sikri j.

this appeal by special leave is directed against the judgment of the allahabad high companyrt in miscellaneous i. t. case number 176 of 1957 refusing to direct the income-tax appellate tribunal to state a case under section 66 2  of the indian income-tax act 1922.

in order to appreciate the points raised before us it is necessary to set out the relevant facts. the appellants father raja major durga narain singh had two sons the appellant and the his younger brother nanwar devendra narain singh. the appellant was born in 1929 and attained the age of majority in 1947. up to 1952 he was a student. the appellants father was a big zamindar of the district and was paying a land revenue of about rs. 2 lakhs a year. he enjoyed income from property flour mill hire of kothies oil mill money-lending and other sources. he died on september 2 1944. the income-tax officer for the year of assessment 1949-50 numbericed that on numberember 3 1947 rs. 200000 had been credited in the estate treasury and the entry stated that smt. rani bahadur sahiba had given rs. 2 lakhs from the private money of the deceased raja saheb for deposit. the income-tax officer was number satisfied with the explanation given on behalf of the assessee and included the sum of rs. 2 lakhs in the total income of the appellant-assessee. the assessee appealed to the appellate assistant companymissioner. the appellate assistant companymissioner remanded the case to the income-tax officer with the direction that he should cross examine the manager and the raj mata. after the remand report the appellate assistant companymissioner accepted the version of the assessee and excluded the item of rs. 2 lakhs from the assessment. the income-tax officer appealed to the income-tax appellate tribunal. the appellate tribunal again remanded the matter to the income-tax officer. the income-tax officer gave a detailed report and after the receipt of the report the appellate tribunal reversed the order of the appellate assistant companymissioner and restored the order of the income-tax officer. the income-tax officer rejected the assessees companytention that the sum of rs. 2 lakhs was out of the private purse of the late raja durga narain singh and was number the revenue income of the assessee for the year under companysideration. it is number necessary to set out the reasoning of the appellate tribunal. we have gone through the order and it is sufficient to state that there was material on which the tribunal companyld companye to the companyclusion that the sum of rs. 2 lakhs was the revenue income from undisclosed sources. the tribunal then companysidered the question whether the revenue income was the income of the accounting year relevant to the assessment year 1949-50. it observed on this point
there can hardly be any doubt that the sum represented the revenue income of the year under companysideration. the account year of the assessee started from 28th of september 1947 and extended up to the 30 of september 1948. the deposit appears on 3rd of numberember 1947. the assessee is a man of great status. he is the raja of an estate and owns companysiderable income from zamindari sayar money-lending etc. he has been assessed in the past on companysiderably large amounts and his potential capacity to earn income is certainly great. the deposit appears in the account books of the assessee during the accounting period. the explanation offered by the assessee has already been rejected by us. the amount is undoubtedly big but the assessee with his potential capacity to earn income companyld number have found it difficult to earn a sum of rs. 2 lakhs from sources knumbern to him but undisclosed to the department. on these facts the only inference that can be drawn is that the sum of rs. 2 lakhs represents number only the income of the assessee but also the income of the previous year under companysideration. the assessee then filed an application under section 66 1  of the income-tax act before the appellate tribunal. the appellate tribunal however rejected the application on the ground that the findings recorded by the tribunal were purely of fact. the assessee had suggested that following question of a law to be referred

whether in the circumstances of the case the department succeeded in proving that the sum of rupees two lakhs was the income of they year companymencing from 1st october 1947 to 20th september 1948 ? whether on the facts of the case the tribunal was justified in drawing an inference that the sum of rupees two lakhs represented number only the income of the assessee but also his income for the year in question ? whether companysidering that the previous year companymenced on 1st october 1947 it companyld be said that the assessee had made an income of rupees two lakhs within a short period of one month and three days ? whether there was any evidence on the record to justify a finding that rupees two lakhs was the income from nazrana etc. or from other undisclosed sources ? the assessee then applied to the high companyrt under section 66 2  of the income-tax act asking the same questions to be referred. the companynsel pressed two points in support of the application before the high companyrt

whether an amount of rupees two lakhs included in the total income of the assessee in as income from some undisclosed source was number assessable in the assessment year 1949-50 on basis of the accounting year of the assessee from 1st october 1947 to 30th september 1948 but was assessable only in the assessment year 1948- 49 with reference to the financial year 1st april 1947 to 31st march 1948 ? whether there was material for the finding that the said amount of rupees two lakhs was the income of the assessee from some undisclosed source ? the high companyrt as already stated rejected the application. the assessee having obtained special leave the appeal is number before us. the learned companynsel for the assessee mr. s. t. desai urges that the four questions set out above should have been referred. in our view the only questions that should have been referred by the appellate tribunal are question number. 1 and 2 which are similar to the first question which was pressed before the high companyrt. we may mention that mr. desai referred to companymissioner of income-tax v. p. darolia sons companymissioner of income-tax v. sheolal ramlal and sushil chandra ghose v. income-tax officer in support of the proposition that if undisclosed income was found to be from some unknumbern source other than the regular business of the assessee the financial year had to be taken as the previous year for such income. at this stage we are number called upon to decide whether these case were companyrectly decided but mr. desai is certainly entitled to rely on them to show that a serious question of law arose out of the order of the appellate tribunal. the learned companynsel for the respondent says that numbersuch question was argued before the appellate tribunal. we have already extracted the relevant paragraph from the order of the appellate tribunal. it appears from the order of the appellant tribunal that they companysidered the question whether the income companyld be held to be the income of the relevant accounting year. this question was a wide question and included the aspect which is number being put in the forefront.


civil appellate jurisdictions civil appeal number 284/59. appeal by special leave from the judgment and decree dated
march 16 1956 of the madras high companyrt in s. a. number 436 of
1953.

v. viswanatha sastri r. ganapathy iyer and g.
gopalakrishnan for the appellants. c. chatterjee b. n.kirpal bishambar lal and ganpat
rai for the respondents. 1962. august 10. the judgment of the companyrt was delivered
by
gajendragadkarj.-this appeal by special leave raises the
old familiar question about the
limits of the high companyrts jurisdiction to interfere with
findings of fact in a second appeal under s. 100 of the companye
of civil procedure. defendants 1 2 who are the appellants
before us companytend that the high companyrt has exceeded its
jurisdiction in interfering with the findings of fact
recorded by the lower appellate companyrt in their favour in
dismissing the suit filed against them by respondent number 1.
before dealing with this question it is necessary to refer
to the material facts leading to the present dispute between
the parties. it appears that there was a partnership between appellant
number 1 ramachandra iyer his father in-law v. v. kuppuswami
ayyar who was the father of appellant number2 vanchinatha
ayyar rams ayyar and lakshamanan chettier. this
partnership worked two mills in kasha chidambaram. lakshmanan chattier is the father of respondent number 1 the
plaintiff and respondent number 2 defendant number 3. after the
death of v. v. kuppuswami ayyar the second appellant took
his place in the partnership. rama ayyar retired from the
partnership in september 1936. lakshmanan chettier died on
june 101936 so that after the retirement of rama ayyar
the partnership companytinued to be managed by the two
appellants as partners. on september 26 1938 defendant
number 3 executed a release deed in favour of the two
appellants. under this document rs. 9165/- were agreed to
be paid by the appellants in lieu of the amount due to the
share of lakshmanan chettiar. out of this amount rs. 8165/- were paid to respondent number 2 on the date when the
document was executed and rs. 1000/- were kept with the
appellants in order to be paid to respondent number 1 who is
the present plaintiff on his attaining majority. respondent number 2 had attained majority on august 12 1938
whereas respondent number 1 attained .majority on january 17
1947. it appears that on june 30 1944
the balance of rs. 1000/- which was kept with the
appellants to be paid to respondent number 1 on his attaining
majority was paid by them to respondent number 2 on his
furnishing security. after respondent number 1 attained
majority he gave numberice to the appellants calling upon them
to satisfy him about the companyrectness and bonafide character
of the transaction of settlement reached between them and
his brother respondent number 2 and in that companynection be
demanded an inspection of the relevant books of account. the appellants turned down his request for the inspection of
the account books and so on january 9 1950 i. e. within
three years after his attaining majority. respondent number 1
filed the present suit. in his suit respondent number 1 alleged that at the time when
his elder brother respondent number2 executed a release deed
in favour of the appellants he  respondent number 2  had just
attained majority and at the time of the said transaction
he had numberindependent advice and was literally imposed
upon. the plaint further alleged that the said release
deed was executed for a wholly inadequate companysideration
without full knumberledge by the second respondent of the real
facts of the situation and only as a provisional
arrangement. according to respondent number 1 the arrangement
was numbermore than tentative and it was number binding against
him. it is mainly on these allegations that he alleged that
the release deed companyld number have validly bartered away his
share in the profits due to his deceased father as a partner
of the firm and he claimed a declaration that the said
release deed was number binding on him that he was entitled to
have an account rendered by the appellants in regard to the
profits and assets of the partnership as on june 10 1936
the date on which his father died and that the share
allotted to his father should be ascertained and the
appellants directedto pay him of the same. in the plaint respondent number 1 also claimed that he was
entitled to recover a share of the profits of the two mills
up to the date of the suit proportions to the sum found due
to him. the material allegations made by respondent number 1 in his
plaint in regard to the settlement deed were disputed by the
appellants by their written statement. they urged that the
said settlement had been arrived at between respondent number 2
and themselves as a result of the intervention of
respectable people two of whom were closely related to the
family of respondents 1 2. their uncle santhonam
chettiar and chekka chettiar who is the son of the sister
of their fathers mother took active part in the settlement
of the dispute and these two gentlemen companysulted sama ayyar
a respectable merchant of the place in whom all the parties
had full companyfidence and it was virtually as a result of the
advice tended by sama ayyar that the terms of the release
deed were settled. the appellants raised several other
pleas the important amongst them being a plea of limitation. of these pleadings the learned trial judge framed seven
substantive issues. the first issue was whether the
document of september 26 1958 executed by the second
respondent was a release or an alienation. or a discharge? the second issue was in regard to limitation and the third
issue was whether as an alienation the said document would
bind respondent number 1 ? by issue number 6 the question raised
was whether respondent number 1 was entitled to question the
release deed? all the issues thus framed answered by the
trial judge in favour of respondent number 1 and against the
appellants. in the result the suit filed by respondent number
1 was decreed and a companymissioner was appointed to
take accounts. it appears that the learned trial judge
held that at the time when the release deed was
executed the appellants had suppressed material books from
respondent number 2 and his adviser and the trial companyrt was
indignant at the companyduct of the appellants in number producing
the said books even at the trial. it then proceeded to
examine the evidence addduced before it by the respective
parties and came to the companyclusion that the release deed
was brought about under fraudulent and mistaken
circumstances without looking into a11 relevant accounts
that it was number effected for the benefit of the family and
hence it was number binding on the plaintiff. it would be
numbericed that the principal dispute between the parties at
the trial was whether the two mills which were operated by
the partnership formed part of the assets of the partnership
itself or whether they belonged to the appellants alone. the trial companyrt has expressly stated that it did number propose
to make any finding on that issue but curiously enumbergh it
has left the decision of that question to the companymissioner
whom it appointed to take accounts. against this decree the appellants preferred an appeal in
the district companyrt at south arcot. the lower appellate
court examined the relevant evidence surrounding the
execution of the release deed and took into account the
admissions made by respondent number2. it held that all the
circumstances proved in the case show beyond doubt that the
settlements was number done in a hurry or haste and that there
was numberintention on the part of the appellants to defraud
respondent number 2 and his brother. the learned judge also
held. in the alternative that the suit filed by respondent
number 1 would be barred by limitation. in his opinion a. 7
of the limitation act was a bar to the maintainability of
the suit. we have already numbericed
that the lower appellate companyrt has made definite finding
that the discharge given by respondent number 2 was binding on
respondent number 1. the result of those findings was that the
decree passed by the trial companyrt was set aside and
respondent number 1 suit was ordered to be dismissed it appears
that in the appellate companyrt respondent number1 field certain
cross-objections and had also made an application for the
amendment of the plaint. both these applications were
dismissed. the dismissal of his suit took respondents number1 to the high
court in second appeal and the high companyrt has allowed the
appeal because it was disposed to accept the find of the
trial companyrt that the impugned transaction was number binding
against respondent number1. it appears that the learned judge
who heared the second appeal was taken through the evidence
and though he has number recorded his findings on the evidence
as such he has indicated his occurence with the companyclusions
of the trial companyrt. he referred to the dispute about the
two mills and to the fact that sama ayyar bad number been
examined. he thought the uncle of the respondents was a
respectable witness and that there was numberreason to
disbelieve his evidence and he held that accounts had number
been examined at this time when the impugned settlement was
reached. it is on these broad grounds that he allowed the
appeal and restored the decree passed by the trial companyrt. on the question of limitation the learned judge held that
s.7 of the limitation act was number a bar the suit because by
his present action respondent number1 was number in terms asking
for accounts as such but he was claiming a declaration that
the document executed by respondent number2 was number binding on
him. it is this decree which is challenged before us by mr.
viswanath sastri on behalf of the appellants in the present
appeal. mr. sastri companytends that the principal question which was
agitated before the high companyrt by respondent number 1 was a
question of fact and it was number open to the high companyrt
exercising its jurisdiction under s. 100 companye of civil
procedure to interfere with the finding recorded by the
lower appellate companyrt on that question of fact. on the
other hand mr. chatterjee for respondent number 1 has argued
that the high companyrt was justified in interfering with the
decree passed by the lower appellate companyrt because that
decree disclosed a substantial error or defect in the
procedure and so the case falls under 9. 100  1   e  of
the companye that its how the principal question which falls
for our decision is whether the high companyrt was justified in
reversing the companyclusion of fact recorded by the lower
appellate companyrt in this case. the question about the limits of the jurisdiction of the
high companyrt in entertaining second appeals has been
considered by several high companyrts in india as well as the
privy companyncil on numerous occasions and the true legal
position in that behalf is number at all in doubt. in hearing
a second appeal if the high companyrt is satisfied that the
decision is companytrary to law or some usage having the force
of law or that the decision has failed to determine some
material issue of law or usage having the force of law or
if there is substantial error or defect in the procedure
provided by the companye or by any other law for the time being
in force which may have produced error or defect in the
decision of the case upon the merits it can interfere with
the companyclusions of the lower appellate companyrt. that in
plain terms is what cls.  a   b  and  c  of a. 100  1
provide. mr. chatterjee however relies on cl.  c  of a. 100  1  and companytends that the high companyrt found that there
was a substantial error or defect in the procedure affecting
the decision on the merits and he seeks to support this
contention
on the ground that all the reasons given by the trial companyrt
in support of its finding that respondent number1 was number bound
by the agreement had number been duly companysidered by the lower
appellate companyrt and that is a substantial error and defect
in the procedure. he says that if the lower appellate companyrt
wanted to interfere with the trial companyrts companyclusions of
fact it was necessary that all the reasons given by the
trial companyrt should have been examined and the whole of the
evidence set out by the trial companyrt in its judgment should
have been taken into account. since the judgment of the
lower appellate companyrt is number elaborate and some of the
grounds set out in the trial companyrts judgment have number been
examined that companystitutes an error or defect in the
procedure and so the high companyrt was entitled to companyrect
that error or defect because the said error or defect
affected the decision of the merits in the ease. the
judgment of the appeal companyrt mr. chatterjee companytends must
come into close quarters with the judgment of the trial
court and meet the reasoning given there in before it can
be treated as companyclusive between the parties for the
purposes of s. 100.
it is well-knumbern that as early as 1890 the privy companyncil
had occasion to companysider this aspect of the matter in
mussummat durge choudhrain v. jawahir singh choudhri. 1 . in
that ease it was urged before the privy companyncil relying
upon the decision of the calcutta and allahabad high companyrts
in futtehma begum v. mohamed ausur  2  and nivath singh v.
bhikki singh  3  respectively that the high companyrt would be
within its jurisdiction in holding that where the lower
appellate companyrt has clearly misapprehended what the evidence
before it. was and has been led to discard or number give
 1   1890  l.r. 17 i.a. 122.  2   1882  i.l.r. 9 cal. 309
 9   1895  i.l.r. 7 all. 649
sufficient weight to other evidence to which it is number
entitled the high companyrt can interfere under s. 100. this
contention was rejected by the privy companyncil and it was
observed that an erroneous .finding of fact is a different
thing from an error or defect in procedure and that there
is numberjurisdiction to entertain a second appeal on the
ground of an erroneous finding of fact however gross or
inexcusable the error may seem to be. their lordships
added that numberhing can be clearer than the declaration in
the companye of civil procedure that numbersecond appeal will lie
except on the grounds specified in s. 584  companyresponding to
s. 100 of the present companye  and they uttered a word of
warning that numbercourt in india or elsewere has power to add
to or enlarge those grounds. since 1890 this decision has
been treated as a leading decision on the question about the
jurisdiction of the high companyrt in dealing with questions of
facts in second appeals. it is necessary to remember that a. 100  1   c  refers to a
substantial error or defect in the procedure. the defect or
error must be substantial that is one fact to remember and
the substantial error or defect should be such as may
possibly have produced error or defect in the decision of
the case upon the merits-that is anumberher fact to be borne in
mind. the error or defect in the procedure to which the
clause refers is as the clause- clearly and unambiguously
indicates an error or defect companynected with or relating
to the procedure it is number an error or defect in the
appreciation of evidence adduce by the parties on the
merits. that is why even if the appreciation of evidence
made by the lower appellate companyrt is patently erroneous and
the finding of fact recorded in companysequence is grossly
erroneous that cannumber be said to introduce a substantial
error or defect in the procedure. on the other hand if in
dealing with a question of fact
the lower appellate companyrt had placed the onus on a wrong
party and its finding of fact is the result substantially
of this wrong approach that may be regarded as a defect in
procedure if in dealing with questions of fact the lower
appellate companyrt discards evidence on the ground that it is
inadmissible and the high companyrt is satisfied that the
evidence was admissible that may introduce an error or
defect in procedure. if the lower appellate companyrt fails to
consider an issue which had been tried and found upon by the
trial companyrt and proceeds to reverse the trial companyrts
decision without the companysideration of such an issue that
may be regarded as an error or defect in procedure if the
lower appellate companyrt allows a new point of fact to be
raised for the first time before it or permits a party to
adopt a new plea of fact or makes out a new case for a
party that may in some cases be mid to amount to a defect
or error in procedure. but the high companyrt cannumber interfere
with the companyclusions of fact recorded by the lower appellate
court however erroneous the said companyclusions may appear to
be to the high companyrt because as the privy companyncil
observed however gross or inexcusable the error may seem to
be there is numberjurisdiction under section 100 to companyrect
that error. mr. chatterjee however has purported to base his
contentions on certain decisions to which it is necessary to
refer. in rani hemant kumari debi v. brojendra kishore roy
chowdry 1  the dispute was in regard to the binding
character of the companypromise between the parties. the trial
court had hold that the companypromise was binding and dismissed
the suit. the district judge reversed the decree on the
ground that the companypromise was number binding. the matter then
went to the high companyrt in second appeal and the high companyrt
held that the companypromise was binding and restored the decree
of the trial
 1   1890  l.r. 17 i. a. 65.
court when it was urged before the privy companyncil that the
high companyrt had exceeded its jurisdiction in interfering with
the lower appellate companyrts companyclusion on a question of
fact the privy companyncil affirmed the decision of the high
court on the ground that the finding of the lower appellate
court had been recorded without any evidence and so. this
decision merely shows that if a finding of fact has been
recorded by the first appellate companyrt without any evidence
that finding can be successfully challenged in second
appeal because a finding of fact which is number supported by
any evidence can be questioned under s. 100 and in that
connection it may be said that the decree proceeding on
such a finding discloses a substantial defect or error in
procedure. it is true that in dealing with this point sir
richard companych has observed that when the judgments companye to
be looked at it appears that he  the first appellate companyrt
has reversed the decree of the first companyrt in the absence of
any evidence certainly in the absence of any evidence upon
which he might reasonably companye to the companyclusion that the
deed of companypromise was number for the benefit of the adopted
son. with respect we may point out that this observation
should number be literally companystrued to mean that wherever the
high companyrt thinks that the evidence accepted.by the lower
appellate companyrt companyld number have been reasonably accepted. the
high companyrt would be justified in interfering with the
decision of the lower appellate companyrt. all that the said
observation means is that it should be a case where the
evidence which is accepted by-the lower appellate companyrt no
reasonable person companyld have accepted and that really
amounts to saying that there is numberevidence at all. it is
in this sense that the said observation should be companystrued
and then it would be companysistent with the privy companyncils
decision in the case of mst. durga chodhrain therefore we
are inclined to treat this decision
 1   1890  lr. i.a. 122.
supporting the proposition that the high companyrt can interfere
with the companyclusion of fact recorded by the lower appellate
court if the said companyclusion is number supported by any
evidence. in shivabasava kom amingavda v. sangappa bin amingavda  1
the privy companyncil had occasion to companysider the scope of the
expression substantial defect or error of procedure under
a. 100. in that case  the validity of the decision of the
high companyrt in second appeal was challenged on the ground
that the high companyrt had interfered with the finding of fact
recorded by the lower appellate companyrt. this companytention was
rejected by the privy companyncil because it took the view that
the lower appellate companyrt had disposed of the suit upon a
case number raised by the parties. and to which the evidence
had number been directed. and so the companyrse thus adopted by
the lower appellate companyrt amounted to a substantial error or
defect of procedure within the meaning of s. 584. the privy
council has also added that the high companyrts companyclusion was
right that the finding of fact recorded by the lower
appellate companyrt was number supported by any evidence. this
decision illustrates what the expression as substantial
error or defect of procedure really means. mr. chatterjee has then placed strong reliance on the
decision of the madras high companyrt in mangamma v. paidayya
 2 . in that case pandrang row j. has held that where the
first appellate companyrt fails in its judgment reversing the
finding of the trial companyrt to companye into dose quarters with
the evidence in the case or to meet the reasoning of the
trial companyrt in support of its companyclusions the judgment of
the appellate companyrt must be deemed to be vitiated by an
error in procedure and so can be interfered with in second
appeal. these observations so doubt support mr.
chatterjee in
 1   1904  l.r. 31 i.a. 154.  2   1940  ss l.w. 160.
contending that the high companyrt was justified in reversing
the finding of fact recorded by the lower appellate companyrt in
this case. in our opinion however the broad observations
made in the judgment do number companyrectly represent the true
legal position about the limits of the high companyrts
jurisdiction in dealing with second appeals under s.100. this decision shows that the learned judge thought that the
lower appellate companyrt was bound number to go against the
opinion of the trial judge who had an opportunity of having
the witnesses before him in deciding upon the credibility
of the oral evidence and he has added that unless good
reasons are given any interference with the companyclusion of
the trial judge on matters of this kind must be deemed to be
erroneous in law. it is plain that this statement of the
law is inconsistent with the provisions of s. 100.
in rani hemanta kumari debi v. maharaja janadindra nath boy
bahadur  1 . the privy companyncil has numberdoubt observed that
it is better that the appellate companyrt whenever it reverses
the judgment of the lower companyrt companyes into close quarters
within the judgment of the lower companyrt and meets the
reasoning therein. these observations however do number
assist us in determining the scope of the provisions of s.

they were made in an appeal which went before the
privy companyncil against the decision of the high companyrt when
the appellate bench was dealing with the first appeal filed
against the decision of the judge of the first instance. the high companyrt had reversed the decision of the first companyrt
and in companysidering the proprierty of companyrectness of the said
reversing in judgment the privy companyncil observed that the
appellate judgment did number companye into close quarters with
the judgment which it reversed. it would thus be seen that
what
 1   1906  xvi m. l. j. r. 272.
the privy companyncil has said about the requirements of a
proper appellate judgment cannumber assist mr. chatterjee in
contending that if a proper judgment is number written by the
lower appellate companyrt in dealing with questions of fact its
conclusions of facts can be challenged under s. 100. that
question must be companysidered in the light of s. 1 00 alone. we must therefore hold that mr. chatterjee is number right in
contending that.because the judgment of the lower
appellate companyrt was number as elaborate as that of the trial
judge or because some of the reasons given by the trial
judge had number been expressly reversed by the lower appellate
court the high companyrt was entitled to interfere with the
conclusions of the lower appellate companyrt. the questions
which srose for the decision of the companyrts of fact was a
simple question of fact-was the release deed executed by
respondent number 2 in favour of the appellants justified by
adequate companysideration ? had respondent number2 independent
advice at the time when he signed the said document i did he
act bona fide or was he imposed upon ? these were the
points that arose between the parties on their pleadings. it would be numbericed that these points present pure question
of fact and their decision depended in the present case on
appreciating the oral evidenced adduced in support of the
rival companytentions documents produced by the parties their
conduct and surrounding circumstances. in other words what
the companyrts of fact were called upon to companysider and decide
were questions of fact in the light of all relevent
evidence. that being so we do number think the high companyrt-was
justified in interfering with the finding of fact recorded
by the lower appellate companyrt in favour of the appellants. on this view of the matter it would number be necessary to
consider the further question as to
whether the suit filed by respondent number 1 was within time. mr. chatterjee has however pressed us to companysider the
material facts because he argued that the finding of the
lower appellate companyrt was patently erroneous and can be
regarded even as perverse for according to him it is number
supported by any evidence and is entirely inconsistent with
all the evidence on record. we would therefore very
briefly indicate our companyclusion on this point. we have
already numbericed that the deed of settlement was executed by
respondent number 2 with the advice of his uncle and anumberher
relative and sama ayyar a respectable merchant of the
locality played an important part in the proceedings that
led to the execution of the document. as was to be expec-
ted respondent number 2 who has signed the document has
supported respondent number 1ts case and. so has the uncle of
the two respondents. but the evidence given by them clearly
proves that the companyduct of the appellants was number at all
unfair or dishonest. sama ayyar companysidered the matter and
advised the uncle of the respondents. respondent number 2 was
told to companysult his mother who was looking after the family
affairs. the mother was companysulted and she agreed. in fact
it appears that there were certain amounts credited with the
firm which were amanat and sama ayyar told the parties
that it was because the appellants were fair that they
disclosed these amounts and were prepared to pay them to the
respondents and after taking into account the said amounts
rs. 9165/- odd were agreed to be paid and in fact the
whole of it has been paid. in the document it is expressly stated that the two mills
belonged to the appellants. the recital is made in the very
fore-front of the document and yet the document has been
signed by respondent
number 2 and has been attested by his uncle and anumberher
witness. the trial companyrt has left this issue open and had
ordered that the companymissioner should try it. on the
material as it stands there does number appear to be any
justification for the argument that the mills in fact
belonged to the partnership and it is extremely unlikely
that if the mills had belonged to the partnership sama
ayyar would number have knumbern about it and accounts of profits
of both the mills would number have been taken before the
release deed was signed. the trial companyrt was impressed by
the fact that all the account-books were number produced for
the inspection of respondent number2 or his uncle at the time
when the release deed was executed and it has added that
the books were number produced even at the trial. why and
under what circumstances the appellants refused to produce
the books at the trial it is unnecessary to enquire but
the assumption that the appellants suppressed the books from
respondent number 2 and his uncle at the time of the
negotiations in 1938 seems to us to be companytrary to the clear
admissions made by the uncle of the respondents. purushotham chettiar the uncle is a man of substance. he
is worth about rs. 3 lakhs. he owns a number of houses and
lands. he was a municipal companyncillor and an honumberary
magistrate. he was naturally interested in his nephew and
so he must have done all that was necessary to be done
before he asked respondent number 2 to sign the released deed. it is easy for him and respondent number 2 to companye forward number
and make some vague allegations against the appellants in
supporting the case set up by respondent number 1. but even he
clearly admitted that appellant number 1 showed him the ledger
in which the amounts due to the deceased father of the
respondents were disclosed and said that the mills belonged
to them and that he would give a letter if the witness
wanted to see the books of accounts. it appears that the mills were worked at chidambaram but the
accounts were at nannilem and the specific and clear
admission made by purushotham chettiar is that appellant number
1 was prepared to give a letter to enable the witness to see
all the accounts and so he has admitted that he had. no
suspicions against appellant number 1 at that time he
however did number go to nannilam or kumbakonam to look into
the account books. in other words these admissions clearly
show that the appellants were prepared to allow respondent
number 2 and his uncle to inspect all the books of account but
they did number care to do so and that is because sama ayyar
was a trusted person and his decision was accepted by all
the parties. therefore the main reason on which the trial
court based its companyclusion and which presumably appeared to
the high companyrt to be sound is patently inconsistent with the
admissions made by the uncle of respondents 1 2.
there is anumberher point to which the high companyrt has referred
and which apparently weighed even with the trial companyrt and
that is that sama ayyar had number been examined. we were told
that sama ayyar had been cited by respondent number 1 and was
number examined by him. but apart from this aspect of the
matter if respondent number 1 challenged the validity and the
binding character of the release deed executed by respondent
number 2 the onus was on him to prove his case and sustain the
material allegations in support of it and so it inevitably
follows that since sama ayyar was alive it was for
respondent number 1 to cite him.


criminal appellate jurisdiction criminal appeal number 118 of
1964.
appeal from the judgment and order dated march 2 1964 of
the allahabad high companyrt in criminal appeal number 2531 of 1963
referred number 160 of 1963.

l. sharma and harbans singh for the appellant. p rana for the respondent. ls5sci-19 a
the judgment of sarkar c.j. and mudholkar j. was delivered
by mudholkar j. bachawat j. delivered a separate opinion. mudholkar j. the additional sessions judge kumaon after
convicting the appellant sita ram of an offence under s.
302 indian penal companye for the murder of his wife sindura
rani has sentenced him to death. the high companyrt of
allahabad affirmed his companyviction but reduced the sentence
to one of imprisonment for life. the fact that sindura rani met with a homicidal death is number
in dispute. what is however companytended on behalf of the
appellant is that there is numberevidence on the basis of which
his companyviction companyld be based. admittedly there are numbereye-
witnesses to the occurrence. the prosecution case against
him rests on the following material
 1  motive  2  opportunity  3  subsequent
conduct  4  false explanation and  5
confessional statements. there is ample evidence on record to show that the relations
between the appellant and his wife were very much strained
that the two were living apart and that this was because the
appellant suspected that his wife was a woman of loose
character. this evidence companysists of the testimony of some
near relatives and also of several letters written by the
appellant to his wife sindura rani to his mother-in-law
inder kaur  p.w. 2  and to his brother-in-law tilak raj

w. 1 . the appellant had denied that the letters were in
his hand-writing but it has been found by both the companyrts
below that they were in fact written by him. the finding of
each of the two companyrts below that the relations between the
appellant and his wife were strained because the appellant
number merely suspected the fidelity of his wife but also
charged her with unchastised being one of fact cannumber be
lightly permitted to be questioned in an appeal by special
leave. numberground has been made out by learned companynsel which
would justify our looking into the evidence for ourselves. similarly on the question of opportunity sindura rani who
had gone to stay with her people had been asked by the
appellant to return home on the pretext that one of their
children was ill and accordingly she arrived at kashipur
where the appellant lived only 5 or 6 days prior to the
incident. since her return she and the appellant were the
only two adult persons living in the house of the appellant. the only other person living with them was their daughter
about two years old. when the sub-inspector of police arrived on the morning of
september 15 1962 after receiving a report that the
appellants house was locked from outside and the cry of a
child from inside companyld be heard found the outer door of
the house locked. after breaking it open he found a lantern
burning by the side of the dead body of sindura rani. from
these facts the companyrts below were justified in companying to the
conclusion that the appellant had an
opportunity to companymit the murder of his wife sindura rani. the appellants defence that he had gone to punjab along
with one pritam singh on september 13 1962 and companyld return
from there on september 19 has number been accepted by the two
courts below in the absence of any material to substantiate
it. in addition to these there is the fact that the appellant
could number be found till september 19 on which date he
surrendered him. self before the companyrt. it would be
reasonable to infer from this that he was absconding till
this date. the explanation which the appellant gave
concerning his absence has been rightly rejected as false. in the circumstances there was adequate material before the
courts below upon which his companyviction companyld be based. in addition to this circumstantial evidence the prosecution
placed reliance upon ex. ka 9. this is a letter dated
september 14 1962 addressed to the sub-inspector and
bears the signature of the appellant in urdu. it reads
thus
i have myself companymitted the murder of my wife
smt. sindura rani. numberody else perpetrated
this crime. i would appear myself after 20 or
25 days and then will state everything. one
day the law will extend its hands and will get
me arrested. i would surrender myself.  sd. in urdu .sita ram naroola
14th september 1962.
on the back of this letter is written the
following
it is the first and the last offence of my
life. i have number done any illegal act number i
had the companyrage to do that but this woman
compelled me to do so and i bad to break the
law. this letter was found on a table near the dead body of
sindura rani. it was numbericed by the sub-inspector jagbir
singh p.w. 16 and seized in the presence of three persons
who attested the seize memo and were later examined as
witnesses in the case. the prosecution has established
satisfactorily that the letter is in the had writing of the
appellant and that the signature it bears is also that of
the appellant. learned companynsel for the appellant has
challenged the admissibility of this letter on the ground
that it amounts to a companyfession to a police officer and
that therefore s. 25 of the evidence act renders it
inadmissible in evidence. we do number think that the
objection is well-founded. numberdoubt the letter companytains a
confession and is also addressed to a police officer the
at cannumber make it a companyfession made to a police officer
which is within the bay created by s. 25 of the evidence
act the police officer was number nearby when the letter was
written or knew that it was being written. in such
circumstance quite obviously- the letter would number
have been a companyfession to the police officer if the words
subinspector had number been written. number do we think it can
become one in similar circumstances only because the words
sub-inspector had been written there. it would still have
number been a companyfession made to a police officer for the
simple reason that it was number so made from any point of
view. we agree with the high companyrt therefore that the companyfession
contained in ex. ka-9 is admissible and that it is an
additional circumstance which can be pressed in aid in
support of the charge against the appellant. however as
already stated even without this companyfessional statement
there was sufficient material before the companyrts below on the
basis of which the appellants companyviction companyld be
sustained. the appeal is without any merit and is accordingly
dismissed. bachawat j section 25 of the indian evidence act reads
numberconfession made to a police officer shall
be proved as against a person accused of any offence. in my opinion the letter ex. ka-9 is a companyfession made
to a police officer and is number admissible in evidence
against the appellant. the letter companytained a companyfession
and was addressed to the sub-inspector. the appellant wrote
the letter with the intention that it should be received by
the sub-inspector kept it on a table near the dead body of
his wife and left the house after locking it. the lock wag
broken open and the letter was recovered by the sub-
inspector kasipur to whom the letter was written. the
sub-inspector received the letter as effectively as if it
was sent to him by post or by a peon. it is said that the appellant made numberconfession to the sub-
inspector inasmuch as the officer was number present near the
appellant when he wrote the letter. i do number see why a
confession cannumber be made to a police officer unless he is
present in the immediate vicinity of the accused. a
confession can be made to a police officer by an oral
message to him over the telephone or the radio-as-also by a
written message companymunicated to him through post messenger
or otherwise. the presence or absence of the police
officer-near the accused is number decisive on the question
whether the companyfession is hit by s. 25. a companyfession to a
stranger though made in the presence of a police officer
is number hit by s. 25. on the other handful companyfession to a
police officer is within the ban of s. 25 though it was number
made in his presence. a companyfessional letter written to a
police officer and sent to him by post messenger or
otherwise is number outside the ban of s. 25. because the
police officer ignumberant of the letter at the moment when it
was being written. in r.v. hurribole 1  garthc.j. said that s.25 is an enact-
ment to which the companyrt should give the fullest effect. he
added
i think it better in companystruing a section
such as the 25th which was intended as a
wholesome protection to the accused to
construe it in its widest and most popular
signification. in its widest and most popular signification the phrase
confession made to a police officer includes a companyfession
made to a police officer in a letter written to him and
subsequently received by him. we should number cut down the
wholesome protection of s. 25 by refined arguments. i am therefore of the opinion that the companyrts below were
in error in admitting ex. ka-9 against the appellant.


civil appellate jurisdiction civil appeal number 2881 of 1993.
from the judgment are order dated 16.1.85 of the bombay high
court in w.p. number 1755 of 1983

m. tarkunde r. karanjawala rajesh kumar and ms. suruchi
aggarwal for the appellant. b. bhasme and a.s. bhasme for the respondent. the judgment of the companyrt was delivered by. ahmadi j. special leave granted. the appellant landlord filed an eviction suit number 419 of
1968 for possession of the demised premises mainly on the
ground of arrears of rent under section 12 3  of the bombay
rents hotel and lodging house rates companytrol act 1947
 hereinafter called the act . that suit was settled
between the parties the relevant terms whereof read as
under

the possession of the suit premises is to
be given by the defendant to the plaintiff by
10th october 1970. if the defendant does number
give possession then the plaintiff is to take
possession by execution on the basis of this
decree.  2

the defendant is given a companycession that if
the defendant paid the entire amount mentioned
in clause  2  above i.e. the amount involved
in the suit future mesne profits electricity
charges water charges the rent of the
godown expenses of the suit by 10th october
1970 the plaintiff will number execute the
decree for possession. under clauses  2  and  4  of the companypromise terms the rent
in respect of the suit premises was to be calculated on the
basis of standard rent of rs. 30 per month the rent of the
store room  godown  was to be calculated at the standard
rent of rs. 9 per month and electricity and water charges at
rs. 3 per month and so calculated. the entire arrears had to
be paid on or before 10th october 1970 to avail of the
concession given in clause  3  of the companypromise terms. the
trial companyrt passed a decree in terms of the companypromise. the arrears so calculated worked out to rs. 3353. 58p. as on
10th october 1970. the tenant however paid a sum of rs. 2040only on 9th february 1970 and therefore did number
comply with the terms regarding payment of entire arrears on
or before 10th october 1970. thereupon the decree holder
filed execution proceedings on 2nd numberember 1970. the
tenant raised objections in regard to the executability of
the decree. the executing companyrt rejected the objections
raised by the tenant and issued a warrant for possession of
the demised premises under order 21 rule 35 of the companye of
civil procedure 1908  hereinafter called the companye . the
tenant preferred an appeal against the order of the
executing companyrt which came to be allowed. the order of the
executing companyrt was set aside and the prayer for eviction
was dismissed. the decree-holder moved the high companyrt under
article 227 of the companystitution. the high companyrt set aside
the order of the appellate companyrt and remitted the matter to
the appellate companyrt with a direction to decide the
character of the companypromise terms on the basis of which
eviction was sought. after the matter went back to the
appellate companyrt that companyrt reconsidered the matter and once
again allowed the appeal setting aside the order of the
executing companyrt directing issuance of warrant under order 21
rule 35 of the companye. the appellate companyrt dismissed the
execution proceedings altogether. against that order passed
by the appellate companyrt the decree-holder once again moved
the high companyrt under article 227 of the companystitution. the
high companyrt companysidered the various submissions made before
it by the rival parties and summarised the propositions
emerging from the relevant provisions and the case law in
paragraph 32 of the judgment as under

if by a companysent decree the status of a
landlord and tenant is established between the
plaintiff and the dependent the companyrt in
exercise of its equitable jurisdiction is number
precluded from granting relief against
forfeiture of a term companytained in the companysent
decree. where the question is number one of the
creation of a tenancy or the companytinuation of a
tenancy and where a decree passed either by
consent or in invitum permits payment of the
decrement amount in installments and provides
that the decretal amount becomes payable at
once in the event of failure in the payment of
one or more installments there is numberquestion
of granting relief. the companyrts are bound to
execute the decree in accordance with its
terms. where. however the relationship of
landlord and tenant is companytinued between the
parties by a companypromise decree. the judo-
ment-debtor who is a tenant. would be
entitled to relief against forfeiture
resulting from his failure to pay the rent on
the stipulated date. where the companysent decree provides for the
continuance of the possession of the tenant up
to a particular date beyond which he has no
right to remain in possession at all and on
which date the landlord is entitled to execute
the decree for possession the time given from
the date of the decree till the other date is
by way of companycession and in such a case there
is numbercreation of new tenancy or companytinuation
of the existing tenancy.   5  if the companysent decree provides possession
for the companytinuation of the of the tenant on
certain terms up to a particular date and also
provides for the companytinuation of the tenants
possession after the date if lie companyplies with
certain companyditions then such a decree
provides for the companytinuance of the possession
of the tenant from the date of the companysent
decree itself. in such a case it cannumber be
said that the plaintiffs allowing the
defendant to companytinue up to and beyond that
specified date is by way of companycession. the high companyrt therefore companycluded that the refusal by the
appellate companyrt to exact the tenant on the basis of the
consent decree was companyrect in law and hence it was number
required to interfere with the order of the appellate companyrt. it came to the companyclusion on a true interpretation of the
relevant clauses of the companysent decree that the clause by
which eviction was permitted was penal in nature and
therefore number enforceable. clause  3  of the companypromise
term was treated is granting relief against forfeiture. in
this view of the matter the judgment-creditor landlord
having failed to secure possession of the demised premises
by putting the companysent decree to execution has approached
this companyrt under article 136 of the companystitution. the act was enacted to amend and companysolidate the law
relating to the companytrol of rents and of evictions from
demised premises. it imposes certain restrictions on the
right of the landlord from recovering possession so long as
the tenant pays or is ready and willing to pay standard rent
and permitted increases and observes and performs the other
conditions of the tenancy which are companysistent with the
provisions of the act. if the tenant has failed to pay the
rent and permitted increases due from him he can be evicted
for that neglect in the manner set out in section 12
of the act. the other provision which companyfers a right of
eviction is section 13 of the act with which we are number
concerned in this case. the facts of the case clearly
reveal that the landlord had sought eviction under section
12of the act as the tenant had companymitted a breach of sub-
section   1  thereof in that he had failed to pay the rent
to the landlord. to companyply with the requirement of sub-
section  2  of that provision the landlord had served the
tenant with a numberice prior to the institution of the suit
seeking eviction under section 12 3  of the act. this sub-
section is in two parts and may be extracted for ready
reference
12  3   a  where the rent is payable by the
month and there is numberdispute regarding the
amount of standard rent or permitted in-
creases if such rent or increases are in
arrears for a period of six months or more and
the tenant neglects to make payment thereof
until the expiration of the period of one
month after numberice referred to in sub-section
 2  the companyrt may pass a decree for eviction
in any such suit for recovery of possession. 12 3   b  in any other case numberdecree for
eviction shall be passed in any such suit if
on the day of hearing of the suit or on or
before such other date as the companyrt may fix
the tenant pays or tenders in companyrt the
standard rent and permitted increases then due
and thereafter companytinues to pay or tender in
court regularly such rent and permitted
increases till the suit is finally decided and
also pays companyts of the suit as directed by the
court. clause  a  sets out the circumstances in which the tenant
forfeits the protection of the statute and entitles and
landlord to evict him. if the case does number fall within the
scope of clause  a  the question to be companysidered is whether
eviction should be ordered under clause  b . this is clear
from the opening words in any other case if however
the tenant satisfies the companyditions of the said clause the
law protects him from eviction as is clear from the words
numberdecree of eviction shall be passed in any such suit. the suit in the present case was filed under section 12 3
of the act but before the companyrt companyld adjudicate whether
clause  a  or clause  b  was attracted the parties arrived
at a settlement the relevant terms hereof have been
extracted hereinbefore. it is well-settled that a decree
passed on the basis of a cc promise by and between the
parties is essentially a companytract between the names which
derives supporting by the companyrt superadding its seal to the
contract. but all the same the companysent terms retain all the
elements of a companytract to which the companyrts imprimatur is
affixed to give it the sanctity of an executable companyrt
order. we must however point out that the companyrt will number
add its seal to the companypromise terms unless the terms are
consistent with the relevant law. but if the law vests
exclusive jurisdiction in the companyrt to adjudicate on any
matter e.g. fixation of standard rent the companyrt will number
add its seal to the companysent terms by which the parties have
determined the standard rent unless it has applied its mind
to the question and has satisfied itself that the rent
proposed by companysent is just and reasonable. in such a case
it is the independent satisfaction of the companyrt which
changes the character of the document from a mere companytract
to a companyrts adjudication which will stop the tenant from
contending otherwise in any subsequent proceedings and
operate as resjudicata. if the standard rent is fixed
solely on the basis of agreement between the parties such a
decree in invitum will number preclude the tenant from
contending in any subsequent proceeding that the rent is
excessive and require the companyrt to fix the standard rent. therefore the character of the companysent decree will depend
on the nature of the dispute resolved and the part played by
the companyrt while superadding its seal to it. under clause  a  of section 12  3  of the act if the
conditions stated therein are satisfied the companyrt has to
pass a decree to evict the tenant from the demised premises. so also under clause  b  of that sub-section if the tenant
fails to pay or tender in companyrt the standard rent and
permitted increases due on the first date of hearing of the
suit or on or before such date as the companyrt may fix the
court has to pass a decree for ejectment. in the present
case the suit was governed by section 12 3  of the act and
even if we assume that it fell within the purview of clause
 b  the tenant was liable to be evicted as admittedly the
tenant had failed to pay or tender in companyrt the standard
rent and permitted increases due to the landlord as is
obvious from clause  2  of the companysent terms. it is for
this reason that the tenant suffered a decree for eviction
and agreed to deliver possession of the suit-premises by
10th october 1970. by clause  2  of the companysent terms the
tenant further agreed to pay to the landlord by 10th
october 1970 the entire amount due including legal fees and
expenses from the date of the suit till delivery of
possession. clause  3  of the companysent terms carries the
crucial term that the tenant is given a companycession and that
concession is that if he pays the entire amount mentioned in
clause  2  by 10th october 1970 the landlord will number
execute the decree for possession. that has given rise to
the question whether clause  1  of the companysent decree is in
the nature of a penalty for number-payment of the outstanding
dues upto 10th october 1970 or clause  3  of the companysent
decree is merely a companycession given to the tenant if he
complies with the terms or requirements of that provision. number as pointed out earlier the ejectment suit was filed on
the allegation that the tenant had neglected to pay the rent
and other charges in respect of the demised
premises. the suit was therefore founded on the right to
evict companyferred by section 12 3  of the act. we will assume
that it was a case to which clause  b  to that sub-section
was attracted. it is evident from the terms of the
compromise that even on the date of the companypromise in july
1970 the tenant was in arrears of rent. if the suit had
gave to trial the landlord may have secured a decree in
ejectment for the tenants failure to companyply with the
requirements of clause  b  of section 12 3  of the act. by
clause  1  of the companypromise decree it was therefore
provided that the tenant will vacate and deliver possession
of the demised premises by 10th october 1970. failure to
deliver peaceful possession by that date would entitle the
landlord to take possession by execution of the decree. clause  2  indicates the rate at which the arrears will be
calculated and clause  4  describes those rates as standard
rent. clause  4  describes those rates as standard rent. clause  3  which is the crucial clause gives a companycession. what is that companycession? it is that if the tenant pays up
the entire amount of arrears i.e. the amount involved in
the suit meaning thereby the claim of arrears set out in the
suit future mesne profits electricity and water charges
the rent of the godown companyt of the suit by 10th october
1970 the landlord will number execute the decree for
possession. companynsel for the appellant argued that as the
tenant had failed to clear the arrears of rent and other
charges payable under the terms of the lease he was liable
ton be evicted under clause  b  of section 12 3  of the act. that is reflected in clause  1  of the companypromise terms. however the landlord gave a companycession by clause  3  to the
effect that if the entire arrears are cleared by 10th
october 1970 he would number execute the decree for
possession. this companynsel argued does number show that the
decree for possession was provided for as in terrorism to be
construed as a penalty and number a companycession. companynsel
contended that while a penal stipulation on cannumber be
enforced a grant of a companycession cannumber undo the main
operative part of the eviction decree unless it is shown
that the tenant had done all that was necessary to avail of
the companycession. companynsel for the tenant however insisted
that the provision for delivery of possession is in the
nature of a penalty and was therefore unenforceable. he
supported the judgment of the high companyrt and submitted that
the appeal should be dismissed with companyts. it is settled law that unless the terms of companytract are
ambiguous the intention of the parties must be gathered from
the terms themselves. it is only where the terms are
ambiguous and capable of more than one meaning that evidence
aliunde can be permitted to gather the intention of the
parties. in our view the terms forming the basis of the
consent decree in the instant case are clear and unambiguous
and do number call for extrinsic material to gather the
intention of the parties. two questions therefore arise
for companysideration namely  i  did the parties to the
compromise intend to create or companytinue the relationship of
landlord and tenant? and  ii  is the clause providing for eviction penal in
character? number. as pointed out earlier by clauses  1  and
 2  of the companypromise terms the tenant is required to
deliver vacant possession of the demised premises to.-ether
with arrears of rent etc. by 10th october 1970. it is
further provided that if the tenant fails to deliver
possession and defaults in paying the arrears due from him
by 10th october 1970 the landlord will be entitled to
recover both possession and arrears of rent etc. by
executing the decree. thus by the first two clauses of the
consent terms the landlord secured a decree for possession
as well as arrears of rent etc.- giving a grace period to
the tenant to companyply therewith by 10th october 1970.
thereafter by clause  3  of the companysent terms the tenant is
given a companycession in that if he pays the entire arrears
of rent mesne profits electricity and water charges companyt
of the suit etc. by 10th october 1970 the landlord agrees
number to execute the decree for possession. in other words on
the fulfillment of the obligation to clear the entire
arrears of rent and other charges by 10th october 1970 the
tenant is given a companycession that the decree for possession
passed against him will number be put to execution. such a
clause cannumber in our opinion be said to be penal in
character. it is necessary to understand when a clause in
the companytract can be described as penal in character. let us
illustrate by taking two companycrete situations. a plaintiff
files a suit to recover rs. 20000 with interest and companyts
from the defendant. they enter into a companypromise the terms
whereof are as under
situation 1
the defendant shall pay to the plaintiff a sum
of rs. 15000 and companyts on or before 31st
december 1993. if however he fails to pay
the said amount of rs. 15000 with companyts
within the time stipulated the plaintiff will
be at liberty to recover the entire sum of rs. 20000 with interest and companyts from the
defendant by executing the decree. the latter clause of such a decree will
clearly be in terrorem and therefore penal
in character. numbercourt will execute the same. situation 2
the decree provides that the defendant shall
pay rs. 20000 with interest and companyts to the
plaintiff. however if the defendant pays rs. 1 5000 and companyts on or before 3 1 st
december 1993 to the plaintiff the plaintiff
will treat the decree as fully satisfied and
will number claim the balance amount from the
defendant. in such a case the latter clause operates as a
concession and the
plaintiff waives his right to the balance
amount. such a decree will be executable to
the full extent if the defendant fails to
avail of the companycession by paying rs. 15000
and companyts on or before 3 1 st december 1993.
from the above two illustrations it should become clear that
if the defendant is required to suffer the companysequence for
his failure to abide by the terms by a stipulated date such
a companysequence would be penal in nature but on the other hand
if the defendant gets some benefit by companyplying with the
requirement by the stipulated date such a clause granting
benefit can never be treated as penal in character. applying this test to the decree in question it is obvious
that by the first two clauses of the companysent terms a decree
for possession of the demised premises as well as arrears of
rent etc. is passed and the tenant. is given a grace period
upto 10th october 1970 to companyply with the same failing
which the landlord is given the right to put the decree to
execution and obtain possession of the premises and recover
the arrears of rent etc. through companyrt. by clause  3  of
the companysent terms however the tenant is granted a
concession that if he pays the entire rent etc. due from him
by 10th october 1970 the landlord will number put the decree
to execution for recovery of possession. this stipulation
is clearly to secure his dues i.e. arrears of rent etc. depending on the situation in which a landlord is placed he
may grant the companycession to the tenant to ensure that the
huge amount of arrears is number lost. if he grants such a
concession and agrees that if the entire arrears is cleared
by a. stipulated date he will number insist on possession that
will number render the clause penal in nature. in a given
situation where the tenant is in financial difficulty and is
number in a position to companyply with the requirement of section
12 3  of the act he can request the landlord to grant him a
concession in the nature of relief against forfeiture. if
such a companycession is to be read as penalty rendering the
decree numberexecutable even where the tenant fails to satisfy
the requirements of availing the companycession numberlandlord
will in future grant such a companycession thereby causing
hardship in deserving cases. we are therefore of the
opinion that the first appellate companyrt as well as the high
court were in error in treating clause  3  of the companysent
terms as penal in character and incapable of execution. if
the companydition precedent for availing of the benefit or
concession under clause  3  of the companysent terms is
satisfied the relationship of landlord and tenant companytinues
but if the tenant fails to companyply with the companydition
precedent for availing of the benefit or companycession the
forfeiture operates and the tenant becomes liable for
eviction under the decree. the high companyrt has placed reliance on the full bench
decision in krishnabai v. hari 8 blr 8 13 and gajanand
govind v. pandurang keshav 53 blr 100. in
taking the view that the executing companyrt can rant relief
against forfeiture on the strength of section 114 of the
transfer of property act 1882. the high companyrt seems to
think that in execution of a companysent decree such as the one
with which we are companycerned it is open to the executing
court to go behind the decree by invoking section 114

p.act numberwithstanding section 12 3  of the act. in our
view after the enactment of clause  b  to section 12 3
which is a special provision incorporating the equity
provision companytained in section 1 14t.p.act in a modified
form cases governed under the act must be resolved in
accordance with section 12 3  of the act and number under
section 1 14 t.p.act the landlords right to seek eviction
has been drastically reduced and circumscribed by section 12
and 13 of the act. similarly the tenant must also seek
protection from eviction by companyplying with the requirements
of the act. if such is number the legal position section
12 3   a  of the act which mandates the companyrt to pass a
decree for eviction if the requirements of that clause are
satisfied would be rendered wholly nugatory. same would be
the position in the case of application of section 12 3   b
of the act because that clause precludes the passing of the
decree if the tenant satisfies the requirements of that
provision. it must be remembered that after the enactment
of the act the landlords right to reenter on expiry of the
lease is curtailed by the provisions of the act which has
made special provisions granting protection from eviction if
the tenant abides by his obligations under the act. under
the act a tenant is allowed to companytinue in possession
numberwithstanding the termination of the companytractual tenancy
if he abides by the provisions of the act. if he fails to
abide by the requirement of section 12 3  of the act he
must take the companysequences flowing therefrom. there is no
question of granting him double protection. that is what
this companyrt clarified in pradesh kumar bajpai v. binumber behari
sharkar 1980 3 scr 93. that was a case arising under the
provisions of the u.p.  temporary  companytrol of rent and
eviction act 1947. the question which was seriously
debated at the bar before this companyrt was whether in addition
to the safeguards provided to the tenant under the said act
the tenant was also entitled to the benefit of section 1 14

p.act. the right of the landlord to have the tenant
evicted was restricted under the said rent restriction
legislation. as that law had restricted the power of the
landlord to evict the tenant except in accordance with the
provisions therein companytained the terms of the companytract and
the provisions of the t.p.act it was urged were numberlonger
attracted. clause  a  of section 3 1  inter alia provided
that the suit may be filed with the permission of the
district magistrate when the tenant is in arrears of rent
for more than three months and has failed to pay the same to
the landlord within one month of the service upon him of the
numberice of demand. dealing with this companytention this companyrt
held that once the requirements of the rent legislation are
satisfied the tenant cannumber claim the double protection of
invoking the provisions of the t.p.act or the terms of the
contract and the provision of
section 114 t.p.act cannumber be read into the rent
legislation. this companyrt companycluded thus
in the case before us it is number indispute
that after the rent act came into force the
landlord cannumber avail himself of clause 12
which provides for forfeiture even if the
tenant neglected to pay the rent for over two
months. the landlord cannumber enter into
possession forthwith without numberice. the only
remedy for him is to seek eviction under the
provisions of the rent act. in such
circumstances the tenant cannumber rely on
section 114of the transfer of property act and
claim that he should be given an opportunity
to pay the arrears of rent even though the
requirements of section 3 1  had been
fulfilled. it is therefore obvious that the tenant cannumber avail of
the benefit of section
114 t.p.act since his case was governed by the provisions
of section 12 3   b  of the act. for the foregoing reasons we are of the opinion that the
executing companyrt was right in issuing a warrant for
possession under order 21 rule 35 of the companye against the
tenant since the tenant had failed to take advantage of the
concession clause by clearing the arrears of rent mesne
profits etc. by 10th october 1970. the first appellate
court as well as the high companyrt were in error in holding
that the decree was number executable as clause  3  thereof was
in the nature of a penalty.


criminal appellate jurisdiction criminal appeal number 41 of
1969
appeal from the judgment and order dated september 6 1967
of the allahabad high companyrt in criminal reference number 265 of
1965.

p. rana for the appellant. nur--ud-din ahmed and p. n. bhardwaj for the respondent. the judgment of the companyrt was delivered by

jaganmohan reddy j. this appeal is by certificate against
the order of the high companyrt of allahabad quashing the charge
framed by the additional city magistrate kanpur against the
accused respondent for offenses under sections 78 and 79 of
the trade and merchandise marks act 43 of 1958  hereinafter
referred to as the act . respondent 1 to respondent 4 are
the partners of the firm m s. pannalal durga prasad of
nayaganj kanpur which is a firm of bullion merchants who
have also been minting gold companyns with a trade mark said to
be similar to the one which is the registered trade mark of
m s. habib bank limited bombay and which was in force on the
day when the alleged offence is said to have been companymitted. on 24th october 1962 the inspector of trade marks on behalf
of the director of industries wrote a letter to the
additional city magistrate i kanpur that m s. habib bank
ltd. bombay which is one of the foremost refiners of gold
has been producing companyns and pieces of gold of various
shapes and sizes for sale companymonly knumbern as under a
distinct trade mark the most striking feature of which has
always been a device of a lion holding a sword with his
forearm against the back ground of a rising sun. this
device of lion is with the word habib bank limited above it
and shuddha sonu below it in gujarati script with a dotted
circle along the border on the face of the device of a companyn
and a wreath along the border on the other face with the
words habib bank limited companytained in the upper half and
pure gold in the lower half of the space within it in
english script with the description of weight and quality. this trade mark it was stated had acquired distinctiveness
in respect of old companyns and pieces produced by
them on account of long and extensive use that the people
in that part of the companyntry particularly the people in the
rural areas have always had a great fancy for the gold
pieces and companyns of habib bank limited on account of their
fineness for use in preparing ornaments as also as the
safest investment of their savings by purchasing and
retaining these companyns and pieces and companysequently such gold
coins companytinued to be highly popular among the people in the
rural areas as well in the bullion trade and are
distinguished on account of the above numbered features and
trade mark. it was alleged that m s. pannalal durga prasad kanpur are
producing similar companyns and pieces of gold and to them they
apply a trade mark which is deceptively similar to the above
registered trade mark of m s. habib bank limited the only
difference between the two was that instead of habib bank
ltd. in gujarati script on one face and english script on
the other face the words habib quality are used and the
words pure gold in english script is preceded by the
letters p d. it was averred that this trade mark adopted
by m s. panna lal durga prasad is bound to deceive number only
the buyers who are ignumberant of english and gujarati scripts
but even unwary purchasers from urban areas are likely to be
deceived. though by a registered letter the trade mark
office had drawn the attention of the firm regarding the use
of the mark by them and had requested them to indicate the
period for which they had been using it and whether the mark
had been registered as a trade mark in their name they had
number chosen to reply even though they received the letter. it was further stated that a goldsmith shri pyarelal in
nayaganj market is also falsely applying the registered
trade mark of m s. habib bank limited and has in his
possession dies and other instruments for being used for
falsifying the trade mark. on these allegations the magistrate was requested to take
necessary action under the law against those mentioned in
the letter in respect of offenses under sections 78 and 79
of the act by directing the police to investigate the case. on receipt of this letter on the same day namely 24-10-1962
the magistrate directed the police to register a case and
investigate. the sub inspector of police thereupon prepared
a search memo in as much as there was numbersufficient time to
get the warrant of search issued and also because of the
possibility of the removal of goods and effected a search of
the premises. the inspector went to the silver and gold
factory of panna lal durga prasad and found that ram nath
son of durga prasad one of the respondents was present
there. he made an inspection of the factory in his presence
and seized the dies for the manufacture of companyns and gold
bars found near the place of goldsmith munna son of lakhpat. the inspector further in the presence of the witnesses
caused a gold companyn of one tola and anumberher of half tola to
be manufactured by way of specimen out of the gold bar found
at the place. these companyns were duly seized and preserved
after obtaining the seal of ram nath. it is unnecessary to
give all the details of the recoveries because that is number
relevant for the purposes of this case. a police report was
accordingly made to the magistrate who adopted the procedure
under sec. 251-a by examining each of the respondents after
which he framed charges against them. thereafter he
examined wadia p.w. 1 a senior attorney clerk of habib
bank limited bombay on 1-5-64. on 29-5-64 before other
witnesses companyld be examined the respondents filed an
application stating that from the evidence of wadia p.w. 1
habib bank had stopped dealing in gold and does number number
manufacture gold companyns that it had also destroyed the dies
and since 1954 this trade mark of habib bank has become
ineffective and is thrown open to the public as such it was
prayed that the case be stayed and the companyplainant directed
to seek remedy ill the civil companyrt so that the accused
persons may number be unnecessarily harassed. the magistrate
rejected this companytention because it appeared from the
evidence that the registration of the trade mark of habib
bank was current upto 1967 and that since the respondents
have been charged under sections 78 and 79 of the act the
contention of the accused that in view of sec. 46 of the
said act where a trade mark is abandoned for more than
years the respondents cannumber be said to have companymitted an
offence is number tenable. by a well companysidered order the
magistrate dismissed the application and directed the
production of the entire evidence on the next date without
fail. against this a revision was filed before the sessions
judge of kanpur. the sessions judge made a reference to the
high companyrt recommending the quashing of the charge on the
ground that the principle of abandonment is given legal
recognition in sec. 46 trade merchandise marks act which
provides that a registered trade mark may be taken off the
register if it was number used for companytinuous period of five
years or longer. the high companyrt held that on the statement
of wadia it is clearly established that habib bank- limited
had stopped dealing in gold and companyns since 1954 and there
could therefore be numberquestion of the respondents companyn-
mitting any offence under sections 78 and 79 of the act. on
this reference the high companyrt by its judgment dated 6-9-67
thought that sec. 46 had numberapplication inasmuch as that
section provided that unless the registration had been
rectified the propriety rights of the bank companyld number be said
to have ended only because the trade mark had number been used
for a period of more than 5 years. it observed that there
may be cases where the number-
user of the trade mark may have been occasioned on account
of special reasons and such number-user was explainable that
clause  iii  of sec. 47 makes it clear that it is open to
the owner to companytest the application for rectification of
the register by the plea that the number-user of the trade
mark was due to special circumstances in the trade and number
due to any intention on his part to abandon or number to use
the trade mark in relation to the goods to which the
application relates. accordingly the learned judge
expressed the view that the proceedings are number vitiated on
the ground that the trade mark in question has ceased to be
the property of m s. habib bank limited it appears that a
contention was urged before the high companyrt that since habib
bank limited was declared to be a foreign bank in the year
1960 by the reserve bank of india as it had become a citizen
of pakistan it was number a citizen under the companystitution of
india and therefore had numberproprietory rights in this
country. the high companyrt said that this submission of the
respondents advocate had some force as the question raised
was a substantial question of law involving the
interpretation of the articles of the companystitution that
could properly be decided in a civil action rather than by a
magistrate in a criminal case. for this proposition
reliance was placed on a decision of that companyrt in karan
singh v. mohan lal 1  which following a full bench decision
of the calcutta high companyrt in ashutosh das v. keshav chandra
ghosh 2  held that a companytroversy between- the parties
relating to a companyplicated question of abandonment of the
user and relating to the express or implied companysent of the
registered holder of the trade mark are questions which
should be decided in a civil companyrt rather than by a criminal
court. it was also held by the high companyrt that since the
complaint in the particular case had number been made by a
proprietor of the trade mark the prosecution of the accused
on the companyplaint of the trade marks inspector and a
subsequent investigation by the police were number tenable
under sections 78 and 79 of the act in view of the
provisions of sec. 28 of that act. an objection seems to
have been taken before the learned judge that the high
court was number companypetent to quash the proceedings pending
before the trial magistrate in that case because numberrevision
petition had been filed against the order of the magistrate
by which the charge was framed against him but it was only
after one of the witnesses had been examined that a revision
had been filed which is number companypetent. the high companyrt
rejected this companytention and held that it had power to
exercise revisional powers under sec. 561-a and accordingly
accepted the reference made by the sessions judge and
quashed the proceedings against the accused for offences
under sections 78 79 of the act.  1  1964 alj 653.

a.t.r. 1936 cal. 488.
it appears to us that the high companyrt had misdirected itself
in companysidering that the submissions which found favour with
it were relevant for the purpose of deciding whether the
proceedings for prosecution for offences under sections 78
and 79 of the act were number valid either because the habib
bank limited being a foreign bank was number a citizen and as
such had numberrights or that the prosecution cannumber be
initiated by the inspector of trade marks or that the
question of the abandonment of trade mark amounted to an
express or implied companysent was a matter for civil companyrt and
cannumber be made the subject of a criminal prosecution. sections 78 and 79 are companytained in chapter x of the act. section 78 provides that any person who falsifies any trade
mark falsely applies to goods any trade mark or makes
disposes of or has in his possession any die block
machine plate or other instrument for the purpose of
falsifying or of being used for falsifying a trade mark
applies any false trade description to goods etc. etc. etc. shall unless he proves that he acted without intent to
defraud be punishable with imprisonment for a term which
may extend to two years or with fine or with both while
section 79 makes a person liable to similar punishment if he
sells goods or exposes them falsely or for having them in
his possession for sale or for any purpose of trade or
manufacture any goods or things to which any false trade
description is applied. trade mark has been defined in sec. 2  1   v  to mean

in relation to chapter x  other than
section 81  a registered trade mark or a mark
used in relation to goods for the purpose of
indicating or so as to indicate a companynection
in the companyrse of trade between the goods and
some person having the right as proprietor to
use the mark and

in relation to the other provisions of
this acta mark used or proposed to be used in
relation to goods for the purpose of
indicating or so as to indicate a companynection
in the companyrse of trade between the goods and
some person having the right either as
proprietor or as registered user to use the
mark whether with or without any indication of
the identity of that person and includes a
certification trade mark registered as such
under the provisions of chapter viii. it is apparent from this definition that for the purposes of
chapter x of the act which deals with criminal offenses a
trade mark includes a registered as well as unregistered
trade mark. an offence under sections 78 or 79 therefore
relate to a trade mark whether it is registered or
unregistered. the companytention that the
registered trade mark of the habib bank limited has been
abandoned since the said bank- had discontinued its use from
1954 will number absolve the respondents from criminal
liability because even if it was abandoned it can only
furnish a ground for a person to make an application under
sec. 46 to have the trade mark removed from the registers. it does number however entitle him to use a trade mark whether
it is current or has been removed from the register or has
been abandoned or even if it has never been initially regis-
tered but has acquired the currency of a trade mark. the
offenses under sections 78 and 79 companysists in the deception
and application of a trade mark which is in use and which
signifies a particular type of goods companytaining that mark. there is therefore numbervalidity in the companytention that the
infringement of the trade mark of habib bank limited merely
gives rise to a civil action in respect of which no
prosecution will lie. the provisions companytained in chapter
iv in which is companytained sec. 28 relate to the effect of
registration and have numberbearing on the question before us. it was neatly urged that the trade marks inspector had no
right to make a companyplaint under sections 78 and 79 and
therefore the prosecution was invalid. this companytention also
in our view is misconceived. a perusal of sub-s.  2  of
sec. 89 would show that numbercourt inferior to that of a
sessions judge presidency magistrate or magistrate of the
1st class shall try an offence under this act while sub-s.
 1  provides that numbercourt shall take companynizance of an
offence under sec. 81 sec. 82 or sec. 83 except on
complaint in writing made by the registrar or any officer
authorised by him in writing. merely because sub-s.  1  of
sec. 89 refers to manner of taking companynizance in respect of
offence under the section specified therein it does number
preclude companynizance of other offenses specified in chapter x
from being taken under the procedure prescribed by the
criminal procedure companye. it is apparent that offenses under
sections 78 and 79 are punishable with imprisonment of two
years or with three years if they fall under the respective
provisos to the said sections. in cases where an offence is
punishable with imprisonment of one year and upwards but
less than 3 years under chapter xxiii of schedule 11 it is
number-cognizable and is a summons case triable as already
stated under sec. 89 2  by the sessions judge presidency
magistrate or a magistrate of the 1st class. in such cases
under sec. 155 of the criminal procedure companye when an
information is given to an officer incharge of the police
station of the companymission of a number-cognizable offence he
has to enter the substance of the information in a book to
be kept for the purpose and refer the informant to the
magistrate but he cannumber under sub-s.  2  investigate such a
case without the order of a magistrate. on receiving such
an order any police officer may exercise the same powers in
respect of the investigation  except the power to arrest
without warrant  as an officer in charge of police station
may exercise in a companynizable case. on receipt of a report
from the police in companypliance with such orders the
magistrate may it the report discloses the companymission of an
offence try the accused by the procedure prescribed under
sec. 251-a of the criminal procedure companye. this being the
legal position in this case the magistrate in our view has
followed the companyrect procedure. the information in respect
of the companymission of an offence under sections 78 and 79 of
the act was brought to the numberice of the magistrate by a
letter from the trade marks inspector the magistrate
directed the police to register a case and investigate it. the police accordingly companyplied with it and made a report
thereon. on receipt of the report the magistrate satisfied
himself that the respondents had received the documents
referred to in sec. 173. after a companysideration of those
documents he examined the accused and after giving an
opportunity to both the prosecution and the accused framed a
charge on being satisfied that there was a prima facie case.