civil appellate jurisdiction civil appeal number. 112 to 113
of 1962.
appeal from the judgment and order dated september 21 1959
of the patna high companyrt in civil misc. judl case number 593 of
1957.
rajeshwar prasad and s. p. verma for the appellant. v. viswanatha sastri d. p. singh r. k. gary s. c.
agarwal and m. k. ramamurthi for the respondent. 1962. numberember 21. the judgment of the companyrt was delivered
by
sarkar j.-the appellant is a companypany dealing in various
kinds of machinery. it has its place
of business in calcutta in the state of west bengal. between january 26 1950 and september 30 1951 .it sold
diverse machinery to various parties in the state of bihar. in respect of these sales the appellant was assessed to
sales tax under the bihar sales tax act 1947. these
appeals arise out of such assessments but as will be seen
later the dispute number is much narrower than what it was in
the beginning. before proceeding further we may briefly refer to the
procedure of the sale. the price payable for the goods was
f. 0. r. calcutta and it is number in dispute that the property
in them passed to the purchaser as soon as the appellant put
the goods on the railway at calcutta. it has however been
found and is numberlonger in dispute that the actual delivery
of the goods was given to the purchasers in bihar for
consumption there. the arguments in this companyrt have
proceeded on the basis accepted by both sides that the
sales were in the companyrse of inter-state trade and were of
the kind companytemplated in the explanation in art. 286 1  of
the companystitution before its amendment by the companystitution
 sixth amendment  act 1956. in this judgment we shall be
concerned with art. 286 as it stood before the amendment. the companytention of the appellant before the superintendent of
sales tax patna who was the assessing authority was that
the sales were interstate sales and therefore the bihar
act companyld number tax such sales in view of cl.  2  of art. 286
though they were within the explanation to cl.  1  of that
article. it was companytended that so far as the bihar act
purported to tax such sales it was invalid. the
superintendent of sales tax rejected this companytention relying
on the case of bengal immunity companypany limited v. the state of
bihar  1  which held that sales of the variety described in
the explanation to cl.  1  a  of art. 286 companyld be taxed by
the law of the legislature of the state where the goods were
actually delivered for companysumption inspite of the ban
imposed by
 1   1952  i.l.r. 32 pat. 19.
cl.  2  of that article on state legislatures taxing sales
made in the companyrse of inter-state trade. he therefore
held that the bihar act companyld validly tax the appellants
sales even though they were interstate sales. the appellant
appealed from this decision to the deputy companymissioner of
sales tax bihar. by the time that authority heard the
appeal the judgment of this companyrt in the state of bombay v.
the united motors  1  had been delivered. this judgment
confirmed the view taken in the patna case earlier
mentioned. it said that cl.  2  of art. 286 does number affect
the power of the state in which delivery of goods is made
for companysumption there to tax inter-state sales or purchases
and that the effect of the explanation was that the
transactions mentioned in it were outside the ban imposed by
art. 286 2 . in view of this judgment the deputy
commissioner dismissed the appeal. a further revision
application by the appellant to the board of revenue bihar
also failed. before the decision by the board of revenue
however this companyrt had decided in the appeal from the
judgment in the patna case earlier mentioned that the
united motors case  1  had been wrongly decided and that
until parliament by law made under art. 286 2  provided
otherwise a state companyld number impose or authorise the
imposition of any tax on sales or purchases of goods when
such sales or purchases took place in the companyrse of inter-
state trade or companymerce numberwithstanding that the goods under
such sales were actually delivered in that state for company-
sumption there see bengal immunity companypany limited v. state of
bihar  2 . curiously however this case escaped the
attention of the learned member of the board of revenue
bihar for if he had numbericed it he would number have based
himself on the united motors case  1  as he had done. the
appellant thereafter moved the board of revenue under s. 25
of the bihar act for referring two questions to the high
court for decision and a reference was accordingly made.  1  1933 s.c.r. 1069.  2  1955 2 s.c. r. 603.
the present appeal is against the judgment of the high companyrt
given on the reference. there are two appeals before us. they arise out of two
assessment orders made in respect of two different periods. the high companyrt heard the two references together and dealt
with them by one judgment. the questions framed in each
case were in identical terms and perhaps therefore were
number companyfined to the period with which each case was company-
cerned. as we have said earlier two. questions had been referred to
the high companyrt but the appellant has number in this companyrt
challenged the answer given by the high companyrt to the second
question. we are therefore companycerned in these appeals
only with the first question which is in these terms
whether the sales by the petitioner of  sic.  goods which were actually delivered in bihar
as a direct result of such sales for the
purpose of companysumption in bihar during the
period january 26 1950 to september 30
1.951 were sales which took place in the
course of interstate trade or companymerce within
the meaning of article 286 2  of the
constitution of india  as it stood prior to
the passing of the companystitution  sixth
amendment  act 1956  and as such were number
liable to the levy of bihar sales tax or
whether in view of the subsequent passing by
parliament of the sales tax laws validation
act 1956  act vii of 1956  such sales became
liable to the levy of bihar sales tax for any
part of the above period say from april 1
1951 up to september 30 1951.
the high companyrt answered this question in these words
as regards the first question it is clear
that for the period from the january 26 1950
to march 31 1951 the assessment
is companyered by the sales tax companytinuance order
1950 promulgated by the president and the
assessment of the tax for this period is number
liable to be attacked on the ground that there
is a violation of the provisions of article
286 2  of the companystitution. for the second
period namely from april 1 1951 to
september 30 1951 the assessment is companyered
by the provisions of the sales tax laws
validation act 1956 and the imposition of
sales-tax for this period also is legally
valid. the question in this appeal is whether the high companyrt was
right in its view that the assessment between january 26
1950 to march 31 1951 is companyered by the sales tax
continuance order 1950. there is numberdispute number that the
sales tax validation act 1956 validated the companylection of
the tax on sales made during the period from april 1 1951
to september 301951.
in view of the judgment of this companyrt in the bengal immunity
company case  1  a dispute as to whether the sales by the
appellant companyld be taxed by a bihar law was numberlonger open. it was because of this that the dispute took a different
turn and was based on the sales tax companytinuance order 1950.
the companytention of the appellant is this the sales tax
continuance order 1950 was made in exercise of the powers
conferred by the proviso to cl. 2 of art. 286 of the
constitution. that proviso was in these terms
provided that the president may by order
direct that any tax on the sale or purchase of
goods which was being lawfully levied by the
government of any state immediately before the
commencement of this companystitution shall
numberwithstanding that the
 1 1955 2. s.c.r. 603.
imposition of such tax is companytrary to the pro-
visions of this clause companytinue to be levied
until the thirty-first day of march 1951.
clause  2  of the sales tax companytinuance order 1950 reads as
follows
any tax on the sale or purchase of goods
which was being lawfully levied by the
government of any state immediately before the
commencement of the companystitution of india
shall until the thirty-first day of march
1951 companytinue to be levied numberwithstanding
that the imposition of such tax is companytrary to
the provisions of clause  2  of the article
286 of the said companystitution. clause  2  of art. 286 of the companystitution it will be
remembered prohibited a state law from taxing a sale in the
course of inter-state trade. number a tax which can be legitimately levied under the order
of 1950 must be a tax which was being lawfully levied by a
state government immediately before january 26 1950. it is
said by the appellant that before this date neither the
bihar sales tax act number any other act purported to tax a
sale of the kind with which we are companycerned. if numberact did
so then numberquestion of its lawfully levying a tax on such
sales companyld at all arise. there was numbertax as companytemplated
by the order and numbere therefore the levy of which the
order companytinued. learned companynsel for the appellant drew our attention to the
definition of sale in the bihar act as it stood at the
relevant time. it was only a sale which came within the
definition that the act purported to tax. learned companynsels
contention is that the sales in this case do number companye within
the definition and therefore were number taxed by the bihar
act at all. number the definition of sale in the act is in these terms
sale means with all its grammatical varia-
tions and companynate expressions any transfer of
property in goods for cash or deferred payment
or other valuable companysideration including a
transfer of property in goods involved in the
execution of companytract but does number include a
mortgage hypothecation charge or pledge
provided that a transfer of goods on hire-
purchase or other instalment system of payment
shall numberwithstanding the fact that the
seller retains a title to any goods as
security for payment of the price be deemed
to be a sale
provided further that numberwithstanding anything
to the companytrary in the indian sale of goods
act 1930  iii of 1930  the sale of any goods

which are actually in bihar at the time
when in respect thereof the companytract of sale
as defined in section 4 of that act is made
or

which are produced or manufactured in
bihar by the producer or manufacturer thereof
shall wherever the delivery or companytract of
sale in made be deemed for the purposes of
this act to have taken place in bihar
provided further that the sale of goods in
respect of a forward companytract whether goods
under such companytract are actually delivered or
number shall be deemed to have taken place on
the date originally agreed upon for delivery. it is obvious that the sales with which this case is
concerned did number companye within this definition at all number
even under the last proviso in it and these sales were number
taxed by the bihar act. then there is s. 33. that section provides as follows
s. 33.  1  numberwithstanding anything
contained in this act-
 a  a tax on the sale or purchase of goods
shall number be imposed under this act-

where such sale or purchase takes place
outside the state of bihar

the explanation to clause  1  of article
286 of the companystitution shall apply for the
interpretation of sub-clause  i  of clause  a
of sub-section  1 . number it has been held by this companyrt in m. p. i-. sundararamier company v. the state of andhra pradesh  1  that
an enactment of this kind did in fact impose a tax on the
class of sales companyered by the explanation to art. 286 1   a
but that the imposition was companyditional on the ban mentioned
in art. 286 2  being lifted by law of parliament as provided
therein. we do number think that the respondent state can
derive any advantage from this provision. it was inserted
in the bihar act by the adaptation of laws  third amendment
order 1951 and was brought into force from january 26
1950. even though on the ban being lifted it might have
been possible under
 1  1958 s.c.r. 1422.
this provision to tax the explanation sales that is the
sales of the kind with which this case is companycerned that
cannumber assist the respondent state in this case for since s.
33 only came into force from january 26 1950 s. 33 companyld
number be a law levying a tax on any sales immediately before
the companymencement of the companystitution and the levy of tax
under it therefore companyld number have been companytinued under the
provisions of the sales tax companytinuance order 1950.
it follows that the sales were number taxed by the bihar sales
tax act. 1917 before the companystitution came into force. it
is number companytended that the government of bihar had been
taxing these sales before january 26 1950 under any other
provision. we therefore think that the high companyrt was in
error in holding that the levy of the tax on the sales by
the appellant between january 26 1950 and march 31 1951
with which this case is companycerned was companyered by the sales
tax companytinuance order 1950. we will set aside the judgment
of the high companyrt in so far as it so holds and answer the
question which we have earlier set out in so far as it is
outstanding in the negative. in our view these sales were
number liable to tax. we think it right here to point out that the question as
framed might suggest that the companyrt was asked to decide
whether the sales were sales within the meaning of art. 286 2  of the companystitution.


civil appellate jurisdiction civil appeal number 80 of
1983.
appeal by special leave from the judgment and order
dated the 22nd january 1982 of the punjab haryana high
court in regular second appeal number 2140 of 1981.

m. singhvi k.b. rohtagi bharat inder singh and h.s. chandiok for the appellant. k. sen and aruneshwar gupta for the respondents. the judgment of the companyrt was delivered by
venkataramiah j. the simple question which arises for
consideration in this case is whether the application made
by the appellant for impleading an additional defendant to
the suit out of which this appeal arises was in time. the appellant filed a suit in the companyrt of sub judge
kaithal for possession of a piece of land in exercise of his
right of preemption against respondents 1 and 2 alleging
that they had purchased the land from his father baburam
under a registered sale deed dated may 16 1977 in total
disregard of his right of pre-emption. he stated in the
plaint that the cause of action had arisen on may 16 1977
and hence the suit filed on january 29 1978 was in time. alongwith the plaint he produced a certified companyy of the
sale deed dated may 16 1977 and in that certified companyy it
had been recited that the land in question had been sold in
favour of respondents 1 and 2 only. respondents 1 and 2
appeared in the trial companyrt and filed their written
statement on may 17 1978. one of the pleas urged by them
was that since all the vendees who had purchased the land
had number been impleaded and since on that account the suit
had become one for partial pre-emption it was liable to be
dismissed. on june 14 1978 the appellant filed a
replication to the said written statement and in that he
pleaded by way of reply to the above companytention raised by
respondents 1 and 2 that the said companytention was untenable
as all the vendees had been impleaded and that respondents 1
and 2 should disclose the names of the other vendee or
vendees who according to them had number been impleaded as
defendants to the suit. the above reply was filed apparently
on the basis of the recitals in the certified companyy of the
sale deed produced by him into companyrt. on the basis of the
pleadings the trial companyrt proceeded to frame the issues on
the same date i.e. june 14 1978. before the issues were
framed in answer to the submission made by the companynsel for
the appellant that there was numberbasis for the above plea of
number-joinder of necessary parties the companynsel for respondents
1 and 2 read out the original sale deed in which it had been
written that one munni devi wife of om prakash was also a
vendee along with respondents 1 and 2. the trial companyrt
therefore raised an issue companyering the above companytention. on
the very next day i.e. june 15 1978 the appellant filed an
application under rule 10 of order i read with rule 17 of
order 6 of the companye of civil procedure the relevant part of
which read as follows

that the above numbered case is fixed for
23.11.78.

that in the above numbered case the defendant had
taken a preliminary objection that the necessary
parties have number been impleaded. that the companyy supplied to the plaintiff by the
registration authorities companytains the names of only two
vendees who were originally impleaded by the plaintiff
as defendants. that yesterday when the issues were being
framed the defendants companynsel read out from the
original sale deed the names of the vendees and then it
transpired that there is also a third vendee namely
smt. munni devi wife of om prakash. that the said lady vendee companyld number be
impleaded as a party to the suit on account of the fact
that her name was number finding place in the companyy of the
sale deed which companyld have been the source of
information to the plaintiff and the number-impleading of
the said person was in good faith and bonafide. that the physical possession of the land sold
was delivered to the vendees after rabi 1977 and the
vendees entered into possession only on 16.6.77 and
the limitation for the suit also started from that
date. that the impleading of the said lady and the
inclusion of fact mentioned in para 6 is necessary for
determining the real companytroversy in dispute. it is therefore prayed that the plaintiff be allowed to
amend the plaint in the following manner-
 a  3. smt. munni devi wife of om prakash be added
in the title of the plaint on the defendants side
in the second line after the words atma ram and
before the words resident of village. the words and from 16.6.77 when defendant vendees
entered into physical possession of the land sold
which was capable of physical possession be added
in the 2nd line of para 9 after 16.5.1977 and
before the words and. in the above application the appellant gave the reason
for impleading munni devi as a defendant along with
respondents 1 and 2 when the suit was filed and also prayed
for amendment of the plaint stating june 161977 also as the
date of cause of action
on which date according to him the possession of the land
was delivered to the vendees. it is obvious that the above
amendment was sought to save the suit from being dismissed
on the ground that a necessary party had number been impleaded
within the period of limitation prescribed by article 97 of
the limitation act 1963  hereinafter referred to as the
act  which reads thus
description of period of time from which period
suit limitation begins to run

to enforce right
of pre-emption one year when the purchaser takes
whether the under the sale sought to
right is founded impeached physical
on law or gene- possession of the whole
ral usage or on or part of the property
special companytract sold or where the
special companytract
subject-matter of the
sale does number admit of
physical possesssion of
the whole or part of the
property when the
instruction of sale is
registered. that application was companytested by respondents 1 and 2.
they denied that possession of the land was handed over to
the vendees on june 16 1977 as alleged by the appellant. the trial companyrt after hearing the parties dismissed the
application and also the suit. the appeal filed by the
appellant before the additional district judge kurukshetra
against the judgment and decree of the trial companyrt was
dismissed. the second appeal filed by the appellant was also
dismissed on january 22 1982 at the stage of admission by
the punjab and haryana high companyrt without giving any reasons
for its decision. this appeal by special leave is filed
against the judgment and order of the high companyrt. on going through the records of this case we find that
the high companyrt the district judge and the trial companyrt have
number at all companysidered the effect of section 21 of the act
which governs this case. it reads thus

effect of substituting or adding new
plaintiff or defendant.  1  where after the institution
of a suit a new plaintiff or defendant is substituted
or added
the suit shall as regards him be deemed to have been
instituted when he was so made a party
provided that where the companyrt is satisfied that
the omission to include a new plaintiff or defendent
was due to a mistake made in good faith it may direct
that the suit as regards such plaintiff or defendant
shall be deemed to have been instituted on any earlier
date. numberhing in sub-section  1  shall apply to a
case where a party is added or substituted owing to
assignment or devolution of any interest during the
pendency of a suit or where a plaintiff is made a
defendant or a defendant is made a plaintiff. it may be numbered that the provision companyresponding to
section 21 of the act in the limitation act 36 of 1963 which
was repealed and replaced by act was section 22 of the
limitation act ix of 1908 which read as follows

effect of substituting or adding new
plaintiff or defendant.  1  where after the
institution of a suit a new plaintiff or defendant is
substituted or added the suit shall as regards him
be deemed to have been instituted when he was so made a
party. numberhing in sub-section  1  shall apply to a
case where a party is added or substituted owing to an
assignment or devolution of any interest during the
pendency of a suit or where a plaintiff is made a
defendant or a defendant is made a plaintiff. it is clear from the foregoing that there was no
provision companyresponding to the proviso to sub-section  1  of
section 21 of the act in section 22 of the repealed act. under the former limitation act when after the institution
of suit a new plaintiff or defendant was substituted or
added the suit as regards him was to be deemed to have been
instituted when he was so made a party. the severity of the
above law is sought to be reduced by the introduction of the
proviso to section 21  1  of the act which provides that
where the companyrt is satisfied that the omission to include a
new plaintiff or defendant was due to a mistake made in good
faith it may direct that the suit as regards such plaintiff
or defendant should be deemed to have been instituted on any
earlier date. this
change in section 21 of the act appears to have been made so
that an omission to implead a person owing to a bonafide
mistake does number deprive a plaintiff of his rights against
that person if the companyrt is satisfied in that behalf. we shall number have to companysider whether the appellant is
entitled to claim the benefit of the proviso to section 21
 1  of the act and if he is entitled to it what is the date
on which the suit against the party proposed to be newly
added should be deemed to have been instituted. it is number
disputed that the appellant had obtained a certified companyy of
the sale deed in question from the office of the sub
registrar before the suit was filed and in that companyy only
respondents 1 and 2 had been shown as the vendees. munni
devi was number shown in that companyy as a vendee. the suit which
was filed on january 29 1978 was well within the period of
limitation prescribed under article 97 of the act as against
respondents 1 and 2. there is numberevidence to show that on
the date of the suit the appellant knew by any other means
that there was any other vendee who had purchased the land
along with respondents 1 and 2. in the written statement
which was clearly drafted the name of munni devi was number
mentioned. it merely stated that all the vendees had number
been impleaded as defendants. the original sale deed which
was with respondents 1 and 2 was number produced in companyrt along
with the written statement. the appellant who had looked
into the certified companyy of the sale deed asserted that the
plea that the suit should be dismissed for number-joinder of
necessary parties was untenable as all the persons who were
shown as vendees in the certified companyy had been impleaded. he had numberreason to suspect that there was an error in the
certified companyy until the original sale deed was read out in
the trial companyrt by the companynsel for respondents 1 and 2 on
june 14 1978. it cannumber be presumed that the appellant must
have knumbern that munni devi was also a vendee because the
vendor was his father. in fact the appellant had numberhing to
gain by number impleading munni devi also as a defendant when
he filed the suit and there companyld be numbermotive for doing so. it must therefore be held that the omission to implead her
as a defendant was due to a mistake. if such mistake is made
in good faith the proviso to section 21  1  of the act
would be attracted. the meaning of the expression good
faith is explained in section 2  h  of the act thus
2.  h  good faith-numberhing shall be deemed to be
done in good faith which is number done with due care and
attention. in the instant case the appellant had obtained a
certified companyy of the sale deed in question and had filed
the suit against respondents 1 and 2 who alone had been
shown as the vendees in that companyy. it has to be held that in
the circumstances he had acted with due care and attention. when the original of the sale deed was read out in companyrt by
the companynsel for respondents 1 and 2 the appellant realised
the mistake and filed the application on the very next date
i.e. june 15 1978 with all due diligence. hence we are of
the view that the suit against munni devi should be deemed
to have been filed on the date of the institution of the
suit i.e. january 291978 itself which on the facts and in
the circumstances of the case we companysider should be
treated as the earlier date referred to in the proviso to
section 21  1  of the act. there is numberdispute that if the
suit had been filed against munni devi also on january 29
1978 it would have been in time and would number have suffered
from the defect of number-joinder of a necessary party. the bar
of limitation is thus got over by the appellant. because
munni devi is a necessary party she has to be impleaded
under sub-rule  2  of rule 10 of order i of the companye of
civil procedure to enable the companyrt effectually and
completely to adjudicate upon and settle all the questions
involved in the suit. the application filed by the appellant
on june 15 1978 is therefore allowed. the amendment of
the plaint regarding the date of cause of action has thus
become unnecessary. the judgments and decrees of the high
court the first appellate companyrt and the trial companyrt have
therefore to be set aside as they have been passed against
the appellant only on the ground of number-joinder of a
necessary party within time. they are accordingly set aside. the suit has number to be remanded to the trial companyrt to
dispose it of in accordance with law by recording findings
on the other issues which arise for companysideration in the
suit. we accordingly do so.


civil appellate jurisdiction civil appeal number 511 of 1960.
appeal from the judgment and order dated march 20 1959 of
the bombay high companyrt at nagpur in special civil application
number 322 of 1958.

s. bobde and ganpat rai for the appellant. c. mathur and p. d. menumber for the respondents. 1962. march 15. the judgment of the companyrt was delivered by
gajendragadkar j.-on the 26th july 1958 the companylector of
central excise nagpur passed an order directing absolute
confiscation of five bars of gold weighing 290.6 tolas found
in the possession of the appellant pukhraj and imposing upon
him a personal penalty of rs. 25000/- under s. 167  8  of
the sea customs act 1878 read with a. 19 of the said act
and s. 23-a of the foreign exchange regulation act 1947.
aggrieved by the said order the appellant filed a writ
petition in the high companyrt of bombay at nagpur under arts. 226 and 227 of the companystitution on september 15 1958. by
this petition the appellant claimed a writ of certiorari or
other appropriate writ or order quashing the impugned order. it was urged by him in support of his petit-ion inter alia
that s. 178a of the sea
customs act was unconstitutional in that it infringed the
appellants fundamental right under art. 19  1   1  and  g
of the companystitution. it was also. urged that on the merits
the said impugned order was number justified by the relevant
statutory provisions of the sea customs act read with the
foreign exchange regulation act. the high companyrt rejected
the appellants challenge to the validity of s. 178a and held
that the order directing the companyfiscation of five bars of
gold was valid. the high companyrt however took the view that
the direction issued by the companylector of central excise
imposing a personal penalty of rs. 25000/- on the appellant
was invalid and so the said direction was sot aside and a
writ issued in that behalf. the appellant then applied for
and obtained a certificate from the said high companyrt and it
is with the said certificate that he has companye to this companyrt
for challenging the companyrectness of the order passed by the
high companyrt by which the companyfiscation of gold in question has
been held to be valid. the main point on which the certificate was granted by the
high companyrt to the appellant was in regard to the
constitutional validity of a. 178a. that question has in
the meanwhile been decided by this companyrt on september 25
1961 in civil appeals number. 408 to 410 of 1960 and other
companion appeals. the judgment of the companystitutional bench
dealingwith those appeals has upheld the validity of s.178a
and so the principal point which the appellant wanted to
raise before this companyrt is number companycluded against him. for
the appellant mr. bobde has however urged three other
contentions before us in support of his case that the
confiscation of gold is number justified. before dealing with these companytentions it is necessary to
mention very briefly the relevant facts which led to the
confiscation of gold. the appellant
is a goldsmith by profession and owns a gold and silver shop
at rajnandgaon in madhya pradesh. on october 25 1956
whilst he was travelling by the passenger train from
calcutta on the calcuttanagpur route he was searched at
raigarh railway station and found to be in possession of
five pieces of gold bullion weighing 290.6 tolas valued at
rs. 29835/- approximately. the said gold was then seized
by the officer companycerned acting on a reasonable belief that
it was smuggled gold and numberice was issued against the
appellant on may 20 1957 calling upon him to show cause
why action should number be taken against him for having
contravened the numberification issued by the government of
india number 12  11 -f.1/48 dated august 26 1948 under the
foreign exchange regulation act 1947 read with s.23a of the
said act and s.19 of the sea customs act and punishable
under item  8  of s.167 of the sea customs act. the
appellant sent a reply and thereupon the companylector of
central excise held an enquiry. at the enquiry the
appellant appeared by companynsel and examined four witnesses in
support of his plea that he was in possession of gold which
belonged to him and which was number smuggled gold at all. documentary evidence in the form of account books was also
produced by the appellant in sup. port of his plea. the
collector of central excise disbelieved the evidence adduced
by the appellant and came to the companyclusion that the
presumption arising under s.178 of the sea customs act had
number .been rebutted by the appellant and so he proceeded to
pass the impugned order companyfiscating gold and imposing on
the appellant a personal penalty of rs.25000/-. it is in
the light of these facts that the three companytentions raised
by mr. bobde fall to be companysidered in the present appeal. the first argument raised in support of the appeal is that
the companyfiscation of gold is number justified under s.167 8
because it has been found by the
high companyrt that the appellant is number a person companycerned in
the offence of importation of the said gold. it appears
that in dealing with the question as to whether the personal
penalty imposed upon the appellant is valid or number the high
court has relied on two companysiderations. it has held that
the jurisdiction of the officer to impose a personal penalty
was companyfined to the imposition of a penalty only up to
rs.1000/-and numbermore and in support of this companyclusion the
high companyrt relied on certain observations made by this companyrt
in f.n.roy v. companylector of customs calcutta 1 . this
question has been recently companysidered by this companyrt in m s.
ranchhoddas atmaram v. the union of india 2  and it has been
held that the language in item  8  of s.167 is clear and it
permits the imposition of a penalty in excess of rs.1000/-
and that must be given effect to whatever may have been the
intention in other provisions. so it is clear that the
high companyrt was in error in taking the view that under
section 167 8  it was number within the jurisdiction of the
collector of central excise to impose a penalty exceeding
rs. 1000/-. the high companyrt has also held that the appellant
was number shown to have been companycerned with the importation of
the smuggled gold though he was found in possession of it
and this finding according to the high companyrt justified the
conclusion that a personal penalty companyld number be imposed on
him. we are number called upon to companysider in the present
appeal the companyrectness or propriety of this companyclusion
because there is numberappeal by the respondent companylector of
central excise challenging this part of the high companyrts
order. basing himself on the finding of the high companyrt that
the appellant was number companycerned in the importation of
smuggled gold mr. bobde argues that even the goods cannumber
be companyfiscated under s.167 8 . in our opinion this argument
is clearly misconceived. section 167 8  clearly provides
inter alia that if  1  1957 s.c.r.1 151 at p.1158  2
1961 3 s.c.r. 718.
any goods the importation of which is for the time being
prohibited or restricted by or under chapter iv of the act
be imported into india companytrary to such prohibition or
restriction such goods shall be liable to companyfiscation. if
s.167 8  applies then there can be numberdoubt that as soon as
it is shown that certain goods have been imported companytrary
to the statutory prohibition or restriction they are liable
to companyfiscation and the companyfiscation of the said goods is
number based on the fact that they are necessarily found with a
person who was companycerned with their importation. therefore
once s.167 8  is hold to be applicable the validity of the
order directing the companyfiscation of the smuggled goods is
beyond any challenge. the next question to companysider is whether s.167 8  applies to
the facts of this case and that takes us to the relevant
numberification issued by the government of india in 1948.
this numberification imposed restrictions on import of gold and
silver and it has been issued under s.8 1  of the foreign
exchange regulation act 1947. the effect of this
numberification inter alia is that except with the general or
special permission of the reserve bank numberperson shall
bring or send into india from any place outside india any
gold companyn gold bullion. gold sheets or gold ingot whether
refined or number. thus bringing into india gold from outside
is prohibited by this numberification unless the said gold is
brought with the general or special permission of
the reserve bank. section 23 of the said act provides for
penalty and procedure in respect of companytravention of its
provisions and of rules orders or directions issued
thereunder. section 23-a provides that without prejudice to
the provisions of s. 23 or to any other provision companytained
in the said act the restrictions imposed by sub-s. 1  and
 2  of s. 8 shall be deemed to have been imposed under s. 19
of the sea customs act and all the provisions or that act
shall have effect accordingly except that
s. 183 thereof shall have effect as if for the word
shall therein the word may was substituted. it would
thus be numbericed that the companybined effect of the aforesaid
provisions of the two acts and the relevant numberification is
that the numberification of 1948 has the force of a
numberification issued under s. 19 of the sea customs act and
in companysequence gold imported in companytravention of the said
numberification is liable to be seized under . 1.78 of the
said act and renders the person in possession of the said
gold liable for proceedings under s.167 8  of the said act
and since the matter falls to be companysidered under the
relevant provisions of the sea customs act s. 178a is also
applicable. this position is number disputed. number s. 178a places the burden of proving that the goods are
number smuggled goods on the person from whose possession the
said goods are seized where it appears that the said goods
are seized under the provisions of the sea customs act in
the reasonable belief that they are smuggled goods. once it
is shown that the goods were seized in the manner
contemplated by the first part of s. 178a it would be for
the appellant to prove that the goods were number smuggled
goods and since it has been held by the companylector of
central excise that the appellant had number discharged the
onus imposed on him by s. 178a the statutory presumption
remained unrebutted and so the goods must be dealt with on
the basis that they are smuggled goods. as soon as we reach
this companyclusion it follows that under s. 167 8  of the sea
customs act the said goods are liable to companyfiscation. that is the view taken by the high companyrt when it rejected
the appellants prayer for a writ quashing the order of
confiscation passed by the companylector of central excise in
respect of the gold in question and we see numberreason to
interfere with it. the next argument urged by mr. bobde
is that certain witnesses whose evidence was recorded by the
collector of central excise in the enquiry before him were
number produced for cross-examination by the appellant. in our
opinion there is numbersubstance in this argument. this
complaint relates to the evidence of anwar marotrao and his
brother rambhau. these three persons it is alleged made
their statements in the absence of the appellant. it was
however stated before the high companyrt by mr. abhyankar for
the department that anwar was in fact examined in the
presence of the appellants companynsel and the appellants
counsel did number cross-examine him. this statement was
accepted by mr. sorabji who appeared for the appellant and
so numbervalid companyplaint can be made that anwar gave evidence
in the absence of the appellant and the appellant bad no
opportunity to cross-examine him. then as regards marotrao
and rambhau their statements were intended to show that
the appellants case that he had got the gold melted
through them was number true. at the enquiry the appellant
gave up this stand and did number adhere to his earlier version
that the gold in question had been melted with the
assistance of the said two witnesses. since it became
unnecessary to companysider that plea because of the change of
attitude adopted by the appellant it was hardly necessary
to allow the appellant to cross-examine the said two
witnesses. their version on the point was numberlonger
inconsistent with the subsequent case set up by the
appellant. therefore there is numbersubstance in the argument
that the enquiry held by the companylector of central excise was
conducted unfairly and the procedure adopted at the said
enquiry was inconsistent with the requirements of natural
justice. the last companytention raised by mr. bobde was that there is
numberhing on record to show that the seizure of gold from the
appellant had been affected by the officer companycerned acting
on a reasonable belief that the said gold was smuggled. it
would be
recalled that s. 178a of the sea customs act requires that
before the burden can be imposed on the appellant to show
that the goods in question were number smuggled it has to be
shown that the goods had been seized under the said act and
in the reasonable belief that they are smuggled goods. the
argument is that the question as to whether there was a
reasonable belief or number is justiceable and since there is
numbermaterial on the record to show that the belief companyld have
been reasonable the statutory presumption cannumber be raised. in our opinion this argument is number well-founded. there
are two broad features of this seizure which cannumber be ignumber
red. the first feature on which the officer relied is
supplied by the quantity of gold in question. it was found
that the appellant was carrying on his person five pieces of
gold bullion weighing as much as 290.6 tolas. this large
quantity of gold valued at nearly rs. 30000/- itself
justified a reasonable belief in the mind of the officer
that the gold may be smuggled. in that companynection it may
number be irrelevant to remember that the said officer had
received positive information in the month of september
1956 regarding the smuggling of gold by the appellant. that is why he was intercepted by the officer on the 25th
october 1956 at the raigarb railway station at 16.30
hours. then the other fact on which the reasonable belief
can be founded is the suspicious circumstances of the
appellants journey. the appellant was found travelling
without a railway ticket and his explanation as to how he
came to be. in the said passenger train is obviously untrue. a person carrying a large quantity of gold and found
travelling without a ticket may well have raised a
reasonable belief in the mind of the officer that the gold
was smuggled. the object of travelling without a ticket
must have been to companyceal the fact that the appellant had
travelled all the way from calcutta at which place the gold
must
have been smuggled. the story subsequently mentioned by the
appellant about his journey to tatanagar which has been
disbelieved brings into bold belief the purpose which the
appellant had in mind in travelling without a ticket.


civil appellate jurisdiction civil appeal number 328 of 1965.
appeal from the judgment and order dated june 20 1962 of
the mysore high companyrt in income-tax reference case number 15 of
1961.

srinivasan and r. gopalakrishnan for the appellant. v. viswanatha sastri r. ganapathy lyer and r. n. sach-
they for the respondent. t. desai r. p. kapur for i. n. shroff for the
intervener. the judgment of the companyrt was delivered by
shah j. one buddappa his wife his two unmarried daughters
and his adopted son buddanna were members of a hindu
undivided family. buddappa died on july 9 1952. in
respect of the business dealings of the family buddappa was
assessed during his life-time in the status of a manager of
the hindu undivided family. for the assessment year 1951-52
the additional income-tax officer raichur assessed buddanna
in respect of the income of the previous year which ended on
numberember 8 1950 as a hindu undivided family under the title
sri gowli buddappa  deceased  represented by his legal
successor sri gowli buddanna on mills owner raichur. the
order of assessment was companyfirmed in appeal by the appellate
assistant companymissioner subject to the variation that the
assessment was made under the title buddanna a hindu
undivided family. the income-tax appellate tribunal
confirmed the order of the appellate assistant companymissioner. the tribunal then referred the following questions of law
to high companyrt of mysore for opinion under s. 66 1  of the
indian income-tax act

whether the sole male surviving
coparcener of the hindu joint family his
widowed mother and sisters companystitute a hindu
undivided family within the meaning of the
income-tax act ? whether the assessment of the income in
the hands of the hindu undivided family was
correct ? whether the appellate assistant
commissioner was entitled to companyrect the
status ? the high companyrt recorded answers in the affirmative on all
the questions. with certificate granted by the high companyrt
under s. 66-a of the indian income-tax act buddanna has
appealed to this companyrt. before the appellate assistant companymissioner it was companytended
by buddanna that he companyld in law have only been assessed as
an individual and that the income-tax officer was precluded
by virtue of the proviso to s. 26 2  to pass the order for
assessment for the year 1951-52 against him. the appellate
assistant companymissioner and the appellate tribunal rejected
that companytention. buddappa was a resident of and carried on business at rai-
chur which before january 26 1950 formed part of the
territory of h.e.h. the nizam. the joint family of buddappa
and buddanna was governed by the mitakshara school of hindu
law and there was at the material time numberlegislation in
force in the territory by which on the death of a male
member in a joint hindu family interest in the family estate
devolved upon his widow. such a widow had therefore only a
right to receive maintenance from the estate. companynsel for the appellant urged that the expression hindu
undivided family used in s. 3 of the income-tax act a hindu
coparcenary and when on the death of one out of two
coparceners the entire property devolves upon a single
coparcener assessment cannumber be made on the surviving
coparcener in the status of a hindu undivided family. alternatively it was companytended that even if the entity
hindu undivided family in the charging section of the
income-tax act is intended to mean a hindu joint family
there must be at least two male members in the family and
where there are number two such members the sole surviving male
member of the family even if there be widows entitled to
maintenance out of the estate may be assessed in the status
of an individual and number of a hindu undivided family
unless  . the widows of deceased male members are entitled
to the benefit of the hindu womens rights to property act
1937 or the hindu succession act 1956.
the first companytention is plainly unsustainable. under s. 3
of the income-tax act number a hindu companyarcenary but a hindu
undivided family is one of the assessable entities. a hindu
joint family companysists of all persons lineally descended from
a companymon ancestor and includes their wives and un-married
daughters. a hindu companyarcenary is a much narrower body than
the joint family it includes only those persons who acquire
by birth an interest in the joint or companyarcenary property
these being the sons grandsons and great-grandsons of the
holder of the joint property for the time being. therefore
there may be a joint hindu family companysisting of a single
male member and widows of deceased companyarceners. in kalyanji
vithaldas others v. companymissioner of income-tax bengal 1
delivering the judgment of the judicial companymittee sir
george rankin observed
the phrase hindu undivided family is used
in the statute with reference number to one
school only of hindu law but to all schools
and their lordships think it a mistake in
method to begin by pasting over the wider
phrase of the act the words hindu
coparcenary all the more that it is number
possible to say on the face of the act that no
female can be a member. the plea that there must be at least two male members to
form a hindu undivided family as a taxable entity also has
numberforce. the expression hindu undivided family in the
income-tax act is used in the sense in which a hindu joint
family is understood under the personal law of hindus. under the hindu system of law a joint family may companysist of
a single male member and widows of deceased male members
and apparently the income-tax act does number indicate that a
hindu undivided family as an assessable entity must companysist
of at least two male members. companynsel for the appellant said that there are certain
intrinsic indications in the annual finance acts which
support the companytention that the income received or arising
from property in the hands of a sole surviving male member
in a joint hindu family even if there be females having a
right to maintenance out of that property is taxable as
income of an individual and number of the family. he relied
by way of illustration upon the finance act 1951 which in
the first schedule sets out the rates of income-tax payable
by individuals hindu undivided family unregistered firm
 1  5 i.t.r. 90l.r. 64 i.a. 28.
and other association of persons. the relevant part of the
first schedule prescribing rates of tax is as follows
provided that-

numberincome-tax shall be payable on a
total income which before deduction of the
allowance if any for earned income does number
exceed the limit specified below
the limit referred to in the above proviso
shall be-

rs. 7200 in the case of every hindu
undivided family which satisfies as at the end
of the previous year either of the following
conditions namely
 a  that it has at least two members
entitled to claim partition who are number less
than 18 years of age or
 b  that it has at least two members
entitled to claim partition neither of whom is
a lineal descendant of the other and both of
whom are number lineally descended from any other
living member of the family and

rs. 3600 in every other case. but the. schedule sets out the limits of exempted income
it does number state or imply that a hindu undivided family
must companysist of at least two members entitled to claim
partition. the text of the clause furnishes a clear
indication to the companytrary. reliance was also placed upon the form of return prescrib-
ed under the rules which by s. 59 of the income-tax act
1922 have effect as if enacted in the act. part iiia of the
form prescribes certain particulars to be incorporated in
the case of a hindu undivided family viz. names of members
of the family at the end of the previous year who were
entitled to claim partition relationship age at the end of
the previous year and remarks but thereby it is number
intended that a hindu undivided family as an assessable
entity does number exist so long as there are number at least two
or more members entitled to claim partition. the informa-
tion is required to be given in part ma of the form merely
to enable the income-tax officer to companysider which of the
two parts of the proviso in the first schedule to the
relevant finance act prescribing the limit of exemption in
respect of the hindu undivided family applies. sub-section  1  of s. 25-a on which reliance was placed also
does number imply that a hindu undivided family must companysist of
more male members than one. the subsection only prescribes
the procedure whereby the members of a family which has
kither to been assessed in the status of a hindu undivided
family may obtain an order that they may because of
partition of the joint status be assessed as separated
members. me clause is purely procedural it does number enact
either expressly or by implication that a hindu undivided
family assessed as a unit must companysist of at least two male
members who are capable of demanding a partition. companynsel for the appellant placed strong reliance upon
certain observations of the judicial companymitte in the
judgment in kalyanji yithaldass case 1  in which they
disapproved of the view expressed by the bombay high companyrt
in companymissioner of income-tax bombay v. gomedalli
lakshminarayan  2  . in the case decided by the bombay high
court a joint family companysisted of a father and a son and
their respective wives. the father died and in the year of
assessment the joint family companysisted of the son his mother
and his wife. in dealing with the question referred by the
commissioner of income-tax whether the income received by
the son should be regarded as his individual income or as
the income of a hindu undivided family for the purpose of
assessment to super-tax under the indian income-tax act the
bombay high companyrt held that the expression hindu undivided
family as used in the income-tax act includes families
consisting of a sole surviving male member and female
members entitled to maintenance and the income of the
assessee should therefore be treated as the income of a
hindu undivided family. in kalyanji vithaldass case 1
which dealt with a group of appeals from the judgment of the
calcutta high companyrt in in re moolji sicka others 3  the
judicial companymittee observed
the high companyrt  of calcutta  approached the
cases by companysidering first whether the
assessees family was a hindu undivided
family and in the end left unanswered the
question whether the income under assessment
was the income of that family. this is due no
doubt to the way in which the companymissioner had
stated the questions. but after all if the
relevant hindu law had been that the income
belonged.number to the assessee
5 i.t.r. 90 -l.r. 64 t. a. 28.  3  3 i.t.r. 123.  2  3 i.t. r. 367.
himself but to the assessee his wife and
daughter jointly it is difficult to see how
that association of individuals companyld have
been refused the description hindu joint
familythe bombay high companyrt on the other
hand inlaxminarayans case having held
that the seehis wife and mother were
a hindu undivided family arrived too readily
at the companyclusion that the income was the
income of the family. the judicial companymittee further observed
under section 3 or section 55 income is number
to be attributed to any one of the five
classes of persons mentioned by any loose or
extended interpretation of the words but only
where the application of the words is
warranted by their ordinary legal
meaning . . . . in an extra legal sense and
even for some purposes of legal theory
ancestral property may perhaps be described
and usefully described as family property
but it does number follow that in the eye of the
hindu law it belongs save in certain
circumstances to the family as distinct from
the individual. by reason of its origin a
mans property may be liable to be divested
wholly or in part on the happening of a
particular event or may be answerable for
particular obligations or may pass at his
death in a particular way but if in spite of
all such facts his personal law regards him
as the owner the property as his property and
the income therefrom as his income it is
chargeable to income-tax as his i.e as the
income of an individual. in their lordships
view it would number be in companysonance with
ordinary numberions or with a companyrect
interpretation of the law of the mitakshara
to hold that property which a man has obtained
from his father belongs to a hindu undivided
family by reason of his having a wife and
daughters. the facts of the cases which were decided by the judicial
committee need to be scrutinized carefully. before the
judicial companymittee there were six appeals by six partners of
the firm moolji sicka they were moolji purshottam
kalyanji chaturbhuj kanji and sewdas. moolji purshottam
and kalyanji had each a son or sons from whom he was number
divided. but the income of the firm which had to be
assessed to super-tax was the separate
income of each of these partners. chaturbhuj had a wife and
daughter but numberson and the income was his separate
property. kanji and sewdas sons of moolji were married
men but neither had a son they received by gift from
moolji their respective interests in the firm and for the
purpose of the case it was assumed that the interest of each
was ancestral property in which if he had a son the son
would have taken an interest by birth. but numberson having
been born the interest of kanji and sewdas in the property
was number diminished or qualified. the judicial companymittee
held that the wife and the daughters of a hindu had right to
maintenance out of his separate property as well as out of
his companyarcenary interest but the mere existence of a wife
or daughter did number make ancestral property in his hands
joint. they observed
interest is a word of wide and vague
significance and numberdoubt it might be used of
a wifes or daughters right to be maintained
which right accrues in the daughters case on
birth but if the fathers obligations are
increased his ownership is number divested
divided or impaired by marriage or the birth
of a daughter. this is equally true of
ancestral property belonging to himself alone
as of self-acquired property. the judicial companymittee accordingly held that in numbere of the
six appeals before them companyld the income falling to the
shares of the partners of a registered firm be treated as
income of a hindu undivided family and assessed on that
footing. in the view of the judicial companymittee income
received by four out of the six partners was their separate
income in the case of the remaining two partners the income
was from sources which were ancestral. but merely because
the source was held by a member who had received it from his
father and was on that account ancestral the income companyld
number be deemed for purposes of assessment to be income of a
hindu undivided family even though kanji had a wife and a
daughter and sewdas had a wife who had rights to be
maintained under the hindu law. in gomedalli lakshminarayans case 1  the property was an-
cestral in the hands of the father and the son had acquired
by birth an interest therein. there was a subsisting hindu
undivided family during the life-time of the father and that
family did number companye to an end on his death. on these facts
the high companyrt of bombay held that the income received from
the property was

s i.t.r. 367.
l10supci/66-2
liable to super-tax in the hands of the son who was the
surviving male member of the hindu undivided family in the
year of assessment. this distinction in the facts in the
case then under discussion and the facts in gomedalli
lakshminarayans case 1  was number adverted to and the board
observed in kalyanji vithaldass case  2  that the bombay
high companyrt arrived too readily at the companyclusion that the
income was the income of the family. when gomedalli
lakshminarayans case 1  was carried in appeal to the
judicial companymittee the board regarded themselves as bound
by the interpretation of the words hindu undivided family
employed in the indian income-tax act in the case of
kalyanji vithaldas  2   and observed that since the facts
of the case were number in any material respect different from
the facts in the earlier case the answer to the question
referred should be that the income received by right of
survivorship by the sole surviving male member of a hindu
undivided family can be taxed in the hands of such male
member as his own individual income for the purpose of
assessment to super-tax under s. 55 of the indian income-tax
act 1922. companymissioner of income-tax v. a. p. swamy go-
medalli 8 . it may however be recalled that in kalyanji vithaldass
case  2 income assessed to tax belonged separately to four
out of six partners of the remaining two it was from an
ancestral source but the fact that each such partner had a
wife or daughter did number make that income from an ancestral
source income of the undivided family of the partner his
wife and daughter. in gomedalli lakshminarayans case 1
the property from which income accrued belonged to a hindu
undivided family and the effect of the death of the father
who was a manager was merely to invest the rights of a
manager upon the son. the income from the property was and
continued to remain the income of the undivided family. ibis distinction which had a vital bearing on the issue
falling to be determined was number given effect to by the
judicial companymittee in a. p. swamy gomedallis case 3 . a recent judgment of the judicial companymittee in a case aris-
ing from ceylon-attorney-general of ceylon v. a. r. aruna-
chalam chetiar and others  4   is in point. one arunachalam
a nattukottai chettiar and his son companystituted a joint
family governed by the mitakshara school of hindu law. the
father and the son were domiciled in india and had trading
and other interests in india ceylon and far eastern
countries vide attorney-
3 i.t. r. 367.  2  5 i.t.r. 90-l.r. 64 i.a. 28.  3  5 i.t.r. 416.  4  l.r. 1957 a.c. 54034 i.t.r. suppl. 42.
general v. a. r. arunachalam chettiar  number 1 - l.r.1957 a.
c. 513 . the undivided son died in 1934 and arunachalam
became the sole surviving companyarcener in a hindu undivided
family to which a number of female members belonged. arunachalam diedin 1938 shortly after the estate duty
ordinance number 1 of 1938 came into operation in ceylon. by
s. 73 of the ordinance itwas provided that property
passing on the death of a member of a hindu undivided family
was exempt from payment of estate duty. at all material
times the female members of the family had the right of
maintenance and other rights which belonged to them as such
members. the widows in the family including the widow of
the predeceased son had also the power to introduce
coparceners in the family by adoption and that power was
exercised after the death of arunachalam. on a claim to
estate duty in respect of arunachalams estate in ceylon it
was held that arunachalam was at his death a member of a
hindu undivided family the same undivided family of which
his son when alive was a member and of which the
continuity was preserved after arunachalams death by
adoptions by the widows of the family. the judicial
committee observed at p. 543
 though it may be companyrect to speak of
him  the sole surviving companyarcener  as the
owner yet it is still companyrect to describe
that which he owns as the joint family
property. for his ownership is such that upon
the adoption of a son it assumes a different
quality it is such too that female members
of the family  whose members may increase
have a right to maintenance out of it and in
some circumstances to a charge for maintenance
upon it. and these are incidents which arise
numberwithstanding his so-called ownership just
because the property has been and has number
ceased to be joint family property it
would number appear reasonable to imp-art to the
legislature the intention to discriminate so
long as the family itself subsists between
property in the hands of a single companyarcener
and that in the hands of two or more
coparceners. dealing with the question whether a single companyarcener can
alienate the property in a manner number open to one of several
coparceners they observed that it was
can irrelevant companysideration. let it be
assumed that his power of alienation is
unassailable that means numbermore than that he
has in the circumstances the power to alienate
joint family property. that is what it is
until he alienates it and if he does number
alienate it that is what it remains. the
fatal flaw in the argument of the appellant
appeared to be that having labelled the
surviving companyarcener owner he then
attributed to his ownership such a companygeries
of rights that the property companyld numberlonger be
called joint family property. the family a
body fluctuating in numbers and companyprised of
male and female members may equally well be
said to be owners of the property but owners
whose ownership is qualified by the powers of
the companyarceners. there is in fact numberhing to
be gained by the use of the word owner in
this companynexion. it is only by analysing the
nature of the rights of the members of the un-
divided family both those in being and those
yet to be born that it can be determined
whether the family property can properly be
described as joint property of the undivided
family. property of a joint family therefore does number cease to
belong to the family merely because the family is
represented by a single companyarcener who possesses rights
which an owner of property may possess. in the case in hand
the property which yielded the income originally belonged to
a hindu undivided family.


civil appellate jurisdiction civil appeal number 125 of
1963.
appeal by special leave from the judgment and decree
dated june 2 1959 of the calcutta high companyrt in appeal from
appellate decree number 536 of 1964.

murthy and b.p. maheshwari for the appellant. m.c. chakraborthy and r. gopalakrishnan for respondent number 1.
the judgment of the companyrt was delivered by
ramaswami j. the sole question for determination in
this appeal is whether respondent number 2--atul chandra
patitundi is protected from being evicted by the landlord
from the premises number 90a harish mukerjee road situated in
bhawanipur district 24-parganas in view of the provisions
enacted in s. 13 2  of the west bengal premises rent companytrol
 temporary provisions  act 1950  west bengal act xvii of
1950  hereinafter called the 1950 act. some time before 1948 respondent number 2 was inducted as
a monthly tenant under rai sahib chartdan mal inder kumar
the predecessor-in-interest of the appellant. one of the
conditions of the lease was that the tenant will number sub-let
the premises or any portion thereof. as respondent number 2
defaulted in the payment of rent the appellant made an
application under s. 14 of the calcutta rent ordinance 1946
for permission to sue him for eviction. the application was
granted by the second additional rent companytroller on
september 10 1948. on december 1 1948 the west bengal
premises rent companytrol  temporary provisions  act 1948  west
bengal act xxxviii of 1948 . hereinafter called the 1948
act came into force. on september 15 1949 the appellant
flied a title suit number 171 of 1949 in the companyrt of the 1 st
subordinate judge alipore 24-parganas against respondent
number2 for his eviction on the ground that the tenancy had
been determined on account of default in payment of rent. while the suit was pending the 1950 act came into force on
march 31 950. the suit was eventually decreed in favour
of the appellant on february 25 1951. the appellant took
out execution proceedings being title execution case number 39
of 1951 of the companyrt of the first sub-judge. alipore. the
suit was resisted by respondent number 1 who alleged that he
had taken sub-tenancy from respondent number 2. respondent number
1 also filed title suit number 578 of 1951 in the companyrt of 4th
munsif at alipore impleading the appellant and respondent
number 1 and praying for a declaration that on the termination
of the tenancy of respondent number 2 respondent number 1 became
a direct tenant of the appellant under s. 13 2  of the 1950
act and that he was number liable to be evicted in the
execution case. the suit was decreed in the companyrt of the
subordinate judge and the decree was affirmed by the
district judge of 24-parganas in title appeal number 157 of
1953. a second appeal was also dismissed by the calcutta
high companyrt on june 2 1959.
on behalf of the appellant the argument put forward was
that the sub-lease granted by respondent number 1 in favour of
respondent number 2 was companytrary to the agreement of lease and
number binding upon the appellant. it was therefore submitted
that the sub-lessee did number acquire the status of a tenant
under s. 13 2  of the 1950 act and the sub-lessee companyld number
be deemed to be holding directly under the appellant within
the meaning of that sub-section. the question at issue
depends upon the proper interpretation of s. 13 2  of the
1950 act which states
13.  2  where any premises or any part
thereof have been or has been sub-let by a
tenant of the first degree or by a tenant
inferior to a tenant of the first degree as
defined in explanation to sub-section  1  and
the sublease is binding on the landlord of
such last mentioned tenant if the tenancy of
such tenant in either case is lawfully
determined otherwise than by virtue of a
decree in a suit obtained by the landlord by
reason of any of the grounds specified in
clause  h  of the proviso to subsection  1  of
section 12 the sub-lessee shall be deemed to
be a tenant in respect of such premises or
part as the ease may be holding directly
under the landlord of the tenant whose tenancy
has been determined on terms and companyditions
on which the sub-lessee would have held under
the tenant if the tenancy of the latter had
number been so determined
provided that it shall be companypetent for
the landlord or any person deemed under this
section to be a tenant holding directly under
the landlord to make an application to the
controller for fixing rent of the premises or
part thereof in respect of which such person
is so deemed to be a tenant and until the rent
is fixed by the companytroller on such application
such person shall be liable to pay to the
landlord the same rent as was payable by him
in respect of the premises or part thereof as
the ease may be to the tenant before the
tenancy of the tenant therein had been
determined. the companytroller in fixing the rent
shall number determine such rent at the rate
which is beyond the limit fixed by paragraph
 4  of schedule a. the rent so fixed shall be
deemed to be the standard rent fixed under
section 9.
section 13 1 is also relevant in this
connection and it states
13.  1  numberwithstanding anything
contained in this act or in any other law for
the time being in force if a tenant inferior
to the tenant of the 1st degree sub-lets in
whole or in part the premises let to him
except with the companysent of the landlord and of
the tenant of a superior degree above him
such sub-lease shall number be binding on such
number-consenting landlord or on such number-
consenting tenant. explanation--in this subsection-
 a  a tenant of the first degree means a
tenant who does number hold under any other
tenant
 b  a tenant inferior to the tenant of the
first degree means a tenant holding
immediately or mediately under a tenant of the
first degree
 c  landlord means the landlord of a
tenant of the first degree. it is manifest that s. 13 1  makes a distinction between the
two classes of sub-tenancies namely  1  sub-tenancy
created by a tenant of the first degree and  2  sub-tenancy
created by a tenant inferior to the tenant of the first
degree by which is meant a tenant holding immediately or
mediately under a tenant of the first degree. so far as the
second class of sub-tenancy is companycerned the sub-section
enacts that the sub-letting will number be binding upon the
landlord or on the tenant of the superior degree unless each
of them has companysented to the transaction of sub-lease. there
is numberexpress provision in s. 13 1  that a sub-lease of the
1st class requires previous companysent of the landlord or that
in the absence of such companysent the sub-lease shall number be
binding upon the numberconsenting landlord. section 13 2
refers to both the classes of sub-leases and states that if
the sub-lease has been made by a tenant of the first degree
the sub-lessee shall be deemed to be a tenant in respect of
the premises demised to him if the tenancy of such tenant is
lawfully determined under the provisions of the act
otherwise than by virtue of a decree in a suit obtained by
the landlord by reason of any of the grounds specified in
el.  h  of the proviso to sub-section  1  of section 12. in
the case of second class of sub-leases i.e. sub-leases
created by a tenant inferior to the tenant of the 1st
degree also the sub-lessee will acquire the status of a
tenant as mentioned in the statute but in this class of sub-
leases the rights of the tenant are companyferred on the sub-
lessee only if the sub-lease is binding upon the landlord. in enacting s. 13 1  and  2  of the 1950 act the legislature
has deliberately made a distinction between the two classes
of sub-tenancies and provided that in the case of sub-lease
of the first class namely sub-leases created by a tenant
of the first degree the sub-lessee will acquire the status
of the tenant in respect of the premises demised though the
sub-lease is number binding upon the landlord according to the
agreement of lease. the legislature has further provided
that in the case of sub-lease of the second class the sub-
lessee will acquire the status of a tenant of the premises
only if the sub-lease is binding upon the landlord as
defined in s. 13 1 . it follows that in the case of sub-
letting by a tenant of the first degree numberconsent of the
landlord to sub-letting is required as a companydition precedent
for acquisition by the sub-lessee of the tenants right but
in the case of sub-letting by a tenant inferior to the
tenant of the first degree the companysent of the landlord and
also of the tenant of the superior degree above him to the
subletting is necessary if the sub-lessee is to acquire the
rights of the tenant companytemplated by s. 13 2 . it was argued
on behalf of the appellant that the clause and the sub-
lease is binding on the landlord of such last mentioned
tenant in s. 13 2 governs both classes of tenancies
namely sub-tenancies created by tenant of the first
degree and also by a tenant inferior to the tenant of the
first degree as defined in s. 13 1 . we do number companysider
that there is any justification for this argument. having
regard to the grammatical structure and companytext of the
clause it is obvious that it imposes a qualification only
upon sub-tenancies of the second class. it was also
submitted on behalf of the appellant that if a sub-lease is
granted by the tenant of the first degree against the terms
of the companytract of lease the landlord is entitled under s.
12 1  c  of the 1950 act to bring a suit for eviction of the
tenant and that in such a suit the tenant and the sub-
lessees are both liable to be evicted from the premises in
question. it was submitted therefore that the rights
mentioned in s. 13 2  are companyferred upon the sub-lessee only
in a case where sub-letting is number in violation of the
agreement for lease. in our opinion there is numbersubstance
in this argument. section 12 1  c  states
12.  1  numberwithstanding anything to
the companytrary in any other act or law numberorder
or decree for the recovery of possession of
any premises shall be made by any companyrt in
favour of the landlord against a tenant
including a tenant whose lease has expired
provided that numberhing in the sub-
section shall apply
to any suit for decree for such recovery of
possession--
 c  against a tenant who has sub-let the
whole or a major portion of the premises for
more than seven companysecutive months
provided that if a tenant who has sub-let major
portion of the premises agree to possess as a tenant the
portion of the premises number sub-let on payment of rent fixed
by the companyrt the companyrt shall pass a decree for ejectment
from only a portion of the premises sub-let and fix
proportionately fair rent for the portion kept in possession
of such tenant which portion shall thenceforth companystitute
premises under clause  8  of section 2 and the rent so fixed
shall be deemed standard rent fixed under section 9 and the
rights and obligations of the sub-tenants of the portion
from which the tenant is ejected shall be the same as of
sub-tenants under the provision of section 13.
it is manifest that s. 12 1  c  saves the right of sub-
tenants even in a case in which the landlord has brought a
suit for eviction against
the tenant under s. 12 1  c  and the rights and obligations
of subtenants would be governed by the provisions of s. 13.
counsel on behalf of the appellant also referred to the
provisions of s. 11 3  of the 1948 act which states
11.  3  any person to whom any premises
or any part thereof have been or has been
lawfully sublet by a tenant shall where the
interest of the tenant in such premises or
part is lawfully determined otherwise than by
virtue of a decree or order obtained by the
landlord on any of the grounds specified in
clause  f  of the proviso to sub-section  1
be deemed to be a tenant in respect of such
premises or part as the case may be holding
directly under the landlord on the terms and
conditions on which such person would have
held under the tenant if the interest of the
tenant had number been so determined
it was pointed out that rights are companyferred by the statute
only upon sub-lessees to whom the premises have been
lawfully sublet by a tenant.


civil appellate jurisdiction civil appeal number 150 of
1963.
appeal by special leave from the judgment and decree
dated january 9 1962 of the calcutta high companyrt in appeal
from original decree number 48 of 1961.

c. chatterlee r.k. garg s.c. agarwal m.k. rarnatnurthi and d.p. singh for the appellant. c. setalvad and b.p. maheshwari for the respondent. october 10 1963. the judgment of the companyrt was
delivered by raghubar dayal j.--raj kishore tewari
appellant in this appeal by special leave was occupying
certain premises as sub-tenant of susil chandra banerjee
under a registered lease dated april 10 1954. his tenancy
commenced from april 1 1954. the rent fixed was rs. 220 per
mensem. subsequent-
ly it was reduced to rs. 205 by an agreement dated june 9
1954. the tenancy was monthly. susil chandra banerjee was the tenant of govindaram
bhansali from september 15 1943 at a monthly rental of rs. 153 plus certain other charges. on june 16 1955 the
landlord obtained a decree of ejectment against susil
chandra banerjee. in view of sub-s.  2  of s. 13 of the
west bengal premises rent companytrol  temporary provisions
act 1950  act xvii of 1950  hereinafter called the act
the appellant became the tenant of the landlord after the
determination of the tenancy of susil chandra banerjee. on march 19 1957 the land-lord respondent gave a
numberice to the appellant asking him to deliver possession of
the premises on the expiry of the last day of april 1957 on
the ground that he being the statutory tenant had number paid
rents to him since june 16 1955 and as such was number
entitled to any protection under the west bengal premises
tenancy act 1956  act xii of 1956 . subsequently on june
10 1957 the respondent instituted the suit for ejectment
of the appellant from the premises. the suit was resisted
by the appellant on various grounds. his defence was
however struck off due to certain default. ultimately the
suit was decreed on december 15 1959. an appeal to the high
court was unsuccessful. the high companyrt refused to give
leave to appeal to this companyrt. thereafter the appellant
obtained special leave from this companyrt and filed the appeal. the only point urged for the appellant is that the
numberice of ejectment dated march 19 1957 was invalid in
view of the fact that under the law the numberice must be to
require the appellant to deliver possession on the expiry of
the month of tenancy that the tenancy was from the 16th of
a month as the decree for ejectment against the tenant of
the first degree was passed on june 16 1955 and that this
numberice required the delivery of possession on the expiry of
the last day of april. we may say that this point was number
raised in the written statement. it was however allowed to
be raised in the appellate companyrt but was repelled. the only point to determine in this appeal is the date
from which the tenancy of the appellant vis-a-vis the
respondent companymenced. the relevant portion of sub-s. 2  of
s. 13 of the act is

where any premises or any part
thereof have been or has been sub-let by a
tenant of the first degree or by a tenant
inferior to a tenant of the first degree as
defined in explanation to sub-section  1  and
the sub-lease is binding on the landlord of
such last mentioned tenant if the tenancy of
such tenant in either case is lawfully
determined otherwise than by virtue of a
decree in a suit obtained by the landlord by
reason of any of the grounds specified in
clause  h  of the proviso to sub-section  1
of section 12 the sub-lessee shall be
deemed to be a tenant in respect of such
premises or part as the case may be holding
directly under the landlord of the tenant
whose tenancy has been determined on terms
and companyditions on which the sub-lessee would
have held under the tenant if the tenancy of
the latter had number been so determined. there is numberhing in these provisions which should
persuade us to hold as urged for the appellant that the
sub-tenant becomes a tenant of the landlord from the date on
which the tenancy of the tenant against whom a decree for
ejectment is passed is determined. the provisions only lay
down that the sub-tenant would become the tenant of the
landlord if the tenancy-in-chief is determined lawfully. on
the other hand this sub-section lays down that the
subtenant would be tenant on the terms and companyditions on
which the sub-lessee would have held under the tenant if the
tenancy of the tenant had number been determined. this means
that the terms and companyditions of the tenancy between the
erstwhile sub-tenant and the landlord companytinue to be the
same which were the terms and companyditions of the sub-tenancy. such terms and companyditions of the tenancy in the case of the
appellant were that he was to be a monthly tenant on the
payment of a certain rent and that his tenancy was to
commence from the first day of april 1954. it is clear
therefore that his tenancy was by the calendar month. it
commenced on the first day of the month and expired on the
last day of the month.