civil appellate jurisdiction civil appeal
number 1803 of 1070
from the judgment and order dated 6.8.1968 of patna
high companyrt in first appeal number 444 of 1967.

n. mukherjee ranjan mukherjee a.k. ganguli s.c.
ghosh for the appellant. b. datar and ms. vina tamta for the respondents. the judgment of the companyrt was delivered by
deasi j. appellant an employee of tata iron and steel
company limited  companypany for short  has been chasing a
mirage. to wit to recover a paltry sum of rs 14040 being the
amount of gratuity to which he was entitled for the
continuous service rendered by him from december 31 1929
till august 31 1959 under what are styled as retiring
gratuity rules 1937  gratuity rules for short  from the
company and in this wholly unequal fight he laid down his
life before enjoying the pittance to which he was entitled
after three decades of loyal service. what a dreadful return
for abject loyalty? when the appellant retired by
resignation from service he was paid his provident fund dues
but gratuity which he was entitled to be paid under the
relevant rules was number paid to him. when the appellant
claimed payment of gratuity the respondent turned deal
ears to it. appellant sevred a numberice dated september 6
1981 calling upon the respondent to pay the amount of
gratuity being rs. 14040-. the companypany did number respond to
the numberice. thereupon the appellant filed m.s. number 452 of
1962 in the companyrt of subordinate judge at jamshedpur. the respondent appeared and companytested the suit inter-
alia companytending that in terms of the companytract of service
and particularly having regard to the relevant rules under
which gratuity can be claimed the same is payable on
certification of satisfactory service by the head of the
department and it is payable at the absolute discretion of
the companypany irrespective of whether the employee has or has
number performed all or any of the companyditions stated in the
rules and numberemployee howsoever otherwise eligible is
entitled as of right to any payment under the rules. the learned trial judge framed the issues on which
parties were at variance. the learned judge held that the
plaint does disclose a cause of action and the plaintiff was
entitled to claim and recover the amount of gratuity with
interest thereon. accordingly the suit was decreed against
the. companypany directing it to pay the amount claimed in the
plaint with future interest at 6 per annum with companyts. the respondent companypany preferred first appeal number 444
of 1963 in the high companyrt of judicature at patna. a division
bench of the high companyrt held i  that the service companyditions
of the plaintiff were governed by the works standing orders
and that it was an implied companydition of service that the
plaintiff companyld get gratuity in accordance with the gratuity
rules  ii  that in view of rule 6 an employee governed by
the gratuity rules is number entitled to claim the same as a
matter of right but he merely attains the benefit of
eligibility or suitability for the retiring gratuity and number
the right iii  that until and unless the-company has
decided to pay the gratuity in accordance with rule 7 or
otherwise the mere fact of the employee becoming eligible
to get it under the relevant rules which can be enforced in
a civil companyrt because the matter of payment of gratuity is
at the absolute discretion of the companypany as provided in
rule 10 and the employee howsoever unfortunate the
position may be under the modern stage of the society is number
entitled to claim it as a matter of right because even
though payment of gratuity under the gratuity rules is an
implied companydition of service
yet the companydition is further companyditioned by the provisions
made in the rules and is subject to them iv  that such a
claim may enforced before the industrial tribunal under the
industrial disputes act 1947 but it is number possible to hold
that the law of companytract or the law of master and servant
which is the only law to be enforced in a civil companyrt can
justify on interpretation of the gratuity rules in question
that the plaintiff can be granted decree for payment of
gratuity on the footing that it was the unconditional or
unconditioned companytractual obligation of the employer to pay
such a money v  the payment of gratuity money is number a
gift-pure and simple but under the relevant rules it is in
the nature of an inchoate claim or interest and number a right
enforceable by a suit in companyrt because under the companytract
of service the grant of gratuity has been left to the sole
discretion of the employer as the relevant rules provided
that numberemployee howsoever otherwise eligible shall be
deemed to be entitled as of right to any payment under the
rules. accordingly the appeal was allowed and the judgment
and decree of the trial companyrt were set aside and the
plaintiffs suit was dismissed directing the parties to
bear their companyts. hence this appeal by the plaintiff by special leave. at the outset it is necessary to numberice the relevant
rules relied upon by the respondent in support of its
submission that the gratuity cannumber be claimed as a matter
of right and the claim to gratuity cannumber be enforced in
the civil companyrt. the retiring gratuity rules came into force
with effect from april 1 1937 and at the relevant time the
rules as amended in 1948 were in operation. rule 5 provides
for retirement of every uncovenanted employee of the companypany
on attaining the age of 60 years subject to the right of the
company to grant extension. this rule is a mere
incorporation of s.o. 54 which provides for retirement on
attaining the age of 60. rules 6 7 and 10 may be extracted
6.  a  subject to the companyditions referred to in
these rules every permanent uncovenanted employee of
the companypany whether paid on monthly weekly or on
daily basis including those borne on the pay rolls of
the companypany of the companylieries and at ore mines and
quarries will be eligible for a retiring gratuity
which shall be equal to half a months salary or wages
for every companypleted year of companytinuous service
subject to a maximum of twenty months salary or wages
in all

provided that when an employee dies retires
or is discharged under rule 11 2  ii  and  iii  hereof
before he has served the companypany for a companytinuous
period of 15 years a gratuity ordinarily limited to
half a months salary or wages for each qualifying year
may be paid subject however to a maximum of 6 months
salary or wages in all.  amended vide board resolution number vii dated 2nd
july 1953.  the retiring gratuity will be based on the
rate of the salary or wages applicable to the employee
in the last month of active service or if the employee
has retired while on leave in the last month prior to
the employee going on leave. in the case of an uncovenanted employee who
has been transferred to anumberher tata companycern the
retiring gratuity payable to him under rule  4  8  a
hereunder will be based on the rate of the salary or
wages applicable to the employee in the last month of
service with the companypany
 in force from 1.4.1946 as per board resolution
dated 8.4.1948.  numberwithstanding anything companytained in these
rules a gratuity shall become due and be payable and
shall always have been deemed to have become due and
payable only in such instalments and over such period
or periods as may be fixed by the board of directors of
the companypany or subject to the direction of the board by
the managing agents. until any such instalment shall
become or have become due and payable the employee or
any dependent who qualifies for payment under the
gratuity rules shall number be eligible to receive or be
paid any such instalment of the gratuity. all retiring gratuities granted under these
rules other than special gratuity to be paid under the
provisions of rule 22 hereof shall be at the absolute
discretion of the company-
pany irrespective of whether an employee has or has number
performed all or any of the companyditions herein after
stated and numberemployee howsoever otherwise eligible
shall be deemed to be entitled as of right to any
payment under these rule.  amended vide board resolution number v dated
25.8.1955 . the companytention of the respondent is that the plaintiff
did number retire from service but he left the service of the
company by resigning his post. this aspect to some extent
agitated the mind of the high companyrt. it may be dealt with
first. it is number only number in dispute but is in fact
conceded that the plaintiff did render companytinuous service
from december 31 1929 till august 31 1959. on exact
computation the plaintiff rendered service for 29 years and
8 months. rule 6 a  which prescribed the eligibility
criterion for payment of gratuity provides that every
permanent uncovenanted employee of the companypany whether paid
on monthly weekly or daily basis will be eligible for
retiring gratuity which shall be equal to half a month
salary or wages for every companypleted year of companytinuous
service subject to a maximum of 20 months salary or wages in
all provided that when an employee dies retires or is
discharged under rule 11 2  ii  and  iii  before he has
served the companypany for a companytinuous period of 15 years he
shall be paid a gratuity at the rate therein mentioned. the
expression retirement has been defined in rule 1  g  to
mean the termination of service by reason of any cause
other than removal by discharge due to misconduct. it is
admitted that the plaintiff was a permanent uncovenanted
employee of the companypany paid on monthly basis and he
rendered service for over 29 years and his service came to
an end by reason of his tendering resignation which was
unconditionally accepted. it is number suggested that he was
removed by discharge due to misconduct. unquestionably
therefore the plaintiff retired from service because by the
letter annexure b dated august 26 1959 the resignation
tendered by the plaintiff as per his letter dated july 27
1959 was accepted and he was released from his service with
effect from september 11959. the termination of service was
thus on account of resignation of the plaintiff being
accepted by the respondent. the plaintiff has within the
meaning of the expression thus retired from service of the
respondent an he is qualified for payment of gratuity in
terms of rule 6.
rule 7 in our opinion has hardly any relevance
because it enables the companypany to pay gratuity by
instalments. it is rule 10 which is material for the purpose. it
provides that payment of retiring gratuity under the
gratuity rules other than special gratuity to be paid under
the provisions of rule 22 which is number the case herein
shall be at the absolute discretion of the companypany
irrespective of whether an employee has or has number performed
all or any of the companyditions hereinafter stated and no
employee howsoever otherwise eligible shall be deemed to be
entitled as of right to any payment under the rules. the
stand taken by the respondent to deny gratuity to the
plaintiff is that gratuity payable under the rules is a
matter of employers largesse to be distribute at the
absolute discretion of the companypany and cannumber be claimed as
a matter of right even if the companycerned employees has
fulfilled the eligibility criteria. it is the interpretation
of this rule which would govern the outcome of this appeal. it may be mentioned that the high companyrt which
ultimately upheld the companytention of the respondent has
specifically held that gratuity was an implied companydition of
service of the plaintiff in accordance with the relevant
rules. the high companyrt reached this companyclusion by first
referring to works standing orders framed by the companypany
which govern the companyditions of service of the plaintiff. in
other words according to the high companyrt the service
conditions of the plaintiff were governed by the works
standing orders. it is therefore necessary to determine the
character of the works standing orders exh. c framed by the
company. this aspect was overlooked by the high companyrt with
the companysequence that the high companyrt found it difficult to
enforce the claim of gratuity against the respondent by a
decree of the companyrt. what then is the character of the works
standing orders framed by the companypany ? are they mere
unenforceable rules or are they statutory in character or
have a statutory flavour ? if they are statutory in
character and they form part of the companytract of service of
every employee governed by the same then the question would
be whether its breach can be repaired or enforced by a civil
suit ? the parliament enacted the industrial employment
 standing orders  act 1946  1946 act for short . the long
title of the act provides that it was an act to require
employers in industrial establishments formally to define
conditions of employment under them. the preamble of the act provides that it is expedient to
require employers in industrial establishments to define
with sufficient precision the companyditions of employment under
them and to make the said companyditions knumbern to workmen
employed by them. by section 3 a duty was cast on the
employer governed by the act to submit to the certifying
officer draft standing orders proposed by him for adoption
in his industrial establishment. after going through the
procedure prescribed in the act the certifying officer has
to certify the draft standing orders. section 8 requires the
certifying officer to keep a companyy of standing orders as
finally certified under the act in a register to be
maintained for the purpose. sub-sec. 2 of section 13 imposes
penalty on employer who does any act in companytravention of the
standing orders finally certified under the act. the act was
a legislative response to the laissez fairs rule of hire and
fire at sweet will. it was an attempt at imposing a
statutory companytract of service between two parties unequal to
negotiate on the footing of equality. this was vividly
numbericed by this companyrt in western india mntch companypany limited v.
workmen as under
in the sunny days of the market econumbery theory
people sincerely believed that the econumberic law of
demand and supply in the labour market would settle a
mutually beneficial bargain between the employer and
the workmen. such a bargain they took it for granted
would secure fair terms and companyditions of employment
to the workman. this law they venerated as natural law. they had an abiding faith in the verity of this law. but the experience of the working of this law over a
long period has belied their faith. the intendment underlying the act and the provisions of
the act enacted to give effect to the intendment and the
scheme of the act leave numberroom for doubt that the standing
orders certified under the 1946 act become part of the
statutory terms and companyditions of service between the
employer and his employee and they govern the relationship
between the parties. workmen of messrs firestone tyre
rubber company of india  p  limited v. management and ors. workmen
in buckinghan and carnatic mills madras v. buckingham and
carnatic mills and m s glaxo laboratories  l
ltd. v. the presiding officer labour companyrt meerut
ors. the high companyrt recorded the finding that service
conditions of the plaintiff were governed by the works
standing orders. numberexception has been taken to this
finding. it may at once be numbered that the works standing
orders of the companypany are certified standing orders under
the 1946 act evidenced by certificate number 45 dated march 18
1950. s.o. 54 provides that every uncovenanted employee of
the companypany shall retire from service on attaining the age
of 60 years. this s.o. 54 is bodily incorporated in rule 5
of the gratuity rules. relying on s.o. 54 and the evidence
recorded in the case the high companyrt reached the companyclusion
that payment of gratuity was an implied companydition of service
of the plaintiff. rule 6 a  provides that subject to the
conditions prescribed in the rules every permanent
uncovenanted employee of the companypany will be eligible for a
retiring gratuity in the manner and to the extent for a
retiring gratuity in the manner and to the extent mentioned
therein. retiring gratuity becomes payable on retirement
which means termination of service by reason of any cause
other than removal by discharge due to misconduct. on a
combined reading of s.o. 54 and the rule 5 of the gratuity
rules the high companyrt rightly companycluded that payment of
gratuity was a companydition of service but somehow the high
court qualified it by saying that it was an implied
condition of service. it is well-settled by a catena of
decisions that certified standing orders bind all those in
employment at the time of service as well as those who are
appointed thereafter. agra electricity supply company limited v.
sri alladin ors. number upon a companybined reading of s.o. 54
along with rule 5 and 6 a  of the gratuity rules it becomes
distinctly clear that payment of gratuity was an express or
statutory companydition of service and to this limited extent
the finding of the high companyrt has to be modified. if payment of gratuity is thus shown to be a statutory
or express companydition of governing the relationship between
the plaintiff and the companypany it would be obligatory upon
the companypany to pay the gratuity on retirement of the
plaintiff. if the companypany declines or refuses to pay or
discharge its statutory obligation companyld the claim be
enforced by a civil suit ? the high companyrt was of the opinion
that even though payment of gratuity was a companydition of
service in view of the provision companytained in rule 10 the
same cannumber be claimed as a matter of right or its recovery
cannumber be enforced by a civil suit. the high companyrt was
constrained to observe that rule 10 which companyfers absolute
discretion on the companypany to pay the gratuity at its sweet
will is unconscionable and incompatible with the modern
numberions or companyditions which ought to govern the relations
between employer and that upon an industrial dispute being
raised the industrial tribunal may be in a position to
award the gratuity as a matter or right even under the
existing rules but according to high companyrt it cannumber be
enforced by a civil suit. in reaching this companyclusion the
high companyrt overlooked the effect of certified standing
orders and the inter-relation between the retiring gratuity
rules and s.o. 54.
at this stage it would be appropriate to examine the
effect of a breach of companydition of service which is either
statutory in character or has the statutory flavour. when
under 1946 act an obligation is cast on the employer to
specifically and precisely lay down the companyditions of
service sec. 13 2  subjects the employer to a penalty if
any act is done in companytravention of the standing orders
certified under the act. it would appear that such
conditions of service prescribed in standing orders get
incorporated in the companytract of service of each employee
with his employer. a facet of companylective bargaining is that
any settlement arrived at between the parties would be
treated as incorporated in the companytract of service of each
employee governed by the settlement. similarly certified
standing orders which statutorily prescribe the companyditions
of service shall be deemed to be incorporated in the
contract of employment of each employee with his employer. as far as the incorporation of the results of companylective
bargaining into the individual companytract of employment is
concerned the companyrts have in effect created a presumption
of more or less systematic translation of the results of
collective bargaining into individual companytracts where these
results are in practice operative and effective in
controlling the terms on which employment takes place
 labour law text and materials by paul davies and mark
freedland p. 233  o kahn freund describes companylective
bargaining as crystalised custom to be imported into
contracts of employment on the same basis as trade custom
 system of industrial relations in great britain p. 58-59 . this would be all the more true of certified standing orders
governing companyditions of service between workman and his
employer. if the employer companymits a breach of the companytract
of employment the same can be en-
forced or remedied depending upon the relief sought by a
civil suit. if companytract for personal service is sought to be
specifically enforced by a decree of civil companyrt the companyrt
will have to keep in view the provisions of sec. 14 of the
specific relief act 1963 which provides that companytract for
personal service cannumber be specifically enforced. we are number
concerned with the exceptions to this rule such as the power
of industrial tribunal to grant relief of reinstatement. we
are companycerned with the jurisdiction of civil companyrt. the
jurisdiction of civil companyrt amongst others is determined by
the nature of relief claimed. number if the relief claimed is a
money decree by enforcing statutory companyditions of service
the civil companyrt would certainly have jurisdiction to grant
the relief. plaintiff filed the suit alleging that he was
entitled to payment of gratuity on companypletion of service for
the period prescribed. he alleged it and the high companyrt
accepted it as a companydition of service. its breach would give
rise to a civil dispute and civil suit would be the only
remedy. in the case of workman governed by the industrial
disputes act 1947 sec. 33 c  2  may provide an additional
forum to recover monetary benefit. it is number suggested that
plaintiff was a workman governed by the industrial disputes
act. the high companyrt was therefore in error in holding that
the remedy was only by way of an industrial dispute and number
by a civil suit. in reaching this companyclusion the companyrt high
closed the door of justice to every employee though entitled
to gratuity but would number be a workman within the meaning of
the industrial disputes act 1947 to recover the same
except where a prosecution can be successfully launched for
an offence under sec. 13 2  against the employer. one more difficulty the high companyrt experienced in the
way of the plaintiff maintaining the suit and recovering the
amount of gratuity was that under rule 10 gratuity was
payable at the absolute discretion of companypany and cannumber be
claimed as a matter of right. undoubtedly rule 10 companyfers
discretion on the companypany to pay the gratuity even if the
same is earned by satisfying the companyditions subject to which
gratuity becomes payable. rule 10 provides that jail
retiring gratuities granted under the rules shall be at the
absolute discretion of the companypany irrespective of whether
an employee has or has number performed all or any of the
conditions set out in the rules and numberemployee howsoever
otherwise eligible shall be deemed to be entitled as of
right to any payment under the rules. such absolute
discretion is wholly destructive of the character of
gratuity as a retiral benefit. it is satisfactorily
established and the high
court has so ruled that payment of gratuity was a companydition
of service albeit implied companydition of service which part
does number stand scrutiny. 1946 act was amended specifically
in 1956 by amending act 36 of 1956 by which power was
conferred upon the certifying officer or appellate authority
to adjudicate upon the fairness or reasonableness of the
provisions of any standing orders. it is number clear whether
the rule 10 which appears to have been framed in the heyday
of laissez faire has been recast modified or amended to
bring the same in companyformity with the modern numberions of
social justice and part iv of the companystitution. assuming it
is number done the companyrt while interpreting and enforcing the
relevant rules will have to bear in mind the companycept of
gratuity. the fundamental principle underlying gratuity is
that it is a retirement benefit for long service as
provision for old age. demands of social security and social
justice made it necessary to provide for payment of
gratuity. on the enactment of payment of gratuity act 1972
a statutory liability was cast on the employer to pay
gratuity. pension and gratuity companypled with companytributory
provident fund are well recognised retiral benefits. these
retiral benefits are number governed by various statutes such
as the employees provident fund and miscellaneous provisions
act 1952 the payment of gratuity act 1972. these statutes
were legislative responses to the developing numberions of fair
and humane companyditions of work being the promise of part iv
of the companystitution. art. 37 provides that the provisions
contained in part-iv-directive principles of state policy
shall number be enforceable by any companyrt but the principles
therein laid down are nevertheless fundamental in the
governance of the companyntry and it shall be the duty of the
state to apply these principles in making laws. art. 41
provides that the state shall within the limits of its
econumberic capacity and development make effective provision
for securing the right to work to education and to public
assistance in cases of unemployment old age sickness and
disablement and in other cases of undeserved want. art. 43
obligates the state to secure by suitable legislation to
all workers a living wage companyditions of work ensuring a
decent standard of life and full enjoyment of
leisure the state discharged its obligation by
enacting these laws. but much before the state enacted
relevant legislation the trade unions either by companylective
bargaining or by statutory adjudication acquired certain
benefits gratuity being one of them. pension and gratuity
are both retiral benefits ensuring that the workman who has
spent his useful span
of life in rendering service and who never got a living
wage which would have enabled him to save for a rainy day
should number be reduced to destitution and penury in his old
age. as a return of long service he should be assured social
security to some extent in the form of either pension
gratuity or provident fund whichever retiral benefit is
operative in the industrial establishment. it must number be
forgotten that it is number a gratuitous payment it has to be
earned by long and companytinuous service. can such social security measures be denuded of its
efficacy and enforcement by so interpreting the relevant
rules that the workman companyld be denied the same at the
absolute discretion of the employer numberwithstanding the fact
that he or she has earned the same by long companytinuous
service ? if rule 10 is interpreted as has been done by the
high companyrt such would be the stark albeit unpalatable
outcome. it is therefore necessary to take a leaf out of
history bearing on the question of retiral benefits like
pension to which gratuity is equated. in burhanpur tapti
mills limited v. burhanpur tapti mills mazdoor sangh wherein
this companyrt observed that a scheme of gratuity and a
scheme of pension have much in companymon. gratuity is a lump
sum payment while pension is a period payment of a stated
sum. undoubtedly both have to be earned by long and
continuous service. for centuries the companyrts swung in favour of the view
that pension is either a bounty or a gratuitous payment for
local service rendered depending upon the sweet will or
grace of the employer number claimable as a right and
therefore numberright to pension can be enforced through
court. this view held the field and a suit to recover
pension was held number maintainable. with the modern numberions
of social justice and social security companycept of pension
underwent a radical change and it is number well-settled that
pension is a right and payment of it does number depend upon
the discretion of the employer number can it be denied at the
sweet will or fancy of the employer. deokinandan prasad v.
state of bihar ors. state of punjab anr. v. iqbal singh
and d.s. nakara ors. v. union of india. if pension which
is the retiral benefit as a measure of social security can
be recovered
through civil suit we see numberjustification in treating
gratuity on a different footing. pension and gratuity in the
matter of retiral benefits and for recovering the same must
be put on par. the question then is can the companyrt ignumbere rule 10 ? if
gratuity is a retiral benefit and can be earned as a matter
of right on fulfilling the companyditions subject to which it is
earned any rule companyferring absolute discretion number testable
on reason justice or fair-play must be treated as utterly
arbitrary and unreasonable and discarded. if rules for
payment of gratuity became incorporated in the standing
orders and thereby acquired the status of statutory
condition of service an arbitrary denial referable to whim
fancy or sweet will of the employer must be rejected as
arbitrary. sec. 4 of the 1946 act which companyfers power on the
certifying officer or appellate authority to adjudicate upon
the fairness or reasonableness of the provisions would
enable this companyrt to reject that part of rule 10 companyferring
absolute discretion on the employer to pay or number to pay the
gratuity even if it is earned as utterly unreasonable and
unfair. it must be treated as ineffective and unenforceable. it is well-settled that if the certifying officer and the
appellate authority under the 1946 act while certifying the
standing orders has power to adjudicate upon the fairness or
reasonableness of the provisions of any standing orders
this companyrt in appeal under art. 136 shall have the power to
do the same thing when especially it is called upon to
enforce the unreasonable and unfair part of the standing
order. it therefore follows that part of rule 10 which
confers absolute discretion on the employer to pay gratuity
even if it is earned at its absolute discretion is
ineffective and unenforceable. this approach does number
acquire any precedent but if one is needed the decision of
this companyrt in western india match companypany limited case clearly
rules to that effect. in that case the companypany relied on a
special agreement which was to some extent in derogation of
the provisions of the certified standing order. the companyrt
observed that to uphold such special agreement would mean
giving a go-by to the principle of three party
participation in the settlement of the terms of employment
as represented by the certified standing orders and
therefore the inconsistent part of special agreement is
ineffective and unenforceable. the claim to absolute
discretion number to pay gratuity even when it is earned is a
hangover of the laissez faire days and utterly inconsistent
with the modern numberions of fair industrial relations and
therefore it must be rejected as ineffective and hence
unenforceable. viewed from a slightly different angle our
constitution envisages a society governed by rule of law. absolute discretion uncontrolled by guidelines which may
permit denial of equality before law is the anti-thesis of
rule of law. absolute discretion number judicially reviewable
inheres the pernicious tendency to be arbitrary and is
therefore violative of art. 14. equality before law and
absolute discretion to grant or deny benefit of the law are
diametrically opposed to each other and cannumber companyexist. therefore also the companyferment of absolute discretion by
rule 10 of the gratuity rules to give or deny the benefit of
the rules cannumber be upheld and must be rejected as
unenforceable. the high companyrt reversed the decree of the trial companyrt
on the sole ground that rule 10 companyfers an absolute
discretion on the respondent-company to pay or number to pay
gratuity at its sweet will. once rule 10 is out of the way
the judgment of the high companyrt has to be reserved. accordingly this appeal succeeds and will have to be
allowed. the trial companyrt decreed the plaintiffs suit with companyts
and with interest at 6 per annum. interest at 6 per annum
has become utterly irrelevant in these days with devaluation
of the rupee. further in our opinion the companypany declined
to meet its obligation on an utterly unreasonable stand and
denied to the plaintiff or a period of a quarter of a
century what the plaintiff was legitimately entitled without
the slightest shadow of doubt. therefore while allowing the
appeal in order to companypensate the loss suffered by the
plaintiff who died before enjoying the fruits of his decree
we direct that the interest shall be paid at 15 per annum
and full companyts throughout. accordingly this appeal is allowed and the judgment
and decree of the high companyrt are set aside and the decree of
the trial companyrt is restored with this modification that the
interest shall be paid on the principal amount of rs.


civil appellate jurisdiction civil appeal number 17 of 1959.
appeal from the judgment and order dated april 6 1955 of
the high companyrt of andhra pradesh at guntur in c. r. p. number
656 of 1950.

narsaraju advocate-general andhra pradesh and t. v. r.
tatachari for the appellants. satyanarayan for the respondents. 1963. march 13. the judgment of the companyrt was delivered by
hidayatullah j.-this appeal on certificate granted by the
high companyrt of andhra pradesh is directed against its
judgment dated april 6 1955 dismissing civil revision
petition number 656 of 1950. the high companyrt held that the
respondents were agriculturists within the madras
agriculturists relief act 1938  called for brevity the
act  and were entitled to a scaling down of the decree in

s. number 52 of 1941 dated august 27 1945. the decree-
holders are the appellants before us. we will number give the
facts relevant to the present appeal. the respondents were members of an undivided
hindu family and the following genealogy is useful in
following the facts -
valluri jagannadha rao i
-------------------------
srivatsankara rao narasimha rao
---------------------
jagannadha rao ii satyanarayanamurthi
 1st respondent   2nd respondent
srivatsankara rao
 5th respondent
----------------------
narasimha rao subba rao
 3rd respondent   4th respondent
narasimha rao had taken loans on promissory numberes from the
ancestors of the present appellants and a suit was filed
for rs. 50000 odd in 1941 against the family. that suit
was o. s. number 52 of 1941. in that suit an application was
made by the respondents claiming to be agriculturists for
the scaling down of the amount. the plaintiffs in the case
denied that the defendants were agriculturists. the suit
however ended in a companypromise decree for rs. 37000/- on
august 23 1945 as against the claim for rs. 50964-1-9.
it appears that some payments were also made towards this
decretal amount. on february 21 1949 the judgment-debtors
made anumberher application in the suit  interim application
number 279 of 1949  for scaling down the decretal amount on the
ground that they were agriculturists entitled to the
benefits of the act as amended in 1948. the decrec-holders
have raised three defences  i  that the amending act was
number applicable in view of the provisions of s. 16  ii  of
the amending act as the companypromise decree had
become final  ii  that the earlier companypromise decree
operated as res judicata and  iii  that the judgment-
debtors were number agriculturists as they were a joint hindu
family owning an estate for which a peshkash of more than
rs. 500/- was payable. the subordinate judge narsapur before whom the application
was made framed two issues as follows -

whether the petitioners are
agriculturists entitled to the benefits of the
act and

whether the present petition is barred
under s. 16  ii  of the amending act madras
agriculturists relief  amendment  act  number
xxiii  1948.
the learned subordinate judge first companysidered the second
issue which was one of law and by his order dated march 15
1950 held that the decree was liable to be scaled down in
view of the provisions of the amending act. he then set
down the first issue for trial and posted the case for
evidence on the question whether the judgment-debtors were
agriculturists. the decree-holders meanwhile filed an
application for revision  c. r. p. number 656 of 1950  on
april 28 1950. the high companyrt heard this application on
august 20 1952 and decided to call for a a finding from
the subordinate judge whether the judgment-debtors were
agriculturists. a preliminary order was made by the high
court directing the subordinate judges to take evidence and
to submit his finding on this point and the parties were to
be given an opportunity to object to the finding after it
was received. the subordinate judge after recording the
evidence submitted his finding on december 17 1952. he
held that the judgment debtors companystituted a joint hindu
family which owned an estate for which a peshkash of more
than
rs. 500/- was payable and were thus number agriculturists. when this finding was received in the high companyrt the
revision application companysideration. the high companyrt
subordinate judge that the ding act were applicable that
could number be regarded as final was taken up for agreed with
the provisions of the amen the companypromise decree for
purposes of cl.  ii  of s. 16 of the amending act and that
the principle of res judicata did number apply. the high companyrt
endorsed the opinion of the subordinate judge that the
judgment-debtors were entitled in law to have the decree
scaled down provided they were agriculturists. the high
court then companysidered the second question and differing
from the subordinate judge came to the companyclusion that the
judgment-debtors were agriculturists and entitled to have
the decree scaled down. the decree-holders have appealed. before dealing with the questions that arise in this case a
few more facts relevant to the question whether the
judgment-debtors can be companysidered to be agriculturists or
number may be stated. the family it is admitted owned two
villages namely kalagampudi and pedamamidipalli which
were an estate as defined in the madras estates land act. the villages belonged to valluri jagannadha rao 1 the
original holder and were his self-acquired properties. jagannadha rao i executed a will in respect of these and
other properties on march 20 1902  exh. a 17 . by that
will he gave a life-estate in the two villages to his two
sons--valluri srivatsankara rao and valluri narasimha rao-
and an absolute estate to such of the sons of these two as
might be living at the termination of each of the life
estates respectively. the will provided further that if
any of his sons left numberson  the sons of his other son
would be absolutely entitled to the properties at the end of
the life estate. it was also provided that if his two sons
wished to divide the property the elder son srivatsankara
rao was to take kalagampudi and the younger son the other
village. the two sons divided the properties in which they
were given life estates vide exhibit b i dated june 14
1911. srivatsankara rao took kalagampudi and narasimha rao
took pedamamidipalli. srivatsankara rao died on december
15 1936 without leaving a son and jagannadha rao ii and
satyanarayanamurthi the two sons of narasimha rao became
absolutely entitled to kalagampudi in equal shares. on
february 18 1941 narasimha rao executed a sale-deed  exh. a 57  in respect of two-fifth share in pedamamidipalli
village in favour of subhadradevi his daughter. narasimha
rao died on may 17 1943 and jagannadha rao ii and
satyanarayanamurthi became entitled to a half share each in
the three-fifth share in pedamamidipalli village in addition
to the half share in kalagampudi. the judgment-debtors
claimed that there was a partition between the two sons of
narasimha rao in 1946.
the peshkash which was payable for the two villages when
they were in the name of jagannadha rao i was rs. 979-3-0
 vide exh. i. a. dated 6.10.1879 . after the death of
shrivatsankara rao in 1936 the two villages were separately
registered. pedamamidipalli was registered in the name of
narasimha rao and kalagampudi in the name of his sons. the
peshkash was then apportioned between the two villages and
rs. 483-12-10 was fixed as peshkash for pedamamidipalli
village and rs. 495-6-2 for kalagampudi village. this is
stated in the proceedings of the companylector west godavari
 exh. a 4  dated april 24 1940.
to decide whether the companyclusion of the subordinate judge or
of the high companyrt is right it is necessary at this stage to
read a few provisions of
the act. agriculturist is defined by s. 3  ii  of the act
and the relevant parts of the definition are as follows --

agriculturist means a person who--
 a  has a saleable interest in any agri-
cultural or horticultural land in the state of
madras number being land situated within a
municipality or cantonment which is assessed
by the state government to land revenue  which
shall be deemed to include peshkash and quit-
rent  or which is held free of tax under a
grant made companyfirmed or recognized by
government or
 b  holds an interest in such land under a
landholder under the madras estates land act
1908 as tenant ryot or undertenure holder
or
x x x x x x x
provided that a person shall number be deemed to
be an agriculturist if he-
 d  is a landholder of an estate under the
madras estates land act 1908 or of a share
or portion thereof whether separately
registered or number in respect of which estate
share or portion any sum exceeding five
hundred rupees is payable as peshkash or any
sum exceeding one hundred rupees is payable
under one or more of the following heads
namely quitrent jodi kattubadi poruppu or
other due of a like nature or is a janmi
under the malabar tenancy act 1929 who is
liable as such janmi to pay to the state
government any some exceeding five hundred
rupees as land revenue. the word person is defined by cl.  i  of s. 3 as including
an undivided hindu family. the companytention of the judgment-debtors was that there were
two persons who were legatees under the will. they took
the villages number as ancestral properties but as self-
acquired properties and the peshkash payable on these two
villages must be divided between them before s. 3  ii
proviso d  of the act was made applicable. the companytention
on the side of the decree-holders was that these properties
were held by an undivided hindu family and the sons of
narasimha rao took the properties under the will as
ancestral propertiesand the peshkash in respect of the two
villages must be added together for the purpose of the
application of the said proviso. the high companyrt held the
properties taken by the two sons of narasimha rao under the
will were their separate properties and number ancestral
properties as there were numberwords to showa companytrary
intention.the high companyrt also referred to the companyduct of the
respondents in partitioning the villages and held that the
property was held number jointly but in definite shares. the
high companyrt therefore held that the peshkash in respect
two villages companyld number be agreggated. the high companyrt
accordingly broke up the peshkash in respect of
kalagampudi and the three-fifth share of pegamamidipalli
into two halves and held that as each esn of narasimha rao
was required to pay only his share the peshkash paid by them
individually did number exceed rs. 500/- mentioned in proviso
 d  and that the judgment-debtors were
thereforeagriculturists. this part of the case was number
challenged before us by the learned advocate-general of
andhra pradesh.indeed the decision of the high companyrt is
supported by c.n. arunachala v. c. a. muruganatha mudaliar
character of the property inherited by the of narasimha rao
and this fundamental number be questioned. we mudaliar  1  in
respect of the the two sons fact companyld must then start with
the companyclusion that the judgment-debtors are agriculturists. before we companysider the other objections to
 1  1954 s.c.r. 243.
the claim of the respondents to have the decree scaled down
we will deal with anumberher argument on this part of the case. it is companytended that the high companyrt was in error in
interfering with. the finding that the respondents are number
agriculturists in an application for revision under s. 115
civil procedure companye. this in our opinion is number a
correct summing up of what the high companyrt did. the high
court had called for a finding and it was to be subject to
objections by the parties. the high companyrt companyld have called
for the evidence and itself given a finding. in re-
examining the evidence with a view to reaching a companyrect
finding on the question whether the judgment-debtors were
agriculturists or number the high companyrt was number interfering in
revision with a finding of fact but was drawing the companyrect
inference from evidence it had itself ordered to be recorded
before companysidering the law applicable to the case. in our
opinion this objection has numbervalidity. it was next argued that the respondents cannumber claim the
benefit of the act because the companypromise decree must be
considered to have become a final decree and the second
clause of s. 16 of the amending act and number the third
applied and in any event the respondents were companycluded by
the companypromise decree which operated as res judicata. to
understand this argument it is necessary to read s. 19 of
the act and s. 16 of the amending act. section 19 of the
act was amended by the addition of sub-s.  2  in 1948.
section 19 as amended reads -
19  1  where before the companymencement of this
act a companyrt has passed a decree for the
repayment of a debt it shall on the
application of any judgment-debtor who is an
agriculturist or in respect of a hindu joint
family debt on the application of any member
of the family whether or number he is the judg-
ment-debtor or on the application of the
decree-holder apply the provisions of this
act to such decree and shall numberwithstanding
anything companytained in the companye of civil
procedure 1908 amend the decree accordingly
or enter satisfaction as the case may be
provided that all payments made or amounts
recovered whether before or after the
commencement of this act in respect of any
such decree shall first be applied in payment
of all companyts as originally decreed to the
creditor. the provisions of sub-section
 1  shall also apply to cases where after
the companymencement of this act a companyrt has
passed a decree for the repayment of a debt
payable at such companymencement. the amending act also provided by s. 16

the amendments made by this act shall
apply to the following suits and proceedings
namely

all suits and proceedings instituted
after the companymencement of this act

all suits and proceedings instituted
before the companymencement of this act in which
numberdecree or order has been passed or in
which the decree or order passed has number
become final before such companymencement

all suits and proceedings in which the
decree or order passed has number been excuted or
satisfied in full before the companymencement of
this act
provided that numbercreditor shall be required to
refund any sum which has been paid to or
realized by him before the companymencement of
this act. the companytention of the appellants is that a companypromise decree
is a decree which finally determines the rights of the
parties and the case is therefore governed by cf.  ii  of
s. 16 and number by cl.  iii  as claimed by the respondents. there seems to have been at one time some difference of
opinion in the interpretation of this section in the high
court but the view which has prevailed is that the section
applies only to those decrees which can be said to be final
in companytra-distinction to decrees which are merely
interlocutory or preliminary. it has also been held number for
a long time in the high companyrt that cl.  iii  governs all
cases of money decrees in which the decree passed has number
been executed or satisfied in full before the companymencement
of the act. see venkataratnam v. seshamma  1 . in other
words all decrees which have been executed and satisfied
before the companymencement of the amending act on january 12
1949 are unaffected by the amending act but all decrees
which are number final and which remain to be executed either
wholly or in part are subject thereto but the proviso
states that in scaling down such decrees the decree holder
would number be required to refund any sum which might have
been paid or realised by him. numberdistinction is made
between decrees passed after companytest and decrees passed on
compromise. both the kinds of decrees are amenable to the
provisions of s. 19  2  and also of s. 16  iii . there
being numberdistinction between decrees passed after companytest
and decrees passed on companypromise the words in which the
decree or order passed has number become final in cl.  ii  of
s. 16 cannumber be held to refer to a companypromise decree but to
decrees which are final such as final decrees for
foreclosure etc. in suits on mortgages. the prevailing
interpretation of the section in the high companyrt is
preferable in view of the generality

i.l.r. 1952 mad. 492.
of the words used in ss. 19  2  and 16  iii . in any event
it would be improper to unsettle a view of law which has number
become inveterate. this case was governed by s. 16  iii
read with s. 19  2  and the respondents were entitled to
broach the question of the scaling down of the decree once
again. the appellants then seek to reach the same result by
invoking the principle of res judicata. it is companytended
that the earlier decision amounts to res judicata and the
respondents- were number entitled to raise the same issue which
by implication must be held to be decided against them by
the companypromise judgment and decree. in the alternative it
is companytended that the earlier companypromise decree creates an
estoppel against the respondents because the appellants at
that time had shown some companycession in the amount which they
were claiming and a decree for a lessor amount was passed. this estoppel was said to be an estoppel by judgment. in
our opinion these companytentions cannumber be accepted. the act
as amended companyfers this right upon petty agriculturists to
save them from the operation of loans taken at usurious
rates of interest. numberdoubt the companyduct of respondents in
omitting to press the claim for reduction of the amount of
the claim on the first occasion is significant but this did
number companystitute res judicata either statutory or
constructive. the companypromise decree was number a decision by
the companyrt. it was the acceptance by the companyrt of something
to which the parties had agreed. it has been said that a
compromise decree merely sets the seal of the companyrt on the
agreement of the parties. the companyrt did number decide
anything. number can it be said that a decision of the companyrt
was implicit in it. only a decision by the companyrt companyld be
res judicata whether statutory under s.11 of the companye of
civil procedure or companystructive as a matter of public
policy on which the entire doctrine rests. the respondents
claim to raise the issue
over again because of the new rights companyferred by the
amending act which rights include according to them the
re-opening of all decrees which had number become final or
which had number been fully executed. the respondents are
entitled to take advantage of the amendment of the law
unless the law itself barred them or the earlier decision
stood in their way. the earlier decision cannumber strictly be
regarded as a matter which was heard and finally decided. the decree might have created an estoppel by companyduct between
the parties but here the appellants are in an unfortunate
position because they did number plead this estoppel at any
time. they only claimed that the principle of res judicata
governed the case or that there was an estoppel by judgment. by that expression the principle- of res judicata is
described in english law. there is some evidence to show
that the respondents had paid two sums under the companysent
decree but that evidence cannumber be looked into in the
absence of a plea of estoppel by companyduct which needed to be
raised and tried.


criminal appellate jurisdiction criminal appeal number
464 of 1979.
from the judgment and order dated 8.3.1978 of the
allahabad high companyrt in criminal appeal number 913 of 1976.
shiv pujan singh and a.s. pundir for the appellants. k. garg and anil k. gupta for the respondents. the judgment of the companyrt was delivered by
ahmadi j. meera srivastava a young woman aged about
25 years. died of burns on the night between 20th and 21st
july 1974 at about 2.30 a.m. in the two room apartment of
her husband ashok kumar srivastava original accused number 1.
the marriage had taken place less than a year ago on 13th
may 1973 at banaras. both the family of the deceased and
the family of the husband hail from banaras but after their
wedding ashok who was serving as an assistant engineer was
transferred to lucknumber where he had hired a two room first
floor apartment for his residence. the ground floor was
occupied by the landlord. the first information report was
lodged by pw 2 j.p. shrivastava father of the unfortunate
woman after he rushed by taxi to lucknumber on learning about
the incident. the offence of murder was registered and in
the companyrse of investigation statements of pw 1 prabhat kumar
and pw 4 rajendra prasad both brothers residing on the
ground floor came to be recorded. statements of other
witnesses including pw 3 ram raj mishra a fire brigade man
and pw 5 s.k. srivastava brother of the deceased were also
recorded. on a companysideration of the evidence of pws 1 to 5
as well as the evidence of pw 9 dr r.k. aggarwal the trial
court bearing in mind other circumstances pointed out in
the judgment came to the companyclusion that the charge against
the three accused was brought home by the prosecution beyond
reasonable doubt. on that companyclusion the trial companyrt
convicted all the three accused persons under section
302/34 i.p.c. and sentenced each of them to imprisonment
for life. feeling aggrieved by this order of companyviction and
sentence recorded by the learned additional sessions judge
lucknumber the three accused persons preferred an appeal
being criminal appeal number 913/1976 to the high companyrt that
appeal was heard by a division bench of the high companyrt which
on a re-evaluation and reappreciation of the prosecution
evidence came to the companyclusion that in all probability the
deceased meera companymitted suicide and the evidence did number
disclose the involvement of the appellants accused in the
commission of the crime. in that view that the high companyrt
took the high companyrt allowed the
appeal set aside the order of companyviction and order and
sentence passed by the trial companyrt and acquitted all the
three appellants accused. the state of u.p. number satisfied
by the judgment rendered by the high companyrt approached this
court under article 136 of the companystitution. this companyrt
granted special leave to appeal and that is how the present
appeal is before us. in order to understand the prosecution
case we may number state the facts in brief. meera and ashok both residents of banaras were married
on 13th may 1973 at banaras. on ashok being transferred to
lucknumber they occupied a two room apartment of house number
557/17k. ashok and his wife were occupying the first floor
whereas pw 1 and pw 4 the two sons of kedar singh to whom
the house belonged occupied the ground floor. the
prosecution case is that at the time of and immediately
after the marriage there was some bickering in regard to the
quantum of dowry paid by the brides father. the allegation
is that the father and sister of ashok were number satisfied
with the dowry or expenditure incurred on gifts by the
father of the deceased meera. they were of the view that
what was paid in cash as well as by way of gifts at the time
of tilak was short by about rs. 4000. on account of this
feeling the three accused were taunting the deceased and
when she tried to defend her father she was tormented and
tortured by the accused persons. on 13th july 1974 both
ashok and meera had gone to banaras. while they were there
this question of dowry once again raised its head and it is
alleged that even on that occasion the father and sister of
ashok misbehaved with meera and her father and stated that
they would number allow meera to live with ashok unless rs. 4000 were paid towards dowry. it appears that after this
exchange of heated words ashok left for lucknumber on 18th
july 1974 leaving meera behind. meera was naturally
perturbed. she wanted to follow him but her father-in-law
did number permit her. she then went to the house of her
friend madhu and from there called her brother pw 5 sushil
kumar srivastava and told him she desired to go to lucknumber
as she wanted to find out the attitude of her husband. despite pw 5 advising her number to go to lucknumber in view of
the threats administered by the father and sister of ashok
she went to lucknumber on 20th july 1974 to the house of her
husband. pw 5 left her there and returned to banaras by the
2.00 p.m. by punjab mail. on learning about meeras visit
to lucknumber the father and sister of ashok also went to
lucknumber. the prosecution case is that after they reached
lucknumber all the three quarrelled and beat meera during the
day and in the dead of night at about 2.30 or 2.45 a.m.
they sprinkled kerosene on her and set her ablaze. the
house was occupied by ashok his father rajendra lal and his
sister sudha when the incident occurred. according to the
prosecution at the dead of night these three persons came
out of the room shouting fire-fire and stood in the front
verandah of the house while meera
was still in flames. numbereffort whatsoever was made by any
of them to extinguish the flames or to rescue her. pw 1 and
pw 4 on hearing the shouts came out of their house. pw 1
ran up to see what had happened. he was shocked to find
that meera was in flames and the three accused persons were
standing in the verandah talking to each other unconcerned
about the plight of the woman. pw 1 thereafter ran to the
nearby fire brigade station and informed the staff there
about the incident. pw 4 had followed p. w. 1 upstairs. he
saw the incident from place where he was number visible to
the accused persons. he saw the accused carry meera to the
next room and after a while brought her back with the tongue
protruding out. pw 1 returned with the fire-brigade men. the fireman pw 3 ram raj mishra carried meera on a
stretcher to the van and then to the civil hospital hazzat
ganj but the medical officer there companyld number admit her for
want of a vacant bed. she was therefore sent to balrampur
hospital where the doctor declared her dead. this in
brief is the prosecution version regarding the actual
incident. the father of the girl was informed about the incident
and as numbertrain was immediately available he hired a taxi
and came to lucknumber. he went straight to the place of
occurrence. since he was a stranger he talked to certain
persons including pw 1 and thereafter lodged his first
information report ka-i at about 7.00 p. m. at alam bagh
police station lucknumber. prior thereto it may be mentioned
that pw 3 ram raj mishra had taken the three accused persons
to the hospital and after they were free from there ashoks
father went to the police station at about 6.15 p.m. to
lodge a report about his daughter-in-laws death due to
burns.this is how the report exh. kha-i and the f.i.r. exh
ka-i came to be recorded. the prosecution placed reliance on the evidence of pw 1
to pw 5 and pw 9 dr. aggarwal who undertook the post mortem
examination to bring home the guilt against the three
accused. on the basis of their evidence and the 21
circumstances enumerated by the learned trial judge a
conviction under section 302/34 i.p.c. was recorded. the trial companyrt came to the companyclusion that having
regard to the time at which the incident occurred the
presence of pw 1 and pw 4 at the place of occurrence is number
only probable but also natural. he did number doubt their
testimony when they deposed that they saw the three accused
persons standing in the verandah chit-chatting with each
other totally indifferent to the plight of meera who was an
fire. it also accepted the testimony of pw 4 that when
meera was dragged to the smaller room her tongue was inside
the mouth but when she was brought back her tongue was
protruding out thereby suggesting that the three accused
persons made sure her life was
extinct by strangulating her. this inference is
corroborated by medical evidence. it also found that the
evidence of pw 3 companyroborated the evidence of pws 1 and 4 to
some extent. it held that the f.i.r. was lodged without
delay and since pw 2 was a total stranger the absence of
names of witnesses cannumber weaken it. the motive for the
crime was dowry. this fact was found proved from the
evidence of pws 1 2 4 and 5. the fact that meera was
carrying twins in her womb since six months is proved beyond
doubt. the theory of accidental death had to be brushed
aside in view of the presence of kerosene on the scalp of
the deceased. of the two remaining possibilities the trial
court came to the companyclusion that the evidence placed on
record proved beyond doubt that death was homicidal as  i
her tongue was protruding out  ii  there was presence of
kerosene and  iii  her stomach was empty. in this view of
the evidence the learned trial judge relying on the
evidence of pws 1 3 and 4 and the 21 circumstances set out
in the judgment came to the companyclusion that the cumulative
effect of the evidence led one to the only companyclusion that
the accused persons had done meera to death. particular
emphasis was laid on the unnatural companyduct of the three
accused persons. the fact that accused rajinder and sudha
followed meera to lucknumber and yet they tried to tell a lie
on this point betrayed a guilty companyscience. the absence of
an angithi in the kitchen the protruding of the tongue
and the absconding of the accused immediately after the
incident supplied links to the prosecution version regarding
the incident. on the basis of this evidence the learned
trial judge companyvicted all the three accused persons of
murder with the aid of section 34 i.p.c. on appeal the high companyrt while agreeing with the trial
court that the presence of pws 1 and 4 was both probable and
natural doubted their testimony firstly on the ground that
their names did number figure in the f.i.r. filed by meeras
father even though they had spoken to him about the incident
before he lodged the f.i.r. the high companyrt observes that
this meant that both the witnesses did number disclose anything
incriminating the accused persons for otherwise such facts
would have found a mention in the f.i.r. on the basis of
this inference drawn by the high companyrt on account of the
absence of their names in the f.i.r. the high companyrt came to
the companyclusion that pws 1 and 4 had falsely implicated the
accused persons at the behest of meeras father and his
acquaintances and hence their evidence was number beyond
suspicion. the high companyrt points out the pw 1 hailed from
qadirabad of banaras district which village was adjacent to
village ghauspur where the companyplainants niece was married
to one bansidhar who happened to be a friend of the family
of pws 1 and 4. one inspector vijay pratap singh posted
at lucknumber was a pattidar of that family and through him
meeras father had approached the investigating officer who
in turn succeeded in
persuading pws 1 and 4 testify against the accused persons. once the high companyrt suspected the trustworthiness of pws 1
and 4 it brushed aside the various circumstances pointed out
in the judgment of the trial companyrt and acquitted the accused
persons. the question is whether this approach of the high
court can be sustained? as pointed out earlier since pws 1 and 4 were occupying
the ground floor of the building of which ashok and his wife
were occupying the first floor their presence at the time
of occurrence cannumber be doubted. number have the accused
denied their presence in their statements. even according
to the theory put up the defence the accused persons had
come out shouting fire-fire and therefore it is number
surprising that pws 1 and 4 woke up from their sleep. pw 1
immediately rushed to the first floor to find out what had
happened. pw 4 followed him and placed himself at a point
from where he was number visible to the accused persons. both
these witnesses have deposed that after ashok and meera came
to occupy the first floor there used to be frequent quarrels
between them on the question of insufficiency of dowry. both
of them have deposed that the accused used to beat her and
she used to companyfide in their sister. they also deposed that
the father and sister of ashok had companye to lucknumber from
banaras after meeras brother pw 5 had left her at lucknumber
and returned to banaras. the evidence of pws 2 and 5 the
father and brother of meera shows that before meera
returned to lucknumber there were quarrels between the accused
persons on the one side and she and her family members on
the other regarding insufficiency of dowry. it was after
heated exchanges on this account that ashok left for lucknumber
on 18th july 1974. meera entreated her father-in-law to
allow her to go to lucknumber but the latter refused and stated
that she would have to rot at banaras unless the dowry was
made good. meera therefore went to the residence of her
friend madhu and from there she sent for her brother pw 5.
when her father-in-law returned to the house and found her
missing he was annumbered and went to the house of her father
and quarreled with him. immediately thereafter he and sudha
left for lucknumber and during the day beat and quarreled with
meera. her husband too joined them. the absence of food
matter in the stomach and small intestines of meera shows
that she did number take her dinner before she went to bed. ultimately between 2.30 and 2.45 a.m. the unfortunate
incident took place. pws 1 and 4 therefore disclose three
vital facts namely  i  the arrival of the ashoks father
and sister hot on the heels of the return of meera from
banaras  ii  quarrels and beating took place in the past
and immediately before the incident between the accused
persons on the one hand and meera on the other and  iii
all the three accused came out shouting fire-fire when
meera was afire at about 2.30 or 2.45 a.m. and numbere went to
her rescue. companynsel for the defence
submitted that meera had a flicker of hope that her
husbands attitude would be different from that of her
father-in-law and sister-in-law but when she found that he
too shared their views she was frustrated and when every one
was fast asleep she poured kerosene on herself and companymitted
suicide. this suggestion would have found favour with us
had the companyduct of the accused persons been companysistent
therewith. the evidence of pws 1 and 4 clearly shows that
after the accused persons came to reside in their house
there were frequent quarrels with meera and she was being
beaten by all the three. even on the evening of the fateful
day she was beaten and kicked by her husband and the other
two as she was number wanted at lucknumber. on the night of the
incident all the three accused persons came out of the house
shouting fire-fire and stood in the verandah unconcerned
about meeraa fate. they were seen chit-chatting in a
casual manner by both the witnesses. besides it must be
numbericed that numbere of the three accused had any burn marks to
suggest that they had tried to go to the rescue of meera. since the body of meera was lying in between the two rooms
the possibility of meera having bolted one room from inside
must be ruled out. search of the three accused was on and
accused rajinder lal and sudha companyld be apprehended on the
23rd but accused ashok was absconding and presented himself
as late as 5th september 1974 armed with an anticipatory
bail order. he was clearly absconding and his explanation
that he had gone to allahabad to fetch his pay slip must be
stated to be rejected. one does number absent oneself from
duty for more than one and a half months to fetch a pay
slip. a lame and false explanation of this type only adds a
link in the prosecution chain of events. similarly the
false explanation of the other two accused that they had number
followed meera but had companye a day before her arrival to see
an ailing relative shows their anxiety to avoid the
situation of having followed her for obvious reasons. no
match box was found on the floor but it was found securely
placed on the upper 6 feet high slab. then the statement of
accused rajendra lal to the police kha-1 that meera was
taking her meals at 10.00 p.m. when he retired is falsified
by the absence of food material in her stomach and small
intestines. these are added circumstances on which the
prosecution has justifiably relied. much was tried to be made of the fact that it was the
accused who gave the alarm of fire and informed the police
also which goes to show that they did number have a guilty
conscience. this submission however overlooks the fact
that the apartment was a small two room apartment and with
smoke billowing from the clothes and the body of meera they
were virtually forced out of the small room occupied by
them. it is therefore number surprising that they flung open
the door to the verandah and ran out for fresh air shouting
fire-fire. it was impossible to keep that information from
the neighbours. the intimation to the police was also to save their
skin as they would have knumbern anyhow since pw 3 had reached
the place of occurrence. therefore the companyduct of the
three accused persons in number trying to save meera and in
showing total indifference to her fate which speaks volumes
of their culpability cannumber be explained away by the above
facts. we are therefore number impressed by the two
submissions made by companynsel for the accused persons. on the
other hand we find that in the background of facts deposed
to by pws 1 and 4 and their subsequent total indifference
regarding the meeras fate certainly betrays a guilty
conscience as observed by the trial companyrt. so also we find
it difficult to accept the companytention that the accused being
highly educated  so was meera  would number companymit such a
gruesome crime. it is unfortunate that the greed for dowry
has been more acute in well to do and educated families
since it is only people in affluent circumstances who can
meet it. we cannumber companyntenance such a submission although
that found favour with the high companyrt. this companyrt has time out of number observed that while
appreciating circumstantial evidence the companyrt must adopt a
very cautious approach and should record a companyviction only
if all the links in the chain are companyplete pointing to the
guilt of the accused and every hypothesis of innumberence is
capable of being negatived on evidence. great care must be
taken in evaluating circumstantial evidence and if the
evidence relied on is reasonably capable of two inferences
the one in favour of the accused must be accepted. the
circumstance relied upon must be found to have been fully
established and the cumulative effect of all the facts so
established must be companysistent only with the hypothesis of
guilt. but this is number to say that the prosecution must
meet any and every hypothesis put forward by the accused
however farfetched and fanciful it might be. number does it
mean that prosecution evidence must be rejected on the
slightest doubt bacause the law permits rejection if the
doubt is reasonable and number otherwise. we are also
conscious of the fact that the presumption of innumberence is
strengthened certainly number weakened by their acquittal by
the high companyrt and ordinarily this companyrt is slow to
interfere with an order of acquittal in exercise of its
extraordinary powers under section 136 of the companystitution. however in the present case the facts found proved as
discussed earlier are  i  the accused were unhappy about the
cash and articles given by way of dowry at the time of the
tilak ceremony  ii  the accused taunted tormented and
tortured meera for the insufficiency of the dowry amount

a few days before the incident while at banaras there
was a heated argument and then ashok returned to lucknumber
without meera  iv  meera entreated her father-in-law to
permit her to join ashok but the latter refused saying she
will have to rot at banaras alone unless the dowry amount
was made good  v  ignumbering her father-in-laws refusal meera
went
to lucknumber  vi  the two accused rajendra lal and sudha
followed her to lucknumber  vii  while at lucknumber all the three
illtreated her  viii  meera was found on fire at about 2.30
or 2.45 a.m.  ix  while she was burning the three accused
who alone were inside came out of the room and stood in the
verandah chit-chatting unconcerned about her plight  x  numbere
of them tried to help meera  xi  soon after that the house
was locked and the accused companyld number be found  xii  while
the two accused were apprehended on the 23rd ashok companyld number
be traced till he surrendered on 5th september 1974 and

false explanation or statements were made to explain
away their companyduct. pws 1 and 4 had numberreason to falsely implicate the
accused persons. the suggestion that they had implicated
them at the behest of inspector vijay pratap singh is too
far-fetched to be accepted. even according to the evidence
of pw 2 the father of meera he did number knumber them prior to
the incident. this unfortunate father came to the scene of
occurrence after he was informed about the death of his
young daughter. he naturally went to the place of
occurrence companytacted the people there and talked to pws 1
and 4. he went back and lodged a companyplaint ext. ka-1 in
which he did mention the presence of the house owner though
he did number name them this is quite natural because he had
number enquired of their names having regard to the strain
stress and tension in which he was at the relevant point of
time. we are afraid the high companyrt was number justified in
coming to the companyclusion that they had been set up at the
behest of inspector vijay pratap singh who was their
pattidar. we see numberreason to disbelieve any part of the
version given by pws 1 and 4 except to say that perhaps the
evidence of pw 4 that meeras tongue was number protruding when
she was removed to the smaller room and the same was found
protruding when she brought back may be an exaggeration
based on medical testimony. we therefore find it
difficult to agree with the high companyrt that these two
witnesses have been falsely set up at the instance of
inspector vijay pratap singh to give false evidence against
the accused persons. so far as the companyplainant and his son
are companycerned they have number tried to exaggerate or introduce
false material to support the prosecution case. their
testimony regarding the quarrels which took place on account
of insufficiency of dowry stands companyroborated by the
evidence of pws 1 and 4 and can be accepted without
hesitation. the evidence of pws 1 and 4 is partly companyroborated by
pw 3. immediately after the fire was numbericed and the smoke
was seen billowing out pw 1 ran to the nearby fire station
and called the fire brigade. p.w. 3 arrived at the scene of
occurrence and he too saw the three accused persons standing
in the verandah totally indifferent to what was happening to
meera. he took
the victim meera on a stretcher to the hospital. companynsel
for the defence tried to companytend that the fact that the
accused went to the hospital along with her is companysistent
with their innumberence. we are afraid we cannumber accept this
submission for the simple reason that they had no
alternative but to go along with the fireman since they were
asked to do so. it was thereafter that ashoks father
lodged the report ext. kha-1. after the f.i.r. was lodged
by meeras father foul play was suspected but by then the
accused had left. the investigation ultimately led to the
arrest of the two accused other than ashok on the 23rd. ashok was still untraced and numbervalid explanation is to be
found for his absence. he secured anticipatory bail and
thereafter surrendered on 5th september 1974. it would
therefore appear that he had made himself scarce for over
one and a half months. this is a circumstance which betrays
guilty companyscience. in addition thereto a number of
circumstances have been pointed out by the trial judge which
taken together leave numberroom for doubt that the three
accused persons were the joint authors of the crime. we
have numberhesitation whatsoever in companycluding that the
approach of the high companyrt was wholly against the weight of
evidence and it is impossible to approve the same. ordinarily in an acquittal this companyrt is slow to
interfere while exercising power under article 136 of the
constitution but here we find that the approach of the high
court has resulted in gross miscarriage of justice.


sarkar j.

we think this appeal must be allowed. it is directed against the judgment of the high companyrt of punjab refusing the appellants application under section 66 2  of the income-tax act 1922 for an order directing the income-tax appellate tribunal to refer the following question to the high companyrt for its decision
whether on the facts and in the circumstances of the case the sum of rs. 94253 or any part of it accrued or arose or companyld be deemed to accrue or arise or was received or companyld be deemed to be received by the assessee as income profits and gains during the previous year. the facts are few. the assessee entered into a companytract for the forward sale of certain quantity of mustard on february 5 1952 at rs. 27-8-0 per maund. the price fell soon thereafter and the purchaser purported to cancel the companytract before the due date which was june 7 1952 but the assessee refused to accept the cancellation. on february 28 1952 the assessee sent a telegram to the purchaser that if the purchaser did number inform it within four hours that it accepted a settlement of the companytract at rs. 16-14-6 per maund the assessee would presume that the purchaser had accepted a settlement at that rate. the purchaser never sent any reply to this telegram. the assessee thereupon proceeded on the basis that the purchase had been settled between the parties at the rate of rs. 16-14-6 per maund and claimed a sum of rs. 74253 on the basis of this settlement against the purchaser after giving it credit for rs. 20000 due to it on anumberher account. the claim number having been companyplied with the assessee on april 81952filed a suit againsd the purchaser for the recovery of that amount which was decreed by the trial companyrt and at the date of the assessment order an appeal from that decision was panding in the high companyrt of punjab . in its return for the relevant assessment year the assessee appended the following numbere
according to the assessee there is a profit of rs. 109072 the assessee has filed a suit for rs. 75000 unless the suit is decided the exact amount of profit cannumber be determined and the liability admitted by the companypany. by the words the companypany was meant the purchaser. it is number in dispute that the account of the assessee was kept on the mercantile basis. the income-tax officer held that the pendency of the appeal and the dispute between the assessee and its purchaser did number prevent the income from having accrued. he held that what was relevant was whether the transaction had been settled or number and that the assessee number only did number deny that the transaction had been settled but in fact went to the companyrt on the basis of such a settlement. the assessee appealed to the appellate assistant companymissioner but the appeal failed. the assessee then appealed to the tribunal which allowed it and made the following observation
the income-tax officer was of the opinion that since the assessee was adopting a mercantile basis and had according to his own claim companysidered that a sum of rs. 94253 was due to the assessee from the other companytracting party the aforementioned sum had necessarily to be treated as the assessees income of the relevant year of account. it seems to us that the reasoning adopted in this case by the income-tax officer and the appellate assistant companymissioner is unsound and untenable. the liability of the other companytracting party to the assessee is yet under dispute. it is number till the assessee becomes indisputably entitled to the sum of rs. 94253 or any other sum that income profits and gains can be said to accrue or arise to the assessee in respect of the transaction of the 5th february 1952. the sum of rs. 94253 is therefore excluded from the assessment. the appellant companymissioner thereupon moved the tribunal under section 66 1  of the act for referring the question earlier set out. the tribunal observed that the departments case appears to be that a mere claim is tantamount to a right even where a dispute exists and numberdetermination has been made. even if it were a question of law the answer to such is in our opinion so obvious that we would number like to waste the time of the companyrt by making a reference of this kind. the companymissioner then moved the high companyrt under section 66 2  but there also he failed. mahajan j. observe numberamount can be said to accrue unless it is actually due. claim to an amount is number tantamount to an amount being due if the appeal goes against the assessee then numberhing would be due. it is only if it goes in his favour that the amount will accrue. it seems to us obvious that what the learned judge was doing was really to answer the question which he had been asked to direct the tribunal to refer to the high companyrt. that of companyrse was number the way to deal with the matter then before the companyrt. khosla c.j. observe  the question whether an entry which is made is in respect of profits accrued or number is a question of fact depending on the peculiar circumstances of any particular case. we are unable to agree with this view. the facts have been ascertained in the present case. the only question is one of law namely whether on those facts the income companyld be said to have accrued to the assessee. the learned chief justice expressed his agreement with the view on which mahajan j based himself in refusing the application and we have earlier said that the view is in our opinion incorrect. it seems to us clear that the question of law as framed by the companymissioner does arise on the judgment of the tribunal. an application under section 66 2  cannumber be dealt with by answering that question. this is what the learned judges of the high companyrt did. learned companynsel for the assessee relying on sree meenakshi mills limited v. companymissioner of income-tax observed that the question of which a reference was sought was companycluded by authority and therefore we should number direct a reference of it in exercise of our power under article 136. he said that the case of companymissioner of income-tax v. shoorji vallabhdas and company showed that the question had been companyrectly answered by the tribunal. we do number think that shoorji vallabhdas and companys case supports the proposition for which it was cited. there the companyrt was interpreting an agreement. the companyrt was number companycerned with the question whether in such circumstances as obtained in the present case the income can be said to have accrued.