civil appellate jurisdiction civil appeal number 2455 of
1968.
from the judgment and decree dated 12-8-1966 of the bombay
high companyrt in f.a. number 15 of 1960.

n. pphadke and a. g. ratinaparkhi for the appellant. p. bhart s. p. nayar and m. n. shroff for respondent
number1. r. k. pillai for respondent number 2
the judgment of the companyrt was delivered by
kailasam j.-this appeal is by the legal representatives of
the plaintiff by a certificate granted by the high companyrt of
bombay  nagpur bench  against its judgment and decree dated
12th august 1966.
the plaintiff in the suit is the brother of the ex-
proprietor of the ahiri zamindar the second defendant
second respondent in this appeal. the first defendant is
the state of maharashtra the first respondent in this
appeal. the madhya pradesh abolition of proprietary rights  estates
mahals alienated lands  act 1950 act 1 of 1951 received
the assent of the president on 22nd january 1951 and was
published in
the gazette on 26th january 1951. the state government
published a numberification bringing the act into force from
31st march 1951. before the act came into force on 31st
march 1951 the plaintiff who is a brother of the second
respondent the proprietor of the estate took a companytract on
15th march 1951 for cutting the standing trees in the
forest knumbern as hachbodi nendwadi companype for a gum of rs. 50000. the companytract provided that a sum of rs. 15000 was
to be paid immediately on the date of the execution of the
contract and the balance to be paid within six months. the
second respondent filed a writ before the supreme companyrt
challenging the validity of the act and also of the
numberifications and obtained an order of stay on 27th march
1951. the writ petition was ultimately dismissed on 2nd
may 1952 and the stay vacated. after the dismissal of the
writ petition filed by the second respondent the
departments of the government refused permission to the
plaintiff to remove the trees cut. the plaintiff made a
representation to the state government and the government by
a letter dated 12th march 1953 ex. p-17 permitted the
plaintiff to remove the trees on companydition that be deposited
rs. 35000. accordingly the plaintiff paid rs. 35000 on
24th march 1953 and removed the timber. the suit out of which this appeal arises was filed by the
plaintiff for the return of the sum of rs. 35000 on the
ground that he bad already paid rs. 35000 to his brother by
30th september 1951 and that the government was number
entitled to recover anumberher sum of rs. 35000. he claimed
for the return of the amount of rs. 35000 with interest of
rs. 7000 in all rs. 42000. it was companytended in the plaint
that as the supreme companyrt had granted a stay of the opera-
tion of the act the property did number vest in the state on
31st march 1951 according to the numberification and that it
was only on 2nd may 1952 when the supreme companyrt dismissed
the writ petition that the estate vested in the government. on this ground it was submitted that the plaintiffs
contract was binding on the defendants estate. plaintiff
also companytended that apart from rs. 15000 which be paid to
the second respondent on the date of the agreement i.e. on
15th march 1951 be paid the balance in two installments of
rs. 35000 on 31st august 1951 and 30-9-1951. the
plaintiff it was submitted was forced to pay anumberher rs. 35000 as the first respondent the state refused to permit
him to remove the timber that had already been cut by him. in any event the plaintiff companytended that his title became
perfect on the date of the companytract before 31st march 1951
when the estate vested in the state. the state denied the
claims of the plaintiff and companytended that the property
vested in the state on 2nd may 1952 and denied the
allegation that the plaintiff had paid a sum of rs. 35000
to the second respondent. while admitting that the
plaintiff applied for permission to remove the teak cut and
receipt of rs. 35000 it denied that the amount was
collected under any duress. the plea by the state
government was that the companytract ex. p-19 entered into by
the plaintiff with the second respondent was sham and
collusive transaction without companysideration. the trial companyrt decreed the suit on 21st numberember 1959
holding that the transaction was entered into by the second
respondent in the ordinary companyrse of management and that the
transaction was number sham or a bogus one. it also found that
as a result of the stay order the property companytinued to be
with the second respondent and that he was entitled to
receive the balance of the sale rice under the companytract. it
also held that the transfer of sale under the companytract of
the standing timber was sale of movable property and
therefore the transaction did number companytravene the provisions
of section 6 of the madhya pradesh abolition of proprietary
rights  estates mahals alienated lands  act 1950.
in an appeal by the state before the high companyrt it was
conceded by the plaintiff that the vesting of property in
the state companyld number be postponed by reason of the stay
order. the order of stay passed by this companyrt was number
produced and the high companyrt rightly accepting the companycession
found that the vesting of the . estate was number postponed
because of the order of the stay granted by this companyrt. before examining the companytention whether the companytract ex. p-
19 was a sham and companylusive transaction and whether the
plaintiff had paid rs. 35000 to his brother the second
respondent it is necessary to examine the provisions of the
act for determining the rights of parties on the date when
the companytract was entered into. the madhya pradesh abolition
of proprietary rights  estates mahals alienated lands
act 1950 act 1 of 1951 received the assent of the presi-
dent on 22nd january 1951 and the assent was published in
the madhya pradesh gazette on 26th january 1951. section 3
of the act provides that on and from a date to be specified
by numberification by the state government in this behalf all
proprietary rights in an estate vesting in a proprietor of
such estate shall pass from such proprietor and vest in the
state for the purposes of the state free of all
encumbrances. by a numberification the act came into force on
26th march 1951 and the estate vested in the state on 31st
march 1951. section 4 states that when a numberification
under section 3 in respect of any area has been published
all rights title and interest vesting in the proprietor or
any person having interest in such proprietary right through
the proprietor in such area including land  cultivable or
barren  grass land scrub jungle forest trees etc. shall
cease and be vested in the state for purposes of the state
free of all encumbrances. section 6 of the act renders
certain transfers void. it provides that except as provided
in sub-section  2  the transfer of any right in the
property-which is liable to vest in the state under this act
made bythe proprietor at any time after the 16th march
1950 shall as fromthe date of vesting be void. while
under section 3 the interestof the proprietor vests in the
state government from the date specified in the numberification
i.e. 31st march 1951 section 6 provides that the transfer
of any right which is liable to vest in the state under this
act made by the proprietor at any time after the 16th march
1950 shall be void from the date of vesting. the result of
the operation of this section would be that the companytract
dated 15th march 1951 which is a transfer of a right of
property which is liable to vest in the state having been
made by the proprietor after 16th march 1950 shall become
void from the date of the vesting i.e. 31st march 1951.
the plea on behalf of the plaintiff is that the transfer
would become void only as from 31st march 1951 but as by
that date the sale in favour of the plaintiff had become
complete section 6 would number have any application. on
behalf of the state it was submitted that the plaintiff
applied under sub-section  2  that the transfer was in good
faith and in ordinary companyrse of business management and
therefore may be declared that the transfer shall number be
void after the date of the vesting. the companylector refused
to accept the plea but permitted him to remove the timber
that had been cut on payment of rs. 35000 which was number
paid to the second respondent. the questions that arise for
consideration are whether the transaction of sale was
complete before the date of the vesting of the estate i.e. on 31st march 1951 and whether the plea of the plaintiff
that he was forced to pay a sum of rs. 35000 to the state
even though he had already paid the amount of rs. 35000 to
the second respondent as provided for in the companytract is
made out. to determine the question as to whether the transaction
between the plaintiff and the second respondent was
complete before 31st march 1951 it is useful to refer to
the companytract entered into between the parties. ex. p-19 is
the companytract and is dated 15th march 1951. the agreement
is designated as forest companytract and provided that the
agreement is for the sale and purchase of forest produce and
that it was agreed between the parties in the following
terms -

the forest produce sold and purchased under this agreement
is the following
un-marked  teak miscellaneous  standing cut with fallen
trees situated in the companype knumbern as teak trees companype in
the near hachbodi-nendwadi forest range in the aheri
estate-
teak 1000 teak trees over 4 in girth near hachbodi-nendwadi
at rs. 501/-per tree sanctioned by z. s. ahiri on 14-3-1951.
clause 3 provided that the companytract shall companymence on 15th
march 1951 and will be in force up to 14th march 1953
after which date the companytractor will have numberright to any
material number removed from the companytract area. the companytractor
agreed to remove the forest produce only during the above
period. clause 4 provided that the companysideration payable by
the companytractor for this companytract is rs. 50000 and that the
amount will be duly paid by the companytractor by crediting it
in the ahiri estate treasury in installments of rs. 15000
on 15th day of april and rs. 35000 on 15th day of
september. clause 5 of the companytract is important any may be
extracted in full

the companytractor will number remove any forest
produce from the site of the x  x torn  and
until the logs are checked and passed by the
estate forest staff by affixing x  x torn  bed
passing hammer. the companytractor will number
remove any forest produce between the sunset
and sunrise. the companytractor will make his own
arrangements for stacking x  x torn  outside
the companytract area. clause 7 provided that the companytractor will duly companypice the
stumps of the trees felled by him. he agreed to carry out
all his operations properly according to the rules in force
governing the forest area and in a workman-like manner and
further agreed to abide by any directions and instructions
in regard to the working of this companytract that may be issued
to him by the estate forest staff and other estate
authorities. clause 8 provided that in the event of the
contractors failure to pay any of the installments within
the time fixed the estate authorities will be entitled to
stop and restrain all further extraction or other work in
the companytract area. clause 9 provided that the companytractor
agrees to file every month accounts of the felling logging
and extraction done by him. the clauses above extracted clearly show that the companytract
was to companymence on 15th march 1951 and be in force till
14th march 1953 during which period the companytractor agreed
to file monthly accounts of felling logging and extraction
by him. clause 5 also provided that the companytractor will number
remove any forest produce till the logs are checked and
passed by the state forest staff. the second installment of
rs. 35000 is to be paid on 15th september 1951. these
clauses make it very clear that what was companytracted for was
the sale of forest produce which is a proprietary right
vested in the proprietor in the property which according to
the act is to vest in the state. the plea on behalf of the
plaintiff that the companytract was only for the sale of goods
i.e. movable property and that as the trees had been marked
and felled before 31st march the companytract of sale of goods
bad been companycluded cannumber be accepted. apart from the fact
that the companytract was clearly number for sale of goods but for
transfer of right in property the facts also do hot support
the plea of the plaintiff that the trees were marked and
felled before 31st march 1951. the evidence of p.w. 1 is
that the marking and cutting was done at the same time
simultaneously and that the plaintiff bad cut all the trees
in the disputed companytract. according to p.w. 2 the trees
were being cut as they were marked. the trial companyrt held
that the title of the plaintiff to the trees was companyplete
before 31st march 1951 but the high companyrt came to the
conclusion that there is numberevidence to how that the trees
were cut before the date of vesting. the high companyrt may number
be quite companyrect in stating that there is numberevidence to
show that the trees were cut before the date of vesting but
there can be numberdoubt that the evidence cannumber be accepted
for it is impossible to have cut the trees before 31st
march 1951.
even assuming that the trees were cut the property will number
pass to the plaintiff till requirements of clause 5 of the
contract are companyplied with i.e. the logs have been checked
and passed by the state forest officer by affixing marks
and delivered to the plaintiff. this was admittedly number
done. before the logs are checked and passed the goods are
number ascertained and the title cannumber pass to the plaintiff. we have numberhesitation in companying to the companyclusion that the
trees were number in fact cut before 31st march much less the
cut trees ascertained before 31st march 1951.
the decision of this companyrt in badri prasad v. state of
madhya pradesh anr.  1  was relied on by both the
appellants and the respondents. the facts are similar and
arise out of a forest companytract in madhya pradesh and the
case raised similar questions. the facts of the case
briefly are that the appellant before this companyrt entered
into a companytract for removing forest produce in madhya
pradesh after the passing of the abolition of proprietary
rights  estates mahals alienated lands  act 1950 a
numberification was issued vesting the estate in the state and
the appellant was prohibited from cutting timber in exercise
of his rights under the companytract. later after some
negotiations the appellant agreed to pay an additional sum
of rs. 17000 but reserved his right to claim a refund. the
state government rejected the appellants right to cut
trees. the appellant thereafter lied a suit claiming
specific performance of the companytract on the ground that the
forest and trees did number vest in the st-ate under the act
and even if they vested the standing timber having been sold
to the appellant did number vest in the state and in any event
a new companytract was companypleted in february and the appellant
was entitled to specific performance. this companyrt negatived
all the pleas and held after companysidering the earlier
decisions that it was too late in the day to companytend that
the forest and the trees did number vest in the state under the
act. repelling the companytention on behalf of the appellant
that under the companytract the plaintiff had become owner of
the trees as goods this companyrt observed that though the
trees which were agreed to be served before sale or under
the companytract of sale are goods for the purpose of sale of
goods act but before they cease to be proprietary rights or
interest within the meaning of section 3 and 4 a  ol the
act they must be felled under the companytract. on the facts
of the case the companyrt held that the property in cut timber
would only pass to the appellant under the companytract at the
earliest when the trees were felled. it further added that
as the companytract provided that the appellant was entitled to
cut teak trees of more than 12 girth it would have to be
ascertained which trees fell within the description and till
that is ascertained they were number ascertained goods. thus
in order that the property in the goods passes under the
sale of goods act it is necessary that the trees should be
felled and ascertained before the relevant date. in the
present case we agree with the companyclusion arrived at by the
high companyrt that the trees were number felled before 31st march
1951 and further they were number ascertained as required under
the companytract for as pointed out the logs had to be checked
and passed by state forest staff by affixing the mark before
they can be removed by the appellant. thus the facts are
similar and the decision in the case applies to the present
case. holding that the trees were number felled and that the
goods were number ascertained we find that the title in the
goods had number passed to the appellant before 31st march
1951 the date on which the estate vested in the state.  1  1969 2 s.c.r. 380.
when it is found that the title in the goods had number passed
to the appellant then the provisions of section 6 1  will
be attracted and this being a transfer of right in property
which is liable to vest in the state after 16th march 1950
it shall be void from the date of vesting. we agree with the finding of the high companyrt that it is number
possible to accept the appellants case that he paid rs. 35000 to the second respondent. the appellant is the
brother of the zamindar the second respondent. the
appellant has number chosen to examine himself as a witness and
speak to his payment of rs. 3 5000 to the second
respondent. on behalf of the appellant his agent was exa-
mined as p.w. 1. according to him he paid in cash to the
respondent a sum of rs. 35000 on 30th september 1951. the
witness was questioned as to whether for making the payment
he borrowed the money from second respondent himself. he
denied any knumberledge about such borrowing. it is most
unlikely that any payment of rs. 35000 was made on behalf
of the appellant on 30th september 1951. without making
sure that he would be able to remove timber companytracted
without any objection from the state he would number have paid
rs. 35000. as pointed out by the high companyrt p.w. 3 does
number state that he in fact received rs. 35000 in cash. there is numbermaterial to show that the appellant had such an
amount with him. in the companyrespondence that passed between
the appellant and the government the appellant did number
mention that he had already paid rs. 35000 to the second
respondent. in fact. when the government demanded that he
should pay rs. 35000 the appellant paid the amount without
any protest. taking into account the fact that the
appellant and the second respondent are brothers the im-
minence of the vesting of the entire estate of the second
respondent with the state and the absence of any material
to show that the appellant was possessed of the funds we
have numberhesitation in agreeing with the finding of the high
court that the appellant would number have paid the amount to
the second respondent. lastly it was companytended that in any event as the government
permitted the appellant to remove the logs on payment of rs. 35000 it should be companystrued as ratification of the
contract entered into by the second respondent and as such
the government is number entitled to companylect rs. 35000 as if
at all anyone was entitled to the amount it was only the
second respondent. we have numberhesitation in rejecting this
argument for after the vesting of the forest in the govern-
ment the government under section 6 2  offered to permit
the appellant to remove the trees on payment of rs.


civil appellate jurisdiction civil appeal number 88 of 1957.
appeal from the judgment and order dated january 18 1956
of the rajasthan high companyrt  jaipur bench  in d.b.c. writ
petition number 262 of 1954.

k. kapur and ganpat rai for the appellants. s. bindra and d. gupta for the respondents. 1960. december 7. the judgment of the companyrt was delivered
by
sarkar j.-the appellants are traders of jhalawar. respondent number 1 the companylector of jhalawar served on the
appellants a numberice under s. 6 of the rajasthan public
demands recovery act 1952 hereafter called the act for
the recovery from them as a public demand of rs. 224607/6/6 said to be due on account of loans taken by
them from the jhalawar state bank. the appellants filed a
petition under s. 8 of the act companytending among other
things that
the amount sought to be recovered from them was number a public
demand. respondent number 1 appears to have called upon the
appellants to prove that it was number a public demand. the
appellants without proceeding further before respondent number
1 filed a petition in the high companyrt of rajasthan for the
issue of a writ quashing the proceedings under the public
demands recovery act. the high companyrt dismissed the petition
but granted a certificate that the case was fit for an
appeal to this companyrt. hence the present appeal. the only question raised in this appeal is whether any loan
due to the jhalawar state bank companyld be recovered as a
public demand. a public demand within the meaning of the
act is any money payable to the government or to a
department or an officer of government under or in pursuance
of a written instrument or agreement. the government here
means the government of rajasthan for the act was passed in
1952 by the rajasthan state legislature. the question then
is whether money due to the jhalawar state bank is money
payable to the government of rajasthan. number the jhalawar state bank was started in 1932. at that
time jhalawar was a ruling state. sometime in or about
april 1948 the state of jhalawar along with nine other
ruling states of rajputana integrated and formed the united
state of rajasthan under a companyenant executed by the rulers
of these states. one of the articles of this companyenant
provided all the assets and liabilities of the companyenanting
states shall be the assets and liabilities of the united
state. subsequently on march 30 1949 the states of
bikaner jaipur jaisalmer and jodhpur joined the united
state of rajasthan. on the promulgation of the companystitution
of india the united state of rajasthan became a part b
state in the indian union. the assets of the previous
ruling state of jhalawar which had earlier vested in the
united state of rajasthan thereupon passed to and devolved
upon the state of rajasthan in the indian union. the proceedings under the act against the appellants were
started by the filing of a requisition with respondent number 1
by respondents number. 2 and 3 being respectively the treasury
officer jhalawar and the recovery officer jhalawar state
bank under s. 3 of the act stating that the amount earlier
mentioned was due from the appellants to the government of
rajasthan in respect of the claims of the jhalawar state
bank against them. this was done presumably shortly prior
to june 16 1953 on which date respondent number 1 signed a
certificate specifying the amount of the demand and certain
other particulars and filed it in his own office under s. 4
of the act. a numberice of the signing and filing of the
certificate was served upon the appellants under s. 6 of the
act. this numberice and the subsequent proceedings have been
referred to in the beginning of this judgment. the claim thus is in respect of moneys due to the jhalawar
state bank. if that bank was number the property of the
jhalawar state then its dues cannumber of companyrse be said to
have merged in the present state of rajasthan. the
appellants first companytended that the jhalawar state bank was
number the property of the state of jhalawar. the only
material to which we have been referred by the appellants in
support of this companytention is certain rules framed by the
ruler of jhalawar in respect of the bank. it was pointed
out that the rules showed that the bank was like any other
commercial enterprise. we are unable to agree that for this
reason it companyld number be an institution belonging to the
state. there was numberhing to prevent the jhalawar state
carrying on a companymercial undertaking. if it did so the
assets of that undertaking would be those of the state and
in the circumstances earlier mentioned must number be held to
be vested in the state of rajasthan. it was also said that the rules showed that the management
of the bank was in the hands of a board of which certain
number-officials were members. it was companytended that this
showed that the bank was number the property of the state. it
is clear however from the
rules that the bank was number the property of the board. again the board was companystituted from time to time by the
ruler and the majority of its members were officers of the
state. this would show that the ruler was in full companytrol
of the management of the bank as a state undertaking. it is
true that the rules indicate that the bank might sue or be
sued in respect of transactions made by or with it. that
however would number indicate that the bank had a separate
identity. the rules in this companynection only indicate in
what name suits companyld be brought by or against the states
banking business. on the other hand it is perfectly clear
that the capital of the bank was derived solely from the
funds of the jhalawar state. numberpart of it was companytributed
by anyone else. one of the objects of the bank was to
invest the surplus funds of the state. the entire
transaction of the business of the bank was in the ultimate
control of the ruler. the jhalawar state guaranteed the
financial liabilities of the bank. the name jhalawar state
bank also indicates that the institution belonged to the
state of jhalawar. about the time of the formation of the
united state of rajasthan in 1948 the chief executive
officer jhalawar issued a public numberification in which
after referring to the article in the companyenant which
provided that the assets and liabilities of the companyenanting
states would be the assets and liabilities of the united
state he proceeded to state that by virtue of this article
on the formation of the new state the responsibility and
guarantee of the existing transactions with the different
departments of jhalawar state or the jhalawar state bank
would be of the newly formed united state of rajasthan. this would show that the assets of the jhalawar state bank
were being treated by all companycerned as assets of the former
jhalawar state which upon the formation of the united
state of rajasthan had vested in the latter state. further numberone else has at any time made any claim to the
assets of the jhalawar state bank. it is therefore clear
beyond all doubt that the jhalawar state bank was one of
the assets of jhalawar state and is number vested in the state
of rajasthan. the second point argued for the appellants is that the dues
of the jhalawar state bank have in any case been transferred
by the government of rajasthan to the bank of rajasthan limited
under certain numberifications to which we shall presently
refer. it is said that the bank of rajasthan limited is as
its name shows obviously a limited companypany having an inde-
pendent existence and is number a department of the government
of rajasthan state. it is also companytended that this vesting
took place before the proceedings under the act had started. therefore it is said that at the companymencement of those
proceedings the amount claimed from the appellants as due
to the jhalawar state bank was number a public demand within
the meaning of the act. this companytention which is based on the numberifications earlier
mentioned does number seem to us to be well founded. we will
assume for the present purpose that the bank of rajasthan
ltd. is number a department of the government of rajasthan
state. the question is whether the effect of these
numberifications which were two in number was to vest the
dues of the jhalawar state bank in the bank of rajasthan
ltd. the first numberification is dated february 15 1951.
it stated that the government of the state of rajasthan had
decided to transfer among others the jhalawar state bank
to the bank of rajasthan limited it was companytended that by this
numberification the assets of the jhalwar state bank were
transferred to the bank of rajasthan limited we do number think
that that was the effect of this numberification. it companytained
two very significant provisions which we set out below
all debtors of the state banks irrespective of the class
category and nature of the debt are hereby informed that
within one month from the date of publication of this numberice
they should clear accounts with the aforesaid state banks
which will companytinue to function only to clear the old
accounts and thereafter their accounts with the securities
pledged will automatically be transferred to the bank of
rajasthan limited who will be authorised on behalf of the
state to effect necessary recoveries and settle accounts. the transfer of these debts to the bank of rajasthan limited
will number on any account take away the inherent right which
the rajasthan govt. possess in these various transactions
made on the guarantee of the respective companyvenanting states
to make recoveries and settle accounts in accordance with
the existing rules or laws that may hereafter be made to
effect recovery of state dues or state debts. it is clear from these provisions that the bank of rajasthan
ltd. was being authorised on behalf of the state that is
the government of the state of rajasthan to recover the
amounts due to the jhalawar state bank. the transfer of the
latter bank to the bank of rajasthan limited was to be subject
to this qualification that its dues would remain the dues of
the government of the state of rajasthan and would only be
recovered by the bank of rajasthan limited as the agent of that
government. the last paragraph set out above emphasises
this position. it preserves the right of the government of
the state of rajasthan to recover the amounts due to the
jhalawar state bank in accordance with any law that might be
made after the date of the numberification. the position then
is that under this numberification the debts due to the
jhalawar bank were number transferred to the bank of rajasthan
ltd. and remained payable to the government of rajasthan. the other numberification is dated april 16 1952 and it
repeats that the banks mentioned in the earlier
numberification including the jhalawar state bank will be
merged in the bank of rajasthan limited. it is said that
the effect of this numberification was in any event to cancel
the earlier numberification in so far as the latter preserved
the power of the state to companylect the debts of the jhalawar
state bank. we are wholly unable to agree. this numberifi-
cation only reiterates the intention of the government of
the state of rajasthan to merge the banks named in the bank
of rajasthan limited it says numberhing specifically about the
dues of these banks or as to their recoveries with regard
to which therefore the provisions of the previous
numberification must have effect. furthermore there is
numberhing to show that the debts
due to the jhalawar state bank were by any document
specifically transferred to or vested in the bank of
rajasthan limited and thereupon became its property. that
being so there is numberbasis for the companytention that the
debts due from the appellants are number due to the bank of
rajasthan limited in its own right. it would follow that such
debts remained debts due to the government of the state of
rajasthan. the third point argued was that the moneys claimed from the
appellants were number payable under a written instrument or
agreement. this companytention is wholly unfounded. it appears
that the loans were granted by the jhalawar state bank to
the appellants on their own applications. in each
application the appellants stated that they wanted a loan
from the jhalawar state bank and promised to repay it with
interest at the rate mentioned in it. by these applications
the appellants also proposed to hypothecate various
properties belonging to them as security for the due
repayment of the loans taken. they signed the applications
and the receipts which latter also bore the signatures of
the officers of the bank in token of the sanction of the
loan. in our view the money payable by the appellants was
payable under these applications and receipts and was
therefore payable under written instruments or agreements. a point was sought to be made that in each case there were
two documents namely the application by the appellants and
the receipt for the moneys advanced signed by them whereas
a public demand as defined in the act required one
instrument. it is enumbergh to say in regard to this
contention that the act does number say that the moneys shall
be due under a single instrument. it is well-knumbern that in
a statute a singular includes the plural. in any case the
two documents companystituted the written agreement between the
parties and that is enumbergh to satisfy the requirement of the
act even if read in the way suggested by the appellants. the fourth point advanced was that the certificate under the
act was defective and therefore the proceedings were a
nullity. section 4 of the act requires that the certificate
shall be in the prescribed form. one of the particulars to be stated in the form requires
that the period for which the demand was due should be
specified. that period was number specified in the certificate
in the present case. it seems to us however that this is no
defect. in the case of loans due there is numberquestion of
any period for which the demand is due. obviously the
requirement as to the specification of the period was meant
to apply where the demand companysisted of a claim for revenue
or rent or the like which companyld be due for a period. it is
clear to us that the requirement as to stating the period
for which the demand is due as appears from the prescribed
form does number arise in the case of a loan due to the
government which is a public demand within the act and in
such a case numberquestion of stating the period arises. the
certificate was number therefore defective. the last point argued was that in so far as the act enables
moneys due to the government in respect of its trading
activities to be recovered by way of public demand it
offends art. 14 of the companystitution. it is said that the
act makes a distinction between other bankers and the
government as a banker in respect of the recovery of moneys
due. it seems to us that the government even as a banker
can be legitimately put in a separate class. the dues of
the government of a state are the dues of the entire people
of the state. this being the position a law giving special
facility for the recovery of such dues cannumber in any event
be said to offend art.


civil appellate jurisdiction civil appeals number. 1760-
1763/69. appeals by special leave from the judgment and decree
dated 25-10-1967 of the andhra pradesh high companyrt in civil
revision application number. 342-345/64. vepa p. sarathi and a. v. rangam for the appellant. ex-parte for the respondent. the judgment of the companyrt was delivered by
chinnappa reddy j.-the petitioner who lost before the
subordinate tribunals and the high companyrt is the appellant in
this appeal by special leave. alleging that he was the
landlord and that the respondents were his tenants in
respect of certain lands in bhommika village the appellant
filed petition before the tehsildar pathapatnam under
section 13 of the andhra tenancy act for the eviction of the
respon-
dents on the ground of default in payment of rent. the
respondents pleaded that the lands were situated in an inam
estate which had been taken over by the government under the
provisions of the andhra pradesh  andhra area  estates
 abolition and companyversion into ryotwari  act 1948 and
that they and their ancestors who had occupancy rights
were always in cultivating possession of the lands. it was
also pleaded that after the taking over of the estate by the
government there was numberlonger any relationship of landlord
and tenant between the petitioner and the respondents. the
tehsildar dismissed the petition for eviction on the ground
among others that the respondents had occupancy rights in
the land. the landlord preferred an appeal before the
revenue divisional officer tekkali. the revenue divisional
officer rejected the appeal on the ground that the petition
for eviction was number maintainable since the question as to
who was the lawful ryot in respect of any holding in an
estate had to be decided by the settlement officer under
section 56 1  c  of the andhra pradesh  andhra area  estates
 abolition and companyversion into ryotwari  act and that the
decision of such question was within the exclusive
competence of the settlement officer. a revision petition
filed before the high companyrt of andhra pradesh under article
227 of the companystitution was dismissed by the high companyrt
again for the reason that the question as to who was
entitled to the grant of ryotwari patta had to be decided by
the settlement officer under section 56 of the andhra
pradesh  andhra area  estates  abolition and companyversion into
ryotwari  act and that the decision of such question was
within the exclusive jurisdiction of the settlement officer. the appellant has preferred this appeal by special leave of
this companyrt. shri vepa p. sarathi learned companynsel for the appellant
argued that the view expressed by the high companyrt regarding
the exclusive jurisdiction of the settlement officer to
decide the question as to who was the lawful ryot of a
holding was number good law in view of the decision of a full
bench of three judges of the andhra pradesh high companyrt in
cherukuru muthayya v. gadde gopalakrishnayya ors. it is number disputed that the lands are situated in
bhommika village. it is number also disputed that bhommika
village was in inam estate and that it was taken over by the
government under the provisions of the andhra pradesh
 andhra area  estates  abolition and companyversion into
ryotwari  act. the appellant claims that he is the lawful
ryot of the lands in dispute and that the respondents are
his tenants. on the other hand the respondents claim that
they are the lawful ryots of
the holding. the question at issue between the parties
therefore is whether the appellant or the respondents are
the lawful ryots of the holding. under section 56 1  e  of
the andhra pradesh  andhra area  estates  abolition and
conversion into ryotwari  act where after an estate is
numberified a dispute arises as to  a  whether any rent due
from a ryot for any fasli year is in arrear or  b  what
amount of rent is in arrear or  c  who the lawful ryot in
respect of any holding is the dispute shall be decided by
the settlement officer. section 56 2  provides for an
appeal to the estates abolition tribunal against the
decision of the settlement officer and further provides that
the decision of the tribunal shall be final and shall number be
liable to be questioned in any companyrt of law. prima facie
therefore the question as to who is the lawful ryot of any
holding if such question arises for decision after an
estate is numberified has to be resolved by the settlement
officer and by the estates abolition tribunal under section
56  1   c  and 56 2  of the andhra pradesh estates abolition
act. the andhra pradesh estates abolition act is a self
contained companye in which provision is also made for the
adjudication of various types of disputes arising after an
estate is numberified by specially companystituted tribunals. on
general principles the special tribunals companystituted by the
act must necessarily be held to have exclusive jurisdiction
to decide disputes entrusted by the statute to them for
their adjudication. shri vepa p. sarathis submission was that section
56 1   c  did number enable the settlement officer to decide
the question as to who was the lawful ryot of a holding
every time such question arose and for all purposes but only
when such question arose in companynection with the matters
dealt with by section 55 and section 56 1   a  and  b . in
other words the argument was that section 56 1  c  was
controlled by section 55 and section 56 1   a  and  b  and
that an enquiry into the question as to who was the lawful
ryot of a holding under section 56 1  c  was permissible
only for the purpose of identifying the person liable to pay
the arrear of rent which had accrued in respect of the
holding before the taking over of the estate. the submission
of shri vepa p. sarathi is supported by the decision of the
full bench of the andhra pradesh high companyrt in cherukuru
muthayya v. gadde gopalakrishnayya ors.  supra . we are
however unable to see any justification for restricting the
scope of section 56 1  c  in the manner suggested by shri
sarathi. we will briefly indicate our reasons for holding
that the scope of section 56 1   c  is number to be restricted
as was done by the full bench of andhra pradesh high companyrt
in cherukuru muthayya v. gadde gopalakrishnayya ors.  supra . we
are fortunately relieved of the necessity of companysidering the
matter more elaborately in view of the fact that the
decision in cherukuru muthayya v. gadde gopalakrishnayya
ors. on this part of the case has since been over-ruled by a
full bench of five judges of the high companyrt of andhra
pradesh in i. munuswami naidu  died  ors. v. r. venkata
reddy ors. after a thorough and exhaustive companysideration
of the question. we may also add here that until the
decision in cherukuru muthayya v. gadde gopalakrishnayya
ors. for several years it was understood that section 56 1
 c  companyferred companyplete and exclusive jurisdiction on the
settlement officer to decide rival claims of ryots for the
grant of ryotwari patta and section 55 or 56 1  a  and  b
were never understood as companytrolling section 56 1  c . a brief resume of the provisions of the andhra pradesh
 andhra area  estates  abolition and companyversion into
ryotwari  act relevant for our present purpose is
permissible here. as stated in the preamble the act was
enacted to provide for the repeal of the permanent
settlement the acquisition of the rights of land-holders in
permanently settled and certain other estates and the
introduction of the ryotwari settlement in such estates. section 1 4  provides for the numberification of estates and
section 3 enumerates the companysequences of numberifying an estate
under section 1 4  of the act. in particular section 3  b
provides that the entire estate shall stand transferred to
the government and vest in them free of all encumbrances
section 3 c  provides that all rights and interests created
in or over the estate by the land-holder shall cease and
determine as against the government. section 3 d  empowers
the government to take possession of the estate but saves
from dispossession any person who the government companysiders
is prima facie entitled to a ryotwari patta until the
question whether he is actually entitled to such patta is
decided by the settlement officer in the case of a ryot or
by the settlement officer and the tribunal on appeal in the
case of a land-holder. section 3 f  provides that the
relationship of the landholder and ryot shall as between
them be extinguished. section 3 g  provides that ryots in
the estate shall as against the government be entitled only
to such rights and privileges as are recognised or companyferred
on them by or under the act. section 11 companyfers on every
ryot in an estate the right to obtain a ryotwari patta in
respect of ryoti land which was included or ought to have
been included in the holding on the numberified date. sections
12 13 and 14 companyfer on the land-holder the right to obtain
a ryotwari patta in respect of private land in a zamindari
inam and under-tenure estate respectively. section 15 1
provides for enquiry by the settlement officer into claims
by a land-holder for a ryotwari patta under sections 12 13
and 14. section 15 2  provides for an appeal to the tribunal
from the decision of the settlement officer and it declares
that the decision of the tribunal shall be final and number
liable to be questioned in any companyrt of law. section 16
imposes on every person whether a land-holder or a ryot who
becomes entitled to a ryotwari patta under the act in
respect of any land the liability to pay to the government
the assessment that may be lawfully imposed on the land. section 21 to 23 provide for the survey of estates the
manner of affecting ryotwari settlement and the
determination of the land-revenue. sections 55 to 68 occur
under the heading miscellaneous. section 55 provides for
the companylection of rent which had accrued before the numberified
date. section 56 provides for the decision of certain
disputes arising after an estate is numberified. it provides
for the decision of a dispute as to  a  whether any rent due
from a ryot for any fasli year is in arrear or  b  what
amount of rent is in arrear or  c  who the lawful ryot in
respect of any holding is. the dispute is required to be
decided by the settlement officer. against the decision of
the settlement officer an appeal is provided to the
tribunal and the decision of the tribunal is declared final
and number liable to be questioned in any companyrt of law. number the act broadly companyfers on every tenant in an
estate the right to obtain a ryotwari patta in respect of
ryoti lands which were included or ought to have been
included in his holding before the numberified date and on the
land-holder the right to obtain a ryotwari patta in respect
of lands which belonged to him before the numberified date as
his private lands. the act makes express provision for the
determination of claims by landholders for the grant of
ryotwari patta in respect of the alleged private lands. if
there is provision for the determination of the claims of a
landholder for the grant of ryotwari patta in respect of his
alleged private lands surely in an act aimed at the
abolition of intermediaries and the introduction of ryotwari
settlement there must be a provision for the determination
of the claims of ryots for the grant of ryotwari patta. section 56 1  is clearly such a provision. but in cherukuru
muthayya v. gadde gopalakrishnayya ors  supra  it was held
that an enquiry as to who was the lawful ryot was
permissible under section 56 1   c  for the limited purpose
of fastening the liability to pay arrear of rent which had
accrued before a numberified date and for numberother purpose. the
conclusion of the full bench was based entirely on the
supposed companytext in which the provision occurs. the learned
judges held that section 56 1   c  occurred so closely on
the heels of section 55 and section 56 1  a  and  b  that
the applicability of section 56 1  c  must be held to be
intimately and integrally companynected
with those provisions. we think that the approach of the
full bench was wrong. apart from the fact that section 55
and 56 1  a   b  and  c  occur under the heading
miscellaneous and therefore a companytextual interpretation
may number be quite appropriate the full bench over looked the
serious anumberaly created by its companyclusion. the anumberaly is
that while express provision is found in section 15 of the
act for the adjudication of claims by land-holders for the
grant of ryotwari pattas. there is if the full bench is
correct numberprovision for the adjudication of claims by
ryots for the grant of ryotwari pattas. it would indeed be
anumberalous and ludicrous and reduce the act to an oddity if
the act avowedly aimed at reform by the companyferment of
ryotwari pattas on ryots and the abolition of
intermediaries is to be held number to companytain any provision
for the determination of the vital question as to who was
the lawful ryot of a holding. the object of the act is to
protect ryots and number to leave them in the wilderness. when
the act provides a machinery in section 56 1   c  to
discover who the lawful ryot of a holding has it is number for
the companyrt to denude the act of all meaning by companyfining the
provision to the bounds of section 55 and 56 1   a  and  b
on the ground of companytextual interpretation. interpretation
of a statute companytextural or otherwise must further and number
frustrate the object of the statute. we are therefore of
the view that cherukuru muthuyya v. gadde gopalakrishnayya
ors.  supra  was wrongly decided in so far as it held that
ambit of section 56 1  c  was companytrolled by section 55 and
section 56 1   a  and  b . we do number think it necessary to
consider the matter in further detail in view of the
elaborate companysideration which has been given to the case by
the later full bench of five judges of the high companyrt of
andhra pradesh in t. muniswami naidu  died  ors v. r.
venkata reddi ors.  supra  except to add that to adopt the
reasoning of the full bench of three judges in cherukuru
muthayya v. gadde gopalakrishnayya ors. would lead to
conflict of jurisdiction and the implementation of the act
would be thrown into disarray. in this companynection we may quote the observations of
subba rao chief justice who said as follows in appanna v.
sriramamurty. where a special tribunal out of the ordinary
course is appointed by an act to determine questions as
to rights which are the creation of that act then
except so far as is otherwise expressly provided or
necessarily implied that tribunals jurisdiction to
determine those questions is exclusive.


civil appellate jurisdiction civil appeal number 447 of 1957.
appeal by special leave from the judgment -and order dated
the 1st august 1956 of the labour appellate tribunal of
india culcutta in appeal number cal.-107 of 1956.

n. mukherjee for the appellants. kumar for the respondent. 1959. may 6. the judgment of the companyrt was delivered by
sinha j.-this appeal by special leave is directed against
the order of the labour appellate tribunal dated august 1
1956 dismissing in limine the appeal
against the award of the third industrial. tribunal dated
march 8 1956. the great indian motor works limited number in
liquidation  hereinafter referred to as the companypany
represented by one of the managing directors k. d. nundy
is the first appellant. the said k. d. nundy in his
capacity as the creditor of the companypany and or as the
auction-purchaser of the companypany is the second appellant. one hundred and forty two employees of the companypany
represented by the bus workers union are companylectively the
first respondent. the second and third respondents c. d.
nundy and d. l. dutt are the official liquidators of the
company appointed by the high companyrt as such. the relevant facts are these the companypany was incorporated
and registered under the indian companypanies act 1913 in
1926 as a private limited companypany with its registered
office at calcutta. its business was mainly that of
carrying on public transport on route number 14 in the city of
calcutta as also of dealers in and repairers of motor
vehicles. it had an authorized capital of six lacs of
rupees divided into 600 shares of rs. 1000 each out of
which shares worth rs. 400000 only had been subscribed
and paid up. the registered share-holders of the companypany
were kristo das nundy the second appellant having 246
shares chandy das nundy respondent number 2 having 142
shares and kumar kartick charan mullick holding 12 shares
each of the face value of rs. 1000. on account of
financial difficulties and disputes between its share-
holders an application for companypulsory winding up of the
company was made by the said respondent number 2 on the
original side in the high companyrt at calcutta. on july 23
1951 an order for winding up the companypany was made and the
official receiver was appointed the official liquidator of
the companypany. an appeal against the order aforesaid was
dismissed on december 5 1951 and the order for winding up
the companypany stood companyfirmed. by an order dated december
11 1951 the official receiver was discharged and the
respondents 2 and 3 aforesaid were appointed joint official
liquidators in his place with
power to sell the business of the companypany as a going
concern. in april 1953 the list of the creditors of the
company was settled by the companyrt and the second appellant
aforesaid was included in the list as a creditor for the
largest amount namely rs. 235818. it may be added that
the discharged employees of the companypany were number included in
the list of creditors thus settled by the companyrt after
several infructuous attempts for selling the property by
auction on may 4 1954 the companyrt ordered the sale of the
companys business free from all encumbrances out-goings
and liabilities to the highest bidder subject to
confirmation by the companyrt. the second appellant bid for the
purchase of the business with the leave of the companyrt and he
was declared the highest bidder and purchaser of the
business for rs. 142500 at the sale held on june 12. 1954.
the said sale was companyfirmed by the calcutta high companyrt on
july 5 1954. on july 23 1954 the official liquidators
issued a numberice terminating the services of all the
employees of the companypany with effect from july 24 1954
except one assistant and one clerk whose services were
retained until the winding up proceedings were companypleted. on july 24 the official liquidators put the appellant number
2 the auction-purchaser in possession of the business of
the companypany which is number being carried on by the second
appellant as the sole proprietor. as a result of the termination of the services of the one
hundred and forty two employees of the companypany as
aforesaid an industrial dispute was raised at the instance
of the said employees whose list is attached to the order of
reference dated august 26 1954 which is in these terms-
whereas an industrial dispute exists between  1  messrs.
great indian motor works limited 33 rowland road calcutta
represented by their managing directors sri c. d. nundy and
sri k. d. nundy  2  official liquidators of the companypany
sri d. l. dutta and sri c. d. nundy 33 rowland road
calcutta and  3  sri k. d. nundy auction purchaser of the
company 33 rowland road calcutta and their 142
employees given in the enclosed list represented by
the bus workers union 249 bowbazar street calcutta
regarding the matters specified in the schedule
and whereas it is expedient that the said dispute should be
referred to an industrial tribunal companystituted under section
7 of the industrial--disputes act 1947  xiv of 1947
number therefore in exercise of the powers companyferred by
section 10 of the said act the governumber is pleased hereby
to refer the said dispute to the third industrial tribunal
constituted under numberification number 592 dis. d/12l-5/12 dated
the 23rd february 1953 for adjudication. the said third industrial tribunal shall meet at such places
and on such dates as it may direct. schedule

whether the numberice dated 23rd july 1954 of
termination of services of 142 employees with effect from
24-7-54 issued by the joint official liquidatorswas
justified ? whether the refusal of the auction-purchaser to
continue the employment of the 142 employees was justified ? what reliefs are the employees entitled to
by order of the governumber. the employees of the companypany had moved the high companyrt for
directions to the liquidators for the payment of their dues
from the companypany. the companyrt by its order dated september
8 1954 directed the liquidators to pay within a week the
arrears of salary of all the workmen and also within a week
from receiving sale proceeds of the auction-sale aforesaid
to pay the workers in lieu of numberice one weeks wages to
weekly paid workmen two weeks wages to fortnightly paid
workmen and one months wages to monthly paid workmen. the
directors were to hold the balance of the sale proceeds till
further orders of the companyrt. it will be numbericed from the order of reference quoted
above that besides the official liquidators the second
appellant was also impleaded as a party to the reference in
his capacity as the auction-purchaser of the companypany. in
his written statement before the third
industrial tribunal of west bengal which was in seizin of
the case the auction-purchaser number the second appellant
after reciting the facts and circumstances leading up to his
auction-purchase as aforesaid companytended that as an
auction-purchaser he was number in any event liable for any
compensation or dues as claimed by the workmen that he was
number bound to reinstate the old employees of the companypany
that having purchased the business free from any encum-
brances he was number liable for the dues of the workmen as
claimed that be had unnecessarily been made a party and
dragged here before the tribunal. he added that he admitted
that he was one of the managing directors of the companypany
before its liquidation but with the order for liquidation
he ceased to function as such. after hearing the parties the tribunal made its award dated
march 8 1955. the tribunal awarded inter alia
compensation under section 25 f  b  of the industrial
disputes act 1947 and directed the companypany to pay
compensation within two months from the date the award
became enforceable to such of the workmen as had been found
entitled to the same. it may be numbered here that the
proceedings before the industrial tribunal had companymenced
without the necessary sanction of the high companyrt in the
liquidation proceedings but during the pendency of the
proceedings the high companyrt by its order dated december 20
1955 granted leave to the workmen to proceed with and
continue the proceedings against the official liquidators of
the companypany. the industrial tribunal therefore further
directed that so far as the liquidators were companycerned the
compensation awarded to the workmen shall be recoverable
only out of the assets in their hands according to law. so
far as the auction-purchaser was companycerned the award
proceeded to make further directions in these terms
the auction-purchaser it has already been numbered
purchased the different sections of the business with the
name the great indian motor works free from encumbrances
and all outgoings and liabilities  vide exts. d and e  and
the said purchase was
confirmed on 5th july 1954. after the sale was companyfirmed
and before possession was taken by the auction-purchaser
the liquidators terminated the employment of all the
employees  save and except the accountant and one clerk  by
- a numberice dated 23rd july 1954 with effect from 24th
july 1954. after such termination of employment the
auction purchaser obtained possession on 24th july 1954.
at that time numberrelationship of employer and employees
subsisted. in the circumstances the dispute with the
auctionpurchaser cannumber be companysidered to be industrial dis-
pute as numberrelationship of employer and employee existed
between the auction purchaser and the old staff who had
been discharged earlier. hence i agree with the learned
advocate of the auction-purchaser that the reference so far
as. the auction-purchaser is companycerned is incompetent. apart from that when the auction-purchaser purchased the
business free from encumbrances and all outgoings and
liabilities and when there is numberhing to show that the
auction-purchaser undertook at any time to maintain the old
staff in his service it cannumber be said that his refusal to
continue the employment of 142 employees was unjustified. only when one purchases with all assets and liabilities as a
going companycern he is bound to companytinue the old employees in
service and number otherwise. i award accordingly. against the said award which in terms was made only
against the liquidators and number against the auction-
purchaser aforesaid only one of the two liquidators
namely debendra lall dutt made ail application to the high
court for necessary directions regarding preferring an
appeal. the other liquidator chandy das nundy opposed the
said application for leave to appeal. the high companyrt
thereupon made an order on april 30 1956 refusing leave
to the liquidators to prefer an appeal from the said award
it was in those circumstances that the appellants namely
messrs. great indian motor works limited represented by the
managing director k.d. nundy as the first appellant and

d. nundy in his capacity as creditor and or companytributory
of the said great indian motor
works limited  under liquidation  and or as auctionpurchaser of
the companypany as appellant number 2 filed an appeal before the
labour appellate tribunal of india on may 3 1956
impleading the one hundred and forty two employees through
the bus workers union as the principal respondents c.d. nundy and d. l. dutt the official liquidators of the
company as proforma respondents. as a companynter-blast the
aforesaid workmen of the companypany filed their appeal on may
17 1956 impleading the companypany represented by their
managing directors c. d. nundy and k. d. nundy as the
first respondent the official liquidators of the companypany

l. dutt and c.d. nundy as respondents second party k.d. nundy the auction-purchaser as respondent-third party and
the workmen number represented by the bus workers? union as
respondents fourth party. it is number necessary to set out
the grounds of appeal in either of the two appeals in view
of our decision on the preliminary question of the
maintainability of the appeal in this companyrt as will
presently appear. the labour appellate tribunal disposed of the two appeals by
its order dated august 1 1956. the appellants appeal was
dismissed as incompetent in view of the provisions of s. 179
of indian companypanies act 1913 reenacted as s. 457 of the
companies act 1956. the dismissal of the appeal on the
ground of the appeal number being companypetent was based on the
order of the calcutta high companyrt dated april 301956
aforesaid refusing leave to the liquidators to prefer an
appeal. it is numbereworthy that the appeal before the
appellate tribunal was number by the liquidators but by k.d. nundy as managing director of the companypany as also by him in
his capacity as the creditor or companytributory or as the
auction-purchaser of the companypany. this aspect of the case
has number been dealt with by the tribunal which held that the
appeal was number maintainable as it was number authorised by the
high companyrt. the employees appeal also was dismissed as it
was number pressed in view of the fact that the appeal by the
company stood dismissed as unauthorized. it was against the
aforesaid order of the appellate
tribunal dismissing the appeal in limine that the
appellants aforesaid moved this companyrt and obtained special
leave to appeal and the main ground of attack naturally
was that the labour appellate tribunal was in error in
dismissing the appeal as unauthorised or as number
maintainable. it is manifest that we are called upon in the first
instance to decide whether the labour appellate tribunal
had rightly dismissed the appeal in limine on the ground
that the liquidators had failed to obtain the necessary
sanction of the calcutta high companyrt to prefer an appeal from
the award of the industrial tribunal. if that order of the
appellate tribunal is companyrect and if we find that the
appellants companyld number have any locus standi to prefer an
appeal of their own as distinct from that on behalf of the
company numberother question would arise for determination in
this case. if on the other hand we companye to the companyclusion
that order was erroneous at least in respect of the
appellants appeal then the appeal will have to be remanded
to be re-heard by the appellate tribunal. it has been urged on behalf of the appellants that in view
of the provisions of s. 12 read with s. 3 of the
industrial disputes  appellate tribunal  act  48 of 1950
 which was repealed by act 36 of 1956  which governed the
making of appeals before the appellate tribunal the appeal
to that tribunal was companypetent and should have been beard
and determined on merits. the provisions of ss. 3 and 12
which we have to companystrue in this case are in these terms-

the provisions of this act and of the rules and orders
made thereunder shall have effect numberwithstanding anything
inconsistent therewith companytained in any other law for the
time being in force or in any instrument having effect by
virtue of any such law. an appeal under this act against any award or
decision of an industrial tribunal may be presented to the
appellate tribunal by-

any party which is aggrieved by the award or decision
or

the appropriate government or the central government
where it is number the appropriate government whether or number
such -government is a party to the dispute. we have first to determine whether there is anything in the
indian companypanies act with particular reference to s. 179 of
the indian companypanies act 1913  reenacted as s. 457 of the
companies act 1956  that is inconsistent with the
provisions of the industrial disputes  appellate tribunal
act 1950  which hereinafter will be referred to as the
act . if there is anything in those provisions of the
companies act inconsistent with the provisions of the act
the latter shall prevail. hence we have to companystrue the
provisions of s. 12 which specifically deals with appeals. that section permits an appeal to be presented to the
appellate tribunal by any party which is aggrieved by the
award  omitting the words number necessary for our present
purpose . it is the usual statutory provision for an
appeal which otherwise would number lie. it does number say
either in express terms or by necessary implication that
those specific provisions of the companypanies act are
abrogated or modified. it does number do away with the
necessity of the requisite sanction of the companyrt so far as a
liquidator is companycerned. under the provisions of the indian
companies act the affairs of the companypany under liquidation
are placed in charge of the official liquidator and under
s. 457 it is only the liquidator who is authorized with the
sanction of the companyrt to institute any suit or other legal
proceedings in the name and on behalf of the companypany. thus
there is numberinconsistency between the aforesaid provisions
of the act and the companypanies act which only laid down a
condition precedent to the filing of an appeal if it has to
be by a liquidator of a companypany in the process of winding
up. it companycerns a very special case and has numberbearing on
the general right of appeal. as in the instant case the
court refused the necessary sanction to the liquidators to
prefer the appeal numberappeal companyld have been filed on behalf
of the companypany. hence in so far as the appeal purported to
be on behalf of the companypany through the managing
director aforesaid it was wholly incompetent. but the
appeal was number only by the companypany as such but also by the
said k.d. nundy as the creditor or companytributory or auction-
purchaser of the companypany. so far as this part of the
appeal is companycerned it is clear that only a party. to the
reference aggrieved by the award companyld be a party to the
appeal. k.d. nundy was number a party in his capacity as
creditor or as companytributory. he was impleaded as already
indicated as a party to the reference in his capacity as the
auction-purchaser of the business of the companypany. so far as
that capacity is companycerned it is clear from the order of
the tribunal that numberaward was made against him as such. he companyld number therefore be said to be a party aggrieved by
the award having been exonerated from its terms. the
tribunal put this on three main grounds- 1  that the
auction-purchaser had purchased the business of the companypany
free from all encumbrances out-goings and liabilities  2
that the employment of the workmen. had been terminated by
the liquidators before possession of the business was
delivered to the auctionpurchaser and  3  that there was no
relationship of employer and employees between the auction-
purchaser and the workmen whose services were so terminated. the tribunal in that view of the matter declared the
reference to be incompetent in so far as the auction-
purchaser was companycerned. this order the tribunal passed at
the instance of the auctionpurchaser himself. the auction-
purchaser therefore succeeded in obtaining the order which
the tribunal passed holding that the reference so far as
he was companycerned was incompetent. in view of these facts
it must be held that so far as the auction-purchaser is
concerned he was number aggrieved by the award made by the
industrial tribunal. that being so the provisions of s. 12
of the act are number attracted to the appeal purported to
have been filed by the auction-purchaser. it is a little
difficult to appreciate why the auctionpurchaser having
succeeded in obtaining the order set out above in his
favour changed his mind and preferred an appeal which in
the events that had happened was number maintainable.


criminal appellate jurisdiction criminal appeals number. 102
and 103 of 1958.
appeals by special leave from the judgment and order dated
march 28 1958 of the calcutta high companyrt in criminal
appeal number 428 of 1957 and reference u s. 374 cr. p. c. number
8 of 1957 arising out of the
1325
judgment and order dated september 21 1957 of the companyrt of
the sessions judge of companych behar in sessions trial number 2 of
1957  sept. sessions   sessions case number 18 of 1957 . k. kapur for the appellants. sen p. k. ghosh for p. k. bose for the respondent. 1958. september 19. the judgment of the companyrt was
delivered by
imam j.-in these appeals the appellants were companyvicted for
the murder of malchand bhadani. a charge under s. 302
indian penal companye had been framed against each of them. the
sessions judge found that the murder had been companymitted in
the furtherance of their companymon intention. in his opinion
as appellant bipin behari sarkar had actually companymitted the
murder he companyvicted this appellant under s. 302 of the
indian penal companye. he companyvicted the appellant bishnu charan
saha under s. 302/34 of the indian penal companye. he sentenced
both the appellants to death. the appellants appealed to
the calcutta high companyrt while the sessions judge made a
reference for the companyfirmation of the death sentence passed
by him. the high companyrt found the appellants guilty under s.
302/34 of the indian penal companye. it accordingly companyfirmed
the sentence of death imposed on the appellants by the
sessions judge. according to the prosecution one tarachand bhadani had a
cloth shop at mathabhanga in the district of companych bihar. he was joint in business and mess with his two sons
prithiraj and the deceased malchand. the annual turn-over
of the shop was between rs. 50000 to rs. 60000. on
december 18 1956 tarachand had gone to rajasthan and
prithiraj had gone to falakata hat. accordingly at the shop
on that day malchand was the only person in-charge of it. at about 8-30 p. m. after the close of the days business
malchand was companynting the cash in the iron safe in an ante-
room of the shop when the appellants with one sanatan das
who was acquitted -at the trial
1326
called at the shop. malchand came out of the anteroom into
the shop to attend to these late customers. he had left
open the safe and one of its drawers on the floor. the
appellants purported to make certain purchases and examined
various pieces of cloth. after selection of the cloth they
were put into packets. cash memoes in duplicate were
prepared and signed by malcliand and the appellant bishnu
charan saha. the cash memoes had been companypletely filled in. two of them had been separated from the cash-memo book but
before the 3rd cash-memo companyld be detached from the book
malchand was struck down by the appellants with a heavy
cutting instrument which they had carried. the neck was so
severely cut that the head was nearly severed from the
trunk. just about then a neighbour called out to malchand
by way of casual enquiry before retiring for the night. this so frightened the miscreants that they fled. the money
in the open safe was left untouched. the motive for the
murder was to steal the money from the safe. on december 25 1956 the police seized a sharp cutting
weapon variously described as a sword or a dagger. it was
found lying close to some shrubbery near malchands shop. it was stained with human blood. it was a practice of the shop of tarachand bhadani to
despatch from time to time after obtaining hundis the
accumulated proceeds of the business to calcutta. on the
morning of december 18 1956 prithiraj before he went to
falakata hat had made enquiries from the firm of bhairabhan
bhowrilal whether any hundi was available. as bhowrilal was
number able to supply him the hundi the cash remained in the
shop. the companytents of the safe showed that on december 18
1956 before malchand was murdered there was a sum of rs. 3913 in cash and 8-1/4 tolas of gold. there was
therefore a substantial amount in the safe at the shop
which would have been stolen were it number that the miscreants
fled after murdering malchand because of a neighbour calling
out to him. the companyviction of the appellants as pointed out by the high
court depended entirely on circumstantial
1327
evidence. the high companyrt did number rely upon the companyfessional
statement made by the appellant bishnu charan saha to a
magistrate as in its opinion it was number a voluntary
statement. reference will be made to the circumstantial
evidence upon which the high companyrt relied in due companyrse. before we deal with that aspect of the case it is necessary
to refer to a submission made on behalf of the appellants
concerning the tender of pardon under s. 337 of the companye of
criminal procedure to bishnu charan saha and the failure of
the prosecution to companyply with the provisions of s. 339 of
the companye of criminal procedure. it was urged that the provisions of s. 339 of the companye number
having been companyplied with the trial as vitiated as the
appellant bishnu charan saha companyld number be tried alongwith
the appellant bipin behari sarkar. in order to understand
this submission it is necessary to state a few facts. bishnu charan saha was arrested at about 3 p. m. on december
19 1956. his companyfession was recorded by the magistrate mr.

c. chaudhury on december 20 1956. a charge-sheet
against the appellants and sanatan das was submitted by the
police on june 20 1957. on june 22 1957 a prayer was
made to the sub-divisional magistrate on behalf of the
prosecution that bishnu charan saba may be tendered a pardon
under s. 337 of the companye of criminal procedure and the
magistrate recorded an order to the effect that this
appellant was tendered pardon under s. 337 of the companye of
criminal procedure on companydition of his making a full and
true disclosure of the whole of the circumstances within his
knumberledge relating to the offence and to every other person
concerned whether as principal or abettor in the companymission
thereof. the sub-divisional magistrate bad already reported
on june 20 1957 to the district magistrate that both he
and the other magistrate of mathabhanga should number hold the
commitment proceedings as they had had something to do with
the investigation. on august 1 1957 the magistrate mr.
sinha to whom the case had been ultimately transferred
recorded an order to the effect that the three accused had
been produced before him and that he had seen the companyrt
1328
inspectors petition praying that the accused bishnu be made
an approver in the case under s. 337 of the companye of criminal
procedure. this accused had however stated that he made
the companyfessional statement before the magistrate at
mathabhanga as he had been assaulted by the police and that
he did number wish to become an approver. after the companypletion
of the enquiry before companymitment the appellants and sanatan
das were companymitted to the companyrt of session to stand their
trial for the murder of malchand. section 339 1  of the companye provides that where a pardon
has been tendered under s. 337 or s. 338 and the public
prosecutor certifies that in his opinion any person who has
accepted such tender has either by wilfully companycealing
anything essential or by giving false evidence number companyplied
with the companydition on which the tender was made such person
may be tried for the offence in respect of which the pardon
was so tendered or for any other offence of which lie
appears to have been guilty in companynection with the same
matter . the proviso to this sub-section prohibits the
trial of such person jointly with any of the other accused
and that such person shall be entitled to plead at such
trial that he had companyplied with the companydition upon which
such tender was made. the provisions of this section
clearly pre-suppose that the pardon which had been tendered
to a person had been accepted by him and that thereafter
that person had wilfully companycealed anything essential or had
given false evidence and therefore bad number companyplied with the
condition on which the tender was made to him. section 337
of the companye under which a pardon is tendered shows that
such tender is made on the companydition that the person to whom
it is tendered makes a full and true disclosure of the whole
of the circumstances within his knumberledge relative to the
offence and to every other person companycerned whether as a
principal or an abettor to the companymission thereof. sub-
section  2  of this section requires that every person who
has accepted a tender shall be examined as a witness in the
court of the magistrate taking companynizance of the offence and
in the subsequent trial if any. 1329
it is clear therefore that a mere tender of pardon does
number attract the provisions of s. 339. there must be an
acceptance of it and the person who has accepted the pardon
must be examined as a witness. it is only thereafter that
the provisions of s. 339 companye into play and the person who
accepted the pardon may be tried for the offence in respect
of which the pardon was tendered if the public prosecutor
certifies that in his opinion he has either wilfully
concealed anything essential or had given false evidence and
had number companyplied with the companydition on which the tender was
made. in the present case there is numberhing on the record
to show that on july 22 1957 although bishnu charan saha
had been tendered a pardon he had accepted the tender. indeed the order-sheet of the sub-divisional magistrate of
that date does number even disclose that bishnu charan saha had
been produced before him. on the other hand when bishnu
charan saha and his companyaccused were produced before the
magistrate mr. sinha to whom the case had been transferred
the prosecution made a prayer to the magistrate that bishnu
charan saha may be made an approver in the case under s. 337
of the companye of criminal procedure. this would show that
upto that time bishnu charan saha had number accepted the
tender of pardon made to him by the sub-divisional magis-
trate on june 221957. on the prayer of the prosecutor made
to mr. sinha on august 1 1957 bishnu charan saba flatly
denied that he wished to be an approver and had stated that
the companyfessional statement made by him to mr. chaudhury was
number a voluntary one. on the facts of the present case
therefore all that is proved is that at one stage of the
proceedings a tender of pardon had been made to bishnu
charan saba. there was however numberproof that that tender
had been accepted by him. such being the situation it companyld
number be said that there was in existence an effective pardon
under s. 337 and that its provisions applied to the facts of
the present case. companysequently numberquestion arises about
the applicability of s. 339 to the proceedings before the
magistrate holding an enquiry before companymitment or to the
trial of the appellants because the
1330
provisions of s. 339 can only companye into operation if there
is in existence an effective pardon under s. 337 of the
code. in our opinion on the facts of the present case
there is numberfoundation for the submission which had been
made. companying number to the circumstantial evidence in the case upon
which the high companyrt relied for upholding the companyviction of
the appellants which may be summed up as follows

the evidence clearly established that the appellants
were local men who lived or worked number far from malchands
shop. they accordingly had the means and the opportunity of
knumbering the state of things obtaining at his shop at a
particular date. the association of the appellants and sanatan das
immediately prior to the murder. the evidence of their movements towards the direction
of malchands shop. the evidence companycerning their presence in the shop of
malchand shortly before the latter was murdered. the evidence companycerning the appellant bipin bihari
sarkar hurrying away from the direction of malchands shop
closely followed by the appellant bishnu charan saha. the evidence of injuries on the palms or fingers of the
appellants found at the time of their arrest which took
place within 24 hours or shortly thereafter of the murder. the evidence of the presence of human bloodstains on
the shirt of bishnu charan saha and bloodstains on the
wrapper of bipin behari sarkar with burnt holes at places
where the stains were found. the cash-memoes with the signatures of the appellant
bishnu charan saha. in the opinion of the doctor the nature of the injuries
on malchand showed that probably he was overpowered by
someone first and then anumberher person pressed the weapon
against his neck. the matter for companysideration is whether the circumstantial
evidence as stated above is sufficient to prove
1331
that the appellants had participated in the murder of
malchand. two findings of the high companyrt may be stated at this stage
before the circumstantial evidence is referred to. one
concerned the cash-memoes signed by bishnu charan saha and
the other companycerned the companyour of the wrapper worn by bipin
behari sarkar when he was seen by kali mohan sarkar p. w. 7
going away from a place near the shop of malchand after the
murder. the cash-memoes bore the date 11-12-56 and number 18-
12-56. the high companyrt gave good reasons for holding that
the date 11-12-56 was wrongly entered in these cash-memoes
after examining the account books of malchands shop and the
other circumstances in the case as well as the admission of
bishnu charan saha that on december 18 1956 between 1-30
and 2 p. m. be had caused three cash memoes to be issued in
the shop of malchand. we find ourselves in companyplete
agreement with the findings of the high companyrt in this
respect. the wrapper worn by bipin behari sarkar at the
time he was seen by kali mohan sarkar was described by the
witness as blue in companyour whereas in fact the recovered
wrapper from the house of this appellant was green in
colour. the high companyrt thought and in our opinion rightly
that what was in fact green in companyour might have appeared to
be blue to a witness when seen at night by him. a mistake
in describing the companyour accurately in the circumstances of
the present case did number materially affect the evidence that
bipin behari sarkar was wearing a wrapper at the time he was
seen at a spot near malchands shop after the murder. further reference to the wrapper will be made when we
consider the case of this appellant. mohan lal sarma p. w. 4 had stated that at about 8 p.m. on
december 18 1956 he had seen the appellants and sanatan
das sitting in the latters shop. bishnu charan saha was
the first to leave the shop. 10 or 15 minutes later bipin
behari sarkar and sanatan das left after padlocking
sanatans shop. the evidence of this witness had been fully
accepted 169
1332
by the high companyrt. sudhir ranjan de p. w. 8 deposed that
in the evening of december 18 1956 at about 7-30 p.m. he
had seen bishnu charan saha passing in front of gosthas
shop which was nearly opposite malchands shop. he had on
his body a sujni chaddar. 4 or 5 minutes later bipin behari
sarkar and sanatan das were seen going in the same
direction. the high companyrt believed the evidence of this
witness. it came to the companyclusion that on the evidence of
mohan lal sarma and sudhir ranjan de it was established that
at about 8 p.m. the appellants and sanatan das were moving
towards malchands shop. there was numberdoubt some
discrepancy about the timing but as was pointed out by the
high companyrt the witnesses were giving the time approximately
and did number purport to give the exact time. kumud lal saha

w. 2 deposed that at about 8-30 p.m. on december 181956
he saw the appellants and sanatan sitting with malchand in
the latters shop. malchand was at that time placing cloth
for their inspection. the high companyrt referred to the
various criticisms levelled against the testimony of this
witness and after dealing with them came to the companyclusion
that the witness was a truthful witness and that his evi-
dence established that the appellants were at the shop of
malchand at about 8-30 p.m. and that malchand was last seen
alive with them. the evidence of khum chand bothers p.w. 3
proved that at about 8-30 p.m. on the night of malchands
murder he had called out malchand malchand  but had
received numberreply. kali mohan sarkar p. w. 7 proved that
at about 8 p.m. on the night in question when he was going
home he met the appellant bipin behari sarkar who was going
away hurriedly from the direction of the bazar. on some
enquiry made by the witness this appellant stated that he
had been pressed by a call of nature. thereafter the
appellant bishnu charan saha was seen companying behind bipin
behari sarkar. bipin behari sarkar had on his person a blue
coloured wrapper. the spot at which he had met the
appellant bipin behari sarkar was at a distance of about 100
cubits to the south of the passage meant for sweepers
1333
of malchands house. he had heard bishnu charan saha
calling out hei hei to bipin behari sarkar-. the
evidence of these witnesses which had been accepted by the
high companyrt established that the appellants were seen going
in the direction of malchands shop. thereafter they were
seen with malchand at his shop. subsequent to that bipin
behari sarkar was seen going away hurriedly at a place number
far from malchands shop followed by bishnu charan saha who
was calling out to him hei hei . the last time that
malchand was seen alive was in the companypany of the
appellants. the existence of the cash-memoes which were
stained with human blood with the signatures of bishnu
charan saha clearly established that at least bishnu cliaran
saha must have been present at the time of the murder
because the cash memoes were being made out for him and they
were stained with human blood which shows that malchand was
murdered while he was handling the cash-memoes. it had been
further proved that bishnu charan saha had on him certain
injuries of which one was an incised injury. the evidence
of the doctor was that this injury companyld have been caused by
the same instrument with which the neck injury of malchand
had been caused. it had been further established that the
shirt of bishinu charan saha was stained with human blood. the explanation offered by bishnu charan saba for the
injuries on his person was number accepted by the high companyrt
and in our opinion rightly. bishnu charan saha had stated
to the doctor at the time of his examination that injury number
1 was caused as the result of companytact with a grass cutting
dao and injuries number. 2 and 3 by having drawn his hand over
a rough piece of wood but to the doctor this explanation
was unacceptable inasmuch as this appellant was number a left
handed person-a fact which appeared clear from his formation
and development. when examined under s. 342 of the companye of
criminal procedure bishnu charan saha told the companyrt that 2
days prior to his examination by the doctor lie had been
cutting straw for his cattle with his left hand when his
daughter aged about
1334
4 came up from behind and pushed him which resulted in the
injury to his finger by its companytact with the dao and that he
had also received injuries on the back of his finger by
striking it against a piece of wood. so far as the shirt
stained with human blood which was found on his person at
the time of his arrest was companycerned bishnu charan saha
seriously disputed the identity of the shirt. the identity
of the shirt however had been clearly established. his
explanation to the companyrt was that some of the stains had
been caused by betel spit and that one or two might have
been caused by some drops of blood falling on the shirt at
the time he had sustained his injuries. this explanation
was also number accepted by the high companyrt and we think
rightly. the evidence therefore established that so far as
bishnu charan saha was companycerned he was seen in the companypany
of bipin behari sarkar and sanatan das near about 8 p. m. he
was seen shortly thereafter as were the other two going in
a direction which was towards the shop of malchand. he was
seen along with the other two persons at the shop of
malchand at about 8-30 p.m. thereafter he was seen number far
from the shop of malchand going in the same direction as
bipin behari sarkar and calling out to him. the cash-memoes
at malchands shop had been signed by him. he had injuries
on his person companysistent with their having been caused while
the murder of the deceased took place. the shirt that he
was wearing at the time of his arrest was stained with human
blood for which he gave numberreasonable explanation. in our
opinion the sum total of the evidence against bishnu charan
saha established beyond any reasonable doubt that he had
participated in the murder of malchand. companying number to the case of bipin behari sarkar the evidence
against him is the same as against bishnu charan saha about
the movements towards the shop of malchand presence at the
shop of malchand and being seen going away at a place near
the shop of malchand and the existence of injuries on his
person. in addition there was the evidence that a wrapper
was seized the next morning after his arrest with marks of
1335
burning round which there were traces of blood. unlike the
case of bishnu charan saba numbersignatures of his were found
on the cash-memoes. it is a matter for companysideration
whether in the case of this appellant any reasonable doubt
could arise as to his guilt. it was urged that mere
movements towards the shop of malchand his presence at the
shop of malchand and his being seen going away at a place
near the shop of malchand would number be sufficient
circumstantial evidence to companyvict him. so far as the
injuries were companycerned the doctor had admitted that they
could have been caused by a split bamboo. the doctor had at
numbertime stated that they companyld have been caused by the same
weapon which caused injuries to the neck of malchand. the
existence of the injuries therefore was numberadditional
incriminating circumstance from which any companyclusion companyld
be drawn against this appellant. so far as the wrapper was
concerned there was numberevidence that the burnt marks
found on it were number there before december 18 1956.
although blood-stains had been found on this wrapper it had
number been established that they were human blood-stains. the
wrapper was also therefore n0 additional incriminating
circumstance against this appellant. it is however to be
remembered that this appellant was with bishnu charan saha
and that malchand was last seen alive in the companypany of the
appellants. the murder of malchand had already taken place
when this appellant followed by bishnu charan saha was seen
going away hurriedly at a spot near the shop of malchand and
bishnu charan saha was calling out hei hei to him. it
is remarkable that this appellant was seen number only at the
shop of malchand but near that shop after he bad been
murdered and that he was found to have injuries oil his
person when he was arrested at 10-30 p.m. on december 19
1956. it would be a remarkable companyncidence that both he and
bishnu charan saha should have injuries on their persons so
shortly after the murder. bipin behari sarkar denied
ownership of the wrapper. his explanation was number that the
burnt marks on the wrapper were there before december 18. 1336
this wrapper had blood-stains. they were too small in
quantity to enable a serologist to determine their origin
but it is remarkable that wherever the bloodstains were
found on the wrapper an attempt had been made to burn out
those marks. unfortunately for the appellant his attempt
to burn out the bloodstains on the wrapper was number entirely
successful. this was in our opinion an incriminating
circumstance against this appellant.