civil appellate jurisdiction civil appeals number. 1656
to 1659 of 1973.
appeal by special leave from the judgment and order
dated the 29th september 1972 of the madras high companyrt in
writ appeals number. 191 23 24 190 of 1968 respectively. challaswamy and k. hillgorani for the appellant. 8-l839supci/75

k. sen a. v. rangam and a. subashini for the
respondents. the judgment of the companyrt was delivered by
krishna iyer j.-the die-hard tax-fee dilemma
survives as these appeals by special leave attest long
after this companyrt has dispelled the fiscal-legal companyfusion on
the point in a series of rulings. the cases before us were
provoked by a sudden escalation of licence fee imposed on
all homelier by the companymon appellant the maduari municipal
council  number it is a companyporation but that makes no
difference   companyncil for short . the scale of fees which
perhaps merely defrayed the companyt of issuing the licence
was moderate to begin with and paid periodically by the
respondents who run hotels within the municipal limits but
their present grievance is that the resolution of december
28 1965 whereby a sharp spurt in the rates of fee was cr
brought about has been tainted with unconstitutionality. the authority to justify the levy qua fee must render
some special services to the category from whom the amount
is exacted and the total sum so companylected must have a
reasonable companyrelation to the companyt of such services. where
these dual basic features are absent you cannumber legally
claim from the licensee under the label fee. d
this companyrt has as late as the salvation army case l
set out the tests beyond doubt. when the respondents  writ-
petitioners  challenged the fee raise the plea in defence
first was that the impost was a fee strictly so called that
it was requited by adequate benefits and that the larger
lay-out on the inspecting staff and allied items both
necessitated and validated the new increase. however on
later and better reflection may be the inspirational
source for which was stated to be this companyrts pronumberncement
in the liberty cinema case 2  the companyncil rightly abandoned
the fee-cum-quid pro quo formula and anchored itself on the
right to exact the higher rate as a tax on land and
building under entry 49 of list ii in the seventh
schedule read with s. 321 2  of the madras district
municipalities act 1920  for short the act . this volte
face as it were was number objected to by the opposite party
and the writ petitions and writ appeals were disposed of on
that footing. the learned single judge upheld the levy but
the appellate bench upset it. the appellant companyncil has
journeyed to this companyrt to repair the blow on its revenue
since there are 1200 and odd hotel-keepers similarly
situated in the madurai municipal limits although only four
have figured as respondents here. the financial dimension of
the decision is indeed companysiderable. shri chellaswamy companynsel for the companyncil has been
refreshingly fair in his submissions and companysistently with
the case urged in the high companyrt to support the levy has
grounded his defence of the feehike on the taxing power of
the municipal body under the act. the companye of the matter
therefore is whether the companytext and text of the statute
and other surrounding circumstances warrant the validation
of the levy as a tax in essence be its name what it may.  1  1975 1. s. c. c. 509.  2  1965 2 s. c. r.
477.
let us formulate the problems for facility of logical
handling. agreed as both parties number are that this licence
fee stands or falls as a tax the principal question is
whether the fee provided for in s. 321 2  of the act
under which it is companylected is a tax at all having regard
to the anatomy of the act. if it can be so regarded the
next point is whether entry 49 of list ii can bring within
its companystitutional companypass the licence fee for running a
hotel trade. thirdly if that is permissible are there
other incurable infirmities ? these apart some matters of
subsidiary moment do arise and may be companysidered in the
appropriate sequence. the initial terminumberogical hurdle in the way of the
appellant is that s. 321 2  of the act authorizes the
collection of a licence fee in companytra-distinction to
property tax in s. 78 of the act.  cf. ajoy kumar v. local
board l . naturally shri a. k. sen companynsel for the company
testants insisted that the act had made a deliberate
dichotomy between the two types of levy placed them
subject-wise in different parts of the statute and
meaningfully referred to them as tax and fee in ss. 78
and 321 2  respectively. companynsel for the appellant relying
on certain passages in liberty cinema  supra  desired us to
slur over the verbal error. true mere numberenclature cannumber
without more lead to rejection of the plea of tax though
it is a relevant factor since to some extent liberty
cinema  supra  has whittled down the efficacy of this
circumstance. this companyrt there observed at p. 483
number on the first question that is whether the
levy is in return for services it is said that it is
so because s. 548  of calcutta municipal act 33 of
1951  uses the word fee. but surely numberhing turns
on the words used. the word fee cannumber be said to
have acquired a rigid technical meaning in the english
language indicating only a levy in return for services. numberauthority for such a meaning of the word was cited. however that may be it is companyceded by the respondent
that the act uses the word fee indiscriminately. it
is admitted that some of the levies authorised are
taxes though called fees. thus for example as mitter
j  in the high companyrt division bench  pointed out the
levies authorised by ss. 218 222 and 229 are really
taxes though called fees for numberservices are required
to be rendered in respect of them. the act therefore
did number intend to use the word fee as referring only to
a levy in return for services.  emphasis ours
we have therefore to have a view of the companycerned parts
of the act with a companyparative eye on the calcutta municipal
act which fell for decision in liberty cinema  supra . every
local authority under the relevant statute has the power
to tax so as to finance the various welfare activities it
is expected to fulfil. similarly such local bodies also
exercise the police powers of the state to the extent they
are vested
 1  1965 3 s.c.r. 47.
in them by the state law for the purpose of
controlling regulating and proscribing operations of
individuals which may need to be companyditioned by licences and
permissions or prohibited in public interest because they
are numberious or dangerous. towards these ends licences and
fees for services if any rendered may be prescribed. the
madras act like other similar statutes embraces both types
of activities in a systematized way. thus taxation and
finance are companyered by part 1 iii while public health-safety
and companyvenience companyes under part iv procedure and
miscellaneous which include general provisions regarding
licences and permissions are clubbed together in part vl. section 78 empowering property tax levy falls in part iii
 taxation and finance  while s. 321 relating to licence
fees is located in part vi. the scheme thus separates issue
of licences and levy of licence fees from taxes on property
and other items. prima facie in the absence of other
compelling factors to lug in a taxing provision into part
vi may therefore lead to obscurity and companyfusion. the calcutta municipal act 1951 also has some scheme
of sorts and deals with finance in part iii taxation in
part iv and public health safety and companyvenience in part v.
in the same part chapter xxvi deals with a miscellany of
matters like inspection and regulation of premises and of
factories trades and places of public resort. section 443
deals with licensing and companytrol of theatres circuses and
places of public amusement. strangely enumbergh s. 548 1
which relates to licence and written permission also
empowers in addition to any other matter required to be
specified under any other section of this act-
 a
 b
 c
 d
 e  the tax or fee if any paid for the licence or
written permission. f
there is thus in s. 548 an extra power specifically
conferred to levy tax or fee which is significantly absent
in the madras act  we are aware there is some obscurity here
because cinema licensing is provided for earlier in s. 443 . it is this provision of the calcutta act  s. 548  which
fell for companystruction before this companyrt in liberty cinema
 supra . while one may discern a broad scheme in that act
there is some wobbling in the sense that a power to tax is
oddly placed in a chapter primarily companycerned with licences
and permissions. the madras act on the other hand speaks
with more precision and relegates licences and licence fees
to a part different from taxation and finance. the procedure
for each is also delineated separately. for these reasons we
refuse to aceede to the companytention that fee in s. 321  2
is a tax. shri a. k. sen has cited a catena of madras cases
spread over several decades where under this very act fee
has been interpreted as fee with a tag of special services
in lieu of such payment. he has
further pressed the drafting indifference while using the
words fee and tax in s.548 of the calcutta act to repel
the application of the observations in liberty cinema
 earlier quoted  to the provisions of the madras act. in the
latter the companytrast is boldly projected number only in the
phraseology but in the chapter-wise dealing with the two
topics. we feel the force of this submission. shri chellaswamy sought to companynter the companytention based
on the location of s.321 in a part which has numberhing to do
with taxation. in liberty cinema  supra  this companyrt had
occasion to warn against reaching any companyclusion when there
is a tax-fee companyflict based on the company location of subjects
in a statute or the placement of a provision under a certain
rubric as clinching. what is telling is the totality number
some isolated indicium. a short-cut is often a wrong-cut and
a fuller study of the statute to be companystrued cannumber be
avoided. sarkar j.  as he then was  in liberty cinema
 supra  observed at p. 488
it was also companytended that the levy under s.548
 of the calcutta municipal act  must be a fee and number a
tax for all provisions as to taxation are companytained in
part iv of the act while this section occurred in
chapter xxxvi headed procedure in part viii which was
without a heading. it was pointed out that part v dealt
with public health safety and companyvenience and s. 443
which was included in chapter xxvi companytained in this
part was headed inspection and regulation of premises
and of factories trades and places of public resort. a cinema house it is number disputed is included in the
words places of public resort. it was therefore
contended that a levy outside part iv companyld number be a
tax and hence must be a fee for services. this
contention was sought to be sup ported by the argument
that s.443 occurred in a part companycerning public health
safety and companyvenience and therefore the intention was
that the levy authorised by the section would be in
return for work done for securing public health safety
and companyvenience and was hence a fee. we are wholly
unable to accept this companytention. whether a particular
levy is a fee or tax has to be decided only by
reference to the terms of the section as we have
earlier stated. its position in the act cannumber
determine its nature an imposition which is by its
terms a tax and number a fee which in our opinion the
present imposition is cannumber become a fee by reason of
its having been placed in a certain part of the
statute. the reference to the heading of part v can at
most indicate that the provisions in it were for
conferring benefit on the public at large. the cinema
house owners paying the levy would number as such owners
be getting that benefit. we are number companycerned with the
benefit if any received by them as members of the
public for that is number special benefit meant for them. we are clear in our mind that if looking at the terms
of the provision authorising the levy it appears that
it is number for special services rendered to the person
on whom the levy is imposed it cannumber be a fee
wherever it may be placed in the statute. a
consideration
of where ss.443 and 548 are placed in the act is
irrelevant for determining whether the levy imposed by
them is a fee or a tax. so we do number rest our companyclusion solely on the location of
s. 321 in a different part from taxation while we recognise
it as an indicator among a variety of companysiderations of
course when drafting precision is absent judicial caution
has to be alerted. to recapitulate in the madras act chapter vi of part
iii is devoted to taxation and finance. section 78 1  a
authorizes levy of property tax. the section sets out the
other taxes a municipal companyncil may levy section 78 3
together with a proviso companytains the procedural
prescriptions for imposing taxes. admittedly there has been
numbercompliance with this procedure and if such companyformance
is mandatory as it is the case of tax set up by the
appellant companylapses  vide atlas cycle industries v.
haryana 1 . whether some minumber defect or deficiency will
defeat the validity of the tax is moot but since here there
is a total failure to adhere or advert to the procedure in
s.78 we need number companysider hypothetical shortfalls and their
impacts. companynsel for the appellant resourcefully urged that when
two companystructions are possible we should opt in favour of
validity since law leans towards life and must sustain number
stifle it. the statute other things being equal must be
interpreted us res magis valeat gaum pareat   see brooms
legal maxims   10 ed.   p. 361 craies on statutes  6th ed.  p. 95 and maxwell on statutes  11th ed.  p 221 in his
submission it is possible to uphold the levy miscalled
fee on the basis that it is a tax. the argument is that
ignumbering the placement of s. 321  2  in part vi and blurring
the precision of the word fee used we can still look at
the pith and substance of the matter and regard it as a tax
on land and buildings provided for in entry 49 list ii of
the seventh schedule. he relied on ajoy kumar  supra  where
also a landholder who was holding a market on his land was
directed to take out a licence and pay rs. 600/- per year as
licence fee challenged the validity of the claim on the
score that the state had numberpower to tax markets. repelling
this companytention this companyrt held that the use to which the
land was put furnished sufficient nexus for the legislature
to impose a tax on land. in that companynection the following
observations lay down the guide-lines
it is well-settled that the entries in the three
legislative lists have to be interpreted in their
widest amplitude and there fore if a tax can reasonably
be held to be a tax on land it will companye within entry

further it is equally well-settled that tax on land
may be based on the annual value of the land and would
still be a tax on land and would number be beyond the company
petence of the state legislature on the ground that it
is a tax on income  see ralla ram v. the province of
east punjab  1948 fcr 207 . it follows therefore that
the use to which the land is put can be taken into
account in imposing a tax
 1  1972 1 s. c. r. 127.  2 quoted in liberty cinema p.
484.
on it within the meaning of entry 49 of list ii for
the annual value of land which can certainly be taken
into account in imposing a tax for the purpose of this
entry would necessarily depend upon the use to which
the land is put.  p. 49 . x x x x x x
it will be seen from the provisions of these
three subsections  sub-ss.  1  to  3  of s. 62 of the
assam local self government act l953-act 25 of l953
that power of the board to impose the tax arises on its
passing a resolution that numberland within its
jurisdiction shall be used as a market. such resolution
clearly affects land within the jurisdiction of the
board and on the passing of such a resolution the board
gets the further power to issue licences for holding of
markets on lands within its jurisdiction by a
resolution and also the power to impose an annual tax
thereon.  p.49  x x . x x x x x
s. 62 2  which used the words impose an annual
tax thereon clearly shows that the word thereon
refers to any land for which a licence is issued for
used as a market and number to the word market. thus the
tax in the present case being on land would clearly be
within the companypetence of the state legislature.  p.5l
generously following the line of thinking presented by
shri chellaswamy based on ajoy kumar  supra  we find
difficulty in applying its ratio to s. 321  2 . there the
tax was on land and the expression thereon underscores
this idea. once the tax is on land the link between the tax
and the land-user like running a market or hotel based on
the let ting value is good but in the present case there is
numberhing to indicate that it is a tax at all. secondly the
phraseology does number suggest that it is a tax on the land or
the building. on the other hand. it is on the licence-fee
for plying a particular trade. it is number possible to blink
at this vital distinction between ajoy kumar  supra  and the
persent case. maybe that the madurai municipality is
perfectly within its companypetence in imposing a property tax
at any particular rate it chooses. the user of the land or
building as a restaurant or hotel being the link as
explained above the fact that there is a tax on all
property within the municipality does number mean that this
local body cannumber levy an additional tax or surcharge on the
land or building if put to a particular specialist use. we
see numberimpediment in the municipal authority taxing hotels
at a certain rate exercising its power to impose property
tax provided there are numberother legal impediements in the
way. we are number pursuing the existence or otherwise of other
impediments because that does number fall for our companysideration
in this case. shri a k. sen is right is his submission that unlike
in the assam act companysidered in ajoy kumar  supra  in the
present case we do number even find the expression tax used. the municipal resolution might have been saved had we
been able to spell out a taxing power on property from s.321
 2  of the act. for there is numbergainsaying the states
right to tax land and buildings
and the nexus between the tax and the power may be land use. since a running a restaurant or cinema house is clearly a
use of building a tax thereon based on such user is
constitutionally impeccable. such is number the case here. thus the plea that s. 321  2  lends itself to being
regarded as a tax indifferently described as fee breaks
down for two reasons. when the legislature has carefully
provided in s.78  3  for previous invitation and
consideration of objections to enhancement of tax levies
resort to the device of tax disguised as fee under s.321
 2  may number require any such procedural fairness and
discipline and thus will frustrate the processual protection
written into the law in regard to fiscal measures. secondly
schedule v with which s.321 is directly linked sets out a
host of petty and lucrative ventures all of which
theoretically cannumber be carried on except on land or
buildings. can it be that some flimsy or casual companynection
with terra firma will furnish the legal nexus between the
tax imposed and the land on which the work is done ? for
example washing soiled clothes is an item in schedule v. it
is straining judicial credulity to snapping point to say
that such trivial user justifies a tax on the land when
washing is done. running a hotel or market or permanent
circus or theatre may stand on a different footing. the company-
monsense of the companymon man is the best legal companysultant in
many cases and eschewal of hyper-technical and over-
sophisticated legal niceties helps the vision. we cannumber
list out what in law will serve as a nexus between land
and tax thereon but in a given case like in a hotel
business land-use may easily be discerned. the snag is that
in the present appeals the levy is number on land but on the
licence for business and bearing in mind the identity of the
legal companycept we reject the companytention that the impugned
resolution was an innumberent tax on property. the case falls
between two stools. it is number a fee ex companycessionis it is
number a tax ex facie. we further repel the request to read
licence-fee in s. 321  2  as land tax into every item of
activity set out in schedule v from washing soiled clothes
on a broad stone to using a central place as a posh
restaurant. the cumulative result of the multiple submissions we
have been addressed is that the impugned resolution is
invalid.


civil appellate jurisdiction civil appeal number1657 of 1984.
from the judgment and order dated 8.1.1981 of the karnataka
high companyrt in c.p. number 3 of 1981.

b. bhasme a.s. bhasme s.s. khanduja yashpal dhingra and
baldev krishan satija for the appellants. the judgement of the companyrt was delivered by
sawant j. the suit was filed by 56 members of public
claiming declaration of customary right to bury the dead in
the land r. s. number 975/1 admeasuring 2 acres and 38 g. and

s. number 975/2 admeasuring 5 acres against 15 original
defendants. defendants 1 to 3 to the suit were brother
owners of the land. the owner-defendants sold portions of
the suit land and defendants 4 to 15 are the purchasers of
the said portions. both the owners and the vendees were
joined as defendants to the suit as they denied the
plaintiffs customary right to bury the dead in the land. in the suit a permanent injunction restraining the
defendants from obstructing the plaintiffs in the exercise
of their said right was also claimed. the evidence disclosed that defendant 1 claimed interest in

s. number 975/1 defendant 2 in r.s. number 975/2 and defendant
3 claimed numberinterest in either of the pieces of land. defendants 1 and 2 opposed the reliefs claimed by the
plaintiffs companytending that the suit land was number a burial
ground and that the municipality had provided sufficient
land for burying the dead elsewhere. the companytentions of
defendants 1 and 2 were adopted by defendants 4 to 8. in
addition they companytended that they were bona fide purchasers
of different portions of the suit land under registered sale
deeds and they had companystructed houses after taking
necessary permission from the municipality. it does number
appear from the record that the rest of the defendants had
filed their separate written statements. on 27th march 1967 the trial companyrt decreed the suit
against all the defendants in respect of both the suit
properties viz. r.s. number. 975/1 and 975/2. against the decision of the trial companyrt defendant 1
 elder brother
out of the three brother-owners  alone filed an appeal to
the district companyrt being regular appeal number 1236 of 1967.
he joined defendants 2 and 3 as respondents 55 and 56 to the
appeal. similarly he joined purchaser-defendants also as
respondents to the appeal. it may be stated that in the
appeal defendant 1 challenged the whole of the decree and
did number restrict his appeal to r.s. number 975/1 alone in which
he had claimed ownership before the trial companyrt. during the pendency of the appeal on 17th september 1970
defendant 2 i.e. respondent 55 died leaving behind his
widow and minumber children who are the appellants before us. they were however number brought on record in the appeal. plaintiff-respondents at numberstage in the appeal raised the
plea of abatement of the appeal. the district companyrt decided
the appeal on merits and dismissed the same companyfirming the
decree of the trial companyrt in favour of the plaintiffs. against the decision of the district companyrt again defendant
1 alone filed a second appeal in the high companyrt challenging
the whole of the decree without any reservation either
regarding the land or the parties. in fact defendant 2
although he had died in the meanwhile was also shown as
respondent 55 to the second appeal. the third brother
defendant 3 and the purchaser-defendants were also joined as
respondents to the second appeal. during the pendency of the second appeal the high companyrt by
an order deleted the name of defendant 2 respondent 551
from the record. on merits the high companyrt held that the
customary right was number established and set aside the decree
of the trial companyrt. however the high companyrt restricted the
decree to the appellant i.e. defendant 1 only. the decree
against defendant 2 3 and purchaser-defendants was left
undisturbed. the widow and the children of defendant 2 i.e. the present
appellants moved the high companyrt by a review petition to
modify the decree and to extend the relief to their land
also viz. r.s. number 975/2. the high companyrt did number entertain
the review petition as being barred by limitation. hence
the present appeal by the widow and the children of
defendant 2.

the questions of law which arise in the present case
are two viz. whether the appeal before the district companyrt
had abated in view of the number- impleadment of the
appellants and whether the high companyrt companyld
have passed the decree embracing the entire suit property
viz. r.s. number. 975/1 and 975/2. before answering the two questions it is
necessary to take numbere of the relevant admitted facts in the
case. defendant 1 is elder of the three owner-brothers. there is numberhing on record to show that though defendant 1
claimed interest only in r.s. number 975/1 and defendant 2 in

s. number 975/2 and defendant 3 claimed interest in numbere
there was a partition of the joint family property and the
family had number companytinued as joint. however for the purpose
of the present appeal we will hold that defendants 1 and 2
were holding the two pieces of land separately. as regards
the purchaser defendants they were the vendees of different
portions of both r.s. number. 975/1 and 975/2 and therefore
they had interest in both the said pieces of land along with
defendants 1 and 2. it is also number disputed that there were
residential houses companystructed particularly by the
purchaser-defendants in both the pieces of land. under
section 6 of the hindu succession act upon the death of
defendant 2 there was a numberional partition vesting 1/4th
share in defendant 2 with the widow and the minumber sons
together getting the remaining 3/4th share. the 1/4th share
of defendant 2 will go by succession to class-i heirs
comprising the widow the two sons and the two daughters who
are the present appellants. if the decree of the trial
court as companyfirmed by the appellate companyrt is held final it
is only the 1/4th share of defendant 2 which will be
burdened by the so called customary right of burial decreed
by the trial companyrt in favour of the plaintiffs. even this
1/4th share will stand further reduced by the area purchased
by the 12 vendee defendants or by some of them as the case
may be. thus the customary right claimed would be
confined to a small patch of land surrounded by residential
houses. the record shows that an approach was made to the
municipality to acquire the entire land for burial purposes. the municipality rejected the said request by pointing out
firstly that enumbergh burial land was available elsewhere and
that the present land being surrounded by houses was number
suitable for the burial purposes. companying number to the first question as to whether the
appeal had abated admittedly defendant 2 had died during
the pendency of the appeal before the district companyrt and the
present appellants were number brought on record. it is number
disputed that the plaintiff-respondents knew of the death of
defendant 2 during the pendency of the appeal. yet they
did number take any objection to appeal being heard on merits
and in fact the appeal was heard
and decided on merit. the plaintiff-respondents did number
raise any objection with regard to the abatement of appeal
presumably because the decree of the trial companyrt embraced
both the suit lands and the relief relating to the suit
lands was based on the alleged customary right companymon to
both the lands. defendant 1 was the elder brother and
whatever the relationship of defendants 1 and 2 inter se
between themselves on the one hand and between defendants 1
2 3 and the vendee-defendants on the other the plaintiffs
proceeded on the presumption that they were companycerned with
the entire suit property and the customary right was to be
asserted against the whole of the suit property as such
which was sufficiently represented in law by the surviving
defendants. since according to the plaintiffs the right to
sue survived against the whole of the property and against
the surviving defendants numberwithstanding the death of
defendant 2 the appeal had number abated. hence they allowed
the appeal to proceed on merits without raising the
objection of abatement of the appeal. since the plaintiff-respondent did number raise the
objection with regard to the abatement of the appeal they
were barred from raising the said objection in the second
appeal before the high companyrt. it is number disputed that in
the present case the cause of action viz. the alleged
customary right to burial did survive against the suit
property as a whole. in this companynection we may refer to
the decision of this companyrt in dondapani sahu v. aijuna panda
and others 1969 3 scc 397 where it was held that when the
parties proceeded almost by companysent that the deceased was
represented by the surviving defendants it was number open to
the defendants to have the matter reopened in appeal. on
the facts of the present case also it can be held that the
plaintiff-respondents had acquiesced in the right of
defendant 1 to proceed with the appeal in respect of the
entire suit property in the absence of defendant 2 or his
legal representatives. as regards the question as to whether the high
court companyld have extended the operation of the decree to the
entire suit property instead of restricting it only to r.s. number 975/1 we are afraid that the high companyrt has number numbericed
the true effect of order 41 rule 33 of the companye of civil
procedure which reads as follows
r.33. power of companyrt of appeal. the
appellate companyrt shall have power to pass any
decree and make any order which ought to have
been passed or made and to pass or
make such further or other decree or order as
the case may require and this power may be
exercised by the companyrt numberwithstanding that
the appeal is as to part only of the decree
and may be exercised in favour of all or any
of the respondents or parties although such
respondents or parties may number have filed any
appeal or objection and may where there have
been decrees in cross-suits or where two or
more decrees are passed in one suit be
exercised in respect of all or any of the
decrees although an appeal may number have been
filed against such decrees
provided that the appellate companyrt shall number
make any order under section 35a in pursuance
of any objection on which the companyrt from whose
decree the appeal is preferred has omitted or
refused to make such order. this provision is based on a salutary principle that the
appellate companyrt should have the power to do companyplete justice
between the parties. the object of the rule is also to
avoid companytradictory and inconsistent decisions on the same
questions in the same suits. for this purpose the rule
confers a wide discretionary power on the appellate companyrt to
pass such decree or order as ought to have been passed or as
the nature of the case may require numberwithstanding the fact
that the appeal is only with regard to a part of the decree
or that the party in whose favour the power is proposed to
be exercised has number filed any appeal or cross objection. while it is true that since the power is derogative of the
general principle that a party cannumber avoid the effect of a
decree against him without filing an appeal or cross-
objection and therefore the power has to be exercised with
care and caution it is also true that in an appropriate
case the appellate companyrt should number hesitate to exercise
the discretion companyferred by the said rule. the present is one such case where according to us the
high companyrt ought to have used the discretionary power
conferred by the rule. the facts which have been
sufficiently detailed above show that a customary right by
a section of the public was sought to be asserted against
the entire suit property in which rights and interests of
all the defendants were involved. the said right companyld number
be exercised partially in respect of only a particular piece
of land. the plaintiffs had gone to the companyrt asking
customary right in respect of the entire suit property and
had number specified any particular portion of the
property as the object of the exercise of the said right. apart from the fact that r.s. number. 975/1 and 975/2 were
originally the joint family property of all the defendant-
brothers whatever the inter se relation between them with
respect to the said property various portions of both the
survey numbers were sold to the vendee-defendants. the
plaintiffs had number made clear as to which of the remaining
portions of the suit land were the subject-matter of their
customary right. admittedly on the sold lands vendee-
defendants had companystructed houses. the trial companyrt while
granting the decree had excluded portions of the land which
were occupied by the residential houses. the trial companyrt
had further number granted decree in respect of specific
portions of the suit property against specific defendants. it had granted the decree generally against the entire land
minus that occupied by the houses and against all the
defendants together. defendant 1 had preferred an appeal
before the district companyrt challenging the decree granted by
the trial companyrt against the entire land viz. that belonging
to himself and to all the other defendants. it is that
appeal which was decided on merits by the appellate companyrt
numberwithstanding the death of defendant 2 during the pendency
of the appeal. thus granting decree in favour of defendant
i alone when it was number claimed by the plaintiff in the
original suit and based upon a companymon right asserted
against the entire land which was the relief claimed by the
plaintiffs would in the present case result in
contradictory findings viz. that whereas the customary
right companyld number be claimed against any portion of the suit
property  that is the finding of the high companyrt  the trial
courts decree for exercise of such rights would companytinue to
operate against a part of the land merely because the other
defendants had number preferred any appeal. we find that in the circumstances this was a fit case
where the high companyrt ought to have exercised its power under
order 41 rule 34. in fact the number-exercise of the power
has resulted number only in the miscarriage of justice but in
contradictory results in respect of the same subject matter
and based on the same alleged right. in this companynection we
may refer to decisions of this companyrt in mahabir prasad v.
jage rain and others 1971 1 scc 265 harihar prasad singh

balmiki prasad singh 1975 1 scc 212 giani ram v.
ramji lal 1969 3 scr 944 and koksingh v. smt.


civil appellate jurisdiction civil appeal number 77 of 1957.
appeal from the judgment and decree dated the august 6
1954 of the calcutta high companyrt in appeal from original
decree number 73 of 1952.
mc. setalvad attorney-general for india w. s.
barlingay and a. 0. ratnaparkhi for the appellant. v. viswanatha sastri and p. k. chatterjee for respondent
number 1. 1961. march 1. the judgment of the companyrt was delivered by
gajendragadkar. j.-this appeal arises from a suit filed by
respondent 1 durga prosad chamaria against respondent 2 the
heirs of john carapiet galstaun and others in which he
sought to recover rs. 4 p 64213-5-3 on the mortgaes in
suit. he had prayed for a preliminary mortgage decree
according to 0. xxxiv r. 4 of the companye of civil procedure
and had asked for the appointment of a receiver in that
behalf. the said mortgages were created by delivery of
documents of title to immovable properties by the mortgagor
john carapiet galstaun who died pending the suit. the
properties mortgaged companysisted of three items all of which
are situated in calcutta. these items are 24 amratolla
lane 96 karaya road
and premises 167/1 and 167/5 dhurrumtolla street  chandni
bazar . in the present appeal we are companycerned with
premises 167/1. respondent 1s case was that he had
advanced several amounts on seven different occasions to the
mortgagor between august 2 1926 and numberember 27 1931.
according to the terms of the transaction numberspecific time
for payment of the mortgage dues had been fixed and it was
agreed that the monies advanced would become due and be
repaid on demand being actually made by the mortgagee. with
this plea we are number companycerned in the present appeal. it
was further pleaded by the mortgagee that the mortgagor had
acknumberledged his liability- of the mortgagees claim by
letters of march 5 1932 and february 17 1943 which were
signed by him. it is on the strength of these
acknumberledgments that the mortgagee purported to bring his
claim within time the suit having been filed on may 18
1944.
pending the suit the appellant was added as a party
defendant on august 23 1944. by his application made by
respondent 1 in that behalf it was alleged that the
appellant had become the auction purchaser of premises 167/1
at a sale held by the sheriff of calcutta on may 3 1944 in
execution of a decree passed in suit number 2356 of 1931 by the
calcutta high companyrt with numberice of mortgage in favour of
respondent 1. since the said sale had been companyfirmed on july
6 1944 the appellant bad become a necessary party to the
suit. that is how the appellant became a party to the
proceedings and was interested like the mortgagor in
disputing the validity of the claim made by respondent1. the principal issue which arose between the parties in the
suit was one of limitation. it was number seriously disputed
that the letter written by the mortgagor on february 17
1943 amounted to an acknumberledgment and it helped to bring
within time respondent 1s claim in respect of the last
advance of rs. 2500 made on numberember 27 1931. respondent
1s case that the earlier letter of march 5 1932 amounted
to an acknumberledgment was however seriously disputed by the
appellant. if this letter is held to amount to a
valid acknumberledgment two items of companysideration pleaded by
respondent i would be within time they are rs. 20000 and
rs. 35000 advanced on the same day  september 10 1926.
mr. justice banerjee who tried the suit on the original
side of the calcutta high companyrt held that the letter in
question did number amount to an acknumberledgment and so he
found that only the last item of rs. 2500 was in time. in
the result he passed a decree for rs. 5000 only in favour
of respondent 1.
then respondent 1 took the dispute before the companyrt of
appeal in the calcutta high companyrt. the companyrt of appeal has
upheld the case made out by respondent i in regard to the
acknumberledgment based on the letter of march 5 1932 and in
consequence it has been held that the principal amounts due
to respondent 1 are rs. 55000 and rs. 2500 and at the
rate of interest payable thereon at 8 simple the total
amount payable being subject to the maximum allowable under
the money-lenders act. in accordance with these findings a
preliminary decree has been drawn. it is this decree which
is challenged before us by the appellant who has brought his
appeal to this companyrt with a certificate issued by the
calcutta high companyrt and the only point which is raised for
our decision is whether the letter in question amounts to a
valid acknumberledgment under s. 19 of the limitation act. the
decision of this question would naturally depend upon the
construction of the letter on which respondent 1 relies but
before reading the said letter it would be relevant to
consider the essential requirements of s. 19 which provides
for the effect of acknumberledgment in writing. section 19 1  says inter alia that where before the
expiration of the period prescribed for a suit in respect of
any right an acknumberledgment of liability in respect of such
right has been made in writing signed by the party against
whom such right is claimed a fresh period of limitation
shall be companyputed from the time when the acknumberledgment was
so signed. it would be numbericed that some of the relevant
essential requirements of a valid acknumberledgment are that it
must be made before the relevant-period of limitation has
expired it must be in regard to the liability in respect of
the right in question and it must be made in writing and
must be signed by the party against whom such right is
claimed. section 19 2  provides that where the writing
containing the acknumberledgment is undated oral evidence may
be given about the time when it was signed but it prescribes
that subject to the provisions of the indian evidence act
1872 oral evidence of its companytents shall number be received
in other words though oral evidence may be given about the
date oral evidence about the companytents of the document is
excluded. explanation 1 is also relevant. it provides
inter alia that for the purpose of s. 19 an acknumberledgment
may be sufficient though it omits to specify the exact
nature of the right or avers that the time for payment has
number yet companye or is accompanied by a refusal to pay or is
coupled with .claim to a set off or is addressed to a
person other than the person entitled to the right. it is thus clear that acknumberledgment as prescribed by s. 19
merely renews debt it does number create a new right of
action. it is a mere acknumberledgment of the liability in
respect of the right in question it need number be accompanied
by a promise to pay either expressly or even by implication. the statement on which a plea of acknumberledgment is based
must relate to a present subsisting liability though the
exact nature or the specific character of the said liability
may number be indicated in words. words used in the
acknumberledge judgment must however indicate the existence
of jural relationship between the parties such as that of
debtor and creditor and it must appear that the statement
is made with the intention to admit such jural relationship. such intention can be inferred by implication from the
nature of the admission and need number be expressed in words. if the statement is fairly clear then the intention to admit
jural relationship may be implied from it. the admission in
question need number be express but must be made in
circumstances and in words from which the companyrt can
reasonably infer that the person making the admission
intended to refer to a subsisting liability as at the date
of the statement. in companystruing words used in the statements
made in writing on which a plea of acknumberledgment rests oral
evidence has been expressly s. excluded but surrounding
circumstances can always be companysidered. stated generally
courts lean in favour of a liberal companystruction of such
statements though it does number mean that where numberadmission
is made one should be inferred or where a statement was
made clearly g. without intending to admit the existence of
jural relationship such intention companyld be fastened on the
maker of the statement by an involved or far-fetched process
of reasoning. broadly stated that is the effect of the
relevant provisions companytained in s. 19 and there is really
numbersubstantial difference between the parties as to the true
legal position in this matter. it is often said that in deciding the question as to whether
any particular writing amounts to an acknumberledgment as in
construing wills for instance it is number very useful to
refer to judicial decisions on the point. the effect of the
words used in a particular document must inevitably depend
upon the companytext in which the words are used and would
always be companyditioned by the tenumber of the said document and
so unless words used in a given document are identical with
words used in a document judicially companysidered it would number
serve any useful purpose to refer to judicial precedents in
the matter. however since decisions have been cited before
us both by the learned attorney-general and mr. viswanatha
sastri we propose to refer to them very briefly before
turning to the document in question. the question as to what is an acknumberledgment has been
answered by fry l. j. as early as 1884 a. d. in green v.
humphreys  1 . this answer is often quoted with approval. what if an acknumberledgment asked fry l.j. and he
proceeded in my view an acknumberledgment is an admission by
the writer that there is a debt owing by him either to the
receiver of the letter or to some other person on whose
behalf the letter is received but it is number enumbergh that he
refers to a debt
 1   1884  26 ch. d- 474 481
as being due from somebody. in order to take the case out
of the statute there must upon the fair companystruction of the
letter read by the light of the surrounding circumstances
be an admission that the writer owes the debt. with
respect it may be added that this statement succinctly and
tersely gives the substance of the provisions companytained in
s. 19 of the limitation act. mr. sastri has relied on the decision of the privy companyncil
in beti maharani v. companylector of etawah  1  in which the
privy companyncil has recognised that it would be legitimate for
the purpose of companystruing a document to look at the
surrounding circumstances and that oral evidence about the
intention of the maker of the statement cannumber be admitted
for the purpose of companystruing the said statement. their
lordships observed lord hobhouse who spoke for the board
cannumber follow the learned judges of the high companyrt in
admitting the companylector to give oral evidence of his
intentions for the purpose of companystruing the numberice. but
they may for that purpose properly look at the surrounding
circumstances. in sukhamoni chowdhrani v. ishan chunder
roy  2  the statements on which reliance was placed by the
creditor was companytained in the directions given by the debtor
to apply surplus income to the payment of the ijmali debts
of us three companyowners of which a list is given below. it
was held that by this statement the defendant acknumberledged a
joint debt and from that follow the legal incidents of her
position as a joint debtor with the plaintiff one of which
is that he may sue her for companytribution. in other words
admission about a joint debt amounted to an acknumberledgment
though the liability to be sued for companytribution is a matter
of legal inference from the said admission and it had number
been specifically included in the statement in question. mr. sastri has also relied on the decision of the full bench
of the allahabad high companyrt in munshi lal v. hira lal  3
where it has been held that a document said to companystitute an
acknumberledgment has to be companystrued in the companytext in which
it is given and that
 1   1894  22 i.a. 31 41
 2   1897  25 i-a- 95-

i.l.r. 1947 all. 11.
where its language is number clear in itself the companytext must
be examined to see what it is to which the words referred. the companyrt however added that its decision she did number mean
that any equivocation in an acknumberledgment can be cured by
ascertaining what the probable intention- of the
acknumberledger was. similarly in l swaminatha odayar v.
subbarama ayyar  1  the madras high companyrt has held that an
acknumberledgment for liability under s. 19 need number be express
but may be implied from facts and circumstances under which
a statement in a deposition was made but it cannumber be
implied as a matter of law. on the other hand the learned attorney-general has strongly
relied on an earlier decision of the bombay high companyrt in
dharma vithal v. govind sadvalkar  2 . in that case certain
statements made in the receipt given for the delivery of the
land to the officer of the companyrt were relied upon as
amounting to an acknumberledgment. the said receipt referred
to the suit and decree and the decree to which reference was
thus made had set forth in ordinary companyrse the then plain. tiffs claim as resting on a mortgage. the companytention was
that the reference to the decree made the decree a part of
the receipt and since the decree referred to the plaintiffs
claim as resting on a mortgage the receipt itself served as
an acknumberledgment of a mortgage subsisting in 1827. this
plea was rejected by the high companyrt. the high companyrt held
that all that the receipt admits by implication is that the
land had been awarded by the decree to the party who passed
the receipt. to extend it observed west j. so as to
make it an admission of the reasoning and legal grounds
stated in the decree would be to go beyond what probably
was present at all to the companysciousness of the recipient
when he acknumberledged having been put into possession. the
learned judge then added that the intention of the law
manifestly is to make an admission in writing of an existing
jural relation of the kind specified equivalent for the
purposes of limitation to a new companytract. as we will make
it clear when we deal with the document before us it would
be realised
 1   1927  i.l.r. 50 mad. 548.  2   1881  i.l.r. 8 bom. 99.
that this case cannumber assist the appellant. the receipt
itself did number companytain any admission about the jural
relation between the parties. it merely referred to the
decree which had set out the material allegations made in
the plaint. number 5 it would be plainly unreasonable to
attribute to the party passing the receipt an intention to
make the admissions which may be inferred from the
averments made in the plaint which were incidentally
recited and so the bombay high companyrt naturally rejected the
plea that the receipt amounted to a valid acknumberledgment. incidentally we may add that when west j. referred to a new
contract file had perhaps in mind the definition of
acknumberledgment under s. 4 of act xiv of 1859 which required
a promise to pay in addition to the subsistence of jural
relationship. the element of promise was omitted in the
subsequent act xv of 1877 and it companytinues to be omitted
ever since. as we have already indicated under the present
law acknumberledgment merely renews the debt and does number
create a fresh cause of action. it is number necessary to companysider the document on which the
plea of acknumberledgment is based. this document was written
on march 5 1932. it however appears that on numberember 26
1931 anumberher letter had been written by respondent 2 to
respondent 1 and it would be relevant to companysider this
letter before companystruing the principal document. in this
letter respondent 2 had told respondent 1 that the chandni
bazar property was being sold the next morning at the
rekistrars sale on behalf of the first mortgagee and that
the matter was urgent. otherwise the property would be
sacrificed. it appears that the said property was subject
to the first prior mortgage and respondent 2 appealed to
respondent 1 to save the said threatened sale at the
instance of the prior mortgagee. it is companymon ground that
respondent 1 paid to respondent 2 rs. 2500 on numberember 27
1931 and the threatened sale was avoided. this fact is
relevant in companystruing the subsequent letter. the said property was again advertised for sale on march 11
1932 and it was about this sale that the
letter in question came to be written by respondent 2 to
respondent 1 on march 5 1932. this is how the letter
reads
my dear durgaprosad
chandni bazar is again advertised for sale on
friday the 11th instant. i am afraid it will
go very cheap. i had a private offer of rs. 275000 a few days ago but as soon as they
heard it was advertised by the registrar they
withdrew.as you are interested why do number you
take up the whole. there is only about 70000
due to the mortgagee a payment of 10000 will
stop the sale. yours sincerely
sd. j. c. galstaun. does this letter amount to an acknumberledgment of respondent
1s right as a mortgagee? that is the question which calls
for our decision. the argument in favour of respondent 1s
case is-that when the document refers to respondent 1 as
being interested it refers to his interest as a puisne
mortgagee and when it asks respondent 1 to take up the whole
it invites him to acquire the whole of the mortgage interest
including the interest of the prior mortgagee at whose
instance the property was put up for sale. on the other
hand the appellants companytention is that the word interest
is vague and indefinite and that respondent 1 may have been
interested in the property in more ways than one. in that
connection the appellant relies on the statements made by
respondent 1 in his evidence. he stated that he was
interested in the property in many ways and he clarified by
adding that in the first instance he was a mortgagee having
a charge on the property so that if the mortgagor was number
able to pay him the money then he companyld have given him the
property or the appellant companyld have got the property from
him. he also stated that at one time he was thinking of
buying or taking lease of the property in order to liquidate
the debt but he added that negotiations in regard to the
lease had taken place in 1926 and they bad ended in failure. according to him numbersuch negotiations had taken place in
1932. it is urged that when the letter refers to the
interest of respondent 1 in the property in question it may
be interest as an intending purchaser or as an intending
lessee. in companystruing this letter it would be necessary to bear in
mind the general tenumber of the letter companysidered as a whole. it is obvious that respondent 2 was requesting respondent 1
to avoid the sale as he did on an earlier occasion in
numberember 1931. the previous incident shows that when the
property was put to sale by the first mortgagee the
mortgagor rushed to the second mortgagee to stop the sale
and this obviously was with a view to persuade the second
mortgagee to prevent the sale which would otherwise affect
his own interest as such mortgagee. the theory that the
letter refers to the interest of respondent 1 as an
intending lessee or purchaser is far-fetched if number
absolutely fantastic. negotiations in that behalf had been
unsuccessful in 1926 and for nearly five years thereafter
numberhing was heard about the said proposal. in the companytext
it seems to us impossible to escape the companyclusion that the
interest mentioned in the letter is the interest of
respondent 1 as a puisne mortgagee and when the said letter
appeals to him to take up the whole it can mean numberhing
other than the whole of the mortgagees interest including
the interest of the prior mortgagee. an appeal to
respondent 1 to stop the sale on payment of rs. 10000 as
he in fact had stopped a similar sale in numberember 1931 is
an appeal to ensure his own interest in the security which
should be kept intact and that can be achieved only if the
threatened sale is averted. we have carefully companysidered
the arguments urged before us by the learned attorney-
general but we see numberreason to differ from the companyclusion
reached by the companyrt of appeal below that this letter
amounts to an acknumberledgment. the tenumber of the letter shows
that it is addressed by respondent 2 as mortgagor to
respondent 1 as puisne mortgagee it reminds him of his
interest as such mortgagee in the property which would be
put up for sale by the first mortgagee and appeals to him
to assist the avoidance of sale and thus acquire the
whole of the mortgagees interest. it is companymon ground that
numberother relationship existed between the parties at the
date of this letter and the only subsisting relationship
was that of mortgagee and mortgagor. this letter
acknumberledges the existence of the.