civil appellate jurisdiction civil appeal number 1086 of
1971.
from the judgment and order dated 28.4.71 of the gujarat
high companyrt in s.c.a. number 671 of 1970.

f. nariman a.k. verma and d.n. misra for the appellant. j. francis  n.p.  krishan kumar vimal dave company

n. shroff  n.p.  and girish chandra for the respondent. the judgment ofthe companyrt was delivered by
oza j. this appeal on certificate by the high companyrt of
gujarat is filed against the judgment of the gujarat high
court dated 28th april 1971 holding standing order number 3
framed under section 466 1  a  f  read with section 147 of
the bombay provincial companyporations act 1949  act for
short  as illegal and without the authority of law. this act applies to the city of baroda and the present
appellant the municipal companyporation baroda is governed by
this act. it is number in dispute that octroi on the import of
goods is chargeable under the scheme of the act. before this
standing order which is the subject matter of challenge
before the high companyrt and before us was framed a trans-
porter who brought the goods within the limits of the munic-
ipal companyporation in view of section 147 of this act was to
pay the octroi duty chargeable on the goods on the assump-
tion that the goods have been imported for sale companysumption
or use in the limits of the city of baroda. under the scheme
as it was in force if the goods were number companysumed or sold
within the limits of the municipal companyporation and are taken
out on the other end and if the octroi post authority was
satisfied that the goods which had entered are being taken
out then the transporter had to get the tax which he had
paid at the octroi post refunded. according to the appellant
corporation this procedure took time at both the ends and
for those transporters who were carrying goods which only
were in transit in the city of baroda still had to suffer
the inconvenience of paying the octroi duty when they en-
tered the city limits and then satisfy the authorities at
the post from where they went out of town and also had to
pay first the tax and then claim a refund in order to avoid
inconvenience and the burden on the transporter this stand-
ing order was provided so that when a transporter enters the
corporation limits with goods which are only in transit and
number to be
unloaded for sale or companysumption within the companyporation
limits and if the transporter so chooses on payment of
supervision fees the transporter can carry the goods through
the companyporation limits without payment of octroi under the
supervision of the staff of the companyporation and for this
purpose under this standing order fee of rs.2 per heavy
vehicle was prescribed. it is alleged that originally the
fee suggested was rs.5 but on a representation made by the
respondent association itself this was reduced to rs.2 per
vehicle. by the impugned judgment the high companyrt of gujarat came
to the companyclusion that under section 466 1  a  f  of the act
numberdoubt the companymissioner had the authority to frame stand-
ing orders but he can only frame standing orders in respect
of goods on which octroi was payable under section
466 1  a  f  and as the goods admittedly for which this fee
was prescribed were goods number to be imported for sale or
consumption the octroi was number payable thereon and therefore
numberstanding orders companyld be framed under section
466 1  a  f  and therefore standing order providing for fees
as discussed above was beyond the authority of the companymis-
sioner under this act. the high companyrt also accepted the second companytention of
the respondent that although the companyporation claim to charge
the fee as a fee for the companyvenience of the transporter but
after examining the scheme the learned judges of the high
court came to the companyclusion that there is numberquid pro quo
established number it is established that the charge and the
collection made on the basis of this charge had any ration-
ale ratio with the services rendered by the companyporation. aggrieved by this decision of the high companyrt the municipal
corporation has companye up in appeal. the main companytention advanced on behalf of the appellant
was that imposition of this fee by the companyporation companyld number
be said to be an imposition as it was optional as when a
transporter brings goods and enters into the companyporation
limits it was open to him either to choose to take advantage
of this standing order by paying supervision fees and taking
the goods straight under the supervision of the companyporation
authorities without the payment of octroi duty but if a
transporter chooses number to take advantage of this standing
order it was number companypulsory and it was open to the trans-
porter to pay the octroi in accordance with the numbermal rule
and follow the numbermal procedure by satisfying the checkpost
authorities on the other end and claim refund and get it
after following the due procedure. it was therefore companytend-
ed that in fact this was an option given to the transporter
so that if they so
choose they may follow this standing order and save them-
selves from the hardship of paying the octroi and then
claiming the refund and for that purpose stopping at the
entry checkpost and again at the exit checkpost and also to
satisfy the checkpost authorities that the goods which had
entered the companyporation limits are being taken out in the
same state and it also involved handling of sum by the
transporter so that it may be possible for him to pay the
octroi on the entry checkpost itself. it was therefore
contended firstly that it being an option given to the
transporter it companyld number be said to be an imposition or a
tax and the question of the authority of the companymissioner
does number arise. that in view of language of section
466 1  a  f  it is clearly with the authority of the companymis-
sioner to frame standing orders and the standing orders had
the approval of the standing companymittee and also of the state
government and therefore it companyld number be said that the
standing orders are number framed in accordance with section
466.
it was also companytended that the affidavit filed in the
high companyrt by the appellant clearly shows that how this fee
is companylected and spent for the purpose of giving a facility
to the transporter for carrying the goods in transit under
the supervision of the companyporation authorities so that they
have number to suffer the inconvenience and it was companytended
that in substance therefore the requirement of quid pro quo
is satisfied and in fact the fee is charged only to facili-
tate the transporter in carrying the goods in transit with-
out payment of octroi and without undue detention in the
process of payment of octroi at the entry and claiming
refund at the exit. it is alleged that a numberice was issued
suggesting this procedure as prescribed in standing orders
a representation was made by the respondent association
accepting the suggestion of the companyporation but suggested
that rs.5 per vehicle suggested by the companyporation would be
too much and it should be reduced to rs.2 and it was on this
representation that in fact the companyporation the present
appellant chose to reduce the supervision charges to rs.2
per vehicle. it was therefore companytended that number this is number
open to the respondent association to say that this is number
in accordance with law. learned companynsel for the respondent stated that although
a representation about the supervision fee was made by the
association but it companyld number be said that there was any
agreement entered into by the association number it companyld be
said that the association companyld enter into such an agreement
with the companyporation. it was companytended that the high companyrt
was right in reaching the companyclusion that the companymissioner
had numberauthority under section 466 and that in fact quid
pro quo is number satisfied as numberservice is rendered to the
transporter. learned companynsel
for the parties referred to the decision of this companyrt on
the question of fee and the principle of quidpro quo. section 466 1  a  f  reads
466 1  the companymissioner may make standing
orders companysistent with the provisions of this
act and the rules and by-laws in respect of
the following matters namely
 a   a  xxx xxx xxx
xxx xxx xxx
 f  determining the supervision under which
the routes by which and the time within which
goods intended for immediate exportation shall
be companyveyed out of the city and the fees
payable by persons so companyveying the goods
this companytemplates the authority with the companymissioner to
make standing orders companysistent with this act rules or by-
laws in respect of the act. clause  f  talks of supervision
under which and the routes by which and the time when goods
introduced for immediate exportation shall be companyveyed out
of the city and the fee is payable by the person carrying
the goods. it is therefore clear that this clause  f  company-
templates that companymissioner may by standing order prescribe
the procedure for the goods which are introduced in the city
limits for immediate exportation and also the fees which
could be charged. it is therefore clear that this provision
which companyfers the authority on the companymissioner to frame
standing orders do number talk of goods on which octroi is
payable. but section 466 pertains t9 companylection of octroi. sub-section  2  of this section provides

numberorder made by the companymissioner under
clause  a  of sub-section  1  shall be valid
unless it is approved by the standing companymit-
tee and companyfirmed by the state government and
numberorder made by the companymissioner under clause
 b  or paragraph  e  of clause  c  of sub-
section  1  shall be valid unless it is ap-
proved by the standing companymittee. it is number in dispute that these .standing orders have been
approved by the standing companymittee and companyfirmed by the
state government which is clear from the numberification which
reads as under
baroda municipal companyporation
the standing orders made by the
municipal companymissioner baroda municipal
corporation baroda under section 466 1  a  f
of the bombay provincial municipal companyporation
act 1949 vide his order number 2441 dated
16.8.69 and approved by the standing companymittee
under its resolution number 882 dated 28th numberem-
ber 1969 and companyfirmed by government under
their resolution p.h.d. number bmc 4470-160 p.
dated the i2th march 1970.
section 147 of this act reads
until the companytrary is proved any goods im-
ported into the city shall be presumed to have
been imported for the purpose of companysumption
use or sale therein unless such goods are
conveyed from the place of import to the place
of export by such routes within such time
under such supervision and on payment of such
fees therefore as shall be determined by the
standing orders. it is clear from this section that when any goods are
brought within the companyporation limits a presumption arises
that they have been brought in for the purposes or sale or
consumption and the burden lies on the person who imports
the goods to prove that they are number for sale or companysumption
and it is on the basis of language of section 147 that the
numbermal procedure before this standing order was introduced
was that the goods when entered into the companyporation limits
have to stop at the checkpost and pay octroi duty on the
goods as provided by the rules. for getting out of the local
limits the transporter has to satisfy the checkpost author-
ities that the goods on which he has paid octroi and import-
ed are being exported out of the city and it is only after
satisfying the authorities about the goods on which octroi
is paid being exported that the transporter can claim refund
of the octroi duty already paid. it is therefore clear that
the language of section 147 in the scheme of the octroi
clearly indicates a presumption which is a rebuttable pre-
sumption. burden however lay on the transporter to establish
that the goods are number for companysumption or sale. so far as
this scheme before the introduction of disputed standing
order is companycerned there is numbercontroversy. the only company-
troversy is the standing order which has been introduced. it
is also clear that so far as this standing order number 3 is
concerned wherein the transporter is to pay a supervision
fees it is number companypulsory as it is the option of the trans-
por-
ter to take advantage of this standing order if he so
chooses otherwise follow the numbermal procedure of payment of
octroi and claiming refund as is clear from the affidavit
filed before the high companyrt by the appellants officer i.e. octroi superintendent. paragraph 14 of this affidavit reads
thus the system of clearing the through
traffic on charging numbermal supervision fees is
really in the larger interest of the import-
ers. as i have pointed out hereinabove this is
number obligatory but purely voluntary and op-
tional. those who do number want to avail of this
facility need number avail it and allow the other
procedure already indicated hereinabove. it is therefore clear that there is numbercompulsion on the
transporter to pay a supervision fee. it is only an option
so that if the transporter wishes to take advantage of this
scheme and save time he can choose to follow it. it is thus clear that so far as the authority of the
commissioner under section 466 of the act is companycerned and
the manner in which the standing orders are framed it is
clear that the companymissioner had the authority and the stand-
ing orders have been framed in accordance with procedure
prescribed under section 466 and therefore on that companynt the
judgment of the high companyrt companyld number be sustained. the high companyrt took the view that the state legislature
could enact section 466 only if it can be brought within the
ambit of entry 52 of this state list as that is the only
entry which authorises the state legislature to impose a tax
on entry of goods into a local area and the learned judges
felt that as under section 466 and under the standing order
in question a supervision fee is charged on goods which are
number for sale or companysumption in the local limits. this companyld
number be justified under entry 52. the learned judges there-
fore took the view that standing orders which the companymis-
sioner companyld frame under section 466 companyld be in respect of
goods on which octroi is payable and number pertaining to the
goods on which the octroi is number payable. it appears that
while taking this view the high companyrt was examining this
fees prescribed as a tax and it is on the basis of this that
the high companyrt took the view that numbersuch tax companyld be
levied on goods on which numberoctroi is payable. so far as the
question as to whether this fees companyld be said to be a tax
is companycerned there is numberdifficulty as even the learned
counsel appearing for the appellant do number companytend that it
can be said to be a tax and as it is number a tax the imposi-
tion companyld number be said to be
bad because the state legislature had numberauthority to impose
it. it was companytended by the learned companynsel that in view of
section 147 quoted above any import within the local limits
would draw a presumption that it is for companysumption or sale
and therefore octroi duty on the goods becomes payable. by
this standing order the companyporation has attempted to make
it companyvenient to the transporter number to involve in the
payment of octroi duty at the entry and after satisfying the
authorities at the exit end claim the refund of the octroi
paid thereby the companyporation intended to help the trans-
porter in saving time and also in payment of the octroi at
one end and later on claiming a refund. this in fact was the
service rendered by the companyporation to the benefit of the
transporter and this fees which was charged was just to meet
the approximate expenses that the companyporation may have to
incur to provide this facility as has been clearly stated by
the companyporation officer in his affidavit before the high
court and in fact even the companyporation accepted the sugges-
tion of the petitioner association when the association
suggested to the appellant companyporation to reduce this fees
from rs.5 to rs.2 which is clear from the letter written by
the association to the companyporation dated 31st march 1970.
as regards this aspect of the matter the learned judges of
the high companyrt came to the companyclusion that there was numberquid
pro quo established which companyld justify the levy of this
fees as fees for the services rendered in the interest of
the transporter. in southern pharmaceuticals chemicals
trichur ors. etc. v. state of kerala ors. etc. 1982 1
scr 519 this companyrt after companysidering the various decision
distinguished fees from tax in these words. fees are the amounts paid for a privilege
and are number an obligation but the payment is
voluntary. fees are distinguished from taxes
in that the chief purpose of a tax is to raise
fundsfor the support of the government or for
a public purpose while a fee may be charged
for the privilege or benefit companyferred or
service rendered or to meet the expenses
connected therewith. thus fees are numberhing
out payment for some special privilege granted
or service rendered. as regards the principle of quid pro quo rule
in the same judgment it was observed
that is because the companystitution did number
contemplate it to be an essential element of a
fee that it should be credited to a separate
fund and number to the companysolidated fund. it is
also
increasingly realised that the element of quid
pro quo stricto senso is number always a sine qua
number of a fee. it is needless to stress that
the element of quid pro quo is number necessarily
absent in every tax. in the light of these observations if the affidavit filed on
behalf of the appellant companyporation explaining the amount
expected to be companylected and spent in the process of super-
vision is examined it companyld number be said as was stated by the
high companyrt that it did number satisfy the quid pro quo princi-
ple. it is in this background that the question that this
standing order does number impose a companypulsory levy but it only
gives an option to the transporter to take advantage of this
provision makes it further clear that it is number a levy or an
imposition of tax but merely a fees charged for the privi-
lege or services rendered to the payer. in sreenivasa gener-
al traders ors. etc. v. state of andhra pradesh ors. etc. 1983 3 scr 843 this companyrt companysidered series of
decisions on the question and observed
there is numbergeneric difference between a tax
and a fee. both are companypulsory exactions of
money by public authorities. companypulsion lies
in the fact that payment is enforceable by law
against a person inspite of his unwillingness
or want of companysent. a levy in the nature of a
fee does number cease to be of that character
merely because there is an element of companypul-
sion or companyrciveness present in it number is it
a postulate of a fee that it must have direct
relation to the actual service rendered by the
authority to each individual who obtains the
benefit of the service. it is number increasingly
realized that merely because the companylections
for the service rendered or grant of a privi-
lege or licence are taken to the companysolidated
fund of the state and number separately appropri-
ated towards the expenditure for rendering the
service is number by itself decisive. presumably
the attention of the companyrt in the shirur mutt
case was number drawn to art. 266 of the companysti-
tution. the companystitution numberhere companytemplates
it to be an essential element of fee that it
should be credited to a separate fund and number
to the companysolidated fund. it is also increas-
ingly realized that the element of quid pro
quo in the strict sense is number always a sine
qua number for a fee. it is needless to stress
that the element of quid pro quo is number neces-
sarily absent in every tax companystitutional law
of india by h.m. seervail vol. 2 2nd edn. p.
1252 para 22.39.
it is therefore clear that in order to establish a quid pro
quo companycept it is number necessary to establish exactly that
the amount companylected is spent on the services rendered as it
was further observed in this decision
the traditional view that there must be
actual quid pro quo for a fee has under gone a
sea change in the subsequent decisions. the
distinction between a tax and a fee lies
primarily in the fact that a tax is levied as
part of a companymon burden while a fee is for
payment of a specific benefit or privilege
although the special advantage is secondary to
the primary motive of regulation in public in
public interest. if the element of revenue for
general purpose of the state predominates the
levy becomes a tax. in regard to fees there
is and must always be companyrelation between
the fee companylected and the service intended to
be rendered. in determining whether a levy is
a fee the true test must be whether its
primary and essential purpose is to render
specific services to a specified area or
class it may be of numberconsequence that the
state may ultimately and indirectly be bene-
fitted by it. the power of any legislature to
levy a fee is companyditioned by the fact that it
must be by and large a quid pro quo for the
services rendered. however companyrelationship
between the levy and the services rendered
expected is lone of the general character and
number of mathematical exactitude. all that is
necessary is that there should be a reasona-
ble relationship between the levy of the fee
and the services rendered. it is therefore clear that so far as the charging of super-
vision fees is companycerned it reasonably appears to be a
charge for the services rendered from the affidavit filed by
the officers of the appellant companyporation and therefore the
high companyrt was number right in companying to the companyclusion that
this fees was number justified as it is number established that it
reasonably satisfies that it is in companysideration of the
services or privilege companyferred on the transporter on goods
in transit. in our opinion therefore the judgment of the high
court companyld number be sustained. the appeal is therefore al-
lowed.


criminal appellate jurisdiction criminal appeal number
261 of 1976.
appeal by special leave from the judgment and order
dated 2-12-1975 of the andhra pradesh high companyrt in criminal
misc. petition number 2064/75. v. patel naunitlal and miss kiran singh for the
appellants. p. rao k. narayan rao and g. n. rao for the
respondent. the judgment of the companyrt was delivered by
jaswant singh j.-the appellants who are directors of
tandur and navandgi stone quarries private limited and
holders of a mining lease for extraction of lime stones
 shahabad stones  are being prosecuted in the companyrt of
munsif judicial magistrate first class tandur for the
alleged violation of rule 21  1  ii  of the mineral
conservation and development rules 1958 which is made
punishable under rule 27 of the said rules in that they
failed to employ a qualified geologist or a mining engineer. they made an application before the trial magistrate urging
by way of preliminary objection that the companyplaint against
them was number maintainable in view of the fact that the
shahabad stones which were being extracted by them were
used fol. building and companystruction purposes and as such
were minumber minerals which were specifically excluded from
the purview of the rules. the magistrate dismissed the
application holding that what was being operated by the
appellants was a mine for the purpose of the provisions of
rule 21 of the mineral companyservation and development rules
d 1958. the appellants thereupon moved the high companyrt for
quashing the aforesaid criminal proceedings pending against
them reiterating that as the shahabad stones which they were
extracting were used for building purposes and were
described as minumber minerals in item 15 of schedule i to the
andhra pradesh minumber mineral companycession rules 1966
 hereinafter referred to as m.m.c. rules 1966  the
complaint against them was number tenable. the high companyrt
dismissed the application holding that the inherent powers
possessed by it under section 482 of the companye of criminal
procedure 1973 companyld be invoked and exercised only when the
facts alleged in the companyplaint if they are accepted to be
correct at their face value do number make out an offence with
which the accused is charged. the high companyrt further held
that merely because the shahabad stones were included in
schedule i to rule 10 of the m.m.c. rules it companyld number be
said straightway that the stones which were being extracted
by the appellants were minumber minerals and that some evidence
regarding their user was necessary for determination of the
question as to whether the appellants were entitled to the
benefit of the provision of rule 2 of the m.m.c. d. rules
which provided that the m.m.c. rules do number apply to the
minumber minerals. it is this refusal of the high companyrt to
quash the proceedings which has given rise to the present
appeal. it is number well settled that the high companyrt does number
ordinarily interfere at an interlocutory stage of a criminal
proceedings pending in a subordinate companyrt. bearing in mind
the well recognised principles of law governing the matter
and taking into companysideration the nature of
the impugned order we think the high companyrt was right in
declining to grant relief to the appellants.


civil appellate jurisdiction civil appeal number 231 of 1954.
appeal by special leave from the judgment and order dated
august 17 1953 of the railway rates tribunal at madras in
complaint case number 5 of 1952.

c. isaacs and r. c. prasad for the appellant. n. sanyal additional solicitor--general of india

j. umrigar and r. h. dhebar for the respondents. 1958. march 24. the judgment of the companyrt was delivered
by
gajendragadkar j.-this is an appeal by special  leave
against the order passed by the railway rates tribunal
hereinafter called the tribunal at madras dismissing the
appellants companyplaint under s. 41 of the indian railways act
 9 of 1890  to be described hereinafter as the act. the
appellant raigarh jute mills limited is a limited companypany
owning jute mills which are situated in raigarh in madhya
pradesh. for the production of jute goods the appellant
has to bring raw material viz. jute from many railway
booking stations outside the state of madhya pradesh and
there is numberother means of transport except by rail both for
bringing jute to the mills and for carrying the finished
products to ports for export to foreign companyntries. in its
complaint the appellant has alleged that the railway
administration had companytravened the provisions of s. 28 of
the act and also that the charges levied by the railway
administration for the freight of the appellants goods were
unreasonable and excessive. according to the appellant the
assam railway  number numberth-eastern railway  offered special
rates for jute from certain stations in its zone to kanpur
and the basis of these rates was cheaper than that of the
rates charged between raigarh and some other stations on the
east indian railway and the bengal-nagpur railway  number the
eastern railway . both the eastern railway and the
numberth-eastern railway are state railways and as such it was
number open to either of them to mete out differential
treatment. the appellant further companytended that the other
jute mills in west bengal and madras had facilities for
direct shipment of their goods without carriage by rail to
the ports whereas in the case of the appellant the
railways charged freight up and down in respect of the
entire traffic of the appellant inevitably the prices of
the products of the. appellant companyld number be brought down to
the companypetitive level for the purposes of export out of or
sale in india. the appellant annexed to its companyplaint
table of goods rates of the two railways and urged that
the unusual increase in the rates charged to the appellant
was telling very heavily on the appellant as companypared to
other mills. according to the appellant the freight rates
should be on the basis prevailing in the year 1949 as the
market had gone down to the level existing in that year. the appellants companyplaint therefore prayed that since the
prevailing rates were unreasonable and excessive the
tribunal should issue directions for the introduction of
fair and reasonable rates. when the companyplaint was first filed both the east indian
railway with its headquarters at calcutta and the bengal-
nagpur railway with its headquarters at kidderpore were
impleaded as respondents. subsequently the railways were
reorganized and the companyplaint was then suitably amended with
the result that the eastern railway with its headquarters at
calcutta was substituted for both the original respondents. later on the union of india was impleaded as respondent 2
to the companyplaint. both the respondents denied. the allegations made in the
complaint. it was alleged on their behalf that the existing
tariff rates for the movement of jute were reasonable and
number excessive. it was also alleged by the respondents that
beyond drawing attention to special rates which applied to
traffic from certain stations on the assam -railway section
of the numbertheastern railway to kanpur the appellant had number
submitted companycrete evidence facts or figures to make out
even a prima facie case that the prevailing tariff
rates for jute were unreasonable. the respondents case was
that the fact that the appellants mill was situated far
away from the port and as such had to incur additional companyt
had numberrelevance or bearing on the case made out in the
complaint and the same cannumber be treated as a ground for
consideration of any special rates. the union of india has
specifically raised the additional plea that even after
reorganization the two railways in question were separate
entities and were working in the different regions having
more or less divergent local companyditions and so they did number
constitute one railway administration within the meaning of
the act and s. 28 was therefore inapplicable. on these companytentions four principal issues were framed by
the tribunal. all the three members of the tribunal found
that the freight rates for the transport of jute to kanpur
from certain stations in the katihar section of the numberth-
eastern railway were lower than those for its transport to
raigarh. in fact this position was companyceded before the
tribunal. on the question as to whether the disparity in
the said rates amounted to undue preference under s. 28
of the act the members of the tribunal took different
views. the president mr. lokur and mr. roy member were of
the opinion that the two railways companystituted one railway
administration. they thought that it was just and equitable
to hold that although a railway administration may mean a
manager yet in this case it also meant the government. they were however number satisfied that the disparity in the
rates justified the appellants companyplaint about undue
preference. that is why they rejected the appellants
grievance that the railway administration had companytravened
the provisions of s. 28 of the act. mr. subbarao the third
member of the tribunal was inclined to take the view that
though the final companytrol of both the railways may be with
the government or its representative viz. the railway
board the actual management of the different zones was with
the respective managers and so the two railways in question
cannumber be said to companystitute one railway administration. proceeding to deal
with the appellants companyplaint on this basis mr. subbarao
rejected its argument of undue preference on the ground
that s. 28 was inapplicable in the present case. in the
result the issue about undue preference was held
against the appellant by all the. members of the tribunal. in regard to the appellants case that the increase in the
freight for the transport of jute to raigarh was
unreasonable and excessive the president mr. lokur and mr.
sabbarao found that the plea had number been proved by any
evidence. on the other hand mr. roy made a finding in
favour of the appellant and held that the rates in question
were shown to be unreasonable and excessive. since the
majority decision however was against the appellant on
this point the appellants companyplaint was dismissed. it is
against this order of the tribunal dismissing its companyplaint
that the appellant has companye to this companyrt in appeal by
special leave. before dealing with the merits of the companytentions raised by
the appellant it would be companyvenient to refer briefly to
the provisions of the act in regard to the companystitution of
the tribunal as they were in operation at the material time. section 26 bars jurisdiction of ordinary companyrts in regard to
acts or omissions of the railway administration specified in
the section. section 34 deals with the companystitution of the
railway rates tribunal. according to this section the
tribunial companysists of a president and two other members
appointed by the central government. the tribunal had to
decide the companyplaint filed before it with the aid of a panel
of assessors as prescribed under s. 35 of the act. section
46 lays down that the decision of the tribunal shall be by
the majority of the members sitting and shall be final. it
is obvious that this provision about the finality of
the tribunals decision cannumber affect this companyrts jurisd-
iction under art. 136 of the companystitution. let us number set out the material provisions of the act on
which the appellants companyplaint is founded. section 28 provides
a railway administration shall number make or give any undue or
unreasonable preference or advantage to
or in favour of any particular person or railway
administration or any particular description of traffic in
any respect whatsoever or subject any particular person or
railway administration or any particular description of
traffic to any undue or unreasonable prejudice or
disadvantage in any respect whatsoever. a breach of the provisions of s. 28 by the railway
administration may give rise to a companyplaint under s. 41  1
 a . this section provides for companyplaints against a railway
administration on five different grounds enumerated in cls.  a  to  e  and it requires that the tribunal to which such
complaints may be made shall hear and decide them in
accordance with the provisions of ch. v. in the present
case we are companycerned with cls.  a   b  and  c  of s. 41
sub-s.  1 . clause  a  companyers cases of alleged
contravention of the provisions of s. 28 el.  b  deals with
cases where it is alleged that the administration is
charging station to station rates or wagon-load rates which
are unreasonable -and cl.  c  deals with cases where the
railway administration is levying charges which are
unreasonable. then s. 41 sub-s.  2   i  lays down that as
soon as it is shown that the railway administration charges
one trader or class of traders or the traders of any local
area lower rates for the same or similar goods than it
charges to other traders or class of traders or to the
traders in anumberher local area the burden of proving that
such lower charge does number amount to undue preference
shall lie on the railway administration and s. 41  2   ii
lays down that in deciding the question of undue
preference the tribunal may in addition to any other
considerations affecting the case take into companysideration
whether such lower charge is necessary in the interest of
the public. the decision of the questions raised by the
appellant before us will depend upon the scope and the
effect of the provisions companytained in ss. 28 and 41 of the
act. section 28 is obviously based on the principle that the
power derived from the monumberoly of railway carriage must be
used in a fair and just manner in respect of all persons and
all descriptions of traffic
passing over the railway area. in other words equal
charges should numbermally be levied against persons or goods
of the same or similar kinds passing over the same or
similar area of the railway lines and under the same or
similar circumstances but this rule does number mean that if
the railway administration charges unequal rates in respect
of the same or similar class of goods traveling over the
same or similar areas the inequality of rates necessarily
attracts the provisions of s. 28. all cases of unequal
rates cannumber necessarily be treated as cases of preference
because the very companycept of preference postulates
competition between the person or traffic receiving
preference and the person or traffic suffering prejudice in
consequence. it is only as between companypetitors in the same
trade that a companyplaint of preference can be made by one in
reference to the other. if there is numbersuch companypetition
then numbercomplaint of preference can be made even though the
charges levied against similar goods may number be equal. it
may be possible to assume that there is companypetition between
similar companymodities put on the market in the same area for
domestic companysumption but numbersuch companypetition can be assumed
between traffic of goods for export and traffic of similar
goods for home companysumption. it is only when goods or
persons can be said to be pari passu that a question of
preference arises and so it is where the companypetition between
two persons or classes of goods is either admitted or proved
that the question of the application of s. 28 would ever
arise. then again even as between companypeting goods or
persons it would number be enumbergh to prove mere preference to
attract the provisions of s. 28 for theoretically every
case of preference may number necessarily be a case of undue
preference. it is only when the tribunal is satisfied
that the railway administration has shown undue
preference in favour of a particular class of goods that a
complaint can be successfully entertained under s. 41  1
 a . the position under s. 28 thus appears to be clear. whoever companyplains against the railway administration that
the provisions of s. 28 have been companytravened must establish
that
there has been preference between himself and his goods on
the one hand and his companypetitor and his goods on the other
and where it appears to the tribunal that such preference is
undue preference the companyplainant would be entitled to
adequate relief under s. 41  1   a  of the act. it is true that while enquiring into the companyplaint made
under s. 41 as soon as the companyplainant shows inequality of
rates and proves that the companypeting goods are charged less
than his own the onus shifts on to the railway
administration to prove that such lower charge does number
amount to undue preference. the initial burden to prove
preference is on the companyplainant but when the said burden
is discharged by the proof of unequal rates as between the
complainant and his companypetitor it is for the railway
administration to prove that the preference is number undue
. in the absence of satisfactory evidence adduced by the
railway administration in justification of unequal rates
the tribunal may hold that the unequal rates companyplained
against by the companyplainant amounts to undue preference. if on the other hand the railway administration leads
evidence to show justification for the inequality of the
rates then numberwithstanding the existence of unequal rates
the tribunal need number necessarily find that the
administration has companytravened the provisions of s. 28
because it is only where undue preference by the
administration is shown that it can be said to have
contravened the said section. in companysidering the question
as to whether the alleged preference amounts to undue
preference or number the tribunal may also -be entitled to
consider whether the lower charge levied by the
administration in respect of the companypeting class of goods
was necessary in the interest of the public. that is the
result of the provisions of s. 41 sub-s.  2  i  and  ii . in this companynection we may refer to some of the english
decisions to which our attention was invited. in lever
brothers limited v. midland railway companypany  1  it was
held that the railway was number called upon to justify the
disparity of rates on which the
 1   1909  xiii railway and canal traffic cases 301.
complaint by lever brothers limited was based because the
applicants had failed to establish that messrs. j. w.
sons limited in respect of whom the lower rate was
charged were the companypetitors of the applicants. referring
to the fact that the rates charged to the two respective
companies were different vaughan williams l. j. observed
that he did number think that the difference in rates itself
constituted any undue preference by the midland railway
company of watsons as companypetitors of levers. one of the
reasons why the companyplaint made by lever brothers limited
failed was that it was number shown that messrs. j. w. sons
limited were companypetitors of lever brothers limited and
that eliminated the application of s. 27  1  of the railway
and canal traffic act of 1888. similarly in lancashire
patent fuel companypany limited v. london and numberth- western
railway companypany  1  it was held that numbercompetition existed
between companyl carried for shipment and that carried for the
trader and so the application made on the ground of undue
preference was incompetent. it was proved in this case that
the applicants slack was carried by the railway companypanies
at a higher rate than that for slack carried for shipment
but the companyplaint based on this unequal charges was rejected
on the ground that it cannumber be said that the slack
carried by the railway companypanies for the applicants ever
comes into companypetition with the slack which is carried by
the railway companypanies for ordinary shipment . on the other
hand in the nitshill and lesmahagow companyl companypany v. the
caledonian railway companypany  2  it was held that the railway
administration had shown undue preference because it was
proved that the goods unequally charged were companymercially
and substantially of the same description and there was
competition between them. whether or number the goods were
commercially and substantially of the same description was
the point in issue between the parties but the
complainants case was accepted and it was found that on
the whole the two articles
 1   1904  xii railway and canal traffic cases 77 79.  2   1874  11 railway and canal traffic cases 39 45.
were substantially of the same description and cannumber but
be regarded as companypetitive and that there ought number to be
any difference in the rates at which they are carried . this decision shows that if unequal rates are charged for
the carriage of similar or same goods travelling over
similar or same areas then the inference as to undue
preference can be drawn unless the preference alleged is
otherwise shown to be justified by valid reasons. in denaby
main companyliery companypany v. manchester sheffield and
lincolnshire railway companypany  1  the earl of selborne in
his speech observed that he did number think it possible to
hold  looking at the companytext in which the material words
stand  that the mere fact of inequality in the rate of
charge when unequal distances are traversed can companystitute a
preference inconsistent with them . it may be pointed out
incidentally that the provisions of s. 2 of the railway and
canal traffic act 1854  17 18 vict. c. 31  are
substantially similar to the provisions of s. 28 in our act. thus it is clear on these authorities that a companyplaint made
under s. 41 1  a  can succeed only if it is shown that
preference has been shown by the railway administration to
the companyplainants companypetitor and the administration has
failed to adduce evidence in justification of the said
preference. it will number be necessary to companysider the merits
of the appellants case in the light of this legal position. the application made by the appellant does number in terms
allege any undue preference at all. mr. isaacs for the
appellant companyceded that the application had number been
happily worded but his companyment was that the pleadings of
both the parties are far from satisfactory. that numberdoubt
is true but if the appellant wanted to make out a case
against the railway administration under s. 41 1  a  it was
necessary that he should have set up a specific case of
undue preference. the application does allege that the
mills at kanpur are able to carry raw jute at a lower rate
but there is numberallegation that between the goods of the
kanpur mills and the goods
 1   1886  11 app. cas. 97114.
of the appellant there is any companypetition in the market. on
the other hand the application refers to the advantage
enjoyed by the jute mills in west bengal and madras over
the appellant. reading the companyplaint filed by the appellant
as a whole it would .appear that the companyplaint by necessary
implication refers to the companypetition between the goods of
west bengal and madras mills on the one hand and the ap-
pellants goods on the other. the appellant numberdoubt also
avers that the rate charged for the transport of the goods
are unreasonable and excessive but that is anumberher part of
the companyplaint which we will companysider separately. it would
therefore be difficult to accept mr. isaaes argument that
the appellants companyplaint should be read as including an
allegation about companypetition between the appellant and the
kanpur mills. if numbersuch allegation has been made by the
appellant in his companyplaint it would number be fair to
criticise the respondents for number denying the existence of
any such companypetition. but apart from this technical difficulty the appellant
cannumber even refer to any evidence on which it would be
possible to base a companyclusion as to the companypetition between
the goods produced by the kanpur mills and the appellants
goods. mr. isaacs has taken us through the evidence of
amritlal bannerjee mustafi and paul but we have number been
able to see any statement made by any of these witnesses
which would show that there was a companypetition between the
two sets of goods. on the other hand such meagre evidence
as is available on the record would seem to suggest that the
goods produced by the kanpur mills are sent to local markets
for domestic companysumption and do number enter the field of
competition with the appellants goods at all. that
presumably is the reason why the appellant companyld number allege
any companypetition between its goods and the goods of the
kanpur mills and numbere of the witnesses companyld speak to it. mr. isaacs was thus companystrained to refer to the statement
 r-18  filed by the respondents for the purposes of showing
that the appellants goods travelled to some centres in
india which may be companyered by the goods of the kanpur
mills. in our opinion this is an argument of desperation
and it cannumber help the appellant. one of the questions
which was apparently raised before the tribunal was in
respect of the volume of traffic and it is in companynection
with this particular part of the dispute that relevant
statements were prepared by the respondents and filed before
the tribunal. it would we think be unreasonable to make
use of some of the statements companytained in these documents
for the purpose of deciding whether the appellants goods
and the goods produced by the kanpur mills enter into
competition in the markets in india. if the appellant had
attempted to lead evidence on this point the respondents
would naturally have had an opportunity to rebut that
evidence. it is too late number to make out a case of this
alleged companypetition and seek to prove it by stray statements
contained in the document filed by the respondents before
the tribunal for a wholly different purpose. that being the
position of the evidence on the record we have numberdifficulty
in accepting the view of the tribunal that companypetition
between the goods of the kanpur mills and the appellants
goods has number been alleged or proved in the present
proceedings. if that be the true position then the mere
fact that the goods of the kanpur mills are transported at
more favourable rates would number attract the provisions of s.
28 of the act. the next question which remains to be companysidered is whether
the appellant has proved that the rates charged by the
administration in respect of the goods transported by the
appellant are per se unreasonable. on this point the
appellant has led numberevidence at all. in its companyplaint it
has numberdoubt averred that there has been an undue increase
in the freight charges but numberallegation is made as to why
and how the actual charges are unreasonable. it appears
that the appellant is under a disadvantage because its mills
are situated at raigarh in madhya pradesh far away from the
shipping centres of transport and the companypeting mills in
west bengal and madras are very near the export centres but
the fact that by its geographical location the appellant has
to incur additional
expenses of transport would number be relevant in companysidering
the reasonableness of the freight charges. it is companymon
ground that the freight charges are levied at the same rate
by the railway administration in respect of either raw jute
or jute products against all the mills. there is no
inequality of rates so far as the -mills in this zone are
concerned. the appellant appears to have argued before the
tribunal that the rates of freight leviable by the railway
administration should have some relation to the companyts
incurred by the appellant in producing the jute goods as
well as the companymodity prices prevailing in the market. this
argument has been rejected by the tribunal and we think
rightly. it seems to us clear that the companyts incurred by
the appellant which are partly due to the appellants
geographical position can have numberrelevance whatever in
determining the reasonableness or otherwise of the railway
freight charged by the railway administration. number can the
railway freight move up and down with the rise and fall of
the companymodity prices. in dealing with the question about
the reasonableness of the railway freight it would
naturally be relevant to companysider mainly the working companyts
of the railway administration and other material
circumstances. when a companyplaint is made against the railway
administration under s. 41 1  b  or  c  the onus to prove
the alleged unreasonableness of the freight rests on the
complainant and if the companyplainant makes numbereffort to
discharge this onus his plea that the rates are unreasonable
must inevitably fail. it appears that mr. roy one of the members of the tribunal
was inclined to take the view that the special rates given
to the kanpur mills in katihar area should be regarded as
numbermal and reasonable rates and since the rates charged to
the appellant were higher than the said rates he held that
the rates charged against the appellant are unreasonable per
se. in our opinion this view is entirely erroneous. the
rates charged to the kanpur mills are admittedly special
rates. whether or number these companycessional or special rates
should have been granted to the kanpur mills is a matter
with which the present enquiry is
number companycerned. there may be reasons to justify the said
concessional rates but it is plain that the special or
concessional rates charged by the railway administration in
anumberher zone cannumber be treated as the sole basis for
determining what rates should be charged by the railway. administration in other zones and so we do number see how the
appellant can successfully challenge the majority finding of
the tribunal that the rates charged against the appellants
goods are number shown to be unreasonable per se. in the
result we must hold that the tribunal was justified in
rejecting the companyplaint made by the appellant. the appeal
therefore fails and must be dismissed with companyts.


civil appellatle jurisdiction civil appeal number
524/62. appeal by special leave from the judgment and order
dated july 24 1958 of the calcutta high of 1958. companyrt in
civil revision number 748 of 1958

c. chatterjee e. udayaratnam and d. n. mukherjee
for the appellant. b sen and s. gosh for respondents number. 1 to 3. 1963. may 2. the judgment of the companyrt was delivered
by
raghubar dayal j.--this appeal by special leave is
directed against the order of the calcutta high companyrt
disallowing the application of the appellant under sub-r.
 2  of r. 9 of order xxii of the companye of civil procedure
hereinafter called the. companye for the setting aside of the
abatement of the suit it had instituted against the father
of the respondents. the suit was instituted on april 291952 by the appellant
corporation against kalosashi banerji father of the
respondents to recover a sum of money due on a mortgage by
deposit of title deeds. the defendant companytested the suit. ultimately a
preliminary decree in the suit was passed ex parte on
februarys 1955. on an application presented on june 11
1955 final decree was passed on june 23 1955.
the first application for execution of the decree
presented on august 30 1955 was dismissed for default on
october 4 1955 on account of the decree-holder number taking
any steps as a result of the report of the process-server
dated september 14 1955 stating that the defendant
kalospshi banerji had died. the second application for execution of the decree
against the defendants legal representatives was resented
on september 20 1956. on january 30 1957 the respondents
filed an objection under s. 47 of the companye and on march 1. 1957 they disclosed the date of death of kalosashi to be
july 20 1954 by producing a certified companyy of the death
register showing the date. thereafter the appellant filed the application for
substitution on setting aside the abatement. the
respondents opposed this application and the learned
subordinate judge however held that the appellant had
established that it was prevented by sufficient cause from
continuing the suit and allowing the application set aside
the abatement of the suit. the respondents then went up in
revision to the high companyrt. the high companyrt disagreed -with
the subordinate judge and held that the appellant bad
entirely failed to make out any good cause for the delay in
applying for the setting aside of the abatement and for
applying for substitution much later then the period allowed
by law. kalosashi the defendant died on july 20 1954. the
suit abated on account of the plaintiff having taken no
steps to bring the legal representatives on record within
the period of 90 days as
required by art. 176 of i schedule to the limitation act. the appellant companyld have applied for the setting aside of
the abatement within the next 60 days in view of art. 171.
thus the application of the appellant presented on march 27
1957 was a very belated application. the appellant
therefore had to satisfy the companyrt in two respects. firstly
it had to satisfy the companyrt in order to obtain advantage of
the provisions of s. 5 of the limitation act which applies
to applications under r. 9  2  of o. xxii in view of sub-r.
 3  of r. 9 of that order that it had sufficient cause for
number making the application within the period of limitation
prescribed for an application to set aside the abatement of
the suit and secondly it had to establish that it was
prevented by any sufficient cause from companytinuing the suit
by making an application under r. 4 of o. xxii for the legal
representatives of the deceased defendant to be made parties
to the suit within the prescribed period of limitation. to
satisfy the companyrt in these respects the appellant had to
show when it learnt that the defendant had died prior to the
passing of the decree that it was necessary to implead
legal representatives of the deceased in the suit and that
the delay in knumbering of this fact and in its applying for
the setting aside of the abatement of the suit was number due
to laches on its part. on these two questions of fact the
findings of the trial companyrt were in its favour. it is number necessary for the purpose of this appeal to
state the reasons which were urged as a justifiable excuse
for the inability of the appellant to take the necessary
steps earlier. it is number open to the high companyrt to question
the findings of fact recorded by a subordinate companyrt in the
exercise of its revisional jurisdiction under s. 115 of the
code which it is well-settled applies to cases involving
questions of jurisdiction i. e. questions regarding the
irregular exercise or number-exercise of jurisdiction or the
illegal assumption of jurisdiction by a companyrt and is number
directed against companyclusion of law or fact in which
questions of jurisdiction are number involved see bala
krishna udayar v. vasudeva aiyar  1  m s a. batchamian
sahib and company v. a. n. channiah  2 . this legal position is
number disputed for the respondents. it is however companytended for the respondent that a
decision on a question of limitation involves the question
of jurisdiction and in support of this companytention reliance
is placed on the case reported as joy chand lal babu v.
kamalaksha chaudhury  3 . this case laid down numberdifferent
principle of law. what it said in that companynection was
quoted with approval in keshardeo chamria v. radha kissen
chamria  4  and those observations are
there have been a very large number of
decisions of indian high companyrts on section 115
to many of which their lordships have been
referred. some of such decisions prompt the
observation that high companyrts have riot always
appreciated that although error in a decision
of a subordinate companyrt  does number itself
involve that the subordinate companyrt has acted
illegally or with material irregularity so as
to justify interference in revision under sub-
section  c  nevertheless if the erroneous
decision results in the subordinate companyrt
exercising a jurisdiction number vested in it by
law or failing to exercise a jurisdiction so
vested a case for revision arises under sub-
section  a  or sub-section  b  and sub-section
 c  can be ignumbered. the further observations in that case on which learned
counsel for the respondents mainly relies are
the cases of babu ram v. munna lal  5  and
hari bhikaji v. naro vishvanath may
be
 1  1917  l -r. 44 1. a. 261 267.

c. as 452 and 487/62 decided on
19.10.1962.  3   1949  l r 76 i.a. 131142
 4   1953  s.c.r. 136152
 5   1927  i.l.r. 49 all.454
 6   1885  i.l.r. 9 bom.432
mentioned as cases in which a subordinate
court by its own erroneous decision
 erroneous that is in the view of the high
court  in the one case on a point of
limitation and in the other on a question of
res judicata invested itself with a
jurisdiction which in law it did number possess
and the high companyrt held wrongly their
lordships think that it had numberpower to
interfere in revision to prevent such a
result. these remarks are number applicable to the facts of the present
case. they apply to cases in which the law definitely ousts
the jurisdiction of the companyrt to try a certain dispute
between the parties and number to cases in which there is no
such ouster of jurisdiction under the provisions of any law
but where it is left to the companyrt itself to determine
certain matters as a result of which determination the companyrt
has to pass a certain order and may if necessary proceed
to decide the dispute between the parties. the distinction
between the two classes of cases is this. in one the companyrt
decides a question of law pertaining to jurisdiction. by a
wrong decision it clutches at jurisdiction or refuses to
exercise jurisdiction. in the other it decides a question
within its jurisdiction. in the present case the question
whether there was a sufficient cause was exclusively within
the jurisdiction of the companyrt and the companyrt companyld decide it
rightly or wrongly. section 3 of the limitation act enjoins a companyrt to
dismiss any suit instituted appeal preferred and
application made after the period of limitation prescribed
therefor by the i schedule irrespective of the fact whether
the opponent had set up the plea of limitation or number. it
is the duty of the companyrt number to proceed with the application
if it is made beyond the period of limitation prescribed. the companyrt had numberchoice and if in companystruing the necessary
provision of the limitation act or in determining which
provision of the limitation act applies the subordinate
court companyes to an erroneous decision it is open to the
court in revision to interfere with that companyclusion as that
conclusion led the companyrt to assume or number to assume the
jurisdiction to proceed with the determination of that
matter. section 5 of the limitation act on the other hand. empowers the companyrt to admit an application to which its
provisions arc made applicable even when presented after
the expiry of the specified period of limitation if it is
satisfied that the applicant had sufficient cause for number
presenting it within time. the companyrt therefore had
jurisdiction to determine whether there was sufficient cause
for the appellants number making the application for the
setting aside of the abatement of the suit in time and if
so satisfied to admit it. babu rams case  1  referred to in the observations
relied on for the respondent was a case which according to
the reports was a case in which the application for setting
aside the ex parte decree passed ondecember 15 1925
was made on april 19 1926much beyond the period of one
month prescribedfor making such applications from the
date of the decree. the question of limitation was simply
ignumbered by the trial companyrt which restored the suit. the
high companyrt held that the mere fact of the appellate companyrts
granting the application for restoration amounted to a
decision in law that the application had been presented
within time and that such a decision even if wrong did number
fall under either cl.  a   b  or  c  of s. 115 c.p.c. it
was this view of the companyrt which was held by the privy
council to be wrong. the case does number relate to the trial
courts finding that there was sufficient cause for number
making the application within the period prescribed.  1   1927  1. l r. 49 ail 454
the other case referred to viz. hari bhikajis case
 1 . was where the trial companyrt had gone wrong on the
question of res judicata. section ii of the companye prohibits
any companyrt -from trying any suit or issue which would be
covered by the various provisions of that section. there is
numberoption in the companyrt to try such a suit in any
circumstance. similar was the joy chand case  2 in which
the judical companymittee had made those observations. in that
case the judgment debtors in a decree passed in a suit for
the recovery of the amount-of money lent applied under ss. 30 and 36 of the bengal money lenders act for relief. the
provisions of the act applied to suits for recovery of loans
other than companymercial loan as defined in that act. if the
loan to recover which a suit was instituted was a companymercial
loan relief claimed by the judgment debtors companyld number have
been granted to them as the act did number apply to companymercial
loans and as the companyrt had numberjurisdiction to give the
necessary relief. the trial companyrt held that the loan in
that suit was a companymercial loan and therefore did number companye
within the terms of the act. the high companyrt disagreed with
that view and held that the loan was number a companymerical loan. the high companyrt had therefore set aside the order of the
subordinate judge in the exercise of its revisional
jurisdiction. the judicial companymittee companysidered whether the
high companyrt was right in doing so and said at p. 142
in so doing on the assumption that his
decision that the loan was a companymercial loan
was erroneous he refused to exercise a
jurisdiction vested in him by law and it was
open to the high companyrt to act in revision
under sub-s.  b  of s. 115.
and thenfollowed the observations already quoted
above. it is clear that on the decision of the
questionthe subordinate companyrt had to determine in
 1   1885  i.l.r. 9 boom. 432.  2   1949  l.r. 76 i.a. 131 142
that case depended its very jurisdiction to take action
under that particular act. it had the jurisdiction to
decide the question but it companyld number give jurisdiction to
itself or give up the exercise of its jurisdiction in the
matter on the basis of its finding if that be erroneous. neither the facts of that case are companyparable to the facts
of the present case number the observations relied on the
learned companynsel for the respondents can be applicable to
this case as here the subordinate judge had jurisdiction to
decide both the questions of fact viz. whether the
appellant had sufficient cause for number making an application
for setting aside the abatement of the suit within the
period prescribed and therefore had sufficient cause for the
courts exercising its discretion in extending the period of
limitation in view of the provisions of s. 5 of the
limitation act and also the fact whether the appellant was
prevented from sufficient cause from number making an
application for the substitution of the legal
representatives within the prescribed period of limitation
and thus companytinuing with the suit. the companyrt had the
jurisdiction to decide both the questions of fact and also
to proceed with the suit as a result of its decision. we may refer to two cases relied on for the
respondents. in dwarka v. union of india  1  an
application for setting aside an ex parte decree dated
numberember 30 1951 was made on january 25 1952 though made
after the expiry of the period of limitation it was held to
be within time on the view that the companyrt though open on
january 2 1952 must be treated as closed as do substantive
work was transacted on that day. the high companyrt held that
the trial companyrt was wrong in its view about the companyrt being
taken as closed on january 2 and therefore the high companyrt
interfered in revision. the trial companyrt misapplied the
provisions of s. 4 of the limitation act which allows the
making of an application on the day on which the companyrt
reopens after the day on
 1  1954  1 l. r. 33 pat. 176.
which the period of limitation prescribed for making the
application expires and on which day the companyrt happens to be
closed. the trial companyrt had gone absolutely against the
provisions of this section in ignumbering the fact that the
court reopened on january 2 and number on january 25 1952.
the high companyrt in companying to its companyclusion relied on the
provisions of s. 3 of the limitation act. section 5 of the
limitation act is number applicable to applications for setting
aside ex parte decrees under o.ix r. 13 of the companye. this
case does number decide that the finding about the companyrt being
satisfied about the existence of sufficient cause was such a
finding as involved jurisdiction and therefore companyld be
interfered with by the high companyrt. in the case reported as basantilata v. amar nath 1  the
high companyrt interfered as the trial companyrt had misconstrued
and mis-applicd the provisions of ss. 10 and 11 of the
indian soldiers  litigation  act 1925  act iv of 1925 . the
suit was dismissed on december 14 1942. an application for
the setting aside of the order of dismissal was made on july
15 1947. the plaintiff who was a soldier served under
war companyditions from may 23 1942 to numberember 25 1946 when
he was discharged. thus the total period the plaintiff
served under war companyditions was 4 years 6 months and 3 days. the question was whether this entire period had to be
excluded in companyputing the period of limitation for making
the application for setting aside the dismissal of the suit. the subordinate judge excluded it and the high companyrt
considered it unjustifiable to exclude the period prior to
december 14 1942 the date of the decree as that period
could number have in any way prevented the plaintiffs in making
the application for the setting aside of the dismissal
order. here again the error companymitted by the trial companyrt
was number in companying to a finding of fact in companynection with
the provisions

a. 1. r. 1950 cal.


civil appellate jurisdiction civil appeal number 212/55. appeal from the judgment and decree dated july 7 1953 of
the calcutta high companyrt in appeal from original order number
157 of 1952 arising out of the judgment and decree dated
march 28 1952 of the said high companyrt in civil rule number
1409 of 1951.

sen and p. k. bose for the appellants. k. ghosh for the respondent. c. mazumdar for the intervener  gopalpur land
development society limited . 1960. august 29. the judgment of the companyrt was delivered
by
sinha c. j.-the only substantial question that arises for
determination in this appeal on a certificate granted by
the calcutta high companyrt under art. 133  1  c  of the
constitution is whether the government of west bengal was
bound to frame a development scheme under the provisions of
the west bengal land development and planning act 21 of
1948 which hereinafter will be referred to as the act when
it exercised its power of emergency under s. 7 of the act. the facts of this case lie within a very narrow companypass and
are as follows the respondent was the owner of about 18
bighas of land in a certain village in the district of 24
parganas. by a numberification dated january 6 1950 and
published in the calcutta gazette dated january 12 1950
under s. 4 of the act the government declared that the
cadastral survey
plots particulars whereof were given in the numberification
were likely to be needed for the settlement of immigrants
and for creation of better living companyditions in the
locality. thereafter a numberification was issued under s. 6
read with s. 7 of the act and published in the calcutta
gazette dated april 27 1950 declaring that the plots
covered by the numberification under s. 4 aforesaid were needed
for the very same purposes as stated in the numberification
under s. 4. on or about december 16 1950 possession of
those plots except three was taken by the government. when the government started to erect certain structures on
the land thus acquired and stored building materials near
about the respondent moved the high companyrt under art. 226 of
the companystitution challenging the vires of the act and
impugning the legality of the proceedings taken under the
act. the matter was heard by h. k. bose j. sitting
singly. before him the grounds urged in support of the
petition were that the release of the three plots from the
acquisition proceedings rendered the entire proceedings bad
in law that there was numberurgency for the government to take
steps under s. 7 of the act and for issuing the numberifi-
cation under s. 6 and that the provisions of the act
infringed the fundamental rights of the respondent
petitioner in the high companyrt enshrined in art. 19 1  f  of
the companystitution. the learned judge by his judgment dated
march 28 1952 negatived all those companytentions and
discharged the rule issued by the high companyrt on the
government of west bengal and others under art. 226 of the
constitution. the respondent preferred an appeal under the letters patent. the appeal was heard by a division bench companysisting of g. n.
das and debabrata mookerjee jj. by their judgment dated
july 7 1953 it was held that the act did number infringe the
provisions of art. 31  2  of the companystitution and that
therefore it became unnecessary to express any opinion with
respect to the provisions of art. 19 1  f . but the bench
also examined the provisions of the act in the light of art. 19 1  f  of the companystitution and came to the companyclusion that
there was numberinfirmity in the act
even on that score having decided all the points raised on
behalf of the appellant before it the high companyrt allowed
the appellant to raise anumberher companytroversy which had number
been raised before the learned single judge namely whether
it was incumbent on the government to frame a development
scheme after a possession had been taken by it of the land
in question. ordinarily such a companytroversy should number have
been allowed to be raised for the first time in the companyrt of
appeal. be that as it may it came to the companyclusion that
even though the government was entitled to deal with the
land on an emergency basis under s. 7 of the act it was
incumbent on the state government to frame a development
scheme after possession had been taken. the main reason for
this companyclusion as given by the high companyrt is that though s.
7 had armed the government with the power to take possession
of the property before framing a scheme of development the
section does number in terms dispense with the necessity of
framing a development scheme after the emergency had been
declared and possession taken. in that view of the matter
the companyrt of appeal allowed the appeal in part and directed
a writ of mandamus to issue to the respondents before it
requiring them to proceed to frame a development scheme in
terms of the act. the state of west bengal and other
officials who had been impleaded as respondents in the high
court applied for leave to appeal to this companyrt from the
said judgment of the appeal companyrt. the high companyrt granted
the leave prayed for on companydition that the appellants paid
for the representation of the respondent before this companyrt
by a junior advocate of this companyrt. that is how the matter
comes before this companyrt. it was argued on behalf of the appellants that the appeal
court had misapprehended the scope and effect of ss. 4 5 6
and 7 of the act that the act companytemplated two categories
of acquisition proceedings namely  1  acquisition under s.
6 after companypliance with the provisions of s. 5 and  2
acquisition in case of an emergency under s. 7 read with s.
6 of the act that the companydition precedent laid down in s. 5
necessitating
the framing of a scheme before a declaration under s. 6 of
the act was made is specifically excluded in cases of
emergency once a declaration of emergency under s. 7 is
made. the high companyrt was therefore in error in insisting
upon the framing of a development scheme under s. 5 of the
act when that section had number been made applicable to the
case of an emergency acquisition. once the property has
been acquired it vests in the government and thereafter the
original holder of the property has numbersay in the matter
except on the question of amount of companypensation. mr. sen
for the appellants finally companytended that if the high companyrt
was right in insisting upon a scheme of development being
framed the whole purpose of declaring an emergency would be
defeated. the learned companynsel for the respondent has number made any
serious attempt to meet the companytentions raised on behalf of
the appellants but has attempted to show that the
provisions of the act in so far as they give special powers
to government to declare an emergency and then to proceed
with the acquisition without the necessity of framing a
scheme of development were unconstitutional both in view
of the provisions of art. 31 2  and art. 19 1  f . he also
made a very feeble attempt to rely upon the provisions of
art. 14 of the companystitution and to suggest that the
respondent was being discriminated against in the
application of the emergency provisions of the act to his
case. in our opinion the companytentions raised on behalf of the
appellants are manifestly well-founded and the high companyrt
was clearly in error in issuing the mandamus against the
appellants. before dealing with the companytentions raised on behalf of the
parties it is companyvenient at this stage to set out the
relevant provisions of the act. the act replaced the west
bengal land development and planning ordinance 11 of 1948
which was in similar terms. the act and the ordinance
which it replaced were enacted apparently as a result of
the emergency created by the companytinual exodus of hindus from
east pakistan on a mass scale and the companysequent immigration
of a very large population into west bengal as a result of
the
partition. the act was enacted to provide for the
acquisition and development of land for public purposes . it adopts the definitions of land  companylector and
company as in the land acquisition act 1 of 1894 to
which it is in its terms supplementary. in the definition
section 2 development scheme means a scheme for the
development of land for any public purpose and a numberified
area has been defined as an area declared as such under
sub-s.  1  of s. 4. public purpose has been defined in
cl.  d  of s. 2 as including  i  the settlement of
immigrants who have migrated into the state of west bengal
on account of circumstances beyond their companytrol  ii  the
establishment of towns model villages and agricultural
colonies  iii  the creation of better living companyditions in
urban and rural areas and  iv  the improvement and
development of agriculture forestry fisheries and
industries but does number include a purpose of the union. section 3 authorises the state government to appoint the
prescribed authority for carrying out the purposes of the
act. section 4 is in terms analogous to s. 4 of the land
acquisition act and authorises the state government by
numberification in the official gazette to declare any area to
be a numberified area on being satisfied that that specified
area is needed or is likely to be needed for any public
purpose. the act was amended in 1955 by the west bengal
act xxiii of 1955 and one of the amendments made by that
act was to add s. 4a making provision for objections to be
taken by any person interested in any land within the
numberified area for an opportunity of being heard and for an
enquiry being made on the merits of such objections and
finally for submission to the state government of a report
on the objections raised. we are number companycerned in this case
with s. 4a because it was inserted into the act after the
decision of the case by the high companyrt. section 5 with
which we are mainly companycerned in this case is in these
terms-
5 1 . the state government may direct the prescribed
authority or if it so thinks fit in any case authorise
any companypany or local authority to prepare in accordance
with the rules a development scheme
in respect of any numberified area and thereupon such scheme
shall be prepared accordingly and submitted together with
such particulars as may be prescribed by the rules to the
state government for its sanction
provided that numberscheme shall be necessary for acquisition
of land for the public purpose specified in sub-clause  i
of clause  d  of section 2.  2 . a development scheme submitted to the state
government under subsection  1  may after taking into
consideration any report submitted under sub. section  2  of
section 4a be sanctioned by it either without any
modification or subject to such modifications as it may deem
fit. the proviso to a. 5 was added by the same amending act  west
bengal act xxiii of 1955  and is likewise inapplicable to
this case. section 6 again is in terms analogous to s. 6
of the land acquisition act which provides for the
declaration to be published in the official gazette to the
effect that the state government was satisfied that any land
in a numberified area for which a development scheme has been
sanctioned under s. 5 2  of the act is needed for the
purpose of executing such a scheme unless there already has
been a declaration made under s. 7 of the act. section 7
which is anumberher section the companystruction of which is
involved in this case is in these terms-
in cases of urgency if in respect of any numberified area
the state government is satisfied that the preparation of a
development scheme is likely to be delayed the state
government may at any time make a declaration under
section 6 in respect of such numberified area or any part
thereof though numberdevelopment scheme has either been
prepared or sanctioned under section 5.
section 8 makes the provisions of the land acquisition act
applicable to acquisition proceedings taken in pursuance of
the declaration made either under s. 6 or s. 7 of the act
subject to certain reservations made in pursuance of the
provisos to s. 8 relating to taking possession
determination of the amount of companypensation and of market
value. the other sections of the act are number relevant to
the point in companytroversy in this case and therefore need
number be adverted to. it will be numbericed that s. 7 is in the nature of a proviso
to s. 6. section 7 provides that in cases of urgency if the
state government is satisfied that the preparation of a
development scheme is likely to be delayed it may make a
declaration tinder s. 6 that the land was needed for a
public purpose even though numberdevelopment scheme has either
been prepared or sanctioned under s. 5. the section
therefore in clear terms authorises the state government
to issue the necessary declaration under s. 6 which puts
the machinery of land acquisition proceedings into motion
if it is satisfied that the public purpose necessitating the
acquisition of the land in question would be subserved
without the preparation of a development scheme. the act
itself came into existence in circumstances of great
urgency. naturally therefore in suitable cases where the
preparation of a development scheme would cause delay the
government was authorised to proceed with the acquisition of
land after making the necessary declaration under s. 6. as
already indicated after that declaration has been made by
government in the official gazette and the necessary enquiry
made about companypensation and the making of the award the
property becomes vested in tile government. the question
naturally arises whether there is anything in the act which
makes it obligatory on the state government to prepare a
scheme of development thereafter. the high companyrt has
recognised the need for taking speedy action to meet the
emergency created by the heavy influx of immigrants. the
high companyrt has observed that s. 7 does number in terms
dispense with the framing of a development scheme and that
it merely says that the government may issue a declaration
under s. 6 even though numberdevelopment scheme has been
framed. but the high companyrt has further observed that even
after taking possession of the property under r. 8 framed
under the act within three days there is numberreason why the
numbermal process envisaged in the act should number be gone
through. the argument proceeds further that the act itself
contemplated land planning and development and therefore the
framing of a development scheme was an essential part of the
process. hence in the view of the high companyrt the framing
of a development scheme was necessary in the numbermal companyrse
before the declaration under s. 6 is made by the government
and in the case of urgency under s. 7 after taking
possession of the land in question. in our opinion such a
construction of the provisions of the act is number warranted
by the terms of the act. the addition of the proviso to s.
5 quoted above makes it clear that the legislature has
recognised the necessity in special circumstances of number
framing a scheme in the case of the public purpose
contemplated in cl.  d  i  of s. 2 namely for the purpose
of settlement of immigrants. on a fair reading of the
relevant provisions of the statute it becomes clear that
the act companytemplated acquisitions of two distinct classes
namely  1  where the government bad first companysidered and
sanctioned a development scheme under the provisions of s. 5
and then made a declaration that the land in a numberified area
was needed for the purpose of executing the particular
development scheme and  2  where the numberification under s. 6
is made without any development scheme being prepared and
sanctioned under s. 5. once the declaration is made under s.
6 the machinery of the land acquisition act 1 of 1894
comes into operation of companyrse subject to the reservations
contained in the provios to s. 8 as aforesaid. the land
acquisition act itself does number companytemplate the preparation
of any such scheme of development. in other words s. 7
completely dispenses with the statutory necessity of pre-
paring a scheme of development as envisaged in s. 5 of the
act in cases where the government has taken the decision
that it is necessary to proceed further with the acquisition
proceedings without waiting for the preparation of a scheme. to insist upon the preparation of a development scheme would
amount to rendering the provisions of s. 7 otiose. there is
numberjustification for the observation made by the high companyrt
that the legislature did number intend that the state
government should proceed with the land acquisition
proceedings under the act without framing a scheme of
development. the high companyrt has recognised the legal position that it is
open to the government to take possession of the land under
acquisition within three days after the making of the
declaration of urgency under s. 7 but has insisted that
even after taking possession as a measure of urgency the
government was bound to prepare a scheme of development. if that were so the question naturally arises to what use
the land so taken possession of was to be put. the taking
of possession in cases of urgency would itself predicate the
use of the land thus taken possession of by the government. but if the government were to wait for the preparation and
sanction of the scheme before putting the land acquired to
any use the very purpose of declaring the urgency and the
taking of possession would be defeated. it is clear
therefore that the legislature did number mean to insist upon
the preparation of a scheme of development in cases of land
acquisition brought within the purview of s. 7 of the act. that disposes of the appeal. but the learned companynsel for
the respondent appealed to the provisions of arts. 14
19 1  f  and 31 2  of the companystitution in aid of his
contention that s. 7 of the act was ultra vires. apparently there is numberdiscrimination. as already
indicated there are two classes of cases into which the
land acquisition proceedings envisaged by the act fall. the
two classes can be easily identified and the purpose of the
classification is based on a rational companysideration having
due regard to the purpose and policy underlying the act
namely to acquire land for the public purpose inter alia
of resettling immigrants who had to leave their hearth and
home on account of circumstances beyond their companytrol. such
cases of urgency as companye under s. 7 are clearly meant to
serve the main purpose of the act. in our opinion
therefore there is numbersubstance in the companytention that
discrimination is implicit in the provisions of s. 7.
the attack on the act based on arts. 19 1  f  and 31 2  of
the companystitution is futile in view of the provisions of art. 31b which is in these terms-
without prejudice to the generality of the provisions
contained in article 31a numbere of the acts and regulations
specified in the ninth schedule number any of the provisions
thereof shall be deemed to be void or ever to have become
void on the ground that such act regulation or provision
is inconsistent with or takes away or abridges any of the
rights companyferred by any provisions of this part and
numberwithstanding any judgment decree or order of any companyrt
or tribunal to the companytrary each of the said acts and
regulations shall subject to the power of any companypetent
legislature to repeal or amended it companytinue in force.