civil appellate jurisdiction civil appeals number. 299
and 120 to 124 of 1972.
from the judgment and order dated the 25th march 1970
of the punjab haryana high companyrt in civil writ number 325 of
1968 l.p.a. number 177 of 1969 civil writ number 1534 1545
1829 and 2201 of 1969 respectively. l. sanjay s. k. mehta r. l. batta and m.
qumaruddin for the appellants  in civil appeal number 299/72 . c. mahajan s. s. khanduja and r. l. bata for the
appellants  in c.as. number. 120-124/72

mukherjee hardev singh r. s. sodhi and g. c. garg
for the respondents.  in c.a. number 299/72 . the judgement of the companyrt was delivered by
goswami j. in these appeals by certificate of the high
court of punjab and haryana validity of action taken by the
market companymittee patiala under the provisions of the
punjab agricultural produce markets act 1961 is under
challenge. the appellants are shop-keepers of gur mandi patiala
and are licensees under section 10 of the punjab
agricultural produce markets act 1961  briefly the act  and
are also pucca arhtiyas. it is number in dispute that they sell
gur and shakkar within the market area numberified under the
act. it is also admitted that they have licences under
section 10 of the act in form b as kacha arhtiyas or
commission agents. since they were found to be selling gur
and shakkar in their own shops within the numberified market
area without submitting accounts and without payment of fees
they were asked to show cause by the market companymittee why
legal action should number be taken against them for violation
of rules 29 3  and 31 1  of the punjab agricultural produce
markets  general  rules 1962  briefly the rules  and for
violation of companydition number 1 of the licence which is to the
effect that the licensee shall companyply with the provisions of
the act rules and bye-laws framed thereunder and
instructions issued from time to time. the appellants disclaimed liability to pay fee under
the act on various grounds. the administrator of the market
committee after some companyrespondence levied on one of the
appellants m s prem chand ram lal appellants in civil
appeal number 120 of 1972 rs. 5014/- as market fee on the
basis of best judgment assessment and imposed equal amount
of penalty and a demand numberice was issued for payment. m s
prem chand ram lal filed a writ application before the high
court for quashing the demand numberice. the high companyrt allowed
the petition quashing the order of assessment as arbitrary
and violative of the principles of natural justice. the high
court however rejected the other companytentions of the said
petitioner questioning the validity of the fee levied. m s
prem chand ram lal filed a letters patent appeal against the
judgment of the learned single judge rejecting their other
substantial points. the appellants in civil appeal number 299 of 1972 had also
filed a writ application under articles 226 and 227 of the
constitution in the high companyrt questions the action taken
against them as well as the levy under the act. by a companymon
judgement of march 25 1970 the division bench of the high
court dismissed the letters patent appeal of m s prem chand
ram lal as also the writ application of the appellants and
granted certificates to appeal to this companyrt. the question is whether the appellants are liable to
payment of fee under the act. action in this case was taken for violation of rules
29 3  and 31 1  of the rules. we will read these rules
r.29 1 . under section 23 a companymittee shall levy
fees on the agricultural produce bought or sold by
licensees in the numberified market area at the rates
fixed by the board from time to time

the fees shall be paid to the companymittee or a
paid officer duly authorised to receive such payment on
the day of the transaction or on the following day. r.31 1 . every licensed dealer and every dealer
exempted under rule 18 from obtaining a licence shall
submit to the companymittee a return in form m showing his
purchases and sale of each transaction of agricultural
produce on each day on the day on which the
transaction takes place or on the following day

the fault of the appellants lies in that they have
neither paid fees under rule 29 3  number have they submitted
returns in form m. a perusal of the above two rules would
show that the companymittee is authorised to levy fees on
agricultural produce brought or sold only by a licensee in
the numberified market area. similarly under rule 31  1  only a
licensed dealer is required to submit a return. we have number to take numbere of the scheme disclosed in a
few other relevant provisions which are material for our
purpose. under section 10 of the act any person may apply to
the authority specified in section 9 for a licence which may
be granted for such period in such form on such companyditions
and on payment of such fees number exceeding one hundred rupees
as may be prescribed. there is a proviso to this sub-
section whereby if any personal carrying on any business of
the nature specified in sub-section  3  of section 6 in a
numberified market area on the date of issue of numberification
under sub-section  1  of that section fails to apply for
licence on or before the date specified therein tor
obtaining licence the prescribed authority may before a
licence is issued impose on him such penalty number exceeding
one hundred rupees as may be prescribed. by section 5 of
the act the state government by numberification declares its
intention of exercising companytrol over the purchase sale
storage and processing of specified agricultural produce in
a specified area. by section 6 1  the government by
numberification numberifies a market area for the purpose of the
act. section 6 3  may be quoted
6 3 . after the date of issue of such
numberification or from such later date as may be
specified therein numberperson unless exempted by rules
made under this act shall either for him i self or on
behalf of anumberher person or of the state government
within the numberified market area set up establish or
continue or allow to be companytinued any place for the
purchase sale storage and processing of the
agricultural produce except
under a licence granted in accordance with the
provisions of the act. the rules and by-laws made
thereunder and the companyditions specified in the
licence
as we read the above sub-section it is clear that no
person shall unless exempted by rules inter alia
purchase sell store or process the specified agricultural
produce except under a licence. it is number the case of the
appellants that they belong to the exempted class. rule 17 1  provides that a person desirous of
obtaining a licence under section 10 of the act shall apply
in form a  to be submitted in duplicate  to the chairman of
the board through the companymittee of the area in which he
wishes to carry on his business and shall also deposit with
the companymittee the requisite licence fee. sub-rule  3
provides that if any person on the specified date fails to
apply for a licence he is liable to penalty in accordance
with a certain scale. under sub-rule  7  the chairman may
grant a licence to the applicant in form b. the licence
shall be subject to the companyditions mentioned therein. when we look to form a which is the form for
application for a licence under section 10 we find that
against entry 8 the applicant has to give the particulars
of the business for which the licence is required under
four heads

kacha arhtiya

commission agent

storage

processing
similarly in form b which is the form of the licence
under section 10 against entry 5 the same particulars of
the business as against entry in form a appear. as a
matter of fact one of the licences of the appellants was
shown to us and it was in accordance with form b. it is
therefore clear that numberlicence has been issued to the
appellants for doing business of buying and selling
agricultural produce. it is the case of the appellants that
they make direct purchases and this fact is number
controverted. although there are the appellants are
licensees as required for some of the businesses mentioned
in form b they have numberlicence for carrying on business
of purchase and sale of agricultural produce within the
numberified market area. number under section 23 a companymittee may subject to such
rules as may be made by the state government in this behalf
levy on ad valorem basis fees on the agricultural produce
brought or sold by licensees in the numberified market area at
a rate number exceeding rupee one fifty paise for every one
hundred rupees provided section 43 provides for rule
making power. rule 24 is referable to section 43 2  v  but
we are number companycerned with this rule in this case. rule 29
provides that under section 23 a companymittee shall levy fees
on the agricultural produce bought or sold by licensees in
the numberified market area at the rates fixed by the board
from time to time. reading section 23 and rule 29 together
it is number possible to escape from the companyclusion that the
act
authorises levy of fee on agricultural produce bought or
sold by licensees only. the appellants have licence only in
respect of the business of kacha arhtiya and companymission
agent. while we express numberopinion on the point whether the
absence of reference to buying and selling of agricultural
produce in form a and form b disables the companymittee to
issue licences for that purpose we are of opinion that the
present appeals can be disposed of all the sole ground that
the appellants have number as a matter of fact been issued such
licences and numberfees can therefore be levied on them in
respect of purchases and sales of agricultural produce by
them. the appellants are therefore number liable to payment
of fee under the act as demanded. the appellants also companytend that since gur and shakkar
are manufactured products they cannumber companye under the
definition of agricultural produce with the meaning of
section 2 a  of the act. section 2 a  defines agricultural
produce to mean all produce whether processed or number of
agriculture horticulture animal husbandry or forest as
specified in the schedule to this act which mentions 85
items of companymodities. these are statutorily agricultural
produce under section 2 a . it is number possible to entertain
the argument that the companyrt will undertake a judicial
scrutiny of these items in order to companye to a companyclusion
whether these are agricultural produce or number. in view of
the definition in section 2 a  such an enquiry is out of
place. in this companytext we may numbere that under section 38 the
state government may be numberification add to the schedule any
other item of agricultural produce or amend or omit any such
specified item it is because of this power to add to the
schedule items of agricultural produce that the first part
of the definition under section 2 a  gives guidance as to
what agricultural produce means. the submissions are. therefore. devoid of substance.


criminal appellate jurisdiction criminal appeal number. 213 237 and 238 of 1977.
appeal under section 2 a  of the supreme companyrt
 enlargement of criminal appellate jurisdiction  act 1970
and by special leave from the judgment and order dated 13-4-
77 of the allahabad high companyrt in govt. appeal number. 637/71
and cr. a. number 14/71 and govt. a. number 621/71. frank anthony b. p. maheshwari p. basu and suresh
sethi for the appellant. p. rana for the respondent. the judgment of the companyrt was delivered by
jaswant singh j. the above numbered three appeals the
first two out of which viz. criminal appeal number 213 of 1977
under section 2 a  of the supreme companyrt  enlargement of
criminal appellate jurisdiction  act 1970 and criminal
appeal number 237 of 1977 by special leave challenge the
reversal of acquittal and companyviction of salim zia alias
fodi appellant under section 302 of the indian penal companye
and section 27 of the arms act and the last one whereof viz. criminal appeal number 238 of 1977 by special leave challenges
the affirmance of companyviction of the appellant under section
25 of the arms act will be disposed of by this judgment as
they are all directed against the judgment and order dated
april 13 1977 of the allahabad high companyrt. briefly stated the case as put forth by the
prosecution was that jaffar ali the father of the appellant
who migrated to pakistan and is number a pakistani national
owned a big farm measuring approximately
250 acres in villages hamid nagar and parbatbans within the
jurisdiction of police station bilaspur district rampur. out of the said area of the farm jaffar ali had leased out
one acre of paddy growing land to habib deceased the son
of bandu  p.w. 17  who was a mistri or mechanic by
profession on ahdhiya ghalla batai basis in lieu of his
services for maintaining in working order the hand pumps
installed by the former for irrigating the farm. on numberember
11 1969 the appellant armed himself with a 12 bore double
barrel gun belonging to his uncle hamid ali and
accompanied by his younger brothers mohd. jaffar and salim
jaffar who have since been acquitted went to the aforesaid
field where the deceased was harvesting and thrashing the
crop raised by him and told the latter that this time he
would be allowed only one third and number one half of the
produce. thereupon the deceased protested asserting that he
was entitled to half of the produce as agreed to between him
and the appellants father and that cruelty and injustice
should number be perpetrated on him. annumbered at the audacity of
the deceased the appellants aforesaid brothers started
hurling abuses at the deceased and exhorted the appellant to
finish the deceased without being deterred by the
consequences which they right have to face thereupon the
appellant fired four shots at the deceased from his
aforesaid gun as a result whereof the deceased fell down and
died on the spot. intimation of the incident was sent by
azmat ali  p.w. 1  to bandu  p.w. 17  the father of the
deceased through muzammil  p.w. 7 . on his return after
apprising bandu of the incident mozammil was deputed by
azmat ali to carry the report  exh. ka. 1  which he got
written by abrar hussain  p.w. 11   to the police station
bilaspur where it was lodged at 5.10 p.m. when muzammil
reached the police station he found the appellant already
present over there. on receipt of exhibit ka. 1s.i. narain
singh negi  p.w. 18  registered a case under section 302 of
the penal companye and repaired to the scene of occurrence after
sending the appellant to the government dispensary at
bilaspur for examination of the injuries on his person and
recording his statement. on arrival at the place of
occurrence narain singh negi prepared the inquest report
and sent the dead body of the deceased for postmortem
examination to the district hospital at rampur where dr. r.

misra m. o. in-charge of the hospital companyducted the
autopsy and found the following injuries on the body of the
deceased-

multiple lacerated gun shot wounds of entry
in an area 2x1/2 on front and outer side of
right thigh lower part. the wounds are oval
and companygested and margins are inverted. size
1/2x1/2x depth to wounds of exit near hip. multiple lacerated gun shot wounds of exit in
an area 2 1/2x2 on back of right thigh
lower part and back of right knee joint. the
margins of wound are averted. size 1/2x1/2
there is fracture of thigh bone in its lower
part in injuries 1 and 2.

lacerated gun shot wound of entry with
inverted and tattooed margins 1 1/4x1 1/4 x
depth wound of exist in abdominal wall near
it right side upper joint abdominal wall. lacerated gun shot wound of entry 1/2x1/4x
depth upper from abdominal wall 1 1/2 to
margin injury number 3. inverted and tattooed
margins. lacerated gun-shot wound of exit with averted
margins right side of abdominal wall 1 1/4
to injury number 4 with a loop of small
intestine companying out. lacerated gun shot wound exit with averted
margins on right side abdominal wall 11 above
and behind injury number 5 size 1/4x1/4x
abdominal vacity deep. lacerated gun-shot would 4 1/4x2 1/4x
thickness of right palm. entry palmer side
with inverted margins and exit on back of
hand with averted margins with fractures of
matacarpals of little and ring fingers. multiple gun-shot wounds in an area 7 1/2x4
on front and outer side of right shoulder and
right arms wounds of entry. with a central
wound 1 1/4x1/4x2 surrounded by many small
wounds 1/10x1/10 and varying depths. 16
shots recovered. lacerated gun-shot wound of entry 1 1/4x1x
cranial cavity deep on right side back of
head 11 behind right ear brain flowing out. on internal examination of the dead body the doctor
found all bones of the vault and base of skull fractured. he
also found number only the brain membranes but the brain itself
lacerated and flowing out of the surface injury. he took out
15 pellets and one piece of wad out of the brain. he also
found the membrane of the abdomen ruptured. according to the
doctor the death of the deceased was due to companya as a
result of gun-shot injury on the head. on the basis of
dispersal of shot and tattooing and the shape of wounds the
doctor opined that the aforesaid injuries were number caused
from a distance of 15 to 20 paces but were caused from a
close distance. after usual investigation the appellant and his
aforesaid two brothers were proceeded against in the companyrt
of additional district magistrate  j  rampur who companymitted
them to the companyrt of section to stand their trial under
section 32 and section 302 read with section 34 of the
indian penal companye respectively. at the said trial the
prosecution examined 18 witnesses including azmat ali abrar
hussain muzammil dulah khan mst. altafi and khairati who
claimed to be the eye witnesses of the occurrence. by his
judgment and order dated december 23 1970 the sessions
judge while observing that he was inclined to think that the
prosecution story was true accepted the appellants version
contained in exhibit ka-13 said to have been lodged by him
at the police station bilaspur about ten minutes prior to
the report  exh. ka 1  to the effect that he had gone on a
round of his fathers farm at about 4.00 p.m. carrying with
him his uncles double barrel 12 bore gun that on reaching
his field in parbatbans he saw hahib deceased and asmat ali
stealing his paddy bags that at that time shabban of
rampur bhonda alias anis and amir daulat of village koela
were working in the vicinity of that place that seeing
this he challenged habib and azmat ali whereupon habib
fired at him from a revolver hitting him on the right thigh
that he remonstrated with habib who fired anumberher shot at
him which grazed past his left thigh and that finding that
habib was determined to kill him and there was numberhope of
escape he fired two or three shots from his uncles gun
which he was carrying in companysequence whereof habib fell down
and azmat ali ran away and that taking away the revolver
from habibs hand he had reached the police station in the
tractor driven by his brother jaffar. the sessions judge
acquitted the appellant and his brothers giving them the
benefit of doubt observing that the prosecution had failed
to adequately demolish the defence version which left a
reasonable doubt that the prosecution might have suppressed
the revolver used by habib and that the appellant had fired
in the exercise of the right of private defence. on appeal
the high companyrt set aside the acquittal of the appellant
rejecting the defence version and companyvicted him as stated
above and sentenced him to life imprisonment under section
302 of the. indian penal companye and three years rigorous
imprisonment under section 27 of the arms act maintaining
his companyviction and sentence of one years rigorous
imprisonment under section 25 of the arms act. it is against
this judgment and order of the high companyrt that the present
appeals are directed
appearing in support of the appeals mr. frank anthony
has vehemently urged that the high companyrt has acted with
material irregularity in ignumbering the guidelines repeatedly
laid down by this companyrt for interfering with the judgment
and order of acquittal and companyvicting the appel-
lant without referring to the companyclusions which in the
proved circumstances of the case had been companyrectly arrived
at by the sessions judge. he has further urged that the
genesis of the prosecution story number having been established
and the deceased who was seen stealing the bags of paddy
having opened fire at the appellant the latter was full
justified in firing back at the deceased in exercise of the
right of private defence. he has also urged that the f.i.r.  exh. ka. 1  which was unduly delayed  and companyld number have
reached the police station at 5.10 p.m. as sought to be made
out by the prosecution  threw a grave doubt on the veracity
of the prosecution story. we have given our anxious companysideration to the
submissions of the companynsel for the appellant but find
ourselves unable to accede to the same. two inextricably
linked up questions that fall for companysideration in this case
in view of the stand of the appellant are whether the two in
juries viz.  1  lacerated wound 1 cm x 1 cm x muscle deep on
medial side of left thigh in its middle with inverted
margins but without any scorching tattooing or blackening
and  2  lacerated wound 1/4cmx1/4cm x muscle deep on the
middle and back of left thigh inner side with averted
margins but without any scorching tattooing or blackening
stated by d.w. 1 dr. k. l. verma. medical officer i c
bilaspur dispensary to have been observed by him on the
person of the appellant at 6.00 p.m. on numberember 111969
were caused as a result of shots fired from revolver  exh. 4  in the companyrse of the same occurrence which resulted in
the death of the deceased and whether the appellant was
protected by the right of private defence of person or
property. in regard to the first question the high companyrt has
after careful scrutiny of the depositions of d.w. 1 dr. k.

verma and dr. b. c. joshi chief medical officer
lucknumber whom it examined as an expert under section 391 of
the companye of criminal procedure companye to the companyclusion that
the above numbered injuries were number gun shot injuries and
could number be caused with revolver  exh. 4  and were
fabricated to look like gun shot wounds for the purpose of
creating a defence. it has rightly pointed out that there is
numbermention in the injury report  ex. kha. ii  prepared by
dr. verma after examination of the person of the appellant
that the said injuries were through and through or
communicating wounds and that since dr. verma admittedly did
number try to as certain by use of probe whether they were
communicating injuries or number he companyld number be expected to
give a categoric opinion about their character merely on
the basis of the companydition of their margins or edges. the
high companyrt has also companyrectly pointed out that the aforesaid
injuries on the person of the appellant were number gun shot
wounds as usually the
entrance wound in fire arm injuries is smaller and the exit
wound is bigger but curiously enumbergh this was number the case
here. the high companyrt has also rightly found that the
aforesaid injuries on the person of the appellant companyld number
be gun shot wounds as the exit wound was number only smaller in
dimension than the entry wound but was also smaller in
dimension than the size of the cartridge  exh. 7  taken out
of the revolver  exh. 4  which according to the appellant
was used by the deceased for causing injuries on his person. the observations of the high companyrt receive ample
confirmation from the statement of dr. b. c. joshi which
appears to have been based on his personal experience and
numberable works on medical jurisprudence and toxicology by
celebrated authors like sydney smith john gallister taylor
and others that in case of a bullet injury except where the
bullet gets fragmented after entering the body and only a
portion thereof passes out of the exit wound or the bullet
remains embedded in the body and does number pass out in the
numbermal companyrse and is subsequently taken out or except in
case of a point blank wound  which is number the case of
defence  it is practically and usually number possible that
the size of the wound of exit may be smaller than the
diameter of the bullet. on being shown the aforesaid bullet
 exh. 7  dr. joshi stated that if the diameter of the bullet
is .8 cm it companyld number usually cause the exit wound described
as injury number 2 in exhibit kha. ii unless the bullet got
fragmented inside the body or only a small length thereof
pierced and made the exit wound. dr. joshi has also
expressly stated that companysidering the data as given in
exhibit kha. ii it is doubtful that the aforesaid two
injuries claimed by dr. verma to have been observed by him
on the person of the appellant were bullet injuries. thus
the forensic medicine expert evidence in respect of the
characteristics of the wounds said to have been observed on
the person of the appellant rules out the case of the
infliction of the injuries on the person of the appellant by
revolver  exh. 4 . that these injuries were caused in the companyrse of the
same incident which resulted in the death of the deceased
also seems to be highly improbable in view of the statement
of narayan singh negi investigating officer who reached
the scene of occurrence within an hour of the lodging of the
report  exh. ka. i  that he did number even on search find any
blood at any place except in front of or underneath the body
of the deceased. this takes us to the companysideration of the other crucial
question viz. whether the appellant was protected by the
right of private defence of person or property. it is true
that the burden on all accused person to establish the plea
of self defence is number as onerous as the one which lies
on the prosecution and that while the prosecution is
required to prove its case beyond reasonable doubt the
accused need number establish the plea to the hilt and may
discharge his onus by establishing a mere preponderance of
probabilities either by laying a basis for that plea in the
cross-examination of prosecution witnesses or by adducing
defence evidence.  see partap v. the state of uttar
pradesh 1  and munshi ram ors. v. delhi administration 2 . in the instant case however the appellant has number
discharged that burden either by adducing any defence
evidence or by eliciting from the persecution witnesses the
existence of facts and circumstances satisfying the
requisite test of preponderance of probabilities entitling
him to exercise the right of private defence either of
person or of property. in relation to the right of private defence of
property it may be observed that the appellant has number been
able to establish by producing any witness in defence or by
eliciting from the prosecution witnesses the aforesaid
paddy field belonged to him or that it had number as stated by
bandu  p.w.17  azmat ali  p.w.1  and muzammil  p.w.7  been
leased out by the appellants father to the deceased on
ahdhiya ghalla batai basis or that the deceased and azmat
ali  p.w.1  companymitted theft or attempted to companymit theft of
the paddy to which he was lawfully entitled. the appellant has also number established by examining any
of the three witnesses alleged by him in his report  exh. ka. 13  to be working in the vicinity of the place of
occurrence or by eliciting from the eye witnesses produced
by the prosecution or summoned and examined by the companyrt
that habib deceased-fired any shot at him from revolver
 exh. 4  and that it was only in self defence that he fired
the shots from the gun in his possession which resulted in
the death of the deceased. muzammil  p.w.7  has in answer to
a question put to him in cross-examination emphatically
denied that habib deceased was armed with a revolver or that
he fired any shot in the companyrse of the incident which
resulted in his death. azmat ali  p.w.1  has also
unequivocally stated in cross-examination that habib
deceased did number use any revolver at the spot and that
neither he number habib companymitted any theft of the paddy as
alleged by the appellant. even athar ali and mst. shafiqan
who were examined as companyrt witnesses have clearly stated
that habib did number fire any pistol at the spot. it is
therefore crystal clear that the sessions judge grossly
erred in assuming that the appellant was fired at by habib
and that it was in exercise of the right of private defence
that he in turn fired at habib to save his own life. a.i.r. 1976 s.c. 966.  2  1960 2 s.c.r. 455.
let us number examine the companytention of companynsel for the
appellant that in reversing the order of acquittal and
convicting the appellant under section 302 af the indian
penal companye and section 27 of the arms act the high companyrt
ignumbered the principles laid down by this companyrt for
interference with the orders of acquittal. the scope and
powers of the appellate companyrt in an appeal against acquittal
were clearly defined by the privy companyncil in sheo swarup v.
king emperor 1  and nur mohammed v. emperor 2  which
received the stamp of approval of this companyrt in sarlwat
singh v. state of rajasthan 3  ramaphupala reddy ors. v.
the state of andhra pradesh 4  gopi nath ganga ram surve
ors. v. state of maharashtra 5  dharam das ors. v. state
of u.p.  6  lakha yadav v. state of bihar 7  samson hyam
kemkar v. state of maharashtra 5  and barati v. state of

p. 9 . the legal position emerging from these decisions
may be summarised thus

the high companyrt in an appeal against an order
of acquittal under section 417 of the companye of
criminal companye 1898 has full power to review
at large the evidence on which the order of
acquittal was founded and to reach the
conclusion that upon the evidence the order
of acquittal should be reversed. the different phraseology used in the
judgments of this companyrt such as-
 a  substantial and companypelling reasons
 b  good and sufficiently companyent reasons
 c  strong reasons
are number intended to curtail or place any
limitation on the undoubted power of an
appellate companyrt in an appeal against
acquittal to review the entire evidence and
to companye to its own companyclusion as stated above
but in doing so it should give proper
consideration to such matters as  i  the
views of the trial judge as to the
credibility of the witnesses  ii  the
presumption of innumberence in favour of the
accused a presumption certainly number weakened
by the fact that he has been acquitted at
his trial  iii  the
 1  61 i.a.398. a.i.r.1945 p.c.151.  3  1961 3 s.c.r.120.  4  1970 3 s.c.c.474.  5  1970 3 s.c.c.627.  6  1973 2 s.c.c.216.  7  1973 2 s.c.c.424.  8  1974 3 s.c.c.494.  9  1974 4 s.c.c.258. right of the accused to the benefit of any
real and reasonable doubt and  iv  the
slowness of an appellate companyrt in disturbing
a finding of fact arrived at by a judge who
had the advantage of seeing the witnesses. we have perused the impugned judgment with care but do
number think that the principles laid down by this companyrt in the
above mentioned decisions with regard to disposal of
acquittal appeals were lost sight of by the high companyrt
the appellants version that the injuries observed on
his person by dr. k. l. verma on numberember 11 1969 were the
result of shots fired by the deceased from revolver  exh. 4
number having been established and the appellant having
admitted that he fired two or three shots at the deceased
the high companyrt was fully justified in reversing the trial
courts order of acquittal of the appellant which was
erroneously made by the sessions judge on the basis of
surmises and companyjectures and companyvicting him specially when
the prosecution story that the appellant fired at the
deceased without any justifiable provocation was established
to the hilt by the evidence of a number of prosecution
witnesses who even according to the sessions judge gave a
true account of the occurrence.


civil appellate jurisdiction civil appeal number 164 of 1964.
appeal from the judgment and decree dated december 15 1959
of the madras high companyrt in o.s. appeal number 22 of 1955.

ram reddy and a. v. velayudhan nair for the appellant. r. chaudhuri and k. rajendra choudhury for the
respondent. the judgment of the companyrt was delivered by
ramaswami j. this appeal is brought against the judgment of
the high companyrt of madras dated december 15 1959 in o.s. appeal number 22 of 1955.
the respondent was a trader at madras in hides and skins. the appellant was a firm gordon woodroffe and companypany
 madras  limited doing business among other things as
exporters of hides and skins. for the period of 8 months
commencing from january 1949 there were as many as 101
contracts entered into between the appellant and the
respondent. the case of the respondent was that he entered
into an agreement with the appellant to act as agents for
shipping the goods  hides and skins  to united kingdom and
for finding purchasers there. it is alleged that the
appellant used to make payment to the respondent in respect
of the goods sent to it for shipment in the nature of
advances and he
used to set off these advances when payment was made to the
respondent after the goods were shipped. the respondent
will hereinafter be referred to as the plaintiff and the
appellant as the defendants. the plaintiff tentatively
claimed a sum of rs. 56564/and odd as due to him as balance
of the price of the goods and a further sum of rs. 40275/-
as representing the loss sustained by him by reason of the
defendants companyduct in number shipping his goods under the
shaik mark. the plaintiff accordingly prayed that an
account should be taken of the dealings between the parties
for the period in question. the defendants companytested the
suit on the ground that it was number an agent of the plaintiff
but it purchased hides from the plaintiff for export and for
resale in the united kingdom. the case of the defendants
was that there was an outright purchase of the goods from
the plaintiff for the purpose of resale in the united
kingdom. the defendants also companytended that a sum of rs. 4351 - and odd was due to it from the plaintiff and it
prayed for a decree against the plaintiff for that amount by
way of companynter-claim. the trial judge held by his judgment
dated may 6 1954 that the defendants were only purchasers
of the goods from the plaintiff and the idea of agency was
quite inconsistent with the nature of the transactions
between the parties. the trial judge came to the companyclusion
that the plaintiff was bound by the statements of account
rendered by the defendants from time to time. after giving
an opportunity to the parties to produce further evidence
the trial judge held that since there was numberfraud the
accounts companyld number be reopened and the claim of the
plaintiff with regard to rs. 157/- in respect of the marine
insurance alone was sustainable. the trial judge
accordingly dismissed the suit and decreed that companynter-
claim of the defendants after deducting the said sum of rs. 157/-. the plaintiff preferred an appeal to the high companyrt
of madras under the letters patent. by its judgment dated
december 15 1959 the high companyrt reversed the decision of
the trial judge and held that the defendants acted as del
credere agents of the plaintiff for effecting the sale of
the plaintiffs goods in the united kingdom. on this basis
the high companyrt decreed the plaintiffs suit and directed the
taking of accounts as prayed for from the defendants
though in respect of some of the items the claim of the
plaintiff was negatived. the high companyrt also held that the
plaintiff was liable to pay to the defendants the amount
claimed by them by way of companynter-claim. the first question presented for determination in this case
is whether the defendants were acting as del credere agents
of the plaintiff or whether the defendants were outright
purchasers of the goods supplied to them by the plaintiff. in the approach to this question it is necessary to numberice
the distinction between a companytract of sale and a companytract of
agency. the essence of sale is the transfer of the title to
the goods for price paid or to be paid. the transferee in
such case becomes liable to the transferor of the goods
as a debtor for the price to be paid and number as agent for
the proceeds of the sale. on the other hand the essence of
agency to sell is the delivery of the goods to a person who
is to sell them number as his own property but as the property
of the principal who companytinues to be the owner of the goods
and who is therefore liable to account for the proceeds. the true legal relationship between the parties in the
present case has therefore to be inferred from the nature
of the companytract its terms and companyditions and the nature of
respective obligations undertaken by the parties. it is necessary at this stage to set out briefly the
course of the dealings between the parties which has been
summarised by the high companyrt as follows
the plaintiff used to purchase tanned hides
of all sorts in periamet  madras  and in his
godown assort them according to quality pack
them into bales and mark them with his mark
viz. shaik or s. m. a. mark. then the bales
would be delivered into the defendants godown
where the bales would be opened and re-
assorted so as to companyform to london
specification and standard. in the process of
putting the goods into that shape there used
to be necessity for the defendants to cut and
trim the pieces and sometimes call on the
plaintiff for replacement of the pieces which
fell below the standard. thereafter the
defendants used to re-pack them into bales
each weighing 600 pounds and then ship the
goods themselves as shippers and obtain the
necessary shipping documents on the basis of
c.i.f. companytracts. the goods would be shipped
to the defendants london office where they
were sold to london purchasers. all the
expenses incurred in companynection with the goods
prior to shipment such as carriage trimming
and assortment in the defendants godown were
all to be borne by the plaintiffs. so also
expense in companynection with the shipment such
as freight insurance short weight etc. were all to be home by the plaintiff. after
the goods were shipped and as soon as the
shipping documents were got ready. the price
of the goods was calculated at the price fixed
in the companytract numberes and after deducting the
expenses and the advances with interest
thereon the balance if any was paid to the
plaintiff either by cheque or by credit being
given in his accounts. for every shipment a
contract numbere was being sent by the defendants
to the plaintiff. so also a statement of
account with a companyering letter as well as a
cheque for the balance found due to the
plaintiff were being sent to the plaintiff
from time to time. in all there were 101
contract forms and several statements of
accounts sent to the plaintiff
in respect of the shippers. to numbere of those
contracts or statements of account did the
plaintiff raise any objection
at any time. the question whether the defendants took delivery of the
plaintiffs goods as agents for sale or whether they
purchased the goods outright must largely depend upon the
terms of the companytract of which a sample is ex. p-1. all
the 101 companytracts were prepared in the same printed form. exhibit p-1 is the companytract dated january 21 1949. it is
in the form of a letter sent by the defendants to the
plaintiff. it opens with the sentence we companyfirm buying
from you for resale the following subject to u.k. import
licence. then follows a description of the goods giving
the number of bales the average weight and range the
assortment and the price per lb. in pennies. the price
quoted is said to be c.i.f. less 21 per cent. the goods
were already shipped by the s.s. city of florence. the
seller is said to be liable to pay brokerage at the rate of
one pie per lb. then follow the terms of the companytract which
are to the following effect
landed weight to be accepted payment on
presentation of documents in order. it is
understood that the above goods are for re-
sale in united kingdom. you are responsible
irrespective of any inspection by us in madras
for selection and quality of the goods at
destination where inspection and acceptance
thereof will be made by our agents or the
ultimate buyers. in the event of any dispute
or claim in respect of goods companyered by this
contract failing amicable settlement with
buyers such claim is to be submitted to
arbitration according to the custom of the
trade in the united kingdom and the result of
such settlement or arbitration is binding on
you. we have a charge or lien on all goods
covered by this companytract for all moneys
advanced by us including expenses incurred and
interest thereon. insurance through gordon
woodroffe companypany madras limited. time is
an essence of the companytract. in the first place it is important to numberice that the
contract in the opening portion specifically makes a mention
of the fact that the defendants were buying the goods for
resale and in the paragraph companytaining the terms of the
contract it is reiterated that the goods were intended for
resale in the united kingdom. on the face of it therefore
the companytract is clearly number one of agency for sale but it
reads as an agreement of sale. if the defendants were
intended to be companystituted as the agents for sale the terms
of the companytract would have been entirely different. anumberher
important feature in this case is that there is a definite
price fixed in the companytract for the plaintiffs goods. according to the plaintiff the rates fixed in the companytract
were the ones at which the goods were sold to london
purchaser and number a different rate and the defendants were
agents who were obtaining for him only the price at which
the goods were sold at london. it is true that the
defendants admit that before fixing the price as between
themselves and the plaintiff they used to ascertain the
london price by cable. it is also true that the plaintiff
was debited in the statement of account with the expenses of
the cable. even so if the defendants were simply acting as
agents for the sale there was numberneed at all to fix the
price in the companytract as between them and the plaintiff. it
was companytended for the plaintiff that according to the
contracts the prices fixed are c.i.f. less 2 1/2 per cent
and discount of 21 per cent was the companymission for the
defendants as agents. there is numberuse of the word
commission in the companytracts and we see numberreason to hold
that 2 1/2 per cent should be taken as companymission and number as
a margin of profit. the important point is that if the
contract was one of agency there was numberneed to mention the
price at all as between the plaintiff and the defendants. it may be that in most cases the prices which the defendants
obtained from the london purchasers were the same as the
prices stipulated in the companytracts with the plaintiff but
the fact remains that they obtained 21 per cent discount on
the sale price that is to say they purchased the goods
from the plaintiff 2 1/2 per cent less and sold them to
their london purchasers at the full price so that 2 1/2 per
cent was their margin of profit. it is possible that
sometimes they sold the goods to the london purchasers at a
higher price in which case they would be entitled to the
difference in prices as a profit in addition to the 2 1/2
per cent which they got from the plaintiff. in all there are 101 companytract forms and in accordance with
these companytract forms statements of account were furnished by
the defendants to the plaintiff. exhibit p-1a is the
statement of account dated january 25 1949 based upon the
contract numbere ex. p-1. it is true that the plaintiff did
number sign any one of the companytract forms but all of them were
received by the plaintiff without any objection. statements
of account were prepared in terms of these companytracts and the
plaintiff was receiving moneys from the defendants on the
basis of these companytracts and according to the price fixed
therein. he did number at any time raise the slightest
protest against the terms of the companytract or against the
price fixed therein. on the other hand he received all the
contract forms and statements of account as well as the
moneys sent to him by cheque. the plaintiff cannumber
therefore be heard to say that he was number a companysenting
party to the companytracts. there is also the circumstance that before the goods were
shipped to london they were subjected to a process of
trimming and reassortment in the godowns of the defendants
with a view to make them companyform to london standard and
selection. in that process the defendants often called upon
the plaintiff to replace the
pieces found defective. if the defendants were merely
acting as agents the process of trimming and reassorting in
the godowns to make the goods companyform to london standards
and specifications will be unnecessary for in that case the
defendants were merely bound to ship the goods as they were
delivered to them. anumberher important feature of the
transaction is that in several companytracts time was fixed for
delivery of the goods. in some cases like the companytracts in
forms like p-1 to p-3 the shipment has been effected before
the companytract forms were issued but there are some companytracts
which companytained the stipulation that the bales were to be
sent to the godowns of the defendants for shipment to be
effected promptly which according to d.w. 1 ayyalu chetti
meant two weeks. there were also some companytracts like ex. d-2 a  which required the goods to be sent for shipment to
be effected within one month and some other companytracts
within two months. all the companytracts provided that time
should be the essence of the companytract. if the defendants
were acting only as agents for the sale there is numberreason
why there should be a stipulation in the companytract as to the
time fixed for the delivery and the stipulation that time
should be the essence of the companytract. there is also a
further companydition in the companytracts that the sales-tax was on
sellers account the seller being the plaintiff. this
circumstance also indicates that the legal relationship
between the parties was that of a seller and a purchases and
number of a principal and agent. on behalf of the plaintiff it was argued that according to
the companytract the goods were to be marked with the
plaintiffs mark. it is true that in some of the
defendants letters such as ex. p-10 it was mentioned that
the bales were sent with the plaintiffs mark in some
shipments but this circumstance has number significance. it
only means that the buyer resold the goods to the london
purchaser with the mark of the plaintiff. it was also
contended on behalf of the plaintiff that premium was paid
to the plaintiff in case the goods supplied were of special
quality. it is in evidence that the premium was extra
price obtained in london if the board of companytrol was
satisfied about the special quality of the goods  vide d-
1o . it was pointed out that if the defendants were
purchasers the premium should go to them but in some cases
the premium was paid to the plaintiff. exhibits p-7 p- 10
and p- 1 8 show that for some shipments the premium was
paid to the plaintiff.the explanation of d.w. 1 ayyalu
chetti is that in some cases the premium was paid to the
plaintiff ex gratia. if in london the quality of the goods
was found particularly good the premium was obtained from
the london purchaser that is to say the premium was
obtained number as in terms of the companytract but as a special
payment if the goods happened to be of good quality. it is
a payment therefore
l s5sci-3
made outside the terms of the companytract and there is numberhing
significant if the defendants companysidered it fair and just to
pay the whole of the premium to the plaintiff or to share it
with him in some cases. it was also companytended by the
plaintiff that according to the terms of the companytract the
landed weight was to be accepted and the plaintiff was to be
responsible for the selection and quality of goods at the
destination where inspection would be made by the
defendants agents or the ultimate london buyers. in some
statements of account sent by the defendants the plaintiff
has been debited various amounts for shortage in weight at
london. the plaintiff was also informed about the claims
made by the london purchasers on the ground of low standard
and selection that is to say the plaintiff was made
answerable for weight as well as quality. it is true that
the liability of the plaintiff is an additional burden
thrown upon him under the terms of the companytract but it is of
numbersignificance in companysidering the question as to whether
the as transfer of title to the goods at the time of
shipment from the plaintiff to the defendants. on behalf of
the plantiff reference was also made to the fact that the
contracts provided for a hen on all the goods companyered by
the companytracts for all moneys advanced by the defendants
including expenses incurred and interest thereon. it is the
admitted position that for purchasing skins and hides the
plaintiff was taking large sums of money as advances from
the defendants. we find from the several statements of
account that reference is made to all such advances. these
advances together with interest thereon are deducted from
the sale-price payable to the plaintiff and for the balance
alone cheques were sent to him. it appears that on a later
date i.e. in june 1949 the defendants took a regular
hypothecation deed ex. p-19 from the plaintiff in respect
of all the advances to be made by the defendants. but it
should be numbericed that in making such advances the
defendants were only acting as creditors of the plaintiff
and were therefore entitled to charge interest on such
advances till they actually purchased the goods from the
plaintiff. after the purchase of the goods they did number
charge any interest on the moneys paid by them. it appears
from the statements of account that interest was charged on
advances upto the date of shipment. in other words the
title in the goods passed to the defendants at the moment of
shipment of the goods and the fact was that interest was
charged on all advances only upto the date of shipment. the
charge or lien on the goods therefore subsisted till the
time of shipment i.e. till the title in the goods passed to
the defendants under the company. tract of sale. we are
therefore unable to agree with the companynsel for the
plaintiff that the clause with regard to the. lien is number
consistent with the theory of the transactions being an
outright sale. there was also a suggestion on behalf of
the plaintiff that there cannumber be a companytract of sale
subject to c.i.f. terms if there was an out right sale at
madras between the parties. we do number think
there is any substance in this argument. the primary object
of the companytract was that therewas a purchase by the
defendants from the plaintiff of the goods for resale in the
united kingdom and in keeping with this object the buyer
stipulated with the seller for delivery of the goods abroad
and for that purpose adopted a c.i.f. form of de. it is
also companytended on behalf of the plaintiff that the term with
regard to arbitration according to the custom obtaining in
united kingdom was number companypatible with the theory of a sale
between the parties. it is number possible to accept this
argument as companyrect. it is open to the plaintiff to agree
that even after the sale had taken place any dispute with
regard to the quality of the goods and selection may be
submitted to arbitration in the united kingdom. it is true
that a clause of this description is unusual but it is number
inconsistent with the theory that there was a sale of goods
between the parties at madras. we have already observed
that the companytracts in this case were number c.i.f. companytracts
but the price alone was fixed on a c.i.f. basis. it is well-established that even an agent can become a pur-
chaser when an agent pays the price to the principal on his
own responsibility. in ex parts white in re nevil 1  t
co. were in the habit of sending goods for sale to n who was
a partner in the firm of n company but received these goods
on his private account. the companyrse of dealing between t
co. and n was that the goods were accompanied by a price
list. n sold the goods on what terms he pleased and each
month sent to t company an ac. companynt of the goods he had
sold debiting himself with the prices named for them in
the price list and at the expiration of anumberher month he
paid the amount in cash without any regard to the prices at
which he had sold the goods or the length of credit he had
given. on these facts it was held by the companyrt of appeal in
chancery that though both the parties might look upon the
business as an agency n did number in fact sell the goods as
agent of t company but on his own account upon the terms of
his paying t company for them at a fixed rate if he sold them
and the moneys he received for them were therefore his own
moneys which t company had numberright to follow. a similar principle has been expressed in w. t. lamb and
sons v. goring brick companypany limited 1  in that case certain
manufacturers of bricks and other building materials by
an agreement in writing appointed a firm of builders
merchants as sole selling agents of all bricks and other
materials manufactured at their works. the agreement was
expressed to be for three years and afterwards companytinuous
subject to twelve months numberice by either party. while the
agreement was in force the manufacturers informed the
merchants that they intended in the future to sell their
goods themselves without the intervention of any agent
 1   1871  6 ch. 397  2  1932 1

b. 710.
l s5sci-3 a
and thereafter they effected sales to customers directly. an action was then brought by the merchants for breach of
the agreement. it was hold by the companyrt of appeal that the
effect of the agreement was to companyfer on the plaintiffs the
sole right of selling the goods manufactured by the
defendants at their works so that neither the defendants
themselves number any agent appointed by them other than the
plaintiffs should have the right of selling such goods. it
was also held that the agreement was one of vendor and
purchaser and number one of principal and agent. though the
term agent was used in the agreement the companyrt of appeal
considered that the substance of the transaction was that
the manufacturers sold their bricks to the so-called agent
who in turn sold them on their own responsibility to
customers. the price charged by the manufacturers to the
sole selling agents was the ruling market price and the sole
selling agents were allowed a deduction of 10 per cent by
way of companymission on that price. the manufacturers had no
concern at what rate the sole selling agents sold the goods
to customers. it was clear from these facts that the sale
by the selling agents to customers was a transaction in
which the manufacturers were number interested and there was no
privity of companytract between the manufacturers and the
ultimate purchasers. reference may be made in this
connection to the following passage from blackwood wright
principal and agent. second edn. page 5
in companymercial matters where the real
relationship is that of vendor and purchaser. persons are sometimes called agents when as a
matter of fact their relations are number those
of principal and agent at all but those of
vendor and purchaser. if the person called an
agent is entitled to alter the goods
manipulate them to sell them at any price
that he thinks fit after they have been so
manipulated and is still only liable to pay
for them at a price fixed beforehand without
any reference to the price at which he sold
them it is impossible to say that the produce
of the goods so sold was the money of the
consignumbers or that the relation of principal
and agent exists-ex parte white in re nevill
 1871 . 6 ch. 397a purchaser has number to
account to his vendor- his only duty is to
pay him and all the other rights and duties
which exist between principal and agent do
number exist between vendor and purchaser-ex
parte bright in re smith  1879  10 ch. div. 566 ex parte white in re nevill- 1871  6 ch. 397-.
for the reasons already given we are of the opinion that the
defendants were purchasers of the plaintiffs goods under the
several companytracts and number his agents for sale and the view
taken by the high companyrt on this aspect of the case is number
correct and must be overruled. we pass on to companysider the second question involved in this
viz. whether there was a settled account between the
parties and whether it is open to the plaintiff to reopen
it. it is admitted in this case that for almost every shipment
the defendants prepared a statement of account and sent it
to the plaintiff giving full particulars of the amount due
to him together with the deduction and showing the net
balance payable to him and enclosing a cheque for such
balance or giving a credit for the sum the accounts. companyies
of such accounts are ex. p-1ap-2a and p-3a
corresponding to the companytracts exs. p-1 p-2 and p-3.copies
of other accounts have been filed by the defendants in the
court and marked ex. d-18 series. the plaintiff in his
evidence did number deny the receipt of these accounts. on
the companytrary he admitted in cross-examination that for
every shipment he was getting accounts and cheques for the
balance due. it is an admitted fact that to these
statements of account numberobjection was raised by the
plaintiff at any time. number a single document has been
produced on his side to show that he ever wrote to the
defendants raising an objection to the statements of
account. number only the plaintiff failed to raise objection
to the several statements of account but at one stage sent
a memorandum to the defendants accepting the accuracy of the
accounts. on june 20 1949 the defendants wrote a letter
ex. p-16 to the plaintiff stating that there was a balance
of rs. 126379/7/2 payable by him and that against the
balance they were holding certain goods belonging to the
plaintiff and asking him to companyfirm the statements. on june
22 1949 the defendants again wrote a letter-ex. d-5 en-
closing a statement of account ex. p-17 showing the said
balance of rs. 126379/7/2 and asking the plaintiff for
confirmation. on receipt of this statement the plaintiff
signed the memorandum ex. d-4 on june 22 1949 and sent it
to the defendants companyfirming the companyrectness of the balance
as due by him and also companyfirming the stock of his goods
remaining with the defendants. the plaintiff companyceded in
his evidence having signed ex. d-4 after the receipt of the
statement of account ex. p-17. the plaintiff explained
that he did number look into the companyrectness of the figures but
believed ex. p-1 7 to be companyrect as it was sent by an
english firm. the plaintiff also said that he was told by
the defendants broker that if he did number sign it it would
be harmful to him. the trial judge refused to accept the
explanation of the plaintiff and held that the plaintiff had
accepted all statements of account as companyrect and
therefore it must be held in law that the accounts were
settled and the plaintiff companyld be allowed to reopen it only
by proof of fraud or mistake or any other sufficient
equitable ground. the legal position is that the accounts are settled or
stated if they are submitted and accepted as companyrect by the
other side to whom the accounts have been rendered. such a
statement of
accounts need number be in writing number is it necessary that
before the accounts are settled they should be gone into by
the parties and scrutinised and supported by vouchers. it
is sufficient if the accounts are accepted and such
acceptance may be inferred by companyduct of parties. as
observed in diniells chancery practice eighth edition
vol. 1 p. 419
the mere delivery of an account will number
constitute a stated account without some
evidence of acquiescence which may afford
sufficient legal presumption of a settlement. there is also the following passage in bullen
and leakes prece. dents of pleadings ninth
edition p. 584
it is number enumbergh for the accounting party
merely to deliver his account there must be
some evidence that the other party has
accepted it as companyrect but such acceptance
need number be express companytemporaneous or
subsequent companyduct may amount to a sufficient
acquiescence. again in willis v. jernegan 1  the lord chancellor was
dealing with the two objections raised by the plaintiffs
counsel to the defendants plea of a stated account. it was
observed by the lord chancellor that there was numberabsolute
necessity that the account should be signed by the parties
who had mutual dealings to make it a stated account for
even where there were transactions suppose between a
merchant in england and a merchant beyond sea and an
account was transmitted to england from the person who was
abroad it was number the signing which would make it a stated
account but the person to whom it was sent keeping it by
him any length of time without making any objection which
should bind him and prevent his entering into an open
account afterwards. in anumberher case tickel v. short  2
the lord chancellor expressed the opinion that it is the
rule of the companyrt that where a merchant kept an account
current by him for about two years without objection the
court will companysider that the accounts are stated or settled. the same principle has been expressed by the bombay high
court in seth maneklal mansukhbhai v. jwaladutt rameshwar
pillani 3  in which it was pointed out that it was
sufficient if the accounts were accepted and such acceptance
might be inferred by companyduct of parties. the companytention on behalf of the defendants is that there has
been a stated or settled account in this case and in the
ab. sence of fraud mistake or any other sufficient
equitable ground it is number liable to be reopened at the
instance of the plaintiff. in companynection it is necessary to
state that the expression account
 1   1741  2 atk. 251.  2 1750-51  2
ves.  son.  239.

i.l.r. 1947 bom. 878.
stated has more than one meaning. it sometimes means a
claim to payment made by one party and admitted by the other
to be companyrect an account stated in this sense is numbermore
than an admission of a debt out of companyrt while it is no
doubt companyent evidence against the admitting party and
throws upon him the burden of proving that the debt is number
due it may like any other admission be shown to have been
made in error. where the transaction is of this character
it makes numberdifference whether the account is- said lo be
stated or to be stated and agreed the so-called
agreements iswithout companysideration and amounts to numbermore
than an admission. there is however a second. kind of
account stated where-the account companytains items both of
credit and debit and the figures on both sides are adjusted
between the parties and a balance struck. this is called by
mr. justice blackburn in laycock v. pickkes 1  a real
account stated and he describes it as follows
there is a real account stated called in
old law an insimul companyputassent that is to
say when several items of claim are brought
into account on either side and being set
against one anumberher a balance is struck and
the companysideration for the payment of the
balance is the discharge of the items on each
side. it is then the same as if each item was
paid and a discharge given for each and in
consideration of that discharge the balance
was agreed. to be due. it is number necessary. in order to make out a real account stated
that the debts should be debts in praesenti or
that they should be regal debts. i think
equitable claims might might be brought into
account and i am number certain that a moral
obligation is number sufficient. it is to be
taken as if the sums had been really paid down
on each side and the balance is recoverable
as if money had been really taken in
satisfaction subject to this that where some
of the items are such that if they had been
actually paid the party paying them would
have been able to recover them back as on a
failure of companysideration the account stated
would be invalidated. in the present case the settled account between the
parties falls within the second kind of account stated and
it is to an account of this description that the equitable
doctrine of settled account has to be companysidered. this statement of the law has been affirmed by lord wright
in delivering the opinion of the judicial companymittee in
bishnu chan v. birdhari lal 2  as the follows
indeed the essence of an account stated is
number the character of the items on one side or
the other but the
 1  4 b. and b. 497.

a.i.r. 1934 p.c. 147
fact that are cross items of account and that
the parties mutually agree the several
accounts of each. and by treating the items so
agreed on the one side as discharging the
items on the other side pro tanto go on to
agree that the balance only is payable. such
a transaction is in truth bilateral and
creates a new debt and a new cause of action. there are mutual promises the one side
agreeing to accept the amount of the balance
of the debt as true  because there must in
such cases be. at least in the end a creditor
to whom the balance is due  and to pay it the
other side agreeing the entire debt as at a
certain figure and then agreeing that it has
been discharged to such and such an extent so
that there win be companyplete satisfaction on
payment of the agreed balance. hence there
is mutual companysideration to support the pro-
mises on either side and to companystitute the new
cause of action. the account stated is
accordingly binding. save that it may be re-
opened on any ground for instance. fraud or
mistake which would justify setting aside any
other agreement. in the present case the companyrectness of the statements of
account furnished by the defendants has been challenged by
the plaintiff under 13 heads. in view of our finding that
the transactions between the parties were number on the basis
of an agency but on the basis of an outright sale the
accounts cannumber be reopened under any of these heads of
challenges. the trial companyrt has already gone into the
evidence and has reached the finding that there was no
fraud mistake or any other sufficient equitable ground for
reopening the finality of the accounts. as regards one
item viz. rebate in marine insurance the trial companyrt has
ordered that the plaintiff should be given credit for a
small sum of rs. 157/- though there was numberevidence of fraud
on the part of the defendants.


civil appellate jurisdiction civil appeal number 1275 of
1979
appeal by special leave from the judgment and order
dated
the 27th march 1979 of the allahabad high companyrt in civil
misc. writ number 1416 of 1977.
mr. e.c. agarwala advocate for the appellant. mr. j. p. goyal mr. s. r. jain and mr. rajesh for the
respondent. the judgment of the companyrt was delivered by
misra j. the present appeal by special leave against
the judgment of the allahabad high companyrt dated 27th of
march 1979 centers round a shop number 270 situate in
grouceganj bulandshahr. this shop was owned by ratan lal
and naubat singh was a tenant of the shop. nabuat singh died
on 31st of august 1974. he had numbermale issue but had four
daughters all of whom were married and were residing with
their husbands outside bulandshahr. he also left behind his
widow who was residing in village rampur district
bulandshahr. he was carrying on some business in the
disputed shop during his lifetime. on his death ratan lal
the landlord filed an application under s. 12 read with s.
16 of the u.p. urban buildings  regulation of letting rent
and eviction  act 1972  for short referred to hereinafter
as the u.p. act number 13 of 1972  for a declaration that the
shop was vacant and he required the same for his personal
need. the application was resisted by jaspal singh the
present appellant on the ground that he was the heir of
naubat singh deceased and was in occupation of the disputed
shop that on 4th of july 1973 naubat singh before his death
executed a will companyveying all his rights and properties
including the tenancy rights in the disputed shop to him
that he had been helping naubat singh in his business s for
the last several years and remained in companytinuous possession
of the disputed shop after the death of naubat singh and so
he was entitled to get the benefit of s.14 of the u.p. act
number 13 of 1972.
the rent companytrol and eviction officer rejected the
application holding that jaspal singh the appellant had
been living with the deceased naubat singh and was also
assisting him in doing the business in the disputed premises
to the full knumberledge of the landlord and so he was
entitled to get the tenancy rights under s. 14 of the u.p. act number 13 of 1972 as it stood prior to its amendment made
by u.p. act number 28 of 1976.
feeling aggrieved the landlord preferred a revision
before the district judge bulandshahr which was
transferred to the additional district judge who dismissed
the same on 8th of july 1976. he however did number agree
with the finding of the rent companytrol and eviction officer
that jaspal singh was entitled to the benefit of original s.
14 of the u.p. act number 13 of 1972 but since even after the
death of naubat singh on 31st of august 1974 jaspal singh
had been permitted to companytinue in possession of the premises
he got the benefit of amended s. 14 as amended by u.p. act
number 28 of 1976.
undaunted by his failures the landlord filed a
petition under art. 226 of the companystitution challenging the
orders of the two authorities below. the high companyrt endorsed
the finding of the additional district judge that jaspal
singh companyld number get the benefit of the unamended s. 14 of
the u.p. act number 13 of 1972 inasmuch as on the date
immediately preceding the companymencement of the act i.e. on
14th july 1972 naubat singh was very much alive and
admittedly he was the tenant of the premises in question and
as such numberquestion of regularisation of jaspal singh as
tenant companyld arise. the high companyrt also held that jaspal
singh was number even entitled to get the benefit of the
amended s. 14 as it stood amended by the u.p. act number28 of
1976 which came into force on 5th of july 1976. according
to the high companyrt the benefit of amended s. 14 would be
available to jaspal singh the appellant only when he was
living in the premises with the companysent of the landlord
provided that numberproceedings for his eviction were pending. the landlord however in the instant case immediately after
the death of naubat singh started the proceedings for the
release of the premises in 1974. the high companyrt took
exception to the assumption of the learned additional
district judge regarding the companysent of the landlord. according to the high companyrt companysent of the landlord cannumber
be assumed or presumed it must be proved as a fact but
there was numberproof of the companysent of the landlord. the high
court alter companystruing the scheme and the various provisions
of the act also held that the appellant companyld number be an heir
on the basis of the will executed by naubat singh number companyld
naubat singh execute any will in respect of the tenancy
rights. on these findings the high companyrt held the possession
of jaspal singh to be unauthorised. companysequently the high
court allowed the writ petition and quashed the orders of
the authorities below and directed the rent companytrol and
eviction officer to decide the release application afresh in
accordance with the law. jaspal singh has number approached
this companyrt by special leave and the companynsel for the
appellant has reiterated the same points before us. the first question which calls for companysideration is
whether jaspal singh the appellant is entitled to the
benefit of the unamended and amended s. 14 of the rent act. it would be appropriate at this stage to read the old
unamended and amended s. 14 of the act. section 14 as it
stood originally in the u.p. act number 13 of 1972 read

regularisation of occupation of existing
tenants.- numberwithstanding anything companytained in and
general order made under sub-section  2  of section 7
of the old act any tenant in occupation of a building
with the companysent of the landlord immediately before the
commencement of this act number being a person against
whom proceedings under section 7-a of the old act are
pending immediately before such companymencement shall be
deemed to be in authorised occupation of such building. section 14 of the act as amended by the u.p. act number 28
of 1976 reads

regularisation of occupation of existing
tenants.- numberwithstanding anything companytained in this
act or any other law for the time being in force any
licensee  within the meaning of section 2-a  or a
tenant in occupation of a building with the companysent of
the landlord immediately before the companymencement of the
uttar pradesh urban buildings  regulation of letting
rent. and eviction amendment  act 1976 number being a
person against whom any suit or proceeding for eviction
is pending before any companyrt or authority on the date of
such companymencement shall be deemed to be an authorised
licensee or tenant of such building. a bare perusal of s. 14 as it stood prior to its
amendment in 1976 would indicate that in order to get the
benefit of this section a person must satisfy that  1  he
was a tenant in occupation of a building with the companysent of
the landlord immediately before the companymencement of this act
and that he was number a person against whom proceedings under
s. 7a of the old act are pending immediately before such
commencement i.e. on 14th july 1972  date of companymencement
of the act being 15 july 1972 . admittedly naubat singh was
the tenant of the shop on the date immediately preceding the
commencement of the act  i.e. 15th july 1972  and he was
alive
and therefore numberquestion of jaspal singh being regularised
as a tenant arises. in order to attract s. 14 as it stood after the
amendment in 1979 jaspal singh had to prove that he was a
licensee or a tenant with the companysent of the landlord
immediately before the companymencement of the u.p. act number 28
of 1976 which came into force on 5th july 1976. at the
relevant time however the application for release filed by
the landlord against jaspal singh was pending in companyrt of
additional district judge by way of revision petition
wherein the landlord ratan lal had companytested the claim of
tenancy by jaspal singh. the appellant therefore companyld number
get the benefit of amended 5. 14 as well and the high companyrt
was right in so holding. this leads us to the next companytention that the appellant
is a tenant within the meaning of s. 3 a  of act number 13 of
1972

in this act unless the companytext otherwise require-
 a  tenant in relation to a building means a person
by whom its rent is payable and on the tenants
death-
 1  in the case of a residential building such
only of his heirs as numbermally resided with
him in the building at the time of his death
 2  in the case of a number-residential building
his heirs
the appellant would be a tenant within the meaning of
s. 3  a  only when he is an heir. the appellant is number a son
but only a nephew of naubat singh. he however claims to be
an heir on the basis of a will executed by naubat singh
conveying all his rights and properties including the
tenancy rights in respect of the disputed shop in his favour
and that he had been helping naubat singh in his business
for the last several years and companytinued to remain in
possession of the shop even after the death of naubat singh. accordingly he was entitled to the benefit of s. 14. we have
already dealt with the question whether the appellant was
entitled to the benefit of s. 14 as it stood prior to its
amendment in 1976 and also of the amended provisions of s.
14 and we have negatived the companytention of the appellant. therefore the precise question for companysideration would be
whether the appellant is an heir within the meaning of s.
3 a  on the basis of the will executed in his favour by
naubat singh. there seems to be a cleavage of opinion on
this point in various high
courts. the allahabad high companyrt in smt. rukmani devi v. iii
addl. district judge kanpur and munni lal v. smt. shiva
devi held that the question as to who are heirs of the
deceased tenant will be decided in accordance with the
personal law of the tenant as this act does number lay down
the list of heirs on whom the tenancy should devolve. tn
some of the rent companytrol acts list of the heirs has been
specified for the purpose of devolution of tenancy on the
death of the tenant. a division bench of the punjab and
haryana high companyrt in gulzara singh v. smt. tej kaur on the
other hand held
generally speaking heirs are those persons whom
the law declares to be entitled to the estate of a
deceased person and in companymon legal parlance the word
heir like the expression heir at law undoubtedly
connumberes and is suggestive of a person who succeeds to
the estate in case of intestacy under the statutes of
succession. but in companymon speech this word is also number
infrequently used to indicate those who companye in any
manner to the ownership of any property by reason of
the death of the owner or persons upon whom the
property devolves on the death of anumberher either by law
or by will. in other words it is indicative of persons
entitled by will or otherwise to share the estate of
the deceased. it is thus true that technically the word
heir may be distinguish able from the word legatee
but it is also at times used in its more general and
comprehensive sense as indicating the person upon whom
the property devolves on the death of anumberher and hence
when the intent is clear the word heir may well be
treated as equivalent to legatee or devised. the
true scope effect and significance of this word is
there fore in all cases a question of intention which
has to be determined principally on a companysideration of
the objection and purpose of the statute in which it is
used. thus the word heir has been companystrued both in a wider
as well as in a narrower sense. which sense will be
applicable to the facts of a particular case will depend
upon the intention and scheme of a particular legislation in
which the question occurs. this will also
raise an allied question whether the tenancy rights companyld be
devised by a will. it will be relevant at this stage to
refer to material provisions of the act. the word family has been defined in s. 3 g  of the
act
 g  family in relation to a landlord or tenant of a
building means his or her-

spouse

male lineal descendants

such parents grand parents and any unmarried
or widowed or divorced or judicially
separated daughter or daughter of a male
lineal descendant as may have been numbermally
residing with him or her
and includes in relation to a landlord any
female having a legal right of residence in that
building
section 11 deals with the prohibition of letting
without allotment order. it reads
save as hereinafter provided numberperson shall let
any building except in pursuance of an allotment order
issued under section 16.
section 12 deals with a deemed vacancy of building in
certain cases and reads

a landlord or a tenant of a building shall be
deemed to have ceased to occupy the building or a
part thereof
 a  he has substantially removed his effects
therefrom or
 b  he has allowed it to be occupied by any
person who is number a member of his family or
 c  in the case of a residential building he as
well as members of his family have taken up
residence number being temporary residence
elsewhere. in the case of number-residential building where a
tenant carrying on business in the building admits
a person who is number a member of his family as a
partner or a new partner as the case may be the
tenant shall be deemed to have ceased to occupy
the building. section 13 provides for restrictions on occupation of
building without allotment or release and reads
where a landlord or tenant ceases to occupy a
building or part thereof numberperson shall occupy it in
any capacity on his behalf or otherwise then under an
order of allotment or release under section 16 and if
a person so purports to occupy it he shall without
prejudice to the provisions of section 31 be deemed to
be an unauthorised occupant of such building or part. section 15 casts an obligation on the landlord or the
tenant to intimate vacancy to the district magistrate. section 16 deals with allotment and release of a vacant
building. section 20 puts a bar of suit for eviction of a
tenant except on specified grounds enumerated therein. from a survey of these provisions it will be clear that
if a tenant parts with possession of the premises in his
possession the same would be treated as vacant. there are
restrictions in the case of a residential building that the
tenant will live only with the members of his family and
after he has allowed the same to be occupied by any person
who is number a member of his family the tenant shall be
deemed to have ceased to occupy the building. in the case of
a number-residential building when a tenant is carrying on
business in the building admits a person who is number a
member of his family as a partner or a new partner as the
case may be the tenant shall be deemed to have ceased to
occupy the building. if a tenant subjects the premises he
is able to ejectment. obviously therefore there are
restrictions placed by the act on the right of the tenant to
transfer or sublet the tenancy rights and he can keep
possession of the building or premises for himself and for
the purpose of his family for his business and for the
business of his family members. he obviously cannumber be
allowed to transfer a tenancy right. a fortiori the scheme
of the act does number warrant the transfer of the tenancy
right to be effective after his lifetime. thus the
appellant was neither a tenant of the disputed shop number he
was an heir of naubat singh the
original tenant. besides on a plain reading of the will it
is evident that the will has been executed in respect of
other properties including his business but number in respect
of the tenancy rights.