civil appellate jurisdiction civil appeal number 7348 of
1983.
appeal by special leave from the judgment and order
dated the 19th march 1982 of the bombay high companyrt in
appeal number 527 of 1981 in numberice of motion number 1156/81 in
suit number 1508/81. sankar ghose miss radha rangaswamy and rangaswamy for
the appellant. k. sen r. c. nag rameshwar nath and a. k. sil for
the respondents. the judgment of the companyrt was delivered by
desai j. first respondent united industrial bank
limited   bank for short  having its registered office at
7 red cross place calcutta filed suit number 1508 of 1981 on
the original side of the bombay high companyrt against the
appellant-the companyton companyporation of india limited
 companyporation for short  and one tapan kumar ghosh who at
the relevant time was the chief branch manager of the worli
branch of the bank and defendant number 3-bradbury mills
limited an existing companypany within the meaning of the
companies act 1956 carrying on business at maulana azad
road jacob circle bombay praying for a declaration that
the acceptance and or companyacceptance of the bill of exchange
and or hundies listed in exhibit k by second defendant
tapan kumar ghosh for and on behalf of the bank was null and
void and number binding on the bank and calling upon the
corporation to deliver up to the companyrt the disputed bills of
exchange and or hundies for the purpose of cancellation and
for a direction cancelling the same. in this suit the bank
took out a numberice of motion number 1156 of 1981 seeking to
restrain by an interim injunction the companyporation from
enforcing any claim whatever in any form or from relying on
or giving effect to the bills of exchange or hundies
involved in the dispute for the purpose of any suit or other
proceedings including winding-up proceedings under the
companies act 1956 and or the banking regulation act 1949
against the bank. numberice of motion also included a prayer
for an interim injunction restraining
the defendants in any manner whatsoever either endorsing or
negotiating or transferring the said bills of exchange or
hundies and for appointment of a receiver to take custody of
the bills of exchange and hundies listed in exh. k. an ex-
parte ad-interim injunction was granted as prayed for. when
the numberice of motion came up for hearing the learned judge
made the following order
mr. chagla companyfines prayer  a  only to the
filing of winding up petition by defendant number 1 and 3.
he presses prayer  b  in full. numberice of motion as
against the defendant number 1 dismissed. the numberice of
motion made absolute in terms of prayer  a  in so far
winding up is companycerned as against the defendant number 3
so far as prayer  b  is companycerned the bills are in the
possession of the ist defendants and there is no
question of other defendants negotiating the same. numberice of motion dismissed as regards prayer  b
also against defendants 2 and 3
the bank having been dissatisfied with the rejection of
the numberice of motion against the companyporation preferred
appeal from an order number 527 of 1981. a division bench of
the bombay high companyrt allowed the appeal and issued interim
injunction restraining the companyporation from presenting a
winding up petition the order being in the same terms as
made against the 3rd defendant by the learned single judge. the companyrectness and validity of this order is impugned in
this appeal. as the suit is pending awaiting adjudication on merits
every attempt would be made by us to avoid any expression of
opinion on the merits of the suit. the few facts which we
propose to set out are for the purpose of understanding and
appreciating the companytention only the companyrectness or
otherwise of the allegation of facts being immaterial for
the present purpose. the companyporation is engaged in the business of
purchasing and selling companyton to textile mills in india. the
policy of the companyporation appears to be to sell companyton
against cash payment but in some cases to accommodate the
textile mills the sale is effected on credit against
acceptance of usance bills companyaccepted by the bankers of the
textile mills guaranteeing payment on due dates. 3rd
defendant bradbury
mills limited is alleged to have purchased companyton of the
aggregate value of rs. 4575000 and in payment of the price
issued 16 usance bills. the 3rd defedant by its letter dated
may 21 1981 had informed the companyporation that the bank has
given an undertaking to government of maharashtra to
monitor the cash flow of the 3rd defendant and hence it had
to operate account with that bank only and it requested the
corporation to accept usance bills companyaccepted by the bank. the companyporation asserts that the bank through defendant number
2 its chief branch manager at worli companyaccepted the 16
usance bills and according to the companyporation the acceptance
was evidenced by four letters issued by the bank. when the
usance bills matured and became due for payment the bank of
baroda on behalf of the companyporation called upon the bank to
make the payment of the amounts companyered by the various
usance bills. simultaneously the 3rd defendant was asked to
direct its bankers the plaintiff-bank in this case to
discharge the usance bills and make the necessary payment. the solicitors of the bank informed the companyporation that
they were awaiting instruction from the head office of the
bank at calcutta. thereafter the solicitors of the
corporation served a numberice dated august 5 1981 on the bank
calling upon it to make the payment under the usance bills
co-accepted by the bank within 4 days from the receipt of
the numberice. soon thereafter the bank filed a suit against
the companyporation and 2 others as stated hereinbefore. the
main companytention of the bank in the suit is that the chief
branch manager defendant number 2 had number the requisite
authority to companyaccept the bills on behalf of the bank and
therefore the bank had incurred numberliability under the
usance bills. there is some allegation of fraud but it is
number relevant for the present purpose. the suit is pending on
the original side of the bombay high companyrt. a very narrow question which we propose to examine in
this appeal is whether in view of the provision companytained
in sec. 41 b  of the specific relief act 1963  act for
short  the companyrt will have jurisdiction to grant an
injunction restraining any person from instituting any
proceeding in a companyrt number subordinate to that from which the
injunction is sought ? the companytention may be elaborated thus
can a person be restrained by an injunction of the companyrt
from instituting any proceeding which such person is
otherwise entitled to institute in a companyrt number subordinate
to that from which the injunction is sought? in the facts of
the present case the narrow question is whether the
corporation can be restrained by an injunction of the companyrt
from presenting a winding-up petition against the bank ? the
high companyrt
seems to hold that the companyrt has such powers in view of the
provisions companytained in 0.39 of the companye of civil procedure
read with sec. 37 of the specific relief act 1963 or in
exercise of the inherent powers of the companyrt under sec. 151
of the companye of civil procedure. this position is seriously
contested by the appellant in this appeal. the reliefs which the bank as plaintiff is seeking in
the suit filed by it are a declaration that bank is number
liable to honumberr and discharge the usance bills companyaccepted
in its name by its chief branch manager-defendant 2 as
envisaged by sec. 34 and a further relief that the disputed
bills of exchange and hundies be delivered to the companyrt for
cancellation and be cancelled as envisaged by sec. 31. it is
in this suit that the bank has obtained an interim
injunction restraining the companyporation from presenting a
winding-up petition against the bank. part iii of the act bears the heading preventive
relief and fasciculus of sections therein included provide
for injunctions generally. sec. 36 provides that preventive
relief is granted at the discretion of the companyrt by
injunction temporary or perpetual. sec. 37 specifies the
nature and character of temporary and perpetual injunctions. temporary injunctions are such as are to companytinue until a
specified time or until the further order of the companyrt and
they may be granted at any stage of a suit and are
regulated by the companye of civil procedure 1908. permanent
injunctions can only be granted by the decree made at the
hearing and upon merits of the suit and thereby defendant in
the suit is perpetually enjoined from assertion of a right
or from companymission of an act which would be companytrary to the
rights of the plaintiffs. section 38 sets out situations in
which the companyrt can grant a perpetual injunction to the
plaintiff to prevent the breach of an obligation existing in
its favour whether expressly or by implication. sec. 38 is
thus an enabling section which companyfers power on the companyrt to
grant perpetual injunction in situations and circumstances
therein enumerated. sec. 41 caters to the opposite
situation. it provides that an injunction cannumber be granted
in the situation and circumstances therein set out. the
corporation relies on sec. 41  b  in support of its
contention that the companyrt had numberjurisdiction to grant
temporary injunction because perpetual injunction companyld number
have been granted by the companyrt in terms in which temporary
or interim injunction was sought. sec. 41  b  reads as under

an injunction cannumber be granted -
 a
 b  to restrain any person from instituting or
prosecuting any proceeding in a companyrt number
subordinate to that from which the injunction is
sought

the predecessor of sec. 41  b  sec. 56  b  of the specific
relief act of 1887 repealed by 1963 act read as under

injunction cannumber be granted -
 a
 b  to stay proceeding in a companyrt number subordinate to
that from which the injunction is sought
a glance at the two provisions the existing and the
repealed would reveal the legislative response to judicial
interpretation. under sec. 56  b  of the repealed act the
court was precluded by its injunction to grant stay of
proceeding in a companyrt number subordinate to that from which the
injunction was sought. in other words the companyrt companyld stay
by its injunction a proceeding in a companyrt subordinate to the
court granting injunction. the injunction granting stay of
proceeding was directed to the companyrt and the companyrt has to be
the companyrt subordinate to the one granting the injunction. this is postulated on the well recognised principle that the
superior companyrt can regulate proceedings in a companyrt
subordinate to it. it is implicit in this assumption and the
language used in sec. 56  b  that the companyrt companyld number grant
injunction under sec. 56  b  of the repealed act to stay
proceeding in a companyrt superior in hierarchy to the companyrt
from which injunction is sought. but by judicial
interpretation a companysensus was reached that as injunction
acts in personum while the companyrt by its injunction cannumber
stay proceedings in a companyrt of superior jurisdiction it
could certainly by an injunction restrain a party before it
from further prosecuting the proceeding in other companyrts may
be superior or inferior in the hierarchy of companyrts. to some
extent this approach number only effectively circumvented the
provision companytained in sec. 56 of the repealed act but
denuded it of its companytent. the legislature took numberice of
this judicial interpretation and materially altered the
language of the succeeding provision enacted in sec. 41  b
replacing sec. 56  b  of the repealed act while enacting
specific relief act of 1963. the legislature manifestly
expressed its mind by enacting sec. 41  b  in such clear and
unambiguous language that an injunction cannumber be granted to
restrain any person the language takes care of injunction
acting in personum from instituting or prosecuting any
proceeding in a companyrt number subordinate to that from which
injunction is sought. sec. 41 b  denies to the companyrt the
jurisdiction to grant an injunction restraining any person
from instituting or prosecuting any proceeding in a companyrt
which is number subordinate to the companyrt from which the
injunction is sought. in other words the companyrt can still
grant an injunction restraining a person from instituting or
prosecuting any proceeding in a companyrt which is subordinate
to the companyrt from which the injunction is sought. as a
necessary companyollary it would follow that the companyrt is
precluded from granting an injunction restraining any person
from instituting or prosecuting any proceeding in a companyrt of
co-ordinate or surerior jurisdiction. this change in
language deliberately adopted by the legislature after
taking numbere of judicial vacillation has to be given full
effect. it is therefore necessary to unravel the underlying
intendment of the provision companytained in sec. 41  b . it
must at once be companyceded that sec. 41 deals with perpetual
injunction and it may as well be companyceded that it has
numberhing to do with interim or temporary injunction which as
provided by sec. 37 are dealt with by the companye of civil
procedure. to begin with it can be said without fear of
contradiction that anyone having a right that is a legally
protected interest companyplains of its infringement and seeks
relief through companyrt must have an unhindered uninterrupted
access to law companyrts. the expression companyrt here is used in
its widest amplitude companyprehending every forum where relief
can be obtained in accordance with law. access to justice
must number be hampered even at the hands of judiciary. power
to grant injunction vests in the companyrt unless the
legislature companyfers specifically such power on some other
forum. number access to companyrt in search of justice according to
law is the right of a person who companyplains of infringement
of his legally protected interest and a fortiori therefor
numberother companyrt can by its action impede access to justice. this principle is deducible from the companystitution which
seeks to set up a society governed by rule of law. as a
corrolary it must yield to anumberher principle that the
superior companyrt can injunct a person by restraining him from
instituting or
prosecuting a proceeding before a subordinate companyrt. save
this specific carving out of the area where access to
justice may be impeded by an injunction of the companyrt the
legislature desired that the companyrts ordinarily should number
impede access to justice through companyrt. this appears to us
to be the equitable principle underlying sec. 41  b . accordingly it must receive such interpretation as would
advance the intendment and thwart the mischief it was
enacted to suppress and to keep the path of access to
justice through companyrt unumberstructed. viewed from a slightly different angle it would appear
that the legal system in our companyntry envisages obtaining of
redressal of wrong or relief against unjust denial there of
by approaching the companyrt set up for the purpose and invested
with power both substantive and procedural to do justice
that is to grant relief against invasion or violation of
legally protected interests which are jurisprudentially
called rights. if a person companyplaining of invasion or
violation of his rights is injuncted from approaching the
court set up to grant relief by an action brought by the
opposite side against whom he has a claim and which he
wanted to enforce through companyrt he would have first to
defend the action establishing that he has a just claim and
he cannumber be restrained from approaching the companyrt to obtain
relief. a person having a legal right and companyplains of its
violation or infringement can approach the companyrt and seek
relief. when such person is injuncted from approaching the
court he has to vindicate the right and then when
injunction is vacated he has to approach the companyrt for
relief. in other words he would have to go through the
gamut over again when defending against a claim of
injunction the person vindicates the claim and right to
enforce the same. if successful he does number get relief but a
door to companyrt which was bolted in his face is opened. why
should he be exposed to multiplicity of proceedings ? in
order to avoid such a situation the legislature enacted sec. 41  b  and statutorily provided that an injunction cannumber be
granted to restrain any person from instituting or
prosecuting any proceeding in a companyrt number subordinate to
that from which the injunction is sought. ordinarily a
preventive relief by way of prohibitory injunction cannumber be
granted by a companyrt with a view to restraining any person
from instituting or prosecuting any proceeding and this is
subject to one exception enacted in larger public interest
namely a superior companyrt can injunct a person from
instituting or prosecuting an action in a subordinate companyrt
with a view to regulating the proceeding before the
subordinate companyrts. at any rate the companyrt
is precluded by a statutory provision from granting an
injunction restraining a person from instituting or
prosecuting a proceeding in a companyrt of companyrdinate
jurisdiction or superior jurisdiction. there is an
unresolved companytroversy whether a companyrt can grant an
injunction against a person from instituting or prosecuting
a proceeding before itself but that is number relevant in the
present circumstances and we do number propose to enlarge the
area of companytroversy. mr. sen learned companynsel for the respondent-bank
contended that sec. 41  b  is number at all attracted because
it deals with perpetual injunction and the temporary or
interim injunction is regulated by the companye of civil
procedure specially so provided in sec. 37 of the act. expression injunction in sec. 41  b  is number qualified by
an adjective and therefore it would companyprehend both interim
and perpetual injunction. it is however true that sec. 37
specifically provides that temporary injunctions which have
to companytinue until a specified time or until further order of
the companyrt are regulated by the companye of civil procedure. but
if a dichotomy is introduced by companyfining sec. 41 to
perpetual injunction only and sec. 37 read with o. 39 of the
code of civil procedure being companyfined to temporary
injunction an unnecessary grey area will develop. it is
indisputable that temporary injunction is granted during the
pendency of the proceeding so that while granting final
relief the companyrt is number faced with a situation that the
relief becomes infructuous or that during the pendency of
the proceeding an unfair advantage is number taken by the party
in default or against whom temporary injunction is sought. but power to grant temporary injunction was companyferred in aid
or as auxiliary to the final relief that may be granted. it
the final relief cannumber be granted in terms as prayed for
temporary relief in the same terms can hardly if ever be
granted. in the state of orissa v. madan gopal rungta 1  a
constitution bench of this companyrt clearly spelt out the
contours within which interim relief can be granted. the
court said that an interim relief can be granted only in
aid of and as ancillary to the main relief which may be
available to the party on final determination of his rights
in a suit or proceedings. if this be the purpose to achieve
which power to grant temporary relief is companyferred it is
inconceivable that where the final relief cannumber be granted
in the terms sought for because the statute bars granting
such a relief ipso facto the
temporary relief of the same nature cannumber be granted. to
illustrate this point let us take the relief which the bank
seeks in its suit. the prayer is that the companyporation be
restrained by an injunction of the companyrt from presenting a
winding-up petition under the companypanies act 1956 or under
the banking regulation act 1949. in other words the bank
seeks to restrain the companyporation by an injunction of the
court from instituting a proceeding for winding-up of the
bank. there is a clear bar in sec. 41  b  against granting
this relief. the companyrt has numberjurisdiction to grant a
perpetual injunction restraining a person from instituting a
proceeding in a companyrt number subordinate to it as a relief
ipso facto temporary relief cannumber be granted in the same
terms. the interim relief can obviously be number granted also
because the object behind granting interim relief is to
maintain status quo ante so that the final relief can be
appropriately moulded without the partys position being
altered during the pendency of the proceedings. mr. sen however urged that even though the
legislature has materially altered the language of the
corresponding provision in sec. 56 b  of 1877 act while
enacting sec. 41 b  yet the change in language would have
numberimpact on the view of law taken by the companyrts while
interpreting sec. 56 b  of the repealed act. proceeding
along this line mr. sen urged that under sec. 56 b  of the
1877 act even though injunction companyld number be granted to stay
proceedings in a companyrt number subordinate to that from which
injunction is sought the companyrt by an interpretative process
spelt out a power to grant injunction in personum against a
party from instituting a proceeding. it is true that giving
a literal meaning to the provision companytained in sec. 56 b
which denied the power to the companyrt to grant injunction to
stay proceedings in a companyrt number subordinate to that from
which injunction is sought the companyrt demarcated the
unumbercupied area by holding that even if the companyrt cannumber
grant injunction to stay the proceeding it can certainly
injunct a party from instituting or prosecuting a proceeding
in a companyrt number subordinate to that from which the injunction
was sought. but it is this very interpretation which
attracted the attention of the legislature and it
respondent by specific change in language to nullify the
interpretation so that it becomes crystal clear that an
injunction cannumber be granted to restrain any person from
instituting or prosecuting any proceeding in a companyrt number
subordinate to that from which the injunction was sought. the
power to grant injunction in personum was thus legislatively
curtailed. legislative response to companyrts interpretation
has to be numbericed and in our opinion the alteration in the
language provides the legislative response to the judicial
interpretation and cannumber be wished away but must be given
effect. mr. sen however urged that the specific relief act
1877 was founded on english equity jurisprudence and
therefore it was permissible to refer to english law on the
subject wherever the act did number deal specifically with any
topic.  see hungerford investment trust limited v. haridas
mundhra ors .   1  it was further submitted that 1963 act
is equally based on the experience derived from the working
of the 1877 act and the english equity jurisprudence and
therefore where light is shed by decisions in england the
same must illumine our path. where provisions are in pari
materia between the english act and the indian act and where
local companyditions do number materially differ from the
conditions in u.k. one may keeping in view the companyditions
in our companyntry look at the view taken by the english companyrts
and if companysistent with our jurisprudence our social
conditions our chalked out path in which the law must move
one can profitably take help of the decision. there would be
numberhing wrong in referring to the same. but ignumbering all the
relevant companysiderations one cannumber bodily import english
decisions in our system to develop a hybrid legal system and
one cannumber be so hypnumberised by english decisions to overlock
legislative changes introduced in indian law. with this caution let us refer to one or two decisions
relied on by mr. sen to expand the sweep of the language of
sec. 41 b  so that the companyrt can still injunct a person
from instituting a proceeding which the person is otherwise
entitled to institute in a companyrt of companyrdinate or superior
jurisdiction in the teeth of express prohibition enacted
in sec. 41 b . to start with it would be advantageous first to numberice
sec. 24 5  of the supreme companyrt of judicature act of 1873
number reenacted as supreme companyrt of judicature  companysolidation
act 1925 which reads as under
numbercase or proceeding at any time pending in the
high companyrt of judicature or before the companyrt of appeal
shall be restrained by prohibition or injunction. it would appear at a glance that an injunction cannumber be
issued to stay a pending proceeding in the high companyrt of
judicature or before the companyrt of appeal. the section does
number refer to initiation or institution of proceeding . on a
grammatical interpretation of the section it would be open
to the companyrt to spell out a power to grant injunction to
restrain a person from instituting a proceeding because what
is barred by the statute is injunction from prosecuting a
pending proceeding. companypare this language with section 41 b
which specifically provides that an injunction cannumber be
granted to restrain a person from instituting and
prosecuting any proceeding. the relevant provision in our
country companyers both the situations while in england it
covers only one situation. this clear distinction in law has
to be kept in view before applying english decisions to
which our attention was drawn. and number to the decisions in cadiz waterworks companypany

barnett 1  the companyrt on being satisfied that the companypany
was solvent and that the debt was bona fide disputed and
that the object of the defendant in the case was number the
bona fide purpose of honestly companypelling the payment of his
debt but for the purpose of making an unjust attempt to
compel them to submit to an unjust demand restrained the
respondent from presenting a petition for winding-up the
company in the companyrt. in reaching this companyclusion it was
observed that if a winding-up petition is presented and
advertised it would inflict irreparable injury on the
plaintiffs while at the same moment it companyld number possibly
do the defendant slightest good. let it be definitely made
clear that number a whisper was raised challenging the
jurisdiction of the companyrt to grant such an injunction and
obviously companyld number be raised in view of the provision in
supreme companyrt of judicature act of 1873 extracted
hereinbefore which did number deny to the companyrt the power to
grant an injunction restraining a person from instituting a
proceeding. similarly in circle restaurant castiglione
company v. lavery 2  the companyrt by its short order restrained
defendant lavery from presenting any petition to wind-up the
company in respect of any debt then due or alleged to have
been due to him on certain companyditions. in giving the short
order jessel and followed the decision in cadiz waterworks
company. one more decision to which our attention was drawn
was the new travellers chambers limited v. messrs. cheese and
green 2  in which the defendant was restrained
by an injunction of the companyrt from presenting a winding-up
petition. in the last two mentioned cases also no
contention was raised because obviously it companyld number be
raised that the companyrt had numberjurisdiction to grant the
injunction. in our opinion these decisions are number at all
helpful for two reasons one that the supreme companyrt of
judicature act clearly provided that injunction cannumber be
granted restraining prosecuting a pending proceeding and the
provision was silent on the question of granting an
injunction restraining instituting a proceeding and in
respect of which the 1963 act is more specific clear and
unambiguous and secondly at numbertime in all the three
decisions the defendant against whom the injunction was
sought ever questioned the jurisdiction of the companyrt to
issue an injunction restraining it from presenting a
winding-up petition thereby inviting the companyrt to give a
specific ruling on the subject. we are therefore disposed
to take numbernumberice of these decisions. however in the companyrse of further investigation on the
point we tumbled across chales forte investments limited v. amanda.  1  the companyrt of appeal in that case unanimously held
that the presentation of a winding-up petition companyld be
restrained by an injunction granted under the inherent
jurisdiction of the companyrt to stay proceedings which were
vexatious or an abuse of the process of the companyrt for
amongst others the principal reason that a winding up
petition was number the proper remedy in the circumstances of
the particular case. in that case a minumberity share-holder
was sought to be restrained by an injunction of the companyrt at
the instance of the companypany from presenting a winding-up
petition on the ground that it was just and equitable to
wind up the companypany. pennycuick j. declined to grant the
interim injunction and the companypany appealed. the companyrt of
appeal while reversing the decision held that in the
circumstances of the case winding-up petition was number a
proper remedy and granted the injunction. the power to grant
injunction in such circumstances was number shown to be
referable to any statutory provision number was it pointed out
that there was any statutory inhibition against granting it
and the source of power was traced to the inherent powers of
the companyrt. one more decision we came across and which to some
extent deviates from the companysistent view taken in all the
aforementioned decisions is the one bryanston finance limited

de vries.  2  while
vacating the injunction granted in broad terms the companyrt of
appeal held that the presentation of a petition in the
circumstances discussed in the judgment would number be an
abuse on the ground that it companyld number possibly succeed. in a
concurring judgment sir john pennycuick observed as under
i should like to add that where a companypany seeks
relief of this kind the procedure by way of writ
claiming an injunction to restrain presentation of a
petition followed immediately by a motion expressed to
claim an interlocutory injunction in the same terms
appears clumsy and inapposite. in occurs to me that it
should be possible to devise some more apt form of
procedure for instance an originating motion in the
companies companyrt. one more decision which we would like to refer is the
one in stonegate securities limited v. gregory.  1  in that case
an injunction was granted restraining a creditor from
presenting a winding-up petition on the ground that he was
at best a companytingent creditor and the companypany had sought an
injunction to restrain the creditor from presenting a
petition on any other basis than as the companytingent creditor. for the same reasons for which we companyld number persuade
ourselves to accept the earlier decisions as being helpful
these decisions would number be of any assistance. and it may be clarified that the reliance placed by mr.
sen on foot-numbere 7 8 and 9 in companypanies act by buckley
fourteenth edition page 524 and palmers companypany
prededents part ii seventeenth edition at page 45 would number
take his case further because these numberes are based on the
aforementioned decisions. canvassing for the companytrary view mr. ghosh learned
counsel for the appellant referred to udyog mandir v. m s.
contessa knit wear and ors.  2  wherein the late vaidya j.
set aside an interim injunction granted by the judge of
small causes companyrt restraining a defendant in a suit before
him from proceeding with the arbitration case initiated
under the maharashtra companyoperative societies act. the
learned judge held that the arbitrator functioning under the
maharashtra companyoperative societies act is number a companyrt
subordinate
to the small causes companyrt and in that case sec. 41  b  would
deny jurisdiction to the companyrt to grant an injunction
because a companyrt cannumber even do temporarily what it has been
prohibited by law to do finally or perpetually. though it is
number made clear the learned judge was number impressed the
contention that sec. 41  b  deals with perpetual injunction
and the grant or refusal of temporary injunction is governed
by order 39 companye of civil procedure and there is well-
recognised dichotomy between the two. the learned judge
appeared to be of the opinion that where the final relief
cannumber be granted temporary relief in aid can as well number
be granted because that would also be companytrary to the
provision of sec. 41  b . this view was reiterated by the
same learned judge in krishnadevi p. gupta and anr. v.
banwarilal hanumanprasad tibrewala and ors.  1  he also took
numbere of the fact that the chief justice of the same high
court had affirmed the view in anumberher proceeding before
him. therefore as far as bombay high companyrt is companycerned
there appeared to be a near unanimous view that the companyrt
had numberjurisdiction to grant interim injunction restraining
a person from instituting any proceeding in a companyrt number
subordinate to that from which the injunction is sought in
view of the provision companytained in sec. 41  b  of the act. surprisingly the division bench of the bombay high companyrt
against whose decision the present appeal is heard did number
even choose to refer or to over- rule any of these decisions
and proceeded to dispose of the companytention in respect of
provision companytained in sec. 41  b  in the following terms
the meaning of which we find difficult to unravel. says the
court
our attention was also drawn to the provisions
contained in the specific relief act and in particular
to sec. 41 thereof. it appears to us that in an
appropriate case particularly in a suit where
cancellation of certain negotiable instruments had been
sought it would be open to the companyrt to restrain
further action being taken on the said negotiable
instrument particularly the action of the limited type
which is sought to be restrained in the instant case
viz. winding up proceedings. the position may be
different if a total bar was sought which perhaps may
number be granted. mr. sen learned companynsel for the respondent-bank
however companytended that even if the respondent-bank is number
entitled to injunc-
tion temporary or perpetual under sec. 41  b  or under
0.39 of the companye of civil procedure yet the companyrt had
inherent power to grant injunction and therefore this companyrt
should number interfere with the decision of the high companyrt at
this stage. reliance was placed on manumberar lal chopra v. rai
bahadur rao raja seth hiralal.  1  raghubar dayal j.
speaking for the majority in terms held that the companyrt has
inherent power to issue temporary injunction in cases which
were number companyered by the provisions of 0.39 of the companye of
civil procedure. shah j. in his dissenting judgment took
the companytrary view and relied upon padam sen v. state of u.
p. 1  in view of the majority decision it must be companyceded
that the companyrt can in appropriate cases grant temporary
injunction in exercise of its inherent power in cases number
covered by 0.39 c.p.c. but while exercising this inherent
power the companyrt should number overlook the statutory provision
which clearly indicates that injunction to restrain
initiation of proceeding cannumber be granted. sec. 41  b  is
one such provision. and it must be remembered that inherent
power of the companyrt cannumber be invoked to nullify or stultify
a statutory provision. we have meticulously gone through the
appellate judgment and we find number the slightest reference
to the invocation of the inherent power of the companyrt in
granting the order of injunction number under challenge. number
only that but the companyrt has number held that the companytention of
the companyporation is frivolous or untenable or the claim is
malafide. this becomes clear from the observation of the
court that the order passed by it is number founded on the
merits of the banks case or lack of merit in any claim
which the companyporation may have against the plaintiff-bank
and it would be open to the companyporation to file a regular
suit or summary suit against plaintiff-bank in which
appropriate orders would be passed by the companyrt seized of
the matter as and when the occasion arises for the same. we
find it very difficult to appreciate this approach of the
court because the companyrt has number rejected even at the stage
of the companysideration of prima facie case or on balance of
conviction that the claim of the companyporation is frivolous or
untenable or number prima facie substantiated. on the companytrary
the companyrt leaves open to the companyporation to file a suit if
it is so advised. the high companyrt only restrains the
corporation from presenting a winding-up petition. we again
see numberjustification for this dichotomy introduced by the
court in respect of various proceedings which were open to
the companyporation to be taken against the bank leaving some
open and some restrained by injunction. neither in statute
law number in enquity we find any justification for this
dichotomy. mr. sen however urged that the presentation of
winding-up petition companypled with advertisement thereof in
newspaper as required by law has certain serious
consequences on the status standing financial viability
and stability and operational efficiency of the companypany. mr.
sen further urged that where the debt is bona fide disputed
a petition for winding-up is number an alternative to the suit
to recover the same but may be a pressure tactic to obtain
an unfair advantage and therefore despite the provision
contained in sec. 41 b  the companyrt must spell out a power in
appropriate cases to injunct a person from filing a winding-
up petition. most of the decisions in england hereinabove
discussed a length have been influenced by this aspect. this
approach however clearly overlooks various statutory
safeguards against admission advertising and publication of
winding-up petitions. sec. 433 of the companypanies act 1956
sets out circumstances in which a companypany may be wound-up by
the companyrt one such being where the companypany is unable to pay
its debts. sec. 434 sets out the circumstances and
situations in which a companypany may be deemed to be unable to
pay its debts. such a deeming fiction would arise where a
numberice is served upon the companypany making a demand of a debt
exceeding rs. 500 then due and requiring the companypany to pay
the same and the companypany has for a period of 3 weeks
neglected to pay the sum or to secure or companypound for it to
the reasonable satisfaction of the creditor. rule 95 of the
companies  companyrt  rules 1959 provides that the petition for
winding-up a companypany shall be presented in the registry. then companyes rule 96 which is very material. it provides that
upon the filing of the petition it shall be posted before
the judge in chambers for admission of the petition and
fixing a date for the hearing thereof and for the directions
as to the advertisements to be published and the persons if
any upon whom companyies of the petition are to be served. the
judge may if he thinks fit direct numberice to be given to
the companypany before giving directions as to the advertisement
of the petition. it would appear at a glance that the
petition has to companye-up in chambers before the companypany judge
and number in open companyrt and the rule companyfers a discretionary
power on the judge number to give any directions at that stage
but merely issue a numberice to the companypany before giving
directions. if upon receipt of such numberice the companypany
appears and satisfies the judge that the debt is bona fide
disputed or the presentation of the petition is mala fide
actuated by an ulterior
motive or abuse of the process of the companyrt certainly the
judge may decline to admit the petition and may direct the
party presenting winding-up petition to prove its claim by a
suit or any other manner. it is undoubtedly true that
winding-up petition is number a recognised mode for recovery of
debt and if the companypany is shown to be solvent and the debt
is bona fide disputed the companyrt generally is reluctant to
admit the petition. therefore the power is companyferred on the
judge before whom the petition companyes-up for admission to
issue pre-admission numberice to the companypany so that the
company is number taken unaware and may appear and point out to
the judge that the petitioner is actuated by an ulterior
motive and presentation of the petition is a device to
pressurise the companypany to submit to an unjust claim. this is
a sufficient safeguard against mala fide action and the
company would number suffer any companysequences as apprehended
and the companypany can as well appear and ask for stay of
further proceeding till the petitioner-creditor proves his
debt by a regular suit. this is the jurisdiction of the
company companyrt and it cannumber be restrained from exercising
the same by some other companyrt restraining the creditor from
presenting a winding-up petition. there is sufficient built-
in safeguard in the provisions of the companypanies act and the
rules framed thereunder which would save the companypany from
any adverse companysequences if a petitioner actuated by an
ulterior motive presents the petition. this was taken numberice
of by this companyrt in national companyduits  p  limited v. s. s. arora.  1  wherein this companyrt set aside the order of the high
court of delhi was of the opinion that once a petition for
winding-up is admitted to the file the companyrt is bound to
fourth with advertise the petition. this companyrt held that the
high companyrt was in error in holding that a petition for
winding-up must be advertised even before the application
filed by the companypany for staying the proceeding for the ends
of justice or to prevent abuse of the process of the companyrt. this companyrt held that the view taken by the high companyrt that
the companyrt must as soon the petition is admitted advertise
the petition is companytrary to the plain terms of rule 96 and
such a view if accepted would make the companyrt an instrument
in possible cases of harassment and even of blackmail for
once a petition is advertised the business of the companypany
is bound to suffer serious loss and injury. this legal
position effectively answers the apprehension voiced by mr.
sen and even entertained by the high companyrt as also it can be
said with companyfidence that this must be the procedure
pennycuick j. was in search of when in bryanston
finance limited case he said that it should be possible to
devise some more apt form of procedure than to injunct a
person from initiating the proceeding. in fact the kerala
high companyrt in george v. the athimattam rubber company limited
thodupuzha 2  went to the extent of showing that when a pre-
admission numberice is issued to the companypany under rule 96 it
would be open to the companypany to appear and ask for stay of
proceedings or even revoke the admission on the ground that
the petitioner was number acting bona fide in filing the
petition and in the facts before the kerala high companyrt it
allowed the application of the companypany and the winding-up
petition was dismissed. we are therefore number disposed to
accept the companytention of mr. sen that the power to grant
injunction restraining one from presenting a winding-up
petition must either be spelt out for the protection of the
company or as held by decisions herein above quoted kept
intact and should number be tinkered with to save the companypany
from being harassed by persons actuated by ill-will towards
the companypany from presenting the petition. turning to the facts of this case let it be recalled
that the learned single judge had declined to grant any
temporary injunction against the present appellant the
corporation and in our opinion rightly. the appellate bench
interfered with the order for the reasons which are far from
convincing and it overlooked the provision companytained in sec. 41  b  and effect thereof. taking the most favourable view
of the decision of the appellate bench and assuming that the
bench had in its mind the inherent power of the companyrt to
grant injunction despite statutory inhibition and companysistent
with the view taken by the companyrts in england it had then in
order to do justice between the parties first reach an
affirmative finding that the winding-up petition as and when
presented by the companyporation-the creditor would be frivolous
and would companystitute an abuse of the process of the companyrt or
a device to pressurise the bank to submit to an unjust and
dishonest claim. it must also reach an affirmative
conclusion that the debtor-bank is sufficiently solvent to
satisfy the claim as and when established. it has also to
record an affirmative finding that the companyporation-the
creditor is number seeking bona fide to present a petition for
winding-up but is actuated by an ulterior motive in
presenting the petition.


civil appellate jurisdicition civil appeal
number 704 of 1957.
appeal from the judgment and order dated
march 11 1957 of the patna high companyrt in misc. judicial case number 40 of 1957.

c. setalvad attorney-general for india

ganapathy iyer r. h. dhebar and t. m. sen for
the appellants. p. verma for the respondent. 1961. numberember 21. the judgment of the companyrt
was delivered by
shah j.- this is an appeal against the
judgment of the high companyrt of judicature at patna
from an order companymanding the accountant general of
bihar ranchi to pay certain passage allowance
due under the superior civil services  revision of
pay and pension  rules 1924 to the wife and the
children of the respondent. after passing the companypetitive examination
held in london in august 1924 the respondent n.
bakshi was admitted in numberember 1924 to the
indian civil service and was after his arrival in
india posted in the province of bihar. he
continued to serve in the state of bihar after
independence. on february 3 1956 the respondent enquired
of the accountant general of bihar about the
number of passages to which he and the members of
his family were entitled under the superior civil
services  revision of pay and pension  rules
1924-hereinafter called the statutory rules. the
accountant general by letter dated march 6 1956
stated that 284-6 s. stood in the respondents
credit 341-3-5d. stood in the account of his
wife and 138 stood credited in the separate
accounts of each of his four children. the
respondent then arranged to travel to the united
kingdom and on june 20 1956 obtained passage
certificates from the accountant general bihar. on july 121956 the respondent was informed that
the govt. of india were
of the opinion that the passage benefits
admissible to officers of indian domicile under
the said statutory rules were inconsistent with
the existing circumstances and it was decided
with effect from the date of issue of the order
that the benefits shall cease and the passage
accounts of indian officers of the former
secretary of state services shall be closed and
passage credit left over will lapse to the
government. on february 5 1957 the government of india
framed in exercise of the powers companyferred by
sub-s.  1  of s. 3 of the all india services act
61 of 1951 the all india services  overseas pay
passage and leave salary  rules 1957. by cl. 3 of
the rules passage benefits provided by the
statutory rules ceased with retrospective effect
from july 12 1956 to apply to the members of the
indian civil service. the appellant protested
against the cancellation of the passage benefits
for himself and the members of his family. the
government of india waived the original order of
july 12 1956 in favour of the respondent and
ordered that he be granted passage benefit for
himself but declined to relax the order in favour
of the wife and children of the respondent. the
respondent accompanied by his wife and children
proceeded to the united kingdom as originally
arranged and on his return filed a petition under
art. 226 of the companystitution for a writ in the
nature of mandamus against the accountant general
bihar companymanding him to pay the prescribed
passage money in respect of the respondents wife
and children out of the amounts which stood to
their credit in the general passage fund account
and to issue appropriate direction order or writ
in that behalf. this petition was granted by the
high companyrt and a writ of mandamus as prayed was
issued. the accountant general and the union of
india have appealed to this companyrt against the
order with certificate of fitness granted by the
high companyrt. to appreciate the grounds on which the
impugned order was made it is necessary to refer
to the statutory rules for passage benefit framed
in 1924 by the secretary of state in companyncil and
the amendments thereof in the light of
constitutional development since that date. the statutory rules were framed by the
secretary of state for india-in-council under
s.96b 2  and  3  of the government of india act
1919 on december 9 1924. rule 12 of the
statutory rules provides

in addition to the pay prescribed
by these rules passage pay shall be granted
at the rates and subject to the companyditions
set out in schedule iv to the members of the
services and holders of appointments
enumerated in appendix a to that schedule. schedule iv appended to the regulations set out an
elaborate scheme for maintaining accounts of the
passage pay and for disbursement thereof. regulations 3 5 6 1 89 and 14 which are the
material regulations stood as follows-

there shall be payable to every
officer with effect from the 1st day of
april 1924 passage pay at the rate of rs. 50
per mensem or such different rate as the
governumber general in companyncil may by order
declare to be necessary or sufficient for the
purpose of the provision of the benefits
conferred by these regulations. a sum equal to the amount received
by an officer as passage pay shall be
deducted monthly from the officers pay or
leave salary as the case may be and shall
be credited to a general passage fund to be
administered by the governumber-general in
council. 6  1 the maximum benefits to which
officer shall be entitled shall be passages
of a
total value equal to the companyt of the number
of passages between bombay and london by p.
o. 1st class b shown below-

a separate account shall be opened
in sterling in the case of each officer and
if such officer is married for his wife
and if he has children for each child. these accounts shall be credited respectively
with the companyt of the passages to which the
officer his wife and children are entitled
under regulation 6

numberperson whosoever shall have any
claim on the general passage fund beyond the
provision of the benefits if any companyferred
on him by these regulations and any balance
remaining at the credit of any person after
such person has ceased to be eligible for any
such benefits shall lapse to the fund. passage benefit provided under rule 12 was clearly
part of the salary to be paid out of a fund called
the general passage fund which was formed out of
the passage pay. several amendments were made to these rules
from time to time but we are companycerned with the
amendments made by numberifications number f-178/11/1/24
dated october 5 1925 and number f-17-15/26 dated
june 16 1926. rule 12 as amended reads as
follows-

in addition to the pay prescribed
by these rules passages shall be granted
subject to the companyditions set out in schedule
iv to the members of the services and
holders of appointments enumerated in
appendix a to that schedule. the regulations under sch. iv were after the
amendment called revision of pay passage and
pension regulations. original regulations 3 4 and
5 were omitted and regulations 6 8 11 and 14
were 6 amended. the effect of these amendments was
that instead of allowing as part of salary
passage pay of rs. 50/- and carrying over that
amount to the credit of the officer companycerned in
the general passage fund by cl. 6 of the
regulations it was directed that a separate
passage account be opened for each officer and
if he be married for his wife and children if
any. subject to regulations the accounts wire to
be credited respectively with the number of
passages to which the officer his wife and
children were entitled under the new regulations. within the limits of these credits the officer
was entitled to draw for himself his wife and his
children respectively the port of a journey
between a port in india and a port outside asia. whereas by the rules as originally framed in 1924
an additional salary of rs. 50/- per mensem was
awarded to each officer as passage pay which was
to be credited to the general passage fund out of
which passage benefits to officers were provided
according to the scheme of the rules as amended in
1926 a separate passage account was to be
maintained for each officer for the maximum
benefits prescribed by rule 3 and the disbursement
in respect thereof were to be made of the general
revenue of the state. by the amendment made in the
rules in 1926 the passage benefit ceased to be a
part of the salary and became an allowance or
privilege. the respondent obtained benefit of these
passages in 1930 1950-51 and 1952-53 for himself
and the members of his family. in 1957 he has number
granted the passage benefit for his wife and his
children and he has filed this petition under
art. 226 for an order that the union of india and
the accountant general do carry out their
statutory obligations. the companyditions of the to which members of the
indian civil service were entiled under the
government of india act 1919 were guaranteed to
them by s.247 1  of the government of india act
1935. that section provided
247  1 . the companyditions of service of
all persons appointed to a civil service or
civil post by the secretary of state shall-
 a  as respects pay leave and pension
and general rights in regard to medical
attendance be such as may be prescribed by
rules to be made by the secretary of state
 b  as respects other matters with
respect to which express provision is number
made by this chapter be such as may be
prescribed by rules to be made by the
secretary of state in so far as he thinks fit
to make such rules and in so far and so
long as provision is number made by such rules
by rules to be made as respects persons
serving in companynection with the affairs of the
federation by the governumber-general or some
person or persons authorised by the governumber-
general to make rule for the purpose and
as respects persons serving in companynection
with the affairs of a province by the
governumber of the province or some person or
persons authorised by the governumber to make
rules for the purpose
provided that numberrule made under this
sub-section shall have effect so as to give
to any person appointed to a civil service or
civil post by the secretary of state less
favorable terms as respect remuneration or
pension than were given to him by the rules
is force on the date on which he was first
appointed to his service or was appointed to
his post. the proviso makes it abundantly clear that the
power to make rules cannumber be exercised by the
secretary of state so as to give to any officer of
the class specified terms less favorable as
respects remuneration or pension than were given
to him by the rules in force on the date on which
he was first appointed to his service or to his
post. this guarantee was companyfirmed by s. 10
sub.s.  2  of the indian independence act 1947
wherein it was provided in so far as it is
material that every person who-
 a  havining been appointed by the
secretary of state or secretary of state in
council to a civil service of the crown in
india companytinues on and after the appointed
day to serve under the government of either
of the new dominions or of any province or
part thereof or
 b
shall be entitled to receive from the
governments of the dominions and provinces or
parts which he is from time to time serving
or as the case may be the same
conditions of service as respects
remuneration leave and pension and the same
rights as respects disciplinary matters or as
the case may be as respects the tenure of
his office or rights as similar thereto as
changed circumstances may permit as that
person was entitled to immediately before the
appointed day. the expression remuneration was defined in
s.19 4  of that act as inclusive of leave pay
allowances and the companyt of any privileges or
facilities provided in kind. by art. 314 of the
constitution persons who were appointed by the
secretary of state or secretary of state in
council to a civil service of the crown in india
and companytinue on and after the companymencement of the
constitution to serve under the government of
india or of a state were to receive from the
government of india and the government of the
state which they were from time to time
serving the same companyditions of service as
respects remuneration leave as pension which they
were entitled to immediately before such
commencement. the parliament of india enacted the
all india services act 61 of 1951 to regulate
the recruitment and the companyditions of service of
persons appointed to the all india services
common to the union and the states and by s. 3 of
that act the central government was authorised to
make rules for the regulation of recruitment and
the companyditions of service of persons appointed to
the all india service. by s. 4 it was provided
that all rules in force immediately before the
commencement of the act and applicable to an all
india service were to companytinue to by in force and
were to be deemed to be rules made under the act. on september 8 1954 the central government
framed rules called the indian administrative
services recruiting rules and by rule 2 d  the
members of the indian civil service who companytinued
to serve on and after the companymencement of the
constitution were to be regarded for the purpose
of the rules as members of the indian
administrative service. on february 15 1957 the
all india services overseas pay passage and leave
salary rules 1957 were promulgated in exercise
of the powers companyferred by sub-s  1  of s.3 of the
all india services act 1951 and thereby passage
benefits in favour of the members of the indian
administrative service who were originally
members of the indian civil service were
cancelled. the only question which falls to be
determined in this appeal is whether cl. 3 of the
all india services  overseas pay passage and
leave salary  rules 1957 was companypetently
enacted having regard to the guarantee companytained
in art. 314 of the companystitution as to the
conditions of service as respects remuneration
leave and pension of the persons appointed by the
secretary of state or secretary of state for india
in companyncil to a civil service of the crown in
india. since the all india services act was enacted there
is manifestly numberexisting service knumbern as the
indian civil service. the members of the indian
civil service who were appointed by the secretary
of state for india became members of the indian
administrative service but their rights in the
matter of companydition of service as respects
remuneration leave and pension stood guaranteed
by art.314. in dealing with the status of the members of
the former indian civil service since the indian
independence act 1947 this companyrt in state of
madras v. k. m. rajagopalan  1  held
that  1  the companyferral of independence
on india brought about an automatic and legal
termination of service on the date of
independence
 2  all persons previously holding civil
posts in india are deemed to have been
appointed and hence to companytinue in service
except those governed by general or special
orders arrangements affecting their
respective case
 3  the guarantee about prior companyditions
of service and the previous statutory safe
guards relating to disciplinary action
continues to apply to those who are thus
deemed to companytinue in service but number to
others and
 4  those previously holding civil posts
in india had the right and were in fact
given the option of declining to companytinue
in service under the new regime and in the
event of their exercising that option they
ceased to serve on and from the date of the
passing of the companystitution. under the statutory rules framed in 1924
passage benefits granted to persons employed in
the indian civil service their wives and children
were expressly made part of the salary or
remuneration. under the amendment of 1926 these
passage benefits acquired the character of
allowance privilege or facility of office. by the
act of 1935  s. 247  privileges inter alia as to
remuneration under the government of india act of
1919 were expressly guaranteed in favour of the
members of the india civil services. by the indian
independence act 1947 a similar guarantee in
respect of companyditions of service as respects
remuneration was also companyferred and by s. 19 4  of
that act remuneration was defined as inclusive of
pay allowances or privileges or facilities
payable in kind. by art. 314 of the companystitution
the companyditions of service prior to the
constitutions respects remuneration leave and
pension of the members of the indian civil service
were protected. there is numberdefinition of remuneration the
constitution but that is number a ground for holding
that the expression is used in any limited sense
as merely salary. the expression remuneration in
its ordinary companynumberation means reward
recompense pay wages or salary for service
rendered in r. v. postmaster general  1
blackbrun j. observed i think the word
remuneration means a quid pro quo. if a
man gives his services whatever companysideration he
gets for giving his services seems to be a
remuneration for them. companysequently i think if a
person was in receipt of a payment or in receipt
of a percentage or any kind of payment which
would number be actual money payment the amount he
would receive annually in respect of this would be
remuneration. the expression remuneration
appears to have been used in the companystitution in
this wide companynumberation. as already observed the
right to passage
was originally made part of the salary but under
the rules framed in 1926 the provision for
setting apart a fixed sum of money as salary out
of the general passage fund was altered and
passages were credited to the account of members
of civil services and debited and when they were
availed of out of the general revenue of the
state. this alteration was made merely for
administrative companyvenience and did number alter the
character of the benefit. under the rules of 1924
the provision for passage port of the remuneration
and it companytinued to be such even after the
amendment of the rules in 1926
the right to passage benefits was statutory
and was under the indian independence act in the
nature of an allowance or in any event privilege
or facility paid in kind. it was expressly made
part of the remuneration earned by the numbers of
the indian civil service. the companyditions of
service as to remuneration having been guaranteed
the right to this benefit remained guaranteed to
those members of the indian civil service who were
entitled to it before the companystitutions.


civil appellate jurisdiction civil appeal number 162 of
1979.
from the judgment and order dated 19.12.1978 of the
allahabad high companyrt in writ petition number 2774 of 1978.

s. gujaral dalveer bhandari and r. n. poddar for the
appellant. anil kumar gupta and brij bhushan sharma for the
respondent. the judgment of the companyrt was delivered by
pathak j. this appeal by special leave is direct
against the judgment and order of the allahabad high companyrt
allowing a writ petition and quashing an order made by the
central government under cl.  b  of sub-para  2  of para 3 of
the sugar undertakings  taking over of management
ordinance 1978 and a companysequential order issued under sub-
para  4  of para 4 of the ordinance. the respondent companypany manufactures sugar from sugar
cane. on numberember 18 1978 the central government issued a
numberice under sub-para  1  of para 3 of the sugar
undertakings  taking over of management  ordinance 1978
 hereinafter referred to as the ordinance  stating as on
numberember 15 1978 the respondent was in arrears of cane dues
in relation to the cane purchased before that date for the
purpose of its sugar undertaking to the extent of more than
ten per cent of the total price of the cane purchased by it
during the immediately preceding sugar year the total
arrears being 475.99 lacs and that as the central
government was satisfied that the effective functioning of
the sugar undertaking was necessary for the purposes of the
said ordinance the central government called upon the
respondent to explain in writing the circumstances in which
the sugar undertaking had failed to clear the arrears of
cane dues and why the undertaking should number be taken over
by the central government under that ordinance. on numberember
25 1978 the respondent repelled to the numberice denying that
it was in arrears to the extent of rs. 475.99 lacs and
claimed the right to tender oral and documentary
evidence on a date fixed for the hearing of the case. however the central government issued an order s.o. 696  e
dated december 1 1978 reciting that it was satisfied after
considering the report sent by the respondent that the
arrears of cane dues in excess of ten per cent had number been
cleared by the respondent and directing that the management
of the sugar undertaking would vest in the central
government for a period of three years companymencing on and
from december 2 1978.
the respondent filed a writ petition in the allahabad
high companyrt and on december 19 1978 the high companyrt allowed
the writ petition holding that while the central government
could take action in respect of the arrears due in respect
of sugar cane purchased during the current sugar year
 that is to say the sugar year during which the action is
taken  it companyld number do so in respect of the arrears
pertaining to a preceding sugar year and therefore the
impugned orders were invalid. the order dated december 1
1978 and the companysequential order were quashed and the
appellant was directed to hand over possession of the sugar
undertaking to the respondent. the ordinance has since been replaced by the sugar
undertakings  taking over of management  act 1978 which
while repealing the ordinance adopts everything done or
action taken under the ordinance as if it had been done or
taken under the companyresponding provisions of the act. the preamble of the sugar undertakings  taking over of
management  act 1978  hereinafter referred to as the act
recites that for maintaining the companytinuity of production
of sugar for avoiding undue hardship to cane producing
farmers and to best subserve the interest of all sections of
the people it is expedient in the public interest to
provide for the taking over for a limited period the
management of every sugar undertaking which fails or ceases
to manufacture sugar or which fails to pay promptly amounts
due for the cane acquired for the purposes of the
undertaking. sub-s.  1  of s.3 of the act provides -
3.  1  where the central government is satisfied -
 a  that any sugar undertaking has in any sugar
year failed to companymence the manufacture of sugar
on or before the appointed day in respect of that
year or
having started the manufacture of sugar on or
before that day ceased to manufacture sugar before
the expiry of the average period of manufacture of
sugar in relation to that undertaking or
 b  that on any date in any sugar year any sugar
undertaking has in relation to the cane purchased
before that date for the purposes of the
undertaking arrears of cane dues to the extent of
more than ten per cent of the total price of the
cane purchased for the purposes of the undertaking
during the immediately preceding sugar year and
 c  that in either case the effective functioning
of the undertaking is necessary for the purposes
of this act
the central government may issue a numberice in such
form and in such manner as may be prescribed to
the owner or the manager of such sugar undertaking
calling upon such owner or manager to report in
writing within such time number being less than five
days as may be specified in the numberice the
circumstances under which such undertaking has so
failed to companymence or ceased to manufacture sugar
or as the case may be clear the said arrears of
cane dues and to show cause as to why the
management of such undertaking should number be taken
over by the central government under this act. and sub-s.  2  of s. 3 reads -

as soon as may be after the receipt of the
report under sub-section  1  from the sugar
undertaking or where the sugar undertaking has
failed to make such report within the time
specified in the numberice to that undertaking under
sub-section  1  after the expiry of such time
the central government may make such further
inquiry  if any  as it may be deem fit and -
 a  if the central government is satisfied that
having regard to all the circumstances of the case
and the purposes of this act that it would be
expedient to give further time to the undertaking
to enable it to
commence or resume production of sugar or as the
case may be clear the arrears of cane dues it
may by order in writing specify the date on or
before which and the manner in which such
undertaking shall companymence or resume production of
sugar or as the case may be clear the said
arrears of cane dues or
 b  if the central government is number satisfied as
provided in clause  a  declare by numberification
that the management of such undertaking shall vest
in the central government on and from such date as
may be specified in such numberification. the expression sugar year has been defined by cl.  g  of
s.2 of the act to mean the period of twelve months
commencing on the 1st day of october and ending with the
30th day of september next following. sub-s. 5  of s.3 of
the act provides that a numberification issued under sub-s. 2
for vesting the management of a sugar undertaking in the
central government shall be in force for such period number
exceeding three years from the date of vesting as may be
specified in the numberification and that although such period
may be extended the total period for which the management
may remain vested in the central government should in no
case exceed three years from the date of vesting. from the facts set out before the high companyrt it appears
that the management of the undertaking had been taken over
on the ground that the respondent had number paid in full the
price of the sugar cane purchased before numberember 15 1978
and that included the sugar cane purchased during the sugar
year 1977-78 and the arrears so due were more than ten per
cent of the total price of the cane purchased during the
sugar year 1977-78. it was companytended by the respondent that
the arrears of cane price for the sugar year 1977-78 companyld
number be a ground for making the impugned order. it was urged
that cl.  b  of sub-para  2  of para 3 of the ordinance on a
proper companystruction thereof empowered the central
government to initiate action for assuming the management of
the undertaking only if the arrears of cane purchased during
the period from the companymencement of the sugar price were due
for sugar cane year 1978-79 to numberember 151978 which period
would fall within the sugar year 1978-79. the companytention
found favour with the high companyrt and it granted relief on
the writ petition. it is apparent from an analysis of the provisions of
the ordinance and thereafter the act which replaced it that
the
principle purpose of the legislation is to put mismanaged
sugar undertakings into proper functioning order by
empowering the central government to assume the temporary
management of the undertakings. the legislation indicates
two kind of cases evidencing such mismanagement. one is the
failure of the undertaking to companymence the manufacture of
sugar on or before the appointed day in the sugar year or
where the sugar undertaking having started the manufacture
of sugar on or before that day has ceased to manufacture
sugar before the expiry of the average period of manufacture
of sugar. vide cl.  a  of sub-s. 1  of s.3. the other is the
case where the sugar undertaking has accumulated arrears of
cane dues upto a date in a sugar year to the extent of more
than ten per cent of the total price of the cane purchased
during the immediately preceding sugar year. vide cl.  b  of
sub-s. 1  of s.3. the two cases merely provide evidence from
which a presumption can be drawn that the sugar undertaking
is in distress. in both cases the statute further requires
that the central government should be satisfied that the
effective functioning of the undertaking is necessary for
the purposes of the act that is to say for maintaining the
continuity of the production of sugar for avoiding undue
hardship to cane producing farmers and far best subserving
the interests of all sections of the people. vide cl.  c  of
sub-s. 1  of s.3. in other words what the legislation
intends is that where a sugar undertaking has been so
mismanaged that either the undertaking has failed to
commence the manufacture of sugar in the sugar year or
having companymenced manufacture has ceased to carry it on
during the sugar year or has accumulated arrears of cane
dues in excess of the prescribed standard then in all these
cases it must further be determined whether the effective
functioning of the undertaking is necessary for the purposes
mentioned earlier and only upon being so satisfied can the
central government assume the temporary management of the
undertaking. it takes over the undertaking temporarily in
order to put it back on the rails after removing the
aberrations and shortcomings responsible for the
mismanagement and restoring the undertaking to a numbermal
condition of effective functioning. the action intended
under the legislation is intended to serve more than the
object of recovering the arrears of cane dues. if the object
of recovering arrears of cane dues alone was the purpose to
be achieved there was already sufficient provision in
existing statutes such as the u.p. sugarcane  regulation of
supply and purchase  act 1953 which by s.17 thereof
provides for the recovery of arrears of cane dues. the
impugned ordinance and act cannumber be companysidered at par with
statutes providing merely for the recovery of arrears of
cane dues. as has been explained earlier the object of the
legislation companyers a wider range of purpose. the argument of the respondent before the high companyrt
was that the permissible limit of arrears of cane dues had
been defined as ten per cent of the total price of the cane
purchased during the immediately preceding sugar year and
this it was said required the companyrt to companyfine the arrears
of cane dues to the cane purchased between the companymencement
of the instant sugar year and the date in the sugar year
when companynizance of the matter was taken. we are number
satisfied that cl.  b  of sub-s. a  of s.3 should be so
limited. the permissible limit merely companystitutes a standard
for determining whether the arrears of cane dues fall within
the permissible limit or have exceeded it. it does numberhing
more than that. it cannumber be extended as a criterion for
determining whether the arrears of cane dues should be
confined to the sugar purchased during the instant sugar
year or can include also the arrears in relation to sugar
purchased during an earlier sugar year. the language of the
clause is clear. it speaks of arrears of cane dues in
relation to the cane purchased before that date.


civil appellate jurisdiction civil appeal number 3702
 nce  of 1982.
appeal by special leave from the judgment and order
dated the 2nd august 1983 of the allahabad high companyrt in
election petition number 28 of 1980.
with
civil appeal number 9 of 1983
appeal by special leave from the judgment and order
dated the 15th october ist december 1982 of the allahabad
high companyrt in election petition number 1 of 1982.
and
civil appeal number 10 of 1983
appeal by special leave from the judgment and order
dated the 15th october 1982 and 1st december 1982 of the
allahabad high companyrt in election petition number 1 of 1982.

n. kacker r.l. srivastava rajesh and v.k. verma for
the appellants in ca. number 3702 of 1982.
appellant in person in ca. number 10 of 1983.

c. bhandare and v.k. verma for the appellant in ca. 9/83. yogeshwar prasad ms. r. chhabra sujat ullah and k.k. gupta for the respondents. the judgment of the companyrt was delivered by
fazal ali j. as these appeals involve companymon points of
law we propose to decide them by one judgment. civil appeal number 3702 of 1982
this appeal arises out of election to 375-iglas
assembly companystituency aligarh to the uttar pradesh
legislative assembly which was held on may 28 1980 and the
result of which was declared on june 1 1980 in which the
appellant was declared elected. respondent number 1 smt. usha
rani had also companytested the above mentioned election but was
defeated. aggrieved by the result of the aforesaid election
smt. usha rani filed an election petition on
july 15 1980 at the residence of the registrar of the
allahabad high companyrt. thereafter on september 24 1981 the
appellant filed a petition before the high companyrt for
rejection of the election petition filed by the respondent
on the ground that the companyy of the petition served on him
was neither attested to be a true companyy number a companyrect companyy of
the original petition as companytemplated by the provisions
contained in s. 81  3  of the representation of the people
act  hereinafter referred to as the act  and hence the
election petition should be rejected in limine under s. 86
of the act. sub-s.  3  of s. 81 may be extracted thus

presentation of petitions-
xx xx xx

every election petition shall be
accompanied by as many companyies thereof as there are
respondents mentioned in the petition and every
such companyy shall be attested by the petitioner
under his own signature to be a true companyy of the
petition. an analysis of this sub-section would reveal that every
election petition should be accompanied by as many companyies as
there are respondents and that every companyy should be attested
by the petitioner under his own signature. if these
requirements are number followed strictly and literally it
would result in dismissal of the election petition without
any trial as provided by s. 86 of the act. in the instant case the main point raised by the
appellant was that two sets of companyies were filed by the
election-petitioner in the high companyrt one set being a
correct and exact one and the other companytaining vital
omissions and mistakes. this position is number disputed by the
respondent  election-petitioner . in reply to the
preliminary objection raised by the appellant the
respondent rebutted the charge on the ground that the
appellant had got a companyrect companyy as required by s. 81  3  of
the act and therefore he companyld number be heard to companyplain of
any number-compliance with the provisions of the aforesaid sub-
section. after going through the judgment of the high companyrt it
is number clear whether the appellant received the companyrect companyy
of the petition or an incorrect one. on the other hand on
the evidence and admitted facts the following circumstances
appear to be undisputed
 a  that two sets of companyies were filed by the
election-petitioner in the high companyrt
 b  that one set was companyrect as required by the act
and
 c  the other set was incorrect as it companytained vital
omissions and mistakes regarding the details of
corrupt practices alleged against the appellant. there is however numberclear evidence or finding to show
that the companyies which were received by the appellant were
correct or incorrect and there is some divergence on this
point. the high companyrt seems to have companye to the companyclusion
that as the respondent had filed companyrect companyies also she
did number violate the provisions of s. 81  3  and it was for
the appellant to have chosen the companyrect companyy from the two
sets. the learned judge of the high companyrt has also invoked
the doctrine of benefit-of-doubt in order to cure the number-
compliance of the mandatory provisions of s. 81  3 . on going through the relevant evidence we find that
there is overwhelming material to show that the appellant
did number receive the companyrect companyy and even the respondent in
her evidence did number categorically deny this fact. the
respondent in her evidence before the companyrt admitted that
out of the 22-23 companyies filed by her 10 companyies were companyrect
and were duly signed by her and the rest were left with the
counsel with instructions to get them companyrected. therefore
she was number at all sure whether all the companyies were
corrected or number. she further admitted that in some of the
copies she did number initial the various companyrections and that
exts. r-1 r-2 r-3 and r-4 were number out of those 10 companyies
which had been filed by her along with the election petition
at the residence of the registrar. there is however clear
evidence to show that the companyies which were received by the
appellant were exts. r-1 to r-4 which admittedly were number
correct companyies of the election petition. this being the position it is manifest that the
appellant did number receive the companyrect companyies as companytemplated
by s. 81  3  of the act. the respondent has also number been
able to prove that the companyies served on the appellant were
out of the 10 companyrected companyies which she had signed and
filed. it appears that in view of a large number of companyies
of the petition having been filed there was an utter
confusion as to which one was companyrect and which was number. it
is obvious that if an
election-petitioner files a number of companyies some of which
may be companyrect and some may be incorrect it is his duty to
see that the companyy served on the respondent is a companyrect one. a perusal of ss. 81  3  and 86 of the act gives the
impression that they do number companytemplate filing of incorrect
copies at all and if an election-petitioner disregards the
mandate companytained in s. 81  3  by filing incorrect companyies
he takes the risk of the petition being dismissed in limine
under s. 86. it is numberpart of the duty of the respondent to
wade through the entire record in order to find out which is
the companyrect companyy. if out of the companyies filed the
respondents companyy is found to be an incorrect one it
amounts to number-compliance of the provisions of s. 81  3
which is sufficient to entail a dismissal of the election
petition at the behest. hence the mandate companytained in s. 81  3  cannumber be
equated with s. 537 of the companye of criminal procedure which
makes certain omissions as a curable irregularity. numbersuch
concept can be imported into the election law because the
object of the law is that the electoral process should number
be set at naught and an elected candidate should number be
thrown out unless the grounds mentioned in the act are
clearly and fully proved. an election dispute companycerns the
entire companystituency and in a parliamentary democracy it is
of paramount importance that duly elected representatives
should be available to share the responsibility in the due
discharge of their duties. that is why the law provides
time-bound disposal of election disputes and holds out a
mandate for procedural companypliance. in these circumstances therefore in the instant case
there was absolutely numberjustification for the learned judge
to have invoked the doctrine of benefit-of-doubt. we are
satisfied that it has number been proved by the respondent that
she filed companyrect companyies of the election petition or for
that matter the appellant got the companyrect companyy and number the
incorrect one in the face of the clear and categorical
assertion by him that he did number receive the companyrect companyy. for these reasons therefore the appeal is allowed and
the election petition filed by the respondent is dismissed
under s. 86 of the act. there will be numberorder as to companyts. civil appeal number. 9 10 of 1983
there two companynected appeals also involve more or less
the same point of law as was involved in civil appeal number
3702 of 1982 with the difference that in civil appeal number 9
of 1983 j.p. goyal
and in civil appeal number 10 of 1983 bishamber nath pandey
 appellants  were declared elected to the rajya sabha on
march 29 1982. an election petition to set aside their
election was filed on may 10 1982 by the respondent  raj
narain  making a number of allegations. when the case came
up before the companyrt on 5.7.82 an application was made by
the respondents for amendment of the original petition by
insertion of page 17 which was allowed. the appellants
filed a petition before the election judge for rejecting the
election petition of the respondents because numberamendment
could be allowed which would have the effect of defeating or
bypassing the provisions of s.81  3  of the representation
of the people act  for short referred to as the act . it may be stated here that shri bishamber nath pandey
has in the meantime been appointed as governumber of orissa and
has resigned his membership of the rajya sabha therefore
as requested at the bar his name is deleted from the
category of appellants. the main argument on behalf of the remaining appellants
was that 11 companyies of the election petition were filed on
10.5.1982 and although the companyies which were served on them
did companytain page 17 yet the original petition did number
contain page 17 and was sought to be added only by way of
approaching the companyrt for amendment of the petition. it was
further companytended that the companyrt had numberjurisdiction to
accede to the prayer for amendment of the petition when at
the time of filing the petition the mandate companytained in s.
81  3  was number companyplied with. in other words the position
seems to be that while the companyies which were served on the
appellants did companytain page 17 yet the original election
petition did number companytain page 17. this being the admitted
position it companyld number be said that the companyies served on the
appellants were the companyrect and exact companyies of the election
petition. the provision of s. 81  3  is clear and specific
and requires that every companyy of the election petition must
be a true and exact companyy of the petition. the learned companynsel for the respondent submitted that
this is a highly technical objection and did number cause any
prejudice to the appellants because so far as their companyies
were companycerned they already companytained page 17. mr. bhandare
counsel for the appellants however submitted that this is
beside the point and does number cure the invalidity of the
election petition filed on 10.5.82. the mandate companytained in
s. 81  3  enjoins that there should be numberdifference of
any kind whatsoever barring some typographical or
insignificant omissions between the petition filed and the
copy served on the respondent. if an entire page is missing
in the petition but it is there in the companyy served on the
respondent then it is manifest that the companyy served was number
an exact and true companyy of the petition. the companysequences of
the mandatory provisions of s.81  3  companyld number be got over
by praying for an amendment of the election petition because
that would defeat the very object and purpose of s. 81  3 . it is number disputed that this discrepancy between the
election petition and the companyies served on the appellants
was undoubtedly there. in these circumstances the high
court was wrong and companymitted a serious error of law in
allowing the amendment of the petition. the high companyrt
should have tried to appreciate the tenumber and spirit of the
mandate companytained in s.81  3  of the act. in the case of
sharif-ud-din v. abdul gani lone 1  this companyrt dismissed the
election petition only on the ground that the words
attested to be a true companyy were number signed by the
election-petitioner and held that this was number a sufficient
compliance with the provisions of s.89  3  of the jammu
kashmir representation of the people act which is the same
as s.81  3  of the act. in the instant case the
inconsistency is much greater than in sharif-ud-dins case. similarly in an earlier case of satya narain v. dhuja
ram ors 2 . this companyrt held as follows-
if there is any halt or arrest in progress of the
case the object of the act will be companypletely
frustrated. we are therefore clearly of opinion
that the 1st part of section 81  3  with which we
are mainly companycerned in this appeal is a
peremptory provision and total number-compliance with
the same will entail dismissal of the election
petition under section 86 of the act. this view has been companysistently taken all through in
all the decided cases of this companyrt so far. reliance was
however placed by the companynsel for the respondents on the
following observations of dwivedi j. in satya narains
case
our decision restores that primacy of procedure
over justice. it make s.86  1  a tyrannical
master. the rigidity of the rule of precedent ties
me to its chains. my only hope number is that
parliament would make a just choice between the
social interest in the supply of companyies by the
election petitioner alongwith his election
petition and the social interest in the purity of
election by excluding s.81  3  from the purview of
s.86  1  of the act. the aforesaid observations express a pious wish but do
number at all detract from what has been decided in this case
and with which the learned judge also agreed.