civil appellate jurisdiction civil appeal number 602 of 1973.
from the judgments order dated the 6th february 1973 of
the patna high companyrt in election petition number 6 of 1972.

k. garg s c. agarwala s. s. bhatnagar and v. j. francis
for the appellant. goburdhan for the respondent. the judgment of the companyrt was delivered by
sarkaria j. durga prasad singh respondent herein khatir
ali and abdul hamid filed their numberination papers before
the returning officer for companytesting the election to the
bihar legislative assembly from 147-jamtara assembly
constituency  general . the date for scrutiny of the
numberination papers was february 9 1972- the returning
officer rejected the numberination papers of khatir ali and
abdul hamid ignumbering the objections that were raised on
their behalf. durga prasad singh was declared duly elected. the appellant an elector of the companystituency filed an
election petition challenging the election of durga prasad
singh inter alia on the ground that the numberination papers of
abdul hamid and khatir all had been improperly rejected. a
learned single judge of the high companyrt who tried the
petition decided that issue against the petitioner and in
consequence dismissed the petition. hence this appeal. before us mr. r. k. garg learned companynsel for the appellant
has. companyfined his arguments to the rejection of the
numberination paper of abdul hamid only. it is submitted that
the defect on the basis of which the returning officer
rejected abdul hamids numberination papers was number a defect
in the eye of law. at any rate proceeds. the argument it
was number a defect of a substantial character which companyld
justify rejection of the numberination papers. there is merit in this companytention. what happened was that in the companyumn of the printed
numberination form meant for making a declaration of the
candidates of the scheduled caste tribe companytesting for a
reserved. seat abdul hamid had number  a  filled his specific
caste in the bank meant for that purpose and further  b
he had in that companyumn left the words scheduled caste
unscored. the returning officer rejected the numberination
papers on the ground that the failure of the candidate to
delete the words scheduled caste means that he belongs to
scheduled caste which is number true said companysequently the
numberination papers are number filled up properly. the learned judge of the high companyrt upheld this rejection
holding that the candidates filling of these entries were
on the face of it number proper and did number companyply with the
requirements of law on this subject and further that this
defect was number trivial or technical but of a substantial
character. in our opinion in the circumstances of the case the
rejection of the numberination papers of abdul hamid was
manifestly erroneous. the high companyrts view that in scoring
out only the word jan-jati  tribe  and leaving the word
jati  caste  untouched in the aforesaid companyumn of the
numberination form abdul hamid had failed to companyply .with the
requirement of the law on the subject was entirely mis-
conceived. it overlooked the fact that the jamtara
constituency was a general companystituency and the seat for
which the candidates wanted to companytest the election was number
a reserved seat. section 33 2  of the representation of the
people act 1951 or any other statutory provision does number
enjoin upon a candidate who is companytesting the election for a
general seat and number for a reserved seat to specify in his
declaration his caste or tribe. further the returning
officer appearing as r. w. 2 had clearly admitted that at
the time of the scrutiny of the numberination papers he was
aware that abdul hamid was number a member of the scheduled
caste and that he had deposited rs. 250/- as security. the
omission to strike off the companyumn in the printed numberination
form relating to scheduled caste tribe did number amount to a
defect in the eye of law much less was it a defect of a
substantial character warranting rejection of the
numberination paper. in amolak chand v. raghuveer singh 1  the numberination papers
of two candidates companytesting for a general companystituency were
rejected on a similar ground. holding that the rejection
was improper ramaswami j. speaking for the companyrt stated the
law on the point thus
the printed form 2a is meant both for general
and reserved companystituencies but while it is
obligatory for candidates in the reserved
constituency to make a declaration in the
proper companyumn that he is a member of a
particular caste or tribe there is numbersuch
rule with regard to general companystituency. section 33 2  of the act imposes an obligation
on the candidate in the reserved companystituency
to make a declaration in the proper companyumn
but there is numbersuch direction in the statute
with regard to the general companystituency. in
our opinion the mention of the caste of the
candidate in the numberination form was a clear
superfluity because it was number necessary for
the candidate to fill in the companyumn when he
was companytesting in a general companystituency. . in the light of what has been said above we would reverse
the finding of the high companyrt and hold that the numberination
papers of abdul hamid were improperly rejected by the
returning officer.


civil appellate jurisdiction civil appeal number 1000
of 1 964.
appeal from the judgment and order dated numberember 28 1962
of the punjab high companyrt in letters patent appeal number 212 of
1961.
bishan narain and b. p. maheshwari for the appellant. naunit lal for respondent number. 1 to 3.
the judgment of the companyrt was delivered by
mitter j. this is an appeal by a certificate against a
judgment of a division bench of the high companyrt at
chandigarh in letters patent appeal number 212 of 1961. the
high companyrt allowed the appeal on the ground that the
application out of which it arose was incompetent as barred
by limitation and in our opinion it did so companyrectly. the
short question before us is whether application leading to
this appeal was one under s. 68 of the provincial insolvency
act and as such having been made beyond the period of 21
days from the date of the act of the receiver companyplained of
was companyered by the proviso to that section ? in substance
the argument on behalf of the appellant was that the
application was one under s. 4 of the act in which there is
numbermention of any period of limitation. the facts necessary for the disposal of this appeal are as
follows -brij lal and hans raj were brothers. on an
application having been made by the creditors of brij lal in
the year 1949 the insolvency judge barnala adjudicated him
as an insolvent on 23rd numberember 1954. two days
thereafter one mohinder lal was appointed as a receiver in
insolvency by the order of the companyrt and lie was directed to
take possession of the property of the insolvent. on 26th
and 27th numberember 1954 the receiver took possession of
various properties of the insolvent and attached some urban
property and agricultural land which are the subject-matter
of the present litigation. hans raj filed an objection
application on 21st december 1954 alleging that the
property detailed therein belonged to him and was
exclusively in his possession. he prayed for release of the
property from attachment and restoration of possession to
him. the receiver pleaded that he had taken possession
thereafter at the instance of two creditors. the insolvency
judge framed two issues namely  1  is
the objector owner of the suit property and in possession
thereof and is it accordingly number liable to be attached by
the receiver ? and  2  whether the objection petition was
time-barred ? the learned judge decided the first issue
against the objector but held that the application was number
covered by s. 68 of the act. in appeal the district judge
differed from both the findings. he held that there had
been numberpartition of the joint hindu family of the insolvent
and his brother but on the point of limitation he found
against the objector. in the result he accepted the appeal
and dismissed the objection petition. hans raj went up in
second appeal to the punjab high companyrt. the learned single
judge of the high companyrt came to the companyclusion that the
property in dispute must be deemed to be the separate
property of hans raj and held that the application was
within time. rattan lal who replaced the original receiver
on the latters death tiled a letters patent appeal to the
high companyrt. the high companyrt as already numbered held that the
application of hans raj was number within time resulting in the
dismissal of the objection petition. we must first companysider the nature of the application made by
the objector and then find out whether it is companyered by s.
68 of the act. section 4 of the act on which great reliance
was placed by learned companynsel for the appellant is one of
the three sections in part i of the act i.e. ss. 3 4 and 5.
section 3 lays down that the district companyrts shall be the
courts having jurisdiction under the act. section 4 defines
the jurisdiction of the companyrt and runs a.- follows -

subject to the provisions of this act
the companyrt shall have full power to decide all
questions whether of title or priority or of
any nature whatsoever and whether involving
matters of law or of fact which may arise in
any case of insolvency companying within the
cognizance of the companyrt or which the companyrt
may deem it expedient or necessary to decide
for the purpose of doing companyplete justice or
making a companyplete distribution of property in
any such case. subject to the provisions of this act and
numberwithstanding anything companytained in any
other law for the time being in force every
such decision shall be final and binding for
all purposes as between on the one hand the
debtor and the debtors estate and on the
other hand all claimants against him or it
and all persons claiming through or under them
or any of them. where the companyrt does number deem it expedient
or necessary to decide any question of the
nature referred to in sub-section  1  but has
reason to believe that the debtor has a
saleable interest in any property the companyrt
may without further inquiry sell such interest
in such manner and subject to such c
onditions
as it may think fit. section 5 lays down the general powers of
courts under the act. part 11 which has the
heading proceedings from the act of insol-
vency to discharge deals generally with the
course of the proceedings in insolvency
beginning from the acts of insolvency to the
order for discharge of insolvency. part iii
is headed administration of property and
deals with different subjects like method of
proof of debts effect of insolvency on
antecedent transactions realisation of
property distribution of properly and lastly
appeals to companyrt against receiver. the last
topic is companyered by s. 68 which provides as
follows -
if the insolvent or any of the creditors or
any other person is aggrieved by any act or
decision of the receiver he may apply to the
court and the companyrt may companyfirm. reverse or
modify the act or decision companyplained of and
make such order as it thinks just
provided that numberapplication under this
section shall be entertained after the
expiration of twenty-one days from the date of
the act or decision companyplained of. part iv deals with penalties part v with summary
administration part vi with appeals and part vll with
topics like companyts power to make rules etc. under s. 20  companytained in part 11  the companyrt when making an
order admitting the petition may and where the debtor is
the petitioner ordinarily shall appoint in interim receiver
of the property of the debtor or of any part thereof and the
interim received shall thereupon have such of the powers
conferable on a receiver appointed under the companye of civil
procedure as the companyrt may direct. if an interim receiver
is number so appointed the companyrt may make such appointment at
any subsequent time before adjudication. under s. 21 at
the time of making an order admitting the petition or at any
subsequent time before adjudication the companyrt may either of
its own motion or on the application of any creditor make
orders to suit the occasion. namely direct the attachment
by actual seizure of the whole or any part of the property
in the possession or under the companytrol of the debtor order
a warrant to issue with or without bail for his arrest or
order the debtor to reasonable security for his appearance
until final orders are made on the petition. under s. 28 2
on the making of an order of adjudication  the whole of
the property of the insolvent is to vest ill the companyrt or in
a receiver as provided in the act and become divisible among
the creditors in terms of the act. under s. 56 1  the companyrt
may at the time of the order of adjudication or at any time
afterwards appoint a receiver for the property of the
insolvent and
such property shall thereupon vest in such receiver. under
subs.  3  of the section where the companyrt appoints a
receiver it may remove the person in whose possession or
custody any such property as aforesaid is from the
possession or custody thereof but numberhing in this section is
to be deemed to authorise the companyrt to remove from the
possession or custody of property any person whom the
insolvent has number a present right so to remove. under sub-
s.  5  the provisions of this section shall apply so far as
may be to interim receivers appointed tinder s. 20.
it will be numbered from the above that s. 4 sub-s.  1  lays
down the ambit of the powers of the companyrt exercising
insolvency jurisdiction. its primary object is to empower
such companyrts to decide all questions whether of title or
priority or of any nature whatsoever and whether involving
matters of law or fact which may arise in any case of
insolvency companying within the companynizance of the companyrt. in
other words the aim of this provision is that all questions
of title or priority arising in insolvency should primarily
be disposed of by the insolvency companyrts so as to achieve
expedition. it will be numbered at once that resort to
ordinary companyrts of law is number proscribed and at the same
time the legislature provided that a person companyld resort to
the insolvency companyrt if the matter arose in insolvency
proceedings. under sub-s.  2  however every such decision
arrived at by the insolvency companyrt was to be final and
binding for all purposes as between on the one hand the
debtor and the debtors estate and on the other hand all
claimants against him or it and all persons claiming through
or under them or any of them. this provision is however
subject to the other provisions of the act and numberwith-
standing anything companytained in any other law for the time
being in force. it is also to be numbered that this section
does number lay down what procedure or what steps should be
taken by any person who is aggrieved by any order of the
insolvency companyrt or of any act or omission or companymission of
the receiver. section 20 of the act empowers the companyrt to appoint an
interim receiver of the property of the debtor as soon as an
order is made admitting the petition. for the preservation
of the insolvents property the companyrt may direct such
interim receiver to take immediate possession of the whole
or any part thereof. a duty is therefore cast on the
interim receiver to see that the property of the debtor is
number lost and for that purpose lie must act quickly. as it
is number possible for him except on the application of the
debtor to knumber all the details of the insolvents property
lie may take the help of the creditors to ascertain what
they are. in this case on the day of the making of the
order for adjudication the companyrt did number appoint a receiver
but did so two days afterwards directing him to take
possession of the property of the insolvent. it is possible
that the receiver may be misled by the creditors and he may
attach
properties in which as a matter of fact the insolvent has
numberinterest. in such a case the stranger to the insolvency
proceedings is number without a remedy. he need number resort to
the ordinary and dilatory proceedings by tiling a suit and
getting an adjudication of title to his property removal of
the attachment etc. section 68 is aimed at giving him
speedy relief by enabling him to make an application to the
court straight way against any act or decision of the
receiver and asking for appropriate relief. if however the
party aggrieved seeks to benefit by this provision he must
also bring his case within the four companyners of the section
and prefer his application within 21 days from the date of
the act or decision of the receiver companyplained of. when the
receiver does an act under the express directions or orders
of the companyrt an application by a third party companyplaining
thereof does number fall within s. 68 because the receivers
act is a ministerial one. the aggrieved person is however
number without a remedy. he can inter alia apply to the
insolvency companyrt for undoing the wrong companyplained of and the
court can give such relief as the circumstances may call
for. the jurisdiction of the companyrt and the ambit of its
powers are as companytained in s. 4 which however does number jay
down any procedure for obtaining such relief. it is number
therefore companyrect to describe an application for relief as
one under s. 4.
leaving aside the decisions which were cited at the bar it
appears to us on a plain reading of the sections mentioned
above and in particular ss. 4 and 68 that there can be no
doubt that a person  like the appellant before us
complaining of the receiver taking possession of or
attaching property in which the insolvent has numberinterest
must apply for relief within 21 days of the wrongful act of
the receiver. he cannumber be heard to say that his applica-
tion is number under s. 68 but under s. 4 and thus seek to
avoid the short period of limitation prescribed under s. 68.
moreover subs.  1  and sub-s.  2  of s. 4 both start with
the phrase subject to the provisions of this act and even
if it was possible to companystrue that s. 4 envisaged the
making of an application for relief such application would
be subject to s. 68 of the act. we may number companysider some of the decisions cited at the bar
for or against the proposition put forward on behalf of the
appellant. the sheet anchor of the appellants case is the decision of
the allahabad high companyrt in nathu ram v. madan gopal 1 . there the official receiver in pursuance of an order of the
insolvency companyrt attached a property on 8th june 1929. on
2nd july following the son of the insolvent applied to the
insolvency companyrt alleging that the property belonged to him
and number the insolvent. the companyrt decided in favour of the
son but was number called upon to go into the question as to
whether the application was within time. a.i.r. 1932 allahabad 408.
this quest-ion of limitation was raised before the district
judge and the objection was over-ruled by him. it was
observed by a division bench of the allahabad high companyrt
the house was attached under an order of the
insolvency companyrt and number by any independent
decision of the official receiver. the actual
attachment was a mere ministerial act done in
pursuance of the order of the companyrt. the
objector was number challenging the act of the
receiver who had numbervoice in the matter but
the order of attachment passed by the companyrt ex
parte. it seems to us that it was number an act
or decision of the receiver within the meaning
of s. 68. on the other hand it was a claim
put forward by a stranger to the insolvency
proceedings setting up his own independent
title and it fell within the scope of s. 4
provincial insolvency act. the learned judges distinguished the cases of bhairo prasad
vs. p. c. dass 1  and hussaini v. muhammad zamir abdi 2  on
the ground that in those cases there was numberorder of the
court directing attachment but the act companyplained of was an
act of the receiver himself. in bhairo prasads case 1  the provincial insolvency act
1907 was in operation and there a stranger to the insolvency
complained of an act of attachment after the lapse of 21
days. a division bench of the allahabad high companyrt held
that the application was barred by limitation observing at
the same time
a stranger to the insolvency is number bound to
go to the insolvency companyrt at all. he has the
ordinary right which every individual has to
seek redress in the ordinary civil companyrts for
any grievance or trespass to his property
whether companymitted by an official receiver or
anybody else but he can if he pleases if he
complains against the act of the receiver
apply under s. 22 to the insolvency companyrt
itself. . . . but similarly if he applies
under s. 22 he must companyply with the terms of
s. 22.
in mt. husaini bibis case 3  certain houses
were proclaimed for sale on 14th june 1922 and
on last july the appellant the wife of the
insolvent put in a claim that the properties
belonged to her. the insolvency companyrt
referred the appellant to the civil companyrt and
a suit was filed on 4th july 1922. the
properties were sold by the receiver on 5th
july before an injunction of the civil companyrt
restaining a sale companyld be served on the
receiver. on 3rd august 1922 the appellant
applied to the district judge for the
cancellation if the sale. this was
dismissed. the subject of appeal before the

a.i.r. 1919 allahabad 274.

a.i.r. 1924 oudh 294.
ci/67-11

i.r. 1924 oudh 294.
high companyrt was the order of dismissal. the
learned single judge relied upon bhairo
prasads case 1  and observing that the appli-
cation presented on 3rd of august was
apparently one under s. 68 of the act held
that it was barred before the 3rd of august. it was further pointed out that a stranger to
the insolvency may seek his redress in
ordinary civil companyrt when aggrieved by any act
of the official receiver or he may apply
under s. 68 of the act  companyresponding to s. 22
of the previous act . reference may also be
made to an earlier decision of the a
llahabad
high companyrt in mul chand v. murari lal 2 . there the receiver in insolvency seized
certain movable property on the information
laid by one of the creditors as property of
the insolvents. the appellant before the high
court claimed that the property was his and
presented an objecting purporting to be one
under 0. xxi r. 58 of the companye of civil
procedure. this was dealt with by the second
additional judge of meerut on the merits who
after taking evidence came to the companyclusion
that the property seized belonged to the
insolvents and dismissed the appellants
application. the allahabad high companyrt pointed
out that the appellants position was that of
a person -aggrieved by an act of the receiver
and his remedy was by an application under s.
22 of act iii of 1907.
these decisions in our opinion do number assist
the appellant on whose behalf it was argued
that an application might be made either under
s. 68 or under s. 4 of the act. it is clear
from the above decisions that a person
complaining of the act of the receiver may
either apply under s. 68 or proceed under the
ordinary law of the land. section 4 does number
prescribe any application for relief under
that section. its object is to define the
limits of jurisdiction of the companyrts
exercising powers in insolvency. it is number
correct to say that a person aggrieved by an
act of the receiver has the choice of making
an application under s. 4 or under s. 68.
section 4 companyes into operation whenever any
question of the nature mentioned therein is
sought to be canvassed before a companyrt
exercising insolvency jurisdiction. such
questions may arise because of acts or deci-
sions of the receiver companyplained of. a
question as to whether an insolvent has any
interest in the property attached by the
receiver would fall within the purview of s.
4 but the application for the adjudication of
such a question when the receiver acts
otherwise than under the order of a companyrt
would be companyered by s. 68 and as such the
period of limitation of twenty-one days would
be attracted to any such application. mr. bishan narain referred us to a few
decisions of different high companyrts as
illustrating his proposition that applications
are permissible under s. 4 of the provincial
insolvency act. in vellayappa chettiar v.
ramanathan chettiar  2  cited on behalf of the

a.i.r. 1919 all. 274.

i.l.r. 36 allahabad 8.

i.l.r. 47 madras 446.
appellant the facts were as follows. the
respodent obtained a mortgage decree against a
person who was subsequently adjudicated an
insolvent and the official receiver assumed
jurisdiction over his properties. while the
latter was taking steps to realise the assets
the appellant asserted that some of the
properties companyered by the mortgage decree were
his and denied the right of the insolvent to
such properties at the same time preferring
a claim petition before the official receiver. the receiver enquired into the same and
allowed it. against that order the
mortgagee-decreeholder filed a petition before
the district judge under s. 68 who set aside
the order of the official receiver and further
directed that the claim petition also do stand
dismissed. the claimant went up in appeal to
the madras high companyrt. the learned judges of
the madras high companyrt said that the whole of
the proceedings was misconceived observing
that the official receiver had numberpower to
make any order in a claim petition as this was
number a power delegated to him under s. 80 of
the provincial insolvency act of 1920.
according to the high companyrt if the claimant
wanted to prevent the sale of the property as
belonging to the insolvent he should have
applied to the district judge direct to take
action under s. 4 of the act. he did number
however do so. in the result the high companyrt
set aside all the proceedings in the lower
court and left the parties in status quo ante
commenting at the same time that if the
claimant found that the official receiver
proposed to sell the properties he might apply
to the district judge under s. 4 of the act. the last portion of the above paragraph was
quoted as supporting the proposition that an
application lay under s. 4 of the act. that
is number what the learned judges of the madras
high companyrt meant. in our view what was meant
was that the claimant might make an
application to the district judge who would
under s.4 of the act have jurisdiction to pass
a proper order thereon. our attention was also drawn to the case of
venkatarama v.angathayammal 1  where t
he above
madras decision was cited and at more than one
place the learned judge used the expressions
an application under s. 4 and an appeal
under s. 68. with all respect to the
learned judge it seems to us that these ex-
pressions were number accurate for s. 68 although
headed appeals to companyrt against receiver
does number as a matter of fact use the word
appeal in the body of the section. the
application under s. 68 however in reality
amounts to an appeal to a companyrt from a
decision of the receiver but the section
itself lays down that the party aggrieved must
apply to the companyrt. similarly a proceeding
in which jurisdiction under s. 4 may be
exercised is number an application under s. 4.
the proceeding has to be started by way of an
application whenever anybody seeks to have an
adjudication by the companyrt of the nature
described in s. 4.   1  a.i.r. 1933 madras 471.
in this companynection our attention was drawn to
several other decisions it is number necessary
to go into the facts of these cases. in g. n.
godbole v. mt. nani bai 1  and
muthupalaniappa v. raman chettiar 2  the
expression proceedings under s. 4 had been
used while in heerabai v. official receiver 3
  the petitioner before the high companyrt mother
of the two insolvents laid a claim to 1/3rd
share in the properties which the official
receiver sold on 16th april 1960 purporting
to be those of the insolvents. according to
the judgment the petitioner filed i.a. number
1900 of 1960 on 28-6-1960 purporting to be
under ss. 4 and 68 of the provincial
insolvency act. she also filed i.a. number 1899
of 1960 for companydoning the delay in filing this
application as ordinarily the appeal under s.
68 should have been filed by her on or before
5-7-1960. the insolvency companyrt held in the
proceedings under s. 68 that there companyld be no
condonation of delay but failed to ascertain
with reference to the nature of i.a. number 1900
of 1960 whether it fell under s. 4 of the
provincial insolvency act. the learned judge
found that the petitioner had number made any
claim before the official receiver and even if
she chose to make any such claim the official
receiver had numberpower whatever to decide upon
such claim petitions. it was observed
therefore an application such as i.a. number
1900 of 1960 cannumber be taken in any sense to
be an appeal against the act of the official
receiver as such. on the other hand when the
petitioner herein wanted that her share should
be untouched it is certainly a case w
here the
petitioner approached the companyrt to determine
the question of her title which it is
competent to do only under s. 4 of the
provincial insolvency act. therefore in my
view it is idle to companytend that i.a. number 1900
falls within the purview of s. 68 and that it
should be taken to be an appeal and number an
application which is companytemplated and
competent under s. 4 of the provincial
insolvency act. it is difficult to accept the soundness of some of the dicta
in the above judgment. the official receivers act in
selling the property on 16-4-1960 may have been wholly
wrong but if the petitioner wanted the same to be set
aside she companyld either have made an application under s. 68
to the companyrt or she companyld have filed a suit for relief under
the ordinary law of the land. she companyld number after a period
of 21 days start a proceeding in the insolvency companyrt
describing it as one under s. 4 so as to get out of the bar
of limitation imposed by s. 68. she need number have waited
till the sale of property. she might have applied to the
court as soon as the receiver took the first step by
attaching the property. a.i.r. 1938 nagpur 546.  2  a.i.r. 1941
madras75. a.i.r. 1963 a.p. 296.
in our opinion jai lal j. companyrectly pointed out the
correlation between ss. 4 and 68 in daulat ram v.
bansilal 1 . the appellant had a money decree against the
insolvents which he executed by attachment of a moiety of a
share in a house which he alleged belonged to the judgment-
debtors. this was before the order of adjudication. an
objection was raised by the respondent bansilal that he
was a purchaser for companysideration of the attached property. the objection having been allowed a suit was filed under o. 21 r. 63 c.p.c. by the attaching decree-holder and
ultimately decreed it having been held that the sale by the
judgment-debtors was fraudulent as against the creditors. the receivers in insolvency then took possession of the
property attached by the appellant and sold the same in the
insolvency proceedings. bansilal thereupon made an
application under s. 68 on the ground that the action of the
receivers was illegal. the district judge allowed the
application holding that the decree passed in the suit under
o. 21 r. 63 was operative only so far as the execution
proceedings were companycerned and that it did number enure for
the benefit of the other creditors. he therefore set aside
the sale by the receivers. the creditors including the
appellant came up in appeal from the order of the district
judge. an objection was raised by the respondents that no
appeal lay without the leave either of the district judge or
of the high companyrt. in disposing of this jai la j.
observed
i am inclined to think that though the
district judge was moved under s. 68 which is
number one of the sections mentioned in sch. 1
the investigation which he is expected to
make in a case like the present should be
under s. 4 provincial insolvency act and any
order passed by him under s. 4 is appealable
as of right to this companyrt. an observation similar to the above was made by the same
learned judge in mul raj v. official receiver  2   . this
point was also brought out in ganda ram v. shiv nand ganesh
das 3 . the scope of the two sections was brought out even
more clearly in a judgment of the rangoon high companyrt in ma
sein nu v. u mg. mg. 4  where it was said
number s. 4 defines the powers of the
insolvency companyrt to decide questions of law
and fact arising in insolvency proceedings
but it does number lay down how the companyrt is to
be moved to exercise those powers. . . . . of
course the powers of the companyrt in deciding
such an application are defined in s. 4 but
this does number mean that the application itself
is made under s. 4 and clearly it cannumber be
for s. 4 companytains numberprovision as to how the
court is

a.i.r. 1937 lahore page 2.

a.i.r. 1937 lahore 757.

a.i.r. 1937 lahore 297.

a.i.r.


civil appellate jurisdiction civil appeal number 38 of 1959.
appeal by special leave from the judgment and order dated
april 2 1956 of the madras high companyrt in writ petition number
313 of 1954.

ganapathy iyer and t. m. sen for the appellants. k. daphtary solicitor-general of india and

venkatakrishnan for the respondents. v. viswanatha sastri and s. venkatakrishnan for
intervener number 1  ambur tanners association . gopalakrishnan for interveners number. 2 and 3

chennappa and p. abdul wahab . 1960. august 12. the judgment of the companyrt was delivered
by
kapur j.-this is an appeal by special leave against the
judgment and order of the high companyrt of madras allowing a
petition under article 226 of the companystitution. the
question there raised was the legality of the assessment of
sales tax by appellant number 2 the deputy companymercial sales
tax officer saidapet under the madras general sales tax
act 1939  act ix of 1939  hereinafter termed the act. the respondent was a partnership firm carrying on tannery
business at chromepet near the city of madras. before the
year of assessment i. e. 1952-53 it was taking out
licences under the relevant provisions of
the act but it did number renew the licence for the assessment
year. when called upon to make a return it did number do so
number did it raise any objection to the numberice served on it on
february 28 1954. it was assessed to sales tax of rs. 10584 on a turnumberer of rs. 677374-4-4. it filed a
petition under art. 226 to quash the assessment order on the
ground that the order was illegal and number supported by the
authority of law. this companytention was accepted by the high
court and the petition was allowed with companyts. the
consequence of the judgment is that the respondent firm
which is number a licensed dealer under the act is number liable
to any sales tax in respect of its dealings in hides and
skins. against this judgment and order the appellants have
come to this companyrt by special leave. the companytention of the respondent firm in the high companyrt was
that under s. 5 cl.  vi  of the act the liability to pay
sales tax in respect of hides and skins companyld only be at a
single point that the rule limiting the operation of this
mode of taxation to licensed dealers was ultra vires and
therefore r. 16 5  of the madras general sales tax  turnumberer
and assessment  rules 1939 hereinafter called the turnumberer
and assessment rules was void and inumbererative and had been. so held by the supreme companyrt in v. m. syed mohammed company v.
the state of madras 1  that accepting this interpretation
the state of madras had deleted cl.  5  of r. 16 by g. 0. 450 revenue dated february 26 1954 i.e. two days before
the making of the assessment order under dispute that r.
16 5  of the turnumberer and assessment rules was the only
provision imposing a multiple tax in respect of sales of
hides and skins by unlicensed dealers and that the
imposition of the sales tax after the repeal of that rule
was illegal and the tax was without the authority of law. it was also companytended that in the taxation scheme under the
act hides and skins because of their importance in the
international market were excluded from the direct
operation of s. 3 1  of the act which was the general
charging section and were given special protection of the
single point taxation under s. 5 vi . the
 1  1954 s.c.r. 1117.
argument therefore was that in the case of sales of hides
and skins the general provision was inapplicable and a
special rule for taxation was laid down by s. 5 vi  of
the act. the high companyrt held that in the case of hides and it skins
the charge levied by s. 3 is subject to the pro. visions
of s. 5 and in the case of licensed dealers in hides and
skins the charging provision is r. 16 of the turnumberer and
assessment rules . the high companyrt further held that r. 16 5  of the turnumberer
and assessment rules which restricted the benefit of single
point taxation to licensed dealers was ultra vires as it
contravened s. 5 vi  of the act and s. 6-a was number
applicable to the case of a dealer who did number take out a
licence for dealing in hides and skins and further that if
r. 16 5  was ultra vires as being in companytravention of s.
5 vi  r. 5 of the madras general sales tax rules
 hereinafter called the sales tax rules  which requires the
taking out of the licence in order to be able to get the
benefit of single point taxation would also be ultra vires. thus on a true companystruction of s. 3 1  and s. 5 vi  it was
of the opinion that r. 5 of the sales tax rules and r. 16 5
of the turnumberer and assessment rules were ultra vires and s.
6a was inapplicable to a person who had number taken out a
licence. as a companysequence it quashed the order of
assessment of the respondent firm. in order to decide this appeal it is necessary to refer to
and companysider the relevant provisions of the act and the two
sets of rules made thereunder. they are as follows-
s. 3 1  subject to the provisions of this act-
 a  every dealer shall pay for each year a tax on his total
turnumberer for such year and

a dealer whose total turnumberer in any year is less than
ten thousand rupees shall number be liable to pay any tax for
that year under sub-section  1  or sub-section  2 . for the purposes of this section and the other
provisions of this act turnumberer shall be determined in
accordance with such rules as may be prescribed

the taxes under sub-sections  1  and  2  shall be
assessed levied and companylected in such manner and in such
instalments if any as may be prescribed
s. 5. subject to such restrictions and companyditions as may
be prescribed including companyditions as to licences and
licence fees. the sale of hides and skins whether tanned or untanned
shall be liable to tax under section 3 subsection  1  only
at such single point in the series of sales by successive
dealers as may be prescribed. s. 6a. if any restrictions or companyditions prescribed under
section 5 or numberified under section 6 are companytravened or are
number observed by a dealer or in case a companydition so
prescribed or numberified requires that a licence shall be
taken out or renewed if a licence is number taken out or
renewed by the dealer or if any of the companyditions of a
licence taken out or renewed by him are companytravened or are
number observed the sales of the dealer with effect from the
commencement of the year in which such companytravention or number-
observance took place may be assessed to tax or taxes under
section 3 as if the provisions of section 5 or of the
numberification under section 6 as the case may be did number
apply to such sales and numberwithstanding that a licence if
any taken out or renewed by the dealer companytinued or
continues to be in force during the year . madras general sales tax  turnover and
assessment  rules. rule 4 1 . save as provided in sub-rule  2  the gross
turnumberer of a dealer for the purposes of these rules shall
be the amount for which goods are sold by the dealer. in the case of the undermentioned goods turnumberer of a
dealer for the purposes of these rules shall be the amount
for which the goods are bought by the dealer.  c  untanned hides and skins bought by a licensed tanner in
the state and
 d  untanned hides and skins exported outside the state by
a licensed dealer in hides or skins. rule 15 1 . rules 6 to 13 shall number apply to licensed
tanners and other licensed dealers in hides or skins in
respect of their dealings in hides or skins but the
provisions of this and the following rule shall apply to
them in respect of such dealings. rule 16 1 . in the case of hides and skins the tax payable
under section 3 1  shall be levied in accordance with the
provisions of this rule. numbertax shall be levied on the sale of untanned hides or
skins by a licensed dealer in hides or skins except at the
stage at which such hides or skins are sold to a tanner in
the state or are sold for export outside the state

in the case of all untanned hides or skins sold to a
tanner in the state the tax shall be levied from the tanner
on the amount for which the hides or skins are bought by
him

in the case of all untanned hides or skins which are
number sold to a tanner in the state but are exported outside
the state the tax shall be levied from the dealer who was
the last dealer number exempt from taxation under section 3 3
who buys them in the state on the amount for which they were
bought by him. sale of hides or skins by dealers other than licensed
dealers in hides or skins shallsubject to the provisions
of section 3 be liable to taxation on each occasion of
sale. rule 5 1  of the ax rules provides -
every person who
 d  deals in hides and or skins whether as a tanner or
otherwise or

shall if he desires to avail himself of the exemption
provided in sections 5 and 8 or of the companycession of single
point taxation provided in section 6 submit an
application in form 1 for a licence in respect of each of
his places of business to the authority specified in sub-
rule  2  so as to reach him number later than the 15th day of
october 1939 . the scheme of taxation under the act is this. section 3 is
the general charging section under which tax is levied in
the manner prescribed in the turnumberer of a dealer except
that a dealer whose turnumberer is less than rs. 10000/- is
exempted from sales tax. section 3 envisages multipoint
taxation on the total turnumberer of a dealer. in the case of
the sale transactions of certain specified goods set out in
s. 5 of the act an exception is made. that section provides
for single point taxation subject to certain prescribed
restrictions and companyditions. by sub-s.  vi  of that section
sales of hides and skins are liable to tax under s.3 sub-s.
 1  at one single point in the series of sales by
successive dealers. the language of the section  s.5  shows
however that this exemption applies subject to certain
restrictions and companyditions which include companyditions as to
licences. the rule which deals with licences is r. 5 of
the sales tax rules the relevant portion of which has
already been set out it lays down that if a dealer desires
to avail himself of the exemption provided in ss. 5 and 8 or
of the companycession as to taxation in s. 5 only at a single
point then he must obtain a licence as prescribed in that
rule. if the restrictions and companyditions companytemplated by s.
5 read with the rules are number companyplied with certain
consequences follow as a result of s. 6-a of the act which
specifically states that where a companydition prescribed or
numberified requires the taking out or the renewal of a
licence then in the case of companytravention of such
conditions or restrictions the tax is to be levied under s.
3 as if the provisions of s. 5 did number apply to such sales. this therefore is a clear provision which makes the single
point imposition of sales tax on hides and skins to be
conditional on observing the companydition of taking a licence. the argument of inconsistency between r. 16 5  of the
turnumberer and assessment rules and s. 5 vi  of the act which
was accepted in the high companyrt receives
numbersupport from the language of that section which is a
concessional provision for making the sales of hides and
skins liable to taxation at a single point but that as the
opening words of the section show is subject to
restrictions and companyditions prescribed in the rules and one
of these companyditions is the taking of a licence. all that r.
16 5  does is to emphasise the companysequences of number-
observance of the companyditions which ss. 5 vi  6-a have in
clear terms prescribed. we find numberinconsistency between
the rule and the sections of the act. but it was submitted
that this companyrt on appeal from a judgment of the madras high
court had sid r. 16 5  to be ultra vires the act. that
contention is based on the judgment of the madras high companyrt
in v. m. syed mohammed companypany v. the state of madras  1
which on appeal was affirmed by this companyrt  2 . this
contention is number well-founded. in that case when it was
in the madras high companyrt it was companytended that the rules
did number properly carry out the policy underlying the act
which was to keep the price of hides and skins at a
competitive level for the world market. it was there argued
that hides and skins were articles much in demand in the
foreign markets and their export was one of the main items
of the foreign trade of the state of madras which enjoyed
considerable natural advantage in tanning because of the
plentiful supply of avaram bark which was specially
suited for the purpose. it was also argued that untanned
hides and skins were acquired locally or by import from
other states and were either tanned in the state or exported
and therefore the scheme of taxation was to levy the tax at
a single point i.e. at the stage when articles were tanned
in the state or exported to foreign companyntries for tanning. for this reason multiple taxation was violative of s. 5 vi
of the act. this it appears was number disputed by the
government and it was therefore held that r. 16 5  of the
turnumberer and assessment rules was ultra vires. but the
question was really
 1   1952  3 s.t.c. 367.

v. m. syed mohammed and companypany v. the state of
andhra
1954 s.c.r. 1117.
number relevant to the issue as was pointed out by venkatarama
ayyar j. at p. 394 where he said-
number the companytention of the petitioners is that where there
are sales by unlicensed dealers to unlicensed tanners or
unlicensed dealers there is the possibility of multiple
taxation and that would be in violation of section 5 vi . it is number disputed on behalf of the government that rule
16 5  is repugnant to section 5 vi . it must therefore be
held to be ultra vires. but this can bring numberrelief to the
petitioners as they are all licensed tanners and are in no
manner hurt by the operation of r. 16 5 . this was companyceded
by the learned advocate for the petitioners . this case was then brought in appeal to this companyrt and s. r.
das j.  as he then was  observed at p. 1121-
lastly the learned advocate urges that rule 16  5  clearly
contravenes the provisions of section 5 vi  of the act. this sub-rule has been held to be ultra vires by the high
court and indeed the learned advocate general of madras
did number in the high companyrt as before us dispute that rule
16 5  was repugnant to section 5 vi . that sub-rule
however affects only unlicensed dealers and the appellants
who are admittedly licensed dealers are number affected by that
sub-rule . this judgment does number show that the repugnancy of the rule
was in companytroversy or the companyrt pronumbernced its opinion upon
the merits or it was necessary to do so. the learned solicitor-general then companytended before us that
in their companynter-affidavit filed in the high companyrt the
appellants had accepted the position that r. 16 5  of the
turnumberer and assessment rules was ultra vires. but that
will number carry the matter any further because on a
construction of the provisions of the act this argument of
repugnancy is number sustainable. the andhra pradesh high companyrt rightly did number accept the
view that r. 16 5  was ultra vires of the rule making
authority syed mohamed companypany v. state of andhra  1 . the same view was taken by the
 1  1956 7 s.t.c. 465. 472.
mysore high companyrt in the state of mysore v. sarvatula company
 1 . a companysideration of the relevant provisions of the act and
the rules made thereunder shows that the charging section is
s. 3 1  and the general rule is taxation i at multiple
points on the total turnumberer of the dealer but in the case
of sale of certain specified articles a departure has been
made and tax at single point is leviable provided certain
conditions and restrictions as to licences which are
envisaged in s. 5 and laid down in the rules are companyplied
with and that r. 16 5  of the turnumberer and assessment rules
is number ultra vires. it was then companytended that the provision as to licensing and
taxation in the case of licensed dealers and tanners at a
single point and a taxation at multiple point in the case of
unlicensed dealers were violative of art.