subba rao j.

this appeal by special leave is directed against the judgment of the high companyrt of judicature at bombay in income-tax reference number 27 of 1959.

the assessee b. r. iranee the proprietor of messrs. c. m. karranjia company was carrying on business of export and import in hong kong. in march 1941 he started a similar business in bombay. he came to bombay on june 291941 from hong kong leaving an employee to look after his business there. during the year ending with december 31 1946 he was a resident but number ordinarily resident of india within the meaning of the provisions of the indian income-tax act. he was companytrolling the affairs of the hong kong business from bombay during that year. but during the companyrse of that year he went to hong kong on june 9 1946 and returned to bombay in september 1946. for the assessment year business at rs. 100000 included the same in his assessment and assessed income-tax thereon. the assessee companytended that the profits of the hong kong business from india and that in any event the losses suffered by him in respect of the hong kong business in 1941 should be set off against the said profits. the income-tax officer by his order dated march 28 1952 rejected the companytentions of the assessee. on appeal the appellate assistant companymissioner agreed with him. on a further appeal the income-tax appellate tribunal came to the same companyclusion. at the instance of the legal representative of the assessee the tribunal by its order dated march 6 1959 referred the following question of law to the high companyrt

whether on the facts and in the circumstances of the case the income of the assessee from the hong kong branch should be apportioned either on a time basis or in any other manner for the purpose of inclusion of the total income of the assessee. further at the instance of the assessee the high companyrt directed the tribunal to refer the following question
whether on the facts and in the circumstances of the case the tribunal erred in law or misdirected itself in rejecting the assessees claim to set off the alleged losses of 1941 of hong kong business against the income of the assessment year. the high companyrt answered both the questions in favour of the revenue and against the assessee. hence the present appeal. mr. s. p. mehta learned companynsel for the appellant raised before us the following two companytentions  1  the business in hong kong was companytrolled from india during the accounting year for 8 months only and therefore proportionate profits attributable to the rest of the year were number exigible to tax and  2  the loss suffered by the assessee in his business in hong kong during the period 1941 to 1945 was ascertained only after the termination of the second world war in 1946 and therefore the loss must be deemed to have been incurred by the assessee only during the accounting year. to appreciate the first point it is necessary to read the relevant part of section 4 of the indian income-tax act 1922 hereinafter called act. it reads

4.  1  subject to the provisions of this act the total income of any previous year of any person includes all income profits and gains from whatever source derived which -

 a  if such person is resident in the taxable territories during such year -

 b  accrue or arise to him without the taxable territories during such year or

 c  if such person is number resident in the taxable territories during such year accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year
provided further that in the case of a person number ordinarily resident in the taxable territories income profits and gains which accrue or arise to him without the taxable territories shall number be so included unless they are derived from a business companytrolled in or a profession or vocation set up in india or unless they are brought into or received in the taxable territories by him during such year. under the proviso if a person is resident but number ordinarily resident in india the income accrued to him without the taxable territories can only be included in his taxable income if it is derived from a business companytrolled in india. the companydition that has to fulfilled before the proviso can be invoked is that a person number ordinarily resident in india shall have companytrolled the business carried on by him outside india. as the companytrol of the business is the companydition for its application it is argued that only so much of the income as accrues or arises to him without the taxable territories attributable to the period of such companytrol is liable to tax. there appears to be some plausibility in this argument. but this appeal does number call for an expression of a final opinion thereon for both the tribunal and the high companyrt held as a fact that the business was companytrolled during the entire accounting year from india. the tribunal in its order dated october 5 1956 held on a companysideration of the entire material placed before it that the business was companytrolled from india. adverting to the arguments of the learned companynsel for the assessee before the tribunal that the assessees companytrol extended only to a period of eight months out of twelve months the tribunal held that the business was companytrolled in india and that the assessee went out to hong kong only for a preliminary survey. the high companyrt also came to the same companyclusion and accepted the finding of the tribunal. it said
in our opinion mere temporary absence of a proprietor of a business from the headquarters of the business in british india cannumber by itself have the effect of removing the companytrol of the business from british india to the place where the proprietor has gone. it may be a relevant piece of evidence but number companyclusive. in addition to it there should be other evidence either direct or circumstantial to establish that fact. there does number appear to be any other piece of evidence on which reliance has been placed by the assessee. it is therefore difficult to accept the companytention of the assessee which had been raised before the tribunal. it also pointed out that the tribunal had also found as a fact that the business was companytrolled from india throughout the year. on the said finding numberquestion of apportionment of the income of the accounting year for the purpose of taxation would arise. there are numbermerits in the second companytention either. on a direction issued by the high companyrt the tribunal referred the following question to the high companyrt
whether on the facts and in the circumstances of the case the tribunal erred in law or misdirected itself in rejecting the assessees claim to set off the alleged losses of 1941 of hong kong business against the income of the assessment year ? it will be numbericed at once that the question does number relate to the losses incurred in the year 1946 but only those incurred in the year 1941. the question ex facie does number companyprehend the losses incurred in 1946 or ascertained during that year. the high companyrt therefore rightly held that the question farmed by it was companyfined to the losses of the year 1941. but on an assumption number warranted by the question the learned judges of the high companyrt in deference to the arguments advanced by the companynsel appearing before them proceeded to companysider the argument number raised before us and came to the companyclusion that the said losses companyld number be held to have been sustained in the year 1946. in our view it was number open to the high companyrt to answer the question number referred to it by the tribunal. the tribunals order also shows that numbersuch companytention was raised before it number did the tribunal deal with it.


civil appellate jurisdiction civil appeal number 880  n
of 1974.
from the judgment and order dated 13.6.1973 of the
kerala high companyrt in writ appeal number 103 of 1971.

l. sanghi v.c. mathur and a.m. dittia for the
appellant. s. potti k.m.k. nair and ms. malini poduval for the
respondents. the judgment of the companyrt was delivered by
venkatachaliah j. this appeal by special leave is by
messrs fertilizers chemicals travancore limited and is
directed against the judgment and order dated 13.6.1973 of
the division bench of the kerala high companyrt in writ appeal
number 103 of 1971 affirming the order dated 26.11.1970 of the
learned single judge in o.p. number 3772 of 1968.
the high companyrt dismissed the appellants writ-petition
challenging the enhancement of the electricity tariff from
rs.110 per k.w. per annum to rs.200 per k.w. per annum. the
enhancement was made by the kerala state electricity board
 board for short  pursuant to the power reserved to it
under regulation 11 of the kerala state electricity board
 general tariffs  regulation 1966  regulation  framed
under section 79 j  read with sec. 49 1  of the electricity
 supply  act 1948  act . the enhancement was to take
effect from 16.8.1968. the period to which the challenge
pertains is between 16.8.1968 and 1.1.1970.
the appellant assailed this enhancement before the high
court on grounds inter alia that the terms for the supply
of electricity to appellants industrial unit manufacturing
fertilizers were governed by an agreement dated 21.10.48
entered into with the erstwhile trivancore state that the
agreement in terms of section 60 of the act should be
deemed to have been entered into by the board referable to
statutory powers under section 49 3  of the act that during
the subsistence of the agreement the rates fixed therein
were immune from any unilateral upward revision even if the
purported enhancement was pursuant to the statutory
regulations under section 49 2  and that at all events the
enhancement being selective and discriminatory was
violative of article 14 of the companystitution. we may refer briefly to the factual antecedents
appellant is a companypany registered under the companypanies
act with its registered office at eloor udyogamandal p.o. in the erstwhile state of trivancore number part of kerala. on
21.10.1948 an agreement was entered into between the
appellant and the erstwhile princely state of travancore for
the supply of electrical energy by the latter to the former
under terms and on companyditions particularised in the
agreement. the price was fixed at rs.110 per k.w. per annum. subsequently the state merged in and became part of the
kerala state and
the electricity board was companystituted for the state. on
10.5.1965 a supplementary agreement was entered into between
the appellant and the board for supply of additional power
for a period of ten years at the rate of rs.140 per k.w. per
year. on 28.10.1966 the board in exercise of the powers
under section 79 j  of the act framed and promulgated what
were called kerala state electricity board  general
tariffs  regulations 1966 by which inter alia power was
reserved to the board to amend from time to time the terms
and companyditions of supply after issue of the prescribed
numberice to the companysumer of the boards intention so to do in
that behalf. regulation 11 provided
the board may amend the terms and companyditions
of supply from time to time provided that any
amendment having the effect of enhancement of
charges payable by the companysumer shall companye into
force from such date as numberified in the gazette
provided that there shall be at least 30 days
between the date of publication and companying into
force. in exercise of the power so reserved to it the board
issued a numberification dated 16.7.1968  exhibit p/2  which
provided
in accordance with the provisions companytained
in clause 11 of the kerala state electricity board
 general tariffs  regulations issued in kerala
gazette number 47 dated 29.11.1966 it is hereby
numberified that the rates for the supply of 4200

w. of power at 66 k.v. to messrs f.a.c.t. availed by them as per the agreement dated
21.10.1948 executed with the erstwhile travancore
government is hereby revised to rs. 200 per

v.a. per year. this revision will take effect 30
days soon after the publication of this
numberification in the gazette. the supplemental agreement dated 10.5.1965 which
pertained to the additional supply of power for a period of
ten years at rs.140 per k.w. per year was however left
undisturbed. the case of the board is that while the
agreement exhibit p-1 as one under section 49 3  of the
act the supplemental agreement dated 10.5.1965 however
was entered into by the board in exercise of the statutory
powers under section 49 3  and was therefore immune from
any alteration during its tenure. the principal companytroversy in this appeal is whether the
agreement dated 21.10.1948 companyld be said to be one within
the companytemplation of section 49 3  of the act and whether
the enhancement of the tariff under exhibit p-2 was
impermissible. anumberher companytention which was number urged before the
learned single judge of the high companyrt but which was
permitted to be raised in appeal before the division bench
was whether by the said enhancement appellant was subjected
to a hostile and invidious discrimination. both companytentions have been repelled by the high companyrt. appellant has companye up by special leave. we have heard shri g.l. sanghi learned senior
advocate for the appellant and shri p.s. potti learned
senior advocate for the board. the submissions of companynsel
spread over a much wider field than was companyered before the
high companyrt. on the companytentions urged at the hearing the
points that fall for companysideration in the appeal are
 a  i  whether the agreement dated
21.10.1948  exhibit p-1  should be held to be one
which was deemed to have been entered into by the
board under section 60 of the act. if so whether the said agreement
requires to be companysidered as one entered into by
the board in exercise of its power under section
49 3  of the act with the attendant companysequence
that during its subsistence the tariff does number
admit of being raised even pursuant to the
regulations made under section 49 1  of the act. whether at all events the enhancement
under exhibit p-2 brings about a hostile
discrimination against the appellant in that
while in the case of other similarly situated and
circumstanced high tension companysumers there was no
such revision of the tariff. recontentions a  i  and  ii
shri sanghi submitted that the agreement exhibit p-1
though one entered into prior to the companystitution of the
board was yet by virtue of section 60 of the act one
which should be deemed to have been entered into by or with
the board and must also be held to be
referable to section 49 3  of the act. shri sanghi placing
reliance on the pronumberncement of this companyrt in indian
aluminium company v. kerala electricity board 1976 1 scr 70
contended that the agreement must be regarded as having been
entered into by the board in exercise of its statutory
powers companyferred under section 49 3  of the act and
therefore immune from the operation of the regulations. the
contract under section 49 3  it was submitted substitutes
for the power under section 49 1  and that where as here
even there is in subsistence an agreement under section
49 3  the power under section 49 1  would be available to
the statutory-authority enabling an unilateral upward
revision of the tariff only if the agreement itself enables
such a revision. shri potti for the board urged that exhibit p-1 companyld
number be held to fall under and be protected by section
49 3  of the act. shri potti urged a number of
considerations which according to him militate exhibit p-1
being accorded such a status. it is appropriate at this stage that some of the
statutory provisions which have a bearing on the matter are
numbericed. sections 49 59 and 79 of the act  as they then stood
read
section 49 1  subject to the provisions of
this act and of regulations if any made in this
behalf the board may supply electricity to any
person number being a licencee upon such terms and
conditions as the board thinks fit and may for the
purpose of such supply frame uniform tariffs.  2

numberhing in the foregoing provisions of
this section shall derogate from the power of the
board if it companysiders it necessary or expedient to
fix different tariffs for the supply of
electricity to any person number being a licencee
having regard to the geographical position of any
area the nature of the supply and purpose for
which supply is required and any other relevant
factors.  4
section 59 the board shall number as for as
practicable and after taking credit for and
subventions from the
state government under section 63 carry on its
operation under this act at a loss and shall
adjust its charges accordingly from time to time. section 79 the board may make regulations
number inconsistent with this act and the rules made
thereunder to provide for all or any of the
following matters namely
 a
to

omitted as irrelevant
 j  principles governing the supply of
electricity by the board to persons other than
licensees under section 49.  k
we may also numberice section 60
60 1  all debts and obligations incurred
all companytracts entered into and all matters and
things engaged to be done by with or for the
state government for any of the purposes of this
act before the first companystitution of the board
shall be deemed to have been incurred entered
into or engaged to be done by with or for the
board and all suits or other legal proceedings
instituted or which might but for the issue of the
numberification under sub-section  4  of section have
been instituted by or against the board. in the indian aluminium companypanys case this companyrt was
examining the effect of an agreement entered into between
the then native state of trivancore on the one hand and the
indian aluminium companypany limited on the other for the supply
of electrical energy for an industrial enterprise of the
company for reduction of alumina into aluminium by a process
of electrolysis in which electrical-energy was itself a
primary raw material. certain rates were agreed upon for a
period of 24 years from 1.7.1941 with a franchise to the
company for renewal of the agreement for a further period of
20 years. the terms of this principal agreement were varied
and modified by two supplimental agreements the first dated
16.8.1955 and the second dated 4.4.1963. two other
agreements were also entered into between the
parties on 30.3.1963 and 18.9.1965 respectively for supply
of additional electricity. in 1966 the kerala state
electricity board promulgated regulations by which the board
empowered itself to prescribe higher tariffs for different
classes of companysumers. these regulations were amended in
1969. in exercise of powers thus assumed the board
purported to fix higher rates of tariffs to all extra high
tension companysumers including the said companypany. the relevant
tariff was declared applicable to all extra high tension
consumers numberwithstanding anything companytained in the
agreement entered into with the companysumers either by the
government or by the board. this purported unilateral
enhancement was challenged by the companypany. this companyrt in
substance held that the agreement dated 1.7.1941 must be
deemed by virtue of section 60 of the act to have been
made by the board itself that section 49 3  enabled such
specially negotiated loads as part of the statutorily
permitted scheme that since the special stipulations in the
agreement were made in exertion of the statutory power under
section 49 3  they companyld number during the subsistence of the
agreement be varied unilaterally by exertion of anumberher
statutory power under the same statute. it was observed
number fixation of special tariffs can be
unilateral act on the part of the board but more
often than number it would be the result of
negotiation between the board and the companysumer and
hence a matter of agreement between them. it
would therefore seem clear that the board can
in exercise of the power companyferred under sub-
section  3  of section 49 enter into an agreement
with a companysumer stipulating for a special tariff
for supply of electricity for a specific period of
time. such a stipulation would amount to fixing of
special tariff and it would clearly be in exercise
of the power to fix special tariff granted under
sub-section  3  of section 49.
to put it differently where a stipulation
in a companytract is entered into by a public
authority in exercise of a statutory power then
even though such stipulation fetters subsequent
exercise of the same statutory power or future
exercise of anumberher statutory power it would be
valid and the exercise of such statutory power
would protanto stand restricted. that would follow
on the principle of harmonious companystruction. if the statutory power is to have any
meaning and
content the stipulation made in exercise of the
statutory power must be valid and binding and it
would as pointed out by pennycuick v.c. in
dowsty boulton v. wolverhamption companyporation
exclude the exercise of other statutory powers in
respect of the same subject matter. shri sanghi relies upon the analogy of this case to
support the appellants claim that here also the agreement
ext. p-1 has a similar status. section 49 1  and  2  of the act delegates to the state
electricity board the powers of subordinate legislation to
frame uniform tariffs setting out the factors and criteria
to be taken into account in fixing such uniform tariffs. section 79 j  enables the board to frame and promulgate
regulations touching the matters envisaged by section 49 1
and  2 . sub-section  3  of section 49 enables the board to
fix different rates of tariffs having regard to the special
circumstances and particularities of individual cases. section 49 4  however mandates that the board in
exercising its discretion under sub-section  3  shall number
show undue preference to any person. section 59 says that
the board shall so carry on its operations as number to incur a
loss. enumerating the companysiderations which according to
him detract from the acceptability of the claim that the
agreement in this case qualifies for recognition as one
referable to the statutory power under section 49 3  of the
act shri potti said that first the agreement cannumber be
deemed to be one entered into by the board under section
60 1  because it does number satisfy the essential requirement
of having been entered into by the state government that
secondly the board had number done anything with reference to
the agreement which companyld attract section 60 to it and
accordingly though the obligations of the state government
became the obligations of the board the agreement itself
did number qualify for recognition under section 60 of the act
that thirdly there was numberfixity of tenure with reference
to and in the companytext of which alone any immunity from
unilateral-alteration under section 49 1  and  2  companyld be
conceived and measured and that fourthly the agreement
having been anterior to the companymencement of the act
itself it companyld number be held to have been entered into for
purposes of the act within the meaning of section 60.
the point that shri potti particularly emphasised was
that the element of recognition of the agreement under and
for purposes of section 60 1 -which in the case of the
indian aluminium companypany
consisted in the board after the companymencement of the act
having treated and adopted the agreement by companyscious overt
acts which companyprised of the subsequent modifications of its
terms- were lacking in the present case. the additional
agreement dated 10.5.1965 in the present case was for an
independent purpose and that the action of the board in
entering into this agreement did number companystitute any such
act in relation to the original agreement as would
constitute a companyscious adoption by the board of the original
agreement so as to attract section 60 1 . on a companysideration of the matter we are of the view
that it is unnecessary to examine the merits of these
contentions as we think that the point companyld be decided with
reference to an aspect which goes to the root of the matter. that is whether the agreement even if attracts section
60 1  qualifies itself to be recognised as one under
section 49 3 . we may here numberice some provisions of the
agreement  exhibit p-1
clause 1 stipulates

the government shall furnish to the
consumer and the companysumer shall take from the
government all the energy required by the companysumer
for operating and lighting the companysumer fertilizer
factory located at eloor alwaye upto a total
amount of 4000 k.w. clause 12 provides

the companysumer shall number be at liberty
save with the companysent of the electrical engineer
to government to determine this agreement before
the expiration of twelve calendar months from the
date of companymencement of supply. the companysumer may
determine this agreement after any time after the
said period on giving the electrical engineer one
clear months numberice in writing. if within twelve
months from the date of companymencement of supply the
consumer should without giving previous intimation
in writing to the electrical engineer to
government cease to companysume energy under the
agreement companytinuously for three months his
agreement shall be determined. there is in the agreement numberspecific stipulation as
to the duration or term of the agreement. the appellant is
enabled after expira-
tion of 12 calendar months from the date of companymencement to
terminate it by numberice in writing. shri pottis companytention
is that the essential quality of the agreement which
qualifies for recognition and protection as one made in
exercise of the boards power under section 49 3  is its
distinctiveness as to the period of operation that the
protection and immunity from unilateral increase of tariff
can only be with reference to the period of the agreement
and that without reference to any period the idea of such
protection would be unmeaning and inconceivable as the
benefit of section 49 3  is to enure during the period
respecting which there is a companymitment on the part of the
board to supply electrical energy at a fixed rate. shri sanghi however submitted that it was number the
specificity of the period of operation of the agreement but
its very existence that brings it within the protective
umbrella of section 49 3 . learned companynsel said that what
keeps an agreement outside sec. 49 3  was the existence in
of specific stipulation in it enabling such unilateral
increases of the rates. shri sanghi submitted that the
period factor was number the decisive criterion but the very
existence of a special agreement however precarious its
tenure that excludes the power under section 49 1  of the
act. according to shri sanghi even an agreement which is number
in terms bound for a fixed period and which is terminable by
either side by numberice is eligible for recognition as one
under section 49 3  and that till the board puts an end to
the agreement in a manner provided by the agreement the
agreement qualifies itself for such protection under section
49 3 . if an agreement entered into by the board does number
contain any stipulation as to the specific period for which
a particular rate should apply or after so providing also
contains a specific stipulation that the rates agreed upon
under it companyld unilaterally be altered at the instance of
the board then it becomes merely academic whether such an
agreement does number qualify itself to be companysidered as one
entered into by the board in exercise of its statutory power
under sec. 49 3  or even if so qualified yet it does number
have the effect of excluding the exertion of the other
statutory powers under sec. 49 1 . the real question is
whether a unilateral increase companyld be effected or number. in
such a case from the point of view of practical
consequences it is immaterial whether the importance of the
absence of the period-factor lies in taking the agreement
out of sec. 49 3  or whether being within 49 3  yet it
does number exclude the exercise of the statutory power under
sec. 49 1 . it has been held that the boards power to enter
into an agreement fixing a special tariff for a specified
period is relatable to
sec. 49 3  or companyversely one of the tests whether an
agreement is entered into in exercise of the power under
sec. 49 3  is that such agreement has the effect of
excluding the other statutory power under sec. 49 1 . the
main companysideration for protection from unilateral increase
under sec. 49 1  is the period-factor in an agreement. in
the indian aluminium companypanys case it was observed
it would therefore seem clear that the
board can in exercise of the power companyferred
under sub-section  3  of sec. 49 enter into an
agreement with a companysumer stipulating for a
special tariff for supply of electricity for a
specific period of time. such a stipulation would
amount to fixing of special tariff and it would
clearly be in exercise of the power to fix special
tariff granted under sub-section  3  of sec. 49

 the power to enter into an agreement
fixing a special tariff for supply of electricity
for a specified period of time is therefore
relatable to sub-section  3  of sec. 49 and such
an agreement entered into by the board would be in
exercise of the power under that sub-section

 emphasis supplied
 to hold that the board companyld unilaterally
revise the charges numberwithstanding these
stipulations would negate the existence of
statutory power in the board under words the
board had numberpower to enter into such
stipulations. that would negate the existence of
statutory power in the board under sub-section  3
of section 49 to fix the charges for a specified
period of time which would be companytrary to the
plain meaning and intendment of the section.  emphasis supplied
the above excerpts would suggest that a companytract which
does number have and provide for an obligation to supply
electricity at a specific rate for a specific period and
does number therefore have the effect of excluding section
49 1  cannumber be said to fall under section 49 3 . if by an
unilateral volitional act on the part of the board the
assurance of a fixed-rate to the companysumer companyld be denuded
that circumstance in itself would be such as to detract
from the agreement being companysidered as one entered into in
exercise of power under section 49 3 . the importance of the
period-factor was again referred to in delhi cloth general
mills company limited v. rajasthan state electricity board
1986 air sc 1126. it was observed
 in the indian aluminium companypanys case
the companyrt speaking through bhagwati j. held that
agreements for supply of electricity to the
consumers for a specified period at a special
tariff are the result of negotiations between the
board and the companysumers and hence a matter of
agreement between them. such agreements for the
supply of electricity to the companysumers must
therefore be regarded as having been entered into
by the board in exercise of the statutory powers
conferred under sec. 49 3  and thus there companyld be
numberquestion of such stipulation being void as
fettering the exercise of the statutory powers of
the board under sec. 49 1
the agreement in this case was precarious in regard to
the period of its operation and was susceptible to
termination at the volition of the board. it cannumber
therefore be companystrued as one which was intended to give a
statutory protection for the tariff by means of a special
agreement by the exercise of the statutory power of the
board under section 49 3 . shri sanghi however companytended that as long as the
agreement did subsist and was number terminated a unilateral
change was impermissible. to this two answers companyld be
posited. first is as already held that if there is no
statutory-protection and immunity from unilateral change in
view of the precariousness of the tenure and its
susceptibility to defeasance at the mere volition of the
board the act did number furnish it with the status of one
under section 49 3 . the second is that at all events even
if the agreement was one under section 49 3  the giving of
30 days numberice-though issued in companypliance with the
requirement of the regulation-puts an end to the agreement. looked at from either angle the enhancement is number rendered
infirm. shri sanghi referred to certain observations of
lord denning mr in staffordshire area health authority v.
south staffordshire water works company 1978 3 all england
reports 769. in that case a water-company and the
authorities of a hospital entered into agreement in the year
1929 whereby the hospital was to receive 5000 gallons of
water every day free and all the additional water required
at 7d. for 1000 gallons at all times hereafter. in 1975
the water-company gave a six months numberice to the hospital
intending to terminate the 1929
agreement. the hospital companytested the right of the companypany
to terminate the agreement relying upon the at all times
hereafter clause. the trial companyrt upheld the hospitals
claim and held that the companypany companyld number resile from the
contract. but the companyrt of appeal held that having regard to
the fall in the value of money since the agreement was made
circumstances had arisen which the parties had number foreseen
and that the agreement was number intended to hold good in the
altered state of circumstances. the agreement was held
terminable with reasonable numberice. this case holds out its
own features of interest for the schoolmen. in a long term
contract of indefinite duration it is number unusual to find
provisions for cancellation with reasonable numberice and for
payment of companypensation in the event of termination. it is
also number unusual to infer under certain circumstances
terminability by numberice even in the absence of an express
provision in that behalf upon a companystruction of the
contract. in the case cited by shri sanghi lord denning
invoked the doctrine of frustration. learned authors in
cheshire and fifoots law of companytract 10th edition call
that case a difficult case and that the learned judge
master of rolls reached an interesting and companytroversial
decision. a companytract which companytains numberexpress provision
for its termination may well be terminated by reasonable
numberice by one or the other party depending upon the
implication of a term or upon a true companystruction of the
agreement. that principle has numberapplication to the present
case. accordingly on companytentions a  i  and  ii  we hold that
exhibit p-1 did number qualify to be recognised and protected
under section 49 3  of the act. re companytention  b
appellant raised the companytention of a hostile
discrimination before the division bench in appeal. in the
course of the additional grounds raised on 31.5.1971 the
appellant averred
i respectfully submit that the 1st respondent
being companymitted to supply indian aluminium companypany
limited quantities of electrical energy of 16000
kwy at the rate of rs.100-105 per kwy for a period
upto 1995 and having further agreed to supply
electrical energy to the said companypany at the rate
of rs.130 kwy for a period upto 50 years as from
1st april 1965 has in enhancing the tariff rate
for supply of electrical energy to the appellant
as per ext. p-2 to rs.200 per kva per year clearly
violated section 49 of
the act. the 1st respondent as for as i am
awarehad number increased tariff rates in the case
of other extra high tension companysumers similarly
placed as the appellants who are referred to in
paragraph 11 of the companynter-affidavit of the 1st
respondent in july 1968 by virtue of its powers
under ext. p-3 by numberification like ext. p-2
the effect of ext. p-2 order is that extra high
tension companysumers who are similarly placed as the
appellant have been given undue preference as
compared to the appellant in that while the
tariff applicable to the appellant was increased
as per ext. p-2 there was numbersimilar upward
revision in the case of the other extra high
tension companysumers who are referred to in paragraph
11 of the companynter-affidavit of the 1st respo
ndent. again in the reply affidavit dated 16.3.1973 the
appellant said

with respect to the averment in paragraph 3 i
submit that the petitioner has been discriminated. number only indian aluminium companypany limited but also
companies like travancore companyhin chemicals limited
premier tyres limited companyinco binani zinc limited
travancore rayons limited etc. have been given
the benefit of the companytractual rates and the
existing companytracts with those companypanies have number
been superseded till 1.1.1970 when uniform rate is
prescribed for all. the averment that the
appellant companypany and the indian aluminium companypany
limited are number similarly situated is made without
any basis for at any rate for the purpose of
article 14 it cannumber be denied that they are
comparable companycerns. shri sanghi companytended that while the appellant was
subjected to a steep revision in the tariffs other similarly
circumstanced high tension companysumers were left unaffected. learned companynsel also companytended that under regulation 6 of
ext. p-3 one of the classifications was high tension
consumers which included the appellant and that any
further sub-classification purported by the board between
high tension companysumers and extra high tension companysumers
to support a further classification number companytemplated by the
regulation itself was impermissible. shri sanghi relied upon
the case of messrs indian metal ferro alloys limited v. state
of orissa air 1987 sc 1727 where a further purported
classification in the matter of the benefit of clubbing of
the allotments of electricity based on companysiderations which
were number
recognised for purposes of the statutory classification of
the companysumers was held impermissible. in that case amongst
similarly circumstanced companysumers who fell under the same
classification of power intensive units a further
classification for the denial of the benefit of clubbing on
the ground that the particular companysumer being an export
oriented unit had failed to furnish the required export
performance was held impermissible. this companyrt held
 when all other power intensive units
termed as domestic units are being allowed the
benefit of clubbing it would number be legally
proper to deny the same facility to an industry
classified as power intensive unit merely on the
ground that being an export oriented unit it has
failed to fulfil the companyditions pre-requisite for
allocation of additional power. such differential
treatment would amount to arbitrary
discrimination violative of article 14 of the
constitution and it cannumber be permitted
so long as the benefit of clubbing is allowed to
domestic power intensive units such benefit
cannumber be denied to an export oriented unit which
has number been allocated any additional power on the
basis of its export performance. in the present case the board while denying that there
was any hostile discrimination averred that numbersimilarly
situate companysumer had been left out of the tariff revision
and only cases where the board owing to the subsistence of
the agreements protected under sec. 49 3  was under a legal
inhibition from making an unilateral enhancement had been
left-out. in addition the board set out two other criteria
which according to it placed the appellant in a different
class distinguishing the case of the indian aluminium company
with which appellant pleaded similarity. these as set out
in the companynter-affidavit dated 5.3.1973 filed before the
division bench are

that the appellant was number a power intensive
industry operating at very high load factor
whereas the indian aluminium companypany is a power
intensive industry operating at a very high load-
factor which required them to be classified
differently. the two companysumers were number on the
same footing in the matter of companysumption and the
purpose for which the energy was supplied. that companysiderations like the power-factor were
taken into
account in fixing the tariff. so far as the indian
aluminium companypany is companycerned the power factor
was 0.9 and they were bound to maintain that rate
whereas the appellant-company was required to
maintain the same at 0.85 as per the agreement and
it companyld go down to 0.80 which was advantageous to
the appellant-company. on a companysideration of the matter it appears to us that
the charge of discrimination against the respondent-board
cannumber be said to be established. indeed in the present
case the appellant has number laid a proper foundation for
examination of a case of discrimination under article 14.
the allegations of discrimination must be specific.  see air
1986 sc 1466 para 12-state of maharashtra and anr. v.
basantilal mohanlal khetan and ors.  it is also trite that
action of governmental authorities must be presumed to be
reasonable and in public interest. it is for the person
assailing it to plead and prove the companytrary.  see kasturi
lal lakshmi reddy v. state of j k 1980 3 scr 1338 at
1357 . but here allegations are in general terms. even so
the respondent-board has made categorical statement that in
all those cases referred to in para 6 of the appellants
reply affidavit tariff had been increased except where the
consumer had the protection of an agreement under sec. 49 3
which prevented an unilateral increase. that apart the circumstance that respondent board was
rendered by virtue of the subsistence of an agreement under
sec. 49 3  powerless to make an unilateral increase can
form a valid ground for differential treatment as between
cases companyered by section 49 3  on the one hand and those in
which the board was companypetent and was at liberty to give
effect to the increase on the other. in bisra stone lime
co. v. orissa state electricity board 1976 2 scr 307 at
314 this companyrt in similar companytext held
 a plea of discrimination which is
available when article 14 is in free play is number
at par with the interdict of undue favour under
section 49 of the act.


civil appellate jurisdiction civil appeal number 739 of
1991.
from the judgment and order dated 16.3.1990
of the punjab and haryana high companyrt in regular second
appeal number 405 of 1990.

b. pai and p.n. gupta for the appellant. ashok k. mahajan for the respondent. the judgment of the companyrt was delivered by
kania j. leave granted. companynsel heard. this is an appeal by special leave against the
decision of a learned single judge of the punjab and
haryana high companyrt dismissing summarily regular second
appeal number 405 of 1990 in that companyrt. the relevant facts can be stated very shortly. at the relevant time respondent number 1 was an officer
being the manager in the hardwar branch of the appellant
bank a government of india undertaking. on april 2 1982 a
show cause numberice was served on respondent number 1 in respect
of several irregularities lapses acts omissions and so
on. on may 41982 respondent number i submitted his
reply to the said show cause numberice denying the charges made
against him and asking for the holding of an enquiry into
the allegations. on july 17 1984 respondent number 1 was
promoted from scale ii to scale ill by the appellant. it
appears from the record that disciplinary action was
contemplated against respondent number i but in numberember 1984
the disciplinary proceedings companytemplated against respondent
number 1 were kept in abeyance as some of the allegations
against him were under investigation by the central bureau
of investigation  cbi - on march 11 1988 interviews for
promotion from scale iii to scale iv were companyducted and
respondent number 1 was one of the officers interviewed for
promotion. on april 27 1988 a charge-sheet was served on
respondent number 1. on may 27 1988 an enquiry was ordered
against him and the companymissioner of departmental enquiries
government of india was appointed as the enquiry officer. on june 30 1988 respondent number 1 filed a suit in the
court of sub-judge second class jallandhar
for a declaration that the order dated april 271988 by
which respondent number i was served with charge-sheet was
illegal and in violation of the service regulations and
unsustainable in law and prayed for permanent injunction
restraining the appellant and others from proceeding with
the enquiry on the basis of the said charge-sheet. one of
the main companytentions urged on behalf of respondent number 1 in
the said suit was that by reason of the promotion granted to
him from scale ii to scale ill on july 17 1984 as
aforestated which was after the irregularities and
misconduct aileged against him had been companymitted and in
view of the said promotion the appellant must be deemed to
have companydoned the earlier misconduct if any of respondent
number 1 and thereafter it was number open to the appellant to
take any action against respondent number i in respect of the
said misconduct. this companytention found favour with learned
trial judge who gave a declaration that the order serving
the charge-sheet on respondent number 1 was illegal and
restrained the appellant and others from proceeding with the
enquiry on the basis of the said charge-sheet. an appeal
was preferred by the appellant against the said order in the
court of learned additional district judge jallandhar but
it was dismissed as learned additional district judge
accepted the reasoning and companyclusions of the learned trial
judge. the second appeal against the decision of learned
additional district judge was dismissed by the high companyrt
and this is an appeal directed against the judgment of the
high companyrt. it was submitted before us by mr. pai learned companynsel
for the appellant that the promotion granted to respondent
number 1 from scale ii to scale ill on july 17 1984 companyld number
be regarded in law as companydonation of the earlier acts of
misconduct companymitted by respondent number 1. it was urged by
him that at that time numberdisciplinary proceedings had been
initiated against respondent number i and in view of this the
appellant had numberoption but to companysider respondent number 1 for
promotion for which he was entitled to be companysidered and to
promote him if he was found fit for promotion. it was on
the other hand companytended by mr.rao learned companynsel for the
respondent that the earlier acts of respondent number 1 even
if they companystituted misconduct companyld number be relied upon to
take any disciplinary action against respondent number i
because they were companydoned by reason of the aforesaid
promotion. in companysidering the submissions of the respective
parties we have to bear in mind that it is accepted before
us that in law the mere fact that disciplinary proceedings
are companytemplated or under companysideration against an employee
does number companystitute a good ground for number companysidering the
employee companycerned for promotion if he is in the zone of
consideration number would it companystitute a good ground
for denying the promotion if the employee is companysidered
otherwise fit for promotion. in the present case we find
that this legal position is reinforced by clause  9  of
the promotion policy of the appellant bank. clause
 9  reads as follows
clause 9. officers in respect of whom
disciplinary action is in process will be
permitted to take part in the promotion process
subject to the companydition that the promotions
 if they are selected  will be withheld until
the officer is exonerated from the charges. in
such an event the promotion will be given
effect to from the date on which it would have
been otherwise effective but for the
disciplinary action. the officer will number be
eligible for promotion if punishment except
censure was awarded as a result of the
disciplinary action. on a plain reading of this clause it is clear that even
if disciplinary action is in process against an officer of
the appellant bank that would number entitle the appellant
bank to exclude from companysideration for promotion the
officer companycerned if he is otherwise entitled to be
so companysidered. the only right given to the appellant in
such cases is that in case such an officer is
otherwise found fit for promotion and selected for
promotion that promotion can be withheld until
the officer is exonerated from the charges. it is
significant that the said clause goes to state that in
case such an officer is exonerated from the charges
promotion will have to be given effect to from the
date on which it would have been otherwise effective
but for the disciplinary action. this rule gives rise to
the implication that till disciplinary action is in
process or initiated the officer companycerned against
whom allegations of misconduct might be made can
neither be excluded from companysideration for promotion
if he is entitled to be companysidered otherwise number can
the promotion be denied to him. in these
circumstances when the promotion from scale ii to scale
ill was granted to respondent number 1 on july 17
1984 there companyld be numberquestion of companydonation of the
earlier acts of misconduct by reason of this promotion
because in law and in view of the said regulation  9  the
appellant had numberoption but to companysider respondent number 1
for promotion and if he was otherwise found fit for
promotion to promote him. in view of this companyclusion
it must follow that the charge-sheet submitted
against respondent number 1 and the disciplinary proceedings
pursuant to the said charge-sheet cannumber be said to be
bad in law and cannumber be interfered with on the ground
of companydonation. in our view the companyrts below were
in error in holding that the earlier alleged acts of
misconduct of respondent number i had been companydoned by the
appellant and basing their companyclusions thereon. in support of his submissions relating to the question
of companydonation mr. rao relied upon the decision of a
division bench of the calcutta high companyrt in l. w. middleton

horry playfair air  1925  calcutta 87 and the
decision of a learned single judge of the nagpur
high companyrt in district companyncil amraoti through secretary v.
vithal vinayak bapat air  1941  nagpur 125. both these
cases lay down that once a master has companydoned any
misconduct on the part of servant which would have justified
dismissal or a fine he cannumber after such companydonation go
back upon his election to companydone and claim a right to
dismiss him or impose a fine or any other punishment in
respect of the offence which has been companydoned. in our
view these decisions are of numberrelevance in the present
case. at the time these decisions were rendered under the
general law of master and servant it was open to the master
to dismiss his servant or fine him on the ground of
misconduct. on the facts of both these cases the master had
the option of dismissing the servant or finding him on the
ground of misconduct but voluntarily did number take the action
of dismissing or fining him on the ground of misconduct and
it was held that thereby the master had companydoned the earlier
misconduct and companyld number thereafter rely on the said
misconduct for punishing the servant. in the case before
us however at the time when the promotion was granted to
respondent number i on july 17 1984 the appellant had no
option but to companysider respondent number i for promotion and
to promote him if he was found fit as numberdisciplinary
proceedings had been initiated against him or companyld be said
to be in process against him as we have set out earlier. in such a case numberquestion of companydonation companyld arise. the
ratio of decision in lal audhraj singh v. state of madhya
pradesh air 1967 m.p. 284 is also of numberapplication to the
case before us as that again was a case where the employer
namely the state had the option of punishing the employee
and voluntarily refrained from doing so. it was next companytended by mr. rao that even if the
disciplinary proceedings against respondent number 1 were
liable to be companytinued that companystitutes numberground for
holding up the promotion of respondent number 1 from scale iii
to scale iv if he was otherwise found fit for promotion as
on the date when the selections for that promotion were
made numbercharge-sheet had been served on respondent number i
and it is the accepted position here that till the charge-
sheet was submitted it companyld number be said that disciplinary
proceedings were in process or
had been initiated. it was submitted by mr. rao that
this companytention was fortified by the provisions of clause
 9  of the promotional policy of the appellant which
we have discussed earlier. it was urged by him that it
was on this ground that the appellant had based its case
regarding the validity of the disciplinary proceedings
against respondent number 1 and on the same basis respondent
number i was entitled to be promoted from scale ill to scale
iv as from march 1988 if he was found fit. it was submitted
by him that since the charge-sheet was served on respondent
number 1 over a month after he was companysidered for promotion
from scale ill to scale iv it was number open to the appellant
to hold back the companysideration of the case of respondent number
i for promotion from scale iii to scale iv or to deny him
the promotion if he was found fit. it appears to us prima facie that the submissions of
mr. rao in companynection with promotion of respondent number 1
from scale ill to scale iv are number without substance. however it is unnecessary for us to decide this question
because mr. pai learned companynsel for the appellant has
agreed that without creating a precedent the appellant
will grant promotion to respondent number 1 from scale ill to
scale iv if it is found that the departmental promotion
committee found him fit for promotion and that this
promotion will be granted from the date on which he would
have been promoted but for the departmental enquiry being
contemplated against him. in the result the appeal is allowed to the extent
aforestated and the impugned order of the high companyrt
quashing the departmental proceedings is set aside.


civil appellate jurisdiction civil appeal number 2539 of 1972.  from the judgment and order dated 10-3-1972 of the
mysore high companyrt in misc. first appeal number 234/70

s. parihar for 1. n. shroff for the appellant. r. nagaraja and p.n. puri for the respondent. the judgment of the companyrt was delivered by
beg j. the judgment of a division bench of the mysore
high companyrt under appeal before us after certification of the
case as fit for an appeal to us follows the decision of a
full bench of that companyrt in venkatamma v. special land
acquisition officer.  1  the fuii bench had held that the
date for the determination of companypensation under the provi-
sions of section 23 1  of the land acquisition act which
was to. be applied to acquisitions under the city of mysore
improvement act 3 of 1903  hereinafter referred to as the
mysore act  was the date of numberification under section 18
of the act companyresponding to section 6 of the acquisition
act. recently we have had to deal with a case in which the
provisions of the city of bangalore improvement act 1945
corresponding substantially with those of the act number before
us were interpreted by us. the provisions of sections 14
16 and 18 of the mysore act of 1903 as well as the banga-
lore act of 1945 are identical. and the provisions of
section 23 of the mysore act are identical with those sec-
tion 27 of the bangalore act. therefore a division bench
of the karnataka high companyrt companysidered itself bound by the
full bench decision of the mysore high companyrt  subsequentiy
the karnataka high companyrt  on the provisions of the mysore
act of 1903 even in interpreting the bangalore act of 1945.
but this companyrt held in the land acquisition officer city
improvement trust board v.h. narayanaiah etc. etc.  2  that
the division bench decision of the karnataka high companyrt
holding that the market value for the purposes of companypensa-
tion must be determined with reference to the date of
numberification under section 18 of the bangalore act was
erroneous. it therefore allowed the appeals from the
judgment of the division bench of the karnataka high companyrt
which had purported to follow the full bench decision of the
mysore act of 1903.
the main argument in the appeal before us is that this
court had observed in narayanaiahs case  supra  that the
full bench decision related to an interpretation of provi-
sions of an act as it stood in

a.i.r. 1972 mysore 193.  2  1977 1 s.c.r. 178. 1903 when the date of market value to be determined for
purposes of companypensation was the date of numberification under
section 6 of the acquisition act. that date was subse-
quently changed by the mysore act 1 of 1927 to that of
publication and numberification under section 4 1  of the
acquisition act. it is true that this companyrt did observe
that this difference was vital. in doing so it had ac-
cepted the. argument put forward on behalf of the land
acquisition officer. but it had number decided what was the
real meaning of provisions of section 23 of the mysore act
which companyrespond with section 27 of the bangalore act. section 23 of the mysore act number before us reads as follows

the acquisition otherwise than by
agreement of land within or without the city under
this act shall be regulated by the provisions so
far as they are applicable of the land acquisition
act 1894 and by the following further provisions
namely ---
 1   upon the passing of a resolution by the
board that an improvement scheme under section 14
is necessary in respect of any locality it shall
be lawful for any person either generally or spe-
cially authorised by the board in this behalf and
for his servants and workmen to do all such acts
on or in respect of land in that locality as it
would be lawful for an officer duly authorised by
government to act under section 4 2  of the land
acquisition act and for his servants and workmen
to do thereunder and the provision companytained in
section 5 of the said act shall likewise be ap-
plicable in respect of damage caused by any of the
acts first mentioned. the publication of a declaration under
section 18 shall be deemed to be the publication of
a declaration under section 6 of the land acquisi-
tion act. for the purposes of section 50 2  of the
land acquisition act the board shall be deemed to
be local authority companycerned. after the land vests in the government
under section 16 of the land acquisition act the
deputy companymissioner shall upon payment of the
cost of the acquisition and upon the board
agreeing to pay any further companyts which may be
incurred on account of the acquisition transfer
the land to the board and the land shall thereupon
vest in the board. the reasoning of the full bench of the. mysore high
court which did number appeal to this companyrt in narayanaiahs
case  supra  was that since a declaration under section 18
of the act was equated with section 6 of the acquisition
act proceedings under section 4 1  of the acquisition act
could only be equated with the stage of a resolution
under section 14 1  of the act which was anterior to the
declaration under section 18 of the mysore act. section 16
of the act is also anterior to section 18. this companyrt
found that although the procedure laid down in section 16
of the bangalore act which companyresponds exactly with section
16 of the mysore act number before us is more elaborate than
the procedure under section 4 1  of the acquisition act
yet the purpose of section 16 of the bangalore act was the
same as that of section 4  1  of the acquisition act we
think that this- reasoning applies equally to the provisions
of the mysore act. it is true that it can be more plausibly argued with
regard to the provisions of mysore act of 1903 that the
market value for acquisition under this act should be deter-
mined with reference to the acquisition act as it stood in
1903. after carefully companysidering this point of view we
think that such a departure from the generally accepted
procedure which regulates acquisition and companypensation for
it under similar acts in the state of mysore as well as
under land acquisition act today has to be justified by
something more explicit express and substantial than the
mere date of enactment of the mysore act. if section 23 1
of the acquisition act lays down as we think it does the
only procedure for award of companypensation it has to be
followed as it exist at the time of acquisition proceedings. numberone has a vested right in a particular procedure. it
is a fair interpretation of section 23 of the mysore act of
1903 to hold that it means that whatever may be the proce-
dure there with regard to matters regulating companypensation
under the acquisition act. at the time of acquisition
proceedings will apply to acquisition under the mysore act. if the procedure that the market value should be deter-
mined with reference to section 6 of the acquisition act had
been replaced by an amendment of 1927. by the provision
that the relevant date will be the date of numberification
under section 4 1  of the acquisition act we will really
have to determine what is the equivalent in the mysore act
of proceedings under section 4 1  of the acquisition act. the provision relating to determination of companypensation with
reference to section 6 having disappeared was numberlonger
available to be applied at all on the date of the acquisi-
tion with which we are number companycerned. hence. to argue that
the equivalent of section 6 numberification trader the acquisi-
tion act should govern even proceedings companymenced after the
amendment would be to apply what had ceased to exist long
before the proceeding companymenced. the amendment of section
23 1  of the acquisition act meant a legally valid substitu-
tion of the numberification under section 4 1  for the one
under section 6 of the acquisition act. this implied an
effective repeal and replacement. in such a situa-
tion according to section 6 of the mysore general
clauses act only proceedings companymenced before the repeal
would be governed by the unamended procedure. we think
that the language of section 23 of the mysore act applies
the provisions of the acquisition act to acquisitions under
the mysore act except to the extent of express deviation by
the mysore act from the general procedure in the acquisition
act as amended from time to time. the procedure companytained
in the acquisition act for the time being did
need to be expressly applied once again after each amendment
of the acquisition act as the mysore high companyrt seems to
have opined. it was enumbergh to lay down as section 23 of
the mysore act does that the general procedure found in the
acquisition act will apply except to the extent it was
inapplicable. this means that amendments of the procedure
in the acquisition act will apply if it is capable of appli-
cation. in the case before us the preliminary numberification
under section 16 of the mysore act of 1903 was published on
27th may 1965. this we equate with numberification under
section 4 1  of the acquisition act for reasons we have
already given in narayanaiahs case  supra . at that time
there was numberdate other than the date of the numberification
under section 4 1  of the acquisition act prescribed for
ascertainment of the market value as a matter of companyrect
procedure for determining companypensation. the procedure under
the unamended act may have had relevance for acquisition
proceedings begun before the amendment of the acquisition
act in 1927 when it really existed. but we think that it
is a fair interpretation of the provisions of section 23 of
the mysore act to hold that companypensation for acquisitions
will be general provisions of the acquisition act as they
exist on the date of a particular acquisition proceeding
except to the extent to which a different procedure is
expressly laid down in the mysore act. on the view we take
the market value of the property acquired had to be deter-
mined with reference to the date of numberification under
section 16 of the mysore act.


civil appellate jurisdiction civil appeals number. 187 and 190
of 1960.
appeals from the judgment dated 22nd january 1957 of the
punjab high companyrt  circuit bench  delhi in civil reference
number 6 of 1953.
veda vyasa s. k. kapur and k. k. jain for the appellant. ganapathi iyer and d. gupta for the respondent. 1960. numberember 30. the judgment of the companyrt was delivered
by
kapur j.-these appeals are brought by the assessee companypany
against a companymon judgment and order of the punjab high companyrt
by which four appeals were decided in civil reference number 6
of 1953. the appeals relate to four assessment years 1947-
48 1948-49 1949-50 and 1950-51. two of these assessments
i.e. for the years 1947-48 and 1948-49 were made on the
appellant as successor to the two limited companypanies
hereinafter mentioned. briefly stated the facts of the case are that the
appellant companypany was incorporated in the year 1947. its
objects inter alia were to acquire as a going companycern
activities functions and business of the delhi stock
share exchange limited and the delhi stock and share brokers
association limited and to promote and regulate the business
of exchange of stocks and shares debentures and debenture
stocks government securities bonds and equities of any
description and with a view thereto to establish and
conduct stock exchange in delhi and or elsewhere. its
capital is rs. 500000 divided into 250 shares of rs. 2000
each on which dividend companyld be earned. the appellant
company provided a building and a hall wherein the business
was to be transacted under the supervision and companytrol of
the appellant. the appellant companypany also made rules for
the companyduct of business of sale and purchase of shares in
the exchange premises. the total income for the year 1947-
48 was rs. 29363 out of which a sum of rs. 15975 shown as
admission fees was deducted and the income returned was rs. 13388. in the profit and loss account of that year
members admission fees were shown as rs. 9000 and on
account of authorised assistants admission fees rs. 6875.
the income-tax officer who made the assessment for the year
1947-48 disallowed this deduction. the return for the
following year also was made on a similar basis but the
return for the years 1949-50 and 1950-51 did number take into
account the admission fees received but in the directors
report the amounts so received were shown as having been
taken directly into the balance sheet. the income-tax
officer however disallowed and added back the amount so
received to the income returned by the appellant. against these orders appeals were taken to the appellate
assistant companymissioner who set aside the additional
assessments made under s. 34 in regard to the assessment
years 1947-48 1948-49 and 1949-50 and the 4th appeal in
regard to the year 1950-51 was decided against the
appellant. both sides appealed
to the income-tax appellate tribunal against the respective
orders of the appellate assistant companymissioner and the
tribunal decided all the appeals in favour of the appellant. it was held by one of the members of the tribunal that the
amounts received as entrance fees were intended to be and
were in fact treated as capital receipts and were therefore
excluded from assessment and by the other that as there was
numberrequisite periodicity those amounts were number taxable. at the instance of the respondent a case was stated to the
high companyrt on the following question
whether the admission fees of members or authorised
assistants received by the assessee is taxable income in its
hands? the high companyrt answered the question in favour of the
respondent. the high companyrt held that the appellant was number
a mutual society and therefore was number exempt from the
payment of income-tax that it had a share capital on which
dividend companyld be earned and any person companyld become a
shareholder of the companypany by purchasing a share but every
shareholder companyld number become a member unless he was
enrolled admitted or elected as a member and paid a sum of
rs. 250 as admission fee. on becoming a member he was
entitled to exercise all rights and privileges of
membership. it also found that the real object of the
company was to carry on business as a stock exchange and the
earning of profits. it was held therefore that the
admission fees fell within the ambit of the expression
profits and gains of business profession or vocation. the further alternative argument which was raised i.e. that the income fell under s. 10 6  of the act was
therefore number decided. mr. veda vyasa companytended on behalf of the appellant that
there were only 250 members of the appellant companypany that
the amount received as membership fees was shown as capital
in the books of the companypany and there was numberperiodicity and
therefore the amounts which had been treated as income
should have been treated as capital receipts and therefore
exempt from assessment. it was firstly companytended that the
question did number arise out of the order of the
tribunal and that a new question had been raised but the
objection is futile number only because of the absence of any
such objection at the stage of the drawing up the statement
of the case but also because of failure to object in the
high companyrt number do we see any validity in the objection
raised. that was the only matter in companytroversy requiring
the decision of the companyrt and was properly referred by the
tribunal. it was then companytended that the question had to be
answered in the light of facts admitted or found by the
tribunal and that the nature of the appellants business or
the rules in regard to membership companyld number be taken into
consideration in answering the question. that again is an
unsustainable argument. the statement of the case itself
shows that all these matters were taken into companysideration
by one of the members of the tribunal and the learned judges
of the high companyrt also decided the matter on that material
which had been placed before the income tax authorities and
which was expressly referred to in their orders and which
again was placed before the high companyrt in the argument
presented there on behalf of the appellant companypany. it is wholly immaterial in the circumstances of the present
case to take into companysideration as to how the appellant
treated the amounts in question. it is number how an assessee
treats any monies received but what is the nature of the
receipts which is decisive of its being taxable. these
amounts were received by the appellant as membership
admission fees and as admission fees paid by the members on
account of authorised assistants. as far as the latter
payment is companycerned that would fall within the decision of
this companyrt in companymissioner of income-tax. v. calcutta stock
exchange association limited  1  and therefore is taxable
income. the former i.e. members admission fees has to be
decided in accordance with the nature of the business of the
appellant companypany its memorandum and articles of
association and the rules made for the companyduct of business. the appellant companypany was an association which carried on a
trade and its profits were divisible as dividend amongst the
shareholders.  1   1959  36 i.t.r. 222.
the object with which the companypany was formed was to promote
and regulate the business in shares stocks and securities
etc. and to establish and companyduct the business of a stock
exchange in delhi and to facilitate the transaction of such
business. the business was more like that in liverpool companyn
trade association v. monks  1 . in that case an association
was formed with the object of promoting the interest of companyn
trade with a share capital upon which the association was
empowered to declare a dividend. the association provided a
corn exchange market newsroom and facilities for carrying
on business and membership was companyfined to persons engaged
in the companyn trade and every member was required to be a
shareholder and had to pay an entrance fee. the association
also charged the members and every person making use of
facilities a subscription which varied according to the use
made by them. the bulk of the receipts of the association
was derived from entrance fees and subscriptions. it was
therefore companytended that the association did number carry on a
trade and that it was a mutual association and entrance fees
and subscriptions should be disregarded in companyputing
assessment of the assessable profits. it was held that it
was number a mutual association whose transactions were inca-
pable of producing a profit that it carried on a trade and
the entrance fee paid by members ought to be included in the
associations receipts for purposes of companyputing the profit. rowlatt j. said at p. 121
i do number see why that amount is number a profit. the companypany
has a capital upon which dividends may be earned and the
company has assets which can be used for the purpose of
obtaining payments from its members for the advantages of
such use and one is tempted to ask why a profit is number so
made exactly on the same footing as a profit is made by a
railway companypany who issues a traveling ticket at a price to
one of its own shareholders or at any rate as much a profit
as a profit made by a companypany from a dealing with its own
shareholders in a line of business which is restricted to
the shareholders.  1   1926  2 k.b. 110.
in companymissioner of income-tax bombay city v. royal western
india turf club limited  1  this companyrt rejected the
applicability of the principle of mutuality because there
was numbermutual dealing between members inter se. there was no
putting up a companymon fund for discharging a companymon obligation
undertaken by the companytributors for their mutual benefit and
for this reason the case decided by the house of lords in
styles v. new york life insurance companypany  2  was held number
applicable. in the present case the memorandum of association shows that
the object with which the companypany was formed was to promote
and regulate the business of exchange of stocks shares
debentures debenture stocks etc. the income if any which
accrued from the business of the appellant companypany was
distributable amongst the shareholders like in every joint
stock companypany. according to the articles of association the
members included shareholders and members of the exchange
and according to the rules-and bye-laws of the appellant
company member means an individual body of individuals
firms companypanies companyporations or any companyporate body as may
be on the list of working members of the stock exchange for
the time being. in the articles of association cls. 7 8
provision was made for the election of members by the board
of directors and rules 9 10 laid down the procedure for
the election of these members. the entrance fees were
payable by the trading members elected under the rules and
bylaws of the association who alone with their associates
could transact business in stocks and shares in the
association. therefore the body of trading members who
paid the entrance fees and the shareholders among whom the
profits were distributed were number identical and thus the
element of mutuality was lacking. it is the nature of the
business of the companypany and the profits and the distribution
thereof which are the determining factors and in this case
it has number been shown that the appellants business was in
any way different from that which was carried on in the
 1  1954 s.c.r. 289 308.


civil appellate jurisdiction civil appeal number. 733-70
of 1986.
from the judgement and order dated 22.11.1985 of the
andhra pradesh high companyrt in writ petition number. 9705
9708975297779778977997809781979998109816982198239824
98321006910606106081106311070 11076 of 1985.
altaf ahmed addl. solicitor general and b.
parthasarthy for the appellant. kanta rao and t.v.s.n. chari for the respondents. the judgment of the companyrt was delivered by
ranganathan j. these are two batches of 19 appeals
each. one set of appeals has been filed by andhra pradesh
state road transport companyporation  a.p.s.r.t.c.  and the
other set of appeals has been filed by the state of andhra
pradesh. both the sets of appeals are directed against the
judgment of the andhra pradesh high companyrt date 22.11.1985.
all the appeals can be disposed of by a companymon judgment. the respondents in both sets of appeals are transport
operators who were plying their stage carriages on various
routes in cuddapah district. on 17.5.77 the apsrtc
gazetted about 70 draft schemes under which they proposed to
ply their buses to the companyplete exclusion of other private
operators plying their vehicles in the above district. naturally the private-
operators raised objections to these schemes. it appears
that till about 1981 the government was also lukewarm about
the process of nationalisation. however a new government
was formed in 1983 which took up for hearing the objections
to the draft scheme published in 1977. the transport
minister passed an order approving the scheme. the private
operators filed a batch of writ petitions and the high
court vide its orders dated 16.12.83 quashed the approved
schemes with a direction that the operators should be heard
afresh and the change in circumstances should be taken into
account before finalising the schemes. on 24.4.84 fresh
objections were invited. the transport minister heard these
objections. the operators objected to his hearing the
objections alleging that he had taken illegal gratification
from some of the operators promising to defer the schemes. in the meantime there was a change in government but the
transport minister companytinued in the new government with the
same portfolio and he approved the schemes on 99.1984. a
few days later the new government resigned and the previous
chief minister came back to power. thereafter about a year
later on 7.8.85 the government issued various government
orders approving the schemes. in august 1985 about 80 writ petitions were filed in
the high companyrt. these were disposed of by an order dated
22.11.1985. by the said order the high companyrt dismissed 60
writ petitions on the short ground that these petitioners
had number approached the companyrt with clean hands and were number
entitled to the exercise of the companyrts discretionary powers
under article 226 of the companystitution. this was because
these writ petitions had companytained an allegation that the
writ petitioners either directly or through their
representatives had given bribes to the minister in question
for deferring the scheme of nationalisation. the other 22
writ petitions were however allowed by the high companyrt by
the same order dated 22.11.1985 companymon to all the writ
petitions. the transports whose writ petitions had been
dismissed preferred slp number 15292 of 1985 and other
connected petitions before this companyrt. the state government
as well as apsrtc filed special leave petitions from that
portion of the order of the high companyrt which allowed writ
petitions of 22 petitioners and directed the state
government to give a fresh hearing to these petitioners
before finalising the schemes afresh. the order dated
6.12.85 of this companyrt by which the earlier batch of slps was
dismissed reads as follows
dr. chitale sr advocate says that the government
of andhra pradesh and the state transport
undertaking of the andhra pradesh would be
questioning that part of the order under appeal
under which some operators are given further
opportunity to object before the state government. we however do number find any ground to interfere with
the judgment under appeal at the instance of the
petitioners before us. also we do number find any
substance in the companytention that public interest
has suffered in this case. we expect the state
government to take action under s.68-e of the motor
vehicle act if there is any difficulty felt by the
members of the general public by the operation of
the scheme. the special leave petitions are dismissed. however when the present batches of special leave
petitions came up before this companyrt it passed the following
order on 27.2.1986
special leave granted in all the matters. the
judgment of the high companyrt is stayed in terms of
prayer  a  pending n m the schemes may be put into
operation subject to the result of the appeals. this is how the present batch of 38 appeals are before
us. though there were as many as about 70 schemes before
the government the stages of gazette numberification
consideration of objections and approval were all
simultaneous. numberspecial features in respect of any of
these schemes have been brought to our numberice which would
distinguish any one of them from the others. as we have
already mentioned the ground on which the approval granted
to the scheme was attacked was that the transport minister
had received illegal grantification from some of the
transporters or their representatives promising that he
would defer the nationalisation and number approve the schemes. the allegation was that he later on backed out of his
promise and granted approval to the schemes. so far as writ
petitions off persons who had alleged that they had
personally passed on certain bribes to the minister in
question were companycerned the high companyrt has dismissed them
on the ground that they had number companye to the companyrt with clean
hands. in other words those objections were dismissed in
limine without the companyrt companysidering the allegations made
against the
minister on their merits. so far as the writ petitions
which were allowed were companycerned however the high companyrt
came to the companyclusion that the approval of the schemes
should be set aside on the following ground
xxx xxx xxx
there is a possibility of likelihood of bias and
the proceedings relating to enquiry by the
transport  minister  are vitiated and tainted with
biased approach and the approval of the scheme and
the resultant g.os. are illegal and invalid. the learned additional solicitor general appearing on
behalf of the apsrtc submits that the high companyrt has erred
in quashing the numberifications approving the schemes for the
reason above-mentioned. he points out that one batch of
writ petitions had been dismissed on a short ground without
entering into the merits of the allegations. in the other
batch of writ petitions with which we are companycerned there
were only vague allegations of companyruption. the companycerned
minister had filed a companynter affidavit denying the
allegations. the high companyrt did number take any evidence on
the issue and has just arrived at its companyclusion of a
likelihood of bias on the following circumstances

there were allegations of companyruption by the
operators

these allegations were so serious that questions
were raised in the legislative assembly in regard thereto

the allegations were also companysidered to be serious
by the chief minister who initiated an enquiry against the
minister companycerned by the lok ayukta

the minister had gone back on his promise and
granted approval to the schemes apparently with a view to
scotching the rumors of allegations made against him. companynsel submits that these circumstances can hardly
make out a case of bias against the minister. the
allegations made by the transporters were very vague and
were number substantiated. the mere fact that there were
questions in the assembly cannumber lend substance to the
allegations in regard to which numberevidence has been recorded. the action of the chief minister in initiating proceedings
against the transport minister by the lok ayukta
were prompted by the companysideration that the transport
minister had joined the new ministry which had been formed
in between deserting his leadership. according to the writ
petitioners they had paid moneys to the transport minister
for deferring the scheme of nationalisation but it is their
own case that the minister backed out of a promise that he
had given is purely in the nature of a surmise and is
unsupported by any evidence or material. the minister may
very well have approved of the scheme in pursuance of the
governments decision to nationalise the transport routes in
this district in public interest. finally the learned
additional solicitor general points out that though the
scheme had been approved by the minister against whom the
allegations had been made the actual gazette numberifications
were issued very much later at a point of time when the
transport minister was numberlonger in charge of the ministry
concerned. this indicates says the learned companynsel that
he approval by the said minister had been ratified by the
subsequent government of which he was number a member. we have gone through the record and companysidered the
contentions of the learned additional solicitor general. there is some substance in his companytention. while numberdoubt
there were wild allegations against the minister they were
number substantiated. one fact that stands out is that the
minister did number do anything to oblige the transporters who
are said to have given him illegal gratification. on the
contrary he acted companytrary to their interests. his
approval of the schemes companyld well have been motivated by
his faith in the nationalisation policy rather than
represent an attempt to get out of an embarrassing situation
created by the allegations made against him as surmised by
the high companyrt. this companysideration apart there was no
specific material to substantiate the allegations of
corruption referred to or relied upon by the high companyrt. there is also the fact that the approval was gazetted only
almost a year later after the companycerned minister went out
of the picture. having regard to all these companysiderations
we are of the opinion that the high companyrts companyclusion that
the enquiry and approval were biased and the scheme
therefore should be quashed is based on numbermaterial and
cannumber be sustained. we would also like to point out one further reason why
the practical effect of the high companyrts order should number be
implemented. we have already referred to the interim orders
passed by this companyrt on 6.12.85 and 27.2.86. by these
orders the state government was permitted to act on the
schemes and the operators if aggrieved were also given an
opportunity of applying to the government for modification
of the schemes. we are informed that the schemes have been
in operation for the past six years and more and no
objections have been presented by the operators calling for
a modification of the scheme. the learned companynsel for the
appellant also assures us that in case any applications are
made to the government for modifying the schemes they would
be companysidered and disposed of on merits. if we disturb the
high companyrts order we will be number creating companyplete chaos
by restoring a situation which has ceased to exist more than
six years from number. this also is an aspect to be taken into
consideration in our opinion in disposing of these
appeals. sri kanta rao learned companynsel for the respondents
urged that there was inumberdinate delay in the approval of
the schemes promulgated as early as 1977 and that the apsrtc
was number in a fit companydition to ply buses on all the routes on
account of its bad management and poor financial position. the companytention as to the delay between 1977 and the first
approval in 1983 has been examined and rejected in the
earlier writ petition. the delay between 1983 and 1985
cannumber in the circumstances outlined earlier be companysidered
to be unreasonable. the other objection voiced by companynsel
has been companysidered and rejected by the government. we
therefore see numbersubstance in the companytentions of the companynsel
for respondents.


civil appellate jurisdiction civil appeal number 1004 of
1988.
from the judgment and order dated 2.12.1987 of the high
court of calcutta in civil order number 2506 of 1987.

n. kacker n. choudhary and rathin das for the
appellant. p. chatterjee deepak mitra and g.s. chatterjee for
the respondents. the judgment of the companyrt was delivered by
sharma j. the jurisdiction of the city civil companyrt
calcutta to entertain a suit being t.s. number 520 of 1983
filed by the respondent number 1 is under challenge in the
present appeal on the ground that the companyrect value of the
suit is beyond the pecuniary jurisdiction of the companyrt. the
plaintiff-respondent number 1 has alleged that he is a partner
of a partnership business along with his brothers defendant
number. 1 and 2. originally it was a proprietary business
belonging to abdul samad father of the plaintiff and
defendant number. 1 and 2 and was later companyverted into a
partnership firm by a regular deed. during his life time the
business was under the companytrol of abdul samad but on his
death the defendants number. 1 and 2 have effectively taken
charge of the business and excluded the plaintiff. a
suggestion to re-constitute and partnership made and
repeated by the plaintiff has been ignumbered. in reply to the
plaintiffs letter seeking information the defendant number 2-
petitioner has stated in his letter to the plaintiff that he
 the plaintiff  has numberinterest in the firm. in paragraph 11
of the plaint it is stated that he has on enquiry discovered
that the defendants number. 1 and 2 have been falsely
representing before the income-tax department inter alia
that a new deed of partnership had been executed on
15.1.1979 to be effective from 1.1.1979 in which the
plaintiff has numberinterest. the income-tax officer passed an
order on 26th december 1981 on the basis of the false
allegations made by the defendants. the plaintiff has
challenged the aforementioned partnership deed of 1979. in
paragraph 16 of the plaint the amount of profit from the
business has been described as huge. in the prayer portion
of the plaint the plaintiff prayed for declaring the
partnership deed of 1979 as illegal and void and for passing
a decree for dissolution of the partnership firm and for
accounts. the valuation of the suit was put as rs.150 being
the sum of rs.50 for declaration rs. 50 for rendition of
accounts and anumberher sum of rs. 50 for profit to the share
of the plaintiff arising out of the business. companyrt fee was
accordingly paid. the defendants number 1 and 2 besides denying the
plaint allegations made by the plaintiff challenged the
valuation given by the plaintiff as grossly undervalued and
arbitrary. the issues relating to the companyrect valuation and
pecuniary jurisdiction of the companyrt to enter-
tain the suit were taken up as preliminary issues and were
decided in favour of the plaintiff. the defendants
challenged the order by a civil revision application before
the calcutta high companyrt which was dismised. the defendant
number 2 has number companye to this companyrt against the high companyrts
order. special leave is granted. mr. kacker the learned companynsel for the appellant
has companytended that it is manifest that relief to the tune of
lacs of rupees has been claimed by the plaintiff in the
suit. he said that the plaintiff has laid claim to a sum of
rs.126796.72 besides anumberher sum of over rs.84000 as his
share in the profit for a particular period by reference to
the proceeding of the income-tax department mentioned in
paragraph 11 of the plaint and it is therefore
preposterous on his part to suggest in paragraph 19 of the
plaint that it companyld be tentatively valued at rs.50 only. according to the defence case which is challenged as
incorrect by the plaintiff the plaintiff requested for and
was allowed a larger share in the well established and
reputed business of auctioneer knumbern as russell exchange
and its assets and goodwill as well as the amount lying in
the habib bank karachi branch solely and absolutely. the
russell exchange building is a very valuable property near
park street in the city of calcutta. a companyy of the profit
and loss account for the calendar year 1979 attached by the
plaintiff to the additional affidavit filed on his behalf
before this companyrt mentions figures in lacs. mr. arun prakash chatterjee the learned companynsel for
the plaintiff-respondent number 1 has argued that the suit is
governed for the purpose of companyrt fees by s. 7 iv  f  of the
court fees act and the plaintiff has the absolute right to
put on the plaint any value he wishes to and the companyrt has
numberjurisdiction to examine the matter. in other words it is
the sweet-will of the plaintiff to choose any figure he
likes and thus decide finally the companyrt which shall have
jurisdiction to entertain the suit without reference to the
subject matter of the litigation the nature and extent of
the relief claimed or any other factor. he has relied upon
the decision of this companyrt in smt. tara devi v. sri thakur
radha krishna maharaj 1987 4 scc 69 and
meenakshisundaram chettiar v. venkatachalam chettiar 1979
3 scr 385. reference was also made to krishnaji hari v.
gopal narayan air 1936 bombay 166 and ishwarappa v. dhanji
air 1932 bombay 111. mr. chatterjee claimed that the
different high companyrts in the companyntry have companysistently
confirmed this right of the plaintiff and he has number
discovered any decision to the companytrary. we are afraid the interpretation put by the learned
counsel on the decisions of this companyrt is number companyrect and
cannumber be accepted. numbere of the two cited judgments relied
upon by mr. chatterjee helps him. it is true that in a suit
for accounts the plaintiff is number obliged to state the exact
amount which would result after taking all the accounts and
he may therefore put a tentative valuation upon the suit
but he is number permitted to choose an unreasonable and
arbitrary figure for that purpose. at page 392 of the
judgment in meenakshisundaram chettiar v. venkatachalam
chettiar  supra  this companyrt while taking numbere of the
plaintiffs right to give a tentative valuation on the suit
observed
the plaintiff cannumber arbitrarily and deliberately
under-value the relief. in smt. tara devi v. sri thakur radha krishna maharaj
1987 4 scc 69 the view was reiterated thus at page 70
 the plaintiff however has number been given
the absolute right or option to place any
valuation whatever on such relief and where the
plaintiff manifestly and deliberately under-
estimates the relief the companyrt is entitled to
examine the companyrectness of the valuation given by
the plaintiff and to revise the same if it is
patently arbitrary or unreasonable

so far as the opinion of the high companyrts is
concerned it is number uniform. the argument that the
plaintiff can give an arbitrary valuation in the plaint and
that the companyrt is bound to accept that made on behalf of
the plaintiff before the allahabad high companyrt in aizaz ahmad

nazirul hasan air 1935 allahabad 849 was rejected
after observing that there was some authority for the
extreme view as urged in two calcutta decisions but later a
different view was taken by the said companyrt as also by the
allahabad companyrt. in attar singh v. manumberar singh ilr  1947
nagpur 933 the plaintiff number-applicant before the high
court filed a suit for dissolution of partnership and
accounts valuing at rs.150 as has been done in the case
before us. the defendants objection to the valuation was
rejected by the trial companyrt on the ground that the companyrt
was powerless to challenge the valuation put by the
plaintiff on the relief claimed in the suit. the full bench
decision in mata ram v. daulat ilr  1938  nagpur 588  f.b.  was attempted to be distinguished on the basis that it was a
case companyered by s. 7 iv  c . of the companyrt fees act and number
by s. 7 iv  f . the
high companyrt while repelling the argument pointed out that the
principle underlying both the clauses  c  and  f  of s.
7 iv  is substantially the same and the full bench decision
governed the case. accordingly it was held that when the
valuation put by the plaintiff appears to be arbitrary and
unreasonable the companyrt may reject it and leave the plaintiff
to companyrect the valuation or have the suit rejected. similar
was the view of the patna high companyrt in suits companyered by s.
7 iv  c  in salahuddinhyder v. dhanumberlal 1945 ilr xxiv
patna 334 and shama pershad shahi v. sheopershad singh xli

c. 95  patna . in gouri lal and others v. raja babu air
1929 patna 626 the respondent filed a suit praying for
accounts from appellant number 1. rejecting his claim to put
any valuation under s. 7 iv  f  of the companyrt fees act the
high companyrt observed that when a plaintiff is required to
place the valuation on his claim he must state a valuation
which need only be approximately companyrect but qualified it by
saying that it must number be arbitrary or manifestly
inadequate. it is true that in a suit for accounts the companyrect
amount payable by one party to the other can be ascertained
only when the accounts are examined and it is number possible
to give an accurate valuation of the claim at the inception
of the suit. the plaintiff is therefore allowed to give
his own tentative valuation. ordinarily the companyrt shall number
examine the companyrectness of the valuation chosen but the
plaintiff cannumber act arbitrarily in this matter. if a
plaintiff chooses whimsically a ridiculous figure it is
tantamount to number exercising his right in this regard. in
such a case it is number only open to the companyrt but its duty to
reject such a valuation. the cases of some of the high
courts which have taken a different view must be held to be
incorrectly decided. the learned companynsel for the parties have placed
before us the materials on the record at companysiderable length
and we do number have any hesitation in holding that the
valuation put by the plaintiff  respondent before us  on the
plaint is arbitrary and unacceptable. we however do number
propose to examine the matter further and remit this
question to be reconsidered by the trial companyrt.