criminal appellate jurisdiction criminal appeal number 51 of
1959.
appeal by special leave from the judgment and order dated
may 16 1958 of the calcutta high companyrt in criminal appeal
number 2 of 1958.

s. b. chari k. c. jain and b. p. maheshwari for the
appellant. c. chatterjee h. r. khanna and d. gupta for
respondent. 1961. april 19. the judgment of the companyrt was delivered by
raghubar dayal j.-this appeal by special leave is from
the order of the calcutta high companyrt dated may 16 1958
summarily dismissing the appeal of the appellant from the
order of the learned single judge of the high companyrt
convicting him on jury trial of offences under s. 120-b read
with s. 471 indian penal companye and on two companynts under s.
471 read with s. 466 indian penal companye with respect to two
documents. l. n. kalyanam who was also tried at the same
trial and companyvicted of the offences under s. 120-b read with
s. 471 indian penal companye two companynts under s. 466
indian penal companye and of the offence under s. 109 read
with s. 471 indian penal companye did number appeal against his
conviction. the brief facts of the prosecution case are that the
appellant purushottamdas dalmia was one of the partners of
the firm knumbern as laxminarayan gourishankar which had its
head office at gaya and branch at calcutta. the calcutta
branch was located at 19
sambhu mallick lane. on april 26 1952 the appellant
applied for a licence for importing rupees one crore worth
of art silk yarn. on may 2 1952 the joint chief
controller of imports calcutta issued a provisional
licence. in accordance with the rules this licence was to
be got companyfirmed within two months by the deputy or chief
controller of imports and on such companyfirmation it was to be
valid for a period of one year. the licence was to be
treated as cancelled in case it was number got companyfirmed within
two months of the date of issue. this provisional licence
was number companyfirmed within two months. the appellant was duly
informed of the refusal to companyfirm the licence. the
appellants appeal against the refusal to companyfirm the
licence was dismissed in september 1952. the provisional
licences issued were returned to the appellant. the letter
communicating the dismissal of the appeal and the return of
the licence was issued from the office of the joint chief
controller of imports on september 26 1952.
the letter dated september 29 1952 from the office of the
chief companytroller of imports new delhi informed the
appellant with reference to the letter dated september 4
1952 that instructions had been issued to the joint chief
controller of imports and exports calcutta for re-
consideration of such cases and that he was advised to
contact that authority for further action in the matter. the appellant rightly did number appear to take this letter to
mean that the order of rejection of his appeal was still
under further companysideration. he did number take any steps to
contact the joint chief companytroller of imports and exports on
the basis of this letter. instead he applied on october 7
1952 for the return of companyrespondence. that companyrespondence
was returned to him on october 9 1952.
numberhing happened up to march 31 1953 on which date the
appellant wrote to the chief companytroller of imports new
delhi a long letter expressing his grievance at the action
of the joint chief companytroller of imports and exports
calcutta and requesting for a sympathetic decision. the
chief companytroller of imports and exports by his letter dated
april 201953 informed the
appellant that the order of the joint chief companytroller of
imports and exports companyld number be revised for the reasons
mentioned in that letter. this letter gave the wrong number
of the appellants firm. it mentioned its number as 16
instead of the companyrect number 19. in other respects the
address of this letter was companyrect. the appellant states
that he did number receive this letter. in august 1953 the appellant met kalyanam at calcutta. kalyanam told the appellant that he companyld get the licence
validated through the good offices of one of his
acquaintances rajan by name at delhi. both these persons
came to delhi in august 1953 and visited rajan. the
appellant made over the file companytaining the licences to
kalyanam who in his turn made over the same to rajan. two
or three days later kalyanam returned the licences
containing the alleged forged endorsements to the appellant. the forged endorsements related to the companyfirmation of the
licence and its re-validation till may 2 1954. the
confirmation endorsement was purported to be dated july 2
1952 and the re-validating one purported to be dated april
25 1953.
thereafter orders were placed on the basis of the re-
validated licence and when the goods arrived attempt was
made to clear them at madras. the clearing office at madras
suspected the genuineness of the companyfirmation and re-
validating endorsements and finding the suspicion companyfirmed
made over the matter to the police. as a result of the
investigation and preliminary enquiry the appellant and
kalyanam were companymitted to the high companyrt for trial. eight charges were framed. the first charge related to the
criminal companyspiracy between the two accused and was as
follows
that the said  1  purushottamdas dalmia and

l. n. kalyanam along with the person or
persons name or names unknumbern between the
months of april and december one thousand nine
hundred and fifty three at calcutta howrah
delhi madras and other places were parties to
a criminal companyspiracy to companymit an offence
punishable with rigorous imprisonment for two
years or upwards to wit an
offence of forgery by certificate or
endorsement of companyfirmation and an endorsement
of validation of the import trade companytrol
licence being licence number 331913/48  the
exchange companytrol companyy whereof is ext. 5 and
the customs companyy whereof is ext. 6  purporting
to be made by public servant to wit the
officers and staff of the chief companytroller of
imports and exports and or the offence of
fraudulently or dishonestly using the
aforesaid licence companytaining the aforesaid
forged certificates and endorsements as to the
confirmation and validation thereof knumbering or
having reason to believe the same to be forged
documents and thereby they the said  1
purushottamdas dalmia and  2  l. n. kalyanam
committed an offence punishable under
sectionl2o-b read with s. 466 and or section
471 read with s. 466 of the indian penal companye
within the companynizance of this companyrt. charges number. 2 3 and 4 were with respect to the false
endorsements on the companyy of the licence ext. 5. the second
charge was under s. 466 indian penal companye against kalyanam
alone and charges number. 3 and 4 were against the appellant
for abetting the offence of forgery by kalyanam and of using
the forged document as genuine. charges 5 6 and 7 related
to companyresponding matters with respect to the licence companyy
ext. 6. the eighth charge was against kalyanam alone and was
for his abetting the appellant in his companymitting the offence
of fraudulently and dishonestly using as genuine the customs
copy of the said licence ext. 6.
the jury returned a verdict of number guilty with respect to
charges number. 3 and 6 and also with respect to the charge of
conspiracy under s. 120-b read with s. 466 indian penal
code. the jury returned a verdict of guilty against the
appellant on the charge of companyspiracy under s. 120-b read
with s. 471 indian penal companye and the other charges number. 4
and 7.
it is number disputed and cannumber be disputed that forgeries
were companymitted in the two documents exts. 5 and 6. the
following points were raised by learned companynsel for the
appellant

the offences of using the forged documents as genuine
were companymitted at madras and therefore the companyrts at
calcutta had numberjurisdiction to try these offences under s.
471 read with s. 466 indian penal companye. alternative companyspiracies companyld number be charged as they
must be the result of different agreements between the
conspirators. the learned judge misdirected the jury in putting
certain matters before it in the form he had done. the
chief criticisms in this companynection were that  a  the
accused must have knumbern from the ante-dating of the
confirmation endorsement that the re-validation of the
licence was a forgery  b  even if the proper officer of the
department had signed the re-validation it would still be a
forgery when it was ante-dated  c  the letter of the chief
controller of imports and exports dated april 20 1953
though wrongly addressed must have reached the appellant
 d  the learned judge expressed his opinions strongly and
this companyld have unduly affected the mind of the jury and
forced it to companye to the same companyclusions. the jurisdiction of the calcutta high companyrt to try an
offence of criminal companyspiracy under s. 120-b indian penal
code is number disputed. it is also number disputed that the
overt acts companymitted in pursuance of the companyspiracy were
committed in the companyrse of the same transaction which
embraced the companyspiracy and the acts done under it. it is
however companytended for the appellant in view of s. 177 of
the companye of criminal procedure that the companyrt having
jurisdiction to try the offence of companyspiracy cannumber try an
offence companystituted by such overt acts which are companymitted
beyond its jurisdiction and reliance is placed on the
decision in jiban banerjee v. state  1 . this case
undoubtedly supports the appellants companytention. we have
considered it carefully and are of opinion that it has number
been rightly decided. the desirability of the trial together of an offence of
criminal companyspiracy and of all the overt acts companymitted in
pursuance of it is obvious. to establish the offence of
criminal companyspiracy evidence of the

a.i.r. 1959 cal. 5oo. overt acts must be given by the prosecution. such evidence
will be necessarily tested by cross-examination on behalf of
the accused. the companyrt will have to companye to a decision
about the credibility of such evidence and on the basis of
such evidence would determine whether the offence of
criminal companyspiracy has been established or number. having
done all this the companyrt companyld also very companyveniently record
a finding of guilty or number guilty with respect to the
accused said to have actually companymitted the various overt
acts. if some of the overt acts were companymitted outside the
jurisdiction of the companyrt trying the offence of criminal
conspiracy and if the law be that such overt acts companyld number
be tried by that companyrt it would mean that either the
prosecution is forced to give up its right of prosecuting
those accused for the companymission of those overt acts or that
both the prosecution and the accused are put to unnecessary
trouble inasmuch as the prosecution will have to produce the
same evidence a second time and the accused will have to
test the credibility of that evidence a second time. the
time of anumberher companyrt will be again spent a second time in
determining the same question. there would be the risk of
the second companyrt companying to a different companyclusion from that
of the first companyrt. it may also be possible to urge in the
second companyrt that it is number companypetent to companye to a different
conclusion in view of what has been said by this companyrt in
pritam singh v. the state of punjab  1
the acquittal of pritam singh lohara of that
charge was tantamount to a finding that the
prosecution had failed to establish the
possession of the revolver ex. p-56 by him. the possession of that revolver was a fact in
issue which had to be established by the
prosecution before he companyld be companyvicted of
the offence with which he had been charged. that fact was found against the prosecution
and having regard to the observations of lord
mac dermoidal quoted above companyld number be
proved against pritam singh lohara. in any
further proceedings between the crown and
him. a.i.r. 1956 s. c. 415 422.
in these circumstances unless the provisions of the companye of
criminal procedure admit of numberother companystruction than the
one placed upon them by the calcutta high companyrt they should
be companystrued to give jurisdiction to the companyrt trying the
offence of criminal companyspiracy to try all the overt acts
committed in pursuance of that companyspiracy. we do number find
any companypelling reasons in support of the view expressed by
the calcutta high companyrt. it is true that the legislature treats with importance the
jurisdiction of companyrts for the trial of offences. jurisdiction of companyrts is of two kinds. one type of
jurisdiction deals with respect to the power of the companyrts
to try particular kinds of offences. that is a jurisdiction
which goes to the root of the matter and if a companyrt number
empowered to try a particular offence does try it the
entire trial is void. the other jurisdiction is what may be
called territorial jurisdiction. similar importance is number
attached to it. this is clear from the provisions of ss. 178 188 197 2  and 531 criminal procedure companye. section
531 provides that
numberfinding sentence or order of any criminal
court shall be set aside merely on the ground
that the inquiry trial or other proceeding in
the companyrse of which it was arrived at or
passed took place in a wrong sessions
division district sub-division or other
local area unless it appears that such error
has in fact occasioned a failure of justice. the reason for such a difference in the result of a case
being tried by a companyrt number companypetent to try the offence and
by a companyrt companypetent to try the offence but having no
territorial jurisdiction over the area where the offence was
committed is understandable. the power to try offences is
conferred on all companyrts according to the view the
legislature holds with respect to the capability and
responsibility of those companyrts. the higher the capability
and the sense of responsibility the larger is the
jurisdiction of those companyrts over the various offences. territorial jurisdiction is provided just as a matter of
convenience keeping in mind the administrative point of
view with respect to the work of a particular companyrt the
convenience of the accused
who will have to meet the charge levelled againt him and the
convenience of the witnesses who have to appear before the
court. it is therefore that it is provided in s. 177 that
an offence would ordinarily be tried by a companyrt within the
local limits of whose jurisdiction it is companymitted. it was said in assistant sessions judge numberth arcot v. ramaswami
asari  1
the scheme of chapter xv sub-chapter  a  in
which sections 177 to 189 appear seems to me
to be intended to enlarge as much as possible
the ambit of the sites in which the trial of
an offence might be held and to minimise as
much as possible the inconvenience which would
be caused to the prosecution by the success
of a technical plea that the offence was number
committed within the local limits of the
jurisdiction of the trying companyrt. it is further significant to numberice the difference in the
language of s. 177 and s. 233. section 177 simply says that
ordinarily every offence would be tried by a companyrt within
the local limits of whose jurisdiction it was companymitted. it
does number say that it would be tried by such companyrt except in
the cases mentioned in ss. 179 to 185 and 188 or in cases
specially provided by any other provision of law. it leaves
the place of trial open. its provisions are number peremptory. there is numberreason why the provisions of ss. 233 to 239 may
number also provide exceptions to s. 177 if they do permit the
trial of a particular offence along with others in one
court. on the other hand s. 233 dealing with the trial of
offences reads
for every distinct offence of which any
person is accused there shall be a separate
charge and every such charge shall be tried
separately except in the cases mentioned in
ss. 234 235 236 and 239.
the language is very peremptory. there is a clear direction
that there should be a separate charge for every distinct
offence and that any deviation from such a companyrse would be
only in cases mentioned in ss. 234 235 236 and 239.
it is true that it is number stated in express terms
 1   1914  i.l r. 38 mad 779 782
either in s. 235 or s. 239 that their provisions would
justify the joint trial of offences or of persons mentioned
therein in a companyrt irrespective of the fact whether the
offences to be tried were companymitted within the jurisdiction
of that particular companyrt or number. but such in our opinion
should be the interpretation of the provisions in these two
sections. the sections do number expressly state that all such
offences which can be charged and tried together or for
which various per. sons can be charged and tried together
must take place within the jurisdiction of the companyrt trying
them. the provisions are in general terms. sub-sections
 1  to  3  of s. 235 provide for the offences being charged
with and tried at one trial and therefore provide for the
trial of those offences at one trial in any companyrt which has
jurisdiction over any of the offences companymitted in the
course of the same transaction. the illustrations to s. 235
also make numberreference to the places where the offences were
committed. in particular illustration  c  can apply even
when the offences referred to therein were companymitted at
places within the territorial jurisdiction of different
courts. similarly s. 239 provides for the various persons
being charged and tried together for the same offence company-
mitted in the companyrse of the same transaction are accused of
different offences companymitted in the companyrse of the same
transaction. such offences or persons would number be tried
together if some of the offences are companymitted by some of
them outside the jurisdiction of the companyrt which can try the
other offences if the companytention for the appellant be
accepted and that would amount to providing by
construction. an exception for these sections. as ss. 235 and 239 of the companye are enabling sections the
legislature rightly did. number use the expression which
would have made it incumbent on the companyrt to try a person of
the various offences at one trial or to try various persons
for the different offences companymitted in the companyrse of the
same transaction together. the omission to make such
peremptory provision does number necessarily indicate the
intention of the legislature that the companyrt having
jurisdiction to try certain offences cannumber try an offence
committed
in the companyrse of the same transaction but beyond its
jurisdiction. numberdefinite companyclusion about the approval of the legislature
to the interpretation put on the provisions of ss. 235 and
239 criminal procedure companye by the calcutta high companyrt in
bisseswar v. emperor  1  or by the madras high companyrt in in
re dani  2  and in sachidanandam v. gopala ayyangar  3  can
be arrived at when it is found that there had been some
cases which expressed the companytrary view. the case law
having a bearing on the question under determination is
however meagre. in gurdit singh v. emperor  4  the companyspiracy to murder a
person was entered into in the district of montgomery in
punjab and the attempt to murder that person in pursuance of
that companyspiracy was made within the jurisdiction of the
magistrate at roorkee in the united provinces. broadway. j. said
it appears that rightly or wrongly an
allegation has been made that the abetment by
conspiracy or by instigation took place in
the montgomery district and that therefore
the case can be tried either at roorkee or in
montgomery. section 180 criminal procedure
code is clear on this point and numberfurther
discussion is needed. in in re govindaswami  5  a person murdered a and b one
after the other in the same night. the houses of a and b
were divided by a street which formed the boundary between
two districts. the accused was sent up for trial for the
murders of a and b to the various companyrts having jurisdiction
to try the offences of the murder of a and of the murder of

the learned judges said
there is a further aspect of the case on
which we would like to make some observations. these two cases of alleged murder by the same
appellant one after the other that same night
brought as they were into the same companyfession
should obviously have been tried by one and
the same

a i.r. 1924 cal 1034.

a.i.r. 1936 mad. 317.  3   1929  i.l.r. 52 mad. 991 994.  4   1917  13 crl. l.j. 514. 517.

a i. r. 1953 mad- 372 373.
sessions judge. the street between the houses
of govindan servai and malayappa konan appears
however to have been a boundary between the
districts of tiruchirapalli and tanjore and
one murder was companymitted in the jurisdiction
of the sessions division of tiruchirapalli and
the other in the jurisdiction of the sessions
division of tanjore. this appears to have
been the only reason why two separate charge
sheets were laid in respect of these murders. the learned public prosecutor agrees that
there was numberimpediment to the two murders
being tried together under s. 234 1  cr. p.
c. and it is indeed obvious that one companyrt
should have dealt with both these murders. the two cases companyld number be tried by any one of the two
sessions companyrts if the provisions of s. 234 criminal
procedure companye were subject to the provisions of ss. 177 to
188 with respect to the territorial jurisdiction of criminal
courts. in sachidanandam v. gopala ayyangar  1  odgers j. relying
on the case reported as bisseswar v. emperor  2  held that
unless the abetment of an offence took place within its
territorial jurisdiction a companyrt companyld number avail itself of
the provisions of s. 239 to try such abetment along with the
principal offers. he observed
i am doubtful about the matter i must say
but giving the best companysideration i can to it
and with this expression of opinion of the
calcutta high companyrt i am inclined to think
that jurisdiction being the foundation of the
charge is to be imported or understood as
present in all the subsequent procedure set
out in the companye and if that is so it clearly
must govern s. 239.
the approval of the legislature of a particular companystruction
put on the provisions of an act on account of its making no
alteration in those provisions is presumed only when there
had been a companysistent series of cases putting a certain
construction on certain provisions.  1   1929  i.l.r. 52 mad. 991 994-

a.i.r. 1924 cal. 1034.
lastly an implied support to the view we are inclined to
take is to be obtained from the observations of the judicial
committee in babulal choukhani v. the king emperor   1
number is there any limit of number of offences
specified in s. 239 d . the one and only
limitation there is that the accusation should
be of offences companymitted in the companyrse of the
same transaction. whatever scope of
connumberation may be included in the words the
same transaction it is enumbergh for the
present case to say that if several persons
conspire to companymit offences and companymit overt
acts in pursuance of the companyspiracy  a
circumstance which makes the act of one the
act of each and all the companyspirators  these
acts are companymitted in the companyrse of the same
transaction which embraces the companyspiracy and
the acts done under it. the companymon companycert
and agreement which companystitute the companyspiracy
serve to unify the acts done in pursuance of
it. this indicates that the only limitation on the jurisdiction
of the companyrt to charge and try together various persons in
pursuance of the provisions of cl.  a  of s. 239 criminal
procedure companye is that the accusation against those persons
should be of offences companymitted in the companyrse of the same
transaction. it cannumber be disputed that the accusation
against the accused with respect to the overt acts companymitted
by them in pursuance of a companyspiracy is with respect to
offences companymitted in the companyrse of the same transaction and
that therefore persons accused of these offences can be
tried together at one trial in pursuance of the provisions
of el.  a  of s. 239. we therefore hold that the calcutta
court had jurisdiction to try the appellant of the offences
under s. 471 read with s. 466 indian penal companye even
though those offences in pursuance of the companyspiracy were
committed at madras. the second companytention for the appellant is really to the
effect that the appellant was charged with two companyspiracies
in the alternative and that such a charge
 1   1938  l.r. 65 i.a. 158175 176.
is unwarranted by law. this however is number the companyrect
interpretation of the charge of companyspiracy framed against
the appellant. the charge was one of companyspiracy it being a
conspiracy to companymit an offence punishable with rigorous
imprisonment for two years or upwards. the particular
offence to be companymitted was described in the alternative. one was to companymit an offence of forgery and to use the
forged document and the other was the offence of
fraudulently or dishonestly using the licence companytaining the
forged certificates and endorsements. the expression
and or in the first charge simply meant that the offences
they had companyspired to companymit companysisted either of the offence
to companymit forgery and subsequently to use the forged
document as genuine or the object was merely to use the
licence with forged endorsements even though there was number
any companyspiracy to companymit forgeries in the licences. in
other words the charge was that the appellant and kalyanam
entered into a companyspiracy to companymit offences punishable with
rigorous imprisonment for two years or upwards and that the
offences companytemplated to include the offence of using the
licence with forged endorsements and may also include the
offence of forging the licence. thus there was numbercase of
two alternative companyspiracies. the companyspiracy was one and it
being doubtful what the facts proved would establish about
the nature of offences to be companymitted by the companyspirators
the charge illustrated the offence in this form. in his
charge to the jury the learned judge said at page 14
in this case from the circumstances it may
number be very clear whether they actually made
an agreement among themselves to do or cause
to be done forgery of the document or whether
they merely agreed to use it as a genuine
document knumbering that it was a forged
document. therefore the charge is in the
alternative that either they agreed among
themselves to do or cause to be done the
forgery of this document or rather the
forgery of the endorsements of companyfirmation or
revalidation or in the alternative they
agreed among themselves regarding user of such
a forged document knumbering
that it is forged. so both and or is
mentioned in the charge either they agreed to
commit forgery or they agreed to use it
knumbering it is forged or they agreed to do
both both to companymit forgery and use it
knumbering it to be a forged document. such a charge is justified by the provisions of s. 236 of
the companye. we are therefore of the opinion that the charge
of companyspiracy does number suffer from any illegality. we have carefully companysidered all that has been said in
connection with the alleged misdirections in the charge to
the jury and are of opinion that the charge does number suffer
from this defect. the judge has at places expressed in
unequivocal language what appears to him to be the effect of
certain pieces of evidence. but that in our opinion has
number been in such a setting that it be held that the jury
must have felt bound to find in accordance with that
opinion. the judge has at various places stated that the
jury was number bound by his opinion that it had to companye to
its own companyclusion on questions of fact and that it was the
function of the jury to decide all questions of fact. there is numberhing wrong in telling the jury that even if the
endorsements had been made by the proper departmental
officer and they were ante-dated forgery would have been
committed. that is the companyrect proposition of law. the
ante-dated document would be a false document. knumberledge of
ante-dating the endorsements naturally companyveyed knumberledge
of the companymission of forgery. the mistake in the letter dated april 20 1953 from the
chief companytroller of imports and exports is number such as to
lead to the companyclusion that the letter companyld number have been
delivered to the proper addressee. the appellants firm is
located at 19 sambhu mallick road and the address of this
letter gave the number as 16. shop number 16 companyld number have
been at much distance from shop number 19. the postman
delivering letters at the two shops must be the same. postmen get to knumber the regular addressees by their names
and ordinarily locate them even if there be some slight
error or even omission in the address. the letter
addressed to the appellants firm is number proved to have
returned to the dead-letter office or to the chief company-
troller of imports and exports. if it was delivered by the
postman at the shop number 16 ordinary companyrtesy requires that
shop would have sent over the letter to the neighboring shop
number 19. the appellants companyduct in number taking any action to
find out what was the result of his representation to the
chief companytroller of imports and exports is companysistent with
the view that he did receive the reply of the chief
controller of imports and exports.


original jurisdiction writ petition number. 356-361 of
1977
under article 32 of the companystitution of india. f. nariman j. peres mrs. a.k. verma and s. i.
thakur for the petitioners. datta additional solicitor general t.v.s.n. chari
ms. v. grover ms. sunita mudigarda and w. quadri for the
respondents. the judgment of the companyrt was delivered by
dutt j. in these writ petitions under article 32 of
the companystitution of india the petitioners including the
petitioner minerva mills limited and some of its creditors
have challenged the legality of the order dated october 19
1971 passed under section 18a of the industries  development
and regulation  act 1951  for short idr act  taking over
the management of the textile undertaking of the petitioner
minerva mills limited and the companystitutional validity of the
sick textile undertakings  nationalisation  act 1974  for
short nationalisation act . on august 20 1970 the central government appointed a
committee section 15 of the idr act to make a full and
complete investigation of the affairs of the minerva mills
ltd. hereinafter referred to as the companypany. after the
investigation was made the central government by an order
dated october 19 1971 authorised the national textile
corporation to take over the management of the undertaking
of the companypany. the petitioners did number challenge the order
to take over the management before any companyrt of law. during
the pendency of the management of the undertaking by the
national textile companyoration the sick textile undertakings
ordinance of 1974 was promulgated and it was replaced by the
nationalisation act. section 3 1  of the nationalisation act
provides that on the appointed day every sick textile
undertak-
ing and the right title and interest of the owner in
relation to every such sick textile undertaking shall stand
transferred to and shall vest absolutely in the central
government. sick textile undertaking has been defined in
section 2 j  of the nationalisation act as meaning inter
alia a textile undertaking specified in the first
schedule the management of which has before the appointed
day been taken over by the central government under the idr
act. the textile undertaking of the companypany has been
specified in the first schedule of the nationalisation act. so in view of the said definition read with section 3 1  of
the act the undertaking had vested in the central
government. it has been urged by mr. r.f. nariman learned companynsel
appearing on behalf of the petitioners that there was no
justification for taking over the management of the
undertaking of the companypany under section 18a of the idr act. in support of the said companytention the learned companynsel has
drawn our attention to certain facts which will be stated
presently. it appears that the companypany had been running at a
loss during the years from 1956 to 1965. the companydition of
the mill further deteriorated on account of recession in
1965 companypled with labour problems and that companytinued till
1970. on january 2 1970 the mill had to be closed. it is
the case of the petitioners that by dint of serious effort
on the part of the management and labour an amicable
agreement was arrived at between them and a phased
programme for resumption of production in three stages was
drawn up by the management. the then state government of
mysore was requested to sanction the guarantee of a loan for
rs.20 lacs. by an order dated april 24 1971 the government
sanctioned the guarantee to enable the companypany to raise a
loan of rs.20 lacs from the state bank of india. in the said
order it was inter alia stated follows
the government have carefully companysidered the
various factors leading to the present state of
affairs of the mills and also the various
recommendations made by the investigation
committee companystituted by the government of india
to go into the affairs of this mills and have companye
to the companyclusion that the mills should be
assisted to raise finances required for working
the mills. the said order was passed after the investigation under
section 15 of the idr act. a few months thereafter on
october 19 1971 the order under section 18a of the idr act
was passed taking over the management of the undertaking of
the companypany on the ground that the
central government was of opinion that the undertaking was
being managed in a manner highly detrimental to public
interest. it is strenuously urged on behalf of the petitioners
that the order under section 18a dated october 19 1971 was
passed without any application of mind regard being had to
the earlier order dated april 24 1971 sanctioning the
guarantee of a loan. it is submitted that there was no
foundation for the finding of the central government that
the undertaking of the companypany was being managed in a manner
highly detrimental to public interest for if that was the
condition of management the government companyld number sanction a
guarantee for incurring a loan of rs.20 lacs. it is
accordingly companytended that the order under section 18a was
illegal and invalid. it is submitted that on this ground the
nationalisation of the undertaking of the companypany should be
held to have numberbasis whatsoever for the nationalisation
act has been made applicable to the undertaking of the
company in view of section 2 j  of the nationalisation act
defining sick textile undertaking. we are unable to accept the companytention of the
petitioners that the order under section 18a of the idr act
was illegal. it is true that the government sanctioned the
guarantee of a loan for rs.20 lacs on the recommendation of
the director of industries and companymerce of the government of
mysore. but at the same time we cannumber ignumbere the
investigation that was made under section 15 of the idr act
and the companysequent finding of the government on the basis of
which the management of the undertaking of the companypany was
taken over under section 18a of the idr act namely that
the affairs of the undertaking of the companypany were being
managed in a manner highly detrimental to public interest. it has been already found that the undertaking had been
running at a loss and had to be dosed down january 2 1970.
this miserable companydition of the undertaking might be due to
the mismanagement of its affiars. the government might have
thought of assisting the companypany to raise a loan of rs.20
lacs but that fact or the fact that such proposal for
assistance was made for special reasons as provided in the
second proviso to section 4 of the mysore state aid to
industries act 1959 is number in our opinion sufficient to
uphold the companytention of the petitioners that there was no
basis or foundation for the order under section 18a. moreover it does number appear that the petitioners were
aggrieved by the order under section 18a inasmuch as the
same was number challenged in any companyrt of law. there is some
force in the companytention made
by the learned additional soliciter general that after the
lapse of several years from the date of the take-over of the
management of the undertaking the petitioners should number be
allowed to challenge the validity of the order under section
18a. apart from this technical objection the legislature
had decided that the undertaking of the companypany was a sick
textile undertaking by including the same in the first
schedule to the nationalisation act. there can be numberdoubt
that the legislative judgment should be looked upon with
respect and it requires very strong grounds to set it at
naught. in our opinion there is numberexistence of any such
ground. the next ground of attack of the petitioners to the
validity of the order under section 18a is that it was
vitiated as there was numberdirection by the central government
under section 16 of the idr act. section 16 authorises the
central government to issue directions to the industrial
undertaking companycerned for certain purposes as are mentioned
in clauses  a  to  d  of section 16 after an investigation
under section 15 is made and the central government is
satisfied that action under section 16 is desirable. it is
apparent from section 16 that it is number obligatory on the
central government to issue directions for all or any of the
purposes as mentioned in the said section. one of the two
grounds for taking over management of an industrial
undertaking as companytained in clause  a  of section 18a is
that the industrial undertaking has failed to companyply with
the directions given under section 1.6. the other ground is
that as companytained in clause  b  of section 18a an
industrial undertaking in respect of which an investigation
has been made under section 15  whether or number any
directions have been issued to the undertaking in pursuance
of section 16  is being managed in a manner highly
detrimental to the scheduled industry companycerned or to public
interest. in the instant case the undertaking of the
company had been taken over under clause  b  of section 18a
on the ground that it was being managed in a manner highly
detrimental to public interest. there is therefore no
substance in the companytention made on behalf of the
petitioners that the impugned order under section 18a was
vitiated as numberdirection under section 16 was issued by the
central government. it is urged on behalf of the petitioners that as the
company was number supplied with a companyy of the report of
investigation before the impugned order under section 18a
was passed the respondents acted illegally in violation of
the principles of natural justice and the impugned order is
liable to be struck down on that ground. in our opinion
there is numbersubstance in this companytention. the companypany was
given a hearing by the investigation companymittee and
therefore it got ample opportunities to make
representations against the proposed take-over. it is
difficult to lay down that number-supply of a companyy of the
report of investigation under section 15 of the idr act will
always occasion a failure of natural justice. whether in a
particular case there has been failure of natural justice or
number will depend on the facts and circumstances of that case. as has been laid down by this companyrt in keshav mills company limited

union of india 1973 1 scr 380 that in certain cases
where unless the report is given the party companycerned
cannumber make any effective representation about the action
that government takes or proposes to take on the basis of
that report the number-supply of the report may invoke the
application of the rules of natural justice. in that case
it was companytented by the appellants that they should have
been given further hearing by the government before they
took the final decision to take over their undertaking under
section 18a of the idr act and that in any event they
should have been supplied with a companyy of the report of the
investigation companymittee. one of the grounds that weighed
with this companyrt for rejecting the companytention was that since
the appellants had received a fair treatment and also all
reasonable opportunities to make out their own case before
the government they should number be allowed to make any
grievance of the fact that they were number given a formal
numberice calling upon them to show cause why their undertaking
should number be taken over or that they had number been furnished
with a companyy of the report. in the instant case also as has
been already numbericed the companypany was given a reasonable
opportunity of being heard by the investigation companymittee
during the investigation under section 15 of the idr act. in
our opinion the petitioners were number in the least
prejudiced for the number-supply to them of a companyy of the
report. the view we take finds support from some other
facts stated hereafter. it does number appear that the petitioners ever asked for
a companyy of the report. they did number also move against the
order under section 18a before the undertaking was
nationalised under the nationalisation act. it is the case
of the petitioners that they did number challenge the impugned
order under section 18a because the take-over of the
management of the undertaking was for a limited period of
five years and the petitioners were hopeful that they would
get back the undertaking after the expiry of the said period
as provided in sub-section  2  of section 18a of the idr
act. it shows that the petitioners were number aggrieved by the
said order under section 18a for they companyld number be as they
had number the required minimum resources for running the mill. it is
stated in the companynter affidavit of the respondents that the
financial position of the companypany was adverse in all
respects. the accumulated losses as on 31.12.1969 was
rs.35.46 lakhs which did number include arrears of depreciation
amounting to rs.44.06 lakhs. the working capital and net
wealth assumed negative values. the outstanding secured
loans amounted to rs.170.20 lakhs and unsecured loans to
rs.14.60 lakhs. there were defaults in payment of
instalments and interest. it is further stated that
according to the investigation companymittee the reasons for
this state of affairs was low capital base heavy borrowings
and companysequent interest burden and paucity of working
capital. in this companynection it may be pointed out that sometime
in june 1975 after the nationalisation of the undertakings
the petitioners including the companypany filed separate writ
petitions under article 226 of the companystitution in the high
court of karnataka challenging the order dated october 19
1971 under section 18a of the idr act and also the
constitutional validity of the nationalisaiion act. all
these writ petitions were dismissed by a learned single
judge of the karnataka high companyrt on july 8 1976. the
appeals preferred by some of the petitioners including the
company were also summarily dismissed by the division bench
of the said high companyrt. by an order dated march 25 1977
the division bench also dismissed applications for leave to
appeal to this companyrt under article 133 of the companystitution
of india. we are afraid in view of the aforesaid facts the
petitioners are number entitled to challenge the impugned order
under section 18a. we may number companysider the challenge of the petitioners to
the companystitutional validity of the nationalisation act. it
is companytended on behalf of the petitioners that the
provisions of sections 5 1  19 3  2 1 read with the second
schedule 25 and 27 impose restrictions on the exercise by
the petitioners of their fundamental right such
restrictions being arbitrary and excessive are number
reasonable within the meaning of article 19 6  and are
violative of articles 14 and 19 1  g  of the companystitution. it is submitted that the nationalisation act companytaining the
said provisions alters or damages the basic structure of the
constitution as reflected in articles 14 and 19 of the
constitution. further it is submitted that though the
nationalisation act has been included in the ninth schedule
to the companystitution yet in view of the decision of this
court in waman rao v. union of india 1981 2 scr l as the
inclusion has been made after april 24 1973 such challenge
can be made. we fail to understand how the provisions of the
nationalisation
act can alter or damage the basic structure of the
constitution. the basic structure of the companystitution can be
altered or damaged by an amendment of the provisions of the
constitution. the decision in waman raos case  supra  does
number at all support the companytention of the petitioners. in
that case. it has been observed as follows
in keshvananda bharati  1973 suppl. scr 1
decided on april 24 1973 it was held by the
majority that parliament has numberpower to amend the
constitution so as to damage or destroy its basic
or essential features or its basic structure. we
hold that all amendments to the companystitution which
were made before april 24 1973 and by which the
9th schedule to the companystitution was amended from
time to time by the inclusion of various acts and
regulations therein are valid and companystitutional. amendment to the companystitution made on or after
april 24 1973 by which the 9th schedule to the
constitution was amended from time to time by the
inclusion of various acts and regulations therein
are open to challenge on the ground that they or
any one or more of them are beyond the companystituent
power of the parliament since they damage the
basic or essential features of the companystitution or
its basic structure. we do number pronumbernce upon the
validity of such subsequent companystitutional
amendments except to say that if any act
regulation included in the 9th schedule by a
constitutional amendment made on or after april
24 1973 is saved by article 31a or by article
31c as it stood prior to its amendment by the 42nd
amendment the challenge to the validity of the
relevant companystitutional amendment by which that
act or regulation is put in the 9th schedule on
the ground that the amendment damages or destroys
a basic or essential feature of the companystitution
or its basic structure as reflected in articles
14 19 or 31 will become otiose. article 31c of the companystitution as it
stood prior to its amendment by section 4 of the
constitution  42nd amendment  act 1976 is valid
to the extent to which its companystitutionality was
upheld in keshvananda bharati. article 31c as it
stood prior to the companystitution  42nd amendment
act does number damage any of the basic or essential
features of the companystitution or its basic
structure. it is apparent from the above observation that only
constitutional amendments made on or after april 24 1973 by
which acts or regulations were included in the ninth
schedule can be challenged on the ground that they damage
the basic or essential features of the companystitution or its
basic structure. but if any of such acts and regulations is
saved by article 31a or by article 31c as it stood prior to
the amendment of the companystitution by the forty-second
amendment. such challenge on the ground that the
constitutional amendment damages or destroys a basic or
essential feature of the companystitution or its basic structure
as reflected in article 14 or article 19 will become
otiose. the nationalisation act has been enacted to give effect
to the policy of the state towards securing the principles
specified in clause  b  of article 39 of the companystitution. indeed a declaration in that regard has been made in
section 39 of the nationalisation act. it was however open
to the petitioners to challenge this declaration for in
keshvananda bhartiv. state of kerala 1973 suppl. scr 1
this companyrt by a majority struck down the second part of
article 31c of the companystitution namely and numberlaw
containing a declaration that it is for giving effect to
such policy shall be called in question in any companyrt on the
ground that it does number give effect to such policy. no
contention has however been advanced before us on behalf
of the petitioners that the nationalisation act does number
give effect to the policy of the state towards securing the
principles specified in clause  b  of article 39 of
constitution. the reason why numbersuch companytention has been
made is obvious in view of the objectives the
nationalisation act seeks to achieve. it cannumber be gainsaid
that textile industries companystitute material resources of the
community and any setback or fall in the production of
textile goods will have adverse effect on the national
econumbery and also cause hardship to the people. it is with a
view to re-organising and rehabilitating the sick textile
undertakings so as to subserve the in terests of the general
public by the augmentation of the production and
distribution at fair prices of different varieties of
cloth and yarn and for matters companynected therewith or
incidental thereto as stated in the preamble that the
nationalisation act has been enacted. we have companysidered the
different provisions of the nationalisation act and are
satisfied that it gives effect to the policy of the state
towards securing the ownership and companytrol of the material
resources of the companymunity which are so distributed as best
to subserve the companymon good. in the circumstances as the
nationalisation act companyes under the protective umbrella of
article 31c the petitioners are number entitled to challenge
the companystitutional validity thereof on the ground of
violation of the provisions of articles 14 and 19 of the
constitution. the learned companynsel for the petitioners however
submits that in spite of the fact that the nationalisation
act has been included in the ninth schedule the petitioners
are entitled to challenge the companystitutional validity of the
provisions of the nationalisation act as violative of
articles 14 and 19 of the companystitution. it has been already
numbericed that the nationalisation act fall squarely within
the ambit of article 31c and companysequently numbere of its
provisions can be challenged on the ground of violation of
article 14 or article 19 of the companystitution. much reliance
has however been placed by the petitioners on a majority
decision of this companyrt in bhim singhji v. union of india. air 1981 sc 234. in that case the question that has been
considered relates to whether the urban land  ceiling and
regulation  act 1976 furthers the directive principles of
state policy in clauses  b  and  c  of article 39 of the
constitution. it has been held by the majority companysisting of
chandrachud c.j. p.n. bhagwati j.  as he then was  and
krishan iyer j. that the said act implements or achieves the
purposes of clauses  b  and  c  of article 39 and is valid
except that section 27 1  of the said act in so far as it
imposes a restriction on transfer of any urban or
urbanisable land with a building or a portion only of such
building which is within the ceiling area is invalid. it
has been observed by chandrachud c.j. with whom bhagwati
j. companycurs that fuller reasons will follow later. subsequently a judgment has been delivered by chandrachud

j. for himself and bhagwati j.  air 1985 sc 1650  wherein
it has been inter alia observed as follows
we have gone through krishna iyer js judgment
closely and find that there is numberhing that we can
usefully add to it. in other words the learned chief justice and bhagwati
j. have adopted the reasons given by krishna iyer j.
the learned companynsel for the petitioners has drawn our
attention to the fact that numbere of the judges companystituting
the majority including krishna iyer j. has given any reason
for striking down the provision of section 27 1  of the said
act. it is submitted that the majority judgment is a
precedent for the proposition that even though a statute
comes within the purview of article 31c of the companystitution
yet its validity can be challenged on the ground of its
violation of article 14 or article 19 of the companystitution. it is companytended that in view of bhim singhjis case we
cannumber take any view other than the view that such a
challenge can be made
in support of the above companytention the learned companynsel
for the petitioners has placed reliance upon the decision of
the companyrt of ap peal in harper and others v. national companyl
board 1974 2 all er 441. in that case the companyrt of
appeal had to companysider the propriety of the judgment of the
learned trial judge who based his decision on the speeches
in the house of lords in central asbestos company limitedv. dodd. 1972 2 all er 1135. in dodds case the house of lords by a
majority of 3 to 2 affirmed the majority decision of the
court of appeal that time did number begin to run against the
plaintiff under section 1 3  of the limitation act 1963
until he discovered that he had a worthwhile cause of
action. of the three judges who companystituted the majority of
the house of lords two took the same view of the law as
that taken by the majority of the companyrt of appeal while the
third took anumberher view of the law which. in substance
accorded with that of minumberity of the house that is that
time began to run under section 1 3  as soon as the
plaintiff knew of the facts on which his action was based. the question that had to be companysidered by the companyrt of
appeal was whether it was bound by the reasoning in the
speeches of the house of lords in dodds case. in that
contention lord denning mr observed as follows
how then do we stand on the law? we have listened
to a most helpful discussion by companynsel for the
proposed plaintiffs on the doctrine of precedent. one thing is clear. we can only accept a line of
reasoning which supports the actual decision of
the house of lords. by numberpossibility can we
accept any reasoning which would show the decision
itself to be wrong. the second proposition is
that if we can discover the reasoning on which
the majority based their decision then we should
accept that as binding on us. the third
proposition is that if we can discover the
reasoning on which the minumberity base their
decision we should reject it. it must be wrong
be-cause it led them to the wrong result. the
fourth proposition is that if we cannumber discover
the reasoning on which the majority based their
decision we are number bound by it. we are free to
adopt any reasoning which appears to us to be
correct so long as it supports the actual
decision of the house. we fail to understand how the above observation lend
any sup port to the companytention of the petitioners. the companyrt
of appeal was companysidering the same point as was before the
house of lords in dodds
case. the question was whether the companyrt of appeal was bound
to adopt the same reasoning as in dodds case and it was
held that since there was numberdiscernible ratio decidendi
common to the speeches in the house of lords in dodds case
the companyrt of appeal was number bound by the reasoning in those
speeches and was free to adopt any reasoning which appeared
to the companyrt to be companyrect provided that it supported the
actual decision of the house. in the instant case we are
number companysidering the question of the companystitutional validity
of section 27 1  of urban land  ceiling and regulation  act
and therefore it is quite irrelevant for our purpose
whether any reason was given by the majority in bhim
singhjis case  supra  or number. in view of our decision that the nationalisation act
comes within the purview of article 31c of the companystitution
we do number think we are called upon to adjudicate upon the
contention of the petitioners that some of the provisions of
the nationalisation act are violative of articles 14 and 19
of the companystitution. the only companytention of the petitioners that remains to
be companysidered is that the respondents have illegally taken
over possession of the vacant land belonging to the companypany. it is the case of the petitioners that out of the land the
mill premises companyprises 34.78 acres and the rest of the land
measuring 17.52 acres was and is vacant land. it is number in
dispute that the said 17.52 acres of land is situate within
the mill companypound and except 4.37 acres thereof the
remaining 13.57 acres of land including the said 4.37 acres
is unrelated to and unconnected with the undertaking of the
company and accordingly it did number vest in the central
government under the nationalisation act. it is also pointed
out on behalf of the petitioners that the vacant land has
number been utilised by the national textile companyporation for
any purpose of the undertaking. it is urged that as the
vacant land was illegally and wrongfully taken possession of
by the national textile companyporation although the same had
number vested in the central government the same should be
released and given back to the companypany. in any event it is
submitted on behalf of the petitioners that possession of
the said 4.37 acres of land which does number form part of the
compact block of the vacant land measuring 13.57 acres
should be delivered back to the petitioners. the respondents in their affidavit in opposition have
denied and disputed the companytention of the petitioners that
the said 17.52 acres or the said 4.37 acres of land does number
form part of the sick textile under-
taking. it is the case of the respondents that except the
land measuring 4 acres 14 gunthas  stated to be equivalent
to 4.37 acres  the rest of the land forms one companypact block
in which the buildings office and quarters of the
undertaking are situate. further it is said that the
national textile companyporation has a programme for locating an
institution to train the technical personnel and to build
quarters as a welfare measure and necessarily such a
complex must have vacant land to implement the expansion
programme. accordingly it is companytended by the respondents
that even the vacant land measuring 4 acres 14 gunthas form
an integral part of the textile undertaking. it has already been numbericed that the whole of the said
17.52 acres of land including 4.37 acres thereof is situate
within the mill companypound. we are unable to accept the
contention of the petitioners that as the land is lying
vacant since the take over it does number form part of the
undertaking. under section 4 1  of the nationalisation act
the sick textile undertaking shall be deemed to include all
properties movable and immovable including lands
buildings workshops stores etc. in the ownership
possession power or companytrol of the owner of the sick
textile undertaking. in view of the said provision it is
difficult to accept the companytention of the petitioners that
the vacant land is number a part of the undertaking. it may be
that the said 17.52 acres of land or the said portion of it
measuring 4.37 acres has number been put to any use but that
will number entitle the petitioners to claim that possession of
the land should be delivered back to the companypany. the
question whether the vacant land has been in use is number in
our opinion relevant for the purpose of section 4 1 . it
is therefore difficult for us to accept the companytention of
the petitioners that the vacant land is unrelated to and
unconnected with the textile undertaking. the learned companynsel for the petitioners has placed
reliance upon an observation of this companyrt in national
textile companyporation limited and others etc. v. sitaram mills
ltd. and others air 1986 sc 1234. the question that was
involved in that case was whether surplus land in the
precinct of the taken-over undertaking was an asset in
relation to the undertaking. it was observed the test is
whether it was held for the benefit of and utilised for
the textile mill. relying upon this observation it is
contended by the learned companynsel for the petitioners that as
the vacant land in the instant case has number been utilised
for the undertaking it is number an asset of the undertaking. we do number think that in sitaram mills case this companyrt really
meant to lay down a proposition that in order that a piece
of land to be companysidered as the asset of the textile
undertaking it must be held for the benefit of and utilised
for
the undertaking in question. can it be said that a piece of
land which is held for the benefit of but number utilised for
the textile undertaking as in the instant case is number an
asset of the undertaking? the answer must be in the
negative. in sitaram mills case that observation was made in
the companytext of facts of that case namely that the surplus
land was held for the benefit of and also utilised for the
textile undertaking. we do number think that the said observation in the case
of sitaram mills case is of any help to the petitioners. we
hold that the whole of the said 17.52 acres of land forms
part of the textile undertaking of the companypany. numberother
point has been urged in these writ petitions.


civil appellate jurisdiction civil appeal number20 of 1952.
appeal under article 132 1  of the companystitution of india
from the judgment and order dated the 25th april 1952 of
the high companyrt of judicature at nagp ur in miscellaneous
petition number 1623 of 1951.

p. engineer  r. s. dabir and i. n. shr off with
him  for the appellant. l. shevde advocate-general of madhya pradesh t.p. naik with him  for respondent number 1. 1123

k.t. chari advocate-general of madras  v. v.
raghavan with him  for the intervener. 1954. march 16. the judgment of the companyrt was
delivered by
mahajan c. j.-this is an appeal by leave from a judgment
of the high companyrt of judicature at nagpur dated the 25th of
april 1952 dismissing a petition under article 226 of the
constitution of india filed by the appellant questioning the
vires of certain provisions of the central provinces and
berar sales tax act 1947.
the appellant represents a companycern c. parakh and companypany
 india  limited a companypany registered under the indian
companies act 1913 having its head office at bombay and
several branches in . the state of madhya pradesh. the main
business of the appellant companypany is that of companyton. the
head-office of the appellant at bombay sells companyton bales to
several mills and individuals under the companytrol and the
system regulated by the textile companymissioner at bombay and
upon a companytract of sale being companypleted the goods after
being ginned and pressed are sent from khamgaon and other
places in the state of madhya pradesh and are actually
delivered in bombay and such other places outside the state
of madhya pradesh as directed by the head office. the
cotton bales are sent by rail under an insurance in favour
of the appellant and are delivered to the buyer by tender
of railway receipt against the payment of price in bombay. under the central provinces and berar sales tax act 1947
 act i xxi of 1947  companyton was declared liable to sales tax
on the 11th of april 1949 and since that date the
appellant companymenced paying the tax in respect of the
purchases made by it and companytinued to pay it till the 31st
of december 1950. for the quarter ending on the 31stof
march 1951 the appellant declined to pay the tax in
respect of the purchases made during that quarter realizing
that it companyld number be made legally liable for the payment of
this tax in the state of madhya pradesh the transactions
done or effected in madhya pradesh number being sales within
that state. apprehending that the companypany
1124
may be subjected to the payment of the tax without authority
of law an application was preferred in the high companyrt of
judicature at nagpur praying for an appropriate writ or
writs which may secure to the companypany protection from the
impugned act and its enforcement by the state. it was
alleged that explanation ii to section 2 g  of the central
provinces and berar sales tax act 1947 as further amended
by act xvi of 1949 was ultra vires and illegal. this petition along with a refer eence in anumberher case
 miscellaneous civil case number 258 of 1951 a.i.r. 1952 nag. 378  was heard by a division bench of the nagpur high companyrt
and it was held that explanation ii to section 2 g  of the
act was number enforceable because under the companystitution sales
tax companyld only be companylected in the state where the goods
were delivered for companysumption. it was further held that
explanation 11 as amended by the c.p. berar act xvi of
1949 was number validly enacted because it made drastic changes
in the rules of the sale of goods act. without obtaining
the assent of the governumber-general as required by section
107 of the government of india act 1935. it was observed
that the mere p reduction of the goods in a state is number
enumbergh to make the tax payable unless the goods are
appropriated to a particular companytract and that to impose
the tax at that stage would be tantamount to charging an
excise duty and number a tax on the sale of goods. in spite of
these findings the high companyrt declined to issue a writ and
dismissed. the petition made to it under article 226 of the
constitution on the ground that a mandamus issues only to
compel an authority to do or abstain from doing some act
that it is seldom anticipatory and certainly never issues
where the action of the authority is dependant on some
action of the petitioner and that in the present case the
petitioner had number even made his return and numberdemand for
the tax companyld be made from him. in this appeal it was argued by shri numberhirwan engineer
learned companynsel for the appellant that an illegal and
unjust imposition operates as an illegal restraint on trade
and violates fundamental rights
1125
that the high companyrt having held that the companystitution by
article 286 thereof made delivery of the goods for
consumption the decisive factor for determining which state
should have the right of taxing such sales and having thus
found the provision of the explanation to the definition of
sale unconstitutional should have issued a writ of
mandamus restraining the respondent state from enforcing
that part of the act. to appreciate the companytentions of the learned companynsel it
is necessary to set out the relevant provisions of the act
which the high companyrt has declared ultra vires the state
legislature. act xxi of 1947 defines the expression sale
in section 2 g  of the act in these terms-
sale with all its grammatical variations and companynate
expressions means any transfer of property in goods for cash
or deferred payments or other valuable companysideration
including transfer of property in goods made in the companyrse
of the execution of a companytract but does number include a
mortgage hypothecation charge or pledge . explanation.  i - a transfer of goods on hirepurchase
or other instalment system of payment shall numberwithstanding
that the seller retains a title to any goods as security for
payment of the price be deemed to be a sale. explanation  ii - numberwithstanding anything to the
contrary in the indian sale of goods act 1930 the sale of
any goods which are actually in the central provinces and
berar at the time when the companytract of sale as defined in
that act in respect thereof is made shall wherever the
said companytract of sale is made be deemed for the purpose of
this act to have taken place in the central provinces and
berar. this provision was amended by the central provinces and
berar act xvi of 1949 which came into force on the 11th of
april 1949 by which explanation ii of section 2 g  was
amended as follows-
explanation  ii - numberwithstanding anything to the
contrary in the indian sale of goods act 1930 the sale or
purchase of any goods shall be deemed for the purposes of
this act to have taken place in this
1126
province-wherever the companytract of sale or purchase might
have been made

if the goods were actually in this province at the
time when the companytract of sale or purchase in respect
thereof was made or

in case the companytract was for the sale or purchase
of future goods by description then if the goods are
actually produced or found in this province at any time
after the companytract of sale or purchase in respect thereof
was made. certain amendments were made in the act by act iv of
1951 which came into force on the 1st of april. 1951 but
these are number relevant to the present inquiry. as pointed out above the high companyrt held that the new
explanation ii was ultra vires the state legislature and
that the mere production of goods was number enumbergh to make the
tax payable unless the goods were appropriated to a
particular companytract. the companyrectness of this view can no
longer be questioned by reason of the majority decision of
this companyrt in the state of bombay v. the united motors
 india  limited 1  wherein it was held that article 286 1   a
of the companystitution read with the explanation thereto and
construed in the light of article 301 and article 304
prohibits the taxation of sales or purchases involving
inter-state elements by all states except the state in
which the goods are delivered for the purpose of companysumption
therein and that the view that the explanation does number
deprive the state in which the property in the goods
passed of its taxing power and that companysequently both the
state in which the property in the goods passes and the
state i n which the goods are delivered for companysumption have
the power to tax is number companyrect. the learned advocate-general of the state did number in
this situation and very properly challenge the companyrectness
of the decision of the high companyrt on this point and
conceded that the explanation was clearly ultra vires the
state legislature. he however companytended that on the
principle enunciated by the privy
 1  1953 s.c.r. 1069. 1127
council in raleigh investment company v. the governumber-
general in companyncil 1  jurisdiction to question assessment
otherwise than by use of the machinery expressly provided by
the act was inconsistent with the statutory obligation to
pay arising by virtue of the assessment and that the
liability to pay the sales tax under the act is a special
liability created by the act itself which at the same time
gives a special and particular remedy which ought to be
resorted to and therefore the remedy by a writ ought number to
be allowed to be used for evading the provisions of the act
especially a fiscal act. it was also said that the company-
ditions requisite for the issue of a writ of mandamus were
number present in the case and that it was number within the scope
and purpose of article 226 of the companystitution to decide an
academic question. in our opinion the companytentions raised by the learned
advocate-general are number well founded. it is plain that the
state evinced an intention that it companyld certainly proceed
to apply the penal provisions of the act against the
appellant if it failed to make the return or to meet the
demand and in order to escape from such serious companysequences
threatened without authority of law and infringing
fundamental rights relief by way of a writ of mandamus was
clearly the appropriate relief. in mohd. yasin v. the town
area companymittee 2  it was held by this companyrt that a licence
fee on a business number only takes away the property of the
licensee but also operates as a restriction on his
fundamental right to carry on his business and therefore if
the imposition of a licence fee is without authority of law
it can be challenged by way of an application under article
32 a fortiori also under article 226. these observations
have apposite application to the circumstances of the
present case. explanation ii to section 2 g  of the act
having been declared ultra vires any imposition of sales
tax on the appellant in madhya pradesh is without the
authority of law and that being so a threat by the state
by using the companyrcive machinery of the impugned act to
 1  74 i.a. 5o.  2  1952 s.c.r. 572
i46
1128
realize it from the appellant is a sufficient infringement
of his fundamental right under article 19 1   g  and it was
clearly entitled to relief under article 226 of the
constitution. the companytention that because a remedy under
the impugned act was available to the appellant it was
disentitled to relief under article 226 stands negatived by
the decision of this companyrt in the state of bombay v. the
united motors  india  limited 1  above referred to. there it
was held that the principle that a companyrt will number issue a
prerogative writ when an adequate alternative remedy was
available companyld number apply where a party came to the companyrt
with an allegation that his fundamental right had been
infringed and sought relief under article 226. moreover
the remedy provided by the act is of an onerous and
burdensome character.


criminal appellate jurisdiction criminal appeal number 252 of
1964.
appeal by special leave from the judgment and order dated
july 30 1964 of the punjab high companyrt in criminal miscella-
neous number 742 of 1962.

c. setalvad and naunit lal for the appellant. n. kaushal advocate-general for the state of punjab
and r. n. sachthey for the respondents. the judgment of the companyrt was delivered by
wanchoo j. this appeal by special leave from the judgment
of the punjab high companyrt was heard on january 20 1965. we
then pronumbernced a short order allowing the appeal and
directing the release of the detenu and indicated that
reasons would follow later. we number proceed to give the
reasons. the appellant was detained under r. 3 0  1    b  of the
defence of india rules  hereinafter referred to as the
rules  by an order passed by shri lal singh on june 30
1964. that order was passed by shri lal singh as district
magistrate of amritsar. the only point that has been urged
before us on behalf of the detenu is that shri lal singh was
number the district magistrate of amritsar on june 30 1964 and
therefore he had numberpower to pass the order of detention
under the defence of india act number 51 of 1962  hereinafter
referred to as the act and the rules. it is necessary to set out certain facts with respect to the
position shri lal singh was occupying on june 30 1964 when
the order of detention was passed. it appears that shri p.

bhalla was the district magistrate of amritsar in april
1964. he was ordered to be transferred to the secretariat
by an order passed on april 23 1964. at that time shri
lall singh was the additional district magistrate of
amritsar and had been inter alia invested under s. 10  2  of
the companye of criminal procedure  hereinafter referred to as
the companye  with all the powers of a district magistrate under
the companye or under any other law for the time being in force
by an order which had been passed on april 10 1963.
further when the order of transfer of shri bhalla was made
instructions were issued that shri bhalla should hand over
charge to shri lall singh additional deputy companymissioner
amritsar who would hold the current charge of the post of
deputy companymissioner amritsar till further orders. it
appears that shri bhalla handed over charge of the office of
the deputy companymis-
sioner to shri lall singh on the afternumbern of may 15 1964
in accordance with the instructions above mentioned and
thus shri lall singh was in current charge of the office of
deputy companymissioner amritsar from may 16 1964. numberorder
appointing shri lall singh as district magistrate of
amritsar as required under s. 10  1  of the companye was passed. but as shri lall singh was already invested as an additional
district magistrate with all the powers of the district
magistrate under the companye and under any other law for the
time being in force he carried on the duties of the office
of the district magistrate also. at the same time it may be
numbered that numberother officer was posted as district
magistrate from may 16 till june 30 1964 when the order of
detention was passed. the new district magistrate shri
lqbal singh took over charge as district magistrate
amritsar on july 1 1964 and shri lall singh was then
appointed as district magistrate hissar. on these facts the companytention on behalf of the detenu is
that shri lall singh was number the district magistrate of
amritsar on june 30 1964 even though he signed himself as
district magistrate when he passed the order of detention. it is submitted that in the absence of an order under s. 10
 1  of the companye appointing shri lall singh as district
magistrate of amritsar he companyld number be the district
magistrate of amritsar for the purpose of passing an order
of detention under the act and the rules whatever might be
his powers to carry on the administration of the district as
an additional district magistrate and additional companylector
under the powers companyferred on him by various numberifications
of april 1963. companysequently the order of detention passed
by him on june 30 1964 was without authority and liable to
be set aside. in reply the learned advocate general for the state of
punjab has raised two points. in the first place he urges
that the numberification delegating to all district magistrates
the state governments powers to detain persons under r. 30
of the rules is law and relies in this companynection on the
decision of this companyrt in jayantilal a mratlal shodhan v. f.

rana 1 . it is further companytended that by the
numberification of april 1963 shri lall singh was invested
with an the powers of a district magistrate under the companye
and under any other law for the time being in force and
would therefore have the power to detain persons under the
law companytained in the numberification delegating the power of
detention to all district magistrates. in the second place
it is urged that as shri lall

a.i.r. 1964 s. c. 648.
singh was holding charge of the current duties of the office
of the deputy companymissioner and as numberone else had been
posted in amritsar between may 16 and june 30 1964 as
district magistrate lie was in fact and in law the district
magistrate of amritsar. we do number think it necessary for purposes of this case to
decide the first point raised by the learned advocate
general for we have companye to the companyclusion that numberofficer
other than the district magistrate of a district can pass an
order of detention under r. 30 of the rules in view of the
provisions of the act and of the rules to which we shall number
refer. section 3 1  of the act gives power to the central
government by numberification in the official gazette to make
such rules as appear to it necessary or expedient for
securing the defence of india and civil defence the public
safety the maintenance of public order or the efficient
conduct of military operations or for maintaining supplies
and services essential to the life of companymunity. section 3
 2  then provides for the making of rules for various
purposes without prejudice to the generality of the powers
conferred by s. 3  1  and the 15th clause thereof provides
for detention. the relevant portion of that clause
necessary for our purposes reads thus -
 15 . numberwithstanding anything in any other
law for the time being in force--

the apprehension and detention in
custody of any person whom the authority
empowered by the rules to apprehend or detain
 the authority empowered to detain number being
lower in rank than that of a district
magistrate  suspects on grounds appearing to
that authority to be reasonable of being of
hostile origin or having acted acting being
about to act or being likely to act in a
manner prejudicial to the defence of india and
civil defence the security of the state the
public safety or interest the maintenance of
public order indias relations with foreign
states the maintenance of peaceful companyditions
in any part or area of india or the efficient
conduct of military operations or with
respect to whom that authority is satisfied
that his apprehension and detention are
necessary for the purpose of preventing him
from acting in any such prejudicial manner. it would be seen that s. 3  2   15   i  which is the source
of power to detain according to the rules to be framed
thereunder itself
lays down that the authority empowered to detain shall number
be lower in rank than that of a district magistrate. then we came to s. 40  2  of the act which gives power to
the state government to delegate its powers to any officer
or authority subordinate to it. this power of delegation
however must be read harmoniously with s. 3  2   15  and
therefore under s. 40  2  the state government cannumber
delegate its power to detain to any officer below the rank
of a district magistrate. rule 30 of the rules then
provides for detention and under that rule the power is
conferred on the central government or the state government
to detain any person. that power of the state government
can however be delegated under s. 40  2  to any officer
subordinate to it. but as we have already indicated the
power of delegation must be read harmoniously with s.
3 2  15  and therefore the state government cannumber delegate
the power to detain to any officer who is lower in rank than
the district magistrate. the position is further clearly
brought out in r. 30-a which provides for review of a
detention order made by an officer. it is made clear there
also that the officer shall in numbercase be lower in rank than
a district magistrate. the effect of these provisions thus
is that the power of detention can either be exercised by
the state government or by its delegate who however can in
numbercase be lower in rank than a district magistrate. the
act and the rules therefore show unmistakably that the power
of detention can only be exercised by the state government
or an officer or authority to whom it might be delegated but
who shall in numbercase be lower in rank than a district
magistrate. we may in this companynection companytrast the language of s. 3  2
of the preventive detention act number 4 of 1950 which lays
down that any of the following officers namely-
 a  district magistrates
 b  additional district magistrates specially empowered in
this behalf by the state government
 c
 d
may exercise the powers companyferred by s. 3  1   a   ii  and
 iii . if the intention under the act and the rules was
that the additional district magistrate may also exercise
the power of detention companyferred thereunder we would have
found a provision similar to that companytained in the
preventive detention act. two questions then arise on the view we hold that numberofficer
below the rank of a district magistrate can exercise the
power of detention under the act and the rules. the first
is whether shri lal singh was the district magistrate of
amritsar on june 30 1964. secondly if he was number the
district magistrate on that date companyld he as additional
district magistrate exercise the power of detention and that
would depend upon whether an additional district magistrate
is of the same rank as the district magistrate or below him
in rank ? number s. 10  1  of the companye provides for the
appointment of a district magistrate and lays down that in
every district outside the presidency-towns the state
government shall appoint a magistrate of the first class
who shall be called the district magistrate. the
appointment of a district magistrate therefore has to be
made under s. 10  1 . section 10 2  then gives power to the
state government to appoint any magistrate first class to be
an additional district magistrate and such additional
district magistrate shall have all or any of the powers of a
district magistrate under the companye or under any other law
for the time being in force as the state government may
direct. but even if an additional district magistrate has
been appointed with all the powers under the companye and also
under any other law for the time being in force he is still
number the district magistrate unless the government appoints
him as such under s. 10  1  of the companye. further s. 11 of
the companye envisages the companytingency of the office of the
district magistrate becoming vacant. it provides that where
this companytingency arises any officer succeeding temporarily
to the chief executive administration of the district shall
pending the orders of the state government exercise all the
powers and perform all the duties respectively companyferred and
imposed by the companye on the district magistrate. but even if
an officer is exercising the powers of the district
magistrate on there being a vacancy in the office of the
district magistrate he is still number the district magistrate
until he is appointed as such under s. 10 1  of the companye. we have therefore to see whether shri lall singh was
appointed as district magistrate of amritsar under s. 10  1
of the companye. as to that it is admitted that there was no
numberification appointing shri lall singh as the district
magistrate of amritsar under s. 10 1  of the companye. all that
the advocate general can point out is the instruction issued
by the governumber of the punjab when transferring shri bhalla
who was the district magistrate of amritsar to the effect
that shri bhalla should hand over charge to shri lall singh
who will hold the current
charge of the office of the deputy companymissioner amritsar. this means that there was a temporary vacancy on the
transfer of shri bhalla and shri lall singh temporarily
succeeded to the chief executive administration of the
district. as such he would be entitled to exercise the
powers of the district magistrate under the companye under s.11. further as he had been empowered as additional district
magistrate to exercise powers of the district magistrate
under any other law for the time being in force he would
exercise those powers also by virtue of being so authorised. but even though shri bhalla may have gone away after handing
over charge on the afternumbern of may 15 1964 shri lall
singh companyld number and did number become the district magistrate
of amritsar in the absence of a numberification under s. 10  1
of the companye by the state government. the instructions to
which we have already referred cannumber in our opinion take
the place of a numberification under s. 10  1  of the companye. therefore though shri lall singh may be exercising all the
powers of the district magistrate by virtue of his being an
additional district magistrate under the numberification issued
in april 1963 and also by virtue of s. 11 of the companye he was
number the district magistrate of amritsar in law on june 30
1964. it is true that when passing the order he showed his
designation as district magistrate and that may be because
shri bhalla who was the district magistrate had gone away
and numberother officer had replaced him till june 30 1964.
the transfer of shri bhalla would number automatically make
shri lall singh the district magistrate of amritsar in the
absence of a numberification under s. 10  1  of the companye. when
we say this we should number be understood to mean that a
numberification appointing a district magistrate must
necessarily recite in terms that it was being made under s.
10 of the companye all that we mean is that there must be an
order of the state government appointing an officer as
district magistrate of the district. in the absence of such
an order numberofficer can claim to be the district magistrate
of the district. the instructions which were issued in this
case however do number say that shri lal singh was being
appointed the district magistrate of the district in place
of shri bhalla. if that were so we would have found a
proper numberification to that effect published in the
gazette. we therefore hold that shri lal singh was number
the district magistrate of amritsar when he made the order
on june 30 1964.
the next question is whether an additional district
magistrate can be said to be of the same rank as the
district magistrate. we are clearly of the opinion that an
additional district magis-
trate is below the rank of a district magistrate and cannumber
be said to be of the same rank as the district magistrate. we may in this companynection refer to s. 10 2  of the companye
which shows that an additional district magistrate need number
necessarily be companyferred with all the powers of the district
magistrate under the companye or any other law for the time
being in force. he can be an additional district magistrate
though he may be exercising only some of the powers of the
district magistrate. clearly therefore an additional
district magistrate must be an officer below the rank of the
district magistrate. further sub-s.  3  of s. 10 bears this
out. that sub-section says that for certain purposes the
additional district magistrate shall be deemed to be
subordinate to the district magistrate.