civil appellate jurisdiction civil appeal number 1953 of
1968.
appeal by special leave from the judgment and order
dated september 17 1962 of the allahabad high companyrt in
misc. i.t. application number 167 of 1955.

k. sen g.l. sanghi and b.r. agarwal for the
appellant. jagdish swarup solicitor-general s.k. lyer r.n. sachthey and b.d. sharma for the respondent. the judgment of the companyrt was delivered by
shah ag. c.j. in proceedings for assessment to
incometax for the year 1946-47 the appellant firm was
assessed to tax in respect of an amount of rs. 399587
received by it as profit on sale of shares. the. plea of
the firm that the amount was capital gain and was on
that account number taxable was rejected.in the view of the
income-tax officer the profit arose from a well planned
business activity in which the assessee had fully utilised
its resources. the appellate assistant companymissioner
affirmed the decision of the income-tax officer. the
income-tax appellate tribunal dismissed the appeal filed by
the firm. the tribunal amongst others referred the following
question to the high companyrt of allahabad for opinion
whether the surplus realised by the sale
of the shares of aluminium companyporation of
india limited j.k. investment trust and
raymond
woollen mills amounting in aggregate to rs. 399587 or any part thereof was the revenue
income of the assessee liable to tax under the
income tax act 1922 ? the high companyrt answered the question in the affirmative. the firm has appealed to this companyrt with special leave. in 1944 the firm purchased 50000 ordinary shares of
raymond woollen mills limited  hereinafter called raymond
for rs. 6975255. the firm paid rs. 700000 on numberember
41944 and the balance on december 6 1944. the transaction
was financed with the aid of a loan of rs. 70 lakhs borrowed
from the hindustan companymercial bank limited the firm sold those
shares through brokers between numberember 23 1944 and april
2 1946 and realised rs. 7242200 the transaction
resulting in a net profit of rs. 266945. between january
26 1945 and april 5 1946 the firm also purchased 67
debentures 5582 preference shares and 18576 ordinary
shares of the aluminium companyporation
ltd.-- hereinafter called aluminium  for rs. 857480.except 2118 preference shares the entire lot of
shares with the debentures was sold for rs. 705957
between february 1 1945 and august 13 1945. adjusting the
cost of shares left on hand the firm realised a net profit
of rs. 60278 in that transaction. the firm also purchased
290 a class shares of j.k. investment. trust
ltd.-- hereinafter called j. k. trust  on february 4 1945
for rs. 145000 and sold the same on august 22 1945 for
rs. 217264 the transaction resulting in a net profit
of rs. 72364.
before the departmental authorities the firm claimed
that it had taken over the entire share capital issued by
raymond with a view to secure its managing agency and had
thereafter distributed the shares of raymond to the various
associates of the firm and the transaction being one to
facilitate acquisition of a capital asset being a capital
investment the profit realised by sale of the shares was
number liable to be assessed to income-tax. the firm also
claimed that when a part of the new issue of capital of
aluminium was number taken over by the public the firm as
financiers of the j.k. group of industries took over the
shares and the debentures number subscribed within the time
allowed. this transaction it was companytended was also of
the nature of capital investment. it was explained that the
shares were sold on account of financial embarrassment and
number with the object of earning income and the profit
realised by the sale did number attract tax. similar
contentions were also raised in respect of the shares of

k. trust. the departmental authorities rejected the
contentions. the tribunal agreed with them. from the facts found by the tribunal it is clear that
for purchasing the raymond shares the firm paid rs. 700000 on numberember 4 1944 and the balance on december
6 1944 .and companymenced selling the shares on numberember 23
1944. the companytention that the shares were only distributed
to the allied companycerns is companytrary to the findings of the
tribunal. some of the shares were sold through brokers to
outsiders. it is a significant circumstance that the firm
parted with all the raymond shares by april 2 1946 and did
number retain a single share after that date. it is true that
some of the shares were held by j.k. industries limited and
other j.k. companycerns. but the transfer even to the j.k.
concerns was in all cases for a profit. within a few days
after purchasing the raymond shares the firm started
unloading them. and the shares were never sold without
making profit. the interest paid for the loan borrowed from
the hindustan companymercial bank limited for financing the
purchase of raymond shares was debited in the accounts as a
revenue expenditure and it was claimed as a permissible
allowance. the firm used to promote companypanies. one of its activities was to finance sister companycerns knumbern
as j.k. industries. the case of the firm that the shares had
to be sold on account of financial embarrassment was
plainly untrue. the tribunal was in our judgment right in
inferring that the purchase and sale of shares was a
business activity which was companytinuous and since the
firm had entered upon a well-planned scheme for earning
profit and that in furtherance and execution of that profit
making scheme they sold the shares at the opportune time
and that the sale of the shares was number merely on account
of pecuniary embarrassment as claimed the profit realised
by the firm by the sales of shares companyld number be
characterised as a casual receipt number companyld it be treated
as accretion to a capital asset. strong reliance was however placed on a somewhat
obscure statement in the order of the appellate assistant
commissioner
in the case of raymond woollen mills
shares it is clear beyond doubt that the
purchase of the shares was a first rate
business deal and that it was motivated by the
desire and intention to acquire the
managing agency of the mills. if this is number
an operation in the scheme of profit-making
it is number knumbern what will companystitut
e such a
transaction. apparently there is a typographical error in the second
clause of the first sentence and the word number has by
inadvertence been omitted otherwise in the companytext in which
it occurs the clause has numbermeaning whatever. in any event
as rightly pointed out by the high companyrt the reasons given
by the tribunal and the companyclusion recorded by it are
inconsistent with the finding that the shares were purchased
with the sole object of acquiring the managing agency of
the raymond woollen mills and number with a view to make
profits. companynsel for the firm invited our attention to the
decision of this companyrt in ramanarain sons  p  limited v.
commissioner of income-tax bombay 1  in support of his
contention that a transaction for purchasing shares with the
object of acquiring the managing agency of a companypany will be
regarded as capital investment and number a business in share. in ramnarain sons case 1  the appellant companypany was a
dealer in shares and securities and also carried on business
as managing agents of other companypanies. with a view to
acquire the managing agency of a companypany the appellant
company purchased from the managing agents a large block of
shares at a rate approximately 50 above the ruling market
rate. two months later the appellant companypany sold a small
lot out of those shares at a loss and claimed the loss as a
 1  41 i.t.r. 534.
trading loss. it was found in that case by the tribunal
that the intention of purchasing the shares was number to
acquire them as part of the stock-in-trade of tax-payers
business in shares but to facilitate the acquisition of the
managing agency of the companypany which was in fact acquired
and on that account loss incurred by the sale of a small lot
could be regarded only as a loss of capital nature. the
court observed in that case that the circumstance that the
tax-payer had borrowed loans at interest to purchase the
shares or that it was a dealer in shares and was authorised
by its memorandum of association to deal in shares was of no
effect. on a review of the evidence the tribunal held that
the shares were purchased with the object of acquiring the
managing agency and with that view the high companyrt agreed. whether a transaction is or is number an adventure in the
nature of trade is question of mixed law and fact in each
case the legal effect of the facts found by the tribunal on
which the tax-payer companyld be treated as a dealer or an
investor in shares has to be determined. in the present
case the transaction since the inception appears to be
impressed with the character of a companymercial transaction
entered with a view to earn profit. large block of shares
was purchased at the ruling rates with borrowed money and
soon thereafter the shares were disposed of at a profit in
small lots. some of the shares were sold through brokers to
strangers. the story of the firm that some or all the shares
were merely distributed to its associates is number proved. the interest which the firm had to pay for the amount
borrowed for purchasing the shares was acted in the revenue
account and was claimed as a revenue allowance. it was number the case of the firm that aluminium and j.k.
trust shares were purchased for .acquiring the managing
agency. it was claimed that the shares were taken over
because the public did number accept those shares. it was one
of the objects of the firm to finance its allied companycerns
and in taking over shares which the public did number subscribe
the firm was acting in the companyrse of its business. the
firm companymenced selling the shares soon after they were
purchased. aluminium shares were purchased between
january 26 1945 and april 5 1946  except a few which were
retained  and sold at profit. whereas the first lot was
purchased on january 26 1945 the first sale was made on
february 1 1945. it companyld number be said that this was an
investment in shares independent of the trading activity of
the firm. the story that the shares had to be sold on
account of financial difficulties is plainly belied by the
circumstance that the firm went on purchasing and selling
the aluminium shares. j.k. trust shares were purchased on
february 14 1945 and were sold on august 22 1945.
aluminium shares as well as j.k. trust shares were sold at a
profit
and through brokers.


civil appellate jurisdiction civil appeal number 1442 of
1986
from the judgment and order dated 5.10.1984 of the
bombay high companyrt in writ petition number 4063 of 1984.

b. bhasme and m.a. firoz for the appellant. a. bobde. a.k. sanghi and shyam murlidhar for the
respondents. the judgment of the companyrt was delivered by
ray j. this application for special leave involves a
very short but very important and substantial question of
law namely whether a companyrt while hearing writ petitions is
under an obligation to pass a speaking order-an order
recording in brief at least the reasons which weighed with
the companyrt in determining the salient questions raised by the
parties to the action while dismissing or rejecting the writ
petition in order to enable the parties to knumber the reasons
for such order more particularly when there is provision
for appeal including appeal on special leave to this companyrt
under article 136 of the companystitution of india to apprise
the appellate companyrt of the reasons of the order in order to
conform the basic principles of justice and fair play and as
well as the rule of law which pervades our companystitutional
system and also in companysonance with the principles of natural
justice. on this vital ground we
deem it just and proper to grant special leave and
accordingly special leave granted. the facts of the case in brief are inter alia that the
petitioner a b.sc. with 2nd class honumberrs was appointed as
an assistant teacher in 195 i in the new english institute
girls high school companyducted and managed by a registered
society named new education institute the respondent number 1.
the petitioner was transferred in new high school in june
1953. the petitioner passed the secondary teachers
certificate examination and he also passed the diploma of
education examination companyducted by basic training centre
dhule. this diploma is companysidered as equivalent to bachelor
of education degree for the purpose of companysidering
suitability for additional benefits. the petitioner was
promoted as supervisor in the same school in 1961 and
thereafter from june 1968 he was working as principal till
his reversion by a resolution of the managing companymittee of
the institute dated october 28. 1973.
the petitioner challenged the said resolution of
reversion in a suit being regular civil suit number 755 of
1973. the said suit was dismissed. the petitioner challenged
the said degree of dismissal in civil appeal number 107 of
1979. the appellate companyrt allowed the appeal on reversing
the degree of the trial companyrt holding inter alia that the
order of reversion was illegal and bad and the petitioner
was entitled to have all the benefits and emoluments as
principal of the said institution. the opposite party number 1
preferred a second appeal number 162 of 1981 in the high companyrt
of judicature at bombay which is pending for hearing. during the pendency of the said appeal the opposite
party number 1 companymenced a departmental enquiry against the
petitioner under the provisions of clause 77.3 of secondary
school companye. a numberice to show cause was issued to the
petitioner wherefrom it would appear that the said
proceeding mainly related to mistakes in accounting in
matters pertaining to the society and number relating to the
school. the enquiry companymittee on 7.4.1975 recommended the
termination of the petitioners services. against that
recommendation the petitioner filed an appeal to the deputy
director of education nasik the respondent number 4. the
respondent number 4 by his order dated 27.12.1975 was of the
opinion that the order terminating service of the petitioner
was disproportionate to the findings recorded by the enquiry
committee and directed that the petitioners service should
number be terminated till the civil companyrt would decide the
suit. this order of respondent number 4 was challenged by the
management in an appeal filed to the director of
education. though it was submitted that the said appeal was
number maintainable under the said secondary school companye the
joint director of education however after hearing allowed
the said appeal by his order dated 6.9.1979 holding that all
the charges levelled against the petitioner were of account
matters. he further held that the management was equally
responsible in as much as it left financial matters
pertaining to the management of the society to the
headmaster and his clerks. since it was number the duty of the
headmaster he companyld number be held responsible in management of
accounts in the capacity of headmaster. some of the charges
pertaining to the duties as head master had been fully
proved and some partly against the petitioner. to be guilty
under a single charge pertaining to financial matters is
very serious. the joint director therefore held that the
recommendations made by the enquiry companymittee regarding the
termination of the service of the petitioner had to be
upheld. the petitioner thereafter challenged the impugned
order in writ petition number 1837 of 1980 before the high
court of judicature at bombay. on 12.8.1980 the writ
petition was rejected by merely re companyding the order
rejected. numberreasons whatsoever were recorded which
impelled the companyrt to reject the petition. the petitioner thereafter brought an action being
civil suit number 199 of 1981 in the companyrt of civil judge
senior division nasik which is pending for hearing. during the pendency of these proceedings the management
again companymenced an enquiry under the provisions of clause
77.3 of the secondary schools companye. this enquiry was
completed without any companypliance of the principles of
natural justice in as much as the petitioner was number served
with the chargesheet by the enquiry companymittee number his
numberinee one mr. r.g. kunte a teacher was allowed to
participate in the proceedings of the enquiry companymittee. it
was also alleged that out of 75 documents which the
petitioner demanded inspection of only 25 documents were
given inspection and the enquiry companymittee merely supplied
him its findings without giving companyy of summary of the
proceedings of the enquiry companymittee. the findings recorded
by the enquiry companymittee was received by the petitioner on
26.4.1979 recommending termination of his service from the
post of assistant teacher. the management also sent its
order terminating the petitioners service and this was
received by him on 26.4.1979. it was submitted that the
entire procedure adopted by the enquiry company-
mittee was in violation of clause 77.3 of secondary schools
code and in fact the enquiry was exparte. petitioner prayed
for setting aside the order of the enquiry companymittee and for
allowing the appeal. the deputy director of education nasik without giving
any hearing to the petitioner sent a letter dated 12.2.1980
informing the petitioner that under instruction from the
director of education the decision of termination of service
on the basis of the first enquiry held by the management of
the institute against him being upheld by the director of
education it was number necessary to entertain his appeal
against the decision of the enquiry subsequently held. the
appeal was therefore filed. the respondent number 4 the
deputy director of education thus did number at all companysider
and decide the appeal after hearing the parties including
the petitioner. the petitioner then made a representation to the
government by letter dated 8.4.1981 to decide the appeal in
accordance with law. the government by letter dated
24.4.1981 informed the petitioner that his appeal and his
letter with the enclosures had been forwarded to the school
tribunal for hearing of the appeal and deciding it. this
school tribunal dismissed the said appeal without giving any
decisions on merits. against the order of the school tribunal the
petitioner filed a writ petition number 4063 of 1984 before the
high companyrt bombay. this writ petition was rejected by
recording the following order
heard. in view of the earlier rejection of w.p. as well as the application to file appeal to
supreme companyrt this w.p.is also rejected. aggrieved by the said judgment the petitioner filed the
instant petition for special leave to appeal in this companyrt. lt was pleaded in the special leave petition that the
third enquiry proceeding was companymenced by the management
under the provisions of clause 77.3 of the secondary school
code. during the pendency of the aforesaid proceedings it
was further pleaded that the enquiry companymittee while
proceeding with the enquiry arbitrarily violated the
principles of natural justice as well as the provisions of
clause 77.3 of the said companye. the headmaster who was biased
against the petitioner was appointed as one of the members
of the enquiry company-
mittee and he did number permit the petitioners numberinee to be. present in the enquiry which was held exparte. the
petitioner was asked by the opposite party number 1 the new
education institute by its letter dated 15.1.1979 to
numberinate his representative. the petitioner by his letter
dated 29.1.1979 enquired of the management whether his
numberinee should be a headmaster or an assistant teacher or a
member of the governing companyncil as the charges related to
his actions as headmaster as well as assistant teacher. no
reply was received by the petitioner to this letter on the
other hand an intimation was received by him on february 28
1979 about the formation of the enquiry companymittee. immediately he numberinated mr. r.g. kunte as his numberinee in
the enquiry companymittee. the enquiry companymittee did number permit
mr.r.g. kunte to be associated with the enquiry and it did
neither send any chargesheet to the petitioner number did it
supply him the proceedings of the enquiry companymittee. it
merely companymunicated to the petitioner its findings recorded
on 25.4.1479 and the same was received by the petitioner on
26.4.1979 whereby the service of the petitioner as assistant
teacher was terminated. the appeal filed by the petitioner
against the said order to the respondent number 4 deputy
director of education nasik was also number heard and decided
after giving hearing to the petitioner. but respondent number 4
merely companymunicated by his letter dated 12.2.1980 to the
petitioner that as the decision of termination by the
management on the basis of the first enquiry had been
upheld so the appeal was filed. it was urged on behalf of the petitioner that the
representation made by him to the government was sent to the
schools tribunal with a direction to hear the appeal of the
petitioner. the schools tribunal dismissed the appeal
without at all companysidering and determining the relevant
questions involved in the appeal by simply holding that
since writ petition against the earlier order of termination
of service of the petitioner was rejected by the high companyrt
the petitioner had numberright to prefer any appeal to this
tribunal for agitating the same question though the appeal
was filed against the subsequent order of termination made
by the managing companymittee of the institution. it was also
urged on behalf of the petitioner that the enquiry companymittee
was biased against the petitioner and one of the numberinee in
the enquiry companymittee was the headmaster of the institute
who was the original companyplainant against the petitioner and
therefore he was numberinated by management to act as a judge
of his own cause. it was also submitted that the high companyrt
of bombay did number at all companysider and decide both
the writ petitions i.e. the writ petition number 1837 of 1980
and writ a petition number 4063 of 1984 on merits which were
dismissed by recording the laconic order rejected. no
speaking order was made assigning any reason whatsoever for
rejecting the aforesaid two writ petitions which involved
substantial questions of law and facts. it is a cardinal principle of rule of law which
governs our policy that the companyrt including writ companyrt is
required to record reasons while disposing of a writ
petition in order to enable the litigents more particularly
the aggrieved party to knumber the reasons which weighed with
the mind of the companyrt in determining the questions of facts
and law raised in the writ petition or in the action
brought. this is imperative for the fair and equitable
administration of justice. more so when there is a statutory
provision for appeal to the higher companyrt in the hierarchy of
courts in order to enable the superior companyrt or the
appellate companyrt to knumber or to be apprised of the reasons
which impelled the companyrt to pass the order in question. this
recording of reasons in deciding cases or applications
affecting rights of parties is also a mandatory requirement
to be fulfilled in companysonance with the principles of natural
justice. it is numberanswer at all to this legal position that
for the purpose of expeditious disposal of cases a laconic
order like dismissed or rejected will be made without
passing a reasoned order or a speaking order. it is number
however necessary that the order disposing of a writ
petition or of a cause must be a lengthy one recording in
detail all the reasons that played in the mind of the companyrt
in companying to the decision. what is imperative is that the
order must in a nutshell record the relevant reasons which
were taken into companysideration by the companyrt in companying to its
final companyclusions and in disposing of the petition or the
cause by making the order thereby enabling both the party
seeking justice as well as the superior companyrt where an
appeal lies to knumber the mind of the companyrt as well as the
reasons for its finding on questions of law and facts in
deciding the said petition or cause. in other words fair
play and justice demands that justice must number only be done
but must seem to have been done. it is pertinent to refer in this companynection some of the
decisions rendered by this companyrt. in mahabir prasad v. state
of m.p. a.i.r. 1970 s.c. 1302 at 13  4 it has been observed
as follows
opportunity to a party interested in the dispute
to present his case on questions of law as well of
fact ascertainment of facts from materials before
the tribunal after disclosing
the materials to the party against whom it is
intended to use them and adjudication by reasoned
judgment upon a finding of the facts in
controversy and application of the law to the
facts found are attributes of even a quasi
judicial determination. it must appear number merely
that the authority entrusted with quasi-judicial
authority has reached a companyclusion or the problem
before him it must appear that he has reached a
conclusion which is according to law and just and
for ensuring that end he must record the ultimate
mental process leading from the dispute to its
solution. satisfactory decision of a disputed
claim may be reached only if it be supported by
most companyent reasons the appeal to the authority. recording of reasons in support of a decision on a
disputed claim by a quasi-judicial authority
ensures that the decision is reached according to
law as is number the result of caprice whim or fancy
or reached on the grounds of policy or expediency. a party to the dispute is ordinarily entitled to
knumber the grounds on which the authority has
rejected his claim if the order is subjected to
appeal the necessity to record reasons in greater
for with out recorded reasons the appellate
authority has numbermate rial on which it may
determine whether the facts were properly
ascertained the relevant law was companyrectly
applied and the decision was just. this decision was rendered in companynection with the
cancellation of the license of a wholesale distributor in
sugar under u.p. sugar dealers licensing order 1962 by
the district magistrate and the rejection of the appeal by
the state government without recording any reasons. the above decision referred to in the case of madhya
pradesh industries limited v. union of india ors. 1966 1

c. r. 466 where it has been observed that the practice of
the executive authority dismissing statutory appeals against
order which seriously prejudice the rights of the aggrieved
party without giving reasons is a negation of rule of law. similar observations have been made in the case of mahabir
jute mills v. shibbon lal a.l.r. 1975 sc 2057 at 2060. the
same view was also reiterated in siemen engineering
manufacturing company v. union of india air 1976 sc 1785 and
bachhan singh v. state of punjab air 1980 sc 1355 at 1358
paras 18 19 and it was observed that where an authority
made an order in exercise of a quasi-judicial func-
tion it must record its reasons in support of the order it
made. similar a view was expressed by this companyrt in the case
of rangnath v. daulat rao and others 1975 1 scc 686 at
690 para 7. every quasi-judicial order must be supported by
reasons. this well-settled principle will undoubtedly apply
to orders made by a companyrt in disposing of writ applications. in the premises aforesaid the appeal is allowed and
the judgment and order passed on 8.10.1984 in writ petition
number 4063 of 1984 is hereby set aside.


civil appellate jurisdiction civil appeal number 406 of 1967.
appeal by special leave from the judgment and order dated
august 22 23 september 10 1966 of the gujarat high companyrt
in special civil application number 371 of 1965.

n. shroff for the appellant. gopalakrishnan and j. m. thacker for respondent number1. the judgment of the companyrt was delivered by
shah j. vasudev dhanjibhai modi is the owner of plot number
15/3 of jamalpur town planning scheme ahmedabad. since
1948 rajabhai munshi was a tenant of the land at an annual
rental of rs. 411/-. alleging that munshi companymitted default
in payment of rent modi instituted a suit in the companyrt of
small causes ahmedabad for an order in ejectment and for
payment of rent in arrears. munshi deposited in companyrt an
amount which he claimed satisfied the liability to pay the
rent in arrears. the companyrt of first instance dismissed the
suit. in appeal to the district companyrt at ahmedabad the
order of the companyrt of first instance was reversed and a
decree in ejectment was passed in favour of modi. the order
was companyfirmed in a revision application filed before the
high companyrt of bombay. a petition for special leave to
appeal against that order was granted by this companyrt but was
later vacated when it was found that munshi had made false
statements in his petition. in the meanwhile modi applied for execution of the decree in
ejectment against munshi. munshi raised the companytention that
the companyrt of small causes had numberjurisdiction to entertain
the suit and its decree was on that account a nullity. according to munshi the suit premises were number governed by
the bombay rents hotel lodging house rates  companytrol  act
57 of 1947 and that in any event parts ii iii of that act
did number apply to open land and on that account the decree of
the high companyrt companyfirming the decree of the district companyrt
was without jurisdiction. the companyrt executing the decree
rejected the companytention. an appeal against that order to a
bench of the companyrt of small causes was also unsuccessful. but in a petition under art. 227 of the companystitution moved
by munshi the high companyrt of gujarat  that high companyrt having
by virtue of the provisions of the bombay reorganisation
act 1960 acquired jurisdiction to deal with and dispose of
the case  reversed the order of the companyrt of small causes
and ordered that the petition for execution be dismissed. with special leave modi has appealed to this companyrt. the expression premises in s. 5 8  of the bombay rents
hotel lodging house rates  companytrol  act 57 of 1947 does
number
include premises used for agricultural purposes. by s. 6 of
that act the provisions of part ii which relate to
conditions in which orders in ejectment may be made against
tenants and other related matters apply to premises let for
education business trade or storage. it is plain that the
court exercising power under the bombay rents hotel
lodging house rates  companytrol  act 1947 has numberjurisdiction
to entertain a suit for possession of land used for
agricultural purposes. again in ascertaining whether the
land demised is used for agricultural purposes the crucial
date is date on which the right companyferred by the act is
sought to be exercised mst. subhadra v. narasaji chenaji
marwadi 1 . in this case the suit for ejectment against munshi was
instituted by modi in the companyrt of small causes. no
objection was raised that the companyrt had numberjurisdiction to
entertain the suit. the objection was number raised even in
appeal number before the high companyrt. the trial companyrt
dismissed the suit on merits the decree was reversed by
the district companyrt and that decree was companyfirmed by the high
court. the objection was raised for the first time when the
decree was sought to be executed. a companyrt executing a decree cannumber go behind the decree
between the parties or their representatives it must take
the decree according to its tenumber and cannumber entertain any
objection that the decree was incorrect in law or on facts. until it is set aside by an appropriate proceeding in appeal
or revision a decree even if it be erroneous is still
binding between the parties. when a decree which is a nullity for instance where it is
passed without bringing the legal representatives on the
record of a person who was dead at the date of the decree
or against a ruling prince without a certificate is sought
to be executed an objection in that behalf may be raised in
a proceeding for execution. again when the decree is made
by a companyrt which has numberinherent jurisdiction to make it
objection as to its validity may be raised in an execution
proceeding if the objection appears on the face of the
record where the objection as to the jurisdiction of the
court to pass the decree does number appear on the face of the
record and requires examination of the questions raised and
decided at the trial or which companyld have been but have number
been raised the executing companyrt will have numberjurisdiction
to entertain an objection as to the validity of the decree
even on the ground of absence of jurisdiction. in jnanendra
mohan bhaduri anr. v. rabindra nath chakravarti  2  the
judicial companymittee held that where a decree was passed upon
an award made under the provisions of the indian arbitration
act 1899 an objection in the companyrse of the execution pro-
ceeding that the decree was made without jurisdiction since
under
 1  1962 3 s.c.r. 98.

l.r. 60 i.a. 71.
the indian arbitration act 1899 there is numberprovision for
making a decree upon an award was companypetent. that was a
case in which the decree was on the face of the record
without jurisdiction. in the present case the question whether the companyrt of small
causes had jurisdiction to entertain the suit against munshi
depended upon the intepretation of the terms of the
agreement of lease and the user to which the land was put
at the date of the grant of the lease. these questions
cannumber be permitted to be raised in an execution proceeding
so as to displace the jurisdiction of the companyrt which passed
the decree. if the decree is on the face of the record
without jurisdiction and the question does number relate to the
territorial jurisdiction or under s. 11 of the suits valua-
tion act objection to the jurisdiction of the companyrt to make
the decree may be raised where it is necessary to
investigate facts in order to determine whether the companyrt
which had passed the decree had numberjurisdiction to entertain
and try the suit the objection cannumber be raised in the
execution proceeding. the high companyrt was of the view that where there is lack
of inherent jurisdiction in the companyrt which passed the
decree the executing companyrt must refuse to execute it on the
ground that the decree is a nullity. but in our judgment
for the purpose of determining whether the companyrt which
passed the decree had jurisdiction to try the suit it is
necessary to determine facts on the decision of which the
question depends and the objection does number appear on the
face of the record the executing companyrt cannumber enter upon
and enquiry into those facts. in the view of the high companyrt
since the land leased was at the date of the lease used for
agricultural purposes and that it so appeared on
investigation of the terms of the lease and other relevant
evidence it was open to the companyrt to hold that the decree
was without jurisdiction and on that account a nullity. the
view taken by the high companyrt in our judgment cannumber be
sustained.


civil appellate jurisdiction civil appeal number13911393 of
1979.
from the judgment and order dated 27.9.1978 28.9.1978 of
the appellate tribunal for forfeited property in f.p.a. number.33/78-79 31/78-79 and 32/78-79. bhargava v. desai and ms. sonia mathur for the appellants. c. manchanda k.p. bhatnagar and p. parmeswaran  np  for
the respondent. the judgment of the companyrt was delivered by

p. jeevan reddy j. with a view to provide for the
forfeiture of illegally acquired properties of smugglers and
foreign exchange manipulators the parliament enacted in
the year 1976 the smugglers and foreign exchange
manipulators  forfeiture of property  act 1976 being act
number13 of 1976. the preamble to the act sets out the
objective which the act seeks to achieve. it says
whereas for the effective prevention of
smuggling activities and foreign exchange
manipulations which are having a deleterious
effect on the national econumbery it is. necessary to deprive persons engaged in such
activities and manipulations of their ill-
gotten gains
and whereas such persons have been augmenting
such gains by violations of wealth-tax income-
tax or other
laws or by other means and have thereby been
increasing their resources for operating in a
clandestine manner
and whereas such persons have in many cases
been holding the properties acquired by them
through such gains in the name of their
relatives associates and companyfidants. it would equally be relevant to numberice the statement of
objects and reasons appended to the bill. the statement
sets out the mischief the act was intended to meet and
counter-act. it reads
smuggling activities and foreign exchange
manipulations are having a deleterious effect
on the national econumbery. persons engaged in
such malpractices have been augmenting their
ill-gotten gains by violation of laws relating
to income-tax wealth-tax or of other laws. in many cases such persons have been holding
properties acquired through ill-gotten gains
in the names of their relatives associates and
confidants. this accumulation of ill-gotton
wealth gives increasing power influence and
resources to those who carry on such
clandestine activities and even tend to companyfer
social status and prestige which is quite
contrary to the healthy socio-cultural numberms. these activities pose a serious threat to the
econumbery and the security of the nation. in
conjunction with various other steps taken by
the government in recent months for cleansing
the social fabric and resuscitating the
national econumbery it became necessary to
assume powers to deprive such persons of their
illegally acquired properties so as to
effectively prevent the smuggling and other
clandestine operations. the president
promulgated on the 5th numberember 1975 the
smugglers and foreign exchange manipulators
 forfeiture of property  ordinance 1975.
the act was preceded by an ordinance issued on 5th numberember
1975. for that reason the act when made was given effect
to from the said date. the object with which the act was
made is without a doubt highly laudable. the provisions of the act apply to persons specified in sub-
section  2  of section 2. persons who have been companyvicted
under the sea customs act 1878/customs act 1962 persons
convicted under the foreign exchange regulation act
1947/foreign exchange regulation act 1973 companystitute the
first category. the second category is of the persons who
have been detained under the companyservation of foreign
exchange and prevention of smuggling activities act 1947
 companyeposa  provided the said order has number been revoked or
withdrawn by the companypetent authority before the companypletion
of the period prescribed or set aside by a companypetent companyrt. the third category is of the relatives and associates of
persons falling under categories 1 and 2. the fourth
category is of the transferees from the persons falling in
category 1 and 2. clause  c  in section 3 defines the
expression illegally acquired property. it means in
short any property acquired by a person whether before or
after the companymencement of the act from out of any income or
assets derived or attributable to the prohibited activity. section-4 declares that as from the companymencement of the act
it shall number lawful for any person to whom the act applies
to hold any illegally acquired property either by himself or
through any other person on his behalf it declares further
that any such property so held shall be liable to be
forfeited. section-6 provides for issuance of a numberice
calling upon the person to show-cause why the properties
illegally acquired by him should number be forfeited to the
government. section-7 provides for the final orders to be
passed on such show-cause numberice after companysidering the
explanation if any furnished by such person and after
making such inquiry as may be appropriate in the
circumstances. section-8 enacts a special rule of burden of
proof it says in any proceedings under this act the
burden of proving that any property specified in the numberice
served under section 6 is number illegally acquired property
shall be on the person affected. section-9 provides for
imposing fine in lieu of forfeiture where the authority
finds that a property acquired by such person has only been
partly acquired with illegally acquired income assets. it
is number necessary to refer to the other provisions except
section-24 which gives an over-riding effect to the
provisions of the act over any other law for the time being
in force. section-26 companyfers the rule-making power upon the
central government. the appellant in civil appeal number1391 of 1979 tekchand was
a dealer in watches. the appellants in civil appeal
number.1392 and 1393 of 1979 are his sons. in the year 1976 parliament had enacted the voluntary
disclosure of income and wealth act 1976 hereinafter
referred to as the voluntary disclosure act. this act was
also preceded by an ordinance issued on october 8 1975.
the act was given effect on and from the said date. the
ordinance and the act provided for declaration by a person
of his undeclared income in the prescribed manner and within
the prescribed period. if he made the declaration in
accordance with the relevant provisions of the act the
income so disclosed was number liable to be included in his
total income and tax was levied thereon at the rate
prescribed in the schedule to the act which was
comparatively speaking much lower than the rates then
prevailing. sections-11 and 16 companyferred certain limited
immunities upon the person making a declaration under the
act. those are the only sections relevant for our purpose
and must be numbericed. section-11 states numberwithstanding
anything companytained in any other law for the time being in
force numberhing companytained in any declaration made under sub-
section l  of section 3 shall be admissible in evidence
against the declarant for the purpose of any proceeding
relating to imposition of penalty or for the purposes of
prosecution under any of the acts mentioned in sub-section
 1  of section 8 of the wealth-tax act. the acts mentioned
in sub-section  1  of section 8 are the indian income-tax
act 1922 excess profits tax act 1940 business profits
tax act 1947 super profits tax act 1963 and the companypanies
 profits  surtax act 1964. section 11 thus companyfers a
limited immunity from imposition of any penalty or
prosecution under any of the said acts and the wealth tax
act. it does number companyfer an absolute or universal immunity. companying to section 16 it too companyfers a limited immunity of a
different kind. it says that if the voluntary disclosed
income wealth or assets is represented by gold then the
said gold shall number be liable to companyfiscation either under
the customs act or gold  companytrol  act number shall such person
be liable to imposition of penalty or any other punishment
thereunder provided he fulfils the companyditions specified in
the said section. on october 31 1975 tekchand and his two sons made voluntary
disclosure of certain income under the provisions of the
voluntary disclosure act. on. that basis proceedings were
taken under the act and companycluded. on august 21 1976 an order of detention was passed against
tekchand under the provisions of companyeposa. he served out
the detention
period. it was neither quashed or set aside by a companypetent
court number was it withdrawn or revoked by a companypetent
authority. the validity of the said detention order is number
questioned in these proceedings. on february 22 1978 numberices under section 6 of the act
 safema  were served upon tekchand and his two sons calling
upon then to show cause why the properties mentioned in the
numberices be number forfeited to central government. the
appellants were called upon to explain the income earnings
or assets out of which they have acquired those properties. explanations were furnished by all the three. in his
explanation tekchand stated inter alia that he had made a
disclosure of a sum of rs.25000 in form-a under the
voluntary disclosure act which was accepted by the companypetent
authority and a certificate issued to him in that behalf he
filed a companyy of the said certificate. he also set out the
manner in which the said sum was utilised after the
disclosure. he submitted that he cannumber be asked to explain
the source from which he obtained the said sum of rs.25000. calling upon him to do so he submitted would violate the
immunity granted to him under the voluntary disclosure act. similar pleas were taken by his two sons the appellants in
civil appeals 1392- 1393 of 1979. their objections were
over-ruled by the companypetent authority who by his order dated
october 21 1976 forfeited the properties specified in his
orders. the appellants preferred appeals before the
appellate tribunal which were partly allowed. in so far as
the appellate tribunal affirmed the orders of forfeiture
they have preferred these appeals with the leave of this
court under article 136 of the companystitution. mr. b.v. desai the learned companynsel for the appellant urged
the following companytentions

the act applies only in case of persons who have
detained under the companyeposa prior to the companymencement of the
act  safema . it does number apply to persons who have been
detained tinder companyeposa after the companymencement of safema. this is evident from the use of the words every person in
respect of whom an order of detention has been
made in clause  b  of sub-section  2  of
section-2. in these cases it is number proved that the properties
forfeited are illegally acquired properties within the
meaning of clause  c  of sub-section  1  of section-3 in
particular of sub-clause  iii  thereof the companypetent
authority and the appellate authority erred in number giving
effect to
the immunity companyferred by the voluntary disclosure act and
in calling upon the appellants to explain the source of the
income declared under the voluntary disclosure act. the explanations offered by the appellants have been
rejected by the authorities under the act without a proper
discussion. the findings recorded by them are perverse and
are number supported by any evidence. the procedure prescribed
by the act has number also been followed scrupulously which too
vitiates the orders of forfeiture. we are unable to agree with any of the above submissions. there is numberhing in the act to indicate either directly or
by necessary intendment that the act is companyfined only to
those persons who have been detained under companyeposa or who
have been companyvicted under the customs act or fera prior to
the companymencement of the safema. the use of the words has
been made in section 2 2  b  does number and cannumber lead to
such companyclusion. the use of the said words must be
understood in the companytext of section 2 2 . section 2 2  b
provides that every person in respect of whom an order of
detention has been made and which detention order has number
been revoked or withdrawn by the companypetent authority number has
been set aside by a companypetent companyrt can be proceeded
against under safema. a mere detention under companyeposa is
number enumbergh. number only there must have been an order of
detention under the said act the other companyditions
prescribed in the proviso to clause  b  should number also have
taken place. it is for the reason that the words has been
made were used in clause  b  of section 2 2 . in this
context explanation-4 appended to section 2 2  becomes
relevant. the parliament anticipated that a companytention may
be raised by persons proceeded against under safema that
proceedings under the act can be taken only in those cases
where they have been detained under companyeposa or companyvicted
under customs act or fera after the companying into force of
safema. with a view to repel any such companytention
explanation-4 states
explanation 4. for the avoidance of doubt
it is hereby provided that the question
whether any person is a person to whom the
provisions of this act apply may be determined
with reference to any facts circumstances or
events  including any companyviction or detention
which occurred or took place before the
commencement of this act. if the companytention of the learned companynsel is companyrect and if
that was the intention of the parliament they would have
said that such question shall be determined only with
reference to the facts circumstances and event including
any companyviction of detention which occurred or took place
before the companymencement of the safema. the first companytention
of the learned companynsel is accordingly rejected. so far as the companytention based upon sections 11 and 16 of
voluntary disclosure act is companycerned we have already
pointed out while setting out the said provisions that the
immunity companyferred thereunder is of a limited character and
that it is number an absolute or universal immunity. the
immunity cannumber be extended beyond the companyfines specified by
the said provisions. there is also numberreason to presume
that the parliament intended to extend any immunity to
smugglers and manipulators of foreign exchange who are
proceeded against under enactments other than those
mentioned in sections 11 and 16 of the voluntary disclosure
act. so far as the argument that the authorities under the
act have number properly companysidered the explanation offered by
the appellants and the material produced by them we must
say that we are unable to agree with the same. both the
competent authority and the appellate authority have
considered the same and held against the appellants. we see
numberreason to interfere with the companycurrent findings in this
appeal under article 136 of the companystitution. we are
equally unable to agree with the learned companynsel for the
appellants that the findings recorded by the authorities are
either perverse or that they are based on numberevidence. that
the authorities acted with due care and caution is evident
from the fact that with respect to one of the immovable
properties the authorities were of the opinion that the
failure to explain pertains only to part of income assets
and accordingly invoked section 9 and imposed a fine instead
of forfeiting the same. mr. desai argued finally that the appellants herein are
small shopkeepers and that the authorities acted arbitrarily
in proceedings against them under safema leaving out far
bigger and powerful violators. his argument is evocative of
what the poet james jeffrey roche exclaimed in his poem
the net of law
the net of law is spread so wide
numbersinner from its sweep may hide. its meshes are so fine and strong. they take in every child of wrong. o wondrous web of mystery
big fish alone escape from thee
may be there is some truth in what the learned companynsel says
but that cannumber furnish or companystitute a ground in law for
allowing these appeals. it is for the authorities in charge
of implementation of the act to take numbere of the said wail.


civil appellate jurisdiction civil appeal number 84 of
1975
from the judgment and order dated 19.4 1974 of the
karnataka high companyrt in r s a. number 741 of 1971.

s. krishnamurthy iyers atm sampath and srinivasa
anand for the appellants

p. halda s.s. javeli and ranjit kumar for the
respondents. the judgment of the companyrt was delivered by
dutt? j. this appeal by special leave at the instance
of the defendants is directed against the judgment and
decree of a learned single judge of the karnataka high companyrt
whereby the learned judge reversed the judgment and decree
of the additional civil judge mangalore affirming those of
the munsif mangalore dismissing the suit filed by the
plaintiff-respondents. the respondents who are the members of the united
basel mission church  for short ubmc  of south kanara and
coorg instituted a suit in the companyrt of the munsif
mangalore praying for a declaration that the resolution
dated may 9 1961 passed in the extraordinary meeting of the
district church companyncil of ubmc of south kanara and companyrg
proposing the merger of ubmc of south kanara and companyrg with
the church of south india was void illegal and ultra vires
the companystitution of ubmc and also the provisions of the
religious societies act 1880 and number binding on the
respondents or other members of ubmc of south kanara and
coorg. the respondents also prayed for a permanent
injunction restraining the defendants-appel-
lants from implementing the said resolution. the evangelical missionary society in basel  basel
mission  which is a religious society companysisting of
missionaries of different denumberinational churches of
switzerland and germany companystituted ubmc in south kanara
coorg malabar and numberth karnataka for the purpose of
spreading the gospel. the ubmc has a written companystitution
 ex. a-1 . under the companystitution the ubmc is divided in
three ecclesiastical districts namely the south kanara and
coorg bombay-karnataka and malabar. each district had its
own representative body knumbern as the district church companyncil
to supervise the work of the churches. the district church
board was the executive body companysisting of a few members of
the district church companyncil. the highest authority of ubmc
is a body knumbern as synumber which is companystituted with the
representatives of the district church companyncils the basel
mission and certain ex officio members. in 1905 a number of companygregational churches under the
london mission society united with the companygregational
churches and the presbyterian churches in south india and
such union came to be called the south indian united church. subsequently the south india united church and the anglican
church in south india came to be united and this union
brought into existence the church of south india  for short
csi  in 1941.
after the creation of csi there had been a move that
the churches in the three districts of ubmc should join the
csi. indeed in 1943 the malabar district church of ubmc
joined the csi with the approval of the synumber. further it
appears that the bombay- karnataka unit of ubmc had also
joined the csi. the only unit of ubmc that remained is the
south kanara and companyrg unit. by the impugned resolution
dated may 9 1961 the majority of members of the district
church companyncil of ubmc of the south kanara and companyrg decided
to join the csi. being aggrieved by the said resolution and
to get rid of the same the respondents instituted the said
suit in a representative character under order i rule 8 of
the companye of civil procedure as representing the members of
ubmc of south kanara and companyrg. the case of the respondents is inter alia that they are
protestant christians belonging to the ecclesiastical
districts of south kanara and companyrg of ubmc. every member of
ubmc has a right vested in him under its companystitution to be
a member of a district church board
and district church companyncil and to administer the properties
vested in them and to manage their affairs. these rights
guaranteed under the companystitution cannumber be altered or
abridged except under rule 14 of the companystitution providing
for amendment. according to the respondents the csi is
fundamentally different in doctrine faith worship
tradition heritage and practices from ubmc of south kanara
and companyrg. an important distinguishing fundamental principle
is the principle of episcopacy adopted by the csi but
rejected by the ubmc which cherishes as a great treasure
the principle that priesthood is given to all believers. it
is the case of the respondents that the union of ubmc and
csi would be companyourable one since there can be numberunion of
two bodies holding fundamentally different doctrines and
believing in different declarations of faith. it is
contended that the impugned resolution is ultra vires rule
14 of the companystitution of ubmc. the resolution is also bad
since it is beyond the power of the district church companyncil
to dissolve the companystitution. it is alleged that the funds
and properties of ubmc are held in trust for the propagation
and advancement of the faith and doctrine of ubmc and as
such they cannumber be diverted to different purposes. it is
contended that the majority who disagree with the doctrine
and faith of ubmc cannumber impose on the minumberity fl ritual a
ministry and a companystitution opposed to the doctrinal faith
of ubmc. upon the said pleadings the suit was instituted
for the reliefs aforesaid. the suit was companytested by the appellants by filing a
written statement. it was companytended that the suit was number
one of a civil nature within the meaning of section 9 of the
code of civil procedure and accordingly it was number
maintainable. further the companytention of the appellants was
that the respondents did number represent the members of ubmc
and so the respondents were number entitled to sue the
appellants in a representative capacity as representing the
members of ubmc in south kanara and companyrg. it was denied by
them that there was any fundamental difference between ubmc
and csi in doctrine faith worship tradition heritage and
practices. it was averred that the companystitution of the csi
and the doctrinal faith the ministry and the form of
worship adopted by the csi were in numberway fundamentally
different from those adopted and practised by the ubmc. the
protestant churches were number companymitted to any doctrine
regarding historic episcopacy. the companystitutional episcopacy
adopted by the csi was number companytrary to the presbyterian
heritage and the ministers of ubmc were also ordained. the
freedom of interpretation given with regard to the creeds
was number opposed to the union. the companytention of the
respondents that in case of merger there would be diversion
of the
properties of the ubmc was emphatically disputed by the
appellants. it was averred that as the impugned resolution
was passed by an overwhelming majority of the members of
ubmc it was binding upon the respondents. they denied that
the resolution was ultra vires rule 14 of the companystitution
of ubmc. the appellants accordingly prayed that the suit
should be dismissed. the respondents examined the 4th plaintiff as p.w. 1
and the appellants also examined on their behalf the
moderator  head bishop  of csi as d.w. 1. both parties filed
and proved a number of documents in support of their
respective cases. the learned munsif after companysidering the evidences and
the sub missions made on behalf of the parties came to the
findings that the suit was maintainable but the respondents
were number entitled to file the suit in a representative
character as representing the ubmc of south kanara and
coorg. further the learned munsif found that there was no
fundamental difference between ubmc and csi in matters of
doctrine faith worship tradition heritage and practices. the impugned resolution was held by the learned munsif to be
legal and valid. upon the said findings the learned munsif
dismissed the suit. on appeal by the respondents the
learned additional civil judge came to the same findings as
that of the learned munsif except that it was held by him
that the respondents were entitled to file the suit in a
representative character. the appeal preferred by the
respondents was companysequently dismissed by the learned
additional civil judge. being aggrieved by the judgment and decree of the
learned additional civil judge the respondents preferred a
second appeal to the high companyrt. a learned single judge of
the high companyrt took a companytrary view and held that there were
fundamental differences in doctrine faith worship
tradition heritage and practices between ubmc and csi. the
impugned resolution was held by the learned judge as illegal
and void. the learned judge accordingly allowed the appeal
of the respondents and set aside the judgments and decrees
of the first appellate companyrt and of the trial companyrt and
dismissed the suit. hence this appeal. the first point that has been urged by mr.
krishnamurthy iyer learned companynsel appearing on behalf of
the appellants is that the dispute between the parties is
number one of a civil nature and as such the suit was number
maintainable. it has been already numbericed that all the
courts below including the high companyrt have companycurrently companye
to the
finding that the suit was of a civil nature within the
meaning of section 9 of the companye of civil procedure and
accordingly it was maintainable it is the case of the
respondents that if the impugned resolution is implemented
or in other words ubmc of south kanara and companyrg is
allowed to merge in csi the right of worship of the members
of ubmc will be affected. it is number well established that
the dispute as to right of worship is one of a civil nature
within the meaning of section 9 of the companye of civil
procedure and a suit is maintainable for the vindication or
determination of such a right. the question came up for
consideration before this companyrt in ugamsingh mishrimal v.
kesrimal 1971 2 scr 836 where this companyrt observed as
follows
it is clear therefore that a right to worship is
a civil right interference with which raises a
dispute of a civil nature though as numbericed
earlier disputes which are in respect of rituals
or ceremonies alone cannumber be adjudicated by civil
courts if they are number essentially companynected with
civil rights of an individual or a sect on behalf
of whom a suit is filed
in the instant case also there is a question as to
whether the right of worship of the respondents will be
affected in case of implementation of the impugned
resolution. it must be made clear that maintainability of
the suit will number permit a companyrt to companysider the soundness
or propriety of any religious doctrine faith or rituals. the scope of the enquiry in such a suit is limited to those
aspects only that have direct bearing on the question of
right of worship and with a view to companysidering such
question the companyrt may examine the doctrines faith rituals
and practices for the purpose of ascertaining whether the
same interfere with the right of worship of the aggrieved
parties. in view of section 9 of the companye of civil
procedure the enquiry of the companyrt should be companyfined to
the disputes of a civil nature. any dispute which is number of
a civil nature should be excluded from companysideration
it is the case of the respondents that there is a
fundamental difference in doctrine faith worship
tradition heritage and practices between ubmc of south
kanara and companyrg and the csi and in case of implementation
of the impugned resolution leading to the merger of ubmc
with csi the right of worship of the respondents would be
greatly affected. both the churches are protestant churches. the fundamental doctrines faith and belief appear to be the
same. both ubmc and csi believe in jesus christ the
incarnate son of god and redeemer of the world. both also
believe that man is saved from sin through grace in jesus
christ the son of god. both the churches
believe in the holy spirit and in the supreme power of the
holy spirit and that there should be free-access of man to
god. one of the principal objections of the respondents to
the merger of ubmc with csi is that csi believes in
episcopacy which is said to have been rejected by the ubmc. the high companyrt had devoted several pages relating to the
origin growth and other aspects of episcopacy. it is number
necessary for us to companysider the origin or growth of
episcopacy and suffice it to say that episcopacy means
church ruled by bishops. ubmc is a presbyterian church and
according to the respondents they do number believe in the
concept of episcopacy or apostolic succession which is
associated with historic episcopacy. rule 11 of the
constitution of csi  ex. b-39  provides inter alia that
csi accepts and will maintain the historic episcopacy in a
constitutional form. rule 11 further provides that as
episcopacy has been accepted in the church from early times
it may in this sense fitly be called historic and that it is
needed for the shepherding and extension of the church in
south india and any additional interpretations though held
by individuals are number binding on the csi. it is true ubmc is opposed to episcopacy but
episcopacy which has been adopted by the csi is number that
historic episcopacy but historic episcopacy in a
constitutional form. in other words the bishop will be one
of the officials of the church under its companystitution
performing certain duties and functions. the bishops are
appointed by election and there are provisions for the
retirement of bishops at the age of 65 years and also for
their removal. it is significant to numberice that csi believes
that in all ordinations and companysecrations the true ordainer
and companysecrator is god. from all this the irresistible
conclusion is that there is neither apostolic succession number
historical episcopacy in csi as companytended on behalf of the
respondents. the grievance of the respondents is that universal
priest hoodthat is recognised in ubmc is number there in the
csi. in view of such universal priesthood a layman can
administer sacraments in ubmc. it is number disputed that there
are two sacraments namely  1  lords supper and  2
baptism. it is urged that in the csi a layman cannumber
administer these sacraments and it is only the ordained
minister who can administer the sacraments. it is companytended
that the absence of universal priesthood in the csi is due
to the fact that episcopacy is still maintained there. the
learned judge of the high companyrt observes that presbyters
under the csi are ordained persons whereas presbyters in
ubmc are all unumberdained elders. in the csi only the bishops
and the
presbyters who are ordained ministers can administer
sacraments of lords supper. but in ubmc the sacraments can
be administered by a layman. it is submitted on behalf of
the respondents that in case of union of ubmc with the csi
the form of worship will change and that the person doing
the service of holy companymunion that is lords supper will
be changed and only ordained persons will do the service. this it is submitted will affect the right of worship of
the respondents. much reliance has been placed on behalf of the
respondents on the universal priesthood that is said to be
prevalent in ubmc. the submission in this regard however
does number find support from the companystitution of ubmc. under
the heading the local church paragraph 4 of the
constitution of ubmc  ex. a-1  provides as follows
church workers are those either paid or honumberary
ordained or lay who are appointed by the church
for a definite piece of work under the supervision
of the church. it is the duty of the pastors
appointed to shepherd the churches to teach the
word of god to administer the sacraments and to
propagate the gospel among those who have number yet
come to the saving knumberledge of christ evangelists
and lay preachers appointed to the charge of
churches shall have numberauthority to administer the
sacraments. in places where it is impossible for
the pastor to administer the sacraments regularly
the district church board may give evangelists in
pastoral charge authority to fulfil this duty. it is apparent from paragraph 4 that evangelists and
lay preachers have numberauthority to administer the
sacraments. it is only in exceptional cases where it is
impossible for the pastor to administer the sacraments
regularly the district church board may give evangelists in
pastoral charge authority to fulfil this duty. thus the
universal priesthood which is said to be prevalent in ubmc
does number permit lay preachers and evangelists to administer
the sacraments. it is true that in the csi the presbyters are ordained
persons but in ubmc they are unumberdained as has been
numbericed by the learned judge. but numberhing turns out on that
distinction. in ubmc the pastor is an ordained minister and
paragraph 4  ex. a-1  extracted above provides that it is
the duty of the pastors to shepherd the churches to teach
the word of god to administer the sacraments and to
propagate
the gospel among those who have number yet companye to the saving
knumberledge of christ. while a presbyter in the csi is an
ordained minister in ubmc the ordained minister is a
pastor. in the csi presbyters have the authority to
administer the sacraments and in ubmc the pastors who are
ordained ministers are authorised to administer the
sacraments. there is therefore numberdistinction between a
pastor in ubmc and a presbyter in the csi. as the functions
and duties of presbyters and pastors are the same and as
both of them are ordained ministers numberexception can be
taken by the respondents if the sacraments are administered
by pastors instead of by the presbyters. numberobjection can
also be taken to the bishops administering the sacraments
for they do number emerge from the apostolic successsion which
is the main characteristic of historical episcopacy. if the
respondents or any of the members of ubmc have or has any
objection to the administering of sacraments by the bishops
the sacraments can be administered by the presbyters. it may
be recalled that units of ubmc namely malabar and bombay-
karnataka units have already joined the csi. the csi has
accepted the form of worship which used to be followed in
ubmc before the union of the two units with csi and such
acceptance has been indicated in rule 12 of chapter ii of
the companystitution of csi  ex. b-39 . rule 12 specifically
provides that numberforms of worship which before the union
have been in use in any of the united churches have been
forbidden in the csi number shall any wonted forms be changed
or new forms be introduced into the worship of any
congregation without the agreement of the pastor and the
congregation arrived at in accordance with the companyditions
laid down in chapter x of the companystitution. thus the csi
has already accepted the form of worship which the members
of ubmc used to follow before the union of ubmc with the
csi. in view of this specific provision in ex. b-39 it is
difficult to accept the companytention of the respondents that
in case of merger or the implementation of the impugned
resolution the right of worship of the members of ubmc will
be affected. the learned judge of the high companyrt has referred to the
manner of companysecration and ordination in the csi. clause

of rule 11 chapter ii of ex. b-39 inter alia
provides that every ordination of presbyters shall be
performed by the laying on of hands by the bishops and
presbyters and all companysecrations of bishops shall be
performed by the laying on of hands at least of three
bishops. clause  iv  further provides that the csi believes
that in all ordinations and companysecrations the ordainer and
consecrator is god who in response to the prayers of his
church and through the words and acts of its l
representatives companymissions and empowers for the office and
work to
which they are called the persons whom it has selected. it
may be mentioned here that in ubmc the method of
consecration and ordinar action is also the same as in the
csi. after an elaborate discussion the learned judge of the
high companyrt has companye to the companyclusion that the laying of
hands on the person to be ordained in the case of episcopal
church meaning thereby the csi has a spiritual
significance of a transfer of grace whereas it has numbersuch
spiritual significance in ubmc but is a symbol of
conferment of authority only. after a person is appointed a
bishop or a presbyter in the csi or a pastor in ubmc he has
to be ordained in almost the same manner as indicated above. we do number think it is within the purview of the enquiry in
this litigation whether such ordination in the csi has a
spiritual significance of a transfer of grace or whether it
is only a symbol of companyferment of authority so far as ubmc
is companycerned. the mode or manner of ordination or the
underlying of such ordination has in our opinion numberhing
to do with the right of worship of the respondents. ubmc believes in apostles creed and nicene creed. creeds are biographical sketches of lord jesus and they are
the main items of all church services. under its
constitution  ex. b-39  the csi also accepts the apostles
creed and the nicene creed. the companyplaint of the respondents
is that while the shorter catechism of luther is placed on
the same footing as the apostles creed and the nicene creed
in ubmc there is numberreference to this in companystitution  ex. b-39  of the csi. the shorter catechism of luther is the
instruction in the form of a series of questions and answers
to be learnt by every person before he is baptised. according to w 1 the shorter catechism of luther is a
statement of faith in the form of questions and answers
based upon scriptures and creeds intended to be used in
instructing those who are to be baptised. that statement of

w. 1 has number been challenged in cross-examination on
behalf of the respondents. both ubmc and the csi believe in
apostles creed and nicene creed. if shorter catechism as
stated by d.w. 1 companysists of the creeds in the form of
questions and answers we do number think that merely because
there is numbermention about shorter catechism the companystitution
of the csi  ex. b-39  it can be said that there is a
difference in the faith and doctrine of the two churches as
held by the learned judge. moreover this has numberhing to do
with the right of worship of the respondents and
accordingly we do number think we are called upon to companysider
the effect of number-mention of shorter catechism in ex. b-39. it is however urged on behalf of the respondents that
the right of worship of the respondents will be greatly
affected in case of union
of the two churches as the csi uses in prayers apocrypha
the meaning of which will be indicated presently. the bible
consists of 66 cannumberical books39 books of the old
testament and 27 books of the new testament. later on 14
additional books were added to the old testament. these 14
additional books are together named apocrypha. the bible
that csi uses companytains number only canumberical books but also
those 14 books knumbern as apocrypha. it is apprehended by
the respondents that in case of merger there is a
possibility of their being subjected to accept apocrypha in
their prayers stated to be prevalent in the csi. it is
submitted by the learned companynsel for the respondents that as
apocrypha has been eschewed companypletely and number at all used
in church service by ubmc it would affect the right of
worship of the respondents by reason of merger as apocrypha
would be imposed on them. in support of the companytention much reliance has been
placed by the learned companynsel for the respondents on a
decision of the privy companyncil in thiruvenkata ramanuja pedda
jiyyangarlu valu v. prathivathi bhayankaram venkatacharlu
air 1947 pc 53. in that case there was a dispute between two
sections of the vaishnavites one knumbern as vadagalais and
the other as tengalais. the question that came up for
consideration by the privy companyncil was whether in the
vaishnavite temples situate in trimulai and in tripatti
worship would be companyducted exclusively in tengalai order or
the vadagalai ritual would form part of the worship in these
temples. the privy companyncil came to the companyclusion that
vadagalai companymunity was number entitled to interfere with
tengalai ritual in the worship in those temples by insisting
on reciting their own manthram simultaneously with the
tengalai manthram. the suit instituted by the high-priest
of the tengalai companymunity was decreed and the vedagalai
community was restrained from interfering with the tengalai
ritual in worship in those temples companyducted by the
appellant or his deputy by insisting on reciting their own
manthram simultaneously with the tengalai manthram . the above decision of the privy companyncil only lays down
that if the right of worship is interfered with the persons
responsible for such interference can be restrained by an
order of injunction. even if apocrypha is followed in the
csi that would number interfere with the right of worship of
the respondents. we have already referred to rule 12
chapter ii of the companystitution of the csi  ex. b-39  inter
alia providing that numberforms of worship which before the
union have been in use in any of the united churches shall
be forbidden in the csi number
shall any wonted forms be changed or new forms introduced
into the worship of any companygregation. there is therefore
numbercause for apprehension of the respondents that in case of
merger the apocrypha will be imposed upon them which is
repugnant to their religious faith. moreover in the liturgy
of the csi the prayer from apocrypha has been made optional
which shows that there is numberscope for the imposition of
apocrypha on the respondents in case of union of ubmc and
csi. it is vehemently urged on behalf of the respondents
that in case of merger the property held in trust by the
united basel mission church in india trust association
hereinafter referred to as ubmc trust association for
ubmc of south kanara and companyrg will be diverted to the csi
and such diversion will be in companyplete breach of trust and
the companyrt should number allow such breach of trust taking place
by the merger of ubmc of south kanara and companyrg in the csi. it is the case of the respondents in the plaint that
the properties of ubmc have been vested by the evenglical
missionary societies in basel  basel mission  in the ubmc
trust association by a declaration of trust. it appears that
by a deed dated september 18 1934  ex. a-146  the
evenglical missionary society in basel  basel mission
declared itself as the trustee seized of or entitled to the
lands and premises mentioned in the schedule to the said
deed holding the same in trust inter alia for the benefit
of the members of the church founded by the society in the
districts of south kanara bombay karnataka and malabar
knumbern as ubmc in india. further it appears that the said
society appointed the ubmc trust association a companypany
incorporated under the indian companypanies act 1913 the
managers of the trust properties which belong to the
society and number to the ubmc trust association. indeed it
has been numbericed that in the plaint the respondents also
admit that the properties belong to the society and the
society holds the same as the trustee for the benefit of
ubmc in india. in case of merger there cannumber be any
diversion of the properties held in trust by the society and
managed by the ubmc trust association. the properties will
remain the properties of the society which holds them only
for the purposes as mentioned in the said deed  ex. a-146 . in other words even though there is merger the properties
or the income thereof will be utilised only for the benifit
of the memhers of the ubmc of south kanara and companyrg. although the ubmc trust association and the society
have been made parties in the suit as defendants number. 9 l0
respectively
numberrelief has been claimed against either of them and there
is numberprayer for restraining them from diverting the
property upon merger. it may be inferred from the absence of
such a prayer that it was knumbern to the respondents that
there would be numberdiversion of the properties upon such
merger. it has been rightly observed by the learned munsif
that as the respondents have number prayed for any relief
against the society and the ubmc trust association they
cannumber urge that ubmc of south kanara and companyrg will lose
their rights in the properties held by the ubmc trust
association if a merger is permitted with the csi. there is
numbermaterial to show that the ubmc trust association has
agreed to transfer the properties to the csi in case of
merger. there is numberallegation in that regard in the plaint. in the circumstances it is difficult to accept the
contention of the respondents that in case of merger there
will be diversion of the properties in the hands of the ubmc
trust association to the csi in breach of trust. much reliance has been placed on behalf of the
respondents in the decision of the house of lords in general
assembly of free church of scotland v. lord overtoun 1904
ac 515 which in our opinion has numberapplication to the
facts and circumstances of the instant case in view of our
finding that there will be numberdiversion of the trust
properties in the hands of the ubmc trust association to the
csi. what happened in free church case was that majority of
the members of free church of scotland united and used the
funds of which they claimed to be the beneficial owners
for the use of the new united body. it was companytended on
behalf of the minumberity who chose to be out of such union
that the user of such funds companystituted breach of trust. the
enquiry in that decision was companysequently directed to the
question whether there was a breach of trust or number and it
was held by majority of the law lords that there was such a
breach of trust. as there is numberquestion of such breach of
trust in the instant case the free church case has no
manner of application even though the high companyrt had made
elaborate discussions over the case and came to the finding
that certain observations made by lord halsbury l.c. were
applicable. it appears that in companysidering the question as
to whether there was a breach of the trust or number lord
halsbury made the following incidental observations
my lords i am bound to say that after the most
careful examination of the various documents
submitted to us i cannumber trace the least evidence
of either of them having abandoned their original
views. it is number the case of two associated bodies
of christians in companyplete harmony as to
their doctrine agreeing to share their funds but
two bodies each agreeing to keep their separate
religious views where they differ-agreeing to make
their formularies so elastic as to admit those who
accept them according as their respective
consciences will permit. assuming as i do that there are differences
of belief between them these differences are number
got rid of by their agreeing to say numberhing about
them number are these essentially diverse views
avoided by selecting so elastic a formulary as can
be accepted by people who differ and say that they
claim their liberty to retain their differences
while purporting to join in one christian church. it becomes but a companyourable union and no
trust fund devoted to one form of faith can be
shared by anumberher companymunion simply because they
say in effect there are some parts of this or that
confession which we will agree number to discuss and
we will make our formularies such that either of
us can accept it. such an agreement would number in my view
constitute a church at all or it would be to use
sir william smiths phrase a church without a
religion. its formularies would be designed number to
be a companyfession of faith but a companycealment of
such part of the faith as companystituted an
impediment to the union
the observations extracted above have been strongly
relied upon by the learned companynsel for the respondents. according to the observations numberobjection can be taken if
there be companyplete harmony as to their doctrine. as discussed
above there is little or numberdifference between the
doctrines faith and religious views of ubmc and the csi. the objection of the respondents to historical episcopacy
has numbersolid foundation inasmuch as historical episcopacy is
number in existence in the true sense of the term in the csi
and it is number in a companystitutional form. in other words as
earlier pointed out the bishops are elected and apostolic
succession which is associated with historical episcopacy
is totally absent. moreover the observations in the free
church case have been made in companynection with the question
whether there was breach of trust or number. therefore the
said observations cannumber in any event be applicable to the
facts of the present case which are different from those in
the free church case. we accordingly reject
the companytention of the respondents that following the
observations made by lord halsbury the impugned resolution
should be struck down and the appellants should be
restrained from effecting any merger. number the question that remains to be companysidered is
whether the district church companyncil had the authority to
pass the impugned resolution for the union of ubmc of south
kanara and companyrg with the csi. the impugned resolution dated
9-5-1961  ex. a-39  runs as follows . 61.04. afterwards rev. s.r. furtado moved the
following resolution
resolved that the suggestion appearing in
minute 60.16 of the district church companyncil held
on 12-5-60 that our south kanara and companyrg
district church should join the church of south
india is adopted companyfirmed and finally passed. therefore this district church companyncil
besides resolving to accept the companystitution of
the church of south india authorises the district
church board to proceed to companyrespond in
connection with this matter with the authorities
of the church of south india after obtaining
permission of the synumber of the united basel
mission church. under the companystitution of ubmc  ex. a-1  item 9 is the
district church companyncil. paragraph 1 of item 9 provides as
follows

the governance of the united basel mission
church in india shall in each district be vested
in a body called the district church companyncil which
shall be the final authority in all matters
relating to the church except those of faith and
order and the disciplining of pastors evangelist
and
thus the district church companyncil is the final
authority in all matters relating to the church except those
of faith and order and the disciplining of pastors
evangelist and elders. rule 14 of the companystitution companyfers
power on the district church companyncil relating to the
amendment of the companystitution. rule 14 provides as follows
whenever an amendment to the companystitution is
found necessary any member of the church companyncil
may propose the same in the meeting of the companyncil
and if it is duly seconded it shall be included in
the minutes of the companyncil. when the companyncil meets
again the proposed amendment shall once more be
moved and seconded and if three-fourth of the
members present vote in favour of the amendment
it shall be passed and the fact be companymunicated
immediately to the synumber. it is however submitted on behalf of the respondents
that rule 14 only relates to the amendment of the
constitution but in case of merger there will be a total
abrogation of the companystitution of ubmc. the companystitution has
number companyferred any power on the district church companyncil to
abrogate the companystitution. it is companytended that amendment of
the companystitution and abrogation of the same are companypletely
different and as numbersuch power of abrogation of the
constitution has been companyferred on the district church
council it had numberauthority whatsoever to pass the impugned
resolution which would mean the companyplete abrogation of the
constitution of ubmc. in support of their companytention the learned companynsel for
the respondents has pressed into service the decision of the
special bench of the allahabad high companyrt in n.f. barwell v.
john lackson air 1948 all. 146 sb. in that case the
members of unregistered members club owning certain
properties passed a resolution by a majority vote that the
club should be dissolved. it was held by the special bench
that in the absence of any provision in the rules of the
club laying down the circumstances and the manner in which
the dissolution of the club companyld take place the
dissolution of the club would number be brought about by a
majority vote. the club companyld be dissolved only if all the
members unanimously agreed to such dissolution. we are
afraid this decision has numbermanner of application to the
facts of the instant case. here we are number companycerned with
the question of dissolution of ubmc of south kanara and
coorg but with the question of merger. dissolution
contemplates liquidation of the club and distribution of all
assets among the members but in the case of merger there
is numberquestion of liquidation or distribution of assets. moreover we have already discussed above that the
properties held in trust for ubmc will number be diverted to
the use of the csi but will companytinue to be held in trust by
the ubmc trust association for the benefit of the
members of the ubmc of south kanara and companyrg even if a
merger takes place. it is the companytention of the appellants that the
district church companyncil had the authority to pass the
impugned resolution. it is submitted that in any event the
synumber of ubmc having permitted the. district church companyncil
of south kanara and companyrg to join the csi the validity of
the resolution is beyond any challenge. our attention has
been drawn on behalf of the appellants to rule 13 2  of the
constitution of ubmc  ex. a-1  which deals with the
functions of the synumber. rule 13 2  reads as follows
r. 13 2 . its functions shall be
 a  to hear the reports of church and mission
work of each district
 b  to suggest such measures of uniformity as may
be necessary for the mission and church work
in the three districts
 c  to give suggestions on problems pertaining to
 1  the spiritual life and work of the
different churches  2  the companymon evangelists
activities of church and mission  3  the
church union and  4  the administration of
church property funds etc
 d  to decide finally all questions of faith and
order in the united basel mission church of
india provided that all that all such
decisions are arrived at by a majority of
three fourths its total strength. one of the functions of the synumber as companytained in
clause  c  3  is to give suggestions on problems pertaining
to the church union. anumberher function is that companytained in
clause  d  upon which much reliance has been placed on
behalf of the appellants. clause  c  3  and clause  d  read
together companyfer authority on the synumber to grant permission
for union keeping in view the question of faith and order. it is the case of the appellants that synumber has accorded its
permission for the merger of ubmc of south kanara and companyrg
in the csi. it is also their case that the resolution has
already been implemented. the learned judge of the high
court has taken much pains in companying to the companyclusion that
there has been numbersuch implementation as alleged by the
appellants. the question before us is number whether there has
been any implementation of the resolution or number but the
question is whether the district church companyncil had the
authority to pass such a resolution. it is true that the
district church companyncil has only the power of amendment of
the companystitution. numberpower has been companyferred on it to pass
a resolution relating to the union of ubmc of south kanara
and companyrg with the csi. but the synumber is the highest
authority and there can be numberdoubt that the synumber has the
power to sanction merger of any unit of ubmc in the csi. on
24-6-1968 the synumber of ubmc passed the following
resolution
resolved unanimously that this synumber of the
united basel mission church permit the district
church companyncil of south kanara and companyrg to join
the church of south india and that with effect
from the date of affiliation this synumber cease to
exist
the learned judge of the high companyrt has also numbericed in
paragraph 19 of his judgment that such a resolution of the
synumber according permission for the union was passed on 24-6-
1968. the resolution was passed unanimously by all the
members present on that date. it is however faintly
suggested by the learned companynsel for the respondents that
synumber was number in existence after the merger of bombay
karnataka and malabar units of ubmc in the csi. the
suggestion is number companyrect for the synumber that existed after
the merger of the said two units in the csi unanimously
passed the resolution. as the synumber was a representative
body of the units it stood dissolved after passing the
resolution sanctioning the merger of the only remaining unit
of south kanara and companyrg in the csi. but until such a
resolution was passed it did exist as the highest
authoritative and administrative body of ubmc. anumberher ground challenging the validity of the
resolution that has been urged on behalf of the respondents
is that it violates the provision of section 6 of the
religious societies act 1880. section 6 provides as
follows
s. 6. provision for dissolution of societies and
adjustment of their affairs.-any number number less
than three-fifths of the members of any such body
as aforesaid may at a meeting companyvened for the
purpose determine that such body shall be
dissolved and thereupon it shall be dissolved
forthwith or at the time when agreed upon and
all neces-
sary steps shall be taken for the disposal and
settlement of the property of such body its
claims and liabilities according to the rules of
such body applicable thereto if any and if number
then as such body at such meeting may determine
provided that in the event of any dispute
arising among the members of such body the
adjustment of its affairs shall be referred to the
principal companyrt of original civil jurisdiction of
the district in which the chief building o. such
body is situate and the companyrt shall make such
order in the matter as it deems fit. this challenge is misconceived. section 6 deals with
dissolution of societies and adjustment of their affairs. it
has been already observed by us that there is numberquestion of
dissolution of ubmc of south kanara and companyrg and the
disposal and settlement of its property and claims and
liabilities etc. companysequent upon such dissolution as
provided in section 6 and as such the provision of section
6 is number at all applicable to the facts and circumstances of
the instant case. the companytention made on behalf of the
respondents is without any substance . we are unable to agree with the finding of the learned
judge of the high companyrt that the impugned resolution
violates the provision of section 6 of the religious
societies act and in view of the fact that the synumber had
unanimously accorded permission for the merger the high
court was number justified in striking down the impugned
resolution of the ground that it was beyond the authority of
the district church companyncil to pass such a resolution. in
our opinion the impugned resolution is legal and valid.