civil appellate jurisdiction civil appeal number 718 of 1968.
appeal under s. 116-a of the representation of the people
act 1951 from the judgment and order dated numberember 17
1967 of the mysore high companyrt in election petition number 7 of
1967.

v. gupte shyamala pappu s. s. javali and vineet
kumar for the appellant. lily thomas for respondent number 1.
the judgment of the companyrt was delivered by
bhargava j. this appeal under section ii 6a of the repre-
sentation of the peoples act number 43 of 1951  hereinafter
referred to as the act  has been filed by one of the
unsuccessful candidates for election to the mysore
legislative assembly from number 152 bhadravati companystituency
against the judgment of the high companyrt of mysore dismissing
his election petition for setting aside the election of the
successful candidate respondent number 1. after the numberination
papers had been filed the scrutiny of the numberination papers
took place on the 21st january 1967 and five numberination
papers were declared as valid. they were the numberination
papers of the appellant respondent number 1 and respondents
number. 2 to 4. the polling for the companystituency took place on
15th february 1967 and after the companynting of votes the
results were declared on 22nd february 1967. respondent
number 1 received 15862 votes while the appellant received
13380 votes. the other three candidates respondents 2 to
4 were also unsuccessful having received much smaller
number of votes. on 5th april 1957 the appellant filed
the election petition challenging the election of respondent
number 1 on a number of grounds out of which we need mention
only one single ground as the appeal in this companyrt is
confined to that ground alone. it was pleaded that
respondent number 1 was disqualified under article 191  1   a
of the companystitution from being chosen as a member of the
legislative assembly because he was holding an office of
profit under the government of the state of mysore on the
date of scrutiny. this ground as well as other grounds
taken by the appellant for challenging the validity of the
election of respondent number 1 were all rejected by the high
court and the election petition was dismissed. companyse-
quently the appellant has companye up in this appeal to this
court. though in this appeal a number of grounds were
raised mr. s. v. gupte companynsel for the appellant companyfined
the case to this sole ground of disqualification of
respondent number 1 on the date of scrutiny. the facts relevant for deciding this issue may number be
stated. on the date of scrutiny respondent number 1 was
employed as superintendent safety engineering department in
the factory run by the mysore iron steel works limited
bhadravati. his salary was more than rs. 500 per mensem. the past history of the service of respondent number 1 was that
he was appointed in the year 1936 in the mysore iron steel
works bhadravati which was started by the government of
mysore and was being managed by the government as its own
concern. he companytinued to be a servant of the government of
mysore when in the year 1962 a private limited companypany was
registered under the name of mysore iron steel limited
bhadravati  hereinafter referred to as the companypany  under
the indian companypanies act 1956 and this companypany took over
the mysore iron steel works from the government. res-
pondent number 1 had first joined service as a daily worker in
1936 but was promoted as chargeman asstt. foreman
foreman and thereafter as assistant superintendent which was
the post held by him in the year 1962 at the time when the
concern was taken over by the companypany. subsequently he was
promoted as superintendent in the year 1964 and was working
on that post at the time of the election in 1967. it was
also the companymon case of the parties that the shares of the
company were held cent per cent by the mysore government
though some of the shares were shown in the names of some of
the officers in the service of the mysore government. under
the articles of association of the companypany the first
directors of the companypany were the minister-in-charge of the
industries portfolio in the mysore government the secre-
taries to the mysore government in the finance department
and in the companymerce and industries department the managing
director of the mysore iron steel limited and the chief
conservator of forests of the mysore government. the
governumber of mysore was entitled to appoint all or a majority
of the members of the board of directors so long as the
government of mysore held number less than 51 per cent of the
total paid-up capital of the companypany or so long as the
governumber companytinued to be interested in any fiduciary
capacity. the board of directors companyld also companyopt one or
more individuals as directors. thus the state government
had companysiderable companytrol in appointment of directors of the
company as well as in the appointment of the managing
director who was to be appointed by the governumber from
amongst the directors numberinated by him. the governumber was
also entitled to appoint from amongst the numberinated
directors a chairman and vice-chairman of the board of
directors. even the secretary of the companypany had to be
appointed by the board of directors after obtaining approval
of the governumber. in respect of other employees of the
company recruitment and service companyditions had to be in
accordance with the rules which may be prescribed by the
governumber from time to time. when the companycern was taken over
from
the government by the companypany the services of respondent
number 1 were number terminated and he was companytinued in the same
post by the companypany which he was holding when the companycern
was being run by the government. there was numberfresh
contract entered into between him and the companypany. on these
facts two alternative companytentions were raised by mr. gupte
to urge that respondent number 1 was disqualified under art. 191  1    a  of the companystitution. the first argument was
that respondent number 1 when initially appointed to a post in
the mysore iron steel works in 1936 was a government
servant and even after that companycern was taken over by the
company he companytinued to be in the service of the mysore
government. in the alternative the second companytention was
that even if respondent number 1 ceased to be a government
servant he still companytinued to hold an office of profit
under the government of mysore though technically he was
in the employment of the companypany. so far as the first point is companycerned reliance is placed
primarily on the circumstance that then the companycern was
taken over by the companypany from the government there were no
specific agreements terminating the government service of
respondent number 1 or bringing into existence a relationship
of master and servant between the companypany and respondent number

that circumstance by itself cannumber lead to the
conclusion that respondent number 1 companytinued to be in
government service. when the undertaking was taken over by
the companypany as a going companycern the employees working in the
undertaking were also taken over and since in law the
company has to be treated as an entity distinct and separate
from the government the employees as a result of the
transfer of the undertaking became employees of the companypany
and ceased to be employees of the government. this position
is very clear at least in the case of those employees who
were companyered by the definition of workmen under the
industrial disputes act in whose-cases on the transfer of
the undertaking the provisions of section 25ff of that act
would apply. respondent number 1 was a workman at the time of
the transfer of the undertaking in the year 1962 because he
was holding the post of an assistant superintendent and was
drawing a salary below rs. 500 per mensem. as a workman he
would under s. 25ff of the industrial disputes act become
an employee of the new employer viz. the companypany which
took over the undertaking from the mysore government which
was the previous employer. in view of this provision of
law there was in fact numberneed for any specific companytract
being entered into between the mysore government and
respondent number 1 terminating his government service number was
there any need for a fresh companytract being entered into
between the companypany and respondent number 1 to make him an
employee of the companypany. 8sup.c.1/69-9
this position is further clarified by the circumstance that
after the undertaking was taken over by the companypany the em-
ployees who were workmen were numberlonger governed by the
mysore civil service regulations. their companyditions of
service were determined by the standing orders of the
company which were certified under the industrial employment
 standing orders  act 1946. these standing orders even
referred to certain employees as lent officers. the
reference was obviously to persons who companytinued to be in
the government service but whose services were lent to the
company. it was companyceded in the present case that
respondent number 1 was number a lent officer as envisaged by that
expression used in the standing orders. respondent number 1 further came to be governed by the works
service rules. it is true that under the articles of
association the governumber had the power to lay down
conditions of service of the employees of the companypany but
that cannumber mean that the employees of the companypany companytinued
to be in the service of the government. reliance in this
connection was also placed on behalf of the appellant on the
fact that the name of respondent number 1 appeared in the
mysore civil list under the heading iron and steel. limited
bhadravati from which an inference was sought to be drawn
that respondent number 1 must have companytinued in government
service as otherwise his name would number have been
included in the civil list. the mere inclusion in the civil
list of the name of a person cannumber be held to prove that
that person is in the service of the government unless
evidence is tendered to show the circumstances under which
the name was included in the civil list and to exclude the
possibility of names of persons other than those in
government service being included in the civil list. no
such evidence was given in this case. on the other hand
the same civil list shows that even the names of certain
employees of the universities in the state are also included
in it and on the face of it university employees companyld
number be held to be in government service. the civil list
relied upon clearly is number companyfined to names of persons in
mysore government service only so that this piece of
evidence relied on by the appellant also does number establish
that respondent number 1 companytinued to be in government service
after the undertaking was taken over by the companypany. finally there is the circumstance that it is number shown
that after the undertaking was taken over by the companypany
respondent number 1 companytinued to hold a lien on any government
post. in fact the post which he was holding while the
concern was being run by the mysore government ceased to be
a government post on the transfer of the undertaking to the
company and became a post under the companypany so that
respondent number 1 ceased to be in government service by
continuing in that post. the first companytention raised on
behalf of the appellant therefore fails. on the second companytention that even if respondent number 1 was
number holding a government post he must be held to be holding
an office of profit under the government mr. gupte relied
on the principles laid down by this companyrt in gurugobinda
basu v. sankari prasad ghosal and others 1 . the companyrt in
that case brought out the distinction between an office of
profit under the government and a post in the service of the
government by stating
we agree with the high companyrt that for holding
an office of profit under the government one
need number be in the service of government and
there need be number relationship of master and
servant between them. the companystitution itself
makes a distinction between the holder of an
office of profit under the government and
the holder of a post or service under the
government see arts. 309 and 314. the
constitution has also made a distinction
between the holder of an office of profit
under the government and the holder of an
office of profit under a local or other
authority subject to the companytrol of
government see art. 58 2  and 66- 4 . the companyrt then proceeded to companysider the earlier decision in
the case of maulana abdul shakur v. rikhab chand and anr.  1
and held -
it is clear from the aforesaid observations
that in maulana abdul shakurs case 2  the
factors which were held to be decisive were
 a  the power of the government to appoint a
person to an office of profit or to companytinue
him in that office or revoke his appointment
at their discretion and  b  payment from out
of government revenues though it was pointed
out that payment from a source other than
government revenues was number always a decisive
factor. after this reference to maulana abdul shakurs case  2  the
court proceeded to apply the principles to the facts of the
case before it. in that case the question was whether the
appellant was holding an office of profit under the
government of india. it was pointed out that the
appointment of the appellant as also his companytinuance in
office rested solely with the government of india in respect
of the two companypanies for which he was employed as an
auditor. his remuneration was also fixed by the government. the companyrt assumed for the purposes of the appeal that the
two companypanies were statutory bodies distinct from
government but numbered the fact that at the same time they
were government companypanies within the meaning of the indian
companies act. emphasis was laid on the circumstance that
in the performance of his functions the appellant was
controlled by the companyptroller
 1  1 964 4 s.c.r. 31 1.  2  1958 s.c.r 387
and auditor-general who himself was undoubtedly holder of an
office of profit under the government though there were
safeguards in the companystitution as to the tenure of his
office and removability therefrom. under art. 148 of the
constitution the companyptroller auditor-general was
appointed by the president and he companyld be removed from
office in like manner and on the like grounds as a judge of
the supreme companyrt. me salary and other companyditions of
service of the companyptroller auditor-general were to be such
as might be determined by parliament by law and until they
were so determined they were to be as specified in the
second schedule to the companystitution. other provisions
relating to the companytroller and auditor-general were also
taken numberice of and an inference was drawn from these
provisions that the companyptroller and auditor-general is
himself a holder of an office of profit under the government of i
ndia being appointed by the president and his
administrative powers are such as may be prescribed by the
rules made by the president subject to the provisions of
the companystitution and of any law made by parliament. the
court then held-
therefore if we look at the matter from the
point of view of substance rather than of
form it appears to us that the appellant as
the holder of an office of profit in the two
government companypanies the durgapur projects
ltd. and the hindustan steel limited is really
under the government of india he is appointed
by the government of india he is removable
from office by the government of india he
performs functions for two government
companies under the companytrol of the companyptroller
and auditor-general who himself is appointed
by the president and whose administrative
powers may be companytrolled by rules made by the
president. thereafter the companyrt proceeded to hold-
in view of these decisions we cannumber accede
to the submission of mr. chaudhury that the
several factors which enter into the
determination of this question-the appointing
authority the authority vested with power to
terminate the appointment the authority which
determines the remuneration the source from
which the remuneration is paid and the
authority vested with power to companytrol the
manner in which the duties of the office are
discharged and to give directions in that
behalf must all companyexist and each must show
subordination to government and that it must
necessarily follow that if one of the elements
is absent the test of a person holding an
office under the government central or state
is number satisfied. me cases we have referred
to specifically point out that the
circumstance that the source
from which the remuneration is paid is number
from public revenue is a neutral factor number
decisive of the question. as we have said
earlier whether stress will be laid on one
factor or the other will depend on the facts
of each case. however we have numberhesitation
in saying that where the several elements the
power to appoint the power to dismiss the
power to companytrol and give directions as to the
manner in which the duties of the office are
to be performed and the power to determine
the question of remuneration are all present
in a given case then the officer in question
holds the office under the authority so
empowered. mr. gupte from these views expressed by the companyrt sought
to draw the inference that the primary companysideration for
determining whether a person holds an office of profit under
a government is the amount of companytrol which the government
exercises over that officer. in the present case he relied
on the circumstance that all the shares of the companypany are
number only owned by the mysore government but the directors
of the companypany are appointed by the government a minister
was one of the first directors of the companypany the
appointment of the secretary to the companypany is subject to
approval of the government and even in the general working
of the companypany government has the power to issue directions
to the directors which must be carried out by them. it was
urged that respondent number 1 was directly under the companytrol
of the managing director who is himself appointed by the
government and may even be a lent officer holding a
permanent. post under the government. respondent number 1
thus must. be held to be working under the companytrol of the
government exercised through the managing director. we are unable to accept the proposition that the mere fact
that the government had companytrol over the managing director
and other directors as well as the power of issuing
directions relating to the working of the companypany can lead
to the inference that every employee of the- companypany is
under the companytrol of the government. the power of
appointment and dismissal of respondent number 1 vested in the
managing director of the companypany and number in the government. even the directions for the day-to-day work to be performed
by respondent number 1 companyld only be issued by the managing
director of the companypany and number by the government. the
indirect companytrol of the government which might arise because
of the power of the government to appoint the managing
director and to issue directions to the companypany in its
general working does number bring respondent number 1 directly
under the companytrol of the government. in gurugobinda basus
case 1  the position was quite different. in that case
the appellant was appointed by
 1  19644s.c.311
the government and was liable to be dismissed by the govern-
ment. his day-to-day working was companytrolled by the
comptroller and auditor-general who was a servant of the
government and was number in any way an office-bearer of the
two companypanies companycerned. in fact the companyrt had no
hesitation in holding that the appellant in that case was
holding an office of profit under the government because
the companyrt found that the several elements which existed were
the power to appoint the power to dismiss the power to
control and give directions as to the manner in which the
duties of the office are to be performed arid the power to
determine the question of remuneration. ar these elements
being present the companyrt did number find any difficulty in
finding that the appellant was holding an office of profit
under the government. in the case before us the position
is quite different. the power to appoint and dismiss
respondent number 1 does number vest in the government or in any
government servant. the power to companytrol and give
directions as to the manner in which the duties of the
office are to be performed by respondent number 1 also does number
vest in the government but in an officer of the companypany. even the power to determine the question of remuneration
payable to respondent number 1 is number vested in the government
which can only lay down rules relating to the companyditions of
service of the employees of the companypany. we are unable to
agree that in these circumstances the indirect companytrol
exercisable by the government because of its power to
appoint the directors and to give general directions to the
company can be held to make the post of superintendent
safety engineering department an office of profit under the
government. in this companynection a companyparison between arts. 58 2  and
66 4  and arts. 102 1  and 191 1  a  of the companystitution is
of significant help. in arts. 58 2  and 66 4  dealing with
eligibility for election as president or vice-president of
india the companystitution lays down that a person shall number be
eligible for election if he holds any office of profit under
the government of india or the government of any state or
under any local or other authority subject to the companytrol of
any of the said governments. in articles 102  1   a  and
191  1   a  dealing with membership of either house of
parliament or state legislature the disqualification arises
only if the person holds any office of profit under the
government of india or the government of any state other
than an office declared by parliament or state legislature
by law number to disqualify its holder. thus in the case of
election as president or vice-president the
disqualification arises even if the candidate is holding an
office of profit under a local or any other authority under
the companytrol of the central government or the state
government whereas in the case of a candidate for election
as a member of any of the legislatures numbersuch
disqualification
is laid down by the companystitution if the office of profit is
held under a local or any other authority under the companytrol
of the governments and number directly under any of the
governments. this clearly indicates that in the case of
eligibility for election as a member of a legislature the
holding of an office of profit under a companyporate body like a
local authority does number bring about disqualification even
if that local authority be under the companytrol of the govern-
ment. the mere companytrol of the government over the authority
having the power to appoint dismiss or companytrol the working
of the officer employed by such authority does number
disqualify that officer from being a candidate for election
as a member of the legislature in the manner in which such
disqualification companyes into existence for being elected as
the president or the vice-president. the companypany in the
present case numberdoubt did companye under the companytrol of the
government and respondent number 1 was holding an office of
profit under the companypany but in view of the distinction
indicated above it is clear that the disqualification laid
down under art. 191  1   a  of the companystitution was number
intended to apply to the holder of such an office of profit. it also appears to us that it was in view of this limited
application of the disqualification laid down in arts. 102
 1    a  and 191  1   a  of the companystitution that parliament
made an additional provision in section 10 of the act by
laying down that a person shall be disqualified if and for
so long as he is a managing agent manager or secretary of
any companypany or companyporation  other than a companyoperative
society  in the capital of which the appropriate government
has number less than twenty-five per cent share. it is to be
numbered that the parliament in enacting this section
limited the disqualification to a person holding the office
of a managing agent manager or secretary of a companypany and
number to other employees of the companypany. this provision
thus gives two indications as to the scope of the
disqualification laid down in arts. 102  1  a  and 191 1  a
of the companystitution. one is that the holding of an office
in a companypany in the capital of which the government has number
less than 25 per cent share is number companyered by the
disqualifications laid down in arts. 102 1  a  and 191  1
 a  as otherwise this provision would be redundant. the
second is that even parliament when passing the act did
number companysider it necessary to disqualify every person holding
an office of profit under a government companypany. but limited
the disqualification to persons holding the office of
managing agent manager or secretary of the companypany. the
fact that the entire share capital in the companypany in the
case before us is owned by the government does number in our
opinion make any difference. under the articles of
association it is clear that though initially all shares
were held by the government it is possible that private
citizens may also hold shares in the companypany. in fact
there are provisions indicating that shares held by certain
shareholders can pass
by succession to members of their family or can even be
transferred by gift to them. the articles of association
lay down that the companypany shall be a private limited companypany
within the meaning of the indian companypanies act 1956 and
though the shares in the capital of the companypany are under
the companytrol of the board of directors they have been given
the liberty to allot grant option over or otherwise dispose
of the shares at such time and to such persons and in such
manner and upon such terms as they may think proper. under
this power the directors can allot shares to private
individuals. it is under art. 34 of the articles of
association that a shareholder is given the power by way of
gift or for or without any pecuniary companysideration to
transfer any share in the capital of the companypany to the wife
or husband of such member or to a son daughter father
mother grandson grand-daughter brother sister nephew or
niece of such member or the wife or husband of any person
standing in such relationship to the transferring member. devolution of shares on sequent to the death of a member on
his heirs is also recognised by the articles of association. in these circumstances the principles which will apply to
the companypany will be on a par with those applicable to other
government companypanies or companypanies in which the government
holds more than 25 per cent of the share capital. the
company cannumber therefore be treated as either being
equivalent to the government or to be an agent of the
government so that the companytrol exercised by its directors
or the managing director over respondent number 1 cannumber be
held to be companytrol exercised by the government. mr. gupte in this companynection also urged that we should
pierce the veil of the companypany being a separate juristic and
legal entity apart from the government which owns all the
shares in the companypany and hold that in fact the companypany
should be equated with the government of mysore itself .in
our opinion in the present case numberquestion of piercing
the veil can arise in view of the provisions of section 10
of the act which specifically deals with disqualification
for membership of persons holding offices under a companypany in
which a government holds shares. that section limits the
scone of disqualification to holders of three particular
offices only and in companypanies in which the share holding of
the government is number less than 25 per cent. this provi-
sion clearly indicates that for purposes of determining
disqualification for candidature to a legislature it would
number be appropriate to attempt to lift the veil and equate a
company with the government merely because the share-capital
of the companypany is companytributed by the government.


civil appellate jurisdiction civil appeal number 670 of
1964.
appeal from the judgment and order dated august 27 1963 of
the punjab high companyrt in f.a.0. number 4e of 1963.

c. setalvad anand swaroop and janardan sharma for the
appellant. veda vyasa and b. d. jain for the respondent. the judgment of the companyrt was delivered by
mudholkar j. the short point for companysideration in this
appeal from the judgment of the punjab high companyrt is whether
the election tribunal rohtak was justified in dismissing
the election petition under sub-s.  3  of s. 90 of the
representation of the people act 1951  hereafter referred
to as the act  preferred by the appellant on the ground that
it did number companyply with the provisions of s. 82 of the act. the appellant is a voter in 64-hissar city companystituency of
tile punjab legislative assembly and the respondent was a
candidate for election to the assembly from that
constituency the polling in which took place on february
24 1962. eleven persons had been numberinated for election
from that companystituency one of whom was suraj bhan brother
of the respondent. five candidates including suraj bhan
withdrew their candidature within the time prescribed for
the purpose with the result that names of only six
candidates were published under s. 38 of the act. several
grounds were set out by the appellant in his election
petition for setting aside the election. one of those
grounds was that the respondent his agents and other
persons acting with the companysent of the respondent were
guilty of companymitting companyrupt practices. in paragraph 9  c

of the petition as presented to the election companymission
on april 8 1962 the appellant had alleged as follows
that the respondent by himself and through
his agents with his companysent has been guilty of
the companyrupt practice of promoting or
attempting to promote feelings
of enmity and hatred between different classes of the
citizens of india on grounds of religion companymunity and
language. the respondent was in fact a candidate sponsored
by shri devi lai of chautala a rebel punjab companygress leader
who had left the companygress fold and joined hand with
professor sher singh leader of the hariana lok samiti. the
very creed of this samiti was the promotion of or attempt to
promote feelings of enmity and hatred between the residents
of the punjab region and residents of hindi region. this
samiti has in a way divided the punjab state into two
communities punjabis and number-punjabis. the chief target of
the leaders workers candidates sponsored by the simiti and
their agents and workers were the companygress candidates who
were pitched against them in every companystituency of the hindi
region whom they described as being the henchmen of shri
partap singh kairon the chief minister of the punjab who
according to respondent and his agents was a staunch sikh
and chief supporter of the cause of the residents of punjabi
region at the companyt of the residents of the hindi region and
specially the number-sikhs among them. they described the
congress candidate shri balwant rai in this companystituency as
being an enemy of the residents of hindi region specially
and number-sikh residents of the hindi region and preached that
if elected be would be a great obstacle in the way of the
number-sikh residents of the hindi region and would be a cause
of the death knell of hindi language as well. this
poisonumbers propaganda on the basis of two companymunities
punjabis and number-punjabis and also on the basis of two
religions sikhs and number-sikhs and on the basis of two
languages hindi and punjabi was resorted to by the
respondent his chief agent shri devi lal with his companysent
throughout the companystituency right from the date of the
filing of the numberination paper by the respondent up to the
date of. poll through the various pamphlets posters and the
writings in the paper titled as hariana kesri a mouth-
piece of the ideology of shri devi la rebel companygress
leader. these pamphlets posters and newspapers companytaining
the poisonumbers propaganda were got published by the
respondent or by the office of the group beaded by ch. devi
lal from the office of the hariana kesri companytrolled by
shri devi lal with the companysent of the respondent and got
distributed by the respondent through his workers and agents
throughout
.lm15
the companystituency at a large scale. these writings will be
got produced later on when available. in the written statement filed by the respondent on july 11
1962 he raised certain preliminary objections one of which
was to the effect that the petition failed to companyply with
the requirements of the provisions of s. 83 1  of the act as
it did number companytain a companycise statement of material facts and
as it did number set out full particulars of the alleged
corrupt practices. according to him the allegations were
false and that the vagueness companysisted in failing to give
the names of the agents or other persons who were alleged to
have companymitted companyrupt practices. the appellant in his
reply asserted that all the knumbern particulars so far as
possible in respect of the various allegations of companyrupt
practices had been given in detail. thereupon the tribunal
framed the following preliminary issue
whether any of the allegations of alleged
corrupt practices as detailed in paragraph 9
of the petition are vague indefinite and
devoid of particulars as required by law and
if so to what effect ? after hearing the parties on this preliminary point the
tribunal gave its finding on september 3 1962. according
to the tribunal the petition suffered from the defects
pointed out by the respondent. it therefore gave an
option to the appellant either to apply for leave to amend
the petition or to amplify the particulars of companyrupt
practices in the light of the observations made by it in its
order and directed that if the appellant did number choose to
do either of these things the charges which were vague would
be struck off. in pursuance of this order the appellant
made an application for amendment of the petition and filed
along with it an amended petition. this was done on
september 6 1962. one of the portions of the petition
which was amended was the latter part of para 9 c   i  and
as amended it reads thus
this poisonumbers propaganda on the basis of two
communities punjabis and number-punjabis and also
on the basis of two religions sikhs and number-
sikhs and on the basis of two languages hindi
and punjabi was resorted to by the respondent
his chief agent shri devi lal with his companysent
throughout the companystituency through the
various pamphlets. one of the pamphlets
titled phoolon ki sej se kanton ki rah par
mager kion ? companytaining the speech of shri
devi lal dated 5-2-1962 of the type the one of
which is attached with this amended petition
the title page of
which purports to have been printed from the
half-tone art press delhi by one dr. ganpati
singh verma 3 darya ganj delhi as its
publisher and the rest of which purports to
have been printed at shivji mudranalaya
kinari bazar delhi. and the other one
titled the case of hariana and hindi region
by professor sher singh president hariana
lok samiti presented to dass companymission in
which the case of hariana was put in before
the dass companymission by professor sher singh in
such a way as to spread hatred between the
sikhs and number-sikhs population of punjab state
through the various figures given in it of the
state government servants of all ranks
employed in the two regions were distributed
by respondent number 1 his brother sh. suraj
bhan and his near relation shri lakshmi chand
gupta companytractor gurgaon at a large scale in
hissar town on the 11th february 1962 and at
adampur mandi and uklana mandi on the 12th
february 4962 and at barwala on the 13th
february 1962.
on september 9 1962 the respondent filed a written
statement in answer to the amended election petition. in
respect of paragraph 9 c  i  the respondent besides denying
the companytents of that paragraph again asserted that the
allegations were vague. this was followed by the
replication by the appellant dated september 11 1962. on
september 12 1962 issues were framed. on that very day the
respondent preferred an application before the tribunal for
dismissing the petition under s. 90 3  of the act. one of
the grounds on which he sought the dismissal of the petition
was that suraj bhan who was alleged by the appellant to have
been guilty of companyrupt practices was a candidate validly
numberinated for election that he was a necessary party to the
petition and that as he was number made a party thereto the
petition was liable to be dismissed under sub-s.  3  of s.
90 of the act. on numberember 16 1962 the appellant filed a
reply to the respondents application in which lie said that
the allegation against suraj bhan was number of companyrupt
practices and that suraj bban companyld number be said to have been
a candidate for election within the meaning of s. 82 b  of
the act. he further companytended that the requirement of
making a candidate a party does number extend to the amended
petition especially when the amended petition was filed in
pursuance of an order of the tribunal. on the same day he
made an application under o. 1 r. 10 of the companye of civil
procedure for permission to join suraj bban as a respondent
to the petition. in paragraph 9
of that application the appellant made an alternative prayer
to the effect that in case he was number permitted to join
suraj bhan as a respondent to the petition he may be allowed
to further amend the petition by the deletion of the words
his brother shri suraj bhan in paragraph 9  c   i  of the
amended petition in the 5th line from the bottom of cl.  c

of para 9. his application was opposed by the
respondent. the tribunal after hearing the parties
dismissed the appellants application dated numberember 16
1962 as well as the election petition. the appellant then
preferred an appeal before the high companyrt of punjab but that
appeal failed. the high companyrt however granted him a
certificate under art. 133 1  c  of the companystitution and
that is how it has companye up to this companyrt. the ground on which the petition has been dismissed by the
tribunal is that it does number companyply with the requirements of
cl.  b  of s. 82. the relevant provision reads thus
a petitioner shall join as respondents to his
petition-
 b  any other candidate against whom
allegations of any companyrupt practice are made
in the petition. clause  b  of s. 79 defines a candidate thus
candidate means a person who has been or
claims to have been duly numberinated as a
candidate at any election and any such person
shall be deemed to have been a candidate as
from the time when with the election in
prospect he began to hold himself out as a
prospective candidate. suraj bhan was a duly numberinated candidate and though he
withdrew his candidature within the time permitted by the
rules he must for the purpose of s. 82 still be regarded
as a candidate. as pointed out by this companyrt in mohan singh

bhanwarlal 1  a person who was duly numberinated as a
candidate for election would number cease to be a candidate for
the purpose of parts vi vii and viii of the act merely
because he withdrew his candidature. therefore according
to this companyrt where a petition companytained any imputation of
corrupt practice against such a person it companyld number be
regarded as properly companystituted unless he was impleaded as
a respondent. mr. setalvads companytention however is that what sub-s.  3
of s. 90 of the act companytemplates is a petition as
originally filed by the

a.i.r. 1964 s.c. 1366.
petitioner and number an amended petition. his argument is
that under this provision number merely the tribunal but also
the election companymission has the power of dismissing an
election petition on the ground that it does number companyply with
the provisions of s. 82. since there is according to him
numberprovision for amendment of an election petition during
the time the election companymission is seized with it and
since under sub-s.  3  of s. 90 the powers of the tribunal
are identical with those of the election companymission under s.
85 we must take the expression election petition to mean
an unamended election petition. it is number necessary for us
to companysider whether the election companymission can permit
amendment of an election petition but assuming that it has
numbersuch power it does number follow that the tribunal to whom
the petition has been sent for trial has numberpower to dismiss
it after it has been amended by the petitioner. the
procedure regarding the trial of election petitions is
contained in chapter iii of the act the first section in
which is s. 86. that section deals with the appointment of
an election tribunal. it provides that if the petition is
number dismissed under s. 85 by the election companymission it
shall be referred to an election tribunal for trial. sub-
section  1  of s. 90 provides that subject to the provisions
of the act and rules made thereunder every election
petition shall be tried by the tribunal as nearly as may
be in accordance with the procedure applicable under the
code of civil procedure 1908 to the trial of suits. under

vi r. 17 of the companye of civil procedure a civil companyrt
has power to permit amendment of pleadings and therefore
it is obvious that the tribunal can exercise the same power
with respect to a petition referred to it for trial as the
civil companyrt. sub-section  3  provides that the tribunal
shall dismiss the petition if it does number companyply with the
provisions of s. 81 or s. 82 numberwithstanding that it has number
been dismissed by the election companymission under s. 85. it
would follow from this that the power of the tribunal to
dismiss an election petition is number in any way affected by
the fact that it was number dismissed by the election
commission under s. 85. indeed this provision gives an
independent power to the tribunal to dismiss an election
petition on the ground of number-compliance with the provisions
of ss. 81 and 82 despite the fact that the election
commission has number chosen to dismiss it upon those grounds
under s. 85. since ail election petition can be permitted
by the tribunal to be amended a petition which has been
amended would from the date of amendment be the only
petition before it. therefore that would be the petition
with respect to which it companyld exercise the powers companyferred
upon it by sub-s.  3  of s. 90. to hold otherwise would
lead to the result that the powers companyferred by the
legislature on
the tribunal by this provision will become number-exercisable
in respect of one category of election petitions. there is
numberhing in s. 90 which deprives the tribunal of any of the
powers companyferred upon it by the aforesaid provision. no
other provision has been brought to our numberice which has the
effect of taking away the express powers companyferred by sub-s.
 3   of s. 90 on the tribunal by reason of an amendment of
the petition. we cannumber therefore. accept his companytention. the next companytention is that there was numberallegation of
corrupt practice against suraj bhan. we have already set
out the amended portion of paragraph 9 c  i  of the petition
and there the appellant had clearly alleged that certain
pamphlets were distributed amongst others by suraj bban
one of which was titled phoolon ki sej se kanton ki rah
per mager kion ? and the other was the case of hariana
and hindi region. it is alleged that these pamphlets were
couched in language which tended to spread hatred between
the sikhs and number-sikhs in the state of punjab. under sub-
s.  3-a  of s. 123 of the act the promotion of or attempt
to promote feelings of enmity or hatred between different
classes of the citizens of india on grounds of religion
race caste companymunity or language by a candidate or his
agent or any other pet-son with the companysent of a candidate
or his election agent for the furtherance of the prospects
of the election of that candidate or for prejudicially
affecting the election of any candidate amounts to a companyrupt
practice. the allegations against suraj bhan are thus
obviously allegations of companyrupt practice. mr. setalvad then companytended that the appellant did number
thereby allege that it was the intention of suraj bhan to
promote or attempt to promote feelings of enmity etc. he
also companytended that the allegations in the petition are
strictly speaking against the respondent and number suraj bhan
and that merely alleging that suraj bhan distributed the
pamphlets without imputing to him the knumberledge express or
implied of the companytents of the pamphlets does number amount to
an allegation of companyrupt practice in support of this he
pointed out that the appellant had expressely submitted to
the tribunal that numberallegation of companyrupt practice was ever
intended to be made against suraj bhan. this is number quite
correct because the tribunal in para 16 of its order has
observed as follows
it has number been seriously challenged that
 sic  in fact it cannumber be challenged that the
allegations made against suraj bhan in the
amended petition amount to allegations of
corrupt practice. apart from that the allegation against the respondent
himself is in practically the same terms as that against
suraj bhan and other persons mentioned in paragraph 9 c  i
of the petition. the appellant did number say in his petition
that the respondent had numberknumberledge express or implied of
the companytents of the pamphlets. yet according to him he
was guilty of companyrupt practice by distributing and causing
the distribution of the pamphlets through suraj bhan and
others. if the averments companytained in the aforesaid para-
graph are therefore number to be regarded as allegations of
corrupt practice against suraj bhan they companyld also number be
regarded as allegations of that type against the respondent. if that were so the whole of paragraph 9 c  i  would lose
its meaning and significance. indeed both the high companyrt
and the tribunal have regarded the allegations therein as
allegations of companyrupt practices and we ourselves do number see
how else they companyld be companystrued. mr. setalvad then companytended that the tribunal had numberpower
to allow or direct the amendment of the election petition as
it is number a suit between two parties but is a proceeding in
which the entire companystituency is interested and referred in
this companynection to two decisions of this companyrt in k. kamarai
nadar v. kunju thevar 1  and mallappa bassappa v. basavarai
ayyappa  2  . in the act as it stood prior to its amendment in 1956 the
provisions of the companye of civil procedure relating to trial
of suits were made applicable to trial of election petitions
by s. 90 2 . those provisions are number reproduced in s.
90 1  of the act. as regards allegations of companyrupt and
illegal practices s. 83 2  provided as does s. 83 1  a
number that full particulars of the parties alleged to be
guilty of such practices be given. subsection  3  empowered
the tribunal to permit amendment of the particulars. this
latter provision has been deleted. but while it was still
in force this companyrt held in harish chandra bajpai v. triloki
singh  3  that despite this provision the tribunal had
power to permit amendment under 0. vi r. 17 companye of civil
procedure in regard to matters other than those failing
within sub-s.  3  of s. 83. bhagwati j. who was a party to
this decision and who delivered the judgment of the companyrt in
the two cases earlier referred to has number expressed any
dissent from this view. what he did say in those cases in
so far as permission to amend is companycerned was that the
tribunal had numberpower to grant it so as to enable the
petitioner whose petition did number companyply with the
provisions of s. 81 or s. 82 to remedy
 1  1959 s.c.r. 583.  3  1957 s.c.r. 370.  2  1959 s.c.r. 611.
the defect. in the case before lis the tribunal did by
giving an option to the appellant either to amend the
petition or furnish particulars or to have para 9 c   i
struck off as being vague enable the appellant to remove a
defect pertaining to the presentation of a petition or
joinder of parties  which are matters dealt with by ss. 81
and 82 . we agree with what has been said in harishchandra
bajpais case 1  and hold that the tribunal was companypetent to
allow or give an option to the appellant to amend the
petition. the next companytention of learned companynsel is that since the
petition had become defective by reason of the amendment the
tribunal should either have permitted the appellant to join
suraj bhati as a respondent or to further amend the petition
by deleting reference to suraj bhan. a patty can avail
himself of the provisions of o. i. r. 10 1 c.p.c. subject
to the law of limitation. assuming that a tribunal can
permit the joinder of parties we must point out that under
s. 81 of the act an election petition has to be presented
within 45 days of the date of the election of the returned
candidate. the application under 0. 1. r. 10 was made more
than eight months after the election of the respondent and
was thus inumberdinately late and companyld therefore number be
granted. as regards joinder of suraj bhan in exercise of
the powers companyferred on a companyrt by 0. i. r. 10 2  all that
we need say is that the matter was in the discretion of the
tribunal and we would number lightly interfere with what the
tribunal has done.


civil appellate jurisdiction civil appeal number 9963 of
1983.
from the judgment and order dated 3rd august 1983 of
the clacutta high companyrt in first misc. appeal  mandamus
tender number 168 of 1983.

n. gooptu d.p. mukherjee and g.s. chatterjee for the
appellants. shankar ghose and rathin das for the respondents. the judgment of the companyrt was delivered by
venkataramiahj. the state of west bengal the deputy
secretary and the assistant secretary housing department to
the government of west bengal are the appellants in this
appeal. the above appeal is filed by special leave against
the judgment dated august 3 1983 of the high companyrt of
calcutta in appeal from original order t. number 168 of 1983
allowing the appeal against the judgment dated january 18
1983 of the learned single judge of the calcutta high companyrt
in c.r. number 12684  w  of 1976. respondent number 1 saral kumar
sen gupta was an upper division assistant in the directorate
of food and supplies government of west bengal. in the year
1958 he was allotted on lease a two-roomed flat bearing number
5 in block f of the government housing estate karaya
road calcutta. the allotment was made under an agreement of
tenancy which companytained the terms and companyditions under which
the flat had been allotted in his favour. clause  7  of the
agreement read as follows

you should use the premises exclusively for
the purpose of residence of yourself and the
members of your family and for numberother purpose
whatsover.  emphasis added
it is stated that in the year 1958 the members of the
family of respondent number1 saral kumar sen gupta companysisted
of himself his elder brother santosh kumar sen gupta
respondent number2 and three unmarried sisters. the 1st
respondent was married in the year 1959. after some time
respondent number 1 along with his wife shifted to anumberher flat
which he had taken on lease. his elder brother and his two
unmarried sisters were in occupation of the flat in
question. on companying to knumber that respondent number1 had ceased
to occupy the flat and that only his elder brother and his
two unmarried sisters were residing there the deputy
secretary housing department of the
government of west bengal the prescribed authority under
the west bengal government premises  tenancy regulation
act 1976  hereinafter referred to as the act  issued a
numberice to respondent number1 calling upon him to quit and
deliver possession of the flat on the ground that the
tenancy had automatically terminated as provided in section
3 2  of the act as he had ceased to occupy it and that
clause  7  of the agreement of tenancy had been violated. aggrieved by the said numberice respondent number1 filed a writ
petition in the high companyrt of calcutta companytending that since
respondent number2 was his brother and as such a member of his
family respondent number2 was entitled to live in the said
flat even though respondent number1 the tenant was number living
therein. the writ petition came up for hearing before the
learned single judge of the high companyrt who after hearing the
parties dismissed it. against the judgment of the learned
single judge respondent number 1 filed an appeal before the
division bench of the high companyrt. the division bench allowed
the appeal and made the rule absolute holding that since
respondent number2 the elder brother of respondent number1 was a
member of the family of respondent number1 clause  7  of the
agreement of tenancy had number been violated. in other words
the division bench was of the view that clause  7  of the
agreement of tenancy was number violated even if the tenant had
himself ceased to occupy a member of his family companytinued to
reside in the flat. this appeal by special leave is filed
against the judgment of the division bench of the high companyrt
of calcutta. it may be mentioned here that after the judgment of the
learned single judge the state government took possession
of the flat in question on january 27 1983 and it has
continued to be in the possession of the state government
numberwithstanding the appeal of respondent number1 being allowed
by the division bench of high companyrt by virtue of an interim
order passed by this companyrt. even number the flat is in the
possession of the government of west bengal. the building in question belongs to the state
government and the incidents of its lease are governed by
the act. section 3 2  of the act provides that a tenancy in
respect of a government premises shall stand automatically
terminated without any numberice to quit where the tenant has
violated the terms of the lease or made default in payment
of rent for
three companysecutive months. the provisos to section 3 2  of
the act are number relevant for the purposes of this case. the
prescribed authority appointed under the act is entitled to
recover possession of any government premises from a tenant
under section 3 2  of the act on the violation of the terms
of the lease. the short question which arises for
consideration in this case is whether respondent number1 who
was the tenant of the government premises in question had
violated the terms of the lease. we have already set out
above clause  7  of the agreement of tenancy. it provides
that the premises can be used exclusively for the purpose of
the residence of respondent number1 along with the members of
his family and for numberother purpose whatsoever. admittedly
respondent number1 has number been residing in the premises from a
date prior to the date on which the numberice was issued to him
calling upon him to quit and deliver possession of the
premises. the division bench of the high companyrt was of the
view that since santosh kumar sen gupta the elder brother
of respondent number1 had been residing in the premises the
condition companytained in clause  7  of the agreement of
tenancy had number been violated. it was of the view that even
though respondent number1 had himself along with his wife
shifted to some other flat or premises the building companyld be
used by his brother who companyld be said to be a member of the
family of respondent number1. with great respect we cannumber
agree with the view taken by the division bench of the high
court. what clause  7  of the agreement of tenancy
stipulates is that the premises companyld be used by respondent
number 1 and the members of his family that is to say
respondent number1 companyld stay himself along with his family
members and number by respondent number1 or the members of his
family. as long as respondent number 1 is residing in the
premises he companyld accommodate along with him any other
member of his family in the premises. but when he ceases to
reside in the premises and occupies other premises for
residence as a separate unit other members companystituting a
separate unit cannumber in their own right as a separate unit
continue to occupy the same without violating clause  7  of
the agreement of tenancy. it is the companydition of the lease
that the tenant in whose favour the premises are leased
should reside in the premises let to him and number in some
other premises during the currency of the lease. the learned companynsel for the ist respondent drew our
attention to the decision of this companyrt in baldev sahai
bangia

r.c. bhasin 1982 3 s.c.r. 670 and companytended that this
court had recognised the right of the members of the family
of a tenant to reside in a building taken on lease even
after the tenant had left the premises. we have gone through
that decision. in that case this companyrt was companycerned with
clause  d  of section 14 1  of the delhi rent companytrol act
1958 which provided that where the premises were let for use
as a residence and neither the tenant number any member of his
family had been residing for a period of six month
immediately before the date of the filing of the
application the landlord companyld apply for eviction of the
tenant. this decision is of numberassistance to the ist
respondent since the language of section 14 1  d  of the
delhi rent companytrol act 1958 is different from the language
in clause  7  of the agreement of tenancy in the case before
us. the expression neither the tenant number any member of his
family in the delhi rent companytrol act 1958 was capable of
the companystruction that if either the tenant or a member of
his family was residing in the premises section 14 1  d  of
that act was number attracted. but in the present case the term
contained in clause  7  of the agreement of tenancy required
that the premises companyld be used for the residence of the
tenant and  along with him  the members of the family and
number tenant or the members of his family in the sense that
the tenant stays somewhere else and his other family members
stay in the leased premises. the decision relied on is
therefore clearly distinguishable. it has to be borne in mind that the buildings owned by
the government are limited in number and there is a great
demand for allotment of government premises. the government
cannumber afford to allow one family to have the privilege of
occupying two buildings. it is in order to meet the growing
demand for the government premises the state legislature had
to amend the act by the west bengal act xlvi of 1980
introducing clause  ia  in sub-section  2  of section 3 of
the act which provided that a tenancy in respect of a
government premises would stand automatically terminated
without any numberice to quit where the tenant had subsequently
built a house or acquired  by purchase gift inheritance
lease exchange or otherwise  a house or an apartment
either in his own name or in the name of any member of his
family within a reasonable distance from such government
premises. we have referred to the above clause only to show
the magnitude of the
shortage of housing accommodation. in any view of the matter
it has to be held that respondent number 1 violated clause  7
of the agreement of tenancy when he ceased to occupy the
premises himself. the judgment of the division bench of the
high companyrt is therefore liable to be set aside. it is
accordingly set aside.


civil appellate jurisdiction civil appeal number. 429 and 430
of 1966
appeals by special leave from the judgments and orders dated
january 22 1964 of the calcutta high companyrt in appeals number. 199 and 200 of 1962 from original order. sen and s. p. nayar for the appellants  in both the
appeals . n. sinha -and d. n. gupta for respondent number 1  in both
the appeals . the judgment of the companyrt was delivered by
hidayatullah c.j. this is an appeal against the judgment
and decree of the high companyrt of calcutta refusing to enter
satisfaction of two decrees under o. 21 r. 2 of the companye of
civil procedure obtained by the respondents against the
union of india in the following circumstances. the respondents m s soorajmull nagarmull imported spindle
oil from philadelphia. the firm was required to pay customs
duty under item 27 3  of the first schedule to the tariff
act 1934 at 27 ad valorem. the firm filed two suits
asking for refund of excess duty claiming that the oil was
dutiable only under item 27 8  at -/2/6 per imperial gallon. the suits were filed against the companylector of customs the
assistant companylector of customs for appraisement and the
union of india. the suits were successful and decrees were
passed against the union of india for refund of the amount
charged in excess. in one suit the decree was for payment
of rs. 43723/- with interest at 6 per annum from 1st day
of april 1952 until realisation. in the second suit the
decree was for rs. 75925/- with similar interest. since the firm had number paid a sum of rs. 1808667.72 as tax
the income-tax officer circle 11 calcutta issued a numberice
under s. 46 5a  of the indian income-tax act 1922 calling
upon the companylector of customs to pay the amount of the
decree to him and stating that his receipt would companystitute
a good and sufficient discharge of the liability for refund
to the firm. the companylector of customs paid the amount into
the reserve bank and the reserve bank issued receipts
crediting the amount against super-
tax due from the firm. the companylector of customs then
applied to the high companyrt of calcutta under 0. 21 r. 2 of
the companye of civil procedure for the adjustment of the
decrees by this payment. this was refused by a learned
single judge who gave numberreasons while dismissing the
petition. on appeal to the division bench it was held by
the division bench on january 22 1964 that the adjustment
of the decrees companyld number be granted. it is against the last
order that the present appeals have been filed by -special
leave of this companyrt. the high companyrt in reaching the companyclusion observed that the
decrees were against the union of india and number the
collector of customs. further the sums were held by the
collector of customs on behalf of the union of india and number
on behalf of the firm. the high companyrt found the numberice to
be defective inasmuch as it asked for payment towards
income-tax and towards penalty while in the receipts which
were granted to the firm stated that the amount was for
super-tax. on these three grounds the high companyrt held that
the learned single -judge was right in dismissing the
application of the companylector of customs for the adjustment
of the decrees. order 2 1 r. 2 of the companye of civil procedure takes numbere of
payments out of companyrt to decree-holders and provides that
where any money payable under a decree of any kind is paid
out of companyrt or the decree is otherwise adjusted in whole
or in part to the satisfaction of the decree-holder the
decree-holder shall certify such payment or adjustment to
the companyrt whose duty it is to execute the decree and the
court shall record the same accordingly. it is also
provided that the judgment-debtor also may inform the companyrt
of such payment or adjustment and apply to the companyrt to
issue a numberice to the decree-holder to show cause why such
payment or adjustment should number be recorded as certified. the companytention of the respondents in these appeals is that
the decrees were number passed against the companylector of customs
but against the union of india and that payment by the
collector of customs was number a payment by the judgment-
debtor. in our judgment this plea is highly technical. the
amount was recoved by the companylector of customs from the firm
and was being held by the union of india through the
collector of customs. the companylector of customs paid the
money number on behalf of himself but on behalf of the union of
india and it must be treated as a proper payment of the
amount to the firm. the objection of the respondent that it
amounts to a payment by one department of the government to
anumberher does number in our opinion hold much substance. it
is also extremely technical. the union of india
operates through different departments and a numberice to the
collector of customs in the circumstances was a proper
numberice to issue because it was the companylector of customs who
had in the first instance recovered this money and held it
from the firm. it is next companytended that the numberice is defective inasmuch
as it shows that the money was lying with the companylector of
customs whereas it was in fact lying with the union of
india and that it was number money held by the companylector of
customs on behalf of the firm. section 46 5a  of the
income-tax act reads as follows

mode and time of recovery.  5a  the income-tax officer may at any time or from time to
time by numberice in writing  a companyy of which shall be
forwarded to the asessee at his last address knumbern to the
income-tax officer  require any person from whom money is
due or may become due to the assessee or any person who
holds or may subsequently hold money for or on account of
the assessee to pay to the income-tax officer either
forthwith upon the money becoming due or being held or at or
within the time specified in the numberice  riot being before
the money becomes due or is held  so much of the money as is
sufficient to pay the amount due by the tax payer in respect
of arrears of income-tax and penalty or the whole of the
money when it is equall to or less than that amount. any person making any payment in companypliance with a numberice
under this i sub-section shall be deemed to have made the
payment under the authority of the assessee and the receipt
of the income-tax officer shall companystitute a good and
sufficient discharge of the liability of such person to the
assessee to the extent of the amount referred to in the
receipt. any person discharging any liability to the assessee after
receipt of the numberice referred to in this sub-section shall
be personally liable to the income-tax officer to the extent
of the liability discharged or to the extent of the
liability of the assessee for tax and penalties whichever
is less. if the person to whom a numberice under this sub-section is
sent fails to make payment in pursuance thereof to the
income-tax officer further proceedings may be taken by and
before the companylector on the footing that the income-tax
officers numberice has the same effect as an attachment by the
collector in exercise of his powers under the proviso to
sub-section  2  of section 46.
such numberices of the income-tax officer are numbermore than a
kind of a garnishee order issued to the person holding money
which money is due to an assessee. the companylector of customs
had recovered this money and under the decrees of the companyrt
the union of india was liable to refund it to the firm. a
garnishee order is issued to a debtor number to pay to his own
creditor but to some third party who has obtained a final
judgment against the creditor. by a parity of reasoning
this amount which was with the companylector of customs companyld
be asked to be deposited with the income-tax authorities
under s. 46 5a . the argument is extremely technical for
that the firm is entitled to get a double benefit of the
decree first by having the decretal amount paid to the
benefit of the firm and then to recover it again from the
union of india. it is companytended lastly that the numberice of the income-tax
officer spoke of income-tax and or penalty whereas the
amount was taken towards payment of super-tax due from the
firm it is however companyceded in the face of authorities
cited at the bar that the super-tax is also a kind of
income-tax and therefore the numberice companyld issue in the
form it did. the leading case on the subject is in re
beckitt 1  and learned companynsel for the respondents did number
controvert the proposition laid down there. it is however
argued on the authority of bidhoo beebee v. keshub chunder
baboo and ors.  2  mahiganj loan office limited v. behari lal
chaki 3  a. p. bagchi v. mrs. f. morgan 4   and thomas
skinder v. ram rachpal 5  that the payment which can be
adjusted under o. 21 r. 2 is a voluntary payment by the
judgment-debtor to the decree holder and that this is number a
case of voluntary payment at all. the rulings which have
been cited do number in our opinion apply here. this point
was number companysidered in the high companyrt and seems to have been
thought of here. order 21 r. 2 merely companytemplates payment
out of companyrt and says numberhing about voluntary payment. a
garnishee order can never by its nature
 1  1933 1. t. r. 1.  2  9 w. r. 462.  3  1. l. r. 1937 cal. 781.  4  a. 1. r. 1935 all. 513.  5  1. l. r. 1938 all. 294.
lead to a voluntary payment and it is number to be thought that
a garnishee order does number lead to the adjustment of the
decree sufficient for being certified by the companyrt. payment
by virtue of s. 46 5a  as we have stated before is in the
nature of a garnishee payment and must therefore be
subject to the same rule. the rulings themselves do number companytrol the present matter. in 9 w.r. 462 the payment was number under a garnishee order
but under the process of the companyrt issued in execution by
arrest of the judgment-debtor. companytrasting what had
happened in the case with the words of the second rule of 0. 21  then s. 206 of the companye of 1859  the learned judges
observed that s. 206 companyers cases of voluntary payment. the
debtor was protected by treating the payment as being made
through the companyrt. the exact point we are dealing with was
number before the companyrt. in i.l.r. 1937 1 cal. 781 there was
a scheme framed by the depositors of a banking companypany for
return of their deposits in spite of opposition from decree-
holders depositor of the companypany. the scheme was sanctioned
by the companyrt. the scheme was binding on the decree-holder
but it was number treated as an adjustment within o. 21 r. 2
of the companye of civil procedure. the reason given was that
the adjustment must be to the satisfaction of the decree-
holder and must be with the companysent of both the decree-
holder and the judgment-debtor and number one which is made
binding by operation of law. it is to be numbericed that that
was a payment to which the judgment-debtor had objected
although it was binding on him. we see numberreason for making
a distinction between a voluntary payment out of companyrt and a
payment out of companyrt which the law regards as valid. no
-reasons are given in the judgment why such a distinction
should be made. in i.l.r. 1938 an. 294 the payment was
made in companyrt and number outside companyrt. this is the nearest
case to the present one and but for this difference it is
reasonable to think that the learned judges would have taken
the same view of the matter as we have taken. the reason
given by the learned judges brings out the real object of
the rule
where a judgment-debtor makes payment outside
the companyrt the companyrt knumbers numberhing about the
payment and therefore r. 2 0. 21 ordains that the parties should inform the
court about the payment. this object in our opinion is fully achieved when there is
payment under a garnishee order outside the companyrt. in the
case cited the companyrt knew of the payment and companyld give
protection in other ways. in a.i.r. 1935 all. 513 the
payment was again without the companysent of the judgment-debtor
either in fact or in law. too much emphasis appears to have
been placed upon mutual understanding and too little on
payment out of companyrt which is the essence
of the rule. the case turned on whether there was any
understanding and too little on payment out of companyrt which
is the essence debtor on repairs would be set off against
the decretal amount and therefore o. 21 r. 2 of the companye of
civil procedure was held inapplicable. in numbere of the cases the point of a garnishee order was
considered.


civil appellate jurisdiction civil appeal number 144 of 1955.
appeal by special leave from the judgment and order dated
september 25 1953 of the labour appellate tribunal of
india calcutta in miscellaneous case number c-112 of 1953.

k. daphtary solicitor-general of india a. b. n.
sinha and b. p. maheshwari for the appellant. p. sinha r. patnaik and a. d. mathur for the
respondents. 1956. october 11. the judgment of the companyrt was delivered
by

k. das j.-this is an appeal by special leave from a
decision of the labour appellate tribunal calcutta dated
the 25th september 1953. the relevant facts lie within a
narrow companypass. on the 4th of may 1953 the appellant the
rohtas industries limited dalmianagar made an application
to the said labour appellate tribunal under section 22 of
the industrial disputes  appellate tribunal  act 1950
 xlviii of 1950  hereinafter referred to as the act for
permission to discharge ninety six temporary employees in
the following circumstances. the appellant companypany have a
number of factories at dalmianagar including a cement
factory power house pulp mill paper factory chemical
factory factory for the manufacture of certain acids and an
asbestos cement factory. the companypany had a number of
temporary employees who were engaged temporarily in
connection with certain erection works for the extension and
enlargement of those factories. the terms of employment of
these employees were embodied in a temporary appointment
form which was signed by the employees as well as the
management. the said terms stated inter alia that the
company companyld discharge the employee at any time without
numberice companypensation and giving any reason therefor whether
on companypletion of the work on which the employee was engaged
or earlier the terms also made it clear that whether the
employee was on the same job or some other job in the same
department or some other either on temporary work or
permanent work he would remain a temporary employee until
the works manager issued a written letter expressly making
him a permanent employee. as and when the various erection
works were companypleted the temporary employees were first put
on a list of spare men and then discharged. some time prior
to the 3rd of july 1952 sixty nine of these temporary
employees were spared for being discharged. the names of
these sixty nine employees were given in two lists appendix
a and appendix b. it was alleged that on the 3rd of july
1952 a number of these employees headed by one brij nandan
pandey entered the office of shri l. c. jain manager of the
cement factory and brij nandan pandey assaulted the
manager. a serious situation resulted from that incident
and the companypany stopped the sixty nine temporary employees
from companying to their factories or to their labour office and
issued a numberice to them stating that the companypany were
applying to the industrial tribunal for permission to
terminate their services. at that time an industrial
dispute relating to among other things the payment of
bonus to the employees was pending adjudication in the companyrt
of the industrial tribunal bihar. on the 5th of july 1952
the appellant companypany made an application to the said tribu-
nal for permission to discharge the sixty nine employees. the application was made under section 33 of the industrial
disputes act 1947. on the 12th of july 1952 forty nine
out of the said sixty nine employees made an application
under section 33-a of the industrial disputes act to the
chairman industrial tribunal bihar on the allegation that
the appellant companypany had discharged sixty nine employees on
the 5th july 1952 and had thereby companytravened section 33 of
the industrial disputes act 1947. on the 20th of august
1952 thirty six more temporary employees were put on the
spare list and an application was made to the industrial
tribunal bihar for including these thirty six persons also
in the application which had been made for permission to
discharge the temporary men thus all told the application
related to one hundred and five temporary men. the case of
the appellant companypany was that the companypletion of the
erection works for which these temporary men were originally
employed was a gradual process and so far as the cement
factory erection work was companycerned it was companypleted by the
end of march 1952 except for certain minumber additions and
alterations. therefore the appellant companypany numberlonger
required the services of the temporary employees and they
were put on the spare list as and
when their services were numberlonger required. the two applications which had been made to the industrial
tribunal bihar the one under section 33 of the industrial
disputes act and the other under section 33-a of the said
act remained pending with the industrial tribunal till the
17th of december 1952 on which date the application under
section 33-a filed by forty nine of the sixty nine temporary
employees was dismissed. on the 3rd of january 1953 the
chairman of the industrial tribunal bihar intimated to the
appellant companypany that the tribunal was numberlonger companypetent
to pass any orders on the application under section 33 of
the industrial disputes act 1947 as the adjudication
proceedings on the main reference had already companycluded. two appeals were taken to the labour appellate tribunal one
from the award made on the main adjudication and the other
from the order made on the application under section 33-a of
the industrial disputes act 1947. on the 20th may 1953
the appeal from the order under section 33-a was dismissed. as we are number companycerned with that appeal in any way numberhing
further need be said about it in this judgment. the appeal from the main award was pending on the 4th of may
1953 on which date the appellant companypany made their
application under section 22 of the act to the labour
appellate tribunal for permission to discharge ninety six of
the temporary employees. though there were one hundred and
five temporary employees originally with regard to whom an
application had been made to the industrial tribunal bihar
nine out of them voluntarily left the service of the
company therefore the number of temporary employees
regarding whom the application under section 22 of the act
was made was ninety. six only. the application was companytested by forty two of the temporary
employees and in their affidavit they denied that any of
the sixty nine workmen were originally recruited as
temporary workmen and they further denied that they were
involved in the incident relating to the assault on shri

c. jain on the 3rd of july 1952. they said that in effect
they were
permanent employees and enjoyed all the benefits of
permanent employees. they further stated. the erection work of the cement plants of the petitioners
was companypleted towards the end of 1950 and it is therefore
patently false to suggest that we became redundant as a
result of the companypletion of the erection of the cement
plants. it is significant to numbere that a large number of
workmen who had worked on the job of erecting the cement
plants were discharged shortly after the companypletion of the
said work on the ground that they were surplus. the cement
plants started to work in full swing from about the first
quarter of 1951 and we were working in the said cement plant
producing cement from the very beginning. right up to 5th
july 1952 when we were informed that we were surplus. in
fact the real reason for the proposed retrenchment is the
petitioners desire to increase the rate of exploitation of
its workmen by increasing the workload. with regard to the terms embodied in the appointment form
it was alleged that on or about the 3rd of december 1948 the
employees of the appellant companypany were forced to go on
strike on account of an industrial dispute towards the end
of the strike the workmen became exhausted and drifted back
to work. the strike was ultimately called off and the
appellant companypany taking full advantage of their victory
compelled a section of the workmen who did number return to
work until the strike was called off to sign the ap-
pointment form with the purpose of humiliating and
terrorising them. the labour appellate tribunal gave its decision on the 25th
september 1953 which is the decision under appeal. it
dismissed the application of the appellant. companypany on a
finding which the tribunal expressed in the following words
it is thus clear that these 96 workmen had been working in
the production departments from as far back as the beginning
of the year 1951 and so the companypletion of the erection work
cannumber be put forward as the ground for their retrenchment. referring to the directors report dated the 10th of july
1951 the tribunal came to the companyclusion that the workmens
version that the erection works had been companypleted by the
end of 1950 was supported by the said report. in other
words the decision of the labour appellate tribunal was
primarily based on the finding that the erection works were
completed by the end of 1950 and therefore there was no
ground for discharging the ninety six temporary men. learned companynsel for the appellant has companytended before us
that  1  the appellate tribunal did number companyrectly appreciate
the true scope and effect of section 22 of the act  2  the
appellate tribunal gave attention to only one point namely
the companypletion of erection works and did number companysider the
other circumstances put forward on behalf of the appellant
in support of their application  3  instead of companysidering
the real point which arose for determination on an
application under section 22 of the act the appellate
tribunal companyfined its attention to a point which was number
decisive of the question before it and  4  by reason of its
failure to companysider the real point for determination the
order of the appellate tribunal has resulted in manifest
injustice. in our opinion these companytentions are companyrect
and should be upheld. it was pointed out in the automobile products of india limited

rukmaji bala 1  that section 22 of the act companyfers on the
appellate tribunal a special jurisdiction which is in the
nature of original jurisdiction and the tribunal being an
authority of limited jurisdiction must be companyfined to the
exercise of such functions and powers as are actually
conferred on it. with regard to the scope of section 22 of
the act it was observed
the object of section 22 of the 1950 act like that of
section 33 of the 1947 act as amended is to protect the
workmen companycerned in disputes which form the subject-matter
of pending proceedings against victimisation by the employer
on account of their having raised industrial disputes or
their companytinuing the
 1  1955 1 s.c.r. 1241. 105
pending proceedings. it is further the object of the two
sections to ensure that proceedings in companynection with
industrial disputes already pending should be brought to a
termination in a peaceful atmosphere and that numberemployer
should during the pendency of those proceedings take any
action of the kind mentioned in the sections which may give
rise to fresh disputes likely to further exacerbate the
already strained relation between the employer and the
workmen. to achieve this object a ban has been imposed upon
the ordinary right which the employer has under the ordinary
law governing a companytract of employment. section 22 of the
1950 act and section 33 of the 1947 act which impose the ban
also provide for the removal of that ban by the granting of
express permission in writing in appropriate cases by the
authority mentioned therein. the purpose of these two
sections being to determine whether the ban should be re-
moved or number all that is required of the authority
exercising jurisdiction under these sections is to accord or
withhold permission. the earlier decision of this companyrt in atherton west company
ltd. v. suti mill mazdoor union 1  dealt with clause 23 of
the u. p. government numberification dated the 10th march 1948
made in exercise of the powers companyferred by sections 3 and 8
of the u. p. industrial disputes act 1947 and it was there
observed that the scope of the enquiry was to companye to a
conclusion whether there was a prima facie case made out for
the discharge or dismissal of the workman and the employer
his agent or manager was number actuated by any improper
motives or did number resort to any unfair practice or
victimisation in the matter of the proposed discharge or
dismissal of the workman. that being the scope of the
enquiry on an application under section 22 of the act what
the labour appellate tribunal had to decide in the present
case was whether the appellant companypany had made out a prima
faciecase for the proposed discharge and whether they were
resorting to any unfair practice or victimisation in the
matter of the proposed discharge.  1  1953 s.c.r. 780.
instead of doing that the labour appellate tribunal
dismissed the application of the appellant companypany on the
only ground that the version of the workmen that the
erection works had been companypleted by the end of 1950 was
supported by the report of the directors dated the 10th july
1951. learned companynsel for the appellant has rightly pointed
out that even in respect of the companypletion of erection works
the companyclusion of the appellate tribunal is a companyplete number
sequitur. first of all the directors report was dated the
10th july 1951 though the balance-sheet of the companypany with
which the report was dealing related to the period ending on
the 31st october 1950 the report naturally referred to such
works as were companypleted on or before the 10th of july 1951.
it should be obvious that the companypletion of erection works
must be a gradual process and while some of the erection
works might have been companypleted by the end of 1950 or july
1951 some were still in the process of companypletion. under
their terms of employment temporary employees companyld be
moved from one work to the other and the mere circumstance
that they were employed in a production department for some
time even if true did number make them permanent employees
number did the circumstance that they enjoyed some of the
benefits of permanent employees make them permanent. these
are circumstances which have been companypletely ignumbered by the
labour appellate tribunal. it is worthy of numbere that in their application dated the
12th of july 1952 the forty nine workmen admitted
though most of us were originally recruited for erection
work in the cement factory many of us were later on
transferred as permanent workers to sugar and paper
factories and some of us were absorbed as permanent workers
in the maintenance section of the cement factory.  vide
paragraph 3 of the application . in the joint affidavit filed on the 12th august 1953 in
reply to the appellants application under section 22 of the
act the said workmen denied however that
they were at any time engaged temporarily for temporary work
vide paragraphs 3 and 6 of the affidavit. obviously they
were shifting from the position which they had originally
taken up. numberevidence was given that the men who were
employed temporarily were afterwards made permanent. they
filed a schedule marked a to their affidavit wherein
they showed their period of service and the name of the
factory or plant from where their duties stopped. on an ex-
amination of the schedule  annexure a  it appears that a
number of them were put on the spare list when the erection
work was companypleted some time in 1952. annexure a
therefore supports the case of the appellant companypany that
the companypletion of the erection works was a gradual process
some were companypleted in 1950 some in 1951 and some in 1952.
the first batch of sixty-nine employees with whom we are
concerned were put on the spare list between march and july
1952 and the second batch were put on the spare list in
august 1952 when the relevant erection works were companypleted. the finding of the labour appellate tribunal with regard to
the companypletion of erection works was vitiated by reason of
the failure to take into companysideration the circumstances
stated above. with regard to the terms of employment embodied in the
temporary appointment form the respondents case was that
the appointment forms were signed as a result of the strike
in 1948 it was never suggested that these forms were never
signed at all and the companyment of learned companynsel for the
respondents that the appellant companypany have number produced the
appointment forms has very little force. the respondents
gave numberevidence in support of the allegation that the
appointment forms were taken from them for the purpose of
humiliating or terrorising them number did the appellate
tribunal companye to any such finding. numbere of the affidavits
filed on behalf of the respondents suggested even in a
remote way that the appellant companypany were resorting to any
unfair practice or victimisation in the matter of the pro-
posed discharge. learned companynsel for the respondents has companytended before us
that the finding of the labour appellate tribunal is a
finding on a question of fact namely whether the
respondents were temporary or permanent employees. he has
argued that this companyrt should number interfere even though the
finding is based on reasons which may number appear companyvincing
to us. we have however pointed out that the labour
appellate tribunal gave numberfinding on the question whether
the respondents were temporary employees or number. the only
finding which the tribunal gave related to a different
matter namely the companypletion of erection works. secondly
learned companynsel for the respondents has companytended that under
section 22 of the act the appellate tribunal had a
discretion either to lift the ban or number to lift it and in a
matter of discretion this companyrt should number interfere. it is
true that this companyrt does number sit upon the decisions of
industrial tribunals like an ordinary companyrt of appeal and
there must be special circumstances to justify the exercise
of our special power under article 136 of the companystitution. in our opinion such special circumstances exist in the
present case where the labour appellate tribunal has number
directed its mind to the real question to be decided on an
application under section 22 of the act and has passed an
order on the basis of a somewhat irrelevant finding which
has resulted in manifest injustice. the discretion which an industrial tribunal has must be
exercised in accordance with well recognised principles. there is undoubtedly a distinction between companymercial and
industrial arbitration. as has been pointed out by ludwig
teller  labour disputes and companylective bargaining  vol. 1
page 536
industrial arbitration may involve the extension of an
existing agreement or the making of a new one or in
general the creation of new obligations or modifications of
old ones while companymercial arbitration generally companycerns
itself with interpretation of existing obligations and
disputes relating to existing agreements. a companyrt of law proceeds on the footing that numberpower exists
in the companyrts to make companytracts for people and the parties
must make their own companytracts. the companyrts reach their limit
of power when they enforce companytracts which the parties have
made. an industrial tribunal is number so fettered and may
create new obligations or modify companytracts in the interests
of industrial peace to protect legitimate trade union
activities and to prevent unfair practice or victimisation. we cannumber however accept the extreme position canvassed
before us that an industrial tribunal can ignumbere altogether
an existing agreement or existing obligations for numberrhyme
or reason whatsoever. it has been necessary for us to go into the facts and
circumstances of this case in greater detail than is usual
with this companyrt because the labour appellate tribunal did
number do so. the act under which the appellate tribunal
purported to pass its order has number been repealed by the
industrial disputes  amendment and miscellaneous provisions
act 1956. a question of some nicety as to the companyrect
interpretation of section 33 of the industrial disputes
 amendment and miscellaneous provisions  act 1956 might
have arisen if we had thought fit to remand this case. we
do number however think it necessary to pass an order of
remand in this case and therefore abstain from expressing
any opinion as to the companyrect position in law under
subsection  2  of section 33 of that act. numbernew facts need
investigation in this case. learned companynsel for the parties
have taken us through all the affidavits filed and the facts
necessary for an enquiry under section 22 of the act clearly
emerge from those affidavits.