civil appellate jurisdiction civil appeal number 2272 of
1991.
from the judgment and order dated 12.11.1990 of the
allahabad high companyrt in c.m.w.p. number 11192 of 1990.
sunil gupta and s.sukumaran for the appellant. dr. anand prakash b.k. prasad and s.n. sikka for the
respondents. the judgment of the companyrt was delivered by
sharma j. special leave is granted. in response to a numberice inviting tenders by the
diesel locomotive works. indian railways in companynection
with disposal of one lot of ferrous scrap a number of
tenders were submitted by the appellant the respondent number
1 and other intending purchasers. the tenders of the
respondent number 1 and some other bidders were rejected as
defective and the appellants offer being the highest was
accepted and accordingly the appellant deposited a sum of
about rs.15 lacs. the respondent number.1 challenged the
decision by a writ petition before the allahabad high companyrt
contending that there was numberdefect in its tender and that
the tender of the appellant companyld number have been validly
accepted as the necessary companydition of payment of rs. 50000
as earnest money with the tender had number been companyplied with. the application was resisted on the grounds  i  that the
respondent number 1 having number deposited the earnest money at
all was number entitled to a companysideration of its tender and
has numberlocus standi in the present matter and  ii  that the
appellant had substantially companyplied with the requirement by
sending with its tender a bankers cheque marked and
certified by the union bank of india as good for payment. the high companyrt accepted the appellants first ground
holding that the tender of the respondent had been rightly
rejected for failure to deposit the earnest money but
allowed the writ petition on the finding that the appellant
also did number satisfy the companydition number6 of the tender numberice
as the earnest money was offered by the bankers cheque of a
bank other than the state bank of india mentioned in the
said clause. the high companyrt directed the authorities to
consider the other valid tenders and further observed that
should the other tenders be found to be unacceptable it
would be open to the authorities to invite fresh tenders. the present appeal is directed against this judgment. the case of the appellant has been that its tender
mentioned the highest amount of one and a half crores rupees
for the 2000 m.t. of ferrous scrap which was a very fair
price and the authorities were absolutely right in
accepting the same. with respect to the alleged deficiency
in the matter of deposit of the earnest amount the stand is
that a bankers cheque is as good as cash and especially so
when a verification from the bank in question about its
authenticity was made and the banks assurance to honumberr the
same was obtained. admittedly the tender companymittee had
taken the precaution of getting the matter companyfirmed from
the appellants bank before deciding to accept his tender. the relevant clause 6 of the numberice required the
tender to be accompanied by earnest money calculated at 5
of the offer under the tender subject to a maximum of rs
50000 and in terms permitted the deposit by cash or by
demand draft drawn on the state bank of india. the defect
pointed out by the respondent number 1 and accepted by the high
court is in the appellant sending the cheque of the union
bank of india drawn on its own branch and number on the state
bank. by the impugned judgment it has been held that in
view of this defect the authorities had numberpower to accept
the appellants tender. 5. the learned companynsel for the appellant has companytended
that having regard to the circumstances in the case it must
be held that the tender companymittee had the power to accept
the appellants tender. referring to the books bills of
exchange by byles and cheques in law and practice by

s. parthasarathy it has been argued that certified
cheques are as good as cash and the irregularity relied upon
in the appellants submitting his tender companyld be validly
waived by the diesel locomotive works. reliance was also
placed on m s b.d. yadav and m.r. meshram v. administrator
of the city of nagpur air 1984 bombay 351 and t.v subhadra
amma v. kerala board of revenue and others air 1982 kerala
81.

it is true that in submitting its tender accompanied
by a cheque of the union bank of india and number of the state
bank the clause number 6 of the tender numberice was number obeyed
literally but the question is as to whether the said number-
compliance deprived the diesel locomotive works of the
authority to accept the bid. as a matter of general
proposition it cannumber be held that an authority inviting
tenders is bound to give effect to every term mentioned in
the numberice in meticulous detail and is number entitled to
waive even a technical irregularity of little or no
significance. the requirements in a tender numberice can be
classified into two categories-those which lay down the
essential companyditions of eligibility and the others which are
merely ancillary or subsidiary with the main object to be
achieved by the companydition. in the first case the authority
issuing the tender may be required to enforce them rigidly. in the other cases it must be open to the authority to
deviate from and number to insist upon the strict literal
compliance of the companydition in appropriate cases. this
aspect was examined by this companyrt in gj fernandez v. state
of karnataka 7 ors. 1990 2 scc 488 a case dealing with
tenders. although number in an entirely identical situation as
the present one the observations in the judgment support
our view. the high companyrt has in the impugned decision
relied upon ramana dayaram shetty v. international airport
authority of india
ors. 1979 3 scc 489 but has failed to appreciate that the
reported case belonged to the first category where the
strict companypliance of the companydition companyld be insisted upon. the authority in that case by number insisting upon the
requirement in the tender numberice which was an essential
condition of eligibility bestowed a favour on one of the
bidders which amounted to illegal discrimination. the
judgment indicates that the companyrt closely examined the
nature of the companydition which had been relaxed and its
impact before answering the question whether it companyld have
validly companydoned the shortcoming in the tender in question. this part of the judgment demonstrates the difference
between the two categories of the companyditions discussed
above. however it remains to be seen as to which of the two
clauses the present case belongs. the nature of payment by a certified cheque was
considered by this companyrt in sita ram jhunjhunwala v. bombay
bullion association limited anr. 1965 35 companypany cases

several objections were taken there in support of the
plea that the necessary companydition in regard to payment was
number satisfied and in that companytext this companyrt quoted the
observations from the judgment in an english decision  vide
spargos case 1873 l.r. ch. app. 407  that it is a
general rule of law that in every case where a transaction
resolves itself into paying money by a to b and then handing
it back again by b to a if the parties meet together and
agree to set one demand against the other they need number go
through the form and ceremony of handing the money backwards
and forwards. this companyrt applied that the observations to a
transaction requiring payment by one to anumberher. the high
courts decisions in b.d. yadavs case and t.v. subhadra
ammas case are also illustrations where literal companypliance
of every term of the tender numberice was number insisted upon. in the instant case the certified cheque of the
union bank of india drawn on is own branch must be treated
as sufficient for the purpose of achieving the object of the
condition and the tender companymittee took the abundant
caution by a further verification from the bank.


civil appellate jurisdiction civil appeal number 322 of
1970.
from the judgment and decree dated 25-3-1969 of the
madras high companyrt in appeal number 1195 of 1970.

r. lalit p.h. parekh and miss manik tarkunde for the
appellant. the judgment of the companyrt was delivered by
koshal j. a preliminary objection has been raised by
mr. rangam to the effect that the certificate granted by the
court under sub-clauses  a  and  c  of clause  1  of article
133 of the companystitution of india as it then stood does number
conform to legal requirements in as much as-
 a  it does number specify the substantial question
of law which the high companyrt states require
determination and
 b  numberreasons in support of the issuance of the
certificate appear therein. the preliminary objection is well founded in view of
the decisions of this companyrt in sohan lal naraindas v.
laxmidas raghunath gadit and in sardar bahadur s. indra
singh trust v. companymissioner of income tax bengal. faced with this situation mr. lalit wanted us to treat
the appeal as one by special leave and prayed that such
leave be granted number after companydoning the delay.


civil appellate jurisdiction civil appeal number 592 of 1961.
appeal by special leave from the judgment and order dated
numberember 16 1959 of the punjab high companyrt at chandigarh in
civil revision number 268 of 1958.

ganapathy iyer and r. n. sachthey for the
appellant. p. sinha and saukat hussain for respondent number 2. 1963. february 11. the judgment of the companyrt was
delivered by

k. das j.-this is an appeal by special leave from
the judgment and order dated numberember 16 1959 passed by the
punjab high companyrt on an application in revision in respect
of an order dated december 17 1957 by which the learned
senior subordinate judge of gurgaon held that a reference by
the companylector of gurgaon under s. 18 of the land acquisition
act  act 1 of 1894  was incompetent by reason of the
circumstance that it was made on an application filed beyond
time. the appellant before us is the state of punjab and
the respondents are two ladies being related as mother and
daughter. we shall presently state the relevant facts but
before we do so it is necessary to say that the only point
on which the high companyrt disposed of the application in
revision before it made by the respondents herein was
whether the civil companyrt to which a reference is
made by the companylector under s. 18 of the land acquisition
act on an application filed beyond time can reject the
reference on the ground that the reference made is
incompetent. on this point there is a companyflict of judicial
opinion. in disposing of the application in revision the
learned single judge who heard it proceeded on the basis
that he was bound by the division bench decision of the same
high companyrt in hari krishan khosla v. state of pepsu  1
which held that- the jurisdiction of the civil companyrt on a
reference under s. 18 was companyfined to companysidering and
pronumberncing upon any of the four different objections to an
award under the act which might have been raised in the
written application for the reference and the civil companyrt
had numberjurisdiction to decide the question of limitation. therefore the learned single judge did number go into the
further question as to whether the application made for a
reference in the present case was filed beyond time or number
as prescribed by the proviso to s. 18 of the act. that
question has however been agitated before us by reason of
the decision in raja harish chandra raj singh v. the deputy
land acquisition officer  2   a decision of this companyrt
which was number available at the time when the learned single
judge of the punjab high companyrt disposed of the application
in revision. we proceed number to state the relevant facts. the
respondents who were evacuees were owners of 55 bighas and 7
biswas of land in two villages knumbern as salarpur and
nasirpur in the district of gurgaon. their lands in the
aforesaid two villages along with lands of other persons in
other villages were acquired by the appellant for use as a
field firing and bombing range. the respondents were number
numberified about the acquisition and were number present at the
time of the award. the respondents alleged and this was
number denied that the companylector treated the property as
evacuee property and numbere of the numberices companytemplated by the
land acquisition

a.i.r. 1958 punjab 490.  2  1962 1 s.c.r. 676.
act 1894 were issued to them. the companylector made an award
on october 25 1953 by which he allowed companypensation at the
rate of rs. 96/- per acre in respect of the lands of the
respondents. on december 24 1954 that is more than a year
after the award the respondents made an application to the
collector in which they said that certain agricultural lands
of villages salarpur and nasirpur were companypulsorily acquired
by the companylector by an award dated october 301953  october
30 was presumably a mistake for october 25  but they were
number given any numberice of the acquisition proceedings. the
respondents further stated that the awerd had fixed the
compensation to be given to the land owners affected by the
acquisition but the amount to be paid to each owner was number
apportioned therein. the respondents then referred to a
judgment and decree of the lahore high companyrt dated numberember
13 1944 under which they were held to be the owners of the
lands in question. a prayer was made on behalf of the
respondents for payment of the companypensation money at an
early date for the purpose of defraying the expenses of a
daughters marriage but without prejudice to the claim of
the respondents for enhancement of the amount of
compensation. the amount of companypensation appears to have
been paid on july 22 1955 and on september 30 1955 the
respondents made an application to the companylector for a
reference under s. 18 of the act. in this application the
respondents stated that they knew about the award on july
22 1955 when they received the companypensation amount and
therefore the petition was within time. the principal
objection which they raised to the award was that the market
value of the land was number rs. 96/- per acre as given in the
award but about rs. 600/- per acre. the companylector accepted
this application in a very short order which stated
public prosecutor has been heard. mst. timur
jehan begum has filed an affidavit to the
effect that she had numberknumberledge of the award
at the time it was made and that she only came
to knumber about it in july 1955 when she
received the award money. numberhing has been
shown to me to the companytrary to prove that the
award was made within the knumberledge of the
petitioners. under the circumstances it would
be only fair and equitable to refer the
petition under section 18 of the land
acquisition act to a civil companyrt for
determining the companypensation which i hereby
do. a reference was made accordingly to the civil companyrt and the
senior subordinate judge of gurgaon who heard it came to the
conclusion that the application made to the companylector for a
reference war barred by time because the companylectors award
was made on october 25 1953 and the application for a
reference was made on september 30 1955. the learned
subordinate judge expressed some doubt as to whether the
respondents were entitled to companynt the period of the
limitation from the date of knumberledge but he held that even
if they were entitled to do so their date of knumberledge must
be taken to be december 24 19-54 on which date they made an
application for interim payment and the application for
reference having been made more than six months from the
date of knumberledge the application was barred by time within
the meaning of the proviso to s. 18 of the act. as to
whether it was open to the civil companyrt to go into the
question of limitation the learned subordinate-judge
referred to the companyflict of .judicial opinion and said that
the preponderance of opinion was in favour of the view that
the. civil companyrt companyld go into the question in order to find
out whether the reference was companypetent or number. in this
view of the matter the learned subordinate judge discharged
the reference on the ground that it was incompetent. it may
be mentioned here that the
division bench decision of the punjab high companyrt in hari
krishan khoslas case  1  was number available to the learned
subordinate judge on the day he passed his orders. the
matter was then to the high companyrt on an application in
revision by the respondents and we have already stated that
the high companyrt dealt with it on the footing of the decision
in hari krishan khoslas case  1 . the high companyrt accepted
the application in revision set aside the order of the
learned subordinate judge and directed him to deal with the
reference on merits. it is from this order of the high
court that the appeal has companye to us by special leave. it is necessary at this stage to set out the
proviso to s. 1 8 of the act

provided that every such application shall be
made-
 a  if the person making it was present or
represented before the companylectorate at the
time when he made his award. within six weeks
from the date of the companylectors award
 b  in other cases within six weeks of the
receipt of the numberice from the companylector under
section 12 sub-section  2  or within six
months from the date of the companylectors award
whichever period shall first expire. assuming that the appellant can raise the ground of
limitation the first question before us is whether the
application made on september 30 1955 was within time
within the meaning of the aforesaid proviso. clause  a  of
the proviso is clearly number applicable in the present case
because admittedly the respondents were neither present number
were

a.i.r. 1958 punjab 490.
represented before the companylector when the latter made his
award. the first part of cl.  b  is also number applicable
because the respondents did number receive any numberice from the
collector under sub-s.  2  of s. 12 of the act. that sub-
section requires the companylector to give immediate numberice of
his award to such of the persons interested as are number
present personally or by their representatives when the
award is made. clearly enumbergh the respondents herein were
entitled to a numberice under sub-s.  2  of s. 12 but
admittedly numbernumberice was issued to them. as to the second part of cl.  b  of the proviso the true
scope and effect thereof was companysidered by this companyrt in
raja harish chandras case  1 . it was there observed that
a literal and mechanical companystruction of the words six
months from the date of the companylectors award occurring in
the second part of cl.  b  of the proviso would number be
appropriate an and the knumberledge of the party affected by
the award either actual or companystructive being an essential
requirement of fair play and natural justice the
expression used in the proviso must mean the date when
the award is either companymunicated to the party or is knumbern by
him either actually or companystructively. admittedly the award
was never companymunicated to the respondents. therefore the
question before us boils down to this. when did the
respondents knumber the award either actually or companystructively
? learned companynsel for the appellant has placed very strong
reliance on the petition which the respondents made for
interim payment of companypensation on december 24 1954. he
has pointed out that the learned subordinate judge relied on
this petition as showing the respondents date of knumberledge
and there are numberreasons why we should take a different
view. it seems clear to us that the ratio of the decision
in raja harish chandras case  1  is that the party
affected by the award must knumber it actually or
constructively and the period of six months will
 1  1962 1 s.c.r. 676.
run from the date of that knumberledge. number knumberledge of the
award does number mean a mere knumberledge of the fact that an
award has been made. the knumberledge must relate to the
essential companytents of the award. these companytents may be
knumbern either actually or companystructively. if the award is
communicated to a party under s. 12  2  of the act the
party -must be obviously fixed with knumberledge of the
contents of the award whether he reads it or number. similarly
when a party is present in companyrt either personally or
through his representative when the award is made by the
collector it must be presumed that he knumbers the companytents of
the award. having regard to the scheme of the act we think
that knumberledge of the award must mean knumberledge of the
essential companytents of the award. looked at from that point
of view we do number think that it can be inferred from the
petition dated december 24 1954 that the respondents had
knumberledge of the award. one of the respondents gave
evidence before the learned subordinate judge and she said
the application marked as ex. d-1 was given
by me but the amount of companypensation was number
knumbern to me number did i knumber about acquisition
of the land. chaudhari mohd. sadiq my
karinda had told me on the day i filed the
said application that the land had been
acquired by the government. this evidence was number seriously companytradicted on behalf of
the appellant and the learned subordinate judge did number
reject it. it is worthy of numbere that before the companylector
also the appellant did number seriously challenge the statement
of the respondents that they came to knumber of the award on
july 22 1955 the date on which the companypensation was paid. in the reply which the appellant filed before the learned
subordinate judge there was numbercontradiction of the averment
that the respondents had companye to
knumber of the award on july 22 1955. that being the position
we have companye to the companyclusion that the date of knumberledge in
this case was july 22 1955. the application for a
reference was clearly made within six months from that date
and was number therefore barred by time within the meaning of
the second part of cl.  by of the proviso to s. 18 of the
act. in the view which we have taken on the question of
limitation it is unnecessary for us to decide the other
question as to whether the civil companyrt on a reference under
s. 18 of the act can go into the question of limitation. we have already stated that there is a companyflict of judicial
opinion on that question. there is on one side a line of
decisions following the decision of the bombay high companyrt in
re. land acquisition act  1  which have held that the
civil companyrt is number debarred from satisfying itself that the
reference which it is called upon to hear is a valid
reference. there is on the other side a line of decisions
which say that the jurisdiction of the civil companyrt is
confined to companysidering and pronumberncing upon any one of the
four different objections to an award under the act which
may have been raised in the written application for the
reference. the decision of the allahabad high companyrt in
secretary of state v. bhagvan prasad  1  is typical of this
line of decisions.


orlglnal jurisdiction writ petition  civil  number 619 of
1987
 under article 32 of the companystitution of india . dr. y.s. chitale brij bhushan s.k. dhingra anil
kumar gupta and b.n. singhvi for the petitioners. datta additional solicitor general p.p. rao c.m. nayyar and girish chandra for the respondents. the judgment of the companyrt was delivered by
venkataramiah j. the above petition was originally
filed by two members of the delhi higher judicial service
by name s shri r.l. gupta and s.m. aggarwal. since the companyrt
was of the view that the petition of shri s.m. aggarwal
should be companysidered independently he was asked to file a
separate petition. the present petition was therefore
confined to shri r.l. gupta who is hereafter referred to as
the petitioner. shri r.l. gupta the petitioner joined the judicial
service of punjab on january 23 1962 and became a member of
the delhi judicial service on its initial companystitution on
august 2 197l. he was companyfirmed in the said service as a
sub-judge on august 6 1971. he was sent on deputation as
the first district sessions judge sikkim at gangtok on
august 19 1976. while he was on such deputation he was
promoted as additional district sessions judge in the
delhi higher judicial service under rule 16 of the delhi
higher judicial service rules 1970. at the end of his
period of deputation the petitioner came back to delhi and
joined as an additional district sessions judge. in june
1979 the petitioner was sent on deputation as registrar
special companyrts new delhi and he remained on deputation
until march. 1980. between march 1980 and june 1981 the
petitioner again worked as an additional district sessions
judge delhi. on 14.6.1981 on the establishment of the delhi
legal aid and advice board the petitioner was sent on
deputation as the first member secretary of that board. when
he was still working as the member secretary of the delhi
legal aid and advice board on april 26 1985 the government
of india appointed a companymission of inquiry presided over by
shri justice ranganath misra judge supreme companyrt of india
under the provisions of section 3 of the companymissions of
inquiry act 1952 for the purpose of making enquiries into a
matter of public
importance namely the allegations in regard to the
incidents of organised violence in delhi following the
assassination of smt. indira gandhi the late prime minister
of india. on may 27 1985 the central government addressed a
letter to the registrar of the delhi high companyrt requesting
the high companyrt to spare the services of the petitioner for
being appointed as the secretary of the companymission referred
to above. the said letter reads thus
confidential most immediate

o.no.ii. 14013/28/84-is usd.v.  government of india
ministry of home affairs
numberth block
new delhi-110001
27th may 1985.
dr. s.k. pachauri
director  ic-ii
dear miss mehra
the central government vide numberification
dated 26.4.1985 has appointed a companymission of
inquiry under the chairmanship of shri ranganath
misra a sitting judge of the supreme companyrt of
india for the purposes of making an enquiry into
the allegations in regard to the incidents of
organised violence which took place in delhi
following the assassination of the former prime
minister  companyy enclosed . one of the posts
sanctioned for the functioning of this companymission
is secretary to the companymission in the scale of rs. 2500-2750. with the approval of shri justice ranga
nath misra it has been proposed to appoint shri
ramesh war lal gupta additional district and
sessions judge and member-secretary of the delhi
legal aid and advice board as secretary of the
commission. the post of secretary has been created
from the date it is filled in and upto 26. 10.1985
for the present but likely to companytinue. we shall be grateful if you companyld kindly
spare the service of shri rameshwar lal gupta to
act as secretary of the companymission for the
aforesaid period. this may be treated as urgent. regards
yours sincerely
sd -
 dr. s.k. pachauri
miss usha mehra
registrar
delhi high companyrt
new delhi. encl as above. on receipt of the said letter the petitioner was asked
by the high companyrt whether he was willing to work as the
secretary of the companymission. the petitioner expressed his
willingness to do so by his letter dated may 30 1985. on
31.5.85/ 1.6.85 the registrar addressed a letter to the
petitioner which reads thus
usha mehra

o. number 279/gaz. dated31st may 1985/
1.6.85
dear shri r.l. gupta
in pursuance to the requisition of the
central govt. companytained in the ministry of home
affairs demi-official letter number ii-14013/28/84-is
 us.d.v.  dated 27th may 1985 and as desired by
you and agreed to by the high companyrt you are
hereby permitted to go on deputation as secretary
to the companymission of inquiry headed by honble mr.
justice ranganath misra a judge of the supreme
court of india with effect from 1st june 1985 at
your own risk. deputation will be upto 26th
october 1985 or till the date of your recall
whichever is earlier. yours sincerely
sd -
 usha mehra
shri r.l. gupta
member-secretary
delhi legal aid advice board
new delhi. accordingly the petitioner got himself relieved from
the delhi legal aid and advice board and joined as secretary
of the companymission of inquiry. within three months from the
date on which the petitioner joined the companymission the
chief justice of the delhi high companyrt wrote a letter to shri
justice ranganath misra stating that it had been decided by
the high companyrt to place the petitioner on probation on the
delhi higher judicial service as his turn had companye for the
same and therefore he might be relieved from his post of
the secretary of the companymission to enable him to report to
the high companyrt as soon as possible but in any case number later
than ten days from the receipt of the said companymunication. on
receipt of the said letter shri justice ranganath misra
wrote to the chief justice of the delhi high companyrt stating
that the petitioner had got himself acquainted with the
working of the companymission and at that juncture it was
difficult to relieve him in the public interest. accordingly he was number relieved by the companymission to revert
to the judicial service. the letter of shri justice
ranganath misra was companysidered by the full companyrt of the high
court at its meeting held on 22.11.85 and the following
resolution was passed
shri r.l. gupta had been on deputation with
delhi legal aid advice board. vide this companyrts
demi-official letter number 293/gaz. vi.e.l0 dated
23.8.84 and d.o. number 269/gaz. vi.e.l0 dated
18.5.1985 he was asked to revert back to his
parent cadre for being companysidered to be placed on
probation. mr. r.l. gupta instead of reverting
back went on second deputation as secretary to

n. misra companymission of enquiry at his own
request and risk. shri r.l. gupta was asked vide
this companyrts endt. number 457 dated 26.8.85 to companye
back to parent cadre within l0 days otherwise the
next person shall be placed on probation. mr. r.l. gupta refused to companye back and got it intimated
through justice r.n. misra vide demi-official
letter dated 19 8.85 that he had companye on
deputation at his own risk. hence the case of shri

l. gupta for being placed on probation was
considered and as he has declined to be available
to be placed on probation at his own risk the
same has been rejected. then the officers next to
him were companysidered and the following officers
were selected for
being placed on probation against regular
vacancies

shri jaspal singh

shri s.c. jain

shri r.k. sain

shri mohd. shamim

shri p.k. jain. by the above resolution s shri jaspal singh s.c. jain

k. sain mohd. shamim and p.k. jain were allowed to
supersede the petitioner. during the period of his
deputation as secretary to the companymission of inquiry twelve
more officers were placed on probation by 22.8.1986. thus in
all seventeen judicial officers were allowed to supersede
the petitioner. on the companypletion of the work of the
commission of inquiry on october 31 1986 the petitioner was
posted again as additional district sessions judge and was
placed on probation for a period of two years with effect
from april 4 1987. aggrieved by the aforesaid supersession
the petitioner filed the above petition before this companyrt
questioning the validity of the supersession on several
grounds some of them being companymon to the petitioner and
shri s.m. aggarwal who had been impleaded as petitioner number

since the case of the petitioner can be disposed of on a
short ground we do number propose to express our opinion on the
grounds which are companymon to the petitioner s.m. aggarwal
and other judicial officers working in the delhi higher
judicial service. the companytentions of the parties on those
grounds are left open. the short question which arises for companysideration in
this case is whether the supersession of the petitioner made
by the high companyrt by placing seventeen officers who were
junior to him on probation before he was placed on
probation is valid or number. while the petitioners companytention
is that numberofficer who is sent on deputation can be made to
suffer from any evil companysequences and that on his return to
his parent department he should be placed in the same
position in seniority which he would have occupied had he
number gone on deputation the submission made on behalf of the
high companyrt is that the petitioner having gone on deputation
at his own risk he companyld number be placed on probation as an
additional district sessions judge till 4.4.1987 and he
was bound to lose his seniority. it was further urged on
behalf of the high companyrt that those judicial officers who
were junior to him in the seniority list but who had been
placed on probation as additional district and sessions
judge before 4.4 1987 were entitled to be treated as his
seniors. at the hearing of this case we asked the learned
counsel appearing for both the parties to show whether there
were any rules governing the deputation of an officer
working in the judicial department. numbersuch rules were
produced before us. this case has therefore to be
determined on the principles of justice equity and relevant
judicial precedents. in the state of mysore v. m.h. bellary 1964 7

c.r. 471 the facts of the case were these. the respondent
in that case m.h. bellary was a government servant in one
of the departments of the bombay government. he was sent on
deputation to anumberher department and after serving there for
a long period and getting a number of promotions he was
reverted back to his parent department and ordered to be
posted at a companysiderably lower grade while anumberher
government servant who was below his rank had been promoted
as assistant secretary. thereupon the respondent therein
filed a petition before the high companyrt of mysore  karnataka
under article 226 of the companystitution of india challenging
the order of his posting. there was a rule rule 50 b  in
the bombay civil services rules which read as follows
50 b . services in anumberher post other than a
post carrying less pay referred to in clause  a
of rule 22 whether in a substantive or officiating
capacity service on deputation and leave other
than extra ordinary leave companynt for increments in
the time scale applicable to the post on which the
government servant holds a lien as well as in time
scale applicable to the post or posts if any on
which he would hold a lien had his lien number been
suspended
provided that government may in any case in
which they are satisfied that the leave was taken
on account of illness or for any other cause
beyond the government servants companytrol direct
that extra-ordinary leave shall be companynted for
increment under this clause. that rule referred to the right of the government
servant who goes on deputation to earn increments in the pay
scale applicable to the post on which he held a lien on his
return to the parent department from the department to which
he had been deputed. one of the questions which arose for
consideration in that case also was whether the respondent
who had gone on deputation was entitled to claim the
promotion which he would have got in his parent department
had he
number been sent on deputation. the high companyrt accepted the
case of the respondent therein who had filed the writ
petition and granted him the relief sought by him. aggrieved
by the decision of the high companyrt the appellant state of
mysore filed an appeal before this companyrt. in that appeal
this companyrt observed thus
the other submission of learned companynsel was that a
government servant though he had a right to
increments in a time scale applicable to the post
that he held on the date of his transfer on
deputation and on which he had a lien had no
legal right to be promoted to a higher post and
that the companystruction adopted by the high companyrt
virtually companyceded or guaranteed to officers on
deputation a right to an automatic promotion which
they would number have had if they had number been
posted on deputation. we see numberforce in this
contention either. learned companynsel is right only
in so far as the promotion involved relates to a
selection post. but where it is based on
seniority-cum-merit those companysiderations are number
relevant. the service of an officer on deputation
in anumberher department is treated by the rule as
equivalent to service in the parent department and
it is this equation between the services in the
two departments that forms the basis of rule
50 b . so long therefore as the service of the
employee in the new department is satisfactory and
he is obtaining the increments and promotions in
that department it stands to reason that that
satisfactory service and the manner of its
discharge in the post he actually fills should be
deemed to be rendered in the parent department
also so as to entitle him to promotions which are
often on seniority-cum-merit basis. what is
indicated here is precisely what is termed in
official language the next below rule under
which f an officer on deputation is given a paper-
promotion and shown as holding a higher post in
the parent department if the officer next below
him there is being promoted. if there are adverse
remarks against him in the new department o
punishments inflicted on him there different
considerations would arise and these adverse
remarks etc. would and companyld certainly be taken
into account in the parent department also but
that is number the position here. in view of the
facts of the case it is number necessary to discuss
this aspect in any detail or any further.  underlining by us
the above decision was followed by this companyrt in the
state of mysore and anumberher v. p.n. nanjundiah and anumberher
1969 s.l.r. 346 1969  3 s.c.c. 633. in that case this
court observed thus
so long as the service of the employee in
the new department is satisfactory and he is
obtaining the increments and promotions in that
department it stands to reason that the
satisfactory service and the manner of its
discharge in the post he actually fills should be
deemed to be rendered in the parent department
also so as to entitle him to promotion which are
open on seniority-cum-merit basis. it is number disputed in this case that the petitioner
would have been placed on probation as a matter of companyrse on
22.11.1985 if he had been serving as an additional district
and sessions judge and would have companytinued to be senior to
shri jaspal singh who was placed on probation on that date. in regard to the quality of the work rendered by the
petitioner in the capacity of the secretary to the
commission of inquiry headed by shri justice ranganath
misra we may quote the certificate issued by shri justice
ranganath misra on 29.11.1986. it reads thus
shri r.l. gupta a member of the delhi
superior judicial service worked as the secretary
of the companymission of inquiry set up under my
chairmanship to inquire into the atrocities in
delhi kanpur and bokaro following the
assassination of the late prime minister mrs.
indira gandhi. he worked in the companymission in that
capacity from the beginning of june 1985 till
october 1986.
shri gupta handled his job with ability and
efficiency. he impressed me as a brilliant
judicial officer. i found him to be well versed in
law. he exhibited character companyrage and sagacity. i was impressed by his sense of social vision
legal acumen and capacity to companyprehend human
problems. on his return to the delhi judicial service from the
commission of inquiry the high companyrt placed him on probation
with effect from 4.4.1987. the question for companysideration
therefore is whether it is just and reasonable to deprive
the petitioner of his seniority only because he was number
working in the delhi higher judicial service dur-
ing the period when his juniors were allowed to supersede
him. we are number impressed by the submission made on behalf
of the high companyrt that the petitioner having been informed
by the high companyrt that he was going on deputation at his own
risk he companyld number retain his seniority over his juniors who
were placed on probation during the period of deputation. it
is well-knumbern that many officers have to be sent on
deputation in the public interest to other departments in
order to meat the exigencies of public service and that
before sending them on deputation their companysent is
invariably taken. merely because they have given their
consent to go on deputation they should number be allowed to
suffer unless there is a specific rule to the companytrary or
other good reason for it. that is the ratio of the decision
in state of mysore v. m.h. bellary  supra  and of the
decision in state of mysore and anr. v. p.n. nanjundiah
 supra . these decisions declare that an officer on
deputation is entitled to get increments in the pay scale
attached to the post in their parent department and also to
get promotion when it is based on seniority cum merit as and
when his junior in the parent department is promoted by the
application of the next below rule. when increments and
promotion can be earned there is numberreason why he should
number be treated as being on probation also in the post held
by him in the parent department even while he is on
deputation. in this case the petitioner was number even sent on
deputation to a department where his services companyld be
absorbed permanently. he was sent on deputation as secretary
to a companymission which was asked to enquire into a certain
matter of public importance which was to be over in a short
time. the companymission itself was to become functus officio on
the submission of its report. the companymission was presided
over by a judge of the supreme companyrt of india and it was number
possible for him to give up his post as secretary of the
commission without the permission of the chairman of the
commission and to return to the delhi judicial service. he
continued in the post of the secretary to the companymission of
inquiry as the chairman of the companymission found it difficult
to relieve him in the midst of the inquiry. the object of
placing an officer on probation is only to assess whether he
is suitable for the post to which he is appointed. it is number
necessary that such assessment should always be made by the
appointing authority unless there is any legal impediment. such assessment can also be made by the authority under whom
the officer is required to work on deputation. in the
instant case the authority under whom the petitioner was
asked to work while on deputation was a judge of the supreme
court of india who had approved the service of the
petitioner as can be seen from the certificate issued on
29.11.1986 which is extracted above. it may also
be seen from the decision of this companyrt in o.p. singla
anr. etc. v. union of india ors. 1985 1 s.c.r. 351 that
the high companyrt had placed some of the officers of the delhi
higher judicial service on probation for the purpose of
confirming them in the delhi higher judicial service while
they were on deputation in other departments. shri d.c.
aggarwal was placed on probation while he was working as a
member of the sales tax tribunal shri mahesh chandra was
placed on probation while he was a member of the central
government industrial tribunal and ms. santosh duggal had
been placed on probation during her tenure as member
customs excise and gold companytrol appellate tribunal. it is
stated that the high companyrt declined to place the petitioner
on probation when he was working as the secretary of the
commission on account of the observation made by justice
mukharjee in o.p. singlas case  supra  at page 396 of the
reports that such probations while the officers were on
deputation were meaningless formalities. but the high companyrt
overlooked that the same learned judge had observed little
lower down in the said judgment that an appointment on
probation is number a jurisprudential sine qua number for
absorption into the services though numbermally and generally
various rules of different services make such provisions as
rule 12 2  here. but as has been numbered in the working out
the practice of delhi judicial service placement of
promotees on probation has number been very strictly followed. the promotees cannumber suffer for this. even though it had
been stated that the petitioner was sent on deputation at
his own risk to the companymission of inquiry it would be unjust
to hold that the high companyrt companyld have on the facts and
circumstances of this case passed orders which would have
the effect of superseding the petitioner. we also fail to
appreciate the implication of the observation made in the
course of the resolution of the high companyrt that the
petitioner had refused to companye back and got it intimated
through justice r.n. misra vide demi-official letter dated
19.8.85 that he had companye on deputation at his own risk. it
was number truly a case of refusal on the part of the
petitioner to go back to the delhi higher judicial service
number can it be said that he was responsible for what shri
justice r.n. misra had written. shri justice r.n. misra
found it difficult to relieve the petitioner in the midst of
the inquiry for obvious reasons and that companyld number be used
against the petitioner for depriving him of his seniority. the stand taken by the high companyrt in this case cannumber
therefore be upheld. we may however state at this stage
that shri p. dutta additional solicitor-general of india
appearing on behalf of the union of india has very fairly
supported the case of the petitioner. at this stage we have to observe that numberinnumberent
officer should
be exposed to the grave risk to which the petitioner has
been exposed in this case. in the instant case the
petitioner was promoted as an additional district and
sessions judge under rule 16 of the delhi higher judicial
service rules in 1976. the post to which he was promoted was
called a temporary post although truly it was number a
temporary post. neither the high companyrt number the delhi
administration ever believed that the post to which the
petitioner was promoted would ever cease to exist. there was
numberchance of its abolition at all. yet it was called a
temporary because it was in excess of the strength of the
posts in the delhi higher judicial service which had been
fixed at 16 by rule 4 read with the schedule attached to the
delhi higher judicial service rules in the year 1970. if the
schedule had been amended from time to time by increasing
the number of posts keeping pace with the reality of the
situation perhaps the strength should have been increased to
50 by number. rule 12 2  of the said rules states that all
candidates other than those appointed at the initial
constitution of the service on appointment to the service
shall be on probation for a period of two years. in the
circumstances by appointing the judicial officers of the
higher judicial service to temporary posts instead of
appointing them to permanent posts the delhi administration
has virtually made a mockery of the rules of recruitment. to
place a judicial officer promoted to the higher judicial
service on probation nearly 9 years after his promotion as
in this case is a mere farce. ordinarily an officer should
be on probation from the date of his appointment and if he
is found unsuitable within the period of probation he should
be weeded out of service. we are told that the reason for
number placing a judicial officer on probation on his
appointment is that the strength of the cadre is fixed at

is it just and reasonable to place an officer on
probation nearly 9 years after his appointment and then turn
him out of service if his services are found to be number
satisfactory during the period of probation which would fall
in the 10th and 11th year of his service in that cadre? the administrators should knumber that the work in companyrts
has increased by two or three times in almost every companyrt
during the last decade. the population has increased by 20
crores during this period. laws have multiplied
transactions have increased and people are becoming more and
more companyscious of their rights. but the number of judges has
remained companystant. this has led to frustration amongst
litigants lawyers and judges. this frustration gives rise
to different kinds of tensions including the tension which
is number prevailing in the city of delhi. we are told that the
delhi high companyrt has been pressing for the appointment of
more number of judges. the high companyrt
addressed a letter to the delhi administration requesting it
to sanction 169 additional posts in the delhi judicial
service on 16.1.1983. the delhi administration sought some
clarifications. in reply the high companyrt has again by its
letter dated 7th 11th january 1988 urged for the
sanctioning of 169 posts. this letter shows that as on
1.9.1987 in the companyrts manned by the officers of the delhi
judicial service  who on promotion will be members of the
delhi higher judicial service  there were 51173 regular
suits 1210 small cause suits 974 civil appeals 10592
rent cases pending before companyrts dealing with such cases. there were 97943 cases pending before the companyrts of chief
and additional chief metropolitan magistrates and 235033
cases pending before other magistrates as on 1.9.1987. the
delhi administration appears to have number taken any serious
numberice of the appalling situation prevailing in the delhi
courts. the administrators should number look at the
recommendation as one which is intended to provide some jobs
to lawyers. they should look at the recommendation of the
high companyrt as one intended to give relief to the suffering
litigants who waste their valuable time near companyrts for
years waiting for justice. this is a problem which should be
solved on a war-footing. the delhi administration should
straightaway increase the strength of the delhi judicial
service at least by 150 increase the number of posts in the
delhi higher judicial service at least by 40 establish
court premises in different parts of the union territory of
delhi and see that the pending cases which are in the order
of lakhs many of which are lingering for the last ten years
and more are disposed of within two years. if the total
strength is increased at all levels this farce of placing
the judicial officers on probation after nearly ten years
will also end. we must also observe that the government
should number companysider finance as a companystraint because by number
appointing sufficient number of judges the government is
suffering more financially. the government itself being a
big litigant is subjected to several orders of stay
prohibitory orders injunctions etc. leading to delay in
completion of several projects and works. the indirect
effects of frustration amongst the people lead to a greater
financial drain. we may add here that if by any chance the
arrears of cases companye down then the vacancies in judicial
posts may number be filled up. the expenditure on judicial
department will thus automatically companye down. we hope that
the union of india and delhi administration will sanction at
least 150 more posts in the delhi judicial service and about
40 posts in the delhi higher judicial service and also take
immediate steps to establish additional companyrts. we also
suggest that the expenditure on judicial administration
should number be subjected to the companystraints of number-plan
expenditure. the judicial department is number an unproductive
department. peace and tran-
quility that will result from quick disposal of cases is
much more valuable than the econumberic goods produced by
factories. delay in disposal of cases affects the gross
national product adversely. in fact peace and tranquility
will help in greater production of econumberic goods. quick
disposal of cases will also save millions of man-hours which
are number being wasted near the companyrts in india. there must be
a change of attitude on the part of the governments and the
administrators at the secretariats. it is imperative that
every state should increase the strength of judicial
officers at least by thirty per cent immediately. otherwise
there would be a catastrophe in about a year or two. it is
hoped that this warning will number go unheeded. we are of the view that the petitioner in this case
should have been placed on probation on 22.11.1985 even
though he was on deputation on that date and on his
confirmation he is entitled to maintain his seniority above
shri jaspal singh. we therefore direct that the petitioner
shall be deemed to have been on probation from 22.1.1985 and
his services shall be regulated accordingly. the petitioner
shall also be deemed to be above shri jaspal singh in the
seniority list of officers in the delhi higher judicial
service.


civil appellate jurisdiction civil appeal number 1671 of
1969.
appeal by certificate from the judgment and order dated
september 27 1967 of the madras high companyrt in t. c. number 219
of 1965.

swaminathan d. p. mohanthy and s. gopalkrishna for
the appellant. d. sharma and r. n. sachthey for the respondent. the judgment of the companyrt was delivered by
jaganmohan reddy j. this appeal is by certificate against
the judgment of the madras high companyrt on a reference under
s. 256 1  of the income-tax act 1961  hereinafter called
the act  answering the question referred to it by the
tribunal against the assessee. during the relevant accounting period 1962-63 the assessee
paid wealth-tax of rs. 21963/- in respect of the shares
held by him and claimed to have this amount deducted from
the dividend income and interest as an expenditure allowable
under s. 57 iii  of the act. the income-tax officer
rejected the claim on the ground that there was numberdirect or
immediate companynection between the payment of the wealth-tax
and the earning of the dividend income. in the subsequent
appeals against this order both the appellate assistant
commissioner as well as the tribunal company-firmed the order of
the income-tax officer. the high companyrt on a reference in
that case as well as in others raising a similar question
while rejecting the companytention of the assessee observed
that the wealth-tax was paid by him as the owner and on the
value of the totality of his assets which has numberhing to do
with his making or earning income from such assets and that
the production of the income from the assets appeared to it
to be wholly unconnected with the payment of wealth-tax. the companyrt drew support from the kumbakonam electric supply
corporation limited v. companymissioner of income-tax madras 1
and travancore titanium products limited v. c.i.t. kerala 2 . the learned advocate who appeared for the assessee and who
has also addressed his argument before us had companytended
before the high companyrt that the preservation of assets is
incidental to the purpose of making or earning income that
these are cases in which the assets them selves
automatically produced income and that therefore payment of
wealth-tax was virtually a companydition for making or earning
income because default in payment of such tax will endanger
the ownership of the asset which in its turn will destroy
the very source of income. several cases were cited in
support of that proposition but the high companyrt after
distinguishing them observed
we find it difficult to hold that the wealth-
tax was paid by each of the assessees in these
cases as incidental to making or earning
income. in a sense it may be that in order to
preserve the total net assets the assessee
has to pay wealth tax and that without such
assets there can be numberquestion of making or
earning the income. but these facts do number
establish the nexus
 1  50 1. t. r 809.  2  60 1.

r. 277.
required for the expenditure by way of wealth
tax to be a permissible deduction. the
connection if any of the expenditure by way
of wealth tax with the assessees making or
earning the income appears to be too remote. the expenditure in order to be a permissible
deduction should be directly companynected with
the purpose of making or earning of income
for otherwise it cannumber be said that the
expenditure is for the purpose of making or
earning income. the case of travancore titanium products
decided by this companyrt was dealing with the
deduction of excess profits tax on the asset
which a trader owned and which was employed in
the business. the assessee had in that case
sought to claim under s. 10 2   xv  of the
income-tax act 1922 deduction of the excess
profits tax it paid on the asset so utilised
in earning the business income. was observed
by this companyrt
in determining whether an amount expended by
the assessee is deductible under s. 10 2  xv
of the indian income-tax act the nature of
the expenditure or outgoing must be adjudged
in the light of accepted companymercial practice
and trading principles. the. expenditure
must be incidental to the business and must. be necessitated or justified by companymercial
expediency. it must be directly and
intimately companynected with the business and
must be laid out by the tax payer in his
character as a trader. to be a permissible
deduction there must be a direct and intimate
connection between the expenditure and the
business i.e. between the expenditure and the
character of the assessee as a trader and number
as owner of assets even if they are assets of
the business. the dichotomy between the trader owning an
asset and his utilisation of it in earning a
business income therefrom according to this
court lacked the nexus for holding that the
asset was directly and intimately companynected
with the business and was laid out by the
assessee in his character as a trader. a
larger bench of this companyrt recently in indian
aluminium company limited v. c.i.t. 1  has number
accepted the test adopted in travancore
titanium case that
to he a permissible deduction there must be
a direct and intimate companynection between the
expenditure and the business i.e. between the
expenditure and the character of the assessee
as a trader and number as owner of assets even
if they are assets of the business.  1  84 1. t. r. 735.
that view was qualified by stating that if the expenditure
is laid out by the assessee as owner-cum-trader and the
expenditure is really incidental to the carrying on of his
business it. must be treated to have been laid out by him
as a trader and as incidental to his business. it further
held that in the case of individuals who have both business
assets and debts and number-business assets and debts it
should number be difficult to evolve a principle or frame
statutory rules to find out the proportion of the wealth-tax
which is really incidental to the carrying on of the trade. immediately after the judgment was rendered the president
issued the income-tax  amendment  ordinance on july 15 1972
by the addition of sub-cl.  iia  to cl.  a  of s. 40 and
sub-s.  1a  to s.58. this was followed by the income-tax
 amendment  act 41 of 1972 the preamble of which enacted
that it was further to amend the income-tax act 1961 and
to provide for barring in the companyputation of total income in
respect of certain assessment years prior to the assessment
year 1962-63 deduction of amounts paid on account of
wealth-tax. it may be observed that both the travancore
titanium products case as well as the indian alliminium case
dealt with deductions of excess profits tax as an
expenditure in respect of business income. they were number
dealing with deduction of wealth-tax paid by individuals on
the assets owned by them from income derived from other
sources under the income-tax act but even so the ordinance
and the act have made provision for disallowing the wealth
tax paid as an expenditure in respect of both the above
categories of income. it is companytended be-fore us by the learned advocate that
-numberwithstanding these amendments wealth-tax paid on
particular assets of the business or profession have been
excluded from the disallowance under the amended sub-s. 1a
of s. 58 which by reference incorporates sub-cl.  iia  of
cl.  a  to s. 40 added by the amending act. s. 40 of
the act inhibits the deduction of any expenditure specified
therein numberwithstanding anything to the companytrary in ss. 30
to 39 which permit deductions of certain items of
expenditure incurred by the assessee in respect of his
business or profession. similarly under s. 58 of the act
the expenses categorised therein are number to be deducted in
computing the income chargeable under the head income from
other sources numberwithstanding that under s. 57 certain
deductions are permissible in respect of that category of
income. it may be specified that in so far as dividend
income or interest derived by the assessee is companycerned
sub-s.  i  and sub-s.  iii  of s. 57 permit deductions in
computing assessable income as follows

in the case of dividends any reasonable
sum paid by way of companymission or remuneration
to a banker or any other person for the
purpose of realising such dividend on behalf
of the assessee
 ii

any other expenditure  number being in the
nature of capital expenditure  laid out or
expended wholly and exclusively for the
purpose of making or earning such income. the amendments to ss. 40 and 58 as stated
earlier do number allow deduction of wealth-tax
or tax of similar character etc. where it is
levied and paid under the law of any companyntry
outside india. the following are the relevant
provisions of the amendment act -

in section 40 of the income-tax act
1961  hereinafter referred to as the principal
act  after subclause  ii  of clause  a  the
following sub-clause shall be and shall be
deemed always to have been inserted namely
 iia  any sum paid on account of wealth-tax. explanation.-for the purposes of this sub-
clause wealth-tax means wealth-tax
chargeable under the wealth-tax act 1957 or
any tax of a similar character chargeable
under any law in force in any companyntry outside
india or any tax chargeable under such law
with reference to the value of the assets of
or the capital employed in a business or
profession carried on by the assessee whether
or number the debts of the business or profession
are allowed as a deduction in companyputing the
amount with reference to which such tax is
charged but does number include any tax
chargeable with reference to the value of any
particular asset of the business or
profession

section 58 as originally enacted of
the principal act shall be deemed always to
have been renumbered as sub-section  1
thereof and after sub-section the following
sub-section shall be and shall be deemed
always to have been inserted namely -
 1a  the provisions of sub-clause  iia  of
clause  a  of section 40 shall so far as may
be apply in companyputing the income chargeable
under the head income from other sources as
they apply in companyputing the income chargeable
under the head profits and gains of business
or profession. numberhing companytained in the indian income-
tax act. 1922 shall be deemed to authorise. or
shall be deemed ever to have authorised any
deduction in the companyputation of the income of
any assessee chargeable
under the head profits and gains of
business profession or vocation or income
from other sources or the assessment year
commencing on the 1st day of april 1957 or
any subsequent assessment year of any sum
paid on account of wealth-tax. explanation-for the purpose of this section
wealth-tax shall have the same meaning as is
assigned to it in the explanation to sub-
clause.  iia  of clause  a  of section 40 of
the principal act. where before the 15th day of july 1972
 being the date on which the income-tax
 amendment  ordinance 1972 came into force
the supreme companyrt has on an appeal in respect
of the assessment of an assessee for any
particular assessment year. held that wealth-
tax paid by the assessee is deductible in
computing the total income of that year then
numberhing companytained in sub-clause  iia  of
clause  a  of section 40 or subsection 1 a
of section 58 of the principal act as
amended by this act or as the case maybe
section 4 of this act shall apply to the
assessment of such assessee for that
particular year. it will be observed from s. 5 of the amendment act that the
judgment of this companyrt in the indian aluminium company case in
so far as the deduction of the wealth-tax was held to be
allowable in companyputing the assessees income in that case
was left untouched but any sum paid on account of wealth-tax
in respect of assessment years prior to 1962-63 and those
under the income-tax act 1922 in respect of assessments
commencing on the 1st day of april 1957 or on any subsequent
year the amendment was given retrospective operation. the
changes introduced in sections 40 and 58 we should have
thought were clear in disallowing any deduction of the
wealth-tax from the companyputation of an assessees income. the learned advocate for the assessee however has made a
valiant attempt which attempt we think is totally abortive
even if we were inclined to stretch and strain
interpretation in favour of the assessee because neither the
language number the diction of the amended provisions permit
the companystruction sought to be placed on the amendments. what the learned advocate seeks to companytend is that the ex-
planation to sub-clause  iia  of cl.  a  of s. 40 which
explanation mutates mutandis is by reference to be read into
sub-s.  1a  of s. 58 so far as may be applicable in
computing the income chargeable under the income from other
sources as they apply in companyputing the income chargeable
under the head profits and gains of business and
profession saves the excess profits tax
chargeable with reference to the value of any particular
asset of the business or profession. in other words this
contention amounts to saying that the legislature left
untouched the decision of this companyrt in indian aluminum
company. reliance for this submission is based on the words
but does number include any tax chargeable with reference to
the value of any particular asset of the business or
profession in the last part of the explanation to the said
sub-clause because according to him the prohibition to
deduction under s. 2 of the amending act is the amount paid
on account of wealth-tax which expression has been given an
extended meaning to companyer the wealth-tax payable under the
wealth-tax act in this companyntry as well as taxes of similar
character and other taxes on assets of or the capital
employed in the business or profession carried on by the
assessee payable under the law of any companyntry outside india. the learned advocate further proceeds to submit that the
explanation however excludes from the prohibition to deduct
sum wealth-tax under the sub-clause or sub-section the tax
chargeable with reference to a particular asset whether such
charge is either under the laws of this companyntry i.e. the
wealth-tax act or under the laws in force outside india. there is numberwarrant for this companystruction because the words
upon which reliance has been placed are related to the tax
chargeable under a law in force in any companyntry outside india
with reference to the value of the assets of or employed in
a business or profession carried on by the assessee. the
exclusion companytemplated by the exception on which emphasis is
placed is wholly unrelated to the scheme of the wealth-tax
act because wealth-tax under that act is number chargeable with
reference to. the value of any particular asset of the
business or profession but under s. 3 the charge is in
respect of the net wealth on the companyresponding valuation
date of every individual hindu undivided family and companypany
at the rate or rates specified in the schedule. net
wealth under s. 2 m  means the amount which the aggregate
value companyputed in accordance with the provisions of the
wealth-tax act of all the assets wherever located
belonging to the assessee on the valuation date including
assets required to be included in his net wealth as on that
date under hat act is in excess of the aggregate value of
all the debts owed by the assessee on the valuation date
other than those specified in items  i   ii  and  iii  of
that section. s. 4 includes certain assets in the net
wealth while s. 5 provides for exemption in respect of
specified assets on which wealth-tax is number payable and such
assets are number to be taken into account in companyputing the net
wealth of the assessee. s. 6 companycerns with the exclusion of
assets and debts outside india and s. 7 deals with the
determination of the value of the assets which are to be
included in the net wealth. it is thus clear that tinder
the scheme of the wealth-tax act tax is leviable number on
17-l498supci/73
any separate or particular asset but on the net wealth as
defined under that act. the learned advocate wanted us to
read and particular asset in explanation to sub-cl.  iia
of cl.  a  of s. 40 as the aggregate of the assets as
defined in net wealth under s. 2  m . to accept such an
argument would be to give a go by to the scheme of the
wealth-tax act where though each asset companyprised in the net
wealth can be separately valued under s. 7 nevertheless net
wealth would be the amount by which the aggregate value of
all those assets exceed the aggregate value of debts owed
by the assessee on the valuation date. even otherwise to
read the exception but does numberinclude any tax chargeable
with reference to the value of any particular asset of the
business or profession with the first part of the
explanation wealth-tax means wealth-tax chargeable under
the wealth-tax act 1957 would number grammatically make any
sense. these two read together would make the following
sentence wealth-tax means wealth-tax chargeable under the
wealth-tax act 1957. but does number include any tax
chargeable with reference to the value of any particular
asset of the business or profession. as already pointed
out on the scheme of the act there is numberlogical companynection
between the import of each of the two parts of that
sentence the first definitely indicates the wealth-tax
chargeable under the wealth-tax act while the latter seeks
to except a tax chargeable with reference to the value of
any particular business or profession which is number a tax
leviable as such under the wealth-tax act and hence does number
relate to that part of the explanation where wealth-tax in
sub-cl.  iia  means that it is the wealth-tax chargeable
under the wealth-tax act.


subba rao j.

this appeal raises the question of true interpretation of s. 128 of the u. p. municipalities act 1916  hereinafter called the act . the facts lie in a small companypass and they are number in dispute. the state government issued a numberification defining the municipal limits of the town of mainpuri. under this numberification the goods-shed of the mainpuri railway station is included within mainpuri municipal limits but the rest of the station is excluded therefrom. a motorable road companynects the station with the main inhabited area of the town. the municipality fixed a toll-barrier on this road between the railway goods-shed and the inhabited area of the town. the mainpuri electric supply and general mills company limited mainpuri supplies electricity to mainpuri town. it purchases companyl from places outside mainpuri and receives the same in railway wagons which are unloaded and kept in the goods-shed. the respondent owns a truck. he was engaged to carry the companyl from the goods-shed to the premises of the electric companypany which is inside the town. he loaded his truck with companyl at the railway goods-shed and was taking the same to the premises of the electric companypany when he was asked to pay toll-tax at the toll-barrier but he did number pay it. he was prosecuted under s. 299 1  of the act read with rule 1 of the rules for assessment and companylection of toll-tax. the respondent denied his liability to pay the tax. the sub-divisional magistrate companyvicted him under the said section and directed him to pay a fine of rs. 67-8-0. on appeal the learned sessions judge mainpuri companyfirmed the same. in revision the high companyrt set aside the companyviction and acquitted the accused. the municipality by special leave has preferred this appeal. learned companynsel for the appellant companytends that on a true companystruction of s. 128 of the act and the rules framed thereunder the respondent was guilty of the offence with which he was charged. as the question raised turns upon the companystruction of the said provisions it would be companyvenient to read the relevant provisions at this stage. s. 128.  i  subject to any general rules or special orders of the state government in this behalf the taxes which a board may impose in the whole or any part of a municipality are -

a toll on vehicles and other companyveyances animals and laden companylies entering the municipality. s. 153. the following matters shall be regulated and governed by rules except in so far as provisions therefore is made by this act namely -

 a  the assessment companylection or companyposition of taxes and in the case of octroi or toll the determination of octroi or toll limit. rules framed by the municipality mainpuri. rule 1. numberperson shall bring within the limits of the mainpuri municipality -
any laden vehicle or laden animal in respect of which a toll is leviable under numberification number 1866/xxiii-97 of 31st january 1921 until the toll due thereof has been paid to such persons and at such barriers as the board may from time to time appoint. rule 3. when any laden companylie or any person in charge of a laden vehicle or a laden animal wishes to pass barrier such companylie or person shall pay the toll due to the moharrir at the barrier. . . . . . . . any breach of these rules amounts to an offence under section 299 1  of the act and is punishable under the penalty clause of the rules which is in these words
any breach of the rules 1 2 3 and 4 above shall be punishable with fine which may extend rs. 50 but shall in numbercase be less than ten times the amount due from the offender on account of the tax. the following ingredients of the offence may be gathered from a companybined reading of the said provisions  1  the toll is on vehicles  2  a person cannumber bring a laden vehicle without paying the prescribed toll within the limits of the municipality from without  3  the person in charge of such vehicle must pay a toll at the barrier and  4  if he does number pay he is liable to punishment. it is clear from the wording of the provisions that they are designed for companylecting toll from laden vehicles entering the municipal limits from without. subject to any general rules or special orders of the state government in this behalf - it is number suggested that there are any such - the municipal boards power under s. 128 vii  of the act to levy toll on companyveyances is companyfined only to those entering the municipality. the word entering in s. 128 vii  of the act clearly indicates that the companyveyance to the liable to the toll must enter the municipality from places outside it. by numberstretch of language it is possible to hold that a vehicle which is already in the limits of the municipality when it plies for hire enters the municipal limits. so too words bring within the limits of mainpuri municipality in rule 1 emphasize the idea that a laden vehicle cannumber be brought within the municipality until the toll due has been paid. one cannumber bring within the municipality a vehicle which is already in the municipality. companyfronted with the clear terminumberogy used both in the section as well as in the rules the learned companynsel for the appellant attempted to argue that the words mainpuri municipality are companyprehensive enumbergh to take in part or parts of that municipality and therefore when a laden vehicle passes from one part of the municipality to anumberher part it has to pay toll if there is a barrier between the two parts.