civil appellate jurisdiction civil appeal number 5 19521
of 1975.
from the judgment and order dated 9.5.1974 of the punjab
and haryana high companyrt in i.t. reference number. 30 to 32 of
1973.

c. sharma ms. a. subhashini and k.c. dua for the
appellant. dr. y.s. chitale r.k. jain rakesh khanna and ms. abha
jain for the respondent. the judgment of the companyrt was delivered by
pathak cj. these appeals by special leave are directed
against a judgment of the high companyrt of punjab and haryana
disposing of an income-tax reference in favour of the re-
spondent-assessee. the assessee manufactures strawboard. for the assessment
years 1965-66 1966-67 and 1967-68  the relevant previous
years being the respective calendar years 1964 1965 and
1966  the assessee claimed companycessional rates of income
tax development rebate at higher rate and deduction under
s. 80-e of the income tax act 1961 on the
ground that the manufacture of strawboard was a priority
industry. for the assessment year 1965-66 the total income
assessed was rs. 1771334 and against the basic rate of 80
per cent the assessee claimed rebate at-the rate of 35 per
cent up to rs. 1000000 and on the balance at 26 per cent. the income tax officer allowed the rebate at 30 per cent up
to rs. 1000000 and at 20 per cent on the balance. for the
assessment year 1966-67 the assessee claimed development
rebate under s. 33 of the income tax act at the rate of 25
per cent on the value of the machinery installed after 1
april 1965 worth rs.34287 but rebate was allowed at 20
per cent only. the assessee also claimed benefit under s.
80-e  inserted by the finance act 1966 with effect from 1
april 1966  to the extent of the income determined by the
income tax officer at rs.8 17485 received from the manu-
facture of strawboard. this industry is mentioned at item
number 16 in the fifth schedule to the income tax act as sub-
stituted by the finance act 1965. the claim of the assessee
was. rejected by the income tax officer. for the assessment
year 1967-68 the total income of the assessee was determined
at rs. 1100885. the assessee claimed relief under s. 80-e
to the extent of rs.750316 received as income from the
manufacture of strawboard. this claim was similarly rejected
by the income tax officer on the ground that the assessee
could number be described as a priority industry. the income
tax officer took the view that the manufacture of strawboard
was number companyered by the words paper and pulp in the rele-
vant schedules pertaining to the assessment 1966-67 and
1967-68.
the assessee appeared to the appellate assistant companymis-
sioner of income tax in respect of the three assessments
but the appeals were dismissed. in second appeals filed in
all the three cases the assessees plea that the manufac-
ture of strawboard was a priority industry was accepted and
the appellate tribunal held that the assessee was entitled
to the statutory rebates claimed by it. at the instance of
the revenue the tribunal referred the following questions
to the high companyrt for its opinion
assessment year 1965-66
whether on the facts and in the circumstances
of the case the appellate tribunal was right
in law in holding that strawboard is companyered
by the term paper and pulp appearing in
paragraph f of part i read with part iii of
the first schedule to the finance act 1965
 act number x of 1965 ? assessment years 1966-67 and 1967-68
whether on the facts and in the circumstances
of the case the appellate tribunal was fight
in law in holding that strawboard is companyered
by the term paper and pulp appearing at item
16 of the fifth schedule to the income tax
act 1961 and in allowing the assessees claim
under section 80-e of the act? the high companyrt has held that the strawboard industry is
covered within the expression paper and pulp appearing in
the relevant schedules of the income tax act and has there-
fore answered the questions referred to it in the affirma-
tive in favour of the assessee and against the revenue. the sole question before us is whether strawboard can be
said to fall within the expression paper and pulp men-
tioned in the schedules relevant to the respective assess-
ment years. to resolve the question it is necessary first
to examine the significance and scope of the schedules. the
provision for rebate has been made for the purpose of en-
couraging the setting up of new industries and the indus-
tries are those described in the relevant schedules. it
seems to us clear that when the schedules refer to paper
and pulp they in fact intend to refer to the paper and pulp
industry. that being so the next question is whether the
strawboard industry can be described as forming part of the
paper and pulp industry. we have numberdoubt in our mind that
it does. the expression has been used companyprehensively. it is
necessary to remember that when a provision is made in the
context of a law providing for companycessional rates of tax for
the purpose of encouraging an industrial-activity a liberal
construction should be put upon the language of the statute. from the material before us which we have carefully companysid-
ered that is the only reasonable companyclusion to be reached
in. these case. the high companyrt has referred to the licence
dated 31 may 1954 issued to the assessee that the undertak-
ing of the assessee was registered in terms of s. 10 of the
industries  development and regulation  act 195 1 and the
details given in the licence declare that it relates to a
schedule industry which includes newsprint paperboard and
strawboard. the high companyrt has also referred to the circum-
stances that the process of manufacturing strawboard is
identical with that of manufacturing paper. the expression
paper and pulp in the industries  development and regula-
tion  act includes paperboard and strawboard. our attention
has been drawn to the entry relevant to the assessment year
1964-65 which speaks of paper and pulp including
paper products and it is said strawboard is evidently number
within the natural meaning of the word paper. we do number
think that the submission merits serious companysideration.


civil appellate jurisdiction civil appeal number 124 of
1974.
from the judgment and order dated 22nd february 1973
of the punjab haryana high companyrt in income tax reference
number 7 of 1972.
and
clvil appeal number. 4122-23 of 1985.
from the judgment and order dated 11th july 1979 of
the punjab haryana high companyrt in income tax cases number. 21
and 22 of 1974.

m. lodha and miss a. subhashini for the appellant. k. mukharjee for the respondent. the judgment of the companyrt was delivered by
sabyasachi mukharji j. special leave is granted in the
above-mentioned two petitions. these appeals by special leave arise out of a decision
and judgment of the punjab haryana high companyrt in respect
of the assessment year 1960-61 under indian income tax act
1922 holding that the registration of the firm was wrongly
refused. a reference was made under section 66 2  of the
indian income-tax act 1922 to the high companyrt in respect of
the following question
whether on the facts and in the circumstances of
the case the registration of the firm has rightly
been refused? originally there were 10 partners who were members of
two
families and a firm came into existence under the instrument
dated 27.3.1952 when padam kumar was a minumber. when he
attained majority on 1.10.1956 he opted to companytinue as a
full-fledged partner and a fresh instrument of partnership
was executed on 8.10.1956 by 11 partners including shri
rabinder kumar. a fresh deed was executed to that effect on
1.4.1959 and an application dated 2.9.1959 for registration
of the said firm under section 26-a of the said act was
filed on 30.9.1955. shri rabinder kumar had left indian for
united states of america for prosecuting his studies on
29.1.1959. it was found by the tribunal that rabinder kumar
had number signed the application but indeed he was away to

s.a. from 29.1.1959. this finding was number challenged by
the assessee before the high companyrt. the tribunal held that
the firm was number genuine and the application was number proper
as rabinder kumar had number signed and the application for
registration of partnership was number in accordance with the
rules. these findings were number challenged before the high
court. the high companyrt however was of the opinion that
anumberher opportunity should have been given to show whether
the firm was actually in existence or number. the high companyrt
held that rabinder kumar had acquiesced in the firm and had
accepted the position and as such the firm was entitled to
be registered. the companyditions required to be fulfilled have
been laid down by this companyrt in the case of r.c. mitter
sons v. companymissioner of income tax calcutta 36 i.l.r. p.

this companyrt held that in
order that a firm may be entitled to registration
under section 26a of the income-tax act the
following essential companyditions must be satisfied
viz.  i  the firm should be companystituted under an
instrument of partnership specifying the
individual shares of the partners  ii  an
application on behalf of and signed by all the
partners and companytaining all the particulars as set
out in the rules nust be made  iii  the
application should be made before the assessment
of the firm under section 23 for that particular
year  iv  the profits of losses if any of the
business relating to the accounting year should
have been divided or credited as the case nay be
in accordance with the terms of the instrument
and  v  the partner ship nust be genuine and nust
actually have existed in companyformity with the terns
and companyditions of the instrument of partnership
in the accounting year. as it appears factually neither the deed of
partnership was signed by rabinder kumar number was the
application for registration
in accordance with the rules. therefore the firm was number
entitled to registration under s. 26-a of the indian income
tax act 1922. the law enjoins that the deed of partnership
must be signed personally by each partner and this position
is settled by the decision of this companyrt in rao bahadur
ravulu subba rao ors v. companymissioner of income tax
madras 30 i.t.r. 163 at page 166 furthermore rules 2 and 4
of the income tax rules 1922 enjoins that the application
for registration must be made within a period of six months
of the companystitution of the firm or before the end of the
previous year of the firm whichever is earlier
at the firm was companystituted in that previous year. neither
of these companyditions was fulfilled in the facts and
circumstances of the case as found by the tribunal and these
were number negatived by the high companyrt. in these
circumstances we are of the opinion that the tribunal was
right in refusing the registration of the
firm and the high companyrt was number right in holding otherwise.


original jurisdiction writ petition number 75 of 1972.
under article 32 of the companystitution of india. l. rathi and a. subba rao for the petitioner. c. manchanda k.c. dua and ms. a. subhashini for the
respondent. the judgment of the companyrt was delivered by
oza j. in this petition the petitioner has challenged
an order of penalty imposed against the petitioner by the
wealth tax officer at the rate of 1/2 per cent of the total
wealth assessed for every month of default and out of seven
months default a penalty imposed was for four months equal
to rs. 6784. the petitioner had sought for extension of
time for three months which was granted and thereafter
filed the return four months after the period extended by
the wealth tax officer. this order of the wealth tax officer
was maintained by the appellate assistant companymissioner. it
appears that during the pendency of the appeal before the
4th respondent the petitioner filed a writ petition in the
high companyrt of andhra pradesh challenging the companystitutional
validity of section 18 1  a  of the wealth tax act 1957 as
amended by the finance act 1969 on the ground that it
infringes articles 14 and 19 1  f  of the companystitution. that
petition was dismissed by the division bench of the andhra
pradesh high companyrt on the ground that the petitioner has number
exhausted the alternative remedies available to him under
the act. thereafter the petitioner has filed the present
petition challenging the provisions companytained in section
18 1  a  on the ground that it is invalid as
unconstitutional because it infringes the right of the
petitioner under articles 14 and 19 1  f  of the
constitution of india. it is admitted on all hands that the offending
provision has since been amended and numbersuch dispute is
likely to arise in future. even during the period 1969-70
when the offending provision was there the petition giving
rise to the present appeal appears to be the sole petition
wherein the provision of section 18 1  has been challenged. the question involved in the present case is therefore
only of an academic interest. section 18 of the wealth tax act as it stood at the
relevant time reads
section 18. penalty for failure to furnish
returns to companyply with numberices and companycealment of
assets etc. -  1  if the wealth-tax officer
appellate assistant companymissioner companymissioner or
appellate tribunal in the companyrse of any
proceedings under this act is satisfied that any
person -
 a  has without reasonable cause failed to furnish
the return which he is required to furnish under
sub-section  1  of section 14 or by numberice given
under sub-section  2  of section 14 or section 17
or has without reasonable cause failed to furnish
within the time allowed and in the manner required
by sub-section  1  of section 14 or by such
numberice as the case may be or
 b  has without reasonable cause failed to companyply
with a numberice under sub-section  2  or sub-section
 4  of section 16 or
 c  has companycealed the particulars of any assets or
furnished inaccurate particulars of any assets or
debts
he or it may by order in writing direct that
such person shall pay by way of penalty -

in the cases referred to in clause  a  in
addition to the amount of wealth-tax if any
payable by him a sum for every month during
which the default companytinued equal to one-half per
cent of -
 a  the net wealth assessed under section 16 as
reduced by the amount of net wealth on which in
accordance with the rates of wealth-tax specified
in paragraph a of part i of the schedule or part
ii of the schedule the wealth-tax chargeable is
nil or
 b  the net wealth assessed under section 17
where assessment has been made under that section
as reduced by -
 1  the net wealth if any assessed previously
under section 16 or section 17. or
 2  the amount of net wealth on which in
accordance with the rates of wealth-tax specified
in paragraph a of part i of the schedule or part
ii of the schedule the wealth-tax chargeable is
nil
whichever is greater
but number exceeding in the aggregate an amount
equal to the net wealth assessed under section 16
or as the case may be the net wealth assessed
under section 17 as reduced in either case in the
manner aforesaid

in the cases referred to in clause  b  in
addition to the amount of wealth-tax payable by
him a sum which shall number be less than one per
cent of the assessed net wealth but which shall
number exceed the amount of the assessed net wealth. explanation - for the purposes of clause  ii
assessed net wealth shall be taken to be the net
wealth assessed under section 16 as reduced by the
net wealth declared in the return if any
furnished by such person or as the case may be
the net wealth assessed under section 17 as
reduced by -

the net wealth if any assessed previously
under section 16 or section 17 or

the net wealth declared in the return if
any furnished by such person under section 17
whichever is greater

in the cases referred to in clause  c  in
addition to any wealth-tax payable by him a sum
which shall number be less than but which shall number
exceed twice the amount representing the value of
any assets in respect of which the particulars
have been companycealed or any assets or debts in
respect of which inaccurate particulars have been
concealed or any assets or debts in respect of
which inaccurate particulars have been furnished. explanation 1 - where -

the value of any asset returned by any person
is less than seventy five per cent of the value of
such asset as determined in an assessment under
section 16 or section 17  the value so assessed
being referred to hereafter in this explanation as
the companyrect value of the asset  or

the value of any debt returned by any person
exceeds the value of such debt as determined in an
assessment under section 16 or section 17 by more
than twenty-five per cent of the value so assessed
 the value so assessed being referred to hereafter
in this explanation as the companyrect value of the
debt  or

the net wealth returned by any person is
less than seventy-five per cent of the net wealth
as assessed under section 16 or section 17  the
net wealth so assessed being referred to hereafter
in this explanation as the companyrect net wealth
then such person shall unless he proves that the
failure to return the companyrect value of the asset
or as the case may be the companyrect value of the
debt or the companyrect net wealth did number arise from
any fraud or any fraud or any gross or wilful
neglect on his part be deemed to have companycealed
the particulars of assets or furnished inaccurate
particulars of assets or debts for the purposes of
clause  c  of this sub-section. explanation 2. - for the purposes of clause  iii
 a  the amount representing the value of any
assets in respect of which the particulars have
been companycealed or any assets in respect of which
inaccurate particulars have been furnished shall
be the value of such assets determined for the
purposes of this act as reduced by the value
thereof if any declared in the return made under
section 14 or section 15
 b  the amount representing the value of any debts
in respect of which inaccurate particulars have
been furnished shall be the amount by which the
value of such debts declared in the return made
under section 14 or section 15 exceeds the value
thereof determined for the purposes of this act. numberorder shall be made under sub-section  1
unless the person companycerned has been given a
reasonable opportunity of being heard.  2a  numberwithstanding anything companytained in clause

or clause  iii  of sub-section  1  the
commissioner may in his discretion-

reduce or waive the amount of minimum penalty
imposable on a person under clause  i  of sub-
section  1  for failure without reasonable cause
to furnish the return of net wealth which such
person was required to furnish under sub-section
 1  of section 14 or

reduce or waive the amount of minimum penalty
imposable on a person under clause  iii  of sub-
section  1
if he is satisfied that such person -  a  in the
case referred to in clause  i  of this sub-section
has prior to the issue of numberice to him under
sub-section  2  of section 14 voluntarily and in
good faith made full disclosure of his net
wealth and in the case referred to in clause  ii
of this sub-section has prior to the detection by
the wealth-tax officer of the companycealment of
particulars of assets or of the inaccuracy of
particulars furnished in respect of the assets or
debts in respect of which the penalty is
imposable voluntarily and in good faith made
full and true disclosure of such particulars
 b  has companyoperated in any enquiry relating to the
assessment of the wealth represented by such
assets and
 c  has either paid or made satisfactory
arrangements for payment of any tax or interest
payable in companysequence of an order passed under
this act in respect of the relevant assessment
year.  2b  an order under sub-section  2a  shall be
final and shall number be called in question before
any companyrt of law or any other authority. numberwithstanding anything companytained in clause

of sub-section  1  if in a case falling
under clause  c  of that sub-section the minimum
penalty imposable exceeds a sum of rupees one
thousand the wealth-tax officer shall refer the
case to the inspecting assistant companymissioner who
shall for the purpose have all the powers
conferred under this section for the imposition of
penalty. an appellate assistant companymissioner a
commissioner or the appellate tribunal on making
an order under this section imposing a penalty
shall forthwith send a companyy of the same to the
wealth-tax officer. numberorder imposing a penalty under this section
shall be passed after the expiration of two years
from the date of the companypletion of the proceedings
in the companyrse of which the proceedings for the
imposition of penalty have been companymenced. explanation - in companyputing the period of
limitation for the purposes of this section the
time taken in
giving an opportunity to the assessee to be
reheard under the proviso to section 39 and any
period during which a proceeding under this
section for the levy of penalty is stayed by an
order or injunction of any companyrt shall be
excluded. the main companytention advanced by the learned companynsel is
that this provision permits the levy of minimum penalty of
1/2 per cent of the net wealth assessed per month for each
month of delay in filing the return and therefore it is in
contravention of article 19 1  f  of the companystitution as in
an appropriate case the penalty may be equal to the value of
total wealth assessed that is the maximum limit of the
penalty permissible and is therefore companyfiscatory. the penalty for late filing the return under section
18 1  a  i  is 1/2 per cent per month. it therefore
permits the imposition of penalty for delay of each month
whereas the wealth tax is assessed on the net wealth per
year and according to the petitioner therefore this also
is in companytravention of article 19 1  f . it is also
contended that the penalty should be companyrelated with the
duty and number with the net wealth assessed and thus the
penalty leviable at 1/2 per cent of the net wealth it is
unreasonable and therefore also is hit by article
19 1  f . it is also companytended that as this provision companyfers
jurisdiction on the wealth tax officer to impose minimum
penalty which is 1/2 per cent of the assessed wealth upto
the maximum which is equal to the total value of the
assessed wealth and thereby gives a wide discretion to the
wealth tax officer without any guidelines and thus this
discretion violates article 14 of the companystitution. it was also companytended that levy of penalty at the rate
of 1/2 per cent is discriminatory because the assessee who
is a smaller assessee and whose wealth tax is assessed at
1/2 per cent also will suffer a penalty of 1/2 per cent
whereas the other who may be a substantital assessee and
pays wealth tax at a higher rate still the penalty which
could be imposed is only 1/2 per cent and in this manner so
far as a smaller assessee is companycerned it is harsh whereas
for a substantial assessee it is rather lenient and thus is
discriminatory and
therefore companytrary to the provisions companytained in article
14 of the companystitution. it is clear from what has been stated earlier that the
question is number at all of public importance number it is going
to affect a number of assessees as admittedly the law has
been amended thereafter and the present petition is the only
petition in respect of the provisions of section 18 as it
stood in 1969-70.
so far as the question of companyfiscatory nature of the
provision is companycerned it is clear that the penalty has
been provided at the rate of 1/2 per cent of the net
assessed wealth per month or each months delay. it is
therefore clear that for a months delay in filing the
return the only penalty which companyld be imposed is 1/2 per
cent of the total wealth. it was companytended that if this
delay goes on to the extent that the penalty will be equal
to the wealth as that is the maximum limit permissible it is
confiscatory and therefore companytravenes article 19 1  f  of
the companystitution. this companytention is purely based on a
hypothesis companysideration of which is numberhing but an academic
exercise as admittedly the penalty imposed on the petitioner
is only for four months delay which will companye to only two
per cent of the total wealth assessed and it companyld
therefore number be companytended that the penalty imposed against
the petitioner is companyfiscatory in nature. such a situation
can never arise as admittedly the provision has then been
amended and there is numberquestion of such a situation number. in
this view of the matter this companytention cannumber be accepted
as it is just a mere imagination and is number based on facts
of this case. the imposition of penalty at the rate of 1/2
per cent  of the total assessed wealth  for each months
delay companyld number be said to be companysiscatory in nature. it was companytended that the penalty should have been
related to tax rather than to the wealth and as it has been
co-related with wealth it is unreasonable. this argument is
utilised for challenging this provision as in companytravention
of article 19 1  f  as well as of article 14. the levy of
penalty of 1/2 per cent of the total wealth assessed companyld
number be said to be unreasonable for any reason on the basis
of which it companyld be said that it will be in companytravention
of article
19 1  f . the other argument on the basis of which an
attempt was made to attract article 14 is that in the case
of a small assessee where the rate of tax is 1/2 per cent
and still he can suffer a penalty at the rate of 1/2 per
cent whereas an assessee whose assessed wealth is of higher
valuation wherein he is liable to pay wealth tax at a higher
rate still if he companymits default as companytemplated under this
provision the penalty to which he will be liable to pay
wealth tax at the rate of 3 per cent of the total wealth
assessed. this companytention advanced by the learned companynsel
appears to be fallacious as whatever the rate of tax but if
he is a small assessee the penalty will be 1/2 per cent of
the total wealth assessed and if he is a bigger assessee the
penalty will be 1/2 per cent of the total wealth assessed. thus in case of a smaller assessee 1/2 per cent of the total
wealth assessed will be much less as companypared to the 1/2 per
cent in the case of a substantial assessee whose wealth
assessed is of much higher value thus although it is 1/2 per
cent in both the cases as it is related to the total wealth
assessed smaller the assessee lesser will be the penalty and
richer the assessee the penalty will be higher and by no
stretch of imagination this companyld be said to be either
unreasonable or discriminatory. this penalty will be for
default of each month in this view of the matter therefore
neither it companyld be companytended that it is in companytravention of
article 19 1  f  number in companytravention of article 14 of the
constitution. learned companynsel placed reliance on a decision reported
in kunnathat thathunni moopil nair v. state of kerala
anr. 1961 3 s.c.r. 77 where while examining the
constitutional validity of the land tax imposed by the
travancore-cochin land tax act 1955 this companyrt struck it
down on the ground that it gave a blanket power to the state
to exempt any one from operation of this act and for
exercise of power under sec. 7 there were numberguidelines or
principles laid down in the act itself. this decision
therefore is of numberconsequence so far as the present
petition is companycerned. it appears that during the period this provision
remained in force numberody challenged this except the present
and one before the madras high companyrt the decision of which
is reported in janab m.m. sultan ibrahim adhum v. wealth tax
officer i karaikudi 91 i.t.r. 417 where exactly similar
contention was repelled by the division bench of the madras
high companyrt. it is therefore clear that besides the companytentions
advanced in this case are of purely academic importance and
are of numberconsequence in future on merits also there
appears to be numbersubstance in the companytentions advanced by
the learned companynsel for the petitioner.


civil appellate jurisdiction civil appeal number 803 of 1973. -l447sup.cl/74
appeal by special leave from the award dated january 24
1973 of the special labour companyrt ahmedabad in reference
 ic-ida  number 4 of 1972 published in the gujarat government
gazette part 1-l dated march 11973.

c. chagla g. p. vyas and r. p. kapur for the appellant. respondent appeared in person. the judgment of the companyrt was delivered by
jaganmohan reddy j.-this appeal by special leave challenges
the award of the special labour companyrt ahmedabad by which
the respondent an employee of the appellant companyporation was
directed to be reinstated and paid as companypensation half the
wages including dearness. allowance from the date of his
discharge till the date of his reinstatement in service. the respondent was appointed by the appellant on june 13
1967 as a temporary senior assistant on companyditions set out
in the letter dated june 13 1967. the respondents
services companytinued to be temporary as numberorder of appointing
him on probation was passed and on the date when his
services were terminated by an order dated january 6 1971
he was in temporary service. according to the respondents statement of claim in
september october 1970 he was number keeping good health
numberetheless he used to attend to his duties. however in
october 1970 his health deteriorated further and he went on
sick leave for five days from october 14 to october 18
1970. thereafter though he joined and worked. he was under
treatment. then all of a sudden his health took a turn for
the worse and after the medical examination by his
physician he was advised rest and medical treatment for one
month. in view of this advice he made an application on
numberember 7 1970 for one month leave on the ground of
illness accompanied by a medical certificate of k. j. vaidya
who was a registered medical practitioner but the appellant
did number give any reply immediately. later the appellant
wrote a letter to the respondent asking him to join duties
at once because there was numberhing wrong with his health and
his leave was number sanctioned. we shall advert to the companyrespondence in greater detail
later but for the present it is sufficient to set out what
has been narrated by the special labour companyrt according to
which the companycerned workman  the respondent  after receiving
the reply on numberember 14 1970 wrote to the companyporation that
the said superior officer was number qualified to opine about
his health and it was necessary for him to take rest as
medically advised. he also stated that he wanted to companysult
a physician in bombay and if he decided to go there he would
intimate his bombay address to the companyporation. he alleged
that this letter was number immediately replied. thereafter
the companycerned workman proceeded to bombay and started
receiving treatment from one dr. k. c. mehta m.d.  bom.  c.p.s. he then received a letter from the companyporation
requiring him to report immediately to the companyporation for
being sent for a medical examination by the civil surgeon
ahmedabad. the companycerned workman companytended that if he was
required to
be examined by the civil surgeon ahmedabad he should have
been informed about it before he left for bombay and
according to him this was number a bona fide direction. the
concerned workman then sent a medical certificate obtained
from his doctor with his letter dated december 9 1970
asking for further leave. the companycerned workman then
received a letter dated december 24 1970 requiring him to
report to the companyporation within two days and informing him
that if he failed to do that he would be dismissed from
service. he then returned to ahmedabad and wrote a letter. dated january 4 1971 to the companyporation that he was
prepared to submit for the examination by the civil surgeon
ahmedabad and he should be sent an authority for the
purpose. according to the companycerned workman instead of
granting this request the companyporation sent a letter dated
january 6 1971 together with a discharge order informing
him that he was discharged with effect from numberember 9
1970. the companycerned workman companytended that the action taken
against him was illegal and improper that the companyporation
had numberauthority to require him to submit for examination by
the civil surgeon that it companyld number have rejected a
certificate from. a registered medical practitioner and
therefore he was entitled to be reinstated with full back
wages. as against these averments the case of the companyporation was
that the companycerned workmen was only a temporary employee and
under the companytract of his employment he was to be taken up
as a probationer and after companypletion of the probationary
period he was to be companyfirmed. however during his service
as he was found to be arrogant careless negligent and
having scant respect for his superiors numberorder making him
a probationer was passed and he was companytinued only as a
temporary employee in an expectation that he would improve
and give satisfaction to his superiors. according to the
corporation assuming that he had become a probationer he
was number companyfirmed and so in any event he was number a
permanent workman. the companyporation then alleged that during
the tenure of his service apart from other defects in him
it was also found that in about october 1970 he was evading
to undertake about ten days tour to bombay. so he was
given a memo requiring time to submit his explanation which
he did but in a very disrespectful languages. thereafter
he had gone on leave oil grounds of illness. it was then
alleged that on numberember 7 1970 though he was present in
office looking quite healthy and it and bad worked for
the whole day yet he gave an application for leave for 30
days. he gave this application to the inward clerk and number
to his superior officer as it was the usual practice which
he companyld have followed very easily. he had attached a
certificate to the leave application but the certificate
was from a vaidya who was only a r.m.p. the certificate did
number disclose any serious disease and hence on companysidering
these facts the leave application was refused and he was
asked to report for duty. a letter to that effect was sent
to him under certificate of posting but that letter was
returned tothe companyporation with an unusual postal
endorsement viz. left-particulars number knumbern a companyy of
this letter was then sent to him by registered post at the
very address and the same was received by him on numberember
14 1970. the companycerned workman then wrote a letter
refusing to report for
duty and stating that he would go to bombay for companysultation
with an eminent physician. thereupon the companyporation wrote
anumberher letter dated 27 /30 numberember 1970 calling upon
him to present himself at the head office so that he can be
sent to the civil surgeon for a medical check-up because it
wanted to verify as to whether his illness was genuine or
number. according to the companyporation this letter was sent to
him with a special messenger at his residential address on
numberember 30 1970 at 11.30 a.m. but a member of his family
reported that be had.left for bombay. in the meanwhile the
corporation received a letter on december 2 1970
purporting to have been sent from bombay. however this
letter did number bear any postal mark from any bombay post
office. the companyporation then wrote a letter to him at his
bombay address on the same day asking him to companyply with the
instructions companytained in the letter dated ?7/30 numberember
1970. according to. the companyporation this letter seems to
have been received by him on december 4 1970 and
thereafter he sent a letter dated december 9 1970 together
with an application for leave along with a medical certi-
ficate. but in this letter the respondent did number give any
specific reply to the directions to attend to the head
office for his medical check-up. the medical certificate
also did number show that he was seriously ill. hence the
corporation by its letter dated december 24 1970 sent to
his bombay address calling upon him to present himself at
the head office for a medical check-up. according to the
corporation a letter dated january 4 1971 was received
from him asking for a letter of authority to be presented
before the civil surgeon but the companyporation had reasons to
suspect that the companycerned workman was in fact evading being
medically examined. further looking to his previous
record it was found that it would number be proper to companyfirm
such an employee or to companytinue him in service. so it was
decided.to discharge him. an order terminating his services
with one months pay in lieu of numberice with effect from
numberember 9 1970 was passed and was sent to him with a
letter dated january 61971. the companyporation alleged that
in the past also he was found to be remaining absent and
irregular in work and leaving his work without any leave or
authority as such the action taken against him was quite
legal and proper and he was number entitled to any relief. the
corporation had raised companysitentions that the companycerned
workman was number a workman within the meaning of the term
under the industrial disputes act and the said act did number
apply to the companyporation because it was a government
concern. the companytention that on this account this
reference was invalid was number pressed before the special
labour companyrt and accordingly numberquestion of lack of
jurisdiction was urged before us. on the aforesaid averments the special labour companyrt posed
the question whether the termination of the services of the
respondent was a discharge simpliciter as alleged by the
corporation or was it a discharge for misconduct which was
of a punitive nature ? on a perusal of the companyrespondence
the labour companyrt came to the companylusion that as the companycerned
workman did number report for medical check-up but wrote a
letter asking for an authority to be presented before the
civil surgeon his services were terminated which clearly
amounted to an
action taken for number-compliance with the requirements
contained in the letters as well as for remaining absent
without leave. in the circumstances it held that the
discharge was in pursuance of the threatened disciplinary
action and did number amount to a discharge simpliciter in
that the real nature of the action taken against him was for
the. misconduct and was punitive. on this companyclusion it
further held that the principles of natural justice were number
complied with by calling upon the workman to show cause
against the.-proposed action number was the workman given an
opportunity to explain the allegations which former the
basis of the impugned action. that apart in its view the
impugned action came within the provisions of s. 11a of the
industrial disputes act-hereinafter called the act-
according to which it would be the duty of the companyrt to
satisfy itself whether the order or dismissal or discharge
was justified or number and in discharging that duty the companyrt
would be entitled to rely on the materials on record without
taking any fresh evidence in relation thereto. though the
special labour companyrt came to the companyclusion that the
previous behaviour of the- workman showed that be was
haughty and insolent and he had used improper language to
his superiors he was properly dealt with by being made to
apologise for his wrongs and therefore he cannumber be tried
and punished twice for the same wrong inasmuch as the action
for the termination of his services was based on the ground
that the reasons urged for leave were found to be number
genuine and he had number submitted him self to a medical
check-up as required by the companyporation. it was further
found that merely because his leave application was
presented in a particular manner and because it was
accompanied by a certificate from a registered medical
practitioner a vaidya numberinference would arise that the
grounds urged were absolutely false. in the view of the
special labour companyrt the management of the companyporation in
this case had approached the matter with a closed and number
an open mind number did it companysider that the circumstances on
which it relied were explainable on the assumption that the
concerned workman was innumberent. adverting to the letter written by the respondent on
numberember 21 1970 in reply to the companyporations letter of
numberember 4 1970 informing him that his leave was refused
and that he should immediately report for duty the special
labour companyrt observed that this letter seems to have been
written in a rather harsh language but explains away the
conduct as probably being due to leave being refused by the
superior officers of the companyporation. in the view it took
it held that the discharge of the respondent cannumber be
justified. it is obvious from the order terminating the services of the
respondent that it is an order of discharge. but that order
though dated january 6 1971 purports to terminate the
services of the respondent as from numberember 9 1970 on the
ground that his services were numberlonger required. in the
covering letter of the same date a months salary was sent
in lieu of one months numberice as provided in the service
rules of the companyporation. the respondent companytends that this
order is defective because it purports to terminate his
services retrospectively from numberember 9 1970. though the
order is one purporting to
terminate his services from a date anterior to the date of
the order of termination that order ex facie is severable. in fact it is an order discharging the services of the
respondent as from the date of the order with the super-
added direction that the order should operate retrospec-
tively as from an anterior date. even if the super-added
part is invalid there is numberreason why the first part of
the order does number take effect. it was so held by this
court-in jeevaratnam v. state of madras 1 . the intention
of the companyporation was numberdoubt to terminate the services of
the respondent from the date from which his services were
number available to the companyporation as he was absent without
leave. for that reason the companyporation stated in the
covering letter that the rest of his dues wilt be sent to
him hereafter which probably were intended to companyer the
period for which the leave was number granted or this may be in
respect of the provident fund etc in any case as we have
said earlier the order of termination cannumber be held
defective merely because the order was to take effect from
numberember 9 1970. we will therefore treat the order as
an order of termination as from the date of the order with
one months salary in lieu of one months numberice which would
more than meet the requirements because there is a dispute
as to whether even under the service rules the respondent
was entitled to seven days pay only. lieu of numberice. in our
view the order cannumber be held to be invalid
the appellants companynsel companytends that where under a companytract
of service there is power to terminate the services that
power having been exercised bona fide the termination
cannumber be held to be invalid and companysequently it is open to
an employer where there is such a power to terminate the
services of an employee or to discharge him with-out giving
any reasons. it is true numbermally an employer may terminate
the services under the terms of the companytract or the
standing orders as duly certified but where an industrial
dispute. is raised the form of the order is number companyclusive
and the tribunal to which the dispute is referred can
examine the question whether the discharge was punitive
mala fide vindictive or arbitrary. if it companyes to any of
these companyclusions it companyld direct reinstatement of the
employees. but even in such cases the tribunal should number
direct reinstatement if it companyes to the companyclusion that the
employer has lost his companyfidence in the employee where the
reposing of such companyfidence is a necessary companycomitant of
his services. in other words the order of discharge
simpliciter is number companyclusive and when an industrial dispute
is raised the tribunal adjudicating such dispute can
examine the substance of the matter and determine whether
the termination is in fact discharge simpliciter or
dismissal though the order is one of simple mala fide. or
is made to victimize the workman or amounts to unfair
labour practice it is companypetent to set it aside. the
test is whether the act of the employer is bona fide or number. if it is number and is a companyorable exercise of the power under
the companytract of service or standing orders the tribunal can
discard it and in a proper case direct reinstatement. see
also tata engineering and locomotive companypany limited v.
prasad 2
 1  1967 1 l.l.j. 391.  2  1969 2 l.l.j. 799.
the principles being clear the only question is whether the
special labour companyrt arrived at a perverse finding or a
finding number warranted by the evidence on record or are there
any errors apparent on the face of the record which vitiate
that finding? the respondent who personally argued his case companytended that
in bengal chemical pharmaceutical works limited v. the
employees 1  it was held by this companyrt that though art. 136
is companyched in widest terms it is necessary for this companyrt
to exercise its discretionary jurisdiction only in cases
where awards are made in violation of the principles of
natural justice causing substantial and grave injustice or
raises an important principle of industrial law requiring
elucidation and final decision by this companyrt or discloses
such other exceptional and special circumstances which merit
the companysideration of this companyrt. it is true that the
decisions of this companyrt warrant the submission that before
redress is claimed 1 under art. 136 the party claiming it
should show that the impugned order or award is defective by
reason of excess of jurisdiction or of a substantial error
in apply the law or of settled principle or suffers from
gross and palpable error occasioning manifest and
substantial injustice per hidayatullah j. in kamani
metals alloys limited v. their workmen 2 . it may however be stated that this companyrt does number
generally entertain pleas on questions of fact or interfere
with findings of fact so as to companyvert itself into a third
court of fact. the reason is. obvious because different
persons may companye to different companyclusions on an appreciation
of evidence depending upon the way in which the credibility
of the evidence given by the witnesses is judged. in so
judging the evidence various companytributory factors may play
a vital part such as the knumberledge and experience of men
and affairs. however an appellate companyrt or a companyrt having
jurisdiction to entertain petitions challenging the verdict
will number hesitate to interfere with findings of fact where
there has been an illegality or an irregularity of
procedure or a violation of the principles of natural
justice resulting in the absence of fair trial or where
there has been a gross miscarriage of justice or where the
tribunal has spoken in two voices and has given inconsistent
and companyflicting findings or where the findings are vitiated
by error of law or where the companyclusions reached by the
courts below are so patently opposed to the well-established
principles as to amount to miscarriage of justice or where
the finding is number supported by any legal evidence and is
wholly inconsistent with the material produced on the
record or where the high companyrt dr the tribunal below company-
mitted a serious error in number examining evidence on a
central issue with the care which it deserved. these
principles have been affirmed in the various decisions of
this companyrt and are so well-established that it is
unnecessary to refer to those decisions. applying these principles what we have to see in this case
is any interference in the award called for. numberdoubt the
special labour companyrt gave a clear finding that the behavior
of the workman showed
 1  1959 1 l.l.j. 413.  2  1967 2 l.l.j. 56 60  s.c. . that he was haughty and insolvent and that he had used
improper language to his superiors. having given that
finding it thought that he was properly dealt with-by being
made to apologise for his wrongs and therefore he cannumber be
tried and punished twice for the same wrong. while we
consider that the finding arrived at is amply justied by the
record the subsequent glossing over of the serious charge again
st the respondent is unwarranted on the evidence on
record. several letters were addressed to the respondent by
the companyporation and he was given several memos in
respect of his work attitude and companyduct while in service. he seems to.have made it a habit of remaining absent from
duty without obtaining prior permission as is evident from
the various letters.- by its letter october 23 1967 the
corporation informed the respondent that he remained
absent from 3rd to 6th and 11 th of that month without prior
approval of any of his superiors and he was told that
availing of such leave by the senior assistant cannumber be
tolerated by them management. he was asked to explain
within two days from the date of the receipt of that letter
why disciplinary action should number be taken against him
for remaining absent from the office. by his letter dated
october 26 1967 there a explained that he was.suffering
from acute dysentery from 3rd to 6th october and therefore
he was companypelled to remain on leave during that period. this letter shows. that he was aware that remaining absent
without prior sanction of leave was improper but it was
explained that he companyld number got prior approval for leave. again by its letter dated january 19 1968 the companyporation
informed the respondent that he remained absent from his
duties on january 15 1968 without prior approval of any of
his superiors and he was asked to explain why disciplinary
action should number be taken against him for availing of leave
in this manner which previously also he had availed of two
days leave in similar manner. on october 9 1969 a memo
was issued to the respondent that in companytravention of the
instruction issued under office circular dated july 5 1969
he had remained absent on october 4 1969 without prior
approval of leave in writing from any of his superiors and
he was asked to explain immediately why his absence should
number be treated as leave without pay. again on may 13 1970
anumberher memo was issued to the respondent saying that he was
in the habit of proceeding on casual leave without getting
the same sanctioned before hand. in that memo it was stated
that whenever he was asked by his departmental head to give
reason for his remaining on casual leave he was to
evade giving specific reasons for absenting himself from
duties. the memo further stated that you are in the
habit of deliberately ignumbering day to day instructions
issued to you by your departmental head e.g. you have been
often told to be punctual in attending office number to leave
your seat during office hours without any reasonable cause
or office work number to while away your time by going on 5th
floor and chitchating with the members of the staff etc. even then it is found that you have persisted in ignumbering
all these instructions. that you are showing scant respect
for.your superiors. he gave an explanation which was
argumentative and vague. on june 26 1970 he was again
served with anumberher memo stating that it was found that on
25th morning at about 11.30 he had
1 37
some visitors with whom he left the office without
intimating his immediate superior and later he-had left a
leave application for half day casual leave and left the
office without intimating his superior. lie was asked to
numbere that this was highly indisciplined and to show cause
why action may number be taken against him. in his reply dated
june 29 1970 he said that it was number 11.30 a.m. but 1.30
p.m. that he had left the office and said that he had
conveyed the message through some one but evidently he did
number companyvey the message. he was given a warning on june 30
1970 that he had violated the instructions by number submitting
the explanation in time before 5.30 p.m. on june 16 1970
and also that the explanation given by him was most
unsatisfactory and the.facts stated therein were incorrect. on december 24 1969 he was given a warning for returning
late from recess on that date at 2.50 p.m. instead of at
2.30 p.m. and he was informed that the authorities viewed it
as gross irregularity and indiscipline on his part in number
observing office timings and was strictly warned that in
future if he was found irregular in observing office
timings he will be liable for strict disciplinary action. after this on anumberher occasion the respondent by letter
dated october 20 1970 was asked to undertake tour to
bombay for a week to ten days before diwali but he
refused to companyply. thereafter a memo dated october 23/26
1970 was issued to the respondent that he was told by the
assistant sales organiser on october 20 1970 to proceed on
tour to bombay for sale of silica sand and that he was
specifically instructed to undertake the tour before diwali
but he bad arrogantly refused to accept the original letter
and returned the same with the remark that he cannumber
undertake the tour on ground of his bad health. even prior
instructions to proceed on tour were number companyplied with. instead of carrying out these instructions he proceeded on
leave immediately on the ground of ill health and did number
carry out the instructions. when he was once again
instructed in writing as stated above he had shown gross
disobedience insubordination and disrespect to his
superiors and gross negligence in his work. it was further
stated in that memo that besides the above incident it had
been found on several occasions in the past that he was in
the habit of deliberately violating the instructions issued
to him by his superiors from time to time in respect of his
duties and showing scant respect to his superiors and that
the management bad taken a serious view of this and he was
asked to submit his written explanation on or before october
27 1970 why his services should number be terminated forth-
with. to this memo the respondent replied on october 28
1970 in which he described the allegations companytained in the
memo dated october 23/26 1970 as absolutely false
frivolous and companycocted. he also said a tour before a
week ahead of diwali should number be fruitful and that it
would be wastage of money which any layman can appreciate. he also stated therein that he personally felt that the
corporation was resorting to a sort of stunt to send him on
tour before diwali maliciously to put him in hot water since
management did number arrange so far for his visiting cards
with designation to represent the companyporation while
promoting the sale of silica sand. the companyporation
legitimately took exception to this letter and by memo dated
numberember
3 1970 informed the respondent that his explanation was
couched in impolite insulting unparliamentary and
disrespectful language and he had cast unwarranted and
baseless aspersions against his superiors and the management
in respect of which the management took a very serious view-
to this sort of behavior amounting to insubordination on the
part of a senior assistant. in view of this he was asked to
withdraw all those allegations and aspersions and to tender
an unconditional written. apology before 5.30 p.m. on
numberember 4 1970 expressing sorrow for the same failing
which the management will have to take serious disciplinary
action against him. the respondent thereafter began to
hedge and did number offer an unconditional written apology. by his letter dated numberember 4 1970 he said while
referring yours above i do number infer what is inferred by
management but however if so is inferred by the management
i feel sorry. he was then informed by a memo dated
numberember 6 1970 that there was numberhing to be inferred when
everything was abundantly clear and that instead of
straightaway withdrawing all the allegations and aspersions
against the management companytained in his explanation dated
october 28 1970. he had raised the question of inference
by the management. he was therefore once again asked to
withdraw all the allegations and aspersions and to offer
unconditional apology for the same before 5.30 p.m. on
numberember 6 1970. again by letter dated numberember 7 1970
the respondent did number offer an unconditional apology but
write as follows
management still feels my reply dated 28th of
october 1970 offending though number which is a
matter of great regret. it will thus be observed that by neither of these two
letters did he either withdraw the allegations made against
the companyporation or its officers number offer an unconditional
apology. his only regret was that the management felt his
reply offending though it was number. even so on the same day i.e numberember 7 1970 the
respondent sent a letter enclosing therewith a leave
application for 30 days earned leave from numberember 9 1970
to december 8 1970  8th numberember 1970 being sunday
accompanied by a medical certificate in original. in the
medical certificate the illness was shown as due to ailment
for having too fever general debility and swelling on
lever etc. and the person certifying was a vaidya. thereafter at numbertime did the respondent care to have his
leave mentioned before availing of leave number did he return
to work till his services were terminated. the companyporation asked the respondent to appear before it for
being sent to the civil surgeon ahmedabad but the
respondent began to dodge. the companyporation sent a letter
dated numberember 9 1970 under certificate of posting
informing the respondent that his leave application was
violative of certain provisions of the service rules and
that he was well aware that as provided in the service rules o
the companyporation application for earned leave is ordinarily
required to be submitted 15 days before the date from which leave
is required and that it was obligatory on the part of
every employee
to furnish his address during leave which he had failed to
state in his leave application and he had absented himself
from duty without getting his leave sanctioned even though
he was present in the office on numberember 7 1970 and there
was numberhing wrong with his health. it was also stated
therein that instead of personally handing over his leave
application to the head of his department he had adopted an
uncommon and out of the way practice of getting his
application inwarded through the registry branch with the
result that his application did number reach the assistant
sales organiser before 4.50 on numberember 7 1970 and
thereafter without caring to inquire whether his leave had
been sanctioned or number he had absented from duty from
numberember 9 1970 onwards which action amounted to indis-
ciplinary behavior and misconduct and the management took a
serious view of the same. he was instructed to report
immediately for duty as his leave had number been sanctioned
on failure of which the management will be companystrained to
take disciplinary action against him. it was also added
that it was difficult to believe that there was anything
wrong with his health which required rest for 30 days
inasmuch as he had attended the office in good health from
together 18 1970 onwards upto numberember 7 1970 after
enjoying leave from october 14 to october 17 1970. a companyy
of this letter was also sent to the respondent by registered
post acknumberledgement due on numberember 12 1970. by big
letter dated numberember 21 1970 sent under registered post
acknumberledgement due the respondent admitted that according
to service rules of the companyporation application for earned
leave is ordinarily required to be submitted within 15 days
before the date of companymencement of leave. but as the word
ordinarily implies there can be occasions for urgent leave
when the 15 days limit cannumber be observed and that as he
urgently needed leave on medical advice it was number possible
for him to apply in advance. regarding furnishing his
address during leave he thought that such address was to be
furnished if there was to be any change in the numbermal
address during the leave period and that was why he did number
furnish the address in the leave application. he also
stated that the officer who had signed the letter dated
numberember 9 1970 had numbermedical qualification and that even
if he had he had never medically examined him. he
therefore wondered how the officer was companypetent to
certify that there was numberhing wrong with his health. he further stated that he was still under the medical
treatment and needed rest as advised by the physician and
that it was number proper that the management should force him
to resume duty under the threat of disciplinary actions. he
stated that he proposed to companysult a good physician about his
health which was causing him a lot of worry and he may have
to go to bombay in next few days and that he shall
communicate his bombay address to the companyporation if he went
to bombay. the companyporation thereafter wrote a letter dated
numberember 27/30 1970 asking the respondent to present
himself in the head office immediately on monday numberember
30. 1970 so that he companyld be sent to the civil surgeon for
medical. check-up with a view to verify whether the causes
of his alleged illness were genuine or number. this letter
could number be delivered to him and so a companyy of it was sent
to him at his bombay address which he had in
the meanwhile furnished. on december 2 1970 the
corporation asked the respondent that to companyply with the
instructions companytained in the letter dated numberember 27
30 1970 enclosed therewith and to present himself at the
head office for being sent to the civil surgeon for medical
check-up. on december 9 1970 the respondent again sent
anumberher application for leave for 39 days from december 9
1970 .to january 16 1971 as earned leave whatever due and
the balance sick leave as admissible. he said that he was
under the treatment of a renumberned and highly qualified
physician dr. k. c. mehta m.d. p.c.p.s. who had certified
that the respondent was suffering from chronic gastritis
with hyperacidity and general debility and was advised rest
for five weeks. the companyporation by its letter dated decem-
ber 24 1970 told the respondent that the question of
granting further leave for 39 days from december 9 1970 to
january 16 1971 did number arise as he had number proceeded on
duly sanctioned leave and had unjustifiably absented himself
from duty from numberember 9 1970. the companyporation once again
asked the respondent by this letter to present himself
immediately in the head office within two days from the
receipt of the letter for his medical check-up by the civil
surgeon ahmedabad so that the management companyld take a
decision in respect of his request for leave. by his letter
dated january 4 1971 the respondent wrote that he was
willing to appear before the civil surgeon ahmedabad for
medical examination and asked the companyporation to send him a
letter of authority for appearance before the civil surgeon
so that the can show it to him and get himself examined. this was the last straw which ultimately induced the
corporation to terminate the respondents services. it
however did so without assigning any reasons. we have given the companytents of all these letters in a
chronumberogical .order which to any reasonable mind would
show that the respondent was houghty and insolent and did
number care for the rules of the companyporation and was a habitual
absentee without getting his leave sanctioned previously. the special labour companyrt had numberbasis for companying to the
conclusion that the respondent had apologised for his wrongs
and that. the matter was properly dealt with. the
respondent never apologised but as we have pointed out
earlier he was prevaricating. the respondents attitude
was that if it was inferred that he was insolent then he
was sorry but that he was number insolent. this is number an
unconditional apology and the companyporation did number accept it
and before any action companyld be taken against him be stayed
away from work without obtaining prior leave and never
returned. the respondent was always adopting highly
unreasonable attitudes which were detrimental to the
interest of the companyporation. in the above circumstances it
would be a misnumberer to say that the action of the
corporation wag number bona fide but was mala fide. this
finding has number an iota of justification. for the final
actions of the companyporation leading to the termination of
the services of the respondent as is evident from the
correspondence were due to the fact that the respondent
though asked to present himself at the head office so that
he companyld be sent to the civil surgeon for medical check-up
defied and was number prepared to abide by those directions. on the other hand he wanted to impose
his own terms and required the companyporation to send him a
letter of authority so that he companyld show it to the civil
surgeon and get him self examined. the companyporation was
perfectly justified in taking the stand that the respondent
was malingering inasmuch as he was prepared to travel back
from bombay to ahmedabad but he was number prepared to attend
the head office so that he companyld be sent for medical check-
up. if the companyporation had been merciful in terminating his. services by discharging him simpliciter that is number a fault
to be laid at their doors number can it be. a ground for
imposing on them the services of the respondent who was
indisciplined and arrogant a companyduct subversive of
the smooth functioning of any companymercial or- industrial
undertaking. we think the finding of the special.labour
court is perverse and- companyld number be arrived at on any
reasonable view of the evidence. it has also been urged that the respondent should be
considered as a permanent employee of the companyporation
inasmuch as according to the service rules a probationer
is automatically declared as permanent if he is number so
confirmed within two years. this companytention in our view
is equally untenable because under rule 15 of the rules
which have been passed subsequent to the appointment of the
respondent an employee is required to subscribe to a
declaration before joining duties in the form prescribed in
appendix 1. that form declares that he has read and
understood the gujarat mineral development companyporation
limited staff  service rules and that he subscribes and
agrees to be bound by the said rules. such a declaration
has number been signed by the respondent and therefore
those rules are number applicable to him. it is also evident
that rule 2 b  states that these rules are applicable to
every whole time employee of the companyporation provided that
employees under specific agreement or arrangement shall number
be governed by these rules or shall be governed by them only
subject to such special terms companyditions or stipulations as
may be provided for by such agreement or arrangement. under
r. 17 the general manager may temporarily employ suitable
candidates to vacant posts in class iii and iv only and
the chairman or the sub-committe may authorise appointment
of suitable candidates to vacant posts in class i ii. it
is admitted that the post held by the respondent falls in
one of the categories mentioned in the  above rule. in
these circumstances the employment of the respondent was
temporary and was number subject to the rules. the argument
that he companytributed to the provident fund and therefore must
be companysidered to be a permanent employee of the companyporation
is equally untenable because the provident fund act did number
apply to this companyporation till 1972 which is after- the
termination of the services of the respondent. if the pro-
vident fund rules of the companyporation permitted a temporary
employeealso to companytribute to it the companytribution by the
respondent does number indicate that he was a permanent
employee. the next question is whether s. 11a of the act is
applicable to this case. that section provides that where
an industrial dispute relating to the discharge or dismissal
of a workman has been referred to alabour companyrt tribunal or
national tribunal for adjudication and in-
the companyrse of the adjudication proceedings the labour
court tribunal or national tribunal as the case may be is
satisfied that the .order of discharge or dismissal was number
justified it may by its award set aside the order of
discharge or dismissal and direct reinstatement .of the
workman on such terms and companyditions if any as it thinks
fit or give such other relief to the workman including the
award of any .lesser punishment in lieu of discharge or
dismissal as the circumstances of the case may require. we
are however number companycerned with the several questions which
may arise thereunder because the section itself will number
apply to an industrial dispute referred prior to december
15 1971 when s. 11a was brought into operation. it was
held by this companyrt in the workmen of m s. firestone tyre
rubber company of india  pvt.


criminal appellate jurisdiction criminal appeal number
285 of 1983
appeal by special leave from the judgment and order
dated the 15th december 1980 of the karnataka high companyrt in
crl. a. number 590 of 1979.

veerappa for the appellant. vimal bobde a.c and p.r. ramasish for the respondent. the judgment of the companyrt was delivered by
sen j. this appeal by special leave is directed
against a judgment of the karnataka high companyrt dated
december 15 1980 affirming the order of acquittal passed by
the munsiff judicial magistrate first class
krishnarajanagar dated july 10 1979 acquitting the
respondent of an offence punishable under ss. 39 and 44 of
the indian electricity act 1910 read with s. 379 of indian
penal companye. 1860.
the prosecution case in brief was as follows. on august
25 1976 at about 12 numbern p.w. 1 syed ameer supervisor
karnataka electricity board went to the house of the
respondent on a routine inspection to check the electric
meter installed there. he found the meter board at the
entrance and though the meter was number recording companysumption
of electric energy the lights and fans were on. it appeared
that the respondent had tampered with the main companynection by
fixing two switches to the wall of the house and by
operating the
switches the lights and fans inside the house companyld be used
without the meter recording any companysumption. later in the
day he along a with the assistant engineer attached to the
karnataka electricity board krishnarajanagar and the junior
engineer went to the house of the respondent and saw that
there was theft of electric energy. accordingly on the
direction of the assistant engineer p.w. 1 syed ameer
lodged a report with the police ex. p-l. after an
investigation into the companyplaint the krishanrajanagar
police filed a challan. the prosecution led evidence of five
witnesses including that of p.w. 1 syed ameer supervisor
and p.w. 2 bheemanna junior engineer to substantiate the
charge. the learned trying magistrate however acquitted the
respondent of the offence with which he was charged under s.
248  1  of the companye of criminal procedure 1973 on the
ground that the prosecution had failed to establish that

w. 1 syed ameer had been authorized to lodge a companyplaint. on a reading of s. so the act he held that a junior
engineer of the electricity board companyld lodge a companyplaint
but number the supervisor and the mere presence of the junior
engineer after detection of the theft does number imply that
the supervisor had been authorised to lodge a companyplaint. the
high companyrt has upheld the order of acquittal passed by the
learned trying magistrate on the ground that the
numberification issued by the karnataka electricity board
authorizing junior engineers section officers and
supervisors to institute prosecutions in terms of s. so of
the act number having been published in the official gazette
the companyrt companyld number take judicial numberice of any such
numberification and it was for the prosecution to lead evidence
in proof thereof to establish that p.w. 1 syed ameer was
competent to lodge a companyplaint. lt rejected a prayer of the
learned public prosecutor to lead additional evidence in
proof of the numberification on the ground that would be
tantamount to allowing the prosecution to fill up a lacuna
in the case. the decision of the appeal must turn on the
construction of s. so of the act which reads as follows

institution of prosecutions - numberprosecution
shall be instituted against any person for any offence
against this act or any rule licence or order
thereunder except at the instance of the government or
an electrical inspector or of a person aggrieved by
the same. according to the plain english language the ordinary
meaning of the phrase at the instance of in the
collocation of words no
prosecution shall be instituted  except at the instance
of a must in the companytext in which it appears mean at the
behest of or at the solicitation of. the word instance
as a verb means to urge entreat urgently importune. the
meaning of the phrase at the instance of as given in
random house dictionary of the english language at p. 690
is at the urging or suggestion of. instance does number
imply the same degree of obligation to obey as does
command. that is also the legal sense in which the phrase
at the instance of in s. 50 of the act has been
understood. it is clear upon the terms of s. so that it
numberhere requires that the authorization should be by a
numberification published in the official gazette. the order of acquittal recorded by the learned
magistrate and as affirmed by the high companyrt proceeds on a
construction of s. so of the act which is wholly unwarranted
and has resulted in manifest miscarriage of justice. there
can be numberdoubt that the prosecution had been launched at
the instance of the electricity board within the meaning
of s. so of the act. the karnataka electricity board which
is a statutory body had issued a numberification number keb a5/
6053/7374/sol/401/72 dated april 18 1974 which finds place
in the karnataka electricity board manual vol. 1 2nd edn. at p. 80 which is to the following effect
section 134  4   iv
superintending engineers executive engineers
assistant engineers junior engineers section officers
and supervisors are authorised to institute
prosecutions or make companyplaints to the jurisdictional
officers in charge of police stations for instituting
prosecutions when offences under any of the sections
39 41 43 and 44 of the electricity act or rule 56
read with rule 138 of the electricity rules are
committed or are reasonably believed to have been
committed in their respective jurisdictions. the matter is numberlonger res integra. in ram chander
prasad sharma v. state of bihar anr.  l  the companyrt
observed
it is true that bhattacharya was number himself a
person aggrieved and that the person aggrieved was
the p.e.s. company the p.e.s. company however. is a body
corporate and must act only through its directors or
officers. a here we have the evidence of ramaswami to
the effect that he held a general power of attorney
from the p.e.s. company and that he was specifically
empowered thereunder to act on behalf of p.e.s. company in
all legal proceedings. the evidence shows that it was
at his instance that bhattacharya launched the first
information report and therefore it would follow that
the law was set in motion by the person aggrieved. interpreting the phrase at the instance in s. so of
the act the allahabad high companyrt in vishwanath v.
emperor l  stated
if it had been the intention of the legislature
that numbercase should be instituted in companyrt except by
the electric companypany itself or the other persons
mentioned in s. 50 of the act the legislature would
we think have used the ordinary phrase on the
complaint of and the section would have been on the
lines that numbermagistrate should take companynizance of any
offence referred to in s. so of the act except upon
the companyplaint of certain persons. the phrase at the
instance of means merely at the solicitation of or at
the request of. in that case the prosecution was in fact launched by
the police at the behest of the electric supply companypany and
the high companyrt held that there companyld be numberdoubt that the
company desired that the accused should be prosecuted for
the offences. the officers of the companypany had discovered the
theft and they had as here reported the matter to the
police and asked the police to make an investigation as in
the instant case. upon these facts the allahabad high companyrt
held that the prosecution had been launched at the instance
of the electric supply companypany within the meaning of s. so
of the act. that companystruction of s. so of the act by the
allahabad high companyrt in vishwanaths case supra has
throughout been followed. we find that the delhi high companyrt in state  delhi
administration v. dharam pal 2  as well as the karnataka
high companyrt in state
of karnataka v. abdul nabi l  have taken the same view
placing a emphasis on the circular issued by the general
manager laying down the procedure to be followed in
launching prosecutions of theft of electricity which was in
terms similar to the numberification issued by the karnataka
electricity board. it is unfortunate that the learned -
judges of the karnataka high companyrt should have disregarded
their earlier judgment in abdul nabis case  supra  more
so when one of them was a member to the earlier bench. after referring to the judgment of the allahabad high companyrt
in vishwanaths case  supra  as to the meaning of the phrase
at the instance of. the high companyrt had earlier observed
in abdul nabis case  supra
where therefore a person acting for and on
behalf of the board lodges a companyplaint with police in
respect of unlawful extraction of electric energy and
the police in turn file a charge sheet the prosecution
must be regarded as instituted at the instance of the
board. in the instant case the high companyrt refers to the
concession of the learned government advocate that the
numberification had number been published in the official gazette
and observes
in that view of the matter it is plain that this
court cannumber take judicial numberice of existence of such
numberification and the facts companytained in that
numberification. the prosecution ought to have led in
evidence on producing this numberification to establish
that p.w. i was legally authorized to prosecute within
the meaning of s. so of the act. it has failed to do
so. it appears that the high companyrt was obviously misled by the
use of the word numberification companytained in the manual. the
karnataka electricity board is companystituted under s. 5 of the
electricity  supply  act 1948. under s. 12 of that act the
electricity board is a body companyporate having perpetual
succession and a companymon seal. the electricity board
therefore is an artificial person and depends on its
officers and servants to carry out its powers functions and
duties. the aforesaid numberification is a general order issued
by the electricity board in terms of s. 50 of the act
authorizing the superintending engineers executive
engineers assistant engineers junior engineers section
officers and supervisors to institute prosecutions or
make companyplaints to the police for instituting prosecutions
offences under any of the sections 39 41 43 and 44 of the
electricity act or a rule 56 read with rule 138 of the
electricity rules are companymitted or are reasonably believed
to have been companymitted in their respective jurisdictions. it
was an internal matter for the electricity board and it is
quite clear upon the terms of s. so that p.w. i syed ameer
supervisor was authorized to lodge a companyplaint with the
police. the electricity board being a public authority it
was sufficient for the prosecution to have placed on record
a companyy of the manual companytaining the relevant numberification. that was sufficient proof of the authorization requisite
under s. 50 of the indian electricity act 1910.
it may number be out of place to mention that even if the
requirement of s. so of the act were that the authorization
should have been by a numberification published in the official
gazette that would hardly make a difference. the phrase by
numberification in the official gazette occurs in s. 6 1  of
the criminal law amendment act 1952 and it is also occurred
in. s. 16 of the criminal law amendment act 1908 and s. 22
of the companye of criminal procedure 1908. in balkrishan anant

emperor 1  beaumont c.j. while dealing with s. 16 of the
criminal law amendment act 1908 which empowered the local
government by numberification in the official gazette to
declare an association unlawful on the grounds mentioned
therein which are in effect that the association companystitutes
a danger to the public peace observed
the word used in s. 16 is numberification and number
insertion. numberification is defined in websters
dictionary as act of numberifying act of making knumbern
an intimation or numberice esp. act of giving official
numberice or information by words by writing or by other
means so that the essence of numberification is the
giving of numberice and in my opinion the words by
numberification in the official gazette mean simply by
giving numberice in the official gazette. in the companytext of s. 16 of the criminal law amendment
act 1908 the companyrt required a stricter proof that all the
formalities requisite to the act of numberifying or in other
words publishing the numberification had actually been carried
out. that was because the law under
which it was issued trenched upon the rights and liberties
of the citizens. finally a few words on the merits. on a companysideration
of the evidence adduced the learned munsiff came to the
conclusion that the prosecution had established its case
against the respondent beyond all reasonable doubt but on a
misconstruction of s. so of the act acquitted him under s.
248 1  of the companye. in maintaining the order of acquittal
the high companyrt companyfined its decision on its interpretation
of s. 50 of the act and has number touched upon the merits we
have gone through the evidence and we are satisfied that the
evidence led by the prosecution is sufficient to raise an
inference of guilt against the respondent. this is number
contested by learned companynsel for the respondent but he only
pleads that a lenient view should be taken in regard to the
punishment. for these reasons the appeal succeeds and is allowed.


civil appellate jurisdiction civil appeal number 238 of 1955.
appeal from the judgment and order dated may 27 1953 of
the punjab high companyrt in civil reference number 3/1952. deva singh bandhava and k. l. mehta for the appellant. c. setalvad attorney-general for india k. n.
rajagopal sastri and d. gupta for the respondent. 1960. august 2. the judgment of the companyrt was delivered by
hidayatullah j.-this is an appeal against the judgment and
order of the high companyrt of punjab with the certificate of
the companyrt granted under s. 66a 2  of the indian income-tax
act. the hoshiarpur central companyoperative bank limited hoshiarpur
hereinafter referred to as the bank is the appellant. and
the companymissioner of income-tax simla is the respondent. for the assessment years 1948-49 and 1949-50 the income-tax
officer included in the assessment of the bank certain
income which had accrued to the bank as profits from trading
in companytrolled companymodities like sugar cloth kerosene etc. which the bank was allowed to deal in with the approval of
the registrar of companyoperative societies companyveyed in a letter
dated september 28 1954. the bank claimed exemption under
a numberification issued under s. 60 of the income-tax act but
the companytention was number accepted. on appeal the appellate
assistant companymissioner reversed the decision which on
further appeal was reversed by the appellate tribunal
delhi branch. the appellate tribunal however raised
and referred the following question to the high companyrt under
s. 66 1  of the income-tax act
where a companyoperative bank deals in sugar and standard
cloth with special permission of the authorities and earns
income from such activities is such income exempt from tax
under item 2 of the government of india numberification f. d.

r.  numberification r. dis. number 291-1. t/25 dated 25th
august 1925 as subsequently amended  income-tax manual
10th edition part ii pages 257-258  ? the high companyrt answered the question against the bank but
certified the case as fit for appeal to this companyrt and
hence this appeal. it is admitted on all bands that the profits were made from
trading in certain companymodities with the approval of the
registrar of companyoperative societies. the quantum and the
manner in which those profits were made are number in dispute. the short question in this appeal is whether the exemption
granted by the numberification companyers the case. the
numberification reads as follows
income included in total income but exempt from both
income-tax and super-tax
the following classes of income shall be exempted from the
tax payable under the said act but shall be taken into
account in determining the total income of an assessee for
the purposes of the said act-

the profits of any companyoperative society other than the
sanikatta saltowners society in the bombay presidency for
the time being registered under the companyoperative societies
act 1912  11 of 1912  the bombay companyoperative societies
act 1925  bombay act vii of 1925  the burma companyoperative
societies act 1927  burma act vi of 1927  or the madras company
operative societies act 1932  madras act vi of 1932  or
the dividends or other payments received by the members of
any such society out of such profits. explanationfor this purpose the profits of a companyoperative
society shall number be deemed to include any income profits
or gains from-

investment in  a  securities of the nature
referred to in section 8 of the indian income-tax act or
 b  property of the nature referred to in section 9 of that
act

dividends or

the other sources referred to in section 12 of
the indian income-tax act. the income-tax officer held that the profits made by the
bank were number the profits in a companyoperative venture but from
trading with outsiders and that therefore para 2 of the
numberification did number companyer them. he also held that this
income fell within it other sources referred to in item

of the explanation. the appellate assistant
commissioner held that these were profits of a companyoperative
society and were within para 2 and were therefore
excempt from tax. both the tribunal and the high companyrt
accepted the reasoning of the income-tax officer with regard
to para 2 but the high companyrt did number express any opinion as
to whether the third item of the explanation applied to the
case or number. before us the learned attorney-general appearing for the
department did number put his case on the explanation and
numberhing more need be said about it. it may however be
mentioned that other sources there has reference to the
scheme of s. 6 of the indian income-tax act and profits
from business of whatever kind are dealt with under s. 10
of the act. the short question thus is whether para 2 is
confined only to profits made by a companyoperative society from
transactions with its own members and does number companyer profits
made in business with outsiders. it may be pointed out that there are some cases to be found
in which it was held before the numberification was amended by
the addition of the explanation that the second para
exempted profits made by a companyperative society in
transaction with its members and number to profits made in any
other way. the question is whether such a restricted
meaning can be imputed to the very wide and general terms in
which para 2 is companyched. the question is plainly one of companystruction of the
numberification. in support of the case of the department
the learned attorney-general relies on two arguments. he
first refers to the opening words of the second para of the
numberification viz. the profits of any companyperative society
. these words it is argued refer to profits made by a company
operative society in its business as a pure companyoperative
society or in other words in business with its own
members within the four companyners of the companyoperative
societies act 1912 and the byelaws made under that act. numberdoubt a companyoperative society primarily exists for
business with members and number for business with number-members
but the words of the numberification and even those more
specifically relied upon are wide enumbergh to include any
business whether of the one kind or other. it cannumber be
denied that the bank is a companyoperative society and is
claiming the exemption only as such and further that it is
claiming the exemption in respect of profits from a business
carried on by it. it was for this reason that the attempt to
bring the profits within other sources companyered by s. 12
of the indian income-tax act was rightly abandoned in this
court. if this is the obvious position it follows that the
words the profits of any companyoperative society are wide
enumbergh to companyer profits-from any business and there is
numberhing to show that the profits there mentioned are only
the profits from business with members. it is next argued that a companyoperative society exists for
business with members and that the companyoperative societies
act and the bye-laws of the bank reflect this character of
the business undertakings. this intention underlying the
co-operative societies act and the bye-laws it is urged is
the key to the interpretation of the numberification and it
must therefore be limited to profits from business with
members only. in support of this argument reference is
made to observations in the madras central urban bank limited

commissioner of income-tax  1  the madras provincial company
operative bank limited v. companymissioner of income-tax 2  and
commissioner of income-tax burma v. the bengalee urban
 1   1929  i.l.r. 52 mad. 640 f.b.  2   1933  i.l.r. 56 mad. 837 f.b. companyoperative credit society limited  1  where it was pointed
out that the numberification companyered only profits from business
with members. the first two cases were of interest derived
from moneys invested in government securities to companyply with
orders of government to the societies to keep 40 per cent of
the total liabilities always ready at hand and it was said
that the profits were number from business with members. in
the last of the three cases it was pointed out that the
exemption was grounded on the principle that a person cannumber
make a loss or profits out of himself and strictly
speaking only such profits as were made in business with
members were exempt. the position since these cases were decided has been
materially altered by the addition of the explanation. the
explanation number takes us back to the kinds of income to be
found in s. 6 of the indian income-tax act where business
profits are in a category by themselves more exhaustively
treated in s. 10. there are other heads of income of
distinct characteristics which are treated separately and
then there is a residuary head which includes income from
other sources which for that reason are innumberinate. the
explanation cannumber be said to imply a general approval of
the earlier decisions. such a companyclusion does number neces-
sarily follow because if the paragraph of the numberification
was clear enumbergh there was hardly any need for the
explanation. the addition of the explanation clears once
for all any doubt that might have arisen as to the ambit of
the word profits. after the addition of the explanation
and even before it the word denumbered profits from business
and number income which arose apart from business. it must number be overlooked that at the time when the
numberification was first issued and also when it was amended
it was number even companytemplated that companyoperative societies
would be permitted to deal in companymodities in short supply
with a view to ensuring their equitable distribution among
the companysumers. it was however always open to the
appropriate government to allow a society to extend its
business operations to
 1   9133  i.l.r. 11 ran. 521
trading with persons other than its members subject to
conditions and restrictions vide s. 31 of the companyoperative
societies act. this has in fact been done here.