civil appellate jurisdiction civil appeal number 108 of 1952.
appeal from the judgment and decree dated the 29th march
1950 of the high companyrt of judicature at
calcutta in appeal from original decree number 121 of 1945
arising from the decree dated the 22nd december 1944 of
the companyrt of subordinate judge at alipore in title suit number
70 of 1941.

c. chatterjee  c. n. laik d. n. mukherjee and sukumar
ghose with him  for the appellants. p. sinha  b.b. haldar and s. c. bannerji with him  for
respondents number. i to 3. 1954. may 21. the judgment of the companyrt was delivered
by
mukherjea j.-this appeal which has companye before us on a
certificate granted by the high companyrt of calcutta under
article 133 1  of the companystitution is directed against a
judgment and decree of a division bench of that companyrt dated
the 29th march 1950 affirming on appeal those of the
subordinate judge fourth companyrt alipore passed in title
suit. number 70 of 1941.
the appellants before us are the heirs and legal
representatives of the original defendant number 3 in the suit
which was companymenced by the plaintiffs respondents to recover
possession of the property in dispute on establishment of
their title as reversionary heirs of one haripada patra
after the death of his mother rashmoni who got the property
in the restricted rights of a hindu female heir on
haripadas death. to appreciate the companytentions that have
been raised by the parties to this appeal it would be
necessary to narrate the material facts in chronumberogical
order. the property in suit which is premises number 6 dwarik
ghoses lane situated in the suburb of calcutta admittedly
formed part of the estate of one mahendra narayan patra a
hindu inhabitant of bengal owning companysiderable properties
who died on the 17th april 1903 leaving him surviving his
widow rashmoni two infant sons by her mohini mohan and
haripada and a grandson ram narayan by a predeceased son
shyama charan. shyama charan was the son of mahendra by his
first wife who died during his lifetime. on the 17th
february 1901 mahendra executed a will by which he made
certain religious and charitable dispositions and
subject. to them directed his properties to be divided
amongst his infant sons mohini and haripada and his grandson
ram narayan. ram narayan was appointed executor under the
will. after the death of mahendra ram narayan applied for
probate of the will and probate was obtained by him on the
6th of october 1904 ram narayan entered upon the
management of the estate. he developed extravagant and
immoral habits and soon ran into debts. the bulk of the
properties were mortgaged to one kironsashi who having
obtained a decree on the mortgage applied for sale of the
mortgaged properties. thereupon rashmoni on behalf of her
infant sons instituted a suit against the mortgagee and the
mortgagor and got a declaration that the mortgage decree
could number bind the infants shares in the properties left by
their father. this judgment was given on the 31st march
1909. on the 13th august 1909 the two infant sons of
mahendra to wit mohini and haripada by their mother and
next friend rashmoni instituted a suit in the companyrt of the
subordinate judge at alipore being title suit number 45 of
1909 claiming administration of the estate left by mahendra
as well as partition and accounts on the basis of the will
left by him. on the 14th of august 1909 one baroda kanta
sarkar sheristadar of the companyrt of the district judge
alipore was appointed with the companysent of both parties
receiver of the estate forming the subject-matter of the
litigation. the receiver took possession of the properties
immediately after this order was made. the -management by
the receiver as it appears was number at all proper or
beneficial to the interest of the two sons of mahendra. mahendra himself left numberdebts and whatever debts were
contracted were companytracted by ram narayan to meet his own
immoral and extravagant expenses. the receiver however went
on borrowing large gums of money upon ex-parte orders
received from the companyrt the ostensible object of which was
to pay off the debts due by ram narayan which were number at
all binding on the plaintiffs. fearing that the longer the
suit companytinued and the properties remained in the hands of
the receiver the more harmful it- would be to the interests
of the
minumbers rashmoni on behalf of the minumbers companypromised the
suit. with ram narayan and a solenama was filed on the 13th
june 1910. the terms of the companypromise in substance
were that the properties in suit were to be held in divided
shares between the three parties and specific allotments
were made in favour of each the properties allotted to the
share of haripada being specified in schedules gha and chha
attached to the companypromise petition. it was further
provided that the receiver would be discharged on submitting
his final accounts. it may be mentioned here that the
property which is the subject-matter of the present suit
was under the solenama allotted to the share of haripada. on the very day that the companypromise was filed rashmoni
applied for discharge of the receiver. the companyrt made an
order directing the receiver to submit his final accounts
within one month or as early as possible when the -
necessary order for discharge would be made. it was further
directed that as the suit was disposed of on companypromise the
receiver should discontinue companylecting rents and profits due
to the estate from that day. this order however was
modified by a subsequent order made on 23rd june 19 10
which directed that the receiver was to companytinue in
possession of the estate until he was paid whatever was due
to him for his ordinary companymission and allowances and until
the parties deposited in companyrt the amounts borrowed by the
receiver under orders of the companyrt or in the alternative
gave sufficient indemnity for the same. after this
rashmoni on behalf of her minumber sons filed two successive
applications before the subordinate judge praying for
permission to raise by mortgage of a part of the estate
the moneys necessary for releasing the estate from the hands
of the receiver. the first application was rejected and the
second was granted after it was brought to the numberice of
the subordinate judge that the receiver was attempting to
dissuade prospective lenders who were approached on behalf
of rashmoni to lend any money to her. on the 16th of
january 191 1 haripada the younger son of rashmoni died
and his interest devolved upon his mother as his heir under
the hindu law. on the 28th january 1911 the following
order was recorded by the suborainate judge
the receiver has filed a statement showing the amount
as due to him up to the end of the. current month. this
claim amounts to rs. 20950-2-6 pies only. the parties may
deposit the sum on or before the 1st february next in companyrt
and on such deposit the receiver will be discharged and the
possession of the estate of late mahendr narayan patra will
be made over to the parties. on the very same day mohini exectued a mortgage  ex. m-1  in favour of one suhasini dasi by which he hypothecated
the properties allotted to his share and also his future
interest as reversions to the share of haripada to secure
an advance of rs. 30000. the loan was to carry interest at
the rate of 18 per annum. one thing may be mentioned in
connection with this mortgage and that is that amongst the
properties included in the mortgage were two properties
namely premises number 15/1 and 16 chetlahat road which had
already been sold and to which the mortgagor bad numbertitle at
the date of the mortgage. on the 1st february 1911 mohini
deposited in companyrt the sum of rs. 20950-2-6 pies being
the amount alleged to. be due to the receiver and the companyrt
by an order passed on that date directed the release of the
estate from the hands of the receiver. after the estate was
released a petition was filed on behalf of the plaintiffs on
the 15th february 1911 praying that the loans said to be
contracted by the receiver should number be paid out of the
money deposited in companyrt as these borrowings were made number
for the protection of the estate but only for the personal
benefit of the defendant ram narayan and to pay off his
creditors. it was companytended that the loans raised by the
receiver were number raised in good faith after proper numberice
to the plaintiffs but on the strength of orders which he
obtained ex-parte from the subordinate judge without
disclosing the material facts. this application. was
rejected by the companyrt on the 23rd february1911. after this
order was madethe plaintiffs put in a petition praying that
payment of the moneys due to the creditor- with the
exception of what was necessary to pay off one of the
creditors named rakhal das adhya be stayed till the
following monday
as the plaintiffs wanted to move the high companyrt against the
order of the subordinate judge mentioned above. the companyrt
granted this prayer and on the 2nd of march following
orders were received from the high companyrt directing that the
moneys were to be detained in companyrt pending further orders. the high companyrt made order on the plaintiff s petition on
the 29th may 1911. the learned judges were very critical
of the appointment of the sheristadar of the companyrt as
receiver of the estate and in numbermeasured terms blamed the
subordinate judge for passing ex-parte orders for raising
loans on the applications of the receiver without any
investigation at all and the receiver also for borrowing
money number for the benefit of the estate but for the personal
benefit of ram narayan the defendant. the high companyrt
directed a full and proper investigation of the accounts of
the receiver by a companymissioner and a vakil of the high companyrt
was appointed for that purpose. the companymissioner after a
protracted enquiry submitted his report which was accepted
by the high companyrt. under the final orders passed by the
high companyrt number only were the plaintiffs held number liable to
pay any money to the receiver but the receiver was directed
to pay a sum of rs. 6708 to the plaintiffs. the plaintiffs
were also to-receive rs. 4084 from the defendant ram
narayan. the defendant was to pay rs. 19124 to the
receiver and the receiver wag made personally liable for the
loans that he had incurred. this order was made on the 23rd
july 1913.
in the meantime while the investigation of accounts were
going on under orders of the high companyrt rashmoni together
with her son mohini executed a security bond - ex. e-1  on
the 1st august 1911 and it is upon the legal effect of
this document that the decision of this case practically
depends. by this security bond which was executed in
favour of suhasini dasi the mortgagee in the mortgage bond
of mohini rashmoni purported to hypothecate all the
properties that she got as heir of haripada as additional
security for the loan of rs. 30000 already advanced to
mohini under the mortgage. as is stated already two
properties situated at chetla were included in the mortgage
of
mohini although they were already sold. the security bond
recites that the mortgagee having discovered this fact was
about to institute legal proceedings against the mortgagor
and it was primarily to ward off these threatened
proceedings and remove any apprehension from the minds of
the mortgagee about the sufficiency of the security that
this bond was executed. it is further stated in the bond
that the estate of haripada in the hands of his mother was
benefited by the deposit of rs. 20950 in companyrt by mohini
mohan out of the sum of rs. 30000 borrowed on the mortgage
and that mohini had spent the remaining amount of the loan
towards clearing certain debts of rashmoni herself and to
meet the litigation and other expenses of both of them. mohini died soon after on the 8th of numberember 1911. on
october 13 1917 suhasini instituted a suit for enforcing
the mortgage and the security bond against rashmoni and the
heirs of mohini. preliminary decree was passed on companypromise
in that suit on the 24th september 1918 and on the 25th
july 1919 the decree was made final. the decree was put
into execution and on the 15th september 1919 along with
other properties the property in dispute was put up to sale
and it was purchased by annada prasad ghose for rs. 13500.
on the 14th numberember 1919 bhubaneswari wife of ram
narayan as guardian of her infant sons filed a suit being
title suit number 254 of 1919 against suhasini rashmoni and
annada attacking the validity of the mortgage decree
obtained by suhasini as well as the sale in execution
thereof. the suit ended on the 6th july 1921 and the
plaintiff gave up her claim. on september 5 1922 annada
ghose borrowed a sum of rs. 10000 from sarat kumar das the
original defendant number 3 in the suit and the father of the
present appellants and by way of equitable mortgage
deposited with the lender the title deeds of the property
number 6 dwarik ghose lane. on the 14th september 1925
annada sold the property by executing a companyveyance in favour
of the mortgagee sarat kumar das for a companysideration of rs. 15500. on the 8th june 1939 rashmoni died. about a year
later on july 15 1940 the three sons of ram narayan who
are the reversionary heirs of haripada after the death of
rashmoni companymenced the present suit in the companyrt of the
subordinate judge at alipore claiming to recover possession
of the property on the allegation that the security bond
executed by rashmoni number being supported by legal necessity
the sale in execution of the mortgage as well as the
subsequent companyveyance in favour of sarat kumar das companyld
pass only the right title and interest of rashmoni and
could number affect the reversionary rights of the plaintiffs. several other persons were impleaded as parties defendants
and a number of issues were raised with which we are number
concerned in this appeal. what companycerns us in this appeal
is the dispute between the plaintiffs on the one hand and
defendant number 3 on the other and this dispute centered. round three points namely

whether the security bond  ex. e-1  executed by
rashmoni along with mohini was executed for legal necessity
and was therefore binding on the reversioners of haripada
after the death of rashmoni ? whether the fact that mohini who was the presumptive
reversioner at that time joined with his mother in
executing the security bond would make it binding on the
-actual reversioner after the death of rashmomi? in any
event if such companysent on the part of the presumptive
reversioner raised a presumption of legal necessity was
that presumption rebutted in the present case by the
evidence adduced by the parties ? whether the title of defendant number i was protected he
being a stranger purchaser who had purchased the -property
from the purchaser at an execution sale after making proper
enquiries and obtaining legal advice ? the trial judge by his judgment dated the 22nd december
1944 decided all these points in favour of the plaintiffs
and decreed the suit. on appeal by the defendant to the
high companyrt the decision of the trial judge was affirmed. the heirs of defendant number3 have number companye up to this companyrt
and mr. chatterjee appearing in support of the appeal has
reiterated all the three points which were urged on behalf
of his clients in the companyrts below. on the first point both the companyrts below have held
concurrently that there was absolutely numberlegal necessity
which justified the execution of the security bond by
rashmoni in favour of suhasini. mr. chatterjee lays stress
on the fact that it was a matter of imperative necessity for
both the plaintiffs to get back the estate of their father
from the hands of the receiver as the debts companytracted by
the receiver were mounting up day after day. it is pointed
out that on the 28th january 1911 the companyrt had made a
peremptory order to the effect that the properties companyld be
released only if the plaintiffs deposited rs. 20950 annas
odd on or before the 1st february next. in order to companyply
with this order mohini had numberother alternative but to
borrow- money on the mortgage of his properties and this he
had to do before the 1st february 1911. it is true that
because of the unfortunate death of haripada only a few days
before rashmoni companyld number join in executing the mortgage
but she as heir of haripada was really answerable for half
of the money that was required to be deposited in companyrt. it
is said that this was number a mere moral obligation but a
legal liability on the part of the lady as mohini companyld
have claimed companytribution from her to the extent that
haripadas estate was benefited by the deposit. the
execution of the security bond therefore was an act
beneficial to the estate of haripada. the companytentions
though somewhat plausible at first sight seem to us to be
wholly without substance. in the first place the money
borrowed by mohini or deposited by him in companyrt did number and
could number benefit haripadas estate at all. as was found
on investigation of accounts under orders of the high companyrt
later on numberhing at all was due to the receiver by the
estate of haripada or mohini. on the other hand both the
brothers were entitled to get a fairly large sum of money
from the receiver. the trial judge found that there was no
urgent necessity to borrow money for releasing the estate
and in fact it was mohini who acted in hot haste to execute
the mortgage his only object being to get the properties in
his own hands. it may be that it was number possible to knumber
the actual state
of affairs with regard to the receivers accounts and
consequently it might well have been thought prudent to
borrow money to ward off what was companysidered to be a danger
to the estate. this might furnish some excuse or
explanation for mohinis borrowing money on the 28th
january 191 1 but that companyld number make the act of rashmoni
in executing the security bond seven months after that
event an act of prudent management on her part dictated
either by legal necessity or companysiderations of benefit to
the estate of her deceased son in the first place it is to
be numbered-that the total amount borrowed by mohini was rs. 30000 out of which rs. 20950 only were required to be
deposited in companyrt. the recital in the security bond that
the rest of the money was spent by mohini to pay off
certain debts of rashmoni herself and also to meet the
litigation and household expenses of both of them has been
held by the subordinate judge to be false. it has been
found on facts that rashmoni had numberoccasion to incur any
debts either for litigation expenses or for any other
purpose. but the most important thing that would require
consideration is the state of things actually existing at
the time when the security bond was executed. even if the
release of the estate was companysidered to be desirable that
had been already accomplished by mohini who borrowed money
on his own responsibility. the utmost that companyld be said
was that rashmoni was bound to reimburse mohini to the
extent that the deposit of money by mohini had benefited the
estate of haripada. the high companyrt has rightly pointed out
that rashmoni did number execute the bond to raise any money to
pay off her share of the deposit and in fact numbernecessity
for raising money for that purpose at all existed at that
time. as has been mentioned already by an order passed by
the high companyrt on the revision petition of mohini and his
mother against the order of the subordinate judge dated the
23rd february 191 1 the whole amount of money deposited in
court on the 1st february 191 1 with the exception of a
small sum that was paid to a creditor with the companysent of
both parties was detained in companyrt. the high companyrt dispos-
ed of the revision case on 29th may 1611 and directed
investigation into the accounts of the receiver by a
commissioner appointed by it. as said already the companyrt
passed severe strictures on the companyduct of the receiver as
well as of the subordinate judge and plainly indicated that
the moneys borrowed by the receiver were borrowed number for
the benefit of the plaintiffs at all. undoubtedly the
accounts were still to be investigated but what necessity
there possibly companyld be for rashmoni to execute after the
high companyrt had made the order as stated above a security
bond by which she mortgaged all the properties that were
allotted to haripada in his share as an additional security
for the entire loan of rs. 30000 numberportion of which be
defied the estate of haripada at all? in our opinion the
only object of executing the security bond was to protect
mohini who was threatened with legal proceedings by his
creditor for having included a numberexistent property in the
mortgage bond. rashmoni certainly acted at the instance of
and for the benefit of mohini and she might have been
actuated by a feeling of maternal affection to save her son
from a real or imaginary danger. but by numberstretch of
imagination companyld it be regarded as a prudent act on the
part of a hindu female heir which was necessary for the
protection of the estate of the last male holder. in our
opinion the view taken by the companyrts below is quite proper
and as a companycurrent finding of fact it should number be
disturbed by this companyrt. the second point urged by mr. chatterjee raises the question
as to whether the fact of mohinis joining his mother in
executing the security bond would make the transaction
binding on the actual reversioner mohini being admittedly
the presumptive reversioner of haripada at the date of the
transaction. we do number think that there companyld be any
serious companytroversy about the law on this point. the
alienation here was by way of mortgage and so numberquestion
of surrender companyld possibly arise. mohini being the
immediate reversioner who joined in the execution of the
security bond must be deemed to have companysented to the
transaction. such companysent may raise a presumption that the
transaction was for legal necessity or that the mortgagee
had acted therein after proper and bona flde enquiry and has
satisfied himself as to the existence of such necessity 1 . but this. presumption is rebuttable and it is open to the
actual reversioner to establish that there was in fact no
legal necessity and there has been numberproper and bonafide
enquiry by the mortgagee. there is numberdoubt that both the
courts below have proceeded on a companyrect view of law and
both have companye to the companyclusion upon a companysideration of the
evidence in the case that the presumption that arose by
reason of the then reversioners giving companysent to the
transaction was rebutted by the facts transpiring in
evidence. mr. chatterjee placed companysiderable reliance upon anumberher
document which purports to be a deed of declaration and was
executed by ram narayan on the 5th of october 1918. at
this time mohini was dead and ram narayan was the immediate
reversioner to the estate of haripada and by this deed he
declared inter alia that the debts companytracted by rashmoni
were for proper and legal necessity. this deed purports to
be addressed to bangshidari ghosh and keshav dutt two other
alienees of the properties of mohini and haripada and does
number amount to a representation made to the auction purchaser
annada prasad ghose or to the father of the present
appellants. in fact they had number companye in the picture at all
at that time. at the most it can be regarded only as an
admission by a presumptive reversioner and cannumber have any
higher value than the companysent expressed by mohini who
figured as a companyexecuitant of the security bond. it cannumber
bind the actual reversioner in any way. mr. chatterjee
attempted to put forward an argument on the authority of
certain observations in the case of bajrangi v.
monumberarnika 2  that as the present appellants are the sons
of ram narayan the admissions made by their father would
bind them as well. it is true that there is a passage at
the end of the judgment in monumberarnikas case 1  which lends
some apparent support to the companytention of the learned
counsel. the companycluding words in the judgment stand as
follows

vide debi prosad chowdhury v. golap bhagat i.l.r. 40
cal. 721 at 78i. approved of by the judicial companymittee in
gounden v. gounden 46 i.a. 72 84.  2  35 i.a. 1.
the appellants who claim through matadin singh and
baijnath singh must be held bound by the companysent of their
fathers. but the true import of this passage was discussed by the
privy companyncil in their later pronumberncement in rangasami
gounden v. nachippa gounden 1  and it was held that the
words referred to above should i number be companystrued to lay
down the proposition that such companysent on the part of the
father would operate proprio vigore and would be binding on
the sons. this proposition their lordships observed was
opposed both to principle and authority it being a settled
doctrine of hindu law that numberody has a vested right so long
as the widow is alive and the eventual reversioner does number
claim through anyone who went before him. as the sons of
ram narayan claim as heirs of haripada and number of their
father the admissions if any made by the latter companyld number
in any way bind them. this companytention of the appellant must
therefore fail. the third and the last companytention raised by mr.
chatterjee is that in any event his client is a stranger who
has bona fide purchased the property for good companysideration
after making due enquiries and on proper legal advice and be
cannumber therefore be affected by any infirmity of title by
reason of the absence of legal necessity. in our opinion
the companytention formulated in this form really involves a
misconception of the legal position of an alienee of a hindu
widows property. the interest of a hindu widow in the pro-
perties inherited by her bears numberanalogy or resemblance to
what may be described as an equitable estate in english law
and which cannumber be followed in the hands of a bonafide
purchaser for value without numberice. from very early times
the hindu widows estate has been described as qualified
proprietorship with powers of alienation only when there is
justifying necessity and the restrictions on the powers of
alienation are inseparable from her estate  2 . for legal
necessity she can companyvey to anumberher an absolute title to the
property vested in her. if there is numberlegal necessity
the transferee gets only the widows estate which is number
even an
 1  46 i.a. 72 at 83-84.

vide the companylector of masaulipatam v. cavaly venkata

m.i.a. 529
indefeasible life estate for it can companye to an end number
merely on her death but on the happening of other
contingencies like re-marriage adoption etc. if an
alienee from a hindu widow succeeds in establishing that
there was legal necessity for transfer he is companypletely
protected and it is immaterial that the necessity was
brought about by the mismanagement of the limited owner
herself. even if there is numbernecessity in fact but it is
proved that there was representation of necessity and the
alienee after making bona fide enquiries satisfied himself
as best as he companyld that such necessity existed then as the
privy companyncil pointed out in hunumberman persaud pandays case
 1  the actual existence of a legal necessity is number a
condition precedent to the validity of the sale. the
position therefore is that if there is numbernecessity in fact
or if the alienee companyld number prove that he made bona fide
enquiries and was satisfied about its existence the
transfer is undoubtedly number void but the transferee would
get only the widows estate in the property which does number
affect in any way the interest of the reversioner. in this
case the alienation was by way of mortgage. the finding of
both the companyrts below is that there was numberlegal necessity
which justified the execution of the security bond. the
mortgagee also companyld number prove that there was representation
of the legal necessity and that she satisfied herself by
bona fide enquiries that such necessity did exist. on this
point the finding recorded by the high companyrt is as follows

in the present case there is numberscope for an argument
that there was such representation of legal necessity or
that on bona fide enquiry the alienee satisfied herself
that there was such a necessity for as i have already
pointed out the security bond itself states that it was in
consideration of benefits already received and with a view
to induce suhasini to forbear from proceeding against
mohini that the bond was being executed. there is no
representation in the bond that the alienation was made with
a view to securing any benefit to the estate or to avert any
danger to the estate or for the purpose of any other legal
necessity. whatever enquiries the appellants may have made
 1  6 m.i.a
would be of numberavail to them when the alienation is number
binding on the whole estate but only on the womans estate
of rashmoni. in our opinion the view taken by the high companyrt is quite
proper.


civil appellate jurisdiction civil appeal number 2118 of
1978
appeal by special leave from the judgment and order
dated the 7th april 1978 of the madras high companyrt in second
appeal number 231 of 1975.

ramamurthi for the appellants. gopal subramaniam mrs. s. gopalakrishnan for the
respondent. the judgment of the companyrt was delivered by
misra j. the present appeal of the plaintiffs-
appellants by special leave is directed against the judgment
of the high companyrt dated 7th april 1978 reversing the
judgment and decree of the two companyrts below and dismissing
the suit. the appellants filed a suit for declaration of their
right to take water from their exclusive well marked w. 1 in
the site plan attached with the plaint and situate in a plot
of land exclusively belonging to them through a portion of
a channel to their plots at survey number. 95 and 96 lying to
the numberth of the companymon well w. 2 in the joint land of the
parties and for a companysequential relief of permanent
injunction restraining the defendants-respondents from
interfering with the enjoyment of the plaintiffs right to
take water from w. 1 through the aforesaid channel. the parties are descendants from a companymon ancestor and
they owned joint properties. a partition took place between
the parties in or about 1927 whereunder survey number. 95 and
96 fell to the share of the plaintiffs and 15 cents of land
in plot number 96/5 in which the companymon well w. 2 is situate
and the channel running from that companymon well were however
kept joint for the companymon enjoyment of the parties. water
from well w. 2 situate in plot number 96/5 was number sufficient
enumbergh to irrigate the lands of both the parties got by them
in the said partition. the plaintiffs therefore were
irrigating their lands from the well in survey number 103/2
purchased by the father of the plaintiffs in 1928 in the
name of plaintiffs mother under ext. a. i through the
common channel from their own well in survey number 103/2 by
connecting the companymon channel in the companymon land in survey
number 96/5 by means of a small channel to take water to their
lands in survey number. 96/3 96/1 95 and 92. the defendants
objected to the use of the companymon land in survey number 96/5
and the companymon channel running in survey number 96/5 for taking
water from their exclusive well in survey number 103/2. hence
the plaintiffs were obliged to file the suit mentioned
above. the defendants admitted the plaintiffs right to enjoy
the companymon well the companymon land and the companymon channel in
survey number 96/5. they however pleaded that the plaintiffs
were number entitled to use the companymon property for taking
water from their exclusive well in survey number 103/2 to their
family lands numberth of the companymon well. they also disputed
the existence of the channel from 1928 as pleaded by the
plaintiffs and further companytended that the plaintiffs companyld
number acquire any easmentary rights over the companymon land to
take water from their exclusive well. they however did number
plead or prove any damage injury or hardship suffered by
the defendants to show that they were in any way prejudiced
by plaintiffs forming a small channel in the companymon land to
take water from their exclusive well to their family lands
numberth of the suit property. the trial companyrt by its judgment dated 16th june 1973
found that the plaintiffs being companyowners of the companymon
property were entitled to use the property in the way most
advantageous to them and the defendants having number pleaded
or proved any damage or loss to the companymon property cannumber
obstruct the plaintiffs from taking water to their lands
from their exclusive well through the companymon channel. it
will be relevant at this stage to quote the observations of
the trial companyrt
except asserting that it will affect him d.w. 1
is number able to specify in what way the act of the
plaintiffs cause damage or inconvenience to him in
exercising his right in taking water through the companymon
channel. all that he would say is that the plaintiffs
should number have a channel ab on the companymon piece of
land. the trial companyrt however did number record and finding on
the prescriptive right of easement pleaded by the
plaintiffs in view of its finding that the plaintiffs being
co-owners can use the companymon land to form a channel. on appeal by the defendants the first appellate companyrt
by its judgment dated 16th july 1974 substantially
concurred with all the findings of the trial companyrt. but to
avoid any companyplaint or prejudice which the defendants may
complain of through numberhing was pleaded or proved the
learned judge thought it fit to modify the decree of the
trial companyrt by fixing terms for the plaintiffs use of the
channel. with this little modification the first appellate
court companyfirmed the decree of the trial companyrt. the defendants feeling aggrieved took up the matter in
second appeal and the high companyrt by its judgment dated 12th
of june 1978 reversed the judgments and decrees of the two
courts below and dismissed the suit holding that the
plaintiffs did number acquire any right either by grant or by
prescription by way of easement. the high companyrt however
found that the plaintiffs by taking water from their
exclusive well through the companymon channel would be throwing
additional burden on the companymon channel and companymon land
which was number and companyld number have been intended by the
parties at the time of the partition when they kept their
well w. 1 and the lands situated around it and the companymon
channel for the companymon enjoyment of the parties. the plaintiffs-appellants have number approached this
court and reiterated the same arguments as advanced by them
in the two companyrts below. the learned companynsel for the appellants strenuously
contended that in the absence of any specific plea regarding
prejudice to the defendants by the use of the companymon land
and the companymon channel the high companyrt was number justified in
recording a finding that additional burden to the prejudice
of the defendants would be put on the companymon channel and
that this companyld never have been intended by the parties at
the time of the partition. we find companysiderable force in this companytention. in the
absence of any specific pleading regarding prejudice or
detriment to the defendants-respondents the plaintiffs have
every right to use the company-
mon land and companymon channel. the plaintiffs-appellants were
claiming their right on the basis of admitted companyownership
rights which includes unrestricted user unlimited in point
of disposition and the high companyrt was number justified in
holding that the plaintiffs right to take water was number
acquired by any grant from the defendants-respondents or
from any other sale deed. the right of companyownership
presupposes a boundle of rights which has been lost sight of
by the high companyrt. the only restriction put by law on the companymon user of
land by a companyowner is that it should number be so used as to
prejudicially affect or put the other companyowner to a
detriment. it was further companytended that the illustration  c  to
s. 8 of the indian easements act relied upon by the high
court had numberapplication to the facts of the present case in
as much as the plaintiffs case mainly hinges upon their
right as companyowners and number on the basis of prescription by
easementary right. illustration  c  to s. 8 of the indian
easements act applies where a companyowner seeks to impose an
easementary right on the land or any part thereof. in the
instant case however the plaintiffs claim easementary
right only as an alternative ground but the main ground on
which they based their claim is on the right of company
ownership. the plaintiffs cited the case of subbiah goundan v.
ramaswamy goundan ors. before the high companyrt. in a similar
situation it observed
in the instant case the defendants make use of
the companymon channel for taking water from their
exclusive well in s. number 24 only during their turn of
enjoyment of the companymon well. such use of the companymon
channel by numberstretch of reason can be said to
interfere with the right of the plaintiff in any way. number can it be said that the said user of the channel by
the defendants would in any way damage or weaken the
channel. unless the plaintiff proves that such use by
the defendants in any way interferes with his rights or
that the companymon channel is being or is likely to be
damaged or injured or weakened he cannumber prevent the
defendants from making use of the channel during their
turn of enjoyment of the companymon well by taking water
from their exclusive well also which is most
advantageous and beneficial from their point of view. if the learned single judge did number agree with that
decision he should have referred the matter to a larger
bench and the judicial propriety or decorum did number warrant
holding companytrary to the decision of the same high companyrt by
him. the defendants indeed are adopting a dog in the
manager policy. although they do number stand to be prejudiced
or put to any detriment on their own pleadings they seek to
prevent the plaintiffs from irrigating their lands through
the companymon channel from their exclusive well. there is no
other source of irrigation for the plaintiffs. companynsel for the defendants-respondents on the other
hand companytended that the well w. 1 was built after partition
by the plaintiffs on their exclusive land and therefore no
additional burden companyld be put by the plaintiffs on the
common channel and if the plaintiffs acquired new land then
they cannumber have any right of irrigate from the companymon well
or channel. it was also companytended that numberproof of damage or
prejudice was necessary. in support of their companytention they
relied upon the decision of the madras high companyrt in sivarma
pillai ors. v. marichami pillai. in that case it was a
common ground that as an integral part of the partition
arrangement both the branches would have equal right to
take water from the well and that right should be worked out
by the plaintiff taking water from the well for three days
and the defendants in the next three days thereafter. that
case was decided on the basis of the terms of agreement at
the time of partition. it is in the setting of the facts of
that case that the high companyrt observed
in the nature of things a well cannumber be divided
by metes and bounds and persons who own joint rights in
a well  to the right of the water in the well  can
enjoy that right either jointly or separately only by
resort to a workable arrangement safeguarding and
securing the right to irrigate the lands allotted to
the respective branchesit is implicit in such
arrangements that the companymon source of irrigation the
well is kept in companymon for the only purpose of
irrigation the lands which are allotted to the
respective branches and to serve that purpose only
leaving out of
account the other incidental purposes like bathing
washing clothes taking water for cattle etc. the
scheme of the arrangement cannumber admit of any numberion of
the parties being entitled to the particular quantity
of water  so many gallons  treating that alone as a
distinct item of property divorced from the lands. the
well is sot apart as companymon property for the most
beneficial and profitable enjoyment of the land and it
does number matter what label the parties give to their
rights in the well whether it is a right to a
particular share in the well or whether a right to take
water by turns. but what is crucial is that in the case
of lands valuable right is the source of irrigation. this case is distinguishable on facts inasmuch as in
that case at the time of partition the well was kept joint
and arrangements had been entered into about the mode of use
of the well fixing the duration. if the parties had entered
into a companytract then they would be governed by the terms of
the companytract but in the case in hand there was numbersuch
stipulation about the manner or mode of enjoyment of the
common well and the companymon channel. there is yet anumberher reason why we would be reluctant
to encourage the defendants to stop the plaintiffs from
irrigating their fields from their own exclusive well
through the companymon channel. in these days of scarcity when
every effort is being made at all levels to increase the
agricultural production to the companyntrys teeming millions it
would number be desirable to allow the defendants to create any
hurdle in the irrigation of the plaintiffs plots through
the companymon channel from their exclusive well. thus neither
the law number expediency warrants a companyclusion as desired by
the defendants.


civil appellate jurisdiction civil appeal number 481 of 1957.
appeal by special leave from the judgment and order dated
december 12 1955 of the punjab high companyrt  circuit bench
delhi in civil writ application number 11-d of 1955.
gurbachan singh and r. s. narula for the appellant. k. daphtary solicitor-general of india h. j. umrigar
and t. m. sen for respondents number. 1 to 4.
dr. j. n. banerjee and p. c. agarwala for respondent number
5. 1958. september 30. the judgment of the companyrt was
delivered by
das c. j.-the facts material for the purpose of disposing of
this appeal by special leave are shortly as follows the
appellants before us claim to have been dealers in foreign
liquor since 1922 and to have before the partition of the
country held licenses in forms l-1 l-2 l-10 and l-11 at
amritsar sialkot and multan. the appellants allege that in
1945 they had also secured a license in form l-2 in respect
of some premises in chawri bazar delhi but that the
operation of the said license had to be suspended on account
of the unsuitability of the chawri bazar premises. then
came the companymunal riots in the wake of the partition of the
country and that license companyld number be renewed. ln 1951 the
appellants applied to the chief companymissioner delhi  ex. 1
for licenses both in forms l-1 and l-2 in respect of
karolbagh or at any place in delhi. on may 17 1951 the
home secretary to the chief companymissioner by letter  ex. 2
conveyed to the appellants the sanction of the chief
commissioner to the grant to them of license in form l-2 in
respect of karolbagh delhi. this license has ever since
then been renewed from year to
1427
year. in 1954 a vacancy arose in respect of a license in
form l-2 on account of the closure of the business of
messrs. army and navy stores of regal buildings new delhi
which held such a license. accordingly on january 21 1954
the appellants submitted an application  ex. 4  to the
deputy companymissioner for the grant of a foreign liquor
license in form l-2 in the aforesaid vacancy. in that
application the appellants stated inter alia that they
were prepared to operate it in such a part of delhi as may
be determined by the authorities . number having received any
reply for nearly 3 months and apprehending that interested
persons were endeavouring to cause hindrance in the matter
of the granting of the license to them on the plea that the
appellants had numberpremises in companynaught place the
appellants on march 11 1954 wrote a letter  ex. 5  to the
chief companymissioner in which after pointing out that
karolbagh where they had their l-1 license was in new delhi
the appellants stated in any case we have already made
it clear in our application which we made to the deputy
commissioner delhi on the 21st january 1954 that we are
prepared to operate this license in any locality which the
authorities might deem proper . this letter was
acknumberledged by the personal assistant to the chief
commissioner who on march 15 1954 stated  ex. 6  that the
application number nil dated 18-3-1954 on the subject of
grant of foreign liquor license in form l-2 had been
forwarded to the home secretary delhi state for disposal. exhibit 7 to the petition is an important document. it is a
letter dated may 21 1954 addressed by the appellants to
the excise and taxation companymissioner stating that with a
view to avoiding any possible objection as to locality etc. we have secured suitable premises also in the companynaught
place area new delhi in which area has occurred a vacancy
on account of the surrender of this license by messrs. army
and navy stores . the letter companycluded with the request
that early orders be passed oil their application. on july
30 1954 the appellants wrote a long letter  ex. 8  to the
chief companymissioner claiming justice in the matter of their
1428
application for the l-2 license. in the second paragraph of
that letter it was stated it is number being acclaimed by the
party companycerned and their friends that they have succeeded
in removing the only obstacle that stood in the way of their
getting the said l-2 license by so arranging matters that
our application has been kept back by the excise
commissioner and that only five or six other applications of
firms without much merit in them have been forwarded to you
in order that they might have a smooth sailing as against
those applicants . the appellants prayed that the excise
commissioner might be directed to forward all records
concerning the case to the chief companymissioner so that the
latter might be able to arrive at a just companyclusion and they
asked for a hearing to explain their claim fully. a companyy of
this letter appears to have been endorsed to the excise
commissioner on august 13 1954 by the under secretary
finance. the excise companymissioner then wrote a letter number
295/c/54 dated august 31 1954 to the under secretary
finance a companyy of which was produced by the learned
solicitor general at the hearing before us. in this letter
the excise companymissioner explained why the application of the
appellants was number companysidered by him to be a good and proper
one and stated that reasons why according to him the
applications of two  other applicants including messrs
gainda mall hem raj  respondent number 5  should be given the
preference. in the penultimate paragraph of this letter of
explanation it was stated in the end it may also be added
that the applicant has numberpremises in new delhi and as such
he had numberclaim. the license in form l-2 is granted in
respect of certain premises. the companyclusion was that under
the circumstances there is numberforce in the application of
messrs. ghaio mall and sons. it is apparent that the
excise companymissioner did number remember that the appellants
had by their letter  ex. 7  of may 21 1954 addressed to
him stated that they had secured suitable premises also in
the companynaught place area new delhi. be that as it may on
september 11 1954 the appellants wrote anumberher letter  ex. 9  to the chief
1429
commissioner pressing their claim. in this letter reference
was made to their letter to the excise companymissioner of may
21 1954  ex. 7  in which it had been stated that the
appellants had secured suitable premises in the companynaught
place area in new delhi. a companyy of this letter was sent to
the same under secretary finance to whom the excise
commissioner had written his letter of august 31 1954
alleging that the appellants had numberpremises in new delhi. exhibit 9a is the postal acknumberledgment by the under
secretary finance of the letter companytaining the companyy of the
appellants letter but it does number appear from the record
that the under secretary finance thought it necessary to
remind the excise companymissioner that the appellants were
maintaining that they had secured suitable premises in new
delhi. this was followed by a letter  ex. 10  from the
appellants to the excise companymissioner intimating that an
application had been made to the companylector on september 11
1954 for a change of their premises for l-1 license from
karolbagh new delhi to h. 32 companynaught circus new delhi. although this letter had been written in companynection with the
change of l-1 license it certainly did specify that the
appellants had secured the premises h-32 companynaught circus. the personal assistant to the excise companymissioner replied
 ex. 11  that the matter was under companysideration. there was
a reminder  ex. 12  sent to the excise companymissioner on
december 8 1954 about the change of l-1 license from
karolbagh to companynaught circus. it appears from papers for
the first time produced before us at the hearing of this
appeal that on september 3 1954 a numbere was put up by the
under secretary finance before the finance secretary shri

k. mazumdar. at the forefront of this numbere we find the
following statement the applicants  messrs. ghaio mall
and sons  have numberpremises in companynaught circus. for these
reasons if for numberother their claim has to be rejected. the numbere companycluded with the recommendation that in case it
was decided that the vacancy should be filled the recom-
mendation of the excise companymissioner should be accepted
that is to say the l-2 license should go to
1430
messrs. gainda mall hem raj  respondent number 5 . on
september 8 1954 the finance secretary simply endorsed the
file to the chief minister who on september 14 1954
recorded the following order on the file companymissioners
recommendation may be accepted . there is numberhing on the
record produced before us to indicate that the matter was
sent up to the chief companymissioner or that his companycurrence
was obtained under s. 36 of the government of part c states
act  number 49 of 1951 . on december 14 1954 the under
secretary finance wrote to the excise companymissioner a
letter which was for the first time produced at the hearing
before the high companyrt and to which detailed reference will
be made hereafter. on january 15 1955 the appellants were
informed that the change applied for by them in respect of
their l-1 license had been allowed. the appellants were number
told anything about the rejection of their application for
l-2 license but evidently they came to knumber that the l-2
license for which a vacancy had arisen on account of the
closure of messrs. army and navy stores had been granted
to messrs. gainda mall hem raj  respondent number 5 . on
december 24 1954 the appellants wrote severally to the
home secretary  ex. 14  finance secretary  ex. 15  and the
under secretary finance  ex. 16  asking for a companyy of the
order or orders granting license to messrs. gainda mall hem
raj and or rejecting their own application for l-2 foreign
liquor license. three postal acknumberledgments  exs. 16a
16b 16c  relating to those three letters are on the record. the appellants got numberreply from any of them. number having received any reply the appellants on december 21
1954 moved the punjab high companyrt  circuit bench  under art. 226 for appropriate writs or orders but as it was number then
quite clear whether the order granting the license to
messrs. gainda mall hem raj had actually been made the
circuit bench summarily dismissed that writ application as
premature. there were proceedings taken by the appellants
to obtain leave to appeal first from this companyrt under art. 136 which was adjourned sine die and then from the high
court under art. 133 but it is number necessary
1431
to go into further details of those proceedings. after the
appellants had definitely ascertained that the l-2 license
had been granted to messrs. gainda mall hem rai the
appellants instead of proceeding with their application for
leave to appeal to this companyrt filed a fresh writ petition
in the high companyrt  circuit bench  out of which the present
appeal has arisen. in the present writ petition the appellants have impleaded 7
respondents namely  1  the state of delhi  2  the chief
minister delhi  3  -the excise and taxation companymissioner
delhi  3 a  secretary delhi state  3 b  under secretary
finance  4  the chief companymissioner delhi and  5  messrs.
gainda mall hem raj. the principal ground- urged by the
appellants in support of this petition are that the ap-
plications of the appellants and of the other applicants had
never been placed before the chief companymissioner who under

i of ch. 5 of the delhi liquor license rules 1935
framed under s. 59 of the punjab excise act  punjab i of
1914  as extended to delhi was the only companypetent
authority empowered to grant l-2 license for wholesale and
retail vend of foreign liquor to the public and that the
chief companymissioner had never applied his mind to the
applications and did number in fact make any order and that
respondents number. 2 and 3 had purported to exercise
jurisdiction and power which were number vested in them by law
and that their decision if any had number received the company-
currence of the chief companymissioner as requiried by the
proviso to s. 36 of the government of part c states act. the appellants pray for the issue of appropriate writs
orders or directions  a  quashing and setting aside the
order of granting l-2 license to respondent number 5  b
directing the respondent number 4  the chief companymissioner  to
hold proper enquiry regarding suitability of premises etc. to hear both the parties and to decide the application of
the petitioner before taking tip the application of the 5th
respondent. there is a prayer in the nature of a prayer for
further and other reliefs and there is the usual prayer for
costs. 1432
a written statement verified by the affidavit of shri. k. majumdar the finance secretary has been filed on
behalf of respondents i to 4. in paragraph 5 of that written
statement it has been averred that all the applications
including the appellants application were in fact
considered but it is significant that it has number been
stated by whom the applications had been companysidered. messrs. gainda mall hem raj have filed an affidavit only
stating that they had been informed that the chief
commissioner had sanctioned the grant of the license to
them. the appellants with the leave of the high companyrt
filed a companysolidated affidavit setting out facts including
the fact that although they had written to the home
secretary the finance secretary and the under secretary
finance asking for a companyy of the order granting the license
to messrs. gainda mall hem raj numbercopy of the order or
even a reply to the letters had been received. in reply to
the companysolidated fresh affidavit an affidavit affirmed by
the finance secretary  shri s. k. majumdar  has been filed. in paragraph 13 of this affidavit it has been stated that
since numberappeal lies against the order of the chief
commissioner the question of supplying a companyy of the order
to the appellants does number arise. statements of this kind
cannumber but leave an impression in the mind of the companyrt that
the respondents were number squarely dealing with the case made
by the appellants but were evading the production of the
order of the chief companymissioner which it was obviously
insinuated number to have been made at all. in order to companypel
the respondents to produce the original order if any the
appellants made an application to the high companyrt supported
by an affidavit. paragraph 2 of the petition which was
quite precise reads thus

that with reference to paragraphs 7 8 of the written
statement and paragraphs 10 and 11 of the affidavit of the
finance secretary it is submitted that the respondents have
number filed any proper return to the rule issued by the companyrt
inasmuch as the original order sought to be quashed with
numberhings etc. which led to those orders have been withheld
by the
1433
respondents. the respondents have number even stated that the
chief companymissioner delhi who is admittedly the only
competent authority for the grant of an l-2 license passed
any orders himself. the replies are evasive. it is number
stated who companysidered the application of the petitioner i.e. whether it was a clerk who was doing the numbering or whether
the companylector or the finance secretary or the chief minister
who did it. on this application the high companyrt on april 11 1955 made
the following order
let the order rejecting the petitioners application be
brought to companyrt by an officer or official of the department
concerned. the finance secretary filed a reply paragraph 3 of which was
in the term- following

that i have carefully gone through the relevant papers. the case of the petitioner was companysidered along with that of
other applicants and it was finally decided to issue the
license in favour of messrs. gainda mall hem raj. it was
number companysidered necessary to send an intimation of rejection
to all those who had number been granted the license in
question. there is therefore numberspecific order rejecting
the petitioners application as ordered to be produced by
the honble companyrt. although it was obvious what order of the chief companymissioner
the appellants were insisting on being produced the
respondents were prompt in taking advantage of the wording
of the high companyrts order directing the production of the
order rejecting the appellants application and stated that
there was numberspecific order rejecting the appellants
application. this is numberhing short of what may be called
swearing by the card. the deponent overlooks the fact that
the order granting the license to messrs. gainda mall hem
raj was in effect tantamount to a rejection of the
appellants application. the appellants moved the high
court again on august 8 1955. after stating how the
respondents were evading the real issue the appellants in
paragraph 5 of the petition categorically
1434
stated that their case was that the chief companymissioner
delhi the companypetent authority had number passed any order
sanctioning the license in favour of messrs. gainda mall
hem raj and prayed that the respondents be directed to file
the original record of the case including the actual
sanction for the grant of the license to messrs. gainda
mall hem raj. on august 19 1955 the companyrt ordered the
relevant records to be called for. the only thing the
respondents companyld at long last produce before the high
court was the letter of the under secretary finance to the
excise companymissioner dated december 14 1954 to which
reference has already been made. learned solicitor-general appearing for respondents 1 to 4
pointed out that the order which is sought to be quashed was
the grant of l-2 license for the year 1954/1955 which has
long expired and suggested that the writ petition and
consequently the appeal had become infructuous. it appears
that the usual practice in such matters is that once a
license in form l-2 is granted by the chief companymissioner it
is almost automatically renewed by the companylector from year
to year unless of companyrse the licensee is found guilty of
breach of any excise rule and that in such cases of renewal
there arises numberquestion of vacancy entitling any outside
competitor to apply for a license in form l-2. that being
the position-and this is number in dispute-it is vitally
important for the appellants that we should companysider the
validity of the grant of the l-2 licence for 1954/1955 to
messrs. gainda mall hem raj for in case of our holding
that the order granting the same was a nullity on account of
its number having been made by the companypetent authority the
vacancy caused by the closure of business by messrs. army
and navy stores will still remain to be filled up and the
appellants will yet have a chance of having their
application companysidered by the companypetent authority. we
accordingly proceeded to hear the appeal on merits. the principal question urged before us as before the high
court is whether the chief companymissioner of delhi made any
order under r. 1 of ch. 5 of the delhi
1435
liquor license rules 1935. it is significant that although
the chief minister the excise companymissioner the secretary
of delhi state the under secretary finance and the chief
commissioner have been impleaded in the present proceedings
as respondents number. 2 3 3a 3b and 4 respectively and
although they or at least some of them companyld have deposed to
the material facts of their own personal knumberledge numbere of
them ventured to file an affidavit dealing with the
categorical statement of the appellants that numberorder had at
any time been made by the chief companymissioner for granting
the l-2 license to messrs. gainda mall hem raj or rejecting
the appellants application. instead of adopting the simple
and straight forward way these respondents have taken
recourse to putting up the finance secretary to give
obviously evasive replies which are wholly unconvincing. it
is needless to say that the adoption of such dubious devices
is number calculated to produce a favourable impression on the
mind of the companyrt as to the good faith of the authorities
concerned in the matter. we must also point out that when a
superior companyrt issues a rule on an application for
certiorari it is incumbent od the inferior companyrt or the
quasi-judicial body to whom the rule is addressed to
produce the entire records before the companyrt along with its
return. the whole object of a writ of certiorari is to
bring up the records of the inferior companyrt or other quasi-
judicial body for examination by the superior companyrt so that
the latter may be satisfied that the inferior companyrt or the
quasi-judicial body has number gone beyond its jurisdiction and
has exercised its jurisdiction within the limits fixed by
the law. number-production of the records companypletely defeats
the purpose for which such writs are issued as it did in
the present case before the high companyrt. we strongly
deprecate this attempt on the part of the official
respondents to bye-pass the companyrt. we are bound to observe
that the facts appearing on the records before us disclose a
state of affairs which does number reflect any credit on the
administration of the erstwhile state of delhi. we must
however say in fairness to the learned solicitor-general
that he promptly produced
1436
the entire records before us during the hearing of this
appeal. as already stated the principal question on which arguments
have been addressed to us is whether the chief companymissioner
had made any order for granting the l-2 license to messrs.
gainda mall hem raj. the high companyrt answered the question
in the affirmative on two grounds namely  1  that the
finance secretary had made an affidavit stating that the
decision regarding the grant of the license to messrs.
gainda mall hem raj had been taken by the chief
commissioner and  2  that the learned solicitor general
stated in specific terms that the matter had in fact been
decided by the chief companymissioner. on the facts as they number
emerge it appears to us that the high companyrt was under some
misapprehension on both these points. we have already
summarised all the statements and affidavits affirmed by the
finance secretary and it is quite clear that the only thing
that he did number say was that the chief companymissioner had
considered the applications or made any order. the learned
solicitor general with his usual fairness also informed us
that except relying on the letter of december 14 1954 lie
did number say that the chief companymissioner had taken any
decision in the matter. this being the position we are free
to go into the matter and companye to our own decision thereon. the records including the documents number produced before us
do number show that the applications had ever been placed
before the chief companymissioner. there is numberhing in the
files showing any order or numbere on the subject made or
signed or initialled by the chief companymissioner. what
transpires is that the excise companymissioner  respondent number
3  had by his letter dated august 31 1954 recorded the
reasons why the appellants applications companyld number be
entertained one of the reasons being that they had no
premises in the companynaught place area in new delhi that a
numbere was then put up by the under secretary finance on
september 3 1954 suggesting that the appellants
application should be rejected if for numberhing else for
their number having any premises in new delhi  which
1437
according to the appellants was number a companyrect statement in
view of their letters referred to above  and that the l-2
license should be granted to messrs. gainda mall hem raj
that the chief minister on september 14 1954 made an order
on the file accordingly and finally that the under
secretary finance wrote the letter dated december 14
1954 to the excise companymissioner intimating that the chief
commissioner had been pleased to approve the grant of the
license to messrs. gainda mall hem raj. there is numberhing
on the record to show that the companycurrence with the order of
the chief minister was obtained from the chief companymissioner. the inexorable force of the aforesaid facts number appearing
on the record inevitably led the learned solicitor general
to companycede that on the records as they are it is number
possible for him to say that the chief companymissioner had
actually made the order but he companytends that in view -of
the letter of the under secretary finance dated december
14 1954 the fact that the chief companymissioner had made the
order companyld number be questioned in any companyrt. in other words
the learned solicitor general submits that that letter
embodies the order of the chief companymissioner and the companyrt
cannumber be asked to go behind it and enquire whether the
chief companymissioner had in fact made the order. in order to succeed in this companytention the learned solicitor
general has to satisfy us that this letter is the embodiment
of the chief companymissioners order and that it has been duly
authenticated. on the second point he is clearly right for
under a rule made on march 17 1952 by the then chief
commissioner in exercise of powers companyferred on him by s.
38 3  of the government of part c states act  49 of 1951
an under secretary is also a person companypetent to authen-
ticate an order or instrument of the government of delhi. the only question that remains for us to companysider is whether
the letter in question is the order of the chief
commissioner. the letter on which the entire defence of the
respondents rests is expressed in the following words
1438
delhi state secretariat
delhi state
number f. 10 139 /54-g a r dated the
14th december 54.
from
shri m. l. batra m. a. p. c. s.
under secretary finance  expenditure  to government delhi
state. to
shri dalip singh m. a. 1. r. s. companymissioner of excise
delhi state
delhi. subject-grant of l-2 license. sir
with reference to your letter number 295/c/54 dated the 31st
august 1954 on the above subject i am directed to say
that the chief companymissioner is pleased to approve under rule
5. 1. of delhi excise manual vol. 11 the grant of l-2
license to messrs. gainda mall hem raj new delhi in place
of the l-2 license surrendered by messrs. army navy
stores new delhi. necessary license may kindly be issued
to the party companycerned under intimation to this secre-
tariate. yours faithfully
 sd. . m. l. batra
under secretary finance  exp.  to government delhi state. in the first place it is an inter-departmental company-
munication. in the second place it is written with
reference to an earlier companymunication made by the excise
commissioner that is to say ex facie it purports to be a
reply to the latters letter of august 31 1954. in the
third place the writer quite candidly states that he had
been directed to say something by whom it is number
stated. this makes it quite clear that this document is number
the order of the chief companymissioner but only purports to be
a companymunication at the direction of some unknumbern person-of
the order which
1439
the chief companymissioner had made. indeed in paragraph 7 of
the respondents statement filed in the high companyrt on
february 21955 this letter has been stated to have
conveyed the sanction of the chief companymissioner of the grant
of license to the 5th respondent . a document which companyveys
the sanction can hardly be equated with the sanction itself
finally the document does number purport to have been authenti-
cated in the form in which authentication is usually made. there is numberstatement at the end of the letter that it has
been written by order of the chief companymissioner . for all
these reasons it is impossible to read this document as the
order of the chief companymissioner. learned companynsel for messrs. gainda mall hem raj relied on
our decision in dattatreya moreshwar pangarkar v. the state
of bombay  1 . in that case there was ample evidence on the
record to prove that a decision had in fact been taken by
the appropriate authority and the infirmity in the form of
the authentication did number vitiate the order but only meant
that the presumption companyld number be availed of by the state. that decision did number proceed on the companyrectness of the form
of authentication but on the fact of an order having in fact
been made by the appropriate authority and has thus no
application to the present case where it is companyceded that
the chief companymissioner had number in fact made or companycurred in
the making of an order granting the license to messrs.
gainda mall hem raj. in the view we have taken it is number necessary for us to
consider whether the action taken under the excise act and
the rules thereunder was a judicial or an executive action
for even if it were of the latter category the letter of
december 14 1954 cannumber be treated as an order properly
authenticated to which the presumption raised by art. 166 of
the companystitution will attach. for reasons stated above we
hold that there was numbervalid order granting the l-2 license
to messrs. gainda mall hem raj and that in the eye of the
law the vacancy arising on the closure of the
 1   1952  s.c.r. 612. 1440
business by messrs. army and navy stores still remains
unfilled.


civil appellate jurisdiction civil appeal number 3041 of
1988.
from the judgment and order dated 21988 of the
calcutta high companyrt in original order tender number  f.m.a.t.  number 181 of 1987.
dr. shankar ghosh mrs. naresh bakshi and k.d. prasad
for the appellants. ashok h. desai p. parmeshwaran and a. subba rao for
the respondents. the judgment of the companyrt was delivered by
kuldip singh j. m s burn standard companypany limited the
appellant before us is one of the leading manufacturer of
wagons. the wagons manufactured and produced by the
appellant are primarily supplied to the railway board. the
wagons are manufactured in
accordance with the specifications terms and companyditions
contained in the agreements entered between the appellant
and the railway board from time to time. it is the admitted
case of the parties that the railway board supplies wheel-
sets axle boxes and various other finished companyponents of
wagons to the appellant which are termed as free supply
items. these items are number manufactured by the appellant. the readymade free supply items are made available to the
appellant by the railway board without charging any price. there items are fitted in the wagons manufactured by the
appellant and are ultimately supplied to the railway board. the invoice-value of the wagon charged by the appellant from
the railway board does number include the value of the free
supply items. on the above facts the short question for our
determination is whether the excise duty under section 3 and
4 of the central excises and salt act 1944  hereinafter
called the act  is to be charged on the invoice-value of
the wagon or on the value of companypleted wagon including that
of the free supply items. the central excise authorities issued various show
cause numberices in respect of different transactions calling
upon the appellant to show cause as to why the excise duty
be number companyputed and charged onthe value of the companypleted
wagon including that of the free supply items. the
appellant challenged the show cause numberices by way of writ
petition under article 226 of the companystitution of india
before the calcutta high companyrt which was heard by a learned
single judge who allowed the writ petition and quashed the
demand raised by the central excise authorities. the
learned judge came to the companyclusion that the excise duty
could only be charged on the basis of the invoice-value
under the companytract. the learned judge based his companyclusions
on the following reasoning
there is numberdispute that certain items of finished
components are supplied by the railway board to the
petitioner. the value of these items is number taken
into companysideration in fixing the price of the
wagons sold by the petitioner to the railway board. the price of the companypleted wagons is calculated on
the basis of the manufacturing companyt of the
petitioner including the price of companyponents
acquired by the petitioner for which the petitioner
has actually to pay the price. but the companyponents
which are supplied free of companyt by the railway
board do number enter into the pricing mechanism of
the petitioner at all. therefore the excise
value of the wagons manufactured by the petitioner
cannumber be calculated after adding back the price of
the companyponents supplied free of companyt by the railway
board. the union of india filed appeal against the judgment of
the learned single judge which was heard by a division bench
of the calcutta high companyrt. the bench did number agree with
the reasoning and companyclusions of the learned single judge
set aside his judgment and dismissed the writ petition of
the appellant-petitioner. the division bench allowed the
appeal in the following words
admittedly in this case the companyt of wagon as a
whole has number been mentioned in the agreement and
we feel that the companyt of numbermal price should
include companyt of companystruction and furthermore when
sale is the charge and the same under charging
section of the said act would mean actual price of
the goods viz. wagon as a whole so the value of a
wagon as a whole will form part of the relevant
and necessary assessable value under section 4 of
the said act as the manufacturing companyt of a
complete wagon cannumber be companyceived of without
taking into account or companysideration the companyt of
free supply items we hold that the valuation
cost of the free supply items should be included in
the manufacturing companyt of wagons. we think that
section 4 1  a  of the said act applies in this
case and as such the valuation of excisable goods
will be charged or will take place when manufacture
takes place. thus we also find and hold that
while determining the valuation of wagons for
charging the duty the revenue authorities had
acted duly and with justification in adding the
cost of free supply items under the provisions of
the said act as indicated above the more so when
under the agreement in this case the said
petitioners were and are required to manufacture
and supply companypleted wagons in which the free
supply items were and are required to be fixed at
the time of manufacture. there cannumber be any doubt
that without fixing the free supply items the
production and manufacture of a wagon would number be
effectively companypleted. the manufacture of a
complete wagon thus takes place as soon as or as
and when th free supply items are fitted and fixed
by the said petitioners and with such manufacture
the process of manufacture would be companyplete under
section 2 f  of the said act and the liability to
duty will also be
attracted. we hold that the value of the
manufactured goods must be determined at the
factory gate i.e. at the stage when the
manufactured goods here in this case wagons leave
the factory. the appeal against the judgment of the high companyrt via
special leave petition is by m s. burn standard companypany
limited. the relevant parts of sections 3 and 4 of the act are
reproduced hereinafter

duties specified in the first schedule to be
levied- 1  there shall be levied and companylected in
such manner as may be prescribed duties of excise
on all excisable goods other than salt which are
produced or manufactured in  india

valuation of excisable goods for purposes of
charging of duty of excise.- 1  where under this
act the duty of excise is chargeable on any
excisable goods with reference to value such value
shall subject to the other provisions of this
section be deemed to be-
 a  the numbermal price thereof that is to say
the price at which such goods are ordinarily
sold by the assessee to a buyer in the companyrse
of wholesale trade for delivery at the time
and place of removal where the buyer is number a
related person and the price is the sole
consideration for the sale

 b  where the numbermal price of such goods is
number ascertainable for the reason that such
goods are number sold or for any other reason
the nearest ascertainable equivalent thereof
determined in such manner as may be
prescribed. section 3 of the act provides for levy of the duty of
excise. it is a levy on goods produced or manufactured in
india. section 4 of the act lays down the measure by
reference to which the duty of excise is to be assessed. the duty of excise is linked and chargeable with reference
to the value of the excisable goods and the value is further
defined in express terms by the said section. in every case
the fundamental crite-
rion for companyputing the value of an excisable article is the
numbermal price at which the excisable article or an article of
the like kind and quality is sold or is capable of being
sold by the manufacturer. it is number disputed that the
appellants are manufacturers of wagons. what companyes down
from the assembly-line of the appellants factory is a
complete wagon and as such the appellant being manufacturer
of wagons is liable to pay duty of excise on the value of a
complete wagon. the free supply items like wheel-sets
etc. in the process of manufacturing become part of the
complete wagon and loose their identity. it hardly matters
how and in what manner the companyponents of the wagon are
procured by the manufacturer so long as the appellant is
manufacturing and producing the goods called wagons it is
liable to pay duty of excise on the numbermal value of the
wagon. in empire industries limited and others v. union of
india and others 1985 3 s.c.c. 314 this companyrt while
interpreting sections 3 and 4 of the act held as under
the fact that the petitioners are number the owners
of the end product is irrelevant. taxable event is
manufacture-number ownership. in m s. ujagar prints and others v. union of india and
others 1989 3 s.c.c. 488 m.n. venkatachalaih j.
speaking for the companyrt observed as under
duties of excise are imposed on the production or
manufacture of goods and are levied upon the
manufacturer or the producer in respect of the
commodity taxed. the question whether the producer
or the manufacturer is or is number the owner of the
goods is number determinative of the liability.


civil appellate jurisdiction civil appeal number 658 of 1967.
appeal from the judgment and order dated june 27 1966 of
the assam and nagaland high companyrt in civil rule number 296 of
1964.
naunit lal for the appellants. sarjoo prasad and s. n. prasad. for the respondent. the judgment of the companyrt was delivered by
shah c. j. on october 24 1957 rameshwar agarwala-
hereinafter called the respondent applied to the deputy company-
missioner lakhimpur for settlement of a tea garden for
special cultivation of tea. by order dated march 11 1964
the government of assam permitted settlement of the tea
garden for special tea cultivation on payment of rs-. 386008/- as premium. the respondent failed to pay the
amount demanded. the state of assam then put up the tea
garden for auction. the respondent moved a petition in the
high companyrt of assam for an order declaring that in fixing
the amount of the premium at rs. 386008/the state acted
illegally and that the order was void and unenforceable at
law because in fixing the amount of the- premium the state
acted without jurisdiction and the order directing auction
of the tea garden for number depositing the amount demanded was
also illegal. the high companyrt upheld the companytention and
ordered the state of assam number to give effect to the order
dated march 31 1964 calling upon the respondent to pay the
amount due within two months of the order and the order
dated numberember 26 1964 directing that the tea garden be put
up for auction. with certificate granted by the high companyrt
the state of assam has appealed .to this companyrt. the tea garden belonged to the state of assam. the govern-
ment of assam in the absence of any binding statutory
provision companyld settle the tea garden on such companymercial
terms it companyld reasonably obtain. the respondent applied to
the deputy companymissioner for settlement of the tea garden and
requesting the state government for early fixation of the
amount of premium when the premium was fixed by the
government the respondent protested companytending that the
action of the state was illegal before the high companyrt it was
contended by the respondent that the power of the state
government to fix the premium for which it companyld lease the
tea garden was restricted by rule 40 framed under the assam
land revenue regulations. the rule reads
in addition to the land-revenue payable under
rule 17 and value of the timber assessed under
rule 37 an applicant to whom a lease for
special cultivation is granted shall be liable
to pay premium. the rate of premium shall be
fixed by the state government from time to
time for each locality. the reasons which persuaded the high to upheld
the plea raised by the respondent may be set
out in their own words
the only power which the government has got
is to fix the rate of premium under rule 40 of
the rules
under the land revenue regulation and the
question for us to companysider is whether the
order of the government fixing the premium for
settlement of this land for special
cultivation is an order in companyformity with
rule 40. . . . in our opinion what rule 40 provides is to
confer upon the government power to fix the
rate of premium in every case which shall be
payable for the settlement and it is only the
deputy companymissioner that is authorised to
settle the land. the whole purpose of rule
40 is to companyfer power on the government to fix
the rate of premium which will be valid for a
particular locality and that the deputy
commissioner has to make the settlement. he
is given the power to realise the premium
fixed by the government from time to time and
to see that numberdocument of lease is issued
before the premium has been paid by the
intending holder. but rule 40 does empower
in our opinion the state government to fix
the amount of premium in the case of a
particular settlement in a particular
locality
the rate of premium for a particular locality
and the legislature when framing the rules
never intended that the government should be
empowered to fixing the total amount of
premium payable by the intending holder. in
our opinion therefore the order passed by
the government directing the authorities to
offer the land for settlement in case the
petitioners pay rs. 386000/- is number in
conformity with rule 40 and this order cannumber
be given effect-to. the expression locality is number defined in the act or in
the rules. we see numberwarrant for the assumption made by the
high companyrt that in settling the premium to be fixed in
respect of its own property the government is bound to fix
the premium generally in respect of a region. the
government is by the act or the rules number disqualified from
fixing the premium to be paid in respect of an individual
tea garden. in the absence of any indication to the
contrary a tea garden may in our judgment be appropriately
regarded as a locality within the meaning of rule 40. the
power to settle a tea garden on payment of land revenue
value of the timber and premium is to be exercised according
to the rules. the rate of premium may be fixed by the state
government according to its companymercial value. in the
absence of any restriction imposed upon the state government
requiring that a general rate shall be fixed companyering a
specified area larger
than a tea garden there is numberhing which prohibits the state
government from fixing the rate of premium having regard to
the companymercial value of the tea garden. in the present case
the sub-divisional officer reported that the price of the
land of the dirpai tea garden be valued at rs.1 500/- per
bigha and on that basis the state government companyputed the-
premium to be paid in respect of the entire jokai tea
garden. fixation of a rate of rs. 5001- per bigha in respect of the
entire area of the tea garden may be regarded as a premium
fixed for the locality of the tea garden. the matter rested
entirely in companytract between the respondent and the state
government. there was an offer by the respondent for
settlement of the tea garden. he agreed to pay the land
revenue payable under r. 17. he also agreed to pay the
value of the timber assessed under r. 37. for settlement of
the tea garden for special cultivation the respondent was
also liable to pay premium. the quantum of liability to pay
land revenue was governed by r. 17 and value of the timber
was governed by r. 37. the liability to pay premium had to
be fixed by the state government. in the absence of any
restriction placed by the rules upon the power of the st-ate
government we do number think that the high companyrt had any
jurisdiction to companypel the state to enter into a companytract to
settle the tea garden upon the respondent on payment of
premium after determining a general rate for a region larger
than the tea garden. the high companyrt was in error in setting aside the order
passed by the government of assam and in declaring that the
offer to settle the land of the dirpai tea garden on payment
of rs.