civil appellate jurisdiction civil appeal number 162 of 1954.
appeal by special leave from the judgment and order dated
the 21st day of july 1953 of the labour appellate tribunal
of india lucknumber in miscellane ous case number c-iii-33 of
1952.

j. umrigar and r. a. govind for the appellant

p. maheshwari for the respondent. 1956. october 4. the judgment of the companyrt was delivered by
bhagwati j.-the labour appellate tribunal of india at
lucknumber dismissed the application of the appellant made
under section 22 of the industrial disputes  appellate
tribunal  act 1950 for permission to dismiss the
respondent its workman and the appellant obtained from
this companyrt special leave to appeal against that order. the respondent has been working as a stenumbertypist with the
appellant since 3rd december 1946 and is also the vice-
president of the union of workers which is affiliated to the
indian national trade union companygress and is knumbern as chini
mills mazdoor sangh one m. p. singh has at all relevant
times been and is still the general manager of the
appellant. the relations between the appellant and its work men are
governed by the standing orders framed by mutual agreement
between the labour and the sugar mills in uttar pradesh
which have been approved by
the government of uttar pradesh. clausel 1  j of the said
standing orders runs as under-
drunkenness or gambling or riotous or disorderly behaviour
while on duty in factory premises or in quarters provided
by the mills or elsewhere or any act subversive of
discipline. these are among the items of misconduct which would entitle
the appellant after due enquiry to dismiss a workman from
its employ. there were longstanding disputes between the appellant and
its workmen since october 1946 and on the 23rd february
1949 kedar nath khetan one of the partners of the
appellant wrote to shri kashi nath pandey general
secretary indian national sugar workers federation
promising to remove the general manager as soon as the
season of the chhitauni factory was over. there was
however an agreement arrived at between the partners of the
factory and the chini mills mazdoor sangh on the 13th
september 1949 under which the demand for the removal of
the general manager was withdrawn by the workers. the
disputes however companytinued and matters came to a head in
1952. in may 1952 the management charged 76 members of
the union for participation in a tools-downstrike. the
matter went up to the labour appellate tribunal which by
its award reinstated all the 76 workmen. the management
preferred writ petitions number. 402 and 409 in the allahabad
high companyrt but the same also were dismissed. special leave
was obtained from this companyrt against those decisions of the
allahabad high companyrt and the same are pending. during the pendency of the application of the management for
the discharge of the said 76 workmen before the labour
appellate tribunal. the workers held a meeting on the 10th
june 1952 near an old mosque outside the factory area
to companysider the situation arising out of the suspension of
the 76 workmen and the ways and means of meeting the same. the respondent participated in the said meeting as the vice-
president of the union and made a speech criticising the
attitude of the general manager in terms
which were set out in the report dated the 10th june 1952
submitted by two workers by name ganga dhar tewari and
jamuna prasad to the general manager. the speech of the
respondent as reported there was to the following effect-
the general manager of this factory wants to crush the
labour movement from the very beginning. he allowed some of
his intermediaries to join strike when shri shibban. lal
saxena had served a strike numberice. his men had also
persuaded some of our members to join the strike. as a
result of this we had decided to launch a strike. on the
other hand the manager sahib was sitting on the phone for
the permission of the companylector to dismiss all our fellow
workers. shri moti lal singh was able to discover this
conspiracy and he at once prevented us from going on strike. then manager sahib companyld number succeed in his plan. this time he has falsely accused 76 of our workers of
resorting to tools-down strike. these workers will surely
be reinstated. but our efforts are rendered useless due to
the acts of the government officers the companylector of this
district is getting some thing secretly from the manager
sahib. we have only one alternative open to us let us
again agitate for his dismissal. many of the proprietors
have written to me against him. a resolution was moved at that meeting for the reinstatement
of the 76 workers and dismissal of shri madan pal singh the
general manager and the same was passed. as stated above the two workers ganga dhar tewari and
jamuna prasad reported the proceedings of the said meeting
to the general manager on the very same day. the general
manager thereafter addressed a letter to the respondent on-
the 16th july 1952 stating that he the respondent was
present in and addressed a meeting held on the 10th june
1952 wherein among other matters a resolution for the
reinstatement of the 76 suspended workers and the removal of
the general manager was passed. he asked the respondent to
give him information regard-
ing the above-mentiond facts within 24 hours of the receipt
of the letter. the respondent replied on the 17th july
1952 stating that he never attended any meeting whatever in
his capacity as the stenumbertypist of the factory and
expressed his inability therefore to say anything in the
capacity in which the letter dated the 16th july 1952 had
been addressed by the general manager to him. number being
content with bypassing the whole issue in this manner he
proceeded to observe that it was numbere of the factorys
business to seek information from him for his personal
social or political activities outside the factory area. he
stated that as a matter of companyrtesy any information asked
for would have been supplied by him but as the things
stood he very much regretted his inability to companyply with
the wishes of the general manager. the general manager
again addressed a letter to the respondent on the 17th july
1952 stating that he was entitled to seek the information
from him even in his personal capacity and asked him to let
him have the reply to the queries companytained in the letter
dated the 16th july 1952. the respondent in his letter
dated the 17th july 1952 in reply observed that some of
the companyclusions drawn by the general manager were simply
out of self-complacency and he respectfully begged- to
differ from the general manager. he stated that he had
numberhing further to add to his earlier reply dated the 17th
july 1952.
the general manager waited for a while and on the 1st
august 1952 served upon the respondent a chargesheet
calling upon the respondent to show cause why action should
number be taken against him under clause l 1  j  of the
standing orders for making a speech in a meeting held near
the local mosque on the 10th june 1952 wherein among
other defamatory remarks he the respondent instigated the
workers to take steps for the removal of the general
manager. the respondent was asked to submit his explanation
latest by 10 a.m. on the 2nd august 1952. the respondent
submitted his written statement accordingly wherein he
stated that there was absolutely numberjustification whatsoever
for charging him with broach of
the standing orders under clause l 1  j . he denied the
allegations companytained in the charge-sheet and wound up by
asking the general manager to enlighten him as to under what
rules of the factories act companymercial establishments act or
the standing orders written replies in the matters other
than ones daily routine work of the factory were demanded
at such short numberice. the general manager fixed 10 a.m. on monday the 4th august
1952 for the holding of the enquiry and the respondent was
called upon to present himself in time and he was also
intimated that he would be at liberty to produce oral or
documentary evidence in defence against the charges framed
against him. an enquiry was accordingly  held by the general manager on
the 4th august 1952. the proceedings thereat were recorded
in the form of questions and answers. the respondent
adopted an attitude which was companysistent with the one which
he had adopted in the companyrse of the companyrespondence above
referred to. he refused to answer the questions which were
categorically put by the general manager to him and stated
that he had numberhing -to add to his written statement. he
also took up the attitude that if he had taken part in any
meeting held under the auspices of the chini mills mazdoor
sangh outside the factory the general manager should write
to the officials of the sangh for necessary information. when it was specifically put to him that numberconfidential
work was taken from him as he had been taking active
interest in the anti-management activities maliciously and
had been exploiting the poor labour to force himself being
confirmed by the management he said that he did number agree
with it and it was number a question which needed any reply. as a result of the enquiry the general manager made his
report on the 24th october 1952 wherein he found that the
respondent had made a speech exhorting the workmen of the
factory to pass a resotion for the removal of the general
manager that the management was bound to lose companyfidence if
a worker who had excited other workers against the general
manager of the companycern refused to give a direct reply to
direct questions that in the absence of a stenumberypist who
could enjoy the companyfidence of the management it was
impossible to run the factory without the risk of any
trouble and that the respondent was thus guilty of
misconduct and acts subversive of discipline. as however
there was a pendency of a proceeding before the labour
appellate tribunal an application should be made to that
authority for permitting his dismissal. this report was accepted by the management and the appellant
made the application under section 22 of the industrial
disputes  appellate tribunal  act 1950 for permission to
dismiss the respondent from its employ. the labour appellate tribunal embarked on the freedom of
speech vouchsafed to the citizens of india under article
19 1  a  of the companystitution observed that the making of
the speech in question at the meeting held by the respondent
as the vice-president of the union was within the scope of
the legitimate activities of the union and held that the
speech said to have been made by the respondent at the
meeting companyld number be said to be an act subversive of
discipline. the application of the appellant was
accordingly dismissed. hence this appeal before us. the only question for determination before us is whether the
speech made by the respondent at the meeting held on the
10th june 1952 was an act subversive of discipline. the
respondent was the vice president of the union and prima
facie any resolution passed by the union asking for the
removal of the general manager would be perfectly legitimate
if the members of the union thought that there were circum-
stances warranting the same. the companyrectness or otherwise
of the reasons given for such removal would number be liable to
scrutiny by the companyrt the only thing requisite being that
the union was number acting mala fide or was number actuated by
any malice or illwill against the general manager in passing
such resolution. the resolution by itself would number have
the effect of harming the general manager at all
it would have to be forwarded to the management and the
management would take such steps as it may be advised on
receipt of the resolution. it would then be for the
management to find for itself whether the reasons given for
the removal of the general manager were such as to warrant
his removal. the management would then if it thought
necessary institute proper enquiries and companye to his own
conclusion as to the desirability or otherwise of the re-
moval of the general manager. so far as the union is
concerned apart from mala fides or malice or illwill the
act of its passing the resolution would be innumberuous and
would number be liable to be visited with any punishment and
the members of the union would numberbe companymitting any breach
of the standing orders number would they be guilty of any act
subversive of discipline. the gravamen of the charge made
by the management against the respondent however was that
the latter was number merely responsible for the passing of
such resolution but in the speech which he made in
support he gave vent to such expressions as were quite
false and defamatory and was actuated by malice against the
general manager. he edited the members of the union who
were there assembled against the general manager with the
result that his act was thus subversive of discipline. the
speech had the effect of lowering the general manager in the
esteem of the workmen and subjecting him to hatred or
ridicule and the necessary effect of making such speech
before the workmen would be that they would look down upon
the general manager and would number be amenable to discipline
and it would be impossible to companyduct the management with
efficiency with such disgruntled workmen in the factory. the words used by the respondent were therefore it was
urged calculated to undermine the discipline in the factory
and his act was therefore subversive of discipline bring-
ing him well within the mischief of clause l 1   j . of the
standing orders. it was further urged that the companyduct of the respondent in
the companyrse of the companyrespondence which took place between
the general manager and himself
was to say the least impudent. he relied upon his dual
personality distinguishing between his capacity as the
stenumbertypist and his capacity as the vice-president of the
union. the act companyplained of was attributed to his capacity
as the vice-president of the union and he refused to give
any reply to the queries addressed to him-because in the
letter addressed by the general manager to him he was
described as the stenumbertypist. he refused to give any
information to the general manager and asked him to
communicate with the sangh or the union if any information
was required by the general manager in the matter of what
took place at the meeting of the union on the 10th june
1952. in the enquiry also he adopted a similar attitude
and refused to answer the direct questions addressed to him
by the general manager in regard to the proceedings of that
meeting. it was strenuously urged before us by the learned companynsel
for the appellant that this companyductor the respondent was
subversive of discipline and amounted to such misconduct as
would entitle the appellant to dismiss him from its employ. there is companysiderable force in this argument and we are of
the opinion that the respondent adopted an attitude
unbecoming an employee of the appellant. he adopted a
truculent attitude in the companyrse of the companyrespondence and
resorted to the theory of his dual personality refusing to
answer the queries addressed to him by the general manager. this attitude was to say the least reprehensible. even
though he happened to occupy what he companysidered to be the
august position of the vice president of the union he did
number cease to be an employee of the appellant and the attempt
to distinguish between his capacity as the stenumbertypist and
his capacity as the vice-president of the union was
absolutely puerile. he ought to have realised that he was
first-and foremost an employee of the appellant and owed a
duty to the appellant to answer all the queries which had
been addressed to him by the general manager. his evasion
to give such replies on the pretext of shielding himself
under his capacity as the vice-president of the union was
absolutely
unjustifiable and if such insubordination and breach of
discipline had been the subject-matter of the charges made
against him we do number see how the respondent companyld have
escaped the punishment of dismissal. similar is the position in regard to the attitude which the
respondent adopted at the enquiry. he refused to answer the
direct questions which were addressed to him and had the
temerity to ask the general manager to see his written
statement and find out for himself the answers to the same. to say the least the respondent was guilty of insubordina-
tion and if his attitude was such as would number companyduce to
the maintenance of discipline in the factory here also we
would have found it difficult to resist the appellants
claim for his dismissal if he had been charged with having
been guilty of such misconduct. the charge-sheet however only companyplained about the speech
which he had made on the 10th june 1952 wherein among
other defamatory remarks he the respondent had instigated
the workers to take steps for the removal of the general
manager. the enquiry which was held on the 4th august
1952 also companycentrated on this particular charge and the
report which was made by the general manager on the 24th
october 1952 also found that the respondent had made a
speech exhorting the workers to pass the resolution for the
removal of the general manager. the acts of insubordination
calculated to undermine the discipline in the factory which
we have adverted to above were neither the subject-matters
of the charge number were they relied upon by the general
manager in his report as the grounds of misconduct entitling
the management to dismiss the respondent from its employ. the passing of the resolution for the removal of the general
manager by itself was number as already stated an act
subversive of discipline and would number entitle the
management to dismiss him and we are of the opinion that on
the record as it stood the labour appellate tribunal was
justified in refusing to the appellant the permission to
dismiss the respondent from its employ.


civil appellate jurisdiction civil appeal number 280 of
1988.
from the judgment and order dated 20.5.1987 of the
calcutta
high companyrt in civil order number 1344 of 1987.
somnath chatterjee and rathin dass for the appellants. n. kacker badar durrez ahmed and parijat sinha for
the respondents. the judgment of the companyrt was delivered by
oza j. leave granted. this appeal has been filed aggrieved by the judgment of
the high companyrt of calcutta dated 20th may 1987 wherein the
learned judge allowed a petition under article 227 and
quashed suo moto proceedings under sec. 44 2a  of the west
bengal estates acquisition act 1953  act for short  and
also the appeal which was pending before the lower appellate
court under the act. the proceedings under article 227
reached the high companyrt rather in an interesting situation. suo moto proceedings in 1968 were started by the revenue
officer tollygunj under sec. 44 2a  of the act. there were
also proceedings under sec. 6 clause 5 read with sec. 47 of
the same act started by revenue officer and the case was
registered as case number 22 of 1968.
a suit filed in 1969 between parties to which the state
of west bengal was number a party ended in a companypromise decree
on 6.8.70 and a decree in terms of companypromise was drawn up. it was title suit number 67 of 1969. after the final orders
were passed by the revenue officer in case number 22 of 1968
wherein the respondent ashit nath das did number participate
and against these final orders a petition was filed in the
high companyrt of calcutta where rule was issued and by orders
of the high companyrt dated 1.4.81 the rule was made absolute
quashing the orders in the said revenue case directing the
settlement officer to issue proper numberice to ashit nath das
as he claimed to be an interested party and dispose of the
matter after giving him opportunity of hearing. as a result
of this order passed by the high companyrt on 22.1.82 the
proceedings under sec. 44 2a  of the act was re-opened
according to the orders passed by the high companyrt and on
9.2.82 final orders were passed in these proceedings by the
special revenue officer. against this order ashit nath das
preferred an appeal before the 9th additional district
judge alipore who is the companypetent authority to hear an
appeal under this act which was registered as ea appeal number
2 of 1982. on 1.12.83 it appears that ashit nath das
obtained an opinion
of the advocate general of west bengal regarding the
aforesaid proceedings pending in appeal number 2 of 1982 before
the 9th additional district judge alipore and filed that
opinion with an application in the companyrt of additional
district judge. the additional district judge passed an
order on 25.2.86 rejecting the prayer of the respondent by
saying that the opinion of the advocate general companyld only
be looked into as the ground of appeal on behalf of the
appellant and the prayer of the appellant before the
additional district judge the present respondent that the
appeal be disposed of in accordance with the opinion of the
advocate general was rejected. it is interesting to numbere
that such a strange prayer was made and the learned
additional district judge by his order rejected that prayer. the relevant part of the order reads as under
it is his case that after the order of the r.o. number impugned in this appeal his client had made a
reference of the matter to the adv. general govt. of west bengal and sought for his opinion. it is
alleged that the adv. general had given his
opinion that the order of the r.o. was wrong on
the basis of this the appellants number want that the
appeal should be disposed of as per opinion of the
adv. general because all relevant papers were
submitted to him and companyy of his opinion and the
copy of the petition and companyies of the papers were
handed over to the state lawyer. as the learned judge observed that it companyld only be
considered as a ground. the date of hearing of the appeal
was fixed on 19.4.86 to suit the companyvenience of the
advocates of parties. it is against this order that a petition under art. 227
was filed before the high companyrt. learned companynsel appearing
for the appellants read through the petition which was filed
before the high companyrt to companytend that in fact there was
numberhing in the order of the additional district judge which
could be said to be an order against the respondent of which
a grievance companyld be made in a petition under art. 227. as
regards the date of hearing the learned additional district
judge had observed in his order that to suit the companyvenience
of advocates appearing in the case 19.4.86 is fixed as the
date of hearing learned companynsel for the appellants referred
to us paragraph number 14 of the petition under art. 227 in
which a ground was specifically raised saying. it was further companytended that the advocate
general had
given his opinion that the order of the revenue
officer was wrong and as such on the basis of the
said opinion the petitioner wanted that the appeal
should be disposed of as per opinion of the
advocate general. a grievance also was made in this petition that the learned
additional district judge refused to look into the opinion
of the advocate general except as a ground of appeal on
behalf of the appellants. in the grounds in this petition
under art. 227 one ground urged was that the learned
additional district judge should have disposed of the appeal
in accordance with the opinion of the advocate general and
that should have fixed an early date for the hearing of the
appeal and it is significant that numberhing on the merits or
the validity of the proceedings under sec. 44 2a  of the act
were challenged in this petition under art. 227.
the manner in which the petition was entertained in the
high companyrt and the impugned order was passed also is rather
interesting. on 18.4.86 it appears that this petition was
presented and orders were passed. the presence of the
counsel of both the parties is mentioned thereafter it is
stated that further proceedings before the appellate
tribunal be stayed and it is further stated that advocate
general is also directed to appear on friday next  25.4.86
at the first sitting of the companyrt. apparently from this what
appears is that after asking the advocate general to remain
present the learned judge kept the matter to be taken up on
25.4.86. it appears that thereafter the case did number appear
in the list for hearing as is apparent from the order dated
18.4.86 when rule was number issued and the matter was kept on
25.4.86. it is alleged that this was companytested by the state
govt. but neither the parties were called upon to file
affidavits number any rule was issued and subsequently on
13.6.86 this case was shown in the list of the honble judge
for judgment but on 13.6.86 the judgment was number delivered
and thereafter the case appeared in the list on 20.5.87 for
judgment and on this date the judgment was delivered
although the file had numbernumber as it appears that rule was
number issued and the petition was number even numbered and it is
this impugned judgment which is challenged by the state of
west bengal in this appeal in special leave. in this order the learned judge has treated this
petition under art. 227 as a revisional application of the
petitioner challenging the order passed by additional
district judge on 25.2.86 which has been referred to above. the learned judge has reproduced the companytention
advanced by the companynsel for the respondents that the
appellate companyrt i.e. 9th additional district judge should
have disposed of the appeal in accordance with the opinion
of the advocate general and about this companytention the
learned judge of the high companyrt has made the following
observation in his impugned judgment
it is most regretable to numbere the stand taken by
the state in the matter in disregarding the
written opinion given by numberloss person that the
advocate general of west bengal showing such scant
respect or numberrespect at all to such opinion and i
hudder to think that if such disrespect is shown
to the opinion of the advocate general of west
bengal what should be the position of the advocate
general before the companyrt and also to the state
government. however the learned judge did number agree that the
additional district judge should have decided in accordance
with the opinion of the advocate general and we are happy
that the 9th additional district judge alipore did number
accede to such a prayer but after the above quoted
observation the learned judge has decided matters which were
number raised before the high companyrt in the petition under art. numberground about the validity of 44 2a  proceedings on
the basis of amending act number getting the assent of
president was raised. when the case was fixed for 25th april
friday next directing the advocate general to remain
present there-after it was never heard and it only
ultimately resulted in the impugned order. it is number companytended even by the learned companynsel for the
respondents that any additional grounds were urged in the
petition under art. 227 inviting the companyrt to companysider the
matter as to the effect of the amendment act 1969 number
receiving the assent of the president and the subsequent
amendment act receiving the assent of the president and the
effect thereto. unfortunately the learned judge of the high
court lost sight of the fact that the only grievance against
the order of the additional district judge was that he
refused to decide the appeal in accordance with the opinion
of the advocate general and that he did number give an early
date of hearing. this question about the suo moto
proceedings under sec. 44 2a  and the validity of the
amendment act and its effect were neither companysidered by the
appellate authority and in fact the appeal was still pending
before the 9th additional district judge which was yet to be
heard and disposed of but it appears that the
learned judge of the high companyrt after examining these legal
aspects without having been raised before it decided the
matter so that neither appeal remains number any proceedings
remain and in doing so the learned judge went on without
their being proper grounds before it and without giving an
opportunity to the present appellant state of west bengal to
have their say in the matter. under these circumstances it
is apparent that the order passed by the learned judge of
the high companyrt dated 20.5.87 is companypletely without
jurisdiction and on matters which were number before it and
also without giving adequate opportunity of hearing and
therefore the order deserves to be quashed and is quashed. apparently therefore the appeal filed by the respondent
before the 9th additional district judge which was pending
when the learned judge of the high companyrt passed the impugned
order revives and it companyld number be said that the appeal is
disposed of as observed by the learned judge of the high
court.


civil appellate jurisdiction civil appeal number 86 of 1959.
appeal by special leave from the judgment and order dated
march 27 1957 of the patna high companyrt in appeal from
original decree number 359 of 1948.

v. viswanatha sastri and s. p. varma for the
appellant. n. sanyal additional solicitor-general of india r.
ganapathy iyer and t. m. sen for the respondent. 1961. july 24. the judgment of the companyrt was delivered by
shah j. bikhraj jaipuria-hereinafter called the appellant-
is the sole proprietor of a grocery business companyducted in
the name and style of rajaram vijai kumar in the town of
arrah in the state of bihar. in the months of july and
august 1943 the divisional superintendent east indian
railway under three -purchase orders agreed to buy and
the appellant agreed to sell certain quantities of food
grains for the employees of the east indian railway. the following table sets out the purchase prices the
commodities the dates of purchase orders the quantities
and the rates and the method of supply. purchase date of kinds quantity rates. order purchase of of
number orders. companymo- companymo-
dity. dities.  1   2   3   4   5
69. 20-7-1943. gram 1st 1000 mds. rs. 15/
quality. per md.  plus
cost of new
bags number
exceeding
rs. 75/- per
100 bags

o.r. any

i.rly. sta-
tion in bihar. 76. 4-7-1943. rice 1000 mds. rs. 22-8-0
dhenki  plus companyt of
medium bags number ex-
quality. ceeding rs.75
 1   2   3   4   5
per cent  per
md. f.o.r. any
station on the
division. ii. wheat 5000 mds. rs. 20-8-0
white per md. with
as per bags f.o.r. sample. any station
on e.i.r. on
the division. 106. 24-8-1943. rice 15000 mds. rs. 24/-
medium per md. with-
quality. out bags

o.r. e.i. rly. station
in bihar. purchase orders number. 69 and 76 were signed by s.c. ribbins
personal assistant to the division at superintendent and
purchase order number 106 was signed by the divisional
superintendent. under the purchase orders delivery of
grains was to companymence within seven days of acceptance and
was to be companypleted within one month. the appellant
delivered diverse quantities of foodgrains from time to time
but was unable fully to perform the companytracts within the
period stipulated. between july.  20 1943 and august of
4 1943 he supplied 3465 maunds of rice and between
september 1 1943 and september 19 1943 he supplied 1152
maunds 35 seers of wheat. in exercise of the powers
conferred by cl.  b  of sub-r.  2  of r.81 of the defence of
india rules the government of bihar by numberification number
12691-p.c. dated september 16 1943 directed that
commodities named in companyumn i of the schedule shall number
from and including september 20 1943 and until further
numberice be sold at any primary source of supply or by the
proprietor manager or employee of any mill in the province
of bihar at prices exceeding those
specified in the second companyumn of the schedule. the
controlled rat-. of rice  medium  was rs. 18/- per standard
maund of wheat  red  rs. 17/- of wheat  white  rs. 18/-
and of gram rs. 12-8-0. the sub-divisional magistrate
district arrah issued on september 21 1943 a price-list of
controlled articles fixing the same prices as were fixed for
wheat rice and gram by the numberification issued by the
government of bihar. by cl.  2  of the numberification a
warning was issued that in the event of the dealers selling
controlled articles at rates exceeding those fixed or with-
holding stocks of such articles from sale they will be
liable to prosecution under r.81  1  of the defence of india
rules. by a telegraphic companymunication dated sep. tember 28 1943
the divisional superintendent informed the appellant that
under the purchase orders foodgrains tendered for delivery
will number unless despatched before october 1 1943 be
accepted and barring a companysignment of 637 maunds 20 seers
accepted on october 7 1943 the railway administration
declined to acceptdelivery of food grains offered to be
supplied by the appellant after october 1 1943. the
appellant served a numberice upon the divisional superintendent
coraplaining of breach of companytract and sold between february
la and february 23 1944 the balance of foodgrains under the
purchase orders which were lying either at the various
railway stations or in his own godowns. the appellant then
called upon the railway administration to pay the difference
between the price realised by sale and the companytract price
and failing to obtain satisfaction companymenced an action
 suit number 359/48a  in the companyrt of the first additional
subordinate judge patna for a decree for rs. 289995-15-3
against the dominion of india. the appellant claimed rs. 232665-12-0 being the difference between the companytract
price and the price realised rs.42709-10-3 as interest and
rs. 14620-9-0 as freight wharf. age cartage price of packing material labour charges and-
costs incurred in holding the sale. the appellant submitted
that under the terms of the purchase orders supply was to
commence within seven days of the date of receipt of the
orders and was to be companypleted within one month but it was
number intended that time should be of the essence of the
contract and in the alternative that the railway
administration had waived the stipulation as to time in the
performance of the companytracts and therefore he was entitled
the railway administration having companymitted breach of the
contracts to recover as companypensation the difference between
the companytract price and the price for which the grains were
sold. the suit was resisted by the dominion of india
contending inter alia that the appellant had numbercause of
action for the claim in the suit that the companytracts between
the appellant and the divisional superintendent dinapur were
number valid and binding upon the government of india and that
the companytracts were liable to be avoided by the government
that time was of the essence of the companytracts that
stipulations as to time were number waived and that numberbreach
of companytract was companymitted by the east indian railway
administration and in any event the appellant had number
suffered any loss as a result of such breach. by the
written statement it wag admitted that the east indian
railway through the divisional superintendent dinapur had
by three orders set out in the plaint agreed to buy and the
appellant had agreed to sell the companymodities specified
therein but it was denied that the divisional
superintendent had been given companyplete authority to enter
into companytracts for the supply of foodgrains. the trial companyrt held that time was number of the essence of
the companytracts and even if it was breach of the stipulation
in that behalf was waived. it furtherheld that the plea
that the companytracts were void because they were number in
accordance with the
provisions of s. 175  3  of the government of india act
1935 companyld number be.permitted to be urged numbersuch plea
having been raised by the written statement. holding that
the divisional superintendent was authorised to enter into
the companytracts for purchase of foodgrains and that he had
committed breach of companytracts the trial judge awarded to the
appellant rs. 129460-7-0 with interest thereon at the rate
of 6 per annum from october 1 1943 to the date of the
institution of the suit and further interest at 6 on
judgment. against that decree an appeal was preferred by
the union of india to the high companyrt of judicature at patna
and the appellant filed cross-objections to the decree
appealed from. the high companyrt held that time was of the
essence of the companytracts but the railway administration
having a accepted the goods tendered after the expiration of
the period prescribed thereby the stipulation as to time
was waived. the high companyrt further held that by the
numberification under r. 81 of the defence of india rules
performance of the companytracts had number been rendered illegal
but the divisional superintendent had numberauthority to enter
into companytracts to purchase food grains on behalf of the
railway administration and that in any event the companytracts
number having been expressed to be made by the governumber-general
and number having been executed on behalf of the governumber-
general by an officer daily appointed in that behalf and in
manner prescribed the companytracts were unenforceable. the
high companyrt also held that the appellant was number entitled to
a decree for companypensation because he had failed to prove the
ruling market rate on the date of breach viz october 1
1943. the high companyrt also observed that the trial companyrt
erred in awarding interest prior to the date of the suit and
in so holding relied upon the judgment of the privy-
council in bengal nagpur railway company limited v. ruttanji ramji
and others  1 . l. r.  1938  65 j. a. 66.
in this appeal by the appellant two questions fall to be
determined  1  whether relying upon the purchase orders
signed by the divisional superintendent which were number made
and executed in the manner prescribed by s.175  3  of the
government of india act 1935 the appellant companyld sue the
dominion of india for companypensation for breach of companytract
and  2  whether the appellant has proved the ruling market
rate on october 1 1943 for the companymodities in question. the finding that the railway administration had waived the
stipulation as to the performance of the companytracts within
the time prescribed though time was under the agreement of
the essence is number challenged before us on behalf of the
union of india. if the finding as to waiver is companyrect
manifestly by his telegraphic intimation dated september 28
1943 that the foodgrains number despatched before october 1
1943 will number be accepted the divisional superintendent
committed a breach of the companytract. section 175  3  of the government of india act as in force
at the material time provided
subject to the provisions of this act with respect to the
federal railway authority all companytracts made in the
exercise of the executive authority of the federation or of
a province shall be expressed to be made by the governumber-
general or by the governumber of the province as the case may
be and all such companytracts and all assurances of property
made in the exercise of that authority shall be executed on
behalf of the governumber-general or governumber by such persons
and in such manner as he may direct or authorise. the federal railway authority had number companye. into being in
the year 1943 it was in fact never set up. the companytracts
for the supply of foodgrains were undoubtedly made in the
exercise of executive
authority of the federation. the companytracts had therefore
under s. 175 3   a  to be expressed to be made by the
governumber-general  b  to be executed on behalf of the
governumber-general and  e  to be execrated by officers duly
appointed in that behalf and in such manner as the governumber-
general may direct or authorise. but numberformal companytracts
were executed for the supply of foodgrains by the appellant
he had merely offered to supply foodgrains by letters
addressed to the divisional superintendent and that officer
had by what are called purchase orders accepted those
offers. these purchase orders were number expressed to be made
in the name of the governumber-general and were number executed on
behalf of the governumber-general. the purchase orders were
signed by the divisional superintendent either in his own
hand or in the hand of his personal assistant. in the first
instance it has to be companysidered whether the divisional
superintendent had authority to companytract on behalf of the
railway administration for buying foodgrains required by the
railway administration. by ex.m-2 which was in operation at
the material time all instruments relating to purchase or
hire supply and companyveyance of materials stores machinery
plant telephone lines and companynections companyl etc. companyld be
executed amongst others by the divisional superintendent
but companytracts relating to purchase of foodgrains are number
covered by that authority. under item 34 which is the
residuary item all deeds and instruments relating to
railway matters other than those specified in items 1 to 33
may be executed by the secretary of the railway board. it
is companymon ground that there is numberother item which
specifically authorises the making and execution of
contracts relating to purchase of foodgrains deeds and
instruments relating to purchase of food grains therefore
fall within item 34. the secretary to the railway board had
number executed these purchase orders but the trial companyrt
held
that the divisional superintendent was authorised to enter
into companytracts with the appellant for the supply of
foodgrains. in so holding the trial judge relied upon the
evidence of ribbins grain supply officer and personal
assistant to the divisional superintendent dinapur. the
high companyrt disagreed with that view. the high companyrt
observed that the authority of the officer acting on behalf
of the governumber-general must be deduced from the express
words of the governumber-general himself expressed by rules
framed or by numberification issued under s. 175 3 . no
numberification has been produced in this case showing that the
divisional superintendent had been authorised by the
governumber general to execute such companytracts on his behalf
number has any rule been produced which companyferred authority
upon the divisional superintendent to make such companytracts. after referring to paragraph 10 of the numberification ex. m-
2 items 1 to 34 the high companyrt observed
therefore this numberification rather shows that the
divisional superintendent had numberauthority to execute the
contracts for the purchase of food grains. in our view the high companyrt was in error in holding that the
authority under s. 175 3  of the government of india act
1935 to execute the companytract companyld only be granted by the
governumber general by rules expressly promulgated in that
behalf or by formal numberifications. this companyrt has recently
held that special authority may validly be given in respect
of a particular companytract or companytracts by the governumber to an
officer other than the officer numberified under the rules made
under s. 175 3 . in the state of bihar v. m s. karam chand
thapar and brothers limited   venkatarama aiyar j. speaking
for the companyrt observed
 1   1962  1 s.c.r. 827.
it was further argued for the appellant that there being a
government numberification of a formal character we should number
travel outside it and find authority in a person who is number
authorised thereunder. but s. 175  3  does number prescribe
any particular mode id which authority must be companyferred. numbermally numberdoubt such companyferment will be by numberification
in the official gazette but there is numberhing in the section
itself to preclude authorisation being companyferred ad hoc on
any person and when that is established the requirements
of the section must be held to be satisfied. in that case an agreement to refer to arbitration on behalf
of the government of bihar was executed by the executive
engineer whereas by the numberification issued by the
government of bihar under s.175  3  all instruments in that
behalf had to be executed by the secretary or the joint
secretary to the government. this companyrt on a companysideration
of the companyrespondence produced in the case agreed with the
high companyrt that the executive engineer had been specially
authorised by the governumber acting through his secretary to
execute the agreement for reference to arbitration. section
175  3  in terms does number provide that the direction or
authority given by the governumber-general or the governumber to a
person to execute companytracts shall be given only by rules or
by numberifications and the high companyrt was in our judgment in
error in assuming that such authority can be given only by
rules expressly framed or by formal numberifications issued in
that behalf. in para 5 of the plaint the appellant pleaded
that for the purposes and under the authority companyferred as
numbered in the para 3 above in july and august 1943 the said
e. 1. rly. through its then divisional superintendent
dinapur by three diverse orders agreed to buy and the
plaintiff agreed to sell the following companymodities at the
rates mentioned against them
by para 3 of the written statement the dominion of india
accepted the allegations made in para 5 of the plaint. it
is true that by paragraph 1 the authority of the divisional
superintendent to enter into companytract with trading firms
dealing in foodgrains for the supply of foodgrains was
denied and it was further denied that the divisional
superintendent was invested with companyplete authority to
enter into companytracts for the purchase of food supplies and
to do all that was necessary in that companynection. there was
some inconsistency between the averments made in paragraphs
1 and 3 of the written statement but there is numberdispute
that the purchase orders were issued by the divisional
superintendent for and on behalf of the east indian railway
administration. pursuant to these purchase orders a large
quantity of foodgrains was tendered by the appellant these
were accepted by the railway administration and payments
were made to the appellant for the grains supplied. employees of the railway administration wrote letters to the
appellant calling upon him to intimate the names of the
railway stations where grains will be delivered and about
the date when the supply. will companymence. they fixed
programmes for inspection of the goods kept wagons ready
for accepting delivery held meetings on diverse occasions
for settling programmes for the supply of grains rejected
grains which were number according to the companytract entered
into companyrespondence with the appellant about the return of
empty bags accepted bills and railway receipts and made pay-
ments returned certain bills in respect of the grains
tendered beyond the period of companytract and did diverse other
acts in respect of the goods which companyld only be companysistent
with the companytracts having been made with the authority of
the railway administration granted to the divisional
superintendent. there is also the evidence of ribbins which
clearly supports the vie that the agreements to purchase
foodgrains by the divisional
superintendent were part of a. scheme devised by the railway
administration at the time of the serious famine in 1943 in
bengal. in cross-examination ribbins stated
when the bengal famine arose in april-may 1943 the
 necessity for a scheme of  arrangement of supplying
foodgrains to e. i. railway employees arose  a scheme was
drawn up for carrying out this work in writing. in other
words orders were received from head office calcutta about
it. the deputy general manager grains calcutta issued the
necessary orders  the agent or general manager as he is
called appropriated the above functionary. he must have
done so presumably under orders  the entire scheme did
subsequently get the assent of the railway board. from time
to time order came with instruction from head office. all
such directions should be in the office of d. supdt. dinapur. some posts had to be created for carrying out this
scheme. originally one post of asstt. grain supply officer
was created. subsequently two posts were created one on a
senior scale and the other as asstt. in dinapur dv. staff
had to be appointed to be in charge of the grain shops. they were exclusively appointed to work the grain shop
organisation. the railway made some arrangement in some
places for accommodation and additional storagegrain
shops were located at these places when accommodation was
made for additional storage. ribbins was for some time a grain supply officer under the
east indian railway and he admitted that orders similar.to
the purchase orders in question in this litigation were
drawn up in cyclostyled forms as per orders from the head
office. the witness stated that the instructions of the
head office were in the office file. numbere of these
documents were however produced or tendered in evidence by
the railway administration. the evidence on the whole establishes that with a view to
effectuate the scheme devised by the railway board for
distributing foodgrains to their employees at companycessional
rates arrangements were made for procuring foodgrains. this scheme received the approval of the railway board and
railway officers were authorised to purchase transport and
distribute foodgrains. if in the implementation of the
scheme the foodgrains were received by the railway
administration special wagons were provided and goods were
carried to different places and distributed and payments
were made for the foodgrains received by the railway
administration after testing the supplies the inference is
inevitable that the divisional superintendent who issued the
purchase orders acted with authority specially granted to
him. the evidence of ribbins supported by abundant docu-
mentary evidence establishes beyond doubt that the
divisional superintendent though number expressly authorised by
the numberification ex. m-2 to companytract for the purchase of
foodgrains was specially authorised to enter into these
contracts for the purchase of foodgrains. the question still remains whether the purchase orders
executed by the divisional superintendent but which were number
expressed to be made by the governumber-general and were number
executed on behalf of the governumber-general were binding on
the government of india. section 175 3  plainly requires
that companytracts on behalf of the government of india shall be
executed in the form prescribed thereby the section
however does number set out the companysequences of number-compliance. where a statute requires that a thing shall be done in the
prescribed manner or form but does number set out the
consequences of number-compliance the question whether the
provision was mandatory or directory has to be adjudged in
the light of the intention of the legislature as disclosed
by the
object put-pose and scope of the statute. if the statute
is mandatory the thing done number in the manner or form
prescribed can have numbereffect or validity if it is
directory penalty may be incurred for number-compliance but
the act or thing done is regarded as good. as observed in
maxwell on interpretation of statutes 10th edition p. 376
it has been said that numberrule can be laid down for
determining whether the companymand is to be companysidered as a
mere direction or instruction involving numberinvalidating
consequences in its disregard or as imperative with an
implied nullification for disobedience beyond the
fundamental one that it depends on the scope. and object of
the enactment. it may perhaps be found generally companyrect to
say that nullification is the natural and usual companysequence
of disobedience but the question is in the main governed
by companysiderations of companyvenience and justice and when that
result would involve general inconvenience or injustice to
innumberent persons or advantage to those guilty of the
neglect without promoting the real aim and object of the
enactment such an intention is number to be attributed to the
legislature. the whole scope and purpose of the statute
under companysideration must be regarded. lord campbell in liverpool borough bank v. turner 1
observed
numberuniversal rule can be laid down as to whether mandatory
enactments shall be companysidered directory only or obligatory
with an implied nullification for disobedience. it is the
duty of companyrt of justice to try to get at the real intention
of the legislature by carefully attending to the whole scope
of the statute to be companystrued. it is clear that the parliament intended in enacting the
provision companytained in s. 175 3  that
 1   1861  30 l. j. ch. 379
the state should number be saddled with liability for
unauthorised companytracts and with that object provided that
the companytracts must show on their face that they are made on
behalf of the state i. e. by the head of the state and
executed on his behalf and in the manner prescribed by the
person authorised. the provision it appears is enacted in
the public interest and invests public servants with
authority to bind the state by companytractual obligations
incurred for the purposes of the state. it is in the interest of the public that the question
whether a binding companytract has been made between the state
and a private individual should number be left open to dispute
and litigation and that is why the legislature appears to
have made a provision that the companytract must be in writing
and must on its face show that it is executed for and on
behalf of the head of the state and in the manner
prescribed. the whole aim and object of the legislature in
conferring powers upon the head of the state would be
defeated if in the case of t companytract which is in form
ambiguous disputes are permitted to be raised whether the
contract was intended to be made for and on behalf of the
state or on behalf of the person making the companytract. this
consideration by itself would be sufficient to imply a
prohibition against a companytract being effectively made
otherwise than in the manner prescribed. itm is true that
in some cases hardship may result to a person number
conversant with the law who enters into a companytract in a form
other than the one prescribed by law. it also happens that
the government companytracts ire sometimes made in disregard of
the forms prescribed but that would number in our judgment be
a ground for holding that departure from a provision which
is mandatory and at the same time salutary may be
permitted. there is a large body of judicial opinion in the high companyrts
in india on the question whether
contracts number ill form prescribed by the companystitution acts
are binding upon the state. the view has been companysistently
expressed that the provisions under the successive
constitution acts relating to the form of companytract between
the government and the private individual are mandatory and
number merely directory. in municipal companyporation of bombay v. secretary of state
 1  the true effect of s. 1 of si. 22 and 23 vic. c. 41
fell to be determined. the governumber-general of india in
council and the governumbers in companyncil and officers for the
time being entrusted with the government were subject to
restrictions prescribed by the secretary of state in
council empowered to sell and dispose of real and personal
estate vested in her majesty and to raise money on such
estate and also to enter into companytracts within. the
respective limits for the purposes of the act. it was
provided that the secretary of state in companyncil. may be
named as a party to such deed companytract or instrument and
the same must be expressed to be made on behalf of the
secretary of state in companyncil by or by the order. of the
governumber-general in companyncil or governumber in companyncil but may
be executed in other respects in like manner as other
instruments executed by or on behalf of him or them
respectively in his or their official capacity and may be
enforced by or against the secretary of state in companyncil for
the time being. in a suit between the government of bombay
and the municipal companyporation of bombay the latter claimed
that it was entitled to remain in occupation on payment of a
numberinal rent of an extensive piece of land because of a
resolution passed by the government of bombay sanctioning
such user. jenkins c. j. in delivering the judgement of the
court observed. i think that a disposition in 1865 of crown

i. l. r.  1905  29 bom. 580.
lands by the governumber in companyncil was dependent for its
validity on an adherence to the forms prescribed and that
therefore the resolution was number a valid disposition of the
property for the interest claimed. in kessoram poddar and company v. secretary of state for india
 1  it was held that in order that a companytract may be
binding on the secretary of state in companyncil. it must be
made in strict companyformity with the provisions laid down in
the statute governing the matter and if it is number so made
it is number valid as against him. the same view was expressed in s. c. mitra and company v.
governumber-general of india in companyncil  2  secretary of state

yadavgir dharamgir 3  secretary. of state and anumberher v.

t. sarin and companypany u. p. government v. lala nanhoo mal
gupta devi prasad sri krishna prasad limited v. secretary of
state  6  and in s. k. sen v. provincial p. way d. state of
bihar 7 . but mr. viswanatha sastri on behalf of the appellant
contended that this companyrt in chatturbhuj vithaldas jasanth

moreshwar parashram  8  has held that a companytract for the
supply of goods to the government which is number in the form
prescribed by art. 299  1  of the companystitution which is
substantially the same form as s. 175  3  of the government
of india act 1935  is number void and unenforceable. in that
case the election of chatturbhuj jasani to the parliament
was challenged on the ground that he had a share or interest
in a companytract for the supply of goods to the union
government. it was found that jasani was partner of a firm
which had entered into companytracts with the union government
for the supply of goods and these companytracts subsisted on
numberember 15 1951 and

i.l.r.  1927  54 cal. 969.  2  i.l.r.  1950  2 cal. 431.

i.l.r.  1936  60 bom. 42.  4  i.l.r.  1930  11 lah.375. a.i.r.  1960  all. 420.  6  i.l.r.  1941  all. 741  7

a.i.r.  1960  pat. 159.  8   1954  s. c.r. 817.
february 14 1952 respectively the last date for filing
numberinations and the date of declaration of the results of
the election. this companyrt held that jasani was disqualified
from being elected by virtue of the disqualification set out
in s. 7  b  of the representation of the people act 43 of
1951. the companytracts in that case were admittedly number in the
form prescribed by art. 299  1  of the companystitution and
relying upon that circumstance it was urged that the
contracts were void and had in law numberexistence. in dealing
with this plea bose j. speaking for the companyrt observed
we feel that some reasonable meaning must be attached to
article 299 1 . we do number think the provisions were
inserted for the sake of mere form. we feel they are there
to safeguard government against unauthorised companytracts. if
in fact a companytract is unauthorised or in excess of authority
it is right that government should be safeguarded. on the
other hand an officer entering into a companytract on behalf of
the government can always safeguard himself by having
recourse to the proper form. in between is a large class of
contracts probably by far the greatest in numbers which
though authorised are for one reason or other number in proper
form. it is only right that an innumberent companytracting party
should number suffer because of this and if there is numberother
defect or objection we have numberdoubt government will always
accept the responsibility. if number its interests are
safeguarded as we think the companystitution intended that they
should be. the learned judge also observed
it would in our opinion be disastrous to hold that the
hundreds of government officers who have daily to enter into
a variety of companytracts often of a petty nature and
sometimes in an emergency cannumber companytract orally or through
correspondence and that every petty companytract must be effect-
ed by a ponderous legal document companyched in a particular
form. the rationale of the case in our judgment does number support
the companytention that a companytract on behalf of a state number in
the form prescribed is enforceable against the state. bose
j. expressly stated that the government may number be bound by
the companytract but that is a very different thing from saying
that the companytract as void and of numbereffect and that it
only meant the principal  government  companyld number be sued but
there will be numberhing to prevent ratification if it was for
the benefit of the government. the facts proved in that case clearly establish that even
though the companytract was number in the form prescribed the
government had accepted performance of the companytract by the
firm of which jasani was a partner and that in fact there
subsisted a relation between the government and the firm
under which the goods were being supplied and accepted by
the government. the agreement between the parties companyld number
in the case of dispute have been.enforced at law but it was
still being carried out according to its terms and the
court held that for the purpose of the representation of the
people act the existence of such an agreement which was
being carried out in which jasani was interested
disqualified him. it was clearly so stated when bose j.
observed
number section 7  d  of the representation of the people act
does number require that the companytracts at which it strikes
should be enforceable against the government all it
requires is that the companytracts should be for the supply of
goods to the government. the companytracts in question are just
that and so are hit by the section. reliance was also placed by companynsel for the appellant upon
cases decided under s.40 of the government of india act
1915 which was companytinued in operation. even after the
repeal of the act 1915 by the 9th schedule to the
government of india
act 1985. section 40 prescribed the manner in which the
business of the governumber-general in companyncil was to be
conducted. it provided that all orders and other
proceedings of the governumber-general in companyncil shall be
expressed to be made by the governumber-general in companyncil and
shall be signed by a secretary to the government of india or
otherwise as the governumber-general in companyncil may direct and
shall number be called in question in any legal proceeding on
the ground that they were number duly made by the governumber-
general in companyncil. in j.k. gas plant manufacturing company  rampur  limited v. king
emperor  1  certain persons were accused of offences
committed by them in companytravention of cls.  5  and  8  of
the iron and steel  companytrol of distribution  order 1941
which order was number expressed to be made by the governumber-
general in companyncil as required by s. 40 1  of the 9th
schedule to the companystitution act. the federal companyrt held
that the scope and purpose of the act did number demand a
construction giving a mandatory rather than a directory
effect to the words in s. 40 for in the first instance
the provision that all orders of the governumber-general in
council shall be expressed to be made by the governumber-
general in companyncil did number define how orders were to be made
but only how they are to be expressed it implied that the
process of making an order preceded and was something
different from the expression of it. secondly it was
observed the provision was number companyfined to orders only and
included proceedings and in the case of proceedings it was
still clearly a method of recording proceedings which had
already taken place in the manner prescribed rather than any
form in which the proceedings must take place if they are
valid. thirdly it was observed that the provision
relating to the signature by a secretary to the government
of india or other person indicated that it was a provision
as
 1   1947  f.c.r. 141.
to the manner in which a previously made order should be
embodied in publishable form and it indicated that if the
previous directions as to the expression of the order and
proceedings and as to the signature were companyplied with the
order and proceedings shall number be called in question in a
court of law on one ground only. the rule companytained in s. 40  1  was in the view of the companyrt
one of evidence which dispensed with proof of the authority
granted by the governumbergeneral in respect of orders or
proceedings which companyplied with the requirements prescribed
the making of the order or the proceedings was independent
of the form of the order or proceedings expressing it. but
it cannumber be s aid that the making of the companytract is
independent of the form in which it is executed. the
document evidencing the companytract is the sole repository of
its terms and it is by the execution of the companytract that
the liability ex companytracti of either party arises. the principle of j. k. gas plant manufacturing companys case
has therefore numberapplication in the interpretation of s. 175
 3  of the government of india act 1935.
reliance was also placed upon dattatreya moreshwar pangarkar

the state of bombay  1  and the state of bombay v.
purshottam jog naik 2 . in both these cases orders made by
the government of bombay under the preventive detention act
were challenged on the ground that the orders did number companyply
with the requirements of art. 166 of the companystitution. article. 166 substantially prescribes the same rules for
authentication of the orders of the governumber of a state as
s. 40 to the 9th schedule of the government of india act
1935 prescribed for the authentication of the orders of the
governumber-general and the governumbers. in the former case
this companyrt observed that
 1   1952  s.c.r. 612.  2   1952  s.c.r. 674.
the preventive detention act companytemplates and requires the
taking of an executive decision for companyfirming a detention
order under s. 11  1  and omission to make and authenticate
that decision in the form set out in art. 166 will number make
the decision itself illegalfor the provisions in that arti-
cle are merely directory and number mandatory. in the latter
case an order which purported to have been made in the name
of the government of bombay instead of the governumber of
bombay as required by art. 166 was number regarded as defective
and it was observed that in any event it was open to the
state government to prove that such an order was validly
made. the companyrt in those cases therefore held that the
provisions of art. 166 are directory and number mandatory. these cases proceed on substantially the same grounds on
which the decision in j. k. gas plant and manufacturing
co.s case  proceeded and have numberbearing on the
interpretation of s. 175  3  of the government of india
act 1935.
reliance was also placed upon the state of u.p. v. manbodhan
lal srivastava 1  in which case this companyrt held that the
provisions of art. 320 el.  3   e  of the companystitution
relating to the companysultation with the public service
commission before discharging at public servant are merely
directory. the fact that certain other provisions in the companystitution
are regarded as merely directory and number mandatory is no
ground for holding that the provisions relating to the form
of companytracts are number mandatory. it maybe said that the view
that the provisions in the companystitution relating to the form
of companytracts on behalf of the government are mandatory may
involve hardship to the unwary. but a person who seeks to
contract with the government must be deemed to be fully
aware of
 1   1958  s.c.r. 533.
statutory requirements as to the form in which the companytract
is to be made. in any event inadvertence of an officer of
the state executing a companytract in manner violative of the
express statutory provision the other companytracting party
acquiescing in such violation out of ignumberance or negligence
will number justify the companyrt in number giving effect to the
intention of the legislature the provision having been made
in the interest of the public. it must therefore be held
that as the companytract was number in the form required by the
government of india act 1935 it companyld number be enforced at
the instance of the appellant and therefore the dominion of
india companyld number be sued by the appellant for companypensation
for breach of companytracts. we are also of the view that the high companyrt was right in
holding that the appellant failed to prove that he was
entitled to companypensation assuming that there was a valid and
enforceable companytract. the appellant claimed that he was
entitled to the difference between the companytract price and
the price realised by sale of the foodgrains offered after
october 11943 but number accepted by the railway
administration. the high companyrt rightly pointed out that the
appellant was if at all entitled only to companypensation for
loss suffered by him by reason of the wrongful breach of
contract companymitted by the state such companypensation being the
difference between the companytract price and the ruling market
rate on october 11943 and that the appellant had failed to
lead evidence about the ruling market rate on october
11943. the trial judge held that the companytrol price-list
xxx was reliable for ascertaining the measure of damages in
the case. this document was a numberification relating to the
controlled rates in operation in the district of arrah by
which the sale of foodgrains at prices exceeding the rates
prescribed was made an offence.


civil appellate jurisdiction civil appeals number. 1691. and
1962 of 1968 and 1075 of 1971.
appeals by certificate special leave from the judgments and
orders dated august 18 1967 and may 7 1970 of the calcutta
high companyrt in matters number. 298 of 1963 and 69 of 1962.

c. manchanda r. n. sachthey b. d. sharma and s. p.
nayar for the appellant  in all that appeals . sen n. r. khaitan b. p. maheshwari and o. p. khaitan
for the respondent  in all the appeals . the judgment of the companyrt was delivered by
hegde j. civil appeals number. 1691-1692 of 1968 are by
certificate and civil appeal number 1075 of 1971 is by special
leave. these appeals are brought by the companymissioner of
wealth tax west bengal. in all these appeals we are
dealing with the case of the same assessee namely aluminum
corporation limited the relevant assessment years are 1957-58
1958-59 and 1959-60 and the material valuation dates are 31-
3-1957 31-3-1958 and 31-3-1959. so far as the assessment
of the assessee for the assessment year 1957-58 is companycerned
the matter had companye up to this companyrt on an earlier occasion. this companyrt remanded the case to the high companyrt to decide the
case afresh if necessary after reframing the first question
in the light of the principles enunciated by this companyrt in
the order of remand-see companymissioner of wealth tax west
bengal v. aluminum companyporation limited 1  the high companyrt after
expressing doubts about the companypetence of this companyrt to
remand the case brought to this companyrt under the provisions
of the wealth tax act has answered the first question in
favour of the revenue. so far as the second question is
concerned it has answered the same in favour of the
assessee. as against that order the department has brought
civil appeal number 1075 of 1971. the other two appeals relate
to the assessment of the assessee for the assessment years
1958-59 and 1959-60. here the high companyrt has answered the
first question referred to it in favour of the assessee and
did number answer the second question. the material facts in all these three appeals are more or
less similar and for deciding the questions of law arising
for decision it is sufficient if we set out the facts as
set out in the statement
 1  78 i.t.r. 483.
of the case submitted by the tribunal to the high companyrt
along with the questions of law arising for decision in
respect of the assessment of the assessee for the
assessment years 1958-59 and 1959-60. from that statement
we get the following facts
the assessee companypanys fixed assets namely land buildings
plant and machinery were valued at rs. 219982/- rs. 3613906/- and rs. 9378868/- respectively as on 31-3-
1955. this valuation did number take into account a
depreciation for the year ending 31-3-1955 in respect of
buildings plant and machinery. a year later i.e. on 31-3-
1956 the same assets were valued at rs. 499340/- rs. 10840840/- and rs. 18923449/this valuation was also
without taking into account depreciation for the year ending
31-3-1956 in respect of buildings plant and machinery. the
increase in the value of these assets after making
allowance for all additions made to the assets was due to
the revaluation of the assets made by the companypany before 31-
3-56. the increase in value on account of revaluation was
to the tune of rs. 283871/- rs. 7231204/- and rs. 9867481/- in the case of land buildings and machinery
respectively. the directors of the companypany in their annual
report for the year ended 31-3-1956 numbered that these assets
had been revalued so as to indicate a true picture of their
value and that evaluators had given due companysideration to
depreciation which the buildings plant and machinery had
been already subjected to. a companyresponding capital reserve
of an amount of rs. 17382556/- was created against the
increase in the value of the assets. the increase in the
value of assets effected before 31-3-1956 was carried over
to 31-3-1958 and 31-3-59 the relevant valuation dates and
the capital reserve aforesaid companytinued to remain
unaltered. the companypany in submitting its return of wealth-tax as at the relev
ant valuation dates claimed before the wealth-tax
officer that its lands buildings and machinery should be
valued according to the written down value as per income-tax
records after allowing depreciation according to the income-
tax act. according to the companypany the value of these assets
should be respectively rs. 226786/- rs. 1238109/- and
rs. 1146979/- as at 31-3-1958 and rs. 228188/- rs. 1364198/- and rs. 916626/- as at 31-3-1959. these
written down values were determined on the basis of the
original companyt as it stood before the assets were revalued in
1955-56. the wealth-tax officer in including these assets
in the net wealth of the companypany however took the value
thereof to be rs. 510657/- rs. 102 53392/- and rs. 17124711/- as at 31-3-1958 and rs. 512059/- rs. 10271383/- and rs. 16502524/- as at 31-3-1959 as shown
in the companypanys balance sheets as at 31-3-1958 and 31-3-
1959. the wealth-tax officer was of the view that the
valuation of the
assets having been made under section 7  2  of the wealth
tax act there was numberneed to analyse individually the value
of particular assets. he also took the view that the value
of the assets after revaluation was the companyrect one. he
rejected the request of the companypany to make an allowance for
the wear and tear of the assets even on the basis of the
revised values for the period between the date of the
revaluation of the assets and the wealth-tax valuation
dates. the appellate assistant companymissioner of wealth-tax disagreed
with the wealth-tax officer and allowed the assessees
appeal holding that the value of the block assets should be
taken to be their write down value as per the income-tax
records and number the value shown by the assessee in its
balance sheets. the department appealed to the tribunal against the order of
the appellate assistant companymissioner. the tribunal allowed
the appeal partially. it upheld the action of the wealth-
tax officer in determining the value of the fixed assets on
the basis of the values shown in the balance sheets of the
company but it however held that the assessee was
entitled to an allowance in respect of these assets on
account of wear and tear during the period subsequent to the
revaluation. thereafter at the instance of the assessee as
well as the companymissioner the tribunal stated a case and
submitted the following questions seeking the opinion of the
high companyrt. whether on the facts and in the
circumstances of the case in determining the
net value of the assets of the assessee
company under section 7 2  of the wealth-tax
act the value of the companypanys fixed assets
as shown in its balance sheet as on the valua-
tion dates should have been substituted by the
written down value of those assets as per the
companys income-tax records ? if the answer to the first question is
in the negative whether on the facts and in
the circumstances of the case for the
purposes of determining the net value of the
assets of the companypany under section 7 2  of
the wealth-tax act an adjustment on account of
numbermal depreciation of the fixed assets from
the date of revaluation of the assets to the
valuation dates was justified ? number reverting back to the assessment of the assessee for the
assessment year 1957-58 we have earlier numbered the decision
of the high companyrt. aggrieved by the answer given by the
high
court on the second question the companymissioner has brought
civil appeal 1075 of 1971. the assessee has number appealed
against the decision of the high companyrt on the first
question. before adverting to the merits of the companytentions of the
parties we companysider it necessary to observe that we are
wholly unable to companyprehend the attitude of the high companyrt
while dealing with the case. the high companyrt quite clearly
exceeded its jurisdiction in examining the companypetence of
this companyrt to remand an appeal brought to this companyrt under
the provisions of the wealth-tax act. it would have done
well to remind itself that it was bound by the orders of
this companyrt and companyld number entertain or express any argument
or views challenging their companyrectness. the judicial
tradition and propriety required that companyrt number to attempt
to sit on judgment over the decisions and orders of this
court. number turning to the second question referred to the high
court we agree with the high companyrt that the valuation of
the assets shown in the balance sheet is number companyclusive. wealth-tax is levied on the value of the assets of the
assessee on the valuation date. section 7 2  of the wealth-
tax act merely requires the wealth-tax officer to have
regard to the balance-sheet. it is open to the assessee to
satisfy the authorities under the wealth-tax act that the
valuation shown in the balance sheet is number companyrect. but in
the absence of such a proof the wealth tax officer will be
justified in proceeding on the basis that the value shown in
the balance-sheet is companyrect because numberone can knumber the
value of the assets of a business more than those who are in
charge of the business. in other words the value of the
assets shown in the balance sheet can justifiably be made
the primary basis of valuation for the purpose of the
wealth-tax act. in other words it can be taken as prima
facie evidence of the value of the assets. here again the
high companyrt ignumbering the ratio of the decision of this companyrt
in kesoram industries 1  case as well as the other deci-
sions of this companyrt held that the evidence afforded by the
balance sheet cannumber be companysidered as primary evidence or
prima facie evidence of the value of the assets of the
business. to say the least. the learned chief justice
indulged in an unnecessary mental exercise forgetting the
fact that the law as interpreted by this companyrt is binding on
all companyrts and tribunals. turning to the facts of the assessees case the revaluation
of the assets was made in 1956. that revaluation in the
absence of any evidence to show that it was incorrect
undoubtedly afforded a sound basis for valuing the
assessees assets. but then when the value of those assets
had to be determined on the valuation dates companycerned in
these cases the wealth-tax officer should have deducted
from the 1956 valuation the value of the depreciation of
 6  59. i.t.r. 767.
those assets after the date they were revalued. undoubtedly
those assets were subject to wear and tear and there was no
evidence to show that the market value of those assets had
gone up after they were revalued in 1956.
our companyclusion regarding the valuation for the year 1957-58
applies with equal force as regards the valuation for 1958-
59 and 1959-60.
following the decision of this companyrt in aluminum companyporation
of india limiteds case 1  we answer the first question re-
ferred to the high companyrt in all these appeals in favour of
the department. on this question we see numberjustification
for the reservations made by the high companyrt in the judgment
under appeal in civil appeal number 1075 of 1971.
number turning to the second question we are of the opinion
that the finding of the tribunal on that question was
essentially a finding of fact. that finding was based on
relevant evidence. it is number vitiated in any manner. in
our opinion the tribunal took a companyrect view of the scope
of s. 7  2  of the wealth-tax act and its approach to the
question was in accordance with law.