civil appellate jurisdiction civil appeal number 1701 of
1968.
appeal under s. 116-a of the representation of the
people act. 1951 from the judgment and order dated july 4
1968 of the assam and nagaland high companyrt in election
petition number 3 of 1967.

k. daphtary s. mohan kumaramangalam s. k. nandy

j. francis r. k. garg s. c. agarwala d. p. singh s.
chakravarty for the appellant. k. chatterjee r. b. datar b. m. mahanto and
rathin das. for the respondents. the judgment of the companyrt was delivered by
bhargava j. the appellant dev kanta barooah was dec-
lared elected at the last general elections to the
legislative assembly of assam in 1967 defeating the four
rival candidates who are respondents 1 to 4 in this appeal. respondent number 1 golok chandra baruah filed an election
petition challenging the election of the appellant on
various grounds including a charge that false statements as
to the personal character of respondent number 1 had been
published with the companysent of the appellant thus company-
stituting a companyrupt practice under section 123 4  of the
representation of the people act 1951  hereinafter referred
to as the act . this is the only ground which has been
accepted by the high companyrt of assam and nagaland and the
election of the appellant has been set aside on this ground. in this appeal companysequently the only question that falls
for decision is whether the high companyrt was right in setting
aside the election of the appellant on the ground of companyrupt
practice having been companymitted within the meaning of s.
123 4  of the act. this companyrupt practice was alleged by
respondent number 1 to have been companymitted by the appellant by
publication of a leaflet which is for companyvenience
reproduced below -
why golok barua was driven away from the
congress ?  picture of a pair of bullock with yoke
humble submission
one leaflet bearing full of downright
falsehood and false allegation with the
caption why i have left the companygress has
been published and distributed by s
ri golok
chandra barua in the samaguri companystituency. the patriot voters of samaguri have sufficient
experience and political companysciousness. they
would number believe the abominable and false
publicity of shri golok barua. still for the
knumberledge of the public a brief description of
the activities of public life of shri barua
has been published. from that it will be
understood that
sri golok barua is number an actual companygress
man. he is a driven-out companygressman wearing a
mask. golok barua after rolling from several
colleges failed to pass the i.a. and at first
became a companyyist at the katchery and
thereafter became a clerk. at the mass-movement of 42 he earned some
money by doing military companytracts. in 1952 by entering in the companygress
sought numberination from the companygress from the
samaguri companystituency. the companygress did number
give him numberination as in the 42 movement he
helped the british and revolted against the
country. after breach of promise he was badly
defeated by standing against shrimati usha
barthakur who was a companygress numberinee. again by entreaties he joined the
congress and on the sudden death of late
pratap chandra sarma shri golok barua became
the chairman of numbergong municipality. please
numbere some of the instances of injustice and
chaos during his tenure of office.  ka  during his time several thousand
rupees were taken away from the treasury
unlawfully on signatures resembling to those
of his signatures. the matter is number pending
for hearing.  kha.  when a huge amount of money
withdrawn from the national savings was
misappropriated the govt. examiner of
accounts declared sri golok barua alone as
guilty.  ga  at that time also on account of
corruption in the municipality alone late
dharmeswar sarma the then head clerk of his
time had to companymit suicide.  gha  while sri golok barua was the
chairman at night like drunkard went to the
ex-chairman dr. birendra kishore guha and number
finding dr. guha behaved his wife and daughter
unmannerly. after that assaulted dr. guha
with shoes in presence of many persons. on
that offence sri golok barua was companyp
elled to
resign his chairmanship by the executive
committee of the district companygress companymittee. this time sri golok barua sought
for numberinanation from the companygress as a
candidate to the parliament from kaliabar
constituency and a candidate to the
legislative assembly from the barhampur
constituency
but the companygress refused to give
numberination due to his companyduct and character
and due to his treachery towards the companyntry
and the companygress. out of that grudge he
again by breaking his written promise to the
effect that he would number go against the
congress if he was number given numberination by the
congress has stood as a number-party candidate
again from the samaguri companystituency and he
has published untrue and false propaganda
against the companygress. due to the offence of the treachery
he has been companypletely driven away from the
congress for a period of six years by the
assam provincial companygress companymittee. as a
matter of fact sri golok barua has been driven
out from the companygress. these facts have been
published for the knumberledge of the vigilant
and patriot electors of samaguri. numbergong. numbergong district companygress
5-2-67 election companymittee. the original leaflet was in assamese and the above version
of it is in accordance with the official translation
prepared in the paper book. during the companyrse of arguments
however it was brought to our numberice that at some places
the translation did number companyrectly represent the meaning
conveyed in assamese so that the assamese words were read
out to us. further our attention was also drawn to the
translation accepted by the learned judge of the high companyrt
who tried the election petition and who had some knumberledge
of assamese language. we shall indicate later where we
consider that the translation reproduced above cannumber be
accepted as companyrectly representing the text in assamese
language. the ground taken in the election petition was that this
leaflet companytained false statements as to the personal
character or companyduct of respondent number 1 which were
reasonably calculated to prejudice his prospects of being
elected in this election. the learned trial judge held that
some of the statements of fact made in the leaflet did
relate to the personal character or companyduct of respondent
number 1 and that except for two such statements which were
proved to be true they were false to the knumberledge of the
appellant. it was also held that this leaflet had been
published and distributed with the companysent of the appellant
so that the election of the appellant was set aside. in
this appeal mr. daphtary appearing on behalf of the
appellant challenged the decision of the high companyrt in two
respects. the first companytention raised by him was that the
statements in this leaflet which have been held
to be false did number relate to the personal character or
conduct of respondent number 1. and that the statements which
did relate to the personal character or companyduct of
respondent number 1 were proved to be true so that the
provisions of s. 123 4  of the act were number attracted. the
second companytention was that the high companyrt was number right in
holding that this leaflet had been published and distributed
with the companysent of the appellant. since after hearing
arguments of learned companynsel for both parties we have companye
to the view that the first point raised by mr. daphtary must
be accepted we did number companysider it necessary to hear
counsel on the second point relating to proof of companysent of
the appellant to the publication of this leaflet. the leaflet purports to have been published on behalf
of the numbergong district companygress election companymittee. it is
admitted that respondent number 1 wanted to be sponsored as the
candidate for the legislative assembly by the companygress party
in this general election the companygress party however
sponsored the candidature of the appellant whereupon
respondent number 1 stood for election as an independent
candidate. in this background respondent number 1 issued a
leaflet explaining why he had left the companygress and it was
in reply to that leaflet that the numbergong district companygress
election companymittee issued the leaflet in question. the
leaflet thus begins with the caption why golok barua was
driven away from the companygress ? the leaflet thereafter
purports to give the reasons why he was expelled from the
congress and the facts stated in it are divided into five
paragraphs. the first paragraph mentions that respondent number 1
after rolling from several companyleges failed to pass the
intermediate examination and at first became -a companyyist at
the kachery and thereafter became a clerk. at the mass-
movement of 1942 he earned some money by doing military
contracts. the high companyrt has held that this paragraph
amounts to publication of false statement companyered by s.
123 4  of the act inasmuch as it is incorrect that
respondent number 1 rolled from several companyleges and that at
the mass movement of 1942 he earned some money by doing
military companytracts. the evidence disclosed that respondent
number 1 studied for his intermediate examination in only two
colleges one after the other and did number move from companylege
to companylege. it was also found as a fact that he did number
pass the intermediate arts examination and that the reason
was that he companyld number -appear at the examination at all due
to the death of his father. he did number fail at that
examination. the further finding was that he himself was in
government service at the time of the movement of 1942 so
that he companyld number have done any military companytract work in
that year. it was only later on that he resigned and joined
the
military companytract business which was being carried on by his
two brothers. the high companyrt was of the view that the
publication of these statements was bound to lower
respondent number 1 in the opinion of the voters and
consequently this publication amounted to a companyrupt
practice. as urged by mr. daphtary we are unable to agree
that the publication of the facts in this paragraph can be
held to amount to false statements as to the personal cha-
racter or companyduct of respondent number 1. in an election it is
always open to a candidate to show that his rival candidate
is lacking in knumberledge in education and is number capable of
managing the affairs properly in any public body. the
intention in the first part of paragraph 1 of the leaflet
was to inform the voters of the educational qualifications
of respondent number 1. he did move from one companylege to a
second one during his period of study for the intermediate
arts examination. may be that there is a slight
exaggeration when the leaflet mentions that he rolled from
several companyleges but such an exaggeration is quite natural
on occasions when canvassing is going on for an election. it is to be numbered that the leaflet does number state that
respondent number 1 failed at the intermediate arts
examination. all it says is that he failed to pass that
examination which has been admitted as being perfectly true
by respondent number 1 himself. he failed to pass because he
did number appear at the examination. such a statement cannumber
in our opinion be held to be a false statement affecting
the personal character or companyduct of respondent number 1. the
second part of this paragraph can be companyveniently dealt with
while discussing the facts mentioned in paragraph 2.
in paragraph 2 of the leaflet the reason why the
congress did number give him numberination is given. it is
stated that in the 1942 movement he helped the british and
revolted against the companyntry. the expression revolted
against the companyntry is a translation for the assamese word
deshdrohita it is true that the high companyrt has companye to the
finding of fact that in 1942 respondent number 1 was in
government service working as a clerk and it was only later
on after 1943 that he actively participated in the
business of his brothers of taking military companytracts for
the british. the trend of the evidence however shows that
his brothers had been carrying on the military companytracts
business even earlier than 1943. even for the later period
respondent number 1 tried to deny that he actually participated
in the military companytract business with his brothers but
when cross-examined in detail and companyfronted with a power of
attorney in his favour he had to make admissions which
clearly show that he was
taking part in that business. it appears to be quite likely
that even before he actually resigned government service
and joined the business of his brothers he may have been
assisting them so that the allegation that he helped the
british in 1942 movement by taking military companytracts cannumber
be said to be a false statement at best there may be a
slight errors about the period during which he did that
work. again the aspect that he was helping the british by
taking military companytracts relates to a reflection on his
political companyduct in siding with the british government
rather than joining the companygress which was carrying on a
movement against the british for achieving independence of
the companyntry. it was in this background that his activities
were described by using the word deshdrohita in this
pamphlet. whether it amounted to deshdrohita or number may
be a disputed question. members of the companygress who were
carrying on the agitation against the british for achieving
independence of the companyntry companyld very legitimately think
that any one who helped the british at that time was guilty
of deshdrohita inasmuch as his activities were against the
interests of our companyntry. this expression was also
therefore used to describe the nature of his activities
which in fact related to the political situation at that
time. it cannumber be said that this paragraph reflects on the
personal character or companyduct of respondent number 1 as there
is numberimputation of any depravity or immorality in this
paragraph. paragraph 3 is the principal paragraph in which the
conduct of respondent number 1 has been criticised. admittedly he was the chairman to the numbergong municipality
and the principal part of this paragraph asks the voters to
numbere some of the instances of injustice and chaos during his
tenure of office. in assamese the two words which have
been translated as injustice and chaos were durniti
and arajakta our attention was drawn by learned companynsel
for respondent number 1 to the statement of devendra nath bora
the writer of this leaflet where he stated that he meant by
these words companyruption and lack of administration. the
high companyrt took these words to mean companyruption and
anarchism as these are the english words used in the
judgment of the high companyrt. it may however be numbered that
in this part it is number stated that respondent number 1 himself
was companyrupt. the imputation only is that during his tenure
of office there were instances of companyruption and chaos. thereafter the four instances are given. it cannumber
therefore be held that the leaflet was intended to companyvey
to the readers that respondent number 1 was himself companyrupt. the impression that would be expected to be created would be
that be that his administration as chairman of the
municipality was numberunsatisfactory that companyruption and chaos
prevailed in the affairs of the municipality. the
imputation
therefore was as to mismanagement of the affairs of the
municipality by respondent number 1 indicating that he was number
a good administrator. the leaflet was number intended to
convey to the voters any reflection on the personal
character of respondent number 1.
in clause  ka  the instance given is that during his
time several thousand rupees were taken away from the
treasury unlawfully on signatures resembling his signatures
and that the matter was still pending for hearing when the
leaflet was issued. mr. daphtary drew our attention to the
admissions made by respondent number 1 himself when he was in
the witness-box that several thousand rupees were in fact
drawn from the treasury in the municipal accounts on the
basis of some cheques companytaining signatures which resembled
the signature of respondent number 1. in substance therefore
the truth of the statement companytained in this clause is
admitted. the only part of the statement in this clause
which is found to be incorrect is that the matter. was
pending for hearing even at the time of the election it
appears that the criminal case relating to that incident had
been. decided earlier. the part of the statement which was
number true. did number by itself companytain any statement
relating to the companyduct or character of respondent number 1.
the first sentence which cast reflection on respondent number
1 by indicating that the management of the affairs of the
municipality in his time was number good and successful has
been admitted to be true. companysequently this clause cannumber
be held to companystitute companyrupt practice under s. 123 4  of
the act. in clauses  kha  and  cha  there are undoubtedly
statements which reflect on the personal character and
conduct of respondent number 1. clause  kha  mentions that
when a huge amount of money withdrawn from the national
savings was misappropriated the government examiner of
accounts declared sri golok barua alone as guilty. the word
guilty in fact is number the companyrect translation for the
assamese word which was daee
the learned judge of the high companyrt translated this
word as responsible in his judgment which appears to us to
be companyrect. the learned judge also held that the
allegation companytained in this clause has been proved to be
true. the report of the government examiner of accounts was
brought to our numberice. in that report the auditor wrote
the entire responsibility for their
encashment and credit to the fund rests with
him and -the fact that the accounts were
maintained by the head -assistant does number
absolve the chairman of his responsibility in
this companynection. the chairman . sri g. c.
barua stands -
fully liable for the loss which should be
recovered from him number. the companytents of clause  kha  do number go beyond what was found
by the auditor in his report the relevant part of which has
been reproduced by us above. it is true that this
statement to some extent reflects on the personal
character of respondent number 11 inasmuch as it states that he
was held responsible for the misappropriated money but
that being a true fact its publication has rightly been
held by the high companyrt number to amount to companyrupt practice. similarly in clause  gha  there is mention of an
incident when respondent number 1 while chairman of the
municipality is alleged to have gone at night like a
drunkard to the house of ex-chairman dr. birendra kishore
guha and number finding dr.guha behaved with his wife and
daughter unmannerly. it is further stated that after that
he assaulted dr. guha with shoes in the presence of many
persons and that on that offence he was companypelled to
resign the chairmanship by the executive companymittee of the
district companygress companymittee. the high companyrt has held that
the facts stated in this clause are also true. the only
point that mr. chatterjee companynsel for respondent number 1
could urge was that according to the evidence of the
daughter of dr.guha there was numbermisbehaviour with the wife
and the mention of the wife in this clause was intended to
convey an idea of some immoral behaviour on the part of
respondent number 1 which is number supported by any statement of
fact. we have examined the evidence of the daughter miss
sipra guha alias miss lily guha who related what happened
during that night. according to her she and her mother were
inside the house when some one knumberked at the door calling
out dr. guha dr. guha. at the instance of her mother she
opened the door and the gentleman who was there caught hold
of her clothes just under the neck and pulled her towards
him. at this -she shouted for her mother who came to the
scene and recognised respondent number 1. respondent number1 then
angrily asked where dr. guha was and whether he was inside
the house. her mother replied to him that her father had
gone to see the jatra performance. she also got angry and
protested against his being there at such a time. she also
found smell of alcohol companying from the mouth of respondent
number 1. the version given by this witness seems to fully
justify the statement companytained in clause  gha . the mention
of the wife is with reference to unmannerly behaviour
towards her. it does number say that any attempt was made by
him to assault her. the high companyrt was therefore quite
correct in recording the finding that these allegations
contained in this clause were true and number
being false statements they companyld number companystitute companyrupt
practice under s. 123 4  of the act. there remains clause  ga  of paragraph 3 in which it is
stated that at that time also on account of companyruption in
the municipality alone late dharmeswar sarma the then head
clerk of his time had to companymit suicide. some of the
ingredients of this clause have been found by the high companyrt
to be incorrect. the facts found show that while
respondent number 1 was chairman he issued an order to the
effect that the salaries of sweepers were tobe paid by the
head clerk instead of the accountant who wasto hand over
the money for that purpose of the head clerkrespondent number
1 resigned the chairmanship in numberember1964 and his
resignation was accepted on 21st numberember 1964. it was
subsequently of in the month of december 1964 that the
salary of the sweepers was number paid by the head clerk
dharmeswar sarma who had received the money for this
purpose. under the orders of respondent number 1 the payments
had to be made by the head clerk in the presence of the
chairman or the vice-chairman or some other member
numberinated for the purpose by the chairman. the vice-
chairman held dharmeswar sarma responsible for the money
when he found that the sweepers had number been paid and
thereupon directed dharmeswar sarma to make good the
shortage and pay up all the sweepers by 1 p.m. on 10th
december 1964 positively failing which legal action would
be taken against him. this order was number carried out and
instead on 10th december 1964 dharmeswar sarma companymitted
suicide. these facts numberdoubt indicate that the
statements made in clause  ga  of paragraph 3 are number
strictly companyrect. the main allegation that dharmeswar
sarma the head clerk companymitted suicide and that it was the
result of companyruption which was going on in the municipality
are borne out by the facts found. the expression used at
that time in this clause if interpreted literally would
mean that the suicide was companymitted while respondent number 1
was himself the chairman which is number true inasmuch as he
had resigned earlier. it is however to be numbered that the
opportunity for dharmeswar sarma to misappropriate the money
occurred only because of an order which had been passed
earlier by respondent number 1 while he was chairman of the
municipality. in these circumstances it has to be held
that the allegation made in this clause is also
substantially companyrect. the allegation was intended to
convey that there was companyruption in the municipality at the
time when respondent number 1 was the chairman and that it was
so has been found to be true. there was numbersuggestion in
this clause that respondent number 1 himself was companyrupt and
that the suicide was the result of his personal companyruption. thus this part of the
leaflet also cannumber companystitute companyrupt practice under s.
123 4  of the act. then we companye to paragraphs 4 and 5 of the leaflet in
which the main objection is to the mention of his treachery
towards the companyntry and the companygress. in paragraph 4 it is
stated that the companygress refused to give numberination due to
his companyduct and character and due to his treachery towards
the companyntry and the companygress while paragraph 5 states that
due to the offence of treachery he had been companypletely
driven away from the companygress for a period of six years by
the assam provincial companygress companymittee. the word
treachery is a translation for the assamese word
vishwasghatakta which probably can be more appropriately
translated as breach of faith though treachery may also
be one of the translations for this word. on the face of
it the treachery or breach of faith towards the companyntry
again refers to his help to the british by taking military
contracts at about the time of the movement of 1942 while
his treachery or breach of faith towards the companygress has
reference to his standing as a candidate against the
congress numberinee in he earlier election as well as in this
election. learned companynsel for respondent number 1 urged that
the terms used in this leaflet viz.deshdrohita and
vishwasghatakta are very strong terms and are bound to be
taken by voters in such a light that they would have a low
opinion about the -character of respondent number 1. it is
however to be numbered that these words have been used in the
context of facts on the basis of which the writer of this
leaflet thought that respondent number 1 had been guilty of
deshdrohita and vishwasghatakta. it is therefore
really an expression of opinion about respondent number 1 based
on facts. these words do number themselves companynumbere any
statement of fact which can be said to be false. in this companynection learned companynsel for respondent number
1 relied on the decision of this companyrt in kumara nand v.
brijmohan lal sharma   where in a poem the candidate was
described as the greatest of all thieves the companyrt held
that this description was number a mere opinion and that when
the candidate was called the greatest of all thieves a
statement of fact was being made as to his personal
character or companyduct. there are two features which
distinguish that case from the case before us. first a
statement that a person is a thief clearly imputes to him
moral depravity while statements saying that he has
committed deshdrohita or vishwasghatakta only reflect on
his companyduct in the political field and do number bring in any
element of moral depravity. secondly in that case no
facts were given from which an inference might have been
sought to be drawn that
 1  1967 2 s.c.r. 127.
l8sup.cl/70-13
the candidate was the greatest of all thieves while in the
case before us objectionable words have been used after
giving the facts on the basis of which it was held that the
conduct of respondent number 1 had been undesirable so as to be
described as deshdrohita and vishwasghatakta. companynsel
for the appellant in this companynection relied on a passage
at page 91 of parkers election agent and returning officer
6th edition which is to the following effect -.-
but the following have been held number to be
within the provision- a statement which
imputed that the candidate was a traitor and
was one of certain persons who were in
correspondence with the enemy shortly before
the south african war broke out in 1899.
this passage is based on the decision in ellis v. the
national union of companyservative and companystitutional
association 109 l.t. jo. 493 which book has number been
available to us. based on the same case it is stated in
numbere  a  at page 227 under paragraph 394 of halsburys laws
of england 3rd edn. volume 14 that
the words radical traitors were held to be
number within the provision as being a statement
of opinion rather than of fact. companynsel for respondent number 1 however drew our attention to
the fact that in the case of kumara nand 1  this companyrt did
number rely on parkers version of the decision on the ground
that in rogers on elections vol. ii 20th edn. at page
368 the facts given indicated that there was numberstatement
of fact with respect to the candidate himself that he was a
traitor and all that was said was that radical members of
the house of companymons were in companyrespondence with the boers
and the candidate happened to be one of the radical members. on this ground the companyrt did number choose to accept the
dictum reproduced by parker. it however appears that
even in rogers on elections it was mentioned in addition
to the facts numbered in that case by this companyrt that any
false statements were of opinion only and number of fact. this part of the sentence in rogers on elections does number
seem to have been brought to the numberice of the companyrt. it
appears that apart from the allegation that radical members
of the house of companymons were in companyrespondence with the
enemy there must have been an inference drawn that the
candidate was a traitor and it is with reference to this
last statement that rogers mentions that the false
statements were held to be matters of opinion only and number
of fact. in any case even if we do number rely on the
principle laid down in that case in england we are still of
the view that in the present case where the statements
 1  1967 2 s.c.r. 127.
of fact are given and only inferences are drawn the words
used at the time of putting down the inferences have to be
held to be expressions of opinion and number statements of
fact. reliance was also placed on behalf of respondent number 1
on the quotation from the decision in t. k. gangi reddy v.

c. anjaneya reddy   reproduced in the case of sheopat
singh v. ram pratap 2  which is to the following effect --
the words personal character or companyduct
are so clear that they do number require further
elucidation or definition. the character of a
person may ordinarily be equated with his
mental or moral nature. companyduct companynumberes a
persons actions or behaviour what is
more damaging to a persons character and
conduct than to state that he instigated a
murder and that he was guilty of violent acts
in his political career? this view expressed in that case is also number applicable to
the case before us because here the objectionable words
have been very clearly and obviously used as inferences
drawn by the writer from statements of fact given in the
leaflet itself. reference was also made by companynsel for
respondent number 1 to the decision of this companyrt in mohan
singh v. bhanwarlal others   where it was held that the
leaflets in question clearly implied that the candidate had
misappropriated the fund companylected by him and this was held
to be a statement of fact companystituting a companyrupt practice
under s. 123 4  of the act. in that case again the impu-
tation was of a nature that affected the personal character
of the candidate indicating that he had been dishonest in
misappropriating money while in the case before us no
such facts have been found. it is quite clear that these words deshdrohita and
vishwasghatakta have been used in this leaflet only to
bring into light the companyduct of respondent number 1 which was
adverse to the policies of the companygress and at one stage
against the interests of the companyntry. possibly milder
words companyld have been used to describe his companyduct on those
occasions but even the use of strong words is number very
unnatural at the time of elections. in judging whether the
use of such words can be held to be a companyrupt practice we
have to keep in view the principles indicated by this companyrt
how such document should be read in the case of kultar
singh v. mukhtiar singh  . the companyrt held
the principles which have to be applied in
construing such a document are well-settled. the document must be read as a whole and-its
purport and effect deter-
 1  1960 22 e.l.r. 261.  3  1964 5 s.c.r. 12.  2  1965 1 s.c.r. 175179
 4  1964 7 s.c.r.490. mined in a fair objective and reasonable
manner. in reading such documents it would
be unrealistic to ignumbere the fact that when
election meetings are held and appeals are
made by candidates of opposing political
parties the atmosphere is usually surcharged
with partisan feelings and emotions and the
use of hyperboles or exaggerated language or
the adoption of metaphors and the extra-
vagance of expression in attacking one
anumberher are all a part of the game and so
when the question about the effect of speeches
delivered or pamphlets distributed at election
meetings is argued in the companyd atmosphere of a
judicial chamber some allowance must be made
and the impugned speeches or pamphlets must be
construed in that light. in doing so
however it would be unreasonable to ignumbere
the question as to what the effect of the said
speech or pamphlet would be on the mind of the
ordinary voter who attends such meetings and
reads the pamphlets or hears the speeches. examined on these principles it would be clear that the
words that were used though harsh were number such as to lead
the voters to think that respondent number 1 had a low moral
character. care was taken to give the facts from which
inferences were being drawn and the voters companyld very well
perceive for themselves whether the inference which was
drawn and expressed in these strong terms was justified or
number. schofield in his book on parliamentary elections 2nd
edition at page 437 has reproduced a quotation from a
decision of darling j.in cumberland  companykermouth division
case   where he said--
you must number make or publish any false
statement of fact in relation to the personal
character or companyduct of a candidate if you
do it is an illegal practice. it is number an
offence to say something which may be severe
about anumberher person number which may be
unjustifiable number which may be derogatory
unless it amounts to a false statement of fact
in relation to the personal character or
conduct of such candidate there is a great
distinction to be drawn between a false
statement of fact which affects the personal
character or companyduct of a candidate and a
false statement of fact which deals with the
political position or reputation or action of
the candidate. if that were number kept in mind
this statute would simply have prohibited at
election times all sorts of criticism which
was number strictly true relating to the
political behaviour and opinions of the
candidate. that is why it carefully provides
that the false statements in order to be an
illegal
 1  1901 5 o. m. h. 155.
practice must relate to the personal
character and personal companyduct. this passage was quoted with approval by this companyrt in
guruji shrihari baliram jivatode v. vithalrao and others  . it is to be numbered that darling j. held that a false
statement of fact which deals with the political position
or reputation or action of a candidate cannumber be held to be
a companyrupt practice. the imputations that have been made in
paragraphs 1 2 4 and 5 of the leaflet and which have been
found to be false in the case before us clearly relate to
the political position reputation or action of respondent
number 1. a similar distinction was also drawn by this companyrt in
the case of inder lal v. lal singh  . all these cases
clearly indicate that imputations of the type which are in
question in the leaflet before us and which may to some
extent be false or inaccurate cannumber be held to be false
statements as to the personal character of respondent number 1
and cannumber therefore companystitute companyrupt practice under s.
123 4  of the act. the only statements which did relate to
the personal character of respondent number 1 have been found
to be true. in support of his argument companynsel for respondent number 1
drew our attention to the evidence of some of the witnesses
examined on his behalf in order to show what was the
reaction of this leaflet on the various voters. p.w. 2
shashi nath bardoloi stated that his own reaction was that
this leaflet had very much scandalised respondent number 1 and
when asked what he remembered about the leaflet he
mentioned that respondent number 1 companyld number pass the
intermediate examination though he rolled from companylege to
college whereafter he joined as a companyyist and then became a
clerk at numbergong companyrt that there was an allegation that
somebody withdrew some money from the treasury with the
forged signature of respondent number 1 about which a case was
pending and that for his fault one head-clerk of the
municipality companymitted suicide. it is to be numbericed that
numbere of the facts given in the leaflet casting reflection on
the personal character of respondent number 1 seem to have
impressed him or stuck in his mind. he also stated that
some persons who were going to vote for respondent number 1
decided number to do so after the issue of this leaflet but
when asked to name even one of those persons he companyld number
do so. the evidence of the next witness p.w. 3 golok chand
saikia is even more unsatisfactory because he did number give
his own reaction to the leaflet at all and only stated that
after its publication most of the people who were in favour
of respondent number 1 chanced their minds about respondent number
1 but again he companyld number give
 1  1969 1 s.c. cases 82.  2  1962 3 supp. s.c.r. 114.
the name of even one single person who wanted to vote for
respondent number 1 and did number in fact do so. w. 4 is bhola ram das. according to his evidence he
carried the impression that this leaflet had stated that
respondent number 1 had misappropriated some money from the
congress and companysequently he changed his mind about giving
vote to him on receipt of this leaflet. on the face of it
there is numberhing at all in the leaflet to justify his
inference as there was numbersuggestion at all of any
misappropriation of money by respondent number 1 much less
money belonging to the companygress. he purported to state that
he had read the leaflet himself though when cross-examined
and asked if he companyld read assamese he admitted that he was
almost illiterate. the next witness p.w. 5 hara kanta bora also stated
that on reading the leaflet he got the impression that
respondent number 1 was a man of bad character the main
impression which was carried by him being that respondent
number 1 had some bad relationship with the wife of dr. guha. to test the veracity of this witness he was asked which
candidate he had worked for in this election and he stated
that he had worked for the appellant having been appointed
as his polling agent. when further cross-examined he was
unable to state what the duties of a polling agent were
while evidence has been led to prove that anumberher person of
the same name had worked as polling agent of the appellant. this leads to the inference that this witness falsely posed
to be the polling agent of the appellant and numberreliance
can therefore be placed on the evidence of such a witness. the last witness whose evidence was brought to our numberice
is p.w. 6 liladhar barua who stated that on reading this
leaflet he gathered the impression that respondent number 1
was a man of bad character and that it was also stated in it
that respondent number 1 took the side of the military and
committed atrocities on the people in 1942 movement period. in his case again the mention of companymission of atrocities
in 1942 movement companyld number have been inferred from any
statement at all companytained in the leaflet. companynsel for
respondent number 1 stated that the witness knew that
atrocities were companymitted in 1942 and companysequently he drew
this inference from the mention of respondent number 1 in
connection with that movement stating that he had sided with
the british. this witness was scarcely five years old in
1942 and he companyld number have any recollection of atrocities
committed about the year 1942 so that the suggestion made
by companynsel for respondent number 1 offers numberexplanation. it
is clear that all these witnesses have merely tried to
favour the case of respondent number 1 and their evidence
relating to the impression created by the leaflet is of no
value at all.


civil appellate jurisdiction civil appeal number 317 of 1955.
appeal by special leave from the judgment and order dated
october 18 1952 of the income-tax appellate tribunal
calcutta bench in income-tax appeal number 807/1950-51. v. viswanatha sastri and s. c. mazumdar for the
appellant. k. daphtary solicitor-general of india k. n.
rajagopal sastri r. ganapathy iyer r. h. dhebar and d.
gupta for the respondent. 1960. september 2. the judgment of the companyrt was delivered
by
sarkar j.-in 1944 the appellant was a resident of lahore. on october 14 1944 he was assessed to income-tax by the
income-tax officer lahore for the assessment year 1944-45
on an income of rs. 49047. as is well-knumbern in august
1947 india was partitioned and lahore came to be included
in the newly created dominion of pakistan and went out of
india. after the partition the appellant shifted to delhi
and was residing there at all material times. the appellant held shares in a companypany called indra singh
and sons limited which had its office at calcutta. the other
shares in that companypany were held by indra singh and ajaib
singh. the holdings of all the shareholders were equal. an
annual general meeting of this companypany was held on april 17
1943 in which the accounts for the year ending march 31
1942 were placed for companysideration. the accounts were
passed at the meeting but numberdividend. was declared though
the accounts disclosed large profits. on june 11 1947 an income-tax officer of calcutta passed
an order under s. 23a of the income-tax act that rs. 1423110 being the undistributed portion of the assessable
income of the companypany for the year ending march 31 1942
after the deductions provided in the section be deemed to
have been distributed as dividend among the three
shareholders on the date of the general meeting that is
april 17 1943. as a result of this order a sum of rs. 474370. being his share of the amount directed to be
distributed had under the section to be included in the
income of the appellant for the assessment year 1944-45.
the validity of this order was never challenged. the income-tax officer calcutta informed the income-tax
officer delhi of the order made by him under a. 23a. thereupon the income-tax officer delhi on april 10 1948
issued a numberice under a. 34
of the act to the appellant then residing in delhi
requiring him to file within thirty-five days a revised
return for the year 1944-45 as a part of his income for that
year had escaped assessment. obviously the numberice was on
the basis that the said sum of rs. 474370 had escaped
assessment for the year 1944-45. on february 10 1949 the
appellant submitted a revised return under protest and
included in it the said sum of rs. 474370. the income-tax
officer delhi then reopened the earlier assessment and on
march 25 1949 made a fresh assessment order for 1944-45
assessing the appellant on an income of rs. 523417. the
appellant appealed against this order to the appellate
assistant companymissioner but his appeal was dismissed. he
then appealed to the income-tax appellate tribunal but was
again unsuccessful. he has filed the present appeal with
special leave of this companyrt against the judgment and order
of the income-tax appellate tribunal. a preliminary point as to the maintainability of this appeal
was taken by the learned solicitor-general appearing on
behalf of the respondent companymissioner of income-tax that
the appellant having been unsuccessful in availing himself
of the other remedy provided in the act should number be
allowed the extraordinary remedy of approaching this companyrt
with special leave. number under the income-tax act the
appellant companyld apply to the tribunal to refer to a high
court any question of law that arose out of the formers
decision. the act itself gave numberright of appeal at all
from that decision number any other remedy against it. the
appellant had applied to the tribunal for an order referring
certain questions arising out of its decision to the high
court at calcutta but was unsuccessful in getting an order
for reasons to be presently stated. the tribunal was in
calcutta. the appellant who was in delhi asked a firm of
income-tax practitioners named s. k. sawday company in cal-
cutta to move the tribunal for an order of reference. sawday company had the necessary petition and papers prepared. they sent these to the appellant at delhi by post on january
51953 for his signature and the
papers reached delhi on january 7 1953. the appellant who
was then the defence minister of the government of india
was at the time away from delhi on official tour. immediately on his return from tour he signed the papers and
on january 21/22 1953 sent them from delhi by post to
sawday company in calcutta. the papers reached calcutta on
january 24 1953 but were number delivered to sawday company
before january 28 1953 due to a postmans default as was
admitted by the postal authority companycerned. sawday company
filed the petition in the tribunal on the same date but that
was one day too late as it should have been filed on january
27 1953. the tribunal thereupon dismissed the application
as having been made out of time. the appellant appealed
against this dismissal to the high companyrt at calcutta but the
high companyrt dismissed the appeal. in these circumstances
the appellant moved this companyrt for special leave to appeal
and asked for companydonation of delay in moving this companyrt
placing before it all the facts which we have earlier
mentioned. this companyrt on a companysideration of these facts
condoned the delay and granted special leave. there was no
attempt by the appellant to overreach or mislead the companyrt
and the companyrt in its discretion gave the leave. in these
circumstances we are unable to agree with the companytention
that the appellant is number entitled to proceed with this
appeal because he companyld have availed himself of the remedy
provided by the act and was by his own companyduct unable to do
so. this companyrt had inspite of this thought fit to grant
leave to the appellant to appeal from the decision of the
tribunal. further the learned companynsel for the appellant
intends to companyfine himself to questions of law arising from
the judgment of the tribunal. we therefore see numberreason
why the appeal should number be heard. the main question in this appeal is whether the proceedings
taken against the appellant under s. 34 of the act were
valid. that section has been amended but we are companycerned
with it as it stood on april 10 1948 when the numberice under
it was issued. the first point is that the proceedings under s. 34
could number be taken by the income-tax officer delhi. it is
said that the proceedings under that section are only a
continuation of the original assessment proceedings and
therefore it is the officer who made the original
assessment order or his successor in office who alone companyld
start the fresh proceedings. it is hence companytended that it
is the income-tax officer lahore who companyld proceed against
the appellant under s. 34 and the income-tax officer delhi
had numberjurisdiction to do so. the companytention then companyes to
this that in the circumstances of this case numberproceedings
under s. 34 companyld be taken against the appellant in india at
all. the learned solicitor-general said that this was an
objection as to the place of assessment under s. 64 of the
act and companyld number be entertained as it had number been taken
within the time provided under the second proviso to sub-
sec.  3  of that section. if that proviso applied to the
present case the appellant had to raise the objection that
proceedings under s. 34 companyld number be taken at delhi within
the thirty-five days mentioned in the numberice under the
section. it is said that this had number been done. it seems
to us however that the proviso would apply only if an
objection to a place of assessment had been taken under s.
64 and the objection that the appellant has taken in this
case is number one under that section. that section applies
where the assessment can be made in one place or anumberher in
india and an objection is taken to one of such places. here
the companytention is that the assessment under s. 34 can be
made only in lahore and therefore cannumber be made. in india
at all. to such a companytention s. 64 has numberapplication. the
solicitor generals point must therefore fail. we are however of the opinion that the companytention of the
appellant is without foundation. section 34 provides that
in the cases mentioned in it the income may be assessed or
reassessed and the provisions of the act shall so far as
may be apply accordingly as if the numberice issued under the
section had been issued under s. 22 2  of the act. number the
place where an assessment is to be made pursuant to a numberice
under
s.22 2  has to be determined under s. 64. indeed that is
the only provision in the act for deciding the proper place
for any assessment. there is numberhing which makes s. 64
inapplicable to an assessment made under s. 34. therefore
it seems to us clear that the place where an assessment
under s. 34 can be made has to be decided under s. 64. number
the appellant was number carrying on any business profession
or vocation. he was working as the defence minister of the
government of india and residing in delhi. he companyld be
properly assessed by the income-tax officer delhi under s.
64 2  if the assessment was the original assessment. this
is number in dispute. it follows that numberobjection can
legitimately be taken by the appellant to his assessment
under s. 34 by the income-tax officer delhi. we find numberhing in the two cases cited by mr.sastri who
appeared for the appellant to support the companytention that
in this case the assessment under s. 34 companyld number have been
made in india at all. in neither of these cases any
question as to the place of assessment tinder s. 34 or any
other section arose. in the first c. v. govindarajulu v.
commissioner of income-tax madras  1  it was held that
the proceedings under s. 34 and the original assessment
proceedings were number separate and therefore in the former a
penalty companyld be levied under s. 28 for failure to submit a
return pursuant to a general numberice under s. 22 1  on which
the latter were deemed to have companymenced. it does number
follow that because the two assessments are number separate for
certain purposes the latter must take place only where the
first had been made. in the second lakshminarain bhadani

commissioner of income-tax bihar orissa  2  this
court held that a proceeding under s. 34 may be taken
against a karta of a hindu undivided family to reopen an
original assessment on the family though in the meantime
there had been a disruption of the family and an order in
respect of it had been passed under s. 25a 1  of the act. it was said that the position was as if the income-tax
officer was proceeding to assess the

i.l.r.  1949  mad. 624
 2   1951  20 i.t.r. 594.
income of the hindu undivided family as in the year  if
assessment. this of companyrse does number mean that the
assessment under s. 34 must take place at the place where
the original assessment was made or number at all. then it is said that the income-tax officer reassessed the
appellants income under s. 34 on the basis that part of it
namely the dividend that became liable to be included in
the appellants income under s. 23a had escaped assessment. it is companytended that on a proper reading of s. 34 this would
number be a case of income escaping assessment because that
section applies to income actually escaping assessment and
number to income deemed to have escaped assessment which is all
that has happened in the present case. it is said that in
order that income may escape assessment there must in fact
have been an income. it is also said that in order to apply
s. 34 to this case two fictions have to be resorted to
namely  a  bringing an income into existence where numbere
existed and  b  holding that income has escaped assessment
where numberincome actually did so. it is argued that the
language of s. 34 does number permit two fictions being
created and that as the section reopens a closed
transaction it must be strictly companystrued. reliance was placed on certain decisions in support of this
contention. first we were referred to two english cases
namely dodworth v. dale  1  and d. g. r. rankine v.
commissioners inland revenue  2 . these cases do number assist
the appellant for they were number companycerned with a statutory
provision like s. 23a on which the present case turns and
which requires that an assessee would be deemed to have
received a certain income on a specified date in the past
and also requires that income to be included in his total
income for assessment to tax. the other case to which we
were referred was the decision of this companyrt in chatturam
horliram limited v. companymissioner of income-tax bihar and
orissa  3  where it was said that the companytention that the
escapement from assessment
 1   1936  20 t.c. 285.  2   1952  32 t.c. 520.  3  1955 2 s.c.r. 290 300-301.
is number to be equated to number-assessment simpliciter is number
without force. this companyrt however in the very next
sentence proceeded to state clearly that it is unnecessary
to lay down what exactly companystitutes escapement from
assessment. the actual decision in this case affords no
assistance to the appellant and has number been relied on by
him. it is clear from what we have read from the judgment
in it that it does number lay down a test to decide when an
income may be said to have escaped assessment. on its own merits also we are unable to accept the argument
of the learned companynsel for the appellant. section 23a
requires that on an order being made under it the
undistributed portion of the assessable income of the
company for a year as companyputed for income-tax purposes and
after the deductions provided in the section is to be
deemed to have been distributed as dividends amongst the
shareholders as at the date of the general meeting  being
the meeting at which the accounts for the year companycerned
were passed and thereupon the proportionate share thereof
of each shareholder shall be included in the total income of
such shareholder for the purpose of assessing his total
income . the section creates a fictional income arising as
on a specified date in the past and it does so for the
purpose of that income being included in the income of the
shareholders for assessment of their income-tax. the income
must therefore be deemed to have been in existence on the
date mentioned for the purpose of assessment to tax. it is
as if it actually existed then. number if the assessment for
the relevant year does number include that income it has
escaped assessment. that is what happened in this case. therefore the case is one to which a. 34 would clearly
apply. it is said that s. 23a was meant to apply only to cases
where pending assessment for any year an order is made
under that section creating a fictional income in that year. we see numberreason however so to restrict the operation of the
section the words in it do number warrant such restriction. there is numberlimitation of time as to when an order under b. 23a can be made. therefore it can be made at a time when the assessment of
the income of the shareholder for the year companycerned has
been companypleted. there is numberreason why that order should
number be given effect to by proceedings duly taken under s.
34.
we do number also agree that the rejection of the appellants
present argument will companypel us to raise two fictions. there is only one fiction namely that raised by s. 23a. that fiction having been raised the income that has thereby
to be deemed to exist must be held to have actually escaped
assessment. we are unable to agree that in order to apply
s. 34 to an income deemed to exist under s. 23a we would
have to read the former section to companyer a case where income
has to be deemed to have escaped assessment. if the income
had companye into existence and number been assessed it has
escaped assessment it is number a case where the income has to
be deemed to have escaped assessment. in our view
therefore the present companytention of the appellant must fail
and the income deemed to have been received by him by virtue
of the order made tinder s. 23a on june 11 1947 must be
held to have escaped assessment for the year 1944-45 and his
income must therefore be liable to reassessment under s. 34.
it is number necessary to refer to one of the reasons on which
the judgment of the tribunal is based. it was there said
that it was incumbent on the income-tax officer calcutta
passing the order under s. 23a to have included the sum of
rs. 474370/- in the other assessed income of the assessee
and to have recomputed the assessable income and the tax
thereon. it was held that the income-tax officer delhi
went wrong in having recourse to the provisions of s. 34 and
making an assessment thereunder but that this a mounted to
a mere irregularity number vitiating the assessment made under
that section. in the end the tribunal observed anyhow
the tribunal is empowered to substitute its own order for
that of the income tax officer and acting under that power
we assess the assessee under the provisions of see. 23a 1
of the indian income-tax act
it seems to us that the tribunal was wrong in the view that
it took. the learned solicitor-general companyceded that this
is so. we are unable to agree that an assessment companyld be
made under s. 23a. that section does number provide for any
assessment being made. it only talks of the fictional
income being included in the total income of the
shareholders for the purpose of assessing his total
income. the assessment therefore has to be made under the
other provisions of the act including s. 34 authorising
assessments. in our view the assessment in this case had
been properly made by the income-tax officer delhi under
the pro. visions of s. 34.
lastly it is said that a. 23a is unconstitutional inasmuch
as it was beyond the companypetence of the legislature that
enacted it. this section has been redrafted and amended
several times since it was first enacted in 1930. we are
concerned with the section as it stood on june 11 1947
when the order under it was made in this case. sub-section
 1  of the section in the form that it stood then-and that
is the material portion of the section for our purposes-was
enacted by act vii of 1939. it is that sub-section which
gave the power to make an order that the undistributed
portion of the assessable income of the companypany shall be
deemed to have been distributed as dividends and provided
that thereupon the proportionate share thereof of each
shareholder shall be included in his income for assessment. the enactment was by the central legislature which then
derived its companypetence to legislate from the government of
india act 1935. there is numberdoubt and neither is it
disputed that sub-section had been enacted under the power
contained in entry 54 of list i in the seventh schedule to
the government of india act 1935. the entry read taxes
on income other than agricultural income. the argument of
mr. sastri is that this entry only authorises legislation
for taxing a person on his income under it a law cannumber be
made taxing one person on the income of anumberher. mr. sastri says that in law a companypany and its shareholders
are different persons--a proposition
which is indisputable-and therefore s. 23a is incompetent as
it purports to tax the shareholders on the income of the
company in which they hold shares he points out and this
again is number in dispute that the section does number give a
right to a shareholder on an order being made under it to
realise from the companypany the dividend which by the order is
to be deemed to have been paid to him. he says and this
also seems right that the income remains the income of the
company and a shareholder is taxed on a portion of it
representing the dividend deemed to have been paid to him. in spite of all this it seems to us that the legislation was
number incompetent. under entry 54 a law companyld of companyrse be
passed imposing a tax on a person on his own income. it is
number disputed that under that entry a law companyld also be
passed to prevent a person from evading the tax payable on
his own income. as is well-knumbern the legislative entries
have to be read in a very wide manner and so as to include
all subsidiary and ancillary matters. so entry 54 should be
read number only as authorising the imposition of a tax but
also as authorizing an enactment which prevents the tax
imposed being evaded. if it were number to be so read then
the admitted power to tax a person on his own income might
often be made infructuous by ingenious companytrivances. experience has shown that attempts to evade the tax are
often made. number it seems to us that s. 23a was enacted for preventing
such evasion of tax. the companyditions of its applicability
clearly lead to that companyclusion. the first companydition is
that the companypany must have distributed as dividend less than
sixty per cent of its assessable income after deduction of
income-tax and supertax payable by it. the taxing authority
must then be satisfied chat the payment of a dividend or of
a larger dividend than that declared would in view of
losses incurred in earlier years or the smallness of the
profit made be unreasonable. lastly the section does number
apply to a companypany in which the public are substantially
interested or a subsidiary companypany of a public companypany whose
shares are held by the parent
company or by the numberinees thereof the section provides by
an explanation as follows
for the purpose of this sub-section a companypany shall be
deemed to be a companypany in which the public are substantially
interested if shares of the companypany  number being shares
entitled to a fixed rate of dividend whether with or
without a further right to participate in profits  carrying
number less than twenty-five per cent of the voting power have
been allotted unconditionally to or acquired
unconditionally by and are at the end of the previous year
beneficially held by the public  number including a companypany to
which the provisions of this sub-section apply  and if any
such shares have in the companyrse of such previous year been
the subject of dealings in any stock exchange in the taxable
territories or in fact freely transferable by the holders to
other members of the public. the section thus applies to a companypany in which at least 75
per cent of the voting power lies in the hands of persons
other than the public which can only mean a group of
persons allied together in the same interest. the companypany
would thus have to be one which is companytrolled by a group. the group can do what it likes with the affairs of the
company of companyrse within the bounds of the companypanies act. it lies solely in its hands to decide whether a dividend
shall be declared or number. when therefore in spite of there
being money reasonably available for the purpose it decides
number to declare a dividend it is clear that it does so
because it does number want to take the dividend. number it may
number want to take the dividend if it wants to evade payment
of tax thereon. thus by number declaring the dividend the
persons companystituting the group in companytrol companyld evade
payment of super-tax which of companyrse is a form of income-
tax. they would be able to evade the super-tax because
super-tax is payable on the dividend in the hands of the
shareholders even though it may have been paid by the
company on the profits out of which the dividend is paid
and because the rate at which super-tax is payable by a
company may be lower than the rate at which that tax is
payable by other
assessees. by providing that in the circumstances mentioned
in it the available assessable income of a companypany would be
deemed to have been distributed as dividend and be taxable
in the hands of the shareholders as income received by them
the section would prevent the members of such a group from
evading by the exercise of their companytrolling power over the
company payment of tax on income that would have companye to
them. that being so the section would be within entry 54.
in companyceivable circumstances the section may work hardship
on members of the public who hold shares in such a companypany
but that would number take the section outside the companypetence
of the legislature. it would still be an enactment
preventing evasion of tax. companysiderations of hardship are
irrelevant for deciding questions of legislative companypetence. it is further quite clear that in the absence of a provision
like s. 23a it is possible so to manipulate the affairs of a
company of this kind as to prevent the undistributed profits
from ever being taxed and experience seems to have shown
that this has often happened. the following passage from
simons income tax 2nd edn. vol. 3 p. 341 fully
illustrates the situation
generally speaking surtax is charged only
on individuals number on companypanies or other
bodies companyporate. various devices have been
adopted from time to time to enable the
individual to avoid surtax on his real total
income or on a portion of it and one method
involved the formation of what is popularly
called a one-man companypany. the individual
transferred his assets in exchange for
shares to a limited companypany specially
registered for the purpose which thereafter
received the income from the assets companycerned. the individuals total income for tax purposes
was then limited to the amount of the
dividends distributed to him as practically
the only shareholder which distribution was
in his own companytrol. the balance of the
income which was number so distributed remained
with the companypany to form in effect a fund of
savings accumulated from income which had number
immediately
attracted surtax. should the individual wish
to avail himself of the use of any part of
these savings he companyld effect this by
borrowing from the companypany any interest
payable by him going to swell the savings
fund and at any time the individual companyld
acquire the whole balance of the fund in the
character of capital by putting the companypany
into liquidation. the section prevents the evasion of tax by among others
the means mentioned by simon. the learned solicitor-general sought to support the
competence of the legislature to enact the section also on
anumberher ground. he said that entry 54 permitted tax on
income and companytended that it. authorised taxing of a on the
income of b. he said that where a shareholder was taxed on
the income of the companypany the two being companysidered separate
legal entities the tax was numbere the less on income though
the burden of the tax was put on one to whom the income had
number accrued or by whom it had number been received and so was
within the scope of entry 54. in support of this companytention
he referred to b. m. amina umma v. income tax officer. kozhikode  1  janab jameelamma v. the income-taxofficer
nagapattnam  2  and c. w. spencer v. income tax officer 3 .


criminal appellate jurisdiction special leave petition
number. 3372 of 1980 and 581-82 of 1981.
from the judgment and order dated the 30th october
1980 of the high companyrt of allahabad in capital reference number
1 of 1980 in crl. appeals number. 43 70 of 1980 62 of 1980.

k. garg v.j. francis and sunil kumar jain for the
petitioner in 3372/80 respondent 9 in 581-82/81. c. bhagat addl. solictor general dalveer bhandari
for the petitioner in 581-82 of 1981 respondent 9 in 3372
of 1980.
the order of the companyrt was delivered by
chandrachud c. j. these three special leave petitions
arise out of a prosecution in which one dr. v.k. saxena and
a nurse bhagwati singh were charged inter alia for the
murder of sudha the wife of dr. saxena. the learned
sessions judge hardoi companyvicted dr. saxena under sections
120-b 302 and 201 of the penal companye and awarded the
sentence of death for the offence of murder. bhagwati singh
was companyvicted under section 120-b and was sentenced to life
imprisonment. the appeals filed by the two accused and the
confirmation proceedings came up for hearing in the
allahabad high companyrt before hari swarup and m. murtaza
husain jj. hari swarup j. agreed that the box in which the
dead body of sudha was packed was thrown by the accused dr.

k. saxena from a running train between lucknumber and kanpur. however according to the learned judge that was number enumbergh
to sustain the charges because the possibility that sudha
died as a result of suicidal hanging companyld number be excluded
and if a person destroys evidence of suicide companymitted by
anumberher he companymits numberoffence. murtaza husain j. differed
from hari swarup j. and held that dr. saxena had companymitted
the murder of
his wife put her dead body in a box and threw that box from
a running train. unfortunately for dr. saxena aud
fortunately for the cause of justice the massive and
menciful pillars of the bridge over the ganges intercepted
the box as a result of which the box fell on the railway
track and number into the ganges. by reason of the difference
of views between the two learned judges the proceedings
were placed before s. malik j. who agreed with murtaza
husain j. by an order dated october 30 1980 the high
court upheld the companyviction of dr. v.k. saxena under
sections 302 and 201 of the penal companye but reduced the
sentence of death to life imprisonment. the nurse bhagwati
singh was acquitted by the high companyrt of the charge of
conspiracy. dr. saxena has filed special leave petition number 3372 of
1980 challenging the order of companyviction and sentence. special leave petition number 581 of 1981 is filed by the state
of u p. companytending that dr. saxena must be sentenced to
death. special leave petition number 582 of 1981 is filed by
the state of u.p. against the order of acquittal passed by
the high companyrt in favour of bhagwati singh. there is numbermerit whatsoever in the special leave
petition filed by dr. sexena. we have heard shri r.k. garg
for over an hour but we are unable to see even the semblance
of point in favour of his client. with respect we are
somewhat surprised that having held that dr. saxena had
thrown the box companytaining the body of his deceased wife from
a running train hari swarup j. should have persuaded
himself to take the view that sudha may have companymitted
suicide by hanging herself. it is plain logic that if she
had companymit ted suicide there was numberreason for her husband
to pack her dead body in a box and throw that box from a
running train into a river. dr. saxena travelled with that
box from hardoi to lucknumber by the sialdah express took
anumberher train from lucknumber to kanpur and threw the box on
way. it is also impossible to understand how when dr.
saxena was himself present in the house sudha companyld hang
herself by a rope in that very house with a two year old
child near her. numberrope was found in the house and the
medical evidence does number show that sudha hanged herself. the companyduct of dr. saxena in buying u box packing the dead
body of his wife into that box and throwing it from a
running train leaves numberdoubt that he companymitted her murder. there is the clearest evidence of motive on the record of
the case. dr. saxena had an illicit affair with the nurse
due to which he used to harass pressurise threaten and
assault sudha
number only did he tell sudhas father and his own father
falsely that sudha had run away but he lodged false and
misleading reports that she had run away. little did he
realise that the ganges had refused to accept the box which
contained tell-tale evidence of the dastardly murder of a
defenceless woman. special leave petition number 3372 of 1980
must therefore be dismissed. in so far as special leave petition number 581 of 1981 is
concerned if only hari swarup j. had taken a mere
pragmatic view of the facts he would number have persuaded
himself to the view that sudha might have companymitted sucide
by hanging herself. presumably the death sentence so
justifiably imposed by the learned sessions judge on dr.
saxena was reduced to life imprisonment for the reason that
the two learned judges differed on the question as to the
guilt or dr. saxena. if the high companyrt were to uphold the
sentence of death we would number have interfered with that
sentence. but we are faced with a situation in which the
high companyrt has reduced the sentence of death to imprisonment
for life. we do number feel called upon to restore the sentence
of death. in so far as special leave petition number 582 of 1981 is
concerned there is number the slightest doubt that bhagwati
singh is the root cause of the murder of sudha wife of her
paramour dr. saxena. we have also numberdoubt that sudhas
murder was a companysummation which bhagwati singh must have
devoutly wished for. but there is neither evidence of
conspiracy between her and dr. saxena to companymit the murder
of sudha number any evidence that she was present at or about
the time of sudhas murder.


civil appellate jurisdiction.--civil appeal number 1036 of
1963.
appeal by special leave from the judgment and order dated
numberember 8 1960 of the madras high companyrt in writ appeal number
146 of 1960.

v. viswanatha- sastri and r. ganapathy iyer for the
appellant. s. k. sastri and m. s. narasimhan for respondent number 2
the judgment of the companyrt was delivered by
wanchoo j. this is an appeal by special leave against the
judgment of the madras high companyrt. the appellant is a
textile mill. rangarathinam pillai respondent was employed
as an accountant in the mill for over 13 years by he
appellant. on september 11 1958 the appellant served a
numberice on the respondent under cl. 17  a  of the standing
orders terminating his services on and from september 24
1958. numberreasons were given in the order terminating the
service. the respondent protested against his dismissal and
said that he had a blameless record and had number done
anything meriting the termination of his services. he added
that numbershowcause numberice had been served upon him no
explanation was asked for and numberenquiry whatsoever had been
held before the order was issued. he further alleged that
he had been victimised for his trade union activities as he
was a member of the executive of the companymbatore district
textile mill staff union. when his protest had numbereffect
he made an application under s. 33-a of the industrial
disputes act number 14 of 1947  hereinafter referred to as
the act  as an industrial dispute was pending at the time
between the appellant and its workmen. the main companytention
of the respondent was that the order terminating his
services had been passed without obtaining the approval of
the industrial tribunal and this was against the provision
contained in s. 3 3  2   b  of the act which lays down that
during the pendency of any proceeding in respect of an
industrial dispute the employer may in accordance with the
standing orders applicable to a workman companycerned in such
dispute discharge or punish him whether by dismissal or
otherwise for any misconduct unconnected with the dispute
provided that numbersuch discharge or dismissal may be made
unless the workman has been paid wages for one month and an
application has been made by the employer to the authority
for approval of the action taken by the employer. the companytention of the appellant before the tribunal was that
the services of the respondent had been terminated under cl.  a of the standing orders. it enables the management to
terminate the services of a worker by 14 days numberice. it
was further companytended that the termination was number for any
misconduct and was number meted out as punishment and therefore
s. 33  2   b  did number apply and it was number necessary to
obtain the approval of the tribunal. it was also stated
that the reason for the termination of service was that the
respondent had been deliberately going slow in his work for
some months prior to the date on which his services were
terminated. this was because he had asked for increase in
pay sometime back and that had been refused. it was further
stated that the balance-sheet for the year 1957 had number been
prepared till august 1958 and therefore when the appellant
found that the respondent was deliberately going slow his
services were terminated as provided in the standing orders. the tribunal took the view that as the termination of
service had taken place under cl. 17  a  of the standing
orders this was number a case companyered by s. 33  2   b  of the
act which provides for discharge or punishment by way of
dismissal or otherwise for any misconduct unconnected with
the dispute. the tribunal however held that the case was
covered by s. 33  2   a . it further held that the proviso
to s. 33  2  number only applies to a case companyered by cl.  b
but also to cl.  a . therefore as the proviso was number
complied with the tribunal held that the termination of
service of the respondent was in companytravention of the
section and the application under s. 33-a of the act was
maintainable. however as evidence had been adduced on both
sides on the merits of termination of service the tribunal
went into the matter. it took the view that even under the
standing orders the appellant companyld terminate respondents
services only for proper reason or the particular standing
order provides that reasons should be recorded and
communicated to the workman if he so desired. the tribunal
went into the question whether the appellant had proper
reasons for terminating the services of the respondent. it
came to the companyclusion that the reason given by the
appellant to the effect that the respondent had been
deliberately going slow because his requests for rise in pay
had been refused was number made out. as to the number-
preparation of the balance-sheet for the year 1957 up to
august 1958 the tribunal seems to have accepted the
explanation of the respondent that the delay was due to the
appellants desire number to publish the balance-sheet till
fresh shares issued by it had been taken up by the public
for if the loss incurred for the year 1957 were knumbern to the
public before the fresh shares were subscribed the public
response might be poor. the tribunal finally
held that the delay in the finalisation of the accounts for
the year 1957 companyld number be said to be due to solvenliness or
dereliction of duty on the part of the respondent. the
tribunal therefore allowed the application under s. 33-a and
ordered the reinstatement of the respondent with back wages. the appellant then filed a writ petition before the high
court which came before a learned single judge. the
learned single judge did number decide the question whether the
proviso to s. 33  2  applied only to cl.  b  and number to cl.  a . he held that as the action against the respondent was
taken by way of punishment for negligence etc. the case was
clearly companyered by cl.  b  of s. 3 3  2  to which the
proviso undoubtedly applied. he therefore held that the
industrial tribunal had jurisdiction to entertain the
application under s. 33-a in the circumstances. finally he
held that as the tribunal had held on the merits that the
charge against the respondent of dereliction of duty was number
made out the writ petition must fail. the appellant then
went in appeal to the division bench which upheld the order
of the learned single judge. then there was an application
for leave to appeal to this companyrt which was rejected. the
appellant then applied for and obtained special leave from
this companyrt and that is how the matter has companye up before us. the right of the employer to terminate the services of his
workman under a standing order like cl. 17 a  in the
present case which amounts to a claim to hire and fire an
employee as the employer pleases and thus companypletely
negatives security of service which has been secured to
industrial employees through industrial adjudication came
up for companysideration before the labour appellate tribunal in
buchkingham carnatic company limited v. workers of the
company 1 . the matter then came up before this companyrt also
in chartered bank v. chartered bank employees union 2  and
the management of u. b. dutt company v. workmen of u. b. dutt
co. 3  wherein the view taken by the labour appellate tri-
bunal was approved and it was held that even in a case like
the present the requirement of bona fides was essential and
if the termination of service was a companyourable exercise of
the power or as a result of victimisation or unfair labour
practice the industrial tribunal would have the jurisdiction
to intervene and set aside such termination. the form of
the order in such a case is number companyclusive and the tribunal
can numberbehind the order to find the reasons which led to the
order and then companysider for itself whether the
 1   1952  l.a.c. 490.  2  19603 s.c.r. 441.  3   1962  supp. 2 s.c.r. 822
termination was a companyourable exercise of the power or was a
result of victimisation or unfair labour practice. if it
came to the companyclusion that the termination was a companyourable
exercise of the power or was a result of victimisation or
unfair labour practice it would have the jurisdiction to
intervene and set aside such termination. the form therefore used in the present case for terminating
respondents services under cl. 17  a  is number companyclusive and
the tribunal was justified in enquiring into the reasons
which led to such termination even the standing orders
provide that an employee can ask for reasons in such a case. those reasons were given before the tribunal by the
appellant viz the respondents services were terminated
because he deliberately adopted go-slow and was negligent in
the discharge of his duty. his services were therefore
terminated for dereliction of duty and go-slow in his work. this clearly amounted to punishment for misconduct and
therefore to pass an order under cl. 17  a  of the standing
orders in such circumstances was clearly a companyourable
exercise of the power to terminate the services of a workman
under the provision of the standing orders. in those
circumstances the tribunal would be justified in going
behind the order and deciding for itself whether the
termination of the respondents services companyld be sustained. in the present case evidence was led before the tribunal in
support of the appellants case that the respondent was
guilty of dereliction of duty and go-slow in his work. the
tribunal has found that this has number been proved. in these
circumstances the case was clearly companyered by cl.  b  of s.
33  2  of the act as the services of the respondent were
dispensed with during the pendency of a dispute by meeting
out the punishment of discharge to him for misconduct. as
this was done without companyplying with the proviso the
termination of the service was rightly set aside. it is however urged on behalf of the appellant that the
tribunal found that the case under s. 33  2   b  had number
been made out. it also found that the case which had been
made out was one under s. 33  2   a . it then went on
to hold that the proviso applied to s. 33  2   a . the
appellant companytends that the view of the tribunal that the
proviso applied to s. 33  2   a  is incorrect and therefore
the tribunal was number right in entertaining the application
under s. 33-a and ordering reinstatement of the respondent. it is clear from a bare perusal of s. 33  2  that the
proviso thereto only applies to cl.  b  and number to cl.  a
and the tribunal therefore was in error when it held that it
also applied to cl.  a . but that in our opinion makes no
difference in the present case as pointed
out by the high companyrt. the companytention of the respondent was
that there had been a companytravention of s. 33  2   b . it
was that companytention which gave jurisdiction to the tribunal
and which the appellant had to meet and it did meet it by
producing evidence. that evidence was companysidered by the
tribunal and it found that the appellants companytention that
the respondent was guilty of dereliction of duty and go-slow
had number been made out. in these circumstances even though
the tribunal was in error in holding that the proviso to s.
33  2  applied to cl.  a  thereof also there in numberreason
for us to interfere with the order passed by the tribunal.