions have been made by the petitioners in accordance with the directions given herein. in case of irregularity any of the said authorities shall be entitled to call upon the petitioner to rectify the said irregularity. it shall also be open to the competent authority university and the government of karnataka tamil nadu to bring any such irregularity to the notice of this court by way of an interlocutory application for appropriate orders in that behalf. it is made clear that any violation of the directions given herein by the petitioners shall entail serious consequences inasmuch as the above orders are made based upon their representations and even before a counter affidavit has been filed by the respective respondents in view of the urgency expressed by them. dealing with writ petition no 598 of 1993the court after noticing that an agreement was entered into between the institution and the government of kerala according to which while 85 of the seats were to be filled by the government and the remaining 15 of the seats were left for the management to fill up in its discretion observed that since the basic principle in unni krishnan as well as the order dated august 181993 is that merit shall be the guiding principle in the matter of admission a plea for discretionary quota could not be countenanced and it was directed that the said writ petition shall also be governed by the order dated may 141993as modified by addition. by order dated october 719933 the constitution bench having regard to the fact that the year 1993 being a year of transition and adjustment and also in view of the orders of the government of india permitting admission of foreign students to the extent of as much as 50 of the seats as well as the time that had already elapsed permitted the private professional colleges to admit non resident indians and foreign students up to a maximum extent of 15 of the intake capacity of that year. i e 1993with the direction that the basis of the said selection would be as indicated in order dated may 1419934 on the basis of merit leaving to the management of the college t m a pai foundation v state of karnataka1993. 4scc276 2002. indlaw sc 2264 unnikrishnan j p v. state of a p 1993 4 scc 111 1993 indlaw sc 1168 concerned to adjudge the merit of these candidates having regard to the relevant factors. it was further made clear that this was a special provision made only for that year. in the aforesaid order dated october 719933with reference to the minority educational institutions in the state of kerala such as those covered by writ petition no 598 of 1993 it has been observed the system obtaining in kerala appears to be altogether different which was unfortunately not brought to our notice on august 181993 there are only two private engineering colleges in the state said to be minority educational institutions. the system obtaining in this state appears to be that the entire fees collected by these private engineering colleges has to be made over to the government while the government bears the entire expenditure for running the colleges. under this system the colleges were allowed to admit students of their own choice to the extent of 15. we have heard learned counsel for the parties and we are of the view that except for the minority educational institutions in kerala which are governed by the terms of the agreements with the government of kerala the directions given by this court with regard to admissions for the academic session 1993 can continue and govern admissions for the next academic session commencing in 1994 as regards the institutions in the state of kerala which are governed by the terms of agreements with the government of kerala the admissions to such institutions would be made in accordance with those agreements. it is therefore directed that the admission for the academic session commencing in 1994 to the professional courses in the institutions which are claimed to be minority educational institutions shall be made on the following basis i in the institutions referred to in writ petitions nos 284 of 1993 and 482 of 1993 admission shall be made as per the directions given in the order dated august 1819932for the academic session commencing in 1993. in the institutions referred to in writ petition no 598 of 1993 and similar minority educational institutions in the state of kerala which are governed by an agreement with the government of kerala the admissions shall be made in accordance with the terms of those agreements. in respect of the seats which are left for management to fill in its discretion merit shall be the guiding principle. since the entire expenditure of the colleges is borne by the state the entire fees collected are also made over to the state these colleges must be required to draw the students even with respect to the seats to be filled by the management from out of the state merit list if any. in the absence of such list they can themselves devise the method for such selection. we make it clear that regarding the character of these institutions whether they are minority educational institutions we express no opinion. that is a matter between the institutions and the government of kerala. it is enough to record that shri vellapally learned counsel for the state of kerala disputes the minority character of these institutions. in rest of the minority educational institutions falling in categories 12 and 3 indicated in paragraph 5 of the order dated august 1819932admission shall be made in accordance with the directions contained in the order dated may 141993 in writ petitions nos 350 and 355 of 1993 as modified by order dated august 1819932but the directions would not apply to the institutions referred to in paragraph 18 of the order dated august 1819932 in this context we would like to impress upon the managements of the institutions concerned that while assessing the merit of a candidate for admission the objective should be to promote the excellence of the institution as a vehicle of general secular education. insofar as non resident indians and foreign students are concerned the permissible limit would be only 5 of the total intake for a given year as per the direction contained in paragraph 6 of the order dated may 141993 as modified by order dated august 1819932 the admission against these seats shall be made on the basis of merit. but it would be open for the management of the institution to adjudge the merit of the candidates having regard to the relevant factors. the matters be listed for hearing on july 201994 notice be issued to the attorney general of india and the advocates general for the states on the questions as reframed. written submissions in brief should be submitted by learned counsel by july 131994. the contempt petition nos 65100 and 126 of 1992 arise out of the judgment of this court in keshav chandra joshi v union of india 1990 indlaw sc 270 in which this court had directed to determine inter se seniority of the direct recruits and promotee asstt. conservators forests u p rendered on november 61990 it would appear that at present there are 215 direct recruits and 100 promotee asstt. conservators forest working in the forest department. in k c joshi case it was concluded that the promotees were appointed on ad hoc basis as a stop gap arrangement in 7ubstantive posts. their appointments were dehors the rules. until they are appointed by the governor according to the rules they do not become the members of the service in a substantive capacity. their continuous length of ad hoc service from the date of their initial appointment can not be counted towards seniority. the direct recruits were appointed in accordance with rule 5a read with appendix a of u p forest service rules1952 for short the rules. their seniority shall be counted from the date of their discharging duties of the post of asstt. conservators forest and the seniority of direct recruits shall accordingly be fixed. the governor was directed to make appointment by promotion to substantive vacancies to the post of asstt. conservators forest if not already made in accordance with rule 5b read with appendix b and rule 6. we are informed that till date no appointments in terms thereof have been made. the seniority of the promotee asstt. conservators forest shall be counted from the respective dates of appointment to the substantive posts in their quota under rule 6 of the rules. the inter se seniority of the direct recruits and promotees shall be determined in accordance with rules 56 and 24 as per the judgment in k c joshi case. all the employees are entitled to all consequential benefits. later when raj narayan singh and others filed writ petition civil no 641 of 1991this court on june 61991 directed to convert the writ petition as a contempt case for non implementation of the direction issued in k c joshi case which was numbered as contempt petition no 164 of 1971 when. it came up for hearing on august. 231991this court observed thus we are told by the counsel for the state of u p that for the purpose of working out the seniority draft list has been prepared and was in circulation inviting objections. the petitioners therein had not filed any objection despite giving time but it was directed that the state would consider their cases even if they make any representation. in the light of that stand while dismissing the contempt petition this court directed the sate government to dispose of the matter on the basis of the representation that may be received from the petitioners therein against the draft seniority list within six months from that date. in these contempt petitions the promotees as well as some of the subsequent direct recruits complain against fixation of their inter se seniority by the state government. shri r k garg for the promotees contended that as on august 311982 selection of the promotees on regular basis to fill up the posts of asstt. conservator forest for the years 1973 74 to 1979 80 had taken place by a regularly constituted selection committee which selected 140 candidates for appointment. therefore they are entitled to the seniority from the respective years. it is also contended that the promotees are entitled in terms of the judgment in k c joshi case for appointment by promotion to substantive vacancies within their quota in the respective years and that therefore their seniority should be counted from the years in which they started discharging their duties as asstt. conservators forest as they were initially appointed to the substantive vacancies. shri verma appearing for some of the later direct recruits contended that the direct recruits were appointed to the substantive vacancies as held in k c joshi case and their seniority was fixed in the judgment from the date on which they started discharging the duties of the post as asstt. conservators forest. treating them to be temporary as shown in the seniority list prepared by the state is in utter contempt of the directions in joshi case1. in the rejoinder the promotees have stated that as on december 311974 a total number of 140 posts of asstt. conservators forest were available and their quota as per the existing rules was 25 per cent. as on december 11980186 posts namely140 and 46 posts created during the period were available. as per the ratio the promotees are entitled to 33 13per cent quota. as on march 11198532 more posts were created and the total posts available were 218 on. december 1198640 more posts were created. therefore as on march ii1985the total posts available were. 258 on march 11985the quota was increased by 50 per cent. the promotees therefore are entitled to 50 per cent of the posts. as in the year 199072 more posts were created and the total posts are now 330 therefore they are entitled to 50 per cent of the quota in the tentative list. but that was not done. thereby the action of the state is in defiance of the direction issued by this court. in the counter affidavit filed by the state it is stated that as on december 11980 both permanent and temporary posts were 131 as on february 121986203 posts were existing. the permanent posts are 102 and temporary posts are 173 and the total would come to 275 as per rules 5 and 24 only permanent posts should be counted as substantive posts and temporary posts can not be counted for fixation of the seniority. it is further contended that though decision was taken to give 50 per cent quota to the promotees the statutory rules have not been made. therefore they are entitled to only 33 13 per cent quota. since the seniority as per the direction of this court was made only to substantive posts some of the direct recruits became temporary direct recruits and the seniority was determined accordingly. in the light of the respective contentions the question arises whether the determination of the seniority is in accordance with the directions issued by this court. in the light of the background scenario we can not strictly take it to be a case of contempt but in working out the directions issued by this court the state government committed a mistake in law. we have to consider therefore whether the procedure adopted by the sate to determine the inter se seniority is in accordance with the rules and the law laid down in k c joshi case. the directions issued in k c joshi case have already been extracted and their need to reiterate is obviated. from the averments it would appear that 100 promotee asstt. conservators forest are awaiting appointment to substantive vacancies. the total number of direct recruits appears to be 215 prior to december 311974the quota was 75 per cent to the direct recruits and 25 per cent to the promotees. similarly as on january 11975the ratio was increased to 33 13 per cent namely66 23 per cent to the direct recruits and 33 13 per cent to the promotees. indisputably a decision was taken on march 11975 to increase the quota to 50 per cent but no amendment to the statutory rules to give effect to it was made. therefore the operative rule as on that date appears to be 33 13 per cent in respect of promotees. therefore the procedure to be adopted by the state in fixing the inter se seniority of the direct recruits and the promotees in their respective quota is the sole question. there is no rota prescribed in the rules. therefore the state is enjoined to implement the judgment of this court in the light of the statutory rules. it is clear from the counter affidavit filed by the state that the posts are both permanent and temporary. if the temporary posts are likely to continue for long normally as per the law laid down by this court they be treated for the purpose of counting seniority as permanent posts unless they are likely to be abolished. it is a policy matter. therefore the state has to determine whether the posts are likely to be made permanent or abolished. in the event of converting them as permanent under rule 24the quota prescribed in rule 6 would be applied to substantive posts. the seniority shall be determined in accordance with the quota rule to the posts available in the respective years in which the vacancies had arisen otherwise existing substantive posts should be filled up applying rule 6 it is therefore incumbent upon the state government to find out how many vacancies were existing in the year 1974 75 and thereafter every year and to determine as to how the respective posts stood reserved for the direct recruits and promotees in accordance with the quota. on so determining the direct recruits would go en block as seniors to the promotees and the promotee officers in the order of their inter se seniority be appointed by the governor under rule 5b read with rule 6 and would be placed below the direct recruits. similar exercise for each year in which the substantive vacancies had arisen should be done. the officers he they direct recruits or promotees would rank below the juniormost officer in the list of the previous year. after this exercise is exhausted appointments should be made posts are to be filled up to substantive vacancies. it would be open to the state government to fix tentatively the inter se seniority in the temporary posts according to the ratio between the direct recruits and the promotees in the same manner of filling the substantive posts as indicated above. as and when the temporary posts are converted either into permanent posts or the vacancies arise due to superannuation of the senior officers they should be fixed in the respective vacancies and fitment made. after exhausting the exercise the remaining candidates awaiting appointment would continue to be temporary until they get due placement or fixation of their seniority. these directions would meet the exigencies. the state government is directed to undertake fresh exercise in the light of the above directions and complete the same within a period of four months from the date of the receipt of the order. the contempt petitions are accordingly disposed of. petition disposed of.

IN-Ext

FACTS for admission in the last academic session 1993-94,an interim order in the following terms was made by a bench comprising hon'ble the chief justice and justice b.p.jeevan reddy on may 14,1993 in writ petition. there will be an interim order in the following terms. (i) fifty per cent of the total intake in the petitioners' educational institutions shall be permitted to be filled up by candidates selected by the agencies of the state government on the basis of a competitive examination/test. the candidates so selected and admitted shall pay scales of fee as applicable to this class of students as determined by the state government from time to time. (ii) the remaining fifty per cent of the intake may be regulated by the petitioners to admit candidates belonging to the particular religious or linguistic minority. however,the selection shall be made strictly on the basis of merit among the candidates seeking admission to the institutions. such merit shall be determined on the basis of the academic performance at the qualifying examination; or on the basis of any objective test that the institution might itself apply to determine such relative and competing merits; or on the basis of performance of the results of the selection tests that the state government may itself hold for selecting candidates for admission to technical colleges in the state. it is optional for the petitioners to adopt any one of these three modes and apply it uniformally. candidates so selected on the basis of merit amongst the minorities shall,however,abide by such condition in the matter of payment of tuition and other fee as may be permitted by the state government. thereafter the matter was considered by the constitution bench. in that order the writ petitions placed before the bench were categorised into five categories,namely,(1) unaided minority educational institutions,(2) minority educational institutions which are in receipt of state funds by way of aid,(3) minority educational institutions in respect of which it is not clear from the averments in the writ petitions whether they are aided or unaided institutions,(4) writ petitions challenging the correctness and applicability of unni krishnan' filed by educational institutions which do not claim to be minority educational institutions,(5) writ petitions which do not fall in any of the above categories. it was directed that the order dated may 14,1993,would not apply to educational institutions falling in categories (4) and (5) and the institutions referred to in paragraph 18 of the order dated august 18,1993. the 50% seats to be filled up by candidates selected by the agencies of the state government on the basis of a competitive examination/test as well as the remaining 50% seats to be filled in accordance with cl.of the said order shall be equally distributed between free seats and payment seats. in other words,out of the 50% seats to be filled up by government,half will be payment seats and half will be free seats.similarly,out of the 50% of the seats to be filled up by the management in accordance of the said order,half shall be payment seats and the other half free seats. the nris,if any admitted to an extent not exceeding 5% of the total seats shall be out of the payment seats to be filled under after completing the admissions each of the colleges,shall submit to the competent authority,to the university to which it is affiliated and to the government concerned statements containing full particulars of the students admitted. ARGUMENT as on august 31,1982 selection of the promotees on regular basis to fill up the posts of asstt.conservator,forest for the years 1973-74 to 1979-80 had taken place by a regularly constituted selection committee which selected 140 candidates for appointment. therefore,they are entitled to the seniority from the respective years.it is also contended that the promotees are entitled,in terms of the judgment in k.c.joshi case' for appointment by promotion to substantive vacancies within their quota in the respective years and that therefore,their seniority should be counted from the years in which they started discharging their duties as asstt.conservators,forest,as they were initially appointed to the substantive vacancies. shri verma appearing for some of the later direct recruits,contended that the direct recruits were appointed to the substantive vacancies as held in k.c.joshi case' and their seniority was fixed in the judgment from the date on which they started discharging the duties of the post as asstt.conservators,forest. treating them to be temporary as shown in the seniority list prepared by the state is in utter contempt of the directions in joshi case1 ISSUE in these matters relating to admission to professional courses in medicine,engineering,pharmacy,nursing,etc.in educational institutions which are claimed to be minority educational institutions,the petitioners have questioned the applicability of the scheme framed by this court in j.p.unni krishnan v.state of a.p.(1993) 1 scc 645 1993 indlaw sc 1056 i as well as the applicability of the rules and orders made by several state governments on the basis of the said decision. ANALYSIS this order is made on the assumption that the petitioners are minority institutions. the claim of being a "minority" -whether based on religion or language -and the claim of being a "minority educational institution" put forward by the petitioners cannot be pronounced upon without first ascertaining what the said expressions connote and signify. having regard to the importance of the questions involved we consider it appropriate to issue notice to the attorney general of india as well as the advocates general for the states. it would,therefore,not be feasible to take up the hearing of these matters before the court closes for the long vacation. since the process of selection of candidates for admission for the next academic session is to commence soon,it is necessary to pass an interim order governing admission to the professional courses in minority educational institutions for the next academic session. since the entire,expenditure of the colleges is borne by the state -the entire fees collected are also made over to the state -these colleges must be required to draw the students even with respect to the seats to be filled by the management from out of the state merit list,if any. in the absence of such list,they can themselves devise the method for such selection. the court in keshav chandra joshi v.union of india' 1990 indlaw sc 270 in which this court had directed to determine inter se seniority of the direct recruits and promotee asstt.conservators,forests,u.p. in k.c.joshi case,it was concluded that the promotees were appointed on ad hoc basis as a stop-gap arrangement in substantive posts. until they are appointed by the governor according to the rules,they do not become the members of the service in a substantive capacity. their continuous length of ad hoc service from the date of their initial appointment cannot be counted towards seniority. the direct recruits were appointed in accordance with rule 5(a) read with appendix a of u.p.forest service rules,1952 for short 'the rules'. their seniority shall be counted from the date of their discharging duties of the post of asstt.conservators,forest and the seniority of direct recruits shall accordingly be fixed. the governor was directed to make appointment by promotion to substantive vacancies to the post of asstt.conservators,forest,if not already made,in accordance with rule 5(b) read with appendix b and rule 6. till date no appointments in terms thereof have been made. the seniority of the promotee asstt.conservators,forest shall be counted from the respective dates of appointment to the substantive posts in their quota under rule 6 of the rules. the inter se seniority of the direct recruits and promotees shall be determined in accordance with rules 5,6 and 24 as per the judgment in k.c.joshi case. all the employees are entitled to all consequential benefits. the direct recruits would go en block as seniors to the promotees and the promotee officers in the order of their inter se seniority be appointed by the governor under rule 5(b) read with rule 6 and would be placed below the direct recruits. similar exercise for each year in which the substantive vacancies had arisen should be done. the officers,he they direct recruits or promotees would rank below the juniormost officer in the list of the previous year. after this exercise is exhausted; appointments should be made; posts are to be filled up to substantive vacancies. STATUTE article 32 of writ petition under the constitution of india

twelve accused persons were tried for offences under section 302307149324147148 and section 3 of terrorist and disruptive activites. prevention act1987 hereinafter referred to as tada by the learned designated judge pune. out of the said twelve accused6 accused were acquitted of all the charges while the five appellants herein namely bonkya alias bharat shivaji mane a 5mandu baliba dombe a 8ashok baloba dombe a 9ranjar bhausaheb dombe a 10 and kaka alias pandurang baloba dombe a 11 were convicted for offences under section 302307149 ipc and section 3 of tada and sentenced to suffer life imprisonment and to pay a fine of rs 5000 each for the offence under section 302149 ipc. 10 years ri and a fine of rs 5000 each for the offence under section 307149 ipc 2 years ri for the offence under section 324149 ipc and life imprisonment and fine of rs 5000 each for the offence under section 3 of tada in default of payment of fine on each of the counts the appellants were to undergo further ri for two years each. the substantive sentences of imprisonment were however directed to run concurrently. one accused died during the pendency of the trial. through this appeal under section 19 of tada the appellants have called in question their conviction and sentence. for the sake of convenience the accused shall be referred to hereinafter by the number assigned to them in the trial court judgment as accused i e a 5a 8a 10 etc. according to the prosecution case on 11th august1990 at about 3 00 p m anna shety band patte mukesh ramesh and prakash band patte had gone to the vrindavan video parlour for watching a movie. the accused a 6a 10 and a 11 alongwith one other person were also present at the video parlour. there was an altercation between the accused and the complainant party when the leg of kaka dombe a 11 dashed against the leg of anna shety band patte. pw both the prosecution witnesses as well as. the accused party left the video parlour threatening each other. the complainant party went towards jagdamba hotel owned by waman band patte pw at that time baban karpe bajrang band patte sanjay mane ramesh pawar were also present near the hotel. at about 4 00 p m the appellants and other accused persons allegedly armed with swords satturs and sticks arrived there in two auto rickshaws and one jeep. out of the accused a 5a 6a 8a 10 and a 11 were carrying swords while a 7 and a 9 had satturs and the remaining accused were armed with sticks. on the arrival of accused party anna shetty ran away. appellants a 5a 10 and a 11 thereafter assaulted bajrang band patte pw 14 on his head in front of the hotel. they also assaulted baban karpe pw 9 and popat deceased who had run away to the math after chasing them in the auto rickshaws and the jeep. it is alleged that a 5a 10 and a 11 assaulted popat deceased with the swords on his head and thighs and when baban tried to intervene he was also assaulted and he received a blow with the sattur near his knee. he ran away to conceal himself. bajrang pw 14 was taken to the hospital by waman pw 15ramesh pw 11 and prakash pw 2whereas popat deceased who was seriously injured and had fallen down unconscious after receipt of the injuries was removed to the hospital by the police when it arrived at the spot a little later. all the injured persons were admitted to the hospital. while receiving the treatment popat succumbed to his injuries. on receipt of information asstt. police inspector joshi arrived at the hospital and baban karpe pw 9 narrated the occurrence to him which was reduced into writing. on the basis of the said report an fir for offences under section 302307149147148 ipc was registered vide cr no 101 of 1990 at about 6 00 p m the inquest on the dead body of popat was conducted and the body was sent for post mortem examination. bajrang pw 14 regained consciousness during the night intervening 11th and 12th august1990 and made a statement to the police in respect of the incident which took place in front of jagdamba hotel and on the basis of that statement cr no 10290 was registered. the jeep allegedly used by the accused party was later found in front of the house of accused baloba dombe a 1 who died subsequently one sword stained with blood and two blood stained sticks were recovered from the said jeep. an auto rickshaw bearing registration no mwq 5624 belonging to manik bhende gavali was found abandoned in a damaged condition with broken glasses. it was also taken into possession vide a panchnama. the accused were searched for but could not be traced. they were subsequently arrested on different dates. on a disclosure statement made by a 11 before the police and the panches under section 27 of the evidence act and on his pointing out a sword was recovered from the field at korti where it lay buried. a 10 also made a disclosure statement under section 27 of the evidence act to the effect that he had buried a sword behind yamai tukai temple and could get it recovered. on the pointing out by a 10the said sword was also recovered and taken into possession through a panchnama. during the investigation an identification parade was got conducted through the executive magistrate pw 32 when baban karpe pw 9 and other prosecution witnesses identified the assailants. samples of blood of the accused were collected for ascertaining their blood groups and sent for chemical analysis. the blood samples of bajrang pw 14 and baban karpe pw 9 were similarly collected. the blood stained clothes of the deceased and the injured persons as also the swords were sent to the chemical examiner for analysis. after completion of the investigation two charge sheets arising out of crime no 10190 and crime no 10290 were filed before the designated court. during the pendency of the two charge sheets the addl. public prosecutor through an application ex. p 35requested the court for holding trial in respect of both the chargesheets together which application was allowed by the designated court vide order dated 5 december 1992 and that is how both the cases were tried together by virtue of the provisions of section 220 1 cr. p c as the series of acts in both the cases were so inter connected as to form one transaction. at the trial the prosecution alleged that the accused party with an intent to commit terror in the wadar community had committed the murder of popat and injured pw 9 and pw 14by using lethal weapons and had thereby committed terror in the wadar community and thus committed an offence under section 3 of tada besides the other offences as already noticed. baloba a 1 died during the pendency of the trial and therefore the proceedings against him abated. the plea of the remaining accused in their statements under section 313 cr. p c was one of total denial and false implication. according to a 2a 3a 5a 6 and a 7 they had been identified by pw 9during the identification parade at the instance of the police. a 4 alleged false implication at the instance of pw 15 waman while a 8 alleged false implication at the hands of the police with a view to pressurise him to withdraw a complaint concerning the murder of his brother and 5 others allegedly committed by the police. a 9 also put forward a similar defence while a 10 alleged that the police had instituted a false case against him at the instance of narayan dhotare according to a 11also the witnesses had deposed falsely against him at the instance of narayan dhotare. the learned judge of the designated court acquitted a 2a 3a 4a 6a 7 and a 12 of the offences charged against them apparently influenced by the lack of identification of these accused persons by the prosecution witnesses at the identification parade conducted by the executive magistrate. the appellants however were convicted and sentenced in the manner as already noticed. we have heard learned counsel for the parties and perused the record. that the incident arose out of a petty altercation between a 11 and his three companions with pw 10 and his three companions at the video parlour and later on led in the homicidal death of popat band patte on 11 august 1990 and injuries to pw9 and pw14 was neither disputed before the learned designated court nor before us. from the post mortem report prepared by dr a p khiste. pw 22we find that the deceased had four incised injuries which had caused extensive damage to his internal organs also. according to pw 22the internal injuries on the deceased were a result of the following external injuries 1 incised wound transverse on left groin at centre medial to left public symphysis and left superior iliac crest all muscles vessels cut both femoral vessels vein artery cut dimension 4 x 2 x 5 cms. transverse incised wound on right parital region bone deep4 x 2 x 1 cms. cms above right ear fracture of right parietal bone with laceration of brain. 3 verticle incised wound 5 x 1 x 1 cms. bone deep at centre of vertex fracture of skull with laceration of brain. pw 22 opined that these injuries individually as well as collectively were sufficient in the ordinary course of nature to cause death. pw 9 was examined by dr khiste pw 22 who noticed the following two injuries on his person 1 transverse superficial incised wound 10x12 cm on posterior of left knee in popliteal. edges were clean out. 2 abraded contusion below right knee and front of right leg5 x 5 cm. pw 14 bajrang was also medically examined and the following injuries were found on him 1. transverse lacerated would on occipital region3 x 1 cm. bone deep. injury was bleeding fresh. 2 multiple abraded contusion all over the back. the defence plea of total denial and false implication has been rightly rejected by the designated court in view of the over whelming cogent and reliable prosecution evidence. the trial court for the purposes of consideration of the evidence divided the prosecution case into three parts namely i the incident at vrindavan video parlour ii incident near jagdamba hotel and iii the incident at the math. so far as the first incident is concerned that merely provided the motive for the assault near the jagdamba hotel and the math. the evidence regarding the first incident was given by pw10pw11 and pw12 these witnesses deposed that while they were watching a movie at the video parlour a 11a 6 and a 10 alongwith one other person had occupied the seats in the row behind them and when the leg of a 11 dashed against the leg of pw10who told him to keep his leg properly a 11 started abusing him in filthy language and threatened him that he would deal with him. in view of the altercation the complainants left the video parlour and went towards jagdamba hotel. some of the prosecution witnesses including the deceased pw9 and pw14 were already standing near the jagdamba hotel. pw10 narrated the incident of the video parlour to those persons and in the meantime the accused party arrived there in a jeep and two auto rickshaws and started assaulting the complainant party. however according to the prosecution evidence itself during the assault none out of the four prosecution witnesses with whom the altercation had taken place at the video parlour was injured. near the jagdamba hotel it was bajrang pw 14 who received the injuries at the hands of the accused. some of the other witnesses including popat deceased and baban pw 9 fled towards the math to save themselves. the evidence of pw10pw 11 and pw 12 has received ample corroboration from the testimony of pw 9pw 13pw 14 and pw 15who deposed that while the witnesses were narrating the incident of the video parlour to waman band patte pw 15 and other witnesses present there the accused party arrived in a jeep and two auto rickshaws variously armed and opened an attack on the complainant party with a view to teach them a lesson for the altercation which had taken place earlier at the video parlour. we do not find any force in the submission of the learned counsel for the appellant that since mohan lal pw 19who runs the video parlour has not fully supported the prosecution version regarding the cause of altercation at the video parlour the genesis of the occurrence gets shrouded in doubt. pw 19 was declared hostile by the prosecution and was cross examined by the addl. public prosecutor. we find from a careful analysis of the evidence that the testimony of pw9 to pw 15 regarding the incident at the video parlour is cogent and trustworthy and nothing has been brought out during the cross examination of these witnesses which may cast any doubt about the correctness of the version given by them regarding the incident at the video parlour. even from the evidence of the hostile witness pw 19 mohanlal it emerges that on the day of the incident there was an altercation at the video parlour though he has given the cause of the altercation to be somewhat different which explanation does not appeal to us. even if for the sake of argument we were to ignore the evidence of pw19it would not materially affect the prosecution case in so faras the incident at the video parlour is concerned. we are in agreement with the designated court that there is ample evidence led by the prosecution to establish the incident at the video parlour and also that the said incident was the origin for the subsequent assault. to connect the accused with the incidents near the jagdamba hotel and the math the prosecution has examined pw3pw4pw9pw10pw11pw12pw13 and pw14 besides pw7pw20 and pw21 the last three witnesses however turned hostile at the trial and were cross examined by the addl. public prosecutor with the permission of the court. out of the remaining witnesses mentioned above pw 9 and pw 14 are the injured witnesses. these are thus the stamped witnesses whose presence admits of no doubt and being themselves the victims they would not leave out the real assailants and substitute them with innocent persons. pw 15 waman band patte who is the owner of the jagdamba hotel has lent sufficient corroboration to the testimony of the other prosecution witnesses in general and pw9 and pw14 in particular. from the testimony of pw9it stands established that while mukesh pw 12 was narrating the incident which had taken place at the video parlour the appellants alongwith 78 other persons arrived in a jeep and two auto rickshaws armed with swords satturs and sticks and opened the assault on the prosecution witnesses and that a 11 and his two associates assaulted pw 14 with swords. his testimony receives ample corroboration from the testimony of pw10pw11pw14 and pw15 waman the proprietor of jagdamba hotel besides the medical evidence. these witnesses categorically deposed that a 5a 10 and a 11 were responsible for causing injuries to bajrang pw 14. these witnesses knew the accused from before by their names and had also identified them later when called upon to do so. they specifically described the roles played by a 5a 10 and a 11 pw 10pw 11pw 12pw 13pw 14 and pw 15 also spoke about the presence of a 1a 8 and a 9 with their respective weapons alongwith a 5a 10 and a 11 near the jagdamba hotel at the time of assault on pw 14. an identification parade had been held by shri shrikant chimanaji jahagirdar pw 32executive magistrate. at the identification parade a 5 was identified by pw 9pw10pw 11pw 14 and pw 15 a 10 by pws 10 to 15 a 11 by pw 3 and pws 9 to 15 a 1 by pws 10 to 15 a 8 and a 9 by pw 3 and by pws 10 to 15. so far as other accused are concerned none of the prosecution witnesses ascribed any role to a 2a 3 and a 12 and even though pw 15 deposed at the trial about the presence of a 4a 6 and a 7 and stated that they were present with the accused party but the trial court for good and sufficient reasons found that his testimony as regards their presence in the unlawful assembly had not received trustworthy corroboration from any other prosecution evidence. the learned designated court opined that though the identity of a 1 since deada 5a 8a 9a 10 and a 11 as the assailants had been established by the prosecution evidence beyond a reasonable doubt the same could not be said about the participation of the remaining accused. we agree. from our independent analytical appreciation of the evidence on the record we are of the opinion that the designated court rightly found the participation of a 1a 5a 8a 9 and a 11in the assault to have been positively established. however so far as a 10 is concerned we find that there is merit in the submissions of the learned counsel for the appellant that his identify and participation in the assault has not been established beyond a reasonable doubt. baban karpe pw 9himself an injured witness failed to identify a 10 at the time of the identification parade held by pw 32though he identified a 10 later on in the court during the trial. that apart the name of a 10 does not figure specifically in the statement of baban pw 9which formed the basis of the fir ex 77 pw 10pw 11 and pw 15 have tried to implicate a 10 by making tell tale improvements in their statements at the trial by ascribing a role to him in the assault by improving upon their statements earlier recorded during the investigation with which statements they were duly confronted. even bajrang pw 14 who is an injured witness himself and deposed about the incident at jagdamba hotel with sufficient details appears to have exaggerated the version when he stated that he had been assaulted by a 10 also besides a 5 and a 11 auite contrary to his earlier statement. there is only one injury which was received by pw 14 and according to the other prosecution witnesses that injury had been caused to him by a 11 the tendency to exaggerate the incident is not uncommon and that an innocent person may be roped in alongwith the guilty ones is a possibility which cannot in the facts and circumstances of this case be ruled out. in view of the improvement made by the prosecution witnesses at the trial from their earlier statements and the infirmities already noticed we are of the opinion that it can not be said with any amount of certainty that the participation of a 10 in the assault or even his presence in the unlawful assembly at the time of the assault near jagdamba hotel or the math has been substantiated. the prosecution has not been able to establish the case against a 10 beyond a reasonable doubt and is our opinion he is entitled to the benefit of the doubt. in so far as the remaining appellants are concerned the evidence of the eye witnesses and particularly of pw 3 and pws 9 to 14 unmistakably connects them with the assault on the complainant party near the jagdamba hotel and at the math resulting in the death of popat and injuries being caused to pw9 and pw14 despite searching cross examination nothing has been brought out in their cross examination from which any doubt may arise about the participation of a 1a 5a 8a 9 and a 11 in the assault or discredit the testimony of any of these witnesses. their evidence establishes the manner in which the assault originated as well as the role played by each one of them. the appellants other than a10 were as already noticed identified by various prosecution witnesses at the identification parade held by pw 32the executive magistrate also. besides the testimony of these prosecution witnesses has received ample corroboration from the medical evidence as well as the recoveries of the weapons of offence. from our independent examination of the material on the record we are satisfied that the prosecution has been able to establish its case against a 5a 8a 9 and a 11 and the deceased a 1 beyond a reasonable doubt. that takes us now to consider the nature of the offence committed by a 5a 8a 9 and a 11. the designated court as already noticed found all of them guilty and convicted them for the offences under section 3 tada302149307149 and 323149 ipc. the victims it appears from the record belong to the wadar community. the designated court after considering the evidence of the first incident and the manner of assault on the deceased and pw 9 and pw 14came to the conclusion that the appellants alongwith some others had intended to create terror in a section of the people wadar community and with that intention had assaulted pw 14the deceased and pw9 by lethal weapons and were therefore guilty of committing an offence under section 3 tada. in our opinion the designated court fell in error in holding that an offence under section 3 of tada had been committed by the accused appellants in the established facts and circumstances of this case. merely because the deceased and the two injured witnesses belong to wadar community no inference could be drawn that the attack by the appellants on them was intended to strike terror in a section of the society namely the wadar community. there is no basis for such an assumption. prosecution has led no evidence in that behalf either. it appears to be a mere coincidence that pw9pw14 and the deceased all belong to the wadar community. there is nothing on the record to disclose as to which community do the appellants belong to or what grievance they had against the wadar community. by no stretch of imagination. can it be said that the accused had the intention to strike terror much less in a particular section of the society when they entered into an altercation at the video parlour or even when they went after the complainant party and opened an assault on then opposite jagdamba hotel or at the math. none out of those who were present at the video parlour received any injury and there is no material on the record to show as to which community did they belong to either. prosecution has led no evidence nor brought any circumstances on the record from which any inference may be drawn that the appellants intended to strike terror amongst the wadar community. it was not proper for the designated court to draw an inference of intention from the mere consequence i e the victims belonging to the particular community. the learned trial court appears to have ignored to take into consideration the essential requirements for establishing an offence under section 3 of tada. in hitendra vishnu thakur and others vs. state of maharashtra. and others 1994 4 scc602. 1994 indlaw sc 1706 this court opined that the criminal activity in order to invoke tada must be committed with the requisite intention as contemplated by section 31 of the act by use of such weapons as have been enumerated therein and which cause or are likely to result in the commission of offences as mentioned in that section. it was observed thus keeping in view the settled position that the provisions of section 3 of tada have been held to be constitutionally valid in kartar singh case and from the law laid down by this court in usmanbhai and niranjan cases it follows that an activity which is sought to be punished under section 31 of tada has to be such which can not be classified as a mere law and order problem or disturbance of public order or even disturbance of the even tempo of the life of the community of any specified locality but is of the nature which can not be tackled as an ordinary criminal activity under the ordinary penal law by the normal law enforcement agencies because the intended extent and reach of the criminal activity of the terrorist is such which travels beyond the gravity of the mere disturbance of public order even of a virulent nature and may at times transcend the frontiers of the locality and may include such anti national activities which throw a challenge to the very integrity and sovereignty of the country in its democratic polity. thus unless the act complained of falls strictly within the letter and spirit of section 31 of tada and is committed with the intention as envisaged by that section by means of the weapons etc as are enumerated therein with the motive as postulated thereby an accused can not be tried or convicted for an offence under section 31 of tada. likewise if it is only as a consequence of the criminal act that fear terror or and panic is caused but the intention of committing the particular crime can not be said to be the one strictly envisaged by section 31it would be impermissible to try or convict and punish an accused under tada the commission of the crime with the intention to achieve the result as envisaged by the section and not merely where the consequence of the crime committed by the accused create that result would attract the provisions of section 31 of tada. emphasis supplied. thus keeping in view the background in which the occurrence took place namely the altercation at the video parlour which has a great relevance to determine the applicability of section 3 tada we are of the opinion that the finding of the designated court that the appellants have committed an offence punishable under section 3 tada is clearly erroneous. in fairness to the learned counsel for the state mr madhav reddy sr advocate we must also record that he conceded that in the facts and circumstances of the case and keeping in view the law laid down by the constitution bench in kartar singh 's case 1994. supp scale 1 1994 indlaw sc 525 and hitendra vishnu thakur 's case 1994 indlaw sc 1706 supra no offence under section 3 of tada could be said to have been committed by the appellants. the conviction and sentence of the appellants for the offence under section 3 tada can not therefore be sustained and is hereby set aside. appellants no 1 a 52 a 83 a 9 and. 5 a 11 had alongwith the deceased accused a 1 and some others about whose identity there has been some doubt formed an unlawful assembly and in furtherance of the common object of that assembly committed the murder of popat deceased besides causing injuries to pw9 and pw14. the designated court therefore rightly found the said appellants guilty of the offences under section 302149307149 and section 324149. ipc the conviction and sentence of appellants no 1 a 52 a 83 a 9 and 5 a 11 for the said offences as recorded by the learned designated court are well merited and calls for no interference. in the result the appeal succeeds insofar as a 10 appellant no 4 is concerned. he is given the benefit of doubt and acquitted of all the charges against him. he shall be released from custody forthwith if not required in any other case. the conviction and sentence of appellants no 123 and 5 for the offence under section 3 tada is also set aside but their conviction and sentence for the other offences as recorded by the designated court is upheld and to that extent their appeals fail. before we part with the judgment we would also like to deal with a submission made on behalf of the appellants by their learned counsel that since the offence under section 3 of tada is not made out the criminal appeal filed in this court may be transferred to the high court for its disposal in exercise of our jurisdiction under article 142 of the constitution of india for the reason that a first appeal against conviction and sentence recorded for various offences under the indian penal code by the sessions court lies to the high court. learned counsel submitted that the appellants should not be denied the opportunity to get the first hearing in the high court because in the event of their failure in the high court they still have a chance to approach this court under article 136 of the constitution of india. the argument is fallacious and runs in the teeth of the express provisions of section 19 of tada. section 19 1 and 2 of tada read as follows. 19 appeal 1 notwithstanding anything contained in the code an appeal shall lie as a matter of right from any judgment sentence or order not being an interlocutory order of a designated court to the supreme court both on facts and on law. 2 except as aforesaid no appeal or revision shall lie to any court from any judgment sentence or order including an interlocutory order of a designated court. a bare perusal of the above section shows that an appeal against the judgment sentence or order of the designated court except an interlocutory order shall lie on facts and on law to the supreme court and that no appeal or revision shall lie to any other court. in the face of this express provision there is no scope to urge that the appeal may be transferred to the high court because of the acquittal of the appellants for the offence punishable under section 3 tada by us. in a case where the designated court finds that no offence under tada is made out it is open to the said court to transfer the case to the regular criminal court under section 18 tada but once the charge is framed and the case is tried by the designated court an appeal against conviction sentence or acquittal lies only to the supreme court and to no other court. under section 12 of tada the designated court has the jurisdiction not only to try the cases under tada but also to try offences under the indian penal code if the offence under tada is connected with such other offences. the amplitude of powers available to this court under article 142 of the constitution of india is normally speaking not conditioned by any statutory provision but it can not be lost sight of that this court exercises jurisdiction under article 142 of the constitution with a view to do justice between the parties but not in disregard of the relevant statutory provisions. the transfer of the appeal to the high court after hearing the appeal on merits and finding that section 3 of tada on the basis of the evidence led by the prosecution was not made out is neither desirable nor proper nor permissible let alone justified. there can not be piece meal hearing of an appeal on merits first by this court to determine if an offence under tada is made out or not and then by the high court. the submission of the learned counsel is thus devoid of merits and is consequently rejected.

IN-Ext

FACTS twelve accused persons were tried for offences under section 302,307/149,324,147,148 and section 3 of terrorist and disruptive activites. prevention) act,1987 (hereinafter referred to as 'tada') by the learned designated judge,pune. out of the said twelve accused,6 accused were acquitted of all the charges while the five appellants herein namely,bonkya alias bharat shivaji mane (a-5),mandu baliba dombe (a-8),ashok baloba dombe (a-9),ranjar bhausaheb dombe (a-10) and kaka alias pandurang baloba dombe (a-11) were convicted for offences under section 302/307/149 ipc and section 3 of tada and sentenced to suffer life imprisonment and to pay a fine of rs.5,000/-each for the offence under section 302/149 ipc. 10 years ri and a fine of rs.5,000/-each for the offence under section 307/149 ipc; 2 years ri for the offence under section 324/149 ipc and life imprisonment and fine of rs.5,000/-each for the offence under section 3 of tada. in default of payment of fine on each of the counts,the appellants were to undergo further ri for two years each. the substantive sentences of imprisonment were however directed to run concurrently. one accused died during the pendency of the trial. anna shety band patte,mukesh,ramesh and prakash band patte had gone to the vrindavan video parlour for watching a movie. the accused a-6,a-10 and a-11 alongwith one other person were also present at the video parlour. there was an altercation between the accused and the complainant party when the leg of kaka dombe (a-11) dashed against the leg of anna shety band patte. pw. both the prosecution witnesses as well as. the accused party left the video parlour threatening each other. the complainant party went towards jagdamba hotel owned by waman band patte pw.at that time baban karpe,bajrang band patte,sanjay mane,ramesh pawar were also present near the hotel. at about 4.00 p.m.,the appellants and other accused persons allegedly armed with swords,satturs and sticks arrived there in two auto-rickshaws and one jeep. on the arrival of accused party anna shetty ran away. appellants a-5,a-10 and a-11 thereafter assaulted bajrang band patte (pw-14) on his head in front of the hotel. they also assaulted baban karpe (pw-9) and popat deceased,who had run away to the math,after chasing them in the auto rickshaws and the jeep. it is alleged that a-5,a-10 and a-11 assaulted popat deceased with the swords on his head and thighs and when baban tried to intervene he was also assaulted and he received a blow with the sattur near his knee. he ran away to conceal himself. bajrang (pw-14) was taken to the hospital by waman pw-15,ramesh pw-11 and prakash pw-2,whereas popat deceased who was seriously injured and had fallen down unconscious after receipt of the injuries was removed to the hospital by the police when it arrived at the spot a little later. all the injured persons were admitted to the hospital. police inspector joshi arrived at the hospital and baban karpe pw-9 narrated the occurrence to him. the inquest on the dead body of popat was conducted and the body was sent for post-mortem examination. the jeep allegedly used by the accused party was later found in front of the house of accused baloba dombe,a-1 (who died subsequently). one sword,stained with blood and two blood stained sticks were recovered from the said jeep. an auto-rickshaw bearing registration no.mwq-5624 belonging to manik bhende-gavali was found abandoned in a damaged condition with broken glasses. the accused were searched for but could not be traced. they were subsequently arrested on different dates. on a disclosure statement made by a-11 before the police and the panches under section 27 of the evidence act and on his pointing out a sword was recovered from the field at korti,where it lay buried. ARGUMENT the prosecution alleged that the accused party with an intent to commit terror in the wadar community had committed the murder of popat and injured pw-9 and pw-14,by using lethal weapons and had thereby committed terror in the wadar community and,thus,committed an offence under section 3 of tada. according to a-2,a-3,a-5,a-6 and a-7 they had been identified by pw-9,during the identification parade,at the instance of the police.a-4 alleged false implication at the instance of pw-15 waman while a-8 alleged false implication at the hands of the police with a view to pressurise him to withdraw a complaint concerning the murder of his brother and 5 others allegedly committed by the police. a-9 also put forward a similar defence,while a-10 alleged that the police had instituted a false case against him at the instance of narayan dhotare,according to a-11,also the witnesses had deposed falsely against him at the instance of narayan dhotare. ISSUE the appeal under section 19 of tada,the appellants have called in question their conviction and sentence ANALYSIS that the incident arose out of a petty altercation between a-11 and his three companions with pw-10 and his three companions at the video parlour and later on led in the homicidal death of popat band patte on 11 august 1990 and injuries to pw9 and pw14 was neither disputed before the learned designated court nor before the present court. from the post-mortem report, the deceased had four incised injuries which had caused extensive damage to his internal organs the testimony of pw9 to pw-15 regarding the incident at the video parlour is cogent and trustworthy and nothing has been brought out during the cross-examination of these witnesses which may cast any doubt about the correctness of the version given by them regarding the incident at the video parlour. the designated court rightly found the participation of a-1,a-5,a-8,a-9 and a-11,in the assault,to have been positively established. however,so far as a-10 is concerned, there is merit in the submissions of the learned counsel for the appellant that his identify and participation in the assault has not been established beyond a reasonable doubt. the name of a-10 does not figure specifically in the statement of baban pw-9,which formed the basis of the fir. the prosecution has been able to establish its case against a-5,a-8,a-9 and a-11 and the deceased a-1 beyond a reasonable doubt. the designated court fell in error in holding that an offence under section 3 of tada had been committed by the accused-appellants in the established facts and circumstances of this case. merely because the deceased and the two injured witnesses belong to wadar community,no inference could be drawn that the attack by the appellants on them was intended to strike terror in a section of the society,namely,the wadar community. in hitendra vishnu thakur and others vs. state of maharashtra. and others [(1994) 4 scc,602. 1994 indlaw sc 1706 this court opined that the criminal activity in order to invoke tada must be committed with the requisite intention as contemplated by section 3(1) of the act by use of such weapons as have been enumerated therein and which cause or are likely to result in the commission of offences as mentioned in that section. appellants no.1 (a-5),2 (a-8),3 (a-9) and. 5 (a-11) had alongwith the deceased accused a-1 and some others,about whose identity there has been some doubt,formed an unlawful assembly and in furtherance of the common object of that assembly committed the murder of popat deceased besides causing injuries to pw9 and pw14. in the result,the appeal succeeds insofar as a-10 (appellant no.4) is concerned. he is given the benefit of doubt and acquitted of all the charges against him. he shall be released from custody forthwith if not required in any other case. the conviction and sentence of appellants no.1,2,3 and 5 for the offence under section 3 tada is also set aside but their conviction and sentence for the other offences as recorded by the designated court is upheld and to that extent their appeals fail. section 19 of tada shows that an appeal against the judgment,sentence or order,of the designated court (except an interlocutory order) shall lie on facts and on law to the supreme court and that no appeal or revision shall lie to any other court. in the face of this express provision,there is no scope to urge that the appeal may be transferred to the high court because of the acquittal of the appellants for the offence punishable under section 3 tada. under section 12 of tada the designated court has the jurisdiction not only to try the cases under tada but also to try offences under the indian penal code if the offence under tada is connected with such other offences. the amplitude of powers available to this court under article 142 of the constitution of india is normally speaking not conditioned by any statutory provision but it cannot be lost sight of that this court exercises jurisdiction under article 142 of the constitution with a view to do justice between the parties but not in disregard of the relevant statutory provisions. the transfer of the appeal to the high court,after hearing the appeal on merits and finding that section 3 of tada on the basis of the evidence led by the prosecution,was not made out,is neither desirable nor proper nor permissible let alone justified. final judgment the submission of the learned counsel is devoid of merits and is consequently rejected. STATUTE the court found the said appellants guilty of the offences under section 302/149,307/149 and section 324/149. ipc. provisions of section 19 of tada. section 19 (1) and (2) of tada read as follows. 19.appeal - (1) notwithstanding anything contained in the code,an appeal shall lie as a matter of right from any judgment,sentence or order,not being an interlocutory order,of a designated court to the supreme court both on facts and on law. 2) except as aforesaid,no appeal or revision shall lie to any court from any judgment,sentence or order including an interlocutory order of a designated court.

these three appeals by special leave are directed against one and the same judgment dated 25 09 l992 of the division bench of calcutta high court. the three appellants are the state of west bengal in appeal arising out of slp c no 401 of 1993the state fishery development corporation ltd in appeal arising out of slp c no 13516 of 1992 and bansilal farms in appeal arising out of slp c no 13314 of 1992. the respondents are the members of one sarkar family in the city of calcutta. the dispute centres around a fishery called nalban fishery. a suit for partition was filed by one of the co sharers of said sarkar family in the high court of calcutta on 3 9 1955which was registered as suit no 2539 of 1955 the schedule of properties included the disputed nalban fishery. a learned single judge of the calcutta high court passed a preliminary decree in the said suit on 11 8 1960 one of the co sharers of the sarkar family preferred an appeal against the preliminary decree before the division bench which was registered as appeal no200 of 1960 during the pendency of the aforesaid appeal the state of west. bengal requisitioned large extent of fisheries including the disputed nalban fishery on 5 11 1969 in exercise of power under section 31 of the west bengal land requisition and acquisition act of 1948 hereinafter referred to as the requisition act pursuant to the aforesaid requisition order the state of west bengal took possession of the nalban fishery on 8 11 1969 members of the sarkar family challenged the order of requisition by filing a writ petition in calcutta high court in november1969 which was registered as civil rule no 7317 w of 1969 the aforesaid writ petition was dismissed by the learned single judge. the appeal to the division bench was preferred against the aforesaid order of dismissal which was registered as f m a no 126 of 1970 the division bench dismissed the appeal by its order dated 5 7 1971 sarkar family moved this court in slp c no 1452 of 1972 by order dated 17 11 1972. this court dismissed the special leave petition. the appeal arising out of the petition suit bearing suit no 2539 of 1955 which had been registered as appeal no 200 of 1960 was finally disposed of by the division bench and the said order was assailed in this court in slp c nos 5370 5371 of 1978 the said two appeals arising out of the said two special leave petitions were disposed of by order dated 18 4 1979 on the basis of a compromise arrived at between the parties on intervention of shri ashok sen who appearing for one of the parties but it was indicated in the order that the state 's right in relation to the fisheries will not be affected by the decree in question. this court further ordered we again wish to re emphasize that the terms of the decree shall not effect the rights of the state of west bengal in any manner whatsoever to the fisheries in question if they have vested in state under the provisions of the west bengal estate acquisition act of 1953 act x of 1954. prior to the passing of the aforesaid order on april 181979 while granting special leave petition on 10 11 1978 this court had directed that the state of west bengal will be made a party to the proceeding and further the collector parganas was appointed as receiver in respect of the fisheries owned by the sarkar family. the court had also further directed that the collector will be the receiver in respect of the fisheries which has not already been vested in the state and whose possession has not already been taken over by the state. pursuant to the aforesaid order appointing collector 24 parganas as receiver. the collector 24 parganas took possession of the fisheries including nalban fishery as receiver and submitted a compliance report dated 22 11 1978 to the registrar of this court. it may be noted that nalban fishery had been requisitioned by the state of west bengal under the provisions of requisition act since 5 11 1969 and possession thereof had been taken on 8 11 1969 and the sarkar family had challenged the said order unsuccessfully which final by the dismissal of the special leave petition by this court on 17 11 1972 on 25 5 1979 the collector 24 parganas who had been appointed as receiver realised that he could not have taken possession of nalban fishery as receiver since the said fishery had already been in possession of the state of west bengal pursuant to requisition order dated 5 11 1969 obviously the earlier compliance report dated 20 11 1978 that the receiver has taken possession of the nalban fishery was a symbolic one inasmuch as the state of west. bengal was in fact in possession of the said fishery. the receiver therefore intimated to the registrar of this court the mistake committed by him in his earlier report and after taking advice from the senior counsel expressed apology to this court for the mistake committed in the earlier report while the matter stood thus in relation to the aforesaid nalban fishery the government of west bengal handed over the possession of the said nalban fishery to the director of inland fisheries state fisheries development corporation for undertaking fisheries development scheme. the aforesaid corporation issued an advertisement for auctioning the nalban fishery for a boating complex. the sarkar family thereupon filed an application before the calcutta high court contending inter alia that under the decree passed in the partition suit by the supreme court the property belongs to the sarkar family and could not have been handed over to the state of west bengal that application was disposed of by the learned single called upon the collector 24 parganas who was the receiver pursuance to the orders of the supreme court to take over the possession of nalban fishery from the state of west bengal and give vacant possession of the same to the sarkar family. this order of the learned single judge was challenged in appeal before the division bench and the division bench having dismissed the same the present appeals have been preferred. it may be noticed at this stage that bansilal farms appellant in appeal arising out of slp c no 13314 of 1992 was the highest offerer for running the boating complex on the surface water of nalban fishery and had been granted licence for that purpose and in fact had started the operation of the boating complex since 1991 but on the application of mrs dhira mitra one of the co sharers of the sarkar family the high court having issued an order of injunction the farm is no longer operating. mr harish salve the learned senior counsel for the state of west bengal. s s ray the learned senior counsel appearing for bansilal farms and mr g ramaswamy the learned senior counsel appearing for the state fishery development corporation ltd contended that a compromise decree between the parties in a suit for partition will not in army way affect the rights of the state in respect of the fisheries whether such rights the state acquires by virtue of an order of requisition under the requisition act or by virtue of any other statutory provisions under which the fisheries right vest in the state. it was further contended that this court while giving affect to the compromise arrived at between the sarkar family made it explicitely clear that the said compromise will not in any way affect the rights of the state over the fisheries even if those fisheries agreed to be divided between the parties and in that view of the matter and the state of west bengal having already requisitioned the nalban fishery and having taken possession of the same the receiver could not have taken possession of the said nalban fishery pursuant to the order of this court appointing the collector 24 parganas as receiver and. under the circumstances the said receiver rightly intimated this court about the mistake committed by him and re delivered possession of nalban fishery to the state of west bengal. the calcutta high court both the learned single judge as well as the division bench committed serious error of law in directing the receiver to take possession of nalban fishery from the state of west bengal and deliver the vacant possession of the same to the members of the sarkar family. the learned counsel also urged that in any view of the matter on the amendment of the west bengal land reforms act in the year 1936 giving it retrospective effect and defining land to include tank fishery the nalban fishery vests in the state of west bengal and therefore the high court could not have issued the impugned direction. ray the learned senior counsel appearing for bansilal farms in addition to the contentions raised by mr salve appearing for the state of west. bengal contended that the state being the owner of nalban fishery and having vested the management and control thereof with the state fishery development corporation and the said corporation having decided to use the tank fishery for a boating complex and the bansilal farms being the highest bidder and having been granted the right to have a boating complex therein and he having invested a huge sum of money his rights can not be taken away in the dispute between the state and the sarkar family. jaideep gupta learned counsel appearing for the respondents on the other hand condented that the decree passed by the supreme court in the partition suit amongst the members of the sarkar family on the basis of a compromise arrived at between the parties would bind the state of west bengal as the decree has been passed in presence of the state who was impleaded as a party. he further contended that nalban fishery having been vested in the state of west bengal under the provisions of west bengal under the provisions of west bengal acquisition act1955the state can not get rid of the direction given by the supreme court to the receiver to handover possession of the various fisheries covered by the final decree to the parties to whom they have been allotted under the decree and the nalban fishery being one such fishery the possession thereof was required to be given to the person in whose favour the said fishery has been allotted and therefore the learned single judge as well as the division bench in appeal have rightly issued the directions. gupta also contended that the receiver assumed possession of the fisheries pursuant to the order of the supreme court dated 6th of november1978 and having submitted a report to that effect on 22 11 1978 indicating that it has taken possession of the nalban fishery. the subsequent incumbent to the post of district magistrate 24 parganas who became the receiver by virtue of his official position had no further jurisdiction to re deliver possession of the nalban fishery to the state of west bengal and the comments already made by the high court on the report of the subsequent receiver sufficiently indicate how he had acted with the bias mind and consequently the nalban fishery having not vested in the state of west bengal under the acquisition act the decree passed by the supreme court on 18 4 1979 remains operative. judged from this view there is no infirmity with the direction issued by the learned single judge as well as division bench of the calcutta high court warranting interference by this court. gupta also contended that the order of the high court of honourable mr justice deepak kumar sen dated 23 9 1980 directing the receiver to allow m s ghose and saha surveyors to make proper demarcation in the nalban fishery dividing the same in two lots and thereafter carry out the directions of the supreme court in respect thereof has become final the same not having been challenged by the state of west. bengal and therefore it would not be open for the said state in application for execution of the decree to raise the question of vesting of the nalban fishery with the state and the court would not interfere with the direction given by the learned single judge and division bench of the calcutta high court. on the question of vesting of the tank fishery under the amended provisions of the west bengal land reforms act mr. gupta contended that the validity of the said act has been challenged and is pending before the calcutta high court an interim order has been passed in the said proceeding and therefore until that matter is decided it can not be said. that the tank fishery vested with the state of west bengal. in this connection he had further urged that this question had not been raised before the high court. in view of the rival submissions at the bar the first question that arises for consideration is whether in the suit for partition amongst the members of the sarkar family which was ultimately disposed of by a compromise decree in this court nalban fishery had been allotted to some members of the sarkar family and whether such decree would affect the rights of the state and bind the state of west. bengal. the nalban fishery was one of the items of property in the suit for partition is not disputed. it is also not disputed that the state of west bengal though was not a party to the suit but in course of proceeding before this court by an order of the court the said state of west bengal was impleaded as a party. the aforesaid order directing impleadment of the state of west bengal as a 7 party was obviously intended for the purpose that the interest of the state and the rights of the state in relation of the state and the rights of the state in relation of the state and the rights of the state in relation to several fisheries could be protected. the suit ultimately no doubt was disposed of on the basis of a compromise arrived at between the parties but the court took sufficient care in disposing of the appeals on the terms of compromise by observing that the state has substantial interest with regard to fisheries rights covered by the litigation and nothing in the decree will not affect the rights of the state of west. bengal in any manner whatsoever to the fisheries in question if they are vested in the state under the provisions of west bengal estates acquisition act1953. it would be appropriate at this stage to extract this part of the decree passed by this court in view of the foregoing we again wish to re emphasize that the terms the decree shall not affect the rights of the state of west bengal in any manner whatsoever to the fisheries in question if they have vested in the state under the provisions of the west bengal estates acquisition act1953 act x of 1954. further while directing the receiver to handover possession of the various fisheries covered by the final decree to the parties to whom they have been allotted under the decree this court also protected the interest of the state by observing we made it quite clear that this will not in any manner prejudice or affect the right of the state to its claim over the fisheries under the west bengal acquisition act 1955 west bengal act 1 of 1954 or under any other statute. it is an undisputed fact that nalban fishery had been requisitioned much prior to the aforesaid decree of this court dated 18 4 1979 and therefore the rights of the state to the fishery either by virtue of the requisition order or by virtue of any provision of any other statute remained protected and as such said state of west. bengal ca nt be bound down by the so called allotment of fisheries in favour of some members of the sarkar family under the compromise decree in question. the nalban fishery had been requisitioned by the state of west bengal in exercise of power under section 31 of the west bengal land requisition and acquisition act is not disputed and can not be disputed and since the validity of the said order of requisition had been challenged by the sarkar family in the calcutta high court and being unsuccessful there they had also filed special leave petition in this court in slp c no 145272 which was ultimately dismissed by this court on 17 11 1972. the dismissal of the special leave petition as aforesaid affirmed that the nalban fishery had been legally requisitioned by the state of west bengal and the state was in possession of the same since 8 11 1969. the next question that arises for consideration is whether the receiver appointed by this court was at all entitled to take possession of the nalban fishery pursuant to the order of this court or the nalban fishery could not have been taken possession by the receiver and therefore the second receiver rightly corrected the mistake committed by his predecessor. from the report submitted by the receiver it transpired that the district magistrate 24 parganas who was appointed as receiver took possession of several fisheries including nalban fishery obviously on the impression that the lease in respect of the said fishery which had been granted by the sarkar family had lapsed. the said receiver was not aware of the fact that nalban fishery had in fact requisitioned by the state of west bengal and the state is in possession of the same since november1369 the possession thus taken by the receiver of the vast extent tank fishery is obviously a symbolical possession but in view of the order of this court dated 18 4 1979 as well as 22 4 1979 while passing a decree in terms of compromise arrived at between the parties and on the admitted position that state had already come into possession of the fishery by virtue of the order under the requisition act the said fishery remained out of the purview of the allotment made by the sarkar family in the compromise and therefore the receiver could not have taken possession of the same. the successor receiver in the circumstances therefore was fully justified in bringing it to the notice of this court by giving a second report indicating therein that his predecessor had erroneously taken the possession of nalban fishery which is in contravention of the directions of this court dated 18 4 1979 and for which the receiver offered his unconditional apology. we do not find any force in the contention of mr gupta appearing for the respondents that the succeeding receiver had no jurisdiction to re deliver the possession of nalban fishery is the state of west bengal when his predecessor has already taken possession of the same pursuant to the order of this court. the receiver appointed by a court is an officer of the court. the said receiver will be fully justified in rectifying any mistake or error committed by him while implementing the direction of the court. we do not find any illegality in the act of the succeeding receiver in rectifying the earlier mistake and re delivering the possession of nalban fishery to the state of west bengal. as has been stated earlier the possession which was taken by the earlier receiver was a symbolical one and factually the state had not been divested of its possession which it took on 8 11 1969 in our considered opinion the succeeding receiver rightly took into account the directions of this court passed on 18 4 1979 and 24 4 1979 and rightly took the view that the rights and interest of the state in relation to nalban fishery is not affected in any manner by the so called allotment of the fishery in the partition decree amongst the members of the sarkar family. the next question that arises for consideration is whether the order of honourable mr justice deepak kumar sen dated 6 10 1980 would operate as res judicata since the state did not challenge the same. from the order in question which has been annexed as annexure p to the special leave petition c no 13314 of 1992it appears that the order was passed on the application on one of the members of sarkar family mr pulak sarkar. the state of west bengal was neither a party to the proceedings nor was noticed by the high court before passing the order. the order was in fact a direction to the collector 24 paraganas who had been appointed as a receiver by the supreme court in the pending appeal before it. no reasons have been given by the learned judge in issuing the said directing and on the other hand the order appears to be bald order calling upon and thereafter carry out the directions of the honourable supreme court in respect of the same. the aforesaid order can not be held to operate as res judicata taking away the rights of the state of west. bengal in respect of the nalban fishery as the state was not a party to the proceedings. besides the direction of the learned judge to the effect the collector24 paraganas is directed to allow messers ghose and saha surveyors to make proper demarcation in the nalban fishery dividing the same in two lots. after such demarcation is made the commissioner of partition is directed to approve the same and carry out the direction of the honble supreme court in respect thereof. does not in any way take away rights of the state of west. bengal which is otherwise protected by the supreme court while passing the compromise decree. the direction of the learned single judge on the other hand is to carry out the directions of the supreme court in respect of the nalban fishery. in view of our earlier conclusion that the rights and interest of the state of west bengal was not in any way be affected by the so called partition and allotment of the nalban fishery inter se amongst the members of the sarkar family the said order dated 63 10 1980 passed by the learned single judge of the calcutta high court will not stand on the way of the state in claiming and putting forth its interest and right over the nalban fishery. the contention of mr gupta appearing for the respondents therefore cannot be sustained. the next question that arises for consideration is what is the effect of the amendment to the west bengal land reforms act which was amended in the year 1986 but with retrospective effect. by virtue of the extended definition of land in section 2 7 and the amended provisions of section 3a of the land reforms act tank fishery like nalban fishery come within the definition of and it vests in the state by operation of section 31 read with section 14. it is no doubt true that a writ petition has been filed challenging the validity of the aforesaid act and notification issued there under in relation to vary nalban fishery which is still pending and therefore it would not be proper for us to examine the provisions of the emended west bengal land reforms act and to express any opinion thereon. suffice it to say that under the amended provisions of the west bengal land reforms act tank fishery being included in the land would vest in the state by combined reading of sections 3a and 14 and therefore the state can not be divested of the rights accruing by the amended provisions until the amended provisions are declared invalid by a competent court of law. since we have been informed that the writ petition challenging the amended act is still pending in the calcutta high court we may observe that our conclusion hereunder in relation to applicability of the amended provisions of the west bengal land reforms act so far as nalban fishery is concerned would be subject to the constitutionality itself to be decided by the high court in the pending writ petition. in view of our aforesaid conclusions the impugned directions of the learned single judge as well as of the division bench are set aside and these appeals are allowed. the injunction order issued against bansilal farms appellant in appeal arising out of slp c no 13314 of 1992stands vacated. we would further observe that the state should determine the amount of compensation which the sarkar family is entitled to under the relevant provisions of the act under which nalban fishery vests with the state of west bengal and the compensation amount be paid on being determined in accordance with the law to the family members of sarkar family in whose favour nalban fishery had been allotted under the compromise decree by this court. there will be no order as to costs. order accordingly.

IN-Ext

FACTS the respondents are the members of one sarkar family in the city of calcutta. the dispute centres around a fishery called nalban fishery. a suit for partition was filed by one of the co-sharers of said sarkar family in the high court of calcutta. a learned single judge of the calcutta high court passed a preliminary decree in the said suit. one of the co-sharers of the sarkar family preferred an appeal against the preliminary decree before the division bench. during the pendency of the aforesaid appeal the state of west bengal requisitioned large extent of fisheries including the disputed nalban fishery, in exercise of power under section 3(1) of the west bengal land requisition and acquisition act of 1948. members of the sarkar family challenged the order of requisition by filing a writ petition in calcutta high court which was was dismissed by the learned single judge. sc had directed that the state of west bengal will be made a party to the proceeding and further the collector parganas was appointed as receiver in respect of the fisheries owned by the sarkar family. the court had also further directed that the collector will be the receiver in respect of the fisheries which has not already been vested in the state and whose possession has not already been taken over by the state. pursuant to the aforesaid order appointing collector 24 parganas as receiver,the collector 24 parganas took possession of the fisheries including nalban fishery as receiver and submitted a compliance report to the registrar of this court. the collector 24 parganas who had been appointed as receiver realised that he could not have taken possession of nalban fishery as receiver since the said fishery had already been in possession of the state of west bengal pursuant to requisition order. the receiver,therefore,intimated to the registrar of this court the mistake committed by him in his earlier report and expressed apology to this court for the mistake committed in the earlier report. while the matter stood thus in relation to the aforesaid nalban fishery,the government of west bengal handed over the possession of the said nalban fishery to the director of inland fisheries,state fisheries development corporation for undertaking fisheries development scheme. the aforesaid corporation issued an advertisement for auctioning the nalban fishery for a boating complex. the sarkar family thereupon filed an application before the calcutta high court contending inter alia that under the decree passed in the partition suit by the supreme court the property belongs to the sarkar family and could not have been handed-over to the state of west bengal. that application was disposed of by the learned single called upon the collector 24 parganas who was the receiver pursuance to the orders of the supreme court to take over the possession of nalban fishery from the state of west bengal and give vacant possession of the same to the sarkar family. ARGUMENT a compromise decree between the parties in a suit for partition will not in army way affect the rights of the state in respect of the fisheries whether such rights the state acquires by virtue of an order of requisition under the requisition act or by virtue of any other statutory provisions under which the fisheries right vest in the state. on the amendment of the west bengal land reforms act in the year 1936 giving it retrospective effect and defining land to include tank -fishery the nalban fishery vests in the state of west bengal. nalban fishery having been vested in the state of west bengal under the provisions of west bengal under the provisions of west bengal acquisition act,1955,the state cannot get rid of the direction given by the supreme court to the receiver to handover possession of the various fisheries covered by the final decree to the parties to whom they have been allotted under the decree and the nalban fishery being one such fishery,the possession thereof was required to be given to the person in whose favour the said fishery has been allotted. ISSUE whether in the suit for partition amongst the members of the sarkar family which was ultimately disposed of by a compromise decree in this court nalban fishery had been allotted to some members of the sarkar family and whether such decree would affect the rights of the state and bind the state of west bengal. ANALYSIS the nalban fishery was one of the items of property in the suit for partition is not disputed. it is also not disputed that the state of west bengal though was not a party to the suit but in course of proceeding before this court by an order of the court the said state of west bengal was impleaded as a party. the aforesaid order directing impleadment of the state of west bengal as a 7 party was obviously intended for the purpose that the interest of the state and the rights of the state in relation of the state and the rights of the state in relation of the state and the rights of the state in relation to several fisheries could be protected. further while directing the receiver to handover possession of the various fisheries covered by the final decree to the parties to whom they have been allotted under the decree,this court also protected the interest of the state by observing that they made it quite clear that this will not in any manner prejudice or affect the right of the state to its claim over the fisheries under the west bengal acquisition act 1955 or under any other statute. it is an undisputed fact that nalban fishery had been requisitioned much prior to the aforesaid decree of this court and,therefore,the rights of the state to the fishery either by virtue of the requisition order or by virtue of any provision of any other statute remained protected and as such said state of west bengal can't be bound down by the so-called allotment of fisheries in favour of some members of the sarkar family under the compromise decree in question. the district magistrate 24 parganas who was appointed as receiver took possession of several fisheries including nalban fishery obviously on the impression that the lease in respect of the said fishery which had been granted by the sarkar family had lapsed. the said receiver was not aware of the fact that nalban fishery had in fact requisitioned by the state of west bengal and the state is in possession of the same. the successor receiver,in the circumstances,therefore,was fully justified in bringing it to the notice of this court by giving a second report indicating therein that his predecessor had erroneously taken the possession of nalban fishery which is in contravention of the directions of this court and for which the receiver offered his unconditional apology. the court did not find any illegality in the act of the succeeding receiver in rectifying the earlier mistake and re-delivering the possession of nalban fishery to the state of west bengal. the aforesaid order cannot be held to operate as res judicata taking away the rights of the state of west bengal in respect of the nalban fishery as the state was not a party to the proceedings. the rights and interest of the state of west bengal was not in any way be affected by the so-called partition and allotment of the nalban fishery inter se amongst the members of the sarkar family,the order passed by the learned single judge of the calcutta high court will not stand on the way of the state in claiming and putting forth its interest and right over the nalban fishery. STATUTE the suit ultimately no doubt was disposed of on the basis of a compromise arrived at between the parties but the court took sufficient care in disposing of the appeals on the terms of compromise by observing that the state has substantial interest with regard to fisheries rights covered by the litigation and nothing in the decree will not affect the rights of the state of west bengal in any manner whatsoever to the fisheries in question if they are vested in the state under the provisions of west bengal estates acquisition act,1953. by virtue of the extended definition of 'land' in section 2 (7) and the amended provisions of section 3(a) of the land reforms act,tank fishery,like nalban fishery come within the definition of and it vests in the state by operation of section 3(1) read with section 14. the nalban fishery had been requisitioned by the state of west bengal in exercise of power under section 3(1) of the west bengal land requisition and acquisition act is not disputed and cannot be disputed.

we have heard learned counsel on both sides. the admitted facts are that the respondents through their agents had registered trade mark raleigh and other trade marks 12 marks under the indian merchandise marks act1889 4 of 1989 and the trade marks act1940 5 of 1940 the trade and merchandise marks act1958 43 of 1958 for short the act which came into force with effect from october 31958 has repealed the predecessor act and now the act is in operation. the respondents entered into an agreement with sudhir kumar sen on november 31948 to render technical know how to the indian company to be formed which would manufacture bicycles and market them under raleigh 's indian trade marks. pursuant thereto a company called sen raleigh limited came into existence which manufactured cycles with technical assistance by the respondents raleigh industries of u k and marketed the bicycles with a brand name and trade marks belonging to the respondents. on april 241954sen. raleigh was recorded as permitted users of the trade marks. by agreement dated december 291962sen raleigh and the respondents agreed that sen raleigh was registered user for further period up to 1976 sen raleigh was taken over by the government of india on september 81975 under the idr act and the government took over the management of sen raleigh limited. the agreement dated december 291962 was modified and the respondents were given option to terminate the agreement. an agreement dated december 201976 was entered into between the appellant as registered user and the respondent in respect of 12 trade marks for a period of 5 years. on march 281978joint application by sen raleigh and the appellant duly signed by the respondent as proprietor and sen raleigh limited as registered user came to be made before the registrar of trade marks. on october 241980sen raleigh was nationalized and got vested in the appellant corporation by publication of the notification under idr act. on march 51982the respondent wrote a letter to the appellant that in the absence of a new agreement they were instructing their advocate to prevent the appellant by restraint proceedings to use the trade mark effective from april 11982. on march 241982the appellant made an application under sections 3246 and 56 of the act against the respondents in the high court of calcutta in suit no 26692 pleading inter alia that the respondents had failed to provide technical assistance by passing the technical know how to sen raleigh after november 11976 neither the appellant nor sen raleigh were registered users of the trade mark after november 11976. u s 482 of the act up to the date of one month before filing that rectification application. a continuous period of 5 years or longer had passed and the trade mark had not been bona fide used by the respondent. having regard to the extended nature of non user of the concerned trade mark after november 11976any further use of the said trade marks by the respondents was likely to deceive and cause confusion to the trade and public alike in india etc. simultaneously an application for registration of three trade marks an their favour was filed by the appellant on march 251982. by proceedings dated june 131984the registrar of trade marks informed the appellant that the registered user 's applications were abandoned since the appellant failed to comply with the statutory requirements. the learned single judge dismissed the application by his judgment dated september 131990 holding inter alia that any proprietor mentioned in s 461b of the act extends to bona fide user other than registered users. special circumstances as a defense were available to the respondent for non user even after 1979the supply technical know how by the respondent was not totally absent. after termination of the collaboration and user agreement between the appellant and the respondents it was likely to cause confusion and deception amongst the trade and public. the conduct of the respondents was not violative of s 32b and c the court in those circumstances declined to rectify the trade mark and strike it off from the register of trade marks. on appeal the division bench in appeal no 1391 confirmed the same holding that on and from october 251980the respondent had allowed and permitted the appellant to manufacture bicycles etc according its specifications and to pass off the goods under their trade marks. though the collaboration and registered user agreements stood expired from october 311981no agreement came to be executes nor continued to use the specifications on technical know how. there is no specific bar for an unregistered lincesee to use registered trade mark so long as there is a connection in the course of trade between the licenser and the lincesee. the appellant was unable to prove that there had been no such user of the trade mark for a continuous period of 61 months or longer and the lack of bona fide intention the expression by any registered proprietors in s 461b should not be restricted to user by proprietor or registered user who should also include bona fide or authorized users the legislature did not intend to register proprietor to be deprived of their property at the instance of user whose use is unregistered. the expression therefore should not be restricted to user by the proprietor himself or any registered user but should also take into account bona fide authorized user. non registration of the user agreement by sen raleigh and the appellant was due to the default of the latter. the appellant had not taken any steps to withdraw registered user applications and as such should not be permitted to take such a contradictory stand of applying for rectification at the same time. the power u s 46 is discretionary. in view of the appellant 's conduct it was taking advantage of its own wrong. the discretion therefore was not to be extended in favour of the appellant. thus this appeal by special leave. shri raju ramchandran learned senior counsel for the appellant raised three fold contentions. it is his pivotal contention that undisputedly when the respondent was not in urge of trade mark as a registered proprietor or its agent sen raleigh as permitted user for a period of 5 years immediately preceding the date of the application u s 46 for removal of the trade mark from the register there was no bona fide user thereof in relation to those goods by the proprietor himself. the respondents admittedly did not use the same. the appellant can not be said to be either the proprietor of the trade mark since 1976since the agreement lapsed or permitted user the high court therefore was wrong in holding that 5 years period had not lapsed. the harmonious construction should be put up in such a way that s 482 and s 466 by of the act could be permitted to have their full play in their operational structure. the construction put up by the high court renders sub s 2 of s 48 otiose or surplus age which interpretation is impermissible. it is contended that the registered user must be understood to be the user by the proprietor or authorized user registered under section 48 the period of 5 years should be computed from that date of expiry of registered user. the division bench therefore was wrong in its conclusion that the appellant has failed to establish it. on the other hand it is for the respondent to prove the same. he further contended that the special circumstances enumerated in sub s 3 of s 46 must be such that the respondents had intended to use the registered trade mark. for over a long period the trade mark was not used by the respondents as its registered proprietor. the respondents did not prove that they were prevented to use the same for 5 years or more preceding the date of the application. the burden is on tile respondents to prove that non user was due to special circumstance of the trade and not due to some other cause which would have operated whether special circumstances had arisen or not since the respondents were not using the trade mark since april 201954the plea of special circumstances is not available to the respondents. the division bench or the learned single judge did not record any finding as to the period up to which the bicycles could be imported into india and the period during which the ban was imposed but for which the respondent had an intention to import bicycles but were prevented to do so due to the ban. in the absence of such a findings the high court was wrong in law in refusing to rectify the trade mark and striking it off the register. the court while exercising its discretion u s 46 should look into not only commercial interest of the parties but also public interest. in normal circumstances when it is established that the trade mark was not used either by the registered proprietor or the permitted user the public interest of supply of the quality of the goods marketed by the appellant should be taken into factual consideration for removal of the trade mark from the register. shri ashok desai learned senior counsel for respondents resisted the contentions. according to the learned counsel the respondents have collaboration agreement with sen raleigh which was taken over by the government under idr act and the appellant came to manufacture with the technical know how supplied by the respondents the raleigh bicycles under the trade mark registered by the respondents in the register of the registrar under the act. the appellant was using the same as an agent. the operation of s 482 must be construed in such a way that the bona fide user even by a non registered user so long as there exist a rational connection between the proprietor of the trade mark and passes off the goods in the market manufactured by the appellant is construed to be a bona fide user for and on behalf of the registered proprietor namely the respondents. admitted position is that the respondent being the registered proprietor until it is proved that its trade mark was not used to pass off the goods manufactured by the appellant and that the appellant had discontinued the user and 5 years lapsed thereafter the non use of the trade mark continues thereafter the rectification application u s 46 1b would be ordered. in view of the prohibition to import bicycles the respondent was prevented to use the trade mark but by collaboration agreement it was continuing to use the trade mark by the permitted user. the special circumstance is that the appellant filed an application for registration u s 481 and continued it till it was abandoned. it would also be considered as a special circumstance for non user. the discretion exercised by the court must be judged in the light of the facts and circumstances the appellant having used the trade mark it does not lie in the mouth of the appellant to contend that he is not a permitted user or a bona fide user of the trade mark. in view of the diverse contentions the question arises whether the high court was right in refusing to rectify and strike off the trade marks of the respondents from the register of trade marks. s 461b reads as under. 46 removal from register and imposition of limitations on ground of non use 1. subject to the provisions of section 47a registered trade mark may be taken off the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a high court or to the registrar by any person aggrieved on the ground either a xxx xxx xxx xxx b that up to a date of one month before the date of the application a continuous period of five years or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being. sub s 3 envisages that an application shall not be entitled to rely for the purpose of clause b of sub s 1 or for purpose of sub s 2 on any non use of a trade mark which is shown to have been due to special circumstances in the trade and not to any intention to abandon or not to use the trade mark in relation to the goods to which the application relates. s 48 provides for registered users which reads thus 48 registered users 1 subject to the provisions of section 49a person other than the registered proprietor of a trade mark may be registered as the registered user thereof in respect of any or all of the goods in respect of which the trade mark is registered otherwise than as a defensive trade mark but the central government may by rules made in this behalf provide that no application for registration as such shall be entertained unless the agreement between the parties complies with the conditions laid down in the rules for preventing trafficking in trade marks 2 permitted use of a trade mark shall be deemed to be use by the proprietor thereof and shall be used by a person the proprietor for the purpose of s 46 or for any other purpose for which such use is material under this act or any other law. it would thus be apparent that subject to section 46for a registered trade mark up to date within one month before the date of making application for rectification for a continuous period of 5 years or longer if registered trade mark had not been use during that period there was no bona fide user in relation to those goods by the proprietor thereof for the time being. the trade mark should be taken off and struck out form the register of trade marks in respect of any goods in respect of which the trade mark is registered sub s 3 enables the registered proprietor to show special circumstances for the non use of the trade mark due to which circumstances in the trade he could not use the trade mark for the above period and not with any intention to abandon the use of trade mark or not to use the trade mark in relation to good to which the application for rectification relates. sub s 2 of s 48 give defence to permitted user in relation to a registered trade mark. it means the use of the trade mark by a registered user of the trade mark in relation to good with which he is connected in the course of trade and in respect of which the trade mark remains registered for the time being and for which he is registered as a registered user and which complies with any conditions or restrictions to which the registration of the trade marks is subjected to. s 48 1 envisages that subject to the provisions of section 49a person other than the registered proprietor of a trade mark may be registered as a registered user thereof in respect of any or all of the goods in respect of which the trade mark is registered otherwise than as defensive trade mark. the permitted use of trade mark shall be deemed to be used by the proprietor thereof and shall be deemed no to be used by a person other than the proprietor for the purpose of s 46 or for any other purpose for which such use is material under the act or any other law. the central government is empowered to prevent trafficking in trade mark. it would therefore be clear that a permitted use of the trade mark should be done under sub s 1 of section 48 it. should be either by the registered proprietor of the trade mark or a person other than the registered proprietor registered u s 481 to use the trade mark by operation of sub section 2 an un registered person u s 481 or a person who did not register u s 1 of s 48 shall not be deemed to be a registered user for the purpose of s 46 or any other law. the high court recorded a finding and it is not disputed across the bar that the appellant had entered into an agreement with sen raleigh which was a permitted user and used the trade mark till november 11976 and thereafter by registered user agreement dated december 201976 used trade mark for a period of 5 years. it is not in dispute that till date of filing of the application the appellant used the trade mark in passing off the bicycles under the trade mark of the respondent. the question therefore is whether the appellant must be deemed to be bona fide user of the trade mark though there was no agreement nor was it registered as permitted user u s 481. on admitted position and in the facts and circumstances we are of the view that the appellant was a ago user of the trade mark of the respondent in passing off the bicycles under the trade mark of the respondent who admittedly is a registered proprietor. it is true as held by this court that to get a trade mark registered without any intention to use it in relation to any goods but merely to make money out of it by selling it to others the right to use it as a commodity would be trafficking in that trade mark. it requires to be prevented and prohibited. the court would not lend assistance to such registered proprietors of the trade mark. there must be real trade connection between the proprietor of the trade and licensee of the goods and the intention to use the trade mark must exist at the date of the application for registration of trade mark and such intention must be genuine and bona fide and continue to subsist in order to disprove the charge of trafficking in trade mark. it is a question of fact in every case. the question is whether the trade connection exists to dispel the charge of trafficking in the trade mark. this question was considered by this court in american home products corporation vs mac laboratories pvt ltd and anr 1985 indlaw sc 464 and they need no reiteration. it is seen that preceding the nationalization of the cycle manufacturing industry under the idr act the respondent had a collaboration agreement with sen raliegh who was a registered user under section 48 from him the appellant came to succeed by statutory operation. it was therefore not a case of getting the trade mark registered under the predecessor act and continuing under the act for trafficking of the trade mark. it is true that u s 431 either the registered proprietor or a permitted person is required to register as permitted user. the benefit of s 46 would be available during the period for which the agreement registered and user continued in furtherance thereof. it appears that even an unregistered licensee so long as there is unbroken connection in the course of the trade between the licensor and the passing off lincesee 's goods under the trade mark there would be sufficient connection in the course of the trade between the proprietor and bona fide user of the trade mark by unregistered user. it must therefore be held that though the deemed presumption under sub s 2 of s 48 is referable to the permitted user or the registered user and it does not extend to unregistered permitted user the connecting link of passing off the goods between the licensor 's trade mark and the lincesee should bona fide be with the permission or consent which may be express or implied by long course of dealings. it would connect the registered proprietor and the user of the trade mark by the unregistered lincesee. the appellant must be presumed by course of conduct that he is a bona fide user for the purpose of s 461b. in k r beri and co vs. the metal godds mfg. co pvt limited and anr. air 1980 delhi 299 1980 indlaw del 180the division bench construed s 482 and held that an unregistered user of the trade mark even with the consent of the proprietor can not be construed to be a registered user u s 481 and such construction renders sub s 2 of s 48 surplus age or otios which is impermissible by statutory construction. we have given anxious consideration to the reasoning therein. on strict interpretation the view of the division bench may be correct but it is not correct to hold that by a bona fide user of an unregistered user when connection between the proprietor of the trade mark and the permitted user in relation to passing off the goods under the trade mark are proved it does not render sub section 2 of s 48 surplus age or otios. it is true that the burden flies on the registered proprietor of the trade mark to establish the exceptions provided under s 463 equally the applicant for rectification also prima facie shows non user for the relevant period. then the burden shifts to the proprietor of the trade mark to affirmatively prove the special circumstances for non user of trade mark. it must be shown that the non use of the trade mark is due to special circumstances of the trade and not due to some other cause which would have operated whether the special circumstances had arisen off not. although the special circumstances of trade taken by themselves would have prevented the use of the trade mark. if the non user was in fact due to some other circumstances and would have occured whether the circumstances had followed or not subs 3 would not apply. it must therefore be duty of the registered proprietor to show what non user was strictly due to the special circumstances of trade and not of any intention on the part of the registered proprietor not to use the trade mark during the relevant period. though there was a ban on impart of the raleigh cycles manufactured outside india and passed off under the registered mark of the respondents as a registered proprietor the circumstances do not attracted sub section 3 of s 46 to relieve the respondents to establish non user but on the facts of this case we have the admitted position that sen raleigh admittedly was a registered user through which the appellant had bona fide used the registered trade mark of the registered proprietor there is no discontinuance or non use of the trade mark by the respondent to establish the special circumstances in this case. it is also not necessary to go into the question whether the application filed by the appellant u s 481 and its pendency would be a special circumstance in favour of the respondent. suffice it to hold that subs 3 of s 46. is not attracted to the facts in this case. the question then is whether the discretion has been properly exercised by both the division bench as well the single judge in refusing to take off the trade mark from the register by striking off trade mark from the register of the registrar of trade marks. it is true that while exercising discretion the court u s 46 of the act should take into consideration not only commercial interest of the parties but also public interest in para 21 82 at page 386 of the law of trade marks and passing off by p narayanan 4th ed it is stated that the court or the registrar has discretion in granting or refusing an application for rectification. ordinarily however the mark will be expunged taken off when the factual circumstances necessary for the removal are established unless it is shown that the case comes within the exceptions provided in the sub section 3 the high court refused to exercise the discretion to strike off the trade mark from the register. it is seen that the appellant had not abandoned at any point of time the use of the trade mark of the respondent registered proprietor till filing of the application. though the appellant has not used the trade mark by itself since 1954 and after the expiry of the permitted use by sen raleigh until the notice was issued by the respondent directing the appellant not to use the trade mark the appellant came to use the same in passing off bicycles manufactured by it under trade mark of the respondent. it is not relevant for the purpose of s 461b whether the bicycles were manufactured with the assistance of technical know how passed on by sen raleigh or the permitted user. suffice it to state that the appellant as a fact had used the trade mark of the respondent in passing off the bicycles manufactured by it. the high court in our view declined for good reasons to rectify the trade mark under section act b of the act. we are also not persuaded to take a different view from that of the high court. in these circumstances we are of the view that the high court has properly exercised its discretion and refused to rectify and strike off the trade mark from the register of trade marks of the registrar. the appeal is accordingly dismissed but in the circumstances without costs.

IN-Ext

FACTS the respondents through their agents had registered trade mark "raleigh" and other trade marks (12 marks) under the indian merchandise marks act,1889 (4 of 1989) and the trade marks act,1940 (5 of 1940). the trade and merchandise marks act,1958 (43 of 1958) (for short,the 'act) which came into force with effect from october 3,1958 has repealed the predecessor act and now the act is in operation. the respondents entered into an agreement with sudhir kumar sen on november 3,1948 to render technical know-how to the indian company to be formed which would manufacture bicycles and market them under raleigh's indian trade marks. pursuant thereto,a company called sen raleigh limited came into existence which manufactured cycles with technical assistance by the respondents-raleigh industries of u.k.and marketed the bicycles with a brand name and trade marks belonging to the respondents. on april 24,1954,sen. raleigh was recorded as permitted users of the trade marks. by agreement dated december 29,1962,sen raleigh and the respondents agreed that sen raleigh was registered user for further period up to 1976. sen raleigh was taken over by the government of india on september 8,1975 under the idr act and the government took over the management of sen raleigh limited. the agreement dated december 29,1962 was modified and the respondents were given option to terminate the agreement. an agreement dated december 20,1976 was entered into between the appellant,as registered user and the respondent in respect of 12 trade marks for a period of 5 years. on march 28,1978,joint application by sen raleigh and the appellant duly signed by the respondent as proprietor and sen raleigh limited as registered user came to be made before the registrar of trade marks. on october 24,1980,sen raleigh was nationalized and got vested in the appellant-corporation by publication of the notification under idr act. on march 5,1982,the respondent wrote a letter to the appellant that in the absence of a new agreement they were instructing their advocate to prevent the appellant by restraint proceedings to use the trade mark effective from april 1,1982. on march 24,1982,the appellant made an application under sections 32,46 and 56 of the act against the respondents in the high court of calcutta in suit no.266/92 pleading,inter alia,that the respondents had failed to provide technical assistance by passing the technical know-how to sen raleigh after november 1,1976. the learned single judge dismissed the application by his judgment dated september 13,1990 holding,inter alia,that any proprietor mentioned in s.46(1)(b) of the act extends to bona fide user other than registered users. on appeal,the division bench in appeal no.13/91 confirmed the same holding. thus,this appeal by special leave. ARGUMENT learned senior counsel for the appellant,raised three-fold contentions. it is his pivotal contention that undisputedly when the respondent was not in urge of trade mark as "a registered proprietor" or its agent sen raleigh as permitted user" for a period of 5 years immediately preceding the date of the application u/s.46 for removal of the trade mark from the register,there was no bona fide user thereof in relation to those goods by the proprietor himself. the respondents admittedly did not use the same. the appellant cannot be said to be either the proprietor of the trade mark since 1976,since the agreement lapsed or permitted user-. he further contended that the special circumstances enumerated in sub-s.(3) of s.46 must be such that the respondents had intended to use the registered trade mark. for over a long period,the trade mark was not used by the respondents as its registered proprietor. the respondents did not prove that they were prevented to use the same for 5 years or more preceding the date of the application. the burden is on tile respondents to prove that non-user was due to special circumstance of the trade and not due to some other cause which would have operated whether special circumstances had arisen or not since the respondents were not using the trade mark since april 20,1954,the plea of special circumstances is not available to the respondents. learned senior counsel for respondents,resisted the contentions. according to the learned counsel,the respondents have collaboration agreement with sen raleigh which was taken over by the government under idr act and the appellant came to manufacture,with the technical know-how supplied by the respondents,the raleigh bicycles under the trade mark registered by the respondents in the register of the registrar under the act. the appellant was using the same as an agent. the operation of s.48(2) must be construed in such a way that the bona fide user even by a non-registered user,so long as there exist a rational connection between the proprietor of the trade mark and passes off the goods in the market manufactured by the appellant,is construed to be a bona fide user for and on behalf of the registered proprietor,namely,the respondents. ISSUE whether the high court was right in refusing to rectify and strike off the trade marks of the respondents from the register of trade marks. whether the appellant must be deemed to be bona fide user of the trade mark,though there was no agreement nor was it registered as permitted user u/s.48(1). ANALYSIS subject to section 46,for a registered trade mark up to date within one month before the date of making application for rectification for a continuous period of 5 years or longer if registered trade mark had not been use during that period,there was no bona fide user in relation to those goods by the proprietor thereof for the time being. a permitted use of the trade mark should be done under sub-s.(1) of section 48. it should be either by the registered proprietor of the trade mark or a person other than the registered proprietor registered u/s.48(1) to use the trade mark by operation of sub-section (2).an un-registered person u/s.48(1) or a person who did not register u/s.(1) of s.48 shall not be deemed to be a registered user for the purpose of s.46 or any other law. the high court recorded a finding and it is not disputed across the bar,that the appellant had entered into an agreement with sen raleigh which was a permitted user and used the trade mark till november 1,1976 and thereafter by registered user agreement dated december 20,1976 used trade mark for a period of 5 years. it is not in dispute that till date of filing of the application,the appellant used the trade mark in passing off the bicycles under the trade mark of the respondent. to get a trade mark registered without any intention to use it in relation to any goods but merely to make money out of it by selling it to others,the right to use it as a commodity would be trafficking in that trade mark. it requires to be prevented and prohibited. the court would not lend assistance to such registered proprietors of the trade mark. there must be real trade connection between the proprietor of the trade and licensee of the goods and the intention to use the trade mark must exist at the date of the application for registration of trade mark and such intention must be genuine and bona fide and continue to subsist in order to disprove the charge of trafficking in trade mark. it is a question of fact in every case. the question is: whether the trade connection exists to dispel the charge of trafficking in the trade mark. though the deemed presumption under sub-s.(2) of s.48 is referable to the permitted user or the registered user and it does not extend to unregistered permitted user,the connecting link of passing off the goods between the licensor's trade mark and the lincesee should bona fide be with the permission or consent which may be express or implied by long course of dealings. it would connect the registered proprietor and the user of the trade mark by the unregistered lincesee. the appellant must be presumed by course of conduct that he is a bona fide user for the purpose of s.46(1)(b. the high court has properly exercised its discretion and refused to rectify and strike off the trade mark,from the register of trade marks of the registrar. STATUTE s.46(1)(b) of the trade and merchandise marks act,1958 reads as under. 46.removal from register and imposition of limitations on ground of non-use.-(1. subject to the provisions of section 47,a registered trade mark may be taken off the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a high court or to the registrar by any person aggrieved on the ground either - (a) xxx xxx xxx xxx (b) that up to a date of one month before the date of the application,a continuous period of five years or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being. s.48 provides for registered users which reads thus: '48.registered users.-(1) subject to the provisions of section 49,a person other than the registered proprietor of a trade mark may be registered as the registered user thereof in respect of any or all of the goods in respect of which the trade mark is registered otherwise than as a defensive trade mark; but the central government may,by rules made in this behalf,provide that no application for registration as such shall be entertained unless the agreement between the parties complies with the conditions laid down in the rules for preventing trafficking in trade marks.(2) permitted use of a trade mark shall be deemed to be use by the proprietor thereof.and shall be used by a person the proprietor.for the purpose of s.46 or for any other purpose for which such use is material under this act or any other law.

the appellant is a trust which wanted to establish a self financing engineering college and submitted an application during 1994 95 to the university of kerala as well as to all india council for technical education hereinafter called the aicte. there was an inspection by a team of professors of the university and it recommended favourably when it stated that the facilities provided by the appellant would be sufficient for establish ing an engineering college. the aicte sent a communication on 30 4 1995 stating that on the basis of the observations made by the expert committee and the recommendations made by the central regional committee state level committee and central task force as per the provisions of the aicte regulation dated 30 1 1994the aicte was granting conditional approval for establishing an engineering and technical college. the abovesaid approval was subject to the fulfilment of specific conditions mentioned in annexure i and the general conditions mentioned in annexure ii to the said letter. in the event of contravention of the conditions guidelines norms and regula tions of the aicte the aicte could withdraw the approval at any time. under the impression that the state govt was to grant permission the appellant requested the state government by letter dated 24 6 1995 for permission to start the college. meanwhile the mahatama gandhi university by their letter dated 31 5 1995 forwarded to the government a list of colleges and courses for affiliation during the academic year 1995 96 the appellant 's college was shown as one of the colleges among the affiliated colleges for the said period. the appellant sent a reminder to the government on 26 8 1995 for permission for starting the college for the academic year 1995 96 and ultimately the government refused permission by informing the appellant by a letter dated 16 8 1996 as follows. in inviting your attention to the reference cited i am to inform you that government regret their inability to comply with your request. thereafter the appellant filed writ petition o p no 4612 of 1996 for quashing the said order and for a direction to sanction and establish an engineering college. the learned single judge of the high court by his judgment dated 14 1 1997 allowed the writ petition quashed the above said order of the government dated 16 8 1996 and directed the mahatama gandhi university to consider the appellant 's application for permanent affiliation without reference to the above letter of the government and pass appropriate order within 8 weeks from the date of the receipt of a copy of the judgment. the direction to pass a fresh order of affiliation was issued in view of the fact that the university contended before the learned single judge that unless the government granted approval permanent affiliation could not be granted. the government was also directed to reconsider its decision. against the said judgment of the learned single judge the commis sioner and secretary of the government higher education department filed writ appeal no 1024 of 1997 the division bench of the high court allowed the appeal and set aside the order of the government and dismissed the writ petition. the division bench however observed that the appellant was at liberty to make a fresh application to the government of kerala for according sanction for setting up the engineering college or to request the government to consider the earlier application for a future academic year. it is against the abovesaid judgment of the division bench that this appeal has been preferred. learned senior counsel for the appellant. sri t l vishwanatha. iyer contended that the division bench erred in reversing the well considered judgment of the learned single judge and according to him after the coming into force of the aicte act1987the statutes conferring power on the state or university to the extent they were inconsistent with the central act were void. in so far as institutions imparting technical education were concerned the university or the state government had no independent role to play except to the extent provided in the above said enactment in the present case the aicte had made inspections and was satisfied that the necessary infrastructure was available and that the appellant would be able to conform to the required standards of the education. the aicte had consulted the state of kerala as well as the mahatama gandhi university. the university had granted conditional approval as stated earlier. therefore the aicte consti tuted a task force and obtained its opinion and thereafter granted its approval on 13 11 1995 subject to various conditions. according to the learned senior counsel it was indeed not necessary for the appellant to have applied to the state government for any further sanction to establish the college. it might be that under the relevant statutes of the university the university was required to obtain the views of the state government but that did not amount to requiring any approval of the state government and indeed if any such statute required the approval of the state government it would be void in view of what was stated by this court in state of tamil nadu. another v adhiyaman educational research institute. othersl995 4 scc 104 1995 indlaw sc 1631. sri t l viswanatha iyer also contended that though the state government stated in its counter affidavit filed in the high court that the policy of the government was not to grant approval to self financing engineering colleges to be established such a policy could not come in the way of the appellant in view of what this court has stated in similar circumstances in thirumuruga kirupan variyar thavathiru sundara swamigal medical education charitable trust v state of tamil nadu others1996 3 scc 15 1996 indlaw sc 858. on the other hand learned additional solicitor general sri mukul rohtagi contended on behalf of the state of kerala that the policy of the state of kerala at the relevant time was not to grant approval for establish ment of more engineering colleges in the state. the government had clarified in the counter affidavit filed in the high court that the government was not in a position to take a decision to start new engineering colleges without properly assessing the necessity of more engineering graduates from the state and without exploring the possibility of employment opportunities in the country as a whole. also there were four engineering colleges at kannur trichur kottayam and thiruvananthapuram districts and three private aided engineering colleges at palakkad ernakulam kothamangalam and kollam districts. the model engineering college emakulam was a selffinancing engineering college and others were the colleges at changannur and pathansamthitta and there was a self financing engineering college at kasargode. there were also two unaided engineering colleges at mallappuram and thiruvananthapuram. even though the appellant trust was not seeking aid from the government and even assuming that it was financially self sufficient it would not be in the interests of the students employment to permit new engineering colleges to be established. thus the government policy was not to grant fresh approvals. if more approvals were granted it might lead to commercialisation of education. the following points arise for consideration 1. whether in view of the judgment of this court in state of tamil nadu another v adhiyaman educational research institute others1995 4 scc 104 1995 indlaw sc 1631the provisions of the aicte act1987 occupied the field and it was not necessary to obtain the further approval of the government or other authority. whether any statute in the state of kerala if it required such approval would be void. 2 whether the orders of rejection passed by the state government were valid on merits and whether the university should have granted further orders to continue the affiliation solely on the basis of the aicte permission. point 1. this point is more or less covered by the judgment of this court in state of tamil nadu. but in the context of s 10k regarding approval for starting a technical institution certain aspects of the judgment need to be highlighted. before we refer to the abovesaid judgment it will be necessary to refer to certain provisions of the aicte act and the relevant regulations. the abovesaid act was an act to provide for the establishment of all india council for technical education with a view to the proper planning and coordinated development of the technical education system throughout the country the promotion of qualitative improvement of such education in relation to planned quantitative growth and the regulation and proper maintenance of norms and standards in the technical education system and for matters connected therewith. u s 10 of the act it is stated that it is the duty of the council constituted under the act to take all steps as the said council might think fit for ensuring coordinated and integrated develop ment of technical education and maintenance of standards. for the purposes of performing its functions under the act the council may a undertake survey in various fields of technical education collect data on all related matters and make forecast of the needed growth and development in technical education b coordinate the development of technical education in the country at all levels c allocate and disburse out of the fund of the council such grants on such terms and conditions as it may think fit to i technical institutions and ii universities imparting technical education in coordination with the commission d promote innovations research and development in established and new technologies generation adoption and adaptation of new technologies to meet developmental requirements and for overall improve ment of educational processes e formulate schemes for promoting technical education for women handicapped and weaker sections of the society f promote an effective link between technical education system and other relevant systems including research and development organisations industry and the community g evolve suitable performance appraisal systems for technical institutions and universities imparting technical education incorpo rating norms and mechanisms for enforcing accountability h formulate schemes for the initial and in service training of teachers and identify institutions or centres and set up new centres for offering staff development programmes including continuing education of teachers i lay down norms and standards for courses curricula physical and instructional facilities staff pattern staff qualifications quality instructions assessment and examinations j fix norms and guidelines for charging tuition and other fees. the clause in s 101 which is important in the present case is subcl k of s 101 and it provides that the council might grant approval for starting new technical institutions and for introduction of new courses or programmes in consultation with the agencies concerned. sub cl 1 permits the council to advice the central government in certain respects sub cl m lay down norms for granting autonomy subcl n to take necessary steps to prevent commercialisation of technical education cl o to provide guidelines for admission of students to technical institutions and universities imparting technical education cl p to inspect or cause inspection to any technical institution cl q to withhold or discontinue grant cl r to strengthen the existing organisa tions etc. cl s to declare technical institutions as fit to receive grants cl t to advice for declaring institutions to be deemed as universities cl u to set up a national board of accreditation. s 11 of the act deals with inspection. regulations have been framed on 31st october1994 by the aicte in exercise of powers conferred on it by s 231 of the aicte act. regulation 2 states that these regulations will be applicable to proposals relating to a grant of approval of the council for establishment of new technical institutions including universities or university depart ments and deemed universities and for technical institutions function ing on the date of commencement of these regulations at degree and diploma levels b grant of approval of the council for introduction of any course or programme in the technical institutions and technical departments or universities or deemed universities c grant of approval of the council for existing intake capacity of seats and for increase in the annual intake capacity of seats in courses and programmes. regulation 4 deals with the requirement of grant of approval and for the commencement of these regulations a b no course or programme shall be introduced in any technical institutions university or deemed university or university departments or college or c no technical institutions universities or deemed universities or university departments or colleges shall continue to admit students for degree or diploma courses or programmes. d no approved intake capacity of seats shall be increased or varied except with the approval of the council. reg 42. regulation 5 deals with the forms of the applications and regulation 6 deals with the conditions for grant of approval sub cls 1 of regulation 6 deals with the financial position. sub cl 2 with the courses or programmes and sub cl 3 deals with the power of admissions and sub cl 4 with tuition fees etc and sub cl 5 with the staff and sub cl 6 with the governing body of the private institutions and subcl 7 with other matters. regulation 8 deals with scrutiny of applications. there is a prelimi nary scrutiny of the applications by the bureau rc of the council. sub cl 4 of regulation 8 reads as follows. reg 84. the bureau rc shall invite comments recommendations on the applications referred to in sub regulation 3 from the follow ing namely. i the state government concerned ii the affiliating university state board of technical education iii bureaus mpcd iv bureau bos v bureau ra vi the regional office. sub cl 5 of regulation 8 requires the regional office to arrange visits by an expert committee constituted by the council which is to forward its recommendations to the council. sub cl 6 of regulation 8 states that the state level committee constituted under regulation 94 is to consider the recommendations of the state government and others mentioned in regulation 84 and that it is to make its recommendations to the central task force constituted under regulation 95 and consider the recommendations of the state level committee and send its recommendations to the member secretary of the council. sub cls 8 9 of regulation 8 are important and read as follows reg 88 if there is a disagreement in the recommendations made by the state government university or the regional committee the central task force shall invite representatives of the respective agencies for further consultations before making final recommenda tion 9. on the recommendation of the central task force the council shall decide the question of grant of approval as sought for in the application. provided that the council may for reasons to be communicated to the applicant allow the approval with such restrictions or modifications as it may deem necessary. sub cl 10 of regulation 8 states that the decision of the council shall be communicated to the state government concerned or the ugc as the case may be the concerned university or the state board the regional office and the applicant before 30th april in case the application was made before the preceding 31st december. the tamil nadu case. as stated earlier the above provisions of the aicte act came up for consideration in state of tamil nadu v adhiyaman educational research institute1995 4 scc 104 1995 indlaw sc 1631. in the above matter the state of tamil nadu granted permission on 17 4 84 to all private managements to start private engineering colleges without financial commitment to government but subject to conditions. at that time in 1984the aicte act was not on the statute book. the government of tamil nadu granted permission to the trust for the academic year 1987 88 to start an engineering college. the university also granted permission on 21 11 87 for the academic year 1987. 88 later on these permissions were withdrawn by the state after issuing show cause on 16 7 89 so did the university on 26 7 89 but by that date the aicte act1987 had come into force. the learned single judge and the division bench held in favour of the trust and quashed and orders of the government and the university. the said judgments were affirmed by this court. it was held that the aicte act was referable to entry 66list. i of the constitution of india relating to coordination and determination of standards in institutions for higher education or research and scientific and technical institutions. after the constitutional amendment 42 amendment act1976 entry 25 of list iii in the concurrent list. read education included technical education medical institution and universities subject to the provisions of entries 636465 and 66 of list i vocational and technical training of labour. thus the state law under entry 23 of list iii would be repugnant to any law made by the parliament under entry 66 of list i to the extent of inconsistency. the tamil nadu act was of 1976 and the university act was of 1923 and were laws referable to the list. iii whether. they were preconstitutional or a post constitutional laws they would be repugnant to the aicte act passed by parliament under entry 66 of list. i in the above case this court referred to the various provisions of the aicte act and on the question of repugnancy held as follows. hence on the subjects covered by the statute the state could not make a law under entry 25 of list iii after the forty second amendment. if there was any such existing law immediately before the commencement of the constitution within the meaning of art 372 of the constitution as the madras university act 1923 on the enactment of the present central act the provisions of the said law if repugnant to the provisions of the central act would stand impliedly repealed to the extent of repugnancy. such repugnancy would have to be adjudged on the basis of the tests which are applied for adjudging repugnancy u art 254 of the constitution. we shall now refer to the above judgment dealing with the question of approval for establishing technical institutions under s 10k of the aicte act. the tamil nadu rules of 1976 made under the 1976 act had no doubt excluded technical institutions from the purview of the rules but this court pointed out that the rules were capable of being amended so as to extend to such technical institutions and that if they were so extended the state act of 1976 and the rules would require approval by the state government and that would be void. it was stated that inasmuch as the state act will overlap and will be in conflict with the provisions of the central act in various areas. granting approval for starting new technical institution. inspection of technical institution which are matters covered by the central act. this court then referred to the madras university act1923 it was held that s 10 of the central act dealt with various matters including granting approval for starting new technical institutionsand that so far as these matters were concerned. it is not the university act and the university but it is the central act and the council created under it which will have the jurisdiction. to that extent after the coming into force of the central act the provisions of the university act will be deemed to have become unenforceable. thus in the two passages set out above this court clearly held that because of s 10k of the central act which vested the powers of granting approval in the council the t n act of 1976 and the university act1923 could not deal with any questions of approval for establishment of technical institutions. all that was necessary was that under the regulations the aicte council had to consult them. statutory powers of the state of kerala and the m g university. the question is as to how far the judgment in the tamil nadu case is to be applied in the state of kerala. learned additional solicitor general stated before us that there was no statute in the state of kerala corresponding to the tamil nadu act of 1976 nor any other law which specifically required the approval of the state government. it was however contended that the tamil nadu case was concerned only with the standards of education and as to who could fix them. we are not inclined to agree. we have already pointed out under point 1 that in the tamil nadu case s 10k of the aicte act was referred to and the power of approval for establishing a technical institution was considered in our opinion even if there was a state law in the state of kerala which required the approval of the state government for establishing technical institutions such a law would have been repugnant to the aicte act and void to that extent as held in the tamil nadu case. the only provision relied on before us by the state government which according to its learned senior counsel amounted to a statutory requirement of approval of the state government was the one contained in cl 97 of the kerala university first statute. it reads as follows grant of affiliation 1. after considering the report of the commission and the report of the local inquiry if any and after making such further inquiry as it may deem necessary the syndicate shall decide after ascer taining the view of the government also whether the affiliation be granted or refused either in whole or part. in case affiliation is granted the fact shall be reported to the senate at its next meet ing. it will be noticed that cl 97 of the statute required that before the university took a decision on affiliationit had to ascertain the views of the state government. the reference to the commission in the above cl 97 is to the commission of inspection appointed by the university. sub cl 1 of cl 9 of the statute required verification of the facilities that may exist for starting the new colleges course. the commission was to inspect the site verify the title deeds as regards the proprietary right of the management over the land and buildings if any offered building accommodation provided if any assets of the management constitution of the registered body and all other relevant matters sub cl 2 of cl 9 stated that the affiliation shall depend upon the fulfilment by the management of all the conditions for the satisfactory establishment and maintenance of the proposed institutional courses of studies and on the reports of inspection by the commission or commissions which the university may appoint for the purpose. as held in the tamil nadu case the central act of 1987 and in particular s 10k occupied the field relating the grant of approvals for establishing technical institutions and the provisions of the central act alone were to be complied with. so far as the provisions of the mahatma gandhi university act or its statutes were concerned and in particular statute 97they merely required the university to obtain the views of the state government. that could not be characterised as requiring the approval of the state government. if indeed the university statute could be so inter preted such a provision requiring approval of the state government would be repugnant to the provisions of s 10k of the aicte act1987 and would again be void. as pointed out in the tamil nadu case there were enough provisions in the central act for consultation by the council of the aicte with various agencies including the state governments and the universities concerned. the state level committee and the central regional committees contained various experts and state representatives. in case of difference of opinion as between the various consultees the aicte would have to go by the views of the central task force. these were sufficient safeguards for ascertaining the views of the state governments and the universities. no doubt the question of affiliation was a different matter and was not covered by the central act but in the tamil nadu case it was held that the university could not impose any conditions inconsistent with the aicte act or its regulation or the conditions imposed by the aicte therefore the procedure for obtaining the affiliation and any conditions which could be imposed by the university could not be inconsistent with the provisions of the central act. the university could not therefore in any event have sought for approval of the state government. thus we hold in the present case that there was no statutory require ment for obtaining the approval of the state government and even if there was one it would have been repugnant to the aicte act. the university statute 97 merely required that the views of the state government be obtained before granting affiliation and this did not amount to obtaining approval. if the university statute required approvalit would have been repugnant to the aicte act. point 1 is decided accordingly. point 2. factual position and pleadings in this case. on facts the position was that the aicte had granted approval on 30 4 95 expressly stating that this was on consideration of the observations made by the expert committee and the recommendations made by the central regional committee state level committee central task force as per the provisions of aicte regulations dated 31 10 94. the aicte had granted condition approval and the conditions were specified in annexure. i to the order and the general conditions were enlisted in annexure ii the. state government was directed by the aicte to announce admission in accordance with regulation notified on 20 5 94 and based on the judgment of the supreme court in unnikrishnan v state of andhra pradesh1993 1 scc. 645 1993 indlaw sc 1168 the mahatma gandhi university had included this appellant in the list of colleges and courses which were granted affiliation during 1995 96 and the university had written to the state government on 31 5 95 that as per statute 97the views of the government were to be sent before granting affili ation. the letter said that for that reason the proposals of the university were being submitted to the government for necessary action. the appellant had sent a reminder on 26 8 95 the state in its letter dated 16 8 96 to the appellant merely stated that government regret their inability to comply with your request. no reasons were assigned in the said letter. but the state in its counter filed in the high court tried to explain that the director of technical education had opined that during the year 1995 96it might not be practicable to start the college for the director could not ascertain the details of the facilities available. it was stated he could not ascertain the infrastructural facilities provided by the appellant as per the norms prescribed by the all india council of technical education. the all india council for technical education and the mahatma gandhi university have sought for the remarks of the state government. para 4 of the counter affidavit had further stated that the government was not in a position to take a decision to start new engineering college without properly assessing the necessity of more engineering gradu ates in the state and exploring the possibility of employment oppor tunity in the country to the extent possible. the state government in its counter then gave the names of the existing colleges and their location. we have already referred to these details. it also observed that there was widespread student prospects against starting new colleges and it was necessary to be cautious in the matter of starting new engineering colleges. it was stated that government could not initially take a decision on the appellant 's affiliation because of elections and that matter being one of major policy the government had subsequently taken a policy decision not to sanction any affiliation to such colleges either in the private sector or in the public sector for this year. these are stated to be the reasons for the government 's rejection by letter dated 16 8 96. state government 's refusal to grant permission is illegal and void on merits. as already stated in view of the judgment of this court in tamil nadu case it is obvious that there is no need to approach the state of kerala for its approval for starting the engineering colleges. there is no power vested in the state under any state law to grant approval and even if it was so vested it would have been void in view of tamil nadu case. this ground of repugnancy alone would be sufficient to quash the state government 's letter dated 16 8 1996 refusing to give their approval. even on merits the reasons given by the state government in its counter are not tenable in law. the director of technical education of the state was a member of the state level committee as per regulation 94 of the aicte regulations. the secretary technical education of the state of kerala was also a member of that committee. the aicte 's approval dated 30 4 95 showed that the approval had been given by the state level com mittee of which they were obviously members. it is therefore not under standable how the director had given a contrary opinion to the state government. regulation 84 of aicte only required calling for the com ments recommendations of the state government and of the university. in case there was difference between the state government university or the regional committee the central task force was to make a final recommen dation under regulation. 84 here. the letter of approval of the aicte dated 30 4 95 showed that the central task force had given its approval. the said approval was based also on the inspection by the expert committee of the aicte hence the state government in its counter could not have relied upon any contrary opinion of the director of technical education. if the state government had any other valid objections its only remedy was to place its objections before the aicte council under the aicte act or before the committees e g state level committee etc. the so called policy of the state as mentioned in the counter affidavit filed in the high court was not a ground for refusing approval. in thirwnuruga kirupan and variyar thavathiru sundara swamigal medical education charitable trust v state of tamil nadu others1996 3 scc 15 1996 indlaw sc 858which was a case relating to medical education and which also related to the effect of a central law upon a law made by the state under entry 25 list iii it was held that the essentiality certificate can not be withheld by the state government on any policy consideration because the policy in the matter of establishment of a new medical college now vests with the central government alone. therefore the state could not have any policy outside the aicte act and indeed if it had a policy it should have placed the same before the aicte and that too before the latter granted permission. once that procedure laid down in the aicte act and regulations had been followed under regulation 84and the central task force had also given its favourable recommendations there was no scope for any further objection or approval by the state. we may however add that if thereafter any fresh facts came to light after an approval was granted by the aicte or if the state felt that some conditions attached to the permission and required by the aicte to be complied with were not complied with then the state government could always write to the aicte to enable the latter to take appropriate action. decision of university in not granting further or fined affiliation wrong on merits. admittedly the university 's inspection report was in favour of the appellant. this is clear from the appellant 's letter dated 31 5 95 to the state government. the only requirement as per the statute 97 was for the university to obtain the views of the state government. obtaining the views of the state government as already stated did not amount to obtaining its approval. procedure and conditions for affiliation could not be inconsistent with the provisions of the central act in particular s 10k of the regulation and the university could not seek approval of government. the university was also one of the agencies consulted by the council of the aicte under regulation 8 once that was over and approval was granted by the aicte if there was any default on the part of the college in compliance with the conditions of approval the only remedy for the univer sity was to bring those facts to the notice of the aicte so that the latter could take appropriate action. reliance for the respondent was placed upon the subsequent report of the syndicate dated 7 8 97 this report no doubt pointed out that the appellant had not complied with certain conditions mentioned in the approval dated 30 4 95 granted by the aicte assuming certain fresh facts had come to the notice of the university it could only place the said facts before the aicte. thus the university ought to have considered the grant of final or further affiliation without waiting for any approval from the state govern ment and should have acted on the basis of the permission granted by aicte and other relevant factors in the university act or statutes which are not inconsistent with the aicte act or its regulations. for the aforesaid reasons we set aside the judgment of the division bench of the high court and uphold the reasoning of the learned single judge in his judgment in op 461296 dated 14 1 1997 we hold that the approval of the aicte was sufficient we do not also think that it was necessary for the learned single judge to direct the state government to reconsider its decision. the learned single judge 's order quashing the letter of the state government dated 16 8 96 is upheld. the direction to the mahatama gandhi university to consider the application of the appellant for final affiliation or continuance of affiliation is confirmed and this is to be done on the basis of the approval granted by the aicte dated 30 4 95or any other relevant factors in the university act or its statutes which are not inconsistent with the aicte act or its regulations. the appeal is allowed and disposed of as stated above. there will be no order as to costs. m jagannadha rao j. the petitioner was not a party in the high court of kerala and this special leave petition was filed with leave of this court. we find that the petitioner has already filed a writ petition in the delhi high court namely cwp no 952 of 1998 and the same is pending. it will be for the petitioner to have the said matter disposed of by the high court of delhi. therefore this special leave petition is dismissed as premature. appeal allowed.

IN-Ext

FACTS the appellant is a trust which wanted to establish a self-financing engineering college and submitted an application to the university of kerala as well as to all india council for technical education (hereinafter called the 'aicte'). there was an inspection by a team of professors of the university and it recommended favourably when it stated that the facilities provided by the appellant would be sufficient for establishing an engineering college. the aicte sent a communication stating that on the basis of the observations made by the expert committee and the recommendations made by the central regional committee,state level committee and central task force as per the provisions of the aicte regulation,the aicte was granting conditional approval for establishing an engineering and technical college. in the event of contravention of the conditions,guidelines,norms and regulations of the aicte,the aicte could withdraw the approval at any time. under the impression that the state govt.was to grant permission,the appellant requested the state government for permission to start the college. meanwhile,the mahatma gandhi university by their letter dated forwarded to the government a list of colleges and courses for affiliation during that academic year. the appellant's college was shown as one of the colleges among the affiliated colleges for the said period. the appellant sent a reminder to the government for permission for starting the college for that academic year and ultimately the government refused permission by informing the appellant by a letter. thereafter,the appellant filed writ petition for quashing the said order and for a direction to sanction and establish an engineering college. ARGUMENT learned senior counsel appearing for the state fishery development corporation ltd.contended that a compromise decree between the parties in a suit for partition will not in army way affect the rights of the state in respect of the fisheries whether such rights the state acquires by virtue of an order of requisition under the requisition act or by virtue of any other statutory provisions under which the fisheries right vest in the state. it was further contended that this court while giving affect to the compromise arrived at between the sarkar family made it explicitely clear that the said compromise will not in any way affect the rights of the state over the fisheries even if those fisheries agreed to be divided between the parties and in that view of the matter and the state of west bengal having already requisitioned the nalban fishery and having taken possession of the same the receiver could not have taken possession of the said nalban fishery pursuant to the order of this court appointing the collector 24 parganas as receiver and. under the circumstances the said receiver rightly intimated this court about the mistake committed by him and re-delivered possession of nalban fishery to the state of west bengal. contended that the order of the high court of hon'ble mr. justice deepak kumar sen dated 23.9.1980 directing the receiver to allow m/s. ghose and saha surveyors to make proper demarcation in the nalban fishery dividing the same in two lots and thereafter carry out the directions of the supreme court in respect thereof has become final,the same not having been challenged by the state of west. bengal and therefore,it would not be open for the said state in application for execution of the decree to raise the question of vesting of the nalban fishery with the state and the court would not interfere with the direction given by the learned single judge and division bench of the calcutta high court. ISSUE (1) whether in view of the judgment of this court in state of tamil nadu & another v.adhiyaman educational & research institute & others,[1995] 4 scc 104 1995 indlaw sc 1631,the provisions of the aicte act,1987 occupied the field and it was not necessary to obtain the further approval of the government or other authority? whether any statute in the state of kerala if it required such approval,would be void? (2) whether the orders of rejection passed by the state government were valid on merits and whether the university should have granted further orders to continue the affiliation solely on the basis of the aicte permission? ANALYSIS the aicte act,1987 was an act to provide for the establishment of all india council for technical education with a view to the proper planning and coordinated development of the technical education system throughout the country,the promotion of qualitative improvement of such education in relation to planned quantitative growth and the regulation and proper maintenance of norms and standards in the technical education system and for matters connected therewith. sub-cl.10 of regulation 8 states that the decision of the council shall be communicated to the state government concerned or the ugc,as the case may be,the concerned university or the state board,the regional office and the applicant before 30th april in case the application was made before the preceding 31st december. in the above matter,the state of tamil nadu granted permission to all private managements to start private engineering colleges without financial commitment to government but subject to conditions. at that time,the aicte act was not on the statute book. the government of tamil nadu granted permission to the trust for the academic year 1987-88 to start an engineering college. s.10 of the madras university act,1923 dealt with various matters (including granting approval for starting new technical institutions),and that so far as these matters were concerned. it is not the university act and the university but it is the central act and the council created under it which will have the jurisdiction. to that extent,after the coming into force of the central act,the provisions of the university act will be deemed to have become unenforceable. because of s.10(k) of the central act which vested the powers of granting approval in the council,the t.n.act of 1976 and the university act,1923 could not deal with any questions of 'approval' for establishment of technical institutions. in the tamil nadu case,s.10(k) of the aicte act was referred to and the power of 'approval' for establishing a technical institution was considered,in our opinion,even if there was a state law in the state of kerala which required the approval of the state government for establishing technical institutions,such a law would have been repugnant to the aicte act and void to that extent,as held in the tamil nadu case. sub-cl.(1) of cl.(9) of the kerala university first statute required "verification of the facilities that may exist for starting the new colleges/course". the commission was to inspect the site, verify the title deeds as regards the proprietary right of the management over the land (and buildings, if any) offered, building accommodation provided, if any, assets of the management, constitution of the registered body and all other relevant matters. sub-cl.(2) of cl.(9) of kerala university first statute stated that the affiliation "shall depend upon the fulfilment by the management of all the conditions for the satisfactory establishment and maintenance of the proposed institutional courses of studies and on the reports of inspection by the commission or commissions which the university may appoint for the purpose. the procedure for obtaining the affiliation and any conditions which could be imposed by the university,could not be inconsistent with the provisions of the central act. the university could not,therefore,in any event have sought for 'approval' of the state government. the state government in its counter then gave the names of the existing colleges and their location. the court observed that there was widespread student prospects against starting new colleges and it was necessary to be cautious in the matter of starting new engineering colleges. government could not initially take a decision on the appellant's affiliation because of elections and that matter being one of 'major policy' the government had subsequently "taken a policy decision not to sanction any affiliation to such colleges either in the private sector or in the public sector for this year. in thirwnuruga kirupan and variyar thavathiru sundara swamigal medical education & charitable trust v.state of tamil nadu & others,[1996] 3 scc 15 1996 indlaw sc 858,which was a case relating to medical education and which also related to the effect of a central law upon a law made by the state under entry 25 list iii,it was held that the "essentiality certificate cannot be withheld by the state government on any policy consideration because the policy in the matter of establishment of a new medical college now vests with the central government alone". after an approval was granted by the aicte or if the state felt that some conditions attached to the permission and required by the aicte to be complied with,were not complied with,then the state government could always write to the aicte,to enable the latter to take appropriate action. the only requirement as per the statute 9(7) was for the university to obtain the "views" of the state government.obtaining the 'views' of the state government,as already stated,did not amount to obtaining its 'approval'. procedure and conditions for affiliation could not be inconsistent with the provisions of the central act,in particular s.10(k) of the regulation,and the university could not seek approval of government. the university was also one of the agencies consulted by the council of the aicte under regulation 8. the approval of the aicte was sufficient. the direction to the mahatma gandhi university to consider the application of the appellant for final affiliation or continuance of affiliation is confirmed and this is to be done on the basis of the approval granted by the aicte,or any other relevant factors in the university act or its statutes,which are not inconsistent with the aicte act or its regulations. STATUTE u/s.10 of the aicte act,1987,it is stated that it is the duty of the council constituted under the act to take all steps as the said council might think fit for ensuring coordinated and integrated development of technical education and maintenance of standards. subcl.(k) of s.10(1) of aicte act,1987 provides that the council might "grant approval for starting new technical institutions and for introduction of new courses or programmes in consultation with the agencies concerned. sub-cl.(1) of aicte act,1987 permits the council to advice the central government in certain respects,sub-cl.(m) s.11 of aicte act,1987 deals with inspection. regulations have been framed by the aicte in exercise of powers conferred on it by s.23(1) of the aicte act. regulation 2 states that these regulations will be applicable to proposals relating to "(a) grant of approval of the council for establishment of new technical institutions including universities or university departments and deemed universities and for technical institutions functioning on the date of commencement of these regulations at degree and diploma levels; (b) grant of approval of the council for introduction of any course or programme in the technical institutions and technical departments or universities or deemed universities; (c) grant of approval of the council for existing intake capacity of seats and for increase in the annual intake capacity of seats in courses and programmes. regulation 4 deals with the requirement of grant of approval and for the commencement of these regulations. regulation 5 deals with the forms of the applications and regulation 6 deals with the conditions for grant of approval,sub-cls.1 of regulation 6 deals with the financial position, sub-cl.2 with the courses or programmes and sub-cl.3 deals with the power of admissions and sub-cl.4 with tuition fees etc.and sub-cl.5 with the staff and sub-cl.6 with the governing body of the private institutions and subcl.7 with other matters. regulation 8 deals with scrutiny of applications. cl.9(7) of the kerala university first statute.

the appellant is a company incorporated under the companies act1956 with the object of manufacture and sale of cigarettes. members of general public are the shareholders and the shares of the company are traded in through various stock exchanges in the country. a petition was filed under article 226 of the constitution by respondent no 1 seeking for a writ of mandamus to treat the members of the respondent union who are employees working in the canteen of the appellants factory as employees of the appellant and for grant of monetary and other consequential benefits. the canteen is provided in the factory premises of the appellant pursuant to section 46 of the factories act1948 hereinafter referred to as the actwhich obliges a factory employing more than 250 workmen to provide such a canteen. on behalf of the respondents it is contended that the appellant had been managing the canteen up to the year 1982 and thereafter introduced the contract system for maintaining the canteen so established that though the management of the canteen had been entrusted to the contractors from time to time the personnel employed in the canteen were retained by all the contractors and they have been paid salaries through contractors that the workmen employed in the canteen have been provided with esi benefits under the code No. vst the appellant and benefits arising under the employees provident funds act are also provided similarly that the appellant has also provided a building along with furniture utensils cutlery gas electricity water supply and other facilities that the contractor is engaged only to prepare the food and serve it to the employees and that the quality of the food and the rates are controlled by the management of the appellant. on behalf of the appellant contention was raised that no writ would lie against the appellant inasmuch as the appellant is a company which is not an authority or a person against whom a writ would lie. it was submitted that they do not discharge any public duty and hence the writ can not be issued. on the merits of the matter the appellant disputed various questions of fact and urged that the decision of this court in parimal chandra raha vs life insurance corporation of india1995 supp 2 scc 611 1995 indlaw sc 183would not be applicable to the appellant in the facts and circumstances of the case. the learned single judge who decided the matter in the first instance held that a writ would lie against a company under a private management following the decision in t gattaiah vs commissioner of labour1981 ii llj 54 1981 indlaw ap 26in which it was held that establishment of a canteen and its maintenance is a statutory requirement under section 46 of the act a public duty is imposed on the company to establish and maintain the canteen inasmuch as members of the respondent union are working in the canteen they are entitled to seek a mandamus. he therefore held that when a public duty is called upon to be discharged by a private management a writ of mandamus would lie and could be issued under article 226 of the constitution. he thus rejected the contention. on the merits of the matter the learned single judge followed the decision in parimal chandra rahas case holding that when the duty had been enjoined on the appellant to provide and maintain a canteen facility under the factories act it becomes the obligation of the appellant to establish a canteen and that is what the appellant had done. therefore when that work is got done through somebody else by providing the necessary infrastructure and other facilities when the personnel did not change though the contractors changed from time to time he held that they become employees of the appellant. on that basis the learned single judge granted reliefs sought for by the respondents however imposing certain restrictions with regard to the age being medically fit on the date of the writ petition had put in a minimum of three years of continuous service and such service prior to the attainment of the minimum qualifying age under the company should be ignored. on appeal the division bench of the high court affirmed the view taken by the learned single judge. the division bench referred to their decision in rakesh gupta vs hyderabad stock exchange ltd hyderabad ors. air 1996 ap 430 1996 indlaw ap. 302that a writ in the nature of mandamus certiorari and prohibition are recognised as public law remedies and are not available to enforce private law rights. however noticing that the expression any person or authority used in article 226 of the constitution should not be confined only to statutory authorities and instrumentalities of state but would cover any other person or body performing public duty. the form of the body concerned is not very much relevant. what is relevant is the nature of the duty imposed on that body. the duty must be judged in the light of positive obligation owed by the person or authority to the affected party no matter by what means the duty is imposed. on that basis the division bench of the high court dismissed the writ appeal. hence this appeal. on behalf of the appellant contention put forth at the forefront is that a writ would not lie against the appellant inasmuch as the appellant is engaged in the manufacture and sale of cigarettes and as an incident thereto has provided a canteen to its workmen pursuant to an obligation under section 46 of the act. shri s ganesh learned counsel for the appellant pressed into service the decision of this court in anadi mukta sadguru shree muktajee vandas swami survarna jayanti mahotsav smarak trust ors vs v r rudani ors. 1989 2 scc 691 1989. indlaw sc 589to contend that mere running of a factory to manufacture and sell of cigarettes can never be considered to be a public duty much less an incident thereto such as providing a canteen to its workmen. on behalf of the respondent heavy reliance was placed on this decision and also the decision of the high court in t gattaiahs case to contend that in running a canteen under section 46 of the act the appellant was discharging a public duty and therefore a writ of mandamus would lie against it. n anadi muktas case the contention similar to the present case had been raised. writ petitioners were seeking for a writ of mandamus to put them back in the college and they were claiming only a terminal benefit or arrears of salary payable to them. in that background it was observed that if the rights are purely of a private character no mandamus could be issued and also if the management of the college were purely a private body with no public duty mandamus would not lie. in that case the respondent was managing the affiliated college to which public money is paid as government aid which played a major role in the control maintenance and working of educational institutions. the aided institutions it was noticed like government institutions discharge public function by way of imparting education to students. they were subject to the rules and regulations of the affiliating university and their activities were closely supervised by the university authorities. employment in such institutions therefore is not devoid of any public character inasmuch as the service conditions of the academic staff were controlled by the university particularly in regard to their pay scales and the protection by university decisions creating a legal right or duty relationship between the staff and the management. when there is existence of such relationship mandamus could not be refused to such an aggrieved party. it was further explained in that decision that the term authority used in article 226 of the constitution should receive a liberal meaning unlike the term in article 12which is only for the purpose of enforcement of fundamental rights under article 32 the words any person or authority used in article 226 are therefore not be confined only to statutory authorities or instrumentalities of the state but would cover any other person or body performing public duty. the duty must be judged in the light of positive obligation owed by the person or authority to the affected party no matter by what means the duty is imposed if a positive obligation exists mandamus can not be denied. in de smith woolf and jowells judicial review of administrative action5th edn. it is noticed that not all the activities of the private bodies are subject to private law e g the activities by private bodies may be governed by the standards of public law when its decisions are subject to duties conferred by statute or when by virtue of the function it is performing or possibly its dominant position in the market it is under an implied duty to act in the public interest. by way of illustration it is noticed that a private company selected to run a prison although motivated by commercial profit should be regarded at least in relation to some of its activities as subject to public law because of the nature of the function it is performing. this is because the prisoners for whose custody and care it is responsible are in the prison in consequence of an order of the court and the purpose and nature of their detention is a matter of public concern and interest. after detailed discussion the learned authors have summarized the position with the following propositions 1 the test of whether a body is performing a public function and is hence amenable to judicial review may not depend upon the source of its power or whether the body is ostensibly a public or a private body. 2 the principles of judicial review prima facie govern the activities of bodies performing public functions. however not all decisions taken by bodies in the course of their public functions are the subject matter of judicial review. in the following two situations judicial review will not normally be appropriate even though the body may be performing a public function a where some other branch of the law more appropriately governs the dispute between the parties. in such a case that branch of the law and its remedies should and normally will be applied and b where there is a contract between the litigants. in such a case the express or implied terms of the agreement should normally govern the matter. this reflects the normal approach of english law namely that the terms of a contract will normally govern the transaction or other relationship between the parties rather than the general law. thus where a special method of resolving disputes such as arbitration or resolution by private or domestic tribunals has been agreed by the parties expressly or by necessary implicationthat regime and not judicial review will normally govern the dispute. the high court has relied very strongly on the decision of a learned single judge in t gattaiahs case wherein it was stated that a writ may lie under article 226 of the constitution against a company incorporated under the companies act1956 as it is permissible to issue a writ against any person. prima facie therefore a private person or an incorporated company can not be taken out of the sweep and the contemplation of article 226 of the constitution. that decision does not take note of the fact as to the nature of the functions that a person or an incorporated company should be performing to attract judicial review under article 226 of the constitution. in anadi muktas case this court examined the various aspects and the distinction between an authority and a person and after analysis of the decisions referred in that regard came to the conclusion that it is only in the circumstances when the authority or the person performs a public function or discharges a public duty article 226 of the constitution can be invoked. in the present case the appellant is engaged in the manufacture and sale of cigarettes. manufacture and sale of cigarettes will not involve any public function. incidental to that activity there is an obligation under section 46 of the act to set up a canteen when the establishment has more than 250 workmen. that means it is a condition of service in relation to a workman providing better facilities to workmen to discharge their duties properly and maintain their own health or welfare. in other words it is only a labour welfare device for the benefit of its work force unlike a provision where pollution control act makes it obligatory even on a private company not to discharge certain effluents. in such cases public duty is owed to the public in general and not specific to any person or group of persons. further the damage that would be caused in not observing them is immense. if merely what can be considered a part of the conditions of service of a workman is violated then we do not think there is any justification to hold that such activity will amount to public duty. thus we are of the view that the high court fell into error that appellant is amenable to writ jurisdiction. this court in indian petrochemicals corporation ltd anr vs. shramik sena ors. 19996 scc. 439 1999 indlaw sc 513referred to the decisions in parimal chandra rahas case reserve bank of india vs workmen1996. 3 scc 267and m m r khan vs union of india1990 supp. scc 191 1996 indlaw sc 618and held that the workmen of a statutory canteen as in the present case would be workmen of an establishment for the purposes of the act only and not for other purposes. thereafter this court further examined whether the material on record would show that the workmen are employees of the management for all purposes and adopted some of the tests as follows. the canteen has been there since the inception of the appellants factory. the workmen have been employed for long years and despite a change of contractors the workers have continued to be employed in the canteen. the premises furniture fixture fuel electricity utensils etc have been provided for by the appellant. the wages of the canteen workers have to be reimbursed by the appellant. the supervision and control on the canteen is exercised by the appellant through its authorised officer as can be seen from the various clauses of the contract between the appellant and the contractor. the contractor is nothing but an agent or a manager of the appellant who works completely under the supervision control and directions of the appellant. the workmen have the protection of continuous employment in the establishment. in the present case the findings recorded by the learned single judge on examination of the facts available is that there had been a canteen within the premises of the appellant up to the year 1982 and it is only from 1982 onwards the management of the canteen has been entrusted to a private contractor that even after change of the contractor the canteen workers have continued to be the same irrespective of the change in the contractors from time to time that wages were paid to the workmen in the canteen by the management through the contractor that the appellant has provided the accommodation furniture fuel electricity utensils etc. that the management exercises control over the standard in quality quantity and the rate of the food items supplied to the workmen for whose benefit the canteen is established. thus these circumstances clearly indicate that the appellant has a complete control over the activities in respect of the canteen and the contractor has absolutely no discretion either in regard to the menu quality and quantity of the food items much less the rate at which the same are supplied to the workmen. when the management of the appellant exercises such a complete control the canteen shall be deemed to be run by the management itself. the appellant in any manner can not controvert these facts. we do agree that the respondents have a strong case on merits. since we have held that the high court had no jurisdiction to entertain a petition under article 226 of the constitution we would have set aside the order made by the high court. however in the special features of the case although we do not agree with the high court on the first question raised we feel after clarifying the legal position that we should not disturb the decision given by the high court. the appeal therefore stands dismissed subject to what is stated in regard to writs to be issued by the high court in respect of persons or authorities exercising public duty or otherwise. no costs. civil appeal nos 653397 653497. in these appeals on a reference made on the question whether certain persons employed in the canteen should be treated as employees of the appellant and if so in what category they are to be fitted in and to what wages they are entitled to the industrial tribunal hyderabadhereinafter referred to as the tribunal inquired into the matter. the contesting respondents contended that the workmen in the canteen had been working right from its inception that is since 1967 that from 1976 onwards after expiry of the contract with the industrial catering services they had been directly working with the appellant without any contractor that they sought for regularization of their services by letter dated 28 february 1978 that the said letter was corrected and redrafted by the personnel manager to indicate the idea of floating an association society to run the canteen that this modified request contained in ex. w 49 was stated to be contradictory to the stand taken by the workmen all through. the tribunal concluded that there was no doubt that the personnel manager modified ex. w 50 and obtained ex. w 49 in the modified form. the tribunal held against them as there was no material to show that the management had discussed on each point and thereafter an agreement had been drafted. the tribunal recorded the findings that the canteen had been working for the benefit of the workmen within the premises provided by and with the equipment supplied by the appellant that the appellant supplies the provisions for the preparation of foodstuffs that the appellant issues token to the employees who on production of the same obtain foodstuffs from the canteen that the committee appointed by the appellant decides the menu and as per the directions and supervision of the catering officer the canteen functions that the quality and quantity of the foodstuffs is supervised by him who functions under the committee. the contributions like esi provident fund etc had also been categorically specified to be provided by the appellant and esi code for the permanent establishment and for the present workmen was the same that after the evidence was tendered by the workmen the appellant got the code changed and the appellant transferred the workmen from one place to another and that the amount to be surrendered by way of unpaid salaries had to be remitted back to the management. thus the tribunal held that these facts clearly indicated that the appellant exercised administrative financial and disciplinary control over the workmen in question. the tribunal held that no other material is required to hold them to be employees of the appellant. in those circumstances the tribunal passed an award that these workmen should be treated as employees of the appellant and they are entitled to payment of appropriate scales and designations in terms of ex. w12 and w14 from 1 april 1979 with all consequential and attendant benefits of arrears of pay etc together with counting of entire service for the purpose of terminal benefits. against this award a writ petition was filed before the high court. the high court dismissed the same stating that it is covered by another matter. it is unnecessary to examine the contention whether the matter is covered by a subsequent decision or not as the facts of the present case stand on its own. the reference had been made to the tribunal and adjudication had been made by the tribunal as to the status of the workmen the nature of employment control exercised by the appellant which leave no room for doubt that they are the employees of the appellant. a contention is also sought to be made that it is not possible to run a canteen in the refinery area. it is contended that under the petroleum rules framed under the petroleum act1934there are certain hazardous areas where there can not be a canteen as no fire furnace source of heat or light capable of igniting inflammable vapours shall be allowed except in the firing spaces or stills and boilers. however there is no material on record to show that the canteen is located in such an area where it would be hazardous to have a fire furnace source of heat or light to cook food. in the absence of such material we find no substance in this contention. it is brought to our notice that a fire had taken place on a tank on 14 september 1997 and that it was extinguished after 14 days which severely damaged all the building including the canteen and that food and beverages being provided to its employees by making an arrangement to obtain the same from outside the premises of the appellant. these facts are brought to our notice by an affidavit filed on 21 november 2000 but these factors do not come in the way of the award made by the tribunal as it is possible to locate the canteen in an appropriate place where there is no hazard of the kind envisaged under the petroleum rules. this contention is also rejected. in the circumstances aforesaid the contention vis vis the findings recorded by the tribunal we find absolutely no merit in these appeals and the same shall stand dismissed.

IN-Ext

FACTS the appellant is a company incorporated under the companies act,1956 with the object of manufacture and sale of cigarettes. members of general public are the shareholders and the shares of the company are traded in through various stock exchanges in the country. a petition was filed under article 226 of the constitution by respondent no.1 seeking for a writ of mandamus to treat the members of the respondent-union who are employees working in the canteen of the appellants factory as employees of the appellant and for grant of monetary and other consequential benefits. the learned single judge granted reliefs sought for by the respondents,however,imposing certain restrictions with regard to the age,being medically fit,on the date of the writ petition,had put in a minimum of three years of continuous service and such service prior to the attainment of the minimum qualifying age under the company should be ignored . on appeal,the division bench of the high court affirmed the view taken by the learned single judge. ARGUMENT on behalf of the respondents,it is contended that the appellant had been managing the canteen up to the year 1982 and thereafter introduced the contract system for maintaining the canteen so established; that though the management of the canteen had been entrusted to the contractors from time to time,the personnel employed in the canteen were retained by all the contractors and they have been paid salaries through contractors; that the workmen employed in the canteen have been provided with esi benefits under the code no.vst,the appellant,and benefits arising under the employees provident funds act are also provided similarly; that the appellant has also provided a building along with furniture,utensils,cutlery,gas,electricity,water supply and other facilities; that the contractor is engaged only to prepare the food and serve it to the employees and that the quality of the food and the rates are controlled by the management of the appellant. on behalf of the appellant,contention was raised that no writ would lie against the appellant inasmuch as the appellant is a company,which is not an authority or a person against whom a writ would lie. it was submitted that they do not discharge any public duty and hence the writ cannot be issued. on the merits of the matter,the appellant disputed various questions of fact and urged that the decision of this court in parimal chandra raha vs. life insurance corporation of india,1995 supp.(2) scc 611 1995 indlaw sc 183,would not be applicable to the appellant in the facts and circumstances of the case. on behalf of the appellant contention put forth at the forefront is that a writ would not lie against the appellant inasmuch as the appellant is engaged in the manufacture and sale of cigarettes and as an incident thereto has provided a canteen to its workmen pursuant to an obligation under section 46 of the act. on behalf of the respondent,heavy reliance was placed on this decision and also the decision of the high court in t.gattaiahs case,to contend that in running a canteen under section 46 of the act,the appellant was discharging a public duty and,therefore,a writ of mandamus would lie against it. the contesting respondents contended that the workmen in the canteen had been working right from its inception,that is,since 1967; that from 1976 onwards,after expiry of the contract with the industrial catering services,they had been directly working with the appellant without any contractor; that they sought for regularization of their services by letter dated 28 february 1978; that the said letter was corrected and redrafted by the personnel manager to indicate the idea of floating an association/society to run the canteen; that this modified request contained in ex.w-49 was stated to be contradictory to the stand taken by the workmen all through. ISSUE in these appeals,on a reference made on the question whether certain persons employed in the canteen should be treated as employees of the appellant and,if so,in what category they are to be fitted in and to what wages they are entitled to,the industrial tribunal,hyderabad,[hereinafter referred to as the tribunal] inquired into the matter ANALYSIS in de smith,woolf and jowells judicial review of administrative action,5th edn.,after detailed discussion,the learned authors have summarized the position with the following propositions: (1) the test of whether a body is performing a public function,and is hence amenable to judicial review,may not depend upon the source of its power or whether the body is ostensibly a public or a private body. 2) the principles of judicial review prima facie govern the activities of bodies performing public functions. however,not all decisions taken by bodies in the course of their public functions are the subject matter of judicial review. in the following two situations judicial review will not normally be appropriate even though the body may be performing a public function: (a) where some other branch of the law more appropriately governs the dispute between the parties. in such a case,that branch of the law and its remedies should and normally will be applied; and (b) where there is a contract between the litigants. in such a case the express or implied terms of the agreement should normally govern the matter. thus,where a special method of resolving disputes (such as arbitration or resolution by private or domestic tribunals) has been agreed by the parties (expressly or by necessary implication),that regime,and not judicial review,will normally govern the dispute. the high court has relied very strongly on the decision of a learned single judge in t.gattaiahs case wherein it was stated that a writ may lie under article 226 of the constitution against a company incorporated under the companies act,1956 as it is permissible to issue a writ against any person. in anadi muktas case this court examined the various aspects and the distinction between an authority and a person and after analysis of the decisions referred in that regard came to the conclusion that it is only in the circumstances when the authority or the person performs a public function or discharges a public duty article 226 of the constitution can be invoked. in the present case,the appellant is engaged in the manufacture and sale of cigarettes. manufacture and sale of cigarettes will not involve any public function. incidental to that activity there is an obligation under section 46 of the act to set up a canteen when the establishment has more than 250 workmen. that means,it is a condition of service in relation to a workman providing better facilities to workmen to discharge their duties properly and maintain their own health or welfare. the findings recorded by the learned single judge on examination of the facts available is that there had been a canteen within the premises of the appellant up to the year 1982 and it is only from 1982 onwards the management of the canteen has been entrusted to a private contractor; that even after change of the contractor,the canteen workers have continued to be the same irrespective of the change in the contractors from time to time; that wages were paid to the workmen in the canteen by the management through the contractor; that the appellant has provided the accommodation,furniture,fuel,electricity,utensils,etc. that the management exercises control over the standard in quality,quantity and the rate of the food items supplied to the workmen for whose benefit the canteen is established. thus,these circumstances clearly indicate that the appellant has a complete control over the activities in respect of the canteen and the contractor has absolutely no discretion either in regard to the menu,quality and quantity of the food items much less the rate at which the same are supplied to the workmen. when the management of the appellant exercises such a complete control,the canteen shall be deemed to be run by the management itself. the appellant in any manner cannot controvert these facts. there is no material on record to show that the canteen is located in such an area where it would be hazardous to have a fire,furnace,source of heat or light to cook food. STATUTE the canteen is provided in the factory premises of the appellant pursuant to section 46 of the factories act,1948 [hereinafter referred to as the act],which obliges a factory employing more than 250 workmen to provide such a canteen.

a suit was filed in s c suit no 493 of 1986 in the bombay city civil court bombay by vicco laboratories appellant herein manufacturers of ayurvedic pharmaceutical products against defendant nos 1 to 4respondents herein for a declaration that the title and format of the suit serial yeh jo hai zindagi exclusively belonged to them and respondents nos 1 to 4 have no right thereto and for permanent injunction restraining the said respondents from making use of the title or episodes belonging to the petitioners or any episodes hereafter made. a number of averments germane to this case as set out in the plaint are set out hereunder. the petitioners carried on business as manufacturers of ayurvedic pharmaceuticals products which were sold under the brand name of vicco and have acquired substantial reputation in the market. the 1st respondent are an advertising agency and have been the advertising agents in respect of the products manufactured by the petitioners as aforesaid for number of years. the 2nd respondent is a director andor partner of the 1st respondent and has mainly dealt with the petitioners on behalf of the 1st respondent. respondents nos 3 4 are proprietary concerns of respondent no 2 the 5th respondent is the union of india and has been joined as the authority concerning television in india in the name and style of doordarshan which is a television media. the petitioners had employed the respondent nos 1 to 4 as their advertising agents through the petitioners sister concern m s modern advertising agency and uta advertising agency and were dealing with the respondent no 1 mainly through the petitioners managing director g k pendharkar. in 1984doordarshan in order to popularize sponsored serial undertook the production of a serial by the name humlog. the petitioners are also pioneers in making use of doordarshan for advertising their products through the agency of the 1st respondent approached the 1st respondent to act as their agents for the purpose of producing a serial which would be shown as petitioners sponsored programme. the petitioners agreed to pay the entire costs of the said production to the said advertising agency and requested it to look into the matter employed various persons on behalf of the petitioners and prepare a suitable serial for them. pursuant to the said arrangement the respondent nos 1 to 4 as the agents of the petitioners prepared at the costs and expenses of the petitioners a serial entitled yeh jo hai zindagi. the petitioners claimed that as a result of the employment of the respondent nos 1 to 4 and the finances paid by them the petitioners are the owners of the said serial yeh jo hai zindagi and the title thereof. the first and second respondents under the arrangement produced about 60 episodes and the petitioners have spent a crore of rupees for the products and telecast of the said episodes and have also spent large sums of money on advertising to popularize the said programme. yeh jo hai zindagi had gained popularity and had become one of the most exclusive and popular serial. the petitioners claimed that the exclusive right to use the title thereof belonged to them and the 2nd episode of yeh jo hai zindagi was telecast without the name of the petitioners being mentioned as sponsors nor was their advertisement shown. this was due to the negligence of the respondent nos 1 to 4 but the respondents recovered the cost of production from the petitioners. further the said respondents had been recovering the cost of production well in advance of the serial episodes being actually produced. the petitioners claimed that they were the real producers and owners of the said serial yeh jo hai zindagi and the petitioners to the knowledge of the respondents have entered into an agreement assigning the video rights in the said serial to one m s esquire distributing and servicing pvt. ltd on. 01 january 1985 the petitioners though not required to do so made an ex gratia payment to respondent nos 1 to 4 of a portion of the royalty received by them from the said m s esquire distributing and servicing pvt. 1st and 2nd respondents had by their letter dated 14 december 1984 confirmed that the petitioners have all t v and video rights of the sponsored programme in hindi yeh jo hai zindagi and vest with the petitioners. though original agreement was to have 27 episodes but having regard to the popularity of the programme the petitioners decided to increase the said serial to 52 episodes and by a letter dated 22 april 1985 the petitioners informed respondent nos 1 and 2 that in the title of the 27th and 28th episodes it has been stated that it is presented by oberoi films. some time in may 1985the 1st respondent proposed to the petitioners that some other products should be tied up with the serial yeh jo hai zindagi. however the petitioners were not interested in the same as they wanted the serial to project their products only exclusively and did not agree to any other products being tied up with the said serial. the respondents on 27 december 1985 alleged that they were losing rs 50000 to rs 75000 per episode and indicated that they wanted to get a new sponsor. by their letter dated 02 january 1986 the petitioners informed the 1st and 2nd respondents that it was not possible to increase the costs of production for the episodes and that in the circumstances the production of the serial may stop. it was also pointed out that the name yeh jo hai zindagi is associated with the vicco laboratories and that if they wanted to obtain another sponsor they could produce a new serial under a different name. the petitioners apprehended that the respondent nos 1 to 3 intended to produce further episodes under the title yeh jo hai zindagi making use of the same format as the earlier serial for and on behalf of the third party. the petitioners reserved their right to sue for damages in terms of order ii rule 2 cpc. the respondent nos 1 to 4 in their written statement contested the suit. apart from raising the question of valuation of the suit and the pecuniary jurisdiction of the court to try the same they also raised question that the petitioners are not the owners of the copyright in the said serial within the meaning of s 17 of the copyright act1957 and the copyright in respect of the said serial belongs and vests with the respondent nos 1 to 4. therefore it was submitted that the suit lacked cause of action. while traversing the case on merit they contended that it was all along agreed between the petitioners and respondents that the copyright in the said serial would rest exclusively in the respondents and not in the petitioners. thus the respondents name was shown in the title of the said serial as the producer thereof right from the beginning of the said serial but the petitioners did not protest against the same. consistently with the said intention further the master cassette of the said serial at all relevant times remained exclusively with the respondents and not with the petitioners and the petitioners paid to the respondents 50 of the royalty received from m s esquire distributing and servicing pvt. ltd under the agreement dated 1 januray 198504 march 1985 and 16 september 1985 the advertisements issued by the petitioners themselves in various newspapers to give wide publicity to the said serial would indicate that the serial mentioned these respondents are the owners of the copyright in respect of the said serial and the petitioners claim in that behalf is devoid of any substance. the respondents also contended that even assuming but without admitting that even if the petitioners are the owners of the copyright in respect of the said serial as on the date of the suit they ceased to be such owners in view of the fact that these rights vested in them before the institution of the suit and they have acquiesced in the exercise of the said right by these respondents by their conduct as referred to earlier. it was also contended that the 2nd respondent is an artist and a film maker and has been in the field of film making for the past 20 years. in the course of his business the 2nd respondent has developed contacts and connections with important and renowned personalities artists technicians etc in the film industry. in the year 1967the 2nd respondent 's wife mrs sunanda s oberoi started the proprietary business of advertising agency in the name and style of art commercial and the 2nd respondent used to work in various capacities for the said firm. in the year 1983the said proprietary firm was converted into a private limited company which is the 1st respondent in the present suit and the 2nd respondent constituted respondent nos 3 and 4 as his proprietary firm. about 18 years ago before filing of the suit the respondents came into contact with the petitioners initially as clients in connection with the job of advertisement of their products on all india radio theatre and films and later on television. these ad films and jingles fetched handsome returns for the petitioners and boosted their sales beyond their own expectations. in course of time the 2nd respondent and partners of the petitioners especially g k pendharkar came very close to each other and developed very intimate relations. either at the end of 1983 or early part of 1984the 5th respondent through the said doorsarshan decided to introduce the production of films or serials especially for exhibitions on tv instead of exhibiting telecasting films produced by the professional film producers on payment of exorbitant royalty to them partly as an economy measure and partly to provide avenues to and exposure new talents. the 5th respondent thereafter decided to entertain welcome andor encourage the proposals from the private producers to produce such serials or films at their own cost and responsibility and under the said scheme the advertisers desirous of linking up their advertisements with such films or serials were required to negotiate and settle directly with the producers of such films andor serials the royalty or consideration payable to such producers for linking up their advertisements and commercials with their film serial and under the said scheme further such advertisements were offered handsome concessions in the rates of advertisements for display of their ads on tv. as against the regular rates charge of rs 324000 for display of advertisements on tv of such advertisers for 120 seconds per telecast the relevant time at the rate of rs 35000 only for 120 seconds in addition to the royalty or consideration payable to the producers of such films or serials which invariably was far less than the difference between the usual rates and concession rates of advertisements. the 2nd respondent undertook the preliminary project work on his own without loss of any time. the 2nd respondent made extensive study and research and prepared a format of the proposed serial. the said team of the 2nd respondent responded to his appeal and took great pains and put in hard work in the said project and presented to him an exclusive and ingenious format of the proposed serial. the 2nd respondent then approached the 5th respondent through doordarshan with his proposal to produce the said serial then proposed to be entitled mussibat hai. after a number of meetings between the 2nd respondent and the concerned officers and the authorities of the respondents at delhi in connection with the said proposal approved a pilot i e the first episode as sample on 19 september 1984 to produce a tv serial comprising 52 episodes subject of course to the 5th respondent discretion to discontinue the same if the same proved a flop before the expiry of the stipulated period. the entire cost of the spade work and the cost of the title song was borne exclusively by the respondents and nothing was contributed by the petitioners in this regard. the 5th respondent registered the respondent nos 1 and 2 as the producers of the said serial. after finalizing the proposal by the tv authorities respondent no 2 asked the petitioners as to whether they were interested in the linking up their ads with the said serial. petitioners agreed to link up their ads with 26 episodes of the said serial. the petitioners agreed to pay fixed amount to these respondents per episode for linking up their commercials with the said serial and not on the basis of the actual cost of production of each episode so that if the cost of production exceeded the said fixed amount the respondents had to bear the same. in these circumstances the respondents contended that by entering into the said agreement of sponsorship neither the petitioners nor the respondents created nor did they ever intend to create any relationship of employer and employee andor master and servant or principal and agent between the petitioners on the one hand and the respondents no 1 to 4 on the other. nor did the parties intend that the respondents should produce the said serial for the petitioners or at the instance of the petitioners and the respondents intended to embark on the production of the said serial on their own. the petitioners by their letter dated 02 january 1987 turned down the respondents demand and informed the respondents that they had no objection if the respondents went ahead with the production of the said serial and merely requested the respondents that the title of the said serial yeh jo hai zindagi may not be used by the respondents. in the meanwhile the respondents contended that m s brook bond ltd who wanted to link up their commercial with 13 episodes and agreed to pay and paid the ruling market price. on these grounds the respondents contended that the suit of the petitioners is misconceived malicious and baseless and is liable to be dismissed. the respondents contended that on no occasion the petitioners acted as a producer and even the contract was signed by the petitioners as an advertiser and by the respondent no 1 as an approved agent. the respondents strongly contended that the serial hum log was produced by the petitioners in collaboration with m s concept advertisers. the trial court raised as many as 12 issues and they are as follows 1 is it proved that this court has no pecuniary jurisdiction to entertain and try this suit. the plaintiffs prove that the t v serial entitled yeh jo hai zindagi was produced by the defendant nos 1 to 4 as agents and the said serial made by defendant nos 1 to 4 in the course of their employment with the plaintiffs as alleged. 3 do the plaintiffs prove that the entire serial rights including the excluding the exclusive right to use the title thereof belong to the plaintiffs as alleged. 4 are defendant nos 1 to 4 entitled to deny the ownership of the plaintiffs of the film. yeh jo hai zindagi in view of exhibits a b and e colly to the plaint. the defendants prove that the plaintiffs are not the owners of the copyright of the tv serial film viz. yeh jo hai zindagi within the meaning of s 17 of the copyright act. the defendant nos 1 to 4 prove that it was intended between the parties that copyrights in respect of the said film should vest exclusively with the defendants or that the right of ownership was waived by the plaintiffs. 7 does. the suit suffer from non joinder of necessary parties. the suit not maintainable against defendant no 5 for failure to give notice u s 80 of cpc. 9 are. the plaintiffs entitled to the declaration sought. 10 are. the plaintiffs entitled to permanent injuction as prayed for. 11 to what relief if any are the plaintiffs entitled. 12 what order. the trial court found that the petitioners have not been able to prove that the tv serial yeh jo hai zindagi was produced by defendants nos 1 to 4 as agents in the course of their employment as the agent of the petitioners as contended in the suit. the petitioners were also not able to prove that the entire serial rights including the exclusive right to use the title thereof belonged to the petitioners as alleged. it was also held that the respondents nos 1 to 4 are entitled to deny the ownership of the petitioners of the film yeh jo hai zindagi in view of exhibits a b and e produced in the case. it was also held that the respondents proved that the petitioners are not the owners of the copy right of the tv serial film viz. yeh jo hai zindagi within the meaning of s 17 of the copy right act and it was intended between the parties that copy rights in respect of the said film should vest exclusively with the respondents or that the rights of ownership was waived by the petitioners. after examining the oral and documentary evidence on record it is disclosed that prior to letter sent on 11 july 1984 the petitioners were acquainted even with the format of the suit serial they did not have any connection with the suit serial till that date and relied upon the wording used therein to the effect that you and mr g k pendharkar are requested to join mr oberoi and his creative team when the format of the proposed half and hour sponsored programme shall be presented to you. that was the first occasion when the format was presented to the petitioners. it was also on record that the shri g k pendharkar of the petitioners and respondent no 2 had long standing relations with each other and they had already done a lot of advertising works for the petitioners before the production of the suit serial. exhibit g 1 which is exhibit 27 a in the petitioners compilation is a letter written by shri s p agrawal controller of programmes of doordarshan to respondent no 1m s art commercia with reference to the format for the proposed serial of half and hour duration tentatively titled musibat hai serial sent to them on 13 july 1984 since the letter was addressed to m s art commercia in which the proposal was accepted for production of the serial and the first episode was to be sent for preview and approval which would be given only after seeing the recording of the first episode. that letter had been addressed to respondent no 1m s art commercia. the trial court felt that it was addressed not to the petitioners but to the respondents alone. the trial court also relied on exhibit c 1 which indicated that the respondents were submitting a format for the serial which was to be registered on behalf of the client m s vicco laboratories. the learned judge of the trial court took the view that this letter nowhere mentioned that the respondents wanted to register their format on behalf of their producers which is consistent with the modern norms of advertising. the trial court ultimately came to the conclusion that the spade work on the production of the suit serial had already started before 11 july 1984 and on that day for the first time film was presented to the petitioners. it was therefore found that there was no copy right attached to any idea but copy right is attached to the work and what is important is that not only the idea of producing the suit serial on tv came to the mind of respondent no 2 but he had already started working on it in advance and forwarded it to doordarshan for its approval. the trial court after examining exhibits c 1e 1f 1 p 1 found that the proposal was for 52 episodes and was accepted by the doordarshan while the case put forth on behalf of the appellants is that the original agreement was to have 27 episodes and having regard to the popularity of the programme the petitioners decided to increase the said serial to 52 episodes. the evidence was found to be inconsistent with the theory put forth by the petitioners that they are producers of the suit serial and if it were to hold otherwise the agreement or arrangement with the respondents was only for 26 episodes whereas the sponsorship was for 52 episodes. the trial court examined in detail the letter dated 19 july 1984 exhibit f 1 written by shri g k pendharkar of the petitioners and concluded that averments made in the plaint stated that the original agreement was to have 27 episodes but having regard to the popularity of the serial programme the petitioners decided to increase the said serial to 52 episodes. in one of the contracts exhibit h 1 the wording used is as under sponsorship of programme of 25 mts duration produced by sponsor entitled yeh jo hai zindagi including 2 mts free commercial time. relying upon this letter emphasis was laid on the words produced by sponsors whether two capacities sponsor and producer can co exist in one and the same person or not has been examined and the trial court noted that the wording had been borrowed from the tariff card and tariff card also indicated what are the categories of the advertisers and rates thereof. it is held that words produced by sponsors would not mean that the sponsors themselves are the producers of the said programmes as is clear from the tariff card. the trial court proceeded thereafter to examine the payments made in regard to production of the serial. thus it was found that the first 26 episodes the amount per episode paid by the petitioners was rs 120000 and each bill contained the expression service charges which was stated by the appellants that the respondents acted as agents of the petitioners for production of suit serial. on proper construction of the bills the trial court rejected the contention that these bills and payments as showing that they had borne the costs of production of the suit serial and therefore they are the producers. inasmuch as the respondents could not claim any amount at random details regarding expenditure were included in the bills and therefore it is the sponsor 's price for sponsoring the suit serial. strong reliance was placed upon certain circumstances namely that the format had been approved by the petitioners only on 11 july 1984 and pw 1 admitted that in view of the bill the entry claiming deduction made by the petitioners in their accounts in the financial year ending on 30 march 1984 that the amount was not to be paid for all 26 episodes or even thereafter in lump sum and the bill for 26 episodes enabled petitioners to claim deduction for the entire amount without actual payment in financial year 1983 84 that the entry made for the financial year 1983 84 was beneficial to the petitioners that there was no ceiling on advertising expenditure and it was introduced from 1 april 1984 onwards the plaintiff did not produce the account books to show if the deduction in respect of the entire amount was claimed or not though they were repeatedly called upon to produce them. the trial court was conscious enough not to enter into the controversy whether during the particular account year ending on 31 march 1984 the advertising expenditure was fully exempted from tax or that there was disallowance of 20 per cent on that point and the decision regarding income tax deductions is not necessary as there is enough other material to show that the said bill was ante date. the change in the title from 55th episode for vicco laboratories was introduced. their contention was that there was a protest from the petitioners and as a result thereof this change took place. the 55th episode was telecast sometime at the end of november or beginning of december 1985 and thus there was a time gap of 78 months between the protest and the telecast of the 55th episode. therefore it can not be said that there is any communication between the same. the trial court also noticed that in respect of both the advertisements and also in respect of suit serial the petitioners paid to the respondent nos 5 and 6 amount which was to be the maximum amount. thus the profits or loss was of the respondents and there is element of liability to render account was missing and thus there was no question of respondents being the agents of the petitioners within the meaning of s 182 of the indian contract act. the suit serial was produced by the respondents as agents of the petitioners was false. the facts emerging in the case indicate that the petitioners had joined the production of the suit serial after some concrete beginning had been made like recording of the title song the conceiving of the title and format of the suit serial etc. the trial court summed up the position that the two capacities sponsor and producer can not co exist in one and the same person. if the documents are interpreted that the petitioners are the sponsors as well as the producers it would lead to absurd results. thus the trial court proceeded to uphold the contentions raised on behalf of the respondents to dismiss the suit. on appeal the high court re examined the matter and on examination of the pleadings the contentions put forth before the court the evidence on record and the findings recorded by the trial court concluded that the findings recorded by the trial court are proper. in doing so the high court noticed that the admitted position in the pleadings and the oral evidence is that the petitioners agreed to sponsor only 26 episodes whereas the respondents had agreed to produce 52 episodes and had made firm commitment to doordarshan to that effect and this circumstance militates against the respondents having undertaken the production at the behest or at the request of the petitioners. the high court observed that the petitioners had no knowledge of the doordarshan scheme regarding the sponsored programme and linking of 2 minutes advertisement and agreed with the findings of the trial court that it is improbable for the respondents to have agreed to reduce its income in the form of commission and undertake the responsible job of production of the serial. it was stated that certain bills had been given to the petitioners to suit their convenience in tax matters and there was no such bill submitted to the petitioners by the respondents when the petitioner had agreed to extend the sponsorship from episodes nos 27 to 52 and noticed the nature of the system of accounting maintained by them and held that the petitioners had got deductions in respect of the entire amount of the bill in the year which ended on 31 march 1984. the high court also noticed the circumstance of respondent no 2 's name appearing as producer in the titles of the suit serial and the petitioners did not do anything by way of protest or other objection or take steps to withhold payment of the respondents which in the normal course would have been done and therefore the explanation now sought to be offered by the petitioners in the form of a written protest was devoid of any substance. the explanation given by the petitioners that they were busy in the shootings did not carry much weight with the high court. the high court also examined the scope of s 17 of the copyright act and the ingredients thereof not having been established the high court held that no claim could be based on the same and thus agreed with the findings recorded by the trial court and dismissed the appeal. in this special leave petition u art 136 of the constitution the contentions raised before the high court are reiterated particularly as to the effect of s 17 of the copyright act and whether the correspondence on record would not indicate that they were entitled to ownership and copyright in respect of the tv programme yeh jo hai zindagi. the learned counsel for the petitioners strongly relied upon the following documents 1 the cost estimate. 2 the bills of cost of production. 3 letters dated 14 december 1984 and 15 november 1985. 4 contracts with doordarshan. 5 contractd with esquire distributing servicing pvt ltd. we have carefully considered the contentions urged on behalf of the petitioners. we are not satisfied that the petitioners have made out a case for consideration by this court. the matter rests purely upon the appreciation of evidence on record and does not give rise to any question of such importance as to be decided by this court u art 136 of the constitution. it is clear from the findings recorded by the trial court and the appellate court 1 that the respondents have not undertaken the production of the said serial at the instance of the petitioners. g k pendharkar the managing director of petitioner no 1 was asked to come to view the format of the programme and the petitioners were not even acquainted with the format of the serial while the respondents had taken concrete steps in this regard prior to the letter dated 11 july 1984. 2 that the petitioners had agreed to sponsor only 26 episodes whereas the respondents had agreed to produce 52 episodes and had given a firm commitment to that effect to doordarshan as is clear from the letter dated 12 july 1984 sent by the respondents to doordarshan. the trial court thus rightly noted that there was no agency between the parties. 3 that the titles of each episode indicated that respondent no 2 is the producer of the said serial and the petitioners are only the sponsors. as late as on 22 april 1985the petitioners communicated their displeasure on this display in the episodes as to the titles. however the titles continued to show mr s s oberoi as the producer of the serial and the petitioners did not withhold payments. 4 that the courts below have refuted the claim of the petitioners that the bill dated 19 march 1984 establishes the fact that the production work had been started by the respondents at the behest of the petitioners. it has been proved that the said bill was ante dated and raised by the respondents in july1984 ostensibly for the purpose of benefiting the petitioners for their obtaining tax concessions. 5 that the doordarshan which have been impleaded as a party in their written statement stated that they recognize the respondents as producers of the said serial and recognize the petitioners as sponsors only. 6 that the evidence of mr s s gill who gave evidence on behalf of the information broadcasting ministry that he was not acquainted with mr pendharkar and that doordarshan had no direct connection with the petitioners but only with the respondents as producers or the director stood un impeached. in his further evidence mr gill stated that some time in the month of may june1984 he had met kundan shah and requested to make a comedy serial for doordarshan which clearly indicated that it is only the respondents who were dealing with doordarshan. 7 that the video rights were assigned to esquire distributing servicing pvt. ltd by the respondents pursuant to letters dated 14 december 1984 and 15 november 1985 and had received royalty for the video rights and the original u matic cassettes were returned to them by esquire distributing servicing pvt. ltd as their property. 8 that there was no transfer of rights in favour of the petitioners by the respondents in the aforesaid letters and no consideration whatsoever was paid to the respondents for issuing the said letters which have no legal consequences and it was after the petitioners received the letter dated 19 october 1985 from esquire distributing servicing pvt. ltd that the respondents were asked by the petitioners to issue another letter in this regard. thus the pleadings and the evidence on record clearly indicated that the respondents were not the agents of the petitioners for the purpose of producing the said serial. the aggregate amount of rs 76 50 lakhs which was paid to the respondents for 60 episodes is not the amount for cost of production but the fixed price for sponsoring the said serial in order to link up their advertisement with the serial and avail substantial benefit of concessional rate under the scheme envisaged by doordarshan. the respondents were not liable to render accounts to the petitioners who paid them a fixed sum for sponsoring the programme. if the expenses were less the petitioners did not ask for a refund and the profit or loss was entirely of the respondents. it is clear that the bills that have been raised were only to accommodate the petitioners from the circumstances narrated above. however the learned counsel for the petitioners made elaborate reference to the income tax act1961 and the provisions whether such availment of benefit could be taken or not pursuant to the amendment effected to the provisions relating to computation of business income at different stages may not be very germane to the present case. it is probable that the respondents had obliged the petitioners by issuing these bills because the bills can not be read in isolation but with reference to surrounding circumstances. therefore the view taken by the courts below in this regard appears to be correct. so far as the contentions raised on the basis of s 17 of the copyright act is concerned it is clear that the petitioners were not able to establish that the respondent nos 1 to 4 produced the said serial 1 as the agents of the petitioners 2 in the course of their employment with the petitioners 3 for valuable consideration paid by the petitioners to them and iv at the instance of the petitioners. when these factors had not been established and the suit is itself not dependent on the interpretation of s 17 of the copyright act pleadings and issues raised did not attract the same. on appreciation of evidence the courts below have come to the conclusion that the respondents did not make the said serial for valuable consideration at the instance of the petitioners and in view of the findings of fact the claim of copyright or ownership in respect of the serial u s 17b and c would not arise at all. thus we find absolutely no merit in this petition. we decline to interfere with the order made by the high court affirming the decree of the trial court. petition dismissed.

IN-Ext

FACTS the petitioners carried on business as manufacturers of ayurvedic pharmaceuticals products,which were sold under the brand name of "vicco" and have acquired substantial reputation in the market. the 1st respondent are an advertising agency and have been the advertising agents in respect of the products manufactured by the petitioners as aforesaid for number of years. the 2nd respondent is a director and/or partner of the 1st respondent and has mainly dealt with the petitioners on behalf of the 1st respondent. respondents nos.3 & 4 ae proprietary concerns of respondent no.2. the 5th respondent is the union of india and has been joined as the authority concerning television in india in the name and style of doordarshan,which is a television media. the petitioners had employed the respondent nos.1 to 4 as their advertising agents through the petitioners' sister concern "m/s modern advertising agency" and "uta advertising agency" and were dealing with the respondent no.1 mainly through the petitioners managing director,g.k.pendharkar. in 1984,doordarshan in order to popularize sponsored serial,undertook the production of a serial by the name "humlog". the petitioners agreed to pay the entire costs of the said production to the said advertising agency and requested it to look into the matter,employed various persons on behalf of the petitioners and prepare a suitable serial for them. pursuant to the said arrangement,the respondent nos.1 to 4 as the agents of the petitioners prepared at the costs and expenses of the petitioners,a serial entitled "yeh jo hai zindagi". the petitioners claimed that as a result of the employment of the respondent nos.1 to 4 and the finances paid by them the petitioners are the owners of the said serial "yeh jo hai zindagi" and the title thereof. "yeh jo hai zindagi" had gained popularity and had become one of the most exclusive and popular serial. the petitioners claimed that the exclusive right to use the title thereof belonged to them and the 2nd episode of "yeh jo hai zindagi" was telecast without the name of the petitioners being mentioned as sponsors nor was their advertisement shown. this was due to the negligence of the respondent nos.1 to 4. but the respondents recovered the cost of production from the petitioners. further the said respondents had been recovering the cost of production well in advance of the serial episodes being actually produced. the petitioners claimed that they were the real producers and owners of the said serial "yeh jo hai zindagi" and the petitioners to the knowledge of the respondents have entered into an agreement assigning the video rights in the said serial to one m/s esquire distributing and servicing pvt.ltd. 1st and 2nd respondents confirmed that the petitioners have all t.v.and video rights of the sponsored programme in hindi "yeh jo hai zindagi" and vest with the petitioners. though original agreement was to have 27 episodes but having regard to the popularity of the programme the petitioners decided to increase the said serial to 52 episodes and the petitioners informed respondent nos.1 and 2 that in the title of the 27th and 28th episodes it has been stated that it is presented by "oberoi films". some time in may 1985,the 1st respondent proposed to the petitioners that some other products should be tied up with the serial "yeh jo hai zindagi". however,the petitioners were not interested in the same as they wanted the serial to project their products only exclusively and did not agree to any other products being tied up with the said serial. the respondents alleged that they were losing rs.50,000/-to rs.75,000/-per episode and indicated that they wanted to get a new sponsor. the petitioners informed the 1st and 2nd respondents that it was not possible to increase the costs of production for the episodes and that in the circumstances,the production of the serial may stop. it was also pointed out that the name "yeh jo hai zindagi" is associated with the "vicco laboratories" and that if they wanted to obtain another sponsor they could produce a new serial under a different name. the petitioners apprehended that the respondent nos.1 to 3 intended to produce further episodes under the title "yeh jo hai zindagi" making use of the same format as the earlier serial for and on behalf of the third party.the petitioners reserved their right to sue for damages in terms of order ii,rule 2 cpc. ARGUMENT the copyright in the said serial would rest exclusively in the respondents and not in the petitioners. thus the respondents' name was shown in the title of the said serial as the producer thereof right from the beginning of the said serial but the petitioners did not protest against the same. even assuming but without admitting that even if the petitioners are the owners of the copyright in respect of the said serial as on the date of the suit they ceased to be such owners in view of the fact that these rights vested in them before the institution of the suit and they have acquiesced in the exercise of the said right by these respondents by their conduct as referred to earlier. it was also contended that the 2nd respondent is an artist and a film maker and has been in the field of film making for the past 20 years. the petitioners by their letter turned down the respondents' demand and informed the respondents that they had no objection if the respondents went ahead with the production of the said serial and merely requested the respondents that the title of the said serial "yeh jo hai zindagi" may not be used by the respondents. in the meanwhile,the respondents contended that m/s brook bond ltd.who wanted to link up their commercial with 13 episodes and agreed to pay and paid the ruling market price. on these grounds,the respondents contended that the suit of the petitioners is misconceived,malicious and baseless and is liable to be dismissed. ISSUE in this special leave petition u/art.136 of the constitution,the contentions raised before the high court are reiterated particularly as to the effect of s.17 of the copyright act and whether the correspondence on record would not indicate that they were entitled to ownership and copyright in respect of the tv programme 'yeh jo hai zindagi. ANALYSIS there was no copy right attached to any idea,but copy right is attached to the work and what is important is that not only the idea of producing the suit serial on tv came to the mind of respondent no.2 but he had already started working on it in advance and forwarded it to doordarshan for its approval. the respondents were not the agents of the petitioners for the purpose of producing the said serial. the aggregate amount of rs.76.50 lakhs which was paid to the respondents for 60 episodes is not the amount for cost of production but the fixed price for sponsoring the said serial in order to link up their advertisement with the serial and avail substantial benefit of concessional rate under the scheme envisaged by doordarshan. the petitioners had agreed to sponsor only 26 episodes whereas the respondents had agreed to produce 52 episodes and had given a firm commitment to that effect to doordarshan. that the titles of each episode indicated that respondent no.2 is the producer of the said serial and the petitioners are only the sponsors. however,the titles continued to show mr.s.s.oberoi as the producer of the serial and the petitioners did not withhold payments. the production work had been started by the respondents at the behest of the petitioners. doordarshan recognizes the respondents as producers of the said serial and recognize the petitioners as sponsors only. there was no transfer of rights in favour of the petitioners by the respondents in the aforesaid letters and no consideration whatsoever was paid to the respondents for issuing the said letters which have no legal consequences. the respondents were not liable to render accounts to the petitioners who paid them a fixed sum for sponsoring the programme. if the expenses were less,the petitioners did not ask for a refund and the profit or loss was entirely of the respondents. it is clear that the bills that have been raised were only to accommodate the petitioners from the circumstances narrated above. it is probable that the respondents had obliged the petitioners by issuing these bills because the bills cannot be read in isolation but with reference to surrounding circumstances. where s.17 of the copyright act is concerned,it is clear that the petitioners were not able to establish that the respondent nos.1 to 4 produced the said serial (1) as the agents of the petitioners; (2) in the course of their employment with the petitioners; (3) for valuable consideration paid by the petitioners to them; and (iv) at the instance of the petitioners. when these factors had not been established and the suit is itself not dependent on the interpretation of s.17 of the copyright act,pleadings and issues raised did not attract the same. on appreciation of evidence,the court has come to the conclusion that the respondents did not make the said serial for valuable consideration at the instance of the petitioners and in view of the findings of fact,the claim of copyright or ownership in respect of the serial u/s.17(b) and (c) would not arise at all.

the accused appellant has been held guily of of fences punishable under section 302 and section 3762f of indian penal code. the trial court sentenced the appellant to death under section 302 ipc and to undergo rigorous imprisonment for life and pay a fine of rs 10000 in default of payment to undergo further r i for 3 years under section 3762f ipc. while the learned additional sessions judge made a reference to the high court for confirmation of death sentence under section 366 cr. p c the appellant preferred an appeal putting in issue his conviction and sentence. the criminal reference and the criminal appeal were heard by a division bench of rajasthan high court. the two learned judges constituting the division bench differed in their opinion. in the opinion of one learned judge the circumstantial evidence on which rests the prosecution case was not sufficient to record a finding of guilty against the appellant on any of the charges framed against him. in the opinion of the other learned judge the prosecution evidence was sufficient to sustain the conviction as recorded by the trial court though the case was not one of those rarest of rare cases as would warrant death sentence being awarded to the appellant. in view of the difference of opinion the learned acting chief justice assigned the case for hearing by a third judge under section 392 of cr. p c the third learned judge has on an independent appreciation of evidence recorded his own findings upholding the conviction of the accused on both the charges framed against him and thus agreeing with one of the two learned judges constituting the division bench in conclusion. in the result the high court has declined the confirmation of death sentence but upheld the conviction on both the charges found proved and dismissed the appeal laying challenge to the conviction subject to modification in the sentence by substituting sentence of life imprisonment for death sentence under section 302 ipc. the accused appellant has filed this appeal by special leave. kumari s a young child aged about 5 years was last seen at about 4 p m on 18th march 1991 and thereafter she did not return home. at about 7 a m on 19th march 1991 kishori lal pw4 informed bd pw2 the unfortunate father of s that dead body of a girl was lying near mohalla basera on the outskirts of village kotputli. bd rushed to the place only to find that the dead body was of none else than his own daughter section blood was oozing out from her mouth and private parts. a noose was also found around her neck. at 7 25 a m on 19 3 1991 first information report was lodged by bd at police station kotputli. offence was registered under sections 302 and 376 ipc. the inves tigation commenced. the dead body was sent for post mortem examination which was performed at 9 30 a m on the same day by a medical board of three doctors. it was found that the victim was brutally ravished and thereafter killed. according to the medical opinion the probable cause of death of s was shock produced due to vaginal trauma and rupture of post fornix along with asphyxia due to ligature around the neck. all injuries found on the person of the victim could be around 6 of 24 hours old prior to the time of post mortem examina tion. the vaginal injuries clotted blood and injuries to post fornix were indica tive of rape having been committed on the victim. the clothes were removed from the dead body and seized. slides of vaginal swab were prepared for cyto chemical analysis for blood and seminal stains. the forensic science laboratory confirmed presence of group b blood on the clothes of deceased. the accused was arrested on 3 4 1991 on suspicion. on 4 4 1991 he was medically examined. there was no injury on his private parts or on any other part of body. the clothes on his person did not have any blood or seminal stains. he was a grown up male of 21 years and capable of performing sexual intercourse. on 5 4 1991 at about 12 30 p m he gave an information exbt. and in confirmation of the information led the police to a dry well wherefrom an underwear and baniyan wrapped in a newspaper dated 18 3 1991 were recovered. the clothes so recovered were sent to forensic science laboratory. according to report exbt. human semen was detected on underwear. p30 of forensic science laboratory human blood of group b was detected on the underwear. the accused was challaned and charge sheeted for the offences as already stated hereinabove. the prosecution examined 21 witnesses in all. it is not necessary here to extensively deal with the evidence adduced by the prosecution. suffice it to observe that there is no direct evidence connecting the accused with the offences charged. the prosecution case depends on circumstantial evidence. the pieces of circumstantial evidence which have been found proved and held as forging an incriminating chain against the accused are as under i last seen together ii abnormal conduct of the accused iii recovery of underwear and baniyan which was found to be stained with semen and blood group b which is also the blood group of the deceased iv false plea of alibi and v accused absconding since the date of offence. we would proceed to examine each of the pieces of incriminating circumstantial evidence so as to find out if each one of the circumstantial evidence is proved individually and whether collectively it forges such a chain of incriminating circumstances as would fasten the guilt on the accused beyond by shadow of reasonable doubt. in dhananjoy chatterjee v state of west bengal 1994 2 scc 220 1994 indlaw sc 1743 wherein one of us dr a s anand j as his lordship then was spoke for the bench. this court held as under in a case based on circumstantial evidence the circumstances from which the conclusion of guilt is to be drawn have not only to be fully established but also that all the circumstances so established should be of a conclusive nature and consistent only with the hypoth esis of the guilt of the accused. those circumstances should not be capable of being explained by any other hypothesis except the guilt of the accused and the chain of the evidence must be so complete as not to leave any reasonable ground for the belief consistent with the innocence of the accused. it needs no reminder that legally estab lished circumstances and not merely indignation of the court can form the basis of conviction and the more serious the crime the greater should be the care taken to scrutinize the evidence lest suspicion takes the place of proof. in dhananjoy chatterjee 's case 1994 indlaw sc 1743 supra the decision of this court in sharad birdhichand sarda v state of maharashtra 1984 4 scc 116 1984 indlaw sc 432 was relied on. in the later case it was also held that a false explanation or false plea taken by the accused can be used as an additional link in the chain of circumstantial evidence subject to satisfication of three essential conditions namely i various links in the chain of evidence led by the prosecution have been satisfactorily proved ii the said circumstance points to the guilt of the accused with reasonable definiteness and iii the circumstance is in proxim ity to the time and situation. i last seen together on the point of last seen together there is solitary testimony of a child witness shalu pw7 aged about 4 years on 23 3 1992 the date of her examination in the court. on asking a few questions by way of preliminary examination the learned trial judge found that the witness could answer some of the questions. she stated that accompanied by phukla another young girl a cousin of hers and s the deceased she had gone to purchase balloon from the shop of goma. while returning the accused told s that her feet were mudstained and he would wash her feet and saying so he took s inside his house leaving behind the two girls including shalu pw7 who returned to their houses leaving s behind. it is this testimony which has been relied upon by the trial court as also by the high court as the evidence of last seen together. the witness is a child witness of very tender age and examined in the court almost a year after the date of the incident. we have very carefully read the statement of this witness. there is nothing in her statement to suggest that what she is narrating in the court is the story of a day soon before the date and time of the incident or the date on which dead body of s was found. to constitute evidence of last seen together the evidence must definitely permit an inference being drawn that the victim and the accused were seen together at a point of time in close proximity with the time and date of the commission of crime. from the evi dence of shalu pw7 such an inference can not be drawn. goma to whose shop the three girls had gone to buy balloon has not been examined. there is something mysterious about the discovery of shalu as a witness to the incident. s has died. the third girl who was with s and shalu has not been examined either in the court or during investigation. the statement of shahu was recorded during investigation on 25 3 1991 i e about six days after the date of incident. harish chand sharma the investigating officer was specifically asked how the name of this witness came to his knowledge during investigation. he gave an evasive answer saying that the fact that shalu was accompanying s must have come in the staement of the witnesses. he was further asked to name the witness in whose statement shalu 's reference was available but the investigation officer drew a blank and could not tell the name of the witness from whom any clue as to shalu was received by him. thus how and in what manner the investigating officer came to learn about shalu pw7 so as to record her statement during investigation remains shrounded in mystery. the fact remains that the testimony of shalu pw 7 aged 4 years even if taken at its face value does not constitute such a circumstance as to draw an incriminating inference against the accused and connect him with the crime. abnormal conduct of accused kalu ram pw5 stated that two or three days after the date of dead body of s having been found. he and santosh. pw9 had gone to see a movie in a cinema hall where the accused was employed as a gate keeper. there the accused had enquired from them as to what was the punishment awardable to an offender who was found to have been committed rape on a girl and killed her. the accused was told by the witness that the punishment could be 20 or even 40 years of imprisonment or imprisonment for life. thereafter the wit nesses went to see movie in the cinema hall. during cross examination kalu ram stated that the accused was his neighbour previously known to him. on a pertinent question the witness stated that while making such a query there was no change in the facial expression of the accused that is he had remained normal. santosh pw9 did not support the version of kalu ram and was declared hostile. without going into the question as to whether the statement of kalu ram pw5 is to be believed or not in view of the same having not been supported by santosh pw9 let us assess the intrinsic value of such testimony as a piece of incriminating evidence. it appears that to begin with the death of s was a blind murder and the police was clue less about the likely offender. the police appears to have embarked upon a search akin to a combing operation and in that process several suspected characters were called and interrogated. harish chand sharma pw21 stated that between 19th and 25th march 1991 the accused subhash was called at the police station several times for making enquiries. he did not remember and was therefore not in a position to tell how many number of times the accused subhash was called for interrogation or making enquiries. on seeing the case diary he stated that on 21 3 1991 the accused was definitely called twice on the same day though there is no mention of what enquiries were made from him. however the accused was not detained and was sent back. any person even if innocent and not connected in any way with a gruesome crime which had recently occurred and was talk of the town if called by police and interrogated as a suspect would be scared and be apprehensive of the likelihood of his being implicated in the crime. placed in such situation if a villager unaware of the law happens to ask a person who he feels knows the things better than what he himself does as to what would be the period of incarceration to be suffered by any person for such an offence the impulse for inquiry may be outcome of a feeling of nervousness or mere inquisitiveness such an enquiry is not necessarily suggestive of the working of a criminal mind. iii recovery of underwear stained with blood and semen strangely enough the underwear and baniyan though discovered and seized on an information given by the accused and on his pointing out apparently on a statement recorded under section 27 of the evidence act have not been produced and exhibited in the court. what happened to these clothes is not known. there is not investigation directed towards finding out and no evidence worth its name collected and adduced in the court to show that the underwear and baniyan were of the accused. insofar as baniyan is concerned it has no stains of any type on it and therefore its discovery and seizure is meaningless and irrelevant. so far as the underwear is concerned the investigation suffers from another infirmity also. blood sam ple of the accused was not collected and therefore not grouped. no evidence is available to show as to what was the blood group of the accused and therefore the possibility of blood on the underwear being of the accused himself can not be and is not ruled out. the number and extent of spread of stains is also not known. shri sushil kumar jain the learned counsel for the accused appellant has placed reliance on shankarlal gyarasilal dixit v state of maharashtra air 1981. sc 765 1980 indlaw sc 47. therein a charge under sections 376 and 302 ipc was sought to be substantiated on circumstanctial evidence. one of the circumstan tial evidence relied on was that a human blood stain of b group was found on the accused 's pant which blood group was also of the deceased. another circumstantial evidence relied on was that a stain of semen was found on the under pant of the accused. this court held that the presence of blood stain of b group measuring 0 5 cm. in diameter on the appellant 's pant and of a dried stain of semen on his under pant were circumstances for too feeble to establish that the appellant raped or murdered the victim. b group is not uncommon group of blood and no effort was made to exclude the possibility that the blood of the accused belonged to the same group. as regards the dried stain of semen on the appellant 's under pant the court observed that the accused was a grown up man of 30 years and no compelling inference could arise that the stain was caused during the course of the sexual assault committed by him on the victim girl. in the present case the age of the accused was about 21 years at the time of the incident. on his arrest he was subjected to medical examination and found to be a potent and capable person. presence of semen stain on underwear assuming that the underwear belonged to the accused though there is no evidence adduced in this regard is not by itself an incriminating piece of evidence connecting the accused with the crime in question. so also the discov ery of b group blood stain on the underwear can not be treated as an incrimi nating piece of evidence against the accused connecting him with the crime because there is no evidence that the underwear belonged to the accused and further the possiblity of the underwear being stained with the blood of the person to whom it belonged or the accused if he was wearing it has not been ruled out. false plea of alibi. the high court has gone completely amiss in holding that a plea of alibi was taken by the accused and that was found to be false. the accused has not stated during his statement under section 313 cr. p c and nowhere suggested during cross examination of prosecution witnesses that at the time of the incident he was at a place wherefrom he could not have reached the place of the offence on the date and at the time of its commission. although the dead body of the victim was found on the outskirts of the village however there is no material available on record to fix the place and the likely time at which rape was committed on s and then she was murdered. what is being treated as the plea of alibi by the trial court and the high court is this. the accused appears to have been engaged as a causal not regular gate keeper at hira moti a local talkies. the proprietor of the cinema hall was examined to state that on 18th and 19th march the accused had taken leave from his job and during those days he was not present on duty. this piece of evidence was put to the accused during his statement under section 313 cr. p c and in reply he stated galat hai not correct. the purpose of asking questions during examination under section 313 cr. p c is to afford the accused personally an opportunity of explaining any incriminating circumstance so appearing in evidence against him. the accused may or may not avail the opportunity for offering his explanation. the accused did not avail the opportunity and stood short by simply stating that the statement of cinema owner was not correct. literal meaning of alibi is elsewhere. in law this term is used to express that defence in a criminal prosecution where the party accused in order to prove that he could not have committed the crime charged against him offers evidence that he was in a different place at that time. the plea taken should be capable of meaning that having regard to the time and place when and where he is alleged to have committed the offence he could not have been present. the plea of alibi postulates the physical impossibility of the presence of the accused at the scene of offence by reason of his presence at another place. see law lexicon p ramnath iyer second edition p 87. denial by an accused of an assertion made by his employer that the accused was on leave of absence from duty on the date of offence does not by any stretch of reasoning or logic amount to pleading alibi. we are clearly of the opinion that the accused appellant has not taken a plea of alibi and therefore the question of finding it false and then drawing an inference adverse to him does not arise at all. v absconding of the accused was the accused absconding at all. grave injustice has been done to the accused by holding it as a fact that the accused was absconding after the date of the incident and then treating the so called absconding as a piece of incrimi nating circumstantial evidence against the accused. according to harish chand sharma the accused was arrested on 3 4 1991 vide exbt. p21 at behror which is a place situated at a distance of about 30 35 kms. from village kotputli where the incident had taken place. though the accused is alleged to have been arrested at behror but the memo of arrest was not prepared at behror it was prepared at village kotputli. the memo of arrest does not state the arrest of accused having been made at behror. if the accused was arrested at behror there is no reason why the memo of arrest should not have been prepared at village behror. at least this fact should have been mentioned in the memo of arrest even if the same was prepared at village kotputli. secondly harish chand sharma himself states that between 19 3 1991 and 25 3 1991 the ac cused was called several times at the police station and on 21 3 1991 itself he was called twice in a day. thus he was always available to the police. kalu ram pw5 accompanied by a friend santosh pw9 had gone to see a movie in cinema talkies heera moti two days after the date of the incident and there the accused was present on his duty. there is no evidence adduced by the prosecution to hold that soon after the date of the offence the accused was found missing from his residence or the place of his employment and was not available though searched at the place or places where normally he ought to have been. hence it could not have been held that the accused was absconding. conclusion. thus none of the pieces of evidence relied on as incriminating by the trial court and the high court can be treated as incriminating pieces of circumstantial evidence against the accused. though the offence is gruesome and revolts the human conscience but an accused can be convicted only on legal evidence and if only a chain of circumstantial evidence has been so forged as to rule out the possibility of any other reasonable hypothesis excepting the guilt of the accused. in shankarlal gyarasilal dixit 's case 1980 indlaw sc 47 supra this court cautioned human nature is too willing when faced with brutal crimes to spin stories out of strong suspicions. this court has held time and again that between may be true and must be true there is a long distance to travel which must be covered by clear cogent and unimpeachable evidence by the prosecu tion before an accused is condemned a convict. the trial court and the high court have proceeded on an assumption of availability of five pieces forging links in the chain of circumstantial evi dence out of which we have found as stated hereinabove four of the alleged circumstances not to be pieces of incriminating circumstantial evidence at all. we are left with circumstance No 3 only i e recovery of underwear and baniyan stained with semen and human blood group b which alone in the fact and circumstances of the case discussed hereinabove can not form basis of conviction of the accused appellant for the offence charged. before parting with the case we would like to place on record an observation of ours touching an aspect of the case. there are clueless crimes committed. the factum of a cognizable crime having been committed is known but neither the identity of the accused is disclosed nor is there any indication available of the witnesses who would be able to furnish useful and relevant evidence. such offences put to test the wits of an investigating officer. a vigilant investigating officer well versed with the techniques of the job is in a position to collect the threads of evidence finding out the path which leads to the culprit. the ends which the administration of cirminal justice serves are not achieved merely by catching hold of the culprit. the accusation has to be proved to hilt in a court of law. the evidence of investigating officer given in the court should have a rhythm explaining step by step how the investigation proceeded leading to detection of the offender and collection of evidence against him. this is necessary to exclude the likelihood of any innocent having been picked up and branded as culprit and then the gravity of the offence arousing human sympathy persuading the mind to be carried away by doubtful or dubious circumstances treating them as of beyond doubt evidentiary value. the appeals are allowed. conviction of the accused appellant under sections 302 and 3762f of indian penal code is set aside. he is acquitted of the charges framed against him. he shall be set at liberty forthwith if not required to be detained in connection with any other offence. appeals allowed.

IN-Ext

FACTS the accused-appellant has been held guily of of-fences punishable under section 302 and section 376(2)(f) of indian penal code. while the learned additional sessions judge made a reference to the high court for confirmation of death sentence under section 366 cr. p.c., the appellant preferred an appeal putting in issue his conviction and sentence kumari s, a young child aged about 5 years, was last seen at about 4 p.m. on 18th march, 1991 and thereafter she did not return home. at about 7 a.m. on 19th march 1991, kishori lal, pw4 informed bd (pw2), the unfortunate father of s, that dead body of a girl was lying near mohalla basera on the outskirts of village kotputli. the dead body was sent for post-mortem examination which was performed at 9.30 a.m., on the same day, by a medical board of three doctors. it was found that the victim was brutally ravished and thereafter killed. according to the medical opinion the probable cause of death of s was shock produced due to vaginal trauma and rupture of post- fornix along with asphyxia due to ligature around the neck. the forensic science laboratory confirmed presence of group-b blood on the clothes of deceased. the clothes of the accussed recovered were sent to forensic science laboratory. according to report human semen was detected on underwear and human blood of group 'b' was detected on the underwear. ARGUMENT the learned counsel for the accused-appellant has placed reliance on shankarlal gyarasilal dixit v. state of maharashtra, air (1981. sc 765 1980 indlaw sc 47. therein a charge under sections 376 and 302 ipc was sought to be substantiated on circumstanctial evidence. one of the circumstan-tial evidence relied on was that a human blood stain of 'b' group was found on the accused's pant which blood group was also of the deceased. another circumstantial evidence relied on was that a stain of semen was found on the under-pant of the accused. the court held that the presence of blood-stain of 'b' group measuring 0.5 cm. in diameter on the appellant's pant and of a dried stain of semen on his under-pant, were circumstances for too feeble to establish that the appellant raped or murdered the victim. b' group is not uncommon group of blood and no effort was made to exclude the possibility that the blood of the accused belonged to the same group. as regards the dried stain of semen on the appellant's under-pant, the court observed that the accused was a grown-up man of 30 years and no compelling inference could arise that the stain was caused during the course of the sexual assault committed by him on the victim girl. in the present case the age of the accused was about 21 years at the time of the incident. on his arrest he was subjected to medical examination and found to be a potent and capable person. presence of semen stain on underwear, assuming that the underwear belonged to the accused though there is no evidence adduced in this regard, is not by itself an incriminating piece of evidence connecting the accused with the crime in question. so also the discov-ery of 'b' group blood-stain on the underwear cannot be treated as an incrimi-nating piece of evidence against the accused connecting him with the crime because there is no evidence that the underwear belonged to the accused and further the possiblity of the underwear being stained with the blood of the person to whom it belonged, or the accused if he was wearing it has not been ruled out ISSUE we would proceed to examine each of the pieces of incriminating circumstantial evidence so as to find out if each one of the circumstantial evidence is proved individually and whether collectively it forges such a chain of incriminating circumstances as would fasten the guilt on the accused beyond by shadow of reasonable doubt. ANALYSIS there is nothing in child witness’s statement to suggest that what she is narrating in the court is the story of a day soon before the date and time of the incident or the date on which dead body of s was found. to constitute evidence of last seen together, the evidence must definitely permit an inference being drawn that the victim and the accused were seen together at a point of time in close proximity with the time and date of the commission of crime. any person even if innocent and not connected in any way with a gruesome crime which had recently occurred and was talk of the town, if called by police and interrogated as a suspect, would be scared and be apprehensive of the likelihood of his being implicated in the crime. the high court has gone completely amiss in holding that a plea of alibi was taken by the accused and that was found to be false. the accused has not stated during his statement under section 313 cr. p.c. and nowhere suggested during cross-examination of prosecution witnesses that at the time of the incident he was at a place wherefrom he could not have reached the place of the offence on the date and at the time of its commission. the plea of alibi postulates the physical impossibility of the presence of the accused at the scene of offence by reason of his presence at another place. see law lexicon, p. ramnath iyer, second edition, p.87. denial by an accused of an assertion made by his employer that the accused was on leave of absence from duty on the date of offence does not, by any stretch of reasoning or logic, amount to pleading alibi. the accused-appellant has not taken a plea of alibi and therefore the question of finding it false, and then drawing an inference adverse to him, does not arise at all. v) absconding of the accused was the accused absconding at all. grave injustice has been done to the accused by holding it as a fact that the accused was absconding after the date of the incident and then treating the so-called absconding as a piece of incrimi-nating circumstantial evidence against the accused. none of the pieces of evidence relied on as incriminating, by the trial court and the high court, can be treated as incriminating pieces of circumstantial evidence against the accused. though the offence is gruesome and revolts the human conscience but an accused can be convicted only on legal evidence and if only a chain of circumstantial evidence has been so forged as to rule out the possibility of any other reasonable hypothesis excepting the guilt of the accused. in shankarlal gyarasilal dixit's case 1980 indlaw sc 47 (supra), this court cautioned - "human nature is too willing, when faced with brutal crimes, to spin stories out of strong suspicions. the court has held time and again that between may be true and must be true there is a long distance to travel which must be covered by clear, cogent and unimpeachable evidence by the prosecu-tion before an accused is condemned a convict. the trial court and the high court have proceeded on an assumption of availability of five pieces forging links in the chain of circumstantial evi-dence out of which we have found, as stated hereinabove, four of the alleged circumstances not to be pieces of incriminating circumstantial evidence at all. the factum of a cognizable crime having been committed is known but neither the identity of the accused is disclosed nor is there any indication available of the witnesses who would be able to furnish useful and relevant evidence. such offences put to test the wits of an investigating officer. the ends, which the administration of cirminal justice serves, are not achieved merely by catching hold of the culprit. the accusation has to be proved to hilt in a court of law. the evidence of investigating officer given in the court should have a rhythm explaining step by step how the investigation proceeded leading to detection of the offender and collection of evidence against him. this is necessary to exclude the likelihood of any innocent having been picked up and branded as culprit and then the gravity of the offence arousing human sympathy persuading the mind to be carried away by doubtful or dubious circumstances treating them as of 'beyond doubt' evidentiary value.

these two appeals involve identical questions and therefore are disposed of by this common judgment after noticing the factual position so far as they are relevant. the appellants question correctness of the judgment rendered by a division bench of the madras high court which held that the withdrawal of benefits extended to the appellants as subsidy was in order. the appellants questioned legality or the g o ms No 989 dated 1 9 1988 directing discontinuance of purchase tax exemption in case of mills which exceeded the ceiling of rs 300 lakes during the period of five years and government letter dated 28 12 1988 which made the aforesaid g o ms No 989 of 1 9 1988 operative retrospectively from 1 4 1988. initially the writ petitions were filed before the high court but after constitution of the tamil nadu taxation special tribunal hereinafter referred to as the tribunal the writ petitions were transferred to the tribunal which held that on application of the principles of promissory estoppel and legitimate expectation the withdrawal of benefit was not sustainable in law. the state questioned correctness of the judgment before the high court which as noted above held the g o ms and the govt. letter to be valid reversing the conclusions arrived at by the tribunal. the judgment forms subject matter of challenge in these appeals. in support of the appeals the primary stands raised by the appellants are. the doctrines of promissory estoppel and legitimate expectation were applicable to the facts of the case. there was no material to show existence of any overriding public interest to rule out application of the aforesaid doctrine there was no scope for retrospective withdrawal. in any event before withdrawal of the benefits no opportunity of hearing was granted. the high court erroneously came to hold that the state government had not filed any counter. the materials which were produced before the high court and on the basis of which it is decided that the decision of the government is in order were not even pleaded in the pleadings and during arguments. the appellants were taken by surprise by production of materials which were not even disclosed to the appellants. the contents of the files which were produced before the high court and on which reliance was placed to hold against the appellants are not known to the appellants. in other words there was clear violation of the principles of natural justice. the government 's letter dated 28 12 1988 refers to some decision but in the absence of any authentication as required under article 166 of the constitution of india 1950 in short the constitution the same is ineffective. in any event the retrospective withdrawal of the benefit on the basis of an executive decision is impermissible. in response learned counsel for the respondent state submitted that the appellants have failed to adduce any evidence or material to show that were in any way induced by any governmental action to set up industries. in fact the government of tamil nadu vide g o ms. No 1294 dated 24 10 1975 granted exemption from purchase tax on sugarcane in favour of sugar mills established in co operative and public sectors in the form of annual subsidy equivalent to purchase tax on sugarcane. there was no scope for any mis understanding that it applied to any private sector participation in the sphere of sugar manufacturing. the commercial productions were started in case of appellants in c a No 86062002 i e ponni sugars erode ltd v govt. of tamil nadu ors on 27 1 1984 and in c a 86052002 i e bannari amman sugars ltd v commercial tax officer. on 22 1 1986. the appellants only made representation to government subsequently claiming exemption at par with the cooperative and public sector mills. as there was no inducement or assurance the question of any promissory estoppel did not arise. so far as legitimate expectation aspect is concerned it is too well known that the benefit extended can be withdrawn and with this knowledge if the units are set up the principle of legitimate expectation does not apply. the high court recorded the following findings on the factual aspects. the respondents have established their units prior to the government orders granting the subsidy and they have no vested right to claim exemption. no inducement was made in the government orders to establish the units. the respondents have not acted on the basis of the government orders for establishing the units. the grant of subsidy is a concession and the government has got good reasons for modifying the scheme in public interest. no prejudice is caused to the respondents since the scheme was interested to make the units viable and the modified scheme provides for safeguards to that extent. the order granting subsidy can be withdrawn in public interest. the government has exercised their right to modify the scheme in the interest of public revenue. the stand taken by the present appellants before the tribunal and the high court was rejected. with reference to the files produced certain factual conclusions were arrived at the correctness of those form the core challenge in these appeals. estoppel is a rule of equity which has gained new dismensions in recent years. a new class of estoppel has come to be recognized by the courts in this country as well as in england. the doctrine of promissory estoppel has assumed importance in recent years though it was dimly noticed in some of the earlier cases. the leading case on the subject is central london property trust ltd v high trees house ltd 1947 1 k b 130. the rule laid down in high trees case supra again came up for consideration before the king 's bench in combe v bombe 1951 2 k b 215. therein the court ruled that the principle stated in high trees 's case supra is that where one party has by his words or conduct made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly then once the other party has taken him at his word and acted on it the party who gave the promise or assurance can not afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him but he must accept their legal relations subject to the qualification which he himself has so introduced even though it is not supported in point of law by any consideration but only by his word. but that principle does not create any cause of action which did not exist before so that where a promise is made which is not supported by any consideration the promise can not bring an action on the basis of that promise. the principle enunciated in the high trees case supra was also recognized by the house of lords in tool metal manufacturing co ltd v tungsten electric co ltd 1955. all e r 657 1955 1 w l r 761. that principle was adopted by this court in union of india v indo afghan agencies ltd air 1968. sc 718 1967 indlaw sc 411 and turner morrison and co ltd v hungerford investment trust ltd 1972 1 scc 857 1972 indlaw sc 190. doctrine of promissory estoppel has been envolved by the courts on the principles of equity to avoid injustice. promissory estoppel is defined in black 's law distionary as an estoppel which arises when there is a promise which promissor should reasonable expect to induce action or forbearance of a definite and substantial character on the part of promisee and which does include such action or forbearance and such promise is binding if injustice can be avoided only by enforcement of promise. so far as this court is concerned it invoked the doctrine in indo afghan agencies 's case 1967 indlaw sc 411 supra in which is was inter alia laid down that even though the case would not fall within the terms of section 115 of the indian evidence act 1872 in short the evidence act which enacts the rule of estoppel it would still be open to a party who had acted on a representation made by the government to claim that the government should be bound to carry out the promise made by it even though the promise was not recorded in the form of a formal contract as required by article 299 of the constitution. see century spinning co v ulhasnagar municipal council air 1971. sc 1021 1970 indlaw sc 341 radhakrishna v state of bihar air 1977. sc 1496 1977 indlaw sc 282 motilal padampat sugar mills co ltd v state of u p 1979 2 scc 409 1978 indlaw sc 56 union of india v godfrey philips indian ltd 1985 4 scc 369 1985 indlaw sc 275 and dr ashok kumar maheshwari v state of u p another 1998 2 supreme 100 1998 indlaw sc 1376. in the backdrop let us travel a little distance into the past to understand the evolution of the doctrine of promissory estoppel. dixon j an australian jurists in grundt v great boulder gold mines prorietary ltd 1939 59 clr 641 aust laid down as under it is often said simply that the party asserting the estoppel must have been induced to act to his detriment. although substantially such a statement is correct and leads to no misunderstanding it does not bring out clearly the basal purpose of the doctrine. that purpose is to avoid or prevent a detriment to the party asserting the estoppel by compelling the opposite party to adhere to the assumption upon which the former acted or abstained from acting. this means that the real detriment or harm from which the law seeks to give protection is that which would flow from the change of position if the assumptions were deserted that led to it. the principle set out above was reiterated by lord denning in high trees 's case supra. this principle has been evolved by equity to avoid injustice. it is nether in the realm of contract nor in the realm of estoppel. its object is to interpose equity shorn of its form to mitigate the rigour of strict law as noted in anglo afghan aencies 's case1967 indlaw sc 411 supra and sharma transport represented by d p sharma v government of a p and others 2002 2 scc 188 2001 indlaw sc 19917. no vested right as to tax holding is acquired by a person who is granted concession. if any concession has been given it can be withdrawn at any time and no time limit should be insisted upon before it was withdrawn. the rule of promissory estoppel can be invoked only if on the basis of representation made by the government the industry was established to avail benefit if of exemption. in kasinka trading and anr v union of india and anr. 1995 1 scc 274 1994 indlaw sc 2183. it was held that the doctrine of promissory estoppel represents a principle evolved by equity to avoid injustice. a person may have a legitimate expectation of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. the expectation may arise either from a representation or promise made by the authority including an implied representation or from consistent past practice. the doctrine of legitimate expectation has an important place in the developing law of judicial review. it is however not necessary to explore the doctrine in this case it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who can not point to the existence of a substantive right to obtain the leave of the court to apply for judicial review. it is generally agreed that legitimate expectation gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right to a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. the doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such involved. the protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. in other words where a person 's legitimate expectation in not fulfilled by taking a particular decision then decision maker should justify the denial of such expectation by showing some overriding public interest. see union of india and others. v hindustan development corporation and others air 1994. sc 9981993 indlaw sc 1085. while the discretion to change the policy in exercise of the executive power when not trammelled by any statute or rule is wide enough what is imperative and implicit in terms of article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily or by any ulterior criteria. the wide sweep of article 14 and the requirement of every state action qualifying for its validity on this touchstone irrespective of the field of activity of the state is an accepted tenet. the basic requirement of article 14 is fairness in action by the state and non arbitrariness in essence and substance is the heart beat of fair play. actions are amenable in the panorama of judicial review only to the extent that the state must act validity for discernible reasons not whimsically for any ulterior purpose. the meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. a question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. a basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so does if really satisfy the test of reasonableness. where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure the deviation to act in different manner which does not disclose any discernible principle which is reasonable itself small be labelled as arbitrary. every state action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary. this court 's observations in g b mahajan v jalgaon municipal council air 1991 sc 1153 1990 indlaw sc 438 are kept out of lush field of administrative policy except where policy is inconsistent with the express or implied provision of a statute which creates the power to which the policy relates or where a decision made in purported exercise of power is such that a repository of the power acting reasonably and in good faith could not have made it. but there has to be a word of caution. something overwhelming must appear before the court will intervene. that is and ought to be a difficult onus for an applicant to discharge. the courts are not very good at formulating or evaluating policy. sometimes when the courts have intervened on policy grounds the court 's view of the range of policies open under the statute or of what is unreasonable policy has not got public acceptance. on the contrary curial views of policy have been subjected to stringent criticism. as professor wade points out in administrative law by h w r wade 6th edition there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable. the reasonableness in administrative law must therefore distinguish between proper course and improper abuse of power. nor is the test court 's own standard of reasonableness as it might conceive it in a given situation. the point to note is that the thing is not unreasonable in the legal sense merely because the court thinks it to be unwise. in hindustan development corporation 's case1993 indlaw sc 1085 supra it was observed that decision taken by the authority must be found to be arbitrary unreasonable and not taken in public interest where the doctrine of legitimate expectation can be applied. if it is a question of policy even by ways of change of old policy the courts can not intervene with the decision. in a given case whether there are such facts and circumstances giving rise to legitimate expectation would primarily be a question of fact. as was observed in punjab communications ltd v union of india of others air 1999 sc 1801 1999 indlaw sc 1548 the change in policy can defeat a substantive legitimate expectation if it can be justified on wednesbury reasonableness. the decision maker has the choice in the balancing of the pros and cons relevant to the change in policy. it is therefore clear that the choice of police is for the decision maker and not the court. the legitimate substantive expectation merely permits the court to find out if the change of policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. a claim based on merely legitimate expectation without anything more can not ipso facto give a right. its uniqueness lies in the fact that it covers the entire span of time present past and future. how significant is the statement that today is tomorrows yesterday. the present is as we experience it the past is a present memory and future is a present expectation. for legal purposes expectation is not same as anticipation. legitimacy of an expectation can be inferred only if it is founded on the sanction of law. as observed in attorney general for new south wale v quinn 1990 64 australian ljr 327 to strike the exercise of administrative power solely on the ground of avoiding the disappointment of the legitimate expectations of an individual would be to set the courts adrift on a featureless sea of pragmatism. moreover the negotiation of a legitimate expectation falling short of a legal right is too nebulous to form a basis for invalidating the exercise of a power when its exercise otherwise accords with law. if a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary discriminatory unfair or biased gross abuse of power of violation of principles of natural justice the same can be questioned on the well known grounds attracting article 14 but a claim based on mere legitimate expectation without anything more can not ipso facto give a right to invoke these principles. it can be one of the grounds to consider but the court must lift the veil and see whether the decision is violative of these principles warranting interference. it depends very much on the facts and the recognised general principles of administrative law applicable to such facts and the concept of legitimate expectation which is the latest recruit to a long list of concepts fashioned by the courts for the review of administrative action must be restricted to the general legal limitations applicable and binding the manner of the future exercise of administrative power in a particular case. it follows that the concept of legitimate expectation is not the key which unlocks the treasure of natural justice and it ought not to unlock the gates which shuts the court out of review on the merits particularly when the elements of speculation and uncertainty are inherent in that very concept. as cautioned in attorney general for new south wale 's case the courts should restrain themselves and respect such claims duly to the legal limitations. it is a well meant caution. otherwise a resourceful litigant having vested interest in contract licences etc can successfully indulge in getting welfare activities mandated by directing principles thwarted to further his own interest. the caution particularly in the changing scenario becomes all the more important. if the state acts within the bounds of reasonableness it would be legitimate to take into consideration the national priorities and adopt trade policies. as noted above the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed. reasonableness of restriction is to be determined in an objective manner and from the standpoint of interest of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. a restriction can not be said to be unreasonable merely because in a given case it operates harshly. in determining whether there is any unfairness involved the nature of the right alleged to have taken infringed the underlying purpose of the restriction imposed the extent and urgency of the evil sought to be remedied thereby the disproportion of the imposition the prevailing condition at the relevant time enter into judicial verdict the reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. see parbhani transport co operative society ltd v regional transport authority aurangabad and others air 1960. sc 9011960 indlaw sc 472 shree meenakshi mills ltd v union of india air 1974. sc 3651973 indlaw sc 291 hari chand sarda v mizo district council and another air 1967 sc 829 1966 indlaw sc 125 krishnan kakkanth v government of kerala and others air 1997. sc 128 1996 indlaw sc 1845 and union of india and another v international trading co and another 2003 5 scc 437 2003 indlaw sc 472. article 166 of the constitution deals with the conduct of government business. the said provision reads as follows 166. conduct of business of the government of a state 1 all executive action of the government of a state shall be expressed to be taken in the name of the governor. 2 orders and other instruments made and executed in the name of the governor shall be authenticated in such manner as may be specified in rules to be made by the governor and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the governor. the governor shall make rules for the more convenient transaction of the business of the government of the state and for the allocating among ministers of the said business in so far as it is not business with respect to which the governor is by or under this constitution required to act in his discretion. clause 1 requires that all executive action of the state government shall have to be taken in the name of the governor. further is no particular formula of words required for compliance with article 1661. what the court has to see is whether the substance of its requirement has been complied with. a constitution bench in r chitralekha etc. v state of mysore and ors. air 1964. sc 1823 1964 indlaw sc 103 held that the provisions of the article were only directory and not mandatory in character and if they were not complied with it could still be established as a question of fact that the impugned order was issued in fact by the state government or the governor. clause 1 does not prescribe how an executive action of the government is to be performed it only prescribes the mode under which such act is to be expressed. while clause 1 is in relation to the mode of expression clause 2 lays down the ways in which the order is to be authenticated. whether there is any government order in terms of article 166 has to be adjudicated from the factual background of each case. in order to invoke the doctrine of promissory estoppel clear sound and positive foundation must be laid in the petition itself by the party invoking and doctrine the bald expressions without any supporting material to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the government would not be sufficient to press into aid the doctrine. the courts are bound to consider all aspects including the results sought to be achieved and the public good at large because while considering the applicability of the doctrine the courts have to do equity and the fundamental principles of equity must for ever be present in the mind of the court. in shrijee sales corporation and anr v union of india 1997 3 scc 398 1996 indlaw sc 1561 it was observed that once public interest is accepted as the superior equity which can override individual equity the principle would be applicable even in cases where a period has been indicated for operation of the promise. if there is a supervening public equity the government would be allowed to change its stand and has the power to withdraw from representation made by it which induced persons to take certain steps which may have gone adverse to the interest of such persons on account of such withdrawal. moreover the government is competent to rescind from the promise even if there is no manifest public interest involved provided no one is put in any adverse situation which can not be rectified. similar view was expressed in m s pawan alloys and casting pvt ltd meerut etc. v u p state electricity board and others air 1997. sc 3910 1997 indlaw sc 1364 and in sales tax officers and anr. v shree durga oil mills and anr. 1999 1 scc 573 1997 indlaw sc 1219 it was further held that the government could change its industrial policy if the situation so warranted and merely because the resolution was announced for a particular period it did not mean that the government could not amend and change the policy under any circumstances. if the party claiming application of the doctrine acted on the basis of a notification it should have known that such notification was liable to be amended or rescinded at any point of time if the government felt that it was necessary to do so in public interest. in view of the factual position recorded by the high court that at the point of time the appellants units were set up and the commercial production started there was no assurance or promise. the doctrine of promissory estoppel had no application to the facts of the case at that stage. we find no substance in the plea that before a policy decision is taken to amend or alter the promise indicated in any particular notification the beneficiary was to be granted an opportunity of hearing. such a plea is clearly unsustainable. while taking policy decision the government is not required to hear the persons who have been granted the benefit which is sought to be withdrawn. the question of legitimate expectation arises according to the appellants after the benefits were granted by the concerned g o ms. at this juncture we would like to take note to certain factual positions highlighted by the appellants which are practically undisputed by the respondents. contrary to what the high court has stated it appears from record that counter affidavits were filed. the reasons which have weighed with the high court to uphold the action of the state were not pleaded before the high court specifically and the high court cull out those from the files which were produced before it. though the appellants were not entitled to any opportunity of hearing before alteration of the benefits flowing from the notifications or withdrawal of any benefit yet when the state has not taken any specific stand justifying the withdrawal and the high court referred to the files to put its seal of proof notwithstanding non requirement for granting any opportunity before the withdrawal principles of natural justice certainly were applicable since the high court with reference to the files recorded findings on the basis thereof. as noted above no specific grounds or reasons were indicated to justify the withdrawal in the affidavits filed before the tribunal or the high court as the case may be. as the correctness of factual basis justifying withdrawal is in issue fair play certainly warranted grant of opportunity to the appellants to present its side of the picture. further a definite plea was taken that there was no scope for retrospective withdrawal of benefit by an executive order. the high court has not dealt with the issue. the same also needs to be examined. above being the position decision of the high court by placing reliance on the files to hold that the withdrawal was justified is not tenable in law and in the fitness of things the high court should hear the matter afresh and taken decision on those two issues. it is made clear that we have not expressed any opinion on those issues on the facts of the present case. it is to be noted that no privilege was claimed from production of the file as the files were produced before the high court and in fact the high court referred to the materials on the files to affirm state 's action. we direct that the state government if it so chooses shall file its further counter affidavits before the high court within six weeks from today indicating the reasons which warranted the withdrawal of the benefits extended. the plea of the appellants regarding legitimate expectation shall be considered by the high court in the light of materials to be placed by the respondents by affidavits as directed above. we make it clear that we have not expressed any opinion on the factual aspects except indicating the principles underlying legitimate expectation. another point which was specifically raised before the high court but has not been dealt by it is the legality of the action in directing retrospective withdrawal of the benefit by a letter of the government. whether the same is permissible in law has to be decided by the high court. to the aforesaid limited extent the matter is remitted to the high court for fresh consideration. the appeals are disposed of accordingly without any order as to costs. appeals disposed of.

IN-Ext

FACTS the appellants question correctness of the judgment rendered by a division bench of the madras high court which held that the withdrawal of benefits extended to the appellants as subsidy was in order. the appellants questioned legality of the g.m.o directing discontinuance of purchase tax exemption in case of mills which exceeded the ceiling of rs. 300 lakes during the period of five years, and government letter which made the aforesaid g.m.o operative retrospectively. initially the writ petitions were filed before the high court, but after constitution of the tamil nadu taxation special tribunal (hereinafter referred to as the 'tribunal') the writ petitions were transferred to the tribunal which held that on application of the principles of promissory estoppel and legitimate expectation, the withdrawal of benefit was not sustainable in law. the state questioned correctness of the judgment before the high court which, as noted above, held the g.m.o and the govt. letter to be valid, reversing the conclusions arrived at by the tribunal. the judgment forms subject matter of challenge in these appeals. with reference to the files produced, certain factual conclusions were arrived at, the correctness of those form the core challenge in these appeals. a new class of estoppel has come to be recognized by the courts in this country as well as in england. the doctrine of 'promissory estoppel' has assumed importance in recent years though it was dimly noticed in some of the earlier cases. ARGUMENT the doctrines of promissory estoppel and legitimate expectation were applicable to the facts of the case. there was no material to show existence of any overriding public interest to rule out application of the aforesaid doctrine there was no scope for retrospective withdrawal. in any event, before withdrawal of the benefits, no opportunity of hearing was granted. the appellants have failed to adduce any evidence or material to show that were in any way induced by any governmental action to set up industries. ISSUE the question of legitimate expectation arises according to the appellants after the benefits were granted by the concerned g.m.os. further, a definite plea was taken that there was no scope for retrospective withdrawal of benefit by an executive order. ANALYSIS "promissory estoppel" is defined in black's law distionary as "an estoppel which arises when there is a promise which promissor should reasonable expect to induce action or forbearance of a definite and substantial character on the part of promisee, and which does include such action or forbearance, and such promise is binding if injustice can be avoided only by enforcement of promise". in central london property trust ltd. v. high trees house ltd., [1947] 1 k.b. 130 (high trees case) , the principle stated is that, where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the party who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word. but that principle does not create any cause of action, which did not exist before; so that, where a promise is made which is not supported by any consideration, the promise cannot bring an action on the basis of that promise. no vested right as to tax holding is acquired by a person who is granted concession. if any concession has been given it can be withdrawn at any time and no time limit should be insisted upon before it was withdrawn. the rule of promissory estoppel can be invoked only if on the basis of representation made by the government, the industry was established to avail benefit if of exemption. a person may have a 'legitimate expectation' of being treated in a certain way by an administrative authority even though he has no legal right in private law to receive such treatment. the expectation may arise either from a representation or promise made by the authority, including an implied representation, or from consistent past practice. the doctrine of legitimate expectation has an important place in the developing law of judicial review. it is, however, not necessary to explore the doctrine in this case, it is enough merely to note that a legitimate expectation can provide a sufficient interest to enable one who cannot point to the existence of a substantive right to obtain the leave of the court to apply for judicial review. the doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such involved. the protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. the basic requirement of article 14 is fairness in action by the state, and non-arbitrariness in essence and substance is the heart beat of fair play. actions are amenable, in the panorama of judicial review only to the extent that the state must act validity for discernible reasons, not whimsically for any ulterior purpose. the meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. a question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. a basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does if really satisfy the test of reasonableness. every state action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary. something overwhelming must appear before the court will intervene. that is and ought to be a difficult onus for an applicant to discharge. there is ample room within the legal boundaries for radical differences of opinion in which neither side is unreasonable. the reasonableness in administrative law must, therefore, distinguish between proper course and improper abuse of power. nor is the test court's own standard of reasonableness as it might conceive it in a given situation. the point to note is that the thing is not unreasonable in the legal sense merely because the court thinks it to be unwise. in punjab communications ltd. v. union of india of others, air (1999) sc 1801 1999 indlaw sc 1548, the change in policy can defeat a substantive legitimate expectation if it can be justified on "wednesbury reasonableness." the decision-maker has the choice in the balancing of the pros and cons relevant to the change in policy. it is, therefore, clear that the choice of police is for the decision-maker and not the court. the legitimate substantive expectation merely permits the court to find out if the change of policy which is the cause for defeating the legitimate expectation is irrational or perverse or one which no reasonable person could have made. a claim based on merely legitimate expectation without anything more cannot ipso facto give a right. its uniqueness lies in the fact that it covers the entire span of time; present, past and future. how significant is the statement that today is tomorrows' yesterday. the present is as we experience it, the past is a present memory and future is a present expectation. if a denial of legitimate expectation in a given case amounts to denial of right guaranteed or is arbitrary, discriminatory, unfair or biased, gross abuse of power of violation of principles of natural justice, the same can be questioned on the well known grounds attracting article 14 but a claim based on mere legitimate expectation without anything more cannot ipso facto give a right to invoke these principles. if the state acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. as noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed. reasonableness of restriction is to be determined in an objective manner and from the standpoint of interest of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. a restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. the state government, if it so chooses, shall file its further counter-affidavits before the high court within six weeks from today indicating the reasons which warranted the withdrawal of the benefits extended. the plea of the appellants regarding legitimate expectation shall be considered by the high court in the light of materials to be placed by the respondents by affidavits as directed above. the court made it clear that we have not expressed any opinion on the factual aspects except indicating the principles underlying legitimate expectation. another point which was specifically raised before the high court but has not been dealt by it is the legality of the action in directing retrospective withdrawal of the benefit by a letter of the government. whether the same is permissible in law has to be decided by the high court. STATUTE article 166 of the constitution deals with the conduct of government business. the said provision reads as follows: conduct of business of the government of a state,- (1) all executive action of the government of a state shall be expressed to be taken in the name of the governor, (2) orders and other instruments made and executed in the name of the governor shall be authenticated in such manner as may be specified in rules to be made by the governor, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the governor,(3) the governor shall make rules for the more convenient transaction of the business of the government of the state, and for the allocating among ministers of the said business in so far as it is not business with respect to which the governor is by or under this constitution required to act in his discretion.

these appeals arising out of a judgment and order dated 26 4 2000 passed in writ petition no 1188 of 1997 by the high court of madhya pradesh indore bench involving similar questions of law and fact were taken up for hearing together and are being disposed of by this common judgment. background facts. the appellant nos 1 and 2 are degree holders in civil engineering and appellant nos. 3 and 4 are diploma holders in civil engineering. they having come to learn that certain vacancies exist in the respondent authority applied therefor although no advertisement in that behalf was issued. the respondent authority appointed the appellants and posted them to an overseas project known as indore habitat project which was implemented through the agency of overseas development authority hereinafter referred to as the oda on daily wages. rs 63 per day for the degree holders and rs 52 50 per day for the diploma holders. on or about 17 3 1997 however they began receiving a salary of rs 1500 per month. allegedly from their salary provident fund was being deducted. they were also being granted the benefit of leave. a dispute arose as to whether all the appellants were employed for the purpose of the said project or the appellants in civil appeal no 337 of 2002 were appointed in the year 1991 by the authority for its own job. an industrial dispute was raised by the appellants herein as their services were not being regularized by the respondent. the said dispute was referred for adjudication of the labour court indore by the state of madhya pradesh on the following questions. 1whether non regularisation of the sub engineers as per the listed enclosed is valid and proper. if no then to which relief they are entitled and what directions should be given to the employer. 2whether it is valid and proper for not giving equal salary to these sub engineers like other sub engineers in accordance with the equal work. proceedings before the tribunal. the parties filed their respective pleadings before the labour court and also adduced their respective evidences. the labour court on the basis of the materials produced before it arrived at the following findings 1. the appellants were appointed by the indore development authority. all the employees have been working in the establishment of the respondents for last 5 6 years. their work was satisfactory. work has been taken by the respondent from all the appellants except four. respondents had also mentioned in their claim that there was a proposal to hand over the colony of oda project to indore municipal corporation. the salary fixed by the commissioner was earlier given to all engineers and later on they were given the salary fixed by the collector. there is no difference in their work and the work of the employees of indore development authority. aggrieved by and dissatisfied with the said award the respondent authority herein filed a writ petition before the madhya pradesh high court indore bench which was marked as writ petition no 1188 of 1997. by reason of the impugned judgment dated 26 4 2000 the said writ petition was allowed. high court judgment. the high court accepted the contention of the respondent authority that the appellants were not appointed against the sanctioned posts and their services were taken on account of the said oda project which was implemented through the agency of the respondent authority. the oda project is said to have been completed and only the maintenance thereof was to be looked after by the indore municipal corporation. it was held that the services of the appellants can not be directed to be regularized in services. as regard the application of the madhya pradesh industrial employment standing orders act 1961 for short the 1961 act and the rules framed there under known as m p industrial employment standing order rules 1963 for short the 1963 rules it was observed that although there was no specific pleadings raised in this behalf by the respondents therein nor any question having been referred to the labour court by the state government touching the said issue it committed an error in granting relief to them on the basis thereof on its own motion. despite the same the high court went into the question of applicability of the said act and held that the 1961 act and the 1963 rules had no application. before the high court various documents were produced by the appellants herein to show the nature of their employment but the same had not been taken on records by the high court. as regard application of the doctrine of equal pay for equal work it was held to be not applicable as the appellants were not entitled to absorption or classification in terms of the 1961 act and the 1963 rules. submissions. dr rajiv dhawan learned senior counsel appearing on behalf of the appellants in civil appeal no 337 of 2002 and mr m n rao learned senior counsel appearing on behalf of the appellants in civil appeal no 335 of 2002 took us through materials on records and contended that the appellants herein became permanent employees of the respondents having regard to the provisions contained in section 2 of the 1961 act and order 2i and 2vi of the standard standing orders as set out in the annexure appended to the 1963 rules defining permanent employees and the temporary employees. placing reliance on several documents which have come into existence at a subsequent stage dr dhawan would contend that vacancies in fact had arisen after passing of the judgment of the high court and thus the services of the appellants should be regularized there against. the vacancies according to the learned counsel need not be permanent ones. it was urged that the expression clear vacancies has to be read in the context of period for which the concerned workman was required to work namely six months. the learned counsel would argue that the job was required to be performed for six months for which somebody else could have been appointed so as to attract the provisions of the 1961 act and the 1963 rules. dr dhawan would furthermore contend that the findings of fact had been arrived at by the labour court that the appellants of civil appeal no 337 of 2002 were appointed by the authority and not only their work was being taken in the project but also in other works and thus mere posting of the appellants to the said project would not disentitle them from the benefit of the said act. the learned counsel would urge that a seniority list was also drawn up and an employment code was assigned to each one of the appellants from which fact the nature of their employment should be judged. the learned counsel would submit that the sufficient materials were brought on records to show that vacancies were available and as the appellants worked for a period of more than six months they became permanent employees in terms of the act. it was further contended that as the respondents despite direction to produce documents including the offers for appointment did not produce the same an adverse inference should have been drawn against them by the high court. as regard the claim of equal pay for equal work the learned counsel would urge that the high court has failed to consider the same in its true perspective. mr v r reddy learned senior counsel appearing on behalf of the respondents on the other hand would contend that indisputably the appellants were engaged by the respondent authority but such appointments were made for the purpose of the project financed by oda. the learned counsel would submit that in fact no appointment letter was issued to the appellants. our attention was also drawn to the application dated 22 10 1991 filed by one o p mandloi before the chairman of the indore development authority disclosing his educational qualifications and enclosing therewith the mark sheets and degrees obtained by him in civil engineering and also secondary school examination certificate to show his date of birth. whereupon the chief executive officer on the body of the said application itself made the following endorsement he may be tried in daily wages and should be entrusted with the work of progress collection of oda work put with illegible. sd c e o 23 10 91. the learned counsel would submit that in the aforementioned premise the question of regularization of the services of the appellants does not arise. drawing our attention also to the pleadings as also the reliefs claimed for by the appellants before the labour court the learned counsel would contend that no contention was raised therein by the appellants as regard their entitlement of permanency in terms of the provisions of the 1961 act and the 1963 rules. furthermore from the reliefs claimed it would appear that the appellants had inter alia prayed for continuance of their services by the indore municipal corporation which knocks off the very basis of their claim. it was urged that there does not exist any controversy that oda was to continue before 30 6 1997 and as such the appellants could not have been absorbed by the respondent authority. statutory. provisions section 22 of the 1961 act. reads as follows nothing in this act shall apply to the employees in an undertaking to whom the fundamental and supplementary rules civil services classification control and appeal rules civil services temporary service rules revised leave rules civil service regulations or any other rules or regulations that may be notified in this behalf by the state government in the official gazette apply. 2 of the standard standing order reads as under 2. classification of employees. employees shall be classified as i permanent ii permanent seasonaliii. probationers iv badlies v apprentices and vi temporary. i a permanent employee is one who has completed six months satisfactory service in a clear vacancy in one or more posts whether as a probationer or otherwise or a person whose name has been entered in the muster roll and who is given a ticket of permanent employee vi. temporary employee means an employee who has been employed for work which is essentially of a temporary character or who is temporarily employed as an additional employee in connection with the temporary increase in the work of a permanent nature provided that in case such employee is required to work continuously for more than six months he shall be deemed to be a permanent employee within the meaning of cl. i above. determination. the respondent authority is a state within the meaning of article. 12 of the constitution of india. it is therefore constitutionally obliged to strictly comply with the requirements of articles 14 and 16 thereof before making any appointment. it is also not in dispute that the respondent authority has been constituted under madhya pradesh nagar tatha gram nibesh adhiniyam 1973 adhiniyam section 47 whereof mandates that all appointments to the posts of officers and servants included in the state cadre mentioned in section 76 b of the development authority services must be made by the state government and the appointments to the posts of officers and servants included in the local cadre in the said services by the concerned town and country development authority. the proviso appended to section 47 of the adhiniyam further mandates that no post shall be created in any authority without the prior sanction of the state government. section 76b provides for constitution of development authorities service. it is also not in dispute that the state government in exercise of its rule making power conferred upon it section 85 of the adhiniyam has made rules known as m p development authority services officers and servants recruitment rules 1987. the posts of sub engineers in which the appellants were appointed. it is nobody 's case were sanctioned ones. concededly the respondent authority before making any appointment neither intimated the employment exchange about the existing vacancies if any nor issued any advertisement in relation thereto. indisputably the conditions precedent for appointment of the officers and servants of the authority as contained in the service rules had not been complied with. the appointments of the appellants were therefore void ab initio being opposed to public policy as also violative of articles 14 and 16 of the constitution of india. the question therefore which arises for consideration is as to whether they could lay a valid claim for regularization of their services. the answer thereto must be rendered in negative. regularisation can not be claimed as a matter of right. an illegal appointment can not be legalized by taking recourse to regularization. what can be regularized is an irregularity and not an illegality. the constitutional scheme which the country has adopted does not contemplate any backdoor appointment. a state before offering public service to a person must comply with the constitutional requirements of articles 14 and 16 of the constitution. all actions of the state must conform to the constitutional requirements. a daily wager in absence of a statutory provision in this behalf would not be entitled to regularization. see state of u p others vs. ajay kumar 1997 4 scc 88 1997 indlaw sc 833 jawaharlal nehru krishi viswa vidyalaya jabalpur m p vs. bal kishan soni and others 1997 5 scc 86 1997 indlaw sc 928. in hindustan shipyard ltd and others vs dr p sambasiva rao and others 1996 7 scc 499 1996 indlaw sc 3441 a division bench of this court observed. the process of regularization involves regular appointment which can be done only in accordance with the prescribed procedure. having regard to the rules which have been made by the appellant corporation regular appointment on the post of medical officer can only be made after the duly constituted selection committee has found the person suitable for such appointment. in a umarani vs registrar cooperative societies and ors. jt 2004 6 sc 110 2004 indlaw sc 606 a three judge bench of this court of which we were members upon taking into consideration a large number of decisions held although we do not intend to express any opinion as to whether the cooperative society is a state within the meaning of article but it is beyond any cavil of doubt that the writ petition will be maintainable when the action of the cooperative society is violative of mandatory statutory provisions. in this case except the nodal centre functions and supervision of the cooperative society the state has no administrative control over its day to day affairs. the state has not created any post nor they could do so on their own. the state has not borne any part of the financial burden. it was therefore impermissible for the state to direct regularization of the services of the employees of the cooperative societies. such an order can not be upheld also on the ground that the employees allegedly served the cooperative societies for a long time. yet recently in pankaj gupta ors etc. vs state of jammu kshmir ors. jt 2004 8 sc 531 2004 indlaw sc 729 a division bench of this court opined no person illegally appointed or appointed without following the procedure prescribed under the law is entitled to claim that he should be continued in service. in this situation we see no reason to interfere with the impugned order. the appointees have no right for regularization in the service because of the erroneous procedure adopted by the concerned authority in appointing such persons. case law relied upon by the appellant. in dr a k jain and others etc. vs union of india and others 1987 supp. scc 497. 1987 indlaw sc 28778 this court did not lay down any law. it was in fact held that as the petitioners therein were not regularized in accordance with the prescribed rules and regulations for regular appointments their services had to be terminated and as such there had been neither any arbitrary nor illegal action on the part of the respondents nor any violation of the fundamental rights guaranteed under articles 14 and 16. however having regard to the facts and circumstances of the said case some directions were issued presumably in terms of article 142 of the constitution. in hindustan shipyard ltd 1996 indlaw sc 3441 supra this court also distinguished the said decision. in niadar and another vs delhi administration and another 1992 4 scc 112 1988 indlaw sc 244 again no law has been laid down. it appears that there existed a scheme for regularization and some directions were issued in terms thereof. the said decisions thus are of no assistance in this case. application of the act and the rules. the 1961 act was enacted to provide for rules defining with sufficient precision in certain matters the conditions of employment of employees in undertakings in the state of madhya pradesh. by reason of the provisions of the said act application of standard standing orders to undertakings has been provided in terms whereof the matters to be provided in the standard standing orders have been specified. under sub s 1 of section 6 the state government may by notification apply standard standing orders to such class of undertakings and from such date as may be specified therein. sub s 2 of section 6 reads as under where immediately before the commencement of this act standing order are in force in respect of any undertaking such standing orders shall until standard standing orders are applied to such undertaking under sub s. 1 continue in force as if they were made under this act. no notification has been brought to our notice that the standard standing orders had been made applicable to the appellants. it is furthermore not in dispute that adhiniyam came into force in 1973. the statute rules and regulations formed by the state govern the terms and conditions of service of the employees of the respondent. the terms of conditions of service contained in the 1973 act and the 1987 rules are not in derogation of the provisions contained in schedule appended to the 1961 act. the 1961 act provides for classification of employees in five categories. the 1973 act as noticed hereinbefore clearly mandates that all posts should be sanctioned by the state government and all appointments to the said cadre must be made by the state government alone. even the appointments to the local cadre must be made by the authority. the said provisions were not complied with. it is accepted that no appointment letter was issued in favour of the appellants. had the appointments of the appellants been made in terms of the provisions of the adhiniyam and rules framed thereunder the respondent authority was statutorily enjoined to make an offer of appointment in writing which was to be accepted by the appellants herein. who made the appointments of the appellants to the project or other works carried on by the authority is not known. whether the person making an appointment had the requisite jurisdiction or not is also not clear. we have noticed hereinbefore that in the case of om prakash mondloi the ceo made an endorsement to the effect that he may be tried in daily wages and should be entrusted with the work of progress collection of oda work. the said order is not an offer of appointment by any sense of term. it may be true that the appellants had been later on put on a monthly salary but there is nothing on record to show as to how the same was done. they might have been subjected to the provisions of the employees provident fund and might have been granted the benefit of leave or given some employment code and their names might have found place in the seniority list amongst others but thereby they can not be said to have been given a permanent ticket. the so called seniority list which is contained in annexure p 27 whereupon strong reliance has been placed by dr dhawan merely itself goes to show that it was prepared in respect of office muster employees. the said seniority list was not prepared in terms of the classification of employees within the meaning of the 1961 act and the rules framed there under but was based on the date of joining probably for the purpose of maintenance of records. the 1973 act or the rules framed there under do not provide for appointments on ad hoc basis or on daily wages. the 1961 act itself shows that the employees are to be classified in six categories namely permanent permanent seasonal probationers badlies apprentices and temporary. the recruitments of the appellants do not fall in any of the said categories. with a view to become eligible to be considered as a permanent employee or a temporary employee one must be appointed in terms thereof. permanent employee has been divided in two categories i who had been appointed against a clear vacancy in one or more posts as probationers and otherwise and ii whose name had been registered at muster roll and who has been given a ticket of permanent employee. a ticket of permanent employee was thus required to be issued in terms of order 3 of the standard standing orders. grant of such ticket was imperative before permanency could be so claimed. the appellants have not produced any such ticket. it is not the case of the appellants that they had been working as technical supervisors and clerks in respect of which service book may be maintained instead of issuance of a ticket. it is also not the case of the appellants that their names had appeared in the service book maintained for the said purpose. the standing orders governing the terms and conditions of service must be read subject to the constitutional limitations wherever applicable. constitution being the suprema lax shall prevail over all other statutes. the only provision as regard recruitment of the employees is contained in order 4 which merely provides that the manager shall within a period of six months lay down the procedure for recruitment of employees and notify it on the notice board on which standing orders are exhibited and shall send copy thereof to the labour commissioner. the matter relating to recruitment is governed by the 1973 act and the 1987 rules. in absence of any specific directions contained in the schedule appended to the standing orders the statute and the statutory rules applicable to the employees of the respondent shall prevail. in m p vidyut karamchari sangh vs m p electricity board 2004 9 scc 755 2004 indlaw sc 198 a three judge bench of this court held that a regulation which is not inconsistent with the provisions of the 1961 act and the rules can be issued by a statutory authority. for the purpose of this matter we would proceed on the basis that the 1961 act is a special statute. vis a vis the 1973 act and the rules framed thereunder. but in absence of any conflict in the provisions of the said act the conditions of service including those relating to recruitment as provided for in the 1973 act and the 1987 rules would apply. if by reason of the latter the appointment is invalid the same can not be validated by taking recourse to regularization. for the purpose of regularization which would confer on the concerned employee a permanent status there must exist a post. however we may hasten to add that regularization itself does not imply permanency. we have used the term keeping in view the provisions of 1963 rules. we have noticed the provisions of the act and the rules. no case was made out by the appellants herein in their statements of claim that they became permanent employees in terms thereof. there is also nothing on records to show that such a claim was put forward even in the demand raising the industrial dispute. presumably the appellants were aware of the statutory limitations in this behalf. furthermore the labour court having derived its jurisdiction from the reference made by the state government it was bound to act within the four corners thereof. it could not enlarge the scope of the reference nor could deviate therefrom. a demand which was not raised at the time of raising the dispute could not have been gone into by the labour court being not the subject matter thereof. the questions which have been raised before us by dr dhawan had not been raised before the labour court. the labour court in absence of any pleadings or any proof as regard application of the 1961 act and the 1963 rules had proceeded on the basis that they would become permanent employees in terms of order 2ii and 2vi of the annexure appended thereto. the appellants did not adduce any evidence as regard nature of their employment or the classification under which they were appointed. they have also not been able to show that they had been issued any permanent ticket. dr dhawan is not correct in his submission that a separate ticket need not be issued and what was necessary was merely to show that the appellants had been recognized by the state as its employees having been provided with employment code. we have seen that their names had been appearing in the muster rolls maintained by the respondent. the scheme of the employees provident fund or the leave rules would not alter the nature and character of their appointments. the nature of their employment continues save and except a case where a statute interdicts which in turn would be subject to the constitutional limitations. for the purpose of obtaining a permanent status constitutional and statutory conditions precedent therefor must be fulfilled. the submission of mr m n rao to the effect that the principle of equity should be invoked in their case is stated to be rejected. such a plea had expressly been rejected by this court in a umarani 2004 indlaw sc 606 supra. project work. this case involves 31 employees. a distinction is sought to be made by dr dhawan that out of them 27 had been appointed to a project and not in a project. the distinction although appears to be attractive at the first blush but does not stand a moment 's scrutiny. as noticed hereinbefore the high court 's observation remained unchallenged that the project was to be financed by oda. the project was indisputably to be executed by the indore development authority and for the implementation thereof the appointments had to be made by it. if the appellants were appointed for the purpose of the project they would be deemed to have been appointed therefor and only because such appointments had been made by the respondent would by itself not entitle them to claim permanency. the life of the project came to an end on 30 6 1997. the maintenance job upon completion thereof had been taken over by indore municipal corporation. the appellants were aware of the said fact and thus raised an alternative plea in their statements of claims. the labour court could not have granted any relief to them as prayed for as indore municipal corporation is a separate juristic person having been created under a statute. such a relief would have been beyond the scope and purport of the reference made to the labour court by the state government. furthermore the indore municipal corporation was not a party and thus no employee could be thrust upon it without its consent. in a umarani 2004 indlaw sc 606 supra this court held that once the employees are employed for the purpose of the scheme they do not acquire any vested right to continue after the project is over. see also karnataka state coop. apex bank ltd vs. y s shetty and others 2000 10 scc 179 1999 indlaw sc 2211 and m d u p land development corporation and another vs. amar singh and others 2003 5 scc 388 2003 indlaw sc 331. it is furthermore evident that the persons appointed as daily wagers held no posts. the appointments thus had been made for the purpose of the project which as indicated hereinbefore came to an end. the plea of dr dhawan to the effect that the appellants in civil appeal. No 337 of 2002 were asked to perform other duties also may not be of much significance having regard to our foregoing findings. however it has been seen that even services of one of them had been requisitioned only for the project work. the high court in our opinion was right in arriving at the conclusion that the appellants were not entitled to be regularized in service. adverse inference. some documents were said to have been called for from the respondents which are said to have been not produced. one of such documents was offers of appointment. the witness examined on behalf of the respondents although at one stage stated that the appointment letters had been issued to them upon going through the records brought with him however asserted that no such appointment letter was issued. had the letters of appointment been issued the appellants themselves could have produced the same. they did not do so. it is accepted at the bar when the endorsement on the application filed by om prakash mondloi was shown that the appointment letters were not issued. we do not know the relevance of other documents called for for determining the issue. if a document was called for in absence of any pleadings the same was not relevant. in absence of any pleadings the appellants could not have called for any document to show that the provisions of the 1961 act and 1963 rules would apply. before the high court as also before us the appellants have produced a large number of documents which were not filed before the labour court. such additional documents had been kept out of consideration by the high court as also by us. we have referred to the said fact only for the purpose of showing that it would not be correct to contend that the appellants had no access to the said documents. an adverse inference need not necessarily be drawn only because it would be lawful to do so. the labour court did not draw any adverse inference. such a plea was not even raised before the high court. recently in m p electricity board vs hariram etc. 2004 air scw 5476. 2004 indlaw sc 829 this court observed in such a factual background in our opinion the industrial court or the high court could not have drawn an adverse inference for the non production of the muster rolls for the year 1990 to 1992 in the absence of specific pleading by the respondents applicants that at least during that period they had worked for 240 days continuously in a given year. the application calling for the production of the documents was for the years 1987 to 1992. as stated above between the period 1987 to 1990 as a matter of fact till end of the year 1990 the respondents have not been able to establish the case of continuous work for 240 days. considering these facts in our view drawing of an adverse inference for the non production of the muster rolls for the years 1991 92 is wholly erroneous on the part of the industrial court and the high court. we can not but bear in mind the fact that the initial burden of establishing the factum of their continuous work for 240 days in a year rests with the applicants respondents. the above burden having not been discharged and the labour court having held so in our opinion the industrial court and the high court erred in basing an order of re instatement solely on an adverse inference drawn erroneously. at this stage it may be useful to refer to a judgment of this court in the case of muncipal corporation faridabad vs siri niwas jt 2004 7 sc 248 2004 indlaw sc 719 wherein this court disagreed with the high court 's view of drawing an adverse inference in regard to the non production of certain relevant documents. this is what this court had to say in that regard. a court of law even in a case where provisions of the indian evidence act apply may presume or may not presume that if a party despite possession of the best evidence had not produced the same it would have gone against his contentions. the matter however would be different where despite direction by a court the evidence is withheld. presumption as to adverse inference for non production of evidence is always optional and one of the factors which is required to be taken into consideration in the background of facts involved in the lis. the presumption thus is not obligatory because notwithstanding the intentional non production other circumstances may exist upon which such intentional non production may be found to be justifiable on some reasonable grounds. in the instant case the industrial tribunal did not draw any adverse inference against the appellant. it was within its jurisdiction to do so particularly having regard to the nature of the evidence adduced by the respondent. in any event in this case we have proceeded on the basis that the assertions of the appellants as regard nature of their employment their continuance in the job for a long time are correct and as such the question as to whether any adverse inference should be drawn for alleged production of documents called for would take a back seat. equal pay for equal work. the appellants having been employed on daily wages did not hold any post. no post was sanctioned by the state government. they were not appointed in terms of the provisions of the statute. they were not therefore entitled to take the recourse of the doctrine of equal pay for equal work as adumbrated in articles 14 and 39d of the constitution of india. the burden was on the appellants to establish that they had a right to invoke the said doctrine in terms of article 14 of the constitution of india. for the purpose of invoking the said doctrine the nature of the work and responsibility attached to the post are some of the factors which were bound to be taken into consideration. furthermore when their services had not been regularized and they had continued on a consolidated pay on ad hoc basis having not undergone the process of regular appointments no direction to give regular pay scale could have been issued by the labour court. see orissa university of agriculture technology and another vs manoj k mohanty 2003 5 scc 188 2003 indlaw sc 348. in state of haryana and another vs tilak raj and others 2003 6 scc 123 2003 indlaw sc 512 it was held a scale of pay is attached to a definite post and in case of a daily wager he hold no posts. the respondent workers can not be held to hold any posts to claim even comparison with the regular and permanent staff for any or all purposes including a claim for equal pay and allowances. to claim a relief on the basis of equality it is for the claimants to substantiate a clear cut basis of equivalence and a resultant hostile discrimination before becoming eligible to claim rights on a par with the other group vis vis an alleged discrimination. no material was placed before the high court as to the nature of the duties of either categories and it is not possible to hold that the principle of equal pay for equal work is an abstract one. the said decision has been noticed in a umarani 2004 indlaw sc 606 supra. conclusion. for the reasons aforementioned we do not find any merit in these appeals which are dismissed accordingly. there shall however be no order as to costs. appeals dismissed.

IN-Ext

FACTS the appellant nos.1 and 2 are degree holders in civil engineering and appellant nos. 3 and 4 are diploma holders in civil engineering. they having come to learn that certain vacancies exist in the respondent- authority, applied therefor although no advertisement in that behalf was issued. the respondent-authority appointed the appellants and posted them to an overseas project known as 'indore habitat project' which was implemented through the agency of 'overseas development authority' (hereinafter referred to as 'the oda'), on daily wages. rs.63/- per day for the degree holders and rs.52.50 per day for the diploma holders. on or about 17.3.1997, however, they began receiving a salary of rs.1500/- per month. allegedly, from their salary, provident fund was being deducted. they were also being granted the benefit of leave. ARGUMENT dr. rajiv dhawan, learned senior counsel, appearing on behalf of the appellants in civil appeal no.337 of 2002 and mr. m.n. rao, learned senior counsel, appearing on behalf of the appellants in civil appeal no.335 of 2002, took us through materials on records and contended that the appellants herein became 'permanent employees' of the respondents having regard to the provisions contained in s. 2 of the 1961 act and order 2(i) and 2(vi) of the standard standing orders as set out in the annexure appended to the 1963 rules defining 'permanent employees' and the 'temporary employees. the learned counsel would urge that a seniority list was also drawn up and an employment code was assigned to each one of the appellants from which fact the nature of their employment should be judged. ISSUE a dispute arose as to whether all the appellants were employed for the purpose of the said project or the appellants in civil appeal no.337 of 2002 were appointed in the year 1991 by the authority for its own job. whether non-regularisation of the sub-engineers (as per the listed enclosed) is valid and proper. if no, then to which relief they are entitled and what directions should be given to the employer. whether it is valid and proper for not giving equal salary to these sub engineers like other sub engineers in accordance with the equal work. the question, which arises for consideration is as to whether they could lay a valid claim for regularization of their services. ANALYSIS an industrial dispute was raised by the appellants herein as their services were not being regularized by the respondent. the respondent-authority is a state within the meaning of art. 12 of the constitution of india. it is, therefore, constitutionally obliged to strictly comply with the requirements of arts. 14 and 16 thereof before making any appointment. indisputably, the conditions precedent for appointment of the officers and servants of the authority, as contained in the service rules had not been complied with. the appointments of the appellants were, therefore, void ab initio being opposed to public policy as also violative of arts. 14 and 16 of the constitution of india. a state before offering public service to a person must comply with the constitutional requirements of arts. 14 and 16 of the constitution. all actions of the state must conform to the constitutional requirements. a daily wager in absence of a statutory provision in this behalf would not be entitled to regularization. see state of u.p. &; others vs. ajay kumar, (1997) 4 scc 88 1997 indlaw sc 833, jawaharlal nehru krishi viswa vidyalaya, jabalpur, m.p. vs. bal kishan soni and others (1997) 5 scc 86] 1997 indlaw sc 928. the recruitments of the appellants do not fall in any of the said categories. with a view to become eligible to be considered as a permanent employee or a temporary employee, one must be appointed in terms thereof. permanent employee has been divided in two categories (i) who had been appointed against a clear vacancy in one or more posts as probationers and otherwise; and (ii) whose name had been registered at muster roll and who has been given a ticket of permanent employee. a 'ticket of permanent employee' was, thus, required to be issued in terms of order 3 of the standard standing orders. the matter relating to recruitment is governed by the 1973 act and the 1987 rules. in absence of any specific directions contained in the schedule appended to the standing orders, the statute and the statutory rules applicable to the employees of the respondent shall prevail. their names had been appearing in the muster rolls maintained by the respondent. the scheme of the employees provident fund or the leave rules would not alter the nature and character of their appointments. the nature of their employment continues save and except a case where a statute interdicts which in turn would be subject to the constitutional limitations. for the purpose of obtaining a permanent status, constitutional and statutory conditions precedent therefor must be fulfilled. indore municipal corporation was not a party and, thus, no employee could be thrust upon it without its consent. it is furthermore evident that the persons appointed as daily wagers held no posts. the appointments, thus, had been made for the purpose of the project which, as indicated hereinbefore, came to an end. the appellants having been employed on daily wages did not hold any post. no post was sanctioned by the state government. they were not appointed in terms of the provisions of the statute. they were not, therefore, entitled to take the recourse of the doctrine of 'equal pay for equal work' as adumbrated in arts. 14 and 39(d) of the constitution of india. the burden was on the appellants to establish that they had a right to invoke the said doctrine in terms of art. 14 of the constitution of india. for the purpose of invoking the said doctrine, the nature of the work and responsibility attached to the post are some of the factors which were bound to be taken into consideration. furthermore, when their services had not been regularized and they had continued on a consolidated pay on ad hoc basis having not undergone the process of regular appointments, no direction to give regular pay scale could have been issued by the labour court. see orissa university of agriculture &; technology and another vs. manoj k. mohanty (2003) 5 scc 188 2003 indlaw sc 348. STATUTE s. 2(2) of the 1961 act. reads as follows : "nothing in this act shall apply to the employees in an undertaking to whom the fundamental and supplementary rules, civil services (classification, control and appeal) rules, civil services (temporary service) rules, revised leave rules, civil service regulations or any other rules or regulations that may be notified in this behalf by the state government in the official gazette apply. cl. 2 of the standard standing order reads as under : "2. classification of employees. employees shall be classified as (i) permanent , (ii) permanent seasonal,(iii. probationers, (iv) badlies, (v) apprentices, and (vi) temporary. i. a 'permanent' employee is one who has completed six months' satisfactory service in a clear vacancy in one or more posts whether as a probationer or otherwise, or a person whose name has been entered in the muster roll and who is given a ticket of permanent employee; (vi. temporary employee' means an employee who has been employed for work which is essentially of a temporary character, or who is temporarily employed as an additional employee in connection with the temporary increase in the work of a permanent nature; provided that in case such employee is required to work continuously for more than six months he shall be deemed to be a permanent employee, within the meaning of cl. i) above. the 1961 act was enacted to provide for rules defining with sufficient precision in certain matters the conditions of employment of employees in undertakings in the state of madhya pradesh. by reason of the provisions of the said act, application of standard standing orders to undertakings has been provided in terms whereof the matters to be provided in the standard standing orders have been specified. under sub-s. 1) of section 6, the state government may, by notification, apply standard standing orders to such class of undertakings and from such date as may be specified therein. sub-s. 2) of s. 6 reads as under : "where immediately before the commencement of this act standing order are in force in respect of any undertaking, such standing orders shall, until standard standing orders are applied to such undertaking under sub-s. 1) continue in force as if they were made under this act.

municipal corporation of delhi aggrieved against the judgment and final order dated 26 03 2004 passed by the high court delhi in criminal revision petition no 185 of 2004 by which order the high court gave the benefit of probation under section 4 of the probation of offenders act1958. herein after referred to as pob act to the second respondent gurcharan singh but maintained the conviction preferred the above appeal. the brief facts leading to the filing of the above appeal are as under. one mr m k verma. pw 4junior engineer civil line zone visited 189 prem gali punja sharif mori gate where he found unauthorized construction going at the first floor of the said plot. f i r was prepared on the report of mr m k verma who forwarded the f i r before zonal engineer who ordered to issue notice under section 343344 of the delhi municipal corporation act1957 for short the dmc act subsequently the second respondent along with kuldeep singh were prosecuted for commission of offences under sections 332 and 461 of the dmc act before the designated municipal court. the trial court after the conclusion of the trial convicted the second respondent under sections 332 and 461 of the dmc act and sentenced him to six months simple imprisonment and imposed a fine of rs 5000 annexure p 1. aggrieved by that order the second respondent accused filed an appeal before the sessions court delhi. the said court by an order and judgment dated 23 3 2004 dismissed the appeal by holding that there was no infirmity in the order passed by the trial court annexure p 2. against the judgment and order dated 23 3 2004the accused filed criminal revision petition no 185 of 2004 before the high court delhi. at the time of arguments the advocate for the accused submitted before the high court that the accused did not wish to challenge the conviction on merits and stated it a fit case of accused to be admitted to the benefit of pob act on the ground that the accused faced trial for 12 years in the lower courts and remained in jail for three days. the high court vide its order dated 26 3 2004 held that the accused suffered the agony of trial lasting for 12 years. besides that he has already undergone some period in custody. the high court also observed that there is no allegation that the petitioner accused is a previous convict and it further held that the accused deserved the benefit of probation under section 4 of the pob act and while maintaining the conviction of the respondent accused the sentence of imprisonment and fine as awarded to him was set aside. the appellant aggrieved by the judgment of the high court preferred the above appeal by way of special leave petition before this court. we have perused the entire pleadings orders and judgments passed by the lower courts and also of the high court the other annexures in particular annexures p 1 and p 2and records annexed to this appeal and also heard the arguments of mr ashwani kumar learned senior counsel appearing for the appellant mr vikas sharma learned counsel appearing for respondent no 1 and mr jaspal singh learned senior counsel appearing for the second respondent. learned senior counsel appearing for the appellant submitted that the high court before extending the benefit of pob act to the accused did not call for a report from the authorities to check upon the conduct of the accused respondent as per section 42 of the pob act and that the appellant mcd was also not given time to file their counter affidavit on the question of sentence. he further submitted that the high court while passing the impugned order and judgment did not take into consideration that the accused respondent had been convicted in another criminal case no 202 of 1997 by the court of metropolitan magistrate patiala house new delhi. in the said case the accused respondent was convicted under section 332461 of the dmc act and sentenced to six months simple imprisonment with a fine of rs 5000. learned senior counsel appearing for the appellant further submitted that there was no good reason for letting the respondent off by granting to him the said benefit of pob act particularly keeping in view the large scale irregularity and unauthorized constructions carried by the builders in delhi despite strict direction of the municipal authorities and courts passing various orders from time to time against the unauthorized constructions. it was further submitted that the high court should not have waived off the payment of fine amount by the accused respondent and that the high court ought to have taken into consideration that the respondent has been in jail for only three days and had not put in substantial period in custody. it was further submitted by learned senior counsel appearing for the appellant that the court shall not direct release of offender unless it is satisfied that the offender or his surety if any has a fixed place of abode or regular occupation in the place over which the court exercises jurisdiction or in which the offender is likely to live during the period for which he enters into the bond. it was also contended that before making any order under section 41 of the pob act the court shall take into consideration the report if any of the probation officer concerned in relation to the case which the high court has miserably failed to do so. therefore learned senior counsel appearing for the appellant prayed that order dated 26 3 2004 in crl. rev pet. no 185 of 2004 be set aside and appropriate orders be passed in this appeal. learned senior counsel appearing for the contesting respondent submitted that the order of the high court does not require any reconsideration by this court and that the high court while extending the benefit of pob act had clearly recorded in the order that the counsel for the state of delhi is not averse to the grant of benefit of probation to the answering respondent and therefore the requirement under section 42 of the pob act has been waived off by the state and that the high court took into consideration the fact that the answering respondent has faced the agony of trial for over 12 years and has also undergone some period in custody and while maintaining the conviction of the answering respondent the benefit of probation was extended to him. it was therefore submitted that the high court passed the said order in the presence of the counsel of all the parties. learned senior counsel appearing for the second respondent submitted that in s t no 202 of 1997a judgment was given by the metropolitan magistrate on 10 9 2002 and the respondent filed an appeal no 374 of 2002 before the court of sessions patiala house new delhi challenging the said order of conviction and in that appeal the court of additional sessions judge patiala house suspended the sentence during the pendency of the appeal upon furnishing a personal bond for a sum of rs 25000 with one surety of the like amount to the satisfaction of the trial court. it was therefore submitted that the sentence imprisonment awarded by the metropolitan magistrate has been suspended under section 389 of the criminal procedure code by the court of additional sessions judge delhi in view of the pendency of the appeal against the order of conviction is a continuation of proceedings and therefore there is no conviction against the answering respondent so long as the same is not decided by the court of sessions. it was also submitted that the requirement of calling of a report from the probationer officer under section 42 of the pob act has been waived off by the counsel for the state of delhi and that the counsel for the mcd also did not raise any objection before the high court. it was further contended that the respondent has not contested the revision in the high court on merits and confined his submission to the benefit of section 4 of the pob act being extended to him. therefore there is no occasion for the high court to go into the issue of extent of constructions being raised by the answering respondent. he further contended that the trial court has committed serious error in exercising jurisdiction while not granting the benefit of probation to the answering respondent and the order of the trial court was therefore rightly and justifiable modified by the high court. concluding his arguments he submitted that the respondent has been released after compliance of the order passed by the high court by furnishing the bone of good conduct and security to the satisfaction of the additional court of metropolitan magistrate delhi and there is no report of any misconduct or breach of the bond of good conduct by the answering respondent since the date of the order of the high court therefore the order of the high court is not liable to be interfered with. in the above background two questions of law arise for consideration by this court 1 whether the high court was correct in extending the benefit of the probation of offenders act1958 to the accused respondent without calling for a report from the authorities relating to the conduct of the respondent as per section 4 of the act. 2 whether. the high court was correct in passing the impugned judgment in view of the fact that the respondent has been convicted in another criminal case no 202 of 1997 by the trial court new delhi. before proceeding further it would be beneficial to reproduce section 4 of the probation of offenders act1958 which is extracted below for ready reference. power of court to release certain offenders on probation of good conduct. 1 when any person is found guilty of having committed an offence not punishable with death or imprisonment for life and the court by which the person is found guilty is of opinion that having record to the circumstances of the case including the nature of the offence and the character of the offender it is expedient to release him on probation of good conduct then notwithstanding anything contained in any other law for the time being in force the court may instead of sentencing him at once to any punishment direct that he be released on his entering into a bond with or without sureties to appear and receive sentence when called upon during such period not exceeding three years as the court may direct and in the meantime to keep the peace and be of good behaviour provided that the court shall no direct such release of an offender unless it is satisfied that the offender or his surety if any has a fixed place of abode or regular occupation in the place over which the court exercises jurisdiction or in which the offender is likely to live during the period for which he enters into the bond. 2 before making any order under sub section. 1the court shall take into consideration the report if any of the probation officer concerned in relation to the case. it is the specific case of the appellant herein that the high court has not afforded to the appellant an opportunity to file counter affidavit. the appellant would have filed the orders passed by the criminal courts convicting the respondent herein had an opportunity been given to the appellant. the high court while passing the impugned order and judgment did not take into consideration that the accused respondent has been convicted in another criminal case no 202 of 1997 by the court of metropolitan magistrate patiala house new delhi. in the said case the accused has been convicted under sections 332461 of the dmc act and sentenced to six months simple imprisonment with fine of rs 5000 in our view there was no good reason for letting the respondent off by granting to him the said benefit of pob act particularly keeping in view the large scale irregularity and unauthorized constructions carried by the builders in delhi despite strict direction of the municipal authorities and despite of the courts passing various orders from time to time against the unauthorized construction. the high court also failed to take into consideration that the respondent has been in jail for three days and had not put in substantial period in custody. the high court vide its order impugned in this appeal has observed that there is no allegation that the respondent is a previous convict. in fact as could be seen from the annexures filed along with this appeal the respondent has been convicted for offence under sections 332 and 461 of the dmc act. the trial court heard the respondent on sentence also and passed the following order convict in person with counsel heard on sentence. it is contended that he is first offender. he is not a previous convict nor habitual offender. he has faced trail since 1991 he is aged about 57 years. he is not doing any business due to his bad health. considering the above facts and circumstances and gravity of the nature of the offence i e extent of construction raised by the accused for commercial as 11 shops at ground floor and 11 shops at first floor i am not inclined to release the accused convict on probation. hence request declined. in the interest of justice sentence of six months si with fine of rs 5000 i d one month si is imposed upon the convict for offence u s 332461 dmc act. fine deposited. convict remained for sentence. the additional sessions judge new delhi also in civil appeal no 7 of 2002 annexure p 2 dismissed the appeal as there is no infirmity in the order of the trial court and uphold the conviction order passed by the trial court on the point of sentence. the appellate court held that no interference is required in the order passed by the trial court regarding point of sentence. since the appellant mcd was not given any opportunity by the high court to file conduct report of the respondent the order impugned in this appeal is liable to be set aside. this apart the respondent did not also disclose the fact in the criminal revision filed before the high court that he has also been convicted in another criminal case no 202 of 1997 by the court of metropolitan magistrate patiala house new delhi. thus the contesting respondent has come to the high court with unclean hands and withholds a vital document in order to gain advantage on the other side. in our opinion he would be guilty of playing fraud on the court as well as on the opposite party. a person whose case is based on falsehood can be summarily thrown out at any stage of the litigation. we have no hesitation to say that a person whose case is based on falsehood has no right to approach the court and he can be summarily thrown out at any stage of the litigation. in the instant case non production of the order and even non mentioning of the conviction and sentence in the criminal case no 202 of 1997 tantamounts to playing fraud on the court. a litigant who approaches the court is bound to produce all documents which are relevant to the litigation. if he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well on the opposite party. the second respondent in our opinion was not justified in suppressing the material fact that he was convicted by the magistrate on an earlier occasion. since the second respondent deliberately suppressed the crucial and important fact we disapprove strongly and particularly the conduct of the second respondent and by reason of such conduct the second respondent disentitled himself from getting any relief or assistance from this court. we however part with this case with heavy heart expressing our strong disapproval of the conduct and behaviour but direct that the second respondent to pay a sum of rs 10000 by way of cost to the appellant herein. we have already reproduced section 4 of the pob act. it applied to all kinds of offenders whether under or above 21 years of age. this section is intended to attempt possible reformation of an offender instead of inflicting on him the normal punishment of his crime. the only limitation imposed by section 6 is that in the first instance an offender under twenty one years of age will not be sentenced to imprisonment. while extending benefit of this case the discretion of the court has to be exercised having regard to the circumstances in which the crime was committed the age character and antecedents of the offender. such exercise of discretion needs a sense of responsibility. the offender can only be released on probation of good conduct under this section when the court forms an opinion having considered the circumstances of the case the nature of the offence and the character of the offender that in a particular case the offender should be released on probation of good conduct. the section itself is clear that before applying the section the magistrate should carefully take into consideration the attendant circumstances. the second respondent is a previous convict as per the records placed before us. such a previous convict can not be released in view of section 4 of the pob act. the court is bound to call for a report as per section 4 of pob act but the high court has failed to do so although the court is not bound by the report of the probationer officer but it must call for such a report before the case comes to its conclusion. the word shall in sub section 2 of section 4 is mandatory and the consideration of the report of the probationer officer is a condition precedent to the release of the accused as reported in the case of state v naguesh g shet govenkar and anr air 1970. goa 49 1969 indlaw goa 8 and a release without such a report. would therefore be illegal. in the case of ram singh and ors v. state of haryana1971 3 scc 914 1970 indlaw sc 513a bench of two judges of this court in paragraph 16 of the judgment observed as under counsel for the appellants invoked the application of probation of offenders act. sections 4 and 6 of the act indicate the procedure requiring the court to call for a report from the probation officer and consideration of the report and any other information available relating to the character and physical and mental condition of the offender. these facts are of primary importance before the court can pass an order under the probation of offenders act. this plea can not be entertained in this court. in the case of r mahalingam v g padmavathi and anr. 1979 crl. lj noc 20 mad. the court observed as under if any report is filed by the probation officer the court is bound to consider it. obtaining such a report of the probation officer is mandatory since the sub s 1 of s 4 says that the court shall consider the report of the probation officer. words. if any do not mean that the court need not call for a report from the probation officer. the words if any would only cover a case where notwithstanding such requisition the probation officer for one reason or other has not submitted a report. before deciding to act under s 4 1it is mandatory on the part of the court to call for a report from the probation officer and if such a report is received it is mandatory on the part of the court to consider the report. but if for one reason or the other such a report is not forthcoming the court has to decide the matter on other materials available to it. in the instant case the magistrate passed order releasing the accused on probation without taking into consideration their character. held the requirement of s 41 was not fulfilled and therefore the case remanded. since the high court has disposed of the criminal revision without giving an opportunity of filing counter affidavit to the counsel for the mcd and that the respondent did not disclose the fact in the criminal revision filed before the high court that he has also been convicted in another criminal case no 202 of 1997the judgment impugned in this appeal can not be allowed to stand. we therefore have no hesitation in setting aside the order impugned and remit the matter to the high court for fresh disposal strictly in accordance with law. the appeal is accordingly allowed with costs of rs 10000 to be paid by the second respondent to the appellant as indicated in paragraph supra. appeal allowed.

IN-Ext

FACTS one mr.m.k.verma ,junior engineer, mori gate where he found unauthorized construction going at the first floor of the said plot. f.i.r.was prepared on the report of mr.m.k.verma who forwarded the f.i.r.before zonal engineer,who ordered to issue notice under section 343/344 of the delhi municipal corporation act,1957 (for short the "dmc act"). subsequently,the second respondent along with kuldeep singh were prosecuted for commission of offences under sections 332 and 461 of the dmc act before the designated municipal court. the appellant,aggrieved by the judgment of the trial court and the high court,preferred the above appeal by way of special leave petition before this court. ARGUMENT the accused did not wish to challenge the conviction on merits and stated it a fit case of accused to be admitted to the benefit of pob act on the ground that the accused faced trial for 12 years in the lower courts and remained in jail for three days. before extending the benefit of pob act to the accused did not call for a report from the authorities to check upon the conduct of the accused-respondent as per section 4(2) of the pob act and that the appellant-mcd was also not given time to file their counter affidavit on the question of sentence. there was no good reason for letting the respondent off by granting to him the said benefit of pob act,particularly keeping in view the large scale irregularity and unauthorized constructions carried by the builders in delhi despite strict direction of the municipal authorities and courts passing various orders from time to time against the unauthorized constructions. ISSUE two questions of law arise for consideration by the court. 1.whether the high court was correct in extending the benefit of the probation of offenders act,1958 to the accused respondent without calling for a report from the authorities relating to the conduct of the respondent as per section 4 of the act. 2.whether the high court was correct in passing the impugned judgment in view of the fact that the respondent has been convicted in another criminal case no.202 of 1997 by the trial court,new delhi." ANALYSIS the high court has not afforded to the appellant an opportunity to file counter affidavit. the high court while passing the impugned order and judgment did not take into consideration that the accused-respondent has been convicted in another criminal case by the court of metropolitan magistrate,patiala house,new delhi. in the said case,the accused has been convicted under sections 332/461 of the dmc act and sentenced to six months simple imprisonment with fine of rs.5000. there was no good reason for letting the respondent off by granting to him the said benefit of pob act particularly,keeping in view the large scale irregularity and unauthorized constructions carried by the builders in delhi despite strict direction of the municipal authorities and despite of the courts passing various orders from time to time against the unauthorized construction. the high court also failed to take into consideration that the respondent has been in jail for three days and had not put in substantial period in custody. in fact,as could be seen from the annexures filed along with this appeal,the respondent has been convicted for offence under sections 332 and 461 of the dmc act. since the appellant-mcd was not given any opportunity by the high court to file conduct report of the respondent,the order impugned in this appeal is liable to be set aside. the respondent did not also disclose the fact in the criminal revision filed before the high court that he has also been convicted in another criminal case. he would be guilty of playing fraud on the court as well as on the opposite party. a person whose case is based on falsehood can be summarily thrown out at any stage of the litigation. a litigant who approaches the court is bound to produce all documents which are relevant to the litigation. if he withholds a vital document in order to gain advantage on the other side then he would be guilty of playing fraud on the court as well on the opposite party. since the second respondent deliberately suppressed the crucial and important fact,the court disapproved strongly and particularly,the conduct of the second respondent and by reason of such conduct,the second respondent disentitled himself from getting any relief or assistance from this court. the court however directed the second respondent to pay a sum of rs.10,000 by way of cost to the appellant herein. the offender can only be released on probation of good conduct under this section when the court forms an opinion,having considered the circumstances of the case,the nature of the offence and the character of the offender,that in a particular case,the offender should be released on probation of good conduct. the second respondent is a previous convict as per the records placed before us. such a previous convict cannot be released in view of section 4 of the pob act. the word "shall" in sub-section (2) of section 4 is mandatory and the consideration of the report of the probationer officer is a condition precedent to the release of the accused as reported in the case of state v.naguesh g.shet govenkar and anr.,air (1970) goa 49 1969 indlaw goa 8 and a release without such a report would,therefore,be illegal. in the case of ram singh and ors.v.state of haryana,[1971] 3 scc 914 1970 indlaw sc 513, it was observed that sections 4 and 6 of the act indicate the procedure requiring the court to call for a report from the probation officer and consideration of the report and any other information available relating to the character and physical and mental condition of the offender. these facts are of primary importance before the court can pass an order under the probation of offenders act. this plea cannot be entertained in this court. since the high court has disposed of the criminal revision without giving an opportunity of filing counter affidavit to the counsel for the mcd and that the respondent did not disclose the fact in the criminal revision filed before the high court that he has also been convicted in another criminal case, the judgment impugned in this appeal cannot be allowed to stand. the court, therefore had no hesitation in setting aside the order impugned and remit the matter to the high court for fresh disposal strictly in accordance with law. STATUTE section 4 of the probation of offenders act,1958- power of court to release certain offenders on probation of good conduct. section 4 of the pob act applies to all kinds of offenders whether under or above 21 years of age. this section 4 of the pob act is intended to attempt possible reformation of an offender instead of inflicting on him the normal punishment of his crime. the only limitation imposed by section 6 of the pob act is that in the first instance an offender under twenty one years of age,will not be sentenced to imprisonment.

these appeals are directed against a judgment and order dated 17 october 2003 passed by the special court constituted under the special courts trial of offences relating to transactions in securities. act 1992 for short the act in misc. application nos. 41 of 1999 4 of 2001 265 266 and 275 of 2003. background facts. the appellants herein who are related to one harshad section mehta since deceased purchased nine residential flats in a building called madhuli apartments in worli area of mumbai. the family of the appellants consists of four brothers their wives children and their widowed mother. the eldest among them harshad section mehta has since expired. the said nine flats it is said were merged and redesigned for joint living of the entire family. the appellants herein and the said. late harshad mehta were persons notified in terms of the act which was enacted to provide for the establishment of a special court for the trial of offences relating to transactions in securities and for matters connected therewith. in terms of the provisions of the act along with late harshad mehta the custodian had notified 29 entities in terms of section 3 of the act comprising three of his younger brothers wife of late harshad mehta wives of two of his younger brothers and other corporate entities a partnership firm and three hufs. however out of the said 29 entitles only late harshad mehta and two of his younger brothers were cited as accused in various criminal cases filed against them. the properties of late harshad mehta and the appellants herein being notified persons stood attached in terms of the provisions of the act. proceedings before the special court. before the learned special court the parties herein filed several applications which can be sub divided in three categories as would be noticed shortly hereinafter. it is not in dispute that the learned special court on or about 3 august 1993 issued directions in various proceedings before it appointing auditors to prepare and audit the books of accounts of all notified persons for the period 1 april 1990 and 8 june 1992 i e the date of the notification. three firms of chartered accountants were appointed to prepare statement of accounts and liabilities of each of the appellants herein. a chartered accountants firm was appointed by the learned special judge by an order dated 17 september 2003 to represent all notified entities in the family of late harshad mehta for the purpose of ascertaining their tax liabilities. we may at this juncture notice the nature of the applications filed by the parties herein before the learned special court i on 26 april 1999 the custodian filed an application being misc. application No 41 of 1999 seeking permission of the special court for sale of residential premises commonly known as madhuli of eight notified entities. a misc. application being 4 of 2001 was filed by the custodian praying for the sale of commercial premises. the appellants herein filed several misc. applications praying for lifting of attachment on their residential premises on the ground that the same had been purchased much prior to 1 april 1991 and the same had no nexus with any illegal transactions in securities. alternatively it was prayed that since their asset base was greater than genuine liabilities the said residential premises should be released from attachment. impugned judgment. by reason of the impugned order dated 17 october 2003 the learned special judge allowed misc. applications nos. 4 of 2001 and 41 of 1999. the misc. applications filed by the appellants herein for release of the residential flats as well as the commercial premises from attachment were dismissed. it was directed in case all adult members of the family of late shri harshad metha who are presently occupying the abovereferred flats file an undertaking in this court within a period of four weeks from today undertaking to vacate the flat occupied by them and hand over peaceful possession thereof to the custodian within a period of four weeks from the date on which the custodian sends them communication asking them to vacate the flats on sale of the flats being sanctioned by the court. the custodian shall permit the members of family of late shri harshad mehta to occupy the flats during the time that the process of the sale of the flats goes on. in case no such undertakings are filed by the adult members as directed above within the aforesaid period the custodian shall stand appointed as receiver of the flats which are described in exh. 8 and exh. 8 1 to misc. petition No 41 of 1999. contentions of the parties appellants 9. mr mahesh jethmalani learned senior counsel appearing on behalf of the appellants in assailing the said judgment of the learned special court inter alia raised the following contentions i some of the entities having their asset base much more than actual liability the impugned judgments are unsustainable. there was no occasion for the custodian to club all the notified entities in one block so as to be termed as harshad mehta group andor to club their assets and liabilities jointly. although in relation to a body corporate incorporated and registered under the indian companies act the doctrine of lifting the corporate veil would be applicable but the same can not be applied in case of individuals. ii having regard to the fact that only three entitles out of eight were involved in the offences the liability of harshad mehta could not have been clubbed for the purpose of directing attachment and consequent sale of the properties which exclusively belong to them. the liabilities of harshad mehta who was a sui generis could have been recovered from the properties held and possessed by him or from the companies floated by him but not from the individual entities at least two of whom being medical practitioners have their income from other sources. the books of accounts and other documents on the basis whereof the auditor 's report had been made having not been allowed to be inspected by the appellants herein on the plea that they had the knowledge thereabout the same could not have been taken into consideration for the purpose of passing of the impugned order or otherwise. v the appellants having preferred appeals against the income tax orders of assessment passed by the authority and the same having been set aside no liability to pay income tax by the appellants as of now being existing the residential properties could not have been sold. vi drawing our attention to a representative chart showing the discrepancies in the accounts of mrs deepika a mehta as shown in a affidavit by the custodian b books of accounts maintained by the appellants and c auditor 's report it was submitted that the auditor 's report could not have been relied upon. a copy of the auditor 's report having only been supplied during pendency of these appeals the learned special judge committed a serious error in passing the impugned judgment relying on or on the basis thereof. respondents. mr ashok h desai learned senior counsel appearing on behalf of the custodian on the other hand would inter alia submit. iin view of the decision of this court in l s synthetics ltd v fairgrowth financial services ltd and another 2004 11 scc 456 2004 indlaw sc 715 all properties belonging to the notified persons being subject to automatic attachment could be applied for discharge of the joint liabilities of the harshad mehta group in terms of section 11 of the act. iithe applications for de notification filed by the appellants herein having been withdrawn the contention raised by the appellants that they are not liable in terms of the provisions of the act are not open to question particularly in view of the fact that no application for de notification could be filed subsequently as they had become barred by limitation. iiithe order of assessment under the income tax act having become final and binding as on the date when the orders of assessment were passed and thus mere filing of appeals were not sufficient for raising a contention that the taxes did not become due. reliance in this behalf has been placed on b c dalal 2005 indlaw sc 1826 v custodian. civil appeal No 2795 of 2004 and the kedarnath jute mfg. co ltd v the commissioner of income tax. central calcutta 1972 3 scc 252 1971 indlaw sc 841. ivthe appellants herein apart from the corporate entity which is a front company of late harshad mehta have received large loans advances and credits from the harshad mehta group and there had been intermingling of the assets to the tune of crores of rupees they can not escape their liabilities under the act. the affidavit filed by the appellants herein before the special court clearly shows that the liabilities exceed the assets in all cases. even in the case of dr pratima mehta wherein some excesses has been shown if the interest is calculated for the last over 13 years of the amount received the liabilities would exceed the assets. v the assets and liabilities of each of the entities having been audited by the chartered accountants it is evident from the reports that in all cases liabilities exceed the assets. vithe decretal amount against the harshad mehta group also would exceed rs 4339 crores and thus the assets held by the appellants are wholly insufficient to meet the liabilities. viifurthermore the appellants are also unable to maintain their residential properties as the custodian had to pay a sum of rs 1 06 crores towards the maintenance of the said residential properties. the assets of the harshad mehta group are valued at rs 972 crores apart from the income tax dues whereas the aggregate amount of income tax dues exceed rs 13800 crores. viiidr. hitesh mehta and dr pratima mehta who are medical practitioners by profession having affirmed affidavits admitting that the share broking and investment businesses which were part of family businesses were undertaken and conducted by late harshad mehta and they had no knowledge thereabout nor were they involved therewith. they at this stage can not be permitted to turn round and contend that they have nothing to do with the liabilities of late harshad mehta. ixthe sale of commercial property had never been seriously contested by the appellants and in fact the contention of the appellants herein before the special court was that if the commercial properties were sold there would be no need to sell the residential properties. even before this court the sale of commercial properties had not been questioned. a large number of commercial properties having already been sold and third party rights having been created this court should not interfere with the impugned judgment. the act. the statement of objects and reasons for enacting the act reads as under 1 in the course of the investigations by the reserve bank of india large scale irregularities and malpractices were noticed in transactions in both the government and other securities indulged in by some brokers in collusion with the employees of various banks and financial institutions. the said irregularities and malpractices led to the diversion of funds from banks and financial institutions to the individual accounts of certain brokers. 2 to deal with the situation and in particular to ensure speedy recovery of the huge amount involved to punish the guilty and restore confidence in and maintain the basic integrity and credibility of the banks and financial institutions the special court trial of offences relating to transactions in securities ordinance 1992 was promulgated on the 6th june 1992. the ordinance provides for the establishment of a special court with a sitting judge of a high court for speedy trial of offences relating to transactions in securities and disposal of properties attached. it also provides for appointment of one or more custodians for attaching the property of the offenders with a view to prevent diversion of such properties by the offenders. section 3 of the act provides for appointment and functions of the custodian. sub s 2 of section 3 postulates that the custodian may on being satisfied on information received that any person has been involved in any offence relating to transactions in securities after the 1st day of april 1991 and on and before 6th june 1992 the statutory period notify the name of such person in the official gazette. 3 of section 3 contains a non obstante clause providing that on and from the date of notification under sub section 2 any property movable or immovable or both belonging to any person notified under that sub section shall stand attached simultaneously with the issue of the notification and such attached properties may be dealt with by the custodian in such manner as the special court may direct. in the ordinance which preceded the act there was no provision for giving post facto hearing to a notified person for cancellation of notification but such a provision has been made in the act as would appear from section 42 thereof 1 of section 4 of the act reads as under contracts entered into fraudulently may be cancelled if the custodian is satisfied after such inquiry as he may think fit that any contract or agreement entered into at any time after the 1st day of april 1991 and on and before the 6th june 1992 in relation to any property of the person notified under sub s 2 of section 3 has been entered into fraudulently or to defeat the provisions of this act he may cancel such contract or agreement and on such cancellation such property shall stand attached under this act. provided that no contract or agreement shall be cancelled except after giving to the parties to the contract or agreement a reasonable opportunity of being heard. 2 of section 4 however provides for a hearing as regard correctness or otherwise of the notification notifying a person in this behalf in the event an appropriate application therefor is filed within 30 days of the issuance of such notification. section 5 provides for establishment of the special court. section 7 confers exclusive jurisdiction upon the special court. any prosecution in respect of any offence referred to in sub s 2 of section 3 pending in any court is required to be transferred to the special court. section 9 provides for the procedure and powers of the special court. section 9 a which was inserted by act 24 of 1994 with effect from 25th january 1994 confers all such jurisdiction powers and authority as were exercisable immediately before such commencement by any civil court in relation to the matter specified therein. section 11 of the act reads as under discharge of liabilities. notwithstanding anything contained in the code and any other law for the time being in force the special court may make such order as it may deem fit directing the custodian for the disposal of the property under attachment. the following liabilities shall be paid or discharged in full as far as may be in the order as under a all revenues taxes cesses and rates due from the persons notified by the custodian under sub s 2 of section 3 to the central government or any state government or any local authority b all amounts due from the person so notified by the custodian to any bank or financial institution or mutual fund and c any other liability as may be specified by the special court from time to time. analysis of the statutory. provisions. the act provides for stringent measures. it was enacted for dealing with an extra ordinary situation in the sense that any person who was involved in any offence relating to transaction of any security may be notified whereupon all his properties stand attached. the provision contained in the act being stringent in nature the purport and intent thereof must be ascertained having regard to the purpose and object it seeks to achieve. the right of a person notified to file an application or to raise a defence that he is not liable in terms of the provisions of the act or in any event the properties attached should not be sold in discharge of the liabilities can be taken at the initial stage by filing an application in terms of sub s 2 of section 4 of the act. but at the stage when liabilities are required to be discharged the notified person may inter alia raise a contention inter alia for the purpose of establishing that the properties held and possessed by them are sufficient to meet their liabilities. in terms of the provisions of the act the special court had been conferred a very wide power. recedents as regard scope of the act. constitutionality and or interpretation of the act came up for consideration before this court in harshad shantilal. mehta 1998. indlaw sc 732 v custodian and others 1998 5 scc 1 wherein the following questions were framed what is meant by revenues taxes cesses and rates due. does the word due refer merely to the liability to pay such taxes etc or does it refer to a liability which has crystallised into a legally ascertained sum immediately payable. do the taxes in cl. a of section 112 refer only to taxes relating to a specific period or to all taxes due from the notified person. at what point of time should the taxes have become due. does the special court have any discretion relating to the extent of payments to be made under section 112a from out of the attached funds property. whether taxes include penalty or interest. whether the special court has the power to absolve a notified person from payment of penalty or interest for a period subsequent to the date of his notification section in the alternative is a notified person liable to payment of penalty or interest arising from his inability to pay taxes after his notification. as regard question No 1 it was held in the present case the words taxes due occur in a section dealing with distribution of property. at this stage the taxes due have to be actually paid out. therefore the phrase taxes due can not refer merely to a liability created by the charging section to pay the tax under the relevant law. it must refer to an ascertained liability for payment of taxes quantified in accordance with law. in other words taxes as assessed which are presently payable by the notified person are taxes which have to be taken into account under section 112a while distributing the property of the notified person. taxes which are not legally assessed or assessments which have not become final and binding on the assessee are not covered under section 112a because unless it is an ascertained and quantified liability disbursement can not be made. in the context of section 112 therefore the taxes due refer to taxes as finally assessed. in regard to question No 2 it was opined every kind of tax liability of the notified person for any other period is not covered by section 112a although the liability may continue to be the liability of the notified person. such tax liability may be discharged either under the directions of the special court under section 112c or the taxing authority may recover the same from any subsequently acquired property of a notified person vide tejkumar balakrishna ruia v a k menon 1996 indlaw sc 2403 or in any other manner from the notified person in accordance with law. the priority however which is given under section 112a to such tax liability only covers such liability for the period 1 4 1991 to 6 6 1992. in respect of the question No 3 it was opined that the date of distribution arrives when the special court completes the examination of claims under section 9 a and if on that date any tax liability for the statutory period is legally assessed and the assessment is final and binding on a notified person that liability would be considered for payment section 111a. subject to what follows. so far as question No 4 is concerned this court despite upholding the contention of the custodian that no question of any reopening of tax assessments before the special court would arise and the liability of the notified person to pay the tax will have to be determined under the machinery provided by the relevant tax law observed but the special court can decide how much of that liability will be discharged out of the funds in the hands of the custodian. this is because the tax liability of a notified person having priority under section 112a is only tax liability pertaining to the statutory period. secondly payment in full may or may not be made by the special court depending upon various circumstances. the special court can for this purpose examine whether there is any fraud collusion or miscarriage of justice in assessment proceedings. the assessee who is before the special court is a person liable to be charged with an offence relating to transactions in securities. he may not in these circumstances explain transactions before the income tax authorities in case his position is prejudicially affected in defending criminal charges. then on account of his property being attached he may not be in a position to deposit the tax assessed or file appeals or further proceedings under the relevant tax law which he could have otherwise done. where the assessment is based on proper material and pertains to the statutory period the special court may not reduce the tax claimed and pay it out in full. but if the assessment is a best judgment assessment the special court may examine whether for example the income which is so assessed to tax bears comparison to the amounts attached by the custodian or whether the taxes so assessed are grossly disproportionate to the properties of the assessee in the hands of the custodian applying the wednesbury principle of proportionality. the special court may in these cases scale down the tax liability to be paid out of the funds in the hands of the custodian. in regard to question No 5 this court agreed with the finding of the special court that neither penalty nor interest can be considered as tax under section 112a of the act. so far question No 6 is concerned it was held that the remedy of a notified person who is assessed to penalty or interest after the notified period would be entitled to move the appropriate authority under the taxing statute stating if it is open to him under the relevant taxing statute to contend that he was unable to pay his taxes on account of the attachment of all his properties under the special court act and that there is a valid reason why penalty or interest should not be imposed upon him after the date of notification the authorities concerned under the taxing statute can take notice of these circumstances in accordance with law for the purpose of deciding whether penalty or interest can be imposed on the notified person. the special court is required to consider this question only from the point of view of distributing any part of the surplus assets in the hands of the custodian after the discharge of liabilities sections 112a and 112b. the special court has full discretion under section 112c to decide whether such claim for penalty or interest should be paid out of any surplus funds in the hands of the custodian. we must however notice that reliance was sought to be placed on the said judgment wherein reference was made to a bombay high court judgment in hitesh shantilal mehta v union of india. 1992 3 bom cr 716 1992 indlaw mum 6066 wherein it was held if the person approaches the special court and makes out for example a case that the property which is attached has no nexus of any sort with the illegal dealings in securities belonging to banks and financial institutions during the relevant period andor that there are no claims or liabilities which have to be satisfied by attachment and sale of such property in our view the special court would have the power to direct the custodian to release such property from attachment. but the said observation was held to be not laying down a law by a 3 judge bench of this court in l s synthetics ltd v fairgrowth financial services ltd and another 2004 11 scc 456 2004 indlaw sc 715 holding i. a notified party has the requisite locus to bring the fact to the notice of the special court that certain sum is owing and due to him from a third party whereupon a proceeding can be initiated for recovery thereof by the custodian and consequent application thereof in discharge of the liability of the notified person. ii sub s. 3 of section 3 should be literally construed and so construed all properties belonging to the notified person shall be subject to attachment which may consequently be applied for discharge of his liabilities in terms of section 11 of the said act. the provisions of the limitation act 1963 have no application in relation to the proceedings under the said act. the ratio of the said decision as regard applicability of the limitation act was further considered by a division bench of this court in fairgrowth investments ltd v custodian 2004 11 scc 472 2004 indlaw sc 868 wherein it was held that section 5 of the limitation act will have no application in relation to an application falling under sub s 2 of section 4 of the act stating it is enough for the purpose of this appeal to hold that section 292 of the limitation act 1963 does not apply to proceedings under section 42 of the special court trial of offences relating to transactions in securities act 1992. since the appellant 's petition of objection had been filed much beyond the period prescribed under that section the special court was right in rejecting the petition in limine. the appeal is accordingly dismissed but without any order as to costs. the appellants herein are notified persons in terms of the provisions of the act. therefore all the properties belonging to them stand attached. such attachment being automatic no finding was required to be arrived at that the same had been acquired either during the notified period or the appellants were involved in offences in transactions in securities. in tejkumar balakrishna ruia v a k menon and another 1997 9 scc 123 1996 indlaw sc 2403 this court held in our view the terms of sub s 3 of section 3 are clear. by reason thereof the property that belongs to a notified person stands attached simultaneously with the issue of the notification that makes him a notified party. the words on and from the date of notification indicate the point of time at which the attachment takes effect this is reiterated by the words shall stand attached simultaneously with the issue of the notification. this also indicates that no separate notification or order in regard to the attachment is necessary. neither the words on and from the date of notification nor the word property lead to the conclusion that what is attached is not only that property which the notified person owned or was possessed of on the date of the notification but also all such property as he might acquire at any time thereafter. the intention to attach property which did not belong to the notified person on the date of the notification but which he might acquire later would had it been there have been clearly expressed and sub s 3 would have stated that such property would stand attached the moment it was acquired by the notified person. the act would also have made provision for a subsistence allowance or the like for the notified person. it seems to us that to give to section 33 the wide meaning that has been ascribed to it in the judgment and order under appeal would render it perilously close to being held unconstitutional for it would deprive the notified person so long as he remained a notified person from earning a livelihood. even to say that such interpretation would reduce a notified person to beggary would not be accurate because the alms that he received being his property would stand attached. the apprehension expressed by the special court does not appear to be well founded if what a notified person obtains by way of purported income or gift or inheritance is really his own money such money would upon establishment of the fact stand attached automatically under the provisions of section 33. in any event it is for parliament to enact a law that meets all contingencies. the courts must interpret the law as it reads. while a purposive interpretation is permissible where two interpretations are possible the purposive interpretation must be such as preserves the constitutionality of the provision. it has further been held that the property be shares dividends and bonus and rights shares would also be attached property. issues. iwhether the appellants being not involved in offences in transactions in securities could have been proceeded against in terms of the provisions of the act. iiwhether individual liabilities of the appellants ought to have been separately considered by the special court as not a part of harshad mehta group. iiiwhether the tax liabilities could not have been held to be due as the order of assessments did not become final and binding. ivwhether the commercial properties could have been sold in auction. vwhether the residential properties should have been released from attachment. before adverting to the questions raised herein we may notice that both the parties have raised several contentions before us which have not precisely been raised before the learned special judge. several subsequent events have also been brought to our notice. the parties have also filed several charts before us showing individual assets and liabilities. it has as noticed hereinbefore further been contended that various best judgment assessment passed by the assessing authority against some of the appellants have been set aside in appeal and the matters are pending reassessment before the assessing authority. the appellants case is that the individual and corporate appellants other than harshad mehta ashwin mehta and sudhir mehta filed applications within the prescribed period before the special court praying for their de notifications. however by an order dated 14 july 2000 the said applications were permitted to be withdrawn with a permission to re file the same. it is not in dispute that the said applications are pending for consideration before the special court. they have not been heard. what would be the effect of the jurisdictional question as regard maintainability of the said application being barred by limitation would indisputably fall for consideration before the special court. we therefore as at present advised refrain ourselves from adverting to the said question. the question however before us is as to whether any contention which may not have a direct bearing with the question as to whether the special court could entertain their applications for de notifications could be raised by way of defence. it is no doubt true that the law of limitation bars a remedy but not a right. see bombay dyeing manufacturing co ltd v the state of bombay and others air 1958 sc 338 savitra khandu beradi v nagar agricultural sale and purchase co operative society ltd ahmednagar and others. air 1957 bom 178 1957 indlaw mum 110 and hari raj singh v sanchalak panchayat. raj u p govt. lucknow and others. air 1968 all 246 1967 indlaw all 16 but as observed hereinbefore. it would not be proper for us to consider as to whether such a remedy being not available in terms of section 42 of the act can still be determined if raised by way of defence. in l s synthetics ltd 2004 indlaw sc 715 supra this court observed a statute of limitation bars a remedy and not a right. although a remedy is barred a defence can be raised. in construing a special statute providing for limitation consideration of plea of hardship is irrelevant. a special statute providing for special or no period of limitation must receive a liberal and broader construction and not a rigid or a narrow one. the intent and purport of parliament enacting the said act furthermore must be given its full effect. we are therefore of the opinion that the provisions of the limitation act have no application so far as directions required to be issued by the special court relating to the disposal of attached property are concerned. although we do not intend to enter into the correctness or otherwise of the said contention of the appellants at this stage however there can not be any doubt whatsoever that they being notified persons all their properties would be deemed to be automatically attached as a consequent thereto. for the said purpose it is not necessary that they should be accused of commission of an offence as such. the contention of the appellants to the effect that their properties should have been attached only towards the liabilities incurred by the parties in respect of the transactions made during the statutory period can not be accepted as all the appellants being notified the attachment of the assets would be automatic. l s synthetics ltd 2004 indlaw sc 715 supra. however the contention of the appellants that the properties held by them otherwise are sufficient to meet their liabilities was required to be gone into as in our considered opinion there can not be a any dispute that the appellants have such a right. a corporate veil indisputably can be lifted on several grounds. lifting the corporate veil. the principle of lifting the corporate veil however ipso facto would not apply to the individuals. the custodian in a case of this nature may however show that the transactions entered into apparently by harshad mehta were intimately connected with acquisition of properties in the name of others. a transaction of benami indisputably can be a subject matter of a lies in terms of section 41 of the act as and when such a question is raised the same may have to be dealt with by the special court appropriately. however nexus between several persons in dealing with the matter may be established by the custodian. the fact however remains that the copies of the documents books of accounts and other records on the basis whereof the auditors appointed by the court filed their reports had not been shown to the appellants herein on the premise that they were in know of the things. as the said question has not been gone into by the learned judge special court it is necessary that the same be considered and appropriately dealt with. the appellants however raised the following contentions i that the statement prepared by the custodian and exhibited as c to his affidavit in rejoinder dated 1 october 2003 was based on material at least all of which were not connected to the appellants as were pointed out before the court. the learned special judge has accepted the figures stated by the custodian at face value without probing the basis on which the statement was prepared even though the appellants in their sur rejoinder asserted that the figures in the statement were contrary to both the books of accounts drawn by them as also the auditor 's report. in para 14 of the sur rejoinder the appellants denied the asset and liability position as arrived at by the custodian. according to the appellants the custodian has under estimated the assets and exaggerated and overstated their liabilities. a triable issue had been raised and the custodian 's petition should have been converted into a suit. this was not done. in fact according to the appellants there are gross errors in the material relied upon by the custodian. the said contention must be properly adjudged. several charts have been filed before us by the appellants to show i liabilities have been exaggerated by the custodian. no credit for rs 1227 crores released to revenue on interest are given by the custodian. ii liabilities have been shown in relation to unperformed contracts. credits not given for relief obtained from income tax. subsequent to the filing of the present appeal in a large number of cases the revenue demands have been set aside. it is open to the appellants herein to show that even if they continued to be notified the custodian was not right in clubbing all the individual members of the family as a single entity styled as harshad mehta group. it is interesting to note that the properties belonging to the mother of harshad mehta has since been released from attachment. the learned special court despite such a contention having been raised by the appellants in their affidavit in reply did not advert thereto. it is furthermore not in dispute that pursuant to or in furtherance of the directions issued by the learned special court the accounts of all entities be it corporate or individual were drawn up separately which approach had not been dis approved by the auditor appointed by the special court. even in the rejoinder filed by the custodian e g paragraphs 14 20 21 and 22 before the special court such contentions have been raised. a sur rejoinder thereto was filed on 15 october 2003 and in paragraphs 1 to 6 thereof the said statements were denied and disputed. our attention has also been drawn to a letter dated 7 october 2003 addressed by all the appellants to the office of the custodian wherein the attention of the custodian was drawn to the fact that all the documents relied upon by him had not been permitted to be inspected and he was requested to forward a report prepared by the chartered accountants in respect of the individual addressors of the letters. the said letter was replied by the custodian by his letter dated 10 october 2003 wherein none of the queries contained in paragraphs 3 to 8 of the said letter was even attempted to be answered. the appellants herein contended that the custodian did not furnish the requisite particulars thereof and inspection was refused on the grounds stated therein. the learned special court in the impugned order stated i the grand total of the admitted liability thus comes to rs 7279127317 15. the amount of priority demand of income tax liabilities comes to rs 18297576248. the estimated value of the immovable properties of this group is rs 184030038. thus the total value of the assets as per the affidavit filed on behalf of the custodian of harshad mehta group is rs 9727332166 94. v thus taking into consideration the total of the decretal amount and the income tax liability it is clear that the total assets of harshad mehta group would be far below the liabilities. in arriving at the said finding no contention of the parties raised in their respective affidavits had been adverted to nor any material filed before it was analysed. in our opinion the learned judge special court should have analysed the respective contentions of the parties in greater details and in particular in regard to assets and liabilities of the separate entities and having regard to the contentions raised by them that they are not part of the harshad mehta group and their individual liabilities can be met from the assets held and possessed by them separately. the statement annexed to the affidavit of the custodian showed individual break up and in that view of the matter the net asset picture of each individual of the appellants herein on individual basis and the effect thereof in our opinion should have received serious consideration at the hands of the learned special court. the custodian in terms of the directions issued by the learned special court had affirmed an affidavit putting on record the assets and liabilities of each of the members of the so called harshad mehta group on an individual basis. allegedly therein it was shown that the individuals had received large loans advances credits from the harshad mehta group and there had been intermingling of the assets to the tune of crores of rupees. before us mr desai had filed a chart for showing the same. the said chart however shows that at least mrs deepika mehta held assets more than her liabilities. mr desai contended that if interest is calculated liabilities would be more than assets. but the said chart has been drawn up on the basis of the audited accounts the correctness whereof is itself in dispute. before us a chart has been produced by the appellants herein as regards mrs deepika mehta to show her liabilities payable as on 8th june 1992 which are as under chart showing comparison of payables as on 8th june 1992. we therefore have not been given a clear picture as to the correctness or otherwise of the affidavit filed by the custodian vis a vis the books of accounts which have been maintained by the appellants themselves as well as the auditor 's report. the learned judge merely accepted the figures mentioned in the affidavit of the custodian and relied thereupon in the judgment without discussing the contentions and arguments raised on behalf of the appellants herein. we therefore are of the opinion in the interest of justice that it is necessary to give another opportunity of hearing to the appellants. it is true that horrendous figures as regard the liabilities of harshad mehta have been projected before us but the same had been shown to be of the entire group. if the liabilities of the individual entities are not treated as that of the group for one reason or the other indisputably liability of those who have nothing to do with the dealings of harshad mehta either in their individual capacities or as directors of some company or otherwise must be dealt with separately. the contention raised on behalf of the appellants is that the harshad mehta should be considered to be sui generis and the custodian may realize his dues from his personal assets as also of those with which he was concerned together with the assets of his front companies but such liability should not be fastened upon others who had nothing to do therewith. as regards liabilities of harshad mehta the appellants contended that since his expiry in the year 2001 his legal interests are not being defended both in the court as well as before the revenue as a result liabilities have been foisted upon him a large part which is on account of interest and penalties. his death has also forced upon him bankruptcy. on the other hand the contention of the custodian is that the appellants had not only taken huge loans or advances from harshad mehta in one capacity or the other but also even transactions and shares were made by harshad mehta on their behalf. further contention of the custodian is that even dr hitesh mehta and dr pratima mehta have admitted that they had no knowledge about the transactions. this may be so but then the effect of the rival contentions was required to be gone into by the learned special court. a finding of fact arrived at upon discussing and analyzing the respective contentions could have gone a long way in assisting this court in arriving at a correct conclusion. the learned judge proceeded on the basis that the assets and liabilities joint and collective of all those who are related with harshad mehta as also the corporate entities in which he was a director or had some other interest must be considered as a group. even in this behalf it was necessary for the special judge to assign sufficient and cogent reasons. a question may further arise as to whether the learned judge was correct in considering the individual liabilities of the notified parties as the liabilities of the group. if those individuals who had no connection with harshad mehta could not have been proceeded against for meeting the liabilities of harshad mehta jointly or severally a clear finding was required to be arrived at. only because there had been large intermingling and flow of funds from harshad mehta and inter se within the group the same by itself may not justify the conclusion that all of their assets were required to be sold irrespective of their individual involvement. it was thus necessary for the learned special court to arrive at a firm conclusion as regard the involvement of the individuals with harshad mehta if any and the extent of his liability as such. furthermore the question as regard liability of the parties should have been determined at the stage of section 9 a of the act. the appellants have contended that the custodian had taken contradictory or inconsistent stand inasmuch as the liabilities of all the entities were treated to be joint liabilities of harshad mehta group. he furthermore wanted to treat the liabilities of the notified entities also as their separate liabilities. he has proceeded on the basis that even if the assets and liabilities of all individuals is taken on an individual basis the liabilities would exceed assets in the case of each individual and corporate entity. it had however never been the case of the custodian that the examination of claims of all the notified parties is complete. it does not appear that claims inter se between the entities within the so called group had ever been taken into consideration. the custodian does not appear to have preferred claims before the special court on behalf of the largest lender on the so called group against those he had to recover loans. such claims may also be preferred. the act confers wide power upon the custodian and the learned special court and in that view of the matter having regard to the principles of natural justice the judgment and order of the learned judge special court should have furthermore been supported by sufficient and cogent reasons. tax liability. it is not in dispute that the tax liabilities of the appellants individually were assessed on the basis of best judgment assessment. it is furthermore not in dispute that in a large number of cases the appellate authorities have set aside best judgment assessments. the contention of the appellant to the effect that the income tax dues should have been considered at the point of time when they become recoverable can not be accepted having regard to the 3 judge bench decision of this court in b c dalal 2005 indlaw sc 1826 supra wherein this court categorically held that in absence of any order of stay granted by the higher court the liabilities would remain. we may further notice that the learned special court relied upon a decision in custodian v union of india and ors. petition No 64 of 1998 disposed of on 17th august 2000 wherein allegedly a dichotomy between sale and distribution was sought to be resolved in terms of the decision of this court in harshad shantilal mehta. indlaw sc 732 supra the appeal where against being civil appeal No 5812 of 2000 was dismissed by this court by an order dated 4 december 2000 stating that it was in agreement with the decision of the special court which called for no interference. this court therefore has laid down a law that mere filing of an appeal is not sufficient particularly when there is no order of stay on recovery has been granted and the demand is outstanding. in kedarnath jute mfg. co ltd 1971 indlaw sc 841 supra this court has held although that liability can not be enforced till the quantification is effected by assessment proceedings the liability for payment of tax is independent of the assessment. it is significant that in the present case the liability had even been quantified and a demand had been created in the sum of rs 149776 by means of the notice dated november 21 1957 during the pendency of the assessment proceedings before the income tax officer and before the finalisation of the assessment. it is not possible to comprehend how the liability would cease to be one because the assessee had taken proceedings before higher authorities for getting it reduced or wiped out so long as the contention of the assessee did not prevail with regard to the quantum of liability etc. but in this case the orders of assessment have been set aside. if the orders of assessment have been set aside the liabilities of the appellants have to be worked out on the basis of the new orders of assessment. so long such orders of assessment are not passed by the competent assessing authorities it can not be said that the appellants are liable to pay a huge amount by way of income tax dues on the basis of such orders of assessment which have since been set aside. a chart has been annexed to the additional written submissions filed by mr desai which originated from a letter dated 9th december 2005 issued by the office of the commissioner of income tax showing the current status of the liabilities of the individual members of the harshad mehta group in the following terms i ashwin mehta rs 1396 crores ii. deepika mehta rs 120 crores even after deducting the amount set aside by itat. it exceeds rs 63 crores. late harshad mehta rs 11829 crores. iv jyoti mehta rs 1457 crores. v hitesh mehta rs 73 crores vi. pratima mehta rs 115 crores even after deducting the amount set aside by itat. it exceeds rs 35 crores vii. sudhir mehta rs 339 crores viii. aatur holdings rs 15 95 crores even after deducting the amount set aside by itat. 2 7 crores. the custodian has further brought on records that if the transactions by or on behalf of corporate entity viz aatur holdings pvt ltd and dr pratima mehta by way of illustration are taken into consideration the same would reveal their modus operandi to the effect that the moneys were diverted from banks and financial institutions by late harshad mehta which were in turn diverted to his family concerns and family members. these moneys were used for speculative transactions and securities and the profits generated was used for acquiring assets. the learned special court having not arrived at such a finding this court is not in a position to go into the correctness or otherwise thereabout. in any view of the matter the learned judge special court having not dealt with the question as regard the mode and manner of disbursements of the amount so far as the tax liabilities of the appellants are concerned elaborately the same requires fresh determination in the light of the decision of this court in harshad shantilal mehta. 1998 indlaw sc 732 supra. in fact the appellants have brought on records various orders passed by income tax appellate authorities to show that the demands of the revenue have been set aside. furthermore the orders of the appellate authority have been passed during pendency of this appeal. this court it is trite can take into consideration the subsequent events. such subsequent events could also be taken into consideration for the purpose of review. in board of control for cricket in india and another v netaji cricket club and others 2005 4 scc 741 2005 indlaw sc 1243. this court held it is also not correct to contend that the court while exercising its review jurisdiction in any situation whatsoever can not take into consideration a subsequent event. in a case of this nature when the court accepts its own mistake in understanding the nature and purport of the undertaking given by the learned senior counsel appearing on behalf of the board and its correlation with as to what transpired in the agm of the board held on 29 9 2004 the subsequent event may be taken into consideration by the court for the purpose of rectifying its own mistake. in view of the aforementioned pronouncement of law we are of the opinion that it is absolutely necessary to request the learned special court to consider the matter afresh. sale of commercial properties has never been seriously contested by the appellants. in fact one of the contentions raised on behalf of the appellants had been that if commercial properties are sold there would be no need to sale the residential properties. this court also in its order dated 5th may 2004 clarified that the interim order dated 30th january 2004 shall not be applicable as regard sale of commercial properties as even before this court the same had not been questioned. it is furthermore not in dispute that third party rights have since been created by reason of sale of a large number of commercial properties. by an order dated 30th january 2004 while admitting the appeals this court directed the learned counsel for the custodian brings on record the result of the bids and the order of the special court dated 17 december 2003 and 20 january 2004. the learned counsel for the appellants proposes to offer his comments on the bids and the two orders of the special court. let it be done within two weeks. the process of finalizing the bids according to law may be proceeded ahead by the special court. however the finalization shall be subject to the result of these appeals. the said order however was modified and clarified by an order dated 5th may 2004 that the same shall not apply to the sale of commercial properties in view of the order of the learned judge special court dated 17th october 2003 wherein it was pointed out that the notified parties did not dispute the commercial properties being put to sale by the custodian. in that view of the matter evidently creation of any third party interest is no longer in dispute nor the same is subject to any order of this court. in any event ordinarily a bona fide purchaser for value in an action sale is treated differently than a decree holder purchasing such properties. in the former event even if such a decree is set aside the interest of the bona fide purchaser in an auction sale is saved. see zain ul abdin khan v muhammad asghar ali khan 15 ia 12 1887 indlaw pc 13. the said decision has been affirmed by this court in gurjoginder singh v jaswant kaur. smt and another 1994 2 scc 368 1994 indlaw sc 1613. in janak raj v gurdial singh and anr. 1967 2 scr 77 1966 indlaw sc 120. this court confirmed a sale in favour of the appellant therein who was a stranger to the suit being the auction purchaser of the judgment debtor 's immovable property in execution of an ex parte money decree in terms of order xxxi rule 92 civil procedure code. despite the fact that ordinarily a sale can be set aside only under rules 89 90 and 91 of order xxxi it was opined that the court is bound to confirm the sale and direct the grant of a certificate vesting the title in the purchaser as from the date of sale when no application in term of rule 92 was made or when such application was made and disallowed and in support thereof zain ul abdin khan 1887 indlaw pc 13 supra and various other decisions were referred to. in padanathil ruqmini amma v p k abdulla 1996 7 scc 668 1996 indlaw sc 3096 this court making a distinction between decree holder auction purchaser himself and a third party bona fide purchaser in an auction sale observed the ratio behind this distinction between a sale to a decree holder and a sale to a stranger is that the court as a matter of policy will protect honest outsider purchasers at sales held in the execution of its decrees although the sales may be subsequently set aside when such purchasers are not parties to the suit. but for such protection the properties which are sold in court auctions would not fetch a proper price and the decree holder himself would suffer. the same consideration does not apply when the decree holder is himself the purchaser and the decree in his favour is set aside. he is a party to the litigation and is very much aware of the vicissitudes of litigation and needs no protection. we therefore do not interfere with that part of the order whereby and wherewith the auction sale as regard commercial properties had been directed by the learned judge special court. the learned judge special court may therefore proceed to pass an appropriate order as regard confirmation of the sale of such properties. residential property. in these appeals we are concerned with sale of eight residential flats in a building known as madhuli. the flat belonging to the mother of late harshad mehta has been released. the flats however during pendency of these appeals have been sold in auction. one of the flats being flat. No 202. arunachal bhawan barakhamba road is subject matter of a separate proceeding pending before this court viz civil appeal. No 681 of 2004. in these appeals we are not concerned with the said flat. admittedly the flats have been sold subject to the result of these appeals. the flats have been sold on the basis of the joint liabilities of the appellants together with harshad mehta and other companies as a group. the liabilities of the appellants in view of our findings aforementioned are required to be considered afresh by the learned judge special court. the purchasers have also filed applications for their impleadment in these appeals. we however have not heard the purchasers as the question as to whether the auction sale of the said flats will be confirmed or not will depend upon the ultimate finding of the learned judge special court upon consideration of the matter afresh in the light of the observations made hereinbefore. we therefore would direct that the confirmation of sale of those flats be considered and appropriate order thereupon may be passed by the learned special court while considering the matter afresh. in the light of the directions issued herein it would be for the purchasers of the said flats to wait till a final decision is made or take back the amount deposited by them subject to any other or further order s that may be passed by the learned special judge. conclusion. in view of our foregoing discussions we are of the opinion that i the contention of the appellants that they being not involved in offences in transactions in securities could not have been proceeded in terms of the provisions of the act can not be accepted in view of the fact that they have been notified in terms thereof. the appellants being notified persons all their personal properties stood automatically attached and any other income from such attached properties would also stand attached. the question as to whether the appellants could have been considered to be part of harshad mehta group by the learned special court need not be determined by us as at present advised in view of the fact that appropriate applications in this behalf are pending consideration before the learned special court. the question as regard intermingling of accounts by the appellants herein with that of the harshad mehta group and or any other or further contentions raised by the parties hereto before us shall receive due consideration of the learned judge special court afresh in the light of the observations made hereinbefore. as regard the tax liabilities of the appellants herein we would request the learned judge special court to consider the matter afresh in the light of the observations made hereinbefore. the learned judge special court in this behalf having regard to the fact that several orders of best judgment assessment have been passed by the assessing authority may take into consideration the ratio laid down in the decision of this court in harshad shantilal mehta. the learned special court shall proceed to pass appropriate orders as regard confirmation of the auction sales in respect of commercial properties. v as regard sale of residential properties an appropriate order may be passed by the learned judge special court in the light of the observations made hereinbefore. we direct the custodian to permit the appellants to have inspection of all the documents in his power or possession in the premises of the special court in the presence of an officer of the court. such documents must be placed for inspection for one week continuously upon giving due notice therefor to the appellants jointly. as the appellants have been represented in all the proceedings jointly only one of them would be nominated by them to have the inspection thereof. the appellants shall be entitled to take the help of a chartered or cost accountant and may make notes therefrom for their use in the pending proceeding. the appellants shall file their objections to the said report if any within ten days thereafter. the custodian may also take assistance and or further assistance from a chartered accountant of his choice. a reply and or rejoinder thereto shall be filed within one week from the date of the receipt of the copy of the objection. the parties shall file their respective documents within one week thereafter. such documents should be supported by affidavits. both the parties shall be entitled to inspect such documents and filed their responses thereto within one week thereafter. the parties shall file the written submissions filed before this court together with all charts before the learned special judge special court within eight weeks from date. the learned judge special court shall allow the parties to make brief oral submissions with pointed reference to their written submissions. such hearing in the peculiar facts and circumstances of this case should continue from day to day. the learned judge special court while hearing the matter in terms of this order shall also consider as to whether the auction sale should be confirmed or not. it will also be open to the learned judge special court to pass an interim order or orders as it may think fit and proper in the event any occasion arises therefor. x we would however request the learned special judge special court to complete the hearings of the matter keeping in view of the fact that auction sale in respect of the residential premises is being consideration as expeditiously as possible and not later than twelve weeks from the date of the receipt of the copy of this order. save and except for sufficient or cogent reasons the learned judge shall not grant any adjournment to either of the parties. the learned judge special court shall take up the matter relating to confirmation of the auction sale in respect of the commercial properties immediately and pass an appropriate order thereupon within four weeks from the date of receipt of copy of this order. if in the meanwhile orders of assessment are passed by the income tax authorities the custodian shall be at liberty to bring the same to the notice of the learned special court which shall also be taken into consideration by the learned judge special court. with the aforementioned observations and directions these appeals are allowed. the impugned judgments are set aside and the matter is remitted to the learned judge special court for consideration of the matter afresh. however the parties shall bear their own costs. appeals allowed.

IN-Ext

FACTS appellants consists of four brothers, their wives, children and their widowed mother. the eldest among them, harshad s. mehta, has since expired. the said nine flats, it is said, were merged and redesigned for joint living of the entire family. the appellants herein and the said late harshad mehta were persons notified in terms of the act which was enacted to provide for the establishment of a special court for the trial of offences relating to transactions in securities and for matters connected therewith. in terms of the provisions of the act, along with late harshad mehta, the custodian had notified 29 entities in terms of s. 3 of the act, comprising three of his younger brothers, wife of late harshad mehta, wives of two of his younger brothers and other corporate entities, a partnership firm and three hufs. however, out of the said 29 entitles, only late harshad mehta and two of his younger brothers were cited as accused in various criminal cases filed against them. the properties of late harshad mehta and the appellants, herein being notified persons stood attached in terms of the provisions of the act. misc. application being 4 of 2001 was filed by the custodian praying for the sale of commercial premises. applications praying for lifting of attachment on their residential premises on the ground that the same had been purchased much prior to 1st april,1991 and the same had no nexus with any illegal transactions in securities. alternatively, it was prayed that since their asset base was greater than genuine liabilities, the said residential premises should be released from attachment. the learned special judge allowed misc. applications nos. 4 of 2001 and 41 of 1999. the misc. applications filed by the appellants herein for release of the residential flats as well as the commercial premises from attachment were dismissed. ARGUMENT (i) some of the entities having their asset base much more than actual liability, the impugned judgments are unsustainable. there was no occasion for the custodian to club all the notified entities in one block so as to be termed as harshad mehta group and/or to club their assets and liabilities jointly. although in relation to a body corporate incorporated and registered under the indian companies act, the doctrine of lifting the corporate veil would be applicable, but the same cannot be applied in case of individuals. (ii) having regard to the fact that only three entitles out of eight were involved in the offences, the liability of harshad mehta could not have been clubbed for the purpose of directing attachment and consequent sale of the properties which exclusively belong to them. (iii) the liabilities of harshad mehta, who was a sui generis, could have been recovered from the properties held and possessed by him or from the companies floated by him but not from the individual entities; at least two of whom being medical practitioners have their income from other sources. (iv) the books of accounts and other documents on the basis whereof the auditor's report had been made having not been allowed to be inspected by the appellants herein on the plea that they had the knowledge thereabout, the same could not have been taken into consideration for the purpose of passing of the impugned order or otherwise. (v) the appellants having preferred appeals against the income tax orders of assessment passed by the authority and the same having been set aside, no liability to pay income tax by the appellants as of now being existing, the residential properties could not have been sold. (vi) drawing our attention to a representative chart showing the discrepancies in the accounts of mrs. deepika a. mehta as shown in (a) affidavit by the custodian; (b) books of accounts maintained by the appellants; and (c) auditor's report, it was submitted that the auditor's report could not have been relied upon. (vii) a copy of the auditor's report having only been supplied during pendency of these appeals, the learned special judge committed a serious error in passing the impugned judgment relying on or on the basis thereof. respondents. ISSUE (i)whether the appellants being not involved in offences in transactions in securities could have been proceeded against in terms of the provisions of the act. (ii) whether individual liabilities of the appellants ought to have been separately considered by the special court as not a part of harshad mehta group. (iii) whether the tax liabilities could not have been held to be due as the order of assessments did not become final and binding. (iv) whether the commercial properties could have been sold in auction. (v) whether the residential properties should have been released from attachment. ANALYSIS the provision contained in the act being stringent in nature, the purport and intent thereof must be ascertained having regard to the purpose and object it seeks to achieve. the right of a person notified to file an application or to raise a defence that he is not liable in terms of the provisions of the act or in any event, the properties attached should not be sold in discharge of the liabilities can be taken at the initial stage by filing an application in terms of sub-s. (2) of s. 4 of the act. but, at the stage when liabilities are required to be discharged, the notified person may inter alia raise a contention inter alia for the purpose of establishing that the properties held and possessed by them are sufficient to meet their liabilities. in terms of the provisions of the act, the special court had been conferred a very wide power. the appellants herein are notified persons in terms of the provisions of the act. therefore, all the properties belonging to them stand attached. such attachment being automatic, no finding was required to be arrived at that the same had been acquired either during the notified period or the appellants were involved in offences in transactions in securities. in tejkumar balakrishna ruia v. a.k. menon and another [(1997) 9 scc 123] 1996 indlaw sc 2403, this court held: "in their view, the terms of sub-s. (3) of s. 3 are clear. by reason thereof, the property that belongs to a notified person stands attached simultaneously with the issue of the notification that makes him a notified party. the words "on and from the date of notification" indicate the point of time at which the attachment takes effect; this is reiterated by the words "shall stand attached simultaneously with the issue of the notification". this also indicates that no separate notification or order in regard to the attachment is necessary. neither the words "on and from the date of notification" nor the word 'property' lead to the conclusion that what is attached is not only that property which the notified person owned or was possessed of on the date of the notification but also all such property as he might acquire at any time thereafter. the intention to attach property which did not belong to the notified person on the date of the notification but which he might acquire later would, had it been there, have been clearly expressed and sub-s. (3) would have stated that such property would stand attached the moment it was acquired by the notified person. the act would also have made provision for a subsistence allowance or the like for the notified person. it seems to us that to give to s. 3(3) the wide meaning that has been ascribed to it in the judgment and order under appeal would render it perilously close to being held unconstitutional, for it would deprive the notified person, so long as he remained a notified person, from earning a livelihood. even to say that such interpretation would reduce a notified person to beggary would not be accurate because the alms that he received, being his property, would stand attached. the apprehension expressed by the special court does not appear to be well founded: if what a notified person obtains by way of purported income or gift or inheritance is really his own money, such money would, upon establishment of the fact, stand attached automatically under the provisions of s. 3(3). in any event, it is for parliament to enact a law that meets all contingencies. the courts must interpret the law as it reads. while a purposive interpretation is permissible where two interpretations are possible, the purposive interpretation must be such as preserves the constitutionality of the provision. it is no doubt true that the law of limitation bars a remedy but not a right. [see bombay dyeing & manufacturing co. ltd. v. the state of bombay and others, air 1958 sc 338, savitra khandu beradi v. nagar agricultural sale and purchase co-operative society ltd. ahmednagar and others [air 1957 bom 178] 1957 indlaw mum 110 and hari raj singh v. sanchalak panchayat raj u.p. govt. lucknow and others [air 1968 all 246], 1967 indlaw all 16 but as observed hereinbefore, it would not be proper for us to consider as to whether such a remedy being not available, in terms of s. 4(2) of the act can still be determined if raised by way of defence. in l.s. synthetics ltd. 2004 indlaw sc 715 (supra), this court observed: "a statute of limitation bars a remedy and not a right. although a remedy is barred, a defence can be raised. in construing a special statute providing for limitation, consideration of plea of hardship is irrelevant. a special statute providing for special or no period of limitation must receive a liberal and broader construction and not a rigid or a narrow one. the intent and purport of parliament enacting the said act furthermore must be given its full effect. we are, therefore, of the opinion that the provisions of the limitation act have no application, so far as directions required to be issued by the special court relating to the disposal of attached property, are concerned." although, the court did not intend to enter into the correctness or otherwise of the said contention of the appellants at this stage, however, there cannot be any doubt whatsoever that they being notified persons, all their properties would be deemed to be automatically attached as a consequent thereto. for the said purpose, it is not necessary that they should be accused of commission of an offence as such. the principle of lifting the corporate veil, however, ipso facto would not apply to the individuals. the custodian in a case of this nature may, however, show that the transactions entered into apparently by harshad mehta were intimately connected with acquisition of properties in the name of others. a transaction of benami indisputably can be a subject matter of a lies in terms of s. 4(1) of the act as and when such a question is raised, the same may have to be dealt with by the special court appropriately. however, nexus between several persons in dealing with the matter may be established by the custodian. the fact, however, remains that the copies of the documents, books of accounts and other records on the basis whereof the auditors appointed by the court filed their reports had not been shown to the appellants herein, on the premise that they were in know of the things. as the said question has not been gone into by the learned judge, special court, it is necessary that the same be considered and appropriately dealt with. if the liabilities of the individual entities are not treated as that of the group, for one reason or the other, indisputably, liability of those who have nothing to do with the dealings of harshad mehta either in their individual capacities or as directors of some company or otherwise must be dealt with separately. a finding of fact arrived at upon discussing and analyzing the respective contentions could have gone a long way in assisting this court in arriving at a correct conclusion. the learned judge proceeded on the basis that the assets and liabilities, joint and collective, of all those who are related with harshad mehta as also the corporate entities in which he was a director or had some other interest must be considered as a group. even in this behalf, it was necessary for the special judge to assign sufficient and cogent reasons. it was, thus, necessary for the learned special court to arrive at a firm conclusion as regard the involvement of the individuals with harshad mehta, if any, and the extent of his liability as such. furthermore, the question as regard liability of the parties should have been determined at the stage of section 9-a of the act. in kedarnath jute mfg. co. ltd. 1971 indlaw sc 841 (supra), this court has held: "although that liability cannot be enforced till the quantification is effected by assessment proceedings, the liability for payment of tax is independent of the assessment. it is significant that in the present case, the liability had even been quantified and a demand had been created in the sum of rs 1,49,776 by means of the notice, dated november 21, 1957, during the pendency of the assessment proceedings before the income tax officer and before the finalisation of the assessment. it is not possible to comprehend how the liability would cease to be one because the assessee had taken proceedings before higher authorities for getting it reduced or wiped out so long as the contention of the assessee did not prevail with regard to the quantum of liability etc." in board of control for cricket in india and another v. netaji cricket club and others [(2005) 4 scc 741] 2005 indlaw sc 1243, this court held: "it is also not correct to contend that the court while exercising its review jurisdiction in any situation whatsoever cannot take into consideration a subsequent event. in a case of this nature when the court accepts its own mistake in understanding the nature and purport of the undertaking given by the learned senior counsel appearing on behalf of the board and its correlation with as to what transpired in the agm of the board held on 29-9-2004, the subsequent event may be taken into consideration by the court for the purpose of rectifying its own mistake." in janak raj v. gurdial singh and anr. [1967 (2) scr 77], 1966 indlaw sc 120 this court confirmed a sale in favour of the appellant therein who was a stranger to the suit being the auction purchaser of the judgment-debtor's immovable property in execution of an ex parte money decree in terms of order xxxi rule 92, civil procedure code. despite the fact that ordinarily a sale can be set aside only under rules 89, 90 and 91 of order xxxi, it was opined that the court is bound to confirm the sale and direct the grant of a certificate vesting the title in the purchaser as from the date of sale when no application in term of rule 92 was made or when such application was made and disallowed and in support thereof zain-ul-abdin khan 1887 indlaw pc 13 (supra) and various other decisions were referred to. STATUTE the statement of objects and reasons for enacting the act reads as under: "(1) in the course of the investigations by the reserve bank of india, large scale irregularities and malpractices were noticed in transactions in both the government and other securities, indulged in by some brokers in collusion with the employees of various banks and financial institutions. the said irregularities and malpractices led to the diversion of funds from banks and financial institutions to the individual accounts of certain brokers. (2) to deal with the situation and in particular to ensure speedy recovery of the huge amount involved, to punish the guilty and restore confidence in and maintain the basic integrity and credibility of the banks and financial institutions the special court (trial of offences relating to transactions in securities) ordinance, 1992, was promulgated on the 6th june, 1992. the ordinance provides for the establishment of a special court with a sitting judge of a high court for speedy trial of offences relating to transactions in securities and disposal of properties attached. it also provides for appointment of one or more custodians for attaching the property of the offenders with a view to prevent diversion of such properties by the offenders. s. 3 of the special courts (trial of offences relating to transactions in securities) act, 1992 provides for appointment and functions of the custodian. s. 5 of the special courts (trial of offences relating to transactions in securities) act, 1992 provides for establishment of the special court. s. 7 of the special courts (trial of offences relating to transactions in securities) act, 1992 confers exclusive jurisdiction upon the special court. s. 9 of the special courts (trial of offences relating to transactions in securities) act, 1992 provides for the procedure and powers of the special court. s. 11 of the special courts (trial of offences relating to transactions in securities) act, 1992 provides for discharge of liabilities.

appellant before us was detained u s 3 of the conservation of foreign exchange and prevention of smuggling activities. act1974. for short cofeposa. he is the managing director of a company registered and incorporated under the provisions of the companies act known as m s sundesh springs private limited. it was an exporter and held a valid licence therefor. the company was to export products of alloy steel. upon exporting of alloy steel it was entitled to credits under the duty entitlement pass book depb. scheme introduced by the government of india with an object of encouraging exports. he allegedly misdeclared both the value and description of goods upon procuring fake and false bills through one prabhjot singh. the said prabhjot singh was said to have been operating three firms viz. m s s p industrial corporation m s. aaysons india and m s p j sales corporation ludhiana. it was allegedly found that non alloy steel bars rods etc of value ranging from rs 15 to rs 17 per kg were exported in the guise of alloy steel forgings bars rods etc by declaring their value thereof from rs 110 to rs 150 per kg and the export proceeds over and above the actual price were being routed through hawala channel. the officers of the directorate of revenue intelligence dri searched the factory as well as the residential premises of appellant and that of prabhjot singh. various incriminating documents were recovered. appellant and the said prabhjot singh made statements u s 108 of the customs act. prabhjot singh allegedly admitted to have supplied fake bills to units owned and controlled by appellant on commission basis without actual supply of the goods. it was also found that appellant had declared goods exported as alloy steel whereas after the tests conducted by central revenue control laboratory they were found to be other than alloy steeli e. non alloy. the consul economicconsulate general of india at dubai allegedly confirmed the existence of a parallel set of export invoices. invoices with a higher value were presented before the indian customs authorities with a view to avail depb incentives but in fact invoices with a lower value were presented for clearance. on the aforementioned allegations an order of detention was issued on 5 4 2005 appellant moved for issuance of a writ of habeas corpus before the high court of judicature of punjab and haryana. the said writ petition was dismissed by an order dated 23 11 2005 by a learned single judge. a letters patent appeal concededly which was not maintainable was filed thereagainst which was dismissed by reason of the impugned judgment. although before the high court the principal ground urged on behalf of appellant in questioning the legality or validity of the order of detention was unexplained delay in passing the order of detention which did not find favour with the high court. before us several other grounds viz. non placement of vital material documents before the detaining authority non supply of documents relied on or referred to in the order of detention as also non application of mind on the part of the detaining authority had been raised. in the meantime admittedly the period of detention being over appellant had been set at large. he was released from custody on 17 5 2006. this appeal however has been pressed as a proceeding under the smugglers and foreign exchange manipulators forfeiture of property act1976 for short safemahas been initiated against appellant. we may first deal with the question of unexplained delay. in this regard we may notice the following dates. on 13 10 2003appellant was arrested. he was discharged on bail on 6 1 2004 several inquiries were conducted both inside and outside india. a report in relation to overseas inquiry was received on 12 5 2004 on 25 6 2004 proposal of detention was sent which was approved on 2 12 2004 on. 20 12 2004the authorities of the dri stated that transactions after 11 10 2003 were not under scrutiny. furthermore the authorities of the dri by a letter dated 28 02 2005 requested the bank to defreeze the bank accounts of appellants. the order of detention was passed on 5 4 2005. the learned additional solicitor general who appeared on behalf of respondent has drawn our attention to a long list of dates showing that searches were conducted and statements of a large number of persons had to be recorded. the final order of detention was preceded not only on the basis of raids conducted in various premises recording of statements of a large number of witnesses carrying on intensive inquiries both within india and outside india obtaining test reports from three different laboratories but also the fact that despite notices appellant and his associates did not cooperate with the investigating authorities. they initiated various civil proceedings from time to time obtained various interim orders and thus delay in passing the order of detention can not be said to have not been explained. learned counsel would contend that keeping in view the nature and magnitude of an offence under cofeposa a distinction must be made between an order of detention passed under cofeposa vis a vis other acts as per the law laid down by this court in rajendrakumar natvarlal shah v state of gujarat and others 1988 3 scc 153 1988 indlaw sc 71 and in that view of the matter the high court must be held to have arrived at a correct decision. indisputably delay to some extent stands explained. but we fail to understand as to why despite the fact that the proposal for detention was made on 2 12 2004the order of detention was passed after four months. we must also notice that in the meantime on 20 12 2004the authorities of the dri had clearly stated that transactions after 11 10 2003 were not under the scrutiny stating in our letter mentioned above your office was requested not to issue the depb scripts to m s girnar impex limited and m s siri amar exports only in respect of the pending application if any filed by these parties up to the date of action i e 11 10 2003 as the past exports were under scrutiny being doubtful as per the intelligence received in this office. this office never intended to stop the export incentives occurring to the parties after the date of action i e 11 10 2003 in the civil your office letter. b l 2 misc. am 2003 ldh dated 17 05 2004 is being referred which is not received in this office. you are therefore requested to supply photocopy of the said letter to the bearer of this letter as this letter is required for filing reply to the honourable court. furthermore as noticed hereinbefore the authorities of the dri by a letter dated 28 02 2005 requested the bank to defreeze the bank accounts of appellant. the said documents in our opinion were material. it was therefore difficult to appreciate why order of detention could not be passed on the basis of the materials gathered by them. it is no doubt true that if the delay is sufficiently explained the same would not be a ground for quashing an order of detention under cofeposa but as in this case a major part of delay remains unexplained. we may also place on record that sen j in rajendrakumar natvarlal shah 1988 indlaw sc 71 suprawhile laying down various stages of the procedures leading to an order of detention opined that rule as to unexplained delay in taking action is not inflexible and a detention under cofeposa may be considered from a different angle. the question came up for consideration recently in rajinder arora v union of india and others 2006 4 scc 796 2006 indlaw sc 87 wherein it has been held furthermore no explanation whatsoever has been offered by the respondent as to why the order of detention has been issued after such a long time. the said question has also not been examined by the authorities before issuing the order of detention. the question as regard delay in issuing the order of detention has been held to be a valid ground for quashing an order of detention by this court in t d abdul rahman v state of kerala and others air 1990 sc 225 1989 indlaw sc 205 stating the conspectus of the above decisions can be summarised thus the question whether the prejudicial activities of a person necessitating to pass an order of detention is proximate to the time when the order is made or the live link between the prejudicial activities and the purpose of detention is snapped depends on the facts and circumstances of each case. no hard and fast rule can be precisely formulated that would be applicable under all circumstances and no exhaustive guidelines can be laid down in that behalf. it follows that the test of proximity is not a rigid or mechanical test by merely counting number of months between the offending acts and the order of detention. however when there is undue and long delay between the prejudicial activities and the passing of detention order the court has to scrutinise whether the detaining authority has satisfactorily examined such a delay and afforded a tenable and reasonable explanation as to why such a delay has occasioned when called upon to answer and further the court has to investigate whether the causal connection has been broken in the circumstances of each case. similarly when there is unsatisfactory and unexplained delay between the date of order of detention and the date of securing the arrest of the detenu such a delay would throw considerable doubt on the genuineness of the subjective satisfaction of the detaining authority leading to a legitimate inference that the detaining authority was not really and genuinely satisfied as regards the necessity for detaining the detenu with a view to preventing him from acting in a prejudicial manner. the delay caused in this case in issuing the order of detention has not been explained. in fact no reason in that behalf whatsoever has been assigned at all. delay as is well known at both stages has to be explained. the court is required to consider the question having regard to the overall picture. we may notice that in sk. serajul v state of west bengal 1975 2 scc 78 1974 indlaw sc 475this court opined there was thus delay at both stages and this delay unless satisfactorily explained would throw considerable doubt on the genuineness of the subjective satisfaction of the district magistrate burdwan recited in the order of detention. it would be reasonable to assume that if the district magistrate of burdwan was really and genuinely satisfied after proper application of mind to the materials before him that it was necessary to detain the petitioner with a view to preventing him from acting in a prejudicial manner he would have acted with greater promptitude both in making the order of detention as also in securing the arrest of the petitioner and the petitioner would not have been allowed to remain at large for such a long period of time to carry on his nefarious activities. in abdul salam alias thiyyan s o thiyyan mohammad detenu no 962general prison trivandrum v union of india and others 1990 3 scc 15 1990 indlaw sc 994 whereupon the learned additional solicitor general has placed strong reliance this court found that there had been potentiality or likelihood of prejudicial activities and thus or mere delay as long as it is explained the court may not strike down the detention. in the instant case we have noticed hereinbefore that the authorities of dri themselves categorically stated that the activities of appellant after 11 10 2003 were not in question and in fact all the bank accounts were defreezed. although learned additional solicitor general may be correct in his submissions that ordinarily we should not exercise our discretionary jurisdiction u art 136 of the constitution of india by allowing appellant to raise new grounds but in our opinion we may have to do so as an order of detention may have to be considered from a different angle. it may be true that the period of detention is over. it may further be true that appellant had remained in detention for the entire period but it is one thing to say that the writ of habeas corpus in this circumstances can not issue but it is another thing to say that an order of detention is required to be quashed so as to enable the detainee to avoid his civil liabilities under safema as also protect his own reputation. in a case of this nature we do not think in view of the admitted facts that we would not permit appellant to raise the said questions. so far as the question of non placement of material documents before the detaining authority is concerned we may notice the following dates i by a letter dated 5 7 2002the authorities of dri stated that appellant stood exonerated for earlier years after detailed examination. by a letter dated 20 12 2004the authorities of dri stated that transactions after 11 10 2003 were not under scrutiny and by letters dated 28 2 2005 and 7 3 2005the bank accounts of appellant were defreezed. by reason of the civil court by orders dated 7 5 2004 and 31 5 2004the bank accounts of m s girnar and shri amar were defreezed. by an order dated 13 8 2004the tribunal ordered release of goods. v by orders dated 31 8 2004 and 28 10 2004the civil judge directed release of documents to appellant. by an order dated 18 11 2004the civil court issued contempt notice to the authorities of dri for non release of documents and the authorities of dri made a statement before the court that the documents are being returned. we have noticed hereinbefore that learned additional solicitor general contended that appellant obstructed the proceedings by initiating various civil litigations. but indisputably those documents involving the civil court proceedings were not placed before the detaining authority. if the same had not been done not only the delay in issuing the order of detention stood unexplained but also thereby the order itself would become vitiated. furthermore the civil court proceedings were over on 19 11 2004. evidently the detaining authority did not take immediate steps to detain appellant. why the documents pertaining to the proceedings of the civil court had not been placed before the detaining authority has not been explained. on their own showing respondents admit that they were relevant documents. the question has been considered by this court in rajinder arora 2006 indlaw sc 87 supra stating admittedly furthermore the status report called for from the customs department has not been taken into consideration by the competent authorities. a division bench of this court in k s nagamuthu v state of tamil nadu ors 2005 9 scale 534 2005 indlaw sc 748 struck down an order of detention on the ground that the relevant material had been withheld from the detaining authority which in that case was a letter of the detenu retracting from confession made by him. in p saravanan v state of t n and others 2001 10 scc 212it was stated when we went through the grounds of detention enumerated by the detaining authority we noticed that there is no escape from the conclusion that the subjective satisfaction arrived at by the detaining authority was the cumulative result of all the grounds mentioned therein. it is difficult for us to say that the detaining authority would have come to the subjective satisfaction solely on the strength of the confession attributed to the petitioner dated 7 11 1999particularly because it was retracted by him. it is possible to presume that the confession made by the co accused sowkath ali would also have contributed to the final opinion that the confession made by the petitioner on 7 11 1999 can safely be relied on. what would have been the position if the detaining authority was apprised of the fact that sowkath ali had retracted his confession is not for us to make a retrospective judgment at this distance of time. in ahamed nassar v state of tamil nadu and others 1999 8 scc 473 1999 indlaw sc 778this court opined the question is not whether the second part of the contents of those letters was relevant or not but whether they were placed before the detaining authority for his consideration. there could be no two opinions on it. it contains the very stand of the detenu of whatever worth. what else would be relevant if not this. it may be that the detaining authority might have come to the same conclusion as the sponsoring authority but its contents are relevant which could not be withheld by the sponsoring authority. the letter dated 19 4 1999 reached the sponsoring authority and reached well within time for it being placed before the detaining authority. there is an obligation cast on the sponsoring authority to place it before the detaining authority which has not been done. even the letter dated 23 4 1999 which reached the secretary concerned at 3 00 p m on 26 4 1999 was much before the formal detention order dated 28 4 1999 the secretary concerned was obliged to place the same before the detaining authority. the respondent authority was not right in not placing it as it contains not only what is already referred to in the bail application dated 1 4 1999 but something more. the statements of appellant and prabhjot singh were noticed by the detaining authority. it had specifically been referred to in extenso in the order of detention. it is however stated that the records were tampered with at the instance of appellant. the self inculpatory statements of appellant and that of prabhjot singh were said to have been taken off the file. respondents contended that on first information report was registered against appellant as also one sepoy narender singh. but the said information report was registered only on 6 4 2005 and not prior to the date of order of detention. in paragraph 36 of the order of detention the detaining authority stated in view of the facts mentioned above i have no hesitation in arriving at the conclusion that you have through your acts of omission and commission indulged in prejudicial activities as narrated above. considering the nature and gravity of the offence the well planned manner in which you have engaged yourself in such prejudicial activities and your role therein as brought out above all of which reflect your high potentiality and propensity to indulge in such prejudicial activities in future i am satisfied that there is a need to prevent you from indulging in such prejudicial activities in future by detention under cofeposa act1974 with a view to preventing you from smuggling goods in future. we have been taken through the order of detention. the statements of appellant and the said prabhjot singh were recorded therein in extenso. recording of such statement must have been made from the xeroxed copies of such documents which were available with the detaining authority. the self inculpatory statements of appellant as also prabhjot singh purported to have been made in terms of s 108 of the customs act were required to be considered before the order of detention could be passed. the same was not done. the original of such documents might not been available with the detaining authority but admittedly the xeroxed copies were. it has not been denied or disputed that even the xeroxed copies of the said documents had not been supplied to the detenue. it may be true that appellant in his representation dated 14 06 2005 requested for showing him the original documents referred to or mentioned in the grounds of detention but then at least the xeroxed copies thereof should have been made available to him. learned additional solicitor general submitted that due to non supply of documents which were not vital or have merely been referred to as incidental the order of detention may not become vitiated as was been held by this court in kamarunnissa v. union of india and another. 1991 1 scc 128 1990 indlaw sc 85 the said decision was rendered in a different fact situation. in the said decision this court stated the law thus if merely an incidental reference is made to some part of the investigation concerning a co accused in the grounds of detention which has no relevance to the case set up against the detenus it is difficult to understand how the detenus could contend that they were denied the right to make an effective representation. it is not sufficient to say that the detenus were not supplied the copies of the documents in time on demand but it must further be shown that the non supply has impaired the detenu 's right to make an effective and purposeful representation. demand of any or every document however irrelevant it may be for the concerned detenu merely on the ground that there is a reference thereto in the grounds of detention cannot vitiate an otherwise legal detention order. no hard and fast rule can be laid down in this behalf but what is essential is that the detenu must show that the failure to supply the documents before the meeting of the advisory board had impaired or prejudiced his right however slight or insignificant it may be. in the present case except stating that the documents were not supplied before the meeting of the advisory board there is no pleading that it had resulted in the impairment of his right nor could counsel for the petitioners point out any such prejudice. we are therefore of the opinion that the view taken by the bombay high court in this behalf is unassailable. what is therefore relevant was as to whether the documents were material. if the documents were material so as to enable the detenue to make an effective representation which is his constitutional as also statutory right non supply thereof would vitiate the order of detention. it is a trite law that all documents which are not material are not necessary to be supplied. what is necessary to be supplied is the relevant and the material documents but thus all relevant documents must be supplied so as to enable the detenue to make an effective representation which is his fundamental right u art 225 of the constitution of india. right to make an effective representation is also a statutory right see sunila jain v 2006 3 scc 321 2006 indlaw sc 65. in this case the statements of appellant and prabhjot singh in our opinion were material. they could not have been withheld. if original of the said documents were not available xeroxed copies thereof could have been made available to him. the detaining authority moreover while relying on the said documents in one part of the order of detention could not have stated in another part that he was not relying thereupon. the very fact that he had referred to the said statements in ex tenso is itself a pointer to the fact that he had relied upon the said documents. even in the earlier part of the impugned order of detention i e detaining authority appears to have drawn his own conclusions. in view of our findings aforementioned it is not necessary to consider the contention raised by mr mukul rohtagi that order of detention suffers from non application of mind. the judgment of the high court therefore cannot be sustained. it is set aside accordingly and the order of detention passed against appellant is quashed. the appeal is allowed. no costs. appeal allowed.

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FACTS appellant was detained u/s.3 of the conservation of foreign exchange and prevention of smuggling activities. act,1974. for short "cofeposa. he is the managing director of a company,registered and incorporated under the provisions of the companies act,known as m/s. sundesh springs private limited. it was an exporter and held a valid licence therefor. the company was to export products of alloy steel. upon exporting of alloy steel,it was entitled to credits under the duty entitlement pass book (depb. scheme introduced by the government of india with an object of encouraging exports. he allegedly misdeclared both the value and description of goods upon procuring fake and false bills through one prabhjot singh. the said prabhjot singh was said to have been operating three firms,viz. m/s. s.p.industrial corporation,m/s. aaysons (india) and m/s. p.j.sales corporation,ludhiana. it was allegedly found that non-alloy steel,bars,rods,etc.of value ranging from rs.15/-to rs.17/-per kg.were exported in the guise of alloy steel forgings,bars,rods,etc.by declaring their value thereof from rs.110/-to rs.150/-per kg.and the export proceeds over and above the actual price were being routed through hawala channel. the officers of the directorate of revenue intelligence (dri) searched the factory as well as the residential premises of appellant and that of prabhjot singh. various incriminating documents were recovered. appellant and the said prabhjot singh made statements u/s.108 of the customs act. prabhjot singh allegedly admitted to have supplied fake bills to units owned and controlled by appellant on commission basis without actual supply of the goods. it was also found that appellant had declared goods exported as "alloy steel" whereas after the tests conducted by central revenue control laboratory,they were found to be "other than alloy steel",i.e.,non-alloy. ARGUMENT the principal ground urged on behalf of appellant in questioning the legality or validity of the order of detention was unexplained delay in passing the order of detention which did not find favour with the high court. the learned additional solicitor general,who appeared on behalf of respondent has drawn our attention to a long list of dates showing that searches were conducted and statements of a large number of persons had to be recorded. the final order of detention was preceded not only on the basis of raids conducted in various premises,recording of statements of a large number of witnesses,carrying on intensive inquiries both within india and outside india,obtaining test reports from three different laboratories but also the fact that despite notices appellant and his associates did not cooperate with the investigating authorities. they initiated various civil proceedings from time to time,obtained various interim orders and,thus,delay in passing the order of detention cannot be said to have not been explained. learned counsel would contend that keeping in view the nature and magnitude of an offence under cofeposa,a distinction must be made between an order of detention passed under cofeposa vis-a-vis other acts as per the law laid down by this court in rajendrakumar natvarlal shah v. state of gujarat and others [(1988) 3 scc 153 1988 indlaw sc 71] and in that view of the matter the high court must be held to have arrived at a correct decision. ISSUE the question of unexplained delay. ANALYSIS the authorities of the dri by a letter dated 28.02.2005 requested the bank to defreeze the bank accounts of appellant. the said documents,in our opinion,were material. it was,therefore,difficult to appreciate why order of detention could not be passed on the basis of the materials gathered by them. it is no doubt true that if the delay is sufficiently explained,the same would not be a ground for quashing an order of detention under cofeposa,but as in this case a major part of delay remains unexplained. delay,as is well known,at both stages has to be explained. the court is required to consider the question having regard to the overall picture. the authorities of dri themselves categorically stated that the activities of appellant after 11.10.2003 were not in question and in fact all the bank accounts were defreezed. although learned additional solicitor general may be correct in his submissions that ordinarily we should not exercise our discretionary jurisdiction u/art.136 of the constitution of india by allowing appellant to raise new grounds but,in the court’s opinion,they have to do so as an order of detention may have to be considered from a different angle. it may be true that the period of detention is over. it may further be true that appellant had remained in detention for the entire period but it is one thing to say that the writ of habeas corpus in this circumstances cannot issue but it is another thing to say that an order of detention is required to be quashed so as to enable the detainee to avoid his civil liabilities under safema as also protect his own reputation. in a case of this nature,we do not think,in view of the admitted facts,that we would not permit appellant to raise the said questions. the statements of appellant and the said prabhjot singh were recorded therein in extenso. recording of such statement must have been made from the xeroxed copies of such documents which were available with the detaining authority. the self-inculpatory statements of appellant as also prabhjot singh purported to have been made in terms of s.108 of the customs act were required to be considered before the order of detention could be passed. the same was not done. the original of such documents might not been available with the detaining authority but admittedly the xeroxed copies were. it has not been denied or disputed that even the xeroxed copies of the said documents had not been supplied to the detenue. it may be true that appellant in his representation dated 14.06.2005 requested for showing him the original documents referred to or mentioned in the grounds of detention but then at least the xeroxed copies thereof should have been made available to him. it is a trite law that all documents which are not material are not necessary to be supplied. what is necessary to be supplied is the relevant and the material documents,but,thus,all relevant documents must be supplied so as to enable the detenue to make an effective representation which is his fundamental right u/art.22(5) of the constitution of india. right to make an effective representation is also a statutory right.[see sunila jain v. 2006) 3 scc 321 2006 indlaw sc 65. in this case,the statements of appellant and prabhjot singh, ,were material. they could not have been withheld. if original of the said documents were not available,xeroxed copies thereof could have been made available to him. the detaining authority moreover while relying on the said documents in one part of the order of detention could not have stated in another part that he was not relying thereupon. the very fact that he had referred to the said statements in ex tenso is itself a pointer to the fact that he had relied upon the said documents. even in the earlier part of the impugned order of detention,i.e.detaining authority appears to have drawn his own conclusions. STATUTE this appeal,however,has been pressed as a proceeding under the smugglers and foreign exchange manipulators (forfeiture of property) act,1976 (for short "safema"),has been initiated against appellant.

this appeal by special leave arises out of a judgment and order dated 1st march2005. rendered by the high court of judicature at bombay whereby the learned single judge has set aside the order passed by the arbitral tribunal holding that they did not have jurisdiction to entertain and try the claim and counter claim made by the parties. in order to appreciate the issue requiring determination a few relevant facts may be stated. the appellant m s bharat petroleum corporation limited is a government of india undertaking under the administrative control of the ministry of petroleum natural gas and is engaged in refining distributing and selling of petroleum products all over the country. the respondent m s great eastern shipping company limited is engaged in the business of shipping and allied activities and owns a fleet of tanker vessels for charter including the vessel known as jag praja. an agreement called the time charter party in legal parlance was entered into between the appellant and the respondent on 6th may1997 for letting on hire vessels for a period of two years from 22nd september1996 to 30th june1997 and from 1st july1997 to 30th june1998on the terms and conditions set out in the said agreement. however before the charter party was to come to an end on 29th june1998the indian oil corporation limited for short ioc acting as agent of the appellant issued a fax to various ship owners including the respondent herein requesting them to extend the validity of the charter party agreement dated 6th may1997 beyond 30th june1998 for a period of one month from 1st july1998 with option for two further extensions of 15 days each. the respondent agreed to the said proposal. accordingly on 29th june1998 an addendum was signed between the parties whereby the validity period of charter party was extended for one month with an option for two further extensions for a period of 15 days each. the terms and conditions exceptions and exemptions contained in the charter party dated 6th may1997 remained unaltered. the parties are ad idem that the charter party dated 6th may1997 was extended till 31st august1998. it appears that since charter party dated 6th may1997 was coming to an end on 31st august1998the oil companies sought permission of the oil co ordination committee a wing of the ministry of petroleum and natural gas for further extension of the charter party. however the oil coordination committee by their fax message dated 26th august1998declined the request of the oil companies including the appellant for further extension of charter party beyond 31st august1998 the said fax message was an internal communication between the oil coordination committee and the oil companies. thereafter in september1998the ioc for and on behalf of the oil industry floated a fresh tender for carriage of petroleum products along the indian coast on time charter basis for a period of one year commencing from 1st september1998 to 31st august1999on the terms and conditions set out in the tender document. in response to the said tender the respondent and other vessel owners submitted their bids. it seems that being aggrieved of the decision of the ioc to invite revised price bids after opening of the sealed tenders one of the bidders filed a writ petition in the bombay high court questioning the said decision. the appellant intervened in the said matter. the writ petition was disposed of vide order dated 20th august1999 while disapproving in principle the action of the ioc in inviting fresh price bids after opening the bids but without recording final opinion on the merits of the issues raised in writ petition the court disposed of the petition inter alia directing that i the charter hire rates should be fixed by the tender evaluation committee and ii as the tender was for the period ending 31st august1999 and the writ petition was being decided on 20th august1999the ioc will not be required to enter into a contract for the period from 1st september1998 to 31st august1999 it is not in dispute that the vessel jag praja with which we are concerned continued to be chartered by the appellant till 31st august1999. it appears that pending finalization of a new charter party for the period commencing 1st september1998certain meetings took place between the oil companies and the ship owners including the respondent herein. on 12th october1998the respondent informed the ioc that if all its nine vessels mentioned in the letter are used at a fair and reasonable rate for one year from 1st september1998 to 31st august1999 for which the tender had been floated they were agreeable to apply the new agreed rates for use of the said nine vessels from 1st july1998 on 31st october1998. the ioc faxed to the respondent relevant portion of the message received by them from oil co ordination committee extending the period of usage of the existing coastal tanker fleet for the month of october1998at 80 charter hire rates prevailing till 30th june1998on provisional basis subject to adjustment of provisional charter hire with retrospective date from 1st september1998 against the revised charter hire to be finalised by the oil industry in response to the tender floated by ioc on 1st september1998 respondent s consent was asked for. the respondent responded immediately vide their letter dated 5th november1998agreeing in principle that revised charter hire rates as and when finalized in response to tender floated by the ioc on 1st september1998would be applicable to the vessels which are selected under the tender retrospectively from 1st september1998 it was pointed out that the vessels which are not chartered under the tender floated would be at a disadvantage. it was clearly stated that since the tender was not finalized the owners will be guided by the existing terms and conditions. some other objections not relevant at this stage were also indicated. as such all said and done oil co ordination committee s proposal was not accepted. nevertheless some suggestions to resolve the controversy were given. thus the proposal by the oil co ordination committee was not accepted by the respondent. in the alternative it was suggested by the respondent that the charter period be extended by six months on the existing terms and conditions at a mutually discussed time charter rate. admittedly the vessels continued to be chartered by the appellant beyond the date of this letter. thereafter for almost two months there was no communication between the parties. it was only on 31st december1998 when the ioc issued a fax to the respondent enclosing draft letter regarding charter party agreement to be signed between the charterers and owners with minor modification if necessaryrequesting the respondent to sign as per proposal by the 4th january1999on which date the respondent expressed its disinclination stating in reply fax that as per usual practice pending finalization of new charter the existing terms and conditions of the charter party continue to apply. finally it was suggested that we therefore suggest that we sign an agreement with you for the period from 1st september1998 until the matter is finally decided by you under the tender on the existing terms and conditions with the charter hire being provisionally paid on an ad hoc basis at 90 of the rate which was prevailing under the existing charter party. kindly confirm in order to draw up a suitable agreement accordingly. emphasis supplied. vide letter of even date i e 4th january1999the appellant suggested to the respondent that in the absence of a formal charter party with effect from 1st september1998a provisional arrangement for a period of four months effective from 1st september1998 with an option for extension of one month may be mutually agreed to by payment at the rate of 80 on charter hire prevailing on 30th june1998as ad hoc hire. the respondent was asked to convey their acceptance to the said suggestion. it appears that the respondent did not respond to the said suggestion by the appellant but all the same its vessel continued to be on charter with the appellant. the writ petition was ultimately disposed of on 20th august1999 it was only after a gap of about seven months that on 15th march2000the ioc informed the respondent about the evaluation of the tenders in terms of the order passed by the high court. charter hire rate worked out by the committee for vessel jag praja for the period from 1st september1998 to 31st august1999 was communicated to the respondent. in response the respondent while expressing their disappointment with the rate but purportedly in view of their long business relations with the appellant conveyed their acceptance of the proposed rate in respect of each of the vessels named in separate letters all dated 1st. may2000with the expectation that their outstanding balance of the hire shall be paid to them at the earliest. however the respondent did not convey their acceptance of the charter hire rates for two vessels viz. jag praja and jag prayog. it appears that the respondent wrote various letters to the appellant for upward revision of the rate in respect of these two vessels but seemingly their request was ultimately turned down on 2nd november2000on receipt of which the respondent slammed a legal notice dated 6th november2000on the appellant inter alia requesting them to revise the rates on the basis of mutual discussions and settle the accounts. having failed to receive any reply to the said notice by another legal notice dated 1st december2000the respondent called upon the appellant to pay balance amount of rs 43947517 to them as charter hire in respect of vessel jag praja for the period from 1st september1998 to 31st august1999 within 15 days from date of receipt of the said notice or treat it as an arbitration notice. the name of the arbitrator was also communicated to the appellant. it seems that pursuant to the said notice and some subsequent correspondence exchanged between the parties an arbitral tribunal was constituted. claims and counter claims were filed before the arbitral tribunal. on the basis of the pleadings of the parties the arbitral tribunal framed as many as eight issues. however arguments were heard only on the following three issues. issue no 1 whether the hon ble arbitral tribunal has no jurisdiction to adjudicate upon the dispute between the claimant and the respondent for the period september1998 to august1999. in respect of the vessel jag praja for the reasons stated in para 1 of the written statement. issue no 2 whether there is any common practice that if the vessel is not re delivered at the end of the period mentioned in the time charter the vessel would be governed by the charter party under which originally it was chartered. issue. no 5 whether the time charter party dated 6th. may1997 came to an end by efflux of time on 30th august1998. vide order dated 12th. may2003 the arbitral tribunal came to the conclusion that the appellant having invoked the arbitration clause contained in charter party agreement dated 6th may1997which was valid upto 31st august1998. and as the dispute between the parties related to the period subsequent to 31st. august1998they had no jurisdiction to decide the reference. the learned tribunal found issue no 2 in the negative and issue no 5 in the affirmative. according to the tribunal on and after 1st september1998charter party agreement dated 6th may1997 was superseded by a fresh agreement and a term of the agreement was that the charter hire rate would be determined by the oil co ordination committee of the ioc in nutshell the tribunal was of the view that with the performance original charter party dated 6th may1997 got extinguished. the respondent challenged the said award before the high court. by the impugned order the learned single judge has set aside the said award inter alia holding that arbitral tribunal has the jurisdiction to adjudicate the disputes between the parties as the vessel continued to be hired by the appellant for the period subsequent to 31st august1998 on the same terms and conditions as were contained in the charter party dated 6th may1997only subject to the revision or modification of the rate of hire to be determined by the oil co ordination committee. the learned judge also felt that the tribunal had erred in totally excluding from its consideration cls 23 and 4 1 of the charter party dated 6th may1997whereunder the charter party was to come to an end on re delivery of the vessel. admittedly after 31st august1998re delivery of vessel did not take place and therefore in terms of clause 23the vessel continued to be hired on the same terms and conditions except the term as to the hire charges on which there was disagreement between the parties. it was thus held that the charter party dated 6th may1997 did not come to an end by efflux of time and it was extended by the parties on the same terms and conditions except the rate of hire. correctness of this order of the high court is questioned in this appeal. mr sudhir chandra learned senior counsel appearing on behalf of the appellant has assailed the impugned order on the sole ground that the charter party dated 6th may1997 having come to an end by efflux of time on 31st august1998the arbitration clause contained in it also perished and therefore in the absence of a fresh arbitration agreement claim of the respondent relating to the period 1st september1998 to 31st august1999 could not be referred to arbitration by invoking arbitration clause in charter party dated 6th may1997 laying emphasis on the fax message dated 26th august1998 addressed by the oil co ordination committee to the oil companies including the appellant inter alia informing them that no further extension of the current charter hire rate will be allowed learned counsel submitted that the said message made it clear to all concerned that charter party dated 6th may1997 would not be extended under any circumstance. shyam divan learned senior counsel appearing on behalf of the respondent on the other hand submitted that notwithstanding the fact that the period fixed originally under the charter party or under the addendum dated 29th june1998 had come to an end the subsequent conduct of the parties goes to show that charter of the vessel by the appellant beyond 31st august1998 continued to be governed by the terms and conditions stipulated in charter party dated 6th may1997 and therefore an arbitration agreement did exist between the parties. learned counsel argued that even otherwise till the vessel was not re delivered in terms of cls 4 and 23 of charter party dated 6th may1997the said agreement could not come to an end. it was pointed out that all the obligations of the owners as well as of the charterers during the period the vessel was in use continued to be discharged under the charter party dated 6th may1997 even after the expiry of the period of the charter party. in support of the proposition that the concurrence of a party can be gathered from his conduct like continued user of the vessel in the present case without any objection to respondent s letter dated 4th january1999reliance is placed on a decision of this court in the godhra electricity co ltd anr. the state of gujarat anr 1974 indlaw sc 253. it was also submitted that the view taken by the high court being a plausible view interference in exercise of extra ordinary jurisdiction u art 136 of the constitution is unwarranted. thus the short question for determination is whether on the expiry of the extended period of charter hire on 31st august1998charter party dated 6th may1997 came to an end and the arbitration agreement between the parties perished with it. before we proceed to examine the rival stands we may note at the outset that neither the arbitral tribunal nor the high court have gone into the question whether the claim made by the respondent would otherwise fall within the ambit of the arbitration clause in the charter party or not. what is in dispute is whether the arbitration agreement between the parties had got extinguished after 31st august1998i e the date of expiry of the extended period of the charter party. therefore we refrain from expressing any opinion on the scope and ambit of the arbitration clause though prime facie it appears to be quite widely worded. it is no doubt true that the general rule is that an offer is not accepted by mere silence on the part of the offerree yet it does not mean that an acceptance always has to be given in so many words. under certain circumstances offerree s silence coupled with his conduct which takes the form of a positive act may constitute an acceptance an agreement sub silentio. therefore the terms of a contract between the parties can be proved not only by their words but also by their conduct. in our view the principle of sub silentio is clearly attracted in the present case. as noted above after the extended period of charter party dated 6th may1997 had come to an end on 31st august1998. and the bids received pursuant to fresh invitation were pending finalization vide their letter dated 12th. october1998the respondent had informed the appellant that they were agreeable to apply new rates for use of the vessel from 1st july1998 provided all the nine vessels are used. however on 31st october1998the appellant faxed ioc s message informing them of the extension of the existing coastal tanker fleet for the month of october1998 at reduced rates viz 80 of the charter party rates prevailing till 30th august1998 on receipt of the said letter the respondent vide their letter dated 5th november1998protested against the revision of the rates for the vessel not being considered under the new bid and stated in unequivocal terms that it was not possible for them to accept the proposal of the oil co ordination committee communicated to them vide letter dated 12th. october1998 yet again while responding to appellant s fax dated 31st december1998whereby the respondent was required to sign a provisional charter party by 4th january1999vide their letter dated 4th january1999the respondent pointed out to the appellant that usual practice is that pending finalization of the new charter the existing terms and conditions of the charter party continue to apply and therefore they were willing to sign the agreement as contemplated by the appellant based on the existing terms and conditions. it was suggested that an agreement may be signed between them for the period from 1st september1998 until the matter was finally decided by the appellant under the tender on the existing terms and conditions with the charter hire being provisionally paid on ad hoc basis at 90 of the rate which was prevailing under the existing charter party. as noted hereinabove there was no response by the appellant to respondent s letter dated 4th january1999 though it appears that vide their letter of even date the appellant did suggest to the respondent that as a token of formal agreement the said letter may be jointly signed by the charterers and the vessel owners. admittedly no such agreement was signed between the parties. indubitably there was no further exchange of correspondence between the parties during the year. nevertheless the appellant continued to use the vessel on hire with them under the time charter dated 6th may1997 the conduct of the parties as evidenced in the said correspondence and in particular appellant s silence on respondent s letters dated 5th november1998 and 4th. january1999coupled with the fact that they continued to use the vessel manifestly goes to show that except for the charter rate there was no other dispute between the parties. they accepted the stand of the respondent sub silentio and thus continued to bind themselves by other terms and conditions contained in the charter party dated 6th may1997which obviously included the arbitration clause. we may examine the issue from another angle based on respondent s stand that charter party dated 6th may1997 continues to be in vogue till the chartered vessel is re delivered. in this context it would be appropriate to refer to cls 4 and 23 of the charter party dated 6th may1997 these are in the following terms 4 delivery redelivery 4 1. the vessel shall continue to be on charter to charterers in direct continuation from 2348 hrs 22 09 1996 to 30 06 1998 the vessel shall be re delivered by charterers to owners on dropping last outward pilot at any port on west coast of india at charterers option. charterers to give owners 15 days notice to probable port of re delivery. 4 2 charterers to load last three cargoes clean and re deliver the vessel in clean condition. final voyage should the vessel be on her voyage towards the port of redelivery at the time of payment of hire is due payment of hire shall be made for such length of time as owners and charterers may agree upon as being estimated time necessary to complete the voyage less any disbursements made or expected to be made or expenses incurred or expected to be incurred by charterers for owners account and less the estimated amount of bunker fuel remaining at the termination of the voyage and when the vessel is redelivered any overpayment shall be refunded by the owners or underpayment paid by charterers. notwithstanding the provisions of cl 4 hereof should the vessel be upon voyage at the expiry of the period of this charter charterers shall have the use of vessel at the same rate and conditions for such extended time as may be necessary for the completion of the round voyage on which she is engaged and her return to a port of redelivery as provided by the charter. on a conjoint reading of the said clauses it is plain that the appellant was under an obligation to re deliver the vessel as per the procedure contemplated in the afore noted clauses. indisputably the vessel in question had not been re delivered at least during the relevant period and the appellant continued to use the vessel beyond 31st august1998 having failed to re deliver the vessel in terms of cl 4 1 of the charter party the appellant can not plead that the charter party had been fully worked out. it is clear from the pleadings and issue no 2framed by the arbitral tribunal that it was respondent s consistent stand that since the hired vessel had not been re delivered at the end of the time charter party the vessel would be governed by the terms and conditions in the charter party dated 6th may1997. however the arbitral tribunal answered the said issue against the respondent. it appears to us that even the question in regard to the effect and consequences of non delivery of the vessel in terms of the cl 4 1 and 23 would by itself be a dispute arising under the said charter party with. respect. the learned arbitral tribunal overlooked this aspect of the matter. we are therefore of the opinion that though performance of the charter party agreement dated 6th may1997 may have come to an end on 31st august1998. but it was still in existence for some purposes viz the effect of vessel s non re delivery as per the prescribed mechanism and its continued use beyond the stipulated time. and thus the arbitration clause in the said charter party operated in respect of these and other allied purposes. therefore the factual scenario in the instant case leads to an inescapable conclusion that notwithstanding the expiry of the period fixed in the time charter party dated 6th may1997the said charter party did not get extinguished inter alia for the purpose of determination of the disputes arising thereunder and the arbitration clause contained therein could be invoked by the respondent. in view of the foregoing discussion we do not find any infirmity in the view taken by the high court that charter party dated 6th may1997 had not come to an end by efflux of time and it got extended by the conduct of the parties warranting interference. having come to the conclusion that an arbitration agreement existed between the parties the question which remains to be considered is whether the disputes between the parties should be referred to the same arbitral tribunal which had come to the conclusion that in the absence of any arbitration agreement it did not have jurisdiction to entertain and try the claims and counter claims. we feel that it would be proper and expedient to constitute a fresh arbitral tribunal. accordingly we constitute an arbitral tribunal consisting of justice m jagannadha rao presiding arbitratorjustice d p wadhwa and justice s n variava former judges of this court to adjudicate upon the claim counter claim by the parties subject to their consent and such terms and conditions as they may deem fit and proper. it goes without saying that the learned tribunal shall deal with the matter uninfluenced by any observations in this order on the respective stands of the parties. resultantly the appeal being devoid of any merit is liable to be dismissed which we do leaving the parties to bear their own costs. the registry is directed to communicate this order to the learned members of the arbitral tribunal to enable them to enter upon the reference and decide the matter as expeditiously as practicable. appeal dismissed.

IN-Ext

FACTS the appellant m/s. bharat petroleum corporation limited is a government of india undertaking,under the administrative control of the ministry of petroleum &; natural gas and is engaged in refining,distributing and selling of petroleum products all over the country. the respondent m/s. great eastern shipping company limited is engaged in the business of shipping and allied activities and owns a fleet of tanker vessels for charter,including the vessel known as jag praja. an agreement,called the time charter party in legal parlance,was entered into between the appellant and the respondent on 6th may,1997 for letting on hire vessels for a period of two years from 22nd september,1996 to 30th june,1997 and from 1st july,1997 to 30th june,1998,on the terms and conditions set out in the said agreement. however,before the charter party was to come to an end,on 29th june,1998,the indian oil corporation limited (for short ioc ),acting as agent of the appellant,issued a fax to various ship owners,including the respondent herein,requesting them to extend the validity of the charter party agreement dated 6th may,1997 beyond 30th june,1998 for a period of one month from 1st july,1998 with option for two further extensions of 15 days each. the respondent agreed to the said proposal. accordingly,on 29th june,1998 an addendum was signed between the parties whereby the validity period of charter party was extended for one month with an option for two further extensions for a period of 15 days each. the terms and conditions; exceptions and exemptions contained in the charter party dated 6th may,1997 remained unaltered. the parties are ad idem that the charter party dated 6th may,1997 was extended till 31st august,1998. it appears that since charter party dated 6th may,1997 was coming to an end on 31st august,1998,the oil companies sought permission of the oil co-ordination committee,a wing of the ministry of petroleum and natural gas for further extension of the charter party. however,the oil coordination committee,by their fax message dated 26th august,1998,declined the request of the oil companies,including the appellant,for further extension of charter party beyond 31st august,1998. the said fax message was an internal communication between the oil coordination committee and the oil companies. thereafter,in september,1998,the ioc for and on behalf of the oil industry,floated a fresh tender for carriage of petroleum products along the indian coast on time charter basis for a period of one year commencing from 1st september,1998 to 31st august,1999,on the terms and conditions set out in the tender document. in response to the said tender,the respondent and other vessel owners submitted their bids. it seems that being aggrieved of the decision of the ioc to invite revised price bids after opening of the sealed tenders,one of the bidders filed a writ petition in the bombay high court,questioning the said decision. ARGUMENT learned senior counsel appearing on behalf of the appellant has assailed the impugned order on the sole ground that the charter party dated 6th may,1997 having come to an end by efflux of time on 31st august,1998,the arbitration clause contained in it also perished and,therefore,in the absence of a fresh arbitration agreement,claim of the respondent relating to the period 1st september,1998 to 31st august,1999 could not be referred to arbitration by invoking arbitration clause in charter party dated 6th may,1997. laying emphasis on the fax message dated 26th august,1998 addressed by the oil co-ordination committee to the oil companies,including the appellant,inter alia,informing them that no further extension of the current charter hire rate will be allowed,learned counsel submitted that the said message made it clear to all concerned that charter party dated 6th may,1997 would not be extended under any circumstance. shyam divan,learned senior counsel appearing on behalf of the respondent,on the other hand,submitted that notwithstanding the fact that the period fixed originally under the charter party or under the addendum dated 29th june,1998 had come to an end,the subsequent conduct of the parties goes to show that charter of the vessel by the appellant beyond 31st august,1998 continued to be governed by the terms and conditions stipulated in charter party dated 6th may,1997 and,therefore,an arbitration agreement did exist between the parties. learned counsel argued that even otherwise till the vessel was not re-delivered in terms of cls.4 and 23 of charter party dated 6th may,1997,the said agreement could not come to an end. it was pointed out that all the obligations of the owners as well as of the charterers during the period the vessel was in use continued to be discharged under the charter party dated 6th may,1997 even after the expiry of the period of the charter party. in support of the proposition that the concurrence of a party can be gathered from his conduct,like continued user of the vessel in the present case,without any objection to respondent s letter dated 4th january,1999,reliance is placed on a decision of this court in the godhra electricity co. ltd.&; anr. vs. the state of gujarat &; anr 1974 indlaw sc 253. it was also submitted that the view taken by the high court being a plausible view,interference in exercise of extra-ordinary jurisdiction u/art.136 of the constitution is unwarranted. ISSUE whether the hon ble arbitral tribunal has no jurisdiction to adjudicate upon the dispute between the claimant and the respondent for the period september,1998 to august,1999. in respect of the vessel jag praja for the reasons stated in para 1 of the written statement. whether there is any common practice that if the vessel is not re-delivered at the end of the period mentioned in the time charter the vessel would be governed by the charter party under which originally it was chartered. whether the time charter party dated 6th. may,1997 came to an end by efflux of time on 30th august,1998. the short question for determination is whether on the expiry of the extended period of charter hire on 31st august,1998,charter party dated 6th may,1997 came to an end and the arbitration agreement between the parties perished with it. ANALYSIS that neither the arbitral tribunal nor the high court have gone into the question whether the claim made by the respondent would otherwise fall within the ambit of the arbitration clause in the charter party or not. what is in dispute is whether the arbitration agreement between the parties had got extinguished after 31st august,1998,i.e.the date of expiry of the extended period of the charter party. it is,no doubt,true that the general rule is that an offer is not accepted by mere silence on the part of the offerree,yet it does not mean that an acceptance always has to be given in so many words. under certain circumstances,offerree s silence,coupled with his conduct,which takes the form of a positive act,may constitute an acceptance an agreement sub silentio. therefore,the terms of a contract between the parties can be proved not only by their words but also by their conduct. in our view,the principle of sub silentio is clearly attracted in the present case. there was no response by the appellant to respondent s letter dated 4th january,1999 though it appears that vide their letter of even date,the appellant did suggest to the respondent that as a token of formal agreement the said letter may be jointly signed by the charterers and the vessel owners. admittedly,no such agreement was signed between the parties. indubitably,there was no further exchange of correspondence between the parties during the year. on a conjoint reading of the clauses,it is plain that the appellant was under an obligation to re-deliver the vessel as per the procedure contemplated in the afore-noted clauses. indisputably,the vessel in question had not been re-delivered at least during the relevant period and the appellant continued to use the vessel beyond 31st august,1998. having failed to re-deliver the vessel in terms of cl.4.1 of the charter party,the appellant cannot plead that the charter party had been fully worked out. it is clear from the pleadings and issue no.2,framed by the arbitral tribunal,that it was respondent s consistent stand that since the hired vessel had not been re-delivered at the end of the time charter party,the vessel would be governed by the terms and conditions in the charter party dated 6th may,1997. however,the arbitral tribunal answered the said issue against the respondent. it appears to us that even the question in regard to the effect and consequences of non-delivery of the vessel in terms of the cl.4.1 and 23 would by itself be a dispute arising under the said charter party .with. respect. the learned arbitral tribunal overlooked this aspect of the matter. resultantly,the appeal being devoid of any merit is liable to be dismissed,which we do,leaving the parties to bear their own costs. STATUTE it would be appropriate to refer to cls.4 and 23 of the charter party dated 6th may,1997. these are in the following terms: "4.delivery &; redelivery 4.1. the vessel shall continue to be on charter to charterers in direct continuation from 2348 hrs.22.09.1996 to 30.06.1998. the vessel shall be re-delivered by charterers to owners on dropping last outward pilot at any port on west coast of india at charterers option. charterers to give owners 15 days notice to probable port of re-delivery. 4.2 charterers to load last three cargoes clean and re-deliver the vessel in clean condition.

aggrieved by the decision of customs excise and gold control appellate tribunal cegat dated 11 4 2000the appellants assessee have come by way of civil appeals under section 35l of the central excise act1944. appellants were engaged in the manufacture of biscuits classifiable under sub heading 1905 11 of the central excise tariff. the biscuits were sold under the brand name meghraj. under show cause notices it was alleged that the appellants herein assessee have sold the biscuits under the brand name meghrajwhich was a registered trade mark of kay aar biscuits p ltd who was using the said trade mark on manufacture of biscuits themselves and therefore the appellants were not eligible to the benefit of ssi notification no 193 ce dated 28 2 1993 as amended by notification no 5994 ce dated 1 3 1994. the above show cause notices were issued by the department demanding differential duty for the period april 1994 to june 1994 amounting to rs 374948 plus short paid duty for the period april 1995 to may 1995 amounting to rs 92992 the said demand was based on an agreement detected by the department. that agreement was between madan verma director of a company known as m s. kay aar biscuits p. ltd ghaziabad and m s rich food products p ltd noida. under the said agreement m s kay aar biscuits p ltd was. party no 1 under the agreement. it was declared that m s kay aar biscuits p ltd was the owner of the registered trade mark meghraj. under the agreement. it was stated that m s kay aar biscuits p ltd was using the aforestated trade mark meghraj for the manufacture of biscuits. under the agreement there was a recital under which it was stated that m s. rich food products p. ltd had put up a unit for manufacture of wafers in noida which it sought to manufacture under the brand name meghraj. under. the said agreement m s kay aar biscuits p ltd gave permission to m s rich food products pvt. ltd to use its trade mark for the manufacture of wafers alone. the said agreement was valid for three years commencing from 22 11 1989. at this stage it may be noted that the appellants herein claim to have started manufacture of biscuits in 1991 the biscuits were sold in wrapper mentioning the name of the appellantsm s. meghraj biscuits industries ltd or meghraj. the appellants claimed that it has been using the wrapper since beginning and since 1991 the use of the trade name or brand name meghraj has never been challenged. the assistant commissioner ghaziabad examined the printed wrappers. he came to the conclusion vide his orders that the trade name meghraj was in the form of a logo printed on the wrapper of the biscuits and therefore the appellants were not entitled to the benefit of notification no 193 ce dated 28 2 93 as amended by notification no 5994 dated 1 3 94 consequently the adjudicating authority called upon the appellants to pay differential duty for the period april 1994 to june 1994 amounting to rs 374948 plus short paid duty for the period april 1995 to may 1995 amounting to rs 92992. aggrieved by the decision of the adjudicating authority the assessee preferred appeals to the commissioner a the said appeals were rejected on the ground that the appellants were using the brand name meghraj of another manufacturer m s kay aar biscuits p ltd on their products biscuits and therefore they were not entitled to the benefit of exemption under notification no 193 ce as amended. it was held that the word meghraj was printed on all the printed wrappers and therefore it was wrong to say that the appellants were not using the brand name meghraj on its products. in this connection reliance was placed by the commissioner a on the said agreement dated 22 11 89 before the commissioner a the appellants herein contended that they had used the name m s meghraj biscuits industries ltd on the wrapper and not on the product. and therefore they were entitled to exemption. this argument was rejected by the commissioner a saying that the appellants were using the brand name meghraj on their products. according to the commissioner athe appellants used the trade name meghraj in the form of a logo which was printed on the wrapper. before the commissioner ait was argued in the alternative that the logo belonged to m s. kay aar biscuits p ltd. that the same was registered ssi unit that m s kay aar biscuits p ltd was lying closed since 1 3 93 and therefore the appellants have been using that logo of m s kay aar biscuits p ltd who was eligible for exemption under notification no 193 ce as amended. this contention was rejected by the commissioner a on the ground that under the notification no 193 ce as amended exemption was not available to the specified goods bearing brand name or trade name registered or not of another person. since the appellants herein had used the trade name meghraj on their products which trade name was owned by m s ltd the appellants were not entitled to the benefit of exemption under notification no 193 ce as amended. accordingly the commissioner a dismissed the appeals. the orders of the commissioner a have been confirmed by order dated 11 4 2000 passed by cegat. hence these civil appeals. to complete the chronology of events it may be pointed out that after the impugned decision of the tribunal dated 11 4 2000the appellants herein moved an application for rectification on 12 5 2000 rom no 722000 in that application it was urged on behalf of the appellants herein that the said brand name meghraj did not belong to m s kay aar biscuits p ltd that the department has failed to discharge its burden to prove that the trade name meghraj belonged to m s kay aar biscuits p ltd that a mere agreement between m s. ltd and m s. rich food products p ltd would not be sufficient to prove that m s kay aar biscuits p ltd was the lawful owner of the brand name. meghraj. in the rectification application. it was further pointed out that in fact the appellants had applied for ownership of the brand name meghraj vide application dated 30 9 91 to the registrar trade marks under the trade marks act and that the said application for registration was pending before the competent authority and since the above arguments were not recorded in the impugned order of the cegat dated 11 4 2000 the same warranted rectification. by order dated 8 12 2000cegat rejected the above rectification application made by the appellants. one more fact needs to be mentioned that on 30 6 2000 the registrar of trade marks appears to have issued registration certificate on 30 6 2000 registering the trade mark meghraj in favour of the appellants with effect form 30 9 91 it appears that issuance of this certificate was mentioned before the cegat which rejected the rectification application on 8 12 2000. notification no 193 ce dated 28 2 93 was issued to help the ssi units to survive in the market dominated by brand name trade name. the object of the notification therefore was to help the ssi units and thereby increased industrial production. under para 4 of the said notification the benefit of exemption was not available for excisable goods bearing brand name or trade name registered or not of another person. explanation ix defined the word brand name or trade name. the same is quoted hereinbelow. explanation ix brand name or trade name shall mean a brand name or trade name whether registered or not that is to say a name or a mark such as symbol monogram label signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person. notification no 193 ce dated 28 2 1993 was subsequently amended by notification no 5994 dated 1 3 94 para 7 of notification no 193 ce as amended read as under para 7 the exemption contained in this notification shall not apply to the specified goods where a manufacturer affixes the specified goods with a brand name or trade name registered or not of another person who is not eligible for the grant of exemption under this notification. in the present case as stated above m s kay aar biscuits p ltd entered into an agreement on 22 11 89 with m s rich food products p ltd under that agreement the director of m s kay aar biscuits p ltd declared that his company was the owner of the registered trade mark meghraj. the name of that director is madan verma. he is the director of the appellants company also. further there is no evidence to show as to whether m s kay aar biscuits p ltd was an eligible manufacturer. this aspect is important since one of the arguments advanced by the appellants herein before the commissioner a was that the trade mark belonged to m s ltd which was registered ssi unit lying closed since 1 3 1993. no explanation has been given as to why madan verma has not been examined by the appellants. he has not been examined even on the question of alleged transfer of the trade mark in favour of the appellants. in the circumstances we do not find any merit in this appeal. on behalf of the appellants it has been vehemently argued that m s kay aar biscuits p ltd was never the registered owner of the trade mark meghraj. it was urged that merely because an agreement stood entered into on 22 11 89 between m s ltd. the department had erred in alleging that the trade mark belonged to m s it was urged that m s ltd had never got the trade mark registered under the trade marks act. it was urged that a false declaration was made by m s kay aar biscuits p ltd under the above agreement on 22 11 89. it was urged that a mere agreement between two parties can not constitute ownership of the trade mark in favour of m s it was urged that in any event m s kay aar biscuits p ltd had stopped its production in 1993 that the company had become defunct that the appellants herein had applied to the registrar of trade marks for registration of the mark meghraj and vide registration certificate dated 30 6 2000 the registrar has recognized the appellants as owner of the trade mark with effect from 30 9 91 in the circumstances the appellants submitted that the demand for differential duty was unwarranted. we do not find any merit in the above arguments. in the case of pahwa chemicals pvt. ltd v. commissioner of central excise delhi 2005 189. elt 257 2005 indlaw sc 799sc. this court has held that the object of the exemption notification was neither to protect the owners of the trade mark nor the consumers from being misled. these are considerations which are relevant in disputes arising out of infringement passing of actions under the trade marks act. the object of the notification is to grant benefits only to those industries which otherwise do not have the advantage of a brand name. applying the ratio of the above judgment to the present case it is clear that grant of registration certificate under the trade marks act will not automatically provide benefit of exemption to the ssi unit. in the case of commissioner of central excise chandigarh v bhalla enterprises 2004. elt 225 2004 indlaw sc 996scthis court held that the assessee will not be entitled to the benefit of exemption if it uses on goods in question same similar brand name with intention of indicating a connection with the goods of the assessee and such other person or uses the name in such manner that it would indicate such connection. it was further held that the burden is on the assessee to satisfy the adjudicating authority that there was no such intention. applying the above test to the facts of the present case madan verma is a common director in the two companies. he has filed an affidavit enclosing the registration certificate dated 30 6 2000. however in that affidavit he has not stated as to on what basis in the agreement of 23 11 89 signed by him he had declared that m s ltd is the owner of the registered trade mark meghraj. there is no deed of assignment from m s kay aar biscuits p ltd in favour of the appellants herein. the department has rightly placed reliance on the agreement of 23 11 89 in the circumstances the burden was on the assessee appellants herein to satisfy the adjudicating authority that there was no intention of indicating a connection with the goods of the assessee and such other person. before us it has been urged that m s ltd is non functional since 1 3 93 and therefore in any event appellants were entitled to use the trade mark meghraj. this argument is based on the concept of abandonment. we do not find any merit in this argument. discontinuation of business in respect of a product does not necessarily amount to abandonment. in the present case there is no evidence from the side of the appellants indicating abandonment of the trade mark by m s although madan verma the director of m s kay aar biscuits p ltd has filed his affidavit enclosing the registration certificate he has nowhere stated that m s ltd has abandoned the trade mark. in the circumstances the department was right in rejecting the above contention. abandonment of the trade mark has to be proved by the appellants in the present case. the burden is on the appellants particularly when the department is relying upon the agreement dated 23 11 89 between m s lastly we are required to examine the retrospective effect of the registration certificate dated 30 6 2000 with effect from 30 9 91 at the outset we may reiterate that the object of the exemption notification was neither to protect the owners of the trade mark nor the consumers from being misled. these are considerations which are relevant in disputes arising under the trade marks act. the object of the exemption notification no 193 ce was to grant benefits to those industries which do not have the advantage of a brand name. however since retrospective nature of the registration certificate dated 30 6 2000 is repeatedly being raised in this court we would like to examine the case law in this regard. the trade marks act1999 has been enacted to amend and consolidate the law relating to trade marks to provide for registration and better protection of trade marks and for prevention of the use of fraudulent marks. u s 28 of the trade marks act1999registration gives to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by the trade marks act. it is correct to say that the registrar trade marks can issue registration certificate u s 28 of the trade marks act with retrospective effect. the question before us is what is the effect of issuance of registration certificate with retrospective effect. this question has been decided by the bombay high court in the case of sunder parmanand lalwani and others v caltex india ltd air 1969 bombay 24 1965 indlaw mum 1419 in which it has been held vide paras 32 and 38 as follows a proprietary right in a mark can be obtained in a number of ways. the mark can be originated by a person or it can be subsequently acquired by him from somebody else. our trade marks law is based on the english trade marks law and the english acts. the first trade marks act in england was passed in 1875 even prior thereto it was firmly established in england that a trader acquired a right of property in a distinctive mark merely by using it upon or in connection with goods irrespective of the length of such user and the extent of his trade and that he was entitled to protect such right of property by appropriate proceedings by way of injunction in a court of law. then came the english trade marks act of 1875which was substituted later by later acts. the english acts enabled registration of a new mark not till then used with the like consequences which a distinctive mark had prior to the passing of the acts. the effect of the relevant provision of the english acts was that registration of a trade mark would be deemed to be equivalent to public user of such mark. prior to the acts one could become a proprietor of a trade mark only by user but after the passing of the act of 1875one could become a proprietor either by user or by registering the mark even prior to its user. he could do the latter after complying with the other requirements of the act including the filing of a declaration of his intention to use such mark. see observations of llyod jacob j in 1956 rpc 1 in the matter of vitamins ltd 's application for trade mark at p 12and. particularly the following a proprietary right in a mark sought to be registered can be obtained in a number of ways. the mark can be originated by a person or can be acquired but in all cases it is necessary that the person putting forward the application should be in possession of some proprietary right which if questioned can be substantiated. law in india under our present act is similar. a person may become a proprietor of a trade mark in diverse ways. the particular mode of acquisition of proprietorship relied upon by the applicant in this case is of his user for the first time in india in connection with watches and allied goods mentioned by him of the mark caltexwhich at the material time was a foreign mark belonging to degoumois co of switzerland and used by them in respect of watches in switzerland. before the deputy registrar and before mr justice shah proprietorship was claimed on the basis that the applicant was entitled to it as an importer 's mark. several authorities were cited and were considered and principles deduced and relied upon in that behalf. in our opinion it is not necessary in this case to go into details about facts in the various decided cases dealing with importer 's marks. in many of those cases the dispute was between a foreign trader using a foreign mark in a foreign country on goods which were subsequently imported by indian importers and sold by them in this country under that very mark. in short it was a competition between a foreign trader and the indian importer for the proprietorship of that mark in this country. we have already reached a conclusion that so far as this country is concerned degoumois co have totally disclaimed any interest in the proprietorship of that mark for watches etc. in india the mark caltex was a totally new mark for watches and allied goods. the applicant was the originator of that mark so far as that class of goods is concerned and so far as this country is concerned. he in fact used it in respect of watches. there is no evidence that that mark was used by anyone else in this country before the applicant in connection with that class of goods. unquestionably the applicant 's user was not large but that fact makes no difference because so far as this country is concerned the mark was a new mark in respect of the class of goods in respect of which the applicant used it. we therefore hold that the applicant is the proprietor of that mark. emphasis supplied. on reading the above quoted paragraphs from the above judgment with which we agree it is clear that the effect of making the registration certificate applicable from retrospective date is based on the principle of deemed equivalence to public user of such mark. this deeming fiction can not be extended to the excise law. it is confined to the provisions of the trade marks act. in a given case like the present case where there is evidence with the department of the trade mark being owned by m s ltd and where there is evidence of the appellants trading on the reputation of m s ltd which is not rebutted by the appellants assesseeissuance of registration certificate with retrospective effect can not confer the benefit of exemption notification to the assessee. in the present case issuance of registration certificate with retrospective effect from 30 9 91 will not tantamount to conferment of exemption benefit under the excise law once it is found that the appellants had wrongly used the trade mark of m s. in the case of consolidated foods corporation v brandon and co. air 1965 bombay 35 1961 indlaw mum 91it has been held vide paras 27 and 30 that the trade marks act merely facilitates the mode of proof. instead of compelling the holder of a trade mark in every case to prove his proprietary right the act provides a procedure whereby on registration the owner gets certain facilities in the mode of proving his title. we quote hereinbelow paras 27 and 30 of the said judgment which read as follows at any rate it must be remembered that in this case i am not dealing with a passing off action or an action for infringement of a trade mark which is alleged to be common property. the case put up by the petitioner corporation that it was the first to use the mark monarch in this country on its food products and that in as much as the mark monarch was admittedly a distinctive mark it had acquired the right to get the mark registered in its name and also the right to oppose the application of any other trader in this country seeking to get that mark registered in his name in respect of the food products manufactured or sold by him. apparently in such a case there is no question of infringement of any right of property in a trade mark for which any relief is sought nor is there any question of passing off so that it might be necessary to enter into questions of nicety as regards whether there could or could not be any property in a trade mark. as already stated by me while referring to the observations of sir john romily it is not really necessary for me to decide in this case as to whether there could or could not be any property in a trade mark for the purpose of deciding this case. even if it is found to be necessary to decide this question as to property in a trade mark i have already pointed out that the courts of equity in england granted relief in cases of infringement of trade marks on the basis of infringement of the right of property in the trade mark. there was no other basis on which those courts could give any relief to the plaintiffs in such cases and for the purpose of such relief the courts of equity did not require the plaintiff to prove that his mark by any length of user was associated in the minds of the public with his goods. all that was necessary for the plaintiff to prove was that he had used that mark in respect of his particular type of goods. that was enough in the eyes of the courts of equity to entitle him to a relief by way of an injunction in case of an infringement of his mark by some other trader. i have also pointed out that the statute which came to be enacted in england in 1875 and the subsequent statutes did nothing more than to embody the rights in relation to trade marks which were already laid down by the courts of equity. as a matter of fact the statute enabled a person to have registered a mark not only which he had been using but also a mark which he proposed to use. the latter type of mark would evidently refer to a distinctive mark a mark which does not directly describe the nature or quality of the goods to which it is attached. in cases of such marks whereas the courts of equity did require some slight user before the proprietor thereof could institute an action for infringement thereof the statute enabled the registration of such mark without any user at all because such mark being distinctive per se it was not necessary for the person applying for its registration to show that mark had acquired a reputation in the market so that it could be associated only with his goods and of nobody else. even so far as this country is concerned the trade marks act of 1940 does not seem to have made any change in the legal rights of the owner of a trade mark as established by the courts of chancery in england. in in re century spinning and manufacturing co ltd. 49 bom lr 52. air 1947 bom 445chagla j as he then was observed in this connection as follows the question is whether in india the trade marks act of 1940 has made any change in the legal rights of the owner of a trade mark. to my mind it is clear that even prior to the passing of this act the owner of a trade mark could maintain an action for the infringement of a trade mark and that action could only be maintained on the assumption that he was the owner of the trade mark and he had a proprietary right in the trade mark. sub cl i of s 20 of the trade marks act itself assumes and implies that such a right existed in the owner of a trade mark because it says that the unregistered holder of a trade mark can maintain a suit for the infringement of a trade mark provided that the trade mark was in use before february. 251937and an application for registration had been made and refused. as regards the question whether there could be any property in a trade mark the learned judge further observed on the same page as follows again turning to s 54 of the specific relief act which deals with cases when a perpetual injunction may be granted the explanation to that section lays down that for the purpose of that section a trade mark is property. therefore if a person invaded or threatened to invade the other 's right to or enjoyment of property the court u s 54 had the discretion to grant a perpetual injunction and trade mark was as much property for the purpose of s 54 as any other kind of property. i therefore agree with the learned advocate general that all that the trade marks act has done is to facilitate the mode of proof. instead of compelling the holder of a trade mark in every case to prove his proprietary right before he could ask the court to grant him an injunction the trade marks act provides a procedure whereby by registering his trade mark the owner gets certain facilities in the mode of proving his title. for instance under s 23 of the trade marks act registration is to be prima facie evidence of the validity of the trade mark. this was precisely the view which was expressed by lord justice romer in 1905 1 k b 592 to which i have already referred in the earlier part of the judgment. to summarise therefore a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. the trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. as between two competitors who are each desirous of adopting such a markit is to use familiar language entirely a question of who gets there first. gaw kan lye v saw kyone saing air 1939. rang 343. fb registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed at common law and at equity without registration. it does however facilitate a remedy which may be enforced and obtained throughout the state and it established the record of facts affecting the right to the mark. registration itself does not create a trade mark. the trade mark exists independently of the registration which merely affords further protection under the statute. common law rights are left wholly unaffected. priority in adoption and use of a trade mark is superior to priority in registration. it was next contended by mr shavaksha that the respondent company had itself shown kipre and co private ltd. the proprietors of the mark on the labels bearing the mark monarch on the different kinds of its food products and therefore the respondent company had no right to apply for registration in its favours as if it was the proprietor thereof. it was conceded by mr shah that the labels which were used on the food products manufactured by kipre and co private ltd did bear the name of kipre and co private ltd immediately below the mark monarch and that the respondent company 's name was printed below it as sole distributors. mr shah however contended that by an agreement exhibit f made between the respondent company and kipre and co private ltd in 1951. it was clearly provided that the mark monarch belonged to the respondent company that kipre and co private ltd were only to manufacture the food products as ordered by the respondent company and that the food products so manufactured were to be bottled and packed by them for its use and benefit and that therefore in spite of kipre and co 's name appearing on the labels the respondent company was the true proprietor of the mark monarch and that therefore it was entitled to apply for its registration as proprietor thereof. now once again turning to the provisions of s 18 sub section iit is clear that only a person claiming to be the proprietor of a trade mark used by him or proposed to be used by him could make an application to the registrar for the registration thereof. according to this provision not only a person should claim to be the proprietor of a trade mark but he should prove that he had used it as such proprietor on his goods. then turning to the label as it stood at the date of the application two names appeared on the label one of kipre and co and the other of the respondent company. if these two names had stood by themselves without any further description of either of them it could be said that both kipre and co and the respondent company were jointly the owners of the mark as well as the owners of the goods to which the label was affixed. but that is not the case. the respondent company is described as the sole distributors on the label. the reasonable inference that could be drawn from this description surely is that the goods were the property of kipre and co and so also the mark. if the respondent company was really the proprietor of the mark and also the owner of the goods one would expect some such words as manufactured by kipre and co for brandon and co private ltd in the absence of any such words a person buying any of these goods on reading the label would naturally believe that what he was buying was the property of kipre and co which was selling its goods under the mark monarch. it is true as contended by mr shah that even distributors and sellers may have marks of their own but then there are ways and ways of indicating on the label itself that the mark embodied therein is the mark belonging to such distributor or seller. obviously therefore on the label as it stood it could not be said that the respondent company was the proprietor of the mark monarch nor could it be said that the mark was used by the respondent company as proprietor thereof. applying the principle of deemed equivalence we may clarify that if the ssi unit wrongly affixes a trade mark of another person be it registered or not or if it uses the trade mark of an ineligible person then such default would not be eliminated by the above principle of deemed equivalence embodied in s 28 of the trade marks act1999 as that principle is based on a deeming fiction which fiction is confined only to the provisions of the trade marks act. before concluding we may refer to the judgment of this court in the case of commissioner of central excise mumbai v bigen industries ltd 2006 197. 305 2006 indlaw sc 546 in that matter a show cause notice was issued calling upon the assessee to show cause why the exemption be not denied to the assessee. in para 19 of the show cause notice the authority accepted the existence of a deed of assignment. however the show cause notice denied the exemption on the ground that notification no 14083 ce did not make any distinction between a brand name owned by a person in india or abroad. in the present case the facts are entirely different. in the present case there is no deed or assignment from m s ltd to the m s meghraj biscuits industries ltd appellants herein as stated above there is no proof of acquisition on payment or consideration by the appellants to m s kay aar biscuits p ltd in the present case there is no evidence of assignment or licence from m s ltd to the appellants. in the present case we are concerned with the retrospective effect of the certificate issued by the registrar of trade marks on 30 6 2000 with effect from 30 9 91. in the circumstances the judgment of this court in the case of bigen industries 2006 indlaw sc 546 supra has no application. for the aforestated reasons we do not find any merit in these civil appeals. before concluding we may point out that we do not wish to express any opinion on the subsequent events which have taken place in this case. our judgment is confined only to the period in question under the impugned show cause notices. accordingly the civil appeals stand dismissed with no order as to costs. appeals dismissed.

IN-Ext

FACTS appellants were engaged in the manufacture of biscuits classifiable under the central excise tariff. the biscuits were sold under the brand name "meghraj". under show cause notices it was alleged that the appellants herein (assessee) have sold the biscuits under the brand name "meghraj",which was a registered trade mark of kay aar biscuits (p) ltd.,who was using the said trade mark on manufacture of biscuits themselves,and,therefore,the appellants were not eligible to the benefit of ssi notification. the assistant commissioner,ghaziabad,examined the printed wrappers and came to the conclusion vide his orders that the trade name "meghraj" was in the form of a logo printed on the wrapper of the biscuits and,therefore,the appellants were not entitled to the benefit of notification. consequently,the adjudicating authority called upon the appellants to pay differential duty for the period april 1994 to june 1994 amounting to rs.3,74,948 plus short paid duty for the period april 1995 to may 1995 amounting to rs.92,992. aggrieved by the decision of the adjudicating authority,the assessee preferred appeals to the commissioner (a). the said appeals were rejected on the ground that the appellants were using the brand name "meghraj" of another manufacturer m/s.kay aar biscuits (p) ltd.on their products (biscuits) and,therefore,they were not entitled to the benefit of exemption under notification. it was held that the word "meghraj" was printed on all the printed wrappers and,therefore,it was wrong to say that the appellants were not using the brand name "meghraj" on its products. ARGUMENT the appellants herein claim to have started manufacture of biscuits in 1991.the biscuits were sold in wrapper mentioning the name of the appellants,"m/s.meghraj biscuits industries ltd." or "meghraj". the appellants claimed that it has been using the wrapper since beginning and since 1991 the use of the trade name or brand name "meghraj" has never been challenged. m/s.kay aar biscuits (p) ltd.was never the registered owner of the trade mark "meghraj". it was urged that merely because an agreement stood entered into on 22.11.89 between m/s.kay aar biscuits (p) ltd.and m/s.rich food products (p) ltd.,the department had erred in alleging that the trade mark belonged to m/s.kay aar biscuits (p) ltd. it was urged that m/s.kay aar biscuits (p) ltd.had never got the trade mark registered under the trade marks act. a mere agreement between two parties cannot constitute ownership of the trade mark in favour of m/s.kay aar biscuits (p) ltd. it was urged that in any event m/s.kay aar biscuits (p) ltd.had stopped its production in 1993; that the company had become defunct; that the appellants herein had applied to the registrar of trade marks for registration of the mark "meghraj" and vide registration certificate dated 30.6.2000 the registrar has recognized the appellants as owner of the trade mark with effect from 30.9.91. in the circumstances,the appellants submitted that the demand for differential duty was unwarranted. ISSUE what is the effect of issuance of registration certificate with retrospective effect. ANALYSIS the registrar of trade marks appears to have issued registration certificate on 30.6.2000 registering the trade mark "meghraj" in favour of the appellants with effect form 30.9.91. it appears that issuance of this certificate was mentioned before the cegat which rejected the rectification application. the object of the notification,therefore,was to help the ssi units and thereby increased industrial production.under para '4' of the said notification,the benefit of exemption was not available for excisable goods bearing brand name or trade name (registered or not) of another person.explanation ix defined the word "brand name" or "trade name". in the case of pahwa chemicals pvt.ltd.v.commissioner of central excise,delhi 2005 (189) elt 257 2005 indlaw sc 799(sc) this court has held that the object of the exemption notification was neither to protect the owners of the trade mark nor the consumers from being misled. these are considerations which are relevant in disputes arising out of infringement/passing of actions under the trade marks act. the object of the notification is to grant benefits only to those industries which otherwise do not have the advantage of a brand name. it is clear that grant of registration certificate under the trade marks act will not automatically provide benefit of exemption to the ssi unit. discontinuation of business in respect of a product does not necessarily amount to abandonment. u/s.28 of the trade marks act,1999,registration gives to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by the trade marks act. the registrar,trade marks,can issue registration certificate u/s.28 of the trade marks act with retrospective effect. he effect of making the registration certificate applicable from retrospective date is based on the principle of deemed equivalence to public user of such mark. this deeming fiction cannot be extended to the excise law.it is confined to the provisions of the trade marks act. in a given case like the present case where there is evidence with the department of the trade mark being owned by m/s.kay aar biscuits (p) ltd.and where there is evidence of the appellants trading on the reputation of m/s.kay aar biscuits (p) ltd.which is not rebutted by the appellants (assessee),issuance of registration certificate with retrospective effect cannot confer the benefit of exemption notification to the assessee. in the case of commissioner of central excise,chandigarh v.bhalla enterprises 2004 (173) elt 225 2004 indlaw sc 996(sc),this court held that the assessee will not be entitled to the benefit of exemption if it uses on goods in question,same/similar brand name with intention of indicating a connection with the goods of the assessee and such other person or uses the name in such manner that it would indicate such connection. it was further held that the burden is on the assessee to satisfy the adjudicating authority that there was no such intention. it is clear that the effect of making the registration certificate applicable from retrospective date is based on the principle of deemed equivalence to public user of such mark. this deeming fiction cannot be extended to the excise law. it is confined to the provisions of the trade marks act. in a given case like the present case where there is evidence with the department of the trade mark being owned by m/s.kay aar biscuits (p) ltd.and where there is evidence of the appellants trading on the reputation of m/s.kay aar biscuits (p) ltd.which is not rebutted by the appellants (assessee),issuance of registration certificate with retrospective effect cannot confer the benefit of exemption notification to the assessee. issuance of registration certificate with retrospective effect from 30.9.91 will not tantamount to conferment of exemption benefit under the excise law once it is found that the appellants had wrongly used the trade mark of m/s.kay aar biscuits (p) ltd. in gaw kan lye v.saw kyone saing,air 1939 rang 343 (fb), it was held that registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed at common law and at equity without registration. according to this provision,not only a person should claim to be the proprietor of a trade mark but he should prove that he had used it as such proprietor on his goods. then turning to the label as it stood at the date of the application,two names appeared on the label,one of kipre and co.and the other of the respondent company. if these two names had stood by themselves without any further description of either of them,it could be said that both kipre and co.and the respondent company were jointly the owners of the mark as well as the owners of the goods to which the label was affixed.but,that is not the case. the reasonable inference that could be drawn from this description surely is that the goods were the property of kipre and co.and so also the mark. if the respondent company was really the proprietor of the mark and also the owner of the goods one would expect some such words as "manufactured by kipre and co.for brandon and co.,private ltd." in the absence of any such words,a person buying any of these goods on reading the label would naturally believe that what he was buying was the property of kipre and co.which was selling its goods under the mark "monarch". even distributors and sellers may have marks of their own,but then,there are ways and ways of indicating on the label itself that the mark embodied therein is the mark belonging to such distributor or seller. therefore,on the label as it stood,it could not be said that the respondent company was the proprietor of the mark "monarch" nor could it be said that the mark was used by the respondent company as proprietor thereof. in the case of commissioner of central excise,mumbai v.bigen industries ltd.2006 (197) elt 305 2006 indlaw sc 546, in that matter a show cause notice was issued calling upon the assessee to show cause why the exemption be not denied to the assessee. in para '19' of the show cause notice the authority accepted the existence of a deed of assignment. the facts are entirely different.in the present case,there is no deed or assignment from m/s.kay aar biscuits (p) ltd.to the m/s.meghraj biscuits industries ltd.(appellants herein). as stated above,there is no proof of acquisition on payment or consideration by the appellants to m/s kay aar biscuits (p) ltd. in the present case,there is no evidence of assignment or licence from m/s.kay aar biscuits (p) ltd.to the appellants. in the present case,we are concerned with the retrospective effect of the certificate issued by the registrar of trade marks on 30.6.2000 with effect from 30.9.91.$$$ratio of the decision in the circumstances,the judgment of this court in the case of bigen industries 2006 indlaw sc 546 (supra) has no application.$$$ratio of the decision for the aforestated reasons,we do not find any merit in these civil appeals. before concluding we may point out that we do not wish to express any opinion on the subsequent events which have taken place in this case. STATUTE explanation ix of notification no.1/93-ce dated 28.2.1993- "brand name" or "trade name" shall mean a brand name or trade name,whether registered or not,that is to say a name or a mark,such as symbol,monogram,label,signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating,or so as to indicate a connection in the course of trade between such specified goods and some person using such name or mark with or without any indication of the identity of that person. s.18 sub-section (i) of trademarks act, 1999,it is clear that only a person claiming to be the proprietor of a trade mark used by him or proposed to be used by him could make an application to the registrar for the registration thereof. applying the principle of deemed equivalence we may clarify that if the ssi unit wrongly affixes a trade mark of another person,be it registered or not,or if it uses the trade mark of an ineligible person then such default would not be eliminated by the above principle of deemed equivalence embodied in s.28 of the trade marks act,1999 as that principle is based on a deeming fiction which fiction is confined only to the provisions of the trade marks act.

this appeal by special leave has been preferred against the judgment and order dated 23 february 2005 of bombay high court aurangabad bench by which the appeal preferred by the appellants was dismissed and their conviction under section 304 b read with section 34 ipc and sentence of 7 years ri imposed thereunder by the learned sessions judge aurangabad was affirmed. the deceased bhimabai was daughter of pw 1 tukaram eknath tambe resident of village sanjkheda. and she was married to appellant No 1. appasaheb son of sheshrao palaskar about two and half years prior to the date of incident which took place on 15 september 1991. the appellant No 2 kadubai is the mother of the appellant No 1 and both the appellants were residing in the same house in village palshi. according to the case of prosecution a sum of rs 5000 and some gold ornaments had been given at the time of marriage of bhimabai. for about six months bhimabai was treated well but thereafter the accused started asking her to bring rs 1000 1200 from her parents to meet the household expenses and also for purchasing manure. whenever bhimabai went to her parental home she used to tell her parents that her husband and mother in law accused appellants were harassing her and used to occasionally beat her. her father pw 1 tukaram along with some of his relatives went to the house of the accused and tried to persuade them not to ill treat bhimabai. thereafter the accused treated bhimabai properly but after about four months they again started harassing her. a few days before nag panchami festival bhimabai came to her parental home and complained that the accused were not giving her proper food clothing and even footwear. she also told her parents that her husband had asked her to bring an amount of rs 1000 1200 for the purpose of household expenses and manure. the case of the prosecution futher is that in the evening of 15 september 1991 a person came from village palshi on a motorcycle and informed pw 1 tukaram that bhimabai was unwell. pw 1 then immediately went to the house of the accused along with some of his relatives. there he saw that bhimabai was lying dead and froth was coming out of her mouth which indicated that she had consumed some poisonous substance. the police patil of the village pw 3 sandu mohanrao patil lodged an accidental death report at 9 00 p m on 15 september 1991 at the police station. on the basis of the said accidental death report pw 6 sandeepan kamble police sub inspector visited the house of the accused held inquest on the dead body of bhimabai and thereafter sent the same for post mortem examination. pw 1 tukaram lodged the fir of the incident at 7 00 p m on 16 september 1991 at p s chikalthana on the basis of which case crime No 144 of 1991 was registered against the appellants under sections 498 a 306 and 304 b ipc. after completion of investigation charge sheet was submitted against the appellants and in due course the case was committed to the court of sessions. the learned sessions judge framed charges under sections 498 a 304 b read with section 34 ipc and section 306 read with section 34 ipc against both the appellants. the appellants pleaded not guilty and claimed to be tried. the prosecution in order to establish its case examined six wintesses and filed some documentary evidence. the learned sessions judge after consideration of the material on record acquitted the appellants of the charges under sections 498 a and 306 read with section 34 ipc but convicted them under section 304 b ipc and imposed a sentence of 7 years ri thereunder. the appeal preferred by the appellants was dismissed by the high court by the judgment and order dated 23 february 2005. we have heard learned counsel for the appellants learned counsel for the state of maharashtra and have perused the records. the post mortem examination on the body of deceased bhimabai was conducted by a team of two doctors of department of forensic medicine and toxicology medical college aurangabad namely dr s m jawale and dr h v godbole on 16 september 1991. the doctors did not find any sign of external or internal injury on the body of the deceased and in their opinion the cause of death was insecticide poisoning. the viscera were preserved for chemical analysis. the report of the post mortem examination was admitted by the defence. the specific case of the prosecution is that bhimabai ended her life by consuming poison because of harassment caused to her by the appellants for or in connection with demand of dowry. it is therefore necessary to briefly examine the evidence of the prosecution witnesses. 1 tukaram father of the deceased has given details of the prosecution version of the incident in his statement in court. he has deposed that in the marriage he had given rs 20000 as dowry. initially bhimabai was treated well for about six months but thereafter the appellants started ill treating her. whenever bhimabai came to her parental home she used to complain that for some domestic reasons she was being harassed. when she had visited her parental home on the last occasion she had said that her husband appasaheb had asked her to bring rs 1000 1200 for domestic expenses and for purchasing manure as he had no sufficient money. bhimabai had complained to him that she was not being given proper food clothings and even footwear and occasionally the appellant No 1 used to beat her. the last time she visited her parental home was during the festival of nag panchami and at that time she looked depressed. the witness has further deposed that on the date of incident a man came from village palshi on motorcycle and informed that he should immediately go there as bhimabai was not well. he then went to village palshi along with other persons of his family where he reached after sun set. he saw that bhimabai was lying dead and froth was coming out of her mouth which was smelling of thimet insecticide. in his cross examination he has admitted that his statement that he had given rs 20000 in dowry at the time of marriage was incorrect and in fact he had given rs 5000 as dowry and the total expenses incurred in the marriage was about rs 20000. he has also deposed that it was after about 1 12 years of marriage that bhimabai first complained to him about the harassment being caused to her. there used to be some bickering in the marital life of bhimabai and her husband on trifling matters. he has admitted that it was appellant No 1 who had sent a person on motorcycle who had given information regarding bhimabai being unwell and that both the appellants were present at the time of her funeral. pw 2 babaji is real brother of father in law of pw 1 tukaram. he has deposed that on an earlier occasion he had gone along with pw 1 and some others to the house of appellant no 1 to persuade him not to harass bhimabai and to treat her well. in his cross examination he has admitted that when he had gone to village palshi to talk with the appellants regarding the ill treatment being meted out to bhimabai there was no talk regarding monetary giving and taking. he also admitted that he had not gone to attend that funeral of bhimabai. pw 5 sumanbai is the mother of the deceased bhimabai. she has stated in her examination in chief that bhimabai was being ill treated by the appellants and the reason for ill treatment was that they were demanding money to be brought from her parental home. the last time bhimabai visited her parental home was on the occasion of the festival of nag panchami and she had complained that she was being ill treated and was sometimes given beating for bringing money from her parents. she has specifically stated that for a period of six months after the marriage bhimabai was treated well and thereafter she had started complaining about the harassment being caused to her. in her cross examination pw 5 sumanbai has stated that after news about the condition of bhimabai was given by a man from village palshi she along with her husband and some other relations went there and noticed that bhimabai was lying dead in the house and froth was coming out of her mouth. she has further stated that she did not make any enquiry as to how bhimabai had died. in her statement under section 161 cr. p c which was recorded very next day of the incident i e on 16 september 1991 she did not state that cause of ill treatment was a demand for money and a consequent beating. when confronted with her aforesaid statement under section 161 cr. she replied that she did not know why there was no mention in the said statement that the cause for ill treatment was a demand for money and a consequent beating. she further stated that it will be correct to say that her daughter was receiving ill treatment as a result of domestic cause. the learned trial judge then sought clarification from the witnesses by putting the following question. what do you mean by domestic cause. what i meant was that there was demand for money for defraying expenses of manure etc. and that was the cause. in the very next paragraph she stated as under it is not true to suggest that in my statement before the police i never said that ill treatment was as a result of demand for money from us and its fulfillment. i can not assign any reason why police did not write about it in my statement. 3 sandu police patil of village palshi has deposed that at about 4 20 p m on 15 september 1991 narayan who is uncle of appellant no 1 appasaheb informed him that the wife of appasaheb had expired. he then went to the house of the appellant and saw bhimabai lying with froth coming out of her mouth. thereafter he gave a report about the incident in writing at the police station. in his cross examination he admitted that he did not make detailed enquiries as to what was the cause of death and where the incident had taken place. he has further deposed that bhimabai had come to his house about six months earlier and had said all was not well between her and her husband but she had not given any specific details. the main witnesses regarding the alleged demand of money and also harassment and beating to bhimabai are her father and mother viz pw 1 tukaram and pw 5 sumanbai. in his examination in chief pw 1 has said that whenever his daughter came to her parental home she used to complain that she was being subjected to harassment by the appellants on account of some domestic reasons and further that her husband appellant no 1 had told her that while coming back from her parental home she should bring rs 1000 1200 for expenses and for manure as he had no sufficient money. pw 5 sumanbai has deposed that bhimabai was receiving ill treatment as a result of domestic cause and to a specific question put by the court as to what she meant by domestic cause she gave a reply that there was a demand for money for defraying expenses of manure etc. it is important to note that in her statement under section 161 cr. p c which was recorded on the very next day of the death of bhimabai this witness did not state that the cause for ill treatment was a demand for money and a consequent beating. the evidence on record does not indicate that the police had any reason to favour the accused and deliberately omitted to mention about the alleged demand of money while recording the statement of pw 5 sumanbai under section 161 cr. the evidence shows that the accused come from very humble background and they could not have exerted any kind of influence financial or otherwise upon the police so as to manage a statement favourable to them when in the course of investigation the statements of witnesses were being recorded under section 161 cr. accepting the statements of father and mother on their face value that utmost which can be held is that the appellant no 1 had asked his wife bhimabai to bring money for meeting domestic expenses and for purchasing manure. two essential ingredient of section 304 b ipc apart from others are i death of women is caused by any burns or bodily injury or occurs otherwise than under normal circumstances and ii women is subjected to cruelty or harassment by her husband or any relative of her husband for or in connection with any demand for dowry. the explanation appended to sub section 1 of section 304 b ipc says that dowry shall have the same meaning as in section 2 of dowry prohibition act 1961. section 2 of dowry prohibition act reads as under 2. definition of dowry in this act dowry means any property or valuable security given or agreed to be given either directly or indirectly a by one party to a marriage to the other party to the marriage or b by the parent of either party to a marriage or by any other person to either party to the marriage or to any other person at or before or any time after the marriage in connection with the marriage of the said parties but does not include dowry or mahr in the case of persons to whom the muslim personal law shariat applies. in view of the aforesaid definition of the word dowry any property or valuable security should be given or agreed to be given either directly or indirectly at or before or any time after the marriage and in connection with the marriage of the said parties. therefore the giving or taking of property or valuable security must have some connection with the marriage of the parties and a correlation between the giving or taking of property or valuable security with the marriage of the parties is essential. being a penal provision it has to be strictly construed. dowry is a fairly well known social custom or practice in india. it is well settled principle of interpretation of statute that if the act is passed with reference to a particular trade business or transaction and words are used which everybody conversant with that trade business or transaction knows or understands to have a particular meaning in it then the words are to be construed as having that particular meaning. see union of india v garware nylons ltd air 1996. sc 3509 1996 indlaw sc 2404 and chemicals and fibres of india v union of india air 1997. sc 558 1991 indlaw sc 861. a demand for money on account of some financial stringency or for meeting some urgent domestic expenses of for purchasing manure can not be termed as a demand for dowry as the said word is normally understood. the evidence adduced by the prosecution does not therefore show that any demand for dowry as defined in section 2 of the dowry prohibition act was made by the appellants as what was allegedly asked for was some money for meeting domestic expenses and for purchasing manure. since an essential ingredient of section 304 b ipc viz demand for dowry is not established the conviction of the appellants can not be sustained. learned counsel for the appellants has also submitted that there is absolutely no evidence either direct or circumstantial to show that bhimabai committed suicide. he has submitted that the insecticide thimet is extensively used by the farmers for preservation of crop and is kept stored in their houses and it could be a case where thimet accidentally got mixed with some food item and was consumed by bhaimabai. it has thus been submitted that no offence under section 306 ipc is made out against the appellants. we do not consider it necessary to examine this question. as already stated the appellants were also charged under sections 498 a and 306 read with section 34 ipc but were acquitted of the said charges by the learned sessions judge which order has attained finality for the reason that the state did not prefer appeal against the same. the appeal before the high court and also in this court has been preferred by the appellants challenging their conviction under section 304 b read with section 34 ipc. it has been held in state of andhra pradesh v thadi narayan air 1962. sc 240 1961 indlaw sc 171 that section 4231bi of code of criminal procedure 1898 which corresponds to section 386bi of code of criminal procedure 1973 is clearly confined to cases of appeals preferred against orders of conviction and sentence the powers conferred by this clause can not be exercised for the purpose of reversing an order of acquittal passed in favour of a party in respect of an offence charged in dealing with an appeal preferred by him against the order of conviction in respect of another offence charged and found proved. therefore we have refrained from expressing any opinion as to whether the appellants could be held guilty of having committed the offence under section 498 a or 306 ipc on the basis of evidence available on record as their acquittal under the aforesaid charges has attained finality and can not be reversed in the appeal filed by the appellants challenging their conviction under section 304 b ipc. in view of the discussion made above the appeal is allowed. the judgment and order dated 23 february 2005 of the high court and the judgment and order dated 04 january 1993 of the learned sessions judge convicting the appellants under section 304 b ipc are set aside and the appellants are acquitted of the said charge. the appellant no 1 is in custody. he shall be released forthwith unless wanted in some other case. the appellant No 2 is on bail. the sureties and bail bonds furnished by her are discharged. appeal allowed.

IN-Ext

FACTS this appeal, by special leave, has been preferred against the judgment and order of bombay high court (aurangabad bench), by which the appeal preferred by the appellants was dismissed and their conviction under section 304-b read with section 34 ipc and sentence of 7 years ri imposed thereunder by the learned sessions judge, aurangabad, was affirmed. the deceased was daughter of pw.1 and she was married to appellant no. 1. about two and half years prior to the date of incident the appellant no. 2, is the mother of the appellant no. 1 and both the appellants were residing in the same house. according to the case of prosecution, a sum of rs. 5000 and some gold ornaments had been given at the time of marriage of bhimabai. for about six months bhimabai was treated well but thereafter the accused started asking her to bring rs. 1,000-1,200 from her parents to meet the household expenses and also for purchasing manure. the case of the prosecution futher is that in the evening of 15 september 1991 a person came from village palshi on a motorcycle and informed pw.1 that bhimabai was unwell. pw.1 then immediately went to the house of the accused along with some of his relatives. there he saw that bhimabai was lying dead and froth was coming out of her mouth which indicated that she had consumed some poisonous substance. the police patil of the village pw.3 lodged an accidental death at the police station. on the basis of the said accidental death report, pw.6 sandeepan kamble, police sub-inspector, visited the house of the accused, held inquest on the dead body of bhimabai, and thereafter sent the same for post-mortem examination. ARGUMENT the insecticide thimet is extensively used by the farmers for preservation of crop and is kept stored in their houses and it could be a case where thimet accidentally got mixed with some food item and was consumed by bhaimabai. no offence under section 306 ipc is made out against the appellants. ISSUE conviction of accused under section 304-b read with section 34 ipc ANALYSIS the main witnesses regarding the alleged demand of money and also harassment and beating to bhimabai are her father and mother. they had said that whenever his daughter came to her parental home, she used to complain that she was being subjected to harassment by the appellants on account of some "domestic reasons" and further that her husband had told her that while coming back from her parental home she should bring rs. 1,000-1,200 for expenses and for manure as he had no sufficient money. it is important to note that in her statement under section 161 cr. p.c. which was recorded on the very next day of the death of bhimabai, this witness did not state that the cause for ill-treatment was "a demand for money and a consequent beating. the evidence on record does not indicate that the police had any reason to favour the accused and deliberately omitted to mention about the alleged demand of money while recording the statement of pw.5 sumanbai under section 161 cr. the evidence shows that the accused come from very humble background and they could not have exerted any kind of influence, financial or otherwise, upon the police so as to manage a statement favourable to them when in the course of investigation the statements of witnesses were being recorded under section 161 cr. in view of the aforesaid definition of the word "dowry" any property or valuable security should be given or agreed to be given either directly or indirectly at or before or any time after the marriage and in connection with the marriage of the said parties. therefore, the giving or taking of property or valuable security must have some connection with the marriage of the parties and a correlation between the giving or taking of property or valuable security with the marriage of the parties is essential. since an essential ingredient of section 304-b ipc viz. demand for dowry is not established, the conviction of the appellants cannot be sustained. the appellants were also charged under sections 498-a and 306 read with section 34 ipc but were acquitted of the said charges by the learned sessions judge, which order has attained finality for the reason that the state did not prefer appeal against the same. the appeal before the high court and also in this court has been preferred by the appellants challenging their conviction under section 304-b read with section 34 ipc. therefore, we have refrained from expressing any opinion as to whether the appellants could be held guilty of having committed the offence under section 498-a or 306 ipc on the basis of evidence available on record as their acquittal under the aforesaid charges has attained finality and cannot be reversed in the appeal filed by the appellants challenging their conviction under section 304-b ipc. STATUTE two essential ingredient of section 304-b ipc, apart from others, are (i) death of women is caused by any burns or bodily injury or occurs otherwise than under normal circumstances, and (ii) women is subjected to cruelty or harassment by her husband or any relative of her husband for, or in connection with, any demand for "dowry. the explanation appended to sub-section (1) of section 304-b ipc says that "dowry" shall have the same meaning as in section 2 of dowry prohibition act, 1961. section 2 of dowry prohibition act reads as under :- "2. definition of "dowry" - in this act "dowry" means any property or valuable security given or agreed to be given either directly or indirectly- (a) by one party to a marriage to the other party to the marriage; or (b) by the parent of either party to a marriage or by any other person, to either party to the marriage or to any other person, at or before or any time after the marriage in connection with the marriage of the said parties, but does not include dowry or mahr in the case of persons to whom the muslim personal law (shariat) applies.

the state of manipur is in appeal before us questioning the judgment and order dated 29 07 2005 passed by a division bench of the guwahati high court in wa nos 61787995 and 100 of 1999 upholding a judgment and order of a learned single judge of the said court dated 19 02 1999 in c r nos 32410125681022 and 1023 of 1998. one shri a j tayeng was the revenue commissioner of government of manipur. the state of manipur had not framed any recruitment rules for appointment inter alia in the revenue department and in particular the field staff thereof. the commissioner of revenue department was conferred with a power of being the cadre controlling authority for non ministerial post of the revenue department. he was also to be the chairman of the departmental promotion committee for non ministerial post of the revenue department. the commissioner allegedly made certain appointments in the posts of mandols process servers and zilladars which was not within the knowledge of the state. the said appointments were made on temporary basis. appointments were made on 11 09 199722 11 1997 and 5 12 1997 a sample copy of the offer of appointment reads as under no 11497 com rev on the recommendation of d p c and under the directives issued by the honourable gauhati high court the following persons are hereby appointed as mandols on temporary basis in the scale of pay of rs 950 20 1150 eb 25 1400 per month with usual allowances against thereto existing clear vacancies of mandals under revenue department from the date of their joining on duties. 2 further they are posted at the places indicate against their names 3 the expenditure is debitable under appropriate heads of accounts of the departments offices concerned. no record in regard to the said recruitments was maintained. an inquiry was therefore made to find out the authority which had issued the said offers of appointments. shri tayeng by a uo note dated 12 01 1998 denied to have made such an appointment stating confidential u o no 21593 com r pt. imphal the 12th jan. 1998 sub submission of report. with reference to the u o letter no 21593 comr pt. dated 6th january1998 regarding the alleged appointment of ad hoc regular appointment to the post of lambus mandols. etc of. the honourable minister revenuei am to say that i am not all aware of such appointments made by me except for 3 lambus who were kept in panel for appointment and accordingly the s o revenue. shri robert shaiza was instructed to take care. i therefore deny making of such appointments. on the other hand md. a r khan secretary revenue has made many appointments of mandols process servers zilladars in the recent months against which i have been complaining that the secretary revenue has no power or authority to make any appointments of field staff as per rules provided under m l r act1960 in this regard i have apprised the matter to the honourable minister revenue already and also informed the chief secretary manipur explaining that the secretary revenue can not make such appointments of field staffs even if he wanted to do so all the relevant files should have been routed through the undersigned so that the same may be brought to the notice of the honourable minister revenue his action has created lots of misunderstanding and confusion. he has been making false and wrong allegations against the commissioner revenue and putting him false position. it is for this reason i have been writing to all the deputy commissioners in the districts even by sending w t messages clarifying the actual position of making any appointment of revenue field staff. i still deny that i have made any appointment of field staffs of revenue department during the recent months. submitted for information and consideration. sd 12198 annayok j tayeng. commissioner revenue. govt of manipur minister revenue. in view of the aforementioned stand taken by the said shri tayeng the offers of appointment issued in favour of the respondents were cancelled by an order dated 17 02 1998 a corrigendum thereto was however issued on 21 02 1998 stating no 21593 comrev. temp i please read as august97 in place of october97 occurring in the 4th line of this government order no 21593 comrev. temp i dated 17 2 1998. in civil appeal arising out of slp c no 19375 19376 of 2005the respondents were appointed on ad hoc basis for a period of six months. their appointments were also cancelled on similar grounds. the respondents herein filed writ petitions before the high court on 4 06 1998 questioning the said order of cancellation of their appointments. the said shri tayeng retired on 28 02 1998 despite the fact that he in his uo note dated 12 02 1998 addressed to the minister of revenue denied to have made any appointment when approached by the writ petitioners respondents he affirmed in their support an affidavit in the high court stating 3 that while i was functioning as revenue commissioner manipur matters relating to appointment on the recommendation of the d p c transfer etc were put up to me in files and i used to pass order on the basis of facts presented to me in file. i also issued appointment order under my signature. after my retirement from service i have no access to such files. as stated above i was transferred and posted to the manipur electronics development corporation during 1997. 4 that after my retirement some of the writ petitioners civil rule no 568 of 1998came to me and show copy of the writ petition and the counter affidavit of the respondent no 12 and 3 i have gone through the copy of the writ petition and the counter affidavit and annexures thereto. the xerox copy of the cyclostyled appointment order bearing no 11497. com rev dated 11 9 97 annexure a1 to the writ petition appointing 3 persons to the post of mandol and no 11497 com rev. dated 11 9 97 annexure a2 to the writ petition appointing 4 persons to the post of mandol are perused by me minutely. i submit that these appointment orders annexures a1 and a2 bear my signature initial and appear to have been issued under my signature. it appears that the appointment orders were issued after complying the formalities prescribed there for which can be ascertained from the relevant official file. since i have retired from service i have no access to the file and do not know what might have been in the file and where is the file. verified that the above statements are true to the best of my knowledge and no part of it is false. the writ petitions filed by the respondents herein were allowed by a learned single judge of the high court opining i the principles of natural justice having not been complied with the impugned orders can not be sustained. whereas in the impugned order the appointments of the respondents were said to have been passed without the knowledge of the administrative department revenue department in the counter affidavit it was stated that no records were available in respect thereof and thus the said plea being inconsistent with each other the orders of cancellation of appointment would be bad in law in the light of a decision of this court in mohinder singh gill and anr v. chief election commissioner delhi and ors air 1978 sc 851 1977 indlaw sc 53. however it was observed however it is further made clear that the state respondent are at liberty to initiate or take up any appropriate legal action in the matter pertaining to their alleged fake appointments in their respective posts in accordance with law and pass necessary order after affording reasonable opportunity of being heard to them. so far as the matter relating to civil appeal arising out of slp c no 19375 19376 of 2005 is concerned it was directed that as the appointment of the respondents were made for a period of six months the employees were only entitled to the salary for the said period. the writ appeals preferred there against by the appellants herein were dismissed. mr jaideep gupta learned senior counsel appearing on behalf of the appellants would submit that the high court went wrong in passing the impugned judgment insofar as it failed to take into consideration that in a case of this nature it was not necessary to comply with the principles of natural justice. strong reliance in this behalf has been placed on kendriya vidyalaya sangathan and others v ajay kumar das and others 2002 4 scc 503 2002 indlaw sc 287. it was argued that the question as to whether appointments were made without the knowledge of the department or for that matter whether any record was available there for was of not much significance as in effect and substance they lead to the same inference and in that view of the matter the decision of this court in mohinder singh gill 1977 indlaw sc 53 supra was not attracted. s b sanyal learned counsel appearing on behalf of the respondents on the other hand would submit that the question as to whether the appointments of the respondents were nullities or not having not been raised before the high court this court should not permit the appellants to raise the said contention at this stage. the learned counsel would submit that even in a case of this nature it was incumbent upon the appellants to comply with the principles of natural justice. strong reliance in this behalf has been placed on parshotam lal dhingra v union of india. air 1958 sc 36 1957 indlaw sc 103murugayya udayar and another. v kothampatti muniyandavar temple by trustee pappathi ammal. 1991 supp 1 scc 331 1991 indlaw sc 904 and kumari shrilekha vidyarthi and others v state of u p and others 1991 1 scc 212 1990 indlaw sc 463. the state while offering appointments having regard to the constitutional scheme adumbrated in arts 14 and 16 of the constitution of india must comply with its constitutional duty subject to just and proper exceptions to give an opportunity of being considered for appointment to all persons eligible there for. the posts of field staffs of the revenue department of the state of manipur were thus required to be filled up having regard to the said constitutional scheme. we would proceed on the assumption that the state had not framed any recruitment rules in terms of the proviso appended to art 309 of the constitution of india but the same by itself would not clothe the commissioner of revenue to make recruitments in violation of the provisions contained in arts 14 and 16 of the constitution of india. the offers of appointment issued in favour of the respondents herein were cancelled inter alia on the premise that the same had been done without the knowledge of the revenue department of the state. no records there for were available with the state. as noticed hereinbefore an inquiry had been made wherein the said shri tayeng the then commissioner of revenue stated that no such appointment had been made to his knowledge. the state proceeded on the said basis. the offers of appointment were cancelled not on the ground that some irregularities had been committed in the process of recruitment but on the ground that they had been non est in the eye of law. the purported appointment letters were fake ones. they were not issued by any authority competent therefor. if the offers of appointments issued in favour of the respondents herein were forged documents the state could not have been compelled to pay salaries to them from the state exchequer. any action which had not been taken by an authority competent therefor and in complete violation of the constitutional and legal framework would not be binding on the state. in any event having regard to the fact that the said authority himself had denied to have issued a letter there was no reason for the state not to act pursuant thereto or in furtherance thereof. the action of the state did not thus lack bonafide. moreover it was for the respondents who had filed the writ petitions to prove existence of legal right in their favour. they had inter alia prayed for issuance of a writ of or in the nature of mandamus. it was thus for them to establish existence of a legal right in their favour and a corresponding legal duty in the respondents to continue to be employed. with a view to establish their legal rights to enable the high court to issue a writ of mandamus the respondents were obligated to establish that the appointments had been made upon following the constitutional mandate adumbrated in arts 14 and 16 of the constitution of india. they have not been able to show that any advertisement had been issued inviting applications from eligible candidates to fill up the said posts. it has also not been shown that the vacancies had been notified to the employment exchange. the commissioner furthermore was not the appointing authority. he was only a cadre controlling authority. he was merely put a chairman of the dpc for non ministerial post of the revenue department. the term dpc would ordinarily mean the departmental promotion committee. the respondents had not been validly appointed and in that view of the matter the question of their case being considered for promotion and or recruitment by the dpc did not and could not arise. even assuming that dpc would mean selection committee there is noting on record to show who were its members and how and at whose instance it was constituted. the commissioner as noticed hereinbefore was the chairman of the dpc how the matter was referred to the dpc has not been disclosed. even the affidavit affirmed by shri tayeng before the high court in this behalf is silent. the appointing authority in absence of any delegation of power having been made in that behalf was the state government. the government order dated 12 01 1998 did not delegate the power of appointment to the commissioner. he therefore was wholly incompetent to issue the appointment letters. the respondents therefore in our opinion were not entitled to hold the posts. in a case of this nature where the facts are admitted the principles of natural justice were not required to be complied with particularly when the same would result in futility. it is true that where appointments had been made by a competent authority or at least some steps have been taken in that behalf the principles of natural justice are required to be complied with in view of the decision of this court in murugayya udayar 1991 indlaw sc 904 supra. we as noticed hereinbefore do not know as to under what circumstances the orders of appointments were issued. the said decision is not an authority for the proposition that the principles of natural justice are required to be complied with in all situations. in kumari shrilekha vidyarthi 1990 indlaw sc 463 suprathis court was dealing with a question in regard to continuance of the law officers. the question which arose herein was not raised. it was held 34 in our opinion the wide sweep of art 14 undoubtedly takes within its fold the impugned circular issued by the state of u p in exercise of its executive power irrespective of the precise nature of appointment of the government counsel in the districts and the other rights contractual or statutory which the appointees may have. it is for this reason that we base our decision on the ground that independent of any statutory right available to the appointees and assuming for the purpose of this case that the rights flow only from the contract of appointment the impugned circular issued in exercise of the executive power of the state must satisfy art 14 of the constitution and if it is shown to be arbitrary it must be struck down. however we have referred to certain provisions relating to initial appointment termination or renewal of tenure to indicate that the action is controlled at least by settled guidelines followed by the state of u p for a long time. this too is relevant for deciding the question of arbitrariness alleged in the present case. 35 it is now too well settled that every state action in order to survive must not be susceptible to the vice of arbitrariness which is the crux of art 14 of the constitution and basic to the rule of law the system which governs us. arbitrariness is the very negation of the rule of law. satisfaction of this basic test in every state action is sine qua non to its validity and in this respect the state can not claim comparison with a private individual even in the field of contract. this distinction between the state and a private individual in the field of contract has to be borne in the mind. we in the facts and circumstances of this case do not see any arbitrariness on the part of the state in its action directing cancellation of appointments. we may on the other hand notice that kumari shrilekha vidyarthi 1990 indlaw sc 463 supra has been distinguished by this court in state of u p and others v u p state law officers association and others 1994 2 scc 204 1994 indlaw sc 1289 stating the reliance placed by the respondents in this behalf on shrilekha vidyarthi v state of u p 1990 indlaw sc 463 is misplaced for the obvious reason that the decision relates to the appointment of the district government counsel and the additional assistant district government counsel who are the law officers appointed by the state government to conduct civil criminal and revenue cases in any court other than the high court. their appointments are made through open competition from among those who are eligible for appointment and strictly on the basis of merit as evidenced by the particulars of their practice opinions of the district magistrate and the district judge and also after taking into consideration their character and conduct. their appointment is in the first instance for one year. it is only after their satisfactory performance during that period that a deed of engagement is given to them and even then the engagement is to be for a term not exceeding three years. the renewal of their further term again depends upon the quality of work and conduct capacity as a lawyer professional conduct public reputation in general and character and integrity as certified by the district magistrate and the district judge. for the said purpose the district magistrate and the district judge are required to maintain a character roll and a record of the work done by the officer and the capacity displayed by him in discharge of the work. his work is also subject to strict supervision. the shortcomings in the work are required to be brought to the notice of the legal remembrancer. it will thus be seen that the appointment of the two sets of officers viz. the government counsel in the high court with whom we are concerned and the district government counsel with whom the said decision was concerned are made by dissimilar procedures. the latter are not appointed as a part of the spoils system. having been selected on merit and for no other consideration they are entitled to continue in their office for the period of the contract of their engagement and they can be removed only for valid reasons. the people are interested in their continuance for the period of their contracts and in their non substitution by those who may come in through the spoils system. it is in these circumstances that this court held that the wholesale termination of their services was arbitrary and violative of art 14 of the constitution. the ratio of the said decision can hardly be applied to the appointments of the law officers in the high court whose appointment itself was arbitrary and was made in disregard of art 14 of the constitution as pointed out aboveemphasis added. in parshotam lal dhingra 1957 indlaw sc 103. suprathis court held that whoever holds civil posts would be entitled to protection of their services in terms of cl 2 of art 309 of the constitution of india in the event any disciplinary action is taken against them stating the underlying idea obviously is that a provision like this will ensure to them a certain amount of security of tenure. cl 2 protects government servants against being dismissed or removed or reduced in rank without being given a reasonable opportunity of showing cause against the action proposed to be taken in regard to them. it will be noted that in cl 1 the words dismissed and removed have been used while in cl 2. the words dismissed removed and reduced in rank have been used. the two protections are 1 against being dismissed or removed by an authority subordinate to that by which the appointment had been made and 2 against being dismissed removed or reduced in rank without being heard. what then is the meaning of those expressions dismissed removed or reduced in rank. it has been said in jayanti prasad v state of uttar pradesh 1951 indlaw all 27 that these are technical words used in cases in which a persons services are terminated by way of punishment. those expressions it is urged have been taken from the service rules where they were used to denote the three major punishments and it is submitted that those expressions should be read and understood in the same sense and treated as words of article in dhirender singh and others v state of haryana and others 1997 2 scc 712 1996 indlaw sc 1725termination of an order of promotion in favour of the appellant was not interfered with by this court as the same had not been approved by the dig being the competent authority. in m c mehta v union of india and others 1999 6 scc 237 1999 indlaw sc 1396this court developed the useless formality theory stating more recently lord bingham has deprecated the useless formality theory in r v. chief constable of the thames valley police forces ex p cotton by giving six reasons see also his article should public law remedies be discretionary. 1991 pl64. a detailed and emphatic criticism of the useless formality theory has been made much earlier in natural justice substance or shadow by prof d h clark of canada 1975 pl27 63 contending that malloch and glynn were wrongly decided. foulkes craig and others say that the court can not prejudge what is to be decided by the decision making authority de smith says courts have not yet committed themselves to any one view though discretion is always with the court. wade says that while futile writs may not be issued a distinction has to be made according to the nature of the decision. thus in relation to cases other than those relating to admitted or indisputable facts there is a considerable divergence of opinion whether the applicant can be compelled to prove that the outcome will be in his favour or he has to prove a case of substance or if he can prove a real likelihood of success or if he is entitled to relief even if there is some remote chance of success. we may however point out that even in cases where the facts are not all admitted or beyond dispute there is a considerable unanimity that the courts can in exercise of their discretion refuse certiorari prohibition mandamus or injunction even though natural justice is not followed. we may also state that there is yet another line of cases as in state bank of patiala v s k sharma rajendra singh v state of m p 1994 indlaw mp 48 that even in relation to statutory provisions requiring notice a distinction is to be made between cases where the provision is intended for individual benefit and where a provision is intended to protect public interest. in the former case it can be waived while in the case of the latter it can not be waived. in kendriya vidyalaya sangathan 2002 indlaw sc 287 suprait was held it is clear that if after the termination of services of the said dr k c rakesh the orders of appointment are issued such orders are not valid. if such appointment orders are a nullity the question of observance of principles of natural justice would not arise. in bar council of india v high court of kerala 2004 6 scc 311 2004 indlaw sc 340it was stated principles of natural justice however cannot be stretched too far. their application may be subject to the provisions of a statute or statutory rule. in r s garg v state of u p and others 2006 6 scc 430 2006 indlaw sc 801it was stated a discretionary power as is well known can not be exercised in an arbitrary manner. it is necessary to emphasize that the state did not proceed on the basis that the amendment to the rules was not necessary. the action of a statutory authority as is well known must be judged on the basis of the norms set up by it and on the basis of the reasons assigned therefor. the same can not be supplemented by fresh reasons in the shape of affidavit or otherwise. for the reasons aforementioned the impugned judgments can not be sustained. they are set aside accordingly. the appeals are allowed. no costs. appeal allowed.

IN-Ext

FACTS one shri a.j.tayeng was the revenue commissioner of government of manipur. the state of manipur had not framed any recruitment rules for appointment inter alia in the revenue department and in particular the field staff thereof. the commissioner of revenue department was conferred with a power of being the cadre controlling authority for non-ministerial post of the revenue department. he was also to be the chairman of the departmental promotion committee for non-ministerial post of the revenue department. the commissioner allegedly made certain appointments in the posts of mandols,process-servers and zilladars which was not within the knowledge of the state. the said appointments were made on temporary basis. his action has created lots of misunderstanding and confusion. he has been making false and wrong allegations against the commissioner (revenue) and putting him false position. the respondents were appointed on ad hoc basis for a period of six months.their appointments were also cancelled on similar grounds. ARGUMENT in a case of this nature it was not necessary to comply with the principles of natural justice. as to whether appointments were made without the knowledge of the department or for that matter whether any record was available there for was of not much significance as in effect and substance they lead to the same inference. ISSUE the respondents herein filed writ petitions before the high court on 4.06.1998 questioning the said order of cancellation of their appointments. ANALYSIS the state while offering appointments,having regard to the constitutional scheme adumbrated in arts.14 and 16 of the constitution of india,must comply with its constitutional duty,subject to just and proper exceptions,to give an opportunity of being considered for appointment to all persons eligible there for. the state had not framed any recruitment rules in terms of the proviso appended to art.309 of the constitution of india but the same by itself would not clothe the commissioner of revenue to make recruitments in violation of the provisions contained in arts.14 and 16 of the constitution of india. the offers of appointment were cancelled not on the ground that some irregularities had been committed in the process of recruitment but on the ground that they had been non-est in the eye of law. the purported appointment letters were fake ones. if the offers of appointments issued in favour of the respondents herein were forged documents,the state could not have been compelled to pay salaries to them from the state exchequer. any action,which had not been taken by an authority competent therefor and in complete violation of the constitutional and legal framework,would not be binding on the state. in any event,having regard to the fact that the said authority himself had denied to have issued a letter,there was no reason for the state not to act pursuant thereto or in furtherance thereof. the action of the state did not,thus,lack bonafide. with a view to establish their legal rights to enable the high court to issue a writ of mandamus,the respondents were obligated to establish that the appointments had been made upon following the constitutional mandate adumbrated in arts.14 and 16 of the constitution of india. they have not been able to show that any advertisement had been issued inviting applications from eligible candidates to fill up the said posts. it has also not been shown that the vacancies had been notified to the employment exchange. the commissioner furthermore was not the appointing authority. even assuming that dpc would mean selection committee,there is nothing on record to show who were its members and how and at whose instance it was constituted. the appointing authority,in absence of any delegation of power having been made in that behalf,was the state government. the government order did not delegate the power of appointment to the commissioner. he,therefore,was wholly incompetent to issue the appointment letters. where the facts are admitted,the principles of natural justice were not required to be complied with,particularly when the same would result in futility. it is true that where appointments had been made by a competent authority or at least some steps have been taken in that behalf,the principles of natural justice are required to be complied with. in kumari shrilekha vidyarthi 1990 indlaw sc 463 (supra), it was held that the wide sweep of art.14 undoubtedly takes within its fold the impugned circular issued by the state of u.p.in exercise of its executive power,irrespective of the precise nature of appointment of the government counsel in the districts and the other rights,contractual or statutory,which the appointees may have. it is for this reason that we base our decision on the ground that independent of any statutory right,available to the appointees,and assuming for the purpose of this case that the rights flow only from the contract of appointment,the impugned circular,issued in exercise of the executive power of the state,must satisfy art.14 of the constitution and if it is shown to be arbitrary,it must be struck down. this too is relevant for deciding the question of arbitrariness alleged in the present case. in m.c.mehta v.union of india and others [(1999) 6 scc 237 1999 indlaw sc 1396],this court developed the "useless formality" theory stating: "more recently lord bingham has deprecated the useless formality theory in r.v.chief constable of the thames valley police forces,ex p cotton by giving six reasons. a detailed and emphatic criticism of the useless formality theory has been made much earlier in natural justice,substance or shadow by prof.d.h.clark of canada (1975 pl,27 63) contending that malloch and glynn were wrongly decided.foulkes,craig and others say that the court cannot prejudge what is to be decided by the decision-making authority.de smith says courts have not yet committed themselves to any one view though discretion is always with the court. wade says that while futile writs may not be issued,a distinction has to be made according to the nature of the decision. thus,in relation to cases other than those relating to admitted or indisputable facts,there is a considerable divergence of opinion whether the applicant can be compelled to prove that the outcome will be in his favour or he has to prove a case of substance or if he can prove a real likelihood of success or if he is entitled to relief even if there is some remote chance of success. in kendriya vidyalaya sangathan 2002 indlaw sc 287 (supra),it was held: "it is clear that if after the termination of services of the said dr.k.c.rakesh,the orders of appointment are issued,such orders are not valid.if such appointment orders are a nullity,the question of observance of principles of natural justice would not arise. in bar council of india v.high court of kerala [(2004) 6 scc 311 2004 indlaw sc 340],it was stated that principles of natural justice,however,cannot be stretched too far and their application may be subject to the provisions of a statute or statutory rule. STATUTE article 15 and 16 of the constitution of india.

ujjagar singh the appellant herein a resident of village bangawali tehsil malerkotla was tried and convicted by the additional sessions judge sangrur for the murder of his niece mukhtiar kaur and was awarded the death penalty. in addition he was convicted for an offence punishable section 376 of the ipc and sentenced to undergo rigorous imprisonment for 10 years and to a fine of rs 5 000 and in default of payment to undergo further r i for one year and section 309 of the ipc to a sentence of simple imprisonment for one year. the aforesaid convictions and sentences have been maintained by the high court and the matter is before us in these proceedings by way of special leave. the facts of the case are as under. at about 2 00 p m on 10th november 2002 a boy whose identity is not forthcoming informed satnam singh pw2 that an incident of firing had taken place in the house of ujjagar singh situated in the fields on the outskirts of the village. satnam singh conveyed this information to sarpanch jora singh pw1 who was attending a marriage at that time. jora singh accompanied by gurdeep singh pw3 thereupon rushed to ujjagar singh 's house and found mukhtiar kaur lying dead with a gun shot injury and the appellant also with a gun shot injury lying unconscious on the ground in the adjoining room. jora singh and gurdeep singh immediately removed ujjagar singh to the civil hospital dhuri in the jeep belonging to kulwant singh pw4. jora singh also met inspector harjinder pal singh pw14 at 4 40 p m near the hospital who recorded his statement at that place and with his endorsement exhibit p a sent it to police station dhuri where the formal fir was registered at about 4 45 p m with the special report being delivered to the illaka magistrate at dhuri itself at 6 20 p m the same evening. the facts as narrated were that arjan singh of village bangawali had three sons puran singh ujjagar singh appellant and ajmer singh. puran singh had died about 20 years earlier leaving behind his wife two sons and a daughter mukhtiar kaur. the two sons and the wife also died long before the incident and mukhtiar kaur the sole surviving member of this branch of the family had been married to balwinder singh pw9 about 9 or 10 years earlier. puran singh had however transferred 30 or 35 bighas of agricultural land falling to his share after the death of his father in the name of the appellant 's sons by a collusive decree in the year 1994 and the suggestion was that this transaction had been objected to by mukhtiar kaur who was demanding that the land be returned to her. it appears that mukhtiar kaur 's relations with her in laws had got strained and she had left her matrimonial home and come to live with ujjagar singh her uncle 7 or 8 months earlier and the suggestion was that mukhtiar kaur had been killed by the appellant with his licensed gun and he had thereafter attempted to commit suicide. having recorded the aforesaid facts in the fir pw14 inspector harjinder pal singh reached the place of incident and lifted one spent 12 bore cartridge case shaktiman make from near mukhtiar kaur 's dead body and one dbbl gun from the place where ujjagar singh appeared to have been shot and another spent cartridge case was recovered from the right barrel of the gun. after completion of the investigation at the spot mukhtiar kaur 's dead body was sent for its post mortem examination. the post mortem examination was also conducted by pw5 dr ishwar singh medical officer civil hospital along with dr harwinder kaur pw17 and it was found that mukhtiar kaur had two gunshot injuries on her dead body a wound of entry on the back of right side of chest 2 cm x 1 cm with margining and blackening and a corresponding exit wound of 5 cm x 3 5 cm to the front of the right side of the chest. dr harwinder kaur aforesaid also took swabs from the vagina of the deceased and as per the chemical examiner 's report dated 2 1 2003 semen was found on the swab taken from the vagina and from the underwear that mukhtiar kaur had been wearing at the time of her death. the weapon and the recovered cartridge cases had also been sent to the forensic science laboratory which in its report dated 4 8 2004 opined that the crime cartridge case ci could have been fired by the right barrel of the weapon whereas the crime cartridge case c2 had been fired from the right barrel. on the completion of the investigation a charge sheet under sections 302 376 and 309 of the ipc was filed against the accused and as he pleaded not guilty he was brought to trial. during the trial jora singh pw1 satnam singh pw2 gurdeep singh pw3 and kulwant singh pw4 resiled from their statements given to the police and were declared hostile. balwinder singh pw9 however supported the prosecution case deposing that the land had in fact been got transferred from gurmail kaur mother of mukhtiar kaur to ujjagar singh by fraud and mukhtiar kaur was therefore entitled to its return. he also deposed that mukhtiar kaur had told him some time earlier that the accused had been beating her and had also committed sexual intercourse with her and that at about 11 p m on 10 11 2002 karam singh pw10 had informed him as to what had transpired on which he along with his father hamir singh pw12 and several others had rushed to bangawali. pw10 karam singh aforesaid confirmed the story given by balwinder singh. the prosecution also relied on the statements of dr vijay kumar pw6 of the civil hospial dhuri who testified that the appellant had been brought to the hospital at about 2 45 p m on 10 11 2002 with a serious gun shot injury dr ripan miglani pw15 of the dayanand medical college hospital ludhiana who deposed that he had been admitted to the department of neuro surgery with a serious gun shot injury and dr sanjay uppal pw16 a plastic surgeon who disclosed that the appellant had been under his treatment for almost 5 weeks and the burnt area around the firearm injury had been removed by him. the prosecution also placed reliance on the statement of asi jasbir singh pw11 who had accompanied inspector harjinder pal singh pw14 to the place of incident and supported the recoveries made from the spot. the prosecution case was then put to the accused and his statement recorded section. 313 of the cr. p c in reply to question 33 he stated as under i am innocent. i have been implicated falsely in this case. i was treating mukhtiar kaur as my daughter and loved her as my daughter. false allegations have been levelled against me. i never harassed mukhtiar kaur nor ever got her land mutated from her mother by fraud. i have not killed mukhtiar kaur. mother of mukhtiar kaur got the land mutated by her own free will and mukhtiar kaur had no dispute about it. balwinder singh her husband was addicted to vices and used to beat her due to which she used to remain under depression and sick generally and used to come to me as my daughter. my house kothi is situated on the outer skirts of village bangawali and door planks had not been fixed so far to rooms. some body suddenly came and fired at me. i fell down on the ground and became unconscious. therefore i could not see what had happened to mukhtiar kaur as she was in other room. later on i came to know that some body had fired at her and she died. i regained consciousness in hospital. the story of rape by me with her has been fabricated by her husband as he is inimical towards me. even i do not know who took me to hospital. i have been implicated in this case falsely. the trial court and the high court relying on the circumstances available on the evidence convicted and sentenced the appellant as already mentioned above. mr goburdhan the learned counsel for the accused has raised several arguments in the course of hearing. he has pointed out that there was absolutely no evidence to suggest that mukhtiar kaur had been subjected to rape and in this view of the matter the very basis for the imposition of the death penalty was not made out. he has also pointed out that there were no eye witnesses to the incident and the 4 witnesses i e jora singh and others who had reached the place of incident and carried the injured appellant to the hospital had also resiled and as the prosecution story now rested on circumstantial evidence alone it was imperative for the investigating officer to have taken the finger prints from the weapon and that in any case the recovery of the spent cartridges and the gun were clearly suspicious as the weapon had been sent to the laboratory after an inordinate delay. it has also been submitted that in a case of attempted suicide a firearm must of necessity be used from a very close range and the absence of any blackening charring or burning around the wound on ujjagar singh clearly ruled out the possibility of such an attempt. it has finally been submitted that the land had been transferred in the name of ujjagar singh 's sons in the year 1994 by gurmail kaur mother of mukhtiar kaur by a collusive decree and there was no evidence to show that mukhtiar kaur had ever displayed any unhappiness or made any complaint to any person or any authority with regard to the decree and as such the very basis of the prosecution story did not exist. the learned state counsel has however supported the judgment of the courts below. he has further emphasized that the prosecution 's case stood proved from various factors including the medical evidence the reports of the forensic science laboratory the chemical examiner from the post mortem reports and the recovery of the gun and cartridges. we have heard the learned counsel for the parties and gone through the record. we first take up for consideration the question of the conviction section 376 of the ipc. we find from the medical evidence and from the chemical examiner 's reports that the vaginal swab and clothes taken from the dead body did indicate the presence of semen. there is however absolutely no evidence to suggest even assuming that the intercourse had been committed by the appellant that he had done so without mukhtiar kaur 's consent or against her will. some suspicions of rape could perhaps have been raised had some tell tale injuries been detected on mukhtiar kaur 's person but we find that the two injuries other than the gun shot wounds i e injury no 3 being on the left pinna and. No 4 an abrasion near the right eye do not indicate any attempt to rape or the commission of rape. it is also significant that the investigators had made no attempt whatsoever to have the appellant medically examined to ascertain his capacity to perform sexual intercourse. the learned state counsel relying on the statement of pw14 inspector harjinder pal singh has however submitted that the examination had not been possible as the appellant had received a very serious gun shot injury and was hanging between life and death. we agree with the submission of the learned counsel that an examination could not have been carried out immediately. but we see no justification in the omission of the prosecution to have him examined after he had recovered his health and been discharged from hospital. we are further of the opinion that even assuming for a moment that sexual intercourse between the two had indeed taken place it can not be said from the evidence before us that it was without the consent or against the wishes of mukhtiar kaur. we therefore find that ujjagar singh 's conviction section 376 of the ipc can not be sustained. mr goburdhan has placed great emphasis on the fact that as the four witnesses who had reached the place of incident i e jora singh satnam singh gurdeep singh and kulwant singh had resiled from their statements and had disowned their initial stories the prosecution had of necessity to rely on circumstantial evidence and if the chain of circumstances remained incomplete or even if one link in the chain was broken the prosecution must fail. he has also relied on the judgment of balu sonba shinde v state of maharashtra 2002 7 scc 543 2002 indlaw sc 1923 to contend that it was open to the accused to take advantage insofar as possible from the statement of a witness though declared hostile and the four witnesses having disowned the prosecution story and having given a different version the appellant was entitled to derive such benefit as possible in this situation. the learned state counsel has however emphasized that both the trial court and the high court had for good reasons opined that the circumstances made out a case for conviction and the accused having given a counter version some obligation lay on him as well to explain the circumstances against him inasmuch that admittedly he and the victim were alone in the house at the time of the incident. reliance for this argument has been placed on the decision of raj kumar prasad tamarkar v state of bihar anr 20071. scale 19 2007 indlaw sc 5. we have considered their arguments very carefully. in mahmood v state of u p 1976 1 scc 542 1975 indlaw sc 643 it has been observed that in a case dependent wholly on circumstantial evidence the court must be satisfied athat the circumstances from which the inference of guilt is to be drawn have been fully established by unimpeachable evidence beyond a shadow of doubt bthat the circumstances are of a determinative tendency unerringly pointing towards the guilt of the accused and cthat the circumstances taken collectively are incapable of explanation on any reasonable hypothesis save that of the guilt sought to be proved against him. in this case this court held that the omission of the prosecution inter alia to have the finger prints found on the alleged murder weapon was fatal to the prosecution story. in 1984 4 scc 116 sharad birdhichand sarda v state of maharashtra 1984 indlaw sc 432 this court discussed the ratio of the judgments in hanumant v state of m p air 1952 sc 343 1952 indlaw sc 89 tufail alias simmi v state of u p 1969 3 scc 198 1969 indlaw sc 573 and ramgopal v state of maharashtra 1972 4 scc 625 1971 indlaw sc 555 and shivaji sahabrao bobade v state of maharashtra 1973 2 scc 793 1973 indlaw sc 181 and observed thus a close analysis of this decision would show that the following conditions must be fulfilled before a case against an accused can be said to be fully established 1the circumstances from which the conclusion of guilt is to be drawn should be fully established. it may be noted here that this court indicated that the circumstances concerned must or should and not may be established. there is not only a grammatical but a legal distinction between may be proved and must be or should be proved as was held by this court in shivaji sahabrao bobade v state of maharashtra 1973 indlaw sc 181 where the following observations were made. certainly it is a primary principle that the accused must be and not merely may be guilty before a court can convict and the mental distance between may be is long and divides vague conjectures from sure conclusions. 2the facts so established should be consistent only with the hypothesis of the guilt of the accused that is to say they should not be explainable on any other hypothesis except that the accused is guilty 3the circumstances should be of a conclusive nature and tendency 4they should exclude every possible hypothesis except the one to be proved and 5there must be a chain of evidence so complete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused. mr goburdhan has also cited mahmood v state of u p 1976 1 scc 542 1975 indlaw sc 643 shankarlal gyarasilal dixit v state of maharashtra 1981 2 scc 35 1980 indlaw sc 47 sharad birdhichand sarda v state of maharashtra 1984 4 scc 116 1984 indlaw sc 432 omwati smt and ors v mahendra singh. 1998 9 scc 81 1997 indlaw sc 1403 sudama pandey ors v state of bihar 2002 1 scc 679 2001 indlaw sc 21243 and r r khanna reddy anr. v state of a p 2006 10 scc 172 2006 indlaw sc 144 in support of his plea relating to the evaluation of circumstantial evidence. these judgments have broadly followed the principles laid down in the judgments referred to above and need not therefore be dealt with us in extenso. it must nonetheless be emphasized that whether a chain is complete or not would depend on the facts of each case emanating from the evidence and no universal yardstick should ever be attempted. it is in this background that we must examine the circumstances in the present case. a few facts stand out from the prosecution story. first the place of incident being adjoining rooms in the residential house of the appellant and the fact that the alleged murder weapon is his licensed dbbl gun is proved on record. the evidence also reveals that the appellant was living in the premises along with his wife mother and son and two daughters who were studying outside the village were frequent visitors but it is the admitted position that nobody but the appellant and the deceased were present at the time of incident. it is also clear from the evidence that the two spent cartridge cases recovered one from near mukhtiar kaur 's dead body and the second from the right barrel of the gun lying near the appellant had been sent to the forensic science laboratory which opined that one of the cartridges had been fired from the gun and the other could have been fired therefrom. mr goburdhan has however laid great emphasis on the fact that no reference to the gun or cartridges had been made in the inquest report and that in any case the weapon and the spent cartridges had been sent to the laboratory belatedly. we are of the opinion however that no adverse inference can be drawn from either of these circumstances. the aforesaid articles had been carried to the laboratory by constable gopal singh who in his affidavit dated 17th march 2003 deposed that he had first taken the articles to the laboratory on 9th december 2002 but they had been returned by the director on the ground that the seals affixed thereon were not of the requisite number and that after removing the objections raised by the director the articles aforesaid had been returned to the laboratory on 18th december 2002. gopal singh was cross examined by the prosecution. and but for some inconsequential questions put to him with regard to the seals not even a suggestion was made that the aforesaid articles had in any way been tampered with. it is true as contended that in column 22 of the inquest report which refers to the articles found near the dead body there is no reference to the spent cartridges or the murder weapon but we find from a perusal of the site plan exh. pjj prepared by the investigating officer inspector harjinder pal singh pw14 on 10th november 2002 that the weapon is shown lying close to the place where the appellant had been found unconscious and a spent cartridge recovered from near the dead body of mukhtiar kaur. it has also been submitted by mr goburdhan that there appeared to be no motive for the incident as the story about mukhtiar kaur 's unhappiness about the transfer of land to the sons of ujjagar singh sought to be proved by pw9 balwinder singh and pw10 karam singh had been disbelieved by the high court with the observation that the statements of these two witnesses could not be relied upon. it is true that in a case relating to circumstantial evidence motive does assume great importance but to say that the absence of motive would dislodge the entire prosecution story is perhaps giving this one factor an importance which is not due and to use the clichi. the motive is in the mind of the accused and can seldom be fathomed with any degree of accuracy. there is however a hint in the testimony of pw14 inspector harjinder pal singh that his enquiries had revealed that the accused was having illicit relations with mukhtiar kaur and we can assume that some thing untoward had happened which could have triggered the volatile and hostile incident. there could perhaps be some truth in this suggestion as it is significant that though the appellant had an extended family living with him i e mother wife son living in the village and two young daughters who were studying outside and residing in a hostel but were frequent visitors home yet none of them has come forth to depose in his favour. to our mind therefore this is yet another circumstance inculpating the accused. mr goburdhan has also laid much stress on the apparent discordance between the prosecution story and the medical evidence and has argued that had the accused attempted to commit suicide the gun shot must of necessity had to be fired from a very close range on which the wound would have marks of burning or charring and that in any event a full blooded shot from a very close range would have torn his face apart. he has in this connection referred us to the statement of dr ripan miglani pw15 and the wound found on the appellant at the time of his medical examination in the department of surgery of the dayanand medical college hospital ludhiana which was about 15 x 8 cm curvilinear wound present on the left half of face extending upto bone. no blackening or foreign body was visible. underlying muscles were exposed and contamination was present. he has thus urged that the absence of any blackening underlined the argument that the shot had been fired from some distance and as such an attempt at suicide was clearly to be ruled out. he has also drawn our attention to the cross examination of the doctor wherein he reiterated that there was no visible blackening and that it was not possible for him to say whether the injury was suicidal or otherwise. the learned state counsel has however relied on the statement of pw16 dr sanjay uppal who was apparently the first doctor to have examined the appellant wherein he clearly testified that the blackened portion around the firearm injury had been removed by him. we are therefore of the opinion that this statement falsifies mr goburdhan 's argument on this aspect. it is also significant that the shot had apparently travelled upwards skirting the mandible through the flesh of the cheek in an upward direction with minimal damage to the bone structure and it is indeed providential that the appellant got away with only an injury albeit a very serious one. the fact that the shot was fired from below going upwards is also supported by the site plan exh. pjj wherein marks of a shot hitting the roof were seen at point e whereas the appellant was found lying at point d in the same room. it is therefore apparent that the weapon had indeed been fired by the appellant from a close range and that the blackened portion around the wound had been removed by dr sanjay uppal. the learned state counsel has emphasized that in the light of the admitted position that the accused and the deceased were the only ones present at the time of incident and that the accused had projected a counter story some credible explanation was also expected from him. reference has been made to raj kumar prasad tamarkar 's case2007 indlaw sc 5 supra wherein in circumstances surprisingly akin to the present matter this court had the following observations to make the conspectus of the events which had been noticed by the learned sessions judge as also by the high court categorically go to show that at the time when the occurrence took place the deceased and the respondent only were in the bedroom and the terrace connecting the same. there was no other person. the cause of death of the deceased usha devi i e by a gun shot injury is not disputed. the fact that the terrace and the bedroom are adjoining each other is not in dispute. the autopsy report shows that a blackening and charring existed so far as injury no i is concerned. the blackening and charring keeping in view the nature of the firearm which is said to have been used clearly go to show that a shot was fired from a short distance. blackening or charring is possible when a shot is fired from a distance of about 2 feet to 3 feet. it therefore can not be a case where the death might have been caused by somebody by firing a shot at the deceased from a distance of more than 6 feet. the place of injury is also important. the lacerated wound was found over grabella middle of forehead. it goes a long way to show that the same must have been done by a person who wanted to kill the deceased from a short distance. there was thus a remote possibility of causation of such type of injury by any other person who was not in the terrace. once the prosecution has been able to show that at the relevant time the room and terrace were in exclusive occupation of the couple the burden of proof lay upon the respondent to show under what circumstances death was caused to his wife. the onus was on him. he failed to discharge the same. we have considered the submission of the state counsel very carefully. it is true that it is generally for the prosecution to prove its case beyond doubt but in circumstances such as the present one some explanation is also due from an accused in order to absolve himself from suspicion of the crime. in his statement section p c his positive stand was that he alone had been in the house with mukhtiar kaur when she had been killed and indeed as per exhibit p jj mukhtiar kaur 's body had been found only one karam 5 feet away from the place where the appellant lay injured. it must be emphasized that but for this self serving statement made by the appellant there is nothing on record to support his positive stance. even otherwise we are of the opinion that had the shot been fired by some intruder the direction would have been more or less horizontal and parallel to the ground and not from down upwards with the pellets hitting the jaw skirting the cheek and hitting the roof at point. e in modi 's medical jurisprudence and toxicology 23rd edition at page 765 while dealing with identification of homicidal and suicidal injuries it has been observed that a suicidal firearm wound is usually a contact wound situated on the side of the temple depending on which hand was used to shoot himself in the centre of the forehead the roof of the mouth in the chest or epigastrium in front or the left side and some times under the chin. the firearm is usually fired at close range. a small weapon like a revolver or a pistol is held in the hand while a rifle or a shot gun is supported on the ground or against the wall. sometimes the firing is done by pulling a string tied to the trigger by the big toe. the skin around the entry wound shows characteristic blackening scorching and tattooing. in such cases the hand used to steady the weapon at the muzzle may be blackened and scorched and may also be stained with squirting of the blood from the injured arteries. in homicidal and accidental shooting the wound may be on any part of the body and the path of the bullet may be in any direction. homicidal shooting by dacoits is not uncommon in india and they are known to make their own firearms. immediate death following a firearm wound is uncommon and even when vital organs are injured a person may be capable of doing extraordinary things. sometimes firearm wounds may look like knife slashes or a bullet hole may resemble a penetrating stab wound if the bullet strikes the head of shoulder at an angle or when an unstable bullet registers a broadside hit. a fateh describes a rare homicidal gun shot wound of the mouth where the entry wound was in the tongue and the direction was horizontally backward while in suicidal wounds the direction is upwards entrance would be in the palate or posterior pharynx. dr b r sharma in his book forensic science in criminal investigation and trials fourth edition at page 1160 too has delineated the circumstances that could indicate suicide and while referring to the site of the injury has observed certain sites are predominantly used by suicides for self inflicted injuries. for example with firearm temple forehead mouth and chest are the favourite sites. with knife throat and wrist are the favourite sites. hesitation injuries are also observed in some suicide cases. it is therefore clear to us that the story of unknown assailants entering the house and causing mukhtiar kaur 's murder etcetera has to be ruled out and that the prosecution story that it was the appellant who had first shot mukhtiar kaur and then attempted to commit suicide stands proved. we also find that no part of the evidence of the hostile witnesses comes to the aid of the appellant. the question now arises as to the sentence that should be imposed on the appellant. it would be seen that both the sessions court and the high court were appalled by the allegations and findings of incestuous rape and murder. we are however of the opinion as already noted above that a case of rape has not been made out. in this background the death sentence is not called for. we accordingly acquit the appellant of the charge section 376 of the ipc but maintain his conviction for the other offences but commute his death sentence to life. with this modification the appeal is dismissed. appeal dismissed.

IN-Ext

FACTS ujjagar singh, the appellant herein, was tried and convicted by the additional sessions judge, sangrur for the murder of his niece mukhtiar kaur and was awarded the death penalty. in addition, he was convicted for an offence punishable u/s. 376 of the ipc and sentenced to undergo rigorous imprisonment for 10 years and to a fine of rs.5, 000/- and in default of payment to undergo further r.i. for one year and u/s. 309 of the ipc to a sentence of simple imprisonment for one year. the aforesaid convictions and sentences have been maintained by the high court and the matter is before us in these proceedings by way of special leave. at about 2.00 p.m. on 10th november 2002 a boy whose identity is not forthcoming, informed satnam singh pw2 that an incident of firing had taken place in the house of ujjagar singh . satnam singh conveyed this information to sarpanch jora singh pw1 who was attending a marriage at that time. jora singh accompanied by gurdeep singh pw3 thereupon rushed to ujjagar singh's house and found mukhtiar kaur lying dead with a gun shot injury and the appellant also with a gun shot injury lying unconscious on the ground in the adjoining room. it appears that mukhtiar kaur's relations with her in-laws had got strained and she had left her matrimonial home and come to live with ujjagar singh, her uncle, 7 or 8 months earlier and the suggestion was that mukhtiar kaur had been killed by the appellant with his licensed gun and he had thereafter attempted to commit suicide. ARGUMENT the learned counsel for the accused has raised several arguments in the course of hearing. he has pointed out that there was absolutely no evidence to suggest that mukhtiar kaur had been subjected to rape and in this view of the matter the very basis for the imposition of the death penalty was not made out. he has also pointed out that there were no eye witnesses to the incident and the 4 witnesses i.e. jora singh and others who had reached the place of incident and carried the injured appellant to the hospital had also resiled and as the prosecution story now rested on circumstantial evidence alone, it was imperative for the investigating officer to have taken the finger prints from the weapon and that in any case the recovery of the spent cartridges and the gun were clearly suspicious as the weapon had been sent to the laboratory after an inordinate delay. it has also been submitted that in a case of attempted suicide a firearm must of necessity be used from a very close range and the absence of any blackening, charring or burning around the wound on ujjagar singh clearly ruled out the possibility of such an attempt. it has finally been submitted that the land had been transferred in the name of ujjagar singh's sons in the year 1994 by gurmail kaur, mother of mukhtiar kaur by a collusive decree and there was no evidence to show that mukhtiar kaur had ever displayed any unhappiness or made any complaint to any person or any authority with regard to the decree and as such, the very basis of the prosecution story did not exist. he had laid great emphasis on the fact that no reference to the gun or cartridges had been made in the inquest report and that in any case the weapon and the spent cartridges had been sent to the laboratory belatedly. ISSUE convictions and sentences by the high court should be maintained or not? ANALYSIS from the medical evidence and from the chemical examiner's reports that the vaginal swab and clothes taken from the dead body did indicate the presence of semen. there is however absolutely no evidence to suggest (even assuming that the intercourse had been committed by the appellant) that he had done so without mukhtiar kaur's consent or against her will. it is also significant that the investigators had made no attempt whatsoever to have the appellant medically examined to ascertain his capacity to perform sexual intercourse. it must nonetheless be emphasized that whether a chain is complete or not would depend on the facts of each case emanating from the evidence and no universal yardstick should ever be attempted. it is in this background that we must examine the circumstances in the present case. a few facts stand out from the prosecution story. first, the place of incident being adjoining rooms in the residential house of the appellant and the fact that the alleged murder weapon is his licensed dbbl gun is proved on record. the evidence also reveals that the appellant was living in the premises along with his wife, mother and son, and two daughters, who were studying outside the village, were frequent visitors, but it is the admitted position that nobody but the appellant and the deceased were present at the time of incident. it is also clear from the evidence that the two spent cartridge cases recovered, one from near mukhtiar kaur's dead body, and the second from the right barrel of the gun lying near the appellant had been sent to the forensic science laboratory which opined that one of the cartridges had been fired from the gun and the other could have been fired therefrom. it is true that in a case relating to circumstantial evidence motive does assume great importance but to say that the absence of motive would dislodge the entire prosecution story is perhaps giving this one factor an importance which is not due and (to use the clichi. the motive is in the mind of the accused and can seldom be fathomed with any degree of accuracy. there is however a hint in the testimony of pw14 inspector harjinder pal singh that his enquiries had revealed that the accused was having illicit relations with mukhtiar kaur and we can assume that some thing untoward had happened which could have triggered the volatile and hostile incident. there could perhaps be some truth in this suggestion, as it is significant that though the appellant had an extended family living with him i.e. mother, wife, son living (in the village) and two young daughters who were studying outside and residing in a hostel, but were frequent visitors home, yet none of them has come forth to depose in his favour. therefore, this is yet another circumstance inculpating the accused. it is also significant that the shot had apparently travelled upwards skirting the mandible, through the flesh of the cheek in an upward direction with minimal damage to the bone structure and it is indeed providential that the appellant got away with only an injury, albeit a very serious one. the fact that the shot was fired from below going upwards is also supported by the site plan exh. pjj wherein marks of a shot hitting the roof were seen at point e whereas the appellant was found lying at point d in the same room. it is therefore apparent that the weapon had indeed been fired by the appellant from a close range and that the blackened portion around the wound had been removed by dr. sanjay uppal. it is true that it is generally for the prosecution to prove its case beyond doubt but in circumstances such as the present one, some explanation is also due from an accused in order to absolve himself from suspicion of the crime. no part of the evidence of the hostile witnesses comes to the aid of the appellant. the question now arises as to the sentence that should be imposed on the appellant. it would be seen that both the sessions court and the high court were appalled by the allegations and findings of incestuous rape and murder. we are however of the opinion, as already noted above, that a case of rape has not been made out. in this background the death sentence is not called for. STATUTE section 376, 309 of ipc

for the sake of convenience we refer to the facts mentioned in civil appeal no of 2008 arising out of s l p c no 15729 of 2008 filed by j mitra co pvt ltd. this matter is a classic illustration of the confusion which has emerged on account of the postponement of in part commencement of patents amendment act2005. quite often the commencement of an act is postponed to some specified future date or to such date as the appropriate government may by notification in the official gazette appoint. provision is also at times made for appointment of different dates for coming into force of different parts of the same act. this is what has exactly happened in this case resulting into utter confusion with regard to pending fao no 29306 filed by respondent no 3 in the high court u s 116 of the indian patents. act1970 as amended by the patents amendment act1999 w e f 26 3 99. span diagnostics limited respondent no 3 herein is a public limited company established in 1972 to indigenously develop and manufacture a comprehensive range of ready made diagnostic reagents made by clinical pathology laboratories. on 14 6 2000 j mitra company pvt ltd. 3 appellant herein filed its application for grant of patent. after scrutiny the said application stood notified by the patent office on 20 11 2004. thus proceedings commenced before the controller of patents in the year 2000 when the appellant herein sought a patent of their device which was opposed by respondent no 3 in the year 2000 by then the patents amendment act1999 had amended the patents act1970 w e f 26 3 99 s 25 of the patents act1970 as amended by patents amendment act1999 dealt with opposition to a patent vides s 25 at that time appeals against decisions made by the controller pertaining to pre grant oppositions under s 25 were maintainable before the high court u s 1162 of the indian patents act1970. we quote herein below ss 25 and 116 as it stood in the year 2000 under the patents amendment act1999 which read as under s 25 opposition to grant of patent. 1 at any time within four months from the date of advertisement of the acceptance of a complete specification under this act or within such further period not exceeding one month in the aggregate as the controller may allow on application made to him in the prescribed manner before the expiry of the four months aforesaid any person interested may give notice to the controller of opposition to the grant of the patent on any of the following grounds namely a that the applicant for the patent or the person under or through whom he claims wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims b that the invention so far as claimed in any claim of the complete specification has been published before the priority date of the claim i in any specification filed in pursuance of an application for a patent made in india on or after the 1st day of january1912 or ii in india or elsewhere in any other document provided that the ground specified in sub cl ii shall not be available where such publication does not constitute an anticipation of the invention by virtue of sub s 2 or sub s 3 of section 29 that the invention so far as claimed in any claim of the complete specification is claimed in a claim of a complete specification published on or after the priority date of the applicant 's claim and filed in pursuance of an application for a patent in india being a claim of which the priority date is earlier than that of the applicant 's claim a that the invention so far as claimed in any claim of the complete specification was publicly known or publicly used in india before the priority date of that claim. explanation for the purposes of this clause an invention relating to a process for which a patent is claimed shall be deemed to have been publicly known or publicly used in india before the priority date of the claim if a product made by that process had already been imported into india before that date except where such importation has been for the purpose of reasonable trial or experiment only b that the invention so far as claimed in any claim of the complete specification is obvious and clearly does not involve any inventive step having regard to the matter published as mentioned in cl b or having regard to what was used in india before the priority date of the applicant 's claim c that the subject of any claim of the complete specification is not an invention within the meaning of this act or is not patentable under this act d that the complete specification does not sufficiently and clearly describe the invention or the method by which it is to be performed e that the applicant has failed to disclose to the controller the information required by s 8 or has furnished the information which in any material particular was false to his knowledge f that in the case of a convention application the application was not made within twelve months from the date of the first application for protection for the invention made in a convention country by the applicant or a person from whom he derives title. but on no other ground. 2 where any such notice of opposition is duly given the controller shall notify the applicant and shall give to the applicant and the opponent an opportunity to be heard before deciding the case. the grant of a patent shall not be refused on the ground stated in cl c of sub s 1 if no patent has been granted in pursuance of the application mentioned in that clause and for the purpose of any inquiry u cl d or cl e of that sub section no account shall be taken of any secret use. s 116 appeals. no appeal shall lie from any decision order or correction made of issued under this act by the central government or from any act or order of the controller for the purpose of giving effect to any such decision order or direction. 2 save as otherwise expressly provided in sub section 1an appeal shall lie to a high court from any decision order or direction of the controller under any of the following provisions that is to say section 15section 16section17section 18section. 19section. 20section 25section. 27section 28section. 51section 54section 57section. 60section 61section 63sub s 3 of section 69section 78section 84section 86s 883section 89section 93s 96 and s 97. every appeal under this section shall be in writing and shall be made within three months from the date of the decision order or direction as the case may be of the controller or within such further time as the high court may in accordance with the rules made by it u s 158 allow. emphasis supplied by us. suffice it to note that under patents amendment act1999 there was only one right given to a person interested to oppose the grant of patent by filing objections at the pre grant stage. under the said amendment act1999as stated above vide. s 116 2. a right of appeal was available to the aggrieved party against orders passed under s 25 the said appellate remedy was available by way of an appeal to the high court. in 2002the legislature desired an amendment to the law and intended to create an appellate forum to hear appeals against orders passed by the controller consequently patents amendment. act2002 was promulgated on 25 6 2002 however it was not brought into force immediately. it may be noted that in the said amendment act2002no provision was made pertaining to post grant opposition. that provision came to be made only under the patents amendment act2005 which was promulgated on 4 4 2005 w e f 1 1 2005. vide s 47 of the patents amendment act2002 entire chapter xix stood substituted. ss 116 and 117a were reworded which read as under s 116 1 subject to the provisions of this act the appellate board established u s 83 of the trade marks act1999 shall be the appellate board for the purposes of this act and the said appellate board shall exercise the jurisdiction power and authority conferred on it by or under this act. provided that the technical member of the appellate board for the purposes of this act shall have the qualifications specified in sub s 2. 2 a person shall not be qualified for appointment as a technical member for the purposes of this act unless he. a has at least five years hold the post of controller under this act or has exercised the functions of the controller under this act for at least five years or. b has for at least ten years functioned as a registered patent agent and possesses a degree in engineering or technology or a masters degree in science from any university established under law for the time being in force or equivalent or c has for at least ten years been an advocate of a proven specialized experience in practicing law relating to patents and designs. section 117a 1. save as otherwise expressly provided in sub section 2no appeal shall lie from any decision order or direction made or issued under this act by the central government or from any act or order of the controller for the purpose of giving effect to any such decision order or direction. an appeal shall lie to the appellate board from any decision order or direction of the controller or central government under section 15section. 16section 17section. 18section. 51section 54section 57section 60section 61section 63section. 66sub s 3 of section 69section. 78sub ss 1 to 5 of section 84section 85section 88section 91s 92 and s 94. every appeal under this section shall be in prescribed form and shall be verified in such manner as may be prescribed and shall be accompanied by a copy of the decision order or direction appealed against any by such fees as may be prescribed. every appeal shall be made within three months from the date of the decision order or direction as the case may be of the controller or the central government or within such further time as the appellate board may in accordance with the rules made by it allow. the provisions of the said amendment act2002however were not simultaneously brought into force. suffice it to note that ss 116 and 117a were not brought into force. however s 25 was brought into force vide notification dated 20 5 2003 even as on 20 5 2003 vide s 25 only one right to oppose a patent at the pre grant stage was available and appeal against an order passed by the earlier lay before the high court under the then existing s 116 of the patents. act1970 for the reason that the amended ss 116 and 117a were not brought into force. without giving effect to the amendments to ss 116 and 117a suggested by s 47 of the patents amendment. act2002on 4 4 2005. the legislature enacted the patents amendment act2005 even here not all provisions were simultaneously brought into force. only certain sections of the patents amendment act2005 were brought into force. vide s 23 of the patents amendment. act2005the then existing s 25 was substituted. the substituted s 25 reads as under 25 opposition to the patent 1. where an application for a patent has been published but a patent has not been granted any person may in writing represent by way of opposition to the controller against the grant of patent on the ground a that the applicant for the patent or the person under or through whom he claims wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims b that the invention so far as claimed in any claim of the complete specification has been published before the priority date of the claim i in any specification filed in pursuance of an application for a patent made in india on or after the 1st day of january1912 or ii in india or elsewhere in any other document c that the invention so far as claimed in any claim of the complete specification is claimed in a claim of a complete specification published on or after the priority date of the applicant 's claim and filed in pursuance of an application for a patent in india being a claim of which the priority date is earlier than that of the applicant 's claim. d that the invention so far as claimed in any claim of the complete specification was publicly known or publicly used in india before the priority date of that claim. explanation. for the purposes of this clause an invention relating to a process for which a patent is claimed shall be deemed to have been publicly known or publicly used in india before the priority date of the claim if a product made by that process had already been imported into india before that date except where such importation has been for the purpose of reasonable trial or experiment only e that the invention so far as claimed in any claim of the complete specification is obvious and clearly does not involve any inventive step having regard to the matter published as mentioned in cl b or having regard to what was used in india before the priority date of the applicant 's claim f that the subject of any claim of the complete specification is not an invention within the meaning of this act or is not patentable under this act g that the complete specification does not sufficiently and clearly describe the invention or the method by which it is to be performed h that the applicant has failed to disclose to the controller the information required by s 8 or has furnished the information which in any material particular was false to his knowledge i that in the case of convention application the application was not made within twelve months from the date of the first application for protection for the invention made in a convention country by the applicant or a person from whom he derives title j that the complete specification does not disclose or wrongly mentions the source or geographical origin of biological material used for the invention k that the invention so far as claimed in any claim of the complete specification is anticipated having regard to the knowledge oral or otherwise available within any local or indigenous community in india or elsewhere but on no other ground and the controller shall if requested by such person for being heard hear him and dispose of such representation in such manner and within such period as may be prescribed. at any time after the grant of patent but before the expiry of a period of one year from the date of publication of grant of a patent any person interested may give notice of opposition to the controller in the prescribed manner on any of the following grounds namely a that the patentee or the person under or through whom he claims wrongfully obtained the invention or any part thereof from him or from a person under or through whom he claims b that the invention so far as claimed in any claim of the complete specification has been published before the priority date of the claim c that the invention so far as claimed in any claim of the complete specification is claimed in a claim of a complete specification published on or after the priority date of the claim of the patentee and filed in pursuance of an application for a patent in india being a claim of which the priority date is earlier than that of the claim of the patentee explanation for the purposes of this clause an invention relating to a process for which a patent is granted shall be deemed to have been publicly known or publicly used in india before the priority date of the claim if a product made by that process had already been imported into india before that date except where such importation has been for the purpose of reasonable trial or experiment only. e that the invention so far as claimed in any claim of the complete specification is obvious and clearly does not involve any inventive step having regard to the matter published as mentioned in cl b or having regard to what was used in india before the priority date of the claim h that the patentee has failed to disclose to the controller the information required by s 8 or has furnished the information which in any material particular was false to his knowledge i that in the case of a patent granted on convention application the application for patent was not made within twelve months from the date of the first application for protection for the invention made in a convention country or in india by the patentee or a person from whom he derives title j that the complete specification does not disclose or wrongly mentions the source and geographical origin of biological material used for the invention k that the invention so far as claimed in any claim of the complete specification was anticipated. having regard to the knowledge oral or otherwise available within any local or indigenous community in india or elsewhere but on no other ground. 3 a where any such notice of opposition is duly given under sub section 2the controller shall notify the patentee. b on receipt of such notice of opposition the controller shall by order in writing constitute a board to be known as the opposition board consisting of such officers as he may determine and refer such notice of opposition along with the documents to that board for examination and submission of its recommendations to the controller. c every opposition board constituted under cl b shall conduct the examination in accordance with such procedure as may be prescribed. on receipt of the recommendation of the opposition board and after giving the patentee and the opponent an opportunity of being heard the controller shall order either to maintain or to amend or to revoke the patent. 5 while passing an order under sub s 4 in respect of the ground mentioned in cl d or cl e of sub section. 2the controller shall not take into account any personal document or secret trial or secret use. in case the controller issues an order under sub s 4 that the patent shall be maintained subject to amendment of the specification or any other document the patent shall stand amended accordingly. we also quote s 61 of the patents amendment act2005 which reads as under s 61 in section 117a of the principal act as inserted by s 47 of the patents amendment act2002in. sub section 2for the words and figures section 20section 25section 27section 28the words figures and brackets section 20sub s 4 of section 25section 28 shall be substituted. this section was not brought into force till 2 4 2007. in short by the patents amendment act2005for the first time a dichotomy was introduced in the patent law between opposition to the pre grant and opposition to the post grant of patent. this was the major structural change in the patent law. similarly under the patents amendment act2005appeal was restricted to the post grant opposition orders and that appeal lay before the appellate board and not to the high court. here also s 25 of the patents act1970 as amended by patents amendment act2005. which refers to pre grant opposition and post grant opposition was brought into force on and from 1 1 2005 whereas amended section 117a by which appeal was provided for against post grant opposition order was not brought into force till 2 4 2007 one more aspect needs to be mentioned. as stated vide patents amendment. act2005a dichotomy was brought in between pre grant and post grant opposition orders. w e f 1 1 2005 but when it came to filing of first appeal for some unknown reasons the amended section 117a which provided for only one statutory appeal and that too against post grant orders passed by the controller was not brought into force. the result is that although the legislature intended to provide for only one statutory appeal to the appellate board by reason of s 61 of the patents amendment act2005 not being brought into force till 2 4 07 a strange situation developed. the legislature intended to provide for only one statutory appeal to the appellate board but by not bringing s 61 into force till 2 4 07appeals filed during the interregnum as in this case became vulnerable and liable to be dismissed as misconceived as is contended by the appellant. this is the controversy which needs to be resolved in this case. on 19 10 2006 when fao no 29306 was filed in the high court chapter xix of the parent act as amended vide patents amendment. act1999 continued to be in operation notwithstanding the enactment of the patents. amendment act2002 and the patents amendment. act2005 as the amended ss 116 and 117a were brought into force only vide notification dated 2 4 07 one more point needs to be noted. section 117 g of the principal act was substituted vide patents amendment act2005 it reads as under section 117g transfer of pending proceedings to appellate board all cases of appeals against any order or decision of the controller and all cases pertaining to revocation of patent other than on a counter claim in a suit for infringement and rectification of register pending before any high court shall be transferred to the appellate board from such date as may be notified by the central government in the official gazette and the appellate board may proceed with the matter either de novo or from the stage it was so transferred. on reading amended section 117 g it becomes clear that all appeals against any order or decision of the controller had to be transferred to the appellate board from such date as may be notified by the central government in the official gazette. this amended section 117 g was also brought into force vide notification dated 3 4 2007 under notes on clauses attached to the statement of objects and reasons it has been clarified vide cl 62. that amended s 117 g is consequential to the enforcement of the jurisdiction of the appellate board u s 64 which results to revocation of patent. vide cl 47 of notes on clauses attached to the statement of objects and reasons it has been clarified that s 64 is also amended vide patents amendment act2005 to confer wider jurisdiction on the appellate board in matters of revocation of patent therefore amended section 117 g which is brought into force only from 3 4 2007 dealt with transfer of pending proceedings from the high court to the appellate board. the question which arises for determination in this batch of civil appeals is whether fao no 29206 and fao no 29306 filed by respondent no 3 herein in the high court were liable to be dismissed. according to the appellant with the change in s 25 brought about by patents amendment act2005a dichotomy was introduced in the patents act1970 according to the appellant that dichotomy was between pre grant opposition and post grant opposition. according to the appellant this was a structural change in the principal act. according to the appellant on 23 8 06 the controller rejected its pre grant opposition and on that day post grant opposition avenue was open to respondent no 3 vide s 252 according to the appellant under the amended s 25 on rejection of pre grant opposition it was open to respondent. no 3 to move an application opposing grant of patent under s 252 the patent was granted to the appellant on 22 9 06 according to the appellant it was open to respondent no 3 to challenge the grant of patent by making post grant opposition under s 252 from which an appeal was maintainable to the appellate board. this was not done. further according to the appellantpre grant opposition was filed by respondent no 3 under s 251 on 21 3 05 according to the appellant though the patents amendment act2005amended s 25 by enacting the amendment on 4 4 05 the said amendment was brought into force w e f 1 1 2005 and therefore it was open to respondent no 3 to challenge the grant of patent by invoking s 252 of the patents act1970 according to the appellant with the change in the structure of the act providing for only one statutory appeal and that too only against the order granting patent under s 254the appeal filed by respondent no 3 against pre grant opposition order was not maintainable on 19 10 06 by which time as stated above s 25 stood restructured providing for a dichotomy between pre grant opposition and post grant opposition. on the other hand on behalf of respondent no 3it has been urged that on 19 10 06 it had filed an appeal in the high court under unamended s 116 of the parent act that even though s 25 stood restructured w e f 1 1 05 on account of absence of notification bringing the amended law into force ss 116 and 117a as amended providing appeal to the appellate board came into force only with effect from 2 4 07 and therefore according to the said respondent its first appeal being fao no 29306 continued to be governed by the law as it stood on 19 10 06 on which date appeal to the high court was maintainable that on 23 8 06 the pre grant oppositionfiled by respondent no 3stood rejected. however on that date appeal against pre grant opposition order was maintainable under section 116to the high court and therefore there is no merit in the argument advanced on behalf of the appellant that the first appeal filed by respondent no 3 was misconceived that it is true that s 25 got restructured w e f 1 1 2005however such restructuring did not obliterate the first appeal filed by respondent no 3 on 19 10 2006. and lastly it was argued on behalf respondent no 3 that the appellant had filed its application for grant of patent on 14 6 2000it was notified on 20 11 04however respondent no 3 had filed its pre grant opposition under s 251 on 21 3 05 when the patents amendment act2005 was not promulgated it was promulgated on 4 4 05 and therefore according to respondent no 3 its pre grant opposition filed on 21 3 05 was valid and proper as respondent no 3 could not have invoked s 252 proceedings on that day namely21 3 05 as the law stood enacted bringing in s 252 only on 4 4 05 in the peculiar circumstances of this case it was urged on behalf of respondent no 3 that no interference is called for by this court in this batch of civil appeals. as stated above quite often the commencement of an act is postponed to some specific future date or to such date as the appropriate government may by notification in the official gazette appoint. at times provision is made for appointment of different dates for coming into force of different parts of the same act. an act can not be said to commence or to be in force unless it is brought into operation by legislative enactment or by the exercise of authority by a delegate empowered to bring it into operation. applying the above tests to the present case we find that by patents amendment act2005 for the first time a dichotomy was inserted in the patent law by providing vide s 251 for opposition to pre grant and vide s 25 2 for opposition to post grant of patent. by reason of patents amendment act2005the kind of opposition available under the said 1970 act is different from what existed earlier. previously there was no post grant opposition. previously the only provision of challenge by an interested party was a pre grant challenge under s 25 1 as it then stood. therefore the courts had evolved the rule of caution as the patent had not faced any challenge at the hands of interested parties. there is however a radical shift due to incorporation of s 252 where an interested party is granted the right to challenge the patent after its grant. the ground of challenge under s 251 is identical to s 252 of the said 1970 act. however s 251 is wider than s 252 as the latter is available only to a person aggrieved. the main difference between s 251 and s 252as brought about by patents amendment. act2005is that even after a patent is grantedpost grant opposition can be filed under s 25 2 for a period of one year. the reason is obvious. in relation to patents that are of recent origin a higher scrutiny is necessary. this is the main rationale underlying s 252 of the said 1970 act. therefore the legislature intended an appeal under section 117a2 to the appellate board from any decision order or direction of the controller inter alia under s 254 which refers to the power of the controller to maintain amend or revoke the patent. in the present case the legislature intended to provide for two types of scrutiny followed by one statutory appeal to the appellate board against post grant proceedings. the legislature intended to have a dichotomy between pre grant opposition and post grant opposition. however the legislature intended that there shall be only one statutory appeal against grant of patent. the legislature intended to obliterate appeal from pre grant proceedingswhich existed earlier. however it was left to the executive to bring the enacted law into force vide notification. for some unknown reasons the amended ss 116 and 117a2 were not brought into force till 2 4 07 whereas the concept of pre grant and post grant oppositions were brought into force w e f 1 1 2005 this is where the legislative intent got defeated during the interregnum. it is during this interregnum that respondent no 3 filed its fao no 29306 in the high court under section 116as. it stood on 19 10 06 under the patents amendment act1999 on that date the amended section 117a suggested by patents amendment act2005was not brought into force. on 19 10 06 the old law prevailed under which an appeal lay before the high court. respondent no 3in both the cases preferred first appeals to the high court u s 116 as it then stood. they are fao no 29206 and fao. no 29306 we have to decide the fate of these pending appeals. one more aspect needs to be mentioned. under the patents amendment act2005appeal is provided to the appellate board against the order of the controller under s 254 however that statutory appeal is maintainable only in post grant opposition proceedings whereas respondent no 3 herein has instituted first appeals under the law then prevailing challenging the order rejecting pre grant opposition dated 23 8 06. taking into account the complexities involved in this case on account of a hiatus created by reason of the law not being brought into force in time we are of the view that the first appeals filed by respondent no 3 in the high court being fao. no 29206 and fao. no 29306would remain in the high court. the said appeals would be heard and disposed of by the high court in accordance with law u s 116 of the said 1970 act as it stood on 19 10 06 the high court will hear and decide the validity of the order passed by the controller dated 23 8 06 rejecting pre grant opposition filed by respondent. no 3 we are informed that there are hardly one or two matters of this nature which are pending. therefore we are of the view that respondent. no 3 can not be let without remedy. in the special circumstances of this case particularly when after 2 4 07 appeals against orders rejecting pre grant opposition are not maintainable and particularly when fao no 29206 and fao no 29306 were filed by respondent no 3 prior to 2 4 07 under the old law we are of the view that these two appeals shall be heard and decided by the high court in accordance with law. the appellate board after 2 4 07 is entitled to hear appeals only arising from orders passed by the controller under s 254i e. in cases of orders passed in post grant opposition. therefore there is no point in transferring the pending fao no 29206 and fao no 29306 to the appellate board which has no authority to decide matters concerning pre grant opposition. moreover it may be noted that even section 117g which refers to transfer of pending proceedings to the appellate board is also brought into force vide notification dated 3 4 07 keeping in mind the peculiar nature of the problem in hand we are of the view that ends of justice. would be sub served if the high court is directed to hear and decide the appeals bearing fao no 29206 and fao no 29306 in accordance with law as it then stood i e. u s 116 under patents. amendment act1999 against orders passed by the controller in pre grant opposition proceedings. accordingly the two civil appeals filed by the appellant herein stand disposed of with no order as to costs. appeal disposed of.

IN-Ext

FACTS span diagnostics limited,respondent no.3 herein,is a public limited company established in 1972 to indigenously develop and manufacture a comprehensive range of readymade diagnostic reagents made by clinical pathology laboratories. on 14.6.2000 j.mitra &amp company pvt.ltd, appellant herein,filed its application for grant of patent.after scrutiny,the said application stood notified by the patent office on 20.11.2004. thus,proceedings commenced before the controller of patents in the year 2000 when the appellant herein sought a patent of their device which was opposed by respondent no.3 in the year 2000.by then,the patents (amendment) act,1999 had amended the patents act,1970 dealt with opposition to a patent vides s.25. at that time appeals against decisions made by the controller pertaining to "pre-grant oppositions" under s.25 were maintainable before the high court u/s.116(2) of the indian patents act,1970. in 2002,the legislature desired an amendment to the law and intended to create an appellate forum to hear appeals against orders passed by the controller consequently patents (amendment) act,2002 was promulgated on 25.6.2002.however,it was not brought into force immediately.it may be noted that in the said amendment act,2002,no provision was made pertaining to "post-grant opposition".that provision came to be made only under the patents (amendment) act,2005. ARGUMENT the controller rejected its "pre-grant opposition" and on that day "post-grant opposition" avenue was open to respondent no.3 vide s.25(2). according to the appellant,under the amended s.25 on rejection of "pre-grant opposition" it was open to respondent no.3 to move an application opposing grant of patent under s.25(2). the patent was granted to the appellant on 22.9.06. according to the appellant,it was open to respondent no.3 to challenge the grant of patent by making "post-grant opposition" under s.25(2) from which an appeal was maintainable to the appellate board. with the change in the structure of the act providing for only one statutory appeal and that too only against the order granting patent under s.25(4),the appeal filed by respondent no.3 against pre-grant opposition order was not maintainable on 19.10.06 by which time,as stated above,s.25 stood restructured providing for a dichotomy between "pre-grant opposition" and "post-grant opposition". ISSUE the question which arises for determination in this batch of civil appeals is : whether fao no.292/06 and fao no.293/06 filed by respondent no.3 herein in the high court were liable to be dismissed. according to the appellant,with the change in s.25 brought about by patents (amendment) act,2005,a dichotomy was introduced in the patents act,1970.according to the appellant,that dichotomy was between "pre-grant opposition" and "post-grant opposition". ANALYSIS patents (amendment) act,2005,for the first time a dichotomy was introduced in the patent law between "opposition to the pre-grant" and "opposition to the post-grant of patent. this was the major structural change in the patent law. similarly,under the patents (amendment) act,2005,appeal was restricted to the post-grant opposition orders and that appeal lay before the appellate board and not to the high court.here also,s.25 of the patents act,1970 as amended by patents (amendment) act,2005 whereas amended section 117a by which appeal was provided for against post-grant opposition order was not brought into force 2007. on 19.10.2006 when fao no.293/06 was filed in the high court,chapter xix of the parent act as amended vide patents (amendment) act,1999 continued to be in operation notwithstanding the enactment of the patents (amendment) act,2002 and the patents (amendment) act,2005 as the amended ss.116 and 117a were brought into force only vide notification dated 2.4.07. quite often the commencement of an act is postponed to some specific future date or to such date as the appropriate government may,by notification in the official gazette,appoint. an act cannot be said to commence or to be in force unless it is brought into operation by legislative enactment or by the exercise of authority by a delegate empowered to bring it into operation. s.25(1) is wider than s.25(2) as the latter is available only to a "person aggrieved". the main difference between s.25(1) and s.25(2),as brought about by patents (amendment) act,2005,is that even after a patent is granted,"post-grant opposition" can be filed under s.25 (2) for a period of one year. the reason is obvious. in relation to patents that are of recent origin,a higher scrutiny is necessary. this is the main rationale underlying s.25(2) of the said 1970 act. therefore,the legislature intended an appeal under section 117a(2) to the appellate board from any decision,order or direction of the controller,inter alia,under s.25(4). the legislature intended to provide for two types of scrutiny followed by one statutory appeal to the appellate board against "post-grant proceedings". the legislature intended to have a dichotomy between "pre-grant opposition" and "post-grant opposition". however,the legislature intended that there shall be only one statutory appeal against grant of patent. it was left to the executive to bring the enacted law into force vide notification. for some unknown reasons,the amended ss.116 and 117a(2) were not brought into force till 2.4.07 whereas the concept of "pre-grant" and "post-grant" oppositions were brought into force w.e.f.1.1.2005. this is where the legislative intent got defeated during the interregnum. it is during this interregnum that respondent no.3 filed its fao no.293/06 in the high court under section 116,as it stood on 19.10.06 under the patents (amendment) act,1999. on that date,the amended section 117a,suggested by patents (amendment) act,2005,was not brought into force. on 19.10.06 the old law prevailed under which an appeal lay before the high court.respondent no.3,in both the cases,preferred first appeals to the high court u/s.116 as it then stood. they are fao no.292/06 and fao no.293/06. the court to decide the fate of these pending appeals.one more aspect needs to be mentioned. under the patents (amendment) act,2005,appeal is provided to the appellate board against the order of the controller under s.25(4). however,that statutory appeal is maintainable only in "post-grant opposition" proceedings whereas respondent no.3 herein has instituted first appeals under the law then prevailing,challenging the order rejecting "pre-grant opposition". there is no point in transferring the pending fao no.292/06 and fao no.293/06 to the appellate board which has no authority to decide matters concerning "pre-grant opposition". moreover,it may be noted that even section 117g,which refers to transfer of pending proceedings to the appellate board,is also brought into force vide notification dated 3.4.07.keeping in mind the peculiar nature of the problem in hand,the court was of the view that ends of justice would be sub served if the high court is directed to hear and decide the appeals bearing fao no.292/06 and fao no.293/06 in accordance with law as it then stood,i.e.,u/s.116 under patents (amendment) act,1999 against orders passed by the controller in "pre-grant opposition" proceedings. STATUTE s.25 of the patents act, 1970- opposition to grant of patent. s.116 of the patents act, 1970.- (1) subject to the provisions of this act,the appellate board established u/s.83 of the trade marks act,1999 shall be the appellate board for the purposes of this act and the said appellate board shall exercise the jurisdiction,power and authority conferred on it by or under this act: provided that the technical member of the appellate board for the purposes of this act shall have the qualifications specified in sub-s.(2). (2) a person shall not be qualified for appointment as a technical member for the purposes of this act unless he- (a) has,at least five years,hold the post of controller under this act or has exercised the functions of the controller under this act for at least five years; or (b) has,for at least ten years,functioned as a registered patent agent and possesses a degree in engineering or technology or a masters degree in science from any university established under law for the time being in force or equivalent; or (c) has,for at least ten years,been an advocate of a proven specialized experience in practicing law relating to patents and designs. section 117a.(1) save as otherwise expressly provided in sub-section (2),no appeal shall lie from any decision,order or direction made or issued under this act by the central government,or from any act or order of the controller for the purpose of giving effect to any such decision,order or direction. (2) an appeal shall lie to the appellate board from any decision,order or direction of the controller or central government under section 15,section 16,section 17,section 18,section 19,section 20,section 25,section 27,section 28,section 51,section 54,section 57,section 60,section 61,section 63,section 66,sub-s.(3) of section 69,section 78,sub-ss.(1) to (5) of section 84,section 85,section 88,section 91,s.92 and s.94. (3) every appeal under this section shall be in prescribed form and shall be verified in such manner as may be prescribed and shall be accompanied by a copy of the decision,order or direction appealed against any by such fees as may be prescribed. (4) every appeal shall be made within three months from the date of the decision,order or direction,as the case may be,of the controller or the central government or within such further time as the appellate board may,in accordance with the rules made by it,allow. section 61 of the patents act, 1970- in section 117a of the principal act [as inserted by s.47 of the patents (amendment) act,2002,in sub-section (2),for the words and figures "section 20,section 25,section 27,section 28,",the words,figures and brackets "section 20,sub-s.(4) of section 25,section 28" shall be substituted. section 117g of the patents act, 1970 - transfer of pending proceedings to appellate board.-all cases of appeals against any order or decision of the controller and all cases pertaining to revocation of patent other than on a counter-claim in a suit for infringement and rectification of register pending before any high court,shall be transferred to the appellate board from such date as may be notified by the central government in the official gazette and the appellate board may proceed with the matter either de novo or from the stage it was so transferred.

leave granted. challenge in this appeal is to the judgment of a division bench of the madhya pradesh high court dismissing the writ appeal filed by the appellant on the ground that it was not maintainable. the appeal was filed u s 21 of the m p uchacha nyayalay khand nyaypeth ko appeal adhiniyam2005. hereinafter referred to as the act it was held that the order was passed in exercise of power of superintendence u art 227 of the constitution of india1950 in short the constitution against which the letters patent appeal is not maintainable. the order of learned single judge was passed on 9 11 2005 against the said order special leave petition was filed which was disposed of by this court by order dated 16 2 2006 we shall refer to the text of the order later. the high court construed as if this court has only waived the limitation for filing of letters patent appeal and there was no direction to consider the case on merits. learned counsel for the appellant submitted that the order of this court is very clear and the conclusions of the high court that merely limitation was waived is contrary to the clear terms of the earlier order of this court. additionally it is submitted that the prayer in the writ petition was to quash the order passed by the assistant commissioner commercial tax. that being so the mere fact that the writ petition was styled u art 227 of the constitution is of no consequence. it is the nature of the relief sought for and the controversy involved which determines the article which is applicable. learned counsel for the respondent state on the other hand supported the impugned judgment of the high court. the earlier order passed by this court dated 22 8 2006 reads as follows heard. since the impugned order is passed by a learned single judge. the normal remedy is to file a letters patent appeal. since we had entertained the special leave petition against the learned single judge 's order it would be appropriate to grant three weeks time to the petitioner to prefer the lpa which if otherwise free from defect shall be entertained for being considered on merits. the interim order passed by this court shall continue for the aforesaid purpose. the special leave petition is disposed of accordingly. underlined for emphasis. a bare reading of the order shows that the direction was to consider the lpa on merits and time was granted to prefer the lpa within three weeks. the high court was directed to dispose of the lpa on merits if it was otherwise free from defect. the high court was therefore not justified in holding that this court 's earlier order only waived the limitation for filing a letters patent appeal. on that score alone the high court 's order is unsustainable. in addition the high court seems to have gone by the nomenclature gone by the nomenclature i e the discription given in the writ petition to be one u art 227 of the constitution. the high court did not consider the nature of the controversy and the prayer involved in the writ petition. as noted above the prayer was to quash the order of assessment passed by the assistant commissioner commercial tax levying purchase as well as entry tax. s 2 of the act reads as follows 21. an appeal shall lie from a judgment or order passed by the one judge of the high court in exercise of original jurisdiction u art 226 of the constitution of india to a division bench comprising of two judges of the same high court. provided that no such appeal shall lie against an interlocutory order or against an order passed in exercise of supervisory jurisdiction u art 227 of the constitution of india. this court in hari vishnu kamath v syed ahmad ishaque and ors air 1955 sc 233 1954 indlaw sc 212 held that the high court while issuing writ of certiorari u art 226 of the constitution can only annul a decision of a tribunal whereas u art 227 of the constitution it can issue further directions as well. as noted above the prayer in the writ petition was to set aside the decision of the assessing officer. in umaji keshao meshram v radhikabai air 1986 sc 1272 1986 indlaw sc 651. it was noted as follows. u art 226 an order direction or writ is to issue to a person authority or the state. in a proceeding under that article the person authority or state against whom the direction order or writ is sought is a necessary party. under article 227however what comes up before the high court is the order or judgment of a subordinate court or tribunal for the purpose of ascertaining whether in giving such judgment or order that subordinate court or tribunal has acted within its authority and according to law. prior to the commencement of the constitution the chartered high courts as also the judicial committee had held that the power to issue prerogative writs possessed by the chartered high courts was an exercise of original jurisdiction see mahomedalli allabux v ismailji abdulali air 1926. bom 332 1926 indlaw mum 144raghunath keshav khadilkar v poona municipalityair. 1945 bom 7 1943 indlaw mum 140 ryots of garabandho v zemindar of parlakimedi air 1943 pc 164 1943 indlaw pc 23 and moulvi hamid hasan nomani. v banwarilal roy 1947 indlaw pc 15 1946 47 74 ind app 120130 131 in the last mentioned case which dealt with the nature of a writ of quo warranto. the judicial committee held in their lordships opinion any original civil jurisdiction possessed by the high court and not in express terms conferred by the letters patent or later enactments falls within the description of ordinary original civil jurisdiction. by art 226 the power of issuing prerogative writs possessed by the chartered high courts prior to the commencement of the constitution has been made wider and more extensive and conferred upon every high court. the nature of the exercise of the power under article 226however remains the same as in the case of the power of issuing prerogative writs possessed by the chartered high courts. a series of decisions of this court has firmly established that a proceeding u art 226 is an original proceeding and when it concerns civil rights it is an original civil proceeding see for instance state of u p v. vijay anand maharaj. 1963 1 scr 1 1962 indlaw sc 34016cit v ishwarlal bhagwandas air 1965 sc 1818 1965 indlaw sc 158ramesh v seth gendalal motilal patni 1966 3 scr 198 1966 indlaw sc 395arbind kumar singh v nand kishore prasad1968 3 scr 322 1968 indlaw sc 223 and ahmedabad mfg calico ptg. co ltd v. ram tahel ramnand air 1972 sc 1598 1972 indlaw sc 378. it was noted as follows. the non obstante clause in rule 18namelynotwithstanding anything contained in rules 14 and 17 of this chaptermakes it abundantly clear why that rule uses the words finally disposed of. as seen above under rules 1 and 17applications u arts 226 and 227 are required to be heard and disposed of by a division bench. rule 4however gives power to a single judge to issue rule nisi on an application u art 226. but precludes him from passing any final order on such application. it is because a single judge has no power under rules 14 and 17 to hear and dispose of a petition u art 226 or 227 that the non obstante clause has been introduced in rule 18 the use of the words be heard and finally disposed of by a single judge in rule 18 merely clarifies the position that in such cases the power of the single judge is not confined merely to issuing a rule nisi. these words were not intended to bar a right of appeal. to say that the words finally disposed of mean finally disposed of so far as the high court is concerned is illogical because rules 14 and 7 use the words be heard and disposed of by a divisional bench and were the reasoning of the full bench correct it would mean that so far as the high court is concerned when a single judge hears a matter and disposes it of it is finally disposed of and when a division bench disposes it of it is not finally disposed of. the right of appeal against the judgment of a single judge is given by the letters patent which have been continued in force by art 225 of the constitution. if under the rules of the high court a matter is heard and disposed of by a single judge an appeal lies against his judgment unless it is barred either under the letters patent or some other enactment. the word finally used in rule 18 of chapter xvii of the appellate side rules does not and can not possibly have the effect of barring a right of appeal conferred by the letters patent. as we have seen above an intra court appeal against the judgment of a single judge in a petition u art 226 is not barred while cl 15 itself bars an intra court appeal against the judgment of a single judge in a petition u art 227. in sushilabai laxminarayan mudliyar v nihalchand waghajibhai shaha 1993 supp 1 scc 11 1991 indlaw sc 718. this court with reference to an unreported judgment in ratnagiri district central co operative bank ltd v. dinkar kashinath watve 1989 indlaw sc 421c a no 520 of 1989 decided on 27 1 1989 held as follows even when in the cause title of an application both art 226 and art 227 of the constitution have been mentioned the learned single judge is at liberty to decide according to facts of each particular case whether the said application ought to be dealt with only u art 226 of the constitution. for determining the question of maintainability of an appeal against such a judgment of the single judge the division bench has to find out whether in substance the judgment has been passed by the learned single judge in exercise of the jurisdiction u art 226 of the constitution. in the event in passing his judgment on an application which had mentioned in its cause title both arts 226 and 227the single judge has in fact invoked only his supervisory powers under article 227the appeal under cl 15 would not lie. the cl 15 of the letters patent expressly bars appeals against orders of single judges passed under revisional or supervisory powers. even when the learned single judge 's order has been passed under both the articles for deciding the maintainability against such an order what would be relevant is the principal or main relief granted by the judgment passed by learned single judge and not the ancillary directions given by him. the expression ancillary means in the context incidental or consequential to the main part of the order. thus the determining factor is the real nature of principal order passed by the single judge which is appealed against and neither the mentioning in the cause title of the application of both the articles nor the granting of ancillary orders thereupon made by learned single judge would be relevant. thus in each case the division bench may consider the substance of the judgment under appeal to ascertain whether the single judge has mainly or principally exercised in the matter his jurisdiction. u art 226 or u art 227 in. the event in his judgment the learned single judge himself had mentioned the particular article of the constitution under which he was passing his judgment in an appeal under cl 15 against such a judgment it may not be necessary for the appellate bench to elaborately examine the question of its maintainability. when without mentioning the particular article the learned single judge decided on merits the application in order to decide the question of maintainability of an appeal against such a judgment the division bench might examine the relief granted by the learned single judge for maintainability of an appeal the determination would be the main and not the ancillary relief. when a combined application u arts 226 and 227 of the constitution is summarily dismissed without reasons the appeal court may consider whether the facts alleged warranted filing of the application u art 226 or u art 227 of the constitution. thereafter this court explained the ratio laid down in the case of umaji 's case1986 indlaw sc 651 supra and expressed thus in umaji case it was clearly held that where the facts justify a party in filing an application either u art 226 or 227 of the constitution of india and the party chooses to file his application under both these articles in fairness of justice to party and in order not to deprive him of valuable right of appeal the court ought to treat the application as being made under article 226and if in deciding the matter in the final order the court gives ancillary directions which may pertain to article 227this ought not to be held to deprive a party of the right of appeal under cl 15 of the letters patent where the substantial part of the order sought to be appealed against is u art 226 rule 18 of the bombay high court appellate side rules read with cl 15 of the letters patent provides for appeal to the division bench of the high court from a judgment of the learned single judge passed on a writ petition u art 226 of the constitution. in the present case the division bench was clearly wrong in holding that the appeal was not maintainable against the order of the learned single judge. in mangalbhai ors v. radhyshyam dr air 1993 sc 806 1992 indlaw sc 509 it was inter alia observed as follows the learned single judge in his impugned judgment dated december 111987 nowhere mentioned that he was exercising the powers u art 227 of the constitution. the learned single judge examined the matter on merit and set aside the orders of the rent controller as well as the resident deputy collector on the ground that the aforesaid judgments were perverse. the findings of the rent controller and resident deputy collector were set aside on the question of habitual defaulter as well as on the ground of bona fide need. thus in the totality of the facts and circumstances of the case the pleadings of the parties in the writ petition and the judgment of the learned single judge leaves no manner of doubt that it was an order passed u art 226 of the constitution and in that view of the matter the letters patent appeal was maintainable before the high court. after taking the aforesaid view one course open was to set aside the order of the division bench and to remand the matter for being disposed of on merits by the division bench of the high court. however taking in view the fact that this litigation is going on for nearly a decade and also the fact that even the learned single judge in his impugned order dated december 111987 had remanded the case to the rent controller we considered it proper in the interest of justice to hear the appeal on merits against the judgment of the learned single judge. we have heard learned counsel for the parties at length on the merits of the case. in lokmat newspapers p shankarprasad 1999 6 scc 275 1999 indlaw sc 587. it was observed as follows it is therefore obvious that the writ petition invoking jurisdiction of the high court both u arts 226 and 227 of the constitution had tried to make out a case for the high court 's interference seeking issuance of an appropriate writ of certiorari u art 226 of the constitution of india. basic averments for invoking such a jurisdiction were already pleaded in the writ petition for the high court 's consideration. it is true as submitted by learned counsel for the appellant that the order of the learned single judge nowhere stated that the court was considering the writ petition u art 226 of the constitution of india. it is equally true that the learned single judge dismissed the writ petition by observing that the courts below had appreciated the contentions and rejected the complaint. but the said observation of the learned single judge did not necessarily mean that the learned judge was not inclined to interfere u art 227 of the constitution of india only. the said observation equally supports the conclusion that the learned judge was not inclined to interfere u arts 226 and 227 as seen earlier he was considering the aforesaid writ petition moved u art 226 as well as art 227 of the constitution of india. under these circumstances it is not possible to agree with the contention of learned counsel for the appellant that the learned single judge had refused to interfere only u art 227 of the constitution of india when he dismissed the writ petition of the respondent. in this connection it is profitable to have a look at the decision of this court in the case of umaji keshao meshram v radhikabai 1986 supp. scc 401 1986 indlaw sc 651 in. that case o chinnappa reddy and d p madon. jj considered the very same question in the light of cl 15 of the letters patent of the bombay high court. madon j speaking for the court made the following pertinent observations petitions are at times filed both u arts 226 and 227 of the constitution. the case of hari vishnu kamath v syed ahmad ishaque air 1955 sc 233 1954 indlaw sc 212 before this court was of such a type. rule 18 provides that where such petitions are filed against orders of the tribunals or authorities specified in rule 18 of chapter xvii of the appellate side rules or against decrees or orders of courts specified in that rule they shall be heard and finally disposed of by a single judge. the question is whether an appeal would lie from the decision of the single judge in such a case. in our opinion where the facts justify a party in filing an application either u art 226 or 227 of the constitution and the party chooses to file his application under both these articles in fairness and justice to such party and in order not to deprive him of the valuable right of appeal the court ought to treat the application as being made under article 226and if in deciding the matter in the final order the court gives ancillary directions which may pertain to article 227this ought not to be held to deprive a party of the right of appeal under cl 15 of the letters patent where the substantial part of the order sought to 296be appealed against is u art 226 such was the view taken by the allahabad high court in aidal singh v karan singh air 1957 all 414 1956 indlaw all 107 and by the punjab high court in raj kishan jain v tulsi dass air 1959 punj 291 1958 indlaw pnh 109 and barham dutt v peoples coop. transport society ltd air 1961 punj 24 1960 indlaw pnh 196 and we are in agreement with it. the aforesaid decision squarely gets attracted on the facts of the present case. it was open to the respondent to invoke the jurisdiction of the high court both u arts 226 and 227 of the constitution of india. once such a jurisdiction was invoked and when his writ petition was dismissed on merits it can not be said that the learned single judge had exercised his jurisdiction only u art 226 of the constitution of india. this conclusion directly flows from the relevant averments made in the writ petition and the nature of jurisdiction invoked by the respondent as noted by the learned single judge in his judgment as seen earlier. consequently it could not be said that cl 15 of the letters patent was not attracted for preferring appeal against the judgment of the learned single judge. it is also necessary to note that the appellant being the respondent in letters patent appeal joined issues on merits and did not take up the contention that the letters patent appeal was not maintainable. for all these reasons therefore the primary objection to the maintainability of the letters patent appeal as canvassed by learned counsel for the appellant has to be repelled. point 1 is therefore answered in the affirmative against the appellant and in favour of the respondent. it takes us to the consideration of points arising for our decision on merits. in surya dev rai v ram chander rai ors air 2003 sc 3044 2003 indlaw sc 598 after referring to decisions in custodian of evacuee property bangalore v khan saheb abdul shukoor etc 1961 3 scr 855 1961 indlaw sc 499 and nagendra nath bora. anr v. commissioner of hills division. air 1958 sc 398 1958 indlaw sc 62t c basappa v t nagappa air 1954 sc 440 1954 indlaw sc 39 and rupa ashok hurra v ashok hurra air 2002 sc 1771 2002 indlaw sc 1966this court held as follows from the aforesaid enunciation of law it is quite vivid and luminescent that the pleadings in the writ petition nature of the order passed by the learned single judge character and the contour of the order directions issued nomenclature given the jurisdictional prospective in the constitutional context are to be perceived. it can not be said in a hypertechnical manner that an order passed in a writ petition if there is assail to the order emerging from the inferior tribunal or subordinate court has to be treated all the time for all purposes to be u art 227 of the constitution of india. phraseology used in exercise of original jurisdiction u art 226 of the constitution in s 2 of the act can not be given a restricted and constricted meaning because an order passed in a writ petition can tantamount to an order u art 226 or 227 of the constitution of india and it would depend upon the real nature of the order passed by the learned single judge. to elaborate whether the learned single judge has exercised his jurisdiction u art 226 or u art 227 or both would depend upon various aspects and many a facet as has been emphasized in the afore quoted decisions of the apex court. the pleadings as has been indicated hereinabove also assume immense significance. as has been held in the case of surya devi rai supra a writ of certiorari can be issued u art 226 of the constitution against an order of a tribunal or an order passed by the sub ordinate court. in quintessentiality it can not be put in a state jacket formula that any order of the learned judge that deals with an order arising from an inferior tribunal or the sub ordinate court is an order u art 227 of the constitution of india and not an order u art 226 of the constitution. it would not be an over emphasis to state that an order in a writ petition can fit into the subtle contour of arts 226 and 227 of the constitution in a composite manner and they can coincide co exit overlap imbricate. in this context it is apt to note that there may be cases where the learned single judge may feel disposed or inclined to issue a writ to do full and complete justice because it is to be borne in mind that art 226 of the constitutions is fundamentally a repository and reservoir of justice based on equity and good conscience. it will depend upon factual matrix of the case. thus there is no manner of doubt that the orders and proceedings of a judicial court subordinate to the high court are amenable to writ jurisdiction of the high court u art 226 of the constitution. upon a review of decided cases and a survey of the occasions wherein the high courts have exercised jurisdiction to command a writ of certiorari or to exercise supervisory jurisdiction u art 227 in the given facts and circumstances in a variety of cases it seems that the distinction between the two jurisdictions stands almost obliterated in practice. probably this is the reason why it has become customary with the lawyers labelling their petitions as one common u arts 226 and 227 of the constitution though such practice has been deprecated in some judicial pronouncement. without entering into niceties and technicality of the subject we venture to state the broad general difference between the two jurisdictions. firstly the writ of certiorari is an exercise of its original jurisdiction by the high court exercise of supervisory jurisdiction is not an original jurisdiction and in this sense it is akin to appellate revisional or corrective jurisdiction. secondly in a writ of certiorari the record of the proceedings having been certified and sent up by the inferior court or tribunal to the high court the high court if inclined to exercise its jurisdiction may simply annul or quash the proceedings and then do no more. in exercise of supervisory jurisdiction the high court may not only quash or set aside the impugned proceedings judgment or order but it may also make such directions as the facts and circumstances of the case may warrant maybe by way of guiding the inferior court or tribunal as to the manner in which it would now proceed further or afresh as commended to or guided by the high court. in appropriate cases the high court while exercising supervisory jurisdiction may substitute such a decision of its own in place of the impugned decision as the inferior court or tribunal should have made. lastly the jurisdiction u art 226 of the constitution is capable of being exercised on a prayer made by or on behalf of the party aggrieved the supervisory jurisdiction is capable of being exercised suo motu as well. in view of what has been stated above the high court was not justified in holding that the letters patent appeal was not maintainable. in addition a bare reading of this court 's earlier order shows that the impugned order is clearly erroneous. the impugned order is set aside. the writ appeal shall be heard by the division bench on merits. the appeal is allowed.

IN-Ext

FACTS challenge in this appeal is to the judgment of a division bench of the madhya pradesh high court dismissing the writ appeal filed by the appellant on the ground that it was not maintainable. the appeal was filed u/s.2(1) of the m.p.uchacha nyayalay (khand nyaypeth ko appeal) adhiniyam,2005. it was held that the order was passed in exercise of power of superintendence u/art.227 of the constitution of india,1950 (in short the 'constitution') against which the letters patent appeal is not maintainable. ARGUMENT learned counsel for the appellant submitted that the order of this court is very clear and the conclusions of the high court that merely limitation was waived is contrary to the clear terms of the earlier order of this court. additionally it is submitted that the prayer in the writ petition was to quash the order passed by the assistant commissioner,commercial tax. ISSUE whether to quash the order of assessment passed by the assistant commissioner,commercial tax levying purchase as well as entry tax. ANALYSIS the writ petition was styled u/art.227 of the constitution is of no consequence. it is the nature of the relief sought for and the controversy involved which determines the article which is applicable. a bare reading of the order shows that the direction was to consider the lpa on merits and time was granted to prefer the lpa within three weeks. the high court's order is unsustainable. the high court seems to have gone by the nomenclature gone by the nomenclature i.e.the discription given in the writ petition to be one u/art.227 of the constitution. the high court did not consider the nature of the controversy and the prayer involved in the writ petition. by art.226 the power of issuing prerogative writs possessed by the chartered high courts prior to the commencement of the constitution has been made wider and more extensive and conferred upon every high court. in umaji keshao meshram v. radhikabai [air 1986 sc 1272 1986 indlaw sc 651. it was noted as follows. u/art.226 an order,direction or writ is to issue to a person,authority or the state. in a proceeding under that article the person,authority or state against whom the direction,order or writ is sought is a necessary party. under article 227,however,what comes up before the high court is the order or judgment of a subordinate court or tribunal for the purpose of ascertaining whether in giving such judgment or order that subordinate court or tribunal has acted within its authority and according to law. the nature of the exercise of the power under article 226,however,remains the same as in the case of the power of issuing prerogative writs possessed by the chartered high courts. it was open to the respondent to invoke the jurisdiction of the high court both u/arts.226 and 227 of the constitution of india. once such a jurisdiction was invoked and when his writ petition was dismissed on merits,it cannot be said that the learned single judge had exercised his jurisdiction only u/art.226 of the constitution of india. this conclusion directly flows from the relevant averments made in the writ petition and the nature of jurisdiction invoked by the respondent as noted by the learned single judge in his judgment,as seen earlier. consequently,it could not be said that cl.15 of the letters patent was not attracted for preferring appeal against the judgment of the learned single judge. it is also necessary to note that the appellant being the respondent in letters patent appeal joined issues on merits and did not take up the contention that the letters patent appeal was not maintainable. for all these reasons,therefore,the primary objection to the maintainability of the letters patent appeal as canvassed by learned counsel for the appellant,has to be repelled. the high court was not justified in holding that the letters patent appeal was not maintainable. in addition,a bare reading of this court's earlier order shows that the impugned order is clearly erroneous. STATUTE s.2 of the m.p.uchacha nyayalay (khand nyaypeth ko appeal) adhiniyam,2005 reads as follows: "2(1. an appeal shall lie from a judgment or order passed by the one judge of the high court in exercise of original jurisdiction u/art.226 of the constitution of india,to a division bench comprising of two judges of the same high court. provided that no such appeal shall lie against an interlocutory order or against an order passed in exercise of supervisory jurisdiction u/art.227 of the constitution of india.

challenge in this appeal is to the order of a division bench of madras high court allowing the appeal filed by the respondent hereinafter referred to as the accused the accused was convicted for offence punishable under section 302 of the indian penal code1860 in short the ipc and sentenced to undergo imprisonment for life and to pay a fine of rs 10000 with default stipulation by principal district judge madurai. he was also convicted for offences punishable under section 392 read with section 397 ipc and sentence to undergo rigorous imprisonment for 10 years and to pay a fine. background facts in a nutshell are as follows. the deceased is one mayurani a sri lankan student who was residing in the first floor of the house belonging to one solsimalai p w 1 the accused is also a sri lankan student studying in a different college but staying in the second floor of the same premises. the occurrence allegedly took place in the afternoon of 22 4 2003. the first information report was lodged by p w 1 on 24 4 2003 at about 9 30 a m it was indicated in the first information report that on 24 4 2003 at 9 00 a m while the informant had gone to perform pooja in the first floor of the house he got foul smell in the last room of the first floor and found blood seeping through the front door. on opening the window he noticed that mayurani was lying in a pool of blood with her face covered with a bag. on the basis of the aforesaid f i r investigation was taken up initially by p w 40. subsequently on the basis of the order of the high court such investigation was completed by p w 42 the accused is stated to have been arrested on suspicion on 26 4 2003 on the basis of the statement of the accused prosecution discovered many materials including a knife and a log allegedly used for killing. initially p w 40 suspected the role of p w 1his wife p w 2p w 3from whose house certain incriminating material were recovered allegedly on the basis of statement of the accused as well as p w 4who was working as a cleaner in the vehicle of p w 1 subsequently however p w 42who took over investigation from p w 40 filed charge sheet only against the present appellant on the footing that p ws 1 to 4 had no role to play in the crime. the prosecution relied upon only circumstantial evidence namely confessional statements of the accused leading to recovery of various incriminating materials. p 6 is the statement leading to recovery of travel bags m os 2 3knife m 0 5wooden log m 0 28rubber gloves m 0 29 series cotton rope with human hair mn o 30 seriestwo sponges soaked with blood m 0 31 seriesbloodstained blue clolour jean pant m 0 32bloodstained white banian m 0 33colour banian m 0 34bloodstained grey colour pant m 0 35bloodstained pillow m 0 36plastic bucket m 0 37 from the house of p w 3 ex p 8 is the statement leading to recovery of computer and its accessories m os 6 to 17 from the house of p w 15a classmate of the accused. p 10 is the statement relating to jewelleries ultimately leading to recovery of gold ingots m o 18 series from the house of p w 19 on the basis of other connecting statements of p w 17 and p w 18 these three statements exs p 6p 8 and p 10 dated 26 4 2003were made before p w 40 in the presence of p w 22 and c w 1 the other confessional statement ex. p 12 dated 22 9 2003 made before p w 42 and subbiah and p w 24led to recovery of m dollar m 0 38 and key chain with key chain in m 0 39 from the toilet in the room of the accused. the prosecution has also relied upon the alleged motive to the effect that the accused urgently wanted money with a view to increase his marks in mathematics and therefore the accused had stolen articles belonging to the deceased. the trial court found the respondent guilty and recorded conviction and imposed sentence as aforestated. the trial court found that the prosecution version rested on circumstantial evidence. the following circumstances were highlighted to find the accused guilty. a the death is homicidal b the accused was in need of money to chase mathematics paper and for the aforesaid purpose he has killed the deceased to take away the valuable articles like computer and gold ornaments to sell such articles in the market. c at the time of occurrence only the accused deceased and pw 9 were available in the premises and there was no other person. d statement of the accused leading to recovery of incriminating materials such as knife rope clothes wooden log and other valuable articles such as computer gold ornamentsm dollar and the key chain with key belonging to the deceased. the high court found that the circumstances highlighted were not sufficient to fasten the guilt on the accused and directed acquittal. learned counsel for the appellant submitted that the high court failed to notice that the circumstances highlighted clearly establish the chain of circumstances which established the prosecution version and the high court was not justified in directing acquittal. learned counsel for the respondent on the other hand supported the judgment of the high court. the conviction based on circumstantial evidence has been highlighted by this court in various orders of this court. it has been consistently laid down by this court that where a case rests squarely on circumstantial evidence the inference of guilt can be justified only when all the incriminating facts and circumstances are found to be incompatible with the innocence of the accused or the guilt of any other person see hukam singh v state of rajasthan air 1977 sc 1063 1977 indlaw sc 433 eradu and ors v. state of hyderabad air 1956 sc 316 1955 indlaw sc 108 earabhadrappa v state of karnataka air 1983 sc 446 1983 indlaw sc 161 state of u p v. sukhbasi and ors air 1985 sc 1224 1985 indlaw sc 71 balwinder singh v state of punjab air 1987 sc 350 1986 indlaw sc 35 ashok kumar chatterjee v state of m p air 1989 sc 1890 1989 indlaw sc 443 the circumstances from which an inference as to the guilt of the accused is drawn have to be proved beyond reasonable doubt and have to be shown to be closely connected with the principal fact sought to be inferred from those circumstances. in bhagat ram v state of punjab air 1954 sc 621 1954 indlaw sc 188it was laid down that where the case depends upon the conclusion drawn from circumstances the cumulative effect of the circumstances must be such as to negative the innocence of the accused and bring the offences home beyond any reasonable doubt. we may also make a reference to a decision of this court in c chenga reddy and ors v. state of a p 1996 10 scc. 193 1996 indlaw sc 3059wherein. it has been observed thus. in a case based on circumstantial evidence the settled law is that the circumstances from which the conclusion of guilt is drawn should be fully proved and such circumstances must be conclusive in nature. moreover all the circumstances should be complete and there should be no gap left in the chain of evidence. further the proved circumstances must be consistent only with the hypothesis of the guilt of the accused and totally inconsistent with his innocence. in padala veera reddy v state of a p and ors air 1990. sc 79 1989 indlaw sc 31it was laid down that when a case rests upon circumstantial evidence such evidence must satisfy the following tests 1 the circumstances from which an inference of guilt is sought to be drawn must be cogently and firmly established 2 those circumstances should be of a definite tendency unerringly pointing towards guilt of the accused 3 the circumstances taken cumulatively should form a chain so complete that there is no escape from the conclusion that within all human probability the crime was committed by the accused and none else and 4 the circumstantial evidence in order to sustain conviction must be complete and incapable of explanation of any other hypothesis than that of the guilt of the accused and such evidence should not only be consistent with the guilt of the accused but should be inconsistent with his innocence. in state of u p v. ashok kumar srivastava1992 crl. lj 1104. 1992 indlaw sc 107it was pointed out that great care must be taken in evaluating circumstantial evidence and if the evidence relied on is reasonably capable of two inferences the one in favour of the accused must be accepted. it was also pointed out that the circumstances relied upon must be found to have been fully established and the cumulative effect of all the facts so established must be consistent only with the hypothesis of guilt. sir alfred wills in his admirable book wills circumstantial evidence chapter vi lays down the following rules specially to be observed in the case of circumstantial evidence 1 the facts alleged as the basis of any legal inference must be clearly proved and beyond reasonable doubt connected with the factum probandum 2 the burden of proof is always on the party who asserts the existence of any fact which infers legal accountability 3 in all cases whether of direct or circumstantial evidence the best evidence must be adduced which the nature of the case admits 4 in order to justify the inference of guilt the inculpatory facts must be incompatible with the innocence of the accused and incapable of explanation upon any other reasonable hypothesis than that of his guilt 5 if there be any reasonable doubt of the guilt of the accused he is entitled as of right to be acquitted. there is no doubt that conviction can be based solely on circumstantial evidence but it should be tested by the touch stone of law relating to circumstantial evidence laid down by the this court as far back as in 1952. in hanumant govind nargundkar and anr. v state of madhya. pradeshair 1952 sc 343 1952 indlaw sc 89wherein it was observed thus it is well to remember that in cases where the evidence is of a circumstantial nature the circumstances from which the conclusion of guilt is to be drawn should be in the first instance be fully established and all the facts so established should be consistent only with the hypothesis of the guilt of the accused. again the circumstances should be of a conclusive nature and tendency and they should be such as to exclude every hypothesis but the one proposed to be proved. in other words there must be a chain of evidence so far complete as not to leave any reasonable ground for a conclusion consistent with the innocence of the accused and it must be such as to show that within all human probability the act must have been done by the accused. a reference may be made to a later decision in sharad birdhichand sarda v state of maharashtraair 1984 sc 1622 1984 indlaw sc 432 therein while dealing with circumstantial evidence it has been held that onus was on the prosecution to prove that the chain is complete and the infirmity of lacuna in prosecution can not be cured by false defence or plea. the conditions precedent in the words of this court before conviction could be based on circumstantial evidence must be fully established. they are 1 the circumstances from which the conclusion of guilt is to be drawn should be fully established. the circumstances concerned must or should and not may be established 2 the facts so established should be consistent only with the hypothesis of the guilt of the accused that is to say they should not be explainable on any other hypothesis except that the accused is guilty 3 the circumstances should be of a conclusive nature and tendency 4 they should exclude every possible hypothesis except the one to be proved and 5 there must be a chain of evidence so compete as not to leave any reasonable ground for the conclusion consistent with the innocence of the accused and must show that in all human probability the act must have been done by the accused. these aspects were highlighted in state of rajasthan v rajaram 20038 scc 180 2003 indlaw sc 630state of haryana v jagbir singh anr 200311 scc 261 2003 indlaw sc 807. the main circumstances relied upon by the prosecution relates to the statements of the accused leading to discovery of materials facts admissible under section 27 of the indian evidence act1872 in short the evidence act. law is well settled that the prosecution while relying upon the confessional statement leading to discovery of articles under section 27 of the evidence act has to prove through cogent evidence that the statement has been made voluntarily and leads to discovery of the relevant facts. the scope and ambit of section 27 of the evidence act had been stated and restated in several decisions of this court. however in almost all such decisions reference is made to the observation of the privy council in pulukuri kotayya v emperor air 1947 pc 67 1946 indlaw pc 23 it is worthwhile to extract such quoted observation it is fallacious to treat the fact discovered within the section as equivalent to the object produced the fact discovered embraces the place from which the object is produced and the knowledge of the accused as to this and the information given must relate distinctly to this fact. information as to past user or the past history of the object produced is not related to his discovery in the setting in which it is discovered. information supplied by a person in custody that i will produce a knife concealed in the roof of my house does not lead to the discovery of the knife knives were discovered many years ago. it leads to the discovery of the fact that a knife is concealed in the house of the informant to his knowledge and if the knife is proved to have been used in the commission of the offence the fact discovered is very relevant. but if to the statement the words be added with which stabbed athese words are inadmissible since they do not related to the discovery of the knife in the house of the informant. at one time it was held that the expression fact discovered in the section is restricted to a physical or material fact which can be perceived by the senses and that it does not include a mental fact now it is fairly settled that the expression fact discovered includes not only the physical object produced but also the place from which it is produced and the knowledge of the accused as to this as noted in pulukuri kottaya 's case 1946 indlaw pc 23 supra. the various requirements of the section can be summed up as follows. the fact of which evidence is sought to be given must be relevant to the issue. it must be borne in mind that the provision has nothing to do with the question of relevancy. the relevancy of the fact discovered must be established according to the prescriptions relating to relevancy of other evidence connecting it with the crime in order to make the fact discovered admissible. the fact must have been discovered. the discovery must have been in consequence of some information received from the accused and not by the accused 's own act. the person giving the information must be accused of any offence. he must be in the custody of a police officer. the discovery of a fact in consequence of information received from an accused in custody must be deposed to. 7 thereupon only that portion of the information which relates distinctly or strictly to the fact discovered can be proved. the rest is inadmissible. as observed in pulukuri kottaya 's case 1946 indlaw pc 23 supra it can seldom happen that information leading to the discovery of a fact forms the foundation of the prosecution case. it is one link in the chain of proof and the other links must be forged in a manner allowed by law. to similar effect was the view expressed in k chinnaswamy reddy v state of a p air 1962 sc 1788 1962 indlaw sc 192. the above position was highlighted in anter singh v state of rajasthan air 2004 sc 2665 2004 indlaw sc 79. in rammi alias rameshwar v state of madhya pradesh air 1999 sc 3544 1999 indlaw sc 1512 the scope and ambit of section 27 of the evidence act was analysed in great detail and it was concluded in para 12 as follows true such information is admissible in evidence under section 27 of the evidence act but admissibility alone would not render the evidence pertaining to the above information reliable. while testing the reliability of such evidence the court has to see whether it was voluntarily stated by the accused. significantly the prosecution has relied upon the evidence of pw 40 who was investigating initially. his evidence has to be considered in the background of what has been stated by pw 22 and cw 1 it has been accepted by the prosecution that great efforts were made by pw 40 to falsely implicate to pws 1 to 4 and for that purpose a departmental proceeding was initiated. even according to the statement of the subsequent investigating officer pw 42several blank papers with the signature of pw 22 and cw 1 had been by pw 40 and such documents had been used to create false records to implicate pws 1 to 4 it is to be noted that pw 2 himself was one of the suspected person at the initial stage of investigation. that apart materials on record such as the statement of p w 22 recorded under section 164 of the code of criminal procedure1973. in short the code and the statement of c w 1raise a reasonable doubt relating to voluntariness of the alleged confession. p w 22who is a close relation of the deceased cousin has stated that two days after the occurrence after the information that bala prasanna was roaming near lic colony anna nagar police brought him to the police station and bala prasanna was arrested at 5 00 p m and was taken to the police station and a witness was present there. it is further stated that at the time of enquiry the accused was beaten up by the police and they have seized a gold ring and rs 5000 cash from him. if this is the statement of p w 22 recorded under section 164 of the code a witness in whose presence the confessional statement leading to discovery of articles from the house of hajeeali p w 3 had been made it raises serious doubt regarding the voluntariness of the statement. in this context it is also note worthy to indicate that c w 1 in his evidence has stated that the accused was in police station on 24 4 2003 itself. similar statement is made by p w 4 that apart c w 1 has stated that no statement has been made in his presence. the prosecution version to the effect that even some signatures on blank papers had been taken from p w 22 and c w 1 thus assumes great importance. the alleged statement made by the accused led to discovery of knife bloodstained clothes rope etc. unfortunately for the prosecution there is no evidence to show that in fact the wearing apparels containing bloodstains belonged to the accused save and except the alleged confessional statement. no witness has spoken that those clothes were worn by the accused at any time far less at or about the time of occurrence. it is also to be kept in view that those articles were recovered from the house of p w 3 and at the initial stage of investigation p w 3 himself was one of the suspected person and he was arrested. therefore the statement of p w 3 and his mother that those articles were brought by the accused and left in the upstairs room is to be considered with a pinch of salt. moreover there is nothing to indicate that in fact the bloodstained clothes and rope had tallied with the blood grouping of the deceased. the knife did not contain any bloodstain. therefore the aspect relating to recovery of articles from the house of p w 3 and his mother can not be considered as a link to complete the chain of circumstantial evidence. the next recovery relates to recovery of computer and accessories. apart from the fact that there is niggling doubt about the so called confession in view of statement under section 164 of the code of p w 22 and the statement of c w 1a further doubt is raised regarding such aspect in view of evidence of c w 1 to the effect that he had seen such computer in the room of the deceased when they had gone to the room after the offence was reported. the fact that c w 1 is a close relation of the deceased adds weight to his evidence rather than taking it away. even accepting that the computer had been given to p w 15 by the accused such circumstance by itself does not unerringly points towards the guilt of the accused either in respect of offence of murder or even robbery. it is quite possible that such articles might have been borrowed by the accused from the deceased and not necessarily stolen by the accused from the deceased after killing her. the fact that p w 9 had not initially stated anything before p w 40 about the accused coming down with computer at 3 30 p m and stated so for the first time when she was re examined after 5 months can not be lost sight of. as a matter of fact p w 9 who was examined on the very date when police started investigation did not inform the police that she had seen the accused coming down from upstairs or that the accused had threatened her. her statement to the following i did not tell anyone that balaprasanna took away the computer and threatened me. i did not tell this even to the inspector of police after going to the police station. i do not tell this even to p w 1. the next recovery relates to the ingots. for the aforesaid aspect the evidence of p ws 1718 and 19 is relevant. since the golden jewellery had been molten and were recovered in the shape of ingots it would be very hazardous to come to the conclusion that in fact the golden jewellery belonged to the deceased. if the accused had killed the deceased and stolen those golden jewellery there is no reason as to why he had also not taken ear rings from the deceased. the fact that ear rings were on the dead body is admitted by the prosecution. the prosecution has strongly relied upon the fact that m dollar belonging to the deceased and a chain with key of the room of the deceased were discovered from inside the toilet in the room which was previously occupied by the accused. for the aforesaid purpose they have relied upon the evidence of p w 42 and the seizure witness p w 24 the accused had allegedly made earlier confessional statement before p w 40 on 26 4 2003 leading to discovery of several articles. the subsequent statement spoken to by p w 42the subsequent investigating officer is alleged to have been made only in september2003after about five months. so far as the first confession statement made before p w 40 is concerned admittedly the accused was under physical custody at that time whereas at the time of last confession stated to have been made before p w 42the accused was on bail and he had been summoned by p w 42 for further examination and therefore technically in custody. if the accused had not made such a statement at such first instance when he had confessed about other articles it is not understood as to how after 5 months when he was on bail he would make such a statement. such alleged confession made belatedly thus creates doubt regarding its authenticity or voluntariness. in this context it is to be noted that c w 1 states that m dollar was taken from him by p w 42 for the purpose of facilitating investigation. keeping in view the fact that c w 1 is a close relation of the deceased and obviously interested in punishing the real culprit such a statement coming from c w 1 can not be slightly brushed aside. the fact that there had been a statement allegedly made by p w 1 leading to recovery of a parallel key from the dash board of the car of p w 1cannot be lost sight of. it is of course true that the prosecution has tried to exonerate p w 1 by adducing evidence through p ws 36 and 39 to the effect that immediately after recovery of the dead body p w 40 had taken two such keys thus contradicting the alleged confession of p w 1 however the very suspicious role of p w 40who apparently was in possession of at least two keys of the same lock creates suspicion regarding recovery of another key after 5 months. law is well settled that when the prosecution relies upon circumstantial evidence all the links in the chain of circumstances must be complete and should be proved through cogent evidence. when the judgment of the high court is analysed in the background of what has been stated by this court as regards circumstantial evidence the inevitable conclusion is that the impugned judgment of the high court does not suffer from any infirmity to warrant interference. the appeal is dismissed. appeal dismissed.

IN-Ext

FACTS the deceased is one mayurani,a sri lankan student,who was residing in the first floor of the house belonging to one solsimalai (p.w.1). the accused is also a sri lankan student studying in a different college,but staying in the second floor of the same premises. the occurrence allegedly took place in the afternoon of 22.4.2003. the first information report was lodged by p.w.1 on 24-4-2003 at about 9.30 a.m. it was indicated in the first information report that on 24.4.2003 at 9.00 a.m.,while the informant had gone to perform pooja in the first floor of the house,he got foul smell in the last room of the first floor and found blood seeping through the front door. on opening the window he noticed that mayurani was lying in a pool of blood with her face covered with a bag.on the basis of the aforesaid f.i.r.,investigation was taken up initially by p.w.40. subsequently on the basis of the order of the high court,such investigation was completed by p.w.42. the accused is stated to have been arrested on suspicion on 26.4.2003. on the basis of the statement of the accused,prosecution discovered many materials including a knife and a log allegedly used for killing. initially,p.w.40 suspected the role of p.w.1,his wife p.w.2,p.w.3,from whose house certain incriminating material were recovered allegedly on the basis of statement of the accused as well as p.w.4,who was working as a cleaner in the vehicle of p.w.1.subsequently,however,p.w.42,who took over investigation from p.w.40 filed charge-sheet only against the present appellant on the footing that p.ws.1 to 4 had no role to play in the crime. challenge in this appeal is to the order of a division bench of madras high court allowing the appeal filed by the respondent (hereinafter referred to as the 'accused'). the accused was convicted for offence punishable under section 302 of the indian penal code,1860 (in short the 'ipc') and sentenced to undergo imprisonment for life and to pay a fine of rs.10,000/-with default stipulation by principal district judge,madurai. ANALYSIS in bhagat ram v.state of punjab (air 1954 sc 621 1954 indlaw sc 188),it was laid down that where the case depends upon the conclusion drawn from circumstances the cumulative effect of the circumstances must be such as to negative the innocence of the accused and bring the offences home beyond any reasonable doubt. in state of u.p.v.ashok kumar srivastava,(1992 crl.lj 1104 1992 indlaw sc 107),it was pointed out that great care must be taken in evaluating circumstantial evidence and if the evidence relied on is reasonably capable of two inferences,the one in favour of the accused must be accepted. it was also pointed out that the circumstances relied upon must be found to have been fully established and the cumulative effect of all the facts so established must be consistent only with the hypothesis of guilt. there is no doubt that conviction can be based solely on circumstantial evidence but it should be tested by the touch-stone of law relating to circumstantial evidence laid down by the this court as far back as in 1952. the main circumstances relied upon by the prosecution relates to the statements of the accused leading to discovery of materials facts,admissible under section 27 of the indian evidence act,1872 (in short the 'evidence act'). the scope and ambit of section 27 of the evidence act had been stated and restated in several decisions of this court. at one time it was held that the expression "fact discovered" in the section is restricted to a physical or material fact which can be perceived by the senses,and that it does not include a mental fact,now it is fairly settled that the expression "fact discovered" includes not only the physical object produced,but also the place from which it is produced and the knowledge of the accused as to this,as noted in pulukuri kottaya's case 1946 indlaw pc 23. in rammi alias rameshwar v.state of madhya pradesh (air 1999 sc 3544 1999 indlaw sc 1512) the scope and ambit of section 27 of the evidence act was analysed in great detail and it was concluded in para 12 as follows. true,such information is admissible in evidence under section 27 of the evidence act,but admissibility alone would not render the evidence,pertaining to the above information,reliable. while testing the reliability of such evidence the court has to see whether it was voluntarily stated by the accused. the alleged statement made by the accused led to discovery of knife,bloodstained clothes,rope,etc. unfortunately,for the prosecution there is no evidence to show that in fact the wearing apparels containing bloodstains belonged to the accused,save and except the alleged confessional statement. no witness has spoken that those clothes were worn by the accused at any time far less at or about the time of occurrence. it is also to be kept in view that those articles were recovered from the house of p.w.3 and at the initial stage of investigation,p.w.3 himself was one of the suspected person and he was arrested. therefore,the statement of p.w.3 and his mother that those articles were brought by the accused and left in the upstairs room is to be considered with a pinch of salt moreover,there is nothing to indicate that in fact the bloodstained clothes and rope had tallied with the blood grouping of the deceased. the knife did not contain any bloodstain. therefore,the aspect relating to recovery of articles from the house of p.w.3 and his mother cannot be considered as a link to complete the chain of circumstantial evidence. the evidence of p.ws.17,18 and 19 is relevant. since the golden jewellery had been molten and were recovered in the shape of ingots,it would be very hazardous to come to the conclusion that in fact the golden jewellery belonged to the deceased. if the accused had killed the deceased and stolen those golden jewellery,there is no reason as to why he had also not taken ear rings from the deceased. the fact that ear rings were on the dead body is admitted by the prosecution. the fact that there had been a statement allegedly made by p.w.1 leading to recovery of a parallel key from the dash board of the car of p.w.1,cannot be lost sight of. final however,the very suspicious role of p.w.40,who apparently was in possession of at least two keys of the same lock creates suspicion regarding recovery of another key after 5 months. law is well settled that when the prosecution relies upon circumstantial evidence,all the links in the chain of circumstances must be complete and should be proved through cogent evidence when the judgment of the high court is analysed in the background of what has been stated by this court as regards circumstantial evidence,the inevitable conclusion is that the impugned judgment of the high court does not suffer from any infirmity to warrant interference. STATUTE section 302 ipc, 1860.

leave granted. interpretation of the provisions of s 461b of the trade and merchandise marks act1958 hereinafter called and referred to for the sake of brevity as the said act is involved herein. the factual matrix of the matter which is not much in dispute is as under. first respondent is the registered proprietor of a trade mark field marshal for diesel engines since 1964 bearing no 228867 one m s jain industries got the trade mark field marshal registered under clause 7inter alia for flour mills centrifugal pumps couplings for machines pulleys included in class 7 and valves parts of machines the said registration was renewed for the periods 13 5 1972 and 12 5 1979 13 5 1979 and 12 7 1986 and 13 7 1986 and 12 7 1993 appellant is said to have commenced its business of manufacturing and selling centrifugal pumps also under the mark field marshall. allegedly on the premise that the first respondent is the proprietor of the said mark by reason of long user and thus acquired a reputation in that behalf a legal notice was issued upon it questioning its right to use the said mark in respect of centrifugal pumps by the appellant laying a claim that it had been using the said mark since 1963. respondent no 1 thereafter filed a suit in the delhi high court for grant of a decree of permanent injunction being suit no 2408 of 1985 alleging infringement of the said mark andor claiming right of passing off in respect thereof. an ex parte order of injunction was passed on 19 12 1985 against the defendant appellant herein to the following effect. notice for april 81986 meanwhile a temporary ex parte injunction is issued against the defendants restraining them from manufacturing or selling either themselves or through any dealer or representative diesel oil engines or parts thereof with the trade mark field marshal andor any other trade mark identical therewith and all goods falling in cl 7 of the trade and merchandise mark rules. the plaintiff shall comply with the requirements of order 39 rule 4 of the code of civil procedure. indisputably during the proceedings in the above suit m s. jain industries by a deed of assignment assigned the said trade mark along with its goodwill in favour of the appellant. one of the stipulations contained therein reads as under that the party of the second part has satisfied the party of the first part of having used the mark field marshal in respect of centrifugal pumps and valves since 1973. indisputably first respondent filed an application under section 4656 and 107 of the act marked as c o no 9 of 1986contending that m s jain industries having not used the trade mark in respect of centrifugal pumps for a period more than five years and one month the mark should be taken off the register. it claimed user of the said mark since 1963 and sought for rectification of the register by expunging the expression circulation and centrifugal pumps from the specification of goods. indisputably appellant filed an application in form tm 24 on 17 6 1986 the assistant registrar trade marks passed an order on 10 11 1986 certifying that the trade mark field marshal brand word per se is registered under no 228867 in part a of the register as of the date 13th. may1965 in class 7 in respect of flour mills circulating and centrifugal pumps coupling for machines pulleys included in class 7and valves parts of machines in the name of pooran chand jain and kailash chand jain trading as jain industries1166phatak. suraj bhan belanganj agra. that pursuant to a request on form tm 23 dated 17th june1986 and order thereon dated 24th october1986. ganga ram anil kumar hufsunil kumar and sumitra rani trading as thukral mechanical works railway road sirhind punjab are registered as subsequent proprietors of this mark as from 30th may1986 by virtue of agreement dated 30th may1986 and. the registration of the aforesaid trade mark has been renewed from time to time and will remain in force for a period of a seven years from 13th. may1986 and may be renewed at the expiration of that period and of each succeeding period of a seven years. in the said c o no 9 of 1986 filed by the first respondent against m s jain industries despite service of notice nobody appeared on behalf of the defendant 16 1 1987 was the date fixed in the said suit. appellant 's counsel appeared on that date and inter alia contended that presently it was the registered owner of the trade mark which was sought to be cancelled. in view of that statement a submission was made on behalf of the first respondent that it may be permitted to withdraw the petition with liberty to file a fresh petition on the same cause of action. the learned judge directed recording of statements of the learned counsel in this behalf pursuant whereto the same were recorded which reads as under c o 9 of 1986. mr singh has filed a reply in this petition bringing out that presently he is the registered owner of the trademark which is sought to be cancelled in this petition. in view of this situation learned counsel for the petitioner has submitted that he may be permitted to withdraw this petition with permission to file a fresh petition on this very cause of action after impleading m s thakural mechanical works etc. let the statement of learned counsel for the petitioner be recorded. statement of shri k l aggarwal counsel for petitioner without oath. in view of the submissions of m s thakural mechanical works i may be permitted to withdraw this petition with permission to file a fresh petition on this very cause of action. statement of shri hemant singh counsel for m s thakural mechanical works without oath. i have no objection if the petitioner is permitted to withdraw this petition with permission to file a fresh petition on this very cause of action. on the basis of the said statement the following order was passed this petition has been filed by m s pm diesels pvt ltd. against m s jain industries and the dy. registrar of trade marks under section 4656 and 107 of the trade and merchandise marks act1958 for rectification of entry relating to the registered trade mark no 228867 in class 7 after. the notice was served upon the respondent 1a reply has been filed by m s thakural mechanical works bringing out there in that they are now the registered proprietors of said. trade mark no 228867 in. this view of the matter learned counsel for the petitioner has submitted that he may be permitted to withdraw this petition with permission to file a fresh petition on this very cause of action. the request is not opposed on behalf of m s thakural mechanical works. in these circumstances the request of the plaintiff is granted and petitioner is permitted to withdraw this petition and file a fresh petition on this very cause of action. the petition is accordingly filed as withdrawn leaving the parties to bear their own costs. a fresh application was filed by the first respondent. the said m s jain industries however was not impleaded as a party therein. the cause of action therefor was stated to have arisen in the following circumstances that the cause of action for the present petition arose in favour of the petitioner and against the respondents in the month of january 1987 when the respondent informed this honourable court that they have been recorded as subsequent proprietors of the impugned registered trade mark no 228867 in class 7 in c o no 9 of 1986whereupon the petitioner withdrew the said earlier petition c o no 9 of 1986 with permission of the court to file the present petition because of the changed circumstances. the cause of action is continuous from day to day till the impugned registration is cancelled rectified. the injunction matter in suit no 2408 of 1985 came up for hearing before a learned single judge of the high court. by an order dated 19 1 1988having regard to the provisions contained in the said act the learned judge opined that appellant having become the registered proprietor of the said trade mark no case for grant of injunction has been made out the interim order of injunction passed on 19 12 1985 was vacated and the defendants were permitted to use their registered trade mark subject to the following conditions a defendants will not use the logo style of the word field marshal of which logo and style the plaintiff is the proprietor under the copyright act. b defendants shall mention the name of the defendant firm thukral mechanical works sirhind on each and every centrifugal pump manufactured by them and sold in the name of field marshal. c the defendants shall maintain proper accounts of the sale of centrifugal pumps under the trade mark field marshal and shall file them in court as and when directed. correctness or otherwise of the said order has not been questioned. the second rectification application filed by the first respondent however was transferred to the intellectual property appellate board. the said application was dismissed. a writ petition was filed there against by the first respondent. a learned single judge of the delhi high court however refused to stay the operation of the order of the board dated 27 10 2004 an appeal was preferred there against. the division bench of the high court thereafter while disposing of both the writ petition and the letters patent appeal allowed the writ petition and set aside the order of the board and directed it to adjudicate the dispute on merits. the said order of the division bench is under challenge in this appeal. the core question which arises for our consideration is as to whether in the aforementioned facts and circumstances of the case the application under s 461b was maintainable. before adverting thereto we may take notice of the relevant statutory provisions ss 461b481482 and 56 read as under section 46 removal from register and imposition of limitations on ground of non use 1 subject to the provisions of section 47a registered trade mark may be taken off the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a high court or to the registrar by any person aggrieved on the ground either a b that up to a date one month before the date of the application a continuous period of five years or longer had elapsed during which the trade mark was registered and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being provided that except where the applicant has been permitted under sub s 3 of s 12 to register an identical or nearly resembling trade mark in respect of the goods in question or where the tribunal is of opinion that he might properly be permitted so to register such a trade mark the tribunal may refuse an application u cl a or cl b in relation to any goods if it is shown that there has been before the relevent date or during the relevant period as the case may be bona fide use of the trade mark by any proprietor thereof for the time being in relation to goods of the same description being goods in respect of which the trade mark is registered. section 48 registered users 1 subject to the provisions of section 49a person other than the registered proprietor of a trade mark may be registered as the registered user thereof in respect of any or all of the goods in respect of which the trademark is registered otherwise than as a defensive trade mark but the central government may by rules made in this behalf provide that no application for registration as such shall be enertained unless the agreement between the parties complies with the conditions laid down in the rules for preventing trafficking in trade marks. the permitted use of a trade mark shall be deemed to be used by the proprietor thereof and shall be deemed not to be used by a person other than the proprietor for the purposes of s 46 or for any other purpose for which such use is material under this act or any other law. section 56 power to cancel or vary registration and to rectify the register 1. on application made in the prescribed manner to a high court or to the registrar by any person aggrieved the tribunal may make such order as it may think fit for cancelling or varying the registration of a trade mark on the ground of any contravention or failure to observe a condition entered on the register in relation thereto. any person aggrieved by the absence or omission from the register of any entry or by any entry made in the register without sufficient cause or by any entry wrongly remaining on the register or by any error of defect in any entry in the register may apply in the prescribed manner to a high court or to the registrar and the tribunal may make such order for making expunging or varying the entry as it may think fit. the tribunal may in any proceeding under this section decide any question that may be necessary or expedient to decide in connection with the rectification of the register. the tribunal of its own motion may after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard make any order referred to in sub s 1 or sub s 2. any order of the high court rectifying the register shall direct that notice of the rectification shall be served upon the registrar in the prescribed manner who shall upon receipt of such notice rectify the register accordingly. the power to rectify the register conferred by this section shall include the power to remove a trade mark registered in part a of the register to part b of the register. indisputably the scope of the provisions for removal from register in terms of s 46 and 56 of the act stand on different footings. whereas s 46 had a limited application s 56 of the act is wider in nature. concededly cl a of sub s 1 of s 46 is not attracted in the case. for the purpose of appreciation of the rival contentions we may notice the findings of the board as also the high court. the board has taken the view that the period of five years and one month will begin to run from the date on which thukral became the proprietor of the trademark that is30th may1986 and therefore the rectification application could have been filed by the appellant only sometime in 1991 opining that an application for rectification against the appellant within a period of seven and a half months from the date of assignment of the trade mark was not maintainable the application was dismissed. the high court on the other hand opined it was not anybody 's case before us that m s jain industries. the registered proprietor of the trademark used it at all. the trademark was used by the appellant and thukral neither of whom were proprietors thereof except that thukral claims to have become its proprietor with effect from 30th may1986 according to learned counsel for the appellant the use of the trademark by thukral was not legally permissible use inasmuch as thukral did not have the consent tacit or otherwise of m s jain industries to use the trademark. if thukral did then it can not be said that there was no bona fide use thereof by its proprietor. that is m s jain industries. this appears to be the position at least till 30th may1986 in. the meantime as a result of the ex parte ad interim injunction granted on 19th december 1985 by this court in suit no 2408 of 1985there was no question of thukral using the trademark field marshal till the injunction was vacated on 19th january1988. the act was enacted to provide for the registration and better protection of trademarks and for the prevention of the use of fraudulent marks of merchandise. registration of a trade mark remains valid for seven years. renewal applications are required to be filed on the expiry of seven years. m s jain industries got itself registered and obtained periodical renewal thereof as is required under the act. first respondent withdrew the application against m s jain industries. the prayer in the application was to take off the registered trade mark from the register in respect of centrifugal pumps goods so far as the registration made in favour of the appellant is concerned. it is in the aforementioned situation we are called upon to determine the meaning of the words for the time being occurring in s 461b of the act. two interpretations thereto which are possible are 1 the said words would denote non use of the trade mark in relation to the goods by the appellant for a period of five years or longer and 2 the mark had not been used for a period of five years or longer either by the present proprietor thereof or his predecessor. we may however also notice that another construction of the said provision has been put forth by mr sunderam learned senior counsel appearing on behalf of the appellant that the word proprietor would not mean a registered proprietor but also a person who has become proprietor by long use thereof. the words for the time being would mean differently in different situations. it may mean the moment or existing position as was held by this court in the case of jivendra nath kaul v collector district magistrate and anr 1992. 3 scc 576 1992 indlaw sc 1107 or in the context of cl 22 of art 366 of the constitution as has been held in h h maharajadhiraja. madhav rao jivaji rao scindia bahadur of gwalior h h maharajadhiraja. maharana shri bhagwat singhji bahadur of udaipur v union of india and anr air 1971. sc 530 1970 indlaw sc 300 para 88 to mean by the use of the expression for the time being in cl 22 of art 366. the president is not invested with authority to accord a temporary recognition to a ruler nor with authority to recognize or not to recognize a ruler arbitrarily the expression for them time being predicts that there shall be a ruler of the indian state that if the first recognized ruler dies or ceases to be a ruler a successor shall be appointed and that there shall not be more rulers than one at a given time. the terms also may bring within its umbrage the entire period of five years or more irrespective of the fact as to whether the registered proprietor was one or more than one as has been held by the high court. there can not be any doubt or dispute that the registration of a trade mark confers a very valuable right. the person in whose name the trade mark has been registered may take action against any person for passing off the goods as that of the registered owner. it confers an exclusive right of use of the trade mark in relation to the goods in which the trade mark is registered. the same is an assignable right in terms of s 36 of the act whereas an unregistered trade mark is not. user of the said mark therefore entails the consequences laid down under cl b of sub s 1 of s 46. however such an application can be filed only by a person aggrieved. when the applicant before the board establishes the fact in regard to non user of the mark for a period of more than five years on the part of the registered owner the latter may show that his case falls within the purview of sub s 3 of s 46. the question which therefore arises is as to who can prove that he had the bona fide intention to use the trade mark on the date of application for registration. indisputably it would be the registered proprietor. s 46 is a penal provision. it provides for civil or evil consequences. it takes away the valuable right of a registered proprietor. it therefore can be taken away only when the conditions laid down therefor are satisfied. while we say so we are not oblivious of the fact that trafficking in trade mark is to be discouraged. a registered proprietor of a trade mark should not be permitted to circumvent the law of user of the trade mark for a long time by assigning the same from time to time. but then such a case has to be made out. allegation of trafficking is a serious one. it must be proved in presence of the person against whom such allegations are made. at the time of grant of original registration advertisements are issued and objections are called for. renewal of registration in a sense also is not automatic. a person who had been using the said trade mark as a proprietor thereof by user is supposed to keep itself abreast with such applications filed by another either for registration of the trade mark or renewal thereof. the non user for a long time would disentitle a registered proprietor from renewal of the registration. it must not however be forgotten that s 461b provides for a special remedy. as a person obtains a right on and from the date of registration andor renewal thereof he can ordinarily be deprived of his right unless it is shown that the assignment thereof by his holder was not a bona fide one or had been made by way of camouflage. if the assignee has obtained assignment for bona fide use he may not be fastened with any liability owing to non user on the part of his predecessor. in other words the mistake of the predecessor should not be visited with non use of the present registered owner. it must however be observed that whether a use is for bona fide purpose would essentially be a question of fact. whether s 461b read with s 48 of the act would bring within its purview not only a registered proprietor but also the proprietor who had otherwise acquired a right would depend upon the facts and circumstances of each case. in kabushiki kaisha toshiba v tosiba appliances co ors 2008 8 scale 354 2008 indlaw sc 1395this court held we do not find any force in the aforementioned submission. cls a and b operate in different fileds. sub s 3 covers a case falling within cl b and not the cl a thereof. had the intention of the parliament been that sub s 3 covers cases falling under cl b and clause ahaving regard to the similarity of the expressions used there was no reason as to why it could not be stated so explicitly. it was furthermore opined there may be a case where owing to certain special circumstances a continuous use is not possible. the trade mark for which registration is obtained is used intermittently. such non user for a temporary period may be due to any exigency including a bar under a statute or a policy decision of the government or any action taken against the registrant. it was observed that in cases of intermittent use also cl b shall apply. in kabushiki kaisha toshiba this court relied upon hardie trading ltd anr. v addisons paint chemicals ltd 2003 11 scc 92 2003 indlaw sc 756 in our opinion the phrase person aggrieved for the purposes of removal on the ground of non use under s 46 has a different connotation from the phrase used in s 56 for canceling or expunging or varying an entry wrongly made or remaining in the register. the submission of mr sudhir chandra. that the appellant was an infringer both of the right of m s jain industries as also the first respondent and thus its use was not bona fide in a case of this nature can not be accepted. if appellant infringed the right of m s jain industries it was for it to take action there for. it did not. first respondent itself accepts that at least immediately prior to the institution of the suit appellant had been using the same. we are not concerned herein as to since when it had been doing so. it obtained an or of injunction. the order of injunction was vacated. for one reason or the other the said order attained finality. prima facie therefore appellant has been held to be the registered owner of the trade mark. it is one thing to say that for the purpose of frustrating an application for rectification the appellant had colluded with its predecessor for the purpose of trafficking by entering into the deed of assignment which is otherwise illegal and bad in law. but it is another thing to say that the appellant could be proceeded against alone for non user of the registered trade mark for a period of more than five years. for the purpose of making out such a case both the original registrants as also the assignee were required to be impleaded as parties. we may at this stage notice that in law of trade marks by mr k c kailasam while commenting on s 47 of the trade marks act1999 to which our attention has been drawn by mr sudhir chandra it is stated. notes on clauses. this clause corresponds to s 46 of the existing act and provides for removal of a trade mark from the register on the ground of non use. a trade mark which is not used within five years of its registration becomes liable for removal either completely or in respect of those goods or services for which the mark has not been used. under s 461it is proposed to clarify that the five years period will start from the date on which the trade mark is actually entered on the register. this amendment is intended to remove any ambiguity as for all other purposes the date of registration will be the date on which the application was filed vide cl 232 proviso to sub cl 1 also provides that the tribunal may refuse removal of the mark if it is shown that any proprietor had in fact made bona fide use of the trademark for goods or services of the same description or associated goods or services. it is also proposed to increase the period from 1 to 3 months in cl 471a and b in which use of the trade mark prior to the date of filing of the application for removal of the trade mark shall be disregarded. this is intended to prevent the registered proprietor to by pass the act by such token use after he comes to know that an application for removal is about to be filed sub cl 3 protects a mark from being removed from the register on ground of non use if such non use is shown to have been due to special circumstances in the trade. the clause is proposed to be modified to clarify that special circumstances in the trade will include restrictions imposed by any law or regulation on the use of trade mark in india. consequential amendments have been made to cover services cl 47 of the bill. the court while construing a statute takes into consideration the parliamentary intent in amending the provisions thereof. it seeks to enhance the period of moratorium of use of the registered trade mark from one month to three months so as to prevent speculative assignment. thus a case of speculative assignment is specifically required to be made out. such an application may be maintainable in terms of s 56 of the act but strictly not in terms of s 461b thereof and that too in the absence of the original registered proprietor. we are not satisfied with the explanation offered by the first respondent that it gave up the case of non use of the registered trade mark against m s jain industries on the basis of statement made by the learned counsel for the appellant firstly because consent does not confer jurisdiction secondly because want andor lack of jurisdiction on the part of the tribunal can not be waived as if any order is passed without jurisdiction the same would be a nullity and thirdly because the cause of action even according to the first respondent in his application before the high court was different. the counsel appearing on behalf of the appellant did not state that it had waived its right so far as non impleadment of m s jain industries was concerned. it only consented for grant of liberty in favour of the first respondent for filing of an application for the self same cause of action. the question of maintainability of the second suit is absence of the registrant proprietor was not and could not have been the subject matter of consent at that stage. the cause of action which permitted the first respondent to file an application for rectification against m s jain industries was non user thereof by it. its non user and rectification of the register could not in the aforementioned situation have been tagged with the cause of action if any against the appellant. the second contention of mr that the appellant was an infringer of the trade mark is again a question of fact. the right of the first respondent as a proprietor of the trade mark by reason of a long user is required to be determined vis vis m s jain industries as also the appellant in the suit filed by it which is pending. the board could not while exercising its jurisdiction under s 461bof the act proceeded on the basis of such presumption. it is not correct that no cause of action survived against jain industries. it was not lost by reason of assignment as was contended by the learned counsel. in the suit only the competing right of the first respondent qua the appellant can be determined and not a right against m s such a right can not be determined in a proceeding under s 461b of the act which is restricted to non user of the registered trade mark. both the appellant and the respondent no 1 were the infringers of the right of m s jain industries as it was the registered proprietor of the trade mark in respect of the goods in question namely centrifugal pumps. two interpretations of the said provision s 461b are possible. while interpreting the same however certain basic principles of construction of statute must be kept in mind. as it takes away somebody 's right it deserves strict construction. jurisdiction of the board being dependent on determination of the foundational facts the same was required to be established on the basis of the averments made in the application and not otherwise. the right of a registered trade mark is not lost automatically on the expiry of five years and one month. it does not provide for a sun set law. it has to be adjudicated upon. whether the registered proprietor of the trade mark had taken recourse to trafficking or not must be determined in an appropriate proceeding. the principle of purchaser of a property has a duty to make enquiriestherefore cannot apply in a case of this nature. so long as the right to assign a registered trade mark remains valid once the same is validly assigned the assignee derives the same right as that of the assignor in terms of the statute. a title to a trade mark derived on assignment as provided for under the act can not be equated with a defective title acquired in any other property as admittedly on the date of assignment the right of the registered trade mark was not extinguished. both the findings of the high court which we have noticed hereinbefore are findings on question of law and in that view of the matter the contention of mr sudhir chandra that the merit of the matter is yet to be gone into by the board can not be a ground for ignoring the submissions made at the bar. our attention has again been drawn to a passage from law of trade marks geographical indications by shri k c kailasam wherein the judgment of the tribunal has been criticized in the following terms from the above legislative intent it would seem that the period of non use of the trade mark is to be reckoned continuously from the date of its registration. in the case of american home products corporation v mac laboratories pvt ltd. rendered under the 1958 act it was held by the supreme court that the person seeking to have the trade mark removed from the register has only to prove. such continuous non user. it would appear that neither the u k act nor the indian act at any time envisaged that the commencement of 5 year period of non use is to be delinked from the date of registration of the mark so as to give a fresh lease of life to the registration every time there is change in the ownership of the mark. if that be so any registered proprietor could easily defeat an application for rectification by assigning the mark to some other person to have a fresh period of 5 years from the date of assignment and thus effectively frustrate the very object of the provision in s 471a and b further it is to be noted that an assignment is subject to the provisions of the act and any rights vested in any other person see. s 37 the assignor can not obviously transfer more rights than he himself has to the assignee under the act. we do not think that the approach of the learned author is entirely correct. an assigner can transfer only such right which he possesses. if his title is not extinguished by reason of a provision of a statute for non user of the trade mark for a period of five years any assignment made shall be valid subject to such situation which we have noticed in paragraph 25 supra. for the views we have taken we are of the opinion that the impugned judgment can not be sustained. it is set aside accordingly. the board shall however proceed to determine afresh the application filed by the first in the light of the legal principles explained above. the appeal is allowed with costs. counsel 's fee assessed at rs 100000. appeal allowed.

IN-Ext

FACTS interpretation of the provisions of s.46(1)(b) of the trade and merchandise marks act,1958 is involved herein. first respondent is the registered proprietor of a trade mark 'field marshal' for diesel engines since 1964 bearing no.228867. one m/s. jain industries got the trade mark 'field marshal' registered under clause (7),inter alia,for flour mills,centrifugal pumps,couplings for machines,pulleys included in class 7 and valves (parts of machines). the said registration was renewed for the periods 13.5.1972 and 12.5.1979; 13.5.1979 and 12.7.1986 and 13.7.1986 and 12.7.1993. appellant is said to have commenced its business of manufacturing and selling centrifugal pumps also under the mark 'field marshall. allegedly,on the premise that the first respondent is the proprietor of the said mark by reason of long user and,thus,acquired a reputation in that behalf,a legal notice was issued upon it questioning its right to use the said mark in respect of centrifugal pumps by the appellant laying a claim that it had been using the said mark since 1963. respondent no.1 thereafter filed a suit in the delhi high court for grant of a decree of permanent injunction being suit no.2408 of 1985 alleging infringement of the said mark and/or claiming right of passing off in respect thereof. an ex parte order of injunction was passed on 19.12.1985 against the defendant. meanwhile,a temporary ex parte injunction is issued against the defendants restraining them from manufacturing or selling either themselves or through any dealer or representative diesel oil engines or parts thereof with the trade mark 'field marshal' and/or any other trade mark identical therewith and all goods falling in cl.7 of the trade and merchandise mark rules. the second rectification application filed by the first respondent,however,was transferred to the intellectual property appellate board. the said application was dismissed. a writ petition was filed there against by the first respondent. a learned single judge of the delhi high court,however,refused to stay the operation of the order of the board dated 27.10.2004.an appeal was preferred there against. the division bench of the high court thereafter while disposing of both the writ petition and the letters patent appeal allowed the writ petition and set aside the order of the board and directed it to adjudicate the dispute on merits. the said order of the division bench is under challenge in this appeal. ARGUMENT appellant's counsel appeared on that date and,inter alia,contended that presently it was the registered owner of the trade mark which was sought to be cancelled. in view of that statement,a submission was made on behalf of the first respondent that it may be permitted to withdraw the petition with liberty to file a fresh petition on the same cause of action. ISSUE whether in the aforementioned facts and circumstances of the case,the application under s.46(1)(b) was maintainable. whether to take off the registered trade mark from the register in respect of centrifugal pumps (goods) so far as the registration made in favour of the appellant is concerned. ANALYSIS the core question which arises for our consideration is as to whether in the aforementioned facts and circumstances of the case,the application under s.46(1)(b) was maintainable. indisputably,the scope of the provisions for removal from register in terms of s.46 and 56 of the act stand on different footings. whereas s.46 had a limited application,s.56 of the act is wider in nature. concededly,cl.(a) of sub-s.(1) of s.46 is not attracted in the case. the prayer in the application was to take off the registered trade mark from the register in respect of centrifugal pumps (goods) so far as the registration made in favour of the appellant is concerned. it is in the aforementioned situation,it is advisable to determine the meaning of the words 'for the time being' occurring in s.46(1)(b) of the act. two interpretations thereto which are possible are: (1) the said words would denote non-use of the trade mark in relation to the goods by the appellant for a period of five years or longer; and (2) the mark had not been used for a period of five years or longer either by the present proprietor thereof or his predecessor. the words 'for the time being' would mean differently in different situations. it may mean 'the moment or existing position' as was held by this court in the case of jivendra nath kaul v. collector/district magistrate and anr.[(1992. 3 scc 576 1992 indlaw sc 1107] or in the context of cl.(22) of art.366 of the constitution as has been held in h.h.maharajadhiraja. madhav rao jivaji rao scindia bahadur of gwalior,h.h.maharajadhiraja. maharana shri bhagwat singhji bahadur of udaipur v. union of india and anr.,air 1971. sc 530 1970 indlaw sc 300 para 88 to mean: "by the use of the expression "for the time being" in cl.(22) of art.366. the president is not invested with authority to accord a temporary recognition to a ruler nor with authority to recognize or not to recognize a ruler arbitrarily : the expression "for them time being" predicts that there shall be a ruler of the indian state,that if the first recognized ruler dies,or ceases to be a ruler,a successor shall be appointed,and that there shall not be more rulers than one at a given time. the person in whose name the trade mark has been registered may take action against any person for passing off the goods as that of the registered owner. it confers an exclusive right of use of the trade mark in relation to the goods in which the trade mark is registered. whether s.46(1)(b) read with s.48 of the act would bring within its purview,not only a registered proprietor but also the proprietor who had otherwise acquired a right would depend upon the facts and circumstances of each case. the court while construing a statute takes into consideration the parliamentary intent in amending the provisions thereof. it seeks to enhance the period of moratorium of use of the registered trade mark from one month to three months so as to prevent speculative assignment. thus,a case of speculative assignment is specifically required to be made out. such an application may be maintainable in terms of s.56 of the act but strictly not in terms of s.46(1)(b) thereof and that too in the absence of the original registered proprietor. attention has again been drawn to a passage from 'law of trade marks &; geographical indications' by shri k.c.kailasam,wherein the judgment of the tribunal has been criticized in the following terms : "from the above legislative intent,it would seem that the period of non-use of the trade mark is to be reckoned continuously from the date of its registration. in the case of american home products corporation v. mac laboratories pvt.ltd. rendered under the 1958 act,it was held by the supreme court that "the person seeking to have the trade mark removed from the register has only to prove. such continuous non-user." it would appear that neither the u.k.act,nor the indian act,at any time envisaged that the commencement of 5 year period of non-use is to be delinked from the date of registration of the mark,so as to give a fresh lease of life to the registration,every-time there is change in the ownership of the mark. if that be so,any registered proprietor could easily defeat an application for rectification by assigning the mark to some other person to have a fresh period of 5 years from the date of assignment and thus effectively frustrate the very object of the provision in s.47(1)(a) and (b). further,it is to be noted that an assignment is subject to "the provisions of the act and any rights vested in any other person" -see. s.37. the assignor cannot obviously transfer more rights than he himself has to the assignee under the act. an assigner can transfer only such right which he possesses. STATUTE interpretation of the provisions of s.46(1)(b) and section 48 of the trade and merchandise marks act,1958

interpretation and or application of the provisions of the gujarat town planning and urban development act1976 for short the act and the rules framed thereunder known as the gujarat town planning and urban development rules1979. for short the rules is in question in this appeal which arises out of a judgment and order dated 27 12 2006 passed by a division bench of the high court of gujarat at ahmedabad in letters patent appeal no 1611 of 2006 arising out of a judgment and order dated 23 11 2006 passed by a learned single judge of the said court in sca no 7092 of 2001. before embarking upon the issue involved in this appeal we may notice the admitted fact of the matter. the government of gujarat in exercise of its power conferred upon it u s 65 of the act made a scheme in respect of the town of umra surat on 1 06 1999. plot nos 177 and 178 were owned by respondent no 4 herein. appellant was a tenant under the said respondent in respect of plot no 178 admeasuring 1067 sq m. he used to run a business of marble and stone therein. a road widening project was proposed in terms of the said scheme. notices therefor were issued both to the appellant as also the respondent No appellant objected thereto. he however did not pursue his case in regard to the proposal for widening of the road. for the said public purpose viz. widening of the road867 sq m of land was taken over leaving only 200 sq m of land. with a view to give effect to the provisions of the act and the rules framed thereunder proceedings were initiated for allotment of the said land in terms of the act 20 of the land was taken over without payment of any compensation. in respect of the proceedings initiated for the purpose of re allotment of the land despite a public notice the appellant did not file any objection. he did not take any part in the proceedings therefor. respondent no 4 was allotted a final plot bearing no 157 and the said 200 sq m of land of plot no 178 has merged in final plot no 165 owned by the respondent no 3. the scheme was notified in the year 1999 respondent no 1 herein which is the statutory agency in terms of the act for the purpose of implementation of the scheme issued a notice u s 67 of the act upon the respondent no 4 on or about 15 01 2000 as he did not respond thereto a notice u s 68 of the act was served on him on 31 03 2000 stating as per the said approved preliminary scheme the plot no 157 is allotted to you. and its pole demarcations were done by the town planning officer at site. the said final plot original plot is allotted in lieu of your no 177178 paiki land. and the said land is now vested in the municipal corporation from 1 7 1999and is of the ownership of the municipal corporation. thereafter the notice below s 67 for the change in occupation was issued on 15 1 2000 to you. in spite of this you have not handed over the possession. therefore as per the gujarat town planning and urban development rules1979 rule 33 the undersigned in exercise of powers conferred below s 681 and 82 of the bombay provincial municipalities act and below the s 68 notice under the gujarat town planning and urban development act this is to inform you that as shown in the sketch on the reverse the premises marked should be vacated within 7 days from receipt of the notice and had over the possession to the surat municipal corporation. if you fail to do so then on completion of the stipulated time limit as per the rule 33 of the gujarat town planning and urban development rules1979 the said land and the occupation on the same will be summarily evicted and your occupation will be removed and if you obstruct interfere on it after taking away the possession you trespass then as provided under rule 33 of the gujarat town planning and urban development rules1979. the action as per the s 188 of the indian penal code will be initiated against you before the criminal court pleased take note of the same. the validity and or legality of the said notice was questioned by the appellant by filing a writ petition in the high court of gujarat inter alia contending that the purported final allotment of plot no 165 in favour of the respondent no 3 and allotment of final plot no 157 in favour of the respondent no 4 were made without issuing any notice as envisaged u ss 52 and 53 of the act. in the said writ petition it was prayed on the facts and circumstances mentioned herein above the petitioner prays to your lordships that a be pleased to issue writ of mandamus or writ in the nature of mandamus or appropriate writ order or direction quashing and setting aside the impugned action of acquiring and demolishing the structures available on the land in question i e original plot no 17 a r s no 17 p situated at umra surat. a learned single judge of the high court dismissed the said writ petition inter alia opining that the interest of landlord and tenant being common and in absence of any inter se dispute between them even if any portion of the land which remained in possession of the tenant was included in the scheme the proper remedy would be to claim compensation to that extent holding it appears that in the said decision the apex court while considering the scheme on the touch stone of the mandatory procedure to be followed by the authority under the bombay town planning rules has given directions to provide alternative accommodation based on the earlier decision in case of jaswantsingh mathurasingh and upheld the scheme. such is not the issue in the present case nor there is any complaint by the tenant that any special notice was not served or that the mandatory procedure for finalization of the scheme is not followed. further it appears that if the interest of the landlord and of the tenant is common and in absence of any inter se dispute between the landlord and tenant even if any portion of the land which is in possession of the tenant is included in the scheme the proper remedy for the tenant would be to claim for compensation to that extent and if such compensation is not received by him he may resort to proper remedy available for recovery of the compensation to the extent of the area in his occupation. at least on ground that the tenant is in occupation it would not be a case for interference with the scheme which is sanctioned and made a part of the statute. suffice it to say that the tenant will be at liberty to resort to appropriate proceedings against the landlord for the inter se rights and also for entitlement of the compensation. but if the area of original plot no 178 is included in the final scheme and in exchange of the original plot held by keshav gramini of 178 and 177the final plot is already allotted and as observed earlier it was even otherwise in the ownership of the original holder and it is only on account of inter se dispute the other persons are lawfully occupying the land the tenant can not insist that his landlord must be allotted the land of final plot no 157 simultaneously when he is to be evicted or deprived of the portion of the land of original plot no 178 therefore in my view considering the peculiar facts and circumstances of the present case the decision of the apex court in case of mansukhlal1991 indlaw sc 975 supra can not be made applicable to the present case. a division bench of the high court dismissed an intra court appeal preferred thereagainst. mr u u lalit learned senior counsel appearing on behalf of the appellant in support of this appeal inter alia would submit i. the provisions of ss 52 and 81 being imperative in character no acquisition of land is permissible without service of any notice upon the persons interested which would include a tenant in occupation and carrying on business thereon. a tenant having regard to the provisions of the transfer of property act or otherwise having an interest in the property can not be deprived therefrom without following the procedure established by law and without initiation of any proceedings for acquisition of land. the tenant 's interest being distinct and separate could not have been held to be merged with the interest of the landlord either for the purpose of allotment of a final plot or otherwise in favour of the landlord. appellant having a right over the remaining 200 sq m of the land of original plot no 178 should be allowed to continue thereupon and final allotment made in favour of the respondent no 3 to that extent should be cancelled. lalit in support of his contention strongly relied upon a decision of this court in mansukhlal jadavji darji and others v ahmedabad municipal corporation and others 1992 1 scc 384 1991 indlaw sc 975 and jaswantsingh mathurasingh and another v ahmedabad municipal corporation and others 1992 supp 1 scc 5 1991 indlaw sc 972. prashant g desai learned counsel appearing on behalf of the respondent no 1on the other hand would submit. i public notices having been issued in terms of the rule 26 of the rules an objection which would nullify the scheme can not be entertained at this stage. ii respondent no 1 corporation merely being interested in the implementation of the scheme is entitled to obtain vacant possession from him so as to enable it to deliver it to the respondent no 3 in whose favour plot no 165 has been finally allotted. the scheme in terms of sub s 3 of s 65 of the act having become a part of the act validity thereof can not be questioned at this stage as modification of the scheme if any will have to undergo the entire process once over again which is not contemplated under the act. the act was enacted to consolidate and amend the law relating to the making and execution of development plans and town planning schemes in the state of gujarat. it is not necessary for us to delve deep into the statutory scheme. suffice it to say that chapter iv of the act deals with control of development and use of land included in the development plans. chapter v of the act provides for town planning schemes. s 40 of the act empowers the appropriate authority to make one or more schemes. a declaration of intention to make a scheme is to be notified whereafter a draft scheme may be published. s 45 provides for reconstitution of the plots sub s 2. whereof inter alia enables allotment of a final plot from an original plot by transfer of any adjoining lands. s 52 contemplates issuance of a notice in a prescribed manner and in the prescribed form. s 52 of the act provides for the contents of preliminary and final scheme. it inter alia provides for giving of a notice by the town planning officer as follows 1 in a preliminary scheme the town planning officer shall. i after giving notice in the prescribed manner and in the prescribed form to the persons affected by the scheme define and demarcate the areas allotted to or reserved for any public purpose or for a purpose of the appropriate authority and the final plots ii after giving notice as aforesaid determine in a case in which a final plot is to be allotted to persons in ownership in common the shares of such persons. further sub s 3 of section 65ss 67 and 68 of the act read as under 65 power of government to sanction or refuse to sanction the scheme and effect of sanction. 3 on and after the date fixed in such notification the preliminary scheme or the final scheme as the case may be shall have effect as if it were enacted in this act. 67 effect of preliminary scheme. on the day on which the preliminary scheme comes into force. a all lands required by the appropriate authority. shall unless it is otherwise determined in such scheme vest absolutely in the appropriate authority free from all encumbrances b all rights in the original plots which have been re constituted into final plots shall determine and the final plots shall become subject to the rights settled by the town planning officer. 68 power of appropriate authority to evict summarily on and after the date on which a preliminary scheme comes into force any person continuing to occupy any land which he is not entitled to occupy under the preliminary scheme. shall in accordance with the prescribed procedure be summarily evicted by the appropriate authority. rules 261263 and 33 of the rules read as under 26 procedure to be followed by town planning officer u s 51 and under sub s 1 of s 52 1. for the purpose of preparing the preliminary scheme and final scheme the town planning officer shall give notice in form h of the date on which he will commence his duties and shall state the time as provided in rule 37 within which the owner of any property or right which is injuriously affected by the making of a town planning scheme shall be entitled u s 82 to make a claim before him. such notice shall be published in the official gazette and in one or more gujarati newspapers circulated within the area of the appropriate authority and shall be pasted in prominent places at or near the areas comprised in the scheme and at the office of the town planning officer. the town planning officer shall before proceeding to deal with the matters specified in section 52publish a notice in form h in the official gazette and in one or more gujarati newspapers circulating within the area of the appropriate authority. such notice shall specify the matters which are proposed to be decided by the town planning officer and state that all persons who are interested in the plots or are affected by any of the matters specified in the notice shall communicate in writing their objections to the town planning officer within a period of twenty days from the publication of notice in the official gazette. such notice shall also be posted at the officer of the town planning officer and of the appropriate authority and the substance of such notice shall be pasted at convenient places in the said locality. 33 procedure for eviction u s 68 1. for eviction under section 68the appropriate authority shall follow the following procedure viz. a the appropriate authority shall in the first instance serve a notice upon a person to be evicted requiring him within such reasonable time as may be specified in the notice to vacate the land. b if the person to be evicted fails to comply with the requirement of the notice the appropriate authority shall depute any officer or servant to remove him. c if the person to be evicted resists or obstructs the officer or servant deputed u cl b or. if he re occupies the land after eviction. the appropriate authority shall prosecute him under s 188 of the indian penal code. before embarking upon the rival contentions we may also notice that the provisions of the bombay town planning rules1955. for short the bombay rules are in pari materia with the rules. rule 21 of the bombay rules provides for the procedure to be followed by the town planning officer. it makes it obligatory on the part of the officer to give notice of the date on which he will commence his duties and shall state therein the time within which the owner of any property or rights which is injuriously affected by the making of the town planning scheme shall be advertised in one or more newspapers published in the regional language and circulating within the jurisdiction of the local authority and shall be posted in prominent places at or near the area comprised in the scheme and at the office of the town planning officer. sub rule 3 of rule 21 of the bombay rules provides for serving of a special notice of at least three clear days upon the person interested in any plot or in any particular area comprised in the scheme before the town planning officer proceeds to deal in detail with the portion of the scheme relating thereto. sub rule 4 makes it imperative upon the town planning officer to give all persons affected by any particular of the scheme sufficient opportunity of stating their views and shall not give any decision till he has duly considered their representations if any. sub rule 5 provides for recording a brief minute setting out the points at issue and the necessary particulars if during the proceedings it appears to the town planning officer that there are conflicting claims or any difference of opinion with regard to any part of the scheme. rules 26 of the rules do not contemplate service of individual notice. it prescribes service of notice in form h a copy of the notice in the said form is kept at the office of the town planning officer during office hours. any person affected by the proposal of the town planning scheme is entitled to inspect the scheme in the office where arrangements for explaining the scheme proposals are made. it furthermore provides that any person entitled to claim damages in terms of s 82 of the act should communicate the details of his claim to the town planning officer. s 81 of the act enables the state to transfer of right from original to final plot or extinction of such right. a town planning scheme therefore envisages calling for objection from the persons concerned for three purposes i in regard to draft scheme ii lodging of any claim for payment of compensation iii participation in the matter of allotment of final plots. we may however notice that rule 21 of the bombay rules provides for notice under sub rule 3 thereof and a reasonable opportunity of hearing under sub rule 5 thereof. sub rule 3 of rule 21 of the bombay rules provides for issuance of a special notice upon the person interested in any plot or in any particular plot comprised in the scheme. we may also take notice of the decision of this court in mansukhlal jadavji. darji1991 indlaw sc 975 supra wherein this court opined that sub rule 3 of rule 21 of the bombay rules was mandatory in nature subject of course to the condition that on the crucial date viz when the town planning scheme is notified in the official gazette he whether an owner or tenant or sub tenant must be in possession of the property. in jaswantsingh mathurasingh1991 indlaw sc 972 suprait was reiterated that a tenant or a sub tenant is a person interested and is entitled to notice. in that context it was held the question is whether the tenant or a sub tenant is a person interested and is entitled to notice. it is obvious that u s 105 of transfer of property act a lease creates right or an interest in enjoyment of the demised property and a tenant or a sub tenant is entitled to remain in possession of the demised property until the lease is duly terminated and eviction takes place in accordance with law. therefore a tenant or a sub tenant in possession of a tenement in the town planning scheme is a person interested within the meaning of rules 213 and 4 of the rules. but he must be in possession of the property on the crucial date i e when. the town planning scheme is notified in the official gazette. every owner or tenant or a sub tenant in possession on that date alone shall be entitled to a notice and opportunity. rule 213however of the bombay rules has been amended in tune with rule 26 of the rules. amended rules are in pari materia with rule 26 of the rules. appellant was a tenant in respect of plot no 178 plot no 177 was not a plot contiguous thereto. they were separated not only by a road but also by various other plots. it is also not in dispute that the appellant filed an objection in regard to the draft scheme but did not eventually pursue the same. the draft scheme was approved 867 sq m of land had been acquired for public purpose out of the said plot no 178 while the proceedings relating to allotment of final plot were in progress he even did not file any objection thereto. if he intended to claim any interest in a portion of plot no 178 either for the purpose of obtaining compensation for acquisition of a part of the land or to continue to have possession over 200 sq m of land in plot no 178it was obligatory on his part to take part in the proceedings. whether irrespective of rule 26 of the rules which prescribes for issuance of a general public notice any special notice upon the appellant was required to be served by the state or by the authority in our opinion cannot be gone into by us in these proceedings for the first time. validity of rule 26 of the rules had never been questioned. it had also not been contended that the said rule is ultra vires s 52 of the act. a person interested in continuing to keep possession over a property and or a part of the amount of compensation must lay his claim before the appropriate authority at the appropriate stage. if in absence of any such claim filed by the appellant the authorities have proceeded to finalise allotment of final plot in favour of the respondent nos 3 and 4 herein it is too late in the day to contend that the entire scheme should be re opened. we would consider the effect of sub s 3 of s 65 of the act a little later but we may at this juncture notice that the respondent no 3 in whose favour plot no 165 has been allotted which includes 200 sq m of land purported to be in possession of the appellant had nothing to do with the dispute between the appellant and his landlord the respondent no 4 respondent no 4 was in possession of a contiguous plot. respondent no 4 was owner of both plot. nos 177 and 178 he was therefore in his own right entitled to final allotment of some plot. we would however assume that it was obligatory on the part of the state to serve a special notice upon the appellant. the question however would be what would be the consequence of non compliance thereof vis vis the conduct of the appellant himself. a person may waive a right either expressly or by necessary implication. he may in a given case disentitle himself from obtaining an equitable relief particularly when he allows a thing to come to an irreversible situation. different statutes provide for different manner of service of notice. the bangalore development authority act1976 provides that every person whose name appears in the assessment list or land revenue records shall be served with notice see sureshchandra c mehta v state of karnataka and others 1994 supp 2 scc 511 1993 indlaw sc 538. in west bengal housing board etc v. brijendra prasad gupta and others etc air 1997 sc 2745it was opined that the authority is not required to make a roaming enquiry as to who is the person entitled to notice. we have referred to the said decisions only to show that the requirements in regard to the manner of service of notice varies from statute to statute and there exists a difference between the bombay rules and the rules. we are however not unmindful of the fact that a statute of town planning ex facie is not a statute for acquisition of a property. an owner of a plot is asked to part therewith only for providing for better facilities of which he would also be a beneficiary. every step taken by the state does not involve application of the doctrine of eminent domain. in this case the appellant did not oppose the draft scheme. it accepted that the state had a right to do so. existence of a public purpose and increase in the valuation of the property was admitted. there exists a distinction in the action of the planning authority as regards vesting of a property in it and one so as to enable it to create a third party interest vis vis for the purpose of re allotment thereof. in the former case the vesting of the land may be held to be an act of acquisition whereas in the latter it would be distribution of certain benefits having regard to the purpose sought to be achieved by a statute involving town planning. it was on that legal principle this court in state of gujarat v shantilal mangaldas ors 1969 3 scr 341 1969 indlaw sc. 254opined that when a development is made the owner of the property gets much more than what would have he got if the same remained undeveloped in the process as by reason thereof he gets the benefit of living in a developed town having good town planning. s 67 of the act provides that all lands required by the appropriate authority shall unless it is otherwise determined in such scheme vest absolutely in the appropriate authority free from all encumbrances with effect from the date on which the preliminary scheme comes into force. what would be the quantum of payment of compensation therefor is also provided in s 82 of the act. it is in the aforementioned situation a claim is to be made before the authority whenever a notice in form h is published. if a claim is not filed the person who is said to be injuriously affected does so at its own peril. had such a claim been filed the authority before making final allotment could have considered the competing claims wherefor a large number of factors were required to be taken into consideration viz. the location of the land the area of the land the nature of right etc. when a statute makes an elaborate provision as regards the formalities required to be undergone at every stage by the local authority the state government and other authorities concerned in preparing and making the final town planning scheme the same should be considered to be exhaustively maneklal chhotalal. ors v. m g makwana ors 1967 3 scr 65 1967 indlaw sc 138. in maneklal chhotalal1967. indlaw sc 138 suprait was held therefore having due regard to the substantive and procedural aspects we are satisfied that the act imposes only reasonable restrictions in which case it is saved u art 195 of the constitution. the considerations referred to above will also show that the grievance of the petitioners that art 14 is violated is also not acceptable. see also bhikhubhai vithlabhai patel ors v. state of gujarat anr 2008 4 scale 278 2008 indlaw sc 527. we are however not oblivious that in a given situation a question may also arise as to whether the restrictions imposed by a statute are reasonable or not. it is not a case where the state by its acts of omissions and commissions was unjustly enriching itself. it was a dispute between two private parties as regards the right to obtain final allotment the principles underlying the same are not in dispute. what is in dispute is the distribution of quantum thereof between two competing claimants viz landlord and tenant. we do not mean to say that under no circumstances the appellant was entitled to allotment of a portion of the property or mandatory compensation in lieu thereof from the landlord. but we intend to emphasise that he has lost his right to enforce the same in a public law forum. he has no enforceable claim against the state at this juncture. he may pursue his claim only against the respondent no 4 in an appropriate proceedings wherein for certain purposes the state or the authorities may also be impleaded as a party. even if he had a claim he would be deemed to have waived the same for the reasons stated hereinafter. it is not in dispute that a appellant although filed an objection with regard to the draft scheme did not choose to pursue it. b he did not file objections for re allotment and did not participate in the proceedings following acquisition instituted by the authorities under the act. in view of the above the issue is whether it was open to him to assert his purported right to special notice in respect of the final allotment in the instant case given the fact that he did not pursue his objections to the draft scheme and subsequently did not object participate during the proceedings for re allotment. it has been noticed by us hereinbefore that under rule 26 of the rules applicable in the instant case as distinguished from the bombay rules wherein special notice is requiredno special notice is mandatorily required to be served. assuming however that it was obligatory for the state to issue notice to the appellant the question is whether the principle of waiver precludes him from claiming equitable relief in this case due to his earlier conduct which allowed the entire process of acquisition and allotment to become final. we are of the opinion that even if he had any such right he waived the same. in halsbury 's laws of england volume 1624th edition para 907it is stated the expression waiver may in law bear different meanings. the primary meaning has been said to be the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted and is either express or implied from conduct. it may arise from a party making an election for example whether or not to exercise a contractual right. waiver may also be by virtue of equitable or promissory estoppel unlike waiver arising from an election no question arises of any particular knowledge on the part of the person making the representation and the estoppel may be suspensory only. where the waiver is not express it may be implied from conduct which is inconsistent with the continuance of the right without the need for writing or for consideration moving from or detriment to the party who benefits by the waiver but mere acts of indulgence will not amount to waiver nor may a party benefit from the waiver unless he has altered his position in reliance on it. as early as 1957the concept of waiver was articulated in a case involving the late assertion of a claim regarding improper constitution of a tribunal in manak lal v dr prem chand air 1957 sc 425 1957 indlaw sc 159 in the following terms. it is true that waiver can not always and in every case be inferred merely from the failure of the party to take the objection. waiver can be inferred only if and after it is shown that the party knew about the relevant facts and was aware of his right to take the objection. as sir johan romilly m r has observed in vyvyan v vyvyan. 1861 30 beav 65 54 e r 813817 waiver or acquiescence like election presupposes that the person to be bound is fully cognizant of his rights and that being so he neglects to enforce them or chooses one benefit instead of another either but not both of which he might claim. in the director of inspection of income tax investigationnew delhi and another v pooran mal sons and another 1975 4 scc 568 1974 indlaw sc 354 the issue was regarding waiver of benefits under a statute of limitation. it was stated we may in this connection refer to the decision in wilson v mcintosh. in that case an applicant to bring lands under the real property act filed his case in court under section 21more than three months after a caveat had been lodged and thereafter obtained an order that the caveator should file her case which she accordingly did. it was held that he had thereby waived his right to have the caveat set aside as lapsed u s 23 the privy council held that the limitation of time contained in s 23 was introduced for the benefit of the applicant to enable him to obtain a speedy determination of his right to have the land brought under the provisions of the act and that it was competent for the applicant to waive the limit of the three months and that he did waive it by stating a case and applying for and obtaining an order upon the appellant to state her case both which steps assumed and proceeded on the assumption of the continued existence of the caveat. they referred with approval to the decision in phillips v martin where the chief justice said here there is abundant evidence of waiver and it is quite clear that a man may by his conduct waive a provision of an act of parliament intended for his benefit. the caveator was not brought into court in any way until the caveat had lapsed. and now the applicant after all these proceedings have been taken by him after doubtless much expense has been incurred on the part of the caveator and after lying by and hoping to get a judgment of the court in his favour asks the court to do that which but for some reasons known to himself he might have asked the court to do before any other step in the proceedings had been taken. i think he is altogether too late. it is to my mind a clear principle of equity and i have no doubt there are abundant authorities on the point that equity will interfere to prevent the machinery of an act of parliament being used by a person to defeat equities which he has himself raised and to get rid of a waiver created by his own acts. the legal principle emerging from these decisions is also stated in craies on statute law 6th edn at page 369 as follows as a general rule the conditions imposed by statutes which authorise legal proceedings are treated as being indispensable to giving the court jurisdiction. but if it appears that the statutory conditions were inserted by the legislature simply for the security or benefit of the parties to the action themselves and that no public interests are involved such conditions will not be considered as indispensable and either party may waive them without affecting the jurisdiction of the court. emphasis supplied. applying the above principles to the present case it must be held that the benefit of notice provided under the act and rules being for the benefit of the appellant in which no public interests are involved he has waived the same. significantly a similar conclusion was reached in the case of krishna bahadur v purna theatre 2004 8 scc 229 2004. indlaw sc 681though the principle was stated far more precisely in the following terms the principle of waiver although is akin to the principle of estoppel the difference between the two however is that whereas estoppel is not a cause of action it is a rule of evidence waiver is contractual and may constitute a cause of action it is an agreement between the parties and a party fully knowing of its rights has agreed not to assert a right for a consideration. a right can be waived by the party for whose benefit certain requirements or conditions had been provided for by a statute subject to the condition that no public interest is involved therein. whenever waiver is pleaded it is for the party pleading the same to show that an agreement waiving the right in consideration of some compromise came into being. statutory right however may also be waived by his conduct. emphasis supplied see also bank of india v o p swarnakar 2003 2 scc 721 2002 indlaw sc 1562. in ramdev food products pvt. ltd v. arvindbhai rambhai patel and ors 2006 8 scale 631 2006 indlaw sc 786this court observed the matter may be considered from another angle. if the first respondent has expressly waived his right on the trade mark registered in the name of the appellant company could he claim the said right indirectly. the answer to the said question must be rendered in the negative. it is well settled that what can not be done directly can not be done indirectly. the term waiver has been described in the following words waiver is the abandonment of a right in such a way that the other party is entitled to plead the abandonment by way of confession and avoidance if the right is thereafter asserted and is either express or implied from conduct. a person who is entitled to rely on a stipulation existing for his benefit alone in a contract or of a statutory provision may waive it and allow the contract or transaction to proceed as though the stipulation or provision did not exist. waiver of this kind depends upon consent and the fact that the other party has acted upon it is sufficient consideration it seems that in general where one party has by his words or conduct made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly then once the other party has taken him at his word and acted on it so as to alter his position the party who gave the promise or assurance can not afterwards be allowed to revert to the previous legal relationship as if no such promise or assurance had been made by him but he must accept their legal relations subject to the qualification which he has himself so introduced even though it is not supported in point of law by any consideration see 16 halsbury 's laws 4th edn para 1471. in this view of the matter it may safely be stated that the appellant through his conduct has waived his right to an equitable remedy in the instant case. such conduct precludes and operates as estoppel against him with respect to asserting a right over a portion of the acquired land in a situation where the scheme in question has attained finality following as a result of the appellant 's inaction. lalit submits that his client is ready and willing to pay some reasonable amount to the respondent no 3 in whose favour plot no 165 has been finally allotted. issuance of any such direction in our opinion is legally impermissible. we therefore are of the opinion that in this case no relief can be granted to the appellant. he may however take recourse to such remedy which is available with him in law including one by filing a suit or making a representation before the state. for the reasons aforementioned the appeal is dismissed. no costs. appeal dismissed.

IN-Ext

FACTS the government of gujarat in exercise of its power conferred upon it u/s.65 of the gujarat town planning and urban development act,1976act made a scheme in respect of the town of umra,surat on 1.06.1999. plot nos.17/7 and 17/8 were owned by respondent no.4 herein. appellant was a tenant under the said respondent in respect of plot no.17/8 admeasuring 1067 sq.m. he used to run a business of marble and stone therein. a road widening project was proposed in terms of the said scheme. notices therefor were issued both to the appellant as also the respondent no. appellant objected thereto. he,however,did not pursue his case in regard to the proposal for widening of the road. for the said public purpose,viz.,widening of the road,867 sq.m.of land was taken over leaving only 200 sq.m.of land. with a view to give effect to the provisions of the act and the rules framed thereunder,proceedings were initiated for allotment of the said land in terms of the act.20% of the land was taken over without payment of any compensation. the validity and/ or legality of the said notice was questioned by the appellant by filing a writ petition in the high court of gujarat inter alia contending that the purported final allotment of plot no.165 in favour of the respondent no.3 and allotment of final plot no.157 in favour of the respondent no.4 were made without issuing any notice as envisaged u/ss.52 and 53 of the act. ARGUMENT mr.u.u.lalit,learned senior counsel appearing on behalf of the appellant,in support of this appeal,inter alia would submit: "(i. the provisions of ss.52 and 81 being imperative in character,no acquisition of land is permissible without service of any notice upon the persons interested which would include a tenant in occupation and carrying on business thereon. ii. a tenant having regard to the provisions of the transfer of property act or otherwise having an interest in the property cannot be deprived therefrom without following the procedure established by law and without initiation of any proceedings for acquisition of land. iii. the tenant's interest being distinct and separate could not have been held to be merged with the interest of the landlord,either for the purpose of allotment of a final plot or otherwise in favour of the landlord. iv. appellant having a right over the remaining 200 sq.m.of the land of original plot no.17/8 should be allowed to continue thereupon and final allotment made in favour of the respondent no.3 to that extent should be cancelled. ISSUE interpretation and/ or application of the provisions of the gujarat town planning and urban development act,1976 and the rules framed thereunder known as the gujarat town planning and urban development rules,1979. for short "the rules") is in question in this appeal which arises out of a judgment by a division bench of the high court of gujarat . ANALYSIS the act was enacted to consolidate and amend the law relating to the making and execution of development plans and town planning schemes in the state of gujarat. it is not necessary for us to delve deep into the statutory scheme. rule 21 of the bombay rules makes it obligatory on the part of the officer to give notice of the date on which he will commence his duties and shall state therein the time,within which the owner of any property or rights which is injuriously affected by the making of the town planning scheme shall be advertised in one or more newspapers published in the regional language and circulating within the jurisdiction of the local authority and shall be posted in prominent places at or near the area comprised in the scheme and at the office of the town planning officer. a town planning scheme,therefore,envisages calling for objection from the persons concerned for three purposes: "(i) in regard to draft scheme; (ii) lodging of any claim for payment of compensation; (iii) participation in the matter of allotment of final plots. rule 21 of the bombay rules provides for notice under sub-rule (3) thereof and a reasonable opportunity of hearing under sub-rule (5) thereof. sub-rule (3) of rule 21 of the bombay rules provides for issuance of a special notice upon the person interested in any plot or in any particular plot comprised in the scheme. take notice of the decision of this court in mansukhlal jadavji. darji1991 indlaw sc 975 (supra) wherein this court opined that sub-rule (3) of rule 21 of the bombay rules was mandatory in nature,subject,of course,to the condition that on the crucial date,viz.,when the town planning scheme is notified in the official gazette,he,whether an owner or tenant or sub-tenant,must be in possession of the property. in jaswantsingh mathurasingh1991 indlaw sc 972 (supra),it was reiterated that a tenant or a sub-tenant is a person interested and is entitled to notice. in that context,it was held: "the question is whether the tenant or a sub-tenant is a person interested and is entitled to notice. it is obvious that u/s.105 of transfer of property act,a lease creates right or an interest in enjoyment of the demised property and a tenant or a sub-tenant is entitled to remain in possession of the demised property until the lease is duly terminated and eviction takes place in accordance with law. therefore,a tenant or a sub-tenant in possession of a tenement in the town planning scheme is a person interested within the meaning of rules 21(3) and (4) of the rules. but he must be in possession of the property on the crucial date i.e.when. the town planning scheme is notified in the official gazette. every owner or tenant or a sub-tenant,in possession on that date alone shall be entitled to a notice and opportunity. it is also not in dispute that the appellant filed an objection in regard to the draft scheme but did not eventually pursue the same. it had also not been contended that the said rule is ultra vires s.52 of the act. a person interested in continuing to keep possession over a property and/ or a part of the amount of compensation must lay his claim before the appropriate authority at the appropriate stage. if in absence of any such claim filed by the appellant,the authorities have proceeded to finalise allotment of final plot in favour of the respondent nos.3 and 4 herein,it is too late in the day to contend that the entire scheme should be re-opened. a person may waive a right either expressly or by necessary implication. he may in a given case disentitle himself from obtaining an equitable relief particularly when he allows a thing to come to an irreversible situation. different statutes provide for different manner of service of notice. the bangalore development authority act,1976 provides that every person whose name appears in the assessment list or land revenue records shall be served with notice.[see sureshchandra c.mehta v. state of karnataka and others 1994 supp (2) scc 511 1993 indlaw sc 538. in west bengal housing board etc.v. brijendra prasad gupta and others,etc.[air 1997 sc 2745],it was opined that the authority is not required to make a roaming enquiry as to who is the person entitled to notice. there exists a distinction in the action of the planning authority as regards vesting of a property in it and one so as to enable it to create a third party interest vis-'-vis for the purpose of re-allotment thereof. when a statute makes an elaborate provision as regards the formalities required to be undergone at every stage by the local authority,the state government and other authorities concerned in preparing and making the final town planning scheme,the same should be considered to be exhaustively.[maneklal chhotalal. ors.v. m.g.makwana &; ors.[(1967) 3 scr 65 1967 indlaw sc 138. it is not a case where the state by its acts of omissions and commissions was unjustly enriching itself. it was a dispute between two private parties as regards the right to obtain final allotment; the principles underlying the same are not in dispute. what is in dispute is the distribution of quantum thereof between two competing claimants,viz.,landlord and tenant. the legal principle emerging from these decisions is also stated in craies on statute law (6th edn.) at page 369 as follows: "as a general rule,the conditions imposed by statutes which authorise legal proceedings are treated as being indispensable to giving the court jurisdiction. but if it appears that the statutory conditions were inserted by the legislature simply for the security or benefit of the parties to the action themselves,and that no public interests are involved,such conditions will not be considered as indispensable,and either party may waive them without affecting the jurisdiction of the court. emphasis supplied. “ applying the above principles to the present case,it must be held that the benefit of notice provided under the act and rules being for the benefit of the appellant in which no public interests are involved,he has waived the same. in this view of the matter,it may safely be stated that the appellant,through his conduct,has waived his right to an equitable remedy in the instant case. such conduct precludes and operates as estoppel against him with respect to asserting a right over a portion of the acquired land in a situation where the scheme in question has attained finality following as a result of the appellant's inaction. lalit submits that his client is ready and willing to pay some reasonable amount to the respondent no.3 in whose favour plot no.165 has been finally allotted. issuance of any such direction, ,is legally impermissible. STATUTE suffice it to say that chapter iv of the gujarat town planning and urban development act,1976 deals with control of development and use of land included in the development plans. rule 21 of the bombay rules provides for the procedure to be followed by the town planning officer. rule 21(3) of the bombay rules has been amended in tune with rule 26 of the rules. amended rules are in pari materia with rule 26 of the rules. s.67 of the act provides that all lands required by the appropriate authority shall,unless it is otherwise determined in such scheme,vest absolutely in the appropriate authority free from all encumbrances with effect from the date on which the preliminary scheme comes into force.

in our view although the high court had set aside the concurrent findings of fact arrived at by the tribunals below under the karnataka land reforms. act1974 in shortthe act in the exercise of its revisional jurisdiction under section 121a of the act even then this is not a fit case where this court in the exercise of its power u art 136 of the constitution would interfere with such an order of the high court. the appellants in this appeal claiming to be the tenants of agricultural land bearing survey no 1251measuring 3 acres 11 gunthas. hereinafter called as the scheduled land situated in lingabahalli village madhugiri taluk in the state of karnataka filed form no 7 before the land tribunal praying for a declaration that they had acquired occupancy rights in respect of the scheduled land. they alleged that they were cultivating the scheduled land from 1968 till the notified date under the act on wara basis giving 13rd of the share in the foodgrains to respondent no 4 accordingly the appellants prayed for an order of occupancy right in respect of the scheduled land alleging that they and their father were cultivating the scheduled land as occupancy. right holders relying inter alia on the entries under the rtc record. the case of the appellants as made out was disputed by the respondent no 4 the case of respondent no 4 was that the scheduled land was mortgaged to the 3rd respondent rajashankar in the year 1968 and after the expiry of the said mortgage the mortgagee was liable to deliver possession of the same. the case of tenancy as made out by the appellants or their father was denied. it was alleged by the respondent no 4 that since the respondent no 3 was a film actor and had settled in madras now chennaiwith the consent of the respondent no 3the scheduled land was given to the father of the appellants and the father of the appellants was cultivating the same from the year 1968 but not as a tenant. accordingly they prayed for rejection of the application filed by the father of the appellants claiming occupancy rights under the act. initially the land tribunal allowed the application of the father of the appellants and feeling aggrieved a writ petition was filed against the said order. the high court had set aside the order of the land tribunal and remanded the case back to the tribunal for a fresh decision. the land tribunal after remand relying on the entries in the rtc record and some other materials on record granted occupancy rights in favour of the appellants. feeling aggrieved the respondent no 4 filed an appeal before the appellate authority which was also dismissed. a revision petition thereafter was moved before the high court and the high court by the impugned judgment had set aside the concurrent findings of fact and rejected the application filed by the father since deceased of the appellants holding inter alia that the appellants or their father had failed to prove the tenancy in respect of the scheduled land. a special leave petition was filed against the judgment of the high court setting aside the concurrent orders allowing the application in respect of which leave has already been granted. we have heard mr raju learned counsel appearing on behalf of the appellants and mr s n bhat learned counsel appearing on behalf of the respondents. we have examined the impugned judgment of the high court as well as the orders of the tribunals below. it is true that the high court while exercising its revisional power under section 121a of the act had set aside the concurrent findings of fact of the land tribunal as well as of the appellate authority even then examining the findings of the high court and considering the power conferred on it in the revisional jurisdiction under section 121a of the act we do not find any reason to interfere with the impugned order of the high court in the exercise of our power u art 136 of the constitution. while setting aside the findings of the tribunal the high court at paragraph 7 of the impugned judgment made the following findings it is an undisputed fact that the revision petitioner has mortgaged the land in dispute in favour of the 5th respondent rajashankar in the year 1968 and after the expiry of the mortgage period since the 5th respondent failed to deliver back the possession of the land in dispute to him he filed the suit for redemption and obtained a decree for redemption. when the matter stood thus the father of the respondent nos 3 and 4 gondappa who is the uncle of the 5th respondent rajashankar filed form no 7 before the land tribunal claiming occupancy rights in respect of the land in dispute contending that he is the tenant of the said land under the 5th respondent from the year 1968i e subsequent to the date of mortgage. to prove this fact he relied upon the entries in the r t c extract for the years 1968 to 1974 wherein his name is shown as the person in cultivation of the land in dispute. but it is significant to note that the nature of cultivation of the land is not shown as that of a tenant in the said r t c extracts. in one year the nature of cultivation is described as swanthaand in the years the column is left blank. thus the r t c extracts produced by him do not support his contention that he was cultivating the land in dispute as a tenant. he has not produced any geni receipts or any lease agreement to show that the 5th respondent has leased out the land in dispute in his favour on crop share basis and that he paid the geni to the 5th respondent. thus he has no documentary evidence in respect of his claim that he came in possession of the land in dispute as a tenant under the 5th respondent and that he was cultivating the land in dispute as a tenant. it is further significant to note that in the evidence given by the respondent no 3 before the land tribunal he claimed that his father has taken the land in dispute on lease in the year 1962from the father of the petitioners gundu rao. even in respect of the said claim he failed to produce any documentary evidence evidencing the said lease of land in dispute from gundu rao. on the other hand in form no 7 filed by gondappa the father of the respondents 3 and 4he alleged that he was the tenant under the 5th respondent in respect of the land in dispute from the year 1968. thus there is no consistent stand regarding the year of commencement of tenancy or under whom gondappa the father of the respondents 3 and 4 became the tenant. so the only question which arises for consideration is whether the said cultivation of the land in dispute by the father of the respondents 3 and 4 during the years 1968 to 1974 can be presumed to be that of a tenant under the provisions of s 4 of the karnataka land reforms act. s 4 of the act makes it clear that a member of the owner 's family can not be considered as a deemed tenant even if he is lawfully cultivating the land belonging to owner. in the present case since the father of the respondents 3 and 4is the uncle of the respondent no 5it can not be said that he is not a member of the family of the respondent no 5. though there is no evidence on record to show that there are any joint family properties belonging to the joint family of respondent no 5 and his uncle there is nothing on record to show that they are not living as members of the joint family. so it is not possible to presume that the father of the respondent nos 3 and 4 gondappa who is the uncle of respondent no 5 was not the member of the family of the mortgagee respondent no 5. again the high court while setting aside the findings of fact also made the following findings but in the instant case since the respondents 3 and 4 failed to produce any evidence to show that their father was cultivating the land in dispute as a tenant under the 5th respondent mortgagee and even when the entries in the r t c extract produced do not support the claim of tenancy set up by the father of the respondents 3 and 4the question of drawing presumption of deemed tenancy in his favour under s 4 of the act does not arise. the father of the respondents 3 and 4being the uncle of respondent no 5 mortgagee it is also quite possible that he might have been allowed to cultivate the land in dispute under the personal supervision of respondent no 5 by assisting him in cultivation of the said land. in the present case also the respondents 3 and 4 failed to prove that their father was cultivating the land in dispute from the year 1968 as a tenant under the respondent no 5 and that after the death of their father they continued as tenants in respect of the land in dispute. it is also significant to note that the respondent no 5who was alive when the enquiry was pending before the land tribunal has not given evidence in favour of the respondents 3 and 4 stating that he has leased out the land in dispute in favour of the respondents 3 and 4 except the interested testimony of respondents 3 and 4there is nothing else on record to show that their father was inducted as a tenant to cultivate the land in dispute by the 5th respondent after the land is dispute was taken on mortgage by him. so it is not possible to presume that the father of the respondents 3 and 4 was inducted as a tenant by the mortgagee the 5th respondent in respect of the land in dispute. since the respondents 3 and 4 failed to produce any documentary evidence to show that their father was put in possession of the land in dispute by the 5th respondent mortgagee as a tenant and that they are continuing as tenants in respect of the said land after the death of their father i find that they are not entitled to grant of occupational rights. the earlier decision of this court reported in ilr 1996 kar page 2340 that when a person fails to prove that he is cultivating the land as tenant he can not be granted occupational right notwithstanding the fact that he might be in possession of the land and cultivating the same is applicable to the facts of the present case on all fours. from a careful examination of the findings given by the high court as quoted hereinabove in upsetting the concurrent findings of fact arrived at by the tribunals below we are not in a position to hold that the high court was not justified in setting aside the concurrent orders of the tribunals below in the exercise of its revisional power under section 121a of the act. the power conferred on the high court to revise the orders of the tribunals below has been provided in section 121a of the act which runs as under the high court may at any time call for the records of any order or proceeding recorded by the appellate authority under this act or any other law for the purpose of satisfying itself as to the legality of such order or as to the regularity of such proceeding and may pass such order with respect thereto as it thinks fit. from a plain reading of section 121a of the act under which revisional jurisdiction can be exercised it would be clear that the high court while exercising such power is entitled to re appreciate the evidence when it finds that the conclusion arrived at by the appellate authority runs contrary to the materials on record and when it finds that there is no evidence to support the conclusion of the appellate authority or when it finds that the reasons given by the appellate authority are absolutely perverse and can not be supported by the evidence on record. it would also be clear from a plain reading of section 121a of the act that the high court is also entitled to interfere with the orders of the tribunals below when the material evidence on record was ignored or a finding was such that no court would come to such conclusion or that the decision of the tribunals below was manifestly unjust. we have carefully examined the provisions under section 121a of the act which is the revisional power under the act and also the provisions u s 115 of the code of civil procedure for short the code so far as s 115 of the code is concerned it has been made clear that it is only in case of a jurisdictional error or when the courts below had acted with material irregularity in the exercise of their jurisdiction that the question of interfering with such an order can arise otherwise the high court is not entitled to interfere with any other order which does not satisfy the conditions laid down for interference u s 115 of the code. on the other hand in our view under section 121a of the act it would be open to the high court to interfere with the orders of the tribunals below as the high court is empowered to look into the legality of the order or regularity of the proceedings although in the exercise of revisional jurisdiction u s 115 of the code the high court is not entitled to look into the legality of the order or the regularity of the proceedings but only entitled to interfere with the orders of the tribunals or the courts below when it finds that they have a exercised a jurisdiction not vested in them by law or b failed to exercise a jurisdiction so vested or c acted in the exercise of their jurisdiction illegally or with material irregularity. reading the aforesaid provisions viz. section 121a of the act and s 115 of the code we have no hesitation in our mind to hold that the revisional power exercised by the high court under section 121a of the act is wider than the one exercised by the high court in its revisional jurisdiction u s 115 of the code. as noted herein earlier since section 121a of the act clearly empowers the high court to look into the legality of the orders impugned therefore it would be open to the high court to consider the material evidence on record when it finds that such evidence was not at all considered by the tribunals below or when the conclusion arrived at by the tribunals below run contrary to the materials on record or when it finds that there is no evidence to support the conclusion of the tribunals below or that the reasons given by the tribunals below are absolutely perverse or a finding was such that no court would come to such a conclusion or that the decisions of the tribunals below were manifestly unjust. therefore under section 121a of the act in the presence of any of the abovementioned circumstances the high court is empowered to look into the legality of the orders impugned in deciding the question whether the appellants could be held to be the tenants under the respondent nos 3 or 4. keeping the aforesaid principles in mind as to when the high court would be justified in the exercise of its power under section 121a of the act to examine the legality of the orders of the tribunals below in an appropriate case let us now examine the findings of the high court while setting aside the concurrent findings of fact of the tribunals below. in our view on a careful examination of the findings of the high court which were based on consideration of the material evidence on record it is difficult for us to hold that the high court was not justified in setting aside the concurrent findings of fact of the tribunals below in the exercise of its jurisdiction under section 121a of the act. we have already noted the findings made by the high court in the impugned judgment on the question whether the appellants could be held to be the tenants on the evidence and materials on record. while doing so in our view the high court was justified in coming to the conclusion that the evidence and material on record would clearly establish that the appellants were not able to prove that they were the tenants in respect of the scheduled land under the respondents. one of the main criteria for deciding whether a particular person is a tenant or not is to see whether there was payment of rent either in cash or in kind. in this case while rejecting the claim of the appellants the high court had considered that the appellants had failed to satisfy the court that any payment of rent was made either by the father of the appellants or by the appellants themselves. the tribunals below while accepting the case of the appellants had relied on the entries made in the rtc record in respect of certain period. while considering such entries the high court had rightly held that from the entries in the rtc record for the years 1968 to 1974the name of the appellants was not shown as the person in cultivation of the land in dispute and also the nature of cultivation of the scheduled land was not shown as that of the tenants in the said rtc record. that being the position the high court had come to a proper conclusion that the entries in the rtc extracts produced by the appellants could not support the contention that they were cultivating the land in dispute as the tenants. in our view also the high court was fully justified in drawing an adverse inference against the appellants for not producing any geni receipts or any lease agreement to show that the 5th respondent before the high court respondent no 3 herein had in fact leased out the scheduled land in favour of the appellants or their father since deceased on crop share basis and that the appellants had paid the geni to the 5th respondent. such being the findings arrived at by the high court with which we are in concurrence it is difficult to hold that the tenancy claimed by the appellants in respect of the scheduled land could be established. considering the above aspect of the matter and after considering the scope of section 121a of the act we are therefore unable to agree with the learned counsel for the appellants that in the exercise of revisional jurisdiction under section 121a of the act the high court was not entitled to set aside the concurrent findings of fact arrived at by the appellate authority and the land tribunal. such being the position we do not find any reason to interfere with the judgment of the high court although the high court in the exercise of its power under section 121a of the act had set aside the concurrent orders of the appellate authority as well as the land tribunal. mr raju the learned counsel appearing on behalf of the appellants however contended before us that it was not open to the high court in the exercise of its revisional jurisdiction under section 121a of the act to interfere with the concurrent findings of fact arrived at by the appellate authority and the land tribunal. in support of his contention he had relied on a decision of this court in the case of dahya lal ors vs. rasul mohammed abdul rahim 1963 3 scr 1 1962 indlaw sc 366. he also relied on a decision of this court in the case of mohan balaku patil ors vs. krishnoji bhaurao hundre dead. by lrs 2000 1 scc 518 1999 indlaw sc 941 and krishtappa yellappa pujar ors vs. ram samsthan beladhadi 1999 1 scc 74 1998 indlaw sc 1197. in our view so far as the decision in the case of mohan balaku patil ors vs. by lrs 2000 1 scc 518 1999 indlaw sc 941 is concerned it is difficult to conceive how this decision could be of any help to the appellants. in that case the findings recorded by the appellate authority as affirmed by the high court by placing reliance on the entries made in the record of rights to the effect that the appellants were not in possession of the land on the relevant date nor were they cultivating the same were not accepted by this court. in any view of the matter in that decision relying on the aforesaid findings this court also had set aside the order made by the appellate authority as affirmed by the high court in revision and restored the order made by the land tribunal. if that case is of any help to the facts of the present case it would be in favour of the respondents. so far as krishtappa yellapa pujar ors vs. ram samsthan beladhadi 1999 1 scc 74 is concerned we again fail to understand that how this could be of any help to the appellants. in that decision it has been made clear that the high court was entitled to interfere with the orders of the appellate authority only on question of law or irregularity in procedure and on no other aspect. in our view we have already held that the high court was entitled to interfere with the concurrent orders of the tribunals below as material evidence on record was not considered at all and non consideration of the material evidence on record is a question of law and therefore the high court was entitled to interfere. accordingly this decision is of no help to the appellants. lastly in our view in view of the discussion made herein above the decision relied on by the learned counsel for the appellant in the case of dahya lal ors vs. rasul mohammed abdul rahim 1963 3 scr 1 1962 indlaw sc 366 need not be discussed. there is another aspect of this matter. even assuming that the high court was not justified in setting aside the concurrent findings of fact in the exercise of its revisional jurisdiction under section 121a of the act then also we are of the view that it is not a fit case where this court should interfere with the impugned judgment of the high court in the exercise of our power u art 136 of the constitution. in union of india ors vs. gangadhar narsingdas aggarwal anr 1997 10 scc 3051995 indlaw sc 1227 this court while declining to interfere with the order of the high court in the exercise of its power u art 136 of the constitution held that even if two views are possible the view taken by the high court being a plausible one it would not call for intervention by this court u art 136 of the constitution. considering the concurrent orders of the appellate authority and the land tribunal and the impugned order of the high court we are in agreement with the high court because the view taken by it was plausible and therefore the question of interference by us u art 136 of the constitution is not warranted. again in jai mangal oraon vs mira nayak smt ors 2000 5 scc 141. 2000 indlaw sc 332this court had laid down that when there was nothing illegal and wrong in the reasoning and conclusions arrived at by the high court and the same appeared to be well merited and in accordance with the interpretation of statutory provisions this court would not interfere with the order of the high court u art 136 of the constitution. we have already considered the findings made by the high court while setting aside the concurrent orders of the tribunals below and found that the same appear to be well merited and in accordance with the material evidence on record therefore this court would not interfere with the order of the high court u art 136 of the constitution. finally in taherakhatoon d by lrs. salambin mohammad 1992 2 scc 635 1992 indlaw sc 355this court at paragraph 20 has observed as follows in view of the above decisions even though we are now dealing with the appeal after grant of special leave we are not bound to go into merits and even if we do so and declare the law or point out the error. still we may not interfere if the justice of the case on facts does not require interference or if we feel that the relief could be moulded in a different fashion. in view of the aforesaid we are therefore of the view that this is not a fit case where this court shall interfere with the order passed by the high court under section 121a of the act 19 for the reasons aforesaid this appeal fails and is dismissed without any order as to costs. appeal dismissed.

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FACTS the appellants claiming to be the tenants of agricultural land, (hereinafter called as the "scheduled land") situated in the state of karnataka,filed before the land tribunal praying for a declaration that they had acquired occupancy rights in respect of the scheduled land. they alleged that they were cultivating the scheduled land from 1968 till the notified date under the act on wara basis giving 1/3rd of the share in the foodgrains to respondent no.4. accordingly,the appellants prayed for an order of occupancy right in respect of the scheduled land alleging that they and their father were cultivating the scheduled land as occupancy right holders relying,inter alia,on the entries under the rtc record. the case of respondent no.4 was that the scheduled land was mortgaged to the 3rd respondent,rajashankar,in 1968 and after the expiry of the said mortgage,the mortgagee was liable to deliver possession of the same. the case of tenancy as made out by the appellants or their father was denied. it was alleged by the respondent no.4 that since the respondent no.3 was a film actor and had settled in madras, with the consent of the respondent no.3,the scheduled land was given to the father of the appellants and the father of the appellants was cultivating the same from 1968 but not as a tenant. accordingly,they prayed for rejection of the application filed by the father of the appellants claiming occupancy rights under the act. initially,the land tribunal allowed the application of the father of the appellants and feeling aggrieved; a writ petition was filed against the said order.the high court had set aside the order of the land tribunal and remanded the case back to the tribunal for a fresh decision. feeling aggrieved,the respondent no.4 filed an appeal before the appellate authority,which was also dismissed. a revision petition,thereafter,was moved before the high court and the high court,by the impugned judgment,had set aside the concurrent findings of fact and rejected the application filed by the father,since deceased,of the appellants holding,inter alia,that the appellants or their father had failed to prove the tenancy in respect of the scheduled land. a special leave petition was filed against the judgment of the high court,setting aside the concurrent orders allowing the application,in respect of which leave has already been granted. ARGUMENT it was not open to the high court,in the exercise of its revisional jurisdiction under section 121a of the act,to interfere with the concurrent findings of fact arrived at by the appellate authority and the land tribunal. ANALYSIS section 121a of the act,had set aside the concurrent findings of fact of the land tribunal as well as of the appellate authority,even then,examining the findings of the high court and considering the power conferred on it in the revisional jurisdiction under section 121a of the act,the court did not find any reason to interfere with the impugned order of the high court in the exercise of our power u/art.136 of the constitution. from a plain reading of section 121a of the act,under which revisional jurisdiction can be exercised,it would be clear that the high court,while exercising such power is entitled to re-appreciate the evidence when it finds that the conclusion arrived at by the appellate authority runs contrary to the materials on record and when it finds that there is no evidence to support the conclusion of the appellate authority or when it finds that the reasons given by the appellate authority are absolutely perverse and cannot be supported by the evidence on record. the high court is also entitled to interfere with the orders of the tribunals below when the material evidence on record was ignored or a finding was such that no court would come to such conclusion or that the decision of the tribunals below was manifestly unjust. the tribunals below,while accepting the case of the appellants,had relied on the entries made in the rtc record in respect of certain period. while considering such entries,the high court had rightly held that from the entries in the rtc record for the years 1968 to 1974,the name of the appellants was not shown as the person in cultivation of the land in dispute and also the nature of cultivation of the scheduled land was not shown as that of the tenants in the said rtc record. the court did not find any reason to interfere with the judgment of the high court,although the high court,in the exercise of its power under section 121a of the act,had set aside the concurrent orders of the appellate authority as well as the land tribunal. even assuming that the high court was not justified in setting aside the concurrent findings of fact in the exercise of its revisional jurisdiction under section 121a of the act,then also,the court was of the view that it is not a fit case where this court should interfere with the impugned judgment of the high court in the exercise of our power u/art.136 of the constitution. in union of india & ors.vs.gangadhar narsingdas aggarwal & anr.[(1997) 10 scc 305],1995 indlaw sc 1227 this court,while declining to interfere with the order of the high court in the exercise of its power u/art.136 of the constitution,held that even if two views are possible,the view taken by the high court being a plausible one,it would not call for intervention by this court u/art.136 of the constitution. this court has already considered the findings made by the high court while setting aside the concurrent orders of the tribunals below and found that the same appear to be well merited and in accordance with the material evidence on record,therefore,this court would not interfere with the order of the high court u/art.136 of the constitution. finally in taherakhatoon (d) by lrs.vs.salambin mohammad [(1992) 2 scc 635 1992 indlaw sc 355],this court observed that in view of the above decisions,even though we are now dealing with the appeal after grant of special leave,we are not bound to go into merits and even if we do so and declare the law or point out the error-still we may not interfere if the justice of the case on facts does not require interference or if we feel that the relief could be moulded in a different fashion. STATUTE section 121a of the karnataka land reforms act,1974 states that "the high court may at any time call for the records of any order or proceeding recorded by the appellate authority under this act or any other law for the purpose of satisfying itself as to the legality of such order or as to the regularity of such proceeding and may pass such order with respect thereto as it thinks fit."

yakshagana is a form of ballet dance. it has its own heritage. indisputably dr kota shivarama karanth for shortdr. karantha jnanapeeth awardee who was a novelist play writer essayist encyclopediationist cultural anthropologist artist writer of science environmentalist. he developed a new form of yakshagana. he was a director of the appellant institute. on or about 18 6 1994he executed a will in favour of the respondent. karanth expired on 9 12 1997 yakshagana ballet dance as developed by dr karanth was performed in new delhi on or about 18 9 2001 respondent filed a suit for declaration injunction and damages alleging violation of the copyright in respect of the said dance vested in her in terms of the said will stating that dr karanth developed a new distinctive dance drama troop or theatrical system which was named by him as yaksha ranga which in his own words mean creative extension of traditional yakshagana and thus the appellants infringed the copyright thereof by performing the same at new delhi without obtaining her prior permission. it was stated that dr karanth had composed seven verses or prasangas for staging yaksharanga ballet apart from bringing in changes in the traditional form thereof on its relevant aspects namely raga tala scenic arrangement costumes etc. these prasangas are i bhishma vijaya ii nala damayanthi iii kanakangi or kanakangi kalyana iv abhimanyu or abhimanyu vada v chitrangadha or babruvahana kalaga vi panchavati and vii. ganga charitha. plaintiff respondent admittedly claimed copyright in respect of literary and artistic works in her favour in terms of clauses 11 and 12 of the said will dated 18 6 1994which read as under 11 since i left the house suhasa i have been living in a specially built house manasa of smt. malini mallya who has built it with borrowed money at her cost. she had joined my service as copyist and later she secured an employment in life insurance corporation of india. ever since 1974 till now in my old age she has been serving me with exemplary devotion and sincerity. and in this occasion i must also acknowledge with gratitude that she diligently cared and nursed my wife leela karanth during her prolonged illness till her last day. and she has cared and looked after me also during my illness which at times had been quite serious enfeebling me for long period. in recognition of her devotion and sincere affection towards me in 1986 i have dedicated one of my novels namelyantida aparanji to her. i have also placed on record her invaluable services to me in my memoirshunchu mansina hathu mukhagalu 1991 edition. in my opinion very long enduring and a signal service she has done to me and to my literary works is in writing a bibliography of all my books a highly meritorious and scholarly work involving so much of pains taking research that it has been acclaimed and rated as the first of its kind in kannada and highly appreciated by critics and scholars. apart from this she has collected and edited all my stray writings from 1924 onwards up to date in eight sumptuous volumes which are being published by mangalore university. this work also has brought her deserving fame and appreciation of scholars. such painstaking service in this direction has brought to light several of my hitherto untraced forgotten and unknown writings and thereby giving them extended or renewed lease of life. for all these services i hereby declare that after my death copyrights in respect of all my literary works shall vest with smt. malini mallya and she alone shall be entitled to receive royalties of all my books and she shall be entitled to print publish and republish and market the same. whatever she may earn thereby shall be her exclusive income and property. no one else shall have any right or claims for the same 12 from time to time i have distributed among my children all gold and silver jewels and ornaments and other valuables which were gifted to me by my friends and admirers. and i have distributed all copper and bronze vessels and utensils among my children while leaving my former home suhasa keeping only bare essential and necessary things and articles. whatever movable properties books fittings furniture utensils etc belonging to me into this house manasa and my car and cash money in hand after my death shall go to smt. malini malya only. no one else shall have any claim or right over the same. any outstanding due to me and bank deposits and whatever assets or properties not mentioned above that is residuary after my death shall belong to smt. malini mallya alone. plaintiff respondent inter alia prayed for passing a judgment and decree against the defendants appellants granting the following reliefs 1 a declaration that the plaintiff is the exclusive copyright holder in respect of yaksharanga ballets namely bhishma vijaya kanakangi nala damayanthi panchavati gaya charitha chitrangadha abhimanyu vadha and for consequential permanent injunction restraining the defendants their agents employees etc from staging or performing any of the above said 7 ballets or prasangas or any parts thereof. 1000 00 2 directing the defendants to pay to the plaintiff damages of rs 15000 towards infringement of her copyright on account of stating or performing abhimanyu vadha on 18 9 2001 at new delhi. 15000 00 3 directing the defendants to pay to the plaintiff interest on rs 15000 at 15 p a from 18 9 2001 till now which is 95 00. 4 directing the defendants to pay future interest on rs 15000 at 15 p a till payment of the entire amount. appellants in their written statement however denied and disputed any copyright of the said dance in dr karanth alleging that whatever work he had done was in the capacity of a director of the kendra with the assistance finance and staff provided by the organization of mahatma gandhi memorial college trust in respect whereof a committee was formed under him by the board of trustees. it was furthermore contended that dr karanth was appointed as the president of the executive committee of yakshagana kendra for a period of three years by the appellant and while holding the said post only he expired. by reason of a judgment and decree dated 14 11 2003the district judge udupi decreed the said suit declaring the plaintiff respondent as a person having the exclusive copyright in respect of seven prasangas and that she had acquired the same by reason of a will as a residuary legatee and the defendants appellants or their employees or agents were restrained from performing the said seven ballets or prasangas or any parts thereof in any manner as evolved distinctively by dr karanth. appellants aggrieved thereby and dissatisfied therewith preferred an appeal before the karnataka high court which was marked as r f a no 271 of 2004. by reason of the impugned judgment and order dated 5 12 2007the said appeal has been dismissed. appellants are thus before us. rajiv dhavan learned senior counsel appearing on behalf of appellants in his usual fairness conceded. i the copyright in the literary work has been assigned by reason of the said will in favour of the respondent in terms of clause 12 of the will. ii dr karanth has made substantial changes in the original traditional form of the yakshagana dance. additions made in the form of the said dance including the prasangas fell within the purview of originality in respect whereof copyright could be claimed. it was however urged. i keeping in view of the findings of the learned trial judge it ought to have been held that no cause of action arose against the appellants in this case as the institution had performed the said dance at new delhi in the memory of dr karanth without charging any fees. the form of copyright as regards dramatic work as has been held by the high court stating the same to be a part of the literary work is not correct as they connote two different things. the form of injunction granted in favour of the plaintiff respondent is not in terms of the provisions of the copyright act1957 as the appellant as an institution or otherwise is entitled to use the same in terms of clauses ai and l of sub section 1 of section 52 thereof. mr g v chandrashekhar learned counsel appearing on behalf of the respondent on the other hand would support the impugned judgment. the copyright act1957 for shortthe act was enacted to amend and consolidate the law relating to copyright. section 2 is the interpretation section. section 2c defines artistic work to mean i a painting a sculpture a drawing including a diagram map chart or planan engraving or a photograph whether or not any such work possesses artistic quality. ii a work of architecture and iii any other work of artistic craftsmanship. the word author is defined in section 2d to meani in relation to a literary or dramatic work the author of the work ii in relation to a musical work the composer iii in relation to an artistic work other than a photograph the artist iv in relation to a photograph the person taking the photograph v in relation to a cinematograph film or sound recording the producer and vi in relation to any literary dramatic musical or artistic work which is computer generated the person who causes the work to be created. the term communication to the public as defined in section 2ff reads as under ff communication to the public means making any work available for being seen or heard or otherwise enjoyed by the public directly or by any means of display or diffusion other than by issuing copies of such work regardless of whether any member of the pubic actually sees hears or otherwise enjoys the work so made available. explanation. for the purposes of this clause communication through satellite or cable or any other means of simultaneous communication to more than one household or place of residence including residential rooms of any hotel or hostel shall be deemed to be communication to the public section 2 ffa defines the word composerin relation to a musical work to mean the person who composes the music regardless of whether he records it in any form of graphical notation. section 2h defines dramatic work to include any piece of recitation choreographic work or entertainment in dumb show the scenic arrangement or acting form of which is fixed in writing or otherwise but does not include a cinematograph film. section 2o defines literary work to include computer programmes tables and compilations including computer databases. section 2qq defines performer to include an actor singer musician dancer acrobat juggler conjurer snake charmer a person delivering a lecture or any other person who makes a performance. section 2y defines work to mean any of the following works namely i a literary dramatic musical or artistic work ii a cinematograph film iii a sound recording. section 13 which occurs in chapter iii of the act provides that subject to the provisions thereof and the other provisions of the said act copyright shall subsists throughout india in the following classes of works that is to say a original literary dramatic musical and artistic works b cinematograph films and c sound recording. section 17 of the act deals with first owner of copyrightin terms whereof subject to the provisions of the act the author of a work shall be the owner of the copyright therein. proviso d appended thereto states that in the case of a government work government shall in the absence of any agreement to the contrary be the first owner of the copyright therein. sections 2223 and 521ai and l of the act which are relevant for our purpose read as under. 22 term of copyright in published literary dramatic musical and artistic works. except as otherwise hereinafter provided copyright shall subsist in any literary dramatic musical or artistic work other than a photograph published within the life time of the author until fifty years from the beginning of the calendar year following the year in which the author dies. explanation in this section the reference to the author shall in the case of a work of joint authorship be construed as a reference to the author who dies last. 23 term of copyright in anonymous and pseudonymous works 1. in the case of a literary dramatic musical or artistic work other than a photographwhich is published anonymously or pseudonymously copyright shall subsist until sixty years from the beginning of the calendar year next following the year in which the work is first published. provided that where the identity of the author is disclosed before the expiry of the said period copyright shall subsist until sixty years from the beginning of the calendar year following the year in which the author dies. in sub section 1references to the author shall in the case of an anonymous work of joint authorship be construed. a where the identity of the authors is disclosed as references to that author. b where the identity of more authors than one is disclosed as references to the author who dies last from amongst such authors. in sub section 1references to the author shall in the case of a pseudonymous work of joint authorship be construed. a where the names of one or more but not all of the authors arc pseudonymous and his or their identity is not disclosed as references to the author whose name is not a pseudonym or if the names of two or more of the authors are not pseudonyms as references to such of those authors who dies last b where the names of one or more but not all of the authors arc pseudonyms and the identity of one or more of them is disclosed as references to the author who dies last from amongst the authors whose names are not pseudonyms and the authors whose names are pseudonyms and are disclosed and c where the names of all the authors arc pseudonyms and the identity of one of them is disclosed as references to the author whose identity is disclosed or if the identity of two or more of such authors is disclosed as references to such of those authors who dies last. for the purposes of this section the identity of an author shall be deemed to have been disclosed if either the identity of the author is disclosed publicly by both the author and the publisher or is otherwise established to the satisfaction of the copyright board by that author. certain acts not to be infringement of copyright 1. the following acts shall not constitute an infringement of copyright namely a a fair dealing with a literary dramatic musical or artistic work not being a computer programme for the purpose of i. private use including research ii criticism or review whether of that work or of any other work xxx xxx xxx i the performance in the course of the activities of an educational institution of a literary dramatic or musical work by the staff and student of the institution or of a cinematograph film or a sound recording if the audience is limited to such staff and students the parents and guardians of the students and persons directly connected with the activities of the institution or the communication to such an audience of a cinematograph film or sound recording. l the performance of a literary dramatic or musical work by an amateur club or society if the performance is given to a non paying audience or for the benefit of a religious institution. before adverting to the submissions made by the learned counsel for the parties we may notice the issues framed in the suit which are i does plaintiff prove that late dr shivaramaji karanth had acquired copyright in respect of seven yakshagana prasangas and also in respect of yakshagana dramatic or theatrical form i e bhishma. vijaya nala damayanthi kanakaangti or kanakangi kalyana abhimanyu or abhimanyu vadha chitrangadha or babruvahana kalaga panchavati chritha followed in the plaint. has the plaintiff became entitled to the said right under the registered will dated 18 06 1994. does the plaintiff prove that her right under the said will was infringed by the defendants. indisputably in view of the submissions made at the bar respondent had acquired copyright in respect of seven yakshagana prasangas as also in respect of yakshagana dramatic or theatrical form as a residuary legatee in terms of clause 12 of the will dated 18 6 1994. however we may notice that whereas the trial court has proceeded on the basis that clause 12 of the will shall apply in the instant case the high court opined that clause 11 thereof is attracted stating no doubt by reading para 12 of the will in isolation one can certainly arrive at the conclusion that the bequest made in favour of the plaintiff is in the nature of residuary bequest. but that is not all in the will ex. p 1 i have already referred to para no 11 of the will while dealing with the topic dramatic works vis vis literary work and therefore if the will is read in its entirety and if we take into account the benefits that flow from the bequest made by dr karanth in favour of the plaintiff it is not as if the plaintiff received the bequest only in respect of the things which form the residuary as mentioned in para 12 of the will but the plaintiff also was given the copyrights in respect of literary works and all books as well as the right to print republished and mark the literary works as well as the books. referring to the new encyclopaedia britannica and halsbury 's laws of england that a literary work with dramatic elements in it would also be literary work the high court observed dramatic works also could contain in its passages of great literary taste as in the case of great plays of william shakespear. therefore the main classification as literary work and dramatic work can not be construed to mean that dramatic work has nothing to do with literary work. the only difference i see in them is that the dramatic work plays forms the text upon which the performance of the plays rests whereas a literary work enables one to read the printed words. neither of the two can be produced without the imaginative skill of the author. it was furthermore held i am of the considered opinion that all the above changes brought about by dr karanth in respect of yakshagana ballet leads to the inference that the imaginative faculties of dr karanth permeated the entire yakshagana prasangas and thus a new look was given to the yakshagana ballets. i therefore hold that the bequest of copyright in literary works and books in favour of the plaintiff by dr karanth will have to be treated as the bequest covering the dramatic works also since i have also drawn the conclusion that the dramatic works is also a form of literature. therefore necessity of mentioning copyright separately in respect of dramatic works does not arise. the plaintiff therefore is entitled to copyright even in respect of the dramatic works namely the seven prasangas by virtue of bequest made in her favour in respect of copyrights and books. broadly speaking a dramatic work may also come within the purview of literary work being a part of dramatic literature. the new encyclopaedia britannica vol iv 15th edition provides the following information about dramatic literature. dramatic literature the texts of plays that can be read as distinct from being seen and heard in performance. we must however notice that the provisions the act make a distinction between the literary work and dramatic work. keeping in view the statutory provisions there can not be any doubt whatsoever that copyright in respect of performance of dance would not come within the purview of the literary work but would come within the purview of the definition of dramatic work. we however do not mean to suggest that any act of literary work will be outside the purview of the will dated 18 6 1994 our exercise in this behalf was only for the purpose of clarifying the provisions of the act with reference to the findings arrived at by the high court. for the aforementioned reasons we agree with dr dhavan that paragraph 12 of the will namely residuary clause shall apply in the instant case apart from the areas which are otherwise covered by paragraph 11 of the will. the residuary clause will apply because it is well settled that no part of the stay lies in limbo. it was also not a case where respondent in any manner whatsoever waived her right. the learned trial judge on issue no 4 opined that plaintiff had not been able to prove actual loss or damage particularly having regard to the fact that dr karanth had associated himself with the appellants for a long time. the learned trial judge recognized the equitable interest vested in the plaintiff respondent. a declaratory decree therefore was passed. we may notice at this stage that the form of injunction granted both by the learned trial judge as also by the high court in favour of the plaintiff respondent. the operative part of the judgment of the trial court reads as under defendants or their employees or agents are restrained from performing the above said 7 ballets or prasangas or in parts thereof in any manner as evolved distinctively by dr karanth by way of permanent injunction. the high court however directed iii. as far as the restraint order passed by the trial court by granting permanent injunction to the plaintiff is concerned the same is modified by ordering that if the appellants desire to stage any of the seven yakshagana prasangas in the manner and form as conceived in all respects viz. costumes choreography and direction by dr karanth the appellants can do so only in accordance with the provisions of the copyrights act1957 in view of copyright in seven prasangas vesting with the plaintiff. decree for injunction is an equitable relief. the courts while passing a decree for permanent injunction would avoid multiplicity of proceedings. the court while passing such a decree is obligated to consider the statutory provisions governing the same. for the said purpose it must be noticed as to what is a copyright and in respect of the matters the same can not be claimed or otherwise the same is lodged by conditions and subject to statutory limitation. in r g anand vs m s delux films ors 1978. 4 scc 1181978 indlaw sc 294this court held thus on a careful consideration and elucidation of the various authorities and the case law on the subject discussed above the following propositions emerge 1 there can be no copyright in an idea subject matter themes plots or historical or legendary facts and violation of the copyright in such cases is confined to the form manner and arrangement and expression of the idea by the author of the copyrighted work. 2 where the same idea is being developed in a different manner it is manifest that the source being common similarities are bound to occur. in such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work. if the defendant 's work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright. in other words in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an act of piracy. 3 one of the surest and the safest test to determine whether or not there has been a violation of copyright is to see if the reader spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original. 4 where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work no question of violation of copyright arises. 5 where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two works are clearly incidental. no infringement of the copyright comes into existence. a violation of copyright amounts to an act of piracy it must be proved by clear and cogent evidence after applying the various tests laid down by the case law discussed above. 7 where. however the question is of the violation of the copyright of stage play by a film producer or a director the task of the plaintiff becomes more difficult to prove piracy. it is manifest that unlike a stage play a film has a much broader prospective wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the idea. even so if the viewer after seeing the film gets a totality of impression that the film is by and large a copy of the original play violation of the copyright may be said to be proved. yet again in eastern book company ors vs d b modak anr 2008. 1 scc 12007 indlaw sc 1341this court held the copyright act is not concerned with the original idea but with the expression of thought. copyright has nothing to do with originality or literary merit. copyrighted material is that what is created by the author by his own skill labour and investment of capital maybe it is a derivative work which gives a flavour of creativity. the copyright work which comes into being should be original in the sense that by virtue of selection coordination or arrangement of pre existing data contained in the work a work somewhat different in character is produced by the author. on the face of the provisions of the copyright act1957we think that the principle laid down by the canadian court would be applicable in copyright of the judgments of the apex court. we make it clear that the decision of ours would be confined to the judgments of the courts which are in the public domain as by virtue of section 52 of the act there is no copyright in the original text of the judgments. to claim copyright in a compilation the author must produce the material with exercise of his skill and judgment which may not be creativity in the sense that it is novel or non obvious but at the same time it is not a product of merely labour and capital. the derivative work produced by the author must have some distinguishable features and flavour to raw text of the judgments delivered by the court. the trivial variation or inputs put in the judgment would not satisfy the test of copyright of an author. the high court in our opinion should have clarified that the appellants can also take the statutory benefit of the provisions contained in clauses ai and l of sub section 1 of section 52 of the act. section 52 of the act provides for certain acts which would not constitute an infringement of copyright. when a fair dealing is made inter alia of a literary or dramatic work for the purpose of private use including research and criticism or review whether of that work or of any other work the right in terms of the provisions of the said act can not be claimed. thus if some performance or dance is carried out within the purview of the said clause the order of injunction shall not be applicable. similarly appellant being an educational institution if the dance is performed within the meaning of provisions of clause i of sub section 1 of section 52 of the act strictly the order of injunction shall not apply thereto also. yet again if such performance is conducted before a non paying audience by the appellant which is an institution if it comes within the purview of amateur club or society the same would not constitute any violation of the said order of injunction. with the aforementioned modification in the order of injunction this appeal is dismissed. however in the facts and circumstances of the case there shall be no order as to costs. appeal dismissed.

IN-Ext

FACTS yakshagana' is a form of ballet dance. it has its own heritage. indisputably,dr.kota shivarama karanth (for short,"dr.karanth"),a jnanapeeth awardee,who was a novelist,play writer,essayist,encyclopediationist,cultural anthropologist,artist,writer of science,environmentalist. he developed a new form of 'yakshagana'. he was a director of the appellant -institute. on or about 18.6.1994,he executed a will in favour of the respondent.dr.karanth expired on 9.12.1997. yakshagana ballet dance as developed by dr.karanth was performed in new delhi on or about 18.9.2001. respondent filed a suit for declaration,injunction and damages alleging violation of the copyright in respect of the said dance vested in her in terms of the said will stating that dr.karanth developed a new distinctive dance,drama troop or theatrical system which was named by him as 'yaksha ranga' which in his own words mean "creative extension of traditional yakshagana" and,thus,the appellants infringed the copyright thereof by performing the same at new delhi without obtaining her prior permission. it was stated that dr.karanth had composed seven verses or prasangas for staging yaksharanga ballet apart from bringing in changes in the traditional form thereof on its relevant aspects,namely,raga,tala,scenic arrangement,costumes etc. these prasangas are: (i) bhishma vijaya; (ii) nala damayanthi; (iii) kanakangi or kanakangi kalyana; (iv) abhimanyu or abhimanyu vada; (v) chitrangadha or babruvahana kalaga; (vi) panchavati; and (vii) ganga charitha. plaintiff -respondent admittedly claimed copyright in respect of 'literary and artistic works' in her favour in terms of clauses 11 and 12 of the said will dated 18.6.1994. plaintiff-respondent,inter alia,prayed for passing a judgment and decree against the defendants -appellants granting the following reliefs. 1.a declaration that the plaintiff is the exclusive copyright holder in respect of yaksharanga ballets,namely,bhishma vijaya,kanakangi,nala damayanthi,panchavati,gaya charitha,chitrangadha,abhimanyu vadha,and for consequential permanent injunction restraining the defendants,their agents,employees etc.from staging or performing any of the above said 7 ballets or prasangas or any parts thereof. 2.directing the defendants to pay to the plaintiff damages of rs.15,000/-towards infringement of her copyright on account of stating or performing abhimanyu vadha on 18-9-2001 at new delhi. 15,000-00. 3.directing the defendants to pay to the plaintiff interest on rs.15,000/-at 15% p.a.from 18-9-2001 till now which is 95-00. 4.directing the defendants to pay future interest on rs.15,000/-at 15% p.a.till payment of the entire amount. ARGUMENT (i) the copyright in the literary work has been assigned by reason of the said will in favour of the respondent in terms of clause 12 of the will. the form of copyright as regards dramatic work as has been held by the high court stating the same to be a part of the literary work is not correct as they connote two different things. the form of injunction granted in favour of the plaintiff -respondent is not in terms of the provisions of the copyright act,1957 as the appellant as an institution or otherwise is entitled to use the same in terms of clauses (a),(i) and (l) of sub-section (1) of section 52 thereof. ISSUE (i) does plaintiff prove that late dr.shivaramaji karanth had acquired copyright in respect of seven yakshagana prasangas and also in respect of yakshagana dramatic or theatrical form i.e.,bhishma vijaya,nala damayanthi,kanakaangti or kanakangi kalyana,abhimanyu or abhimanyu vadha,chitrangadha or babruvahana kalaga,panchavati chritha followed in the plaint? (ii) has the plaintiff became entitled to the said right under the registered will dated 18.06.1994? (iii) does the plaintiff prove that her right under the said will was infringed by the defendants? ANALYSIS a dramatic work may also come within the purview of literary work being a part of dramatic literature. paragraph 12 of the will,namely,residuary clause shall apply in the instant case apart from the areas which are otherwise covered by paragraph 11 of the will. the residuary clause will apply because it is well settled that no part of the stay lies in limbo. it was also not a case where respondent in any manner whatsoever waived her right. ,it must be noticed as to what is a copyright and in respect of the matters the same cannot be claimed or otherwise the same is lodged by conditions and subject to statutory limitation. in r.g.anand vs.m/s delux films & ors.[(1978) 4 scc 118]1978 indlaw sc 294,this court held the following. 1.there can be no copyright in an idea,subject-matter,themes,plots or historical or legendary facts and violation of the copyright in such cases is confined to the form,manner and arrangement and expression of the idea by the author of the copyrighted work. 2.where the same idea is being developed in a different manner,it is manifest that the source being common,similarities are bound to occur. in such a case the courts should determine whether or not the similarities are on fundamental or substantial aspects of the mode of expression adopted in the copyrighted work. if the defendant's work is nothing but a literal imitation of the copyrighted work with some variations here and there it would amount to violation of the copyright. in other words,in order to be actionable the copy must be a substantial and material one which at once leads to the conclusion that the defendant is guilty of an act of piracy. 3.one of the surest and the safest test to determine whether or not there has been a violation of copyright is to see if the reader,spectator or the viewer after having read or seen both the works is clearly of the opinion and gets an unmistakable impression that the subsequent work appears to be a copy of the original. 4.where the theme is the same but is presented and treated differently so that the subsequent work becomes a completely new work,no question of violation of copyright arises. 5.where however apart from the similarities appearing in the two works there are also material and broad dissimilarities which negative the intention to copy the original and the coincidences appearing in the two works are clearly incidental no infringement of the copyright comes into existence. 6.as a violation of copyright amounts to an act of piracy it must be proved by clear and cogent evidence after applying the various tests laid down by the case-law discussed above. 7.where however the question is of the violation of the copyright of stage play by a film producer or a director the task of the plaintiff becomes more difficult to prove piracy. it is manifest that unlike a stage play a film has a much broader prospective,wider field and a bigger background where the defendants can by introducing a variety of incidents give a colour and complexion different from the manner in which the copyrighted work has expressed the idea. section 52 of the act provides for certain acts which would not constitute an infringement of copyright. when a fair dealing is made,inter alia,of a literary or dramatic work for the purpose of private use including research and criticism or review,whether of that work or of any other work,the right in terms of the provisions of the said act cannot be claimed. thus,if some performance or dance is carried out within the purview of the said clause,the order of injunction shall not be applicable. similarly,appellant being an educational institution,if the dance is performed within the meaning of provisions of clause (i) of sub-section (1) of section 52 of the act strictly,the order of injunction shall not apply thereto also. yet again,if such performance is conducted before a non-paying audience by the appellant,which is an institution if it comes within the purview of amateur club or society,the same would not constitute any violation of the said order of injunction. STATUTE the copyright act,1957 (for short,"the act") was enacted to amend and consolidate the law relating to copyright. section 2 of the copyright act,1957 is the interpretation section. section 2(c) of the copyright act,1957 defines 'artistic work'. the word 'author' is defined in section 2(d) of the copyright act,1957. the term "communication to the public" as defined in section 2(ff) of the copyright act,1957. section 2 (ffa) of the copyright act,1957 defines the word "composer",in relation to a musical work,to mean the person who composes the music regardless of whether he records it in any form of graphical notation. section 2(h) of the copyright act,1957 defines "dramatic work" to include any piece of recitation,choreographic work or entertainment in dumb show,the scenic arrangement or acting,form of which is fixed in writing or otherwise but does not include a cinematograph film. section 2(o) of the copyright act,1957 defines "literary work" to include computer programmes,tables and compilations including computer databases. section 2(qq) of the copyright act,1957 defines "performer" to include an actor,singer,musician,dancer,acrobat,juggler,conjurer,snake charmer,a person delivering a lecture or any other person who makes a performance. section 2(y) of the copyright act,1957 defines "work". section 13 of the copyright act,1957 which occurs in chapter iii of the act provides that subject to the provisions thereof and the other provisions of the said act,copyright shall subsists throughout india in the following classes of works,that is to say,- (a) original literary,dramatic,musical and artistic works; (b) cinematograph films; and (c) sound recording. section 17 of the copyright act,1957 deals with "first owner of copyright". sections 22,23 and 52(1)(a),(i) and (l) of the copyright act,1957,which are relevant for our purpose read as under. section 22 of the copyright act,1957 - term of copyright in published literary,dramatic,musical and artistic works. section 23 of the copyright act,1957-term of copyright in anonymous and pseudonymous works. section 52 of the copyright act,1957- certain acts not to be infringement of copyright.

the present appeal arises out of the judgment and order dated 01 07 2002 passed by the high court of bombay at goa in criminal appeal No 6 of 2000 convicting the accused appellant section 302 of the indian penal code for short the the ipc and sentencing him to undergo life imprisonment for the offence by setting aside the order of acquittal passed by the trial court. facts giving rise to the present appeal may be stated first so as to enable us to appreciate the arguments raised by the parties more effectively. on 19 04 1988 between 8 30 p m and 8 45 p m satish narayan sawant the appellant accused No 1 along with two other accused persons and also with two delinquent children allegedly formed an unlawful assembly and that in furtherance of the said common object stabbed one rauji dulba sawant the deceased and also assaulted baby dulba sawant pw 1 ashok dulba sawant pw 2 kunda rauji sawant pw 8 and laxmi dulba sawant pw 18 who are the sister brother wife and mother respectively of the deceased. it is also the case of the prosecution that as a result of the aforesaid stab injuries given to the deceased he expired on the same day i e on 19 04 1988. p s joaquim dias pw 21 who was attached to the ponda police station as p s i received a phone call at about 10 45 p m from p s i k k desai of the panaji police station that a person named rauji dulba sawant had been brought in police jeep by police constable jaisingrao rane and that while he was being taken to the goa medical college he expired. he was informed that the deceased had died as a result of stab injuries received and therefore he was to take necessary steps. on receipt of the aforesaid message pw 21 along with asi tabit mamlekar went to the scene of offence. they reached the scene of offence at about 11 30 p m but found the entire place plunged into darkness and with the help of torch light pw 21 surveyed the scene of offence. during the survey made at the place of occurrence pw 21 noticed some blood stains in the front courtyard of the house and a pipe of length of about 1 foot or slightly less lying in the courtyard having blood stains. thereafter pw 21 along with p i dsa gave a call to the inmates of the house to open the door and on hearing the call one lady opened the door. on enquiring from her pw 21 learnt that her name was yeshoda who was later on arrayed as accused No 3. two juvenile girls named sarita and sharmila who are the sisters of the appellant were found in the house. in the meantime pw 1 pw 2 and pw 8 came to the house from whom pw 21 made certain inquiries and brought them along with accused No 3 and her two juvenile girls to the police station. not finding the appellant and accused no 2 in the house dy. s p shri raikar and p i shri alan osa were sent in their search. after reaching the police station a complaint which is marked as exhibit pw 1 a was lodged by pw 1 in which it was alleged that pw 1 pw 8 pw 18 the deceased rauji and his brother narayan were residing in one house in banastari and they used to share a common kitchen between them. it was further alleged by pw 1 that two or three days before the ganesh festival deceased rauji had informed narayan that he would install statue of lord ganesh in the house and accordingly he had purchased the same. religious ceremony was performed by installing the statue of lord ganesh in the house and. while the said religious ceremony was being performed accused No 2 started uttering insults while standing in the kitchen. accused No 3 told the appellant not to do anything in the ceremony and insulted the family members of rauji. pw 1 also alleged that on 19 04 1988 the deceased rauji returned from his duty at about 6 30 p m and thereafter went to purchase some articles. on his return he went to take bath and after having bath he went and switched off the light of the room. as soon as the deceased switched off the light the appellant came from the room and started abusing rauji. there was a heated exchange of words between rauji and the appellant switched on the light which was again switched off by rauji the deceased. thereupon the appellant went and removed the fuse of the said light. accused No 3 had then lit a kerosene lamp and brought the same in the hall. there was already an oil lamp burning which was attached to the ceiling by a brass chain. meanwhile accused No 3 started abusing pw 1 pw 8 pw 18 and the deceased rauji. thereafter the appellant and the two other alleged accused namely accused nos 2 and 3 and the two juvenile offenders gathered in the hall to assault rauji the deceased pw 1 and pw 8. according to pw 1 in order to avoid the assault by all of them they went to bulcao balcony. when they went there the appellant went to his mother 's room and brought a knife with which he stabbed rauji. at that time all the accused persons were in the balcony. it was also alleged that after the deceased rauji fell down on the ground accused No 3 kicked him. at that time the appellant who was holding the knife in his hand handed over the same to accused No 3 by which she assaulted pw 8 but pw 8 caught the knife in her hand which caused injury to her right palm. thereafter according to pw 1 accused No 3 handed back the knife to the appellant and accused No 2 brought the oil lamp which was hung in the room and hit the oil lamp on the head of rauji the deceased. it was also alleged that when pw 8 tried to intervene the other three accused started assaulting her with fists and slaps. at that time pw 2 came there and questioned the accused persons as to what they were doing whereupon the appellant and accused No 2 started assaulting pw 2 also. then accused No 3 told the appellant and accused No 2 to finish off rauji first. pw 8 pw 18 and pw 1 then lifted rauji and brought him in the courtyard. in the meanwhile residents of the locality had gathered in the courtyard and told the accused persons not to assault rauji. the juvenile offender sarita went inside the house and brought out one iron pipe which she handed over to the appellant who then hit the said pipe on the right leg of pw 1 and also gave a blow with the said pipe on rauji 's right hand. it was also alleged that the other juvenile offender sharmila brought a cement block shaped like an elephant trunk which she handed over to accused No 3 with which accused No 3 started assaulting rauji. pw 1 however intervened and removed the said piece of cement block from the hand of accused No 3 but. accused No 3 then picked up one stone and tried to throw it on rauji by saying that she was going to kill him with that stone. however pw 1 again intervened and removed the said stone from the hand of accused no 3. pw 18 rushed to the rescue of deceased rauji. the accused then started assaulting her and pw 8 with slaps. in the meantime police jeep arrived at the scene and on seeing the police jeep all the accused ran away from the courtyard and went inside. pw 1 and others asked the police to take rauji to the hospital. whereupon the police took him to the hospital in the police jeep along with pw 1 pw 2 and pw 8. on the basis of complaint made by pw 1 an fir was registered and the accused came to be arrested. on completion of the investigation the police submitted the charge sheet against the accused persons namely the present appellant accused No 1 accused nos 2 and 3 and the two juvenile offenders namely sarita and sharmila. the trial court framed charges against all the accused persons for the offence under sections 302 323 143 147 and 149 of the ipc. the accused pleaded not guilty and claimed to be tried. since there were two juvenile offenders there cases were segregated and the trial against accused nos 1 2 and 3 was conducted during the course of which a number of eye witnesses were examined on behalf of the prosecution. after completion of the arguments the trial court reserved the verdict. the trial court passed an order on 04 08 1998 acquitting all the accused persons from the offences under sections 302 323 143 147 and 149 of ipc. being aggrieved by the aforesaid judgment and order of acquittal the state filed an appeal in the high court against accused nos. 1 to 3. the high court by impugned judgment convicted appellant. accused No 1 section 302 ipc and accused nos. 2 and 3 were held guilty of an offence punishable section 323 read with section 34 of the ipc. the appellant herein being aggrieved by the aforesaid order of conviction and sentence filed the present appeal on which we have heard the learned counsel appearing for the appellant and also the learned counsel appearing for the state. mr r sundaravardhan learned senior counsel appearing for the appellant very forcefully submitted that the high court was not justified in setting aside the order of acquittal passed in respect of the present appellant. he submitted that although the incident in question had taken place at about 8 45 p m the same came to be reported to the police at 3 00 a m he also submitted that the police officer pw 21 who received the information about the incident started investigation without recording either any general diary for short g d entry or the fir and therefore the fir which has been proved in the trial court is hit by the provisions of section 162 of the criminal procedure code for short the crpc. he also submitted that the high court has not given any reason for setting aside the appeal against acquittal which was passed after appreciating the entire evidence on record. he further submitted that there was not only shifting of time of the alleged occurrence but also shifting of the place of occurrence from the hall to the outside verandah and courtyard to suit the convenience of the prosecution case. he has drawn our attention towards the entire evidence on record including the cross examination part and with the help of the same he submitted that the entire alleged incident in question had taken place when there was complete darkness at the scene of occurrence. a scuffle started between the nephew and the uncle in which the accused persons also received injuries and therefore the right of private defence of the appellant was available and in that view of the matter the order of conviction and sentence is liable to be set aside. it was further submitted that the alleged eye witnesses of the occurrence were examined by the police belatedly and that the medical evidence adduced in the case does not in any manner support the ocular evidence and if at all it would not be a case of culpable homicide amounting to murder but a case of culpable homicide not amounting to murder. he also submitted that if two views are possible and if there are lacunae in the case of the prosecution the benefit must go to the accused. he next submitted that there was no evidence on record as to when the fir reached the magistrate and that none of the courts below considered the said aspect. he submitted that since there was violation of the provisions of section 162 of the crpc the accused appellant is liable to be acquitted. ms a subhashini learned counsel appearing for the respondent state however strenuously submitted that none of the aforesaid submissions could be accepted by this court as it is a foolproof case of conviction of the appellant section. 302 ipc. she submitted that the high court rightly interfered with the order of acquittal passed by the trial court after critically examining the evidence on record. it was submitted by her that the trial court examined the evidence in the present case in a very summary and cryptic manner and thereby arrived at a wrong conclusion that the accused persons were required to be acquitted. she has drawn our attention to the findings recorded by the high court while setting aside the order of acquittal observing that the evidence of eye witnesses namely pws. 1 2 8 and 18 is convincing and reliable but so far as the evidence of pw 4 is concerned the high court has made an observation that he is not a reliable witness. counsel for the respondent has therefore taken us through the evidence of pws. 1 2 8 and 18 and on the basis thereof submitted that their evidence clearly prove and establish the role of the appellant herein in stabbing the deceased with the knife which he had brought from the other room with the intention of killing the deceased and therefore it is a clear case of conviction. section. in the light of the aforesaid submissions of the counsel appearing for the parties we have given our in depth consideration to the facts of the present case. the starting point of the incident in question as indicated from the evidence on record is the hall where apparently a dispute started between the parties with regard to the electricity connection in the house. the deceased tried to put off the light of one particular room at which the appellant and other accused persons became annoyed and the appellant switched on the light which was again switched off by the deceased. at this the deceased became annoyed and the appellant removed the fuse of the electricity which act of his plunged the entire house into darkness. it is also clear and established that thereafter a lamp was brought by accused No 3 to the room besides another lamp which was already burning in the said room itself. but in any case there was an electricity light post in the front of the house which was giving enough light to the house. there is also evidence on record to show that even outsiders were watching the incident from the road which indicates that there was sufficient light for them to see what was happening in the house where the incident had taken place. there was indeed some scuffle between the parties during the course of which accused No 1 received simple injuries and the deceased died of the two stab injuries inflicted by the present appellant. the said fact is proved by the evidence of pws. 2 8 18 and the complainant herself pw 1. the deceased was taken to the hospital and while so taken he died. pw 21 who was at that time attached to konda police station as psi was informed at about 10 45 p m that the deceased while was being brought in the police jeep by a police constable jaisingrao rane and was being taken to the government medical college but before the deceased could be admitted he died. pw 21 was also informed by said by said psi k k desai of panaji police station that it was a case of assault and that the incident had taken place at verandah and that the said matter pertains to his police station and therefore he should take appropriate action. on receiving the said message he went to the place of occurrence along with psi k k desai and upon reaching the place of occurrence at 11 30 p m he found the entire place plunged in total darkness. therefore he proceeded to survey the place of occurrence with the help of torches. he in his deposition specifically stated that he found that the back door as well as the front door of the house were latched from inside and in front of the house there was a road where there was an electricity pole and there was a street tube light by which the house could be visible and even the lights of the vehicles were flashed at the house. he stated that although the house had electricity connection but was not having the electricity supply. he gave instructions to his subordinate and also to the people around that nobody should touch any article lying at the scene of occurrence. he stated that he made preliminary enquiry and brought yashoda and her two daughters to the police station and sent two other officers in search of accused nos 1 and 2 who were not found in the house. he also stated that he got the complaint registered at the police station which was lodged by pw 1 and that on the next day he again went to the scene of offence and seized the properties involved in the crime which were sealed. he also recovered the knife at the instance of accused sharmila which he seized. on 28 04 1988 that is after about 9 days of the incident accused nos 1 and 2 surrendered before the police and on their surrender they were taken into custody. it was found that accused No 1 was having injury on his back. and he was medically examined. on medical examination his injury was found to be simple. learned counsel appearing for the appellant was critical of the manner in which pw 21 initiated the investigation without recording any g d entry and without getting any fir recorded. he submitted that since the investigation in the instant case was started by the police without recording an fir such an fir is necessarily hit by the provisions of section 162 of the cr. p c he next submitted that no evidence having been led by the prosecution about the time when the fir reached the magistrate therefore there is also violation of the provisions of section 157 of the cr. the issue with regard to the initiation of the investigation without recording the fir was succinctly addressed by this court in the case of state of u p v bhagwant kishore joshi 1964 3 scr 71 1963 indlaw sc 268 observed as follows 17. what is investigation is not defined in the code of criminal procedure but in h n rishbud and inder singh v state of delhi 1954 indlaw sc 14 this court has described the procedure for investigation as follows thus under the code investigation consists generally of the following steps 1 proceeding to the spot 2 ascertainment of the facts and circumstances of the case 3 discovery and arrest of the suspected offender 4 collection of evidence relating to the commission of the offence which may consist of a the examination of various persons including the accused and the reduction of their statements into writing if the officer thinks fit b the search of places of seizure of things considered necessary for the investigation and to be produced at the trial and 5 formation of the opinion as to whether on the material collected there is a case to place the accused before a magistrate for trial and if so taking the necessary steps for the same by the filing of a charge sheet section this court however has not said that if a police officer takes merely one or two of the steps indicated by it what he has done must necessarily be regarded as investigation. investigation in substance means collection of evidence relating to the commission of the offence. the investigating officer is for this purpose entitled to question persons who in this opinion are able to throw light on the offence which has been committed and is likewise entitled to question the suspect and is entitled to reduce the statements of persons questioned by him to writing. he is also entitled to search the place of the offence and to search other places with the object of seizing articles connected with the offence. no doubt for this purpose he has to proceed to the spot where the offence was committed and do various other things. but the main object of investigation being to bring home the offence to the offender the essential part of the duties of an investigating officer in this connection is apart from arresting the offender to collect all material necessary for establishing the accusation against the offender. merely making some preliminary enquire upon receipt of information from an anonymous source or a source of doubtful reliability for checking up the correctness of the information does not amount to collection of evidence and so can not be regarded as investigation. in the absence of any prohibition in the code express or implied i am of opinion that it is open to a police officer to make preliminary enquiries before registering an offence and making a full scale investigation into it. no doubt section 5 a of the prevention of corruption act was enacted for preventing harassment to a government servant and with this object in view investigation except with the previous permission of a magistrate is not permitted to be made by an officer below the rank of deputy superintendent of police. where however a police officer makes some preliminary enquiries does not arrest or even question an accused or question any witnesses but merely makes a few discreet enquiries or looks at some documents without making any notes it is difficult to visualise how any possible harassment or even embarrassment would result therefrom to the suspect or the accused person. if no harassment to the accused results from the action of a police officer how can it be said to defeat the purpose underlying section 5 a looking at the matter this way i hold that what mathur did was something very much short of investigation and therefore the provisions of section 5 a were not violated. since no irregularity was committed by him there is no occasion to invoke the aid of the curative provisions of the code. emphasis underlined. in the instant case it is quite clear from the evidence on record that pw 1 received the information about the death of the deceased from psi of panaji police station without any detail as to how the incident had happened and who had caused the incident. it was a very cryptic information received by him regarding the death of a person residing within the jurisdiction of his police station pursuant to an incident taking place on 10 04 1988 between 8 30 p m to 8 45 p m and therefore it appears that there was not enough information available to him either to get a g d entry recorded or to get an fir lodged. in order to verify the information received pw 21 went to the place of occurrence and found the entire house in total darkness. he went around the house and saw blood marks on the walls of the verandah and also in the courtyard and came to learn about the incident by using torch light. when he reached at the place of occurrence even the complainant party was not available there. but at a later stage they came there. therefore he brought them along with the residents of the house who were found to be there namely accused No 3 and the two juvenile offenders namely sarita and sharmila who were all ladies. after reaching the police station and at the request of pw 1 the fir was recorded at 3 00 a m in the morning. he received the information about the incident on telephone at about 10 45 p m and reached the place of occurrence at about 11 30 p m and he must have been there for quite some time and thereafter returned to the police station which must have taken another about 1 30 to 2 hours. therefore recording of the fir at about 3 00 a m in the morning was justified and properly explained and it can not be said that there was any delay in recording the fir. besides the fact of his going to the place of occurrence would not amount to making an investigation. there is no evidence to show that at that point of time pw 21 seized any articles or interrogated any witnesses or took any other action in initiating or in furtherance of investigation. the ratio of the decision in bhagwant kishore joshi 1963 indlaw sc 268 supra is applicable to the facts of the present case as the police officer merely visited the spot and place of occurrence and made some survey which can not be regarded as investigation. in animireddy venkata ramana and others v public prosecutor high court of andhra pradesh 2008 5 scc 368 2008 indlaw sc 354 this court while considering a similar case observed as follows 10. certain basic facts are not denied or disputed. the deceased died in the bus at about 10 30 p m on 23 6 1998 while travelling to his village home from tuni. pw 1 also sustained injuries in the said incident. immediately after the incident hearing cries of passengers the driver of the bus stopped the bus. not only the accused persons fled away all others also did including pws 3 and 4. they came back after a short while hearing the cries of pw 1. they acceded to his request to take the bus to his house. from the records it appears that the distance between the place where the accident took place and the village in question was not much. in any event the destination of the bus was the said village and they were bound to take the bus thereat. pw 1 informed about the incident to pw 2 another son of the deceased. the dead body of the deceased was brought down from the bus and taken to the house. the conductor of the bus sent an information to the depot manager of the state road transport corporation at tuni. the investigating officer was also informed. a report to that effect might have been noted in the general diary but the same could not have been treated to be an fir. when an information is received by an officer in charge of a police station he in terms of the provisions of the code was expected to reach the place of occurrence as early as possible. it was not necessary for him to take that step only on the basis of a first information report. an information received in regard to commission of a cognizable offence is not required to be preceded by a first information report. duty of the state to protect the life of an injured as also an endeavour on the part of the responsible police officer to reach the place of occurrence in a situation of this nature is his implicit duty and responsibility. if some incident had taken place in a bus the officers of road transport corporation also could not ignore the same. they reached the place of occurrence in another bus at about 1 a m the deceased and the injured were only then shifted to tuni hospital. the ratio of the aforesaid decision is squarely applicable to the facts of the present case. even assuming that pw 21 the investigating officer could have entered the aforesaid information received from psi of panaji police station in the general diary yet they said entry could not have been held or treated to be an fir. the information received by him was very cryptic and without any detail about the incident in question and therefore in any case there was no possibility of recording an fir at that stage. the place of occurrence was in total darkness and even the persons belonging to the complainant side were not available therefore bringing them to the police station where there was sufficient light and recording the complaint at 3 00 a m can not in any manner cast any doubt on the veracity of the prosecution case. in that view of the matter it can not be said that the fir was in any manner hit by the provisions of section 162 of crpc. so far contention that there was violation of section 157 of the crpc is concerned the same is also without any basis for the defence never cross examined pw 21 on the aforesaid issue. so long the defence is not able to establish from the records by cogent evidence that there was any delay in sending the fir to the magistrate it can not be held that there was any such delay. there is no evidence on record before us to hold either way for no such issue was raised either before the trial court or before the high court nor any evidence was led by the defence in respect of the said issue which is sought to be raised at this stage. from the evidence on record it does not appear to us that any suggestion was given to the said witness to the effect that the copy of the fir was not sent or that it was dispatched late which if given would have given an opportunity to the witness to afford some explanation or to show as to when the fir was sent to and received by the magistrate. in that view of the matter we do not agree with the counsel appearing for the appellant that delay in transmitting the fir to the magistrate stands proved in the present case. the next contention that we proceed to discuss now is about whether sufficient light was available at the place of occurrence for the eye witnesses to see the occurrence as stated by them in the evidence. we have pws. 1 2 8 and 18 as eye witnesses to the occurrence. these eye witnesses have stated that the incident had happened initially in the hall where there was some light for accused No 3 has brought a lamp to the hall and apart from that another lamp was also burning which was attached to the ceiling. blood was found by the police on the wall of the verandah and in the courtyard. it is also established from the evidence on record for it is clearly stated that the street light having tube light was giving sufficient light to the place of occurrence and that it was directed towards the house which was the place of occurrence. besides all the aforesaid eye witnesses were inmates of the house and they would know as to who had given the blows for they specifically stated that initially the appellant did not have the knife in his hand but when the deceased and others went to the balcony then he went inside the house and brought a knife with which he gave stab injuries to the deceased which became fatal and as a result of which the deceased died while he was being taken to the hospital. the aforesaid eye witnesses although are related witnesses were natural witnesses for they were the inmates of the house where the incident had taken place. the said eye witnesses are consistent about the principal act of the appellant in stabbing the deceased. the discrepancies which were sought to be pointed out are minor discrepancies without in any manner affecting the substratum of the prosecution case and therefore minor discrepancies in the evidence of the eye witnesses are immaterial. this court has observed as follows in the case of dinesh kumar v state of rajasthan 2008 8 scc 270 2008 indlaw sc 2034 11. it is to be noted that pws 7 and 13 were the injured witnesses and pw 10 was another eyewitness and was the informant. law is fairly well settled that even if acquittal is recorded in respect of the co accused on the ground that there were exaggerations and embellishments yet conviction can be recorded if the evidence is found cogent credible and truthful in respect of another accused. the mere fact that the witnesses were related to the deceased can not be a ground to discard their evidence. in law testimony of an injured witness is given importance. when the eyewitnesses are stated to be interested and inimically disposed towards the accused it has to be noted that it would not be proper to conclude that they would shield the real culprit and rope in innocent persons. the truth or otherwise of the evidence has to be weighed pragmatically. the court would be required to analyse the evidence of related witnesses and those witnesses who are inimically disposed towards the accused. but if after careful analysis and scrutiny of their evidence the version given by the witnesses appears to be clear cogent and credible there is no reason to discard the same. conviction can be made on the basis of such evidence. the aforesaid eye witnesses were cross examined at length but even after such lengthy cross examination these eye witnesses account could not be shaken. the postmortem report indicates that there were sixteen injuries as against the two as adduced in ocular evidence and therefore a submission was made by the counsel appearing for the appellant that the medical evidence adduced in the present case is not supporting the ocular evidence. however a perusal of record clearly shows that the doctor who conducted the postmortem pw 7 stated in his evidence that there were in total 16 injuries when external examination was done by him and the knife m o 11 could have caused the injuries No 1 2 3 and 4. he further stated that the death was caused due to hemorrhage and shock as a result of stab injury. he further stated that injury No 1 was sufficient to cause death in the ordinary course of nature. on being cross examined pw 7 categorically stated that death due to stab injury was in consequence of injury No 1 and all other injuries were superficial in nature. there is no doubt that four injuries are indicated in the postmortem report shown to have been received by the deceased but the fact that the deceased was given stab injuries by the appellant with the help of a knife brought by him from inside the house is clearly established from the ocular evidence. there is therefore one particular injury being injury No 1 caused because of stabbing and the rest being superficial in nature could be caused during scuffle. therefore the alleged discrepancy can not be said to be very vital as it has been held by this court in several decisions that ocular evidence can not be brushed aside only because to some extent it is not in consonance with the medical evidence. reference in this regard may be made to the decision of this court in state of u p v krishna gopal 1988 4 scc 302 1988 indlaw sc 76 anwar v state of haryana 1997 9 scc 766 1997 indlaw sc 2447 ravi kumar v state of punjab 2005 9 scc 315 2005 indlaw sc 170 munivel v state of t n 2006 9 scc 394 2006 indlaw sc 118. all the contentions raised by learned counsel appearing for the appellant were considered by us in the light of evidence on record. and we find that none of the aforesaid submissions has any basis. there is cogent and reliable evidence on record to prove and establish that the accused has committed the act of stabbing as a result of which the deceased had died. before dwelling further into the factual matrix of the case on the basis of which the high court convicted the appellant section 302 ipc it would be useful to briefly recapitulate the law on the point. section 299 and section 300 ipc deals with the definition of culpable homicide and murder respectively. section 299 defines culpable homicide as the act of causing death i with the intention of causing death or ii with the intention of causing such bodily injury as is likely to cause death or iii with the knowledge that such act is likely to cause death. the bare reading of the section makes it crystal clear that the first and the second clause of the section refer to intention apart from the knowledge and the third clause refers to knowledge alone and not intention. both the expression intent and knowledge postulate the existence of a positive mental attitude which is of different degrees. the mental element in culpable homicide i e mental attitude towards the consequences of conduct is one of intention and knowledge. if that is caused in any of the aforesaid three circumstances the offence of culpable homicide is said to have been committed. section 300 ipc however deals with murder although there is no clear definition of murder provided in section 300 ipc. it has been repeatedly held by this court that culpable homicide is the genus and murder is species and that all murders are culpable homicide but not vice versa. section 300 ipc further provides for the exceptions which will constitute culpable homicide not amounting to murder and punishable section when and if there is intent and knowledge then the same would be a case of section 304. i and if it is only a case of knowledge and not the intention to cause murder and bodily injury then the same would be a case of section 304 part ii. the aforesaid distinction between an act amounting to murder and an act not amounting to murder has been brought out in the numerous decisions of this court. in the case of state of a p v rayavarapu punnayya 1976 4 scc 382 1976 indlaw sc 192 this court observed as follows at page 386 12. in the scheme of the penal code culpable homicides is genus and murder its specie. all murder is culpable homicide but not vice versa. speaking generally culpable homicide sans special characteristics of murder is culpable homicide not amounting to murder. for the purpose of fixing punishment proportionate to the gravity of this generic offence the code practically recognises three degrees of culpable homicide. the first is what may be called culpable homicide of the first degree. this is the greatest form of culpable homicide which is defined in section 300 as murder. the second may be termed as culpable homicide of the second degree. this is punishable under the first part of section 304. then there is culpable homicide of the third degree. this is the lowest type of culpable homicide and the punishment provided for it is also the lowest among the punishments provided for the three grades. culpable homicide of this degree is punishable under the second part of section 304. placing strong reliance on the aforesaid decision this court in the case of abdul waheed khan v state of a p 2002 7 scc 175 2002 indlaw sc 1777 observed as follows at page 184 13. b of section 299 corresponds with cls 2 and 3 of section 300. the distinguishing feature of the mens rea requisite u cl 2 is the knowledge possessed by the offender regarding the particular victim being in such a peculiar condition or state of health that the internal harm caused to him is likely to be fatal notwithstanding the fact that such harm would not in the ordinary way of nature be sufficient to cause death of a person in normal health or condition. it is noteworthy that the intention to cause death is not an essential requirement of cl. only the intention of causing the bodily injury coupled with the offender 's knowledge of the likelihood of such injury causing the death of the particular victim is sufficient to bring the killing within the ambit of this clause. this aspect of cl 2 is borne out by illustration b appended to section 300. b of section 299 does not postulate any such knowledge on the part of the offender. instances of cases falling u cl 2 of section 300 can be where the assailant causes death by a fist blow intentionally given knowing that the victim is suffering from an enlarged liver or enlarged spleen or diseased heart and such blow is likely to cause death of that particular person as a result of the rupture of the liver or spleen or the failure of the heart as the case may be. if the assailant had no such knowledge about the disease or special frailty of the victim nor an intention to cause death or bodily injury sufficient in the ordinary course of nature to cause death the offence will not be murder even if the injury which caused the death was intentionally given. in cl 3 of section 300 instead of the words likely to cause death occurring in the corresponding cl. b of section 299 the words sufficient in the ordinary course of nature have been used. obviously the distinction lies between a bodily injury likely to cause death and a bodily injury sufficient in the ordinary course of nature to cause death. the distinction is fine but real and if overlooked may result in miscarriage of justice. the difference between cl. b of section 299 and cl. 3 of section 300 is one of degree of probability of death resulting from the intended bodily injury. to put it more broadly it is the degree of probability of death which determines whether a culpable homicide is of the gravest medium or the lowest degree. the word likely in cl. b of section 299 conveys the sense of probable as distinguished from a mere possibility. the words bodily injury sufficient in the ordinary course of nature to cause death mean that death will be the most probable result of the injury having regard to the ordinary course of nature. for cases to fall within clause 3 it is not necessary that the offender intended to cause death so long as the death ensues from the intentional bodily injury or injuries sufficient to cause death in the ordinary course of nature. rajwant singh v state of kerala is an apt illustration of this point. in virsa singh v state of punjab4. 1958 indlaw sc 82 vivian bose j speaking for the court explained the meaning and scope of cl. it was observed that the prosecution must prove the following facts before it can bring a case under section 300 thirdly. first it must establish quite objectively that a bodily injury is present secondly the nature of the injury must be proved. these are purely objective investigations. thirdly it must be proved that there was an intention to inflict that particular injury that is to say that it was not accidental or unintentional or that some other kind of injury was intended. once these three elements are proved to be present the enquiry proceeds further and fourthly it must be proved that the injury of the type just described made up of the three elements set out above was sufficient to cause death in the ordinary course of nature. this part of the enquiry is purely objective and inferential and has nothing to do with the intention of the offender. the ingredients of clause thirdly of section 300 ipc were brought out by the illustrious judge in his terse language as follows 12. to put it shortly the prosecution must prove the following facts before it can bring a case under section 300 thirdly first it must establish quite objectively that a bodily injury is present secondly the nature of the injury must be proved these are purely objective investigations. thirdly it must be proved that there was an intention to inflict that particular bodily injury that is to say that it was not accidental or unintentional or that some other kind of injury was intended. once these three elements are proved to be present the enquiry proceeds further and fourthly it must be proved that the injury of the type just described made up of the three elements set out above is sufficient to cause death in the ordinary course of nature. the learned judge explained the third ingredient in the following words the question is not whether the prisoner intended to inflict a serious injury or a trivial one but whether he intended to inflict the injury that is proved to be present. if he can show that he did not or if the totality of the circumstances justify such an inference then of course the intent that the section requires is not proved. but if there is nothing beyond the injury and the fact that the appellant inflicted it the only possible inference is that he intended to inflict it. whether he knew of its seriousness or intended serious consequences is neither here nor there. the question so far as the intention is concerned is not whether he intended to kill or to inflict an injury of a particular degree of seriousness but whether he intended to inflict the injury in question and once the existence of the injury is proved the intention to cause it will be presumed unless the evidence or the circumstances warrant an opposite conclusion. these observations of vivian bose j have become locus classicus. the test laid down by virsa singh case4 for the applicability of clause thirdly is now ingrained in our legal system and has become part of the rule of law. under clause thirdly of section 300 ipc culpable homicide is murder if both the following conditions are satisfied i e a that the act which causes death is done with the intention of causing death or is done with the intention of causing a bodily injury and b that the injury intended to be inflicted is sufficient in the ordinary course of nature to cause death. it must be proved that there was an intention to inflict that particular bodily injury which in the ordinary course of nature was sufficient to cause death viz that the injury found to be present was the injury that was intended to be inflicted. thus according to the rule laid down in virsa singh case4 even if the intention of the accused was limited to the infliction of a bodily injury sufficient to cause death in the ordinary course of nature and did not extend to the intention of causing death the offence would be murder. illustration c appended to section 300 clearly brings out this point. c of section 299 and cl. 4 of section 300 both require knowledge of the probability of the act causing death. it is not necessary for the purpose of this case to dilate much on the distinction between these corresponding clauses. it will be sufficient to say that cl. 4 of section 300 would be applicable where the knowledge of the offender as to the probability of death of a person or persons in general as distinguished from a particular person or persons being caused from his imminently dangerous act approximates to a practical certainty. such knowledge on the part of the offender must be of the highest degree of probability the act having been committed by the offender without any excuse for incurring the risk of causing death or such injury as aforesaid. the above are only broad guidelines and not cast iron imperatives. in most cases their observance will facilitate the task of the court. but sometimes the facts are so intertwined and the second and the third stages so telescoped into each that it may not be convenient to give a separate treatment to the matters involved in the second and third stages. the aforesaid principles have been consistently followed by this court in several decisions. reference in this regard may be made to the decision of this court in ruli ram v state of haryana 2002 7 scc 691 2002 indlaw sc 1927 augustine saldanha v state of karnataka 2003 10 scc 472 2003 indlaw sc 674 state of u p v virendra prasad 2004 9 scc 37 2004 indlaw sc 60 chacko v state of kerala 2004 12 scc 269 2004 indlaw sc 20 section n bhadolkar v state of maharasthra 2005 9 scc 71 2004 indlaw sc 268 and jagriti devi v state of h p jt 2009 8 sc 648. 2009 indlaw sc 859. that being the well settled legal position when we test the factual background of the present case on the principles laid down by this court in the aforesaid decisions we are unable to agree with the views taken by the high court. as already noted it is quite clear from the record that there was an altercation preceding the incident. the place of occurrence is a residence inhabited by both the parties and there is no evidence on record that the deceased was armed with any weapon. initially the accused appellant also did not have any weapon with him but during the course of the incident he went inside and got a knife with the help of which he stabbed the deceased. in his cross examination has categorically stated that death due to stab injury was in consequence of injury No 1 and all other injuries were superficial in nature. so it was only injury No 1 which was fatal in nature. factually therefore there was only one main injury caused due to stabbing and that also was given on the back side of the deceased and therefore it can not be said that there was any intention to kill or to inflict an injury of a particular degree of seriousness. records clearly establish that there was indeed a scuffle between the parties with regard to the availability of electricity in a particular room and during the course of scuffle the appellant also received an injury which was simple in nature and that there was heated exchange of words and scuffle between the parties before the actual incident of stabbing took place. there is therefore provocation and the incident happened at the spur of the moment. that being the factual position we are of the considered view that the present case can not be said to be a case section but it is a case falling under section 304 part ii ipc. it is trite law that section 304 part ii comes into play when the death is caused by doing an act with knowledge that it is likely to cause death but there is no intention on the part of the accused either to cause death or to cause such bodily injury as is likely to cause death. accordingly we convict the appellant under section 304 part ii of ipc and sentence him to undergo imprisonment for a period of 7 years. his bail bonds shall stand cancelled and the appellant shall surrender immediately to serve out the remaining period of sentence. if however the appellant does not surrender by himself the state shall take necessary steps to rearrest him to undergo the remaining part of sentence. the appeal stands disposed of in terms of aforesaid order. appeal disposed of.

IN-Ext

FACTS on 19.04.1988 satish narayan sawant, the appellant (accused no. 1) along with two other accused persons and also with two delinquent children allegedly formed an unlawful assembly and that in furtherance of the said common object stabbed one rauji dulba sawant, the deceased and also assaulted baby dulba sawant (pw-1), ashok dulba sawant (pw-2), kunda rauji sawant (pw-8) and laxmi dulba sawant (pw-18) who are the sister, brother, wife and mother respectively of the deceased. it is also the case of the prosecution that as a result of the aforesaid stab injuries given to the deceased, he expired on the same day during the survey made at the place of occurrence, pw-21 noticed some blood-stains in the front courtyard of the house and a pipe of length of about 1 foot or slightly less lying in the courtyard having blood-stains. thereafter, pw-21, along with p.i. d'sa gave a call to the inmates of the house to open the door and on hearing the call, one lady opened the door. on the basis of complaint made by pw-1, an fir was registered and the accused came to be arrested. on completion of the investigation, the police submitted the charge- sheet against the accused persons namely the present appellant (accused no. 1), accused nos. 2 and 3 and the two juvenile offenders, namely sarita and sharmila. the trial court framed charges against all the accused persons for the offence under sections 302, 323, 143, 147 and 149 of the ipc. the accused pleaded not guilty and claimed to be tried. since there were two juvenile offenders there cases were segregated and the trial against accused nos. 1, 2 and 3 was conducted during the course of which a number of eye-witnesses were examined on behalf of the prosecution. after completion of the arguments the trial court reserved the verdict. the trial court passed an order on 04.08.1998 acquitting all the accused persons from the offences under sections 302, 323, 143, 147 and 149 of ipc. being aggrieved by the aforesaid judgment and order of acquittal the state filed an appeal in the high court against accused nos. 1 to 3. ARGUMENT mr. r. sundaravardhan, learned senior counsel appearing for the appellant very forcefully submitted that the high court was not justified in setting aside the order of acquittal passed in respect of the present appellant. he submitted that although the incident in question had taken place at about 8.45 p.m. the same came to be reported to the police at 3.00 a.m. he also submitted that the police officer (pw-21) who received the information about the incident started investigation without recording either any general diary (for short g.d.) entry or the fir and, therefore, the fir which has been proved in the trial court is hit by the provisions of s. 162 of the criminal procedure code (for short "the crpc. he also submitted that the high court has not given any reason for setting aside the appeal against acquittal which was passed after appreciating the entire evidence on record. he further submitted that there was not only shifting of time of the alleged occurrence but also shifting of the place of occurrence from the hall to the outside verandah and courtyard to suit the convenience of the prosecution case, ms. a. subhashini, learned counsel appearing for the respondent- state, however, strenuously submitted that none of the aforesaid submissions could be accepted by this court as it is a foolproof case of conviction of the appellant she submitted that the high court rightly interfered with the order of acquittal passed by the trial court after critically examining the evidence on record. it was submitted by her that the trial court examined the evidence in the present case in a very summary and cryptic manner and thereby arrived at a wrong conclusion that the accused persons were required to be acquitted. ANALYSIS the starting point of the incident in question as indicated from the evidence on record is the hall where apparently a dispute started between the parties with regard to the electricity connection in the house. the deceased tried to put off the light of one particular room at which the appellant and other accused persons became annoyed and the appellant switched on the light which was again switched off by the deceased. at this, the deceased became annoyed and the appellant removed the fuse of the electricity which act of his plunged the entire house into darkness. it is also clear and established that thereafter a lamp was brought by accused no. 3 to the room besides another lamp which was already burning in the said room itself. but, in any case, there was an electricity light post in the front of the house which was giving enough light to the house. there is also evidence on record to show that even outsiders were watching the incident from the road which indicates that there was sufficient light for them to see what was happening in the house where the incident had taken place. there was indeed some scuffle between the parties during the course of which accused no. 1 received simple injuries and the deceased died of the two stab injuries inflicted by the present appellant. the issue with regard to the initiation of the investigation without recording the fir was succinctly addressed by this court in the case of state of u.p. v. bhagwant kishore joshi, (1964) 3 scr 71 1963 indlaw sc 268, observed as follows: "17. what is investigation is not defined in the code of criminal procedure; but in h.n. rishbud and inder singh v. state of delhi 1954 indlaw sc 14 this court has described, the procedure, for investigation as follows: "thus, under the code investigation consists generally of the following steps, (1) proceeding to the spot, (2) ascertainment of the facts and circumstances of the case, (3) discovery and arrest of the suspected offender, (4) collection of evidence relating to the commission of the offence which may consist of (a) the examination of various persons (including the accused) and the reduction of their statements into writing, if the officer thinks fit, (b) the search of places of seizure of things considered necessary for the investigation and to be produced at the trial, and (5) formation of the opinion as to whether on the material collected there is a case to place the accused before a magistrate for trial and if so taking the necessary steps for the same by the filing of a charge-sheet" in the instant case, it is quite clear from the evidence on record that pw-1 received the information about the death of the deceased from psi of panaji police station without any detail as to how the incident had happened and who had caused the incident. it was a very cryptic information received by him regarding the death of a person residing within the jurisdiction of his police station pursuant to an incident taking place on 10.04.1988 between 8.30 p.m. to 8.45 p.m. and, therefore, it appears that there was not enough information available to him either to get a g.d. entry recorded or to get an fir lodged. in order to verify the information received, pw-21 went to the place of occurrence and found the entire house in total darkness. the said eye-witnesses are consistent about the principal act of the appellant in stabbing the deceased. the discrepancies which were sought to be pointed out are minor discrepancies without in any manner affecting the substratum of the prosecution case and therefore, minor discrepancies in the evidence of the eye-witnesses are immaterial. the postmortem report indicates that there were sixteen injuries as against the two as adduced in ocular evidence and, therefore, a submission was made by the counsel appearing for the appellant that the medical evidence adduced in the present case is not supporting the ocular evidence. the place of occurrence is a residence inhabited by both the parties and there is no evidence on record that the deceased was armed with any weapon. records clearly establish that there was indeed a scuffle between the parties with regard to the availability of electricity in a particular room and during the course of scuffle the appellant also received an injury which was simple in nature and that there was heated exchange of words and scuffle between the parties before the actual incident of stabbing took place. there is, therefore, provocation and the incident happened at the spur of the moment. that being the factual position, we are of the considered view that the present case cannot be said to be a case u/s. but it is a case falling under s. 304 part ii ipc. it is trite law that s. 304 part ii comes into play when the death is caused by doing an act with knowledge that it is likely to cause death but there is no intention on the part of the accused either to cause death or to cause such bodily injury as is likely to cause death. STATUTE s. 299 and s. 300 ipc deals with the definition of culpable homicide and murder respectively. s. 299 defines culpable homicide as the act of causing death; (i) with the intention of causing death or (ii) with the intention of causing such bodily injury as is likely to cause death or (iii) with the knowledge that such act is likely to cause death. the bare reading of the section makes it crystal clear that the first and the second clause of the section refer to intention apart from the knowledge and the third clause refers to knowledge alone and not intention. both the expression "intent" and "knowledge" postulate the existence of a positive mental attitude which is of different degrees. the mental element in culpable homicide i.e. mental attitude towards the consequences of conduct is one of intention and knowledge. if that is caused in any of the aforesaid three circumstances, the offence of culpable homicide is said to have been committed. . 300 ipc, however, deals with murder although there is no clear definition of murder provided in s. 300 ipc. it has been repeatedly held by this court that culpable homicide is the genus and murder is species and that all murders are culpable homicide but not vice versa. s. 300 ipc further provides for the exceptions which will constitute culpable homicide not amounting to murder and punishable u/s. when and if there is intent and knowledge then the same would be a case of s. 304. part. i and if it is only a case of knowledge and not the intention to cause murder and bodily injury, then the same would be a case of s. 304 part ii. the aforesaid distinction between an act amounting to murder and an act not amounting to murder has been brought out in the numerous decisions of this court.

these three appeals by special leave are directed against the order dated september 92004 passed by intellectual property appellate board for shortipab whereby it ordered the removal of appellant 's mark infosys from the register of trade marks in respect of computer stationery computer manuals printed matter for computer instructional and teaching materials computer hardware and peripherals and machine and machine tools. the appellant is infosys technologies limited. it was incorporated and registered under the companies act1956 on july 21981 in the name of infosys consultants private limited. the appellant got the trade mark infosys registered in 1987 in classes 16 and 9 in connection with computer stationery computer manuals printed manual for computer instruction and teaching materials computer hardwares computer interface computer peripherals electronics telex interface and in 1988 in class 7 in connection with machine and machine tools and motors not for land vehicles the particulars with reference to the trade mark registered by the appellant are as follows. on april 211992the name of the company infosys consultants pvt. limited was changed to infosys technologies pvt. ltd and thereafter on june 21992the name was changed to the present name i e. infosys technologies limited. the first respondent is jupiter infosys limited. the first respondent was incorporated and registered in september 1978 under the name of jupiter agencies pvt. limited. the name of the first respondent was changed to jupiter infosys p limited in august1995 and now since july2003the name is changed to jupiter international limited. on october 111996the appellant instituted a suit in the calcutta high court for perpetual injunction inter alia restraining the first respondent from infringing the appellant 's mark infosys by using the mark infosys by itself or in combination with other marks in course of its trade. the appellant also prayed for an interim order in the suit. on november 221996the calcutta high court by an ad interim order restrained the first respondent from using the word infosys in any manner in relation to the goods for the time being. the ad interim order was confirmed on november 291996. the appellant having come to know of several instances of misuse of mark infosys also filed a writ petition being writ petition no 14214 of 2000 before the calcutta high court inter alia praying that the registrar of companies be restrained from registering the companies bearing the name infosys. on september 132000the calcutta high court restrained the department of company affairs and registrar of companies from incorporating any company bearing the name infosys without the permission of the appellant. in january 2001the appellant filed yet another suit before the high court of judicature at madras for permanent injunction restraining the first respondent from offering shares to the public as claimed in the initial public offer ipo using infosys. the single judge of the madras high court passed an interim restraint order on february 12001 against the first respondent. the said order was confirmed on may 222001 to remain operative till disposal of suit. the first respondent then filed three separate applications before the madras high court inter alia under sections 46 and 56 of the trade and merchandise marks act1958. the 1958 act in o p no 764 of 2001the first respondent prayed for the removal rectification of the entry in the register of trade mark in respect of trade mark no 475269 in class 16 while in the other two applications being o p no 765 of 2001 and o p no 766 of 2001the first respondent prayed for removal rectification of trade mark no 475267 in class 9 and trade mark no 484837 in class 7 respectively. the appellant opposed these applications on diverse grounds by filing counter affidavits. on august 122003the madras high court framed the following issues. a whether the mark applied for registration was used in respect of the goods for which the mark was registered. b whether the respondent had a bonafide intention to use the mark applied for under section 18 of the trade and merchandise marks act. cwhether the mark registered in favour of the respondent is a service mark. dwhether there is a non use of registered trade mark by the respondent for a period of over 5 years and 1 month. ewhether the registered trade mark is disentitled for protection in a court of law under section 11e of the trade and merchandise marks act. fwhether the registered trade mark has lost its distinctiveness and is liable to be removed under section 32c. g whether the respondent has committed fraud while obtaining registration of the mark and. hto what further relief. the 1958 act was repealed by the trade marks act1999 for shortthe 1999 act in terms of section 100 of the 1999 act the three petitions filed by the first respondent before the madras high court for rectification removal of registered trade mark nos 475269475267 and 484837 were transferred to the ipab. some more facts may be noticed. the appellant filed yet another suit being suit no 2115 of 2002 before delhi high court for infringement of trade mark and passing off against the first respondent. in that suit the appellant also made an application for grant of temporary injunction. the vacation judge of the delhi high court on december 272002 passed an order of temporary injunction against the first respondent as follows notice for 24th march2003 before the joint registrar. heard. perused the averments made in the suit and application which are duly supported by documents on record. i am of the opinion that in case ex parte ad interim orders are not granted the relief claimed itself may be rendered infructuous. accordingly it is directed that pending further consideration of the matter after notice for the next date of hearing the defendants are restrained by themselves their directors employees agents andor others acting on its behalf from using the trade mark corporate name infosys or any other mark name deceptively similar trade mark or colourable imitation thereof as a mark andor corporate name or as part of a mark andor business name in respect of goods andor services for publicity on propaganda on websites and or in domain names in any way whatsoever thereby causing infringement of the registered trade mark infosys of the plaintiff in isolation or in combination with words letters numbers their advertisements as part of their corporate name either in isolation or in goods and services or in or by way of any advertisement publicity campaigns etc. compliance of order xxxix rule 3 cpc within three days. the said suit was transferred to the court of the additional district judge tis hazari court delhi. in that suit an affidavit came to be filed by the first respondent wherein it was stated that the name of the company has been changed from jupiter infosys limited to jupiter international limited and a certificate to that effect has been issued by the registrar of companies kolkata under the companies act1956 and no dispute remains between the parties under the trade mark. the relevant statement made in the affidavit dated july 142003 we were informed that the date of the affidavit is july 142004 reads as follows that in the meantime the defendant has already changed the trade mark namely jupiter international ltd in place of jupiter infosys ltd the copy of the incorporation on change of name which was issued by the registrar of the companies are being marked and annexed herewith as annexure a that now there is no dispute between the plaintiff and defendant under the trade mark. based on this affidavit the suit was partially decreed in favour of the appellant on november 102004. in 2007however the first respondent filed a suit in the court of additional district judge delhi for setting aside the decree dated november 102004 that suit is said to be pending. the ipab proceeded with the matter in light of the issues that were already framed by the high court and heard the parties. the ipab in the impugned order while dealing with the plea of limitation raised by the appellant held that the first respondent was the appropriate aggrieved party in the matter in view of the fresh cause of action having arisen to the first respondent on filing of civil suit no 71 of 2001 by the appellant before the madras high court. the ipab in the impugned order held that the trade mark nos 475269475267 and 484837 have not been used by the appellant for more than a period of five years and one month and the appellant also failed to make out that it had been in manufacturing or trading of the goods for which it had taken registration nos 475269475267 and 484837 consequently the ipab allowed the applications made by the first respondent purportedly under section 461b of the 1958 act and directed the registrar to remove these registrations from the register. we heard mr akhil sibal learned counsel for the appellant and mr vaibhav gaggar learned counsel for the first respondent at quite some length. mr akhil sibal learned counsel for the appellant argued that an application for rectification whether under section 46 or section 56 of the 1958 act can only be preferred by a person aggrieved the applicant must not only be a person aggrieved on the date of the application but must continue to remain a person aggrieved until such time as the rectification application is finally decided. he contended that the first respondent is not shown to have ever traded or intended to trade in any goods covered by the appellant 's registrations under classes 7 and 16 and as such the first respondent is not a person aggrieved with regard to the appellant 's registrations under these two classes. as regards class 9 he would submit that in view of the affidavit filed by the first respondent on july 142004 in the court of additional district judge delhi the first respondent ceases to be an aggrieved person on the date of consideration of the rectification application. learned counsel heavily relied upon two decisions of this court 1 hardie trading ltd anr v. addisons paint chemicals ltd 2003 11 scc 92 2003 indlaw sc 756 and 2 kabushiki kaisha toshiba v tosiba appliances company ors 2008 10 scc 766 2008 indlaw sc 1395. assailing the finding of the ipab as regards non use by the appellant during the relevant period learned counsel for the appellant argued that the said finding was erroneous on legal as well as factual premise. he contended that the ipab erred in holding that software was a service and the subject registrations were in relation to goods without considering the wide definition of goods provided under section 2g of the 1958 act. akhil sibal argued that the ipab committed grave error in relying upon the provisions of the 1999 act and the trade marks rules2002 when these provisions were not applicable as the applications were filed under the 1958 act. according to him the ipab sought to rely upon computer programming which is a service enumerated in class 42without considering the distinction between a computer programme and computer programming and without noticing the entry computer under class 9 which falls within goods. learned counsel would submit that in examining the question of non use under section 461bthe ipab failed to consider that the requisite use must be in relation to goods under registration which is extensively defined under section 22b of the 1958 act. akhil sibal learned counsel also argued that the ipab failed to have regard to the proviso to section 461in terms of which it is open to the registered proprietor to rely upon use of the registered trade mark during the relevant period in relation to goods of the same descriptionin order to resist an application for rectification. he contended that the ipab failed to apply proper legal tests for determining goods of the same description and had that been done it would be evident that computer software amounts to goods of the same description as computer hardware. in this regard he relied upon m s eagle potteries. private ltd v. m s eagle flask industries pvt. ltd air 1993 bombay 185 1992 indlaw mum 6327 lever brothers port sunlight ld v. sunniwite products ld 1949 66 rpc 84. the ritz hotel v charles of the ritz 1989. rpc 333 and australian wine importers trade mark. 6 rpc 311. learned counsel for the appellant also submitted that in any view of the matter the ipab erred in exercising its discretion under section 46 of the 1958 act without taking into consideration the aspect of public interest. he argued that the ipab ought to have considered whether use of mark infosys by the first respondent on computer hardware would create confusion in the mind of the consumers that they might be led to believe that the said hardware is manufactured by the appellant. learned counsel thus submitted that the impugned order is unsustainable and liable to be set aside. on the other hand an objection is raised in the written submissions on behalf of the first respondent and reference was made in support of the objection to seven judge bench decision of this court in l chandrakumar v union of india ors 1997 3 scc 261 1997 indlaw sc 2816 that challenge to the order of ipab directly in the appeal before this court under article 136 of the constitution is barred. in reply to the arguments of learned counsel for the appellant mr vaibhav gaggar learned counsel for the first respondent strenuously urged that the plea of aggrieved person is a new plea and raised substantially for the first time before this court. he argued that the appellant has not taken the plea of the first respondent not being a person aggrieved with respect to filing of the applications for rectification before the ipab merely urging the plea that the first respondent has no locus standi in the written submissions before the ipab is not sufficient. learned counsel would submit that the appellant has for the first time argued before this court that the first respondent is not a person aggrieved andor not capable of maintaining the rectification proceedings with respect to each and every good for which the appellant has been registered since the first respondent has not been registered for all the goods. vaibhav gaggar rather asserted that the first respondent is a person aggrieved in view of the fact that various suits for infringement have been filed by the appellant against the first respondent and on the date of the applications for rectification removal of the subject registrations from the register the suits were pending. with reference to the affidavit dated july 142004 filed by the first respondent before the court of additional district judge he submitted that the said affidavit has no relevance in consideration as to whether the first respondent is an aggrieved person as section 46 1 of the 1958 act relates only to the period upto the date of the filing of the rectification application and the rights of the parties crystallized at that stage itself. in this regard he relied upon a decision of the madras high court in agha hyder hussain anr v. omar khayyam wineries pvt ltd anr air 1977 mad 166. 1976 indlaw mad 380. he also placed reliance upon some more decisions viz ritz hotel ltd 1989. rpc 333philosophy di alberta ferretti 2003 r p c 15. keystone knitting mills trade mark1929 1 ch. d 92 and motor terms company pty limited v. liberty insurance ltd 1967 116 c l r 177 learned counsel for the first respondent further submitted that the affidavit dated july 142004 was not placed by the appellant before the ipab nor any reference of the said affidavit has been made in the written submissions before the ipab and the appellant also did not make any effort to amend the pleadings that the first respondent was not an aggrieved person. it was contended by mr vaibhav gaggar that even otherwise in view of the fraud perpetrated by the appellant qua the registrations in question the issue as to whether the first respondent had a dispute with the trade mark or not pales into insignificance as the primary duty of the court is to maintain the purity of the register. he argued that in a case such as the present one since the allegations against the appellant relate to trafficking squatting and non user the scope of person aggrieved has to be enlarged. learned counsel submitted that the fact that the appellant continues to allege and that stance has not changed in the pleadings in slp as well that the first respondent is an infringer pilfriger defrauder someone who wants to ride on the goodwill of the appellant or someone who wants to mislead the public at large there is no question of the first respondent ceasing to be a person aggrieved at any stage. vaibhav gaggar learned counsel for the first respondent contended that the appellant is registered as a manufacturer and trader under classes 79 and 16 even though it is a company engaged in software only. moreover there is nothing on record to indicate linkage with the manufacturing or marketing of the goods for which the appellant is holding registration of subject trade marks. he vehemently contended that goods in classes 79 and 16 for which the appellant obtained registration were never used in the manner contemplated by the 1958 act for almost 30 years and that would show the mala fide intention of the appellant in having the same registered for the purpose of squatting and trafficking. learned counsel for the first respondent further argued that infosys is not an invented or a coined word the said word is an abbreviation and combination of the words information system the word infosys has been used by various companies abroad as well as within india prior to incorporation of the appellant itself and hence can not be called an invented word. in this regard he relied upon a decision of the madras high court in nestle 's products india. ltd v. p thankaraja. anr air 1978 mad 336 he submitted that appellant is primarily in service industry which is unregistrable under the 1958 act and since the appellant is not trading in the goods in respect of which it is registered it can not be said that the mark of the appellant is distinctive of its goods. in any case learned counsel would submit that the expression infosys is not descriptive expression. insofar as discretion exercised by ipab in ordering removal of the appellant 's registrations from the register under section 461b of the 1958 act is concerned learned counsel for the first respondent submitted that this court should not overturn the discretion so exercised by the ipab keeping in view the dishonest and fraudulent conduct of the appellant. lastly he submitted that although no cross objections or cross appeal has been filed the first respondent has some grievance with regard to the order of the ipab in not considering the case set up in the rectification removal applications particularly with regard to section 56 of the 1958 act. having regard to the order that we intend to make we are not persuaded to accept the objection raised on behalf of the first respondent that present appeal preferred directly before this court from the impugned order passed by the ipab is not maintainable and must be dismissed as such. pertinently the notice was issued in the petitions for special leave to appeal to the respondents on november 12004 in response to the said notice the first respondent filed counter affidavit before this court on march 112005 wherein no specific objection about invocation of jurisdiction of this court directly has been taken. in the counter affidavit a very vague objection in the following terms was raised that the present petition apart from being false and misconceived lacks the necessary jurisdiction hence deserves outright rejection. we are afraid this is hardly an objection about maintainability. apart from it on september 122005 after hearing both parties special leave was granted by this court. in the backdrop of these peculiar facts in our view it is not appropriate to relegate the 17 appellant at this distance of time to challenge the impugned order passed by the ipab in writ petition before the high court. the objection about maintainability of the appeals is accordingly overruled. the moot question which has been debated before us is whether or not the first respondent is an aggrieved person. that the first respondent filed composite applications under sections 46 and 56 of the 1958 act for rectification removal of the trade mark infosys registered in classes 79 and 16 is not in dispute. sections 46 and 56 read as follows s 46 removal from register and imposition of limitations on ground of non use 1 subject to the provisions of section. 47a registered trade mark may be taken off the register in respect of any of the goods in respect of which it is registered on application made in the prescribed manner to a high court or to the registrar by any person aggrieved on the ground either a that the trade mark was registered without any bona fide intention on the part of the applicant for registration that it should be used in relation to those goods by him or in a case to which the provisions of section 45 apply by the company concerned and that there has in fact been no bona fide use of the trade mark in relation to those goods by any proprietor thereof for the time being up to a date one month before the date of the application or b that up to a date one month before the date of the application a continuous period of five years or longer had elapsed during which the trade mark was registered 18 and during which there was no bona fide use thereof in relation to those goods by any proprietor thereof for the time being provided that except where the applicant has been permitted under sub section 3 of section 12 to register an identical or nearly resembling trade mark in respect of the goods in question or where the tribunal is of opinion that he might properly be permitted so to register such a trade mark the tribunal may refuse an application under clause a or clause b in relation to any goods if it is shown that there has been before the relevant date or during the relevant period as the case may be bona fide use of the trade mark by any proprietor thereof for the time being in relation to goods of the same description being goods in respect of which the trade mark is registered. 2 where in relation to any goods in respect of which a trade mark is registered a the circumstances referred to in clause 1 of sub section 1 are shown to exist so far as regards non use of the trade mark in relation to goods to be sold or otherwise traded in in a particular place in india otherwise than for export from indiaor in relation to goods to be exported to a particular market outside india and b a person has been permitted under sub section 3 of section 12 to register an identical or nearly resembling trade mark in respect of those goods under a registration extending to use in relation to goods to be so sold or otherwise traded in or in relation to goods to be so exported or the tribunal is of opinion that he might properly be permitted so to register such a trade mark on application by that person in the prescribed manner to a high court or to the registrar the tribunal may impose on the registration of the first mentioned trade mark such limitations as it thinks proper for securing that that registration shall cease to extend to such use 19 3. an applicant shall not be entitled to rely for the purpose of clause b of sub section 1 or for the purposes of sub section 2 on any non use of a trade mark which is shown to have been due to special circumstances in the trade and not to any intention to abandon or not to use the trade mark in relation to the goods to which the application relates. s 56 power to cancel or vary registration and to rectify the register 1. on application made in the prescribed manner to a high court or to the registrar by any person aggrieved the tribunal may make such order as it may think fit for cancelling or varying the registration of a trade mark on the ground of any contravention or failure to observe a condition entered on the register in relation thereto. any person aggrieved by the absence or omission from the register of any entry or by any entry made in the register without sufficient cause or by any entry wrongly remaining on the register or by any error or defect in any entry in the register may apply in the prescribed manner to a high court or to the registrar and the tribunal may make such order for making expunging or varying the entry as it may think fit. the tribunal may in any proceeding under this section decide any question that may be necessary or expedient to decide in connection with the rectification of the register. the tribunal of its own motion may after giving notice in the prescribed manner to the parties concerned and after giving them an opportunity of being heard make any order referred to in sub section 1 or sub section 2. any order of the high court rectifying the register shall direct that notice of the rectification shall be served upon the registrar in the prescribed manner who shall upon receipt of such notice rectify the register accordingly. the power to rectify the register conferred by this section shall include the power to remove a trade mark registered in part a of the register to part b of the register. the position that emerges from the above provisions is this. whether the application is under section 46 or under section 56 or a composite application under both sections it is a pre requisite that the applicant must be a person aggrieved. section 461 of the 1958 act enables any person aggrieved to apply for removal of registered trade mark from the register on the ground of non use as stated in clause a andor clause b to be an aggrieved person under section 46he must be one whose interest is affected in some possible way it must not be a fanciful suggestion of grievance. a likelihood of some injury or damage to the applicant by such trade mark remaining on the register may meet the test of locus standi. in kerly 's law of trade marks and trade names 11th edition at page 166the legal position with regard to person aggrieved has been summarized thus the persons who are aggrieved are all persons who are in some way or the other substantially interested in having the mark removed where it is a question of removal from the register including all persons who would be substantially damaged if the mark remained and all trade rivals over whom an advantage was gained by a trader who was getting the benefit of a registered trade mark to which he was not entitled. we accept the above statement of law. insofar as section 56 is concerned it provides for varying situations in which the person aggrieved may apply for rectification of the registered trade mark from the register. although both sections namely sections 46 and 56 require person aggrieved to apply for removal of the registered trade mark from the register or rectification of a trade mark in the register the expression person aggrieved for the purposes of these two sections has different connotations. the interpretation of the expression person aggrieved occurring in sections 46 and 56 has come up for consideration before this court on more than one occasion. in hardie trading ltd 2003 indlaw sc 756 2003 11 scc 92this court stated as follows the phrase person aggrieved is a common enough statutory precondition for a valid complaint or appeal. the phrase has been variously construed depending on the context in which it occurs. three sections viz sections 4656 and 69 of the act contain the phrase. section 46 deals with the removal of a registered trade mark from the register on the ground of non use. this section presupposes that the registration which was validly made is liable to be taken off by subsequent non user. section 56 on the other hand deals with situations where the initial registration should not have been or was incorrectly made. the situations covered by this section include a the contravention or failure to observe a condition for registration b the absence of an entry c an entry made without sufficient cause d a wrong entry and e any error or defect in the entry. such type of actions are commenced for the purity of the register which it is in public interest to maintain. applications under sections 46 and 56 may be made to the registrar who is competent to grant the relief. persons aggrieved may also apply for cancellation or varying an entry in the register relating to a certification trade mark to the central government in certain circumstances. since we are not concerned with a certification trade mark the process for registration of which is entirely different we may exclude the interpretation of the phrase person aggrieved occurring in section 69 from consideration for the purposes of this judgment. in our opinion the phrase person aggrieved for the purposes of removal on the ground of non use under section 46 has a different connotation from the phrase used in section 56 for cancelling or expunging or varying an entry wrongly made or remaining in the register. in the latter case the locus standi would be ascertained liberally since it would not only be against the interest of other persons carrying on the same trade but also in the interest of the public to have such wrongful entry removed. it was in this sense that the house of lords defined person aggrieved in the matter of powell 's trade mark although they were no doubt inserted to prevent officious interference by those who had no interest at all in the register being correct and to exclude a mere common informer it is undoubtedly of public interest that they should not be unduly limited inasmuch as it is a public mischief that there should remain upon the register a mark which ought not to be there and by which many persons may be affected who nevertheless would not be willing to enter upon the risk and expense of litigation. whenever it can be shown as here that the applicant is in the same trade as the person who has registered the trade mark and wherever the trade mark if remaining on the register would or might limit the legal rights of the applicant so that by reason of the existence of the entry on the register he could not lawfully do that which but for the existence of the mark upon the register he could lawfully do it appears to me he has a locus standi to be heard as a person aggrieved. but if the ground for rectification is merely based on non user i e under section 46 of the act that is not really on account of any public mischief by way of an incorrect entry. the non user does not by itself render the entry incorrect but it gives a right to a person whose interest is affected to apply for its removal. an applicant must therefore show that in some possible way he may be damaged or injured if the trade mark is allowed to stand and by possible i mean possible in a practical sense and not merely in a fantastic view. all cases of this kind where the original registration is not illegal or improper ought to be considered as questions of common sense to a certain extent at any rate and i think the applicants ought to show something approaching a sufficient or proper reason for applying to have the trade mark expunged. it certainly is not sufficient reason that they are at loggerheads with the respondents or desire in some way to injure them. addisons application was one under section 46 and the test to determine whether the applicant was a person aggrieved within the meaning of that section should have been the one laid down by romer j in wright case and not the one propounded by the house of lords in the matter of powell 's trade mark. the high court and the joint registrar fell into error in not drawing this distinction. however it is not necessary to dilate on this aspect of the matter as the appellant has really argued on the second and third aspects of section 46 viz the alleged non use of the trade marks by hardie and special circumstances. in the case of hardie trading ltd 2003 indlaw sc 756 1this court approved the test applied by romer j in the royal baking powder company v wright crossley and co 1898. 15 rpc 677which has been reproduced in the report. we respectfully agree. hardie trading ltd 2003 indlaw sc 756 1 has been followed by this court in a recent decision in the case of kabushiki kaisha toshiba 2008 10 scc 766 2008 indlaw sc 1395. this court stated that section 46 speaks for private interest while section 56 speaks of a public interest. it is true that the appellant in opposition to the applications for removal rectification of trade mark did not specifically challenge in its counter affidavits the locus standi of the first respondent to be heard as a person aggrieved. obviously in the absence of any specific objection by the appellant to that effect no specific issue was framed by the high court whether the applicant was an aggrieved person. the applications having been transferred to the ipab in terms of section 100 of the 1999 act the ipab examined the matter in light of the issues that were framed by the high court although in the written submissions before it the objection was raised that the first respondent has ceased to have locus standi in view of the subsequent events particularly change of the name of the first respondent from jupiter infosys ltd to jupiter international ltd the question is whether in these circumstances it was incumbent upon the ipab to consider and satisfy itself about the locus standi of the first respondent to be heard as a person aggrieved. in our considered view it was. in the first place when the first respondent applied for rectification removal in respect of three registrations in classes 79 and 16it must have shown in respect of each of them that it is a person aggrieved and the ipab must have separately considered in respect of each registration the locus standi of the first respondent as the considerations for each entry might not have been common. secondly and more importantly during the pendency of the applications certain events had taken place which had some bearing on the question of locus standi of the first respondent insofar as invocation of section 46 1 of the 1958 act is concerned. in the affidavit filed by the first respondent on july 142004 before the court of additional district judge delhi an unequivocal and categorical statement has been made that now there is no dispute between the plaintiff appellant herein and defendant first respondent herein under the trade mark and that defendant has already changed the trade mark namely jupiter international ltd in place of jupiter infosys ltd in terms of section 461not only that the applicant has to show that he is an aggrieved person as his interest is being affected but the ipab must also be satisfied before it directs the removal of registered trade mark that the applicant is an aggrieved person before it invokes the power in directing the removal of the 26 registered trade mark. this is so because the pre requisite for exercise of power under section 461 is that the applicant is a person aggrieved. the question then arises whether it is sufficient for the applicant to show that he is a person aggrieved when he makes his application or he must continue to remain a person aggrieved until such time as the rectification removal application is finally decided. in our view the grievance of the applicant when he invokes section 461 must not only be taken to have existed on the date of making application but must continue to exist when such application is decided. if during the pendency of such application the applicant 's cause of complaint does not survive or his grievance does not subsist due to his own action or the applicant has waived his right or he has lost his interest for any other reason there may not be any justification for rectification as the registered trade mark can not be said to operate prejudicially to his interest. in re apollinaris company 's trade marks while dealing with this aspect kekemich j stated because that is a remedy given to the person aggrieved through the interposition of the court for the benefit of the 14 1891 2 ch 186 27 applicant and if at the date of the trial he has no cause of complaint it seems to be monstrous to suppose that the court will rectify the register at his instance when it can do him no good to rectify and when the retention on the register can do him no harm merely because at the date of his application he may have had some grievance. we concur with the above statement. in the circumstances we are satisfied that the applications made by the first respondent for rectification removal of the subject trade marks from the register need to be considered afresh by the ipab in accordance with law and the observations made above. since the first respondent has also grievance in connection with the impugned order particularly with regard to non consideration of its case under section 56 of the 1958 act we refrain from going into the merits of the diverse contentions raised before us and leave the parties to agitate these contentions before the ipab. in view of the above these appeals are allowed in part and the impugned order dated september 92004 is set aside. the applications being tra nos 25 to 27 of 2003 op nos 764 to 766 of 2001 are restored to the file of intellectual property appellate board chennai for hearing and disposal afresh in accordance with law. the parties shall bear their own costs. appeals allowed.

IN-Ext

FACTS the appellant is infosys technologies limited. it was incorporated and registered under the companies act,1956 on july 2,1981 in the name of infosys consultants private limited. the appellant got the trade mark 'infosys' registered in 1987 in classes 16 and 9 in connection with computer stationery,computer manuals,printed manual for computer instruction and teaching materials; computer hardwares,computer interface,computer peripherals,electronics telex interface and in 1988 in class 7 in connection with machine and machine tools and motors (not for land vehicles). on april 21,1992,the name of the company infosys consultants pvt.limited was changed to infosys technologies pvt.ltd.and thereafter on june 2,1992,the name was changed to the present name,i.e.infosys technologies limited. the first respondent is jupiter infosys limited. the first respondent was incorporated and registered in september 1978 under the name of jupiter agencies pvt.limited. the name of the first respondent was changed to jupiter infosys (p) limited in august,1995 and now since july,2003,the name is changed to jupiter international limited. on october 11,1996,the appellant instituted a suit in the calcutta high court for perpetual injunction,inter alia,restraining the first respondent from infringing the appellant's mark 'infosys' by using the mark 'infosys' by itself or in combination with other marks in course of its trade. the appellant also prayed for an interim order in the suit. on november 22,1996,the calcutta high court by an ad-interim order restrained the first respondent from using the word 'infosys' in any manner in relation to the goods for the time being. the ad-interim order was confirmed on november 29,1996. the appellant having come to know of several instances of misuse of mark 'infosys' also filed a writ petition before the calcutta high court,inter alia,praying that the registrar of companies be restrained from registering the companies bearing the name 'infosys'. on september 13,2000,the calcutta high court restrained the department of company affairs and registrar of companies from incorporating any company bearing the name 'infosys' without the permission of the appellant. in january 2001,the appellant filed yet another suit before the high court of judicature at madras for permanent injunction restraining the first respondent from offering shares to the public as claimed in the initial public offer (ipo) using 'infosys'. the first respondent then filed three separate applications before the madras high court,inter alia,under sections 46 and 56 of the trade and merchandise marks act,1958. the first respondent prayed for the removal/rectification of the entry in the register of trade mark in respect of trade mark no.475269 in class 16 while in the other two applications being,the first respondent prayed for removal/rectification of trade mark no.475267 in class 9 and trade mark no.484837 in class 7 respectively. ARGUMENT assailing the finding of the ipab as regards non-use by the appellant during the relevant period,learned counsel for the appellant argued that the said finding was erroneous on legal as well as factual premise. he contended that the ipab erred in holding that software was a 'service' and the subject registrations were in relation to goods without considering the wide definition of 'goods' provided under section 2(g) of the 1958 act. mr.akhil sibal argued that the ipab committed grave error in relying upon the provisions of the 1999 act and the trade marks rules,2002 when these provisions were not applicable as the applications were filed under the 1958 act. the ipab sought to rely upon 'computer programming' which is a 'service' enumerated in class 42,without considering the distinction between a 'computer programme' and 'computer programming' and without noticing the entry 'computer' under class 9 which falls within 'goods'. learned counsel would submit that in examining the question of non-use under section 46(1)(b),the ipab failed to consider that the requisite use must be 'in relation to goods' under registration,which is extensively defined under section 2(2)(b) of the 1958 act. the plea of 'aggrieved person' is a new plea and raised substantially for the first time before this court. he argued that the appellant has not taken the plea of the first respondent not being a 'person aggrieved' with respect to filing of the applications for rectification before the ipab; merely urging the plea that the first respondent has no locus standi in the written submissions before the ipab is not sufficient. learned counsel would submit that the appellant has,for the first time,argued before this court that the first respondent is not a person aggrieved and/or not capable of maintaining the rectification proceedings with respect to each and every good for which the appellant has been registered since the first respondent has not been registered for all the goods. ISSUE (a) whether the mark applied for registration was used in respect of the goods for which the mark was registered? (b) whether the respondent had a bonafide intention to use the mark applied for under section 18 of the trade and merchandise marks act? (c) whether the mark registered in favour of the respondent is a service mark? (d) whether there is a non use of registered trade mark by the respondent for a period of over 5 years and 1 month. (e) whether the registered trade mark is disentitled for protection in a court of law under section 11(e) of the trade and merchandise marks act? (f) whether the registered trade mark has lost its distinctiveness and is liable to be removed under section 32(c)? (g) whether the respondent has committed fraud while obtaining registration of the mark? (h)to what further relief? ANALYSIS whether the application is under section 46 or under section 56 or a composite application under both sections,it is a pre-requisite that the applicant must be a person aggrieved. section 46(1) of the 1958 act enables any person aggrieved to apply for removal of registered trade mark from the register on the ground of non use as stated in clause (a) and/or clause (b). to be an aggrieved person under section 46,he must be one whose interest is affected in some possible way; it must not be a fanciful suggestion of grievance. a likelihood of some injury or damage to the applicant by such trade mark remaining on the register may meet the test of locus standi. in kerly's law of trade marks and trade names (11th edition) at page 166,the legal position with regard to 'person aggrieved' has been summarized thus the persons who are aggrieved are all persons who are in some way or the other substantially interested in having the mark removed where it is a question of removal from the register; including all persons who would be substantially damaged if the mark remained, and all trade rivals over whom an advantage was gained by a trader who was getting the benefit of a registered trade mark to which he was not entitled. the court accept the above statement of law. sections 46 and 56 require 'person aggrieved' to apply for removal of the registered trade mark from the register or rectification of a trade mark in the register,the expression 'person aggrieved' for the purposes of these two sections has different connotations. in hardie trading ltd 2003 indlaw sc 756.(2003) 11 scc 92),this court stated that the phrase "person aggrieved" is a common enough statutory precondition for a valid complaint or appeal. the phrase has been variously construed depending on the context in which it occurs. three sections viz.sections 46,56 and 69 of the act contain the phrase. section 46 deals with the removal of a registered trade mark from the register on the ground of non-use. this section presupposes that the registration which was validly made is liable to be taken off by subsequent non-user. section 56 on the other hand deals with situations where the initial registration should not have been or was incorrectly made. but if the ground for rectification is merely based on non-user i.e.under section 46 of the act,that is not really on account of any public mischief by way of an incorrect entry. the non-user does not by itself render the entry incorrect but it gives a right to a person whose interest is affected to apply for its removal. an applicant must therefore show that in some possible way he may be damaged or injured if the trade mark is allowed to stand. addisons' application was one under section 46 and the test to determine whether the applicant was a "person aggrieved" within the meaning of that section should have been the one laid down by romer,j.in wright case and not the one propounded by the house of lords in the matter of powell's trade mark. in a recent decision in the case of kabushiki kaisha toshiba (2008) 10 scc 766) 2008 indlaw sc 1395, this court stated that section 46 speaks for private interest while section 56 speaks of a public interest. in the first place,when the first respondent applied for rectification/removal in respect of three registrations in classes 7,9 and 16,it must have shown in respect of each of them that it is a 'person aggrieved' and the ipab must have separately considered in respect of each registration the locus standi of the first respondent as the considerations for each entry might not have been common. during the pendency of the applications,certain events had taken place which had some bearing on the question of locus standi of the first respondent insofar as invocation of section 46 (1) of the 1958 act is concerned. in terms of section 46(1),not only that the applicant has to show that he is an aggrieved person as his interest is being affected but the ipab must also be satisfied,before it directs the removal of registered trade mark,that the applicant is an aggrieved person before it invokes the power in directing the removal of the 26 registered trade mark. this is so because the pre-requisite for exercise of power under section 46(1) is that the applicant is a person aggrieved. in the circumstances, the court was satisfied that the applications made by the first respondent for rectification/removal of the subject trade marks from the register need to be considered afresh by the ipab in accordance with law and the observations made above. since the first respondent has also grievance in connection with the impugned order particularly with regard to non-consideration of its case under section 56 of the 1958 act, the court refrained from going into the merits of the diverse contentions raised before us and leave the parties to agitate these contentions before the ipab. STATUTE s.46 of the trade and merchandise marks act - removal from register and imposition of limitations on ground of non-use. s.56 of the trade and merchandise marks act -power to cancel or vary registration and to rectify the register.

an fir was registered on 23 3 1996 on the statement of one prakashi devi. she stated that on the night of 2223 3 1996while. she and her daughter in law sheela devi were sleeping in her house around 11 30 pm the appellant jumped over the front wall of her house and broke the bulbs and ran away that at that time no male member was present in the house except the children. that around 00 30 am the appellant again came into her house and touched her daughter in law sheela devi who woke up and raised an alarm and that the appellant immediately ran away. the police investigated into the said complaint and submitted a report u s 173 of the code of criminal procedure for short the code. on that basis the following charge was framed by the judicial magistrate first class karnal against the appellant that on 23 3 1996after having made preparation for causing hurt or assault you committed house trespass into the house of smt. prakashi devi and thereby committed an offence punishable u s 452 ipc within my cognizance. secondly on the same date time and place you assaulted and used criminal force against abovenamed prakashi devi with intent to outrage her modesty and thereby committed an offence punishable u s 354 ipc and within my cognizance. and i hereby direct that you be tried on the above said charge by this court. emphasis supplied. when the said charged was read over and explained to the appellant he pleaded not guilty to the said charge and claimed trial. prakashi devi was examined as pw 1 she reiterated what was recorded in the fir that the appellant came into the house around 11 30 pm and broke the bulbs that he came again around 00 30 am and touched her daughter in law sheela devi and when her daughter in law woke up and raised an alarm the appellant ran away. in her cross examination prakashi devi stated that she has five sons that only her husband and one son named mahavir were staying with her that the other four sons were married and were not staying with her that on that night her husband was away in the fields and her son mahavir was also not present in the house. however when confronted with her statement recorded in the fir she admitted having stated that when the appellant had come first time at around 11 30 pm and broke the outside bulbs her son woke up and went out of the house. she also admitted that the appellant did not touch her nor teased her nor abused her. her daughter in law sheela devi gave evidence as pw 2 and stated that she was married to one jaibir who worked in the military services that at 11 to 11 30 pm the accused scaled the door and broke the bulbs in the verandah of her house that when she identified the accused and raised an alarm the accused ran away that again he came around 00 30 am by scaling the door and caught her hand and that when she raised an alarm and when her mother in law woke up he ran away. it was elicited in her cross examination that the accused did not go towards her mother in law nor say anything to her mother in law that she used to come to the village where her in laws were residing only when her husband came home and that the house of her father in law was surrounded by the houses of his brothers and their sons. both pw1 and pw2 stated that the house of the accused was at a distance of 15 16 houses from the house of prakashi devi that the accused had never come into their house earlier that their family and the accused were not on visiting terms with each other even during functions marriages or death though they were on visiting terms with others in the village. pw 2 also stated that she did not know the particulars of the dispute between the accused and her in laws. the investigating officer was examined as pw 3 the accused examined a witness ex sarpanch of the village as dw 1 and he stated that there was a quarrel between the accused and complainant 's son surinder about a water course and subsequently he came to know that the quarrel was converted into a false case against the accused by registering a false allegation that the accused had outraged the modesty of a woman. the learned magistrate by judgment dated 2 2 2001held the accused guilty of offences u ss 452 and 354 cr. pc and sentenced him for rigorous imprisonment for six months and a fine of rs 1000 in default thereof simple imprisonment for one month. the appeal filed by the accused was dismissed by the addl. sessions judge on 20 2 2002 the criminal revision filed by the appellant was disposed of by the high court on 16 3 2010 upholding the conviction but reducing the sentence from six to four months rigorous imprisonment. that order is challenged by the accused. one of the contentions urged by the accused before the appellate court and high court was that the charge against him was that he attempted to outrage the modesty of prakashi devi pw 1 whereas the evidence was to show that he attempted to outrage the modesty of her daughter in law sheela devi. he contended that as the charge levelled against him was not proved and as he was not required to defend himself against a charge that he assaulted and outraged the modesty of sheela devi he ought to have been acquitted. this was negatived by the appellate court and high court holding that an accused can not take advantage of a technical defect in framing the charge. it was held that mentioning the name of prakashi devi instead of the name of sheela devi in the charge was an error that did not prejudice the accused. the following question therefore arises for our consideration when the charge is that the accused assaulted x and outraged her modesty but the evidence is that he assaulted y to outrage her modesty can the accused be punished for having assaulting and outraging the modesty of yeven though he was not charged with any offence with reference to yon the ground that the error or omission in the charge did not prejudice the accused or result in failure of justice. s 211 of the code relates to the contents of the charge. it inter alia provides that every charge under the code shall state the offence with which the accused is charged. s 212 of the code provides that the charge shall contain the particulars as to the time and place of the alleged offence and the person if any against whom or the thing if any in respect of which it was committed as are reasonably sufficient to give the accused notice of the matter with which he is charged. s 215 of the code however clarifies that no error in stating either the offence or the particulars required to be stated in the charge and no omission to state the offence or those particulars shall be regarded at any stage of the case as material unless the accused was in fact misled by such error or omission and it has occasioned a failure of justice. s 464 of the code relates to effect of omission to frame or absence of or error in charge. sub s 1 thereof provides that no finding sentence or order of a court of competent jurisdiction shall be deemed invalid merely on the ground that no charge was framed or on the ground of any error omission or irregularity in the charge including any misjoinder of charge unless in the opinion of the court of appeal confirmation or revision a failure of justice has in fact been occasioned thereby. sub s 2 of sec 464 provides that if the court of appeal confirmation or revision is of opinion that failure of justice has in fact been occasioned it may a in the case of an omission to frame a charge order that a charge be framed and that the trial be recommended from the point immediately after the framing of the charge b in case of an error omission or irregularity in the charge direct a new trial to be had upon a charge framed in whatever manner it thinks fit. in willie william slaney vs state of madhya pradesh. air 1956 sc 116 1955 indlaw sc 80 this court explained the concepts of prejudice to the accused and failure of justice thus 6 before we proceed to set out our answer and examine the provisions of the code we will pause to observe that the code is a code of procedure and like all procedural laws is designed to further the ends of justice and not to frustrate them by the introduction of endless technicalities. the object of the code is to ensure that an accused person gets a full and fair trial along certain well established and well understood lines that accord with our notions of natural justice. if he does if he is tried by a competent court if he is told and clearly understands the nature of the offence for which he is being tried if the case against him is fully and fairly explained to him and he is afforded a full and fair opportunity of defending himself then provided there is substantial compliance with the outward forms of the law mere mistakes in procedure mere inconsequential errors and omissions in the trial are regarded as venal by the code and the trial is not vitiated unless the accused can show substantial prejudice. that broadly speaking is the basic principle on which the code is based. now here as in all procedural laws certain things are regarded as vital. disregard of a provision of that nature is fatal to the trial and at once invalidates the conviction. others are not vital and whatever the irregularity they can be cured and in that event the conviction must stand unless the court is satisfied that there was prejudice. some of these matters are dealt with by the code and wherever that is the case full effect must be given to its provisions. this court then examined the question as to when a procedure adopted could be said to have worked actual injustice to the accused and held except where there is something so vital as to cut at the root of jurisdiction or so abhorrent to what one might term natural justice the matter resolves itself to a question of prejudice. some violations of the code will be so obvious that they will speak for themselves as for example a refusal to give the accused a hearing a refusal to allow him to defend himself a refusal to explain the nature of the charge to him and so forth. these go to the foundations of natural justice and would be struck down as illegal forthwith. it hardly matters whether this is because prejudice is then patent or because it is so abhorrent to well established notions of natural justice that a trial of that kind is only a mockery of a trial and not of the kind envisaged by the laws of our land because either way they would be struck down at once. other violations will not be so obvious and it may be possible to show that having regard to all that occurred no prejudice was occasioned or that there was no reasonable probability of prejudice. in still another class of case the matter may be so near the border line that very slight evidence of a reasonable possibility of prejudice would swing the balance in favour of the accused. the code is emphatic that whatever the irregularity it is not to be regarded as fatal unless there is prejudice. it is the substance that we must seek. courts have to administer justice and justice includes the punishment of guilt just as much as the protection of innocence. neither can be done if the shadow is mistaken for the substance and the goal is lost in a labyrinth of unsubstantial technicalities. broad vision is required a nice balancing of the rights of the state and the protection of society in general against protection from harassment to the individual and the risks of unjust conviction. every reasonable presumption must be made in favour of an accused person he must be given the benefit of every reasonable doubt. the same broad principles of justice and fair play must be brought to bear when determining a matter of prejudice as in adjudging guilt. but when all is said and done what we are concerned to see is whether the accused had a fair trial whether he knew what he was being tried for whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was given a full and fair chance to defend himself. if all these elements are there and no prejudice is shown the conviction must stand whatever the irregularities whether traceable to the charge or to a want of one. in adjudging the question of prejudice the fact that the absence of a charge or a substantial mistake in it is a serious lacuna will naturally operate to the benefit of the accused and if there is any reasonable and substantial doubt about whether he was or was reasonably likely to have been misled in the circumstances of any particular case he is as much entitled to the benefit of it here as elsewhere but if on a careful consideration of all the facts prejudice or a reasonable and substantial likelihood of it is not disclosed the conviction must stand also it will always be material to consider whether objection to the nature of the charge or a total want of one was taken at an early stage. but these are matters of fact which will be special to each different case and no conclusion on these questions of fact in any one case can ever be regarded as a precedent or a guide for a conclusion of fact in another because the facts can never be alike in any two cases however alike they may seem. there is no such thing as a judicial precedent on facts though counsel and even judges are sometimes prone to argue and to act as if there were. in gurbachan singh v state of punjab air 1957 sc 623 1957 indlaw sc 181 following willie slaney this court held in judging a question of prejudice as of guilt courts must act with a broad vision and look to the substance and not to technicalities and their main concern should be to see whether the accused had a fair trial whether he knew what he was being tried for whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was given a full and fair chance to defend himself. in shamnsaheb m multtani vs state of karnataka 2001 2 scc 577. 2001 indlaw sc 19904this court considered the meaning of the expression failure of justice occurring in s 464 of cr. pc this court held thus the crux of the matter is this would there be occasion for a failure of justice by adopting such a course as to convict an accused of the offence under section 304 b ipc when all the ingredients necessary for the said offence have come out in evidence although he was not charged with the said offence. a conviction would be valid even if there is any omission or irregularity in the charge provided it did not occasion a failure of justice. the criminal court particularly the superior court should make a close examination to ascertain whether there was really a failure of justice or whether it is only a camouflage. one of the cardinal principles of natural justice is that no man should be condemned without being heardaudi alteram partem but the law reports are replete with instances of courts hesitating to approve the contention that failure of justice had occasioned merely because a person was not heard on a particular aspect. however if the aspect is of such a nature that non explanation of it has contributed to penalizing an individual the court should say that since he was not given the opportunity to explain that aspect there was failure of justice on account of non compliance with the principle of natural justice. the above principles are reiterated in several decisions of this court including state of west bengal vs laisal haque air 1989 sc 129 1988 indlaw sc 706state of a p vs. thakkidiram reddy. 6 scc 554 1998 indlaw sc 1286dalbir singh v state of up 2004 5 scc 334 2004 indlaw sc 247dumpala chandra reddy vs nimakayala bali reddy 2008. 8 scc 339 2008 indlaw sc 1064 and sanichar sahni vs state of bihar 2009 7 scc 198 2009 indlaw sc 736. the following principles relating to sections 212215 and 464 of the code relevant to this case become evident from the said enunciations i the object of framing a charge is to enable an accused to have a clear idea of what he is being tried for and of the essential facts that he has to meet. the charge must also contain the particulars of date time place and person against whom the offence was committed as are reasonably sufficient to give the accused notice of the matter with which he is charged. the accused is entitled to know with certainty and accuracy the exact nature of the charge against him and unless he has such knowledge his defence will be prejudiced. where an accused is charged with having committed offence against one person but on the evidence led he is convicted for committing offence against another person without a charge being framed in respect of it the accused will be prejudiced resulting in a failure of justice. but there will be no prejudice or failure of justice where there was an error in the charge and the accused was aware of the error. such knowledge can be inferred from the defence that is if the defence of the accused showed that he was defending himself against the real and actual charge and not the erroneous charge. in judging a question of prejudice as of guilt the courts must act with a broad vision and look to the substance and not to the technicalities and their main concern should be to see whether the accused had a fair trial whether he knew what he was being tried for whether the main facts sought to be established against him were explained to him fairly and clearly and whether he was given a full and fair chance to defend himself. the respondent relied upon the decision of this court in state of himachal pradesh v geeta ram 2000 7 scc 452 2000 indlaw sc 408 in that case. the respondent was chargesheeted for an offence u s 376 ipc and s 3 of the scheduled castes and scheduled tribes prevention of atrocities. act1989 the magistrate committed the case to sessions court which was specified as a special court under the act. the special court framed a charge only for an offence u s 376 ipc and after trial convicted the respondent u s 376 ipc and sentenced him to ten years imprisonment. the high court set aside the conviction on the technical ground that the trial court had no jurisdiction as it was a special court specified in under the sc st prevention of atrocities act. this court reversed the decision of the high court on the ground that a special court under the act being a sessions court it continued to have jurisdiction to try the case for the offence u s 376. ipc that matter was considered u s 465 of the code and not relevant on the facts of this case. as noticed above in this case the charge was that appellant committed trespass into the house of prakashi devi for assaulting prakashi devi and assaulted the said prakashi devi and outraged her modesty. the accused concentrated his cross examination with reference to the said charge and elicited answers showing that he did not assault or outrage the modesty of prakashi devi. he did not try to challenge the evidence let in to show that he had tried to outrage the modesty of sheela devi as he was not charged with such an offence. the evidence of pw 1 and pw 2 was that the appellant did not touch or tease or abuse prakashi devi. their evidence was that he touched caught the hand of sheela devi and when she raised an alarm he ran away. when the charge was that the accused attempted to commit trespass into the house of prakashi devi with intent to outrage the modesty of prakashi devi the conclusion of the appellate court and the high court that there was no failure of justice if he is punished for the offence of having assaulted sheela devi and outraging her modesty is opposed to principles of fair play and natural justice embodied in sections 211212215 and 464 of the code. when the accused is charged with having entered the house of prakashi devi and assaulted the said prakashi devi with intent to outrage her modesty and when the accused defended himself in regard to the said charge and concentrated on proving that the said charges were not true he can not be convicted for having assaulted and outraging the modesty of someone else namely sheela devi. the accused did not have any opportunity to meet or defend himself against the charge that he assaulted sheela devi and outraged her modesty. nor did he proceed with his defence on the understanding that he was being charged with having committed the offence with reference to sheela devi. one of the fundamental principles of justice is that an accused should know what is the charge against him so that he can build his defence in regard to that charge. an accused can not be punished for committing an offence against y when he is charged with having committed the offence against x and the entire defence of the accused was with reference to charge of having committed offence against x. the illustrations under a provision of a statute offer relevant and valuable indications as to meaning and object of the provision and are helpful in the working and application of the provision. illustration e u s 215 of the code as contrasted from illustration d under that section throws some light on this issue. the said illustrations are extracted below d a is charged with the murder of khoda baksh on the 21st january1882 in fact the murdered person 's name was haidar baksh and the date of the murder was the 20th. january1882 a was never charged with any murder but one and had heard the inquiry before the magistrate which referred exclusively to the case of haidar baksh. the court may infer from these facts that a was not misled and that the error in the charge was immaterial. e a was charged with murdering haidar baksh on the 20th january1882and khoda baksh who tried to arrest him for that murder on the 21 st january1882 when charged for the murder of haidar baksh he was tried for the murder of khoda baksh. the witnesses present in his defence were witnesses in the case of haidar baksh. the court may infer from this that a was misled and that the error was material. applying the guidance offered by the said illustrations and the legal principles evolved by this court the position will be as follows. if sheela devi alone had been present at the house at the time of the incident and the accused had assaulted and outraged the modesty of the said sheela devi but in the charge the name of the victim had been erroneously mentioned say as sushila devi or prakashi devi though there was no person by such nameand the inquiry exclusively referred to the assault and outraging the modesty of sheela devi the court could infer that the accused was not misled and the error in the charge was immaterial. on the other hand if two persons were present in the house at the time of the incident namely prakashi devi and sheela devi and the accused is charged with trespassing into the house of prakashi devi and assaulting and outraging the modesty of the said prakashi devi and the witnesses refer only to the assault and outraging the modesty of sheela devi the court will have to infer that the accused was prejudiced if the accused had solely concentrated and focused his defence and entire cross examination to show that he did not commit the offences against prakashi devi. the court having charged the accused with the offence of having trespassed into the house of prakashi devi with intent to assault her and having further charged him for having assaulted the said prakashi devi by outraging her modesty convicts him on the ground that though he did not assault or outrage the modesty of prakashi devi he had outraged the modesty of sheela devi that would lead to failure of justice. there was a material error in the charge as it violated the requirement of sub s 1 of s 212 of the code that the charge shall contain particulars as to the person against whom the offence was committed. there were two women present at the house at the time of the alleged incident namely prakashi devi and her daughter in law sheela devi. in view of the specific charge the accused concentrated on showing that the charge was false. he did not attempt to meet the case made out in the trial that the offence was against sheela devi. the accused was thus clearly misled by the error in the charge which caused prejudiced to the accused thereby occasioning failure of justice. therefore we are of the view that there should be a new trial after charging him with the offence of outraging the modesty of sheela devi. the appeal is therefore allowed the conviction of the accused is set aside and the matter is remitted to the trial court with a direction for a new trial after framing a charge by substituting the words her daughter in law sheela devi for the words abovenamed prakashi deviin the second part of the charge. appeal allowed.

IN-Ext

FACTS an fir was registered on 23.3.1996 on the statement of one prakashi devi. she stated that on the night of 22/23.3.1996,while. she and her daughter-in-law sheela devi were sleeping in her house,around 11.30 pm,the appellant jumped over the front wall of her house and broke the bulbs and ran away; that around 00.30 am the appellant again came into her house and touched her daughter-in-law sheela devi who woke up and raised an alarm; and that the appellant immediately ran away. the police investigated into the said complaint and submitted a report u/s.173 of the code of criminal procedure . the judicial magistrate,first class,karnal charged him under section 452 ipc and section 354 ipc. when the said charged was read over and explained to the appellant,he pleaded not guilty to the said charge and claimed trial. prakashi devi was examined as pw-1. that order is challenged by the accused. ISSUE when the charge is that the accused assaulted 'x' and outraged her modesty,but the evidence is that he assaulted 'y' to outrage her modesty,can the accused be punished,for having assaulting and outraging the modesty of 'y',even though he was not charged with any offence with reference to 'y',on the ground that the error or omission in the charge did not prejudice the accused or result in failure of justice. ANALYSIS the following principles relating to sections 212,215 and 464 of the ipc ,relevant to this case,become evident from the said enunciations: (i. the object of framing a charge is to enable an accused to have a clear idea of what he is being tried for and of the essential facts that he has to meet. the charge must also contain the particulars of date,time,place and person against whom the offence was committed,as are reasonably sufficient to give the accused notice of the matter with which he is charged. ii. the accused is entitled to know with certainty and accuracy,the exact nature of the charge against him,and unless he has such knowledge,his defence will be prejudiced. where an accused is charged with having committed offence against one person but on the evidence led,he is convicted for committing offence against another person,without a charge being framed in respect of it,the accused will be prejudiced,resulting in a failure of justice. but there will be no prejudice or failure of justice where there was an error in the charge and the accused was aware of the error. such knowledge can be inferred from the defence,that is,if the defence of the accused showed that he was defending himself against the real and actual charge and not the erroneous charge. iii. in judging a question of prejudice,as of guilt,the courts must act with a broad vision and look to the substance and not to the technicalities,and their main concern should be to see whether the accused had a fair trial,whether he knew what he was being tried for,whether the main facts sought to be established against him were explained to him fairly and clearly,and whether he was given a full and fair chance to defend himself. the charge was that appellant committed trespass into the house of prakashi devi for assaulting prakashi devi,and assaulted the said prakashi devi and outraged her modesty. the accused concentrated his cross-examination with reference to the said charge and elicited answers showing that he did not assault or outrage the modesty of prakashi devi. he did not try to challenge the evidence let in to show that he had tried to outrage the modesty of sheela devi,as he was not charged with such an offence. the evidence of pw-1 and pw-2 was that the appellant did not touch or tease or abuse prakashi devi. their evidence was that he touched/caught the hand of sheela devi and when she raised an alarm he ran away. when the charge was that the accused attempted to commit trespass into the house of prakashi devi with intent to outrage the modesty of prakashi devi,the conclusion of the appellate court and the high court that there was no failure of justice if he is punished for the offence of having assaulted sheela devi and outraging her modesty,is opposed to principles of fair play and natural justice embodied in sections 211,212,215 and 464 of the code. when the accused is charged with having entered the house of prakashi devi and assaulted the said prakashi devi with intent to outrage her modesty and when the accused defended himself in regard to the said charge and concentrated on proving that the said charges were not true,he cannot be convicted for having assaulted and outraging the modesty of someone else,namely sheela devi. the accused did not have any opportunity to meet or defend himself against the charge that he assaulted sheela devi and outraged her modesty. nor did he proceed with his defence on the understanding that he was being charged with having committed the offence with reference to sheela devi. one of the fundamental principles of justice is that an accused should know what is the charge against him so that he can build his defence in regard to that charge. an accused cannot be punished for committing an offence against 'y' when he is charged with having committed the offence against 'x' and the entire defence of the accused was with reference to charge of having committed offence against 'x. in view of the specific charge,the accused concentrated on showing that the charge was false. he did not attempt to meet the case made out in the trial that the offence was against sheela devi. the accused was thus clearly misled by the error in the charge which caused prejudiced to the accused thereby occasioning failure of justice. therefore, there should be a new trial after charging him with the offence of outraging the modesty of sheela devi. STATUTE s.211 of the ipc relates to the contents of the charge. it inter alia provides that every charge under the code shall state the offence with which the accused is charged. s.212 of the ipc provides that the charge shall contain the particulars as to the time and place of the alleged offence,and the person (if any) against whom,or the thing (if any) in respect of which,it was committed,as are reasonably sufficient to give the accused notice of the matter with which he is charged. s.215 of the ipc however clarifies that no error in stating either the offence or the particulars required to be stated in the charge,and no omission to state the offence or those particulars,shall be regarded at any stage of the case as material,unless the accused was in fact misled by such error or omission,and it has occasioned a failure of justice. s.464 of the ipc relates to effect of omission to frame,or absence of,or error in,charge.

this appeal is directed against the final judgment and order dated 03 10 2007 passed by the high court of judicature andhra pradesh at hyderabad in criminal appeal no 436 of 2001 whereby the high court dismissed the appeal filed by the appellant herein and confirmed the judgment dated 19 03 2001 passed by the special judge c b i cases visakhapatnam in c c no 2 of 1998. brief facts a the appellant accused was working as a head clerk in the traffic cadre section in the office of the senior divisional personnel officer south central railway vijayawada during the period from april1992 to november1997 the nature of duties of the appellant accused included dealing with and processing of the matters like promotions transfers seniority list roster list pay fixation on promotions retirements resignations etc of the personnel. one k rama rao the complainant who was examined as pw 1was posted as yard points man grade a under station superintendent south central railway tanuku from december1995 to june1997 in june1997due to excess staff at tanuku. he was instructed to report at head quarters vijayawada and accordingly when he reported there he was asked to go back to tanuku. thereafter he went back to tanuku from where he was subsequently transferred to rajahmundry. thereafter pw 1 made a representation to his senior officer requesting him for posting at vijayawada cheerala vetapalam or tenali. later pw 1 was transferred to vijayawada. as the appellant accused was dealing with the transfers the complainant pw 1 met him on 05 11 1997 at his office to pursue about the issuance of the said transfer order. the appellant accused asked him to come on 10 11 1997 when he met him on 10 11 1997the appellant asked him to come on the next day as he was busy in pay fixation work. on 11 11 1997again he went to the office of the appellant but he could not find him on his seat. again a day after i e on. 13 11 1997when he met the appellant accused he informed him that his request for transfer has been processed and the order is ready and the same has been placed before the a p o for signature and asked him to come on the next day i e on 14 11 1997and demanded rs 200 for releasing the said office order. on the same daypw 1 reported the matter in writing to the inspector of police central bureau of investigation in short the cbivijayawada. on 14 11 1997a trap was laid by the cbi officials along with panchas and when the accused demanded and accepted a sum of rs 200 as illegal gratification he was caught red handed along with the money which was recovered from the right hand side pocket of his pant. on 15 11 1997at 7 30 a m. an fir was registered by the inspector cbi visakhapatnam branch in crime No. rc 20a97 vsp after recording the statements of the witnesses inspector of police cbi visakhapatnam filed charge sheet being no 298 ytr dated 29 04 1998 against the appellant accused for an offence punishable under sections 7131dii read with s 132 of the prevention of corruption act1988 hereinafter referred to as the act in the court of special judge for cbi cases at visakhapatnam. the special judge cbi by order dated 19 03 2001convicted the appellant and sentenced him to undergo rigorous imprisonment for a period of six months and to pay a fine of rs 500 and in default to suffer simple imprisonment for one month for the offence punishable u s 7 of the act and one year rigorous imprisonment with a fine of rs 500 and in default to suffer simple imprisonment for one month for the offence punishable u ss 131d ii. read with s 132 of the act. g against the said order the appellant accused filed criminal appeal no 436 of 2001 before the high court of andhra pradesh. the high court by impugned judgment dated 03 10 2007 dismissed the appeal filed by the appellant accused and confirmed the conviction passed by the trial court. hence the appellant accused has preferred this appeal by way of special leave petition before this court. heard mr atm rangaramanujam learned senior counsel for the appellant and mr harish chandra learned senior counsel for the respondent. notice only on quantum of sentence hearing on all aspects. permissibility. on 28 01 2008this court consisting of three honourable judges issued notice in this matter confining to the quantum of sentence only. in pursuance of the same we permitted mr rangaramanujam learned senior counsel for the appellant to address his arguments confining to quantum of sentence imposed on the appellant accused. as stated in the narration of facts the appellant was convicted u s 7 of the act for which he was sentenced to undergo rigorous imprisonment for six months and to pay a fine of rs 500 in default simple imprisonment for one month. he was also convicted for the offence under s 131dii read with s 132 of the act and sentenced to undergo rigorous imprisonment for one year and fine of rs 500 in default simple imprisonment for one month. the trial court ordered that both the sentences of imprisonment shall run concurrently. the said conviction and sentence was affirmed by the high court. if we confine ourselves to the limited extent of notice dated 28 01 2008we have to hear both sides only on the quantum of sentence. however mr rangaramanujam learned senior counsel for the appellant by drawing our attention to the recent judgment of this court in yomeshbhai pranshankar bhatt vs state of gujarat2011 6 scc 312 2011 indlaw sc 370submitted that in spite of limited notice this court while exercising jurisdiction u art 142 of the constitution in order to do complete justice while hearing the matter finally can go into the merits of the orders passed by the trial court and the high court. in the reported case the appeal was against the concurrent finding of both the courts convicting the appellant u s 302 ipc and sentencing him to suffer imprisonment for life. at the slp stage this court by order dated 27 07 2009issued notice confined only to the question as to whether the petitioner was guilty of commission of an offence under any of the parts of s 304 indian penal code1860 in short ipc and not u s 302 ipc similar request was made before the bench that the appellant was entitled to urge all the questions including his right to urge that he should have been acquitted in the facts and circumstances of the case. this court referred to the supreme court rules1966 which have been framed u art 145 of the constitution and also considered scope of its power u art 142 as well as order 47. rule 6 of the code of civil procedure1908. in short the code while deciding the said question the bench has also considered the scope of s 100 of the code for entertaining the second appeal. it further shows that the court considered the plea of the appellant therein for acquittal despite the fact that the notice was limited in terms of the order dated 27 07 2009 it is relevant to point out that the bench in para 18clarified the position and reopened the case in its entirety even though notice was issued confining to a particular aspect. after permitting the appellant therein to argue the case for acquittal on merits it observed we however make it clear that this can not be a universal practice in all cases. the question whether the court will enlarge the scope of its inquiry at the time of final hearing depends on the facts and circumstances of the case. since in the facts of this case we find that the appellant should be heard on all points we have come to the aforesaid conclusion. emphasis supplied. it is clear that the bench itself has clarified that they are not laying down the law that in spite of issuing notice confining to a particular aspect in the case on hand quantum of sentence the parties are entitled to urge all points and re open the case as if they are free to do the same without any restriction. as a matter of fact the last sentence in para 18 makes it clear that in the facts and circumstances of that case they permitted the appellants to urge all points on merits. in the case on hand it is to be noted that on appreciation of oral and documentary evidence led in by the prosecution and the defence and on appreciation of entire materials the court of first instance i e the trial court convicted the appellant and sentenced him as mentioned above. the high court as an appellate court once again analysed all the material discussed the oral and documentary evidence and finding that the prosecution had proved the guilt of the accused beyond reasonable doubt concurred with the conclusion arrived at by the trial court and dismissed the appeal of the appellant. inasmuch as both the courts have thoroughly discussed the oral and documentary evidence with reference to the charges leveled against the appellant and in view of the limited order dated 28 01 2008 by this court issuing notice confining to quantum of sentence only and even applying the analogy enunciated in yomeshbhai 2011 indlaw sc 370 suprawe feel that it is not a case of such nature that the appellant should be heard on all points consequently we reject the request of the learned senior counsel appearing for the appellant. quantum of sentence. whether requires any reduction. mr rangaramanujam learned senior counsel for the appellant submitted that inasmuch as the alleged incident took place on 14 11 1997 and 14 years have elapsed since then the amount of rs 200 said to have been received by the appellant is trivial in nature and also of the fact that due to the said conviction and sentence he lost his job leniency may be shown and sentence be reduced to the period already undergone. he fairly admitted that out of the maximum period of one year the appellant had served only 52 days in prison. with this factual position let us consider whether the request of the learned senior counsel for the appellant is to be accepted and sentence be reduced to the period already undergone. it is not in dispute that the provisions of the prevention of corruption act1988 alone are applicable since the incident occurred on 14 11 1997 i e subsequent to the act. s 7 of the act relates to public servant taking gratification other than legal remuneration in respect of an official act. if the said offence charge is proved the court has no other option but to impose sentence of imprisonment which shall be not less than six months but which may extend to five years and also liable to fine. the said section reads as under public servant taking gratification other than legal remuneration in respect of an official act whoever being or expecting to be a public servant accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification whatever other than legal remuneration as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show in the exercise of his official functions favour or disfavor to any person or for rendering or attempting to render any service or disservice to any person with the central government or any state government or parliament or the legislature of any state or with any local authority corporation or government company referred to in cl c of section 2or with any public servant whether named or otherwise shall be punishable with imprisonment which shall be not less than six months but which may extend to five years and shall also be liable to fine emphasis supplied. s 13 deals with criminal misconduct by a public servant. as per sub s 2 if any public servant commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine. for clarity we reproduce the said section hereunder criminal misconduct by a public servant 1. a public servant is said to commit the offence of criminal misconduct a if he habitually accepts or obtains or agrees to accept or attempts to obtain from any person for himself or for any other person any gratification other than legal remuneration as a motive or reward such as is mentioned in section 7 or b if he habitually accepts or obtains or agrees to accept or attempts to obtain for himself or for any other person any valuable thing without consideration or for a consideration which he knows to be inadequate from any person whom he knows to have been or to be or to be likely to he concerned in any proceeding or business transacted or about to be transacted by him or having any connection with the official functions of himself or of any public servant to whom he is subordinate or from any person whom he knows to be interests in or related to the person so concerned or c if he dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control as a public servant or allows any other person so to do or d if he i by corrupt or illegal means obtains for himself or for any other person any valuable thing or pecuniary advantage or ii by abusing his position as a public servant obtains for himself or for any other person any valuable thing or pecuniary advantage or iii. while holding office as a public servant obtains for any person any valuable thing or pecuniary advantage without any public interest or e if he or any person on his behalf is in possession or has at any time during the period of his office been in possession for which the public servant can not satisfactorily account of pecuniary resources or property disproportionate to his known sources of income. explanation. for the purposes of this section known sources of income means income received from any lawful source and such receipt has been intimated in accordance with the provisions of any law rules or orders for the time being applicable to public servant. any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine. it is useful to refer that in the prevention of corruption act1947 the same criminal misconduct which is available in s 13 of the 1988 act had been dealt with in s 5 of the 1947 act. s 52 of the 1947 act mandates that any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine. however proviso to sub s 2 of s 5 gives power to the court that for any special reasons to be recorded in writing impose a sentence of imprisonment of less than one year. such relaxation in the form of a proviso has been done away with in the 1988 act. to put it clear in the 1988 act if an offence u s 7 is proved the same is punishable with imprisonment which shall be not less than six months and in the case of section 13it shall not be less than one year. no other interpretation is permissible. other circumstances pleaded for reduction of sentence. in order to substantiate the claim with the regard to the above learned senior counsel for the appellant has relied on the decision of this court in bechaarbhai s prajapati vs state of gujarat2008 11 scc 163 2008 indlaw sc 297 and based on the same requested this court to modify the sentence to the extent of period already undergone. we have gone through the facts in that case. it is true that even in the cited decision the appellant accused demanded only rs 250 and it was paid and accepted. finally the special judge framed charges for offence punishable under sections 712131d read with s 132 of the act. the appellant therein was convicted for offence u s 72 of the act and appeal before the high court was also dismissed. thereafter the same was challenged before this court. this court after holding that the conclusion of the trial court and high court does not suffer from any infirmity considered the alternative submission which related to harshness of sentence. in that case taking note of the fact that the occurrence took place nearly seven years back and also of the fact that the appellant had suffered custody for more than six months considering all these aspects while maintaining the conviction this court reduced the sentence to the period already undergone. since the appellant therein was convicted only u s 7 and s 161 cr. pc the minimum sentence being six months and of the fact that he had suffered custody for more than six months the course adopted by this court is perfectly in order and the same can not be applied to the case on hand wherein the appellant had undergone only 52 days when the minimum sentence was six months u s 7 and one year u s 13. learned senior counsel for the appellant further submitted that inasmuch as the incident had occurred on 14 11 1997 and the trial court has convicted him on 19 03 2001 which was affirmed by the high court on 03 10 2007at this juncture i e. after a gap of 14 years there is no need to retain the same sentence and the court is not justified in directing the appellant to serve the remaining period after such a long time. there is no dispute as regards the date of occurrence and the date of conviction passed by the trial court and affirmed by the high court. inasmuch as the conviction on both counts have been confirmed by this court and we are confined to sentence part alone and in view of the minimum sentence prescribed u ss 7 and 13 of the act we are of the view that though long delay may be a ground for reduction of sentence in other cases the same may not be applicable to the case on hand when the statute prescribes minimum sentence. accordingly we reject the said contention. it was further contended that the amount alleged to have been received by the appellant accused is only rs 200 and he also lost his job after conviction by the trial court. though these grounds may be attractive in respect of other offences where minimum sentence is not prescribed in view of our reasonings in the earlier paras the same can not be applied to the case on hand. about the request based on delay that the appellant has lost his job undergone the ordeal all along etc a lenient view be taken in this case it is useful to refer decision of this court in state of m p vs. shambhu dayal. nagar2006 8 scc 693 2006. indlaw sc 716 wherein it was held that it is difficult to accept the prayer of the respondent that a lenient view be taken in this case. the corruption by public servants has become a gigantic problem. it has spread everywhere. no facet of public activity has been left unaffected by the stink of corruption. it has deep and pervasive impact on the functioning of the entire country. large scale corruption retards the nation building activities and everyone has to suffer on that count. as has been aptly observed in swatantar singh v state of haryana1997 4 scc 14 1997 indlaw sc 1061corruption is corroding like cancerous lymph nodes the vital veins of the body politics social fabric of efficiency in the public service and demoralising the honest officers. the efficiency in public service would improve only when the public servant devotes his sincere attention and does the duty diligently truthfully honestly and devotes himself assiduously to the performance of the duties of his post. the reputation of corrupt would gather thick and unchaseable clouds around the conduct of the officer and gain notoriety much faster than the smoke. art 142 and its applicability. by drawing our attention to art 142 of the constitution of india learned senior counsel for the appellant vehemently submitted that in order to do complete justice this court has ample power to reduce the sentence even to the extent of period already undergone or any other order which would be beneficial to the parties approaching this court. similar claim based on art 142 has been negatived in several decisions by this court we need to refer only the latest decision of this court in manish goel vs rohini goel2010 4 scc 393 2010 indlaw sc 301 the facts in that case are that the parties by persuasion of the family members and friends entered into a compromise and prepared a memorandum of understanding dated 13 11 2009in the proceedings pending before the mediation centre delhi by which they agreed on terms and conditions incorporated therein to settle all their disputes and also for dissolution of their marriage. the parties filed an application under section 13 b1 of the hindu marriage act1955 before the family court delhi seeking divorce by mutual consent. the said hma no 456 of 2009 came before the court and it recorded the statement of parties on 16 11 2009 the parties moved another hma no 457 of 2009 to waive the statutory period of six months in filing the second petition. however the court rejected the said application vide order dated 01 12 2009 observing that the court was not competent to waive the required statutory period of six months under the act and such a waiver was permissible only under the directions of the supreme court as held by this court in anil kumar jain vs maya jain2009. 10 scc 415 2009 indlaw sc 1494 hence the parties have approached this court for appropriate relief. speaking for the bench one of us dr. justice b s chauhan referred to more than fifty decisions including the constitution bench judgments. the relevant paras which are useful may be quoted we are fully alive of the fact that this court has been exercising the power u art 142 of the constitution for dissolution of marriage where the court finds that marriage is totally unworkable emotionally dead beyond salvage and has broken down irretrievably even if the facts of the case do not provide a ground in law on which the divorce could be granted. decree of divorce has been granted to put quietus to all litigations between the parties and to save them from further agony as it is evident from the judgments in romesh chander v savitri. 1995 2 scc 7 1995 indlaw sc 329kanchan devi v promod kumar mittal 1996 8 scc 90 1996 indlaw sc 2663anita sabharwal v anil sabharwal 1997 11 scc 490 1996 indlaw sc 4162ashok hurra v rupa bipin zaveri 1997 4 scc 226 1997 indlaw sc 2568kiran v sharad dutt 2000 10 scc 243 1999 indlaw sc 2077swati verma v rajan verma 2004 1 scc 123 2003 indlaw sc 967harpit singh anand. v state of w b 2004. 10 scc 505 2003 indlaw sc 810jimmy sudarshan purohit v sudarshan sharad purohit 2005 13 scc 410 2004 indlaw sc 2040durga prasanna tripathy v arundhati tripathy 2005 7 scc 353 2005 indlaw sc 486naveen kohli v neelu kohli 2006 4 scc 558 2006 indlaw sc 598sanghamitra. ghosh v kajal kumar ghosh 2007 2 scc 220 2006 indlaw sc 775rishikesh sharma v saroj sharma 2007 2 scc 263 2006 indlaw sc 994samar ghosh v jaya ghosh 2007 4 scc 511 2007 indlaw sc 1000 and satish sitole. ganga 2008. 7 scc 734 2008 indlaw sc 1077 however these are the cases where this court came to rescue the parties on the ground for divorce not provided for by the legislature in the statute. in anjana kishore v puneet kishore 2002 10 scc 194 2001 indlaw sc 21204this court while allowing a transfer petition directed the court concerned to decide the case of divorce by mutual consent ignoring the statutory requirement of moving the motion after expiry of the period of six months under section 13 b2 of the act. in anil kumar jain this court held that an order of waiving the statutory requirements can be passed only by this court in exercise of its powers u art 142 of the constitution. the said power is not vested with any other court. however we have also noticed various judgments of this court taking a contrary view to the effect that in case the legal ground for grant of divorce is missing exercising such power tantamounts to legislation and thus transgression of the powers of the legislature which is not permissible in law vide chetan dass v kamla devi 2001 4 scc 250 2001 indlaw sc 20206 and vishnu dutt sharma. manju sharma 2009 6 scc 379 2009 indlaw sc 330. generally no court has competence to issue a direction contrary to law nor can the court direct an authority to act in contravention of the statutory provisions. the courts are meant to enforce the rule of law and not to pass the orders or directions which are contrary to what has been injected by law vide state of punjab v renuka singla 1996 8 scc 90 1996 indlaw sc 2663state of u p v. harish chandra 1996 9 scc 309 1996 indlaw sc 157union of india v kirloskar pneumatic co ltd 1996 4 scc 453 1996 indlaw sc 131 university of allahabad v dr anand prakash mishra 1997 10 scc 264 1996 indlaw sc 2036 and karnataka srtc v ashrafulla khan 2002 2 scc 560 2002 indlaw sc 21. a constitution bench of this court in prem chand garg v excise commr. air 1963. sc 996 1962 indlaw sc 473 held as under. an order which this court can make in order to do complete justice between the parties must not only be consistent with the fundamental rights guaranteed by the constitution but it can not even be inconsistent with the substantive provisions of the relevant statutory laws. emphasis supplied. the constitution benches of this court in supreme court bar assn v. union of india 1998 4 scc 409 1998 indlaw sc 688 and e s p rajaram v union of india 2001 2 scc 186 2001 indlaw sc 20411 held that u art 142 of the constitution this court can not altogether ignore the substantive provisions of a statute and pass orders concerning an issue which can be settled only through a mechanism prescribed in another statute. it is not to be exercised in a case where there is no basis in law which can form an edifice for building up a superstructure. similar view has been reiterated in a r antulay v r s nayak 1988 2 scc 602 1988 indlaw sc 467bonkya v state of maharashtra 1995 6 scc 447 1995 indlaw sc 1282common cause v union of india 1999 6 scc 667 1999 indlaw sc 503m s ahlawat v state of haryana 2000 1 scc 278 1999 indlaw sc 794m c mehta v kamal nath 2000 6 scc 213 2000 indlaw sc 529state of punjab v rajesh syal 2002 8 scc 158 2002 indlaw sc 1146govt of w b v. tarun k roy 2004 1 scc 347 2003 indlaw sc 1039textile labour assn v. official liquidator 2004 9 scc 741 2004 indlaw sc 277state of karnataka. ameerbi 2007 11 scc 681 2006. indlaw sc 999union of india v shardindu 2007 6 scc 276 2007 indlaw sc 537 and bharat sewa sansthan v u p electronics corpn. ltd 2007 7 scc 737 2007 indlaw sc 1580. in teri oat estates p ltd v. ut chandigarh 2004 2 scc 130 2003 indlaw sc 1504. this court held as under sympathy or sentiment by itself can not be a ground for passing an order in relation whereto the appellants miserably fail to establish a legal right. despite an extraordinary constitutional jurisdiction contained in art 142 of the constitution of india this court ordinarily would not pass an order which would be in contravention of a statutory provision. in laxmidas morarji v behrose darab madan 2009 10 scc 425 2009 indlaw sc 1154while dealing with the provisions of art 142 of the constitution this court has held as under. the power u art 142 of the constitution is a constitutional power and hence not restricted by statutory enactments. though the supreme court would not pass any order u art 142 of the constitution which would amount to supplanting substantive law applicable or ignoring express statutory provisions dealing with the subject at the same time these constitutional powers can not in any way be controlled by any statutory provisions. however it is to be made clear that this power can not be used to supplant the law applicable to the case. this means that acting under article 142the supreme court can not pass an order or grant relief which is totally inconsistent or goes against the substantive or statutory enactments pertaining to the case. the power is to be used sparingly in cases which can not be effectively and appropriately tackled by the existing provisions of law or when the existing provisions of law can not bring about complete justice between the parties. emphasis added. after elaborately discussing almost all the case laws on this subject about jurisdiction of this court under article 142summarised the same in the following words therefore the law in this regard can be summarised to the effect that in exercise of the power u art 142 of the constitution this court generally does not pass an order in contravention of or ignoring the statutory provisions nor is the power exercised merely on sympathy. after saying so the court rejected the request of the parties to waive the statutory period of six months under the act. in mota ram vs state of haryana2009 12 scc 727 2009 indlaw sc 682this court while reiterating the above principles has concluded that art 142 can not be exercised to negate the statutory provisions. in academy of nutrition improvement and others vs union of india jt 2011 8 sc 16 2011 indlaw sc 515the following conclusion about the applicability of art 142 is relevant. the question is having held that rule 44i to be invalid whether we can permit the continuation of the ban on sale of non iodised salt for human consumption for any period. art 142 of the constitution vests unfettered independent jurisdiction to pass any order in public interest to do complete justice if exercise of such jurisdiction is not be contrary to any express provision of law. in supreme court bar association v union of india 1998 4 scc 409. 1998 indlaw sc 688this court observed the supreme court in exercise of its jurisdiction u art 142 has the power to make such order as is necessary for doing complete justice between the parties in any cause or matter pending before it. the very nature of the power must lead the court to set limits for itself within which to exercise those powers and ordinarily it can not disregard a statutory provision governing a subject except perhaps to balance the equities between the conflicting claims of the litigating parties by ironing out the creases in a cause or matter before it. indeed this court is not a court of restricted jurisdiction of only dispute settling. it is well recognised and established that this court has always been a law maker and its role travels beyond merely dispute settling. it is a problem solver in the nebulous areas see. k veeraswami v union of india 1991 3 scc 655 1991 indlaw sc. 711but the substantive statutory provisions dealing with the subject matter of a given case cannot be altogether ignored by this court while making an order u art 142 indeed these constitutional powers can not in any way be controlled by any statutory provisions but at the same time these powers are not meant to be exercised when their exercise may come directly in conflict with what has been expressly provided for in statute dealing expressly with the subject. in kalyan chandra sarkar v rajesh ranjan 2005 3. scc 284 2005 indlaw sc 93this court after reiterating that this court in exercise of its jurisdiction u art 142 of the constitution would not pass any order which would amount to supplanting substantive law applicable to the case or ignoring express statutory provisions dealing with the subject observed as follows. it may therefore be understood that the plenary powers of this court u art 142 of the constitution are inherent in the court and are complementary to those powers which are specifically conferred on the court by various statutes though are not limited by those statutes these. powers also exist independent of the statutes with a view to do complete justice between the parties and are in the nature of supplementary powers. and may be put on a different and perhaps even wider footing than ordinary inherent powers of a court to prevent injustice. the advantage that is derived from a constitutional provision couched in such a wide compass is that it prevents clogging or obstruction of the stream of justice. see supreme court bar association 1998 indlaw sc 688 supra. though the jurisdiction of this court u art 142 of the constitution of india is not in dispute we make it clear that exercise of such power would however depend on the facts and circumstances of each case. the high court in exercise of its jurisdiction u s 482 of the criminal procedure code and this court. u art 142 of the constitution would not ordinarily direct quashing of a case involving crime against the society particularly. when both the trial court as also the high court have found that the charge leveled against the appellant under the act has been made out and proved by the prosecution by placing acceptable evidence. finally learned senior counsel for the appellant has cited certain orders of this court wherein this court has reduced the period of sentence already undergone while upholding the conviction. we have perused those orders. the orders do not disclose any factual details and the relevant provisions under which the accused was charged convicted and minimum sentence if any as available in the act as well as the period already undergone. in the absence of such details we are unable to rely on those orders. from the analysis of the above decisions and the concerned provisions with which we are concerned the following principles emerge a when the court issues notice confining to particular aspect sentence arguments will be heard only to that extent unless some extraordinary circumstance material is shown to the court for arguing the matter on all aspects. long delay in disposal of appeal or any other factor may not be a ground for reduction of sentence particularly when the statute prescribes minimum sentence. in other cases where no such minimum sentence is prescribed it is open to the court to consider the delay and its effect and the ultimate decision. in a case of corruption by public servant quantum of amount is immaterial. ultimately it depends upon the conduct of the delinquent and the proof regarding demand and acceptance established by the prosecution. merely because the delinquent lost his job due to conviction under the act may not be a mitigating circumstance for reduction of sentence particularly when the statute prescribes minimum sentence. though art 142 of the constitution gives wider power to this court waiver of certain period as prescribed in the statute imposing lesser sentence than the minimum prescribed is not permissible. an order which this court can make in order to do complete justice between the parties must not only be consistent with the fundamental rights guaranteed by the constitution but also it can not even be inconsistent with the substantive provisions of the relevant statute. in other words this court can not altogether ignore the substantive provisions of a statute. g in exercise of the power u art 142 of the constitution this court generally does not pass an order in contravention of or ignoring the statutory provisions nor is the power exercised merely on sympathy. h the power u art 142 of the constitution is a constitutional power and not restricted by statutory enactments. however this court would not pass any order u art 142 which would amount to supplant the substantive law applicable or ignoring statutory provisions dealing with the subject. in other words acting under article 142this court can not pass an order or grant relief which is totally inconsistent or goes against the substantive or statutory enactments pertaining to the case. i the powers u art 142 are not meant to be exercised when their exercise may come directly in conflict with what has been expressly provided for in statute dealing expressly with the subject. in the light of the above discussion we are unable to accept any of the contentions raised by the learned senior counsel for the appellant on the other hand we are in entire agreement with the conclusion arrived at by the trial judge as affirmed by the high court. consequently the appeal fails and the same is dismissed. since the appellant is on bail the bail bonds executed by him stand cancelled. the trial judge is directed to secure his presence for serving the remaining period of sentence. appeal dismissed.

IN-Ext

FACTS the appellant-accused was working as a head clerk in the traffic cadre section in the office of the senior divisional personnel officer,south central railway,vijayawada during the period from april,1992 to november,1997. the nature of duties of the appellant-accused included dealing with and processing of the matters like promotions,transfers,seniority list,roster list,pay fixation on promotions,retirements,resignations etc.of the personnel. one k.rama rao-the complainant,who was examined as pw-1,was posted as yard points man,grade 'a' under station superintendent,south central railway,tanuku from december,1995 to june,1997. in june,1997,due to excess staff at tanuku,he was instructed to report at head quarters,vijayawada and accordingly,when he reported there,he was asked to go back to tanuku. thereafter,he went back to tanuku from where he was subsequently transferred to rajahmundry. thereafter,pw-1 made a representation to his senior officer requesting him for posting at vijayawada,cheerala,vetapalam or tenali.later,pw-1 was transferred to vijayawada. as the appellant-accused was dealing with the transfers,the complainant (pw-1) met him on 05.11.1997 at his office to pursue about the issuance of the said transfer order. the appellant-accused asked him to come on 10.11.1997. when he met him on aforesaid date, the appellant asked him to come on the next day as he was busy in pay-fixation work. on 11.11.1997,again he went to the office of the appellant but he could not find him on his seat. again a day after i.e.on 13.11.1997,when he met the appellant-accused,he informed him that his request for transfer has been processed and the order is ready and the same has been placed before the a.p.o.for signature and asked him to come on the next day,i.e.,on 14.11.1997,and demanded rs.200/-for releasing the said office order. he reported the matter in writing to the inspector of police,central bureau of investigation (in short 'the cbi),vijayawada. on 14.11.1997,a trap was laid by the cbi officials along with panchas and when the accused demanded and accepted a sum of rs.200/-as illegal gratification,he was caught red handed along with the money which was recovered from the right hand side pocket of his pant. an fir was registered by the inspector,cbi,visakhapatnam branch. after recording the statements of the witnesses,inspector of police,cbi,visakhapatnam filed charge sheet against the appellant-accused for an offence punishable under sections 7,13(1)(d)(ii) read with s.13(2) of the prevention of corruption act,1988 in the court of special judge for cbi cases at visakhapatnam. the special judge,cbi, convicted the appellant and sentenced him to undergo rigorous imprisonment for a period of six months and to pay a fine of rs.500/-and,in default,to suffer simple imprisonment for one month for the offence punishable u/s.7 of the act and one year rigorous imprisonment with a fine of rs.500/-and,in default,to suffer simple imprisonment for one month for the offence punishable u/ss.13(1)(d) (ii) read with s.13(2) of the act. against the said order,the appellant-accused filed criminal appeal before the high court of andhra pradesh. the high court,by impugned judgment dated 03.10.2007 dismissed the appeal filed by the appellant-accused and confirmed the conviction passed by the trial court. hence,the appellant-accused has preferred this appeal by way of special leave petition before this court. ARGUMENT inasmuch as the alleged incident took place on 14.11.1997 and 14 years have elapsed since then,the amount of rs.200/-said to have been received by the appellant is trivial in nature and also of the fact that due to the said conviction and sentence he lost his job,leniency may be shown and sentence be reduced to the period already undergone. he fairly admitted that out of the maximum period of one year,the appellant had served only 52 days in prison. with this factual position,let us consider whether the request of the learned senior counsel for the appellant is to be accepted and sentence be reduced to the period already undergone. inasmuch as the incident had occurred on 14.11.1997 and the trial court has convicted him on 19.03.2001 which was affirmed by the high court on 03.10.2007,at this juncture,i.e.,after a gap of 14 years,there is no need to retain the same sentence and the court is not justified in directing the appellant to serve the remaining period after such a long time. by drawing our attention to art.142 of the constitution of india,learned senior counsel for the appellant vehemently submitted that in order to do complete justice,this court has ample power to reduce the sentence even to the extent of period already undergone or any other order which would be beneficial to the parties approaching this court. ISSUE notice only on quantum of sentence-hearing on all aspects-permissibility. quantum of sentence-whether requires any reduction. ANALYSIS there is no dispute as regards the date of occurrence and the date of conviction passed by the trial court and affirmed by the high court. inasmuch as the conviction on both counts have been confirmed by this court and we are confined to sentence part alone and in view of the minimum sentence prescribed u/ss.7 and 13 of the act,we are of the view that though long delay may be a ground for reduction of sentence in other cases,the same may not be applicable to the case on hand when the statute prescribes minimum sentence. about the request based on delay that the appellant has lost his job,undergone the ordeal all along etc. a lenient view be taken in this case,it is useful to refer decision of this court in state of m.p.vs.shambhu dayal nagar,(2006) 8 scc 693 2006 indlaw sc 716 wherein it was held that it is difficult to accept the prayer of the respondent that a lenient view be taken in this case. the corruption by public servants has become a gigantic problem. it has spread everywhere. no facet of public activity has been left unaffected by the stink of corruption. it has deep and pervasive impact on the functioning of the entire country. large-scale corruption retards the nation-building activities and everyone has to suffer on that count. similar claim based on art.142 has been negatived in several decisions by this court,we need to refer only the latest decision of this court in manish goel vs.rohini goel,(2010) 4 scc 393 2010 indlaw sc 301. the facts in that case are that the parties by persuasion of the family members and friends,entered into a compromise and prepared a memorandum of understanding dated 13.11.2009,in the proceedings pending before the mediation centre,delhi,by which they agreed on terms and conditions incorporated therein,to settle all their disputes and also for dissolution of their marriage. the parties filed an application under section 13-b(1) of the hindu marriage act,1955 before the family court,delhi seeking divorce by mutual consent. the constitution benches of this court in supreme court bar assn.v.union of india (1998) 4 scc 409 1998 indlaw sc 688 and e.s.p.rajaram v.union of india (2001) 2 scc 186 2001 indlaw sc 20411 held that u/art.142 of the constitution,this court cannot altogether ignore the substantive provisions of a statute and pass orders concerning an issue which can be settled only through a mechanism prescribed in another statute. it is not to be exercised in a case where there is no basis in law which can form an edifice for building up a superstructure. in mota ram vs.state of haryana,(2009) 12 scc 727 2009 indlaw sc 682,this court,while reiterating the above principles has concluded that art.142 cannot be exercised to negate the statutory provisions. in academy of nutrition improvement and others vs.union of india,jt 2011 (8) sc 16 2011 indlaw sc 515,the following conclusion about the applicability of art.142 is relevant: the question is having held that rule 44i to be invalid,whether we can permit the continuation of the ban on sale of non-iodised salt for human consumption for any period.art.142 of the constitution vests unfettered independent jurisdiction to pass any order in public interest to do complete justice,if exercise of such jurisdiction is not be contrary to any express provision of law. though the jurisdiction of this court,u/art.142 of the constitution of india is not in dispute,we make it clear that exercise of such power would,however,depend on the facts and circumstances of each case. the high court,in exercise of its jurisdiction,u/s.482 of the criminal procedure code and this court,u/art.142 of the constitution,would not ordinarily direct quashing of a case involving crime against the society particularly,when both the trial court as also the high court have found that the charge leveled against the appellant under the act has been made out and proved by the prosecution by placing acceptable evidence. the orders do not disclose any factual details and the relevant provisions under which the accused was charged/convicted and minimum sentence,if any,as available in the act as well as the period already undergone. from the analysis of the above decisions and the concerned provisions with which is concerned,the following principles emerge: a) when the court issues notice confining to particular aspect/sentence,arguments will be heard only to that extent unless some extraordinary circumstance/material is shown to the court for arguing the matter on all aspects. b) long delay in disposal of appeal or any other factor may not be a ground for reduction of sentence,particularly,when the statute prescribes minimum sentence.in other cases where no such minimum sentence is prescribed,it is open to the court to consider the delay and its effect and the ultimate decision. c) in a case of corruption by public servant,quantum of amount is immaterial.ultimately it depends upon the conduct of the delinquent and the proof regarding demand and acceptance established by the prosecution. d) merely because the delinquent lost his job due to conviction under the act may not be a mitigating circumstance for reduction of sentence,particularly,when the statute prescribes minimum sentence. e) though art.142 of the constitution gives wider power to this court,waiver of certain period as prescribed in the statute imposing lesser sentence than the minimum prescribed is not permissible. f) an order,which this court can make in order to do complete justice between the parties,must not only be consistent with the fundamental rights guaranteed by the constitution,but also it cannot even be inconsistent with the substantive provisions of the relevant statute. g) in exercise of the power u/art.142 of the constitution,this court generally does not pass an order in contravention of or ignoring the statutory provisions nor is the power exercised merely on sympathy. h) the power u/art.142 of the constitution is a constitutional power and not restricted by statutory enactments. however,this court would not pass any order u/art.142 which would amount to supplant the substantive law applicable or ignoring statutory provisions dealing with the subject. in other words,acting under article 142,this court cannot pass an order or grant relief which is totally inconsistent or goes against the substantive or statutory enactments pertaining to the case. i) the powers u/art.142 are not meant to be exercised when their exercise may come directly in conflict with what has been expressly provided for in statute dealing expressly with the subject. STATUTE section 7 of the prevention of corruption act,1988 reads that public servant taking gratification other than legal remuneration in respect of an official act. s.13 of the prevention of corruption act,1988 deals with criminal misconduct by a public servant. in the prevention of corruption act,1947 the same "criminal misconduct" which is available in s.13 of the 1988 act had been dealt with in s.5 of the 1947 act.s.5(2) of the 1947 act mandates that any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine. however,proviso to sub-s.(2) of s.5 gives power to the court that for any special reasons to be recorded in writing,impose a sentence of imprisonment of less than one year.such relaxation in the form of a proviso has been done away with in the 1988 act. to put it clear,in the 1988 act,if an offence u/s.7 is proved,the same is punishable with imprisonment which shall be not less than six months and in the case of section 13,it shall not be less than one year.

leave granted. these appeals have been preferred from the judgment and order of the high court dated 25 11 2009 in writ petitions civil no 464572009. the appellants challenge the acquisition of their agricultural lands by the state of uttar pradesh for the construction of the district jail of shahjahanpur. the appellants themselves are bhumidar with transferable rights and are residents of village murchha tehsil puwayan in the district of shahjahanpur uttar pradesh. the state of uttar pradesh vide its office memorandum dated 25 10 2004 constituted a committee under the chairmanship of the honourable minister of revenue to suggest its recommendations for transfer of prisons situated in the congested areas of various districts. after conducting its second and final meeting on 10th. january2005the said committee recommended to the state government the shifting of the district jails from congested areas to outside the city limits within the district. as per the schedule this shifting was to be done in two phases 1 st phase 1 district jail shahjahanpur 2 district jail azamgarh 3 district jail jaunpur and 4 district jail moradabad 2 nd phase 1 district jail badaun 2 district jail varanasi 3 district jail barielly and 4 district jail muzaffarnagar. the existing district jail of shahjahanpur constructed in 1870was one of the oldest and required shifting to new premises. the government case is that the district jail is located in a densely populated area of the city and is overcrowded housing as many as 1869 prisoners while having a capacity of only 511. thereafter the state government constituted a committee under the chairmanship of chief secretary government of u p vide office memorandum dated 12 9 2007 to evaluate and consider the shifting of prisons identified to be shifted in the first phase. prisons in the districts of lucknow moradabad were added to the list. this committee was also to evaluate and recommend the means for modernisation of existing old prisons. in its meeting dated 10 10 2007 the committee recommended that a detailed project report dpr be prepared by the rajkiya nirman nigam and that acquisition of lands for shifting of the prisons be done on a priority basis. these recommendations were accepted by the state government vide the approval of the cabinet dated 7 12 2007 following this decision the director general of prisons administration and reformsuttar pradesh vide letter dated 04 06 2008requested the district magistrate shahjahanpur to send all the relevant records to the state government for publication of notification u ss 41 and 17 of the land acquisition act1894 hereinafter the act the land suggested for such acquisition by the divisional land utility committee was. one admeasuring 25 89 hectares 63 93 acres in village morchha tehsil puwayan in the district of shahjahanpur. thereafter the district magistrate shahjahanpur forwarded the proposal to the commissioner and director directorate of land acquisition revenue board uttar pradeshfor the issuance of notifications u ss 41 and 17 of the act which in turn approved of it and further forwarded the recommendation to the state government vide letter dated 2 07 2008. thus the state government issued notifications u ss 41 and 17 on 21 08 2008. however the provisions of section 5a inquiry were dispensed with. the state government explained that this was done in view of the pressing urgency in the matter of construction of the jails. being aggrieved by the aforesaid notifications the appellants moved a writ petition before the high court u art 226 of the constitution of india. the high court in its decision dated 25 11 2009 refused to interfere with the selection of the site for the construction of the jail premises on the ground that it was not required to do so unless it found the selection of the site was wholly arbitrary. the high court also approved the invoking of emergency provisions u s 17 of the act as per the guidelines given in essco fabs private limited and another vs state of haryana and another. 2 scc 377 2008 indlaw sc 2494 having thus stated the high court dismissed the writ petition. before this court the appellants broadly raised the following arguments 1 whether or not the state government was justified in acquiring the said pieces of fertile agricultural land when there were alternative sites of unfertile banjar land available. 2 whether or not the state government was justified in dispensing with the inquiry which is mandated to be conducted under section 5a of the act especially when one year elapsed between the notifications u s 4 and the one u s 6 they further stated that the high court had erred insofar as it upheld the factum of urgency in the absence of a categorical finding an enquiry under section 5a would have been detrimental to public interest. it was urged that it was clear from the counter of the respondent that the contemplation of a new prison was under consideration of the state government for several years. committee was formed matter was discussed at a leisurely pace at various levels and there is no material fact to justify the abridgement of the appellants right of raising an objection to acquisition and of a hearing under section 5a of the act. this court finds a lot of substance in the contentions of the appellants. in connection with land acquisition proceeding whenever the provision of s 17 and its various sub sections including s 174 is used in the name of taking urgent or emergent action and the right of hearing of the land holder under section 5a is dispensed with the court is called upon to consider a few fundamentals in the exercise of such powers. admittedly the land acquisition act a pre constitutional legislation of colonial vintage is a drastic law being expropriatory in nature as it confers on the state a power which affects person 's property right. even though right to property is no longer fundamental and was never a natural right and is acquired on a concession by the state it has to be accepted that without right to some property other rights become illusory. this court is considering these questions especially in the context of some recent trends in land acquisition. this court is of the opinion that the concept of public purpose in land acquisition has to be viewed from an angle which is consistent with the concept of a welfare state. the concept of public purpose can not remain static for all time to come. the concept even though sought to be defined u s 3f of the act is not capable of any precise definition. the said definition having suffered several amendments has assumed the character of an inclusive one. it must be accepted that in construing public purpose a broad and overall view has to be taken and the focus must be on ensuring maximum benefit to the largest number of people. any attempt by the state to acquire land by promoting a public purpose to benefit a particular group of people or to serve any particular interest at the cost of the interest of a large section of people especially of the common people defeats the very concept of public purpose. even though the concept of public purpose was introduced by pre constitutional legislation its application must be consistent with the constitutional ethos and especially the chapter under fundamental rights and also the directive principles. in construing the concept of public purpose the mandate of art 13 of the constitution that any pre constitutional law can not in any way take away or abridge rights conferred under part iii must be kept in mind. by judicial interpretation the contents of these part iii rights are constantly expanded. the meaning of public purpose in acquisition of land must be judged on the touchstone of this expanded view of part iii rights. the open ended nature of our constitution needs a harmonious reconciliation between various competing principles and the overhanging shadows of socio economic reality in this country. therefore the concept of public purpose on this broad horizon must also be read into the provisions of emergency power u s 17 with the consequential dispensation of right of hearing under section 5a of the said act. the courts must examine these questions very carefully when little indians lose their small property in the name of mindless acquisition at the instance of the state. if public purpose can be satisfied by not rendering common man homeless and by exploring other avenues of acquisition the courts before sanctioning an acquisition must in exercise of its power of judicial review focus its attention on the concept of social and economic justice. while examining these questions of public importance the courts especially the higher courts cannot afford to act as mere umpires. in this context we reiterate the principle laid down by this court in authorised officer thanjavur and another vs s naganatha. ayyar and others reported in 1979 3 scc 466 1979 indlaw sc 224wherein this court held it is true that judges are constitutional invigilators and statutory interpreters but they are also responsive and responsible to part iv of the constitution being one of the trinity of the nation 's appointed instrumentalities in the transformation of the socio economic order. the judiciary in its sphere shares the revolutionary purpose of the constitutional order and when called upon to decode social legislation must be animated by a goal oriented approach. this is part of the dynamics of statutory interpretation in the developing countries so that courts are not converted into rescue shelters for those who seek to defeat agrarian justice by cute transactions of many manifestations now so familiar in the country and illustrated by the several cases under appeal. this caveat has become necessary because the judiciary is not a mere umpire as some assume but an activist catalyst in the constitutional scheme. in other words public purpose must be viewed through the prism of constitutional values as stated above. the aforesaid principles in our jurisprudence compel this court to construe any expropriartory legislation like the land acquisition act very strictly. the judicial pronouncements on this aspect are numerous only a few of them may be noted here. in dlf qutab enclave complex educational charitable trust vs state of haryana and ors 2003 5 scc 622 2003 indlaw sc 124this court construed the statute on town planning law and held expropriatory statute as is well known must be strictly construed. the same principle has been reiterated subsequently by a three judge bench of this court in state of maharashtra and anr vs. b e billimoria and ors 2003 7 scc 336 2003 indlaw sc 618 in the context of ceiling law. these principles again found support in the decision of this court in chairman indore vikas pradhikaran vs pure industrial coke and chemicals. ltd and ors 2007. 8 scc 705 2007 indlaw sc 554wherein this court construed the status of a person 's right to property after deletion of art 191f from part iii by referring to various international covenants namely the declaration of human and civil rights this court held that even though right to property has ceased to be a fundamental right but it would however be given an express recognition as a legal right and also as a human right. while discussing the ambit and extent of property right this court reiterated that expropriatory legislation must be given strict construction. in the background of the aforesaid discussion this court proceeds to examine the scope of a person 's right under section 5a of the act. initially section 5a was not there in the land acquisition act1894 but the same was inserted long ago by the land acquisition amendment act1923 vide s 3 of act 38 of 1923. the history behind insertion of section 5a in the act of 1894 seems to be a decision of the division bench of calcutta high court in j e d ezra vs the secretary of state for india and ors reported in 7 c w n 249 in that case the properties of ezra were sought to be acquired under the pre amended provision of the act for expansion of the offices of the bank of bengal. in challenging the said acquisition it was argued that the person whose property is going to be taken away should be allowed a hearing on the principles of natural justice. however the judges found that there was no such provision in the act. in order to remedy this shortcoming in the act of 1894an amendment by way of incorporation of section 5a was introduced on 11th july1923 the statement of objects and reasons for the said amendment is as follows the land acquisition act i of 1894 does not provide that persons having an interest in land which it is proposed to acquire shall have the right of objecting to such acquisition nor is government bound to enquire into and consider any objections that may reach them. the object of this bill is to provide that a local government shall not declare u s 6 of the act that any land is needed for a public purpose unless time has been allowed after the notification u s 4 for persons interested in the land to put in objections and for such objections to be considered by the local government. gazette of india pt. v dated 14th july1923. the said amendment was assented to by the governor general on 5th august1923 and came into force on 1st january1924. the importance and scheme of section 5a was construed by this court in several cases. as early as in 1964this court in nandeshwar prasad and ors vs. u p government and ors. air 1964 sc 1217 1963 indlaw sc 141 speaking through justice k n wanchoo as his lordship then was. the right to file objections under section 5a is a substantial right when a person 's property is being threatened with acquisition and we can not accept that that right can be taken away as if by a side wind. in that case the court was considering the importance of rights under section 5a vis vis s 171 and s 171. a of the act. the same view has been reiterated by another three judge bench decision of this court in munshi singh and ors. union of india 1973 2 scc 337 1972 indlaw sc 176 in para 17 of the report this court held that section 5a embodies a very just and wholesome principle of giving proper and reasonable opportunity to a land loser of persuading the authorities that his property should not be acquired. this court made it clear that declaration u s 6 has to be made only after the appropriate government is satisfied on a consideration of the report made by the collector under section 5a the court however made it clear that only in a case of real urgency the provision of section 5a can be dispensed with. in hindustan petroleum corporation limited vs darius shahpur chennai and ors. 2005 7 scc 627 2005 indlaw sc 578this court held that the right which is conferred under section 5a has to be read considering the provisions of article 300 a of the constitution and so construed the right under section 5a should be interpreted as being akin to a fundamental right. this court held that the same being the legal position the procedures which have been laid down for depriving a person of the said right must be strictly complied with. in a recent judgment of this court in essco fabs 2008 indlaw sc 2494 supra2009 2 scc 377this court after considering previous judgments as also the provisions of s 17 of the act held whereas sub s 1 of s 17 deals with cases of urgencysub s 2 of the said section covers cases of sudden change in the channel of any navigable river or other unforeseen emergency. but even in such cases i e cases of urgency or unforeseen emergencyenquiry contemplated by section 5 a can not ipso facto be dispensed with which is clear from sub s 4 of s 17 of the act. this court therefore held that once a case is covered under sub s 1 or 2 of section 17sub s 4 of s 17 would not necessarily apply. in our opinion therefore the contention of learned counsel for the respondent authorities is not well founded and can not be upheld that once a case is covered by sub ss 1 or 2 of s 17 of the act sub s 4 of s 17 would necessarily apply and there is no question of holding inquiry or hearing objections under section 5 a of the act. acceptance of such contention or upholding of this argument will make sub s 4 of s 17 totally otiose redundant and nugatory. this court also held that in view of the ratio in union of india vs mukesh hans2004 8 scc 14 2004 indlaw sc 1413sub s 4 of s 17 can not be pressed into service by officers who are negligent and lethargic in initiating acquisition proceedings. the question is whether in the admitted facts of this case invoking the urgency clause u s 17 4 is justified. in the writ petition before the high court the petitioners have given the details of the land holding and it has also been stated that the entire holding of petitioners 25791011 and 13 have been acquired and as a result of such acquisition the petitioners have become landless. from the various facts disclosed in the said affidavit it appears that the matter was initiated by the government 's letter dated 4th of june2008 for issuance of s 41 and s 17 notifications. a meeting for selection of the suitable site for construction was held on 27th june2008and the proposal for such acquisition and construction was sent to the director land acquisition on 2nd of july2008 this was in turn forwarded to the state government by the director on 22nd of july2008 after due consideration of the forwarded proposal and documents the state government issued the s 4 notification along with s 17 notification on 21st of august2008 these notifications were published in local newspapers on 24th of september2008. thereafter over a period of 9 months the state government deposited 10 of compensation payable to the landowners along with 10 of acquisition expenses and 70 of cost of acquisition was deposited and the proposal for issuance of s 6 declaration was sent to the director land acquisition on 19th of june2009 the director in turn forwarded all these to the state government on 17th july2009and the state government finally issued the s 6 declaration on 10th of august2009 this declaration was published in the local dailies on 17th of august2009. thus the time which elapsed between publication of s 41 and s 17 notifications and s 6 declaration in the local newspapers is of 11 months and 23 days i e almost one year. this slow pace at which the government machinery had functioned in processing the acquisition clearly evinces that there was no urgency for acquiring the land so as to warrant invoking s 17 4 of the act. in paragraph 15 of the writ petition it has been clearly stated that there was a time gap of more than 11 months between s 4 and s 6 notifications which demonstrates that there was no urgency in the state action which could deny the petitioners their right under section 5a in the counter which was filed in this case by the state before the high court it was not disputed that the time gap between s 4 notification read with section 17and s 6 notification was about 11 months. the construction of jail is certainly in public interest and for such construction land may be acquired. but such acquisition can be made only by strictly following the mandate of the said act. in the facts of this case such acquisition can not be made by invoking emergency provisions of s 17 if so advised government can initiate acquisition proceeding by following the provision of section 5a of the act and in accordance with law. for the reasons aforesaid we hold that the state government was not justified in the facts of this case to invoke the emergency provision of s 174 of the act. the valuable right of the appellants under section 5a of the act can not flatten and steamrolled on the ipsi dixit of the executive authority. the impugned notifications u ss 4 and 6 of the act in so far as they relate to the appellants land are quashed. the possession of the appellants in respect of their land can not be interfered with except in accordance with law. the appeals are allowed. no order as to costs. appeals allowed.

IN-Ext

FACTS the appellants challenge the acquisition of their agricultural lands by the state of uttar pradesh for the construction of the district jail of shahjahanpur. the appellants themselves are bhumidar with transferable rights and are residents of village murchha,tehsil puwayan in the district of shahjahanpur,uttar pradesh. the state of uttar pradesh vide its office memorandum dated 25.10.2004 constituted a committee under the chairmanship of the hon'ble minister of revenue to suggest its recommendations for transfer of prisons situated in the congested areas of various districts. after conducting its second and final meeting on 10th. january,2005,the said committee recommended to the state government the shifting of the district jails from congested areas to outside the city limits within the district. following this decision,the director general of prisons (administration and reforms),uttar pradesh,vide letter dated 04.06.2008,requested the district magistrate,shahjahanpur to send all the relevant records to the state government for publication of notification u/ss.4(1) and 17 of the land acquisition act,1894 . the land suggested for such acquisition by the divisional land utility committee was. one admeasuring 25.89 hectares (63.93 acres) in village morchha,tehsil puwayan in the district of shahjahanpur. thereafter,the district magistrate,shahjahanpur forwarded the proposal to the commissioner and director,directorate of land acquisition (revenue board,uttar pradesh),for the issuance of notifications u/ss.4(1) and 17 of the act,which in turn approved of it and further forwarded the recommendation to the state government,vide letter dated 2.07.2008. thus,the state government issued notifications u/ss.4(1) and 17 on 21.08.2008. however,the provisions of section 5a inquiry were dispensed with. the state government explained that this was done in view of the pressing urgency in the matter of construction of the jails. ARGUMENT it was urged that it was clear from the counter of the respondent that the contemplation of a new prison was under consideration of the state government for several years. committee was formed,matter was discussed at a leisurely pace at various levels and there is no material fact to justify the abridgement of the appellants' right of raising an objection to acquisition and of a hearing under section 5a of the act. ISSUE the appellants broadly raised the following arguments: 1.whether or not the state government was justified in acquiring the said pieces of fertile agricultural land,when there were alternative sites of unfertile banjar land available. 2.whether or not the state government was justified in dispensing with the inquiry which is mandated to be conducted under section 5a of the act,especially when one year elapsed between the notifications u/s.4 and the one u/s.6. they further stated that the high court had erred insofar as it upheld the factum of urgency in the absence of a categorical finding,an enquiry under section 5a would have been detrimental to public interest. ANALYSIS in connection with land acquisition proceeding whenever the provision of s.17 and its various sub-sections including s.17(4) is used in the name of taking urgent or emergent action and the right of hearing of the land holder under section 5a is dispensed with,the court is called upon to consider a few fundamentals in the exercise of such powers. admittedly,the land acquisition act,a pre-constitutional legislation of colonial vintage is a drastic law,being expropriatory in nature as it confers on the state a power which affects person's property right. even though right to property is no longer fundamental and was never a natural right,and is acquired on a concession by the state,it has to be accepted that without right to some property,other rights become illusory. the meaning of public purpose in acquisition of land must be judged on the touchstone of this expanded view of part-iii rights. the open-ended nature of our constitution needs a harmonious reconciliation between various competing principles and the overhanging shadows of socio-economic reality in this country. while examining these questions of public importance,the courts,especially the higher courts,cannot afford to act as mere umpires. in other words public purpose must be viewed through the prism of constitutional values as stated above. the aforesaid principles in our jurisprudence compel this court to construe any expropriartory legislation like the land acquisition act very strictly. the judicial pronouncements on this aspect are numerous,only a few of them may be noted here. in dlf qutab enclave complex educational charitable trust vs. state of haryana and ors.(2003) 5 scc 622 2003 indlaw sc 124,this court construed the statute on town planning law and held "expropriatory statute,as is well known,must be strictly construed. the same principle has been reiterated subsequently by a three-judge bench of this court in state of maharashtra and anr.vs. b.e.billimoria and ors.(2003) 7 scc 336 2003 indlaw sc 618 in the context of ceiling law. section 5a was not there in the land acquisition act,1894 but the same was inserted long ago by the land acquisition (amendment) act,1923 vide s.3 of act 38 of 1923. the question is whether in the admitted facts of this case,invoking the urgency clause u/s.17 (4) is justified. in the writ petition before the high court,the petitioners have given the details of the land holding,and it has also been stated that the entire holding of petitioners 2,5,7,9,10,11 and 13 have been acquired,and as a result of such acquisition,the petitioners have become landless. the construction of jail is certainly in public interest and for such construction land may be acquired. but such acquisition can be made only by strictly following the mandate of the said act. in the facts of this case,such acquisition cannot be made by invoking emergency provisions of s.17. if so advised,government can initiate acquisition proceeding by following the provision of section 5a of the act and in accordance with law. STATUTE in order to remedy this shortcoming in the act of 1894,an amendment by way of incorporation of section 5a was introduced on 11th july,1923.the statement of objects and reasons for the said amendment is as follows: "the land acquisition act i of 1894 does not provide that persons having an interest in land which it is proposed to acquire,shall have the right of objecting to such acquisition; nor is government bound to enquire into and consider any objections that may reach them. the object of this bill is to provide that a local government shall not declare,u/s.6 of the act,that any land is needed for a public purpose unless time has been allowed after the notification u/s.4 for persons interested in the land to put in objections and for such objections to be considered by the local government. gazette of india,pt. v,dated 14th july,1923. the said amendment was assented to by the governor general on 5th august,1923 and came into force on 1st january,1924.

accused pathan hussain basha was married to pathan haseena begum now deceased on 23rd june2002 at guntur. it was an arranged marriage. at the time of marriage it was promised that a dowry of rs 25000 besides other formalities would be paid by the side of the wife to the husband. out of this amount a sum of rs 15000 was paid at that time and it was promised that the balance dowry of rs 10000 would be paid in the month of october2002upon which the marriage was performed. the father of the bride could not pay the balance amount within time because he lacked the resources. the accused pathan hussain basha his father pathan khadar basha and mother pathan nazeer abi forced her to get the balance amount of dowry. despite such pressure she was not able to get that money from her family. it is the case of the prosecution that for non payment of dowry the accused persons harassed the deceased and subjected her to cruelty. they even refused to send her to her parental house. this was informed by the deceased to various persons including her relatives and elders. she was unable to bear the cruelty to which she was subjected by the accused persons. on 15th february2003at about 11 a m the deceased committed suicide by hanging herself in the house of the accused. when pathan basheerunnisa lw3 returned from her work the accused sent her out giving her money to bring the soaps upon which she went out and when she came back she found the accused absent and the bride hanging in the house. subsequently lw 3 pathan basheerunnisa sent her grandson pathan inayatullah khan lw 4 to the house of the parents of the deceased to inform them about the incident. when the parents of the deceased came to the house of the accused and found the deceased hanging from the beam with a saree they untied her and took her to the government general hospital guntur hoping that the deceased may be alive. however upon medical examination by the doctor she was declared brought dead. the father of the deceased pathan yasin khan lw 1 and her mother pathan shamshad begum lw 2 were present at that time. lw 1lodged the report which was registered by sri k srinivasarao lw 16the sub inspector of police. the fir was registered under section 304b and section 498a of the indian penal code1860 for short the ipc thereafter investigation was conducted by one shri p devadass lw 17 he inspected the site from where he recovered and seized the saree that had been used for hanging. this was done in the presence of lw 10 and lw 11shaik ibrahim and mohd ghouse respectively. thereupon the body was sent for postmortem examination through constable p venkateswara reddy lw 15 lw 17p devdass also took photographs of the scene 3 lw 13dr. m madhusudana reddy conducted autopsy over the body of the deceased and prepared post mortem certificate giving the cause of death as asphyxia as a result of hanging. on 16th february2003at about 5 p m. investigating officer arrested all the three accused persons. they faced the trial and were convicted by learned sixth additional munsif magistrate guntur for committing an offence under sections 498a and 304b ipc. they were committed to the court of sessions guntur division guntur for such an offence. they faced the trial and the learned sessions judge vide its judgment dated 4th october2004 found them guilty of the said offences and punished them as follows hence a 1 to a 3 are sentenced to undergo r i for three years and further sentenced to pay a fine of rs 1000 each total fine amount rs 3000 offence punishable u s 498 a ipc i d of the fine amount of rs 1000 to undergo si for 9 months. and further a 1 to a 3 are sentenced to undergo imprisonment for life for the offence u s 304 b ipc both the sentences shall run concurrently. the undergone remand period of a 1 to a 3 shall be set off u s 428 cr. p c m o 1 shall be destroyed after expiry of appeal time. the unmarked property if any shall be destroyed after expiry of appeal time. the judgment dated 4th october2004 passed by the learned trial court was challenged in appeal before the high court. the high court of andhra pradesh vide its judgment dated 26th october2006while allowing the appeal in part convicted accused nos 1 and 2 for the aforementioned offences however acquitted accused no 3namely pathan khadar basha. the sentence awarded by the trial court was confirmed. this gave rise to filing of the present appeals. first and the foremost we must consider what is the evidence led by the prosecution to bring home the guilt of accused. accused were charged with offences under sections 498a and 304b of the ipc the fir in the present case was lodged by lw 1who is the father of the deceased. according to this witness on 23rd january2002the marriage of his daughter was solemnised with accused pathan hussain basha and he had accepted to give rs 25000 in marriage. he had given only rs 15000 and had agreed to pay rs 10000 after four months. this witness has further specifically stated that the said accused treated his daughter in a proper manner for about two months. in the marriage he had also given a gold chain a double bed an iron safe and other items. he had called his son in law accused no 1to his house as per custom at that point the accused demanded a ceiling fan. a ceiling fan was lying with the witness and he gave that to his son in law however he protested the same on the ground that the old fan is not acceptable to him and he would like to have a new fan which was bought for rs 650 by the witness and given to his son in law. when he again invited his son in law and the mother in law of his daughter even then he had gifted some presents to them. the accused asked for rs 1000 with a ring for the deceased. the witness could pay only rs 500 upon which the accused refused to take the deceased to the matrimonial home and went away. later on the accused came to fetch deceased. subsequently the motherin law of the deceased again demanded the balance dowry amount of rs 10000 which he could not pay. his daughter after the ramzan festival had informed him that the accused persons were harassing her and were even beating and abusing her. all three accused used to beat her for the remaining amount of dowry. on 15th february2003a boy had come to him and told him that his daughter had died by hanging herself whereupon he went to the house of the accused and found that his daughter was hanged to a wooden beam with a saree and she was dead. the saree was removed she was taken to the hospital where she was reported to have brought dead. the statement of this witness i e lw 1 is corroborated by lw 3 and lw 7. it is stated by lw 3 that she knew all the accused persons as she was residing in the house of the accused and the deceased. according to this witness also in the beginning they were happy however after some time she used to hear some quarrel between the deceased and the accused persons. accused no 2pathan nazeer abi had given her some amount and asked her to go and bring the soaps. after bringing the soaps she went to the house of the accused persons and found that the accused was absent and the deceased was hanging on one side of the room. after seeing this she raised cries and people came to the scene. lw 4pathan inayatullah khan the grandson of lw 3went to the house of the parents of the deceased and informed them about the unfortunate incident. lw 7 stated on oath that he was present at the time of giving of dowry to the accused by the family of the deceased. he confirmed the fact that rs 15000 was given at the time of marriage and rs 10000 was to be given within some time which the father of the deceased failed to provide. according to him the accused persons used to harass the deceased primarily for non payment of the amount of dowry as a result of which she was forced to commit suicide. in fact there is no dispute to the fact that the deceased died of hanging. dr m madhusudana reddy lw 13 who was the associate professor in forensic medicine at guntur medical college performed the post mortem over the body of the deceased. in the medical report lw13he noticed oblique ligature mark of 17 x 2 5 cm present over front and left sides of neck as well as noticed abrasion 1 5 x 1 cm present over lower part of middle of chin. injuries were found to be antemortem in nature and the cause of death was stated to be asphyxia as a result of hanging. lw 14 is a witness to the seizure of the body and she noticed injuries on the body of the deceased. from the above evidence it is clear that the dowry demands were being raised by the accused persons persistently from the family of the deceased and for that they even harassed the deceased by beating and abusing her. she had informed her parents of the ill treatment and the cruelty inflicted on her for non giving of dowry. the period intervening between the marriage and the death of the deceased is very small. they were married in the year 2002 and she committed suicide by hanging on 15th. february2003 the witnesses including lw 1 have stated that for the first few months they were happy but thereafter there were quarrels between the accused and the deceased. accused pathan hussain basha when he had gone to the parental house of the deceased demanded different items like fan ring and rs 1000 in cash and the balance of the agreed dowry amount. since these demands were not satisfied instantaneously he even left the deceased at her parental house. at this stage it will be appropriate for us to examine as to what are the ingredients of an offence punishable under section 304b of the ipc. in the case of biswajit halder alias babu halder and others v state of w b 2008 1 scc 202 2007 indlaw sc 304the court stated the ingredients of this provision as follows 10 the basic ingredients to attract the provisions of section 304 b are as follows. 1 the death of a woman should be caused by burns or fatal injury or otherwise than under normal circumstances 2 such death should have occurred within seven years of her marriage 3 she must have been subjected to cruelty or harassment by her husband or any relative of her husband and 4 such cruelty or harassment should be for or in connection with demand for dowry. 11 alongside insertion of section 304 b in ipc the legislature also introduced section 113 b of the evidence act which lays down when the question as to whether a person has committed the dowry death of a woman and it is shown that soon before her death such woman had been subjected by such person to cruelty or harassment for or in connection with any demand for dowry the court shall presume that such person had caused the dowry death. 12 explanation appended to section. 113 b lays down that for the purpose of this sectiondowry death shall have the same meaning as in section 304 b of indian penal code. 13 if. section 304 b ipc is read together with section 113 b of the evidence act a comprehensive picture emerges that if a married woman dies in unnatural circumstances at her matrimonial home within 7 years from her marriage and there are allegations of cruelty or harassment upon such married woman for or in connection with demand of dowry by the husband or relatives of the husband the case would squarely come under dowry death and there shall be a presumption against the husband and the relatives. besides examining the ingredients of the provision it would also be necessary for us to examine the meaning and connotation of the expressions dowry deathsoon before her death and in connection with any demand for dowry as appearing in the said section. amongst others lapse of time between the date of marriage and the date of death is also a relevant consideration for the court while examining whether the essential ingredients of the provision are satisfied or not in a given case. in the case of ashok kumar v state of haryana 2010 12 scc 350 2010 indlaw sc 502this court explained these terms in some elucidation and the effect of the deeming fiction appearing in the section as follows 11 the appellant was charged with an offence under section 304 b of the code. this penal section clearly spells out the basic ingredients as well as the matters which are required to be construed strictly and with significance to the cases where death is caused by burns bodily injury or the death occurring otherwise than under normal circumstances in any manner within seven years of a marriage. it is the first criteria which the prosecution must prove. secondly that soon before her death she had been subjected to cruelty or harassment by the husband or any of the relatives of the husband for or in connection with any demand for dowry then such a death shall be called dowry death and the husband or the relative as the case may be will be deemed to have caused such a death. the explanation to this section requires that the expression dowry shall have the same meaning as in s 2 of the act. 12 the definition of dowry under s 2 of the act reads as under 2 definition of dowry. in this actdowry means any property or valuable security given or agreed to be given either directly or indirectly a by one party to a marriage to the other party to the marriage or b by the parents of either party to a marriage or by any other person to either party to the marriage or to any other person at or before or any time after the marriage in connection with the marriage of the said parties but does not include dower or mahr in the case of persons to whom the muslim personal law shariat applies. explanation ii the expression valuable security has the same meaning as in s 30 of the penal code 45 of 1860. from the above definition it is clear thatdowry means any property or valuable security given or agreed to be given either directly or indirectly by one party to another by parents of either party to each other or any other person at before or at any time after the marriage and in connection with the marriage of the said parties but does not include dower or mahr under the muslim personal law. all the expressions used under this section are of a very wide magnitude. the expressions or any time after marriage and in connection with the marriage of the said parties were introduced by the amending act 63 of 1984 and act 43 of 1986 with effect from 2 101985 and 19 11 1986 respectively. these amendments appear to have been made with the intention to cover all demands at the time before and even after the marriage so far they were in connection with the marriage of the said parties. this clearly shows the intent of the legislature that these expressions are of wide meaning and scope. the expression in connection with the marriage can not be given a restricted or a narrower meaning. the expression in connection with the marriage even in common parlance and on its plain language has to be understood generally. the object being that everything which is offending at any time i e at before or after the marriage would be covered under this definition but the demand of dowry has to be in connection with the marriage and not so customary that it would not attract on the face of it the provisions of this section. at this stage it will be appropriate to refer to certain examples showing what has and has not been treated by the courts as dowry. this court in ran singh v state of haryana2008 4 scc 700 2008 indlaw sc 120 held that the payments which are customary payments for example given at the time of birth of a child or other ceremonies as are prevalent in the society or families to the marriage would not be covered under the expression dowry. again in satvir singh v state of punjab20018 scc 633 2001 indlaw sc 224. this court held that the word dowry should be any property or valuable given or agreed to be given in connection with the marriage. the customary payments in connection with birth of a child or other ceremonies are not covered within the ambit of the word dowry. this court in madhu sudan malhotra v kishore chand bhandari1988 supp. scc 424 1987 indlaw sc 28308 held that furnishing of a list of ornaments and other household articles such as refrigerator furniture and electrical appliances etc to the parents or guardians of the bride at the time of settlement of the marriage prima facie amounts to demand of dowry within the meaning of s 2 of the act. the definition of dowry is not restricted to agreement or demand for payment of dowry before and at the time of marriage but even include subsequent demands was the dictum of this court in state of a p v. raj gopal asawa20044 scc 470 2004 indlaw sc 205. the courts have also taken the view that where the husband had demanded a specific sum from his father in law and upon not being given harassed and tortured the wife and after some days she died such cases would clearly fall within the definition of dowry under the act. s 4 of the act is the penal section and demanding a dowryas defined under s 2 of the act is punishable under this section. as already noticed we need not deliberate on this aspect as the accused before us has neither been charged nor punished for that offence. we have examined the provisions of s 2 of the act in a very limited sphere to deal with the contentions raised in regard to the applicability of the provisions of section 304 b of the code. we have already referred to the provisions of section 304 b of the code and the most significant expression used in the section is soon before her death. in our view the expression soon before her death can not be given a restricted or a narrower meaning. they must be understood in their plain language and with reference to their meaning in common parlance. these are the provisions relating to human behaviour and therefore cannot be given such a narrower meaning which would defeat the very purpose of the provisions of the act of course these are penal provisions and must receive strict construction. but even the rule of strict construction requires that the provisions have to be read in conjunction with other relevant provisions and scheme of the act. further the interpretation given should be one which would avoid absurd results on the one hand and would further the object and cause of the law so enacted on the other. we are of the considered view that the concept of reasonable time is the best criteria to be applied for appreciation and examination of such cases. this court in tarsem singh v state of punjab2008. 16 scc 155 2008 indlaw sc 1962 held that the legislative object in providing such a radius of time by employing the words soon before her death is to emphasise the idea that her death should in all probabilities has been the aftermath of such cruelty or harassment. in other words there should be a reasonable if not direct nexus between her death and the dowryrelated cruelty or harassment inflicted on her. similar view was expressed by this court in yashoda v state of m p20043 scc 98 2004 indlaw sc 132 where this court stated that determination of the period would depend on the facts and circumstances of a given case. however the expression would normally imply that there has to be reasonable time gap between t he cruelty inflicted and the death in question. if this is so the legislature in its wisdom would have specified any period which would attract the provisions of this section. however there must be existence of proximate link between the acts of cruelty along with the demand of dowry and the death of the victim. for want of any specific period the concept of reasonable period would be applicable. thus the cruelty harassment and demand of dowry should not be so ancient whereafter the couple and the family members have lived happily and that it would result in abuse of the said protection. such demand or harassment may not strictly and squarely fall within the scope of these provisions unless definite evidence was led to show to the contrary. these matters of course will have to be examined on the facts and circumstances of a given case. the cruelty and harassment by the husband or any relative could be directly relatable to or in connection with any demand for dowry. the expression demand for dowry will have to be construed ejusdem generis to the word immediately preceding this expression. similarlyin connection with the marriage is an expression which has to be given a wider connotation. it is of some significance that these expressions should be given appropriate meaning to avoid undue harassment or advantage to either of the parties. these are penal provisions but ultimately these are the social legislations intended to control offences relating to the society as a whole. dowry is something which existed in our country for a considerable time and the legislature in its wisdom considered it appropriate to enact the law relating to dowry prohibition so as to ensure that any party to the marriage is not harassed or treated with cruelty for satisfaction of demands in consideration and for subsistence of the marriage. the court can not ignore one of the cardinal principles of criminal jurisprudence that a suspect in the indian law is entitled to the protection of art 20 of the constitution of india as well as has a presumption of innocence in his favour. in other words the rule of law requires a person to be innocent till proved guilty. the concept of deeming fiction is hardly applicable to the criminal jurisprudence. in contradistinction to this aspect the legislature has applied the concept of deeming fiction to the provisions of section 304 b where other ingredients of section 304 b are satisfied in that event the husband or all relatives shall be deemed to have caused her death. in other words the offence shall be deemed to have been committed by fiction of law. once the prosecution proves its case with regard to the basic ingredients of section 304 b the court will presume by deemed fiction of law that the husband or the relatives complained of has caused her death. such a presumption can be drawn by the court keeping in view the evidence produced by the prosecution in support of the substantive charge under section 304 b of the code. applying these principles to the facts of the present case it is clear that the ingredients of section 304b read with section 498a ipc are completely satisfied in the present case. by a deeming fiction in law the onus shifts on to the accused to prove as to how the deceased died. it is for the accused to show that the death of the deceased did not result from any cruelty or demand of dowry by the accused persons. the accused did not care to explain as to how the death of his wife occurred. denial can not be treated to be the discharge of onus. onus has to be discharged by leading proper and cogent evidence. it was expected of the accused to explain as to how and why his wife died as well as his conduct immediately prior and subsequent to the death of the deceased. maintaining silence can not be equated to discharge of onus by the accused. in the present case the prosecution by reliable and cogent evidence has established the guilt of the accused. there being no rebuttal thereto there is no occasion to interfere in the judgments of the courts under appeal. the high court acquitted pathan khadar basha the fatherin law of the deceased as there was no direct evidence against him. his acquittal has not been challenged by the state before us thus we are not called upon to discuss this aspect of the matter. accused pathan hussain basha and pathan nazeer abi have rightly been found guilty of the offence by the courts. while we see no reason to differ with the concurrent findings recorded by the trial court and the high court we do see some substance in the argument raised on behalf of the appellants that keeping in view the prosecution evidence the attendant circumstances the age of the accused and the fact that they have already being in jail for a considerable period the court may take lenient view as far as the quantum of sentence is concerned. the offences having been proved against the accused and keeping in view the attendant circumstances we are of the considered view that ends of justice would be met if the punishment awarded to the appellants is reduced. consequently we award ten years rigorous imprisonment to the appellants. the appeals are partially accepted to the extent afore indicated. appeals partly allowed.

IN-Ext

FACTS accused pathan hussain basha,was married to pathan haseena begum (now deceased) in june,2002 at guntur. it was an arranged marriage. at the time of marriage,it was promised that a dowry of rs.25,000/-,besides other formalities,would be paid by the side of the wife to the husband. out of this amount,a sum of rs.15,000/was paid at that time and it was promised that the balance dowry of rs.10,000/would be paid in october,2002,upon which the marriage was performed. the father of the bride could not pay the balance amount within time,because he lacked the resources. the accused pathan hussain basha,his father pathan khadar basha,and mother pathan nazeer abi forced her to get the balance amount of dowry. it is the case of the prosecution that for non-payment of dowry,the accused persons harassed the deceased and subjected her to cruelty. this was informed by the deceased to various persons,including her relatives and elders. she was unable to bear the cruelty to which she was subjected,by the accused persons.on 15th february,2003,the deceased committed suicide by hanging herself in the house of the accused. when pathan basheerunnisa, returned from her work,the accused sent her out giving her money to bring the soaps upon which she went out and when she came back,she found the accused absent and the bride hanging in the house. subsequently, basheerunnisa sent her grandson inayatullah to the house of the parents of the deceased to inform them about the incident. when the parents of the deceased came to the house of the accused and found the deceased hanging from the beam with a saree,they untied her and took her to the government general hospital,guntur hoping that the deceased may be alive. however,upon medical examination by the doctor,she was declared brought dead. the father of the deceased yasin khan and her mother shamshad begum, were present at that time. the fir was registered under section 304b and section 498a of the indian penal code,1860. thereafter,investigation was conducted. he inspected the site from where he recovered and seized the saree that had been used for hanging. the body was sent for postmortem examination,also took photographs of the scene. autopsy was conducted over the body of the deceased and prepared post-mortem certificate giving the cause of death as asphyxia,as a result of hanging.investigating officer arrested all the three accused persons. ANALYSIS accused were charged with offences under sections 498a and 304b of the ipc. the fir in the present case was lodged the father of the deceased. according to this witness,on 23rd january,2002,the marriage of his daughter was solemnised with accused pathan hussain basha and he had accepted to give rs.25,000/in marriage. he had given only rs.15,000/and had agreed to pay rs.10,000/-,after four months. this witness has further specifically stated that the said accused treated his daughter in a proper manner for about two months. in the marriage,he had also given a gold chain,a double bed,an iron safe and other items. the accused asked for rs.1,000/with a ring for the deceased. the witness could pay only rs.500/upon which the accused refused to take the deceased to the matrimonial home and went away. lw-7 confirmed that rs.15,000/was given at the time of marriage and rs.10,000/was to be given within some time,which the father of the deceased failed to provide. according to him,the accused persons used to harass the deceased primarily for non-payment of the amount of dowry,as a result of which,she was forced to commit suicide. the dowry demands were being raised by the accused persons persistently from the family of the deceased and for that they even harassed the deceased,by beating and abusing her. she had informed her parents of the ill-treatment and the cruelty inflicted on her for non-giving of dowry. it was appropriate for the court to examine as to what are the ingredients of an offence punishable under section 304b of the ipc. in the case of biswajit halder alias babu halder and others v.state of w.b.[(2008) 1 scc 202 2007 indlaw sc 304],the court stated the basic ingredients to attract the provisions of section 304-b are (1) the death of a woman should be caused by burns or fatal injury or otherwise than under normal circumstances; (2) such death should have occurred within seven years of her marriage; (3) she must have been subjected to cruelty or harassment by her husband or any relative of her husband; and (4) such cruelty or harassment should be for or in connection with demand for dowry. for the purpose of section 113-b of the evidence act, 'dowry death' shall have the same meaning as in section 304-b of indian penal code. if section 304-b ipc is read together with section 113-b of the evidence act,a comprehensive picture emerges that if a married woman dies in unnatural circumstances at her matrimonial home within 7 years from her marriage and there are allegations of cruelty or harassment upon such married woman for or in connection with demand of dowry by the husband or relatives of the husband,the case would squarely come under "dowry death" and there shall be a presumption against the husband and the relatives. where the husband had demanded a specific sum from his father-in-law and upon not being given,harassed and tortured the wife and after some days she died,such cases would clearly fall within the definition of "dowry" under the act.s.4 of the act is the penal section and demanding a "dowry",as defined under s.2 of the act,is punishable under this section. as already noticed,the court need not deliberate on this aspect,as the accused before the court has neither been charged nor punished for that offence. the court examined the provisions of s.2 of the act in a very limited sphere to deal with the contentions raised in regard to the applicability of the provisions of section 304-b of the code. the court cannot ignore one of the cardinal principles of criminal jurisprudence that a suspect in the indian law is entitled to the protection of art.20 of the constitution of india as well as has a presumption of innocence in his favour. in other words,the rule of law requires a person to be innocent till proved guilty. the concept of deeming fiction is hardly applicable to the criminal jurisprudence. in contradistinction to this aspect,the legislature has applied the concept of deeming fiction to the provisions of section 304-b. where other ingredients of section 304-b are satisfied,in that event,the husband or all relatives shall be deemed to have caused her death. in other words,the offence shall be deemed to have been committed by fiction of law. once the prosecution proves its case with regard to the basic ingredients of section 304-b,the court will presume by deemed fiction of law that the husband or the relatives complained of,has caused her death. such a presumption can be drawn by the court keeping in view the evidence produced by the prosecution in support of the substantive charge under section 304-b of the code. the ingredients of section 304b read with section 498a ipc are completely satisfied in the present case. the accused did not care to explain as to how the death of his wife occurred. denial cannot be treated to be the discharge of onus. onus has to be discharged by leading proper and cogent evidence. it was expected of the accused to explain as to how and why his wife died,as well as his conduct immediately prior and subsequent to the death of the deceased. maintaining silence cannot be equated to discharge of onus by the accused. in the present case,the prosecution by reliable and cogent evidence has established the guilt of the accused. there being no rebuttal thereto,there is no occasion to interfere in the judgments of the courts under appeal. the offences having been proved against the accused and keeping in view the attendant circumstances,the court was of the considered view that ends of justice would be met,if the punishment awarded to the appellants is reduced.

in these appeals the dispute relates to payment of compensation pursuant to acquisition of land of respondent m s. jaswant sugar mills ltd hereinafter referred to as the company and auction of part of the land of the company. there being cross claims all of these appeals were heard together for determination by a common judgment. the company preferred two writ petitions challenging the orders passed by the district magistrate collector meerut and board of revenue dated 18th december1995 and 3rd august1996 respectively. the aforesaid orders were also challenged by the state government. the writ petitions were disposed of by the learned single judge of allahabad high court by a common judgment dated 1st. march2011 by the said judgment the high court directed the state government to pay the company the compensation on the basis of the compromise reached between the state government and the tenure holder company for acquisition of their land by meerut development authority. it is also directed that out of compensation paid by the meerut development authority about rs 4 33 crores an amount of rs 1 62 crores shall be deducted and the remaining amount shall be paid to the company. the state has been given liberty to realize the said amount from those authorities to whom it was wrongly paid by the previous collector tulsi gaur under his order dated 20th. february1992 the impugned judgment dated 1st march2011 has been challenged by the state of u p in c a nos 6169 6171 of 2013 state of u p ors. m s jaswant sugar mills ltd ors etc as also by m s jaswant sugar mills ltd in c a nos 6172 6174 of 2013. ors m s. jaswant sugar mills ltd vs. the colletor district magistrate ors. a piece of land of the company was put to auction for recovery of dues of the company. it was challenged by the company by filing a writ petition. the high court by impugned judgment dated 27th april2001 cancelled the auction sale and allowed the writ petition. in a review application preferred by auction purchaser the high court by order dated 3rd september2001 directed the respondents to refund the amount to the auction purchasers. the aforesaid judgment and orders are under challenge in c a nos 7122 of 20037123 7124 of 20037125 of 2003 and 7126 7129 of 2003. c a nos 6169 6171 of 2013 and c a nos 6172 6174 of 2013. for determination of the issue involved in c a nos 6169 6171 of 2013 and c a nos 6172 6174 of 2013it is desirable to refer the relevant factual matrix of the case which is as follows. the proprietors of respondent company namely m s jaswant sugar mills ltd had six business units as under m s. jaswant sugar mills. meerut straw board mills. pootha farm. northern india paper mills. bindal vanaspati ghee mills. meduwala open pan sugar bijnor. the company was in heavy arrears as on 3rd january1977 to the extent of rs 1 14 crores. accordingly the district collector meerut appointed a receiver under section 286 a of u p zamindari abolition and land reforms acthereinafter referred to as the zamindari abolition act. subsequently the company was acquired by the state on 28th october1984. as per provisions of the u p state sugar undertakings acquisition act1971 hereinafter referred to as the acquisition act1971as amended in the year 1984free from all encumbrances and the said unit was vested with the u p state sugar corporation hereinafter referred to as the corporation. since the company was in arrears to the extent of rs 1 29 crores the district collector meerut by order dated 28th november1984attached all the remaining five constituent units except the sugar mill. the general manger of the aforesaid sugar unit was appointed as a receiver with reference to all the aforesaid remaining five units. in between 1977 to 1984for smooth functioning of the sugar mill payment of dues to sugarcane grower repairing of machinery etc. on the request of the receiver the state government granted loan of rs 6 13 crores to the company and was to be recovered as the arrears of land revenue along with interest. the district collector meerut taking into consideration the dues to the extent of rs 1 62 crores as on 24th october1990 were to be paid by the company extended the tenure of the receiver till further orders. the order of the extension of tenure of the receiver was challenged by the ex proprietors of the company in a writ petition no 184961991 subsequently the receiver was withdrawn on 18th december1995therefore the writ petition was also withdrawn. pursuant to uttar pradesh imposition of ceiling of land holdings act hereinafter referred to as the ceiling actland admeasuring 723 3 bigha belonging to the company was declared surplus. against the same a writ petition no 39051987 was preferred by the company. during the pendency of the aforesaid writ petition the state government issued a notification dated 14th august1987 u s 4 read with s 174 of the land acquisition act1894 for the meerut development authority. it was followed by a notification dated 4th september1987 issued u s 6 of the acquisition act. the said notification included the land of m s pootha farm a constituent unit of the company. in the said case compensation amount of rs 4 33 crores was awarded by special land acquisition officer vide award dated 22nd february1990. the district collector meerut pursuant to a report of the tehsildar ordered to pay the compensation amount after adjustment of different dues payable by the company 11 pursuant to a court 's order the district collector meerut passed a speaking order dated 20th february1992 showing the details of adjustments to be made out of compensation amount of rs 4 34 crores payable by the company as detailed below. the district collector in the said order dated 20th february1992 concluded that after such adjustment the following dues were still to be paid by the company. the state government filed the deduction statement for recovery of the dues before the prescribed authority constituted under u p sugar undertaking acquisition act1971 however the aforesaid claim was rejected by the prescribed authority by order dated 4th october1994 in claim no 13 of 1999. against the said order dated 4th october1994 passed by the prescribed authority the appellant filed appeal no 195 before the appellate tribunal. by order dated 12th october1995the appellate tribunal directed the appellant to file a fresh deduction claim before the prescribed authority. the company moved an application before the district collector meerut stating therein that as on date there are no arrears liability payable by the company therefore requested to remove the receiver. the district collector meerut by order dated 18th december1995allowed the case no 301995 with observation that as on the date no recovery certificate was pending against the company. hence the appointment of receiver was terminated with immediate effect. it was further ordered that a detailed list of the assets be prepared and signed by both the parties and the assets be transferred to the company. an order was passed to appoint a chartered accountant to complete the audit of the accounts. as the order dated 18th december1995passed by the district collector meerut is silent about the amount payable to the company the ex proprietor of the company moved an application before the chairman board of revenue and requested to refund the compensation amount to the company. the company filed a writ petition no 102201996 before high court for modification of the order of the district collector meerut dated 18th december1995. during the pendency of the said case the chairman board of revenue by order dated 3rd august1996 directed that out of the total amount of rs 4 33 crores received as compensation from meerut development authority after deduction of a sum of rs 1 62 crores along with interest and collection charges the balance amount shall be refunded to the company. against the aforesaid order dated 3rd august1996 passed by the chairman board of revenue the company filed writ petition no 313781996 on the ground that there is no dues payable by the company. in the said case the u p state sugar corporation ltd filed a counter affidavit refuting such stand taken by the company. a separate counter affidavit was filed by the deputy secretary sugar and cane development lucknow giving details of dues payable by the company as detailed by the district collector meerut by his order dated 18th december1995. the high court initially passed an interim order on 17th july1997 as under considering the facts and the circumstances of the case the respondents are directed to pay to m s ltd. meerut the amount of compensation money amounting to rs 43394783 40 after deducting a sum of rs 16202402 20 interest and collection charges within a period of two months from today. payments so made shall be subject to final decision of the writ petition. against the interim order the appellant state filed the special appeals. by judgment and order dated 7th july2010 passed in special appeal nos 5179 802010the high court quashed the interim order dated 17th july1997 passed by the learned single judge. it was ordered to dispose of the writ petition expeditiously. in the meantime the district collector by its notice dated 22nd august2005directed the company to refund certain amount. the said notice was also challenged by the company. the high court by judgment and order dated 23rd february2011 quashed the notice dated 22nd august2005. with direction to the appellant to pay the compensation amount to the company. however it was clarified that if the land which have been acquired finally does not fall within the ceiling limit of the company then it will be open for the state to recover it after the finalisation of the ceiling proceedings as per law. subsequently impugned common judgment and order dated 1st. march2011 was passed in writ petition no 313781996etc. with observation and directions as referred to above. the grievance of the appellant state is that the high court while passing the impugned order has not noticed the liability incurred by the undertaking and the loan paid to the company. according to the appellant the aforesaid issue has not been decided. on the other hand learned counsel for the respondents made the following submissions i no amount whatsoever is due and payable by the company to the state. till date there has not been a single determination adjudication by any court authority of any dues against the company nor is there any claim pending before any authority or before any court on date. furthermore the state has not been able to produce any recovery certificate of any department showing any dues against the company. the collector has no power to adjudicate the dues under the u p zamindari abolition and land revenue act and is merely a recovery agent to recover sums payable as arrears of land revenue upon receipt of a valid recovery certificate. we have heard learned counsel for the parties and perused the records. it is not in dispute that the company was under heavy arrears as on 3rd january1977 therefore the district collector meerut appointed the receiver. subsequently sugar mill of the company was acquired on 28th october1984. under sugar undertakings acquisition act1971 and the unit was vested with the u p state sugar corporation. till 28th november1984the company was the owner of the units sugar mill. it was in arrears to the extent of rs 1 29 crores. therefore the district collector meerut attached remaining five constituent units and the general manager of the sugar unit was appointed as a receiver. in between 1979 and 1984the state government extended a facility of loan to the extent of rs 6 13 crores to the receiver appointed by the state government for smooth functioning of the sugar mill including payment of dues to sugarcane grower repairing of machinery etc. it is also not in dispute that labour and other dues were payable by the company apart from sale tax dues and the loan was given by the state government between 1977 1984 for payment of such dues. the high court by the impugned judgment dated 1st march2011though noticed the aforesaid facts including the fact that the collector tulsi gaur by order dated 20th february1992 held that there were dues of about rs 10 44 crores payable by the company part of which can be adjusted from the compensation amount paid by the meerut development authority even thereafter an amount of rs 6 09 crores will remain payable by the company but the high court failed to address such issue. the high court though noticed that s 8 of the u p state sugar undertakings acquisition act1971 empowers the prescribed authority to decide any dispute regarding the amount payable to any person or authority in respect of earlier liabilities of the undertaking but it wrongly held that in view of the provisions of the u p sugar undertakings acquisition act1971. any liability incurred by the company or loan etc taken by the receiver is not payable by the company. it is always open to the competent authority to seek recovery of the amount if due from the company or to adjust the dues. the collector tulsi gaur was not a party by name. the order dated 20th february1992 passed by the collector was also not under challenge inspite of the same the high court declared the order dated 20th february1992 as illegal. for the reason aforesaid the impugned order dated 1st march2011 passed by the high court in w p no 10220 of 1996 etc cannot be upheld. the same is accordingly set aside. the matter is remitted to the district collector meerut to determine the liability of the company upto the date of vesting i e 28th october1984 after notice to the parties. the authority while so determining shall take into consideration the liability of the company as on 28th october1984including labour charges sales tax loan amount given by the state government etc if payable. after determination of liabilities and adjustment of the dues which is payable by the company if any amount is found payable to the company the appellant shall pay the amount within four months from the date of determination. on the other hand if any amount is found payable by the company the competent authority may recover the amount in accordance with law. c a no 7122 of 2003c a nos 7123 7124 of 2003 and c a no 7125 of 2003. for determination of the issue involved in c a nos 7122 of 20037123 7124 of 20037125 of 2003 and 7126 7129 of 2003 relevant factual matrix of the case is as follows. after giving credit of rs 4 33 crores payable by the state government on account of amounts towards compensation for acquisition of land the liability of the company was determined at rs 6 09 crores on 20th february1992 a sale proclamation was accordingly issued. the land of the company measuring 1 391 hectares in village maliyana was put to auction. the appellants m s. rudra estate pvt. ltd and another were the highest bidders. according to auction purchasers the entire amount was paid as per highest bid. title to the land was also transferred in their favour. the company being aggrieved preferred a civil misc. writ petition no 16451 of 1999 before the high court of judicature at allahabad challenging the sale proclamation dated 28th march1992order dated 30th may1992 passed by sub divisional magistrate meerut confirming the sale of the properties owned by the company and the order dated 5th april1999 passed by the commissioner meerut division meerut whereby the objections filed by the company under rule 285 1 of the rules framed under u p zamindari abolition and land reforms act hereinafter referred to as the land reforms act was rejected. the said writ petition was allowed by the learned single judge by the impugned judgment and order dated 27th april2001 with following observations for the facts and reasons stated above this petition succeeds and is hereby allowed. the order dated 05 04 1999 annexure 23order dated 30 05 1992 annexure 7sale proclamation dated 28 3 1992 annexure 2 are hereby quashed and the respondents are directed to restore back status quo ante as on before the auction sale dated 28 04 1992 was held within a period of two weeks from the date a certified copy of this order is communicated to the competent authority. ltd being aggrieved by the said judgment preferred review application under order xlvii rule 1 cpc for review of the judgment and order dated 27th april2001 passed by the high court. the review application was disposed of by an order dated 3rd september2001 with the following observations in view of the aforesaid facts and circumstances in my opinion it will meet the ends of justice if i grant three months time to the respondent no 2 and 3 to refund the amount in question to the auction purchasers application during this time the said amount shall positively be paid to them. it is ordered accordingly. another application was filed by m s ltd under order xivii rule 1 cpc for review of the order dated 3rd september2001 the said review application was dismissed by the impugned judgment dated 15th march2002. the aforesaid orders have been challenged in c a no 7122 of 2003 m s rudra estate pvt ltd anr vs. jaswant sugar mills ltd ors c a nos 7123 7124 of 2003c a no 7125 of 2003 shri munindra singh anr vs. jaswant sugar mills ltd ors. and c a nos 7126 7129 of 2003 commissioner meerut division meerut vs m s jaswant sugar mills ltd. on 30th october2002 c a no 7122 of 2003 preferred by m s ltd was taken up and this court passed the following order delay condoned. out of the 3 special leave petitions the only special leave petition which we find worth being entertained after hearing the learned senior counsel for the petitioners is as against the order dated 15 3 2002 issue notice to respondents no 2 to 4 only limited to the question as to why the amount directed to be refunded to the petitioner should not bear reasonable interest. dasti service in addition is permitted. the other two special leave petitions are dismissed. on 24th january2003c a nos 7123 24 of 2003 preferred by shri munindra singh anr were taken up and this court passed the following order delay condoned. permission to file the special leave petition is granted. after hearing the learned counsel for the petitioners we are satisfied that no fault can be found with the impugned judgment of the high court so far as the setting aside of the sale is concerned. the learned counsel for the petitioners invites our attention to the order dated 20 10 2002 page 94c of the paper book issue notice to respondent nos 1 to 4 limited to the question as to why the amount which will be directed to be refunded to the petitioners herein consequent upon the sale having been set aside should not bear reasonable interest. tag with slpcno 215402002. as against the said order c a nos 7126 292003. commissioner meerut division meerut ors. jaswant sugar mills ltd have been preferred by the commissioner meerut division meerut. the said case was also tagged with the aforesaid appeals. in view of the fact that this court vide order dated 27th. april2003 in c a nos 7123 7124 of 2003 held that this court is satisfied that no fault can be found with the impugned judgment of the high court so far as the setting aside of the sale is concerned we dismiss the appeals so far it relates to cancellation of auction sale. we have heard the parties only on the limited question as to why the amount which has been directed to be refunded to the auction purchasers appellants herein should not bear reasonable interest. in a situation like in the present case one can not hold of any statute entitling the auction purchasers to claim interest in case the auction got cancelled or set aside by the court of law. counsel for the parties also could not refer any of the clauses of auction prescribing interest on refund of amount in case of cancellation of auction or sale. the question arises as to whether in such a situation an auction purchaser can claim interest on equitable ground. in state of maharashtra and others vs maimuma banu and others2003 7 scc 448 2003 indlaw sc 625the question arose as to whether interest was payable on rental compensation. in the said case government resolution provided for payment of rental compensation expeditiously but no provision was made to pay interest in case of delayed payment. this court in the said case held 10 the crucial question is whether there can be any direction for interest on rental compensation once it is held that the same has to be paid within the time frame notwithstanding the fact that there is no statutory obligation. 11 it is not in dispute that in certain cases payments have already been made. though the inevitable conclusion is that the high court is not justified in directing grant of interest on the logic of various provisions contained in the act yet there is an element of equity in favour of the landowners. it is however seen that the writ applications were filed long after the possession was taken. this factor can not be lost sight of while working out the equities. it would therefore be appropriate if the appellants pay interest. 6 from 1 4 2000 till amounts payable as rental compensation are paid to the landowners concerned. this direction shall not apply to those cases where the payments have already been made prior to 1 4 2000 appeals are allowed to the extent indicated without any stipulation of costs. in the present case we find that there was no mis representation on the part of the auction purchasers they deposited the total auction amount within the time stipulated. it has not been in dispute that the title of the land was also transferred in their favour. but for the reasons mentioned by the high court the sale has been cancelled. it has been ordered to refund amount in favour of the auction purchaser appellants we find no reason as to why on equitable grounds the appellants should not get interest on the said amount. taking into consideration the aforesaid factor while working out equities it would therefore be appropriate to direct the state to pay interest at the rate of 6 on the amount to be refunded as per the high court 's order with effect from 27th april2001 and 3rd. september2001the day the high court passed the impugned order. the concerned respondents are directed accordingly. c a nos 6169 6171 of 2013c a nos 6172 6174 of 2013c a no 7122 of 2003c a nos 7123 7124 of 2003c a no 7125 of 2003 are allowed in terms of the directions as above. the appeals c a nos 7126 7129 of 2003 filed by the commissioner meerut are dismissed. no costs. appeals dismissed.

IN-Ext

FACTS in these appeals the dispute relates to payment of compensation pursuant to acquisition of land of respondent-m/s. jaswant sugar mills ltd. and auction of part of the land of the company. the company preferred two writ petitions challenging the orders passed by the district magistrate, which were disposed of by the learned single judge of allahabad high court by a common judgment. by the said judgment,the high court directed the state government to pay the company the compensation on the basis of the compromise reached between the state government and the tenure holder company for acquisition of their land by meerut development authority. it is also directed that out of compensation paid by the meerut development authority (about rs.4.33 crores) an amount of rs.1.62 crores shall be deducted and the remaining amount shall be paid to the company. the high court by impugned judgment dated 27th april,2001 cancelled the auction sale and allowed the writ petition. in a review application preferred by auction purchaser,the high court by order dated 3rd september,2001 directed the respondents to refund the amount to the auction purchasers. the aforesaid judgment and orders are under challenge in c.a.nos.7122 of 2003,7123-7124 of 2003,7125 of 2003 and 7126-7129 of 2003. c.a.nos.6169-6171 of 2013 and c.a.nos.6172-6174 of 2013. during the pendency of the writ petition the state government issued a notification dated 14th august,1987 u/s.4 read with s.17(4) of the land acquisition act,1894 for the meerut development authority. it was followed by a notification dated 4th september,1987 issued u/s 6 of the acquisition act. the said notification included the land of m/s pootha farm,a constituent unit of the company. in the said case compensation amount of rs.4.33 crores was awarded by special land acquisition officer vide award dated 22nd february,1990 the company moved an application before the district collector,meerut stating therein that as on date there are no arrears/liability payable by the company,therefore,requested to remove the receiver. the district collector,meerut by order dated 18th december,1995,allowed the case no.30/1995 with observation that as on the date no recovery certificate was pending against the company. hence,the appointment of receiver was terminated with immediate effect. it was further ordered that a detailed list of the assets be prepared and signed by both the parties and the assets be transferred to the company. the high court by judgment and order dated 23rd february,2011 quashed the notice dated 22nd august,2005. with direction to the appellant to pay the compensation amount to the company. however,it was clarified that if the land,which have been acquired finally,does not fall within the ceiling limit of the company,then it will be open for the state to recover it after the finalisation of the ceiling proceedings,as per law. subsequently,impugned common judgment and order dated 1st. march,2011 was passed in writ petition no.31378/1996,etc.,with observation and directions as referred ARGUMENT the grievance of the appellant-state is that the high court while passing the impugned order has not noticed the liability incurred by the undertaking and the loan paid to the company. according to the appellant,the aforesaid issue has not been decided. on the other hand,learned counsel for the respondents made the following submissions: (i. no amount,whatsoever,is due and payable by the company to the state. till date,there has not been a single determination/adjudication by any court/authority of any dues against the company nor is there any claim pending before any authority or before any court,on date. furthermore,the state has not been able to produce any recovery certificate of any department showing any dues against the company. ii. the collector has no power to adjudicate the dues under the u.p.zamindari abolition and land revenue act and is merely a recovery agent to recover sums payable as arrears of land revenue,upon receipt of a valid recovery certificate. ISSUE the aforesaid orders have been challenged in c.a.no.7122 of 2003 (m/s. rudra estate pvt.ltd.&; anr.vs. jaswant sugar mills ltd.&; ors.),c.a.nos.7123-7124 of 2003,c.a.no.7125 of 2003 (shri munindra singh &; anr.vs. jaswant sugar mills ltd.&; ors. and c.a.nos.7126-7129 of 2003 (commissioner,meerut division,meerut vs. m/s jaswant sugar mills ltd. ANALYSIS it is not in dispute that the company was under heavy arrears as on 3rd january,1977. therefore,the district collector,meerut appointed the receiver. it is also not in dispute that labour and other dues were payable by the company apart from sale tax dues and the loan was given by the state government between 1977-1984 for payment of such dues. the order dated 20th february,1992 passed by the collector was also not under challenge,inspite of the same the high court declared the order dated 20th february,1992 as illegal. the parties only on the limited question as to why the amount which has been directed to be refunded to the auction purchasers-appellants herein should not bear reasonable interest. in a situation like in the present case,one cannot hold of any statute entitling the auction purchasers to claim interest,in case the auction got cancelled or set aside by the court of law. counsel for the parties also could not refer any of the clauses of auction prescribing interest on refund of amount in case of cancellation of auction or sale. the question arises as to whether in such a situation an auction purchaser can claim interest on equitable ground. in state of maharashtra and others vs. maimuma banu and others,(2003) 7 scc 448 2003 indlaw sc 625,the question arose as to whether interest was payable on rental compensation. in the present case, there was no mis-representation on the part of the auction purchasers; they deposited the total auction amount within the time stipulated. it has not been in dispute that the title of the land was also transferred in their favour. but for the reasons mentioned by the high court the sale has been cancelled. it has been ordered to refund amount in favour of the auction purchaser. appellant(s). there is no reason as to why on equitable grounds the appellants should not get interest on the said amount. taking into consideration the aforesaid factor while working out equities,it would,therefore,be appropriate to direct the state to pay interest at the rate of 6% on the amount to be refunded as per the high court's order with effect from 27th april,2001 and 3rd. september,2001,the day,the high court passed the impugned order.

leave granted in slp crl. no 37372014. these appeals are preferred by four accused against the common judgment of the high court of chhattisgarh at bilaspur confirming the judgment of the additional sessions judge bemetara district durg convicting the appellants u s 302 read with ss 34 and 120b of the indian penal code hereinafter referred to as ipc and sentencing each of them to undergo imprisonment for life with a fine of rs 1000 and in default to undergo additional rigorous imprisonment for three months. these appeals have been taken up for disposal together since they arise from a common judgment of the high court deciding the appeals of the accused. the appellant raju. devendra choubey accused no 4 has filed criminal appeal no 822 of 2012 the appellant mahesh accused no 3 has filed criminal appeal no 867 of 2013 the appellant beenu. chandra prakash accused no 2 has filed criminal appeal no 589 of 2014 the appellant smt. shashi tripathi accused no 1 has filed criminal appeal arising out of special leave petition criminal no 3737 of 2014. pw 1 dr. sharda prasad tripathi is the husband of accused shashi tripathi. on 25 11 2003when pw 1 dr. sharda prasad tripathi came home from his clinic found that his daughter in law bhavna tripathi has been murdered. he lodged a first information report f i r on 25 11 2003 at about 2045 hours. the crime was registered. he deposed in court that on 25 11 2003when he returned home he found servant anil kumar pw 21 was weeping. when he went inside he found his daughter in law bhavna and wife shashi lying in the courtyard. bhavna was dead. shashi was unconscious. there were numerous injuries including incised wounds on bhavna none on shashi. after registration of the crime inquest was conducted over the dead body of bhavna on 26 11 2003 post mortem was conducted by dr naresh tiwari and dr m deodhar who gave their report which is marked as exhibit p18 spot map was prepared by the inquiry officer io bloodstained cloth of accused shashi tripathi was taken into possession along with broken bangles bloodstained cement mortar and plain cement mortar were also taken into possession. shashi tripathi mahesh and binu. chandra prakash were arrested on 29 11 2003 a bloodstained knife was taken into possession. the accused raju. devendra choubey was taken into custody on 22 12 2003 and a suzuki motorcycle was also taken into possession. a test identification was conducted by the executive magistrate in the sub jail bemetara on 13 12 2003 a similar identification parade of raju. devendra choubey was conducted on 26 12 2003 after his arrest. a sealed packet containing hair found in the grip of the deceased and another sealed packet containing bloodstained cloth of the deceased were taken into possession vide exhibit p35. after committal the trial court framed charges u s 302 read with ss 34 and 120b of the ipc the prosecution examined 32 witnesses. no defence witness was examined after the statements of the accused were recorded u s 313 of the criminal procedure code1973. according to the prosecution the accused shashi tripathi is the step mother in law of deceased bhavna tripathi. bhavna was married to her step son jitendra kumar in july2003 shashi tripathi used to be annoyed with bhavna tripathi on account of some domestic dispute. she engaged the other accused for murdering bhavna. bhavna was murdered on 25 11 2003 at about 1830 hours in the house where she resided with shashi tripathi. there is no dispute that bhavna 's death is homicidal. dr m deodhar who conducted the postmortem opined that cause of her death was neurogenic and hemorrhagic shock. the injuries found on person of the deceased were as follows external injuries 1 incised wound on left scapular region of size 3 cm x 1 cm 2 incised wound on left scapular region of size 4 cm x 1 cm. x 1 cm 3. one incised wound on left auxiliary region on the posterior auxiliary region of size 3 cm x 2 cm x 3 cm. 4 incised wound on lower costal region left of size. 3 cm x 2 cm x 1 cm 5 incised wound on lower costal region right side on right epigestic region of size 3 cm. x 3 cm with punctured wound 6 incised wound over right costal region of size 3 cm x 2 cm x 1 cm. 7 incised wound on right supra mammary region near middle of size 4 cm x 1 cm x 1 cm 8 incised wound on right supra mammary region lateral aspect of size 3 cm x 1 cm x 1 cm 9 incised wound on radial aspect of left forearm near wrist joint of size 2. cm x cm x cm 10 incised wound on forearm left hand radial side dorsal aspect on lower 23rd region 11 incised wound on left forearm middle l3rd region radial side and posterior aspect of size 2. x 1 cm x 1 cm 12 incised wound on left hand dorsal aspect on 2 nd and 3rd metacarpal region of size 2 cm. x cm. x 1 cm 13 incised wound on ulna region of left hand on lower 13rd region of size 1 cm. x cm x 1 cm and 14 incised wound over left side of neck on anterior triangle of size 2 cm. x 1 cm. internal injuries brain membrane pale lungs trachea pale punctured wound on right and left lungs of size 2 cm x 1 cm2 cm and 1 cm. x 3 cm lobe was cut and there was 3 cm punctured wound. incised wound was also present on the right lobe of size 3 cm x 13 cm x 3 cm. liver kidney and spleen were pale. the deceased was carrying fetus of two months. the sole eyewitness was a boy of 13 years of age anil kumar pw 21who worked as a servant with the family. shashi tripathi had brought him home from bilaspur. he participated in the identification parade which was held in sub jail bemetara and identified the accused persons in the court by touching them. we have carefully examined the manner in which the identification parade was conducted and the manner in which the boy anil kumar pw 21 identified the accused in court and we have no reason to doubt the identification of the accused which assumes importance in this case since the boy did not know the accused before the incident. it is anil kumar pw 21who first informed the head of the family dr sharda prasad tripathi pw 1the complainant about the incident when he came home after closing his clinic. he deposed before the court that shashi didi accused brought him to village jevra from bilaspur. he lived in the house of shashi didi. he ate his food there and studied in a school. he deposed that doctor sahab is her husband and shivendra and jitendra are her sons. jitendra is her step son and the deceased bhavna is the wife of jitendra. she resided with shashi didi. jitendra is a doctor resided and practiced at khamaria whereas his wife resided at jevra. his brother shivendra studies at calcutta. he referred to bhavna as bhabhi. he stated that shashi didi and bhavna sometimes used to quarrel. about the assault he deposed that devendra caught bhavna and chandra prakash attacked her with knife 3 to 4 times and she fell down. the incident occurred in the courtyard and shashi didi was present in the passage. mahesh the fourth accused was standing outside the house. after the assault chandra prakash went to the tv room where shashi didi had kept some money in a rubber band on the table. the accused chandra prakash had threatened him not to disclose anything about the incident to anyone. thereafter all the three accused fled from there. he further deposed that shashi didi took him upstairs to the terrace and asked him not to disclose the truth to anyone but to say that thieves came into the house and committed the crime. shashi didi thereafter started shouting. then she lay down on the courtyard near bhavna bhabhi. this deposition clearly implicates accused nos 12 and 4 the picture that emerges is that shashi tripathi caused bhavna to be killed and for this purpose engaged chandra prakash accused no 2 and raju. devendra choubey accused no 4 by paying them money. she also seems to have had a scuffle with bhavna which is apparent from the fact that her hair was found in the grip of the deceased during investigation. it is obvious that accused nos 2 and 4 did not enter the house to commit a robbery and had a single mission namely to kill bhavana. there is no evidence that they had any previous animosity with the deceased and appeared to have acted as contract killers. the prosecution has found it difficult to pinpoint the motive but shashi tripathi 's husband dr sharda prasad tripathi pw 1 deposed before the court that she tried to create a hindrance in the marriage of his son jitendra since she wanted her daughter abhilasha to marry him however he went ahead with the marriage of jitendra to bhavna whereupon shashi tripathi remained silent. the credibility of the evidence of anil kumar pw 21 was attacked by the learned counsel for the appellants who submitted that the boy is a tutored witness who has been influenced by the police with whom he spent a lot of time. in fact he even came to the court in the company of a police constable after being served summons at allahabad. the learned counsel submitted that the evidence of a child witness must be carefully scrutinized before acceptance since a child can be easy prey for tutoring and the court must insist on corroboration from other evidence. on a careful perusal of the deposition of this child witness we have not found any reason why he would have lied. he was brought to the house by shashi tripathi accusedwho apparently took care of him and sent to school and gave him food and residence. he had no grouse against her neither any ulterior motive in identifying the accused who were not acquainted to him. there was no reason for the sole eye witness anil pw 21 to implicate anybody falsely. merely because he has been some time in the company of the police at the police station his testimony can not be discarded as untrue. the incident occurred within the four walls of the house of the accused shashi tripathi and the only witness was the boy anil. pw 21 his statement that the accused chandra prakash attacked the deceased is corroborated by the recovery of knife from chandra prakash. it must be remembered that the boy comes from a rural back ground and was 13 years of age when the incident occurred. his presence in the house is entirely natural and we have no reason to discard his testimony. the learned counsel for the appellants forcefully attacked the conviction of the other accused viz mahesh chandra prakash and devendra kumar who admittedly were not known to the child witness anil kumar. it was submitted that the test identification parade were delayed and the identification of these accused by the witness in court was not reliable. it is not possible for us to accept this contention. mahesh and chandra prakash were arrested on 29 11 2003their identification parade was conducted on 13 12 2003 within a fortnight or so. the accused devendra kumar was arrested on 22 12 2003 and his identification parade was conducted on 26 12 2003 within four days there is no evidence on record to show that the child witness had an opportunity to see and study the features of the accused between their arrest and test identification parade to enable a tutored identification. in any case the period between the arrest and the identification parade was not large enough to constitute inordinate delay. the learned counsel for the appellants relied upon the judgment of this court in budhsen and anr. state of u p 1970 2 scc 128 1970 indlaw sc 136 where this court made the following observations 7 now facts which establish the identity of an accused person are relevant u s 9 of the indian evidence act. as a general rule the substantive evidence of a witness is a statement made in court. the evidence of mere identification of the accused person at the trial for the first time is from its very nature inherently of a weak character. the evidence in order to carry conviction should ordinarily clarify as to how and under what circumstances he came to pick out the particular accused person and the details of the part which the accused played in the crime in question with reasonable particularity. the purpose of a prior test identification therefore seems to be to test and strengthen the trustworthiness of that evidence. it is accordingly considered a safe rule of prudence to generally look for corroboration of the sworn testimony of witnesses in court as to the identity of the accused who are strangers to them in the form of earlier identification proceeding. there may however be exceptions to this general rule when for example the court is impressed by a particular witness on whose testimony it can safely rely without such or other corroboration. the identification parades belong to the investigation stage. they are generally held during the course of investigation with the primary object of enabling the witnesses to identify persons concerned in the offence who were not previously known to them. this serves to satisfy the investigating officers of the bona fides of the prosecution witnesses and also to furnish evidence to corroborate their testimony in court. identification proceedings in their legal effect amount simply to this that certain persons are brought to jail or some other place and make statements either express or implied that certain individuals whom they point out are persons whom they recognise as having been concerned in the crime. they do not constitute substantive evidence. these parades are of the essentially governed by section 162criminal procedure code. it is for this reason that the identification parades in this case seem to have been held under the supervision of a magistrate. keeping in view the purpose of identification parades the magistrates holding them are expected to take all possible precautions to eliminate any suspicion of unfairness and to reduce the chance of testimonial error. they must therefore take intelligent interest in the proceedings bearing in mind two considerations i that the life and liberty of an accused may depend on their vigilance and caution and ii that justice should be done in the identification. those proceeding should not make it impossible for the identifiers who after all have as a rule only fleeting glimpses of the person they are supposed to identify. generally speaking the magistrate must make a note of every objection raised by an accused at the time of identification and the steps taken by them to ensure fairness to the accused so that the court which is to judge the value of the identification evidence may take them into consideration in the appreciation of that evidence. the power to identify it may be kept in view varies according to the power of observation and memory of the person identifying and each case depends on its own facts but there are two factors which seem to be of basic importance in the evaluation of identification. the persons required to identify an accused should have had no opportunity of seeing him after the commission of the crime and before identification and secondly that no mistakes are made by them or the mistakes made are negligible. the identification to be of value should also be held without much delay. the number of persons mixed up with the accused should be reasonably large and their bearing and general appearance not glaringly dissimilar. the evidence as to identification deserves therefore to be subjected to a close and careful scrutiny by the court. the observations of this court undoubtedly lay down the correct law and we have no reason to doubt them. we however do not see how the observations help the appellants. in the present case the child witness has been found to be reliable. his presence is not doubted since he resided with the family for whom he worked. he had no axe to grind against any of the accused. he became the unfortunate witness of a gruesome murder and fearlessly identified the accused in court. in his deposition he specified the details of the part which the accused played with reasonable particularity. in such a situation it is considered a safe rule of prudence to generally look for corroboration of the sworn testimony of witness in court as to the identity of the accused who are strangers to them in the form of earlier identification proceeding as observed by this court in budhsen 's case 1970 indlaw sc 136 supra. this court has not laid down the requirement in general that all identification parades must be under the supervision of a magistrate as in budhsen 's case 1970 indlaw sc 136 supra the learned counsel for the appellants also relied upon the judgments of this court in subash and shiv kumar vs. state of u p 1987 3 scc 331 1987 indlaw sc 28887and mohd abdul hafeez vs. state of andhra pradesh air 1983. sc 367 1982 indlaw sc 63 the facts and circumstances of the cases are however different and it is not necessary to consider those cases in detail while dealing with the present case. suffice it to say that those cases do not create any doubt as regards the conviction in this case. mr p c agrawala learned senior counsel for the appellant mahesh accused no 3vehemently submitted that this accused ought not to have been convicted u s 302 with the aid of ss 34 and 120 b of ipc in particular it was submitted that the role attributed to the accused was that he merely stood outside the house. he did not even act as a guard because when the witness anil kumar pw 21 came to the house he was not even stopped by the accused from entering the house. the learned counsel for mahesh accused no 3 relied on several decisions of this court in suresh sakharam nangare vs. state of maharashtra 2012 9 scc 249 2012 indlaw sc 304jai bhagwan vs. state of haryana air 1999 sc 1083 1999 indlaw sc 391 and ramashish yadav vs. state of bihar 1999 8 scc 555 1999 indlaw sc 693. it is settled law that common intention and conspiracy are matters of inference and if while drawing an inference any benefit of doubt creeps in it must go to the accused vide baliya vs. state of m p 2012. 9 scc 696 2012 indlaw sc 343. on a careful conspectus of the facts and the law we are of the view that the prosecution has failed to prove the guilt of mahesh beyond reasonable doubt. there is no evidence of his having played any part in the crime. he was merely seen by the witness as standing outside the house when the witness came home. mahesh did not even act as a guard he did not prevent anil kumar pw 21 from entering the house. there is no evidence of the formation or sharing of any common intention with the other accused. there is no reference to a third person in the fir no evidence that he came with the other accused or left with them. no weapon was seized from him nor was any property connected with the crime seized. having regard to the role attributed to him and the absence of incriminating factors we find that it is not safe to convict mahesh of the offence of murder with the aid of ss 34 and 120b. we therefore hold that the accused mahesh accused no 3 in criminal appeal no 867 of 2013 is innocent and the conviction against him is set aside. his bail bonds stand cancelled and sureties are discharged. in view of the above criminal appeal no 867 of 2013 is allowed and criminal appeal nos 822 of 2012589 of 2014 and criminal appeal arising out of slp criminal no 3737 of 2014 are dismissed. appeals disposed of.

IN-Ext

FACTS the appellant -raju (accused no.4) has filed criminal appeal no.822 of 2012. the appellant -mahesh (accused no.3) has filed criminal appeal no.867 of 2013. the appellant -beenu (accused no.2) has filed criminal appeal no.589 of 2014. the appellant -smt.shashi tripathi (accused no.1) has filed criminal appeal arising out of special leave petition (criminal) no.3737 of 2014. pw-1 -dr.sharda prasad tripathi is the husband of accused shashi tripathi. on 25.11.2003,when pw-1 -dr.sharda came home from his clinic,found that his daughter-in-law bhavna tripathi has been murdered. he lodged a f.i.r on 25.11.2003. when he went inside,he found his daughter-in-law -bhavna and wife -shashi lying in the courtyard. bhavna was dead. shashi was unconscious. there were numerous injuries,including incised wounds on bhavna,none on shashi. after registration of the crime,inquest was conducted over the dead body of bhavna on 26.11.2003. post mortem was conducted and the report is marked as exhibit p/18. spot map was prepared by the inquiry officer (io); bloodstained cloth of accused shashi tripathi was taken into possession along with broken bangles; bloodstained cement mortar and plain cement mortar were also taken into possession. shashi tripathi,mahesh and binu @ chandra prakash were arrested on 29.11.2003. a bloodstained knife was taken into possession. the accused raju was taken into custody on 22.12.2003 and a suzuki motorcycle was also taken into possession. a test identification was conducted by the executive magistrate. a similar identification parade of raju was conducted after his arrest. the sole eyewitness was a boy of 13 years of age -anil kumar (pw-21),who worked as a servant with the family. shashi tripathi had brought him home from bilaspur. he participated in the identification parade,which was held in sub jail,bemetara,and identified the accused persons in the court by touching them. he stated that shashi didi and bhavna sometimes used to quarrel. ARGUMENT this accused ought not to have been convicted u/s.302 with the aid of ss.34 and 120 (b) of ipc. in particular it was submitted that the role attributed to the accused was that he merely stood outside the house. he did not even act as a guard because when the witness anil kumar (pw-21) came to the house,he was not even stopped by the accused from entering the house. this accused ought not to have been convicted u/s.302 with the aid of ss.34 and 120 (b) of ipc. in particular it was submitted that the role attributed to the accused was that he merely stood outside the house. he did not even act as a guard because when the witness anil kumar came to the house,he was not even stopped by the accused from entering the house. ANALYSIS it is obvious that accused nos.2 and 4 did not enter the house to commit a robbery and had a single mission,namely,to kill bhavana. there is no evidence that they had any previous animosity with the deceased and appeared to have acted as contract killers. on a careful perusal of the deposition of this child witness,the court did not find any reason why he would have lied. he was brought to the house by shashi tripathi (accused),who apparently took care of him and sent to school and gave him food and residence. he had no grouse against her neither any ulterior motive in identifying the accused,who were not acquainted to him. there was no reason for the sole eye witness -anil (pw-21) to implicate anybody falsely. merely because he has been some time in the company of the police at the police station his testimony cannot be discarded as untrue. the incident occurred within the four walls of the house of the accused -shashi tripathi and the only witness was the boy -anil (pw-21). the accused devendra kumar was arrested on 22.12.2003 and his identification parade was conducted on 26.12.2003-(within four days). there is no evidence on record to show that the child witness had an opportunity to see and study the features of the accused between their arrest and test identification parade to enable a tutored identification. in any case,the period between the arrest and the identification parade was not large enough to constitute inordinate delay. in the present case,the child witness has been found to be reliable. his presence is not doubted,since he resided with the family for whom he worked. he had no axe to grind against any of the accused. he became the unfortunate witness of a gruesome murder and fearlessly identified the accused in court. in his deposition he specified the details of the part which the accused played with reasonable particularity. in such a situation,it is considered a safe rule of prudence to generally look for corroboration of the sworn testimony of witness in court as to the identity of the accused who are strangers to them,in the form of earlier identification proceeding,as observed by this court in budhsen's case 1970 indlaw sc 136 (supra). this court has not laid down the requirement in general that all identification parades must be under the supervision of a magistrate as in budhsen's case 1970 indlaw sc 136 (supra). the facts and circumstances of the cases are however different and it is not necessary to consider those cases in detail while dealing with the present case. suffice it to say that those cases do not create any doubt as regards the conviction in this case. common intention and conspiracy are matters of inference and if while drawing an inference any benefit of doubt creeps in,it must go to the accused. the prosecution has failed to prove the guilt of mahesh beyond reasonable doubt. there is no evidence of his having played any part in the crime. he was merely seen by the witness as standing outside the house when the witness came home. mahesh did not even act as a guard; he did not prevent anil kumar (pw-21) from entering the house. there is no evidence of the formation or sharing of any common intention with the other accused. there is no reference to a third person in the fir; no evidence that he came with the other accused or left with them. no weapon was seized from him,nor was any property connected with the crime,seized. having regard to the role attributed to him and the absence of incriminating factors we find that it is not safe to convict mahesh of the offence of murder with the aid of ss.34 and 120(b). STATUTE after committal,the trial court framed charges u/s.302 read with ss.34 and 120b of the ipc. the prosecution examined 32 witnesses. no defence witness was examined after the statements of the accused were recorded u/s.313 of the criminal procedure code,1973.

this appeal is preferred against the judgment dated 19 8 2011 passed by the high court of punjab and haryana in criminal appeal no 181 sb of 2000 whereby the high court partly allowed the appeal filed by the appellants thereby confirming the conviction of the appellants with certain modifications. briefly stated case of the prosecution is that on the fateful day i e 18 11 1994 at about 8 00 a m in the morning the complainant jagdish pw 5 along with his two sons namely sukhbir and mange ram pw 6 were busy in cutting pullas reeds from the dola of their field. at that time jage ram a 1 and his sons rajbir singh. raju a 2 rakesh a 3 and madan a 4 armed with jaily pharsi and lathis respectively entered the land where the complainant was working with his sons and asked them not to cut the pullas as it was jointly held by both the parties. wordy altercations ensued between the parties and jage ram insisted that he would take away the entire pullas. in the fight the accused persons started inflicting injuries to the complainant and his sons rajbir. raju a 2 gave a pharsi blow on the head of sukhbir jage ram a 1 caused injury to jagdish pw 5 with two jaily blows. additionally madan and rakesh attacked the complainant with lathi blows on shoulder and left elbow respectively and caused several other injuries to the complainant party. jagdish and his injured sons raised alarm hearing which rajesh and usha came to rescue them and on seeing them the accused persons fled away. the injured witnesses were taken to the primary health centre taoru where dr pardeep kumar medical officer medically examined the injured persons. injured sukhbir was vomiting in the hospital and later on he was referred to general hospital gurgaon as his condition deteriorated. a ct scan disclosed that large extra dural haematoma was found in the frontal region with mass effect and sukhbir needed urgent surgery and he was operated upon and the large extra dural haematoma was removed. dr pardeep kumar pw 2 also examined the other injured persons pw 5 jagdish and pw. 6 mange ram. statement of jagdish was recorded based on which f i r was registered at police station taoru gurgaon under sections 323 324 325 and 307 read with section 34 ipc. pw 8 ramesh kumar asi had taken up the investigation. he examined the witnesses and after completion of investigation challan was filed under sections 307 325 324 read with section 34 ipc. in the trial court prosecution examined nine witnesses including jagdish pw5 mange ram pw6 and dr prem kumar pw2 and dr hiiol kanti pal pw9. neuro surgeon pw8 investigating officer and other witnesses. the accused were examined section 313 cr. p c about the incriminating evidence and circumstances. first accused jage ram pleaded that on the date of occurrence complainant party jagdish and his sons mange ram and sukhbir forcibly trespassed into the land belonging to the accused and attempted to forcibly cut the pullas. jagdish further claims that he along with rakesh caused injuries to the complainant party in exercise of right of private defence of property. he has denied that rajesh and usha had seen the incident. raju a 2 and madan a 3 stated that they were not present on the spot and they have been falsely implicated. rakesh a 4 adopted the stand of his father jage ram. upon consideration of oral and documentary evidence the learned additional sessions judge vide judgment dated 17 2 2000 convicted all the accused persons sections 307 and 325 ipc and sentenced them to undergo rigorous imprisonment for five years and one year respectively and a fine of rs 500 each with default clause. aggrieved by the said judgment the accused appellants filed criminal appeal before the high court of punjab and haryana. the high court vide impugned judgment dated 19 8 2011 modified the judgment of the trial court thereby convicted jage ram a 1 section 325 ipc and sentenced him to undergo rigorous imprisonment for one year convicted second accused rajbir. raju section. 307 ipc and imposed sentence of imprisonment for five years as well the fine of rs 500 was confirmed by the high court. sentence section 325 ipc two counts was modified as the sentence section 323 ipc and he was sentenced to undergo six months rigorous imprisonment. both the sentences were ordered to run concurrently. high court modified the sentence of madan a 3 rakesh a 4 section 323 ipc and sentenced them to undergo rigorous imprisonment for six months two counts respectively. in this appeal the appellants assail the correctness of the impugned judgment. ms vibha datta makhija learned senior counsel appearing for the appellants contended that the evidence of the witnesses suffers from material discrepancy and is self contradictory. it was submitted that injured witness sukhbir was not examined in the court and neither ct scan nor x ray nor operational notes of sukhbir were produced before the court and in the absence of such material evidence courts below erred in convicting the second accused section. 307 ipc. additionally the learned counsel contended that the defence plea of private defence was not considered by the courts below in proper perspective. per contra learned counsel appearing for the respondent state contended that the evidence of all the witnesses satisfactorily establishes the overt act of the accused persons and jagdish pw 5 and mange ram pw 6 being the injured witnesses the veracity of these witnesses can not be doubted. it was submitted that the medical evidence sufficiently corroborated the oral evidence and the prosecution has established the intention of the 2nd accused in causing attempt to commit murder of sukhbir and in appreciation of the evidence courts below recorded concurrent findings convicting the second accused section 307 ipc and the same warrants no interference. we have carefully considered the rival contentions and gone through the impugned judgment and perused the materials on record. as it emerges from the evidence complainant jagdish pw 5 and his two sons sukhbir and mange ram were cutting pullas. the accused party went there and asked them not to cut the pullas. in the wordy altercation second accused rajbir. raju gave pharsi blows on the head of sukhbir. pws 5 6 have clearly spoken about the overt act of the accused that a 1 jage ram attacked and caused injury to pw 5 jagdish with jaily blows and that second accused rajbir. raju attacked on the head of sukhbir with pharsi. they have also stated that madan and rakesh caused injuries to pw5 jagdish with lathi on shoulder and left elbow respectively. 2 dr pardeep kumar in his evidence stated that he has examined pws 5 and 6 and noted the injuries on the body of pws 5 and 6 and issued wound certificates. evidence of pws 5 and 6 is amply corroborated by medical evidence. pws 5 and 6 being injured witnesses their evidence is entitled to great weight. cogent and convincing grounds are required to discard the evidence of injured witnesses. in the light of the fact that pws 5 and 6 were injured witnesses courts below tested their evidence for its credibility and recorded concurrent findings that pws 5 and 6 are trustworthy witnesses. we find no reason to take a different view. appellants have raised the contention that the prosecution failed to adduce evidence that a 2 rajbir attempted to commit murder of sukhbir. it was submitted that injured person sukhbir was neither examined nor medical evidence like ct scan x ray and operational notes and sukhbir were produced to corroborate the oral evidence and while so courts below erred in convicting second accused rajbir. dr pardeep kumar pw 2 who examined sukhbir found during his medico legal examination a lacerated wound in the middle of the top of the skull. injured sukhkbir was found vomiting in the hospital and he was examined by a neuro surgeon dr hilol kanti pal pw 9 of safdarjung hospital delhi on 19 11 1994 i e the day after the incident. pw 9 has stated that sukhbir was unconscious since 2 00 p m on 18 11 1994 and was deeply comatose with irregularity of pupils and a laceration was diagnosed on the right front parietal region. further pw 9 has stated that during the ct scan it was revealed that a large extra dural haemotoma was present in the frontal region with mass effect and to avoid further deterioration of his condition he was operated upon by frontal trephine craniopmy an haemotoma measuring about 125 ml was evacuated. pw 9 stated that had not the operation been conducted on sukhbir and had not the extra dural haemotoma removed by operation urgently the head injury caused to sukhbir would have caused his death. as noted by the high court it is thus brought on evidence that had not surgical assistance been given to sukhbir he would have definitely died. for the purpose of conviction section 307 ipc prosecution has to establish i the intention to commit murder and ii the act done by the accused. the burden is on the prosecution that accused had attempted to commit the murder of the prosecution witness. whether the accused person intended to commit murder of another person would depend upon the facts and circumstances of each case. to justify a conviction section 307 ipc it is not essential that fatal injury capable of causing death should have been caused. although the nature of injury actually caused may be of assistance in coming to a finding as to the intention of the accused such intention may also be adduced from other circumstances. the intention of the accused is to be gathered from the circumstances like the nature of the weapon used words used by the accused at the time of the incident motive of the accused parts of the body where the injury was caused and the nature of injury and severity of the blows given etc. in the case of state of m p vs kashiram ors. air 2009. sc 1642. 2009 4 scc 26 2009 indlaw sc 92 the scope of intention for attracting conviction section 307 ipc was elaborated and it was held as under. it is sufficient to justify a conviction section 307 if there is present an intent coupled with some overt act in execution thereof. it is not essential that bodily injury capable of causing death should have been inflicted. the section makes a distinction between the act of the accused and its result if any. the court has to see whether the act irrespective of its result was done with the intention or knowledge and under circumstances mentioned in the section. therefore an accused charged section 307 ipc can not be acquitted merely because the injuries inflicted on the victim were in the nature of a simple hurt. this position was highlighted in state of maharashtra v balram bama patil 1983 2 scc 28 1983 indlaw sc 414 girija shanker v state of u p 2004 3 scc 793 2004 indlaw sc 78 and r prakash v state of karnataka 2004 9 scc 27 2004 indlaw sc 117. whether there was intention to kill or knowledge that death will be caused is a question of fact and would depend on the facts of a given case. the circumstances that the injury inflicted by the accused was simple or minor will not by itself rule out application of section 307 ipc. the determinative question is the intention or knowledge as the case may be and not the nature of the injury. state of m p v saleem 2005 5 scc 554 2005 indlaw sc 413 undue sympathy to impose inadequate sentence would do more harm to the justice system to undermine the public confidence in the efficacy of law and society could not long endure under such serious threats. it is therefore the duty of every court to award proper sentence having regard to the nature of the offence and the manner in which it was executed or committed etc. this position was illuminatingly stated by this court in sevaka perumal v state of t n 1991 3 scc 471 1991 indlaw sc 683. having regard to the weapon used for causing the head injuries to sukhbir nature of injures situs of the injury and the severity of the blows courts below recorded concurrent findings convicting the 2nd appellant section in our considered view the conviction of the second appellant rajbir. 307 ipc is unassailable. learned counsel for the appellants contended that the second appellant is in custody for more than three years and since the occurrence was in the year 1994 prayed for reduction of the sentence imposed on the second appellant to the period already undergone. placing reliance upon the judgment of this court in hari singh vs sukhbir singh ors 1988 4 scc 551 1988 indlaw sc 27 learned counsel for the appellants additionally submitted that in terms of section 357 3 cr. p c that the compensation may be awarded to the victim and the sentence be modified to the period already undergone. for the conviction section 307 ipc courts below imposed upon the 2nd appellant rigorous imprisonment of five years while imposing punishment courts have an obligation to award appropriate punishment. question of awarding sentence is a matter of discretion and the same has to be exercised by the courts taking into consideration all the relevant circumstances. what sentence would meet the ends of justice would depend upon the facts and circumstances of each case and the courts must keep in mind the gravity of the offence motive for the crime nature of the offence and all other attendant circumstances. vide state of m p vs bablu natt 2009 2 scc 272 2008 indlaw sc 2027 alister anthony pareira vs state of maharashtra 2012 2 scc 648 2012 indlaw sc 12 and soman vs state of kerala 2013 11 scc 382 2012 indlaw sc. in the light of the above considering the case in hand the occurrence was of the year 1994 when the complainant party was cutting pullas the accused asked them not to cut the pullas which resulted in the wordy altercation. in the heat of passion the accused have caused injuries to the complainant party. the second accused rajbir. raju is in custody. he surrendered on 5 1 2012 and is stated to be in custody since then for more than three years. having regard to the facts and circumstances of the case in our considered view the period of sentence of five years may be reduced to three years apart from directing the second appellant rajbir. raju to pay substantial compensation to injured sukhbir. as noticed above injured sukhbir sustained grievous head injuries and was deeply comatose and was in a state of shock and trauma. learned counsel for the injured witness submitted that for quite some time injured sukhbir was unconscious and thereafter suffering from mental trauma. having regard to the nature of injuries sustained by sukhbir and the period of treatment and other circumstances we are of the view that it would be appropriate to direct second appellant accused rajbir. raju to pay rs 750000 as compensation to the injured sukhbir. when the matter came up for hearing on 14 10 2014 learned counsel for the appellants informed the court that he had offered rs 500000 by way of demand draft towards compensation to the injured sukhbir in the presence of the sarpanch of the village which he has refused to receive the same. the said amount of rs 500000 is now kept in fixed deposit in the registry of this court. for inflicting blows on pw 5 jagidsh with jaily a 1 jage ram was convicted section 325 ipc and sentenced to undergo rigorous imprisonment for one year. a 3 and a 4 have also given lathis blows to pw 5 and were convicted section 323 ipc and sentenced to undergo rigorous imprisonment for three months by the high court. having regard to the fact that the occurrence was of the year 1994 considering the other facts and circumstances of the case the sentence of imprisonment imposed on jage ram a 1 madan a 3 and rakesh a 4 is reduced to the period already undergone by them. the conviction of a 1 section 325 ipc a 3 and a 4 section 323 ipc is confirmed and the sentence is reduced to the period already undergone by each of them. the conviction of second accused rajbir. 307 ipc is confirmed and the sentence of imprisonment of five years is reduced to the period already undergone and additionally the second accused shall pay a compensation of rs 750000 to the injured witness sukhbir. compensation amount of rs 500000 deposited in this court by the 2nd appellant shall be paid to the injured witness sukhbir. raju shall deposit the balance compensation amount of rs 250000 before the trial court within three months from the date of this judgment and on such deposit the same shall also be paid to the injured witness sukhbir. on failure to deposit the balance compensation the second appellant rajbir. raju shall undergo default sentence of one year. the appeal is allowed to the above said extent. second appellant rajbir. raju is ordered to be released forthwith if not required in any other case. bail bonds of accused a1 a3 and a4 shall stand discharged. appeal allowed.

IN-Ext

FACTS this appeal is preferred against the judgment passed by the high court of punjab and haryana in criminal appeal no.181 sb of 2000, whereby the high court partly allowed the appeal filed by the appellants thereby confirming the conviction of the appellants with certain modifications. case of the prosecution is that on the fateful day i.e. 18.11.1994, at about 8.00 a.m. in the morning the complainant jagdish (pw-5) along with his two sons namely sukhbir and mange ram (pw-6) were busy in cutting pullas (reeds) from the dola of their field. at that time, jage ram (a-1) and his sons rajbir singh. raju (a-2), rakesh (a-3) and madan (a-4) armed with jaily, pharsi and lathis respectively, entered the land where the complainant was working with his sons and asked them not to cut the pullas as it was jointly held by both the parties. wordy altercations ensued between the parties and jage ram insisted that he would take away the entire pullas. in the fight, the accused persons started inflicting injuries to the complainant, and his sons rajbir. raju (a-2) gave a pharsi blow on the head of sukhbir, jage ram (a-1) caused injury to jagdish (pw-5) with two jaily blows. additionally, madan and rakesh attacked the complainant with lathi blows on shoulder and left elbow respectively and caused several other injuries to the complainant party. jagdish and his injured sons raised alarm, hearing which rajesh and usha came to rescue them and on seeing them, the accused persons fled away. the injured witnesses were taken to the primary health centre, taoru where dr. pardeep kumar, medical officer, medically examined the injured persons. injured sukhbir was vomiting in the hospital and later on he was referred to general hospital, gurgaon as his condition deteriorated. a ct scan disclosed that large extra-dural haematoma was found in the frontal region with mass effect and sukhbir needed urgent surgery and he was operated upon and the large extra-dural haematoma was removed. dr. pardeep kumar (pw-2) also examined the other injured persons, pw 5-jagdish and pw. 6- mange ram. statement of jagdish was recorded, based on which f.i.r. was registered he examined the witnesses and after completion of investigation, challan was filed under sections 307, 325, 324 read with s. 34 ipc. the accused were examined u/s. 313 cr. p.c. about the incriminating evidence and circumstances. ARGUMENT ms. vibha datta makhija, learned senior counsel appearing for the appellants contended that the evidence of the witnesses suffers from material discrepancy and is self- contradictory. it was submitted that injured witness sukhbir was not examined in the court and neither ct scan nor x-ray nor operational notes of sukhbir were produced before the court and in the absence of such material evidence, courts below erred in convicting the second accused u/s. the learned counsel contended that the defence plea of private defence was not considered by the courts below in proper perspective. per contra, learned counsel appearing for the respondent-state contended that the evidence of all the witnesses satisfactorily establishes the overt act of the accused persons and jagdish (pw-5) and mange ram (pw-6) being the injured witnesses, the veracity of these witnesses cannot be doubted. it was submitted that the medical evidence sufficiently corroborated the oral evidence and the prosecution has established the intention of the 2nd accused in causing attempt to commit murder of sukhbir and in appreciation of the evidence, courts below recorded concurrent findings convicting the second accused u/s. 307 ipc and the same warrants no interference. appellants have raised the contention that the prosecution failed to adduce evidence that a-2 rajbir attempted to commit murder of sukhbir. it was submitted that injured person sukhbir was neither examined nor medical evidence like ct scan, x-ray and operational notes and sukhbir were produced to corroborate the oral evidence and while so courts below erred in convicting second accused rajbir. learned counsel for the appellants contended that the second appellant is in custody for more than three years and since the occurrence was in the year 1994, prayed for reduction of the sentence imposed on the second appellant to the period already undergone. placing reliance upon the judgment of this court in hari singh vs. sukhbir singh &; ors (1988) 4 scc 551 1988 indlaw sc 27., learned counsel for the appellants additionally submitted that in terms of s. 357 (3) cr. p.c. that the compensation may be awarded to the victim and the sentence be modified to the period already undergone. ISSUE whether the accused person intended to commit murder of another person would depend upon the facts and circumstances of each case. ANALYSIS pws 5 &; 6 have clearly spoken about the overt act of the accused that a-1 jage ram attacked and caused injury to pw-5 jagdish with jaily blows and that second accused rajbir. raju attacked on the head of sukhbir with pharsi. they have also stated that madan and rakesh caused injuries to pw5-jagdish with lathi on shoulder and left elbow respectively. pw. 2- dr. pardeep kumar in his evidence stated that he has examined pws 5 and 6 and noted the injuries on the body of pws 5 and 6 and issued wound certificates. evidence of pws 5 and 6 is amply corroborated by medical evidence. pws 5 and 6 being injured witnesses, their evidence is entitled to great weight. cogent and convincing grounds are required to discard the evidence of injured witnesses. in the light of the fact that pws 5 and 6 were injured witnesses, courts below tested their evidence for its credibility and recorded concurrent findings that pws 5 and 6 are trustworthy witnesses. for the purpose of conviction u/s. 307 ipc, prosecution has to establish (i) the intention to commit murder and (ii) the act done by the accused. to justify a conviction u/s. 307 ipc, it is not essential that fatal injury capable of causing death should have been caused. in the case of state of m.p. vs. kashiram &; ors. air 2009. sc 1642. 2009) 4 scc 26 2009 indlaw sc 92, the scope of intention for attracting conviction u/s. 307 ipc was elaborated and it was held as under. it is sufficient to justify a conviction u/s. 307 if there is present an intent coupled with some overt act in execution thereof. it is not essential that bodily injury capable of causing death should have been inflicted. the conviction of the second appellant rajbir. 307 ipc is unassailable. for the conviction u/s. 307 ipc, courts below imposed upon the 2nd appellant rigorous imprisonment of five years, while imposing punishment, courts have an obligation to award appropriate punishment. in the heat of passion, the accused have caused injuries to the complainant party having regard to the fact that the occurrence was of the year 1994, considering the other facts and circumstances of the case, the sentence of imprisonment imposed on jage ram (a-1), madan (a-3) and rakesh (a-4) is reduced to the period already undergone by them.

this appeal by special leave is directed against order dated 13 7 2005 passed by the division bench of the bombay high court. dismissing letter patents appeal preferred by the appellant against the order of the learned single judge who dismissed his writ petition and confirmed the orders passed by the state minister for revenue in the proceeding r t s 3402 pra kra 309 l 6 dated 18th october2002. it is the appellant 's case that his father shri nawoosingh panjumal panjwani was a displaced person who migrated from pakistan to india during the period of partition and the appellant 's family while in pakistan was having agricultural land over there admeasuring 4 acres 10 gunthas. after migration the family took shelter at refugee camp of pimpri pune in maharashtra. in view of enactment of displaced persons compensation and rehabilitation act1954 by the union of india the immovable properties left behind by muslims who had migrated to pakistan were acquired and the same was distributed to displaced persons as a compensation pool. accordingly father of the appellant was allotted a land admeasuring 2 acres 5 gunthas bearing revenue survey nos 351 and 1182 situated at village lonavala taluka maval district pune. it has been pleaded by the appellant that survey no 1181 and 1182 are one and the same thing. the facts in brief as narrated in the impugned order are that survey nos 118328 and 351 of lonavala were originally owned by one haji habib tar mohammed janu. the said haji habib tar mohammed janu migrated to pakistan and while going to pakistan he sold his property to one smt. hajrabi haji yusuf on 4 6 1949 however this transaction was cancelled by the collector and custodian of evacuee property on 17 4 1949 as per section 8i of the evacuee properties act and these lands were accordingly entered as evacuee property by the tahsildar maval on 26 10 1949 it appears that these survey numbers were also given c t s no 129130 a130 b and 133. it appears that in cts no 129130 a130 b and 133apart from vacant land there is a bungalow no 52 habib villa. it appears that the regional settlement commissioner placed this property for auction through government auctioner and one gulabbai desaipurchased the said property in auction for a consideration of rs 16750 on 17 5 1956 and accordingly sale certificate was issued by the regional settlement commissioner bombay on behalf of the government. in the said sale certificate the c t s no 129130 a130 b and 133 of village lonavala were mentioned. the area of this cts nos were as under. on the basis of the said sale certificate the mutation entry no 1836 was effected in the village record in favour of gulabai desai and thereby her name was entered in survey nos 1181b and 328 of village lonavala to the extent of 29 30 ares and 70 ares respectively. thereafter gulabai sold cts no 133 admeasuring 33 gunthas on 24 4 1977 to respondent no 3 genu kadu. the said gulabai also gifted her remaining area from this survey numbers to her grandson anil gajanan desai on 15 1 1979who in turn has sold his properties to respondent no 2. prem hasmatraj lalwani in the year 1980. the survey nos 1182 and 351being evacuee properties were allotted to the appellant in the year 1956 later on it was found that the appellant is in possession of more area and therefore the said order was modified on 6 5 1982 and excess area was granted to the appellant on payment of rs 31360 which appellant had paid on 17 5 1982 in government treasury and thereby the deputy collector and assistant settlement commissioner pune granted the excess land to the appellant and thereafter the dispute started between the parties. in the impugned order division bench made it clear that since the dispute between the parties was in respect of the area as to what has been purchased in auction sale by gulabai desai and what is the area allotted to the appellant by the orders of the deputy collector and deputy custodian of evacuee properties the appellant requested the bench not to enter into the merits on this question in this lpa since the parties may prosecute their remedies in the civil court for such adjudication and therefore that aspect was not considered by the high court. however in the facts of the conflicting claims the appellant made grievance to the deputy collector and the deputy custodian of evacuee properties in respect of the mutation made in favour of the respondent gulabai and other respondents and therefore by order dated 18 9 1984 the deputy collector and deputy custodian of evacuee properties pune directed the sub divisional officer haveli sub division to take up the case in revision under section 257 of maharashtra land revenue code and pass necessary orders. in view of these directions the sub divisional officer haveli sub division pune initiated proceeding rts revision 14 of 1984 and by order dated 30 7 1985 cancelled the mutation entry no 1836 which comprises land admeasuring 7897 sq yards and directed necessary corrections in the record as per the observations made in the order. it appears that the said order was taken in appeal by the respondent and the matter was remanded to the sub divisional officer. after remand the sub divisional officer conducted inquiry and again passed an order on 29 10 1987 and confirmed the earlier order. therefore the rts appeal no 128 of 1987 was preferred before the collector which was disposed off by the additional collector on 13 7 1993 by the said order the order of the third sub divisional officer was maintained. however further inquiry as directed by the sdo was to be conducted. since the mutation entry no 1836 was cancelled by above order the talathi gave effect to these orders and effected the mutation entry no 2176 and showed the disputed properties in the name of the collector and deputy custodian of evacuee properties. the directions were issued by the collector to the tahsildar to place the appellant in possession of the property as per the orders of the deputy collector and the deputy custodian of evacuee properties. however instead of giving effect to those orders it appears that the revenue officers at tahsil level effected two mutations viz mutation no 2377 and 2394 by mutation entry no 2377 the name of respondent was again mutated in the record and by the mutation entry no 2394 the name of genu kadu was mutated in the record. since the collector noticed on complaint that the orders of the collector has been bypassed or surpassed by the subordinate revenue officers the collector by order dated 12 7 1999 directed the sdo to take these mutations namely mutation entry no 2377 and 2394 in revision and therefore the sub divisional officer maval division has taken these mutations in revision bearing rts revision no 12 of 1999 the said revision was decided by the sub divisional officer at maval on 28 1 2000 and those mutations were cancelled. being aggrieved by the order passed in the said revision respondent no 2 lalwani preferred rts appeal no 81 of 2000 and the respondent no 3 genu kadu preferred rts appeal no 114 of 2000 both. these rts appeals were heard by the additional collector pune and by order dated 28 5 2001 the addl. collector pune dismissed the said appeals and confirmed the order of the sub divisional officer maval. aggrieved by the said order of the additional collector respondent no 2 preferred rts revision no 330 of 2001 under section 257 of maharashtra land revenue code1966 before the additional commissioner pune division pune. the said revision was decided by the additional commissioner pune by order dated 22 11 2001 and the said revision was dismissed. respondent no 2 challenged this order of the additional commissioner by filing the proceeding rts 3402 pra kra 309 l 6 by way of second revision before the revenue minister for state and the said proceeding was decided by the minister for state on 18 10 2002 the revenue minister allowed the said proceeding and set aside the orders passed by the sub divisional officer maval dated 28 1 2000order dated 28 5 2001 of additional collector pune and of additional commissioner dated 22 11 2001and thus restored the position as reflected by the mutation entries nos 1836 and 2377 and 2394 thus all the entries in favour of the respondents were protected and maintained by the order of the state minister for revenue. appellant challenged the order dated 19 10 2002 passed by the minister by filing a writ petition which was dismissed by learned single judge of the bombay high court. thereafter the appellant filed letters patent appeal which was also dismissed by the division bench holding that when the state minister for revenue entertained the matter he was possessed of jurisdiction under section 257 of the maharashtra land revenue code and therefore the order passed by him under the said authority is within his jurisdiction power and competence. the division bench observed thus. we record our finding. that under section 257 of the maharashtra land revenue code more than one revision is possible. now coming to the facts of the present case the mutation entry no 1836 was in fact certified. however the sub divisional officer has taken the said mutation in revision in rts revision no 14 of 1984 and has set aside the mutation by order dated 30 7 1985 there was appeal as against that order which was remanded. it was again decided by the sub divisional officer on 29 10 1987 and the said mutation was set aside. there was rts appeal no 128 of 1987 which was decided on 13 7 1993 in view of these orders the mutation entry no 1836 was cancelled and mutation entry no 2176 was effected whereby the name of the collector and the deputy collector of the evacuee property was entered into 7 x 12 extracts. it is further found that when the orders of the collector directing to put the petitioner into possession were not obeyed by the subordinate revenue officers and the revenue officers effected the mutation entry no 2377 in favour of the respondent nos 3 gulabai desai and mutation entry no 2394 in favour of the respondent no 5 genu kadu and thereafter for second time the special divisional officer maval has exercised the revisional powers under section 257 and initiated proceeding rts revision 12 of 1999 in respect of the mutation entry no 2377 and 2394 the rts revision 1299 was allowed on 28 1 2000 as against that two rts appeals namely rts appeal no 81 of 2000 and rts appeal no 114 of 2000 were preferred by the respondent. they were decided on 28 5 2001 as against that the rts revision no 330 of 2001 was preferred. the same was dismissed. as against that the rts proceeding bearing no 3402 pra. kra 309 l 6 was preferred before the minister for state. all these proceedings will show that twice the sub divisional officer has exercised the revisional power under section 257 at the directions of the collector namely the rts revision no 14 of 1984 and rts revision no 12 of 1999 it will further reveal that the appeals as against the rts revision no 14 of 1984 was preferred by the parties in view of the provisions of section 247 and 249 sub section 2 it will equally appear that when the orders were passed in revision application no 12 of 1999 before the sub divisional officer in exercise of the powers under section 257 the parties have preferred two rts appeals in view of the provisions of section 247 and 249 sub section 2 not only that thereafter the rts revision application no 330 of 2001 was also preferred before the commissioner and if the view is taken that the second revision is not tenable then in that circumstances since the first order passed in rts revision no 12 of 1999 is a revisional order this second revision before the commissioner being rts revision no 330 of 2001 would not have been tenable. however said revision rts 330 of 2001 is tenable since the appeals as provided under section 247 and 249 intervene in between the revisional orders passed by the sub divisional officer and the commissioner. thus in short we find that the scheme under maharashtra land revenue code is quite different scheme and it permits more than one revision. thus viewed from any angle we find that the state minister for revenue when he entertained the matter state minister for revenue was possessed of jurisdiction under section 257 of the maharashtra land revenue code and therefore the order passed by him under the said authority is within his jurisdiction power and competence. hence the present appeal by special leave. mr huzefa ahmadi learned senior counsel appearing for the appellant mainly attacked the revisional power exercised by the minister concerned in purported exercise of jurisdiction under section 257 of the maharashtra land revenue code. in the alternative learned senior counsel submitted that even if it were to be admitted without prejudice that second revision is maintainable the minister being the revisional authority should not have interfered with the findings recorded by all the six revenue authorities. referring the decision of the bombay high court in the case of sambappa vs state of maharashtra 2002 scc on line bombay 1222learned counsel submitted that when the sub divisional officer additional collector and additional commissioner had concurrently recorded finding in favour of the appellant by observing that the revenue record is not in consonance with the factual aspect and they have directed to correct the revenue entries in such a case the second revisional authority exceeded its jurisdiction in entertaining the said application and interfering with the finding of fact. section 257 makes it clear that a revisional authority has to consider only the legality and propriety of the decision. learned counsel referring the revisional jurisdiction of the high court under section 115 of the code of civil procedure tried to impress us that when the power of revision is given to the district judge then the high court can not entertain second revision petition under section 115 of the code. learned counsel relied upon the decision of this court in the case of state of kerala vs k m charia abdulla co air 1965. sc 1585 1964 indlaw sc 353 and hari shankar vs rao girdhari lal chowdhury air 1963 sc 698 1961 indlaw sc 157. ahmadi learned senior counsel further submitted that a request was made to the high court not to enter into the merit of the case and to confine itself to the question whether a second revision was at all maintainable in the light of the ratio in harishankar 's case 1961. indlaw sc 157 supra1962 suppl 1 scr 933. 1961 indlaw sc 157hiralal kapur vs prabhu choudhury1988 2 scc 172 1988 indlaw sc 342 and helper girdharbhai vs saiyed mohmad mirasaheb kadri and others1987 3 scc 538 1987 indlaw sc 28281 learned counsel also drew our attention to the decision of this court in dharampal vs ramshri1993 1 scc 435 1993 indlaw sc 1325 where this court held. that a second revision to the high court under section 482 of the cr. p c was not permitted. lastly mr ahmadi submitted that the second revision would not lie under section 257 of the revenue code since section 259 of the code provides an opportunity to the state government to only correct any final order while exercising power under the provisions of section 257 i e with regard to its legality and propriety. ravindra srivastava learned senior counsel appearing for the respondent state at the very outset submitted that the appellant conceded before the high court not to decide the merit of the case. the only point raised before the high court was with regard to the maintainability of second revision before the state government under section 257 of the revenue code. learned counsel submitted that section 257 expressly confers power of revision on the state government which power is coupled with power of control and superintendence. learned counsel submitted that the commissioner or the additional commissioner is not equal in a rank but subordinate to the state government. learned counsel submitted that the state government is the supreme revenue authority and existence of more than one appeal or revision to an aggrieved party is not per se abhorrent to any legal principle depends upon the statute. srivastava then contended that the high court correctly analysed and appreciated the scheme of the code vis a vis judicial review in revenue matters. learned counsel put heavy reliance on the decision of this court in the case of ishwar singh vs. state of rajasthan and others2005. 2 scc 334 2005 indlaw sc 6 for the proposition that there can be a second revision under the same provision of the statute. the only question that falls for consideration is as to whether a second revision under section 257 is maintainable and that whether the state government exceeds its jurisdiction in entertaining the second revision. before we proceed to decide the aforesaid question we would like to refer the relevant provisions of the maharashtra land revenue code 1966. section 231 defines the revenue officer as under 2 31 revenue officer means every officer of any rank whatsoever appointed under any of the provisions of this code and employed in or about the business of the land revenue or of the surveys assessment accounts or records connected therewith. chapter ii deals with the revenue officers their powers and duties. sections 56 and 7 reads as under 5 chief controlling authority in revenue matters. the chief controlling authority in all matters connected with the land revenue in his division shall vest in the commissioner subject to the superintendence direction and control of the state government. 6 revenue officers in division. the state government shall appoint a commissioner of each division and may appoint in a division an additional commissioner and so many assistant commissioners as may be expedient to assist the commissioner provided that nothing in this section shall preclude the appointment of the same officer as commissioner for two or more divisions. 7 revenue officers in district 1the state government shall appoint a collector for each district including the city of bombay who shall be in charge of the revenue administration there of and a tahsildar for each taluka who shall be the chief officer entrusted with the local revenue administration of a taluka. the state government may appoint one or more additional collectors and in each district including the city of bombay and so many assistant collectors and deputy collectors with such designations such as firstsecondsuper numeraryetc. assistants as may be expressed in the order of their appointmentone or more naib tahsildars in a taluka and one or more additional tahsidars or naib tahsildars therein and such other persons having such designations to assist the revenue officers as it may deem expedient. 3 subject to the general orders of the state government the collector may place any assistant or deputy collector in charge of one more sub divisions of a district or may himself retain charge thereof. such assistant or deputy collector may also be called a sub divisional officer. the collector may appoint to each district as many persons as he thinks fit to be circle officers and circle inspectors to be in charge of a circle and one or more talathis for a saza and one or more kotwals or other village servants for each village or group of villages as he may deem fit. section 11 of the code is worth to be quoted herein. below 11 subordination of officers. 1 all revenue officers shall be subordinate to the state government. 2 unless the state government directs otherwise all revenue officers in a division shall be subordinate to the commissioner and all revenue officers 2in a district including the city of bombay shall be subordinate to the collector. 3unless the state government directs otherwise all other revenue officers including survey officers shall be subordinated the one to the other in such order as the state government may direct. sections 13 and 14 deal with the powers and duties of all revenue officers. from reading of the aforesaid provisions it is manifest that the state government makes appointment of the revenue officers including the commissioner and the chief controlling authorities in the revenue matters. section 5 makes it clear that the chief controlling authority in all matters connected with the land revenue in his division shall vest with the commissioner subject to superintendence directions and control of the state government. section 11 provides that all revenue officers shall be subordinate to the state government. it is therefore clear that in revenue matters the state government is the supreme revenue authority. in the present case we noticed the scheme of the code in the matters of hearing and disposal of appeals revision and review. section 247 deals with the appeal and appellate authorities which reads as under 247 appeal and appellate authorities. in the absence of any express provisions of this code or of any law for the time being in force to the contrary an appeal shall lie from any decision or order passed by a revenue or survey officer specified in column 1 of the schedule e under this code or any other law for the time being in force to the officer specified in column 2 of that schedule whether or not such decision or order may itself have been passed on appeal from the decision of order of the officer specified in column 1 of the said schedule. provided that in no case the number of appeals shall exceed two 2 when on account of promotion of change of designation an appeal against any decision or order lies under this section to the same officer who has passed the decision or order appealed against the appeal shall lie to such other officer competent to decide the appeal to whom it may be transferred under the provisions of this code. section 248 is also relevant which provides the forum of appeal to the state government. similarly section 249 makes provision of appeal against the review or revision. the schedule preferred to in section 227 mentions the authorities before whom appeal would lie. the schedule appended to the code is as follows schedule e see section 247. section 257 is the relevant provision which deals with the power of state government and of certain revenue and survey officers to call for and examine the records and proceedings of subordinate officers. section 257 reads as under 257 power of state government and of certain revenue and survey officers to call for and examine records and proceedings of subordinate officers. the state government and any revenue of survey officer not inferior in rank to an assistant or deputy collector or a superintendent of land records in their respective departments may call for and examine the record of any inquiry or the proceedings of any subordinate revenue or survey officer for the purpose of satisfying itself or himself as the case may be as to the legality or propriety of any decision or order passed and as to the regularity of the proceedings of such officer. a tahsildar a naib tahsildar and a district inspector of land records. may in the same manner call for and examine the proceedings of any officer subordinate to them in any matter in which neither a formal nor a summary inquiry has been held. 3 if in any case it shall appear to the state government or any officer referred to in sub section 1 or sub section 2 that any decision or order or proceedings so called for should be modified annulled or reversed it or he may pass such order thereon as it or he deems fit. provided that the state government or such officer shall not vary or reverse any order affecting any question of right between private persons without having to the parties interested notice to appear and to be heard in support of such order. provided further that an assistant of deputy collector shall not himself pass such order in any matter in which a formal inquiry has been held but shall submit the record with his opinion to the collector who shall pall such order thereon as he may deem fit. a bare reading of the aforesaid provision would show that the provision uses the word and for state government but for other revenue officers. it uses the word or. the language and the words used in the said provision suggest that jurisdiction of the state government is concurrent with the jurisdiction of other revenue officers in deciding the revision. hence even if one party goes to the commissioner in revision the state government can still be approached under section 257 for revision. the power of revision exercised by any revenue officer including the commissioner is a proceeding by a subordinate officer and the state government can satisfy itself as to the legality and propriety of any decision including the order passed in revision by the revenue officers. further in view of the fact that state government itself appoints the revenue officers including the commissioner under the scheme of the code and all revenue officers are subordinate to the state government as per section 11 of the act and even the chief controlling authority in all matters connected with the land revenue in his division is vested with the commissioner they are subject to the superintendence direction and control of the state government as provided under section 5 of the code. the power of the state government has further been widened by section 259 of the code which reads as under 259 rules as to decisions or orders expressly made final whenever in this code it is provided that a decision or order shall be final or conclusive such provision shall mean that no appeal lies from any such decision or order but it shall be lawful to the state government alone to modify annul or reverse any such decision or order under the provision of section 257. the aforesaid provision makes it clear that even if the decision is considered to be final the state government 's power to call for and examine the record and proceedings of subordinate officers is saved. in other words the state government in exercise of its revisional as well as general power of superintendence and control can call for any record of proceedings and consider the legality and propriety of the orders passed by the revenue officers under section 247 or 257 of the code. from perusal of the entire scheme of the code including section 257it is manifest that the revisional powers are not only exercisable by the state government but also by certain other revenue officers. there is nothing in the code to suggest that if these revisional powers are exercised by a revenue officer who has jurisdiction it can not be further exercised by a superior revenue officer or by the state government. a fair reading of sections 257 and 259 suggests that if revisional powers are exercised by a revenue officer having jurisdiction to do so further revisional power can be exercised by the superior officer or by the state government. a similar question came for consideration before this court in the case of ishwar singh vs 2 scc 334 under the rajasthan cooperative societies act1965 in that ac t by section 128 power was conferred upon the state government and the registrar to call for and examine the records of any enquiry or proceedings of any other matter of any officer subordinate to them for the purpose of satisfying themselves as to the legality or propriety of any decision or order passed by such officer. it was submitted by the counsel that section 128 related to two authorities i e the state government and the registrar. in fact the two authorities are interchangeable. if one authority exercises revisional power the other authority logically can not have exercised such power. hence it was argued that second revision was not maintainable. rejecting the submission this court held 20 sub section 2 of section 124 provides that if the decision or order is made by the registrar appeal lies to the government and if the decision or order is made by any other person or a cooperative society the appeal lies to the registrar. therefore under chapter xiii a clear distinction is made between the state government and the registrar. the test is whether the two authorities with concurrent revisional jurisdiction are equal in rank. it is therefore not correct as contended by learned counsel for the appellant that the two authorities i e the state government and the registrar are interchangeable. the power of the government and the registrar in terms of section 128 excludes matters which are covered by section 125 i e revision by the tribunal. considering the entire scheme of the code and the provisions contained in sections 257 and 259we are of the definite opinion that the minister concerned of the state government can entertain second revision to satisfy the legality and propriety of the order passed by the revenue officer. the division bench of the bombay high court has elaborately discussed the question and passed the impugned order holding that section 257 confers jurisdiction to the state government to entertain its revision against the order passed by any revenue officer either in appeal or in revision. we find no infirmity in the impugned order passed by the high court. hence this appeal has no merit which is accordingly dismissed. before parting with the order we must make it clear that in view of the request made by the appellant before the high court not to enter into the merit of the case since the party may prosecute their remedies in the civil court for adjudication we have not expressed any opinion with regard to the merit of the case of the parties. the parties may prosecute their remedies in civil court in accordance with law. petition dismissed.

IN-Ext

FACTS survey nos.118,328 and 351 of lonavala were originally owned by one haji habib tar mohammed janu. the said haji mohammed migrated to pakistan and while going to pakistan,he sold his property to one smt.hajrabi haji yusuf on 4.6.1949. however,this transaction was cancelled by the collector and custodian of evacuee property on 17.4.1949 as per section 8(i) of the evacuee properties act and these lands were accordingly entered as evacuee property by the tahsildar,maval on 26.10.1949. it appears that in cts no.129,130-a,130-b and 133,apart from vacant land there is a bungalow no.52-habib villa. it appears that the regional settlement commissioner placed this property for auction through government auctioner and one gulabbai desai purchased the said property in auction for a consideration of rs.16,750/- on 17.5.1956 and,accordingly,sale certificate was issued by the regional settlement commissioner,bombay on behalf of the government. in the said sale certificate the c.t.s.no 129,130-a,130-b and 133 of village lonavala were mentioned. on the basis of the sale certificate the mutation entry no.1836 was effected in the village record in favour of gulabai desai,and thereby her name was entered in survey nos.118/1b and 328 of village lonavala to the extent of 29.30 acres and 70 acres respectively. thereafter,gulabai sold cts no.133 admeasuring 33 gunthas on 24.4.1977 to respondent no.3 genu kadu. the said gulabai also gifted her remaining area from this survey numbers to her grandson anil gajanan desai on 15.1.1979,who in turn has sold his properties to respondent no.2 -prem hasmatraj lalwani in 1980. the survey nos.118/2 and 351,being evacuee properties,were allotted to the appellant in the year 1956. later on,it was found that the appellant is in possession of more area and,therefore,the said order was modified and excess area was granted to the appellant on payment of rs.31,360/-,which appellant had paid on 17.5.1982 in government treasury and thereby the deputy collector and assistant settlement commissioner,pune granted the excess land to the appellant,and thereafter the dispute started between the parties. being aggrieved by the order passed in the revision,respondent no.2 lalwani preferred rts appeal no.81 of 2000 and the respondent no.3 genu kadu preferred rts appeal no.114 of 2000. both these rts appeals were heard by the additional collector,pune and by order the addl.collector,pune dismissed the said appeals and confirmed the order of the sub divisional officer,maval. aggrieved by the said order of the additional collector,respondent no.2 preferred rts revision no.330 of 2001 under section 257 of maharashtra land revenue code,1966 before the additional commissioner,pune division,pune. the said revision was decided by the additional commissioner,pune and it was dismissed. appellant challenged the order dated 19.10.2002 passed by the minister by filing a writ petition,which was dismissed by learned single judge of the bombay high court. thereafter,the appellant filed letters patent appeal,which was also dismissed by the division bench holding that when the state minister for revenue entertained the matter,he was possessed of jurisdiction under section 257 of the maharashtra land revenue code and,therefore,the order passed by him under the said authority is within his jurisdiction,power and competence. ARGUMENT it is the appellant's case that his father shri nawoosingh panjumal panjwani was a displaced person who migrated from pakistan to india during the period of partition and the appellant's family while in pakistan was having agricultural land over there admeasuring 4 acres 10 gunthas.after migration,the family took shelter at refugee camp of pimpri,pune in maharashtra. in view of enactment of displaced persons (compensation and rehabilitation) act,1954 by the union of india,the immovable properties left behind by muslims who had migrated to pakistan were acquired and the same was distributed to displaced persons as a "compensation pool". referring the decision of the bombay high court in the case of sambappa vs.state of maharashtra [(2002) scc on line,bombay 1222],learned counsel submitted that when the sub-divisional officer,additional collector and additional commissioner had concurrently recorded finding in favour of the appellant by observing that the revenue record is not in consonance with the factual aspect and they have directed to correct the revenue entries,in such a case,the second revisional authority exceeded its jurisdiction in entertaining the said application and interfering with the finding of fact. section 257 makes it clear that a revisional authority has to consider only the legality and propriety of the decision. learned counsel referring the revisional jurisdiction of the high court under section 115 of the code of civil procedure tried to impress us that when the power of revision is given to the district judge,then the high court cannot entertain second revision petition under section 115 of the code. ISSUE whether a second revision under section 257 is maintainable and that whether the state government exceeds its jurisdiction in entertaining the second revision? ANALYSIS the state government makes appointment of the revenue officers including the commissioner and the chief controlling authorities in the revenue matters. section 5 makes it clear that the chief controlling authority in all matters connected with the land revenue in his division shall vest with the commissioner,subject to superintendence,directions and control of the state government. section 11 provides that all revenue officers shall be subordinate to the state government. it is,therefore,clear that in revenue matters the state government is the supreme revenue authority. the power of revision exercised by any revenue officer including the commissioner is a proceeding by a subordinate officer and the state government can satisfy itself as to the legality and propriety of any decision including the order passed in revision by the revenue officers. state government itself appoints the revenue officers including the commissioner under the scheme of the code and all revenue officers are subordinate to the state government as per section 11 of the act,and even the chief controlling authority in all matters connected with the land revenue in his division is vested with the commissioner,they are subject to the superintendence,direction and control of the state government as provided under section 5 of the code. the state government's power to call for and examine the record and proceedings of subordinate officers is saved. the revisional powers are not only exercisable by the state government but also by certain other revenue officers. there is nothing in the code to suggest that if these revisional powers are exercised by a revenue officer who has jurisdiction,it cannot be further exercised by a superior revenue officer or by the state government. in the case of ishwar singh v. state of rajasthan and others,(2005) 2 scc 334 under the rajasthan cooperative societies act,1965, this court held:- sub-section (2) of section 124 provides that if the decision or order is made by the registrar,appeal lies to the government and if the decision or order is made by any other person,or a cooperative society,the appeal lies to the registrar. therefore,under chapter xiii a clear distinction is made between the state government and the registrar. the test is whether the two authorities with concurrent revisional jurisdiction are equal in rank. it is,therefore,not correct as contended by learned counsel for the appellant that the two authorities i.e.the state government and the registrar are interchangeable. the power of the government and the registrar in terms of section 128 excludes matters which are covered by section 125 i.e. revision by the tribunal. STATUTE section 2(31) of the maharashtra land revenue code 1966 defines the revenue officer as that “revenue officer" means every officer of any rank whatsoever appointed under any of the provisions of this code, and employed in or about the business of the land revenue or of the surveys, assessment, accounts, or records connected therewith. chapter ii deals with the revenue officers,their powers and duties. section 5 of the maharashtra land revenue code 1966 - chief controlling authority in revenue matters. section 6 of the maharashtra land revenue code 1966 -revenue officers in division. section 7 of the maharashtra land revenue code 1966 revenue officers in district. section 11 of the maharashtra land revenue code 1966- subordination of officers. sections 13 and 14 of the maharashtra land revenue code 1966 deal with the powers and duties of all revenue officers. section 247 of the maharashtra land revenue code 1966 deals with the appeal and appellate authorities. section 248 of the maharashtra land revenue code 1966 provides for the forum of appeal to the state government. section 249 of the maharashtra land revenue code 1966 makes provision of appeal against the review or revision. section 257 of the maharashtra land revenue code 1966- power of state government and of certain revenue and survey officers to call for and examine records and proceedings of subordinate officers. section 259 of the maharashtra land revenue code 1966- rules as to decisions or orders expressly made final.